Airtel Payments Bank, Bharti Airtel’s fintech arm, will likely clock over Rs 1,300 crore in revenues in FY23, a year-on-year growth of over 40%, according to people aware of the matter.
The reasons for the strong revenue growth can be attributed to a significant surge in the monthly transacting user base and cash management system business, an increase in fee income from cross-selling of financial products like insurance and loans, etc, and growth in consumer deposits.
In FY22, Airtel Payments Bank reported revenues of Rs 941 crore and a profit of Rs 9 crore. The company is targeting to list on the stock exchanges in the next 2-3 years and has started talks with certain strategic investors before coming up with its initial public offering (IPO), sources.
Airtel Payments Bank currently has over 155 million customers, of which 57 million are transacting every month. The company counts a customer as monthly transacting if he or she has done a financial transaction in the last 30 days. In FY22, the company had 43 million monthly transacting users.
Apart from this, the company currently processes around 600-650 million transactions every month and has an annualized gross merchandise value (GMV) of 2 trillion, an increase of 46% from Rs 1.37 trillion in FY22. Similarly, customer deposits during the current financial year grew over Rs 1,500 crore from Rs 1,176 crore in FY22.
“Over the next 3-5 years, we definitely see our monthly transacting users crossing the 100-million mark,” the executive said, adding that schemes like reward programs where customers get cashback benefits on every transaction, the recent launch of new debit cards, and more offering of financial products will help drive the growth going forward.
Currently, Airtel Payments Bank gets about 70% of its revenue from the payments or transaction business, 25% of the revenue comes from fee incomes, that is, by cross-selling financial products like gold loans, insurance, etc, and 5% of revenue comes from consumer deposits.
To grow its fee income, the company recently launched its physical debit card in partnership with Mastercard. The issue price for the same is Rs 349, and it comes with a daily transaction limit of Rs 25,000. The company has also partnered with Care Health Insurance to offer mediclaim policies to its customers.
