Ibibo in talks to acquire online bus ticket portal redBus

MIH, the investment arm of South-Africa based Naspers Group is in talks to acquire Indian online bus ticketing firm redBus in a deal which values the company at Rs 800 crore, according to buzz in the market. Naspers owns travel portal company Ibibo Group.

Phanindra Sama, Sudhakar Pasupunuri and Charan Padmaraju co-founded redBus in 2006. Helion Venture Partners, SeedFund and Inventus Capital are existing investors in redBus.

Kanwaljit Singh, Senior Managing Director at Helion Venture Partners neither denied nor confirmed the deal. “We don’t want to comment on speculation. I can’t say anything now about this,” he said. Phanindra Sama, Co-founder of redBus did not respond to repeated phone calls and text messages sent.

Analysts and investors in the online space say the deal, if struck, will be good news for the industry. “It is good that the industry is showing good exit paths for online companies, which has not been so favourable currently,” said Sanjeev Bikhchandani, Founder and Executive Vice-Chairman, InfoEdge India Ltd.

RedBus covers more than 10,000 bus routes in India and the tickets are available at more than 30,000 ticket outlets. Sameer Guglani, Founder, The Morpheus, said redBus is a great brand, but the returns in the online business are very slow.

“In India the companies take at least 10 years to grow organically. So exits like this will boost any company’s returns and MIH as a partner for RedBus will work as a strong muscle to grow them, Guglani said. He said redBus’s valuation is bound to go high.

“The valuations matter on what the company has done as a leader. So clearly, if Ibibo wants to buy them, they will have to shell out a lot of money,” said an analyst from Ventureast.

Source: http://www.firstpost.com/business/ibibo-in-talks-to-acquire-online-bus-ticket-portal-redbus-874275.html