Azim Premji-backed FSS plans to raise $250 million

Azim Premji-backed payment technology player Financial Software & Systems (FSS) is planning to raise around $250 million during its fifth round of fundraising. The company, which manages around 40,000 out of the total 220,000 ATMs in the country, is also planning to go public. 

The fundraising would support the company’s plan to create more IPs. FSS claims it is the third largest intellectual property (IP) holder after TCS and Infosys. It would also use the money to expand its global presence and for inorganic growth. 

FSS’ Managing Director Nagaraj Mylandla has confirmed the development and said the company would raise Rs 1,000-1,300 crore. The formal process will start in January or February 2017 and end by June/July. 

Informal discussions have already begun with private equity (PE) and pre-IPO investors to assess their interest levels, said Mylandla. The company has approached 10 domestic and international investors. 

Till now, the company has raised around Rs 1,000 crore through equity and debt. Investors include Carlyle Ventures, NEA, Jacob Ballas and Premji Invest. Carlyle exited in 2009 and Mylandla said the company gave good returns. 

When asked if the company would go for an IPO, Mylandla said the company was evaluating options and a decision was yet to be made. 

The company has set a target to close the current financial year with a turnover of around Rs 1,100 crore against Rs 810 crore last year. 

Recently, Florida-based payment systems company ACI Worldwide had said it was terminating its agreement with FSS. However, Mylandla said this wouldn’t have much impact on FSS’ operations as the business from ACI was only Rs 35-40 crore. 

“ACI’s decision will not impact the company’s operations and its customers, largely banks, since all ATMs are managed and monitored by the company’s software FSS Active Device Manager,” said Mylandla.