Network International has gained a foothold in India by taking control of TimesofMoney, a digital payment firm, in a move that it hopes will help it to earn a slice of the lucrative remittances market.
The UAE-based payments company announced yesterday it had acquired a majority stake in TimesofMoney, a unit of the publishing giant Times Group. The conglomerate is most well-known for the Times of India newspaper, the country's most widely-read English language daily.
The acquisition would help Network International open an online remittance service to capture flows between India and the Arabian Gulf, said Bhairav Trivedi, the company's chief executive.
"This transaction further enables us to offer a comprehensive range of new remittance services in the subcontinent, thereby meeting the growing needs of our customers who are looking to remit money abroad through an efficient, reliable and innovative platform," he said.
Network International is 51 per cent owned by Emirates NBD, while Abraaj Capital, a private equity firm, owns the remainder of its stock.
No financial details of the transaction were provided.
Network International said the value of remittances between GCC states and India was about US$25 billion (Dh91.82bn) every year.
Bennett, Coleman & Co, Times Group's flagship publishing arm, will remain as a minority shareholder and continue to have representation on the TimesofMoney board.
The effort by banks to secure a slice of the remittance industry has intensified during the past year, with Dubai's Mashreq offering remittance products with free insurance against the death or injury of the sender this month.
Competition between payments companies has resulted in the UAE becoming one of the cheapest countries in the world from which to remit funds to India. But the cost has risen during the year to date, according to data from the World Bank.
Sending $200 to India from the Emirates cost on average $10.04 during the third quarter of this year compared to $9.71 at the start of the year, the data showed.
That compares with $4.92 for remittances to Pakistan, one of the cheapest remittance corridors in the world.
The partnership between the two companies would help TimesofMoney develop a business that has increased "exponentially" during the past five years, said Avijit Nanda, the TimesofMoney chief executive. "We are confident that our respective complementary strengths will not only allow us to reach new markets but will also help our existing retail and institutional customers with enhanced offerings," he added.
FT Advisors, AZB & Partners and Deloitte advised Network International on the transaction, while Nishith Desai Associates, UBS and PricewaterhouseCoopers worked as advisers on the other side of the deal.