Ebix stock tumbles after clarification of financial 'restatement'

Ebix ( NASDAQ: EBIX ) stock sank as much as 23% in Monday premarket trading after the company clarified on Saturday that its recent "restated" financial information pertains solely to its EbixCash IPO and was done to ensure consistency of presentation. It also explained that the change in the role of Ebix Payment Services after amendments to its contracts with prepaid payment instruments (PPI) issuers for future periods requires Ebix Payment Services' future financial statements to be recorded on a net basis. The stock's decline has since narrowed to a 13% drop at 7:37 AM ET. On Friday, after the close of U.S. markets, Ebix ( EBIX ) said Ebix Payment Services had received a "letter of displeasure" from the Reserve Bank of India dated March 21, 2023, regarding certain co-branding arrangements with EbixCash with the banks for the issuance and operation of PPI. Because of the RBI's directive, Ebix Payment Services will no longer be a principal under the amended co-branding arrangements as of the financial year starting April 1, 2023. Saturday's clarification pointed out that there has been no restatement of the U.S. GAAP financials or the Indian Statutory Audited Financials for any of the previous periods. Further, there was no effect on profit after tax of the U.S. GAAP or the Indian Statutory Audited Financials or the restated consolidated financials, the company said. Earlier this month, Ebix ( EBIX ) that it's progressing with a plan to complete an IPO of its EbixCash subsidiary in India and that it's in advanced stages of a part-asset sale. More on EbixCash IPO: Ebix reaffirms business outlook, receives inbound interest for investments Ebix stock surges 25% after Indian subsidiary files prospectus for $787M IPO Ebix surges almost 26% on result, 'imminent' EbixCash IPO possibility Proposed EbixCash IPO taps SBI Capital as lead manager