InfiBeam Avenues, India's PayPal?
Infibeam Avenues is a small-cap e-commerce company that specializes in electronic payments, online retail and large-scale data processing. The company is relatively new having been started in 2007 by its current CEO Vishal Mehta. The company's subsidiary CC Avenue is primarily composed in the payment processing and online payments segment. It is a form of data processing for any type of online transaction and is directed towards the B2C markets, their clients currently include TAJ hotels, Damac Properties, Amway, Paytm among many other well known brands.
The company is also stepping into the data-center market in India, attempting to host numerous remote servers, as a service. This is primarily directed towards banks, educational and government firms. Finally the third branch of this company is involved in the e-commerce infrastructure business. Infibeams hosts a service call BuildABazaar, which, like Shopify, allows its clients to easily create their own online marketplace from scratch, with features like inventory and logistic management, process online payments and even conduct a digital marketing through the service. Furthermore, the company hosts two other platforms Bill Avenue and Res Avenue, that specialize in the subscription based billing (electricity, water, phone etc) billing sector, and in the e-commerce infrastructure specialized for the hospitality sector respectively.
Looking at InfiBeam's balance sheet it looks clear that the company does not seem to have a large problem in dealing with its financing, as the liabilities are extremely low. Additionally, looking at the growing value of both current and non-current assets the the book value of
Rs 40 definitely holds strong, showing that the equity is almost equivalent to the company's current market price.
Looking at the income statement of this company it is clear that there is a steady growth in both profits and revenues. Furthermore, the company has gone from loss making to significantly profit making in the last 5 years. Although revenues have fallen significantly in the last quarters, the profit growth has been maintained, probably signalling a fall in market share due to competition and government regulations, but an increase in profit margins. Furthermore, rising employee costs and and operating expenses could represent an internal growth in the software company's infrastructure.
In terms of the firm's shareholding, there is a mere 8.5% in the hands of institutions and mutual funds. This means that institutional investors are still not confident on this stock. Hence, proving that like most young I.T companies, InfiBeam Avenues is most definitely a risky investment.
To conclude, it is evident that an investment in Infibeam Avenues is a risky investment due to the youth of this company. However, in my opinion some of this risk is offset by Infibeam's debt free balance sheet. If you are willing to take this risk, I believe that this company's products and services can drive for fantastic growth over the future, hence it would a be a great buy in dips.