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- Ebix Inc. has initiated Chapter 11 bankruptcy proceedings in a North Texas court.
- This company serves as the parent to the Indian fintech and payments entity, EbixCash.
- There are concerns regarding the potential impact of this bankruptcy filing on EbixCash, which has plans for an IPO.
Ebix Inc.’s Bankruptcy Filing
Technology firm Ebix Inc. has initiated bankruptcy proceedings in a North Texas court, prompted by a default on a loan of over $600 million.
This development extends to several subsidiaries of Ebix, including the Indian financial transactions and remittances company, EbixCash.
The implications of this bankruptcy filing raise crucial questions about its impact on the IPO plans of EbixCash in the Indian market.
Debt Obligations
Ebix Inc. functions as a holding company listed on the NASDAQ stock exchange. Notably, it lacks a substantial equity-holding promoter or person in control.
Major shareholders, such as Blackrock, Vanguard Group, and Robin Raina, Chairman, President, and CEO of Ebix Group play significant roles.
The recent financial report for Q3 2023 indicates a decline in operating income, primarily attributed to IPO marketing costs and restructuring-related expenses.
As of December 2021, Ebix Inc. reported $656.0 million in outstanding debt obligations as per its annual report.
Will EbixCash be affected by the Chapter 11 Filing?
The Indian entity, EbixCash Limited, operates as a step-down subsidiary of Ebix Inc.
Brands like Ebix and EbixCash, are owned by Ebix Inc. The bankruptcy proceedings may influence the usage of these brands.
Ebix Inc’s wholly-owned subsidiary, Ebix Singapore Pte, holds a 100 percent stake in the Indian company.
There is a likelihood that the direct subsidiary, Ebix Singapore, will become entangled in the bankruptcy proceedings.
However, EbixCash reassures that its India operations remain unaffected by the Chapter 11 process undertaken by its US-based parent company.
The Chapter 11 proceedings specifically target Ebix entities in the US, excluding approximately 200 affiliates outside the US, as reported by Times Of India.
EbixCash Limited, the Indian entity, does not carry any debt in India but obtained a loan from the parent company for acquiring businesses in India.
The Indian entity plans to repay $350 million from its IPO proceeds.
About Ebix Inc.
Ebix Inc., headquartered in Atlanta, Georgia, United States, is a prominent global provider of On-Demand software and E-commerce services catering to industries such as insurance, finance, e-governance, e-learning, and healthcare.
With a presence in over 50 offices across Australia, Brazil, Canada, India, New Zealand, Singapore, the US, and the UK, Ebix drives numerous exchanges worldwide in life, annuity, health, and property & casualty insurance.
Leveraging various SaaS-based software platforms, Ebix engages hundreds of domain-specific business and technology professionals to offer products, support, and consultancy to a diverse customer base spanning six continents.
The Company is listed on the NASDAQ Global Market (symbol – EBIX).
About EbixCash
EbixCash is a prominent Financial Exchange in India. Employing a ‘Phygital’ strategy, which integrates 260,000 physical distribution outlets with an omnichannel online digital platform, EbixCash has developed an enterprise financial exchange portfolio.
This portfolio includes a leading position in money remittance (both domestic and international), travel services, pre-paid and gift cards, utility payments, and more.
A recent joint venture with the Bombay Stock Exchange strengthens EbixCash’s position in India’s insurance sector.
The digital accessibility of EbixCash’s product portfolio extends across its distribution outlets, covering over 5,500 cities and towns.
Conclusion
Ebix Inc. obtained a substantial forex and prepaid card business in the nation through the acquisition of Centrum Direct from Chandir Gidwani-promoted Centrum and Itz Cash from Ashok Goel’s Essel Group.
In total, Ebix has invested nearly $800 million in its acquisitions in India.
EbixCash’s IPO plans, estimated at INR 6,000 crore, face uncertainty due to the parent company’s bankruptcy.
The Reserve Bank of India (RBI) may impose restrictions on capital repatriation, given the parent’s financial situation.
The intricate relationships and financial interdependencies between Ebix Inc. and EbixCash, introduce uncertainties regarding ownership, brand usage, and the future trajectory of the planned IPO.
