Please note that this conference is being recorded. I now hand the conference over to Ms. Asha Gupta from E&Y Investor Relations. Thank you. Over to you, Ms. Gupta.
Thank you, Dhanvi. Welcome to Aurum PropTech Limited Q3 FY 2023 earnings call. It gives me great pleasure to welcome the management of the company represented by Mr. Ashish Deora, Founder and CEO of Aurum Ventures, Mr. Onkar Shetye, Executive Director of Aurum PropTech Limited, Mr. Hiren Kumar Ladva, EVP Investment of Aurum PropTech Limited, and Mr. Kunal Karan, CFO of Aurum PropTech Limited. Before we start the call, I would like to remind you that anything that is mentioned in this call which reflects any outlook for the future or which can be construed as forward-looking statements must be viewed in conjunction that the risks we face, uncertainties and risks we face are included, but not limited to what we have mentioned in the prospectus filed with SEBI and subsequent annual report, which you can find it on our website.
With that said, I now hand over the call to Mr. Ashish Deora. Over to you, Ashish.
Thank you, Asha. Good afternoon, everyone. Best wishes to all for a prosperous and healthy new year. I am glad to connect again with the investors community in this seventh quarterly call under Aurum management. It is always a pleasure to interact with all of you. Welcome, everyone, and thank you for your continued interest and commitment to Aurum PropTech. Let me first brief you on the exponential growth that the company has achieved. I would like to highlight two points to this effect. Firstly, we have today announced our Q3 results, where the revenue has been INR 38.6 crores. This is a 5x, I repeat, 500% of our Q3 revenue last year, which was INR 7.53 crores. Secondly, we had projected our Q4 revenue to be INR 50 crores.
I am glad to state that we are confident of achieving that by the end of this quarter, which is Q4. What is significant here is that projection of Q4 revenue of INR 50 crore was made in the beginning of the year when our revenue was to the tune of around INR 14 crore. The point that I'm trying to make is that in a very short time, our team has been able to demonstrate not only exponential growth, but also the maturity to project and achieve.
Our revenue growth momentum shows our execution discipline of our strategy and also validates the growth of the PropTech sector as a whole. We believe that real estate as a sector is being transformed digitally. From AI to blockchain to the metaverse to IoT, the New Age real estate customers and enterprise are experiencing the need of these tools and technologies.
Moving from revenue growth, I would now like to take a few minutes on our strategy. We continue to sharpen our focus on delivering technology, capital, and services for real estate consumers and developers. What also keeps us motivated is the need for innovation across various aspects of real estate, whether it is technology, capital, or services.
Analyzing data and then integrating it with various services for the benefit of our consumers is a challenge which we are focused and determined to change. I already touched upon our mindset of exponential revenue growth and strategy. I would now like to take a minute on how Aurum PropTech is creating sectoral knowledge and leadership. Considering that the PropTech sector is at a nascent stage, learning and sharing knowledge with our customers is necessary for us on an hourly basis. To structure this approach, we launched our brand positioning this quarter.
We believe that our brand tagline of Future Ready encapsulates who we are and what we stand for. Future Ready declares that we elevate experiences for our customers, real estate developers, and capital allocators by combining our tech skills, data skills with our real estate domain understanding. This brand positioning will also increase recall value and achieve benefits of scale across our various products. In this quarter, we also launched the Aurum Entrepreneur in Residence program. Our core belief is that entrepreneurial mindset is necessary to run digital products. This program will create necessary engagement with young entrepreneurs. To conclude, at Aurum PropTech, at Aurum, we have constantly delivered value for all our stakeholders over last two decades. We believe that Aurum PropTech is in the right direction as per our group ethos.
Let me now hand over to Onkar, Executive Director, Aurum PropTech, to talk about our ecosystem.
Thank you, Ashish. Welcome everyone and thank you for your continued interest in Aurum PropTech. Let me now briefly share a few highlights during Q3. Today, we have an active customer base of approximately 250 B2B SaaS customers and more than 7,000 RaaS customers. Our SaaS services cater to developers across 46 cities and towns in India. Our RaaS services are consumed in 15 cities across the country.
More than 30,000 potential buyers were active on our tech platforms during their buying journey in the past quarter. Our platforms also hosted 5,000 plus brokers and channel partners, enabling distribution of residential projects of 350 plus developers. This achievement has been possible only because of our collaborative effort of all our partner companies. In a short time, we are seeing the network effect of Aurum PropTech ecosystem, which will keep on getting bigger.
In our connected living segment cluster, we have seen tremendous traction in the co-living RaaS offering. To expand our offerings and play a pivotal role in the branded co-living segment, HelloWorld, our co-living and student housing company, has launched HelloWorld Select, a premium co-living cohort which expands our target customer base and also upsells to existing tenants who would wish to upgrade to a more premium co-living facility. We also onboarded Aurum Analytica, formerly known as Career Socially, during Q3. After the acquisition, rebranding and setting the strategy for Aurum Analytica, we have quickly focused on integrating all our efforts with data science and analytics. We are happy to state that they clocked twice the amount of revenues in Q3 compared to what they did in Q2.
This is a trend that we have constantly observed wherein rebranding and restrategizing the products have shown growth in businesses of our partner companies, primarily due to the network effect of Aurum PropTech ecosystem. From the investment finance cluster, Integrow Asset Management garnered further fund commitment of INR 100 crore to take the total commitment to INR 205 crore. With a strong pipeline of investors, we are looking to have a commitment of INR 300+ crore by March 2023. In our enterprise efficiency cluster, Sell.Do, the real estate SaaS CRM product, continues to be the market leader in India with 6,600+ licenses. Beyond Walls, a digital marketing and broker aggregation solution for developers, launched their operation, having quickly scaled up in Pune since its launch in February 2022 and started generating revenues in Bengaluru and Mumbai also.
There are more than 5,000 brokers already participating on the Beyond Walls platform and benefiting from it. We have, and we will continue to build and grow our SaaS and RaaS products across the focus cluster. The upcoming quarter promises to continue this exciting journey for us. With this, I would now like to hand over to our CFO, Kunal Karan, to detail out the quarterly financials and related matters.
Hello, everyone. As you heard from Onkar about our business update, let me walk you through the details of our financial performance. Today, our board of directors have approved the results for the quarter and nine months ending December 31, 2022. We continue our march with a strong set of numbers which reflect our ability to grow progressively at a scale. Our consolidated revenue for operations for the quarter is INR 38.6 crores as compared to INR 28.3 crores in the previous quarter, up by 36.8%. The revenue for the corresponding quarter for the previous year was INR 7.5 crores. The growth there is 5 times.
We have reached revenue annual run rate of INR 150 crore at the end of the current quarter and are in line to reach the targeted annual run rate of INR 200 crore in the month of March 2023. Our total income for the quarter is INR 41.2 crore as compared to INR 30.8 crore in the previous quarter. EBITDA for the current quarter was INR 2 crore as compared to loss of INR 3.4 crore in the previous quarter. This reflects our approach of conservative cash utilization. The consolidated cash at the end of the quarter was INR 83 crore. We had to raise another 250 crore from the balance rights issue.
In terms of segmental revenues, SaaS and RaaS revenues for this quarter were INR 5.6 crore and INR 33 crore as compared to INR 4.7 crore and INR 23.7 crore respectively in the previous quarter. We continue to see a good traction for our services in the markets. We are confident of our growth journey going ahead. With this, I will now pass on the call to the operator to open the floor for question and answer session. Thank you very much and appreciate your continued interest in Aurum.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, to ask a question, you may enter star and 1 on your phone. The first question is from the line of Rohit Jha, individual investor. Please go ahead.
Hello.
Yes, sir. You're audible. Please go ahead.
Yeah. Hi.
Please proceed. Yes.
Yes. Thanks.
Mr. Jha, please proceed with your question. As there is no response, we'll move to the next question, which is from the line of Qasim Akram, individual investor. Please go ahead. Qasim, your line has been unmuted. Please proceed with your question.
Can you elaborate on the synergies between Integrow Asset Management and HelloWorld Technology?
Thank you for your question, Mr. Qasim Akram. There are immense synergies between both these businesses, primarily from two aspects. One, where it creates a huge differentiator for our co-living business when it is backed by an asset management company, where the investment into the assets for further scale-up and expansions could come in from the asset management base. It likewise similarly benefits the asset management company because the investors get control by the way of an OpCo in form of HelloWorld on the investments that they could make in. In a way, it is creating a PropCo-OpCo model today.
We do have further plans to set up sector-specific PropCo at Integro Management or at Integrow AMC that will facilitate the scaling up of our HelloWorld business. In addition to it also helps us tap in the HelloWorld customer base for future cross platform integration by the way of offering it to various other products like Beyond Walls, etc.
Mr. Akram, just to add to what Onkar spoke, the model of a property company and an operating company, which we call a PropCo and an OpCo, is widely popular in creating value on both sides. A good operating company increases the yield of a property company, and a good property company brings sustainable business to an operating company. If you see the largest asset managers globally, they understand this, and they do this very well. We have these two partner companies, and in both of them we are trying to create this synergy with Integro and HelloWorld.
Qasim, do you have any further questions?
No. Thank you.
Thank you. The next question is from the line of Aditya Sen from Robo Capital. Please go ahead.
Hi. Good evening. I'm hope I'm audible.
Yes, you are.
First of all, congratulations for such a stellar result and also the fact that employee cost as a % of revenue is decreasing. From 70 it has come down to 40. I have a question that in Q1 on call you mentioned that it's INR 10 crore and won't increase any further for this FY. As of now, I guess it's INR 15 crore. It's INR 15 crore now. Would like to know the reason behind this, and also where should we expect this to stabilize?
Your question.
Sorry, could you repeat the reason behind, could you please repeat that?
The increase in employee cost, and also where should we expect this to stabilize?
Look, the rise in employee cost, as you see our results. With every quarter, we are just adding our new companies. With the addition of new companies, definitely a group of new team members joins us. The reason of increase is because of that. Definitely it will grow till we add new entities in the Aurum PropTech folder.
To add to it, if you look at the last quarter, in addition to having added our new partner, we have also expanded in new regions in our existing products. Point in case is Beyond Walls has gone live and operational now in Mumbai and Bengaluru. Likewise, Hello World is also scaling up its co-living business. Both these businesses are RaaS in nature, where they are tech-enabled ops businesses, which require a certain increase in employee strength. These two, so in addition to what Kunal said, increasing our markets and geographies has also increased the
Yeah. Okay. That's great. The next question would be on the EBITDA front. Can you please let us know the EBITDA on the RaaS and SaaS business particularly?
In our segment results we have given the EBITDA numbers. RaaS will definitely have the depreciation cost within it. If we remove the depreciation then the RaaS EBITDA will definitely improve over this.
Okay. Okay. The last one would be, do you have any ballpark figure or any sort of aspirational target in terms of revenue for the next 2 or 3 years?
I think, at this stage, we are focused with the Q4 revenue, which we believe will be to the tune of INR 50 crores.
Do you also believe that would be possible?
Sorry.
Do you also believe that INR 50 CR would be possible in Q4?
I think what we are sort of dealing with now is that when we set this INR 50 crores, at that point of time, the revenue was only INR 14 crores, which was in the 1st quarter of this year.
Right.
We have similarly exponential growth numbers for the upcoming quarters. We will like to kind of detail that out in the next earnings call, in the Q4 earnings call. As of now, the focus is to deliver what we have already projected, what we have already committed.
Okay, great. Those were my questions. I'll call back in the queue.
Thank you. Participants, if you wish to ask any questions, please enter star and one on your touchtone telephone. The next question is from the line of Rahil Shah, individual investor. Please go ahead.
Hello.
Yes, please proceed with your question.
Yeah. Hi, sir. Thank you for the opportunity. I just wanted to ask, do you have any comment on the traction in the real estate industry, like the growth in this segment and how it will benefit the company?
I think real estate as a sector, like we've all been reading and going through multiple reports, is poised to be a $1 trillion sector by 2030 this decade. There are three areas where essentially the sector is changing. One is, from a point of view of more and more institutional capital coming into the business, which demands better efficiency in real estate businesses, which are development businesses and construction businesses. The other thing that is happening is, the consumer of real estate, because of the upward trend in digitization and internet penetration is also changing, and so are his demands.
The consumption of real estate, more so from a purchase point of view, from a buying point of view or from a renting point of view, from a discovery point of view, is now more tech-led. That is effectively helping our customer experience businesses. The third thing that is helping or the third thing that is changing in the real estate sector is that we are now looking at more and more urbanization, more and more movement into cities, which will effectively require more real estate to be constructed in form of residential in form of residential spaces and also office spaces as more and more people come to work.
The demographic of these people who are coming to work is between a Generation Z and millennial, which again falls into our offering of products from a co-living platform to a transaction platform, to a distribution business. All these three tailwinds that we are seeing in this sector are immensely effectively helping our products and services, so to say. I hope.
Okay.
I'm able to answer your question.
Yes, yes. Just one more. What would you say is the company's addressable market size in that sector or maybe overall?
We are in the midst of quantifying this sector. This is I would say one of a kind effort to quantify the sector's size in India. It's being done with an institutional partner. We'll be soon coming out with this report. If we draw some trends that are happening globally, typically 7%-10% has been a penetration or has been the size of a sector vis-à-vis the vis-à-vis the real estate size in countries like US and China. That is where we see this sector at. We would not...
We would say if we, if India doesn't or if India PropTech doesn't reach a $100 billion market size, then it will be an opportunity missed for the entire sector and everyone working in the sector overall.
Okay. Okay. Got it. Thank you so much, sir. All the best.
Thank you. Participants, if you wish to ask any questions, please enter star and one on your telephone. Ladies and gentlemen, to ask a question, please enter star and one on your phone. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead. Rahul Jain has left the queue. Participants, if you wish to ask any questions, please enter star and one. We have a question from the line of Arshad Toshniwal from Bottomup. Please go ahead.
Hello. Hi, sir. actually, I'm new to this company. Postman Disco, I've not tracked it. wanted to just get a brief sense about our business model, our market size and our, typically, economics of the operations.
We'll break this question into 3 parts. The overall sector, or our business comprises of 2 verticals, SaaS and RaaS.
Mm-hmm. Yes.
I hope I'm audible. There is some disturbance in your line, if you could.
Just a minute. Let me mute myself. Is it better now?
It's better, yeah. I'll start with the last one first. There are two verticals when it comes to revenue in our business, SaaS and RaaS, which is products and tech-enabled real estate as a service products. Between these two businesses, we have various focus areas or clusters as we call it, which are taking care of a specific value chain in the entire real estate piece, which is a very complex value chain. It starts from investment finance, which is the first which is, which is the start of a journey of any asset when it comes to development. It has two products, Integrow Asset Management and Aurum Infinity, which typically deal with wholesale investments and retail investments in a regulated form and fashion.
We have enterprise efficiency products which deal with tech expertise and solutions to real estate developers and enterprises. Under that we have products like Beyond Walls, Sell.do. Beyond Walls is a broker aggregation platform. Sell.Do is a CRM. Aurum Analytica is again, a data science product that is offered to developers for better lead management and nurturing. It also has products like TheHouseMonk, which takes care of rental management business for property owners.
The third part is customer experience, where we have a bunch of products ranging from Aurum InstaHome to Aurum KuberX to Aurum Liv, which take care of the customer experience part when it comes to purchasing properties or raising finances or reselling properties in the retail market. The fourth segment is connected living, which deals with the connected living experience in the entire once you purchase or once you own the asset. So there we have a product or an offering called HelloWorld. The economics of operations are primarily driven by the nature of the businesses, which are SaaS and RaaS.
Sorry to interrupt. Just one thing. Just to I think clarify these four verticals. If I understand it correctly, investment finance is the one where, say for example, a builder would require finance or any detail person would require a finance for housing related one or construction, then you would facilitate that. Enterprise efficiency are more, for example, something what an Info Edge platform also does, like broker aggregation or different rental management businesses. Customer experience is the resale market aggregation. I didn't get exactly what the connected living experience. If you can help me correct where I'm going wrong or if there is anything different.
That is correct. I think you've got the 3 segments absolutely right. The 4th segment is the connected living segment, which deals with post-purchase monetization of assets from the asset owner's side and from the consumer's side, discovery and utilization of these assets more from a rental point of view. There we have an offering called the HelloWorld, which is a co-living offering. Student living is a huge opportunity within that co-living segment, a sector which is largely untapped, largely uninstitutionalized in the Indian markets. Your understanding is absolutely right. There are 4 segments as we have outlined and these products that we defined under these 4 segments.
Okay. Okay. when you said this fourth co-living, it is more like Stanza Living as a comparable I'm using, to understand the business model.
We would categorize it in the same segment. However, our approach to this business and our strategies to take care of this problem and innovation segment are different. HelloWorld focuses on student living and young working population. However, it is an asset-light operation. We do not get into owning these assets. Typically, we are more cash positive than these businesses than the other business that you compared with. Our strategies to acquire properties are also different from what a Stanza Living would do.
Okay. I'll just ask a few questions again on this part itself then we'll go to the economics part. For example, when we say for example, an investment finance business, there we are the aggregates between the financial institution and the borrower. If you can just give some example, in a simplified way to understand these four segments and maybe what is our business or revenue contribution from these four segments. In the overall mix.
Sure. I will start with your later part first. I will start with the four segments' revenue contribution. Revenue contribution for investment finance was INR 79 lakhs in this quarter. Revenue contribution for customer experience was INR 2,781 lakhs. The revenue contribution for enterprise efficiency was INR 1,384 lakhs, and for connected living it was INR 3,706 lakh. The consolidated revenue contribution year to date till December 2022 has been INR 81,550 lakhs. The nature of each segment has got three to four use cases, and in accordance to these three to four use cases, the revenue models are defined likewise.
Primarily and fundamentally, the revenue models, for example, in the investment finance segment work in the way of a regulated facilitator to enable investors identify properties to invest. Investment Integro does not itself invest into any properties. It only enables wholesale investors to pooling their money into a regulated financial instrument, and that is then further deployed to, into projects which Integro indexes out, identifies, discovers, and then deploy that. I will also call in my colleague Hiren Ladva, to further elaborate on this question, please.
Thanks, Onkar. Mr. Arshad, just to elaborate on what Onkar has mentioned across all the use cases or all the four focus areas, maybe let's pick up just investment finance. There the overall aim of our strategy is to actually facilitate financing across different use cases, right? Right now, yes, we are focused on Integrow AMC as one conduit to channelize investments into residential real estate assets to start with. We will add other types of real estate assets like commercial real estate. The aim is to here, you know, look at and grow from the assets under management, build them efficiently, and hence add value to the primary customer, i.e. the developer, in enabling them to get more efficient and quicker and reliable capital.
On the other segment, on the investors to give them a transparent and a very well underwritten investment asset in the real estate sector, right? That's the problem statement we are trying to address. Similarly, in all the other focus areas, we are looking at 2 problem statements, which as we said in enterprise efficiency, it's to enable the developers to reach to their customers faster in the most focused manner. Hence, by delivering that value, we bring value to our company, right? I will not go into other focus areas because each focus areas will have, you know, their own individual use cases, right?
Okay.
The business model.
Okay. I think I'll have to read them more about it. User IT should document, et cetera, to update myself. Okay, got it. Got it.
Thank you.
Thank you. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity. If you could share the organic and inorganic breakup of this growth and what are the key drivers for organic growth?
Look, out of, in the current quarter, out of, say, around INR 39 crore, the organic number is around INR 2.5 crore. Mostly the inorganic part contributes around 90% of the current revenue. The organic part definitely will take some time because our products are just getting ready, so it will definitely mature over a period of time. Currently 90% of our revenue is from inorganic.
90%.
Yeah.
Rahul, that has been our strategy to build this business. When we started the journey of building the PropTech ecosystem, the fastest route to start building this was to identify mature products and businesses that are already in markets and acquire and reposition and add further products under it. The key growth drivers to these inorganic businesses have been primarily the broker aggregation piece, which is a large innovation area that we have been able to solve. Institutionalization of channel partner network and distribution network across the country in real estate is an untapped market. There we have got a phenomenal traction by the way of Beyond Walls. That has been one key growth driver.
The other key growth driver has been, of course, HelloWorld, our student living and co-living business, and a business which is largely well understood in markets like U.S. With institutional capital allocators coming in from those areas into this country, this business will get further traction as we see it. What it requires, what the business, the key growth driver here has been really two areas. One is more and more students coming back to cities, back to normalcy, and more and more working population coming back to normalcy.
The urbanization trend that we outlined earlier in this call, that how India is now moving towards a 45% urbanization, which requires more rental, affordable, flexible, new age properties that people can rent, and of course, properties that people can buy with a better customer experience.
Right.
To add. Hi, this is Ashish here. To add to what Onkar just said. The in-house products, to say so, they have started revenue only recently. One of our home loan products, which is KuberX, which was launched 3-4 months ago as a POC, even that has gone ahead and now disbursed loans worth INR 70 odd crores cumulative. We believe that some of these products over 2023 in this calendar year will should do reasonably well. The way we look at it is that there is a lot of our own management bandwidth that gets invested with companies that we own first the 100%, which is Aurum Analytica and HelloWorld. We have kept them as a different entity, right? Because we acquired them.
In a way, these are the companies that are run by us. Between HelloWorld and Aurum Analytica, the revenue is around INR 20 odd crores out of INR 32 crores in this quarter. If I have to include INR 20 crores plus INR 3 crores, that kind of becomes more than 50% of the total revenue, or even more, around 60%, 70% of the total revenue. Comes the companies where we own less than 100%. Where we assume that, while it takes a little bit of our time, but there are also the founders that are doing heavy lifting in those businesses. That kind of takes lesser time of ours.
If you look at the management bandwidth, that kind of gets scratched, it gets scratched into three buckets. One is our own products, of course. Secondly comes into the companies where we own 100% equity, which is HelloWorld and Aurum Analytica, which have been really growing at a tremendous pace. Then also with the companies where we have 51%, where we have other founders, other entrepreneurs to do heavy lifting along with us.
Right. Just quickly, if you could share your thought in terms of how you would see some of the challenges around the interest rate or in general macro to, you know, kind of, to your adoption theme of the tech adoption theme in the sector, which is a definite tailwind to you, but how this, some of this macro may impact your growth projection?
Typically, well, one thing that is definitely happening across the country is after the banking crisis between 2014 to 2020, there has been a lack of banking capital available to real estate enterprises or developers, which is requiring more enterprises, which is in a way affecting the interest rate. We see that more institutional capital from outside the country will flow into this sector because of this demand for capital. This is happening not just for real estate, but also for other sectors as well. That is one key part that we see happening in this sector.
The other is of course, like we earlier said, there is a tremendous change in consumer behavior between 2015 to 2020, in form of discovery, consumption and post-consumption. That is largely going to fuel the tech enablement and evolution in real estate sector from a consumer point of view.
Right. Right. Thanks for the color. That's it from my side.
Thank you. The next question is from the line of Devang Choksey from Devang Management. Please go ahead.
Good evening. My question is that since HelloWorld has been a star player for us since the very start, are we planning to expand the functions of it, or are we planning to keep it intact and not growing it further?
HelloWorld has definitely been a star player for us, one key cog in the entire integrated ecosystem. In the line, in the same line, we have added one more product line in the HelloWorld business, which is HelloWorld Select. This is a premier co-living cohort, which basically expands our target customer base and also ex-upsells the existing, like, tenants who could wish to upgrade their properties to more premium facilities. We have strategically are wanting to go deeper in the student living segment, which is a large segment which we understand, and have also got good control in, and would like to go deeper in the existing market. Hiren Ladva would also like to speak about this business further.
Thanks, Onkar.
Devang, the way we see HelloWorld's positioning in the co-living market, as Omkar was saying, is we have identified those couple of specific segments. At the same time, our business model is also very much, you know, bordering or directionally towards a viable business model. With that, we are looking at leaderships positions in at least 3 cities to start with by the end of next year. Wherein we would have the, you know, number 1 spot in terms of the occupied beds, if you will, or as well as live beds, right? That's definitely the direction that is guiding our expansion plans as far as HelloWorld's capacity addition is concerned.
It will come at the back of not only the existing segments, but as well as the new, premium segments that we are venturing into, right. We are very focused around, you know, garnering leaderships positions in some of the markets that we have identified across the country, where, you know, supply demand, scenario and the unique economics are very, very sound for our business model.
Thank you. I had one more question regarding another product called Aurum InstaHome. What are the growth plans and potential for that?
Aurum InstaHome's business model is unique. It revolves around click, set, sold. The idea is to tackle a few problem statements in the real estate resale, residential real estate resale segment. First is to offer a fair price or offer a fair value for people who, or owners who are wanting to sell their apartment by the way, online and real time. By the way of that, also understand the assets on sale in the residential real estate market. In primary real estate market, it is easy to source this inventory because you have one sector or one stakeholder to connect to, which is a developer. You get a control over, let's say, INR 200-300 crores of asset sizes.
Whereas in the, in the residential resale market, because of the retail format, it is difficult to get control on this inventory. That's one. The second area is essentially offering people an opportunity to expand their reach when it comes to selling the apartment, by the way of offering our suite of broker aggregation platforms, analytical tools like Aurum Analytica and so on. The third is of course, the sold, where we want to offer branded apartments, which have standardized set of offerings, which can be offered to home buyers. The strategy revolves around three, these three. We have been able to do a POC in Navi Mumbai market, where we launched Aurum InstaHome.
The data science and analytical capabilities for MMR region have been completed. We would now like to launch that as well. Further on, we go on, we are looking at going multi-city when it comes to the click, which is the ABM. Then of course, go deeper in these markets by the way of offering our set offering, which is the exclusivity offering in the cities that we call that we expand into.
Thank you so much.
Thank you.
You have answered my doubts.
Thank you.
Thank you.
A reminder to the participants, if you wish to ask any questions, please enter star 1. The next question is from the line of Faisal Havai from S.G. Havai & Co.. Please go ahead.
Well, have you made any estimates as to what our total revenue would be for the financial year 2023, 2024 approximately? We will not hold you to it if at all there's some indication that we can give. Secondly, is there any thought process within the company to at least merge all the companies which are 100% owned by us into Aurum and, you know, so that we don't have this subsidiary accounts, you know, which is always difficult for many investors to understand?
Faisal, on the numbers for 2023, 2024, of course, we have our, we have the internal numbers that we are sort of working towards. We believe that the growth momentum that we have seen in this year across quarters should continue, is what we can only say today. Yes, in the next quarter, we would like to kind of go out and make a projection like how we did earlier when we had projected that we will be a INR 50 crore quarterly number, making it a INR 200 crore company. We'll like to talk about it in the next quarterly earnings.
As far as the subsidiary working is concerned, Onkar, Kunal, you want to?
Yeah, look, this subsidiary definitely we'd also like to consolidate the things. Unfortunately, what happens all these subsidiaries have been created keeping some business requirements in mind, where each of the subsidiaries require some different set of approvals and things from the statutory authorities. To keep all those things independent and not overlapping, that is number one. Second, they have got a different set of management each one of them.
It's a 100% subsidiary that we have AccorYo made that founders to continue with us. We want them to run those entities independently. When it gets mixed up with a bigger organization or a listed company directly, then it becomes difficult for them also to run it independently. We can offer ESOP to the employees at that level of entity for their operations that they do. There are some of the factors that we have to keep in mind, and this is a very early stage right now because all these acquisitions have happened over last six to nine months. Maybe going ahead after some time we can take a call on these things. Definitely we'll keep your suggestion in mind to consider the thing.
Mr. Havai, we would like to draw some parallels with something like a TCS, which has got, let's say, a practice. This is a practice with a flexibility for the entrepreneur to run that business side as a PNL for himself and still keep him motivated. That's one primary reason why we have kept these subsidiaries in addition to what Kunal said about the licensing requirements of each of these businesses.
You feel that even in future it will be very difficult to merge these companies?
It is not difficult to merge these companies, but it's a, I would say, conscious call to keep these companies at the subsidiary level, for these two outlined reasons. It is not difficult to merge these companies or businesses.
Can you just comment on how well this fractional ownership business is growing or how is it shaping up with the regulatory authorities?
The fractional ownership space is a very complex area. From day one, our approach was that we want to enter the market in a fully regulated format. Last quarter, we completed our legal opinions on this. Basically there are essentially two approaches. One is that it is looked at as a real estate fraction, or the other, it is looked at as a financial fraction. For scalability and for being a compliant and regulated business, the opinion is that we look at it as a financial fraction. In accordance to that, we have outlined our go-to-market strategy in alignment with Integrow Asset Management, which has got the right regulated licenses.
Also are creating a distribution network or a distribution team that will be able to work on the distribution piece of this business.
Okay. Basically we will be looking to SEBI to register and all.
Yes, we have already applied for the RIA license for the distribution network, and in terms of the operations team, we have already aligned our strategy to roll out an operations team, which we will further, we will soon elaborate on.
About this AI and, you know, facial recognition software that we are developing for gauging customer reactions and all, any progress on that? Are we generating enough data to really, you know, feed the software?
Yes. We have been able to integrate this data into our existing products. Point in case is that this data is now integrated with our softwares, Sell.Do too. Soon, Aurum Analytica will also start using these softwares, where we'll be able to track consumer behavior across close to 25-35 parameters and then start predicting their behavior over a course of period. Data science is data science and analytics is a very complex work. It, it will take some time for the model to, I would say, start predicting data with accuracy, that can give a certainty of go to market.
When will the, you know, the call for the, you know, I mean, for the rights issue, be made by the company?
We are planning it to do it in the next quarter, which is Q1 of the next year. This is something that we have, we had planned initially that we will do it either in this quarter, which is Q4 or Q1 of the next year. We are on track for that.
We are almost sure that now our acquisitions are almost complete and our suite of products is also there.
The way we see that the acquisitions that we have done, they are all growing at a very reasonable numbers. They are in the right direction. They are in the right strategy. We believe that we have some more work to do with the existing acquisitions and also with the products that are being built in-house. Having said that, the way we are, for example, you talked about two subsidiaries, HelloWorld, which we acquired, had a annual revenue run rate of INR 38 crores when we acquired. Now they are at INR 66 crores. Despite not losing-
What are they at now? Sorry, the line was bad.
INR 66 crores of annualized revenue now. They have done INR 16.5 crores in this quarter.
Okay.
When did we do the acquisition for the? We had done this acquisition like 6 months ago, 7 months ago.
Got it.
Within two quarters, two and a half quarters, we have been able to kind of make it from INR 38 crores to INR 66 crores. I re-state, without losing of any cash on operations, without being EBITDA negative. If we had to go down that path, then of course the growth could have been even more. As our philosophy is to have growth but with an underlying aspect of profitability. I think the acquisitions are doing reasonably well under our management. If there is a compelling opportunity to do something like that, then we will not shy off that.
as of now, we believe that the companies are being handheld very well by the Aurum management.
Thanks a lot for your time and answering my questions so well.
Thank you. The next question is from the line of Mahendra Sharma, individual investor. Please go ahead.
So
Sorry to interrupt, Mahendra. Sorry to interrupt, Mr. Sharma. Your line is breaking up in between.
Uh.
We request you to use handset-
Can you hear now?
Yes, yes. If you can go ahead.
Great show so far. My question can be broken into two parts. One is that given that certain part of the products and services that we talk about or which we have have certain level of overlay with a couple of extremely well backed VC-funded companies and some stalwarts in the industry. Here what I'm referring to is someone like a Square Yards or something what an ANAROCK is doing and the larger IPCs. One is, yes, at this point of time, things are in a very early stage comparatively. When the real. The opportunity is very large. How do we foresee reacting to stiff competition coming in from them, maintaining profitability? That's one.
Second is, what would be the impact of this on the future, I would say, projections that we have?
Interesting question. Every market, every industry will have competition, we understand that we don't shy away from that. Our approach, however, is quite unique here from the businesses that you spoke about where these businesses are purely people businesses. Though you mentioned them as competitors, I would probably refrain from using that same category here. We are a tech-led business. In addition to being a tech-led business, it is an ecosystem of PropTech products and services, which includes various solutions that are offered to a variety of stakeholders, right from investors, wholesale and retail, to developers, to B2B2C, which is channel partners, to consumers and of course to renters also.
Whereas the 2 businesses that you spoke about are only in, let's say, 1 sector of a primary residential real estate sale or broking business or a secondary real estate sale or a broking business. That is not really comparable to
I would like to point out here, I believe Square Yards is also building a complete ecosystem, where they have the same assets management to metaverse to transaction to developer side of transactions and all as well. Maybe a couple of the products that we talk about have exact overlay with theirs, and they are also tech-led.
I think you have called out right. Yes, there are two odd products that would be similar to what we have as an offering. These two products that you outlined are new markets and new initiatives in this industry. Primarily, the business that you spoke about or the company that you spoke about is a broking company, is a broking business, whereas, we do not define ourselves in that category, anywhere.
Also, to add to what Omkar is saying, Mahendra, we are not saying that we have any monopoly on any segment. We are just saying we are unique because we are led by tech. As far as well-funded is concerned, I mean, our numbers are pretty known that we have some INR 80 odd crores in the company, and we have another INR 250 odd crores that we will raise over next few quarters or few years. We are playing our own journey. Within that, I'm sure there will be competition of various kinds that will come in.
Some will not have tech capabilities, some will not have funding capabilities, some will be led by PE, so they will be losing more capital, so they will have that barrier. I mean, these are... This is how a sector evolves. Our own real estate experience as Aurum also kind of comes in very handy at that point of time, because we know what the problem statements are, what the pain points are, how to address that, where should tech be deployed, where should tech might take a back seat. All these are the things that a sector kind of offers you, and we enjoy creating businesses around that.
Sure. I believe that, any so-called competition and disruptive market strategies adopted by them have been factored in when we're doing our projections for the coming period.
Yes, absolutely. We keep a keen eye on these businesses, like I mean, as mentioned. You had also called out the second question on this, which was the impact of this competition on the future business. With the sector size being so large and with only 2, 3 to 4 players, including us being the key players in this market as of now, we see certain scale in, within these 3 to 4 players itself, and these 3 to 4 players will keep on dominating this $100 billion sector, as we build this over the decade.
Sure. Thanks a lot.
Thank you. As there are no further questions, I would now like to hand the floor over to the management for closing comments.
Thank you, Asha. We thank all the stakeholders who have joined the call and participated on this call and have kept on continuously tracking us over the past three quarters. We have put an immense amount of effort on building this with prudence and cadence, not just us, but also our partner companies. We really see a lot of value in these problem and innovation statements that we have that we intend to solve. By the way of doing that, as a byproduct, we also aim at creating shareholder value and stakeholder value for all of us, for all of you. Thank you for your continued interest. We would look forward to see you in the next call.
Until then, we would like to say goodbye. Thank you so much.
Thank you very much. On behalf of Aurum PropTech Limited, that concludes this conference. Thank you for joining.