AvenuesAI Limited (539807) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Infibeam Avenues Q4 FY '21 Earnings Conference Call hosted by K.R. Choksey Research. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Parvati Rai. Thank you, and over to you, ma'am.

Thank you, Steven. Good evening, everyone. On behalf of K.R. Choksey Research, we welcome you all for the Q4 FY '21 earnings conference call of Infibeam Avenues Limited. I take this opportunity to welcome the management of Infibeam Avenues represented by Mr. Vishal Mehta, Managing Director; Mr. Vishwas Patel, Executive Director, Founder and CEO of the Payments business, Mr. R. Srikanth, President; Mr. Hiren Padhya, Chief Financial Officer. We begin the call with a brief overview of the company by the management followed by the Q&A. I now hand over the call to Mr. Vishal Mehta for his opening remarks. Thank you, and over to you, sir.

Thanks, Parvati. Good afternoon to all of you, and welcome to the quarterly earnings call of Infibeam Avenues Limited. Today, we've got an exciting agenda. We would like to discuss with you an overview of the company, the industry and the payment space. We'd like to go over the financials. And we eventually will end up talking about some business outlooks and then answer questions. I'll hand over the call now to Srikanth, who is the President of the company, who will walk you through. Srikanth, all yours.

Yes. Thank you, Vishal. Good evening to all of you. I hope everyone of you and your family members are safe, and I wish good health to all of you. It is my pleasure to present the stand-alone and consolidated accounts of the company today. I'd like to spend 5 minutes on the industry and then take you through the operationals and financial performance. Please refer to Slide #4. The choice is available to the consumer, as you know, for payment options all under 3 categories: one is credit options, debit options and third one is cash. Credit options largely include card-based payment transactions through Visa, Mastercard and Amex, et cetera. Debit options include the bank accounts and wallets. If you observe that the bank accounts, majority of the interventions and innovations are really taking place in India, it's around actually debiting the bank account. This is primarily because India is largely a debit economy, unlike most parts of the world where credit options are widely used. While digital transactions have increased manyfold in India over the last 5 years, cash continues to remain king and noncash transactions are still very low in India. So it's a great opportunity for a company like Infibeam. Demonetization was the first boost, actually, for the growth of digital payments in India. COVID has been other catalyst for the growth of the industry. Referring various institutional research, we observed that there are only about 150 million to 175 million digital users in the country, and about 15% to 18% of the payments are only digital. This provides a very, very strong headroom for growth for a company like Infibeam. Referring to Slide #5. High level committee appointed by Reserve Bank of India found that per capita digital transactions per annum during the year FY 2018 in the country was only 22.4 compared to 34 in Indonesia, 79 in South Africa, 148 in Brazil; and as high as 782 in Singapore. Since 2018, per capita transactions per annum has grown only to about 30 in FY '21 based on RBI payment system indicated data. We believe India has kicked off growth in this sector, and we'll see more merchants and consumers coming online. Structural and secular trends are driving digital payments market growth, resulting in the exceptional momentum in payment business in India. Consumers and business and banks, governments are all adopting digital mode for business, and digital transactions have increased by 3, 4x in the last 5 years, growing that 5-year CAGR over 50%. Various research indicates that the opportunity in payment sectors in India to cross USD 1 trillion in the next 3 to 5 years' time frame, and P2M market size to reach USD 500 billion due to very strong tailwinds. And emerging industries like online groceries, ed tech, med tech, tech companies and many more that will join in the future including the e-governance. The number of industries 10 years ago vis-à-vis today having digital business model and accepting payments online will give you a perspective of how much industry has really expanded, from only having railway ticket booking online and airline bookings and then in retail -- e-retail and e-commerce, ride-hailings, restaurants, groceries, entertainments, newspaper subscriptions, online education, bill payments, insurance, taxes and the list goes on and on. The next 10 years could see many more industries and services coming online where the payment gateway by default will have an excellent growth. And with the low penetrations in India, government's vision to make India less cash economy as well as support from Reserve Bank of India is a positive for the industry. Specifically talking of the opportunities in the payment gateway space in Slide #5, payment market will grow 40% CAGR from the estimated USD 80 billion in FY 2021 to an estimated USD 307 billion by FY 2025, as estimated by Bank of Am Global Research. Current low penetrations and sticky base will aid growth for established payment gateways and for those who can also offer various value-added services. We will touch upon this in a moment. In fourth quarter you will see, in the same slide, the payment gateway is the most lucrative market for growth. I just mentioned earlier about how digital industry has expanded in the last 10 years. In the next 5 years, I would say transacting users will increase to 400 million from 160 million users and an additional 10 million merchants will go potentially online. There are staggering 68% of 60 million MSMEs that are still off-line, while 30% of Indian MSMEs will soon push themselves up to transact digitally compared to the active 2% to 3% today as they see more growth and success through the digital model. Based on the ongoing growth and expanding addressable market over the last few years, we believe that it's a greater degree of opportunities and many areas within the payments that we can now address, given our growing merchants clientele across our fintech platforms. Through Slide #12 and 13 enter the business overview section, let me explain our business strategies and plans to capture growth in the digital space. Slide #12 provides a snapshot of multiple growth engines we have under 2 core business, namely payments and platforms. This is our stronghold. We are a full-stack payments company offering various solutions under the payments, covering payment acceptance, bill payments, payment issuance, new business offerings like new banking, domestic remittances and assisted commerce. And we also offer international remittances through our investee company. We also offer e-commerce marketplace platform for large enterprise planning to launch e-commerce at a massive scale. Platforms and payments combination is a proven model globally. And there are [ very few ] examples of such companies in the U.S. and China and Japan and many parts of the world. Internet giants are also entering payments space. World largest social media company, world largest search engine company, world largest e-commerce company, et cetera, et cetera are entering payment space. Our strategy behind building a broader portfolio or multiple sources of revenue generation is explained in Slide #13, where I would like to spend few more minutes. Please see merchant sourcing platforms in part green. Through our sourcing platforms, namely CCAvenue, PG solutions, a GeM platform, government e-Marketplace platforms, bill payments platforms, which is our BillAvenue platforms, hospitality platforms, which is our ResAvenue platforms, we have built a strong pipeline of sourcing merchants. Bank alliances also is a strong merchant sourcing channel for us. Over 2.5 million merchants are integrated across our fintech platforms. Every day, on an average, 2,000 new merchants got registered across our platforms in financial year '21. In the last 20 years of offering our core payments and e-commerce platforms, this business have been our cash cow and continued to generate positive cash flow for us. We have been consistently profitable. We have also expanded our flagship business brands, CCAvenue, PG, e-commerce SaaS platforms, ResAvenue platforms into international markets. And more expansion is underway, where we will build a strong pipeline of merchants in future in the international markets as well. This is one of our growth driver for the company. With this large merchant base and an understanding of our business that we have built such a long time, it's time we focused on issuing side of our payments, that is lending business. There are various formats of lending that we will get into. The most riskless form of lending is by way of extra settlement. And the same was launched by us in September 2020. We have publicly articulated this. We are currently at an annual run rate of USD 100 million through express settlement of merchant funds. We want to expand this to USD 200 million by next year and reach about 10% of our daily payment processing in India in the next 3 to 5 years. We process payments for roughly INR 300 crore on an average on a daily basis in Q4 2021. And we have guided this as a part of business outlook in our earnings release. Our next lending model would be to start offering credit cards to SMEs and corporates and business loans once partnership with the lending ecosystem players and integrations are completed. Presently, this work is actually work in progress. As mentioned earlier, we have large merchant base, and we have an existing relationship with most of the big merchants in India. This will reduce our go-to-market timings and reduce our marketing and customer acquisition cost. One more important strategy to understand here is that in our e-commerce marketplace platform business, we are working with 2 of the 4 major e-commerce enterprise in the country, namely, one is government enterprise and another one is large private enterprise in the country. Unlike typical e-commerce model where making profits may still be a dream even for big companies, we have a sustainable, profitable product. Plus, we have the ability to expand our scope of offerings from pure e-commerce platform to payment services, including lending. And that is one of the part of our next phase of growth. So the long-term takeaway from here is sourcing platform will continue to generate strong merchant pipeline for us. And we will continue offering them our core services, explore partnerships with the large enterprises, like the one with government e-Marketplace, GeM, and Reliance-owned Jio Platforms Limited, and build partnerships with financial institutions globally for payments acceptance as well as acquirer payments and CPGS business, what is the CCAvenue payment gateway services business, and keeping generating profits and cash flows into the company. To push growth further, we will expand and increase the contribution from the lending portfolio and expand our business internationally. This will improve operational performance and improve cash flows, which we can use to grow faster. Just to let you guys know that our business model is such that the cost do not increase proportionately with the increase in revenues. And this is an advantage of platform-based companies. So in other words, cost is not linear actually to the revenue which we are generating. Revenues are all based on the transaction-based models. Now let me take you through the business and organization developments in the last financial year. These developments are part of our strategy that I just mentioned. Please refer Slide #15. We signed a very prestigious contract with Reliance-owned Jio Platforms Limited and its affiliates somewhere in the end of September 2020 last year, as we have publicly articulated, to license, customize, maintain and access IAL's enterprise e-commerce platform and payment platforms for their internal business use. I'm happy to share that JioMart went live on our platforms in March this year. The base platform is the same as government e-Marketplace platform, but it is -- it got customized for Jio's environment. As part of overall contract, they will also offer payment solutions to Jio Platforms Limited. We have already contracted with JPL to offer our bank grade CPGS platforms. Please note that Jio is not just another customer. Jio is a market in itself, and there are various partnerships that we are exploring with the company. One such partnership is the consortium formed with Jio and Jio's business and financial partners, namely Google and Facebook, to apply for retail payment license or payment network license from Reserve Bank of India. At that right time, we will share more details on this partnership and other developments. Under our payment business, we signed a definitive agreement with one of the world's top banks, JPMorgan Chase, for its India business to offer Infibeam's flagship payment platform, CCAvenue, for processing transactions of its enterprise clients in India. Our entire portfolio of 200-plus payment options is integrated with JPMC in India. This relationship is particularly helpful, keeping in mind our plans to expand in the U.S. In financial year 2021, we announced -- launched top 2 business under the payments segment. These are all new business offering which we announced. First is CPGS business, which is CCAvenue Payment Gateway Services business. Traditionally, our focus has been on merchants within the payment processing. As a part of making banks our customers, where we can process larger volumes of payments irrespective of any payments gateway, we extend our scope of our payment platforms to do backward integration in acquiring business by launching acquirer processor services called CPGS, or CCAvenue Payment Gateway Services. We launched this in Oman around September last year as we have publicly announced. We tied up with 2 of the largest banks in Oman, namely Bank of Muscat and Bank of Dhofar to gain roughly 90% of the market share of processing online cards in Oman. And I just mentioned 2 minutes ago that the same platform has been given to Jio platforms as well. We manage the entire technology from India. We will expand these services globally, starting from the GCC region, and we will also partner with some banks in India. With this, we are now present on both types of payment acquiring transactions, namely a front-end PG with 200-plus payment options and a bank grade global back-end card processor. And in this CPGS business, banks are our ultimate customers. The second new business which we announced to enter into was new banking and lending. For this, we acquired a company last March, April timeframe, company called Cardpay Technologies based out of Bangalore. IAL, large number of merchants portfolio, over 2.5 million and adding 2,000-plus every day of potential customers for offering lending services. In the lending space, we have already started express settlement, as I was telling in the beginning of this call, which I explained actually earlier. Later, we will offer cards and business loans to SMEs and corporates. So the whole of FY '21, we are focused on building strength and resilience in the business. We have taken steps to build a sustainable business model, evident from the developments I enumerated. We have created a very strong moat around our business. We are differentiated not only by core payments and e-commerce marketplace platform that we have developed over the years, but also by the possibility that we can create with our portfolio of offerings to complement our existing core business. To unlock value of our shareholders -- for the shareholders and focus on our payments and platform business, we had announced demerger and simultaneously listing some of our noncore business. Accordingly, NCLT has approved the demerger. And after complying with the listing norms, both the entities, Suvidhaa Infoserve and DRC Systems were listed on the stock exchange in March 2021. Additionally, we rewarded our shareholders with 1:1 bonus shares in December 2020 as a part of our corporate action. Let me now take you through the operational and financial performance of IAL in FY '21. Please refer to Slide #16. The 3 charts review the operational performance of our business at large. Payment processing has increased 55% Y-o-Y to approximately INR 1,00,780 crore in FY '21. Monthly payment processing in Q4 averaged about INR 10,800 crore from little over INR 6,000 crores in the same period last year. Thus, we are in the annual run rate of processing INR 1.2 lakh crore to 1.3 lakh crore or about $18 billion in payments in FY '22. And that's just in India and UAE. Soon, we will also see an international markets like Saudi and a few of the GCC country and USA adding to this growth shortly. Merchant registrations continue to be robust. And our alliance partnerships continue to deepen, opening up for more business for us. Retail contribution continues to dominate in terms of number of merchants on the PG platforms. Education, utility, grocery, IT are among the larger contributors in FY '21. B2B registration trebled and utilities doubled in -- tripled, I'm sorry, B2B registration tripled and utility doubled in Q4 vis-à-vis Q3 sequentially. Basically, merger registrations in FY '21 has been the best we have seen in our history at 300-plus registration on an average every day, and it seems like we are at the digital growth from here -- heart of digital growth from here. Talking about bill payments business through our BillAvenue platform, the average daily volume growth is almost about 7x in March '21 compared to April 20. Bill payments volume in FY '21 is up 226% year-on-year to 25 million and it is up 40% sequentially. We have seen month-on-month growth in volumes in the whole of FY '21. We have 93% market share of total 19,633 billers on BBPS as of 31st March 2021. We are a TSP to majority billers. As more biller categories open up on the BBPS, we will onboard more billers on a consistent basis. Simultaneously, we continue to build the agent network across the country as bill payment is still largely a cash affair in India. We have grown our agent networks from 600,000 last year to nearly 675,000 as of now. Number of agents institutions have increased from 175 last year to the level of 250 at the end of financial year 2021. The industry processed about 25 million bills in March '21, about 1 million a day. Our aim is to process 1 million bills daily in the next 3 to 5 years. Lastly, the performance of government e-Marketplace, GeM. Our largest and our significant customer in e-commerce Marketplace platform which has few other customers. GeM achieved cumulative GMV of INR 1 lakh crore in March 2021. Since inception in August 2016, more than 90% of GeMs GMV has been achieved after GeM went live with us. This is an exclusive contract for almost 6 years, as you all know. We went live in January 2018. We won the contract in August 2017. Within a period of 5 months, the entire target platform went live in January 2018. We earn a very high single-digit basis point on our value of the procurements. Again, this business model is linked to the transaction revenue. As you can see from the chart, GeM GMV in FY '21 was INR 50,000 crore. Government is targeting to double the procurement in FY '22 to INR 1 lakh crore, which is about $13.5 billion with the integration of railways and addition of more government bodies as well as adding more merchants on the platforms to offer wider variety of products and services on the platform. Last year, we signed a definitive agreement, as you all know, with Reliance-owned Jio Platforms Limited to offer the same platform for JioMart, customized to its requirements. JioMart is now live on our platform and is integrated with various 3P platforms for 10x value propositions and 10x consumers experience. We are proud to state that we are now connected with 2 of the 4 largest e-commerce enterprises in the country. GeM and Jio together opens up huge opportunity for us to offer our payment solutions in the payment space. To summarize this slide, both payments and platform business have shown excellent performance in FY '21, despite the ongoing pandemic. We have built a strong pipeline of merchants from whom we expect a good business going forward as they grow that business through the digital mode. With this, let me move on to my financial performance. However, before that, it is very important to really thank the entire leadership of Infibeam Avenues and also employees of Infibeam Avenues and the customers and merchants who supported us actually through this journey, throughout the period consistently, and thanks for all the untiring efforts. Let me just go to the revenue model. This will be made clear from Slide #17 and Slide #18. Please refer Slide #17, which is Infibeam's revenue model. Infibeam revenue comes from 2 business segments: payments and platforms. Payment business contributes 78% of our gross revenues, including revenue from our subsidiary companies, copayments and 22% comes from our platform business. In payment business, approximately 95% of the revenues were generated based on transaction-based revenues and rest being set up fee, maintenance fee, et cetera. Platform revenues is largely license, subscriptions, maintenance, development, setup fee, value-added services and portion asset transaction-based revenues from GeM platforms. Thus, IAL's revenue can also be classified as a transaction-based revenue model, plus nontransaction-based revenue model, refer to the blue boxes in the middle of the row. And derivations from the transaction-based revenues are explained in the third row of the same slide. Our operating expenses are predominantly our pass-through cost in the payment business. As you all know, I have articulated time and again, actually through various calls that our members -- consortium members, partners are issuing banks and network players and so on. So we have to really provide the pass-through cost actually for them. So therefore, our operating expenses are predominantly pass-through cost in the payment business. Let me explain this through Slide #18 where you will understand the payments revenue model and learn about the ecosystem suppliers and the digital payment industry. In payment gateway business, we offer 200-plus payment options. In a single integration to the merchants under the various debits and credit card payment categories, namely debit cards and credit cards, net banking, wallets, EMI, UPIs, pay later, et cetera, each category has a different take rates and involves cost to the company on the top, which we add our margin and give it to the merchants as a bundle. We have taken, say, the examples of credit card options used by the consumers while making the payments for online purchases in the merchant's website or merchant's app to help you to understand the revenue models and value chains in the digital payment business. As you can see pictorial presentation, 2% is being charged to the merchants, and significant portion is typically shared with issuing banks, acquiring banks under payment network. And therefore, they are the main ecosystem player in the cost credit card payment option. Credit option, which also includes the financing costs and the risk of nonpayments, will have a different MDR vis-à-vis the debit options, which directly debits your bank accounts and so on. For certain options, though, there are regulatory guidelines like RuPay, debit cards and UPIs and QR codes; hence, we earn differential rates on every different payment options depending on the payment option used by the consumers. Rates also differs depending on the size of the merchants and depending on the industry. However, international markets are a bit different. It goes without saying that the take rates are higher. The rates in the UAE, for example, are higher compared to India. There are very few payments options in UAE, about 15, unlike 200-plus in India. And credit cards continue to larger size vis-a-vis India. And India is culturally a debit economy. Indians typically actually spend what they have rather than using the credits. So in India, we see larger usage of debit options also evident from the number of debit cards in the country and net banking and UPI transactions compared to credit card; hence, take rates are relatively lower in India. I hope all of you would have got a bit of a clear understanding of our revenue models. With this, I proceed to discuss the financial performance of the company in FY '21 presented in Slide #19. Transaction processed value has increased 27% sequentially to INR 50,391 crore. For the full year of FY '21, the TPV was INR 139,405 crore, which is about $19.1 billion, and it is up 59% compared to FY '20. The natural 27% sequential growth and 59% Y-o-Y growth. And this is exactly the reason why we have shown an impressive performance in Q4. Average monthly TPV in Q4 was approximately INR 17,000 crores. With this run rate, we will be able to process TPV of INR 2 trillion, that is about USD 28 billion in FY '22, and that is pretty much our current run rate actually. Go Payments TPV in Q4 was about -- up 30% sequentially and 159% Y-o-Y. Government e-Marketplace, GeM cumulative GMV crossed INR 1 lakh crore, which is USD 14.1 billion in FY '21, cumulatively. Daily GMV as per GeM publication was close to INR 230 crore -- INR 230 crore to INR 240 crore in March '21 vis-à-vis INR 100 crores in March '20. Bill payments grew through our BillAvenue platform month-on-month in FY '21 and continues to show a stronger volume. FASTag is now live with us, and we expect to see strong volumes going forward. With that gross revenue for the full year, FY '21 was up 3% to 676 crores on a like-to-like basis. Gross revenue in Q4 fell 12% to INR 201 crore from INR 228 crore despite growth in TPV, primarily because of the second wave of COVID as well. Q4 drop in gross revenue was impacted by the change in the industrial pricing mix. Flat fee-based utility and the education sector contribution increased, while contribution from percentage-based retail transactions from the aviation, travel, tourism, hospitality, entertainment have reduced, leading to a lower gross take rate and hence, drop in the net take rates. I'm sure the moment that the COVID situation improves, all these sectors where we are conventionally very, very strong, like aviation, travel, tourism, hospitality, entertainment will again actually reboost, and they will have a different take rates altogether. But we structured the pricing in payment business for capturing market opportunities during the current year. Our net take rates improved 30% sequentially to 6.7 bps from 5.2 bps in Q3. This led to increase in transaction-based net revenues and hence, our net revenue which increased sequentially in Q4 by 8% to INR 66 crores from the level of INR 61 crores in Q3. EBITDA fell marginally 7% sequentially in Q4 to INR 37 crores but was up 5% in Q4 to Q4 last year. Adjusted EBITDA as a percentage of net revenue in Q4 was 56% compared to 65% in Q3 and 58% last year. For full year FY '21 EBITDA, which is actually a very important factor for our growth and for our guidance and so on, it is 61% on the net revenue from the level of 60% in FY '20, and this is what we are guiding for the current year, to 62% for the current year. PAT in Q4 was up 148% sequentially to INR 32 crore and up 30% Y-o-Y. PAT as a percentage of net revenue was 48% in Q4 compared to 21% in Q3. For FY '21, PAT as a percentage of the net revenue was 30% vis-à-vis 41% in FY '20. The drop in PAT, as you all know, in FY '21 is on account of the entire year, a lower share of profit from associates and excluding which the growth would have been 34%. Fundamentally, we have grown actually on the PAT. We are consistently converting the EBITDA into free cash, and cash and cash equivalents have gone up significantly to INR 178 crore from the level of INR 99 crore in the beginning of the year. In the following months, as the effects of pandemic slows, we expect the pricing mix to change, thus improving the net take rates and hence operating performance. Going into FY '22 and further, our payment gateway business in India and government e-Marketplace, GeM, will continue to grow naturally. Payment growth will be driven by merchants, business coming online, more sectors adopting to digital mode of doing business, more sectors with unique business model opening up with the digital model. Government e-Marketplace will keep growing as the government is determined to build an online procurement model, and thus integrating various government bodies procurement into GeM, like what they have done during last year, Railways Department. Apart from this, additional revenues and margin drivers include: first, payment expansions internationally. We have been articulating this as one of the growth drivers for the company on the top line and also for the bottom line. And we plan to have this footprint in more than 10 countries in the next 2 to 3 years. UAE, GCC, Saudi, Oman is already in place. And now U.S. and -- the U.S. is also already launched. And we will be aggressive on Saudi and a few other countries, actually, in the next 2 to 3 years' time frame. Second, new business announced in FY '21, namely CCAvenue Payment Gateway Services, branded as CPGS, new banking, cards and lending. Third driver is bill payments through our BillAvenue platforms. Growth in remittances and assisted commerce, Go Payments is seeing multiple jumps in this business where these monthly payments, GTV crossed actually 3x in March '21 compared to March '20. And this is an encouraging factor for us to really have a growth in the remittances and assisted commerce. And of course, lastly, partnership with Jio Platforms and JPMC Bank in India. And on the profit driver growth, needless to say that express settlement is one of the drivers. Now please turn on to Slide #20. We have a very strong balance sheet. As we generate cash quarter-on-quarter and year-on-year, we have this advantage due to our platform-based business model that allow us to scale faster compared to cost. The company's cash has increased, as I was saying earlier, to INR 178 crore as on 31 March 2021 vis-à-vis INR 99 crore as of 31 March 2020. It's up about 80%. In absolute volume terms, it's up actually INR 79 crore. We are actually a debt-free company with very negligible debt of INR 20 crores of term debt at a very concessional rate of interest. And therefore, we are net cash positive. We are a net debt-free company. Our EBITDA to cash conversion has remained over 100% consistently for many years. And time and again, I have been articulating to the investors, and this is a clear fact. Cash from operations before working capital in FY '21 was INR 148 crore. This is the cash generated. This has been consistently positive and strong for the last many years by virtue of our business model. In payment business, we have a negative working capital as we receive money in first and settle with the merchants after T+1, T+3, T+5, T+7 as is the case, maybe. Working capital does conclude -- thus includes settlement money of merchants lying with us on the closing date of the balance sheet. Hence, for us, cash from operations before working capital is the right measure. Otherwise, the cash from operations is still higher in FY '21 at INR 168 crore before tax. And we don't take merchant money actually in our stock. Free cash flow has been consistently positive. Free cash flow in FY '21 was INR 66 crores vis-à-vis INR 104 crore in FY '20. On Slide #21, we present our outlook of Infibeam. We expect with our success, with our experience, with our run rate of our business, with our run rate actually on our transactional processing both on payments and platform, we expect to increase the transaction processing value to USD 100 billion in 3 to 5-year time frame from FY '22 run rate of USD 22 billion we speak. EBITDA as a percentage of net revenue, we improved from the present level of 61% to the level of 65% in FY '22. Increased secured lending under the new banking from the present level of USD 100 million with a proposed level of USD 200 million in FY '22. With this, I hand over the floor back to the moderator to open it up for question-and-answer session. And thank you all for your time, and thank you all for being patient. Moderator?

[Operator Instructions] The first question is from the line of Mayank Babla from Dalal & Broacha.

Sir, my 2 questions were basically on EBIT. One was on EBITDA. So what was the reason for the softness quarter-on-quarter? And second, in the free cash flow, why was it, sir, lower at INR 66 crores versus INR 104 crores last year? That's all from my side.

Our EBITDA margin, if you have really seen actually, on the net revenue, it was in the Q1 of FY '21, it was 61%, Q2 was 62%, Q3 was 65% and Q4 was actually 56%. Primarily that we have to rationalize our pricing in order to cap actually more market opportunities. And second important reason is that in terms of some of the sectors which carries actually a fixed fee model, like education sectors and utility sectors and so on. So that is also another reason. And third one is that there are the flagship sectors which we are having, like entertainment, travel, hospitality, aviations, and these are all the sectors where conventionally, we are very, very strong, and in terms of both gross take rates and net take rates and margins. And because of the COVID situation, the sectors have not been fully opened. And as and when we open that, we will be able to really improve our margin. That is the reason why we are saying actually that EBITDA margin for the entire year on net revenue basis to the level of 65%.

Sir, on free cash flow?

Hiren, would you like to really answer to this free cash flow question, please?

On the free cash flow, I think, from the last year, INR 104 crore to INR 66 crores is the actual figures. Basically, there's no specific reason for that. But we are just saying in terms of CapEx last year. And in terms of operations also, we have achieved very good performance in terms of free cash flow. So...

One important reason is that -- which I can possibly highlight is that changes in the working capital is one of the important things because in government e-Marketplace business, the DSOs are relatively higher. Because the process of making the government payments actually is a little different as per our contractual terms. It is linked to the order process and so on. And that has also been [ blocked ] actually in the changes in the working capital. So that is primarily one of the reasons. Because in our payment business, DSO is negative, but in our government e-Marketplace of business, DSO is actually always on an average actually around 7 to 8 months' time frame.

[Operator Instructions] The next question is from the line of Ravi Mehta from Deep Financial.

Sir, my first question is pertaining to the take rate. So when I look at Slide 19, so probably the lockdown effects are not that felt in Q4 actually. So any specific reason why the take rates have been low and whereas the volumes have been high, which means probably there are volumes happening, but maybe it's all low-margin happening. So maybe if you can share some color.

Sure, sure. So the fundamental strategy of the company primarily is that we don't want to lose the market share. And we should not really -- I'm not going to do the business, somebody else are going to do the business. Because at the end of the day, as I was mentioning to you earlier in one of the calls actually previously that the pricing pressure is actually is not the art, it's the science. It is there every day. So however, our platforms are good; however, our processing is good; however, our operational efficiency is good; however, our settlement process is good; however, we are having the satisfaction actually before the merchants and so on and so forth, the net effect is that what is actually for the merchants in terms of pricing. So therefore, the pricing pressure has always been there actually for the industry. And so be it actually for the company as well. So therefore, while on one side we are a public company, we cannot really bring down the price actually beyond certain -- below certain threshold levels and so on. But nevertheless, this pressure is always there. So therefore, this quarter, actually, we don't want to really -- we have to daily adopt the rationalized economic pricing in order to capture the market opportunities. That is one thing. Second is that conventionally, we were not very strong in education sector. Thanks to COVID, I think education sectors, we are becoming very, very strong. And education sectors, as the volume goes up, it's actually based on the fixed fee model, same the case with utility bill payments and so on. So therefore, that is also a second reason. And this is basically -- these 2 basic reasons actually pull down the net take rates. Third important reason is that, as I was telling you, the entertainment, travel sectors, aviation sectors and hospitality sectors, including hotels, have not been opened, thanks to COVID. So this is our strong foothold, actually, in terms of our gross take rates and net take rates actually. So from that perspective, once it gets opened, you will have a different net take rates altogether. That is exactly one of the reasons why we are guiding the market actually 65% for net margin in terms of EBITDA, actually.

So as things open up, do you expect the EBIT to go back to FY '20 levels as the mix of the merchants improves...

We are saying we are going to work on a consistent only one number, which is 65% on net revenue EBITDA margin. So therefore, I think it will be probably even better than that.

Ravi, this is Purvesh, if I could just add to what Srikanth said, just add it. There are 2 points to this. One is obviously when these sectors grow, the retail sector, obviously, there will be some change in the pricing mix that will definitely. But on the other side, what Srikanth was mentioning a couple of minutes back, that we are getting into new businesses. These newer businesses have a little pass-through. The lending business, which is also at 100 million currently, which we expect to take it to 200 million, all these are net take rate accretive, which will overall as our business growth will improve the overall take rate. So apart from the natural growth within the payment gateway, these new businesses will also add to the net take. So these are our margin drivers.

Okay. Let me explain, Vishwas here. Let me explain from layman's perspective, right? If you have seen, the overall transaction process has increased by 27% from last quarter. So from say it, INR 39,000 crore has gone up to INR 50,000 crores plus. So it's a healthy 27% jump in just 3 months. Right? And if you look from a layman perspective, the utilities and others in the COVID period where it has work from home and other things have increased. Now typically, utility payments including education have a fix fees. I mean if it's a INR 3 lakh transaction, we are charging INR 25 or INR 30 a transaction. It does not go on a percentage based value. Typically, in all our other businesses where we are very, very strong, like, say, the airline business where we power almost 27 airlines, right, from Emirates Airlines to IndiGo to Vistara, to Gulf Air, to Oman Air. Similarly, in hospitality, where we power the entire Taj Group of Hotels, Oberoi, ITC, Lemon Tree. So all those businesses are severely affected. These are percentage based business. If you are charging for INR 1 lakh, we charge them a healthy 2% or something on those lines, so it will be INR 2,000 every transaction. That's the charge. [ On that we make the business ], right? So percentage-base business. Flat-fee business has increased due to COVID and the percentages business where we are very strong is still down. But overall, if you see the volumes have gone up. That means a significant intake that we have done on the utilities business and on including education and so many other business there is a flat kind of a take rate. So is that -- so how the business...

That's why I wanted to ask because the volumes are actually shorter but the take rates are low, so that's why it's a question whether we are focusing on low-margin process, or probably the market was such that we had to do that.

Right. And just to let you know the data points, actually, in FY '20, our EBITDA net revenue was 59.9%. In FY '21 as a whole, 60.8%. And we are guiding the market for 65%. So for all practical purpose, that we are in the right pathway.

Yes. And as a strategy, it is fair to understand that your guide 65% EBITDA, if you shoot over and above, you would be happy to give it back to the market and capture more volumes?

Can you say it again, please? We -- I couldn't understand.

So when you share that the 60.8% margin, you are targeting 65%, which means that the business is good and mix is much better. And you overshoot your targets, you would be happy to give back some benefits back to the market, merchants and all and rather more volumes. Is that is how we should understand?

Yes, it's a mix of, I would say that -- it's a mix of both. Basically, that why we are actually improving the margins is on threefold account. One is profit driver actually measurement, which we do through our express settlement. Second is the new business offerings of CPGS and new bankings and so on and so forth. Third is our penetrations actually in the overseas market. And fourth is our platform business also. We believe there will be a good traction actually on the platform business in terms of our margin improvements and so on and so forth. And of course, constantly, we monitor the market opportunities, and we don't want to lose the opportunities in any manner. So that's a balance we always do in such a way that we don't reduce the numbers below certain threshold. But at the same time, we would like to capitalize the market opportunity. And we would like to grow both on TPV, but at the same time, actually, we balance the margins as well. So I think this kind of exercise which we do on a day in and day out basis through our rate card process and so on. And unlike some of the private companies actually, where this kind of margin pressures are not there, but being a public company, we are actually coming under the margin pressure, actually. Therefore, we are cognizant about this fact, and we are adopting this kind of a strategy.

Sure, sure. And is it possible to share platform business EBITDA margins?

We will share that, but right now we are not sharing it actually, platforms and payments separately, only at the revenue level we are doing. But not at the margin level because of the competition reasons, but we will definitely share at the right point of time.

Sure, sure. And one more question I have, if I can. So just going by the fintech side, a lot of unlisted players are valued at -- valuation compared to what we are traded at. So is it that they have become much larger or the technology platform is more disruptive? Or any competitive scenario, if you can draw where we stand vis-à-vis the evolving fintech scenario?

Right. I think you hit the bill in a very right manner. And that is the pressure point, which I as a professional going through in the company on a day in and day out basis that there are private players in the market are not making money, and they are net take rates are all actually below the cost, and but still, they are getting valued actually, maybe several x-factors beyond our capabilities and so on so forth, our valuations and so on. So the point is that public company valuations and private company valuations, their modalities are actually a little different. But I think for all practical purposes, as a management team, as a professional team, as a leadership team, what we are really focusing on, our business growth, EBITDA, cash conversion, free cash, cash, cash equivalent actually increased, cost optimization, process improvement, technology investments, overseas actually growth story, new business offering is actually a success story. These are all the factors which we are focusing both on platform business and payment business. So therefore, obviously, the valuation will be, I'm sure, at one point of time, you guys will realize the real intrinsic value in the company, which we believe that it is valued very low. But I'm sure the time factor will prove it that we are valued actually very low. And the intrinsic value of the company is significantly far, far, far superior than compared to rest of the players.

Let me put it another way, Vishwas here. The private player that is there are focused just on one solution, right? And everything on the tech part is something which they have more or less adopted from what we have done over the years. And we continuously invest in building the scalability, the tech stack and others, right, not only for India but for around the region, right? And also, if you see some of the biggest clients that have boarded in the country have -- are onboarded on our platform. And there's a continuous evolution of innovation, and newer technologies that have pushed in such -- so many of the biggest banks in the country adopting us. So it's a matter of faith that they undercut in certain prices, and so the volume and grow, but that's what's happening in the private space. Second thing is less people taking money there because the top 3 or 4 payments players, including us, did not really -- are not looking at money, only 1 or 2 new private guys get that play because be it in the peer group, Naspers PayU is not picking money, BillDesk has already picked up, and there are other 1 or 2 other guys. So the newer guys, 1 or 2, and investors also does not have any inroads will fund these new guys, irrespective of how they grew the volumes. So the question of business and the question of take rates and other things, if you do below cost, it's very easy to scale up, right?

Sure, sir. No, sir, my question was that currently on the competitive landscape, we score better over them is what I understand...

Yes, we are. [indiscernible] If you see the wide forums on what we do, just not the PG, where we have the maximum number of options even today in the country, integrated with so many core banking solutions and 1,001 features, but also if you see the associated things that we do around it, the entire B2B platform, the entire extension into the same platforms in 2 different countries. And then if you look at other solutions like BBPS, Bharat BillPay, not many of our competitors are doing it, where we've grown almost 200% in this quarter on the number of bills processed. And if you see so many of our other solutions, right? What we do in hospitality solutions and our platform business, which is also unique to us, right? And you compare that kind of our company evaluation, which we service the newer guys claiming couple of million dollar valuations. So when we are at enigma why our investors don't value it. So the question answers, you all have to answer more than that.

If you would have really seen, actually, we have shared a lot more data points actually on the business. And we -- by design, we want to be very open and transparent, actually on the numbers and performance and our strategy to the best interest, actually, of the company, to the benefit of our investors and shareholders. And as Vishwas was mentioning that the platform piece, it's a very, very huge piece. And I will, Ravi, I can talk for about 10 hours actually on platform piece, what is our success and so on. In fact, through our platform piece, we are scaling up actually on our payment business, actually, with respect to some of the named accounts and so on. New banking and lending business can really accelerate through that kind of a data. Data is a huge wealth actually for us. And platform business, companies like Jio Platforms, Reliance-owned Jio Platforms will not actually risk the entire JioMart business actually with certain unproven systems and so on. So our system is well proven in the market, and the government e-Marketplace is actually working so well in the last 4 years. And I think the JioMart has done all sorts of due diligence and today, we signed a contract on 29th of September. And by March, actually, within 6 months, the entire target platform actually kept live. It's not a joke. This entire product platforms so far, they are competing with the big boys actually in India, like Amazons and Flipkarts and so on, that kind of a platform which we have gone on live with the 1Ps and 3Ps and enabling actually JioMart in terms of our payment business and scaling up actually along with that build a relationship. And we are doing all sorts of other strategic actions actually along with Reliance, it's not a joke. All these things are possible only with our platform business. And fundamentally, business model is also very lucrative to us. On one side, it is on the GeM business model. It's all the more lucrative. On Jio side, actually, the business model is lucrative either on a direct basis and also on the indirect basis. So therefore, with that, we consider these 2 business verticals, payments and platforms, are our 2 hearts to our engine. And invariably working on a transaction revenue model, and I think with a light asset model, and we are not capital-intensive industries and so on and so forth. And our cost is not linear to services. And the cost is linear -- I mean the cost is basically headcount, whatever the headcount, which we are having about 5 years ago, same headcount only we are having it actually right now. So therefore, for all practical propose we are profitable. We are making a sustainable growth.

Yes. And to add to this with less than 500 people in the payment base and in the platform base around 700, 800, 1,200 people, we are able to generate INR 1 lakh crore in GeM, more than INR 1 lakh crore in CCAvenue plus grow internationally and others. So if you see, the growth is not depending on the number of people. Second thing, if you see the payment stack, right, from the platform to the payment stack we have done it, we are powering the banks. We are going directly to the merchant acquisitions. We are doing bill payments. And now with a new this thing with RBI, we're going to make NUE similar to Mastercard, Visa, and not only grow against NPCI head on in the India market, but also globally. So if you see the whole scape that where we're going to have a card company on the likes of Visa, Master, if you look at the whole payment stack, if you look at the whole platform business. And if you look at 1 million merchants on GeM, 1 million merchants on our payment stack, everything. So -- and it's growing wonderfully in multiple markets. We are already the #2 players in UAE in 3, 4 years sort time. So everybody is right from the -- at the top at Burj Khalifa, if you want to book your tickets to go to the top at the world's tallest building you're going through CCAvenue. All the top builders out there from Nakheel to DAMAC to Emaar, all those maintenance of all those properties, so many utilities. So similarly, in Saudi also, they just started out there, and they'll give you good news on many other markets that we are getting in. So in U.S. also, we are almost there. So going forward, entire thing is -- strategy is in place. That is it.

The next question is from the line of Deven from K.R. Choksey.

I think I was interestingly listening to the response given by Vishwas bhai, and I think Srikanth also on the subject of this particular volume of business in the amount of revenue, plus the, I think issues which are related to the private players who are taking away the larger share by way of setting competing with established companies. Now on one side, I think this particular situation cannot really be changed because I think that they also have the record, I think, in their business so their investors are funding them. And because they're funding them so they're funding them to burn cash, until that time, I think they can survive. I think they will. In the interim period, I think we will add into our portfolio additional revenue coming in from some of the value-added products, which I just started talking about. Probably, I think that will be the pressure that we'll continue to face. So there's 2 full questions here. On one side, suppose we may end up taking or attracting the free money, as I would like to term it as, who are already improving their volumes for their valuation, et cetera. What stops us, I think, from approaching such kind of players to attract that free money, and I think take away market share from others and record higher amount of processing value, that is one point. And suppose if that is to happen, then because the areas or which are, I think, the payment areas, I think from where actually you can take little bit of the volume. If you can put that light on this topic, that will be your first question. Maybe I come to the second question after discussion with you.

So Vishwas here. I'll take on the first question here. Now there are 2 ways to look at it. Take easy money, free money as you quoted, and go after existing market share and try to get in the valuation that is there and burn money, right? So that's one part of looking it. The other way we look at it is that today, the Indian digital market is only 15%, right? 85% is still cash, INR 29 lakh crores of cash is still there. There are so many verticals that are still not digitized in a sense that if you see the entire medical hospitality payments, the medical hospital payments is not digitized. If you see, and we have almost 12 million schools in the country, how many of them are accepting online. So there's a huge market and there's a huge foundation. So either you focus, take money and try to take part of that existing 15% or you look at the 85%. So our company has very clearly focused on it. That's where you see the number of intakes on the new merchants going online with us. If you see our quarter-on-quarter numbers, the number of new updates that is there and that is giving us business. If you see the number of sellers that are coming on the GeM platform now almost across more than 1 million. That's a huge onboarding exercise that all we are doing. So there are 2 ways instead of taking money and we believe -- firmly believe that investor money, this kind of flow should end shortly, with Paytm also now going into an IPO mode and a lot of other guys also getting in their IPO mode. Then some sense should prevail for that other burn also. So we did not burn. There is a huge market that needs to -- to look at the broader picture, the tailwind is behind EBITDAs, we are with the government digital India thing, and there is no significant any headwinds blocking us. So I think this would go all focus on the bigger picture. And anyway, if you've seen, we are still doubling our business quarter-on-quarter, every year-on-year. So that perspective, I don't think we need to look at that kind of grow, burn and flip kind of a model. We're looking at a more sustainable revenue, more sustainable profit. That's what we are looking at.

Thank you, Vishwas bhai, for, I think, putting this point across. And I think I'm happy that at least that we are working on quality of the business. The other point, I think, is probably comes along. Now unlocking situation would start happening because I think we see relatively better progress on the health of the people. And probably, I think, with the prevention and the cure both happening simultaneously in the COVID case, maybe I think you will see opening up of the economy. But some of the impacted sectors which is just mentioned, I think those impacted sectors, I think would probably start at reporting better business, better volume and so would be, I think, the numbers that is expected for you. In the given situation like this, considering that, okay, I think the first quarter is a washout quarter for those sectors. But assuming that I think from where it get little steady or normal in the second, third, fourth quarter, what is the kind of volumes that we are talking about for processing? We have already achieved INR 50,000 crore worth of processing of transaction in this particular quarter. The run rate is already increased for INR 2 lakh crores. What is the run rate that you're talking about for '21, '22 financial years?

This is Vishal here. If we look, specifically, we have grown in double digit -- high double-digit percentages in terms of processing value. So rather than focusing on a year or a quarter, we have set our own vision and targets to process $100 billion in the next 3 to 4 years. So if you look into outlook the run rate, I think we're looking at in terms of FY '21, we can process about close to $30 billion in FY '21. And we are already in that run rate. We think that a combination of flat fee -- if you recollect, we just introduced a flat fee model about 6 to 8 quarters ago. And in COVID it's grown, and given the pandemic that hit us again, which is the second wave of the pandemic, the number of transactions in the fixed price model, that increased by 2 to 3x just in last quarter alone. So it made up for some amount of processing volume, given the other sectors were done. So we think when the other sectors build up, that it gives us a good momentum. The other thing which is also there is they've got a very large pipeline. We've got some very large strategic accounts. Today, we are distributed in processing volume across, as Vishwas said, there are more than 1 million merchants on the platform. We also have some strategic account that are very, very large that potentially can add to the one today. Such strategic accounts account for less than 1% of our processing volume. And so when you add such strategic accounts, we believe that it becomes a very interesting opportunity for us. And that is the one that we'll focus on for this year. But as you can tell, the strategic accounts take their own time to actually build up and scale up and so as a result, short of that, we think that yes, about close to a $30 billion run rate will be achievable, which is what we are right now.

Vishwas here, also on the strategic account, if you see the strategy that we are pursuing on every vertical, right? So we already have a set down, say, a travel vertical from the airlines, to the hospitality, hotels, to all the top ones, 2,000 plus hotels, to almost all the bus, everything. Even if you look at even the marketplace business, right? So we anticipate that in the coming decade, there will be 4 marketplaces that might be dominant in the country, right? So one will be Amazon, the other will be Walmart Flipkart. Third one really, of course, the government on e-market, GeM, what you mentioned about, the GeM is like the monopoly. Entire procurement of the central government is moving to that plus -- some 15-plus states, right? All procurement is going there. And that, of course, Jio will come in with their online to offline strategy. So if you see out of the 4, we are strategically invited into the 2 of these marketplaces, be it the GeM and the Jio marketplace platform, which will complete, which includes the platform and payments play in both. So we're working strategically. And I think this strategic account will drive a significant volume in the coming quarters.

I received a lot of clarity. One last question from my side. What is the status of NUE and when it will likely to come up? What kind of change it can bring as far as our strategy going forward?

Vishwas here. So right now, we can only state that we have made the application for NUE, along with our partners, through a subsidiary company, So Hum, that is it right now because it's awaited right now. RBI will take a decision on the license. Post that, if there is any news, then as duty bound, we will inform the Board and it will put up in the public notice.

The next question is from the line of [ Shubh Joshi ] from Pile of Wealth.

My question is that what is the company CapEx plan in the South America continent, but there is too much opportunity for the businesses. Because that i.e., there is no competitor in the company that -- I think that there is much more growth opportunity. But second is like our -- second is that why that our investors are worried about the company, like we given some insider trading, some [indiscernible]. So please give me some clarity on this one.

So on the capital expenditure, we are actually always a light asset model company. Platform business, our capital expenditure is hardly anything. And on the payment business, it is possibly less than $1 million. So it will not be that significant. And your second question is actually in the context of, I think, insider trading or something. I think none of our -- company is not involved and none of our promoters' company and promoters' group and any of our promoters' shareholders are involved in any of this kind of stock. And there are no case actually pending at this point of time. And so we are not party to any other non -- any other shareholders are potentially actually coming under the purview of this alleged transactions. And we are not -- we are private to that, and we are a public company, and the company is not involved in any manner.

Actually, sir, third question is, what is the plan of the free cash flow? Because monthly cash flow is very important in India because any company, CapEx in India because cost of capital is very high. So that our -- we are much focusing on the free cash flow, right? Everything that company must focus on the free cash flows.

Right. Cash is always king. At the end of the day, we need money actually for our overseas expansions. We need money for our technology investments in terms of the long-term technology investments. So primarily overseas growth drivers and so on. And of course, we need to have strategic investments actually in some of the strategic initiatives of the company within the group. And therefore, we will preserve the cash actually for that besides some of the corporate actions.

Actually, sir, can you explain the Suvidhaa that you listed this company. I read about the business, but I did not understand. But the -- and this is your company that you listed at some day before. Can you please tell me something about it?

So we are not -- Suvidhaa is a separate listed company. And Infibeam management and it's a Infibeam call, we cannot really talk anything about the Suvidhaa or DRC.

Actually, before it's a part of your business, but...

Yes, this is being under law, under regulation. This is being a separate listed entity. It is not correct on our part to really talk about neither Suvidhaa nor DRC. So should you have any questions, definitely, we can put up that question actually to Suvidhaa management and DRC management, and they'll be happy to respond to you.

The next question is from the line of Shri Shankar from [indiscernible].

Okay. The key question that I have is a couple of -- only a couple of questions. The first and foremost, if I look at it, in 2012, you definitely had a monopoly in the payment business to that extent. If I may look at it, your competitors, the Razorpay, PayU and some of these sites have gone -- come into the market. And I think PayPal has already left this market also if I'm not mistaken. So severe amount of pricing pressure, competition that we have seen, so is that pricing pressure in the [indiscernible], is that the reason why you -- the pressure that you see in the entire revenue?

We already have already talked about it. So we are looking at that 85% growth of the market that -- the market that is not digitized as a company. And when the pricing pressure on some of the existing accounts and others will continue and we'll let them fight and burn. Our whole aim is that [indiscernible] good accounts [indiscernible] with our platform plus payment facility plus our wider offerings with BBPS, Bharat Bill Payment Systems, the BillAvenue solution, hospitality solution, ResAvenue, our platform play and others. And then on the payment space, are there is a lot of growth. We're onboarding thousands of merchants every month and the business and the volume continues. So payment is a very generic business, like what is commerce. Commerce is any goods or services sold, the payment is made. We want to be there every time that, that payment is being made. So we have to keep growing that, create new tools, new systems and new things and the growth will continue. Even if you've seen despite the pressing pressure and it's not something new, it's been there for the last 4 years, right? And it will continue growing. As far as PayPal is leaving the country, people could not adapt to the country's rules most probably because the way they do their B2B business in the U.S., vis-à-vis following our Central Bank's prepaid instrument PPI guidelines, it's quite different and not the way they want to go. And maybe perhaps that they must have taken call and maybe focus only on cross-border transactions from abroad. So that's the thing. As they said, look at the broader picture, look at the 85% market that is there. And we have been consistently growing despite whatever the pricing pressure, and we continue to remain profitable.

I'm at no point of time questioning the opportunity that exists. I completely agree with you that we are hardly 15% into the digital mode and that are 85% still remains. I was only trying to figure it out now with some of the players who have come in who are pretty aggressive. They must have been burning and to what extent do you think that they will burn? It's a question that affects you too and invariably gets into a margin pressure. Even some investors ask why is the pressure on the margin. So I was trying to understand that particular part. Now the other part that I want to ask is, how many staff that we have because we are more of a product company effectively. It's not a time and material. So when it's not a time and material part of it, you are moving now yourself into various other markets. You've gone in the Middle East, and you're growing up in almost all these other places. So how much is going to be your additional number of people that we require, except I would assume most in the marketing part of it?

Okay. Let me take this question. On both the verticals, payment verticals and platform verticals, in the platform vertical, we are a hardcore product company. And we offer actually on a -- it's a SaaS, and we offer in our cloud model. It's basically a hardcore product company. In fact, some of the contracts actually permit us to do the overall system integration work, overall application management services work. Our overall application development services work, and we actually reference. So we are a product company, and we license actually our products and services, and we support, maintain and manage the services. But some of these typical services business, we actually stay away. So that is the reason why our revenues are not limited to the cost and it's not limited to the head count. So in that sense, our margin percentage actually on the platform is definitely one of our growth driver actually for our bottom line. So having said that, in our platform -- in our payment business, roughly 95% of our payment business is transaction driven at the end of the day. So the fixed fee business is there, and that is also growing. But by and large, it is actually transaction driven. So therefore, for all practical purpose it has nothing to do with the headcounts in any manner even though we are calling it as a payment services or payment gateway services and so on and so forth. So therefore the margin pressure which you talked about earlier, the margin pressures and pricing pressure is definitely the part of -- that pressure is always there. And that is what we are managing it actually day in and day out actually with our different rate cards and so on and so forth. So I think our numbers speaks itself. I think we have grown -- the previous question asked by Deven, also that we have grown actually quarter-on-quarter in terms of TPV value. In first quarter, the same pressure was also there, INR 18,000 crores actually we processed. Q2, we processed INR 30,000 crore. At Q3, we processed INR 39,000 crore. Q4, we processed INR 50,000 crore. Totally, it's about INR 139,000 crore at the end of the day. And vis-à-vis INR 878,000 crore actually in FY '20, resulting actually 60% experience in 60% growth actually on a Y-on-Y basis. At the end of the day, that the run rate, which Vishal bhai was talking about, the run rate of INR 28 billion is based on our payments and platform business run rate, and we believe that we will be able to grow. That is a unified model which we are having. Because platform is linked to the GeM transactions and Jio transactions, actually, even the GeM business model is like in its peak, but it's largely driven by GeM transactions. On the payment side, we have a conventional PG, frontend PG for the merchants, and we have CPGS new offerings -- we have new banking actually as a profit driver. And we have a white level business and the B2B business actually as per -- besides our build revenues and our ResAvenue platform. Now we strongly believe that the COVID situation is very temporary. The moment COVID situation improves, obviously, the 4 flagship sectors' offers will get actually open, and we will have different margins altogether. Considering all these things early, we have guided the market actually in terms of EBITDA margin.

[indiscernible] somewhere, I think you mentioned that probably you're targeting INR 19 billion that we have done in FY '21, probably going towards INR 28 billion, correct?

No, no. The present run rate actually on the payment business is about INR 18 billion. And on our platform business is about INR 12 billion, INR 13 billion. Total run rate is about INR 28 billion. So that INR 28 billion run rate will possibly will grow actually. So that is why -- that gives the confidence to us that we will do INR 100 billion in 3 to 5 years time.

Okay. So no point of time questioning because if I look at your competitors, like Razorpay or et cetera, the kind of people who are backed on the kind of number of times that they have raised money. Obviously, that as [indiscernible]...

The next question is from the line of [ Unnati Bhavekar ] from K.R. Choksey.

Good evening, everyone. Yes. So my question is that you've been carving out payment transaction process overall and then bill payments process volumes which is the subset of that overall -- which is a part of that Bharat Bill Payment System and you also been talking about GeM transaction process. So can we -- will it be apt to believe that the overall payment GTV is going to be driven by the growth in the Bharat Bill Payment System for the short term now, given that rest of the e-commerce transactions could have been affected due to new lockdowns and discretionary spending being held back?

This is Vishal here. So that was definitely the case in Q4 of last year. We see a lot of -- I mean this quarter also, we have seen -- we have continuously seen okay and good growth. We don't see a dip in transaction volumes. We expect that maybe by end of this quarter, or early next quarter, that when COVID settles down, that will open up quite a bit. So I mean short-term is a relative term, but we think that it can't -- it potentially does not go beyond this quarter.

Okay. And you've been mentioning about the fact that the express lending services that you've been offering to the merchants, that has been quite a margin rate of proposition for you. So without the new banking license, how is this lending happening? Or it could be one kind of a question from my side. That is there. And then again, or is it a part of the operating credit that will extend to the merchant?

No, no. Let me explain on this. Actually, it does not require operating banking license and so on. So express settlement means that as per our normal conventional payment processing business as a front end PG actually for the merchants, so under the regulations under RBI norms, we have, depending upon the merchants, so we have T+3, T+5, T+7 settlements as the case may be. So that is the allowed one. Now today, the merchants are all want actually money on the same day. So therefore, we have an ability to really settle the transactions actually on the same day. And therefore, since we are truncating it actually by 3 days in advance, so we are charging something extra actually to them. And that is what is we call it as express settlement. So is in the process that this is after the excess -- success of the transaction, therefore, the NPA is practically 0. And for all practical purpose that we charge something higher, and that is why we are saying this is like a profit driver actually for the company.

Thank you. As there are no further questions, I now hand the conference over to the management for closing comments.

Thank you all for joining our Q4 and full year earnings call. I hope you are all safe and your family is safe, and we look forward to speaking to you again shortly whenever we update. Thanks again.

Thank you. Ladies and gentlemen, on behalf of Infibeam Avenues Limited and K.R. Choksey Research, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.