U.S.’ Ebix Buys Half Of Kanoria’s VARA Technology

Ebix Group acquires 50 percent stake in Kanoria’s IT firm VARA Technology. 

A customer counts Indian one-hundred rupee banknotes
A customer counts Indian one-hundred rupee banknotes

Ebix, Inc. bought VARA Technology Pvt. in its fifth acquisition in three months as the American software services provider eyes a bigger share of the expanding digital market in Asia’s third largest economy.

The Nasdaq-listed company acquired 50 percent stake in VARA, owned by the Kanoria Foundation – the family trust of SREI Infrastructure Finance Ltd.’s promoters. It infused fresh capital by subscribing to new stock, valuing VARA Tech at $46 million, a statement said. The Indian firm, which provides services to large financial entities, will be rebranded VARA-Ebix.

EbixCash, a subsidiary of Ebix Software India Pvt. Ltd., infused around $23 million, a person privy to the development said requesting anonymity. The deal makes EbixCash the largest shareholder in the company.

Digital payments have been growing in India since demonetisation a year ago as the government pushes cashless transactions to improve tax compliance. Banks and technology companies have come up with a host of online payments options, boosting the market for backend services and intermediaries.

Eyeing the opportunity, Ebix acquired four other digital-focused companies in the last three months: travel site, and money transfer firms Paul Merchants Ltd., YouFirst Money Express Private Ltd., and Wall Street Finance Ltd.

“The relationship with VARA represents a significant opportunity to expand our presence in the banking and financial services in India which is one of leading high-growth economies across the globe,” Robin Raina, Ebix Group chairman, president and chief executive officer said in a statement. “With approximately 3,300 employees on customer assignments, VARA already has a strong presence in the BFSI (banking, financial services and insurance sector in India.”

Ebix’s investment is from the $200 million fund the firm had kept aside for deals, Bhavik Vasa, chief growth officer at EbixCash, told BloombergQuint over the phone. The firm eyes to become the largest financial exchange in the country, he said. VARA has an annual revenue run rate of about $31 million.