Arvind SmartSpaces Limited (ARVSMART) Earnings Call Transcript & Summary

Respected shareholders, good morning to you all, and a warm welcome to the Extraordinary General Meeting of Arvind SmartSpaces Limited. I'm Prakash Makwana, Company Secretary, I will be assisting the Chairman in conducting this EGM. In few of the restrictions imposed due to outbreak of COVID-19, this EGM is being conducted in accordance with the circulars issued by Ministry of Corporate Affairs and Securities and Exchange Board of India through video conferencing or other audiovisual base without the presence of the members at the common venue. Accordingly, the company has taken all requisite steps to enable the members to participate and vote on the items being considered in the EGM. The basic instructions relating to e-Voting and attending the EGM through video conferencing from part of the notice of the EGM. For this purpose, the company has tied up with NSDL to provide facility for voting through remote e-voting, e-Voting during the EGM and participation in the EGM through video conferencing. The remote e-Voting period commenced at 9 a.m. on 1st October, '21 and ended on 3rd October, '21. Now I will record the attendance of directors, auditors and other company officers who are present in this meeting. Mr. Sanjay Lalbhai, Chairman and Non-Executive Director; Mr. Punit Lalbhai, Non-Executive Director; Mr. Kamal Singal, Managing Director and CEO; Mr. Prem Prakash Pangotra, Independent Director; Mr. Nirav Shah, Independent Director; Ms. Pallavi Vyas, Independent Director; Mr. Ankit Jain, CFO; Mr. Sukrut Mehta, Partner SRBC & Company LLP, statutory auditors, [ Mr. Ritesh Bhuj ] scrutinizer. This being the virtual EGM, I would like to draw your attention to certain relevant aspects of the meeting. Members attending the EGM through videoconferencing will be counted as present in person for the purpose of quorum. All members who have joined the meeting are placed on mute mode to avoid any disturbance and to ensure an orderly conduct of the meeting. There will be a question-and-answer session, and we note that only those members who have previously registered as speakers will be allowed to speak and raise the questions as intimated in the notice. For this purpose, the company secretary will announce the name of such member, and that member will be unmuted by the moderator to allow him to speak. Speaker may choose to participate either by audio mode or by audio/video mode. Members who have not previously registered as speakers are not permitted to speak or raise any questions. In case they wish to ask questions, the same will be saying to the Company Secretary via e-mail after the meeting, and the same will be replied within a reasonable time. I will now brief you on a very important matter relating to voting on the resolutions. Members who have not cast their votes through remote e-Voting facility and who are attending this meeting have an additional opportunity to cast their vote by electronic means on all or any of the resolutions. The members who have already cast their votes by remote e-Voting shall not be entitled to vote again. Members may follow the process as provided in the notice of EGM. And members may cast their votes at any time during the course of the EGM. The scrutinizer will scrutinize the votes cast at the meeting and through remote e-Voting. Voting results on the resolution will be announced on or before Wednesday, 6th October 2021. Today, at this EGM, the requisite quorum is present. I now hand over the meeting to the Chairman. Thank you, sir.

Thank you, and good morning. Since the valid quorum is present, I now call the meeting to order with a warm welcome to all members, my fellow directors, the auditors and the company officials present today. For the sake of good order, I confirm that I have satisfied myself that all the efforts feasible under the circumstances have been made by the company to enable the members to participate and vote on the items being considered at this meeting. With the permission of members, I take the notice convening this meeting as read. All the items of special business are explained in detail in the explanatory statement attached to this notice of the meeting. The notice of EGM has been e-mailed to all shareholders whose e-mail IDs were registered with the company. For those shareholders whose e-mail IDs were not available with the company, the notice of EGM was uploaded on website of the company and the stock exchanges. In view of the prevailing difficult circumstances has been permitted by the government, the physical copy of the notice of EGM has not been sent. Dear shareholders. Now let me brief you about the performance of the company. You are aware that your company has delivered exceptional growth in fresh sales from the date of its listing with sales growing at a compounded annual growth rate of 49%. Since FY '16, this sales traction has come on the back of a set of well-designed and executed projects that your company has been able to launch for the years. This sales momentum combined with efficient cash flow management has helped your company bring down its debt-to-equity ratio through a historic low of 0.25% or 0.25%. As we now gear up for the next phase of growth, it is imperative for your company to build on the success by adding projects to our pipeline, which will give us the inventory necessary to sustain this momentum. To achieve this, your company proposes to evaluate judicious mix of capital raising, including raising debt and utilizing internal accruals to invest for growth. With this background, I'm pleased to share with you that we are building on our strategic partnership with HDFC Capital Advisors. HDFC Capital Advisors have already invested with your company to set up a platform to acquire land in one of the most attractive micro markets in North Bangalore. The acquisition process for this project is already underway and should be completed shortly. Now HDFC Capital Advisors and your company are planning to strengthen this partnership with HDFC Capital Advisors proposing an equity investment in Arvind SmartSpaces Limited. As part of this round up investment, the promoters of your company had also invested simultaneously with HDFC Capital Advisors. This investment has already been approved by the Board of your company, and we now seek your approval. This investment will provide your company with long-term capital, patient capital to pursue value, accretive growth while giving your company the additional flexibility to tap new avenues to raise further capital as and when required to meet our aspirations. We firmly believe that this coming together of 2 of the most trusted brands and businesses in India -- and businesses in India, HDFC and Arvind will create tremendous value for all our stakeholders. Accordingly, this proposed issue on a preferential basis 40,32,200 equity shares to HDFC Capital affordable Real Estate Fund 1 and 16,00,000 equity shares to Aura Business Ventures, LLP and 12,22,500 equity shares to Aura Merchandise Private Limited. The total size of the current issue is INR 85 crores, and the issue price is INR 124 per equity share. I would like to further inform you that on the basis of the formula respect by study under ICDR guidelines for the issue of equity shares, the minimum price was worked out to be at INR 123.37 per equity share. The Board of Directors of your company has approved to issue equity shares at a price of INR 124 per equity share. Post allotment of the equity shares, the paid-up share capital of your company would increase to INR 42.4 crores from existing INR 35.55 crores, and the net worth of your company basis March 31, 2021, would also increase from INR 311 crores as on March 31, 2021, to INR 396 crores. I would like to take this opportunity to thank all the shareholders to -- for their faith. They had [ reposed ] in the company. And as we crossed a significant milestone, I would also like to reiterate that the best years for the Indian real estate segment are ahead of us. And a strong brands like your company who have strong partners like HDFC are best positioned to capitalize on this growth. I would also like to express my sincere thanks to all the customers, employees, suppliers, investors, vendors, government authorities, stock exchanges and depositors for their faith and support extended to the company and hope that the same would continue in the coming years. I now place before the meeting, the business mentioned in the notice of EGM to vote and hand over the company or hand over to the company secretary to start the question-and-answer session.

Thank you, Sir. Now I will call the name of the shareholder who is registered as a speaker and thereafter the member will be unmuted by the moderator to enable him to sit. The company has received a request from Mr. Jatin Popatlal, speaker shareholder. Moderator, please unmute him.

[Foreign Language]

Thank you. [Foreign Language]

Thank you, sir. There is no other registered speaker. I would request those members who have not registered in advance, speaker may kindly send their questions to us via e-mail after the meeting is over. We'll ensure that all the questions will be answered via e-mail within the reasonable time. There being no other business, I now formerly request our Chairman to conclude the meeting.

So I heartily thank all members and my core directors for attending and participating in this EGM through video conferencing. I wish all of you safe.