Online retailer Snapdeal's Freecharge has been up for sale for a while now and Axis Bank, India's third-largest private sector bank, is said to be leading the race to acquire the digital payments platform. The bank, which has its headquarters in Mumbai, is said to be conducting due diligence as of now.
While Snapdeal, as well as Axis Bank, are yet to comment on the matter, sources told the Economic Times that if the deal goes through, it might be worth about $100 million.
It was earlier reported that two private banks -- one of them being Bank of Baroda -- and a few other private equity firms had expressed an interest in acquiring Freecharge. Additionally, Paytm is also said to have made a bid of $10-15 million for the platform, but it now looks like Axis Bank could soon take Freecharge off the market.
Freecharge, which was popular with users and racked up about 12 million transactions in April 2017, has taken a hit from the bleeding state of online marketplace Snapdeal. The online marketplace itself is in talks to Flipkart for a buyout. Snapdeal's board members rejected Flipkart's $700-$800 million buyout bid on Tuesday, July 4 and while it reportedly did not explain why it had decided to refuse the offer, talks regarding the sale are said to be ongoing.
Snapdeal's biggest investor Japan's SoftBank Group Corp has been looking to sell the company in a bid to secure a stake in Flipkart, which is India's biggest e-commerce firm. However, this move is likely to further delay the buyout.
Flipkart had made the offer last week and it is much lower than its initial bid of $1 billion, which seems to have miffed Snapdeal. "The board is unhappy with Flipkart pegging the valuation nearly $200 million less, even though Snapdeal cleared the due diligence. The board is, however, hopeful Flipkart would reconsider the offer," Business Standard quoted a source as saying.
Meanwhile, if the deal with Flipkart doesn't go through, Snapdeal is said to be ready with an alternate plan that might see an approval from the board. Under it, the firm may lessen its manpower and cut back on its operations until it finds a new buyer.