Cash here is becoming like the orange-bellied parrot – highly endangered – despite the folding stuff continuing to be the preferred transactional means of many tradies and their customers.

From this month, Macquarie Bank went completely cashless while Linfox Group’s cash-lugging Armaguard is struggling.

But in India, cash rules the Raj, for cultural and practical reasons.

The opportunity is not lost on the ASX listed Findi (ASX:FND), one of India’s biggest ATM operators with wider ambitions to become a fully-fledged digital bank within three years.

“There are 350 million Indians who don’t have bank accounts and another 350 million people with bank accounts who don’t use them regularly,” says Findi chairman Nicholas Smedley. “So half of the population in effect is unbanked.”

Smedley adds that with only 80 million Indians in the tax system, the Reserve Bank of India (RBI) is using ATMs to broaden the tax base (ATM customers need a bank account and they thus become traceable).

Findi currently operates 20,000 ATMs in a fragmented market of about 250,000 machines (an 8 per cent share).

Of these, 8000 ATMs are Findi-owned and deployed on behalf of banks including the country’s biggest, the State Bank of India (SBI) and the Central Bank of India. A further 12,500 are supplied to BTI, the India’s biggest white-label ATM operator (like the ones in convenience stores here).

“We want that number to increase to 80,000 by this time next year, via organic deployment of new ATMs as well as acquisitions,” Smedley says.

Last month the RBI granted provisional authorisation to Findi’s Indian subsidiary, Transaction Solutions International, to own and operate white label ATMs in its own right.

This will enable almost 4000 ATMs deployed with the SBI to be replaced with Findi-branded machines.

Smedley says securing the licence is a key pillar in Findi’s quest to become a full transaction bank and to participate in long-expected industry consolidation.

Findi’s full-year numbers are due this month, but in the first half to September 2023 the company reported a $773,000 net profit, up 350 per cent, on revenue of $31.7 million (up 30 per cent).

About 90 per cent of the turnover was derived from a government determined ATM (interchange) fee of 17 rupees – 35 cents – which adds up given there are one billion transactions across the network annually.

The country’s ATM lobby group is pushing for the rate to be increased to 23 rupees, with the negotiated rate likely to fall somewhat south of that.

Findi’s smaller business line, Findipay, is a digitally-assisted e-commerce network of 20,000 merchant terminals. All up, Findi has about 45,000 service locations across all of its products.

The $160 million market cap Findi is listed on the ASX because it was founded here, but with no local activities a secondary listing on the BSE (formerly Bombay Stock Exchange) beckons.

Smedley notes Indian-listed comparable companies trade on much higher earnings multiples than Findi (despite Findi’s share price almost quadrupling over the last year).

Findi is a rare ASX pure-play exposure to what’s now the world’s most populous nation.

Blue chips including BHP, ANZ Bank and Wesfarmers have a presence there, but nothing that would move the dial.

Other companies with Indian ambitions include wound care house Polynovo (ASX:PNV), which in March won Indian government assent for its dermal scaffold to be made available on a central hospital procurement platform.

Medtech minnow Memphasys (ASX:MEM) strives to make the country even more populous with its sperm-selection device for the ironically popular IVF industry.

Betashares’ India Quality ETF (ASX:IIND) offers an all-in-one exposure to some of India’s greatest domestic companies, including Infosys, Tata Consulting Services, Coal India and Kotak Mahindra Bank.

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