Infibeam in talks to raise up to Rs 1,200-1,500 crore from Fairfax

Editor | Sep 15, 2020

Indian online marketplace Infibeam is looking to raise fresh capital from Canada-based Fairfax Financial Holdings. According to several sources, Prem Watsa’s Fairfax is most likely to invest around Rs. 1,200 to 1,500 crore for a 10-12% stake in the marketplace.

While the investor would get entry into the booming Indian ecommerce industry, Infibeam would use the funds for its expansion plans. According to sources, as part of its expansion strategy, Infibeam would either acquire a company or would assist a global player during its India entry. The capital infused by Fairfax would come in handy for that.

While both Infibeam and Fairfax refused to confirm this news, a person close to the development said, “With its global reach and deep pockets, the evergreen fund (Fairfax) was a preferred partner for the company.”

Good days ahead for Infibeam?

The official confirmation is yet to be made, but even the buzz around Fairfax investing in the Indian etailer resulted in profits. Infibeam’s stock value went up momentarily on Thursday, as soon as the news spread.

It probably is the only online marketplace which is profitable. The company declared a net profit of Rs. 19.7 crore for the first quarter of FY 2017-18 (April to June). Infibeam’s net profit grew by 44.85%, overall growth by 107%, and revenue by 79%. The company revenue went up from Rs. 103.1 crore in FY 2016-17 Q1 to Rs 184.6 crore in FY18 Q1.

This is a remarkable achievement because the losses of other ecommerce players, including the leaders Flipkart and Amazon are only going up. Shopclues, which was profitable for a long time also posted losses. Digital wallet company Paytm too was profitable until it decided to become an online marketplace.

In one of his interviews, Infibeam’s CEO Vishal Mehta said that the company is working towards building a vast logistics network, spread across 100 cities in India.

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