Aurum PropTech Limited (AURUM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Aurum PropTech Limited Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Diwakar Pingle. Thank you, and over to you, sir.

Thanks, Taman. It gives me this pleasure to welcome you all for the Aurum PropTech analyst call. As you all know, pursuant to the closure of open off earlier this year, the control and management of Majesco Limited is now with the Aurum Group. Post approval from Board at Annual General Meeting as of 6 September 2021, the company's name changed to Aurum PropTech Limited in October 2021 from Majesco Limited. Representing the management today, we have Mr. Ashish Deora, Founder and CEO, Aurum Ventures; Mr. Srirang Athalye, President Aurum Ventures and Director, Aurum PropTech Limited; Mr. Onkar Shetye, Executive Director, Aurum PropTech Limited; and Mr. Kunal Karan, who is a CFO of Aurum PropTech Limited. As usual, I'd like to remind you that anything that is said on the call, which reflecting outlook for future or which can be construed as a forward-looking statement must be viewed in conjunction with the risks and uncertainties that we face. These risks and uncertainties are included, but not limited to what we mentioned in the prospectus filed with SEBI and the subsequent annual reports that you can find on the website. With that said, I'll now hand over the call to Srirang. Shri, over to you.

Thanks, Diwakar for the introduction. As you mentioned, this is our second call as Aurum management with the analysts. I will once again introduce Aurum in brief about what Aurum has done in the recent past. We are a new edge technology-driven real estate company with a track record of value creation in sectors like telecom, aviation and renewable energy. Since then, we have successfully invested in multiple sectors. For last decade, we have entirely focused on real estate. Our real estate arm has delivered one of the best campuses built in India, namely Aurum Q Parc. This project has been built with highest quality and safety standards. It hosts Indian and international banks like Axis Bank, ICICI, First Trend of South Africa, Momentum Metropolitan Group and Bank of Japan. This we have always adopted a very strong corporate governance and a transparency in our culture, which has enabled us to attract institutional capital and sovereign wealth funds in our various ventures. As a group, we have always focused on creating value for our stakeholders, which include our customer's capital allocators, investors and our own teams. We are also very focused on very important business aspects like advanced planning and prudent cash flow management. Our impeccable record of servicing debt, wherein every debt has been prepaid, I repeat prepaid, is a testimony to our conservatism. I am personally invested in infusing and implementing sustainability initiatives to enhance our already existing ESB action plan, which is something that guides us and will continue to do so with renewed vigor, attempting to raise the bar with each new acquisition and with each passing year. Now I will hand over to Mr. Ashish Deora, Founder and CEO of Aurum, a Harvard Business School alumni and someone who understands technology and real estate intrinsically. Mr. Deora will elaborate on proptech industry and Aurum PropTech's vision. Over to you, Mr. Deora.

Thank you, Shri. Thank you, Diwakar. I'm once again excited to talk to the analysts and investor community which has always shown immense faith in Majesco, which is now Aurum PropTech. Post Majesco disruption in InsurTech we have solidly embarked on our second inning in this journey to disrupt real estate sector. All businesses are undergoing a massive transformation process globally. Digital adoption and technology acceleration are changing the rules of each sector. In India, real estate sector plays a multiplier effect in development of economy, and is expected to reach a market size of USD 1 trillion, USD 1 trillion by 2030. Due to benefits of RERA, GST and demonetization picking in, institutional capital allocators are investing heavily in real estate in India. We believe and we have now agreed to acquire 49% equity stake in Integro Asset Management. While sell.do helps us build customer digital journey, the acquisition of Integro will jump-start another vertical of real estate that is finance. These acquisitions are key pieces of our ecosystem. With these acquisitions, we now have a team strength of more than 200 team members in various areas of proptech products in Aurum and its industry company. With Integro acquisition, we are also attempting to converge fintech and proptech. So to summarize, our vision is to build an integrated proptech ecosystem, providing data analytics platform, artificial intelligence, machine learning base inside. customer journey enabled by augmented and virtual reality, IoT-based solutions and most importantly, all these rolled into one super app. I will now like to hand it over to Onkar to speak about our acquisitions and our initiatives. Thank you very much.

Thank you, Mr. Deora. Mr. Athalye has talked about the group, and Mr. Deora has outlined the macro vision for proptech sector as well as the role Aurum envisages to play in disrupting this sector. I would like to focus on updating you about what we have done in the last 2 quarters and what we envisage to do in the coming 2 quarters. Our last few months -- over last few months, our teams have met more than 70 proptech companies across India. These teams went through various stages of due diligence, including technical, financial and legal. We are continuing to evaluate more and more companies to align them with our proptech ecosystem. We acquired K2V2 technology and have worked with their team to put them on a growth trajectory. This quarter, its annual revenue run rate increased to INR 18.8 crores. Its customer base stands at 485 B2B accounts. K2V2 is also launching B2B2C products under their beyond walls initiative in Pune. This will accelerate the revenue exponentially. We would also like to apprise you about our investment in Integro, which is a technology-led real estate asset management company focused on transformation of shared insights and effective processes. The investment is for a 49% fee for a value of INR 25 crores. Integro is headed by real estate veterans, Ramashrya Yadav. Integro provides investment management services by identifying and managing the real estate investments functioning as investor manager -- investment manager to AIF, including Integro Real Estate Asset Trust with State Trust, SEBI registered Category 2 AIF. Integro has synergies with K2V2 technologies, CRM software and aggregation platforms wherein K2V2 will be able to give data intelligence on real estate demand side and increased sales velocity of real estate projects. Integro will be able to bring in efficient investments in the supply side and tap into projects where demand side data shows an upside. This investment is a crucial cog in our ecosystem. The investment in Integro also gives an opportunity for Aurum to converge fintech and proptech. Further on, we are also meeting and evaluating property management software companies, which will further add to the network effects of Integro and K2V2 technology. K2V2 taps into demand-side intelligence and demand generation. The property management software will be crucial for demand-side revenue management and collection. Thus, a real estate asset cycle will pass through software junction of these 2 platforms, CRM and property management, where one works on demand generation and intelligence, the other works on demand-side revenue management and collections. The asset management fund also fits in ideally to invest into real estate projects with some monetization upside. In the past few months, our teams focused on outlining the vision of creating an integrated proptech ecosystem, which is focused on 4 core areas: customer digital journey, enterprise digital transformation, property management platform and invest in finance. Now, over the next 2 quarters, until March 2022, our focus area will be product strategy, integration and go-to-market. We are in advanced stages of rolling out our integrated fulfillment center, Aurum , and listing premiums services, Aurum Listing. The team is working on building products with focus on advanced technologies like blockchain, data science, AI and ML. We would like to open it to the forum and ask questions from you all. Thank you very much, and appreciate your continued interest in Aurum PropTech Limited.

[Operator Instructions] First question is from the line of Faisal Hawa from H.G. Hawa and Company.

Congratulations for the new acquisition. May I know that what is our team size at present at the various companies? And how well placed or qualified they are to really evaluate these kind of proptech investments? And my second question is you mentioned and a few U.S. based companies. So on which company are we trying to base our business model so that we can that -- if we get that quickly here? And is there any kind of R&D budget or something, which we're having to develop any kind of products on our own also?

I'm assuming that your question is on 3 sides. One is that how are we evaluating these investments? Second is the global benchmarking of what we are trying to do -- And the third one is -- sorry, if you could repeat the third part of the question?

Third question was do we have some kind of an R&D spend where we could develop products on our own also so that we don't depend on acquisitions alone?

Absolutely. So the reason why we are evaluating acquisitions currently is because we wanted to jump-start the proptech journey. And when we started meeting companies around 5 to 6 months ago, we realized that they were extremely good entrepreneurs, who were building these products. And we thought instead of we rebuilding them, if you could work with these companies that could create a collaborative model in our proptech ecosystem. As Onkar outlined, we have met 70-odd companies at different phases and different teams that met them. But we have only identified 2 companies till now to the the investment stage. What is our sort of understanding of this? Considering that we kind of come from real estate sector, we believe that we understand the pn points of the real estate sector because of our experience in last 14 years in real estate. When we see a pinpoint and we see that somebody is trying to solve that, when we believe that it's a good investment potential. And then, of course, if the entrepreneur has a midterm to long-term vision with us only then we evaluate that. There should be growth mindset. There should be -- they should be led by technology and they should be having an aptitude to create large corporations. These are the ways we evaluate an investment, of course, subject to legal, financial and technical utilities. There is also a 4-step process into this where the first level is more of a business plan understanding, which happens with our business team. And then second level is in a tech demonstration, which is side off by our technology team. Third is then they have to provide softwares. We do software testing of them on our own data, on our own business processes. And then fourthly, we kind of get on to how the business models and how the business plan can be improved if these companies start working with Aurum PropTech. So this is a 4 separate team which works independently and then report on to the Investment Committee to kind of take the investment into the next step. So that's how we are evaluating investments currently. As far as on a global benchmark, we believe that the companies like Open Door, they have been in business for 5 to 10 years now. And they have created very interesting data sets, very interesting way how they navigate a buyer to buy apartments, to lease apartments. How they navigate a seller to rent apartment or to sell that apartment. And this is all now based on smart understanding of the buyer, smart thinking of the buyer, which is possible from artificial intelligence and machine-learning . So that's essentially what we are trying to benchmark here in India. Similarly, on the property management side, there are companies like Yardi and RealPage. Yardi is privately held, but very large property management company. So they are global references on the property management side. So we have, of course, studied all these business models whatever we can from these global companies, and we are trying to make these business models indigenous on trying to implement it with our own understanding of real estate. So that's on the global benchmark. As far as the R&D budget is concerned, we have now 8 people data science team, and they are working on the R&D process, it's a sector. Kunal, over the next quarter, is going to clearly bring out that how much is it on the R&D? And how much is on the development? But just for you to know, we are spending a lot of time and energy on innovation. We have recently taken a blockchain project. And on the blockchain project, we are trying to create some sort of a democratization of ownership of real estate, which we are going to launch in this quarter. And we have probably spent INR 45 lakh on that blockchain product with Chennai-based company. So this is how we are approaching R&D.

Does block platform be integrated with Integro, which we have just acquired?

You are absolutely right. I mean anything that is on the Fintech side. Blockchain and Fintech will eventually become together. We have encouraging blockchain, not necessarily we are encouraging crypto and blockchain, along with fractional ownership, along with what Integro does, can become a very, very solid Fintech combination, and we are working towards that.

Sir, how soon we will be finished with our acquisitions spree of whatever companies and then afterwards, and when will the actual building of the business, integration of all these 7 acquisitions and the actual revenues focus? And how soon you feel you will be able to do it?

So acquisition is an ongoing process. It will not be fair to put a time line to that. Having said that, we are in no rush to kind of say that, look, we need to have 5 companies or 7 companies in 1 quarter or 2 quarters or 4 quarters. We have created our own proptech map. We have crated our own integrated ecosystem, and we are trying to now find the right team, right products, which we can find or buy and align that with our ecosystem. So according to is going to be a continuous process for some time. But the businesses that we have already acquired are, in any case, generating revenue, right? So K2V2 is -- revenue has only gone up over the last few months or so. Acquisitions will continue, but simultaneously, building of products are carrying on as well. So for example, as Onkar outlined, Aurum Listing and Aurum , 2 products, one is which is a premium-listing platform and second is, which is a fulfillment center, a 50-seater integrated contact center. These are going to be rolled out in this quarter itself. So both efforts will go on simultaneously to answer your question.

[Operator Instructions] Next question is from the line of Varinder Bansal from Omkara.

So Ashish, I could honestly understand and read whatever I could when it comes to you and there is no denying the fact that you have done wonders in the last many years. This is a space -- this is like a private equity, or listed private equity company. If I look around some of the proptech companies in India, whether it's Square Yards or 99acres, the gestation period, most of these companies have taken to come to profits is between 6 to 8 years. And still, there are many companies which are struggling in terms of making profits. I just wanted to understand that what are we targeting in terms of the capital allocation, which we'll be doing in this business? And what do you think that our journey could be? Like still it's very, very early stage in terms of getting ready, buying companies. Do you think that to reach that stage because, still, I think, 99acres earn, what, INR 200 crores revenues after 6, 7, 8 years. So the quantum of jump to reach that whatever number INR 500 crores or INR 1,000 crores, will that take so much of time?

Varinder, first of all, thank you for your kind words. I think we are going from interesting season pass that nothing seems to as interesting as proptech. To say -- for you to identify us as real state private equity, I would say one part of the business that we are doing. It's not only investments that we make like private equities and hold those investments to kind of create value on this investment. That is not possible like that. That is 1 part of the idea. What we are doing is we are integrating all these companies into one service recipient layer, which is the super app. So for example, CRM that sell.do will be the backbone for the users that will be buying a partner on our listing platform. So we are also integrating them sidewise by company and by -- also by -- on front end by our own service there. We believe that this will give network effects to each investment, to each company where they will tune from each other's group. We believe that the gross transaction value will keep going up of -- on our platform with each applicable and the wallet share of Aurum PropTech and this industry company will keep going up because there will be network effect from one to another. For example, Onkar spoke about the synergy between K2V2 and Integro. We believe that over the next couple of quarters, they will start working together and they will mutually gain from each other's customer base and teams together. So, real estate private equity for sure, but that's 1 part of the overall picture. Also, there is a huge strategy and emphasis on data management, on how data that is coming from one company, how is it being used by another company? How is that being integrated? I think that is going to become a huge game changer in the future. Most of the global companies that we track, they are doing that. I'm not sure really about some of the companies that you named. I'm sure they must be doing that as well. But most of the global companies are investing on data business, on data strategy quite a bit over last few quarters. And that is where we want to kind of take this. So does that answer your real estate private equity for you. On the capital allocation, you have some those points on the capital allocation. So we think that 70% of the capital that we have, and that we are going to sort of monetize by selling the 2 buildings that we own from the Erstwhile Management, there's a certain number that we believe we will be able to capitalize. And 70% of that can be allocated to acquire strategic investments in some of these companies and 30% can be done for R&D and development at Aurum PropTech level. That's the framework that we are trying to work on currently. Do you want to add something?

Sorry, can you put this in numbers, I think you have cash of nearly INR 100 crores?

A little above INR 100 crores, after making the K2V2 acquisition a little above INR 100 crores.

So the CapEx, what we are planning for acquisitions to make a super app, what will be that number?

So that number currently for year 1 is around INR 12 crores. It's not a very high number. It's done in-house, it's from outsourcing. So is that a large, yes that is on the super app site. But a large sum of this is also -- additional to this has also been invested on data .

So I'm just trying to understand, Ashish, that since you've run a lot of businesses, right? You have interest in a lot of businesses, and you will be the [Foreign Language] of this company, Aurum PropTech, only 35% stake. We will need money, right? Whether it is development of R&D expenses as the early gentleman said. So are we earmarking some, whatever, INR 100 crores, INR 200 crores, INR 500 crores, or whether there is a commitment coming from your end? Or any numbers that kind of what we're looking at?

So let's put this into 3 brackets. First is the cash that company has currently. Second is that the hard assets that the company has, which the idea is to monetize it. And by the way, commercial real estate is coming back with a bank. We are seeing a lot of leasing happening in our Q Parc over last number. So we are fairly confident that we'll get a reasonable value for the 2 buildings that Majesco, that Aurum PropTech ought to be owned from earlier time. So that is the second bracket. First is cash. Second is liquidating the hard assets of the 2 buildings. And the third will be the future capital reason. And from our point of view, look, we are committed in this for a long time. So any amount of capital that is required to be brought in as shareholders will be happy to kind of invest and support the company because this is going to be a -- according to us one of, the largest sectors going forward. Onkar wanted to add something to your earlier part of the question?

What Mr. Deora said, one primary difference between a couple of companies that you mentioned in ours is that our strategy is a mix of inorganic and organic growth wherein we are acquiring companies, which are already there in terms of software development, they have getting products. It needs some realignment with respect to integration into the larger ecosystem and platform and these are revenue-generating products that we have acquired, for example, K2V2 is a revenue-generating product. The further product build here will only accelerate the revenue and go-to-market. Also by focusing more on their go-to-market strategies also we will be able to increase their revenue opportunities exponentially. And that is why our lead time will not be as much as the other 2 companies, which build everything from ground up and scratch. So there, we have a lot of cash already.

Is there any internal number or do you guys are working at in terms of or any targets in your mind for the next 3, 5 years?

Look, we have got it you are absolutely right that the perspective was on 3 to 5 years. That means really any leading numbers at this stage I can only see Kunal sort of telling me question. So -- but look, let's look at it from this point of view, right? One, the view that we are taking as a company is that is for 3- to 5-year build-out, #1. #2, what we are taking is that we believe that this sector, over 10 years, is going to become a billion dollar sector. We believe that there is going to be at least 10% digital adoption in this sector. I mean, what is happening in Cavern and Fintech kind of gives us indication that it could be more, but at a conservative level it will be 10%. So we are talking about $100 billion of proptech sector in next 7 to 9 years. Now within that, the top market players, the top leaders will have its own market share. If we do things right today and if you are a part of that top market pair and top market leaders, then the numbers that you see currently of some of the other competing companies look very, very small. And it's also because, post-COVID, people are realizing that, look, you don't need to visit apartment four times to actually close a sale. You can do it 2 times whereas developers will give you a very, very good immersive journey sitting at your house before that with your family in your living rooms, right? So all these things are changing. There is a complete change in patterns when we see how people are buying homes or people are renting homes post-COVID. And at some point of time, this inflection point will kick in and you'll see all the companies kind of a great amount of revenue to have a decent business model. So on your 3- to 5-year question, I think I can leave it to you here, if you are okay with that one?

Can I ask 1 question, last question, please?

Please.

So sorry, 2 questions, okay? One is that I think your shareholding is still 35%. And I heard you mentioned that you will be going for some external fundraising as well. What are the plans on that side? Will you be looking to raise funds immediately, or you would like to bring your stake to above 50%? That is one of the shareholding side. And the last question is that if you can explain us how much technology cost is there in the real estate sector, say, in India versus global? And with proptech companies like yourself coming in, how much it actually helps the entire real estate companies or the industry in terms of saving money, wherein we can understand that your contribution, as a proptech player, will be massively for these guys?

Varinder, the 35% shareholding is actually something that comes out of 2 parts. The promoters of Majesco held 14%, which we bought into, and then we give an open offer of 26%, and we could acquire only 21% of that. So that is how 35%. I mean I wish if this would have gone up 40% and we would have got the entire 26%, but that was not the case. Now obviously, once you are at 35% to increase the shareholding there are multiple sort of routes and ways to do that, which is either you do through a rights issue or with your . We believe that the company currently is already sitting on cash, which it needs to deploy over the next 3 to 6 months. Burdening with more capital currently is not going to really help the capital table of the company. Having said that, we, at Aurum level, has a very, very strong balance sheet with almost 0 debt. And at the right time, we can invest tremendous amounts of equity in this business. Whether it increases the equity or in form of rights issue or something else, that is for the advisers and bankers to work on. Technology costs, Onkar, you want to talk about?

Varinder, to answer your question, let me put the execution regimen in this part. So the benefits are 3-pronged actually. One, the beneficiaries are B2B. The other is B2C. And the third is B2B2C, all 3 at some point of time, interacting either with respect to ownership and purchase of the real estate asset or managing the real estate asset or selling the real estate asset. And all 3 benefits, all beneficiaries are going to get impacted in this way. The creators of real estate will eventually be able to increase their sales velocity, reduce turnaround times the deployment of the software. They will also be able to better the consumer experience and brand experience, thus bettering their product proposition and brand recall value. Once the asset is sold, the asset owner, which is the B2C, will be able to efficiently manage this asset on a software-driven platform, and, thus, creating multiple opportunities of monetization or servicing that real estate asset. B2B2C, which is a huge ecosystem with respect to channel partners and brokers that are involved in various types of real estate, also will be able to benefit from this software-driven ecosystem. So the conversation I actually moved away from what is the actual cost impact for the developer to this being a necessity to really get to that $1 trillion real estate market, that is where the conversation has happened and COVID has been really the tipping point of this being looked as a cost initiative rather than being looked as a revenue force-multiplier by B2B essentially.

Got it. I have no doubts in terms of the sector per se because we have been very, very bullish on real estate sectors in the last 1 year. And I get those points. I was just trying to think about that, since a lot of players in the same proptech sector have not made money in the, say, in the last 7, 8 years, and proptech as an industry is there since the last 2 decades also, but we haven't seen a very big player emerging out of and very strong financially as well. So you know what are the plans in terms of Aurum to go and hit it in the right way? Because if it hits, then it will be big.

To your point, Varinder ji, actually, what has happened is proptech technology software in real estate has definitely existed for quite a bit, but proptech as an industry has only emerged from 2015. In fact, there is a company called MetaProp in the U.S., we spoke on the proptech. What has happened is there's a lot of that has been done already in the last 3, 5 years. And there's a lot of learnings that these companies that are already into existing that . But the tipping point really has been the last few years, where adoption of technology has got indicated in the D&A of real estate developers and also the consumer of that real estate. And that actually it can benefit us now having entered in it the right time.

[Operator Instructions] We have a follow-up question from the line of Faisal Hawa -- H. G. Hawa and Company.

Sir, I would just like to know what would be your style in growing this company. Would you be growing it like start-ups are known to do at this point of time going for like heavy advertising and hire a lot of people from the ecosystem of start-ups or tech world and really go ham around town or if you would like to build it very slowly. Because I think your blockchain part, where you are going for fractional ownership, having seen even things like crypto growing through advertising and which are in a very gray zone at this point of time. Your fractional ownership model could really, I think it could be quite big because, I mean, that is something which is needed because equity cannot be the only asset class for a small investor.

Faisal bhai, you have picked on to that point that how blockchain can actually democratize the equity investment in real estate sector. And we are working on that to roll out that product soon. Customer acquisition cost, which is a byproduct of heavy advertising and are paying a lot of salary because, currently, there is so much demand for existing talent from all over industry is the 2 biggest challenge, the heavy advertising and talent acquisition are the 2 biggest challenges. And we have very -- we have very often taken...

Your voice is breaking.

Can you hear me now?

Yes. I can hear you clearly now.

We are very often taken a contrarian view. We are very often taken a contrarian view on these scale. And we are ensuring that we don't advertise very heavily, we believe that the consumer acquisition cost is a very, very important metric. We want to keep that under control. On the digital side, on some key team members, yes, we will have to compete with -- compete with the market to get the right talent on board. We have already already. But we are also employing a large part of team which is coming and getting trained with us. These enthusiastic team members have typically 1 to 2 years of experience. And I think they are doing reasonably well. Of course, attrition will be a big challenge in this. That's the challenge that the industry faces, and we are finding ways to deal with that. But we will not follow the current industry trend of heavy advertising and paying obnoxious amounts of salaries for this. What we are also doing is we are leveraging our companies like K2V2, which already has a 200-plus team member, 200 plus team. And we are recruiting in Pune with K2V2 to sort of keep the acquisition costs under control. Our people are comfortable to work in a place where there are already 60, 70 technology team members now working. So it becomes a good sort of working environment for them. So we are sort of leveraging our team members and our investment companies to do the talent acquisition. As far as advertising is concerned, we are aligning all branding strategy, with K2V2, , with Integro. And ensuring that there is a common landing page, so that once you advertise that common landing page, everybody will be able to run their journey from here on and the acquisition cost of the customer can be amortized over multiple products and multiple companies. So we are thinking out of box .

So there is 2 things. Can you elaborate on what the AUM of Integro is at this point of time? What are the specialties within the property management space? And how you feel that Integro, on a stand-alone basis, will perform in the next 2 years? And secondly, can you just elaborate a bit on how K2V2 has performed in terms of revenues and in terms of penetration in customers also? And how much it is growing month-on-month post our acquisition?

So I will talk about the Integro. And for K2V2, I will request Kunal of K2V2 to talk about their numbers. So K2V2 -- Integro is in the process of using their first month of INR 1,000 crores. And it has a set up a team, which is -- which comprises of very few industry people. Because we have also done a diligence on the processes the way we are evaluating each investment, how they are investments? What is the kind of information that they are bringing on board before making an investment decision. And all these processes that they have set are, according to us, are game changer. They have recently started around a year ago. But already, we have got the license from the study to raise the fund and they're in the process of doing that. And once they do their first fund, then I'm assuming that they want to do the multiple funds as yet. So that's really the road map of K2V2 -- Integro. As far as K2V2 is concerned, I'll request Kunal to talk about some of the numbers.

So the way we look at the numbers of K2V2 maybe in the next -- we have got to try to prepare a 3 years plan starting from 1st of September date on which you made the investment and the revenue that we are trying to achieve will be around INR 40 crores. And of course, it will be, first years, there will be negative EBITDA of around INR 3 crores.

INR 40 crores, which financial year are you talking about?

I am saying for 12 months from this September to next August '22.

Okay. Okay.

Because we are just trying to monitor it on a 12-month basis from the date of which we have made the investment.

No, actually, we are most used to financial year, but that's okay. No problem.

Yes. And look, since this is a business that will grow eventually mostly out of this by September sorry, by March the number will be around INR 18 crores of revenue. And the rest will be in the last 5 months of the total 12 months that I said. And of course, we have tried to align the revenue recognition letter based on the India's accounting standards, which are K2V2 being a private share company was not following, and they're not supposed to follow. So all those things have been now aligned, and I think this is a good way to monitor it so that we are in line with our numbers.

So if we are a SaaS product, I mean, why is our margin so less? So you are saying there will be at almost INR 40 crore revenue, you'll be doing an EBITDA only around INR 3 crores. So what is the reason behind it?

This is Onkar here. Essentially, our strategy with K2V2 in the first is ensuring that the existing products are rolled out better with a better go-to-market strategy, which is essentially their SaaS products. We've also identified opportunities together with them in products, which are non-SaaS. And these products are to do with digital marketing, automation. For example, Beyond Walls Digital is their B2B product, which we run as a service. So the answer to your question is, basically, first year is -- we are also investing into talent. First year, we are also investing into product development, product alignment. And we will be able to see these benefits over the next 2 quarters. The CRM products, they do have got their value capitalized already. And they are fairly giving us decent market.

So if these investments were not made, the margin would have been better?

These investments in people and products are definitely required because, at some point of time, we need to exponentially increase the larger CDJ, customer digital journey side of ecosystem. Presently only -- K2V2 only has got a CRM -- had not directly, but it had only the CRM product. But in addition to it, we also need to have a B2B2C, which is a channel partner based CRM, and a B2B platform, which includes the ad automation and digital marketing. There's also R&D happening on the B2C products there, which will be products which will directly cater to the consumers of real estate moving away from B2B strategy. So these products are required to grow the business exponentially beyond only being the real estate CRM.

Who are these 400 customers that we have, what is the -- are they real estate developers or?

The customer is a -- present customer is the mix of visually the real estate developers, B2B. And we also now have bought B2B2C clientele, which is the channel partner ecosystem, which will sign up for the software and participate in launch and sale of the products, connecting with the consumers directly. At some point of time, we will also have a B2C product, which will then align the B2B, the B2B2C and the consumers that is B2C. So it's an integrated approach on the customer digital side of the journey.

We have primarily only to Western India-based real estate developers?

Well, the vision is PAN India. We have identified Tier 1 and Tier 2 city estate and the potential is huge beyond Western India. We will -- we were quite surprised that the technology adoption in Tier 2 cities is quite high as well, even South India is having a good adoption of tech. The primary strategy is to focus on Pune, Mumbai, Bangalore, Delhi, Hyderabad, Chennai in Phase 1, and then evaluate other cities for opportunity. I hope we have answered your questions.

[Operator Instructions] Ladies and gentlemen, that would be our last question for today. I now hand the conference over to the management for their closing comments. Thank you, and over to you.

Thank you very much for all who have attended this call. We look forward to engaging with you over next few quarters as well. And we believe that what we are building is clearly really marketed. We'd like to conclude this call to -- by wishing all of you a very happy Diwali and a prosperous New Year from anybody at Aurum PropTech and Aurum ? Thank you so very much.

Thank you very much. Ladies and gentlemen, on behalf of Aurum PropTech Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.