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Infibeam shares plunge more than 70% amid WhatsApp rumours
Infibeam | Photo Credit: Shah Junaid/VCCircle

The share price of Infibeam Avenues Ltd, the operator of India’s only listed e-commerce firm Infibeam and the parent of payment gateway company CCAvenue, fell more than 70% on Friday.

The reasons for the collapse were not immediately clear but it appears that rumours may have triggered the slide.

Infibeam shares were trading at Rs 180.35 apiece when the opening bell rang on Friday. It sharply declined as the day progressed before closing at Rs 57.90 on the NSE.

In the process, Infibeam lost its status as a unicorn - a company valued at more than $1 billion. The Ahmedabad-headquartered company is now valued at Rs 3,900 crore ($541.67 million).

According to a report by Bloomberg, a message attributed to brokerage firm Equirus Securities had been doing the rounds on WhatsApp claiming that Infibeam had given interest-free and unsecured loans to a unit with negative net assets. TechCircle has not independently accessed this message.

However, Infibeam issued a stock-exchange disclosure a couple of hours after closing bell in which it addressed this matter.

The firm said it had given interest-free unsecured loans to wholly-owned subsidiary NSI lnfinium Global Pvt. Ltd, which owns and operates flagship portal www.infibeam.com

It acknowledged that NSI’s net worth has been negative but said it had obtained legal opinion that the loans do not fall foul of the Companies Act.

Infibeam gave unsecured, interest-free loans of Rs 135 crore ($18.6 million) to related firms for business operations as of March 31, according to the company’s annual report.

Infibeam also addressed a report on The Economic Times’ website on Friday which said there had been a rumour about the company classifying one of its co-founders as a non-promoter. 

"There has been no change in the promoters from the list of promoters identified and disclosed by the company in the offer document for its Initial Public Offering," Infibeam said.

Earlier in the day, as the stock went into freefall, Infibeam put out a statement during trading hours saying that it had already declared all material information which could have bearing on its operations and performance.

“There is no pending information or announcement from the company which may have a bearing on the price behaviour in the scrip,” it said.

Specific email queries sent to Infibeam and Equirus did not elicit a response till the time of publishing this report. A person familiar with the development told TechCircle that Equirus doesn’t cover Infibeam’s stock.

The company’s annual general meeting is slated to take place on Saturday.

Infibeam was founded in 2010 by former Amazon executive Vishal Mehta and operates a horizontal e-commerce platform. It was one of the youngest companies to list on the National Stock Exchange when it floated its initial public offering in March 2016.

In April, Infibeam said it would acquire Unicommerce, the technology solutions arm of Snapdeal.

In February last year, Infibeam had acquired Avenues India, which runs payment gateway CC Avenue, for around Rs 2,000 crore.

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