Nepal’s elite business house, Khetan Group, is set to acquire a 20% share in Fonepay for Rs 140 crore. According to reports, both entities have made final arrangements for the remarkable deal, and the only thing that’s remaining is approval from Nepal Rastra Bank (NRB). That is expected soon as well.
The move marks Khetan Group’s entry into the IT sector. The conglomerate has a wide presence in Nepal’s banking, real estate, food and beverages, and other sectors.
Fonepay is Nepal’s most dominant payment system operator (PSO) with 80% market share. It operates mainly via digital wallets and mobile banking apps. Users can pay for their goods and service purchases via a Fonepay QR scan.
Khetan Group enters Fonepay
With Khetan Group investing in Fonepay, the latter’s valuation has reached Rs 7 billion. Both Khetan and F1Soft (Fonepay’s parent company) have reached a preliminary agreement for the deal. It’s been reported that both entities have agreed to leave 5% of the share price for negotiation. Every aspect of the deal now awaits NRB’s approval to get through.
In which, by mutual agreement, up to 5 percent of the share price has been left for negotiation and has been sent to the National Bank for initial approval.
The regulatory bank will give a theoretical nod to the deal after conducting a ‘fit and proper test’. It’s required because, as a financial service provider, Fonepay is licensed by the NRB (in 2077) to operate. The company’s head office is located in Pulchowk, Lalitpur.
Fonepay not only provides payment services to Nepali users and merchants, but also provides cross-border payment services for Nepali and Indian citizens.
In FY 2081/82, the company completed inter-bank transactions of over Rs 28.34 kharba. Likewise, transactions of Rs 7.66 kharba were made via Fonepay QR. Khetan’s arrival with a significant investment would help lift the company further and continue to cement its relevancy in Nepal’s digital payment landscape.
Fonepay has 19 commercial banks, 14 development banks, 14 finance companies, 9 digital wallets, and 1 microfinance institution in its digital payment network.