Infibeam Rights Issue has recently drawn the attention of investors as the company—Infibeam Avenues Ltd., a key player in India’s e-commerce and fintech services sector—announced its plan to raise capital through this route. With this strategic move, Infibeam aims to bolster its financial base, expand its technological capabilities, and undertake new initiatives for business growth and development.
In this blog, we will know in detail—what is Infibeam’s Rights Issue, why is it being issued, what are its terms and conditions, what are the opportunities or risks for investors, and how much impact it may have in the future.
Infibeam Avenues Limited: Brief Introduction
Infibeam Avenues Limited is a publicly listed Indian company that operates primarily in the fintech and digital commerce sectors. Established with the vision of enabling digital transformation for businesses of all sizes, the company has evolved into one of India’s foremost providers of digital payment infrastructure, e-commerce platforms, and cloud-based software services.
One of Infibeam’s major strengths lies in its flagship platforms—CCAvenue and BillAvenue:
- CCAvenue is one of India’s largest and most trusted online payment gateway solutions, offering businesses a robust platform to accept payments through credit cards, debit cards, net banking, UPI, wallets, and more.
- BillAvenue, on the other hand, is a BBPS (Bharat Bill Payment System)-compliant platform that facilitates easy and secure bill payments across multiple categories such as electricity, telecom, gas, water, and more.
Together, these platforms serve thousands of merchants, including SMEs, large enterprises, banks, and government institutions, ensuring secure, scalable, and real-time payment solutions.
Infibeam Avenues is also a key technology partner in the Government of India’s “Digital India” initiative, working towards the country’s digital empowerment by enabling cashless transactions and financial inclusion. The company’s technological offerings include AI-driven fraud detection, cloud hosting, API management, and enterprise-grade fintech solutions.
In terms of geographical footprint, Infibeam’s services are not limited to India alone. It has steadily expanded its operations to international markets, particularly in the Middle East (UAE, Saudi Arabia) and Southeast Asia, catering to the growing demand for secure digital payments and e-commerce technologies in emerging economies.
The company’s innovative approach, combined with a robust technological backbone and strategic partnerships, has earned it recognition as one of the leading fintech companies in India. With a commitment to innovation, security, and scalability, Infibeam continues to play a pivotal role in reshaping the digital commerce and payments landscape, both in India and abroad.
What is a Rights Issue?
A Rights Issue is a widely used method of raising capital by a public limited company, in which it offers new shares to its existing shareholders in proportion to their current holdings. These shares are typically offered at a discounted price compared to the prevailing market rate, making it an attractive proposition for current investors.
This mechanism allows companies to raise funds without diluting ownership too drastically or relying on external borrowings.
Here’s how a Rights Issue works:
- ✅ Available only to existing shareholders: The offer is extended exclusively to the company’s current shareholders, giving them the “right” (but not obligation) to purchase additional shares before they are offered to the general public.
- ✅ Fixed price and time window: The new shares are issued at a pre-determined price, often lower than the market value, and shareholders must decide whether to subscribe within a specified period (usually 10–15 days).
- ✅ Transferable rights: If shareholders choose not to subscribe, they may renounce (sell) their rights to others in the open market. This is done via a Rights Entitlement (RE), which is traded on the stock exchange during the issue window.
Why do companies issue Rights Shares?
Companies use Rights Issues for a variety of reasons:
- To strengthen the balance sheet by increasing equity capital
- To fund expansion plans, new projects, or acquisitions
- To reduce debt and improve financial ratios
- To invest in research, technology upgrades, or working capital needs
One of the key advantages of a Rights Issue is that it is a cost-effective way for a company to raise funds:
- ❌ No interest payments: Unlike bank loans or debentures, the capital raised does not require the company to pay interest, reducing long-term financial burden
- ✅ Preserves control: Since shares are offered to existing investors first, it helps retain promoter control and shareholder loyalty
- ✅ Market confidence: It signals that the company wants to grow with the support of its current investors, which often builds market trust
However, there are also potential downsides. If shareholders do not subscribe, and the issue is under-subscribed, it may raise concerns about the company’s financial health. Also, issuing too many new shares can result in equity dilution, affecting the value of existing shares.
In conclusion, a Rights Issue is a strategic move by a company to raise capital while giving priority and benefit to its existing shareholders. When timed and executed well, it can serve as a powerful tool for business growth, financial restructuring, or future-proofing the company.
Infibeam Rights Issue: Key Aspects
Infibeam Avenues Ltd., a leading digital payments and e-commerce infrastructure company, has recently announced a rights issue as part of its capital-raising strategy. This initiative is aimed at enabling existing shareholders to participate in the company’s growth while also helping Infibeam meet its expansion and innovation goals. The rights issue comes with several important terms and conditions that shareholders need to be aware of:
Issue Size
The proposed size of the rights issue is ₹750 crore, a significant capital infusion aimed at supporting the company’s strategic plans. This amount will be raised through the issuance of new equity shares offered exclusively to existing shareholders.
Face Value
Each new equity share being issued in the rights offer has a face value of ₹1 per share. The face value represents the nominal value of the share, as distinct from the issue price or the market value.
Rights Ratio
The rights issue is being offered in the ratio of 1:2, which means that shareholders will be entitled to receive 1 new share for every 2 shares they currently hold. This ratio ensures proportionate allotment, allowing existing investors to maintain their percentage ownership in the company if they choose to fully subscribe.
Issue Price
The issue price has been fixed at ₹12.50 per share, which is significantly lower than the prevailing market price of Infibeam’s shares. This discounted pricing is designed to make the offer attractive and encourage maximum participation from eligible shareholders.
Record Date
To determine eligibility for the rights issue, Infibeam will announce a record date—a specific cut-off date by which investors must hold shares in their demat accounts to qualify for the rights offer. Only those who are shareholders as of this record date will receive the rights entitlements.
Subscription Period
Once the rights issue opens, shareholders will typically have a window of 10 to 15 days to subscribe. During this period, eligible investors can either apply for the rights shares, renounce (sell) their rights entitlements to others, or let the offer lapse.
Mode of Offer
The offer will be made directly to the existing shareholders through a rights letter, which will include details such as the number of shares entitled, application process, payment instructions, and important dates. The entire process is regulated by SEBI and follows a well-structured format to ensure transparency and investor protection.
This rights issue reflects the company’s intent to raise growth capital while offering loyal shareholders a preferential opportunity to invest at a favorable rate.
Objectives and Reasons for the Rights Issue by Infibeam
Infibeam Avenues Limited has announced a rights issue with the primary objective of raising capital to support its strategic growth initiatives and enhance its financial stability. The funds raised through this rights issue will be deployed across multiple focus areas that align with the company’s long-term vision. The key objectives include:
1. Expansion of Payment Gateway Infrastructure
One of the major allocations of the rights issue proceeds is towards upgrading and expanding the company’s payment gateway infrastructure, particularly for its flagship platform, CCAvenue. This involves investing in advanced technologies, improving transaction processing capabilities, increasing scalability, enhancing cybersecurity frameworks, and ensuring compliance with global payment standards. These upgrades aim to provide a faster, more secure, and seamless payment experience to merchants and end-users, thereby strengthening Infibeam’s position in the digital payments space.
2. Geographical Expansion
Infibeam aims to scale its operations by entering new and emerging markets, particularly in regions like the Middle East, Africa, and Southeast Asia. These geographies represent significant untapped potential for digital commerce and payment solutions. The expansion will involve building localized platforms, acquiring licenses, establishing partnerships with local banks and financial institutions, and setting up regional offices. This strategic move is expected to diversify revenue streams, reduce dependence on the domestic market, and increase global market share.
3. Fintech Product Development
To stay ahead in the rapidly evolving fintech industry, Infibeam plans to invest in the development of innovative financial products and services. This includes the creation of cutting-edge APIs for businesses, robust invoicing tools, and flexible BNPL (Buy Now, Pay Later) solutions. These offerings will cater to a broader range of customers, including SMEs, large enterprises, and individual users. By enhancing its fintech suite, Infibeam intends to create a more comprehensive digital ecosystem that supports the entire financial lifecycle of its clients.
4. Strengthening Cash Reserves
A portion of the funds will also be allocated towards bolstering the company’s cash reserves. This will provide a stronger financial cushion to manage future operational and working capital needs, address unforeseen challenges, and ensure smoother day-to-day functioning. Maintaining adequate liquidity is crucial for sustaining business continuity and funding future opportunities without relying excessively on debt.
Strategic Impact
Overall, this rights issue is a forward-looking step that is expected to strengthen Infibeam’s financial structure and enhance its capabilities across various verticals. By reinforcing its technology, expanding its market reach, innovating its product offerings, and maintaining financial flexibility, Infibeam aims to solidify its position as a leading player in the fintech and digital commerce space.
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Benefits for investors
Discounted share price: Rights Issue basically gives an opportunity to buy shares at a price lower than the current market price.
Large share holding: Investors can collect more shares if they want to earn future profits.
Long-term value: If Infibeam succeeds in its planned business expansion, the share price is likely to increase in the future.
Renunciation Facility: If you do not want to take up your rights issue, you can trade it to another investor (via the Rights Entitlement Market).
Potential Risks and Cautions
Dilution of Equity: Shareholders who do not subscribe for new shares may have their shareholding ratio reduced.
Market Volatility: If there is a downturn in the market at the time of the rights issue, the price of the new shares is likely to fall.
Business Risk: If Infibeam does not succeed as per the business plan, it may be difficult to get the expected profit from this new fund.
Liquidity Issues: Rights Entitlement (RE) shares may trade less than ordinary shares, which makes trading difficult at times.
Things to Do for Infibeam Shareholders
With the announcement of Infibeam Avenues Ltd.’s rights issue, existing shareholders have a timely opportunity to reassess their position and take strategic decisions. The rights issue allows current investors to acquire additional shares at a discounted rate, but participation is not automatic—it requires proactive steps. Here are some important actions shareholders should consider:
1. Check Your Demat Account
The first step for every shareholder is to verify whether you have received your Rights Entitlement (RE) in your demat account. The Rights Entitlement is credited based on the number of shares held as of the record date set by the company. It reflects your eligibility to apply for new shares in the specified ratio. You can find these entitlements listed in your demat holdings once they are issued.
2. Make a Subscription Decision
After verifying your RE, you must decide whether to subscribe to the new shares being offered. If you believe in the company’s long-term prospects and find the issue price (₹12.50) attractive compared to the current market value, you may choose to apply for the shares within the subscription window. Missing the deadline will result in the lapse of your entitlements.
3. Consider Renouncement (Selling Your Rights)
If you choose not to participate in the rights issue, you are not obliged to let your rights entitlement go to waste. Instead, you have the option to renounce or sell your rights through the stock exchange to another interested investor. This allows you to monetize your entitlement and potentially earn a premium, depending on demand and market price. Renouncement can also be done partially if you wish to subscribe to only a part of your entitlement.
4. Evaluate the Company’s Future Plans
Before deciding to subscribe or renounce, it’s advisable to carefully study Infibeam’s business strategy, future roadmap, and financial health. Key factors to review include:
- The company’s expansion plans in international markets (Middle East, Africa, Southeast Asia)
- Investments in technology and fintech products
- Cash reserves and capital efficiency
- The strength and track record of the management team
This analysis can help you make an informed decision aligned with your investment goals and risk tolerance.
Potential Long-Term Impact for Shareholders
If Infibeam Avenues Ltd. is able to successfully execute its growth strategy and utilize the capital raised through the rights issue effectively, the initiative could have several positive implications for long-term investors:
✅ Shareholder Value Creation
As the company scales its business operations and enters new markets, the resulting revenue growth and improved margins could lead to higher returns for shareholders. Strategic investments in technology and products can strengthen its competitive position in the fintech ecosystem.
✅ Earnings Per Share (EPS) Growth
While rights issues typically lead to dilution of equity, if the capital is deployed efficiently and leads to higher profits, the EPS may eventually rise, signaling stronger profitability and improving market sentiment.
✅ Potential Appreciation in Stock Price
An effective execution of the expansion plans could result in increased investor confidence, leading to a gradual rise in the stock price. As the market responds positively to new developments and improved financials, long-term holders may benefit from capital appreciation.
✅ Enhanced Investment and Partnership Opportunities
A well-capitalized and growing company is more likely to attract institutional investors, strategic partnerships, and joint ventures. This opens up new channels for future funding, collaborations, and product innovations.
Conclusion
Infibeam Avenues Ltd.’s Rights Issue presents a significant opportunity for existing shareholders to deepen their investment in the company at a preferential price. With an issue price set below the current market value and a strategic plan in place to utilize the raised funds for expanding payment infrastructure, entering new markets, and developing innovative fintech products, the rights issue could prove beneficial for long-term investors who have confidence in the company’s vision.
However, as with any investment decision, it’s essential to approach the offer with a clear understanding of both its potential rewards and inherent risks. While the company’s proposed initiatives may lead to improved profitability, increased market presence, and long-term value creation, success will ultimately depend on the effective execution of these plans.
Investors should take the time to analyze Infibeam’s recent financial performance, review its balance sheet, understand its debt levels and liquidity, and assess the credibility and experience of the management team. Additionally, broader market conditions, regulatory changes, and competitive pressures should also be factored into the decision-making process.
Participating in a rights issue is a strategic move—it not only requires capital but also conviction. Shareholders who believe in Infibeam’s growth trajectory and are aligned with its long-term goals may find this an opportune moment to enhance their stake. On the other hand, cautious investors should not hesitate to consult with a financial advisor or conduct detailed research before making a final decision.