There were reports earlier that FreeCharge was in talks with several players like Paytm, MobiKwik, Bank of Baroda and Times Internet.

After Paytm Axis Bank emerges as frontrunner to buy Snapdeals payments arm FreeCharge
Atom Digital Wallets Saturday, July 08, 2017 - 10:05

As Snapdeal continues to look for a buyer for its payments arm FreeCharge, India’s third largest private sector bank Axis Bank has emerged as the frontrunner to buy the digital wallet, according to an Economic Times report.

Earlier, there were reports that Snapdeal was talking to several players like Paytm, MobiKwik, Bank of Baroda (BOB) and Times Internet to sell the beleaguered digital wallet.

It even had signed a non-exclusive term sheet with Paytm while making a bid of $10-15 million for FreeCharge.

The fact that there have been several other buyers shows that Snapdeal has been hawking FreeCharge to others as well.

ET reports that Mumbai-headquartered Axis Bank is currently conducting due diligence on FreeCharge, according to the three sources, who estimate that a potential deal could deliver a payout of $20-40 million to cash-starved Snapdeal.

However, ET says that this couldn’t be independently verified.

Snapdeal acquired FreeCharge in 2015 in a cash-and-stock deal for about $400-450 million, which was then the largest acquisition in the Indian startup space.

Even as Snapdeal awaits its fate in its sale to larger rival Flipkart, it has been looking to sell its payments arm and logistics arm Vulcan Express to bring some relief to the cash-starved ecommerce player.

This comes few days after Jasper board rejected an offer of $800-$900 million for Snapdeal from Flipkart.

At one point, Jasper was eyeing a valuation of close to $1 billion for Free-Charge, as it tried to raise cash for the unit reports ET. However, the situation at Snapdeal and FreeCharge deteriorated as both failed to stay afloat amidst tough competition. With Paytm and MobiKwik expanding aggressively, volume and value of transactions fell sharply at FreeCharge.

The company is estimated to have recorded Rs 300 crore in transaction revenue on about 12 million transactions in April. It had forcasted seven million transactions anf gross merchandise transactions of Rs 20,000 crore by the end of FY17.

Jasper Infotech, Snapdeal’s parents has infused over Rs 440 crore in FreeCharge.