AGS Transact

Technologies
Introduction

 AGS Transact is one of the largest integrated payment solutions

provider in India in terms of providing digital and cash-based
solutions to banks and corporate clients
 Products and services it offers:
o ATM and CRM outsourcing, cash management and digital
payment solutions
 AGS Transact Technologies was incorporated in 2002 as AGS
Infotech Private Limited that started providing banking
automation solutions in India by 2004.
 In 2009, it ventured into ATM outsourcing and managed services
followed by cash management services in 2012 and digital
payments in 2014
Business Model

It broadly has 3 segments of revenue:

 Payment Solutions
 Banking Automation
 Other Automation
Payment Solutions:

ATM/CRM
Management
Cash Payment
solutions
Payment Cash
solutions Management
Digital Business
Business Model
AGS is the second largest company in
India in terms of
• revenue from ATM managed services (15.5%
market share)
• revenue from cash management & number of
ATMs replenished with 26% market share (30%
market share in number of ATMs replenished).
221,066 total POS terminals have been
deployed by AGS. It is one of the
largest deployer of POS terminals at
petroleum outlets in India with 22.3%
market share with OMCs
Along with payment solutions for
merchants, AGS has developed several
VAS like prepaid and loyalty
programs, Cash@POS, payment
gateway and remote payment
solutions, loans against card
receivables
Business Model

In 2015, through cooperation AGS began assembling ATMs

agreements with Diebold and cash dispensers in its
Banking Automation: Nixdorf, AGS began Daman facility. As of FY21 Other Automation:
assembling ATMs and cash AGS has assembled 14,118
dispensers in its Daman facility ATMs.

Automatic paint dispensers

Automating downstream
Cash and card billing hardware capable of delivering right
supply chain of petroleum
and software colour shade supplied to paint
companies
companies
Business Model

 Payment solution has remained the biggest revenue

source while other segments have shrinked over last 3
years
Business Model

Company has also started its digital payment solutions business in International markets of Cambodia,
Sri Lanka and Philippines. This revenue constituted of 4.4%, 4.5% and 3.9% of total revenue in FY21,
FY20, FY19 respectively.
 As Direct benefit transfer remains key agenda of GoI, money in circulation and ATM
withdrawals are expected to increase
Number of beneficiaries went to 970mn in FY21 from 312mn in FY16
Penetration of ATMs in India is one of the lowest

ATM Industry
ATM Industry

On the other hand, use of micro-ATMs in rural areas has

surged due to increasing demand for cash in rural areas, at
a CAGR of around 200% from FY17 to FY20
ATM Industry

ATM Outsourcing models:

Share of number of ATMs managed by banks in the total number of ATMs in India has
decreased from 20.6% in FY12 to 9.2% in FY21
Peers

CMS Infosystems is the biggest player in ATM

outsourcing and cash management business in
India
CMS Infosystems has market share of 41.1%,
based on the total number of outsourced ATMs
in India
Peers
 Client Concentration

Company is highly reliant on few banks for major part of its revenue

Risks

Company relies on Diebold for ATM technology support. Any partnership breakdown will affect revenues
  Regulatory risks

Interchange Fee:

Interchange fee charged on ATMs and MDR are heavily regulated by RBI. Any reduction/removal or failure to increase the fee on regular basis may negatively impact the
company

In July 2021, the RBI allowed an increase in the interchange fee structure for ATM transactions after almost nine years, on account of the increasing cost of ATM deployment
and expenses towards ATM maintenance incurred by the banks and white label ATM operators

Risks RBI had mandated that RuPay debit card transactions be free of charge, leading to loss of revenue from such transactions
Risks

RBI Circular on This required banks to Only 1% of ATMs have Prior to the Also, modification of
Cassette-Swaps in implement usage of implemented the cassette implementation of existing currency note
ATMs: lockable cassettes in a swap feature in their cassette swap, services would require ATM
phased manner, requiring devices, and it is for managing cash modification which
that at least 1/3rd of all anticipated that only replenishment in an would require company
ATMs operated by banks 50% of the ATMs would ATM cost ₹6,500 to to bear substantial costs
be covered every year, in be upgraded to cassette ₹7,500 per month.
order to ensure that all swap by the end of FY22 However, the final cost
ATMs operated by banks depends on the number
may achieve cassette of trips. After the
swap by March 31, 2021. implementation of the
RBI has extended the cassette swap, cash
timeline for replenishment charges
implementation of will increase to ₹12,500
cassette-swap in all to ₹13,000 per ATM per
ATMs until March 31, month
2022
Governance Issue

CBI had alleged that SVIL (wholly owned subsidiary of AGS Transact) entered into a criminal conspiracy with certain officials at specified
banks to dishonestly and fraudulently divert the new currency meant for replenishing ATMs of different banks and exchanged them against
old demonetized currency notes through middlemen and agents

There are outstanding legal proceedings involving its Company, Directors, Subsidiaries and one of Promoters amounting to Rs. 346 cr.

There were serious delays in payment of statutory dues like sales tax, VAT, GST, Provident Fund (PF) and Profession tax etc.
Governance Issue

 IPO issue
AGS Transact IPO involved only OFS of Rs. 680cr
Promoters of AGS Transact

Vineha Enterprises Pvt. Ltd (VEPL) is promoted by Mr. Ravi B. Goyal

who holds 90% of the equity share capital in VEPL.
VEPL is engaged in the business of maintaining, altering, operating
and improving or purchasing and letting on lease or hire all kinds of
machinery, plants and other equipments
 VEPL CCPS Flow:

AGS Ravi
VEPL
Transact Goyal

Money flow:

Ravi Goyal AGS Catalyst TPG &

Vistra ITCL VEPL
(OFS) Transact Trusteeship Oriole

Governance Issue
Thank You