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The Tireless Maverick

EbixCash which has the same philosophy as Ebix in essence, is not in the product business. I created Ebix, and EbixCash as infrastructure businesses, Robin Raina says.

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Robin Raina, the Chairman and CEO of Ebix Inc, who wears the dual hat of founder and promoter of EbixCash, firmly believes that India is ready for a greater presence on the global financial stage and EbixCash, his end-to-end financial services provider, is ideally placed to tap this opportunity. With a slew of high-profile acquisitions, nurturing a discipline of growth and establishing strong governance practices, Raina’s speed of decision making highlights the ambitious goal he has set for himself and his company. The building blocks that include a unified all-inclusive offer and the business model that intuitively houses recurring growth avenues, topped with his overall efforts, place him on the fast track to reaching this mark. Excerpts from an interaction with BW Businessworld’s Group Editorial Director, Noor Fathima Warsia:

As you near the deadline for your proposed IPO, and especially in view of some of the developments in this space recently, there is more attention to profit. EbixCash’s compound annual growth rate (CAGR) over the last three years was 66 per cent and you are on target to clock more than $800 million in revenues and approximately $100 million in EBITDA in 2021. Strictly speaking, EbixCash is profitable. We understand you are planning the IPO proceeds would be in billions. How do you propose to utilise this money?

We are still in the midst of discussions on exactly what we are looking at but it could be one of India’s larger public issues. The key right now is to grow the EbixCash business internationally. I want to create a multinational corporation that is based in India. Today, MNCs come to India, launch their India operations and are placed among the leaders here. I want to launch a brand that can play across the world. I want to make the EbixCash brand a global name to reckon with.
It is my dream to take an Indian MNC to the global stage, and while there are such examples that exist today, they are still too few and far in between for the kind of scale and talent that India houses.

One of the ways to do this is not to just launch the brand in a new international geography. I can guarantee that method will not bring the kind of success I plan for. The way to operate it would be to acquire a local company that operates in the financial space. We would then rebrand it and bring all EbixCash products, inheriting the local relationships of the company we acquire, and therefore create a real winning proposition – one that can cut through the clutter and is future-ready. This works faster and smoother. This is essentially the inorganic part of the growth plan.
We are also keen to branch into other sectors and opportunities that are opening up in India. There is also a plan to bring global products of the parent company Ebix to India. And we intend to do that as well.

What are some of the sectors that you find interesting at the moment?

There are several opportunities in India, given just the headroom for growth in the country. But I will share one example where we already have made some progress. One of our verticals that focuses on the startup and new tech space has just introduced healthcare to it. We have launched EbixCity. This is designed as a chain of smart hospitals that would be technologically savvy irrespective of whether one buys medicines, consults the doctor or the like.

Ebix’ global strength makes me especially bullish about this. Ebix already has tie-ups with 55 medical bodies.

We have strong relationships with nearly every medical school in the US where we sell continuing medical education to doctors, provide backend tech across health and wellness. We are bringing all this to India.

Dr Sameer Kaul has joined us as Managing Director for EbixCity. He was the Head of Oncology at Apollo Hospitals. We teamed him up with all Ebix healthcare technologies to create these smart hospitals which will be present in multiple cities in India.

Acquisitions do appear to be a crucial part of your growth strategy. More than 25 are under the belt including one right in the middle of the pandemic. How do you ensure that the culture of growth that you have built or the EbixCash spirit so to say from an India market perspective, is retained every time you add a company?
The highlight of our last three years CAGR growth rate of 66 per cent is that its primarily organic. We made two small acquisitions in the last three years accounting for $15 million in annual revenues and yet we grew our revenue at such a brisk pace organically. We achieved this by being disciplined, planned and yet clinical. While making acquisitions, companies have to follow a very disciplined approach from Day One. In our case, as soon as the acquisition is done, we centralise certain functions bringing a change in the way the business operates. An example is the acquisition we made during the pandemic, which was AssureEdge, that was then rebranded to EbixCash Global BPO Services.

In this case, we centralised functions such as HR, finance, marketing, admin, IT, software development and so on. Each of these has a direct impact and also play a vital role in bringing the company into our fold. When you centralise finance, for example, you streamline many processes. Or HR for that matter. At the same time, you leave aside some operations such as sales and begin growing it. Once that is done, it enforces discipline. This allows us to bring in the EbixCash process of doing things from the word go and ensures that the culture and ways of working are aligned to the parent brand.

What also helps us specifically is that we have always been a paperless company and it is hence comparatively simpler to instil a system of checks and balances.

When we acquired AssureEdge, it was an 800-people strong company. Right now, the headcount is close to 3,000 people. We grew the business organically in spite of Covid-19. In fact, pre-Covid, the employee count for EbixCash itself was 7,250 people. Right now, we are nearing 11,000 people, which means while many of our businesses such as travel, forex, remittance, consulting etc were shrinking, we still grew other parts of our business, registering overall growth.

Are you attributing this growth to the diversification that exists within your business?

Product and services diversity in our overall offer and our customer’s dependence on the many different products we offer most certainly is the key reason behind our growth. Also, it makes our business a recurring one. This is to say that when we work with a company, as they grow, we grow.

Let’s take the example of remittance. In the pre-Covid period, we were transacting around $6.5 billion of remittance. We work with Western Union, where we have 91 per cent of the market share and we are exclusive to MoneyGram. If their business gets hurts, we will be impacted as well.
Naturally, these players will make immense efforts to grow their business and we will grow with them as they do that. We hence have recurring ways of growing our business. Apart from our people, our strength also lies is in the more than three lakh franchises sitting in remote locations across India, the agents who represent these and are constantly looking at growing their business. In our business model, when they sell any of our products, we pass about 30-40 per cent back to them. The beauty of this model is that these are our remote salespeople.
We don’t have to put too many foot soldiers in these markets because we are already well represented in a mutually growing relationship.

Let’s discuss the central point of your business model and what you have often described as the power of convergence. What were some of the early thoughts that drove you towards this?
I would say the entire play of EbixCash is around the theme of convergence. It is around building financial hubs. Let me again explain with an example. When it comes to travel, you choose your airline but when it comes to the airport, you really don’t have options — you just have to go to the airport. The airport is the infrastructure and the airline is the product.

EbixCash, which has the same philosophy as Ebix in essence, is not in the product business. I created Ebix, and EbixCash as an infrastructure business.

This is in itself is a paradigm shift in how many markets and businesses operate. When I launched Ebix in 2001, I would see it as a software as a service business. What does convergence mean in this context? It is a handshake between all functionalities that exist in a business operation.
In EbixCash, the  convergence is focussed on the finance sector. In the US, all convergence whether it was business to consumer (B2C) or business to business (B2B) came into play because prior to that there were many ‘islands’ that existed in insurance. We drove convergence between frontend and backend processes.

When I was looking at beginning the business in India, the prominent conversations of the time were e-wallets, digitisation and so on. It occurred to me then that people were speaking in silos.
People were making payments but what were they paying for? Travel, utilities and the like. If you looked at all these different pieces, I firmly thought that they can be converged.

Then on the other side, there was travel that by itself was a large industry, which in pre-Covid times was among the fastest-growing industry. Even in this, there were too many silos — commute to the airport, airline, health insurance, travel insurance, forex, hotels and so on.
In this as well, the big question was that what if there was one player that connected all the dots and assimilated all this under the same family.

But to do all this, you need the backend technology, you need the fintech play. All of this lines up under this umbrella, and then I knew this would be the unifier.

So you essentially looked at connecting the B2C side with the B2B side?

In a way, yes, but that is not all. On one side, our business sits on the distribution side providing B2B and B2C products and services but on the other side, we sit at the back and power the tech of a bank, or an insurance company or a travel portal. If you need a loan or if you want to manage wealth, we will power the tech of the bank to provide it. But if we are going to do all this, these companies also need people for fulfilment. Hence, I started the business process outsourcing (BPO) vertical, which later evolved to be a startup and new tech vertical. The entire concept is based on creating a converged entity.

But the structure in India is so different. Why did you think it would succeed here?
Because we did that with Ebix globally. I made it the biggest player in the world in insurance. We process more than $100 billion in premiums on my insurance platform and exchanges. For me, therefore, this was a natural play. This is the essence of EbixCash. When you can understand this, the rest of it follows. Indian financial and insurance industries are no different from the US or European ones.

What are some of your specific plans on each of the EbixCash verticals for 2022?
Across all our verticals, the first and foremost goal would be to get back to the pre-Covid levels. If you take forex and travel alone, we took a $200 million revenue hit. The EBITDA associated with these two verticals was $50 million. We need to recover this. As Covid makes way for the next normal, we being a dominant player in many markets are bound to benefit.

Even during the pandemic, we became exclusive to Ayodhya for their forex, we worked with Tirupathi, Golden Temple, we signed up names like Capgemini, Cognizant, Tata, Citibank, Kotak Mahindra Bank and many more. As airports open, the forex business will keep growing, and as travel resumes and corporate travel picks up, many of our businesses will improve. We could also make acquisitions in each of our verticals.

It was interesting to see that you follow a double audit process. What was the reason behind this?
When a company announces its numbers, people tend to question it. We want to operate at the highest level of governance. This was why we decided to have two big auditors who not only independently audit but also jointly sign it. It takes away even the slightest doubt.

My final question is about India per se. From where you see it, and given that you have insights into global businesses and market movements, what are your thoughts on India’s growth in the current and post-pandemic scenario?
I am very bullish about India. I said this last year, at the height of the pandemic no less, that India would be at 11 per cent growth and that is where we would head in my view. With China struggling on account of its regulatory issues, international money is gravitating towards India. We will see sustained growth and the bull-run in India will continue for the next five years.

There is infrastructure development. We speak about the young demography but apart from such factors, India has achieved much under the leadership of Prime Minister Modi with initiatives such as RuPay and UPI.

These sound very simple but even globally such conveniences are not available. It is simply amazing. We are headed in the right direction. I feel the government will need to rationalise things such as IPOs, taxes and encourage internal IP development and incentivise such efforts. If this can be done, it would truly set India on a high-growth mode.  

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Robin Raina Ebix EbixCash Magazine 28 Dec 2021