Info Edge writes off Rs 76.6 crore investment in Bijnis; know the reason

Investment firm Info Edge has wrote off its entire investment which it made in Bizcrum Infotech Private Limited (Bijnis) worth Rs 76.6 crore as it belives that the investment has lost its inherent value.

Info Edge said the company's continuous cash burn, limited availability of cash in proportion to liabilities considering buyback obligations (including liquidation preference) towards investors, and uncertainty of future capital raise as reasons behind the write-off.

The investment also said that the write off is a technical write-off due to the unspecified liabilities on Bizcrum which may materialise owing to the buyback obligations in the existing shareholders' agreement signed between the company and the investors. This liability is contingent in nature and has been factored in based on the conservative accounting policies followed by the company in compliance with IndAS accounting standards. Therefore, this is not a reflection on the company's financial performance, the market opportunity and the value proposition, it said.

"his liability would only materialize if the company is unable to provide an exit to the key investors via other exit mechanisms like third party sale, listing, among other mechanisms captured in the agreements by a specified date in future and all the key shareholders together choose to exercise the buyback right as an exit mechanism." said Rishabh Katiyar, part of the investment team as Principal at Info Edge Ventures.

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