I have created portfolio that is based on Listed Startup Investment Strategies :
- Experience Management.
- Small In Market Cap.
- Company with high potential to scalable industry.
Stock 1: Niyogin Fintech
Niyogin Fintech Ltd is a fintech company and a registered NBFC. The Co. provides a digital platform that enables access to relevant services & products for MSMEs providing financial inclusion, credit, investments and SAAS services.
RISK :
- there is no much data to track this company.
- there tough competition from old companies like Bajaj Finance, HDFC Bank, Kotak Mahindra Bk, etc…
- NBFC is Highly regulated by SEBI AND RBI, and Government policy.
DISCLAIMER : Not a SEBI Registered Investment Advisor. These are not buy or sell recommendations.
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Can Niyogin Fintech be the true player of digital transformation and financial inclusion partner of India?
Who I am: The company operates on a tech-centric platform-based model offering Banking as a Service (BaaS) through our subsidiary, iServeU and credit solutions to both rural and urban areas in India. We employ a partnership-led strategy collaborating with local enterprise partners that possess extensive distribution networks. These partnerships allow us to leverage the partner’s infrastructure for cost-effective outreach to our targeted customers primarily micro, small and medium enterprises (MSMEs).
Once we onboard a partner, iServeU’s Banking as a Service (BaaS) platforms are integrated into the partners’ customers’ facing touch points. This integration enables these touch points to offer banking, payment, and financial services to their local clientele. By adopting this partner-led approach, the Company can effectively extend its services to a larger number of MSMEs and SMEs through each partner it engages with. The revenue model primarily revolves around transaction fees or commissions earned on every transaction processed through the platform. As an NBFC, Niyogin extends its services to MSMEs by providing credit. They facilitate lead generation and provide digital access to credit and other financial services for MSMEs through our distribution platform NiyoBlu and also by our several Fintech partnerships. Niyogin employs various lending models and generates revenue through either interest income or fees associated with loan lead generation.
“Consolidated Financials” for the Quarter: Revenues stood at Rs. 53.8 crores up 99% year-on-year and 13% quarter-on-quarter. The revenue increase was driven by the prior quarter service revenue and a marginal sequential improvement in Take rates. The adjusted EBITDA loss gap narrowed from Rs. 8.2 crores in Q2 FY24 to Rs. 1.4 crores in Q3 FY24 due to improving economics in the lending and distribution business. ESOP charge for the current quarter was Rs. 0.3 crores versus Rs. 1.1 crores in the previous quarter. The non-GAAP PBT stood at Rs. (4.5) crores in Q3 of this year as against the non-GAAP PBT of Rs. (10.1) crores in the previous quarter. The consolidated cash and cash equivalents stood at Rs. 93.1 crores as on 31st December 2023.
Key development:
- Actively evaluating the acquisition of a comprehensive toolkit to augment our solution suite, particularly in the realm of AI-based assisted and unassisted tools for our partners.
- Successfully resolved the issues affecting the UPI business.
- Consistently booking provisions in accordance with the ECL norms.
- The Company has implemented a comprehensive strategy cantered around 3 pillars of growth
Leveraging our Partner-Led Distribution Channel.
Commitment on Risk Management.
Achieving Technology Enabled Cost Efficiency Throughout the Loan Process.
Some more insights on the business on last Investors concall:
How they are evaluating business:” We remain steadfast in our commitment to growth, both organic and inorganic. Current market conditions have presented us with opportunities to consider the acquisition of several compelling bolt-on businesses. We are actively involved in discussions with various complementary enterprises. Our criteria for engagement revolves around several key factors including appealing valuation, synergies with our existing business, adjacencies to our current markets and the potential to enhance our technological capabilities. These parameters serve as a guiding principle as we navigate these discussions and evaluate potential opportunities. We are optimistic about the potential for strategic acquisitions to further strengthen our position in the market and drive sustainable growth for our Company.”
If we can successfully navigate the entire artificial intelligence acquisition that we’re looking at, I think there we will not only use it as a toolkit for our own use, but we will also sell it in the market as a solution for our partners. (“SuperScan”: Orbo.ai)
Interesting Question and Answer: if there any update regarding the remaining stake in iServeU (Currently 51%) and how we’re thinking of going about that?
Answer: I think no update really to give to the market just yet. We have got busy with a couple of M&A situations quite honestly and while we have signed a non-binding term sheet, there are a couple of others that we are actively looking at. So, that sort of took a little bit of a back seat and I want the business to start becoming profitable, but it’s certainly on the cards at some point in time we will do it, but nothing to really report or update right now.
We haven’t really shared anything in the public domain, but I can’t talk about it except that these are all situations where we think they are good bolt-on ideas and suggestions or businesses that either gave us access to technology or access to a client base that we otherwise don’t have access to. So, that’s really the driver and obviously there could be potential businesses where we could also get access to some licenses, which again will require us to go back to RBI and get permission.
Who are the main distribution partners in the business: We have more than 5,500 CAs that log into our platform NiyoBlu and NiyoBlu is a digital platform, where a customer can log in and apply for a loan. We have more than 30 partners that work with us. These are lending partners apart from Niyogin itself being a lending partner and our plan there is to keep making some fee income on the distribution of unsecured business loans. So, that business is going quite well.!!!
NiyoginQ3.pdf (1.1 MB)
