Infibeam Avenues Ltd

NSE:INFIBEAM

Earnings Call Transcript 2024-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Infibeam Avenues Limited Q1 FY '24 Conference Call hosted by Go India Advisors. [Operator Instructions]. Please note that this conference is being recorded.

I now hand the conference over to Mr. Rajat Gupta from Go India Advisors. Thank you, and over to you, sir.

[Rajat Gupta, analyst]

Yes. Thank you, Salvin. Good afternoon, everyone, and welcome to Infibeam Avenues Limited earnings call to discuss the Q1 FY '24 results. We have on the call with us today, Mr. Vishal Mehta, Managing Director; Mr. Vishwas Patel, Executive Director; Mr. Sunil Bhagat, Chief Financial Officer; and Mr. Purvesh Parekh, Head Investor Relations.

Also joining us on the call today is Mr. B. Ravi, who is advising Infibeam on corporate and financial strategy as an independent consultant. We must remind you that the discussion on today's call may include certain forward-looking statements and must be, therefore, viewed in conjunction with the risk that the company faces.

I now request the MD, Mr. Vishal Mehta, to take us through the company's business outlook and financial highlights, subsequent to which we'll open the floor for Q&A. Thank you, and over to you, sir.

[Vishal Mehta, executive]

Thank you, and welcome to Infibeam Avenues' First Quarter '24 Earnings Call. I'm very excited to present the outstanding quarterly performances of our business. And I'd like to share that some of the achievements have been cemented by our position as a trailblazer in the digital payments industry.

Last quarter, we achieved the highest ever gross and net revenues gross revenue was INR 742 crores, which has been up 77% year-over-year, while the quarterly net revenue is about INR 99 crores. The adjusted mark-to-market loss, which we have recorded in other expenses. If you remove the consolidated adjusted EBITDA was INR 56 crores, up 31% year-over-year. While adjusted profit after tax was INR 32 crores, up 40% year-over-year.

Our profitable revenue business strategy is showing successful results, and we are very confident of being able to create better value for our shareholders going forward. I'm also very confident about achieving this year's guidance. We have published the guidance in our presentation. It is Slide 8 of the presentation in our press release.

We think that this is achievable, and we should be able to set the path for our next level growth as we instill confidence in the shareholders. We expect revenues to come in between INR 3,000 crores to INR 3,300 crores, which is the gross revenue, and net revenue for the year at about INR 410 crores to INR 415 crores. Gross revenue will be above 50% to 70% year-over-year growth, whereas net revenue will see anywhere between 25% to 27% year-over-year growth.

The EBITDA that we expect for this year will be between INR 230 crores to INR 235 crores, which will see an increase of around 30% year-over-year and a PAT between INR 130 crores to INR 150 crores, which is about 40% to 60% year-over-year increase. Over the past few quarters, the company has experienced unprecedented growth in our payments business. Our relentless pursuit of excellence and innovation has allowed us to capitalize on the ever-expanding digital landscape revolutionizing the way merchants conduct business transactions.

One of the key highlights of our performance has been substantial increase in merchant adoption for our digital payment gateway, CCAvenue. Yet again, this quarter, we added 9,500 merchants on a daily average basis. And now we have 10 million merchants. And we've seen a surge of demand for our TapPay solution that we launched about 2 quarters ago.

This serves as a testament for our trust and confidence that our solution is optimized for the experience that merchants request. And our payment gateway as well as our brand is a gold standard in the payment gateway business.

At Infibeam Avenues, corporate governance lies at the heart of our business conduct. We firmly believe and adhere to the principle of transparency, accountability and their essential pillars for our long-term success and trust. Our commitment to strong corporate governance permits every aspect of our business, fostering the culture of trust and reliability that resonates with all our clients and stakeholders.

We have made certain leadership appointments as we evolve our business. Vijay Subramanian who has been with the company, he's been appointed as the role of CEO for our Platform Business. Vijay comes with a degree from IIT Madras and he's worked at Amazon after doing his Masters in Urbana-Champaign. And he has worked on several of the key projects for the Amazon prior to joining Infibeam.

He will now lead the entire Platform Business for our company and taking it to the next phase. Vishwas Patel, who was the Executive Director. He will join the role as a Joint Managing Director, and he'll focus on improving and deepening our payment experiences, both in India and international. In international markets, we've already announced that we have launched and started our business operations in many other countries, including UAE, Australia, U.S. as well as some GCC markets like Saudi Arabia.

I will be deeply focused on building, which we've announced recently called the AI Fintech hub. This AI Fintech hub is a horizontal layer on top of our existing businesses, which is including both Platforms and Payments. Change is always around the corner, and sometimes you proactively invite it and sometimes it comes knocking. But when we look at the potential of what artificial intelligence and machine learning can accomplish, we think that this is the right time to embrace. It's a bold bet, but it's one worth taking.

The companies that will do well in the long term and succeed are the ones that are able to create intelligence within their systems and processes and focus on productivity as well as other aspects of what we can accomplish for our clients. I'll be serving as the Chairman and Managing Director of Infibeam Avenues. And both Vijay as well as Vishwas will be taking over some of the functions that enable us to grow over both Platform as well as Payments business.

The world is experiencing unprecedented digitization across various sectors, revolutionizing the way we transact, the way we work, the way we live. Digital transformation has also brought in an alarming increase in cyber fraud, security breaches as well as posing significant challenges to both individuals, businesses and governments worldwide.

In this era, artificial intelligence will emerge as a very powerful ally in combating such frauds, managing risks as well as ensuring secure authentication process. Infibeam will establish India's first artificial intelligence hub headquartered in GIFT City. And we will initially focus on fintech and financial sectors. Building solutions in these 3 areas, which we acronymically call FAR, which is Fraud Detection, Authentication and Risk. [indiscernible] Infibeam will also be hiring some well-known industry experts to build the business vertical under my leadership. This will create more value for Infibeam going forward.

We are also doing some structural changes to sharpen our focus on the core business, which is Payments and Enterprise Software. We're listing our wholly-owned subsidiary Odigma into -- which is into online digital marketing and it's run by professionals. The CEO of the company is Matthew, he has a degree from IIM from Bangalore. He's been with us for several years, and they have certain marquee clients with them. They're profitable and they will also be running our registry business called .ooo. While .ooo earlier was in the stand-alone Infibeam Avenue's financials, that particular business will be transferred to Odigma as we believe it is complementary to them in offering domain infrastructure, domain services along with marketing solutions.

Infibeam Avenues will also increase its stake in Fable Fintech Private Limited. If you recollect, Infibeam owns 16% of this business. It was into remittances to and from India, primarily focused on bank-grade software, bringing remittances from different countries into India. When somebody had to send small amounts of money from international to India, they would not be able to afford a $25 swift. And rather than using alternative channels, this particular company provides bank-grade software so that individuals can send even small amounts like $50 and $100 into India, while paying a very small fee. And the technology enables it to actually make it extremely competitive and proactive.

And while we were looking at this business and while we're looking at payments and globalization of payments, we'll be adding an additional 25%, increasing our stake in the company to 41%. We'll also be subscribing into compulsory convertible debentures of INR 1.4 crores into the company, along with other investors.

This particular company has marquee list of investors, including ICICI Bank, Paytm and many others. And what we plan to do is to increase our holding and make it an associate company of ours, whereby Infibeam Avenues will own 41% of the company.

Overall, our aim is to seize the maximum of opportunity in growing digitization era that is complementary to our business and stay ahead. I will now ask Vishwas to give you updates on our Payment business. Vishwas, over to you.

[Vishwas Patel, executive]

Thank you, Vishal. So over the past months, we have worked relentlessly to enhance our technology and strengthen our operating metrics. And I'm thrilled to say the results of our efforts with all of you. Our mission has always been to revolutionize the way transactions are conducted. And I'm proud to say that we have delivered on that promise.

We have developed state-of-the-art infrastructure that ensures security, scalability and lightning-fast transaction processing. Our upgraded technology stack will not only bolster our offerings, but will also provide a seamless and a delightful experience to both the merchants and the consumers. Our CCAvenue TapPay solution, which is a revolutionary mobile application, is a step in this direction, which holds a lot of promise to change the way payments are done in our country and beyond. It offers 200-plus payment options to merchants in a single integration, and which is, by far, the highest number of payment options in the off-line mode in India. Since we started rolling out, we have achieved 150,000 downloads in 7, 8 months of FY 2023, 50,000 higher than we had anticipated. This has doubled to now over 300,000 by the end of Q1 FY '24.

We are seeing an accelerated demand from the merchants. Our aim is to reach the hinterlands of India, offering our products. And of course, it's a very sophisticated app-based payment solution, yet very simple to use, and it's relatively cheaper than the competition and is affordable.

Internationally, UAE continues to grow as expected and continues to maintain a stable double-digit net take rate. In Saudi Arabia, we should receive our data localization compliance certificates in a month to be able to start rolling out digital payments. In bill payments to BBPS, our volume-based payment share has improved by 80 basis points to 11.1% in Q1 from 10.3% in Q4. In Q1, which is typically a seasonally weak quarter during the year, the net take rate was around 8.4 basis points, it is up 16% year-on-year, but was slightly down compared to 9 basis points in Q4 due to the change in business and payment mix.

An increase in transaction from certain low-MDR industries and a spike in less credit card transactions that have slightly lowered the take rate compared to the debit option resulted in net take rate going down during the quarter. But we are hopeful that Q2 onwards with the onset of festivities and later followed by the travel season, the take rates will improve and move towards our guided double-digit figures by the end of the year.

I'll now hand over the call to Sunil to give you the financial updates. Sunil Ji, all yours.

[Sunil Bhagat, executive]

Thank you, Vishwas sir. Our dedication to prudent financial management, strategic investments and operational excellence has yielded results that are a testament to our collective efforts. Financially, we have achieved impressive growth driven by a steadfast focus on efficiency and innovation. Our revenue has surged by 77% year-on-year to INR 742 crores, driven by higher contribution from Credit Card payment. Credit Card, like the previous quarter, contributes more than 50% to overall payments processed in India.

This number for us is about 80% in the UAE market. The growth in revenues complemented by an equally robust increase in profitability with a rise of 31% in EBITDA and 40% in PAT, adjusted for M2M gain or loss, which is a notional value and not part of the operations, strictly speaking.

Operationally, the number of merchants have touched 10 million, which is a great future potential for us to cross-sell through lending. There is excess settlement and other modes that we have. Our net take rate for the quarter was 8.4 basis points, up 16% year-on-year. We continue to work towards taking our net take to double digits. We have highlighted on Slide 9, short- to medium-term key focus areas on how we are planning to take it to double digits.

As we speak, we are already working with banking partners and with [indiscernible] on pricing and we are seeing positive outcome for some of these initiatives already. International expansion is on track. We'll share more details once we go live over the next few months. UAE continues to be in double digit, net take rate [indiscernible] wise. With the launch of TapPay in UAE, we will be able to gather higher market share in the region and we'll also launch it in Saudi Arabia and other GCC markets.

Off-line, CCAvenue TapPay as a strategy will start bearing fruits for us over the next 12 to 18 months. We have a focused strategy to scale our international business. As we look to the future, we remain committed to our reason of sustainable growth, innovation and unwavering financial integrity. Our accomplishments this quarter, coupled with our guidance for the year, paved the way for an even brighter journey ahead, one in which we will continue to create value for all our stakeholders.

With this, I will now hand over the call to the operator to open the floor for Q&A. Thank you.

[Operator]

[Operator Instructions]. The first question comes from the line of Jonathan Fernandes from Whitebridge Capital Private Limited.

[Jonathan Fernandes, analyst]

Just a few questions. So I want to know -- so most of the new-age Internet companies are currently like divesting into lending. And is it because there is more money to be made in lending or is there something else? What would be your take on that?

And secondly is, if you could throw some more light on the TapPay expansion plan? Like how many downloads have you seen? What are the performance goals? And how do you plan to compete with the established players in the off-line space, whether it's the cost players or the new API companies with QRs. So how do you then compete with them because you've more turbulence in the off-line space, right?

[Vishal Mehta, executive]

Sure. So I can answer the second question first, and then I'll go to the first -- this is Vishal Mehta. As far as TapPay is concerned, we think that there's a big potential for TapPay to get into the services business, not just products. Whether you're a small-time consultant or whether it is being able to provide some services. Typically, these merchants don't have a point-of-sale solution. And so to be able to offer solutioning, not just to merchants, but also to service providers is a big opportunity that we believe is in front of us.

While we have not segmented the numbers and we've not provided numbers in terms of how TapPay will grow. One thing I can tell you is that we expect that we will hit 1 million merchants this year itself, that's almost 10% of the population of merchants that we hold today. So we're at a 10 million number. I think we should at least have 10% of our merchants on TapPay. That's the internal metrics that we are working on.

The take rates for these merchants are better than what we see in the online front. Directionally, we have said that we want to go to 2-digit take rates while we are at 8.4 basis points. We'd like to get the take rate to go into double digits. And a combination of international expansion, TapPay and be able to focus on certain verticals, which are high yield will allow us to get there.

So I think that is in nutshell, what we can share at the moment. And when we get -- but 1 thing I can tell you is that TapPay is not meaningful at this moment in our overall structure that we can segment out and be able to talk about it specifically.

10% of the population is not a small number, we believe, in 1 year. So we think that it's a very important one. It's an acquisition we've made. And we feel more confident about the success of this acquisition going forward, given that we'll not just open up in India, but also in international locations. Vishwas just mentioned that in UAE also, we will open up TapPay. And we should be able to increase our merchant count by multifold there, by a factor there compared to here because the base there is smaller compared to what we have in India. So this is as far as TapPay is concerned.

Can you remind me of the first question. You were slightly -- I was not able to follow up the first question, please.

[Jonathan Fernandes, analyst]

Yes. So the first question was mainly about most of the companies divesting into lending. So I just wanted to know like what is your take be? Is it because there is more money to be made in lending? Or is there some other component to it?

[Vishal Mehta, executive]

Lending, if you look at some of the global peers, you will find that the revenue streams come from payment, lending and advertising for some of the large Internet companies. And so I think that it's a proven thesis that these 3 verticals are potentially one that can provide profits to companies and that too at scale. And what we believe in is that if you're not -- if you're in the technology business and if you're not at scale, then you're not doing anything important.

So in whatever we are doing, whether you talk about Payments where you have scaled up or whether we think about Enterprise Software that manages scale, I think that becomes the core mantra for us, that whatever we need to do, we need to actually scale up.

As far as lending as an opportunity is concerned, I think it's evolving. I think India is -- you would have noticed that there are a lot of regulations that have changed around lending in the past few quarters and compliance to those regulations become very critical and important. That is one. Second is that we think scale-through processing, lending through having merchants sign up for payment gateway and be able to offer them lending solutions become an extremely attractive proposition. And so I think that we already have discussed in the past what we are doing in terms of instant settlement or express payment, whereby the merchant can receive payments immediately as opposed to waiting for 2 days or 5-day settlement period.

So we think the cost of collection -- lending is really about collection and not about giving. So we think that as long as you're able to optimize your process in such a way that you can have visibility, transparency and have the cost of collection go to or tend to, when I would say, practically 0, but yes, practically 0, then I think that in such cases, it becomes a very attractive proposition and Indian market is right for it.

So we think that lending is a very important facet of what we'll end up doing. And we think that as we build up, you'll hear more about what the company will end up doing. When we talk about artificial intelligence and a few things that allow us and enable us to back test our models and be able to deliver on performances. Those are decision-making models. So when we think about -- and when we discussed about our AI hub opportunities of fraud authentication and risk, these are risk models. And if you are able to build out such models that potentially allow us to be able to externalize them and offer it to others, I think it becomes an attractive proposition. One first, we will try on ourselves before we do provide to others. But we think express settlement is a big opportunity right now for us. And with the cash reserves that we have, we'll double down on that this year.

[Jonathan Fernandes, analyst]

All right. And lastly, if I can just squeeze in a last question. I just wanted to know like what are your thoughts on how do you see the business evolving over the next 3 to 5 years and that kind of a timeline?

[Vishal Mehta, executive]

See, I'll tell you, I think that we've discussed that, that we want to get to a point where we get to $100 billion in processing in the next couple of years. We think that the potential does exist. We want to get to a double-digit take rate. It will be a combination of domestic and international growth. International is less than 10% of our rollout single-digit percentage. We would like to allow it to grow to a 30% number. And while India also grows and India being the beachhead and we'll be able to -- while we build out all the solutioning for India, fortunately, in payments, India is far more evolved than other countries. So that gives us an edge and an advantage.

So we think that we'll continue building out the business in that front. We are getting into the entire discussion and conversation around artificial intelligence. And I think that, that becomes a very critical factor for any company. I'm very optimistic about it and the way we see the response and the things that are evolving around us.

So I think while we look at different aspects of artificial intelligence, the ones that we'll focus on our -- the ones that go horizontally between commerce and payments. One being data models because a lot of companies have data, but it's not in a perfect shape where you can model on top of it. Second is actually the models themselves and being able to test and tune them. And then the third thing are the decision models. The ones that allow you to actually make decisions. And those are the 3 fronts. And I think any problem that you'll see in AI, you typically have these 3 areas that one has to work on.

So we are very solutions focused on this. And within that solutions, we build our products.

[Operator]

[Operator Instructions] The next question comes from the line of Anuj Narula from Makrana Capital.

[Anuj Narula, analyst]

I have 3 questions. So this foray into artificial intelligence that we have announced with our Q1 results. Can you give us more details on what exactly are we planning here? And even though this is a bit too early, but given that AI seems to be everywhere now, how big are we planning to take this business going forward? So this is my first question.

And another one is, like, I just wanted to have a bit more understanding about your bill payments. Can you share some more statistics in terms of where we are, our performance and how we plan to grow in this business and who will be our major competitors in this business segment?

And lastly, just 1 more thing. Any plans to get into B2C business in the future?

[Vishal Mehta, executive]

So I'll take the AI question, and I'll have Vishwas take the bill payments question that you have. See, I mean, I know that a lot of people have heard about artificial intelligence and machine learning has been a technology with very, very high promise. It's been around for decades. But it's only in the last 5, 10 years that you would have seen that companies have pervasively started utilizing it. And the shift in that has been, I mean, because of access to such high volumes of compute capacity, which is available at such a low price and extensively data being available to be able to go and process and get some predictive frameworks out.

So I think these -- whether you're talking about large learning models or generative AI, they've been around for quite a bit. And I think a lot of innovation have happened in the past at least few years that we've seen.

So we think that we are going to focus on solutions, which are going to help both of our platform as well as payments business. We think of AI as a horizontal layer, which will enable it. To give you an example, while Infibeam Avenues has a lot of data. But the first place where one has to maybe start thinking about is that is this data in a format where you can [indiscernible] on top of it. This is not just pure analytics. But do you have the capacity to create your own data lakes? And is it in a format and a framework that you can actually run [indiscernible] that's an algorithm and de-learning that you [indiscernible] to conduct on top of.

And I think every company because India has significant amounts of data, but this data is not in the format that somebody can utilize. Short of putting it in Excel or putting it in some small DB, I don't think that they are in a capacity where you can utilize it and put models on top of it. And so I think a horizontal layer where you were able to go and extract this data and put in a format where you can run models is 1 area of solutioning that the company will focus on, starting with its own data. That's one.

The second area that we will focus on is the modeling part. A lot of data exists with companies. But a lot of companies, we realize, don't know what to do with it. And so how do you build out such model, how do you tune such model is the second area that we can participate in solutioning with? And these are not mutually exclusive. They could be either or, but they're not mutually exclusive.

And then the third part in organizational structure for this is an ability to be able to drive decisions once you reach a certain competency with these models, are the models able to help you make decisions? And when you think about it, I mean, these are the 3 areas that we think will be important for the company.

We will be partnering with commercial as well as government utilization for such things. And in the next few weeks, we will be sharing more information about who we will be working with. We don't think that this is just a India-specific project or program for us. We will utilize the skill sets in the framework on our own businesses, and we will look at providing solutioning to other companies. What we are not doing is building out a product that everybody will utilize from day 1. So I think as we build up, it will -- we expect that it will be remunerated and then within that solution will build out products, which is an approach that we have taken as we build out this framework. We will be adding more data scientists on to our -- in our business and on to a payroll. And we think that with the promise that AI lease -- and we think it's completely transformative. But I will leave that for a future conversation maybe with all of you.

But what we will do is, like I said, I'll be leading that program and maybe that's all I can tell you at this moment. Hopefully, that gives you some idea in terms of how we think through this business. As far as the bill payment, Vishwas you want to take that over?

[Vishwas Patel, executive]

Yes, Vishal. Vishwas here. So our whole bill payment strategy, which is distinct from the payment strategy that we have, it runs through our bill avenue solution and our majority on subsidiary company, Go Payments thing. So BBPS, BillAvenue is a interoperable online payment platform for Indian services. So we have received now a perpetual license, a perpetual license from the Reserve Bank of India to operate as a Bharat Bill Payment Operating Unit for both consumers and billers on both sides.

So today, as we stand, some of the business billers that are there, Indian Oil, HP, GAIL, DishTV, [indiscernible] ICICI Bank. So we are among the top 3 in the BBPOU volume. However, the billers that we have onboarded on to the BBPS platform, almost 87% of all billers have been onboarded by us on the BBPS platform. And on the other side, when you see the agent network that we have across our AI, more than 1 million touch points are there across -- 1,300 plus cities and towns across India. These are the small shops, which are [indiscernible]. So more than 1 million touch points are there across the country.

If you see the volumes, continuous rise, right? So if you see FY '23, we did around INR 14,800 crores of almost -- processing almost 11.8 crores transactions of bill payments. And this quarter, if you -- these 3 months, we have done now INR 4,800 crores alone in 3 months and processed over 3.4 crores bills. So the growth volumes and the trend is continuously growing. And under this thing, as we have also our own AI, that is Go Payments, there alone by giving a variety of other services. In FY '23, we already did INR 12,440 crores through our AI subsidiary. And this quarter alone is another INR 3,432 crores of volumes processed to the Go Payments. So the whole strategy of driving this because some of the bill payments with direct connect as well as putting on the billers [indiscernible] is doing great. So we are one of the top player in this industry.

[Unknown Executive]

They had asked whether we would like to go to B2C future.

[Vishwas Patel, executive]

B2C in future? Right now, no. There is no strategy. We always operate on the B2B principles, direct-to-merchants, direct-to-banks. Our technology, remains in the BillAvenue solution and the CCAvenue solution is used by the variety of the banks who we provide the perks. So the whole idea is always being B2B. The reason we don't go B2C, because of the high cost and consumer acquisition and the kind of solutions that are there, [indiscernible] consumers. We will focus on lending and other things, like given our new app that was [indiscernible]. The whole app is very is different from what a GooglePay or PhonePe is offering in the market. It is [indiscernible].

What we're offering is that you can just download an app and you can start accepting cards on your own phone just and there is also static QR where you can just show the QR and UPI [indiscernible] dynamic QR were link-based selection to the same app. So it's the only channel, world's most [indiscernible] Kirana shop in any hinterland in India and just download the app just like you download any UPI app or any other app and start accepting payments. And it is not just restricted to a UPI payment. Here it is his own phone. So he's not spending anything extra and buying a sound box or paying monthly rentals on that sound box, which is differentiated from the others in the market.

And the kind of certification that we have, being able to take [indiscernible] like among the first in India, definitely, but also among the first in Asia Pacific, where even a transaction amount of above INR 10,000, maybe even INR 2 lakh if the card has a wallet, can be taken on the phone itself. So it's a very disruptive difference on the existing guys or deploying hardware, who are deploying sound boxes and others [indiscernible] simple app based and it will transform and the results will come and see. As we said, we are among the only few where we are just not deploying a QR, but we are giving them not only a QR but accepting this thing through a mobile app, the entire credit card, debit cards and other things. That's the differentiation.

[Operator]

[Operator Instructions] The next question comes from the line of [ Dipesh Sancheti ] from [ Manya Finance ].

[Unknown Analyst]

Just wanted to understand what will be the role of Mr. Malav Mehta in the new company, which will be [indiscernible]? And what will be his holding -- I mean, his holding directly, I think is 1.29%. What is this indirect holding in Infinium Motors Private Limited? And will there be any selling seen from him?

[Vishal Mehta, executive]

So yes, there's no role per se, which is your first question. There is no new companies that we are establishing. So it's a business vertical that we're setting up as an AI hub within the company. And that company is -- I mean, as far as the initial core focus is concerned, we are going to keep on building up both in terms of the Payments business as well as the Platforms business.

So to answer your question, I don't think there's any role and either it's a separate company, it's within the listed company itself that we are building out, AI hub as a vertical, headquartered in GIFT City. We do have plans to expand the hub across multiple cities in India while the headquarters will be in GIFT City. But we will expand across other larger cities within the country as well.

As far as holding is concerned, it's listed, yes, you're right, 1.29%. And the other group companies where you are talking about where -- they hold equity in the listed company, they continue to be having independent directors in their own setup, whereby he is not involved in those companies.

[Unknown Analyst]

So no holding in Infinium Motors Private Limited?

[Vishal Mehta, executive]

No. No holding.

[Unknown Analyst]

Okay. Okay. And do you see any selling from him, I mean, after this exit?

[Vishal Mehta, executive]

I think it's -- I mean, it will be too hard to say because everyone have their own decisions to make. But I think that as and when required by the regulatory authorities, we will be announcing whatever is out there. So I'd not be able to comment on that at this time.

[Unknown Analyst]

Okay. Okay. My second question is regarding the AI-enabled fraud detection. Are we looking at setting up our own, I mean, team? Or are we looking at any acquisitions in the space [indiscernible]? There are many companies in the [indiscernible] space also available. So are we looking...

[Vishal Mehta, executive]

Our internal bias is to build and not to buy. So in other words, we will be having an internal team of data scientists who will become part of us to build out. And we will continue evaluating opportunities as they come our way. So in other words, while we are not adverse to looking at an acquisition, but our internal bias is still to build and not to buy.

[Unknown Analyst]

Okay. And just a last question regarding the TapPay. Very exciting to listen to you about TapPay. How that every phone can become a POS, if I understood it from your explanation of the last question. I mean, how do you -- firstly, how do you download this? Is there any link or something? And secondly, like, is the understanding right that every phone will be POS and we can accept payments on that, so effectively, for 140 crore people, there will be a lot more POS without any actually creating hardware for that?

[Vishwas Patel, executive]

Yes. Vishwas here. So the app is available, CCAvenue for Business on the Google Play Store. You can download it from there. All the merchants and everybody, it's there on a CCAvenue website also, link is provided. India is an Android market. So any Android Version 9 and above can accept it and the phone should have an NFC. So every smartphone, I think about INR 3,500 is already having an NFC chip, right? So that is all the 2 requirement that is there: Android phone with NFC, which almost every phone has, every smartphone of INR 3,500, INR 4,000 and above has it; and Android Version 9 and above, which can accept it. And just go on see CCAvenue, even the sign-up and online onboarding is also through the app itself.

[Unknown Analyst]

Okay. And I mean, [indiscernible] effectively becomes a POS, right?

[Vishwas Patel, executive]

It becomes -- your phone becomes a POS because that's where the whole thing is to align with the Prime Minister's vision of Bhartiya Vyapari. So it's an ability to pay what we have been focusing until now. All the guys just be able to pay, go out without cash. Now we are changing the whole 360 degrees and now we are saying our ability to collect. So anybody and everybody, be it even a coolie at a railway station, after doing his job, he can just collect it. Or a tuition teacher at a student's home can collect the payment by just taking out the phone. And the payment options are not restricted just UPI scanning and doing it. It is also credit cards, debit cards, because credit card volumes are growing, INR 150,000 crores and above per month, volumes are growing. And debit cards and I mean different wallets that are in the market can be accepted through it.

[Unknown Analyst]

Okay. Can you just explain what will be the revenue model for this? I mean how will...

[Vishwas Patel, executive]

It is same CCAvenue model, same CCAvenue model. We earn on every transaction, the bps that we discussed in the first part of the call. That's where it does. But in the off-line world, the bps are a little higher. So the margins are in double-digit bps.

[Operator]

The next question comes from the line of Garima Shah from Envision Capital.

[Grishma Shah, analyst]

I'm curious to know what's happening to the GeM 2.0 platform? I mean, are you in the process of building it or there is some time away.

[Vishal Mehta, executive]

Yes. So I'll give you some background. We've announced that as well in one of our public announcements. GeM 2.0 is a completely new platform. It has no relations with the current existing platform. There is an RFP, which was floated by the Government of India, whereby there's a definition called MSP, which is the Main Service Provider, and that they would have to build it from scratch. The time line for that is about 18 months to deploy. And within that timeframe, you also would need to migrate the old platform data and many others to the new platform.

The current contract, which we have, it's up to December 2023. And there is an option to extend that contract. Even in the existing contract, Infibeam Avenues is not the MSP. We provide the core technology infrastructure for the marketplace. And in the past as well, we have announced that we will be working with companies, whether it's a current MSP or whoever is the new MSP in this case, TCS, to be able to go and offer our core solutioning frameworks.

So other than that, I don't have too much to share, but we expect that we should hear something in the next 2 to 4 weeks. That is regarding the extension of the existing contract and how and when we would participate in terms of build-out of the new program. And as we have available information, we'll share it with you.

[Grishma Shah, analyst]

So the processing volume of, say, INR 53,000 crores that we've done in this quarter, we earned some margins on that?

[Vishal Mehta, executive]

That's correct.

[Grishma Shah, analyst]

Okay. And that kind of -- if everything goes well and whatever is the contract, that kind of can continue to be there?

[Vishal Mehta, executive]

That's correct.

[Grishma Shah, analyst]

And the other question that I had was on this entire -- Go Payments. So the transaction value of INR 3,400 crores. What does it mean? It means all these services together which you highlighted on the slide or what is it?

[Vishwas Patel, executive]

Yes. Vishwas here. So it includes all the services provided by Go Payments directly to the consumers. So that is the services they offer to the agents who further give on all these services, like money transfer, recharges, insurance, cash collections, BBPS bill payments, other enabled payment systems and all that stuff. So the total volume done through that processing through those agent networks last year was INR 12,440 crores. And this quarter, it has, in 90 days alone, it's around INR 3,432 crores.

[Grishma Shah, analyst]

And this has a higher take rate? Or what's the take rate that we are having?

[Vishwas Patel, executive]

So variety of services, some [indiscernible], some are percentage and other things. But at the individual -- this unit level, it has already gone into profitability from this month...

[Operator]

[Operator Instructions] The next question comes from the line of [ Ashish ] from [ Infinity Alto ].

[Unknown Analyst]

Just a couple of questions from my side. One is there is a substantial cash in the balance sheet. What are the thought process in terms of capital allocation going forward on that?

[Vishal Mehta, executive]

Sure. So basically, we talked earlier about express settlements. And express settlement is such that rather than doing a settlement with a merchant on T plus 2 or T plus 5 days, we do the same-day settlement. When you pay a merchant, generally, it takes a settlement time before we would remit the amounts into the merchant account. But instead, we would do it the exact same day. And for that, we have extra bps. It's technically not lending, but it's essentially part of our rate contract and structure, whereby we are able to do same-day settlement. What it does is it changes the cash flow of the merchant significantly.

And through that by design, our cost of collection practically isn't there because the money is coming into the escrow, and then at the end, we would ensure that we would submit to the bank and take the amounts. And for that, we today put our own balance sheet. So what -- rather than taking any loans, we will put our own balance sheet into it because we have had -- we've done more than integral [indiscernible], more than $1 billion last year of express settlement with 0 NPA. So now that we can do $1 billion, we think that we will go to $10 billion. And rather than doing and scaling it up without actually understanding the dynamics, we took an appropriately conservative approach. And that's 1 place that we'd be positioning.

And the second area that we'll focus on is international growth. So we think that International can potentially become 30% or more of our overall revenues. And we think that somewhat raising capital as well as investing capital into the international markets, in each of the markets, there will be different dynamics. But we think that, that becomes a potential opportunity for us to grow.

And the third area where we will be looking at investing into -- and we have already announced that is artificial intelligence, the AI/ML framework that will build up. And that is more of a solutioning framework, not a product framework. So we think that as we build up will continue receiving revenues as well that we're building through and eventually it will transform into a product. Basically, we are solving large problems either for the government to commercial use and potentially building out products that help the industry build up further. These are the 3 areas that we're spending capital in.

[Unknown Analyst]

And in terms of the adjusted PAT, what are the MTM -- why did we have an MTM loss this quarter? Is it part and parcel of our business because...

[Vishal Mehta, executive]

No, the MTM loss is basically because of the investments that we've made in companies. So it's a notional loss.

[Unknown Analyst]

Which -- the Middle Eastern company, is that the loss?

[Vishal Mehta, executive]

No. It's DRC Systems. It's a software services company that [indiscernible].

[Operator]

The next question comes from the line of [ Biju Nair ], an individual investor.

[Unknown Shareholder]

Sir, I would like to know when we can have NASDAQ listing, since the share price is not moving and it's around INR 14. So we know that we don't have a control market too. So what company is doing to create value for shareholders? So what is the plan for NASDAQ listing? There was a report in Economic Times. That's why I'm asking.

[Vishal Mehta, executive]

Yes. So currently, I mean, the Indian company has no plans to list in NASDAQ, that much I can tell you. International opportunities that we have, whereby we own 100% subsidiary in other countries, one of them being UAE. UAE processes AED 10 billion right now on an annualized basis across 7,000-odd clients. So if you go to the top of Burj Khalifa, if you look at Emaar Properties [ Properties TAG ], DAMAC Properties, many of the -- and hopefully, some of you may have talked to your friends and family in UAE, they would have used ccavenue.ae. With TapPay from a few thousand merchants, we'll go to tens of thousands of merchants. Unlike India, UAE is not a very large geography. And the article that you refer to is where there are opportunities to raise capital in each region. And that is reference that you may be alluding to. Currently, we don't have anything more to add other than the fact we would be raising capital. And as and when we hear from our subsidiary, we'll be able to announce it to you as well.

[Unknown Shareholder]

Sir, we are planning [indiscernible] like bonus issue in the near term to create value for shareholders?

[Vishal Mehta, executive]

So we have given dividends, full year dividends for last year. We will continue evaluating and having our board advisors in terms of what we should be doing this year. We've given guidance for this year, we think we are very confident about achieving the numbers that we have stated in our guidance. And first quarter being a soft quarter, we still had upwards of 30% growth in terms of gross revenues. We have announced some kind of structuring where we are listing one of our subsidiary companies into the market and giving shares of that subsidiary company to our shareholders, which is a Odigma which is the one that we've announced recently. So as and when the opportunity is right and the businesses have scaled up and mature and when they have an opportunity to grow, we will continue doing this.

[Unknown Shareholder]

So will it be a separate listing?

[Vishal Mehta, executive]

Yes, it will be separate listing.

[Unknown Shareholder]

Okay. When it will happen, sir? This year end?

[Vishal Mehta, executive]

It's pending, of course, regulatory approvals, but we think it should be this financial -- this fiscal. But we can -- I mean, of course, it has to go through the process.

[Unknown Shareholder]

So by next year we can think of a bonus issue, not this year?

[Vishal Mehta, executive]

While I will not be able to comment specifically on your comment. What I can tell you is that we -- as soon as Odigma is listed, our shareholders will be receiving shares of that company.

[Unknown Shareholder]

Okay. Okay. Okay. Sir, because share is not moving too much, that's why...

[Vishal Mehta, executive]

Yes. No. And like I said, we've also announced our AGM dates and the cutoff per dividend as well along with that.

[Operator]

Thank you. Due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments.

[Vishal Mehta, executive]

Thank you all for attending our first quarter conference call, and we look forward to keeping in touch and providing you with the latest updates in the company and look forward to having you again back in subsequent calls. Thanks all.

[Operator]

On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.