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We were eyeing Yatra for quite some time: Robin Raina

"We also want to enter the visa market and provide visa services, like VSF does," he told Moneycontrol.

July 18, 2019 / 05:18 PM IST

In an exclusive interaction with Moneycontrol, Ebix chief Robin Raina tells what prompted him to acquire Yatra and what are his expectations from this deal.

Edited excerpts:

Q. What were the main factors behind your interest in Yatra?

A: We were keeping an eye on Yatra for quite some time. It had a great brand name but they were not doing fiscally well. One man's distress is another man's opportunity and We formally approached Yatra in March and did due diligence. Yatra was receptive and their board also followed the principles and rules that a public company should follow.

Q. Your company's deal with Yatra follows the MakeMyTrip-GoIbibo deal. Where do yo see the travel market heading? Also, who do you see as your main competitor?


A: India is one of the largest travel markets in the world. Indians are becoming the biggest spenders in the world. Indians are creating a lot of wealth. There is space for everybody and the key is which player ticks the boxes and create an end-to-end solution. MakeMyTrip is a big player and has done well. We have a different approach and we are more focused on profitability than  growth. We also have an international gameplan whereas most of these players are focused on the Indian market. We are already No 1 in Phillippines, No 3 in Indonesia and plan to expand to Latin America,  Europe and USA. We have taken a very end-to-end position. We also want to enter the visa market and provide visa services, like VSF does.

Q. What is the plan on the branding front now?

A: We like the Yatra name and may change it to Ebix-Yatra. Via will remain a B2B brand and Mercury will become our luxury and events travel brand.

Also Read: Ebix signs agreement to acquire Yatra

Q. The deal size is relatively smaller given the debt structure. How much investment are you planning to put into the merged entity?

A: If you see the difference between $336 million and $239 million, that is due to things like earnout, implied premium to the Ebix stock of 20 percent bankers fees, legal fees. Also, our offer said they need to leave $25 million cash. Having said that, we are in the business of growth and whatever it takes, we will put into it. We don't have a specific amount fixed for it. Our goal is to grow the business organically.

Q. Can you explain in detail the $25 million part and is there a secondary component in the deal?

A: No, there is no secondary component. The $25 million amount is what we had said in our original offer in April. We had said our original offer is $336 milion but told them to leave $25 million. It was anyways $311 million and then you have to subtract the premium that we were offering to our stock of 20 percent. So you subtract that and you will see that premium itself was a 20 percent premium on the total value. When you do the math and rest is the legal fees, finance fees, ATB earnout. So, we are buying a completely debt-free company.

Q. When we spoke last time, you said Ebix is an end-to-end financial services company for the end consumer. Can you elaborate on the plans and products you are planning to launch?

A: Whatever market/business we have entered till now, we have become the dominant leader. Travel was the only area where we were not the leader. With this (deal), we will become the leader. We handle $5 billion of foreign exchange in India alone and we have presence in 25 international airports. We own 70 percent of India's cash to cash foreign exchange business. We also bring $6.5 billion of inward remittance. We also provide technology to State Bank of India and have a team of 200 people looking into it and 30 banks use our services for lending technology. Around 70 percent of our revenue from wealth management comes from Europe and Middle East. In the area of e-learning, we have created a very efficient Ebix Smartclass unit. We have also acquired two startups. If you exclude travel, we handle around $15 billion of gross merchandise value under EbixCash portfolio in India.
Priyanka Sahay
first published: Jul 17, 2019 09:24 pm

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