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Axis Bank ends leadership uncertainty, board approves Shikha Sharma's re-appointment as MD and CEO

Bank announces Rs 385 crore all-cash buyout of FreeCharge from Snapdeal

Salil Panchal
Published: Jul 27, 2017 05:08:18 PM IST
Updated: Jul 27, 2017 09:22:21 PM IST

Axis Bank ends leadership uncertainty, board approves Shikha Sharma's re-appointment as MD and CEO
Shikha Sharma, Managing Director and CEO, Axis Bank
Image: Vikas Khot

Axis Bank has ended weeks of speculation surrounding the future of its leader, Shikha Sharma, at the bank. Just a few hours after she announced on Thursday the bank’s acquisition of payments wallet FreeCharge from ecommerce giant Snapdeal, a statement to the stock exchanges said that the board had approved Sharma’s reappointment as managing director and chief executive of the bank.

“The board of directors has approved the reappointment of Shikha Sharma as managing director and CEO of the bank for a period of three years, with effect from June 1, 2018,” a filing to the stock exchanges said. The term of 58-year-old Sharma was set to end in June next year.

There has been much media speculation in recent weeks about Sharma’s future with the bank, given that the executive search firm Egon Zehnder had been selected by the Axis Bank board to identify a new CEO.

But prior to this statement to the stock exchanges, Sharma said little about her future. “I think that the Axis Bank statement has clarified that the appointment of a search firm was in the interest of best governance, argued I would have done nine years with the bank on June 2018.

It does not preclude whether I will do another term or not; you should wait to hear from the board about that at the appropriate time. All I can say is that I am deeply excited about the opportunities in the financial services space….we have a strong brand. My job is to focus on working with the team in doing the best we can for our customers.”

Axis Bank explained in detail about its all-cash acquisition of FreeCharge from Snapdeal. “This acquisition leapfrogs Axis Bank’s digital journey by multiple years. What we are trying to create is the agility of a fintech company, which is backed by the strength of a bank. For the customer this means, getting the appeal of a payment bank, backed by the trust of a bank,” Axis Bank’s chief financial officer Jairam Sridharan said.

The main factor driving this acquisition is to acquire FreeCharge’s younger customer base. With this, Axis gets access to 5.2 crore customers of FreeCharge, along with niche and patented technology. Over 200 of FreeCharge’s staff will be absorbed by Axis Bank, officials said. 85 percent of FreeCharge’s users are mobile-only.

Founded in 2010 by entrepreneur Kunal Shah, FreeCharge started as a recharge deal coupons platform and then transformed into a mobile wallet.

While discussing how Axis Bank’s digital approach is different from that of a fintech company, , Sharma said: “We first think about products and then see how we can make it digitally able.”

The paperwork for the deal was completed Thursday and the bank said that it had applied for necessary regulatory clearances, which could take upto two months. Sharma said that the plan was to retain the FreeCharge brand as a separate entity under Axis Bank.

But there is little clarity at this stage as to how Axis Bank’s own mobile wallet, LIME (launched in September 2015), would function within the bank, now that FreeCharge has been acquired. “We will look at all options after discussing with the regulator,” Sharma said.