Insurance data company Ebix (NASDAQ:EBIX) has been evolving and increasingly, Ebix stock has started a slow march up. It’s a pleasant surprise as I first ran into this company almost a decade ago, when I was still at ZDNet.
At the time they were buying a health care information company called A.D.A.M., for $66 million. I recently found my story on the Ebix Web site.
Since then, Ebix has ridden a lot of ups and downs. The stock traded as low as $9.26 per share in 2012. But it found its footing and rose to as much as $83 per share last year. It opens for trade March 12 at about $51.30 per share.
Ebix is worth looking at again because it’s no longer the company it was. It’s a broader company, with interests in insurance as well as health care. It is also much more focused on India, which is where CEO Robin Raina hails from.
That’s the real story.
Payment Innovation and Ebix Stock
Transaction processing has long been an American lake, dominated by Visa (NYSE:V), MasterCard (NYSE:MA), and their networks of processing partners, many of which have operations in Atlanta, where Ebix is based in the suburban town of John’s Creek.
But India’s government recently pushed through a powerful transaction processing innovation, a Unified Payments Interface that has made India the innovation center of the global payments industry.
Not only did India create a low-cost payment infrastructure, it also pushed people to use it, banning high-denomination bills to fight tax evasion and pushing commerce into the new system.
The rise of low-cost digital payments has boosted Alibaba Group Holding (NASDAQ:BABA), Tencent Holding (OTCMKTS:TCEHY) and even American companies like Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB), all of which have taken advantage of the new infrastructure, at the expense of banks and traditional processors.
This is what Ebix is tapping into.
India Moves and Ebix Stock
Ebix’ market cap is barely $1.5 billion, but U.S. dollars go a long way in India.
The company has made 11 deals in India in just 14 months, all in various areas of ecommerce infrastructure. The purchases cost about $500 million. Raina wants to invest another $500 million this year, and take what had been the remittance system ItzCash, now renamed EbixCash, public.
Raina’s latest deal, announced March 11, is a proposal to buy Yatra Online (NASDAQ:YTRA), the ticketing firm behind Yatra.com, an Indian rival to Expedia (NASDAQ:EXPE) or Booking Holdings (NASDAQ:BKNG).
The company had already bought 80% of Zillious, another online travel booker. The plan is to make Yatra part of EbixCash, then take the whole thing public.
On March 1, Ebix announced its revenue for 2018 was up 37% to $497.8 million and a few days later it announced plans to be at a run rate of $750 million by the end of this year. The country’s footprint in India is large enough for it to sponsor one of the country’s leading business conferences and host the country’s Prime Minister, Narendra Modi.
The Bottom Line on Ebix Stock
India is one of the world’s fastest growing economies, and electronic transactions, thanks to government help, are one of the fastest-growing parts of that economy.
Ebix has transformed itself, in barely a year, from a small American company focused on health payments into a real competitor inside this enormous opportunity.
It has taken real risks to do this, with long-term debt of $274 million and a revolving line of credit worth another $424 million. Its operating cash flow, $89.8 million last year, can hardly keep up.
Ebix is all-in on India and has made itself a speculative stock in the process. But speculating on Ebix stock is worthwhile, and if you want that kind of international exposure, here it is.
Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article.
