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Debt-ridden ATM player AGS Transact Technologies is in talks to sell a majority stake in its digital payment subsidiary India Transact Services (ITSL) to Patanjali group, sources said, as it looks to raise funds after its rating was changed to junk due to non-payment of dues.
“There have been advanced talks between the promoter and Patanjali for selling ITSL. ITSL has around ₹30 crore of debt, which Patanjali can pay lenders with a little more premium to promoter,” a source said.
Another source said there have been talks with multiple interested bidders and a final announcement may come soon from AGS Transact. ITSL is engaged in payment transactions and merchant acquisition business. It also offers a payment processing platform for routing commercial and retail payments between buyers and sellers across the country via a distribution model.
Key metrics
ITSL had 2.48 lakh point of sale terminals as on H1FY25, and registered gross transaction value (GTV) of ₹7,186 crore in the same period. In FY24, the GTV stood at ₹21,788 lakh crore. With a potential acquisition, Patanjali could expand its reach to various merchant outlets across country. Patanjali, in 2024, had also launched co-branded prepaid card in partnership with ITSL.
Separately, according to sources cited above, AGS is also looking to sell its ‘ATM Switch’ business vertical to India 1 Payments. India 1 is a white label ATM operator, promoted by BANKTECH Group PTY Ltd. & BTI Payments Singapore PTE Ltd. The talks between the two parties, however, are yet to reach an advanced stage. AGS Transact, Patanjali and India 1 Payments did not respond to businessline queries till press time.
Rating downgrade
In February this year, CRISIL Ratings downgraded AGS Transact’s ₹900 crore bank loan facility to ‘D’ or junk from ‘A’, as it did delayed paying its loan obligations.
“The rating downgrade reflects delays by AGS in servicing interest and debt obligations on term loans and bill discounting facility in December 2024 and January 2025. The company has not yet disclosed any instance of delay or default on its borrowings to the stock exchanges. The company had also misrepresented facts stating that they have adequate means to support upcoming debt obligations for December 2024 in its no default statement submitted in November 2024,” Crisil Ratings said.
As per interactions with the AGS management, Crisil said it believes that the liquidity of the company has sharply deteriorated over the past 2-3 months owing to delay in collection from receivables as AGS was not able to meet the service level agreements (SLAs) with its customers. Despite repeated follow-up with AGS to obtain more details, the agency said it was is yet to receive any details on the deficiencies of AGS in meeting its SLAs. Banks, who used ATM services of AGS, too moved their business contracts to other players like Hitachi and CMS.
Published on April 11, 2025
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