Finportal: Christina.
Sneha Patel: Good evening, everyone.
Sneha Patel: I hope I'm audible.
Finportal: Hello!
Sneha Patel: Hello!
Finportal: Good morning. Good afternoon, everybody.
Finportal: I welcome you all to the Beacon Trusteeship Conference call
Finportal: today. We have with us Mr. Pratap Singh Nathani, the chairman.
Finportal: I'm managing director, and we also have Sneha Patel, the
Finportal: chief financial officer of Beacon Trusteeship Limited.
Finportal: I would like to hand over the conference over to Mr. Pratap Singh. Nathani.
Finportal: Sir, please continue.
Sneha Patel: Okay, good evening. Everyone. Welcome, all of you
Sneha Patel: to the post earnings call of the listed Company Beacon Trusteeship Limited.
Sneha Patel: So we brought the Ipo in June, the 4th of June, and with that Ipo.
Sneha Patel: and with the help of all you investors.
Sneha Patel: we became India's 1st and only listed trusty company
Sneha Patel: and congratulations to all of you and to our team.
Sneha Patel: So now, taking you through the business model of the corporate trustees in India, how does it all work.
Sneha Patel: shall we issues the license to Intermediaries, act as a monitoring agency
Sneha Patel: to monitor the interest and principal payments to investors in entities and bonds issued by the insurance.
Sneha Patel: which are mostly the large and the midsize corporates.
Sneha Patel: We need to be monitoring the creation and the perfection of the security associated with the same.
Sneha Patel: we need to give them periodic information
Sneha Patel: to the, to Sebi, to rating agencies and to exchanges. So this is our primary job.
Sneha Patel: So what are the kind of products that are associated with a corporate trustee
Sneha Patel: amongst the regulated products by Sebi. It is the Ncds and bonds and the Af. Business.
Sneha Patel: The other unregulated products
Sneha Patel: under Sebi, which are being done here is the security of the Loan Trustee, Securitization Trustee and the Escrow Trustee.
Sneha Patel: So this is broadly the number of products that are being covered by weekr.
Sneha Patel: Just to update on your the issue proceeds.
Sneha Patel: We raised about 32 and a half crores through the
Sneha Patel: about close to 10 crores was through the Ofs route which came to the promoter group.
Sneha Patel: Oh, 7 crores went into software which was allocated to software
Sneha Patel: 100% proceeds allocated in the Ipo were disbursed by the merchant banker from the Ipo Escrow
Sneha Patel: vendors who are working on these softwares.
Sneha Patel: Then, secondly, we had allocated about
Sneha Patel: 50 lakhs for an Rta application. We are taking a taking a license for the Rta business.
Sneha Patel: So 50 lakhs for content as equity into the 100% subsidy
Sneha Patel: called beacon investor holdings for the network criteria. For semi.
Sneha Patel: Currently, as we speak, we are forming the team we have given
Sneha Patel: for the initial members of the team to Sebi.
Sneha Patel: In our application that we have submitted to Sabi, and currently we are amongst
Sneha Patel: amidst the queries that need to be answered to Sebi for the same application.
Sneha Patel: The other part of the money
Sneha Patel: was about 7 crores, which we have taken for license of a Dp.
Sneha Patel: Which we become eligible only after we become an
Sneha Patel: so that's why that money is lying with us in the form of Mps.
Sneha Patel: The eligibility comes after the Rta license. And currently, as we speak, we are identifying the team for a week.
Sneha Patel: The 3rd item, 4 item was office space that we needed to buy.
Sneha Patel: And that's the box.
Sneha Patel: This money was directly disbursed by the merchant banker from the Ipo store to the builder.
Sneha Patel: Now, currently you are facing over the last 4 we are facing delays from, so we'll do it.
Sneha Patel: So what we decided is, we need to look out for a different property.
Sneha Patel: So we've shortlisted the property, and we are going out with investing into the same
Sneha Patel: and replacing the old one with this one. Okay.
Sneha Patel: so we will be getting the position within a week's time.
Sneha Patel: So that's where we are. For the office space from the working capital that was allocated
Sneha Patel: about 3 crores was allocated.
Sneha Patel: We are looking at various options to grow overseas.
Sneha Patel: The 1st option is Mauritius Mauritius. We have, completed the paperwork to create a new company, Mauritius.
Sneha Patel: It will be a hundred percent subsidy of beacon prostitious, limited in Mauritius
Sneha Patel: Act, will act as a local trustee in the Mauritius region.
Sneha Patel: The second expense out of the working capital we will, we are be! We'll be doing something in Dubai.
Sneha Patel: So Dubai are also coming up in the form of
Sneha Patel: a place. A lot of money is coming to India.
Sneha Patel: So we thought we should explore Google.
Sneha Patel: I'm in Singapore also.
Sneha Patel: So the second venue is Dubai.
Sneha Patel: So currently Dubai mainland is offering a low cost
Sneha Patel: opportunity for us to open an office.
Sneha Patel: So that is currently we are focusing on in terms of Dubai.
Sneha Patel: Once these 2 locations happen, then we move on to Singapore.
Sneha Patel: So this is broadly the update on the use of Ipo proceeds now coming to business updates
Sneha Patel: from 1st April to 30th September.
Sneha Patel: Now we should note that the Ipo came in on the 4th of June we got listed.
Sneha Patel: whereas this update is from 1st April to 30th September, which is a close to 6 months.
Sneha Patel: and we are sitting on the 15th
Sneha Patel: for November 18th of November. Sorry.
Sneha Patel: so Beacon had an Aua assets under administration of close to 10 lacros.
Sneha Patel: which have now risen to 12.6 9 lakh crores as of 30th September.
Sneha Patel: That's a decent growth that we've seen in the assets under administration.
Sneha Patel: Your company has one, a total of 299 new assignments overall basis in the last
Sneha Patel: 6 months period, including 123 in the dementia and bond segment for the same period.
Sneha Patel: As for prime database.
Sneha Patel: That's a database company
Sneha Patel: which is based out of Delhi. They come out with a ranking on a quarterly basis.
Sneha Patel: They are ranked us 3rd on the venture, trustee, business and post, and look psu! One
Sneha Patel: that we have handled in the last 6 months.
Sneha Patel: Total new mandates are close to about 2 lakh 61,000 crores in the same period
Sneha Patel: across all products.
Sneha Patel: The Psu and the government sector gave us one lakh 25,000 cros.
Sneha Patel: The bonds coming in from the corporate mandates were to the tune of about 81,847 crores
Sneha Patel: now to break it up
Sneha Patel: from the debenture and the bond trusteeship. We got about 123 mandates, 2 lakh, 16,000,
Sneha Patel: 186 crores.
Sneha Patel: We got 62 mandates in the Security trusty business, worth about 30,454 crores.
Sneha Patel: We got 28 mandates in the Aia of trusty business, worth about 6,590 crores.
Sneha Patel: We got 66 mandates, worth 7,510 crores.
Sneha Patel: and we got 20 new mandates in other ancillary businesses, including escrow and other services.
Sneha Patel: So this is broadly the breakup
Sneha Patel: business updates for the last 6 months
Sneha Patel: 12 like 69,000 Crores versus 10 lakh crores.
Sneha Patel: then 2, 99 assignments. I think this is more of a repeat the last slide.
Sneha Patel: So if there are any questions to that, I would be happy to answer.
Sneha Patel: otherwise I can move to the next slide.
Abhishek Bhutra: Let's keep the question answers in the end, sir.
Sneha Patel: Okay, thank you.
Sneha Patel: Moving to the roadmap for the future growth.
Sneha Patel: Now, where is it from an investor's perspective? We are seeing the future growth.
Sneha Patel: So this is a very important slide.
Sneha Patel: I keep getting a lot of queries on, what is Nikan doing
Sneha Patel: on a day to day basis? Which are the other areas of growth
Sneha Patel: so well. So the Ipo money has been allocated to these are the 4 important categories where we put in our money.
Sneha Patel: or will be putting the money as we move forward.
Sneha Patel: So one very important milestone is the Rta
Sneha Patel: Rta. We thought it important because it enables us to
Sneha Patel: do a cross sell with all our products.
Sneha Patel: So suppose we have a bond issue, you need an
Sneha Patel: so as far as the current milestone
Sneha Patel: as far as Rpa. Business license is concerned.
Sneha Patel: We have taken up our office
Sneha Patel: of 2,600 square feet carpet area in the Washi area on lease basis.
Sneha Patel: and as we speak, the furniture was going on for the last couple of days, and furniture fixture A/C.
Sneha Patel: The PIN call is complete as of yesterday.
Sneha Patel: It's completely ready and ready for inspection of survey.
Sneha Patel: And that's the current status of the office.
Sneha Patel: What is the projected impact? What will we do over there?
Sneha Patel: This will enable us to manage. Investor records. Streamline transactions, support other scalable services.
Sneha Patel: and laying this, laying the groundwork for the next phase of growth to be our team uses.
Sneha Patel: The next very important pillar is the Dp business.
Sneha Patel: Whenever you're doing bond issues, you need an Rta, you need a Vp also.
Sneha Patel: So we thought, why not take that license also.
Sneha Patel: and both incidentally come under the purview of Sebi as a regulator.
Sneha Patel: Once we become an Rta. We propose to become A
Sneha Patel: whenever you do an Rta, you can cross, sell the Dp services to
Sneha Patel: wherever there is an Rta business to you.
Sneha Patel: This will enable us, as a holistic approach to our financial services portfolio.
Sneha Patel: When we are offering warned issues ideals.
Sneha Patel: we can offer these 2 services which will be
Sneha Patel: additional 2 products which will give us the income in our the 3rd most important pillar
Sneha Patel: is the Mauritius trustee subsidiary.
Sneha Patel: So one of the reasons why we picked up Mauritius is a lot of the Fi. Money comes in through this route.
Sneha Patel: We thought we must open office in Mauritius.
Sneha Patel: Formation of a new company will be happening over there.
Sneha Patel: As I explained earlier, we will be taking a new license of a trustee.
Sneha Patel: We'll be doing local level marketing in the Mauritius zone.
Sneha Patel: Now, incidentally, we also have a gift city trustee.
Sneha Patel: A lot of queries come wherein they need options like Mauritius, also Singapore, also the whales.
Sneha Patel: So with Gift City apart from India. We can give all these 3 locations, Mauritius being a very important
Sneha Patel: location.
Sneha Patel: The the income levels also nourishes.
Sneha Patel: Got pretty strong, for example, in an aif. If you get work 2 to 3 lakhs
Sneha Patel: in Mauritius, you can end up getting about
Sneha Patel: $25,000 to $40,000 as the income in a single transaction.
Sneha Patel: The next most important pillar is that the way operations
Sneha Patel: like Mauritius, a lot of money, is lying in Dubai wanting to come into India.
Sneha Patel: Oh, we have also initiated an expansion. We're looking at mainland the way
Sneha Patel: there are 2 options over there mainland, Dubai and Bifc. Dubai.
Sneha Patel: When we export. It seemed to me a very expensive option.
Sneha Patel: costing a lot of money, and it takes a lot of time also to start operations in Bfc.
Sneha Patel: So we chose that we need to stay in the mainland.
Sneha Patel: explore the market. And then if things work out
Sneha Patel: no problem, yeah, I see it here.
Sneha Patel: That will happen across the next 12 months.
Sneha Patel: Moving to 3 ratios on the total income side.
Sneha Patel: we moved from 12.2 6
Sneha Patel: what 13.8 6 crops.
Sneha Patel: which is a growth on a leg for leg h, 1 basis.
Sneha Patel: about 13.0 5%
Sneha Patel: after tax basis. We moved from 3.9 8 crores 4.2 close.
Sneha Patel: which is a growth of 4.5 5%
Sneha Patel: on a profit. Before tax, we moved from 5.5 1 crores
Sneha Patel: point 7 6 growth, which is a growth of 4.3 8%
Sneha Patel: ebitda level. We moved from 5.9 3 crores to 6.1 0 crores.
Sneha Patel: which is a movement of 2.9 1%
Sneha Patel: in ebit. We grew from 5.5 2 crores to
Sneha Patel: point 7 6 crores, which is a moment of point 3 7%.
Sneha Patel: These are the main key issues that we would like to discuss here
Sneha Patel: profit and loss statement. I think this was uploaded earlier. So
Sneha Patel: want to get too much into
Sneha Patel: the P. And L. Statement. We can discuss it in the end of the call
Sneha Patel: balance sheet. Also the same.
Sneha Patel: Now for financial analysis, companies achieved a revenue growth of about 13% close half of the year.
Sneha Patel: We did 13.8 6 cross
Sneha Patel: about 12.2 6,000 each one
Sneha Patel: Ebitda, increased by 2.9%.
Sneha Patel: Ebit rose by 4.3 7% net profit
Sneha Patel: was 5.5 5.4 4% growth.
Sneha Patel: 1 h or half year to half year basis.
Sneha Patel: amounting to what 4.2 2
Sneha Patel: asset base expansion now stands at 8 96 lakhs, which is at 8.9 6 crores.
Sneha Patel: Equity capital has expanded 18 crores because of the idea.
Sneha Patel: Results have increased by 5 pros.
Sneha Patel: 5 sorry reserves are also increased from 5 crores to 25 crores.
Sneha Patel: By September 2024 liabilities wise. Your company is a debt free company from the very beginning.
Sneha Patel: So this is a very good factor for consideration.
Sneha Patel: The bench of trustees just wanted to discuss that. It's a very important pillar for India's market
Sneha Patel: and how we are doing that job.
Sneha Patel: How is the background of the major trustees
Sneha Patel: role of the dementia trustees serve as independent entities appointed by issures
Sneha Patel: to safeguard the interest of the venture holders.
Sneha Patel: We are very crucial components of the operate right market.
Sneha Patel: We need to ensure compliance with regulation.
Sneha Patel: We need to protect the investors rights.
Sneha Patel: The holding period of the bond issuance throughout the holding period.
Sneha Patel: Regulatory framework for this business was announced in 93.
Sneha Patel: Well, there was several dementia trustees that were given licenses, almost all the banks.
Sneha Patel: and that point of time was given licenses.
Sneha Patel: But now only about 3 4 5 banks remain
Sneha Patel: with the trusty license which is active and working
Sneha Patel: the rest of surrendered or inactive.
Sneha Patel: Now, from a submit perspective, the investor protection mechanism needs to be monitored.
Sneha Patel: So we actively monitor more assurances
Sneha Patel: and ensure timely communication of relevant information to the investor and the regulator.
Sneha Patel: We create security in the favor of to the venture holder a large
Sneha Patel: providing a legal charge over the property
Sneha Patel: which enhances investor confidence in the capital markets over time.
Sneha Patel: So Sevi has come out with various processes updates, especially after March 21,
Sneha Patel: Sebi came out with a large scale update on the Sevi guidelines on dementia testers.
Sneha Patel: And it's been continuously evolving.
Sneha Patel: And we have also evolved accordingly.
Sneha Patel: Trusty business typically is a 30 year old business.
Sneha Patel: and we are just 8 to 9 years old in this business.
Sneha Patel: So we have had to adapt to a lot of changes
Sneha Patel: the core activities of a trustees creation and monitoring of the security charge.
Sneha Patel: For when for trustee is pointed.
Sneha Patel: The main one of the main reasons for appointment is creation of the Church.
Sneha Patel: We need to see to it that there's a perfection and creation of charge
Sneha Patel: in the stipulated time of what? 30 to 60 days as per the 7 events
Sneha Patel: we need to be monitoring the events of interest and principal payouts.
Sneha Patel: ₹1. One day report needs to be reported to
Sneha Patel: to the Stock Exchange and to the rating agencies.
Sneha Patel: We need to be do this on a proactive basis.
Sneha Patel: There is a Dlp ledger platform
Sneha Patel: which has been created by Msdl.
Sneha Patel: The team has to report on the Vip ledger platform
Sneha Patel: about the payouts on a timely basis. If there is no payout.
Sneha Patel: we need to raise the amount to the if there is a default, we need to take charge.
Sneha Patel: We need to declare, insure into a reporter, take action based on the credential holders
Sneha Patel: against the security that we are holding in light of the recent
Sneha Patel: and we actually stress that we've seen over the last up to 7 years, we need to be very proactive.
Sneha Patel: And we need to be saving the money of the investors
Sneha Patel: and help in Victoria, of the news.
Sneha Patel: the challenges that we are facing currently
Sneha Patel: most of the trustee spaces, lack of awareness of the trusty business.
Sneha Patel: limited understanding of the trustees role the security business.
Sneha Patel: then misinterpretation of security sometimes, security that is
Sneha Patel: to be required for any transaction is normally misinterpreted.
Sneha Patel: Investors generally overlook before investing. They just blindly sign onto the forms.
Sneha Patel: They just look at the rate of interest. They don't look at the security levels. They just send the form.
Sneha Patel: and then they cry that there is a default.
Sneha Patel: So these are the things these are the challenges that we are facing, and the legal recourse
Sneha Patel: cheers.
Sneha Patel: So the port process is a long and everyone
Sneha Patel: trustees have no Percy power. We need to act on the instructions of the credential orders.
Sneha Patel: Good as far as the risk is concerned.
Sneha Patel: if we default on any of the guidelines given by the survey, so
Sneha Patel: we need to follow the global best practices.
Sneha Patel: We need to take enforcement action on an ongoing basis.
Sneha Patel: So these are the basic challenges that any different trustee faces.
Sneha Patel: So there are other services that the venture trustees do.
Sneha Patel: And we also look like, I explained in the very beginning
Sneha Patel: we are into loan security services, which is
Sneha Patel: for the loans that are created by the banking system.
Sneha Patel: Then there is securitization business.
Sneha Patel: Then there is area of trusty business where we act as A for the S.
Sneha Patel: And there is also other products like estro services.
Sneha Patel: But over the last 15 days we has come out with a new guideline.
Sneha Patel: It's just a discussion paper as we speak.
Sneha Patel: Currently.
Sneha Patel: Don't be it so, demoge the non regulated business from the main trusted business, and
Sneha Patel: so the regulated business will be
Sneha Patel: for the venture. Trusty business and the air business.
Sneha Patel: Other businesses that we are doing
Sneha Patel: constitute to about 35 to 40% of the balance sheet
Sneha Patel: which will need to be demoged as a separate legal entity.
Sneha Patel: So one of the options that we have is to create another subsidy within the trusted business windows.
Sneha Patel: revenue streams into the subset.
Sneha Patel: So this is open for discussion and dialogue
Sneha Patel: with Savi, and through the discussion paper as we develop
Sneha Patel: Further, we will keep our investors posted.
Sneha Patel: That's next the bench of trustees for other services, as I explained, security trustee for loans.
Sneha Patel: So whenever there's a loan banks appoint us custodians appoint us as a autosty to the loan.
Sneha Patel: So from there we are. We are managing the assets.
Sneha Patel: What we typically do is
Sneha Patel: collectively, we need to see to it that we need to create a charge on the Roc
Sneha Patel: on behalf of the bank or any other lender, including an Mdfc.
Sneha Patel: So this is this process helps the lender to streamline their processes, outsource their activities of monitoring governance monitoring.
Sneha Patel: and whenever there is a settle down of a loan
Sneha Patel: they can ensure that they can efficiently sell out those loans in a very good process.
Sneha Patel: The second service is the yeah trusty business.
Sneha Patel: Whenever the app is opening.
Sneha Patel: We're going to submit for our new license.
Sneha Patel: They need to the venture trustee who is license per se.
Sneha Patel: So we can be the conduit.
Sneha Patel: Apply for a new license for the year.
Sneha Patel: So that is what we've been doing.
Sneha Patel: What is our service that we do?
Sneha Patel: So what we do is we give them some bit of legal advice. With the help of
Sneha Patel: legal law firms which are associated with us, we help them creating the Ppm. Document
Sneha Patel: with help of a merchant banker, we help them formulate document before application to Sabi
Sneha Patel: Post that we follow up with semi.
Sneha Patel: We do all the deployments.
Sneha Patel: So if there is any problem. With due diligence we become responsible as the Fund Administrating company
Sneha Patel: as a trustee, and we are answerable to study
Sneha Patel: for this activity. We also have a Gift city outfit where we have times, every service.
Sneha Patel: The 3rd pillar, which is the securitization interesting.
Sneha Patel: We play a role in securitization.
Sneha Patel: What is securitization. Typically, when banks are buying pools from plus from.
Sneha Patel: they need to do this on an ongoing basis to increase their book size, to increase our portfolio sales.
Sneha Patel: 2.
Sneha Patel: The trustee acts in a fiduciary capacity, the trustee
Sneha Patel: as a trustee. What we do is we do the payouts on a month on month basis.
Sneha Patel: For there are 2 forms of separatization. There is direct assignment, and there is a
Sneha Patel: pass through certification based assignment.
Sneha Patel: So these are 2 types of securitization that happened in India.
Sneha Patel: So what we do is we act as a trustee over there.
Sneha Patel: and we do the collection and the payout on behalf of the events
Sneha Patel: and on an ongoing basis we give them collection efficiency reports.
Sneha Patel: If there is a default, we alert the banks.
Sneha Patel: So this is the main role of the testing
Sneha Patel: in terms of client profile we saw that we we did a lot of
Sneha Patel: new business in the beginning.
Sneha Patel: So top 5 clients that we got in the public sector and the government sector are Rudiko.
Sneha Patel: I have seen Ntpc. And Ifcl.
Sneha Patel: As I informed you, before, we were in the top. One trustee in the sector.
Sneha Patel: in the corporate sector. New clients that we got for India was commercial credit, capital perfectes, capital
Sneha Patel: finance bank of.
Sneha Patel: So these are the top clients in there corporate sector about the management.
Sneha Patel: I don't think we need this explanation on this slide.
Sneha Patel: Enough just said to be, or actually
Sneha Patel: means that we've been putting out social media.
Sneha Patel: Thank you.
Sneha Patel: And eagerly waiting for the questions that anybody.
Finportal: Okay, thank you very much. We'll now begin the question and answer session. Please raise your hands to ask your question.
Finportal: We'll take the 1st question from Mr. Sahil Raj. So please unmute yourself and ask the question.
Sahil Raj: Yeah. How are you?
Sahil Raj: Hello.
Finportal: You are not audible.
Finportal: We'll take the question from Mr. Prateek. Sen. Then.
Prateek Sen: Am I audible?
Finportal: Yes, sir.
Prateek Sen: Yeah, thank you for the opportunity, sir. Sir. What's the average revenue that we generate
Prateek Sen: from our clients, or the products that we do like
Prateek Sen: for bond trustee and debenture trustees, and you know the securities, trustees. What is the average revenue that we generate.
Sneha Patel: So it's typically in the radius of one to 2 lakhs is the upfront fees.
Sneha Patel: That is a 1 time fee that is payable at the time of signing the mandate.
Sneha Patel: and there is one to one and a half lakhs of annuity fee that is payable every year.
Sneha Patel: Still, the bond, or any other transaction in the line.
Prateek Sen: Sir, is this annuity collected upfront.
Sneha Patel: For a core data. So suppose you come to me in June.
Sneha Patel: so I will connect the collect the annuity for the next 6 months.
Sneha Patel: and I will collect the upfront fee at that point of time.
Prateek Sen: Understood, sir? And, sir, what's your problem?
Sneha Patel: Sorry it will become due and payable every 1st of April.
Prateek Sen: And, sir, is our pricing on par with the market rate? Or is it like
Prateek Sen: a bit discounted to gain market share.
Sneha Patel: So, as far as pricing is concerned, we are fairly competitive in the market there. Sometimes there is bidding.
Sneha Patel: so the larger trustees would like to outbid you. So you need to. For each transaction
Sneha Patel: negotiate and then close the deal.
Sneha Patel: So it's a fairly competitive market as such.
Prateek Sen: Okay, sir, and like, can you give me some market share data in bond and debenture? Trustees like our market share.
Sneha Patel: Our market share in one individual trustees will be about 15 to 16%.
Prateek Sen: Okay, and the escrow account and security trustees.
Sneha Patel: So there is no established data.
Sneha Patel: What? The other products only for AI of, I can tell you.
Sneha Patel: There are about 1,600 AI's in the country, and we have close to 200 afs, as of today.
Prateek Sen: Okay. Understood, sir.
Prateek Sen: Thank you. I'll just get back in the group.
Sneha Patel: Thank you.
Finportal: Size, or you can ask your question now, if.
Sahil Raj: Given.
Sahil Raj: Hello!
Finportal: So you're audible.
Sahil Raj: I wanted to ask whether the revenue of beacon depends on the assets administered like it's now 1212.6 9 crores from
Sahil Raj: 12.6 9 lakh crores. After 10 lakh crores.
Sneha Patel: In the previous 6 months.
Sneha Patel: Oh, it doesn't depend on the assets under administration.
Sneha Patel: but that's the size that we are trying to tell you that's the
Sneha Patel: proportion that we control in the market.
Sneha Patel: But if you go to a transaction wise, the fee is not linked to that.
Sneha Patel: it is more or less linked to.
Sneha Patel: Although price you negotiate for each transaction.
Sneha Patel: Transaction could range from 50 crores to 500 crores.
Sneha Patel: The fee is respective of the percentage.
Sneha Patel: It is just a clarity.
Sahil Raj: Okay, sir, thank you. And one more question on the status of the software as mentioned in the presentation.
Sahil Raj: What? Exactly does the software will. How will it enhance beacons?
Sahil Raj: Business is going ahead.
Sneha Patel: So it is just not one software. It is a different kind of software for all our products.
Sneha Patel: So what will happen is the software will create stickiness to the client.
Sneha Patel: So suppose you have one software where
Sneha Patel: you are doing the entire calculation.
Sneha Patel: But client can interact with you on an ongoing basis.
Sneha Patel: The legal compliance can be done on the software.
Sneha Patel: that is, for the bond issues for Aia.
Sneha Patel: You can do the nav. You can do client onboarding all of that.
Sahil Raj: And sir, any? Yes, sir, yes, sir, kindly continue.
Sneha Patel: So there is different kind of software
Sneha Patel: for all kinds of products that we are pushing and approval.
Sahil Raj: And any expected timeline. When this will be finally brought into the market by beacon.
Sneha Patel: So it takes 8 to 9 months to build it.
Sneha Patel: So it should be done by the earlier part of the next year.
Sahil Raj: Okay. Alright. Thank you.
Sneha Patel: Thank you.
Finportal: We'll take the next question from Mr. Sriran.
Sriram R: Thank you for the opportunity. So if I see the competitive landscape, you know, there are bank players like, you know, access Sba cap.
Sriram R: You know there is Idbay also, and there are also private players like catalyst.
Sriram R: They are all actually 3 to 3 x to 4 exercise. Now, you know, apart from that, there is also a new player called Vistra, who has received this, you know, license this year. So so what is our right to win in this space, I mean, is it lower cost or something else? How does this industry work.
Sneha Patel: Well, I have to take you back.
Sneha Patel: So in time, so Idbi access.
Sneha Patel: so Vistra used to be ilfs.
Sneha Patel: and the 4th one you said. So all these 4 names that you took these are 30 year old
Sneha Patel: trustees.
Sneha Patel: Yeah. Just say, Hello.
Sriram R: So the proof of the pudding is in the eating.
Sneha Patel: Right now coming to the numbers.
Sneha Patel: If you look at Idbi, they are at about 100 crops.
Sneha Patel: But if you look at Vistra, if you look at
Sneha Patel: catalyst. If you look at access.
Sneha Patel: they are at about 40 to 50 groups.
Sneha Patel: So I would say, they have 2 x plus.
Sneha Patel: and this position we've been able to achieve in the last 8, 9 years
Sneha Patel: what they have achieved in the last 30 years.
Sneha Patel: So I would say that we've done a pretty decent job
Sneha Patel: as far as competition is concerned. Yes, when I started out oh.
Sneha Patel: to take this license, people did laugh at me
Sneha Patel: like, how will you counter these institutions?
Sneha Patel: But if you look at 8 years down the line, we've been able to do a decent job.
Sneha Patel: We've done these numbers for the last 8 years.
Sneha Patel: So I think, we are very competitive with them. We've created various kinds of software.
Sneha Patel: So if if any client approaches me versus all these institutions.
Sneha Patel: So remember you're talking to a private trustee
Sneha Patel: versus you're talking to an institutional trustee.
Sneha Patel: So an institutional trustee will take their own sweet time to give you an answer.
Sneha Patel: whereas a private trustee will be very quick. So that's the difference that we make on the ground.
Sneha Patel: as far as so pricing is concerned. Yes, we have to be very competitive.
Sneha Patel: and we have been very competitive.
Sneha Patel: and we've been able to outbid our competition.
Sriram R: So so what you're saying is basically 2 things. One is pricing and the other is operational efficiency. That is the value. Add that you provide right.
Sneha Patel: So one is software also, just 1 point.
Sriram R: Okay, I'm I'm I'm just including that in operational efficiency. Fine. So you know how much would be the contribution of non dementia trustee revenue currently. And how much do you think it will be in the next 5 years?
Sneha Patel: The Venture Trustee is about 45 to 50%. The remaining is 50%.
Sriram R: So it's 40, 50.
Sneha Patel: Yes, 2 people.
Sriram R: And, sir, with the Rta. The new international operations. How much do you think that can grow.
Sneha Patel: Within 3 to 4 years we should be looking at 75 to 100 person
Sneha Patel: if Rpa. Business and the overseas business kicks off.
Sriram R: From new business.
Sneha Patel: Is the same saying on a total basis we should be reaching that.
Sriram R: And so what is the you know? If I have to track one metric to track your industry, you know. What would that metric be. I mean, it would be an industry or a macro. What is that? I should actually track.
Sneha Patel: So there are multiple factors. So if you look at the bond issues, what Sebi is doing, they're trying to deepen the debt market.
Sneha Patel: So they have taken multiple measures.
Sneha Patel: So in the last 2 to 3 years
Sneha Patel: the denomination of a bond has come down from 10 lakhs to one lakh to 10,000.
Sneha Patel: So this is a big move from
Sneha Patel: what they've been always wanting to do is deepen the debt market, and they have been able to do that by doing this things very quickly.
Sneha Patel: The second one is they have made it compulsory for corporates to borrow 25% of their
Sneha Patel: oh, borrowings through the debt market.
Sneha Patel: So the larger corporates who are borrowing, say, 1,000 crores plus need to do 25% through the bond market compulsory. And you have to report on the balance sheet also.
Sneha Patel: So this is the next trigger.
Sneha Patel: 3rd one is that you are looking at a lot of bond platforms that have been launched and licensed by Sabi.
Sneha Patel: So what is happening with the bond platforms is you can invest as low as
Sneha Patel: ₹10,000 in a bond issue.
Sneha Patel: Previously, any investor who wanted to invest into bonds they had to put in much more money.
Sneha Patel: So typically what Sebi wants to do
Sneha Patel: is that democratize bond markets to such a level
Sneha Patel: of the share market now, in shares, you can buy one share at any point of time.
Sneha Patel: but in bonds you need to put in some bit of money. So this is what where this is going.
Sneha Patel: So this is complete democratization and retailing of the bond markets you're looking at.
Sneha Patel: Rba, they've made retail platform for G 6.
Sneha Patel: You can buy G 6 in retail. So this is what is happening in the bond side.
Sneha Patel: So
Sneha Patel: if you look at the equity markets, you have a little bit of risk there, but in the bond markets it is a safer play. So even the retail investor can participate. So this is where this whole business is going.
Sneha Patel: I'm sorry.
Sriram R: What is the point?
Sneha Patel: Yeah, retail business.
Sneha Patel: You will need to look at the retail reports of Sevi that are being made.
Sneha Patel: and this will continue to grow over time.
Sneha Patel: Secondly, if you're looking at the AI of market.
Sneha Patel: a lot of money is coming through the fis.
Sneha Patel: So there again, a lot of people are coming to us to create a new app time and again.
Sneha Patel: So there's a lot of action going on there. So area businesses want to go.
Sneha Patel: Thirdly, if you look at the loan market
Sneha Patel: banks, banks want to outsource their monitoring activity to outside 3rd party
Sneha Patel: by the regulated intermediaries of selling.
Sneha Patel: So that also is a big business that is coming on.
Sneha Patel: So these are the 3 revenue triggers
Sneha Patel: that are helping us to grow.
Sneha Patel: So this is what you'll have to see. The volumes in these segments and the developments there.
Sriram R: Okay, sir. Lastly, what did you on the loan market? Can you just come again, sir? I couldn't understand that.
Sneha Patel: Yeah. So Loan Market, what is happening is any bank which is giving a loan of about 50 crores?
Sneha Patel: They are appointing a security trustee, which is
Sneha Patel: somebody like us to monitor their payment to monitor the security creation monitor.
Sneha Patel: So that's a big business. So which is growing.
Sriram R: So, since when this is happening, sir, is is this a new mandate? By the Rba, or something.
Sneha Patel: So there is no such mandate from the Rbi. But the banks are finding it very easy and convenient
Sneha Patel: for them to associate with trustees.
Sriram R: Okay, so just since since when this is happening.
Sneha Patel: So this has been happening for the last 5 to 7 years, but of late it has happened more often.
Sriram R: Okay, okay.
Sriram R: fine, sir. And, sir. Lastly, you know, we have listed on the Sme Exchange this year. What is our roadmap to list on the main board.
Sneha Patel: Roadmap per se. You need a network of 75 crores.
Sneha Patel: Currently, we are at about 43 codes.
Sneha Patel: So if you grow at steady state the way we are growing.
Sriram R: Sorry. Your voice is.
Sneha Patel: Yeah. So it.
Sneha Patel: So my Internet connection is unstable. This one.
Sriram R: Yeah.
Sneha Patel: So steady state. If you are going at this rate, it should take about 3 years to get there.
Sneha Patel: But if the international operations and other operations like Rta and Dp. Take off.
Sneha Patel: then we should be there, or here.
Sriram R: Okay, great sir. Thank you so much, sir. Thank you for answering all my questions, all the best.
Sneha Patel: Thank you, sir, thank you.
Finportal: Present sheet, sir. You can ask your question now.
Prasenjit Paul: Good evening, everyone. Am I audible to all of you?
Finportal: But it was.
Sneha Patel: Yes.
Prasenjit Paul: Yeah, thank you for the opportunity. So my 1st question is as per annual report. You have mentioned that you are planning to march the operation of Kratos Fund accounting and beacon play role into this company. So back in Fy 23, we can see your Kratos Revenue was around 2.6 3 crore, so can you help me to know the Fy. 24. Revenue and profit figure of this Kratos and Beacon
Prasenjit Paul: payroll part.
Sneha Patel: So Kratos was about 4 crores.
Sneha Patel: Oh, Odm was about 1.6.
Sneha Patel: Payroll was about close to 50 lakhs.
Prasenjit Paul: What was the profit of this Kratos number on Fortre Revenue?
Sneha Patel: 76 lakhs profit.
Prasenjit Paul: Okay, thank you. My second question is, see, basically, recently, we received Cb approval for our Eif service. And around 6 months back I approached to becon for Eif trusteeship service as well as I have approached to few other trusteeship company as well.
Prasenjit Paul: So what I noticed there are pricing difference around 20 to 30% pricing difference. The quotation that I received from Beacon and others. So I opted for your competitor because of there is around 20% higher price of beacon. Now, while I'm availing those Aif Trust receive service. What I realized is
Prasenjit Paul: the service offering are same. They are following Sevi guidelines, because, as per Sevi, there are some quarterly reporting on call.
Prasenjit Paul: So what I understand the service offering is same as those are regulated to Sebi, but there are differentiation in pricing. So.
Prasenjit Paul: as per my understanding, there is no such differentiation in service offering bus, but differentiation in pricing so as as you can understand. So I myself, as a customer, I opted for another company just because of that pricing differentiation. So going forward, what would be the become strategy. Will you remain to become competitive? Match the player who is offering the lowest price? Or
Prasenjit Paul: you? You think that you can comment some kind of premium and still can attract customer. So what's your planning going forward.
Sneha Patel: Okay? So in terms of AI that you're talking of in M, we offer
Sneha Patel: the entire gamut of services. For example, if you come to me.
Sneha Patel: I will offer you AI of trustee services.
Sneha Patel: Any app that gets approval from Sevi also requires a fund accountant.
Sneha Patel: so that is what is being offered under Kratos, then also requires a software for calculation, for investor onboarding.
Sneha Patel: So if you come to Beacon Trustee, you are getting
Sneha Patel: a good number of services at one doorstep.
Sneha Patel: which is end to end. Now, what is it that I am gaining out of it?
Sneha Patel: If you come to me, I will offer you all these 3 services at one place, plus.
Sneha Patel: If you come to me, I will charge you. Say whatever I quoted when you asked me.
Sneha Patel: plus, I will get income revenue from podium as a software service which is 5 times
Sneha Patel: the revenue that I charge you for a trusty business.
Sneha Patel: Also, if you ask me for fund accounting, I will again charge you 5 times more.
Sneha Patel: So where I was getting. Say, for example, one lakh rupees.
Sneha Patel: With these 3 services I will get about 10 to 12 lakh rupees from the same customer.
Sneha Patel: which is essential for the AI business.
Sneha Patel: and this is essential for my business, for my shareholders.
Prasenjit Paul: Yes, yes, I understood. So that's a very good part that you mentioned about everything under single row
Prasenjit Paul: similar thing is offering by another competitor, you know, Orbis. So they went even one step ahead. They are offering custody service, even on the same single roof.
Prasenjit Paul: So going forward as you can understand this Rta service Trustee service. So these are not based on asset under management. But the custody service is something that is directly related to the asset under management, so, as the asset increase, the custody fees will also increase, and that offers a huge revenue boost of any company so going forward what I understood. You have already entering Rta. Already in the Dp, so our Rta.
Prasenjit Paul: Is done. Dp is done. Legal trustee. So do you have any plan to enter in custody business, because that will give a very big boost in your numbers, as like always grown, and and also the matter of the fact even always are offering everything in a single, but they are still offering a very competitive rate.
Prasenjit Paul: So what about your plan? Do you plan to bring a custody service as well.
Sneha Patel: So, sir, as far as custodian services is concerned.
Sneha Patel: the required network till today is about 50 cros.
Sneha Patel: There's a discussion paper that has been released by Sabi.
Sneha Patel: I think, last month, where the network requirement for a custodian will be 100 crops.
Sneha Patel: So if you look at the revenue that one can make on a hundred crore investment
Sneha Patel: will be fairly low compared to what I would have made on the 50 crore investment.
Sneha Patel: So as far as I'm concerned. That's why I looked at
Sneha Patel: the low value licenses like an Rta. Or for Vp. Service.
Sneha Patel: which are closely related to a bond issuances aif and loans.
Sneha Patel: So this is what I chose to do, rather than taking up something which is, which is a
Sneha Patel: requirement, is very high.
Sneha Patel: So for now on a steady state basis, I will need 100 crores for network.
Sneha Patel: and that to in a separate company.
Sneha Patel: As far as all this is concerned, they put it in the same company, and they did that business.
Sneha Patel: As far as all this is concerned, we don't counter all this in terms of yeah, yeah.
Sneha Patel: we don't counter AI always in terms of other trusted services.
Sneha Patel: So what they are doing is they are cross, subsidizing trustee services for custodian. So they are growing the custodian service at the expense of the trusty business.
Sneha Patel: So this is their business model.
Sneha Patel: My business model is a little different.
Sneha Patel: If I want to put a less amount of money in the licensing
Sneha Patel: and get a better deal. So this is my business idea. So that's how I'm going to.
Prasenjit Paul: Okay. Okay. Thank you, sir. So, wishing you all the best for future, and hope you will. Someday you'll bring all those services under single group, because as an Eif player even still, now I am. I am, you know, I'm looking for 3 different service provider for different things. But yes, bringing everything under a single group. It helps any asset manager. So all the best for your future.
Sneha Patel: Thank you, sir. I'll reach out to you for other other 2 services.
Prasenjit Paul: Sure surely.
Sneha Patel: Thank you, sir.
Finportal: Sridam, so you can ask your question now.
Sriram R: So just one question, you know, are we closely linked to performance of the core rating services of credit rating companies? I mean, is there any correlation like? If they grow by X, we will grow by 1.2 or 0 point 8, or something like that.
Sneha Patel: No, sir, we are not related to their groups.
Sneha Patel: In fact, we are related to the growth of the bond market, the loan market the Af market
Sneha Patel: rating services. They don't do rating for AI services
Sneha Patel: even if there are several downgrades, the bond markets will continue to grow.
Sneha Patel: So that is my opinion.
Sriram R: Okay, sir, understood. Thank you.
Finportal: Do we have any other question.
Finportal: Pradeek? Sir? You can ask your question.
Prateek Sen: Yeah, sir. Given this Sebi consultation paper you just mentioned in the call on separation of business verticals.
Prateek Sen: so would we be going ahead with the merger, merger of Kratos and Beacon payroll, which is not regulated by Cb.
Sneha Patel: We'll not be doing a merger. As such. We will be doing a hundred percent subsidy holding structure.
Prateek Sen: Cool thanks.
Finportal: Now I would like Pratap, sir, to have the closing comments.
Sneha Patel: I just wanted to thank everyone for taking time out and attending this call.
Finportal: Don't!
Sneha Patel: The 1st 6 months have been great.
Sneha Patel: We received a campaign response to the Ipo.
Sneha Patel: and based on the money that we raised in the Ipo.
Sneha Patel: We are working hard towards achieving great numbers for our shareholders. Thank you very much.
Finportal: Thank you everyone for joining.