AGS Transact Technologies is exploring the sale of up to 20% of its cash logistics division, Securevalue India Ltd, 26% of its payment services, and its international operations, Novus Technologies Pte. Ltd. This announcement was made to stock exchanges on December 16. In early December, a Delhi-based investor engaged with AGS Transact’s management, which included CFO Saurabh Lal and Vinayak Goyal, head of the payments division. Ravi Goyal, the chairman and managing director, founded AGS in 2002. The investor described the call as “surreal,” noting that the management focused on promoting their payment services despite the investor’s concerns about the company’s liquidity issues, including unpaid salaries and vendor payments. The management insisted they were undertaking a capital-raising initiative to strengthen the balance sheet, with the investor observing that AGS was conducting multiple calls daily with potential investors.
Despite an initial hour-long discussion, the investor felt unconvinced after just 25 minutes and chose not to invest in AGS, which reported revenues of ₹1,508 crore last year. The challenges faced by AGS Transact became evident during an earnings call of CMS Info Systems Ltd, the leading ATM manager in India. Rajiv Kaul, vice-chairman and CEO, mentioned that the ATM operations for several major banks were disrupted in Q3 due to instability at a key industry player. Shortly after, AGS acknowledged to stock exchanges that a cash crunch had led to defaults on bank loans, statutory payments, and employee salaries. On February 4, Crisil and India Ratings downgraded some of AGS’s borrowings to default status. According to insights from seven executives, including three former employees, the core issues plaguing AGS stem from aggressive and ineffective capital allocation strategies that resulted in a significant cash crunch.
