Thursday 5 November 2015

Wirecard (WDI GY) ... Suvidhaa vs. GI Retail

Thursday 5th November 2015

In my previous post I wrote about Wirecard's acquisition of Great Indian Retail Group

Here are the main details as indicated by Wirecard:
  • Wirecard is set to buy GI Retail for €230 million in cash. 
  • A further payment up to €110 million is possible, linked to the overall financial performance of the acquired businesses in calendar years 2015 to 2017.
  • Consolidated revenue for the acquired businesses is expected to exceed €45 million in calendar year 2015, an increase of more than 50 per cent compared to calendar year 2014. 
  • EBITDA is expected to more than double year on year to exceed €7 million. 
  • Revenue for calendar year 2016 is expected to exceed €75 million and EBITDA after integration costs is expected to be between €15 million to €18 million. 

On this basis, the businesses being acquired under GI Retail appear very attractive. 

Revenue is expected to rise by over 50% in 2015 and increase by a further 67% in 2016. 

The EBITDA margin is expected to be 15.5% in 2015 and rise to somewhere between 20% to 24% in 2016.  

No wonder Wirecard is potentially paying €340 million or c. 7.5x projected 2015 sales or c. 49x forecast 2015 EBITDA to acquire GI Retail. 

In my previous post, I also mentioned a company called Suvidhaa Infoserve Pvt. Ltd. 

Suvidhaa Infoserve Pvt. Ltd

According to Suvidhaa's website, "Suvidhaa is a renowned company in the payment and remittances space." 

Here is the front page to Suvidhaa's website:

Suvidhaa website
Suvidhaa says it is a "... leading aggregator of multiple services like utility bill collection, insurance premium, mobile and DTH recharge, travel tickets, money transfer services on a single platform through a network of 80,000 franchises outlets across the country."

About Suvidhaa
Suvidhaa's website appears somewhat more refined than GI Retail's. For a start it clearly states who the management team is, with detailed biographies for seven members of that team. By contrast, GI Retail's main website mentions nothing of its management. However, GI Technology's website does provide biographies of the group's management.

Further, Suvidhaa's website details the group's investors. These include Norwest Venture Partners, Reliance Venture Asset Management Ltd, International Finance Corporation, and Mitsui & Co. By contrast, GI Retail's website mentions nothing of its financial backers. There is yet another website with details of GI Retail. This is at It's a rather incomplete site as around half the links do not work including the link that should direct to the group's investors.  

Here is a YouTube video of Suvidhaa's founder and Chairman, Mr Paresh Rajde, seemingly being interviewed on an Indian financial news broadcast.

Here is a YouTube video of GI Retail's Managing Director, Mr Ramu Annamalai Ramsamy, seemingly at a desk in a small cupboard. The video has some editing issues as it's rather jumpy throughout as Mr Ramu Annamalai Ramsamy talks through ICASHCARD.


  • Suvidhaa claims "3 Crore (30 million) satisfied customers."
  • GI Retail declares to have "... served more than 60 million customers for travel and payment services across our agent network in 2014."
  • GI Technology mentions "GI has fast grown to serve more than 1 crore (10 million) customers in the under banked segment." 


  • Suvidhaa claims "1.5 Lakh (150 thousand) transactions daily."
  • GI Retail indicates that "Over the last years we have issued more than 35 million money transfer accounts for financial institutions, including our own ICASH wallet."
  • ICASHCARD YouTube video claims "Every month ICASH wallet is doing close to 1.5 million transactions, helping migrant and marginal workforce to send money safely and instantly." 
  • GI Technology highlights that "We provide more than 200,000 people daily with access to affordable financial services and other related services and through our retail partners offer tens of thousands of retailers the opportunity to earn extra money by driving financial inclusion in India." 


  • Suvidhaa claims to be present across a network of "80,000 retail outlets."
  • GI Retail suggests that its Hermes newtork has "... more than 90,000 locations across India, more than 9,000 locations on (sic) the Philippines and retail partnerships in Indonesia and Malaysia."
  • GI Technology mentions that "ICASH wallet is also being distributed by other partner networks numbering more than 100,000 agents across India."

On the tale of the tape, Suvidhaa appears to be a remarkably similar business to GI Retail.

Here are Suvidhaa's accounts to 31 March 2014:

Suvidhaa Infoserve Private Limited annual report
Here is Suvidhaa's balance sheet to 31 March 2014:

Suvidhaa Infoserve Private Limited balance sheet to 31 March 2014
At the time of posting there is c. 101 Indian Rupees to the pound, Sterling.

According to its balance sheet, Suvidaah's net assets totaled 404,808,529 Indian Rupees (INR) or c. £4 million as at 31 March 2014.

Here is Suvidhaa's P&L to 31 March 2014:

Suvidhaa Infoserve Private Limited P&L to 31 March 2014
Suvidhaa Infoserve Private Limited P&L (continued) to 31 March 2014
According to its P&L, Suvidhaa reported 31,753,568,481 INR or c. £314 million of gross transaction value in 2014.

Total income (revenue) was reportedly 434,888,828 INR or c. £4.3 million, up 79% from 2013.

EBITDA was reportedly a loss of 89,472,779 INR or c. £886,000, an improvement on a 180,498,483 INR or c. £1.8 million loss in 2013.

This compares to GI Retail, which Wirecard suggests is on track for at least €45 million in revenue and greater than €7 million in EBITDA for 2015.

It would seem the businesses aren't so similar after all.

I am still short Wirecard. 

Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog. 


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