AGS Transact Technologies, a debt-ridden ATM player, is in talks to sell a majority stake in its digital payment subsidiary, India Transact Services (ITSL), to the Patanjali group to raise funds. ITSL is engaged in payment transactions, merchant acquisition, and payment processing, and has around 2.48 lakh point of sale terminals and a gross transaction value of ₹21,788 lakh crore in the previous fiscal year. The sale would enable Patanjali to expand its reach to various merchant outlets across the country. Additionally, AGS Transact is also in talks to sell its “ATM Switch” business vertical to India 1 Payments, a white-label ATM operator.
The company’s rating was downgraded to junk by CRISIL Ratings in February due to delays in paying loan obligations. According to CRISIL, AGS Transact’s liquidity has deteriorated sharply over the past few months, with the company unable to meet service level agreements (SLAs) with its customers, leading to delayed collections from receivables. As a result, banks have moved their business contracts to other players like Hitachi and CMS.
The advance talks between AGS Transact and Patanjali involve Patanjali paying off ITSL’s debt of ₹30 crore with a small premium to the promoter. Another source claims that there have been talks with multiple interested bidders, with a final announcement expected soon from AGS Transact. The sale would help AGS Transact raise funds to ease its financial burden.
In related news, AGS Transact had launched a co-branded prepaid card with ITSL in 2024, which could further enhance Patanjali’s offerings. AGS Transact, Patanjali, and India 1 Payments did not respond to queries by the publication until the article was published.