1 - Vakrangee

Report
Creating Value by
Empowering Rural India with
Financial and Social Inclusion
INVESTOR
P R E S E N TAT I O N
August 2013
Vakrangee Softwares Limited
Safe Harbour Statement
This presentation and the following discussion may contain “forward looking statements” by Vakrangee
Softwares Limited (“VSL”) that are not historical in nature. These forward looking statements, which
may include statements relating to future results of operations, financial condition, business prospects,
plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and
projections of the management of VSL about the business, industry and markets in which VSL
operates.
These statements are not guarantees of future performance, and are subject to known and unknown
risks, uncertainties, and other factors, some of which are beyond VSL’s control and difficult to predict,
that could cause actual results, performance or achievements to differ materially from those in the
forward looking statements. Such statements are not, and should not be construed, as a representation
as to future performance or achievements of VSL.
In particular, such statements should not be regarded as a projection of future performance of VSL. It
should be noted that the actual performance or achievements of VSL may vary significantly from such
statements.
Vakrangee Softwares Limited
2
VSL is the leader in all three categories namely
?
DO
number of Aadhaar cards generated
data uploaded
YOU
KNOW
number of residents enrolled (over 30 million
till date).
No. of Aadhaar Cards generated (In Mn)
31
PROJECT:
AADHAAR
(UIDAI)
UIDAI's mandate is to issue
every resident a unique
identification number
linked to the resident's
demographic and biometric
information.
•
Vakrangee has been
empanelled in the highest
category i.e. T3F4 category
permitting it with pan-India
enrollment activity.
30.4
30
29
27.8
28
26.5
27
26
25
24
Vakrangee Ltd.
Vakrangee Softwares Limited
•
Swathy
Smartcards Ltd.
Wipro Ltd.
3
?
DO
YOU
KNOW
PROJECT:
ELECTORAL DATA
FOR UTTAR
PRADESH
Vakrangee Softwares Limited
VSL has managed unprecedented success in
the collection of electoral roll data of around
95
38,475
million people
across
gram panchayats
of the state of Uttar Pradesh.
and Delhi.
The Inclusive agenda of the Government consisted of
enrolling eligible population into the electoral rolls,
thereby enabling them to participate in the election
process and governance.
4
?
DO
YOU
KNOW
PROJECT:
INTERNATIONAL
E-GOVERNANCE
PHILIPPINES
Vakrangee Softwares Limited
VSL has Successfully completed dematerialization
of 20 million land deeds for 168 Registrar of Deeds
offices across the nation of Philippines.
20
168
million
Philippines
Registrar Offices
To dematerialise land deeds and introduce paperless
digital record keeping for 168 Registrar of Deeds
offices across the nation of Philippines.
5
?
DO
YOU
KNOW
In February 2012, RBI allowed non-banks to setup, own
and operate White Label ATMs (WLAs) which would
provide ATM services to customers of all banks.
VSL has been granted “In-Principle Authorization”
by RBI for setting up WLAs in India.
VSL will setup, own and operate
15,000
3
minimum WLAs
PROJECT:
FINANCIAL
INCLUSION
under its own brand in
years across the country
VSL will be entitled to receive transaction fee from the banks for
the use of VSL ATM network by the bank customers.
Additional Revenue through advertisement and other value
added services as per the regulations.
Vakrangee Softwares Limited
6
?
DO
YOU
KNOW
PROJECT:
FINANCIAL
INCLUSION
RBI, Ministry of Finance & GoI wanted to expand the
Bank Branches to the unbanked regions in the
country as part of Financial Inclusion Initiative,
allowing the banks to appoint BC & BF to extend
their outreach of financial services in the rural areas.
Exclusive mandate to set up & manage 50,000
bank branches (Ultra Small Branches) for the
states of Maharashtra, Rajasthan and Delhi.
Allowed to Offer G2C as well as B2C services at
these Branches, thus resulting into an Exclusive
Rural Retail Outlets.
3,000
plus Branches are already up
and Operational !!
Vakrangee Softwares Limited
7
VSL - RURAL RETAIL MODEL
•
•
•
•
Vakrangee
Vakrangee SoftwaresSoftwares
Limited
Exclusive
Scale without Capex
Economy of Scale & Scope
Negative Working Capital
8
8
WHY UNIQUE ?
TRADITIONAL
RETAIL MODEL
VSL
RETAIL MODEL
CAPEX
HIGH
LOW
HUMAN CAPITAL
HIGH
LOW
WORKING CAPITAL
HIGH
-VE WORKING CAPITAL
FOOTFALLS
VARY
ASSURED FOOTFALLS
MAINLY PRODUCTS
MAINLY SERVICES
HIGH
JUST IN TIME
RETAIL CATEGORY
INVENTORY
Vakrangee
Vakrangee SoftwaresSoftwares
Limited
9
9
EXCLUSIVITY
DID
Exclusive Mandate to offer Banking services at 50,000 outlets.
YOU
Exclusive Portfolio of G2C services where VSL is empaneled as an
KNOW
enrolment agency.
Strong Back end already created for processing several B2C
services.
Vakrangee
Softwares
Vakrangee Softwares
Limited
10
10
SCALABILITY
DID
Expansion - 16x from 3,000 outlets at Q1FY14 to 50,000 outlets
by end of FY15.
YOU
Highly evolved business model
- Technologically driven real-time
rural connectivity till the Gram Panchayat Level.
KNOW
No Major Capex requirement as Expansion mainly through the
Franchise Model and Resources already in place at the
Grass Root Level…
Economy of Scope – As more New services are added under the
same Infrastructure benefiting from High Operating Leverage.
Vakrangee
Softwares
Vakrangee Softwares
Limited
11
11
We are the last-mile link that
connects rural citizens with India’s
modern ecosystem.
Vakrangee Softwares Limited
Discussion Summary
About Us
Current Profile
Evolution & Transformation
Advantage Vakrangee
The Market Opportunity
Understanding Business Model
Summary Outlook – Next 3 Years
Annexure
Vakrangee Softwares Limited
13
About Us
Pedigree & Execution Capability
Strong Financials
Credentials
Business
Transformation
Vakrangee Softwares Limited
• India’s largest E-Governance player with 20 years of E-Governance focus.
• In-depth experience of handling various E-Governance projects including Election Automation, PDS, UIDAI, CSC, FI, IGRS and
many more.
• Strong track record of delivering time-bound mission critical projects having large
foot-print across geographies.
• Revenues, EBIDTA & PAT for FY13 are Rs. 15,558 mn, Rs. 3,912 mn, & 1,093 mn and have grown at a CAGR of 53.7%, 69.7%, &
66.9% respectively over last 3 years.
• Current FY13 ROCE stands at 27.0%. Total debt is around Rs. 4,309 mn resulting into
Net D:E at 0.8x.
•
•
•
•
•
Part of all Mission Mode Projects (MMPs) over the last 2 decades i.e. MCA 21, RSBY, Passport Seva Kendra, UIDAI etc.
Largest Single System Integrator (SI) for all the Key Government Projects upholding the Largest Democracy.
Empanelled in the highest category i.e. T3F4 category for Select Government Projects i.e. UIDAI - Adhar.
CMMi level III organization, ISO 27001, ISO:IEC 20000 Certified
Included in CNX 500 & BSE 200/500 & Mid-Cap Index.
• BFSI - Exclusive mandate for 5 + 2 years to setup & manage 50,000 bank branches in the states of Maharashtra, Rajasthan, and
Delhi.
• RETAIL - Allowed to provide B2C as well as G2C services at these Outlets, Thus resulting into Exclusive Rural Retail Marts.
14
About Us – Strong Management
Dinesh Nandwana
Chartered Accountant with 22 years experience in overall Management, Operations, Finance & Corporate Affairs.
Chairman & Managing Director
Has led the evolution of Vakrangee since inception by ensuring continuous advance and improve e-Governance
solutions leveraging world-class technologies, processes and people
Santosh Dash
An IT veteran with an MBA gold medalist and B.Tech. More than 18 years of experience in blue chip
organizations like PwC, IBM and ICICI and expertise in BFSI, Agri, Retail and Govt business
Pradeep Kumar
Ex IRS officer with a MBA and B.Tech in telecommunications, has 18+ Years experience in Global business
development and execution of large public sector IT projects.
CEO – Retail & BFSI (Global)
CEO – Government Business
Dr Nishikant Hayatnagarkar
Director – R&D
Vakrangee Softwares Limited
PhD in Computer Science from I.I.T. (Mumbai), with experience of 24 years in the field of software and chip
designing, Leads the SI LOB for Vakrangee.
15
About Us – Financial Overview
Last 3 Year Financials
18,000
12,000
23.5%
25.0%
25.1%
18.9%
10,000
8,000
15.7%
18.1%
20.0%
15.0%
6,000
4,000
30.0%
27.0%
16,000
14,000
As on 29.7.13 (BSE)
10.0%
8,903
13,578
15,558
2,000
-
5.0%
Market capitalization (Rs. Mn)
Price (Rs.)
No. of shares outstanding (Mn)
Face Value (Rs.)
33,220
66.05
502.96
1.00
0.0%
FY11
Revenues (Rs. Mn)
FY12
FY13
% EBITDA Margin
Shareholding Pattern – June 2013
Public
54%
Vakrangee Softwares Limited
% ROCE
52 week High-Low (Rs.)
85.90 – 38.25
Key Institutional Investors
% Holding
Life Insurance Corporation
of India
6.45%
Promoter
39%
DII
7%
FII
0%
16
Evolution & Transformation – Phase I - 1990-2011
1993
Computerization of Central Election Commission
2005
MCA 21 – Ministry of Corporate Affairs
2007
Land Record digitization in UP
2008
RSBY – Smart Card Project - UP. Haryana & Rajasthan
2010
Passport Seva Kendra Project CSC Punjab
2011
UID Enrolment – ALL INDIA Project
UID linked Haryana PDS Project
Vakrangee Softwares Limited
Strong portfolio of G2C services
• Over the Last 2 decades, VSL has built a strong portfolio of several G2C services.
• VSL has been handling several stand alone government projects in e-governance space.
• Have created the backend for assimilating and processing data related to citizens, and
government to citizen interactions.
Grass Root Level Execution Expertise
• Over 22 years of E-Governance Focus - Created Last Mile Infrastructure & Connectivity to
deliver Mission Mode projects (MMPs) at the Grass root level.
• Overcome On – Ground Complexities in Rural Regions – Flexible Timings, Power &
Connectivity Issues, Manpower Training
• Expertise – Have Built strong expertise from Data digitization to Technology Management
Dynamics of Rural Consumer Insight
• Track record of Implementing several Government to Citizen services till the Gram
Panchayat Level.
• Gathering & Understanding the Rural Consumer behavior since being the part of their Ecosystem for over 22 years.
• Offering citizens an end to end solution by integrating a front end that was connected to the
government systems.
17
Evolution & Transformation – Financial Inclusion Project
Bank Branch Outsourcing:
Bank Branch Outsourcing: As the “Brick & Mortar” model of
banking is not sustainable in rural regions, under the “Financial
Inclusion” initiative –
• RBI set the guidelines allowing banks to appoint common BCs to
reach unbanked regions in India.
• Government has decided to transfer the entire scheme benefit
scheme worth more than 3 Trillion per annum through bank
account only.
• Direct Benefit Transfer is a big driver for Branch opening at the
sub tier-III cities in India.
Vakrangee Softwares Limited
Exclusive Banking Common BC Branch Outlets – In
2012, RBI divided all the states into 20 different
Clusters and allotted Exclusive BC Based Banking
Branches for a period of 5 + 2 years .
Government has permitted all the BC Banking
Branches to also offer G2C as well as B2C services
at their Outlets.
Resulting into Exclusive CSC Outlets offering
Banking, G2C as well as B2C services.
18
VSL – Allotment of Financial Inclusion Project
• VSL has secured an exclusive mandate for 5 + 2 years to setup & manage 50,000 bank branches (Ultra
Small Branches) in the states of Maharashtra, Rajasthan, and Delhi.
Allotment of Exclusive BC Based
Banking License
• RBI permits 80:20 Rural : Urban ratio for opening the bank branches.
o Rural – 40,000 Branches
o Urban – 10,000 Branches
• VSL plans to open an Rural Branch at each Gram Panchayat Level in the states of Maharashtra, Rajasthan
and Delhi and the rest to be opened in Urban Regions –
o Maharashtra – 27,000
o Rajasthan – 9,900
o Delhi – 1,100 Branches
Offering of G2C & B2C
Services
Vakrangee Softwares Limited
• The 50,000 branches have also been permitted to extend the G2C and B2C services transforming them into India’s
first Rural Multi-Retail Outlets
19
Evolution & Transformation – Phase II 2011 - Current
OFFERING A WIDE VARIETY OF SERVICES AND PRODUCTS
ACROSS THE SAME TARGET CONSUMERS
AT THE GRAM PANCHAYAT LEVEL.
Portfolio of G2C services
Exclusive Banking BFSI
Services
Strategic Alliances for B2C
Services
VSL
Rural Retail Model
Natural Extension into Standalone Retail chain offering three sets of services across Government, Banking BFSI and Consumer domains – G2C, BFSI &
B2C
Strong Rural Distribution Channel to deliver B2C services – FMCG, Auto, Telecom, Insurance
Vakrangee Softwares Limited
20
Advantage India - Advantage Vakrangee
STRONG TECHNOLOGY
EXPERTISE
EXCLUSIVE BANKING
SERVICES
OTHER EXCLUSIVE G2C
SERVICES
PRESENCE & REACH TILL
GRAM PANCHAYAT LEVEL
Proven track record of delivering time-bound mission critical projects having large
foot-print across geographies including PDS, UIDAI, CSC, IGRS and many more.
UNPARALLELED EXECUTION CAPABILITY & STRONG BOUQUET OF SERVICES
G2C Services
Vakrangee Softwares Limited
BFSI Services
B2C Services
21
The Rural
Opportunity
In India
Vakrangee is
the only
Organized
Retail Player in
this market
Vakrangee Softwares Limited
An opportunity so large, one might
call it a ‘movement’….
The Rural Advantage - 700 million consumers,
US$1 trillion market, 56% of India’s income,
25% of disposable income
700
$1
million consumers
trillion market
22
Indian Rural Market: An Untapped Opportunity
The Indian rural market has emerged as an important growth engine of the Indian economy.
The rural market (rural villages + small towns with <25,000 population) has today become the
largest consumption market for FMCG and consumer durables.
Rural India is ready to drive Consumption Growth
Higher Government Spending
Rural Budget
Allocation
(Rs. Billion)
Bharat Nirman
FY12
FY13
Continuous Bumper Harvest
YoY
(%)
26
24
580
710
22%
400
400
Housing (IAY)
100
152
52%
Education (SSA)
210
273
30%
Health (NRHM)
178
210
18%
2,661
3,171
19%
0%
Wheat
102
95
Rice
MGNREGS
Total Rural Outlay
Sugar
cane
Rising MSPs
Wheat
(‘000)
FY13
88
86
0
50
100
150
200
250
FY12
1110
1000
Paddy
245
236
Food grains
300
Production MT
1285
FY13
145
139
Sugarcane
FY12
126
122
Milk
1120
0
500
1000
1500
Rs. per Quintal
Rise in annual household income from Rs. 75,000 to Rs. 88,000 in FY2013.
Rising disposable income leading to higher spending power
Note: MSP – Minimum Support Prices for farm produce
Vakrangee Softwares Limited
23
Indian Rural Market: An Untapped Opportunity
Per Capita Income per annum
Indian Demographics
70%
25,000
56%
20,000
44%
16,492
19,274
14,418
12,644
15,000
30%
10,000
3,848
5,000
Urban
% Population
Rural
% Income
Rural Income
Rural India moving up the income pyramid
Year 2010
0.4
12
4.8
49.9
88.2
Urban
1.2
0.8
2.1
12
11.2
6.1
41.4
12.9
Rural
79.7
66.3
Urban
2.5
2.1
3.4
43.9
26.3
4
37
79.2
Rural Expenditure
Rural Disposable Income
2012
Share of Rural Wallet
Income Classes In ‘000Rs
Year 2025
Year 2015
2011
4,856
7
29.1
57.9
13.9
7.7
43.8
6.1
Rural
Urban
Rural
100
Globals>1,000
Strivers 500-1,000
Seekers 200-500
Aspiers 90-200
Deprived < 90
80
60
4
5
5
6
10
14
0
10
17
17
40
20
7
5
5
56
2010
Education & Entertainment
Health
Clothing
Others
Transportation & Communication
39
2020
Housing & Consumer Durables
Food
No. of House holds (In Millions)
Vakrangee Softwares Limited
24
The Changing Landscape of Rural India
FMCG
Automobiles
Telecom
Housing & Construction
Vakrangee Softwares Limited
• Higher rural growth of 12% vs. 7% in urban FMCG consumption in 2012.
• Increasing preference for new product categories, personal care products, packaged products etc.
• Improving roads & rising incomes are driving personal ownership of vehicles.
• Around 50% of 2-wheeler sales are coming from rural markets.
• Demand for 4-wheelers is rising in rural markets - 29% of Maruti Suzuki’s sales and17% of Hyundai Motor’s sales came from
rural markets in2012.
• 10% growth in mobile shipments to 203.4 million with rising contribution of rural sales
• 29% growth in rural subscriber base to 395 million and 28% growth in rural teledensity to 36.4% in 2012.
• Rising talk time and rising number of sale of recharge coupons.
• Aspiration for better living driving demand for pucca houses - 65.3% in 2013 vs.
63.3% in 2011.
• 64% Households reported higher spending on construction despite rising prices.
• Indira Niwas Yojana – 2.72 million of new houses constructed.
25
The Changing Landscape of Rural India
Media & Entertainment
• Rising number of rural TV households outpacing the urban growth.
• 53% growth in rural DTH households. Out of total 42 million DTH connections,
26 million (16 million in 2011) are from rural regions in 2012.
• 55% households with higher spend on M&E at Haat / Mela, Cinema etc.
Financial Services
• 20% growth in rural credits to 8.2 million and 18% growth in rural deposits to
14.4 million in 2012.
• 26% growth in disposable income, financial inclusion of GoI, and Direct benefit transfer scheme to further boost the savings &
investment trends.
Education
• 40% increase in government spending in 2013 over 2012.
• Education is becoming a top priority in overall spending; 82% households increased their spending on tuition fees in 2012.
• Aspiration for English medium school, IT training, and private tutors in villages.
Healthcare
•
•
•
•
Vakrangee Softwares Limited
16% increase in government spending on healthcare through NRHM.
80% households increased their healthcare spending in 2012.
Increasing number of hospitals in small towns.
Healthcare market grew from USD 30 billion in 2011 to USD 35 billion in 2012.
26
The Rural Push: Indian Government Policies
National E-Governance Plan(NEGP): Make all government services accessible to common man in his locality, through common service delivery outlets, and
ensure efficiency, transparency, and reliability of such services at affordable costs to realise the basic needs of the common man.
31 MISSION MODE PROJECTS UNDER NATIONAL E-GOVERNANCE PLAN
Central Mission Mode Projects
State Mission Mode Projects
Integrated Mission Mode Projects
Banking
Agriculture
Citizen Service Centre
Central Excise & Customs
Commercial Taxes
e-Biz
Income Tax (IT)
e-District
e-Courts
Insurance
Employment Exchange
e-Procurement
MCA21
Land Records
EDI fore-Trade
National Citizen Database
Municipalities
National E-Governance Service Delivery Gateway
Passport, Immigration & Visa
Gram Panchayats
India Portal
Pensions
Police
e-Office
Property Registration
Posts
Transport
Treasuries
Health
Education
Public Distribution System
The Mission Mode Projects as a part of NEGP will continue to be implemented in India
regardless of the changing political parties and bureaucrats.
Vakrangee Softwares Limited
27
– Rural Retail Mart
Vakrangee’s Rural Retail Mart will act as a bridge
between the Rural India and Modern India by
providing access to several key Banking, G2C as
well as B2C services to Rural India.
What is Vakrangee’s
Rural Retail Mart?
One touch point at each
Gram Panchayat to deliver
all services to the citizens
by using cutting-edge
technology and focusing on
reliability, quality and
serviceability.
Vakrangee Softwares Limited
28
India’s First Organised Rural Retail Mart
Technology Intensive Rural Retail Mart – One Stop Shop
B2C







Telecom - Mobile recharge
DTH service - Recharge, bill payments
Education
Healthcare
Market Research
Agriculture inputs
Automobiles - Dealership of Tata Motors &
Mahindra
 FMCG Products
 White Goods
RURAL POOR
BFSI–Rural Bank Correspondent
 Bank A/C Opening – Savings, Current,
Recurring
 Transactions–Deposits, Withdrawals,
Remittances
 Balance Enquiry, Statement of Accounts
 Direct Benefit Transfer (DBT)
 Pension Disbursement
 Food Security related DBT
 Insurance - Life & Non Life, premium
payments
 Retail loans, ODs, Fixed Deposits
 Recovery of loans
 BSE/NSE Trading Bolts
Services are offered across the entire income spectrum
G2C
 Enrolments-UID Card, NREGA job Card,
Election Card
 Land Record Digitisation, Electoral Rolls, EStamping
 Payment of Utility Bills, Taxes, Levies
 Railway Tickets, Certificates, Hall tickets
 Exam Fee Payments, Online Form Filling
 Election Commission, NREGS, NRHM,
Bharat Nirman
 PDS, School Books, Food Coupon
RURAL RICH
From Direct Cash Disbursement and recharge coupons to the poor, as well as delivering
luxury items like automobiles or high end consumables to the affluent.
Vakrangee Softwares Limited
29
– Franchise Model
Franchise Model
Revenue Streams
To establish the retail outlets using the Franchise Model,
where  Franchisee VLE – Owner of the rural retail mart and
manager of the day-to-day operations.
 Franchisor VSL – Project management, infrastructure
set up, VLE training, access to new services and
updating content.
Fixed
Variable (VSL : VLE – 35% : 65%)
BFSI- Fixed monthly remuneration from banks (VSL
– 100%)
One Time Transactions –
Eg. Account Opening, UID generation
G2C - Fixed monthly subsidies from government
(VSL : VLE – 50% : 50%)
On Going Transactions –
Eg. BFSI – Deposit/Withdrawal, Sale of Products
& Services
B2C - Fixed monthly rentals for OOH
advertisements (VSL – 100%)
Current Operational Update:
• Agreements signed with 31 PSU Banks including SBI & its associate banks,
PNB, BoB, BoI, UBI, CBI etc
• Several B2C Alliances across categories - LIC, GIC, Vodafone, Airtel, Tata
Motors, Mahindra & Mahindra and many more.
Number of Outlets
CURRENT: 3,200
FY 2015: 50,000
• More than 3,000 VSL branches are currently operational and running
successfully.
Vakrangee Softwares Limited
30
Key Alliance Partners
Vakrangee Softwares Limited
31
Execution Through Franchise Model
Corporate PMO
Head Quarters
State PMO
State Office
More than 3,000
Current Operational office locations
Vakrangee
District Office 1
District Office 2
District Office N
District Office 1
District Office 2
Block Office N
Gram Level Office 1
VLE 1
Franchisee VLE
Independent Project Management audit and consulting by the
Big four
Gram Level Office 2
VLE 2
Gram Level Office N
VLE N
Vakrangee requires only minimal additional human resources
for incremental setup of retail outlets
Vakrangee Softwares Limited
32
Robust Technical Infrastructure
The rural retail outlet to be based out of the premises of the VLE (franchisee).
CBS of respective Banks
Internet Connectivity :

B2C
Partner Systems
FI Servers of respective
Banks
G2C
Partner Systems
VSAT connection provides the seamless connectivity & integration of the retail outlet
with the respective banks through CBS, and B2C and G2C partner systems.
Power Supply :

DG Sets to be placed at each outlet to have an un –interrupted power supply.
Security Specifications :
PTS
V-SAT
Rural Multi-Retail Outlet

Defined User Policy - Authentication required for each and every user of the server.
Secured and safe transactions.

SSL Certification, licenses digital certificate: Installed for https safe and secure
transaction
Security Audit - Quarterly security audit including vulnerability and penetration
testing

Note : PTS – Pass Through Server CBS – Core Banking Solution
V-SAT – Very Small Aperture Terminal
Vakrangee Softwares Limited
33
Capex Requirement – Asset Light Model
Sr. No
1
2
3
4
5
6
7
CAPEX REQUIREMENT PER RETAIL OUTLET
Item Name
Laptop + Charger
Web Camera
Printer-Scanner-Copier
DG Set
Furniture & Fixture (1 Table, 3 Chairs, 1 CupBoard, 1 Safe)
VSAT Connection
POS Machine*
Total Capex
Per Outlet
Rs. 1,45,000
+ taxes
VSL will act as the project manager, while VLE will operate the retail outlet and bear all the operating costs and capex (except the POS
machine).
CAPEX PER RETAIL OUTLET
Entity
Franchisee – VLE
Franchisor – VSL
Total Capex
Amount (Rs.)
1,25,000
20,000
1,45,000 **
Asset Light Model – No Major Capex requirement
for Vakrangee
** Vakrangee will provide the POS Machine to VLE free of cost,
however it will be the owner of POS Machine.
Vakrangee Softwares Limited
34
– Store Economics
VSL – Franchisor
Per Retail Outlet (In Rs.)
Per Month
Total Revenues
1,75,000
Year1
21,00,000
VLE – Franchisee
% Gross Margin
BFSI
45 - 50%
25 - 30 %
35 - 40 %
B2C
25 - 30%
12 - 15 %
G2C
10 - 15%
28 - 30 %
PMS & DMS
10 - 15%
15 - 18 %
Cost of Sales
1,25,000
15,00,000
1,500
18,000
EBITDA
48,500
5,82,000
% EBITDA Margin
26.0%
26.0%
Working Capital
-
Operating Costs
-
Capex (POS Machine)
20,000
Total Capital Employed
20,000
Per Retail Outlet (In Rs.)
Total Revenues
BFSI
B2C
G2C
Cost of Sales
Operating Costs
EBITDA*
% EBITDA Margin
-
Working Capital – 1 month
(min - Rs.10,000, max – depending on business
volumes)
Capex
Total Capital Employed
Payback period (months)
Per Month
Year1
1,00,000
12,00,000
45 - 50%
40 - 45%
10 - 15%
43,000
5,16,000
1,900
22,800
55,000
6,60,000
55.0%
55.0%
1,00,000
1,00,000
2,00,000
4
Note * – EBIDTA Calculation excludes Employee Salary Cost as Franchise to be
managed by VLE & his Family.
• 1Gram Panchayat => 1 branch => servicing more than 1,500 household Families.
• Both VSL and VLE will benefit from higher transaction volumes.
• Economies of Scope to drive Profits of the VLE - As new services are added and Transaction Volumes increase over a period of time with no major incremental
capex & operating costs, benefiting from high operating leverage.
Vakrangee Softwares Limited
35
Operationalisation Process of Retail Outlet
3 MONTHS
Vakrangee On-boarding
 Campaigning to generate
awareness and invite applications
by circulating leaflets at gram
panchayats, banks, haats etc.
 Scrutinizing the applications
received
 Conduct online written test &
interview
 Verify KYC documents of VLE
& Sign Franchisee Agreement
with VLE
VLE On-boarding
 Dedicated Settlement Account
opening with the VLE branch
 Submission of KYC documents
along with account number
details to Alliance Partners like
Banks, Business Partners and
Government etc
 CIBIL and Police Verification
 Branch Code generation and
Device ID generation
3 MONTHS
Go Live
 Deployment of IT infrastructure
like hardware, software and
VSAT
 Commissioning of non IT
infrastructure like generator,
furniture and fixtures
 Training and Capacity Building
by Vakrangee and Alliance
Partners
Go Steady
 The retail outlet attains the
operational stability
 The retail outlet achieves a target
of opening 1000 bank a/c,
10,000 E top-ups, sale of 10
micro LIC policies, and sale of 1
New India Insurance policy.
 Go Steady Certificate
 Transaction / Enrolment testing
of the IT system
 Go Live Certificate
Vakrangee Softwares Limited
36
Sample Go Live Certificates from Banks
BANK OF MAHARASHTRA
Vakrangee Softwares Limited
PUNJAB NATIONAL BANK
37
Sample Go Live Certificates from Banks
BANK OF BARODA
Vakrangee Softwares Limited
UNION BANK OF INDIA
38
Sample Go Live Certificates from Banks
MAHARASHTRA GRAMIN BANK (MGM)
Vakrangee Softwares Limited
39
– Summary
No of Outlets
Till Date-Q1 FY14
FY2014 E
FY2015 E
3,200
12,000
50,000
Capex Per Retail Outlet (Rs.) (VSL Share)
Rs. 20,000
Till Date -Q1 FY14
FY2014 E
FY2015 E
60
240
760
Per Month
Annual Estimate
Revenue per Store
1,40,000
16,80,000
• Opex Cost – Franchisee
EBIDTA per Store
40,900
4,90,800
EBIDTA Margin %
29.21%
29.21%
Total Capex (Rs mn.)
STORE LEVEL ECONOMICS - VSL
(Rs.)
• Negative Working Capital
UNIQUE RETAIL FORMAT
EXCLUSIVITY
Vakrangee Softwares Limited
SCALABILITY
LOW CAPITAL
INTENSITY
HIGH OPERATING
LEVERAGE
40
Other Key Projects – White Label ATMs
Background:
• 1,00,000 + ATMs are currently operational only in Tier-I and Tier-II urban areas.
• In February 2012, RBI allowed non-banks to setup, own and operate White Label ATMs (WLAs) which would provide ATM services to customers of all banks.
Vakrangee has been granted “In-Principle Authorisation” by RBI for setting up WLAs in India.
• Vakrangee will setup, own and operate minimum 15,000 WLAs under its own brand
in 3 years across the country.
Sponsor Bank
Revenue Streams
Fixed
 Income from OOH
advertisements
Variable
Cash settlement of transactions
Ensure adequate
cash supply
Redressal of failed transactions
 Financial
Transaction – Rs. 15
 Non-Financial Transaction – Rs. 5
Vakrangee WLA
Vakrangee Softwares Limited
41
Other Key Projects
PDS
(Public Distribution System)
UID
(Unique Identification Project,
AADHAAR)
 Implementation of Biometric
Smart Card based PDS in
Haryana through
computerization of entire PDS
scheme.
 Enrolments of residents for
issuance of unique identification
number which will be used for
delivery of all government benefit
schemes.
 To create 6 million UID linked
Smart Ration Cards.
 Vakrangee is a leading enrolment
agency empanelled with UIDAI on
pan India basis under Tier T3F4
category.
 To install & operate ~9300
Smart Card POS Terminals.
 Allocated in FY12 for 5 years
Vakrangee Softwares Limited
 Highest UID enrolments of more
than 30 million residents till date
IGRS
(Inspector General of Registration &
Stamps)
 Computerisation of the process
of registration of documents and
recovery of stamp duty as per
the Indian Stamp Act.
 Computerized registration of
marriages, societies, firm, nontrading companies, etc.
 Operation of Nagpur zone
offices on BOT basis (approx.
144 offices,160) for 5 years.
Computerization of Election
Commission
 Computerization of the election
commission.
 Generated ~100 million voters’
identification cards and managed
over 100,000 citizen facilitation
centers across Maharashtra,
Rajasthan, Gujarat
and UP
 Completed collection of electoral
roll data of around 95 million
people across 38,475 gram
panchayats in UP.
42
Summary Outlook – Next 3 Years
(Rs. Mn)
FY13 A
FY16 (E)
Revenue
% of Total
Revenues
EBITDA %
Revenue
% of Total
Revenues
EBITDA %
Rural/Retail
4,648
29.8%
15.00 %
67,400
90 %
20-25 %
UID
1,020
6.6%
37.00%
1745
2.%
30-35 %
Other E-Governance Projects
950
6.1%
39.89%
368
1%
19-25 %
Legacy - PMS/DMS/ Others
8,940
57.5%
27.00%
5000
7%
18-22 %
Total
15,558
100%
25.16%
74,513
100%
20-25 %
Projects
• Business Model Transformation – 50,000 Rural Retail Marts to be opened in the next 3 years.
• Rural Retail segment to contribute more than 90% of the Total Revenues by FY 2016.
 Revenues to grow 4.8x at a CAGR of 68% from Rs.15,558 mn in FY13 to Rs.74,513 mn in FY16E.
 EBIDTA to grow 5.2x at a CAGR of 73% from Rs.3815 mn in FY13 to Rs.19991.6 mn in FY16E.
Vakrangee Softwares Limited
43
Summary Outlook – Next 3 Years
Scalability with
No Major Capex
 Expansion from 3,200 Retail Outlets
currently to 50,000 Outlets by FY 2015 e.
Expansion is mainly through franchise
model.
 Vakrangee - Capex per Outlet – Rs. 20,000
per Outlet
 Total Capex requirement
over next 3 years
FY14-16 – Rs.1000 mn.
Vakrangee Softwares Limited
Strong Operating
Leverage
 Economies of Scope to kick in as new
services are added and Transaction
Volumes increase over a period of time,
with no major incremental capex &
operating costs benefiting from high
operating leverage.
Return Ratios to Improve Significantly
 No Major Capex required for Expansion
and Pay Back period is less than 6 months.
 ROCE to improve Significantly as
Incremental ROCE is more than 100% in
the Retail model.
 EBIDTA Margins set to Improve to 2627% by FY16E.
44
Consolidated Financials – Profit & Loss Statement
Consolidated Financials
FY2013
FY2012
% Change
15471.5
0.15
15471.65
13531.8
0.06
13531.86
14.3%
Cost of Materials
Changes in Inventories, Stk in Trade & Finished Goods
Employee Benefit Expense
Other Expenses
Total Expenses
11510.1
-291.8
285.5
152.5
11656.3
10919.8
-50.7
124.7
122.7
11116.5
5.4%
475.5%
128.9%
24.3%
4.9%
EBIDTA
3815.35
2415.36
58.0%
1570.8
859.6
52.1
874.4
557.9
45.3
79.6%
54.1%
15.0%
1437.05
1028.36
39.7%
Tax Expenses
% Revenue
393.65
27.4%
319.66
31.1%
23.1%
Profit after Tax (PAT)
1043.4
708.7
47.2%
2.08
1.42
46.5%
Net Sales Income
Other Operating Income
Total Income from Operations
EBIDTA Margin %
Depreciation Expense
Finance Cost
Other Income
Profit before Tax (PBT)
PAT Margin %
Earnings per Share (EPS)
Vakrangee Softwares Limited
24.7%
6.7%
17.8%
5.2%
45
Consolidated Financials – Balance Sheet Statement
Particulars
FY 2013
FY 2012
EQUITIES & LIABILITIES
Particulars
FY 2013
FY 2012
4,371.2
5,516.2
23.1
14.6
242.8
330.2
(D) Other Non-Current Assets
97.9
47.2
Total - Non – Current Assets
4,735.0
5,908.2
537.7
244.4
6,527.4
4,454.8
ASSETS
Shareholder Funds
Non Current Assets
(A) Equity Share Capital
502.5
250.2
(D) Reserves & Surplus
4,635.7
3,918.8
Total - Shareholder Funds
5,138.2
4,169.0
28.5
28.5
1,456.8
1,559.6
(B) Deferred Tax Liabilities (Net)
828.8
731.6
(C) Other Long Term Liabilities
78.4
69.9
Current Assets
–
–
2,364.0
2,361.1
(A) Inventories
(A) Short term Borrowings
2,852.2
2,155.9
(C) Cash and Bank Balances
318.8
284.1
(B) Trade Payables
1,754.7
1,218.3
(D) Short Term Loans and Advances
191.5
196.1
(C) Other Current Liabilities
1,281.3
1,014.4
(D) Short Term Provisions
406.9
214.6
(E) Other Current Assets
1,506.9
59.0
Total – Current Liabilities
6,295.1
4,603.2
Total – Current Assets
9,082.3
5,238.4
13,825.8
11,161.8
13,817.3
11,146.6
Minority Interest
Non Current Liabilities
(A) Long Term Borrowings
(D) Long Term Provisions
Total - Non – Current Liabilities
Current Liabilities
GRAND TOTAL – EQUITIES & LIABILITIES
Vakrangee Softwares Limited
(A) Fixed Assets
(B) Non-Current Investments
(C) Long Term Loans & Advances
(B) Trade Receivables
GRAND TOTAL – ASSETS
46
THANK YOU
ABHISHEK SHARMA
Sr. Manager – Finance & Investor Relations
Contact: 022 – 67765147, + 91 9167766763
Email: [email protected]
Website: www.vakrangeesoftwares.com
ADITYA JANI
Executive – Finance
Contact: +91 9167766705
Email: [email protected]
Website: www.vakrangeesoftwares.com
Vakrangee Softwares Limited
AMMEET SABARWAL
Contact: +91 9819576873
Email: [email protected],
Website: www.dickensonIR.com
NILESH DALVI
Contact: +91 9819289131
Email: [email protected],
Website: www.dickensonIR.com
47
ANNEXURE
Moving Up the Value Chain
PAST
EVOLUTION PHASE
PRESENT
Sub-Contractor
Partner (Consortium Bids)
Prime / Lead Player
• Rashtriya Swasthya Bima Yojna (RSBY)
• Haryana Public Distribution System (PDS)
• MCA 21
• Rural Retail Mart – Plan to Open 50,000 Rural
Retail Outlets
• All India UID Project - Aadhar (UID)
• National Population Register (NPR)
VSL has over the years Transformed from being an Sub Contracted IT
enabler in E-Governance Projects into a Retail House offering G2C, B2C &
BFSI services and a Lead Player in E-Governance Projects.
ROLE – SUB CONTRACTOR
SECTOR FOCUS – IT / E-Governance
EBIDTA: 10 – 15%
Vakrangee Softwares Limited
• Common Service Centre (CSC) in Punjab &
Rajasthan
• Maharashtra IGRS
ROLE – LEAD PLAYER
SECTOR FOCUS – Retail/BFSI/
E-Governance
EBIDTA: 20 – 25%
49
ATM Penetration in India: One of the Lowest
ATM Market Sizing
10,428
Card base to ATM Ratio
3,037
2,194
1,738
2,387
646
81
India
2,536
United States
ATM / million population
United Kingdom
1,713
596
South Africa
1,207
211
Brazil
China
The ATM penetration in India is currently as low as 81 ATM per million population compared to 1,738 ATM/million in USA and 211 ATM/million in
China. There is huge opportunity for ATM growth through the white label model. It is expected to reach 350,000 ATMs by 2017 in India.
Vakrangee Softwares Limited
50
BFSI – List of Banking Services permitted at Retail Outlet
Sr. No.
BC Activities
1
Savings A/C Opening
2
Deposit in Savings A/C
3
Withdrawal from Savings A/C
4
Remittances - A/C to A/C
5
Remittances - Tatkal
6
Account Opening at /month/BC for first 5 months
7
Recurring Desposit A/C Opening
8
Deposit in Recurring A/C
9
Withdrawal from Recurring A/C
10
Savings Bank Overdraft
11
Savings Bank Overdraft - Disbursement
12
Savings Bank Overdraft - Repayment
13
Repayment in standard assets - Term Loans
14
Repayment in standard assets - Overdraft
15
Repayment in standard assets - Cash Credit
Vakrangee Softwares Limited
Sr. No.
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
BF Activities
Savings A/C Opening
Recurring Deposit A/C Opening
Current A/C Opening
Fixed Deposit (TDR/STDR)
Retail Loans - Disbursement
Retail Loans - Repayment
Over Draft
Kisan Credit Card - Disbursement
Kisan Credit Card - Repayment
Gramin Credit Card - Disbursement
Gramin Credit Card - Repayment
Insurance
Micro Pension
Self Help Group Management
Joint Liability Group Management
Recovery in NPA Accounts - Substandard
Recovery in NPA Accounts - Doubtful
Recovery in Loss & Written Off Accounts
51
List of Empaneled Banks – Agreements Signed
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Name of the Bank
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Baroda Rajasthan Gramin Bank
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Hadoti Kshetiya Gramin bank
IDBI bank
Indian Bank
Indian Overseas Bank
Maharashtra Gramin Bank
Jaipur The Gramin Bank
Marwar Ganganagar Bikaner Gramin Bank
Oriental Bank of Commerce
Vakrangee Softwares Limited
Sr.
No.
Name of the Bank
19
Punjab & Sind Bank
20
Punjab National Bank
21
Rajasthan Gramin Bank
22
State Bank of Hyderabad
23
State Bank of Bikaner & Jaipur
24
State Bank of India
25
Syndicate Bank
26
UCO Bank
27
Union Bank of India
28
United Bank of India
29
Vijaya Bank
30
Vidarbha Kshetriya Gramin Bank
31
Wainganga Krishna Gramin Bank
52
Slide 53
Slide 54
Slide 55
Slide 56

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