Prosus scraps $4.7bn deal for Indian payments group BillDesk

India’s biggest payments deal has collapsed after South Africa’s Naspers scrapped a $4.7bn agreement to buy BillDesk, the country’s oldest payment gateway

Prosus, the international investment arm of Naspers, said on Monday that it was terminating a year-old agreement to merge Mumbai-based BillDesk with its own PayU payment business after “certain conditions” had not been met before the end of September.

The deal’s collapse is a blow to India’s fintech and payments industry, which has attracted foreign investors betting that consumers’ use of online payments will surge in coming years. The Prosus deal valued BillDesk, which has a major share in billing and processing payments for Indian government portals, at almost 20 times its revenues.

Prosus had received approval from India’s competition commission last month for the deal, which was announced in August last year, but the merger also required approval from the Reserve Bank of India. The RBI did not immediately respond to a request for comment.

The Prosus board last week turned down a request by BillDesk to extend the deadline in order to meet conditions, people familiar with the matter said. BillDesk could not immediately be reached with a request for comment.

The people added that Prosus was considered unlikely to return to the deal, which could have created one of the world’s biggest online payment providers with about $147bn in annual payments volume.

Its unravelling comes as many Indian tech unicorns such as Paytm and Zomato, whose valuations soared during the era of cheap money, have fared poorly since listing last autumn.

Prosus, which since 2005 has invested $6bn in Indian companies, including Swiggy, India’s biggest food delivery player, said that it “remains committed to the Indian market and growing its existing businesses within the region”.

The South African group is also the largest shareholder in China’s Tencent, with a stake of just under 29 per cent. The company has been selling parts of the stake this year to finance a stock buyback.

It is not the first time that Prosus has walked away from big deals. In 2020, it was beaten to acquiring the UK’s Just Eat food delivery pioneer in a £5.5bn all-cash deal after Takeaway made a higher offer.