Axis Bank board okays merger of subsidiaries Accelyst with Freecharge

Private sector Axis Bank today said its board of directors has approved merger two of its wholly owned subsidiaries Accelyst Solutions with Freecharge Payment Technologies.

"The board of directors of Axis Bank at its meeting held on April 27, 2018, has considered and approved the scheme of amalgamation of Accelyst Solutions Private Ltd (transferor company) with Freecharge Payment Technologies Pvt Ltd (transferee company), both wholly owned subsidiaries of the bank...under Companies Act, 2013 (scheme)," the bank said in a regulatory filing.

The merger is subject to statutory and regulatory approvals including from the National Company Law Tribunal, stakeholders and transferor company and the transferee company, it added.

Accelyst is engaged in the business of owning and operating a web and mobile-based platform for providing and facilitating online recharge, bill payment, coupon services.

It also serves as marketing platform for third parties, engaged in distribution of mutual funds and insurance products through the mobile application. Company's turnover was Rs 42.20 crore in 2016-17 (provisional). In 2015-16, the turnover was Rs 36.10 crore and Rs 35.10 crore in 2014-15.

Freecharge is a payments solution, payment support services and technology solutions. The company had a turnover of Rs 25 crore in fiscal ended March 2017 (provisional) and in 2015-16 it was at Rs 4.9 crore.

On the rationale of the amalgamation of the two entities, Axis Bank said it consolidate the business in one entity and strengthen the position of the merged entity.

"The transferor company and the transferee company are engaged in similar and complementary lines of businesses and thus the amalgamation of the both companies will result in administrative and operational rationalisation, organisational efficiencies, and in econimies of scale, reduction in overhead and other expenses and optimum utilisation of resources," Axis Bank said.

The bank had acquired Freecharge in October 2017 for Rs 373 crore in an all-cash deal.

Post acquisition activities at Freecharge remain on track, Axis Bank had said yesterday post announcing the quarterly earnings for March quarter.

"The acquisition of Freecharge can potentially leapfrog our digital journey by multiple years. Through Freecharge we intend to leverage payments as a hook (UPI, QR etc); target digitally-native, mobile-first SA customers; and sources and service loans digitally," it said.