The National Payments Corporation of India (NPCI) plans to diversify its shareholding by on-boarding 131 new partners and raise ₹81.64 crore in equity share capital on a private placement basis. The new partners include one public sector bank, 5 private sector banks, 40 foreign banks, 10 small finance banks (SFBs), 6 payments banks and 80 payments service providers. Entrackr first reported the development on November 9, 2020.
In a resolution passed on September 18, the board of NPCI approved to issue 6,50,000 equity shares at a price of ₹1,256 each, aggregating to ₹81.64 crore within a period of 12 months, according to regulatory documents filed with the Ministry of Corporate Affairs. MediaNama has seen copies of the resolution passed by the NPCI’s board. At present, the top 10 shareholders of the NPCI include the State Bank of India, Bank of Baroda, HDFC Bank, ICICI Bank, Axis Bank and HSBC Bank, who together hold a 76.82% shareholding in the umbrella retail payments entity. Further, another 45 smaller banks in total own a 23.18% shareholding in the NPCI.
Proposed equity raise
This marks a significant development in the NPCI’s history as so far only banks have owned the entity since its inception. With the proposed equity share raise retail payments companies that have build services on top of NPCI’s platforms are going to acquire a stake in the NPCI alongside large global banking giants.
- As part of the proposed raising of equity capital, some of new banks that would be shareholders in the NPCI include Indian Overseas Bank, Bandhan Bank, Bank of America, Barclays Bank PLC, JP Morgan Chase and Credit Suisse to name a few. The SFBs include ESAF SFB, Equitas SFB and Ujjivan SFB while Fino Payments Bank, India Post Payments Bank, Airtel Payments Bank, Paytm Payments Bank and Jio Payments Bank are some of the payments banks that will also acquire a stake in the NPCI.
- On the other hand, the Clearing Corporation of India, Mobikwik, PhonePe, PayPoint, PayU, Ola Financial Services, Amazon Pay, Ebix, MoneyGram, Western Union, Hitachi Payments Services, Vakrangee and A-Treds are some of the payment system operators that will join as shareholders.
Each of the above entities will hold a maximum equity stake of 0.57% in the NPCI and post the allotment of this equity stake, banks and financial institutions will own a 78.32% stake in the entity, the filings said. The NPCI says that approximately ₹60-75 crore of the capital raised through this issue will go towards financing capital expenditure going forward.
While the NPCI said that the Reserve Bank of India had instructed it to broad-base its shareholdings to “represent a larger segment of participants”, in a December 2016 report the Watal Committee had first recommended that the NPCI’s shareholding should be diffused.
Between April and September this year, the NPCI processed over 1,525 crore transactions worth over ₹66.85 lakh crore across its 10 payments platforms. In October 2020, the NPCI’s flagship platform UPI processed 2.07 billion transactions worth over ₹3.86 lakh crore, and between April and October 2020 it processed over 11.54 billion UPI transactions worth ₹19.35 lakh crore.
Dilip Asbe to continue as CEO till 2023
While Dilip Asbe’s term as chief executive officer of the NPCI was meant to end in January 2021, the NPCI’s board on September 18 approved extending his term for two more years until January 2023. Asbe was appointed in January 2018 to head the organisation and under his leadership, the company “witnessed tremendous growth in the digital transactions and is enroute to achieve its Vision and Mission of becoming the best in payments industry globally,” the MCA filings say.