Mumbai: Manipal Technologies (MTL), the largest manufacturer of banking and smart cards in India, plans to bring in a financial partner into the eight-decade-old, Pai family-owned business at a valuation of around ₹4,000-4,200 crore ($500 million), multiple people aware of the initiative told ET.
The Pai family is seeking to raise about ₹1,000 crore ($100-125 million) for the Manipal Group business that began as the back office of Syndicate Bank in 1941.
Initially, this proposed transaction will give an exit to a few minority shareholders – family members who own about 20% stake in the parent company MTL. Besides the secondary stake sale, about 5-10% primary shareholding will be sold to meet expansion plans, sources aware of the initiative told ET.
Investment bank Rothschild is mandated to run the stake sale process. A few private equity funds have been sounded out, too, said sources.
MTL is in the business of printing, facilitating secure transactions, marketing, branding and communication for consumer-oriented industries such as retail banking, telecom, education, publishing, consumer goods and retail, financial services, aviation and transport. It also handles government business. MTL has an experience of more than two decades in the security data printing business.
MTL’s operations are led by Gautham Pai, its executive chairman. He was formally inducted into the family business in 1997. Gautham Pai is the son of Satish Pai, first cousin to Ramdas Pai. Ramdas’ son Ranjan Pai is the group chairman of Manipal Hospitals.
When contacted, Gautham Pai declined to comment.
MTL posted a consolidated revenue of Rs 1,900 crore in FY23 with the trading and manufacturing of cards contributing a major part to the total sales. Consolidated ebitda, or operating, margins increased to approximately 12% in FY23 to Rs 230 crore, led by an improvement in the ebitda margins of MCT Cards and MBS, said a recent India Ratings Research report.
Visa, MasterCard, RuPay
MTL’s subsidiary, MCT Cards & Technology, makes up the bulk of MTL’s revenue. MCT’s manufacturing and personalisation facility is certified by Visa, MasterCard, RuPay, Diners, Smart Card Operating System for Transport Application (SCOSTA), and Payment Card Industry Data Security Standard (PCI DSS).
MTL’s revenue profile on a consolidated basis is diversified with secured printing and stationery business accounting for 46%, followed by plastic and metal cards at 34%, and financial inclusion at 11%. The rest comes from the packaging business segment.
Its top 10 clients accounted for 50% of the total revenues in FY22, said a report from Infomerics Ratings.
Key subsidiaries
Major subsidiaries of MTL are Manipal Business Solutions, MCT Cards & Technology, Manipal Logistics, Manipal Digital Holdings GmBH and Manipal Holding Limited UAE.
