Centrum Group to sell money exchange business

Centrum Group, a domestic integrated financial services group, has signed an agreement to sell Centrum Direct (CDL), its money exchange business, to Atlanta-based EBIX for about Rs1,200 crore.

The entire CDL team and assets will be transferred to EBIX - a supplier of on-demand software and e-commerce services - and will become a part of EbixCash, EBIX's financial exchange. The deal was approved by Centrum Board, but is subject to shareholders and other regulatory approvals, a process which may take another 45-60 days.
In 2017, Centrum had divested 18.5-per cent of its stake in CDL to a group of PE investors – Jacob Ballas, New York Life and Evolvence.
“Our money exchange business has seen sustained growth and has consistently innovated to meet changing customer needs. However, consolidation and margin pressures are expected to be major disruptors in this business. With more customers opting for technology enabled platforms, EBIX Inc has the right technological capabilities, a global footprint and a large resource base, to make an ideal home for CDL. The combined strengths of both entities, I believe will set the foundation of a strong business opportunity," Jaspal Bindra, Executive Chairman, Centrum Group, said.
"The sale proceeds will provide Centrum Group a significant resource base to strengthen our core businesses of Wealth Management, Institutional & Retail Broking, Investment Banking, Insurance and our lending verticals along with identifying strategic opportunities for growth,” Bindra added.
CDL, which has an Authorised Dealer–II and a 'full fledged money changer' (FFMC) license, handled transactions worth Rs10,000 crore in FY 2017-18. As of today, the company has a customer base of over 3 million.
It’s services include sale & purchase of foreign currency, overseas remittances, pre-paid travel cards and travelers cheques. The firm has a network of 165 outlets in 55 cities and is the largest airport forex player with presence at 24 airports in India.
“The acquisition of CDL provides us with new abilities in niche financial exchange sectors while expanding our footprint in India. We have been eager to take up a strong position in India’s airports and shipping ports. CDL has a strong financial trajectory in terms of top line and operating margins. We will endeavor to improve it further through complementary products and synergetic operations. I am glad that EbixCash will inherit a strong senior leadership team from CDL," Robin Raina, Chairman, President and CEO, EBIX, said.