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Info Edge (India) Ltd
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Ladies and gentlemen, good day, and welcome to the Info Edge (India) Limited Q3 FY '17/'18 Results Conference Call. Joining us on the call today are Mr. Sanjeev Bikhchandani, Vice Chairman; Mr. Hitesh Oberoi, Managing Director and CEO; and Mr. Chintan Thakkar, CFO.[Operator Instructions] I now hand the conference over to Mr. Hitesh Oberoi. Thank you, and over to you, sir.
Thank you. Good evening, and welcome to our third quarter FY '18 results conference call. We will first take you through the quarterly financial performance of the company. Then we will cover each business in more detail. In the end, we'll be happy to take questions. The audited financial results have also been uploaded on our website, www.infoedge.in. We've also provided segmented billing revenue, profit before taxes and DSR movement in our data sheet on our website.For the stand-alone company, billings in Q3 were INR 228.3 crores versus INR 192.3 crores in the same quarter last year, an increase of 19%. Revenue in Q3 was at -- was INR 227.2 crores versus INR 186.1 crores in the same quarter last year, an increase of 22%.Operating expenses, excluding depreciation, was INR 148.3 crores versus INR 139 crores in the same quarter last year, an increase of 7%. Operating EBITDA, excluding any exceptional item, was at INR 78.8 crores versus INR 47.1 crores in Q3 of last year, an increase of 68% year-on-year.As a result of an increase in revenue by INR 41 crores and partly offset by an increase in expenses of about INR 9 crores. EBITDA adjusted for ESOP non-cash charges stood at INR 82.1 crores versus INR 53.3 crores in Q3 last year, an increase of 54% year-on-year. Operating EBITDA margin was at -- operating EBITDA margin was at 34.7% versus 25.3% in Q3 of last year. Adjusted EBITDA margin stood at 36.1% versus 28.6% in Q3 of last year.Deferred sales revenue has increased to INR 333.1 crores as of December 31, 2017, versus INR 279 crores as of December 31, 2016, an increase of 19% year-on-year. The cash balance today stands at INR 1,457.7 crores as of December 31, 2017. Cash flow from operations stood at INR 95.8 crores during the quarter.Moving onto results by segment. Please note, some of the business-wise numbers that are being given out are management estimates and are not audited. For the recruitment segment in Q3, billings grew by -- billings were at INR 163.2 crores, an increase of 13% year-on-year. Recruitment revenue in Q3 was INR 169 crores, an increase of 20% year-on-year. Operating EBITDA margins in the recruitment segment were at 57% versus 52% in Q3 of last year. EBITDA margins adjusted for ESOP non-cash charge stood at 58% and 54%, respectively. India billings -- Naukri India corporate billings grew 13% year-on-year. In Naukri India, the operating EBITDA margin stood at 56% -- 66% versus 60% in Q3 of last year. EBITDA margin adjusted for ESOP non-cash charge stood at 67% and 62%, respectively.In Naukri, in Q3, we added an average of 14,600 fresh CVs every day versus 13,000 in Q3 of last year, and the Naukri database grew to about 56 million CVs. Average CV modifications in Naukri were at over 294,000 per day versus 211,000 per day in Q3 of last year.Our traffic share in the job portal space continues to be 70%-plus -- 72%-plus, actually, excluding Indeed, and about 63% -- 64% including Indeed. We continue to make reasonable progress in our recruitment tools and systems business and continue to add new customers. Strategically, the business is important for us. We are constantly taking feedback from our customers for improving the product offering in this space.In the recruitment business, revenue growth in Q3 was higher than billing growth. As of Q2 -- as of Q1, Q2 billing towards quarter-end is now being recognized completely in Q3. The slowdown in IT hiring impacted our growth rate in markets like Bangalore. The Naukri Gulf business saw a decent quarter after a long time. Billing for Q3 FY '18 increased 9% year-on-year in the Gulf. Revenue grew by about 12%.Going forward, we expect an increase in marketing costs for recruitment in Q4 as we have launched our new TV ad campaign for Naukri, which is already running across various TV channels. The initial feedback on the campaign has been very intelligent.Moving on to the 99acres business. For 99acres, billings in Q3 grew 54% year-on-year to INR 37.8 crores, while revenue grew 31% year-on-year to INR 34.1 crores. A key reason for high year-on-year growth -- billing growth was, of course, the lower base in Q3 of FY '17 on account of demonetization. Sequentially, we increased our marketing spend during the quarter resulting in a Q3 EBITDA level loss of about INR 7.6 crores versus a profit in Q2 FY '18, where we had negligible marketing spend. In Q3 FY '17, we had a loss of INR 14.1 crores. Adjusted EBITDA adjusted for ESOP expenses stood at a loss of INR 7 crores versus a loss of INR 12.5 crores in Q3 of last year.Our traffic share amongst real estate portals continues to be in the high 40s -- continued to be in the high 40s during the quarter, partly had a increased marketing spend. We were about 40% larger than our nearest competitor on time spent on our platforms as per similar web and now have traffic leadership in all major markets, except Bangalore.While the real estate market continues to be sluggish, a slight improvement was seen because of more clarity around RERA. The RERA set of -- in all major states with significant residential real estate activity, RERA rules have now been notified and authorities are processing applications. In some markets like Andhra, Telangana, Tamil Nadu and West Bengal, registrations are still moving at a slow pace though.As of December 31, 20,000 plus projects have been registered under RERA across the top 8 cities. 14,000 of these projects were registered in Maharashtra alone. We are sensing a slow but sustained recovery over the next 3, 4 quarters in most real estate markets, driven by affordable housing projects. Not many new projects is expected to launch in the next few months.Home loan rates are now at a 6-year low. Going forward, in 99acres, we expect marketing cost to increase in Q4 as we try to consolidate our position in the real estate classified business.Moving on to Jeevansathi. In Jeevansathi, billings grew 19% year-on-year in Q3 FY '18 to INR 16.8 crores, while net sales grew 19% year-on-year and reached INR 16.6 crores. Operating EBITDA losses in Jeevansathi increased to INR 4 crores in Q3 of FY '18 versus a loss of INR 2.1 crores in Q3 of FY '17. EBITDA loss adjusted for ESOP non-cash charge stood at INR 3.9 crores for Q3 FY '18 versus a loss of INR 1.9 crores in Q3 FY '17.In the Hindi belt, our market share continues to grow and our position is getting stronger as Jeevansathi has grown robustly in this market with obvious competition for the past almost 10 quarters now.Mobile traffic in Jeevansathi is around 90% and the Jeevansathi mobile app continues to be the best in the category. We expect to increase the marketing cost for Jeevansathi in Q4 as we believe it is the right time to invest for future growth in the matrimony business.In the Shiksha business, billings grew 13% year-on-year in FY -- in Q3 FY '18 to INR 10.6 crores, while net sales grew 32% year-on-year and reached INR 7.4 crores. We made a loss of INR 1.2 crores at the EBITDA level versus a loss of INR 4.2 crores in Q3 last year. EBITDA loss adjusted for ESOP non-cash charges were at INR 1.1 crores versus INR 3.7 crores loss last year. We continue to work on improving our product and are making good progress, post our site revamp earlier this year. Over the last few quarters, we have substantially improved our content and ASU. As a result, our user base is growing at a healthy rate. We continue to be a leader in this market.Moving on to our strategic investments. Our investee companies continue to witness good growth. As you may have read in the media articles, Zomato has received a funding of USD 150 million from Ant Financial. We have also sold 15% of our holding in Zomato to Ant Financial for a consideration of USD 50 million, which is 6.7% of all Zomato shares equivalent to 15% of our stake in the company. Recently, we have made an investment in 2 companies, Univariety and NoPaperForms, which I've also announced on the exchanges. Additional funding by existing investee companies will be required from time to time, and we will evaluate each one on its own merit. We continue to evaluate new investment opportunities as well.To summarize, in Q3, Naukri saw 13% billing growth. Growth was affected because of a slowdown in IT hiring. We continue to invest in existing products and on new ideas to fuel long-term growth. Our competitive position in Naukri continues to be very strong. Over the last 2 years, our mobile app and sites in all our businesses have seen massive traction, with more and more users accessing our sites through them. This is clearly an area for continuous improvement and product enhancement for us. RERA rollout has progressed well across states, even though various states are at different levels of implementation. Many projects are just registered in Maharashtra and others are now catching up. 99acres saw a recovery of some sorts in Q3, with 54% billing growth. We expect a slow and steady recovery in the real estate market over the next 3 or 4 quarters. For now, home loan rates are at a 6-year low and buyers are opting more for RERA-approved and ready-to-move-in projects. We will continue to invest aggressively in 99acres, Jeevansathi and Shiksha to gain market share going forward. That's all from us. We are now ready for any questions that you may have. Thank you.
[Operator Instructions] The first question is from the line of Gaurav Malhotra from Citigroup.
Just had a few questions. Firstly, on Naukri. You mentioned that IT is seeing some slowdown. What about the other key sectors, say, BFSI infrastructure? Are they in your -- for you growing at a decent pace? Or you are seeing some slowdown there as well?
Well, like I said, we saw a slowdown in IT, especially in markets like Bangalore. But infrastructure sector has been now slow for many years. So we didn't see a turnaround of any sort in that sector. BFSI has been sort of doing well for us. Actually, Bombay was our best-growing market last quarter.
And just to sort of clarify, you said that the recruitment segment EBITDA margins were 57%, right?
Yes.
Okay. And just on your headcount, from the peak of, say, to -- 1Q '17, the headcount has sort of come down by 9%. Any further scope over here for reduction? Or we are pretty much at the bottom of it now?
Well, there's no plan to sort of reduce headcount. Many parts of our business are hiring, but there is always some attrition as well. So I don't expect the number to go down substantially from here. In fact, it may inch up going forward.
And on Zomato, that 6.7% stake sort of implies valuation of, say, $750 million. Any thought on -- that 6%, was there any need to sell that 6% or 7% stake right now, given the company already has enough cash in the books?
Yes. So I think usually, it's not been kind of driven by having more cash in the books, right? We already have healthy cash balance on our balance sheet. This is more a strategic decision that we see a great value in a partner like Ant. And to kind of get them to a particular threshold, we kind of wanted to kind of get them on our side. And that's why we have accommodated them in that sense to ensure that they come and partner with us. So it's more driven by the partnership rather than trying to get some cash on our balance sheet.
[Operator Instructions] The next question is from the line of Ravi Menon from Elara Capital.
First question is on Zomato. The percentage of stake that you sold in the secondary seems to be implying a different valuation from the primary -- our impression of $150 million. It looks like it's resulting in another close to 7% dilution for you. So is that, Chintan, I mean, the way you kind of accommodated like a discount on the secondary sale, while still holding on to a higher value in the primary?
Yes. So see, we have kind of shed away only 6.67% out of our total holding, which is like about 15% level or less than 15%, right? So 85% of assets still remain with us. And it's very customary, very standard normal practice that the valuation in primary market versus secondary market would be different. So, yes, there is some discount to note to the primary value.
Right. I mean, this seems to be very similar to the kind of deal that SoftBank did for Uber. So this is, I guess, like you said, you have a strategic partnership. And do you think that you need something like this to -- is it to take Zomato international? Or is this more to combat Swiggy in the food technology space because they have got a large amount of funding and they've been aggressive in advertising?
I think we're on a very high-growth trajectory. And we would really want them to continue the high-growth trajectory that they are on. Having said that, was there something kind of compelling them purely from a liquidity perspective? No, I don't think that was the reason for them also to go for that. And let's say that it is more like a strategic partnership that Zomato also thought that it would be great to have them on board, and that's why it is driven by that.
All right. Great. And then coming to Naukri, and we've seen you get back to high-teens kind of bookings, despite slowness in IT. But we've been hearing from IT companies that hiring is starting to look up a little bit. So do you expect -- have you seen some early signs of that, that bookings could actually accelerate going forward?
Well, you know there are -- see, IT for us includes IT services companies, e-commerce companies, domestic software development companies, captives of MNCs and so on. So it's a very sort of -- and recruitment firms to hire for IT. So -- and IT-enabled services companies as well. I think it's last quarter we saw a slowdown in hiring as far as these companies go, maybe captives are still hiring in large numbers, but at least IT -- large IT services companies will be lower than what we expected to build from them. Too early to say whether there is a turnaround on that front. We'll know maybe in a couple of months.
[Operator Instructions] The next question is from the line of Ankit Pande from Quant Capital.
My question would be on the 99acres. What kind of traction are we seeing beyond statutory commentary maybe? And more on affordable housing, any traction that we're seeing there in this particular segment?
So 99acres had an excellent quarter actually. Of course, the fact that in Q3 last year, we had demonetization and revenues were impacted big time helped us get 54% year-on-year growth. But in general, the confusion around RERA in the market seems to be sort of over. It's not as if transactions have picked up in a very big way, but at least the builders are now allowed to market projects and they're sort of spending once again on advertising. We are hoping that the market will also start recovering slowly from here on. We don't expect a hockey stick recovery, but a slow and steady recovery over the next few quarters. And of course, the new launches, for example, continue to be -- I mean, there are hardly any new launches in the market. There are very few new launches. It's existing inventory, which is getting sold still. But there is some action in the affordable housing space, and thanks to the boost, which sort of -- one, of course, a lot of the buyers on our site, they want to sort of -- they wanted the budget to buy luxury homes or very expensive homes. So they are sort of keen on buying homes, which are sort of in the INR 30 lakhs, INR 40 lakhs, INR 50 lakhs bracket. Government is also sort of supporting both developers and buyers in this space. So there is more action in this segment. And we expect advertising dollars on -- in this sort of segment to increase going forward. But again, it's early days. We'll know in a few months.
So maybe next year at this point, a lot of the low base effect will really start to kick in? Is that something that I read into your comments as well?
Sorry. I didn't get that.
Maybe in a couple of quarters or into next year, we'll get some of the low base effect really kicking in? Is that something to read off?
Yes, if the market continues to improve. The first half of this year was flattish for us. We saw zero growth. Even the last -- second half of last year was like -- we saw very little growth because of demonetization and then because of GST and RERA. So these things are largely behind us. And if the market for real estate starts to sort of improve slowly, it should benefit us going forward.
Can you just give me the market share number, please?
So traffic share, traffic share over the quarter was about, I think, 48% for us last quarter.
That seems to be an improvement. Is there something specific to it?
Yes. So we've been mostly in this range, 45% to -- 43% to 47%, 48%. But the last quarter, we saw a slight improvement towards quarter-end especially. We saw a spending on marketing once again, so that helped a little bit.
[Operator Instructions] The next question is from the line of Ankur Rudra from CLSA.
Just on Naukri to begin with. You said there was an impact of transition between 2Q and 3Q. Was that mainly on revenues or billings as well?
No. Mainly revenues because likely been -- been mentioned on the earlier calls, we changed our sort of sales closing sort of system a little bit. And what happened over time was our deferred revenue built up. So this quarter, even though billing growth was only 13%, revenue grew by 20% as a result. We ate into that deferred sort of revenue, which has been piling up over the last few quarters.
Okay. And the billing growth, I think, has been somewhat steady at 12 -- sorry, 13%, 14%. You commented about IT slowdown. Did you not see this last quarter? Is it more this quarter alone?
No. No. So IT has been slowing down, I mean, like, I think mentioned over the last -- did I? I don't know whether I mentioned it last quarter. But Bangalore has been sort of impacted the most. Our growth in Bangalore this year for us has been like low single digits. So while markets like Bombay, et cetera, have done well, thanks to growth in financial services and insurance. On the whole, our sort of billing growth has been impacted because 30%, 35% -- about 35% of our businesses is from IT companies.
Sure. So just to get a sense of on an overall basis, what's sort of compensating for the softness in IT? Is this financial services or any other sector you want to highlight?
Yes. So in general, the services sector has been doing okay for us. So BFSI, health care, education, travel, tourism, hospitality, these kind of sort of segments have been doing well. Infra, telecom, IT, these segments have not had a good year. These sectors have not had a good year from a hiring standpoint for us.
And from a hiring standpoint, you commented about IT. You don't see any changes right now. But in the other sectors, any signs of change?
So -- yes. I mean, yes, we're seeing -- I mean, I don't think anybody is laying off. And there are -- everybody is talking about hiring, everybody is talking about projects and things improving in green shoots, and most companies now seem to be saying that issues like GST and demonetization are behind them. But let's see. I mean, we'll know in a few months whether this translates into hiring on the ground or not.
Also, Hitesh, could you break up what was the Naukri India growth?
Well, Quadrangle was flattish to negative and Naukri Gulf was about 9% in terms of billing. So India must have been about 14%, 15% in terms of billing.
For billing, right?
Yes.
And the A&P spending was up in the quarter. This was entirely planned? Or was there any kind of reaction to Indeed?
In last quarter?
Yes.
In last quarter, we didn't really spend too much on marketing. I mean, it was maybe INR 1 crore or so in Naukri, not more than that. But this quarter -- in Q4, we are sort of spending a lot more because we are on TV. In A&P marketing, spend must be up because of spending with -- because spending are in 99acres. 99acres spend was 0 in Q2 of -- in Q2. So we started spending again in real estate.
Okay. And just finally on Zomato, if -- to the extent you can comment, do you think this fund raising round would change the level of spending in cash burn, which had been under the control for the last 6-odd months?
Okay. Let's say that Zomato has been on a high-growth trajectory. And it's not that they have been spending a lot to achieve this high-growth trajectory. So it will depend what strategy we adopt in future. It could well also mean that it could be a war chest, or it could also mean that it can go and fuel the growth and take it to a very new trajectory.
So you don't see this as a round, which will change the strategy we've seen being executive for the last few quarters?
I think not necessarily. I think we'll figure out. I think that -- right now, the deal is announced, we'll figure out. As I am saying that there is no compulsion for them to do that, so we have choice. We are in a sweet spot. We'll figure out.
Basically, what it does do is it gives Zomato options and they'll figure out going along what to do.
The next question is from the line of Mukul Garg from Haitong Securities.
Hitesh, the first question was on the Naukri business. If you look at the Y-o-Y growth in billings for last 3 to 4 quarters, it has been in the same ballpark range. Ideally, the current quarter would have benefited because the December '16 to June '17 quarters were impacted by both demon and GST. So is the weakness -- or is the lack of pickup in growth primarily because of IT services in the third quarter? Or was there some other reason as well, which impacted the Y-o-Y growth?
Yes. Actually, in Naukri, we were not impacted by demonetization in Q3 of last year. We were more impacted by the GST rollout in Q1 of this year. So Q1 was very low billing growth for us this year. But, yes, you are right. The reason we are sort of seeing separate sort of billing growth in Naukri is because of the slowdown we are seeing in IT hiring, and that's been there for the last few quarters now.
Sure. Is it possible to break out how other industries are doing if you would have excluded IT services space, how the overall billing growth would have been?
Yes. We can do the exact math, but my sense is that if we exclude IT, then billing growth would have been more like 16%, 17% for Naukri. But I don't have the exact numbers.
Right. And what would have been a similar corresponding number for the Q1?
We'll have to dig those numbers out. We don't have them right now with us.
Sure. And the second question was, so recently, we saw one of the SEM hiring companies acquire your smaller competitor in the Indian market. Any -- what would be your comments on looking at either the blue-collar workforce market or the temporary market, do you think that might be a fit or that might be actually useful for Naukri business at all?
You mean, the blue-collar market?
Yes.
See, the Naukri platform works very well when you want to hire people who have a CV, right? So if the CV is of some value, then our platform works. But if the CV is of no value, our platform is not very relevant to you. So to the extent that there are some sort of blue-collar jobs where CV is very valuable, for example, if you are a mechanic or if you are an ITI professional, so they're actually the premium blue-collar jobs. I'm sure Naukri can be used as a hiring tool by companies. And there are enough companies, I'm sure, which are already using us. But let's say, if you're just looking to hire a simple driver or a maid for your house or some very, very low-skilled or unskilled workers, then I don't think Naukri is -- or maybe -- or any online platform is a right platform for that right now.
And any possible -- what was the temp-focused space where issue discussing blue-collar workers in industries who are the temp agencies who are doing that? So any sort of collaboration can be done there? Or that is completely a different end market?
So all these temp staffing companies, even companies like Quest, et cetera, have been client to Naukri for a long time. So almost all temp staffing companies use us to hire people. And some of the larger ones, of course, you're aware of, but there are hundreds of smaller ones also -- temp staffing agencies also have been working with us for years. So they use Naukri to hire people for their clients.
[Operator Instructions] The next question is from the line of Vivekanand S from AMBIT Capital.
A couple of questions, if you can, on Zomato. One, on the competitive scenario right now, so what is your best guess of the kind of capital that the sector is attracting right now? And how much cash do you think your rivals are burning right now? That's question number one. Secondly, related to the $50 million that you are getting from Ant Financial. Any specific reason why you chose to sell a particular portion of your stake in Zomato to Ant? And what are you going to do with that cash? That's on Zomato. Secondly, on the core businesses, can you talk about the product refresh and the new features that you are planning to introduce on Naukri? Any update on that?
On Zomato, I mean, we have some pending also kind of information about who is burning how much, but we will not have any verified information. So it would not be right for me to really say how much competition is burning. All that I can say is that, Zomato has not been burning any great amount, right? So Zomato has improved. What are the published numbers out for last year? Also, as we're aware, the trend has been that Zomato has been burning less and less. So Zomato has been on a good trajectory, with less and less burnings. So I think it's in a great place to be. And the whole transaction was driven by a strategic partnership with Ant, because Ant -- given their exposure in Indian market, outside India particularly, we thought it would be great if they are also part of the marquee investors who are already there. And it would further a great partnership with them. And that can take growth -- Zomato's growth to a very new trajectory. Now, would that mean that it would require more cash for growth? Maybe yes, maybe no; maybe it's war chest, maybe it's a growth capital. We'll kind of -- as we go forward, we'll figure that out that how much cash Zomato would need, right? But we were more driven by accommodating them in the spirit of partnership because they also needed to reach to a particular threshold in order to be meaningfully present in the company. And we thought that if we can kind of give out a little bit of stake, but that would kind of help to grow over the rest of the stake at a much higher value and it can put that in a much higher growth trajectory. I think it's a complete win-win for all the 3 parties. So that's where we are coming from.
Yes. To answer your question on Naukri. See, there are 4 or 5 areas where we are investing, and we sort of have been investing for a while, and we'll continue to invest because we need to continuously improve in each of these areas. One is the whole mobile piece, the mobile experience, right? Mobile traffic on all our platforms continues to sort of grow month-on-month. And for Jeevansathi, like I said, it's already 90%. For Naukri, I'm sure it's -- I haven't seen the latest numbers, but we're at about 70%. So this -- so mobile user experience continues to be a big area of investment for us. Matching that, we have been sort of experimenting with cloudsourcing, machine learning techniques to improve our matching algorithm service tool for both the user -- job seeker and the recruiter. So this continues to be an area of investment. If you recall, we acquired a semantic search company also a few years ago to help us improve our search experience. So be -- so search and recommendations and matching is not sort of a big area of investment for us. Personalization of the user experience. So we are sort of continuously using sort of the data we have, the Big Data we have, to personalize the user experience for our users on our platforms. And then, like I sort of mentioned, the whole recruitment management stroke applicant tracking fees, where we are trying to go deeper into the enterprise and help them sort of -- and we're trying to build platforms so that they can do all their regional management and hiring management in Naukri. That is a very important sort of piece for us, and we continue to sort of invest in that area as well. So these are the 4 or 5 sort of places where we are investing. And plus aside, there's tons of other things which we do on a sort of -- on our platform every month to -- sometimes you see them, sometimes you don't see them. A lot of action happens at the back end. A lot of the action happens on the recruiter's side, which you may not be able to see at all. But these are generally the sort of areas we are investing in.
Yes. Thanks for this update. Just on the Zomato and food tech side, you didn't answer my query on how much capital is being pumped in by your competition in the sector. Any thoughts on that?
So I don't have a kind of exact information about how much capital others are bringing in because they're all private companies. We have been hearing some numbers, but I think it would be not appropriate for me to really put those numbers because they are not verified numbers of how much they are spending. But our feeling is based on whatever we have heard in the market that Zomato has been running a business with a very good unit economics and that's been only true for everybody else. So we think that we are on a good wicket here. And with this kind of partnership coming in, we have strengthened our position. And we still remain as the largest shareholder of the company, and we kind of fully supportive of whatever strategies that they would adopt going forward.
[Operator Instructions] The next question is from the line of Anantha Narayan from Crédit Suisse.
Again, to the extent that you can answer this question on Zomato, how does the pre-money valuation of the primary deal compare to the previous one?
So unfortunately, we are bound by shareholder agreement and we may not be able to kind of divulge that information. So it may not be possible for me to really say that.
Okay. And Chintan, if I may ask one more question. Based on the disclosure that you all have made to the exchanges and just we can, obviously, back calculate some of these valuations. The valuation number actually comes out to be fairly low. So clearly -- so is there a part of the structure that has not been disclosed?
Well, I think it's -- always there will be some terms and condition on the shareholders agreement, but I don't think there is anything unusual or unstandard in any of these things. And valuation also, I know there are lots and lots of analysis reports. And it would, again, not be right for me to comment on any of the analysis reports. But there are range of valuations, which are available in the market. Again, I think whatever valuation that we have, I think it's great valuation. But we are completely driven by the spirit of getting somebody like Ant onboard, and it's a partnership that's being formed over here.
[Operator Instructions] The next question is from the line of Rajiv Sharma from HSBC.
Just a couple of questions from my side. First on the real estate market. So with this RERA, now that it's stabilizing, how do you see the medium-term shaping into because we will end up with some larger builders? Smaller builders are getting consolidated. So in that sense, will it mean that there'll be more bargaining power on the customer side and less on platforms, digital platforms? So how do you see this shaping up? How do you see the role of intermediaries, large brokers like JLL and others coming in? What will it mean to you? So if you can just share the big picture, how do you see this space?
Actually, the real estate sector has been in the dump for a long time now. And part of the problem was the fact that it was not regulated, and -- especially the new home market and projects were delayed for years and years. And as a result, as a consequence of that, buyers lost all interest in the new home market. And as a result of that, new home inventories sort of peaked. I mean, they just went through the roof. I mean, they probably were -- many of the cities are sitting on years and years of unsold inventory as far as new homes go, and projects were running behind schedule. Now with RERA -- and if RERA isn't sort of -- if regulators do a good job, hopefully what will happen is that buyer interest will come back into the new home market. So buyers will again sort of feel confident of buying new homes. So that -- so if the regulators do a good job, my sense is that this is a big positive for the real estate market in the medium term. Will it lead to consolidation? Will it lead to smaller builders going out of business? I don't think so, right? I think there's a lot of noise about it, but we're not seeing that in the market yet. I think what will happen is that builders, either large or small, will be forced to sort of invest in projects for which they gave money. Up until now, what was happening in many cases was that builders were raising money for projects and going and buying land for that project and whether it was large builders or small builders and mid-sized builders, most projects running behind schedule. So hopefully, that will change. But I don't know -- I don't think it'll lead to consolidation in the market in the short-term, at least. As far as big brokers go, we work with all kinds of brokers. We work with the large brokerages, we work with small brokers, we work with retail brokers, so almost -- many of these large broking houses are clients of us. And hopefully, this sector will also sort of see the emergence of more professional brokerages over time. And I think that's not a bad thing. That's good for us. There are today maybe, as we speak, maybe tens of thousands of brokers in the market, but very few large sort of professional brokerage firms. Nobody has more than -- in the residential real estate market, I don't think any brokerage has even a 1% share of the market. So if we get over the next 5, 10 years, 30, 40, 50 large brokerages who -- I think it'll help us professionalize the sort of business a little bit more. And it'll be good for us in the long run.
Yes. That's helpful. Secondly, on Zomato, just one question is there. So if you could just provide some color as to how much focus will delivery be going forward. What is the run rate currently? And what's the strategy for the next year?
Yes. So on data rate run rate, we don't reveal them. When Zomato wants to talk about it, they'll talk about it. Now the strategy is going to be, obviously, that will be a big part of the business and that's what will remain. And we have various ways of approaching delivery. Up until now, they have been very prudent on economics. We expect them to continue to be -- but we're also evaluating other models on delivery, which they will figure out what to do.
You're suggesting about another model of delivery. So we are aware of 2 models currently, one is restaurant and the other is you yourself get involved. So is there something in between possible as well?
Well, there are other options that the company is continuously evaluating. I'm not saying we'll do anything else, but they're evaluating options.
The next question is from the line of Ankit Pande from Quant Capital.
Just exploring on Zomato once again with Ant. I think you did touch upon the fact that foreign markets could become a play again. You've spoken in the past about having not a pleasant experience for Zomato. So any thoughts evolving there at this point in time?
So well, I mean, there are certain international markets where the experience could not be -- could have been better. But there are some other more markets where they are doing great. So I don't see that. So wherever they are, they're doing great. Obviously, they are going to enhance their position over there. And Ant coming in is going to help them to see what more they can do in the markets where they're already operating, whether it's India or whether it's outside India.
Could you just walk me through what model of ownership of assets abroad is Zomato?
So we don't reveal that. We were earlier kind of consolidating. So you can look at probably March '15 numbers and annual reports, you may get some sense of it. But after that, they are no more our subsidiary and we are no more consolidating that.
I meant more from the point of view of control, how much and are they partnering? But fine, we'll take that offline. And...
And also, I mean -- so there's no -- they are all 100% subsidiaries. So there's no any different structure from that standpoint. I thought you mentioned on to understand how much investment and how many -- how much success we have there. But if you're looking from a shareholder structure, they are all 100% subsidiaries.
Okay. Okay. Sure. And any pricing upticks that we've taken this quarter?
You're talking about Zomato. You're talking about...
Across the portfolio.
Sorry?
Across the portfolio.
So pricing upticks, in the businesses that we own and operate, right, internal business.
Yes.
No. No. We haven't taken any rate card sort of increases this quarter in any of our businesses.
The next question is from the line of Ashish Chopra from Motilal Oswal Securities.
Just one question from my side. So you mentioned about the pickup or the expectation being sanguine on the 99acres front. Just that I think one small little metric on the number of paid listings that seemed to have come off in this quarter. But anything to read into that? Or what usually kind of drives that on a quarterly basis?
No. No. I don't think we should read too much into that. See, we're focused more on our larger customers, and not so much on the long tilt as well as brokers go. And we also are sort of working hard on removing spam on our site. And -- so I don't think you should read too much into that at this point in time.
Okay. Okay. That's fair. And just in terms of the promotional expenditure of ad Zomato or just the investment. So things like Zomato Gold, a new initiative, probably picking up pretty well. Does that entail a significant amount of burn? Or is there anything that you could share in terms of that being material or pretty much incorporating the normal course of business?
Well, I don't think -- I mean, whatever the trajectory is that there is anything -- any remarkable difference in that. Yes, they would have up a little bit spend in Q3, but I think it's all within the range. They are also continuing to grow further. So I think in terms of the proportionate kind of ratios that you wanted to see, I think they all would be in line with that.
The next question is from the line of Alankar Garude from Macquarie.
Firstly, what is the level of cash on our books currently?
INR 1,457.7 crores.
So this doesn't include the '15 numbers?
As of December 31, 2017.
Okay. Yes. Got it. So the next question is, what are our plans with the cash? Do we intend to continue the string of our acquisition strategy? Or are we open to any major M&A? Also if you could share, are there any plans to perhaps increase the shareholder payout?
See, we intend to use our cash for investing more in our -- the businesses we run ourselves like 99acres, Jeevansathi. These are still in investment mode. We will -- like I mentioned, we are upping our spend in Q4. So we will continue to invest more and more in the businesses we run. We continue to sort of evaluate investment opportunities as well. And some of our existing investee companies when we go funds from time-to-time, so we'll support them on a case-to-case basis. And lastly, we are open to M&A. But we should for the right -- but M&A is more opportunistic and as and when an opportunity comes, we'll evaluate. So, yes, no sort of plan to give money back to shareholders right now.
Of course, we have also declared today a small amount of second interim dividend. So that is 15% of paid up capital. We already gave 25% in the second quarter. Around the third quarter results, we have declared one more dividend.
[Operator Instructions] Ladies and gentlemen, as there are no further questions, I would now like to hand over the floor to Mr. Oberoi for his closing comments. Over to you, sir.
Well, thank you, everyone, for dialing in, and have a great evening.
Thank you very much, sir. Ladies and gentlemen, on behalf of Info Edge (India) Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.