Brightcom Group Limited (532368) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. I'm Bharthi, moderator for the conference call. Welcome to Brightcom Group Limited Investor Conference Call. The duration of the call will be for 1 hour. We have with us today Mr. Suresh Reddy, Chairman and Managing Director; Mr. Y. Srinivasa Rao, Chief Financial Officer; and Mr. Manohar Mollama, Company Secretary. [Operator Instructions] Please note, this conference is recorded. Before we go ahead with the conference, Brightcom Group would like to mention that during the conference call, certain statements in this call reflecting Brightcom's future growth prospects are forward-looking statements, which involve a number of risk and uncertainties that could cause results to differ materially from those in such forward-looking statements. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company. Now I hand over the floor and I forward this call to Mr. Y. Srinivasa Rao, who will update us on the financial aspect of the call. Thank you, and over to you, sir.

Thank you, ma'am. Good afternoon, ladies and gentlemen. It is a pleasure to speak to you all. I briefly expand the financial for the quarter ended 30th June '21. In Q1, financial year '21, '22, the revenue for the quarter 1 was INR 654.05 crores, reaching a growth of 2.27% on year-on-year and a decrease of 6.4% on quarter-on-quarter. EBITDA for the quarter 1 of financial year '21, '22 was INR 203.96 crores, reaching a growth of 6.4% on year-on-year and a decrease of 16.8% on quarter-on-quarter. PAT for the quarter ended at 30th June '21 was INR 105.55 crores, reaching a growth of 4.11% on year-on-year, and decrease of 24.6% on quarter-on-quarter. Revenue from digital marketing segment for Q1 of financial year '21, '22 was INR 566.07 crores, reaching a growth of 7.89% on year-on-year and a decrease of 8.2% on quarter-on-quarter. Profit before tax from Digital Marketing segment for Q1 of financial year '21, '22 was INR 142.79 crores, reaching a growth of 3.18% on year-on-year. Revenue from Software Development segment for Q1 of financial year '21, '22 was INR 87.97 crores. This is briefly the summary of the financials for the quarter -- of the first quarter. We have received some questions from the investor through mail, I'll briefly explain some of them. When we come to the receivables on a consolidated basis, our total receivables are stable at 183 days on a -- on 38 days on a year-on-year basis. The receivables in Digital Marketing segment has been decreased to 131 days from 137 days. Out of the total receivables of INR 1,084 crores, digital is INR 914 crores and the software is INR 170 crores. And this is briefly about the receivables. Now I hand our phone to Mr. Suresh Kumar Reddy, Managing Director.

Thanks, YSR garu. Thanks a lot, all the callers today. I hear we have a full house, a lot more than the usual number of callers. And thanks again for the confidence and the support. So that said, let me just get into the call itself. I think we have a -- we've already published the numbers, and we've also got a quick update on the numbers as of last quarter from YSR. Now I just want to focus a little more on the business today. We've had some very interesting things going on. So I mean, just from the update perspective, yes, we brought in a new head of publishers. There's been an expansive, a huge growth of publishers, a lot more happening in terms of number of publishers, which is contributing to a significant jump on the traffic that's flowing through the system. So that has been which is now beginning to show starting July in terms of revenues and profitability and such. So we are all very excited and this is one of the -- I would say, one of the historic calls from the company's organic growth perspective. I'll explain more as we go. With that said, we've also signed up as the MCM partner of Google, I think we've had an update to you guys, to all the shareholders through the exchanges a while ago. There have also been questions about where we stand in terms of the due diligence of the acquisition target that we announced. It's moving extremely well both the financial accounts diligence as well as the legal diligence. We have 2 separate teams, as I have mentioned in the past. Ernst & Young has been doing the diligence for the financial front, and then we have Tempus, which is doing a -- moving, I would say, if I have to assign a percentage, I would say maybe we have are almost, say, 60%, 65% done. If you want me to give you an estimate on when this acquisition will be completed and when we will have the definitive agreement? It's hard to give a number, but it's looking very positive. So we hope to have this sooner than later. And also a thing to consider is this company has been growing, and it looks like a great -- I mean, overall, industry itself has been doing extremely well. And they are looking almost 25% stronger compared to when we had originally started doing the conversation. So all good in that front. So we are pretty happy with that activity there. Other stuff to report in terms of bonus, I think we've got a shareholder approval. We got a few exchanges approval, all the exchanges approval. So the control date was 20th. And I think we should see the shares fairly soon. There are some paperwork that needs to be done. It's going on as we speak. I'm sure Manohar can give you a better update on the details there. And then similarly, [ preferential issue ] of shares has been approved by the shareholders. And however, due to a lot of paperwork and exchange, we were not able to get this all done before the bonus. So the preferential issue of shares, that is about INR 12-odd crores of shares, they will not get a bonus. So that's -- we've taken a call that they will not get the bonus. So those shares will be issued later after the bonus. So in a way, it should help a little on the dilution side. Then coming to a couple of other things. So, yes, B-local has been another great story to tell because it's picking up a lot of steam. I think July and August have been banner months for B-local as well. So broadly, I wanted to talk a little more on the cash flow and how it has been how the business has been kind of at a flattish growth rate in the past, I would say, almost 3, 4 years. Primarily because -- not because lack of effort from the team or not because lack of sales ability or not because lack of so many things, but mostly because there was a limit to how much we could keep in the -- how much we could buy and how much we could sell and how much was in the receivables. So hence, we were looking to get a line of credit as well to address that. But a few things have happened over the last 6 months where we paid off all the debt. We've been paying off debt. So as a lot of money was drawn out continuously, and then it stopped. Plus we've kind of controlled the payouts a little faster in July and August. So that has also helped improve the cash position. And then on top of it, markets have been great from the digital perspective wise. So when markets have been fantastic, I would say, never before we have witnessed this kind of demand. So we were contemplating on giving a guidance out when we announced the result. However, we wanted to wait at least till the end of -- to the middle of August. So hence, we kind of had a later call to see how things play out. So now we are very clear. We have a much stronger view on the guidance. So we just sent out the guidance numbers, and I'm sure I can -- you can -- you should be able to see it from the exchanges. The -- I will talk and elaborate on those numbers later on. So that's the general update on the business. Coming to -- there are a few questions also, I would like to address here itself so that we don't have to go into the Q&A part of it, from the questions that have been sent to me by various groups and various shareholders. One question was about the stability of the stock price. Yes, it says the price has gone up, I think, since I think August or so August or yes July, I think since June or July, where the prices went up from INR 8-odd to all the way to INR 50 some odd and then there's been some correction that's happening in the market. Then there's a bonus issue, a lot of discussions on that. And the question, I don't understand what the question was, but they -- I think they wanted to bring to the company's notice that we need to be cognizant of the fluctuations. We are trying our best to have as many updates as possible to reach out to as many shareholders as possible. And so that has been the effort. And then there's a question regarding, are you going to be talking to institutions and larger investors. We should be starting fairly soon. We are still working on a few more things to happen sir it's more interesting a story. So we should start that fairly soon. And in terms of better results and growth rate, also, there was a question there saying why didn't you have -- why did you have only 4% growth rate in the last quarter? Yes, I think it took a bit for all the realization to start making inroads. So you would see a really good quarter in the coming quarter and the guidance talks about that, and the quarter after that would be even better from what we are looking in the -- from the internal team. And then there are questions about promoter pledge. I think right now, it's only 8% of the promoter holding. It's not -- 18% of the promoter holding, which is not from 18% of the entire company, so which is much smaller, and it will also get smaller as we go, and we will ensure that we update you along that. Then there's a question, are there going to be any other write-offs or impairments? I don't see any coming absolutely coming in the near future, nothing there. There's a question about how much connected TV work that we do, what percentage of our business? I don't have a number handy. Once we have that all -- the question just came up now. I will just check with the team on exactly how the breakup is. Usually, we don't try to separate out, but I'm sure in the system, there is a way to pull that out. We will pull that out and maybe do a quick update to the market on that. So that is that. There's also a question regarding how Reliance, Flipkart, Airtel and a bunch of other large players in the market, in the Indian market are trying to get into digital marketing and how it's going to impact Brightcom? Again, we have been in the business for a long time. We've worked with a lot of players. There are always regional players who will dominate, but it is a very collaborative marketplace. It is never that 1 player would come and take everything it's never that way because a few people have advertisers, a few people have published a few people have the ability to make the right slice and dices of the data. So it's always very collaborative. And being in the space for this long actually it only helps, and we are actually seeing the benefits of that already. That is all I have for now. We'll open up for questions, and then we may talk a little bit about where we stand on the bonus and other things, maybe -- is Manohar on the call?

Yes, sir, yes, sir. I'm on the call.

Okay. Okay. Manohar, maybe you quickly update that, and then we can go for Q&A.

Sure, sir.

Sure. Thank you.

Yes. Good evening shareholders. This is Manohar. I would like to quickly update regarding the bonus status. So we have actually applied for the in-principle approvals, and then we got the approval. And then regarding the preferential conversion of warrants into equity, we have done 5 tranches from time to time. We have also informed the stock exchanges on that, we have also received the listing approvals for all those tranches. And then we are awaiting for the final 2 tranches, final trading approvals from the exchanges. Hopefully, we'll get them tomorrow and post which we'll apply for the listing applications for the bonus. And hopefully, we are trying our level best to credit the shares on August 27. That is by this Friday, hopefully, the shareholders will receive the bonus shares.

Okay. Thank you, thank you Manohar. Bharti, maybe if you could go for Q&A now. And if you have any questions, then all 3 of us can address them.

[Operator Instructions] First question comes from [ Amit Rao ], an Individual Investor.

Hello?

Yes. Mr. Amit, please go ahead.

Yes. Suresh sir, first of all, I'd like to congratulate you and the management and all the fellow shareholders for the wonderful fleet of achievements that the company is doing and the developments that the company is making in last 1, 1.5 years.

Thank you.

Thank you very much.

We -- yes, just now before 15, 20 minutes, half an hour, the company updated there was an update from the company on the revenue, EBITDA, PAT outlook for the coming 3 quarters. And it was undeliberately amazing to see that. Can you throw some light how we are going to achieve it organically and it does not even include the acquisitions of the company? And also, can we throw some light on the domestic stand-alone business, how we are able to boost it going forward. That would be extremely helpful.

Sure. Thank you. Thank you, thank you very much, Amit. So just to let me -- I knew this question was going to come, so I didn't have the main presentation. So this has been done after work and analysis of the market, a few things have happened. So 1 is, we have increased both the advertisers, number of advertisers and the number of agencies that we work with over the past, I would say, 6 months. And then there's a significant jump in the number of publishers we've had, we've actually done a great job in recruiting a lot more publishers of all sizes, including long tail as well as significant larger publishers that have come onboard, plus the product B-local has been very well received extremely interestingly seen and plus we're getting a higher payouts on those, both so publishers are also very happy on that. And so these are some of the things that are at the base level in terms of the demand in the market. Demand has just been a huge, huge, huge growth plus the pandemic as well. And then on the other side, see we were constrained, like I was talking during the call, we were constrained by some of the cash being taken out by the company continuously to pay-off past debts, which has stopped because we are now debt-free and that money is being rotated. And then we have also -- some of the money that has been coming into the company. Part of it, we have allocated towards meeting these demands. So that has also started to produce some results. So now we are very confident about we are looking forward at a much different company and much more different market. And hence, the revenues that we talked about. I would not get into all the details because anybody can read them. What are at a broad level is -- yes. So at the broad level, this quarter, we are expecting around INR 200 crores of PAT. I think there's a range the team has put together. And then we are expecting around INR 350 crores, INR 360 crores in the December quarter, which is our biggest quarter all the time every year. And then again, Q4, we expect it to be around give and take around INR 245 crores, INR 250 crores is what our expectation is. And then this range has been calculated based upon all -- taking all the factors into account. And so this is broadly the high level. And the details, we can talk later, I guess. This is just a high-level view of it.

Yes, that would be it. And also, if you can throw some light on the recent acquisition announcement that you made in the domestic business, and how we plan to move the stand-alone business going forward?

Yes. There, the idea of this acquisition was to strengthen the stand-alone to be very honest. So we would first bring it in as an acquisition, and then we would merge these 2 into the parent. So the stand-alone -- not just the numbers wise, but also to work together as a larger team to work together as a well-functioning, scalable team is the objective there. To take on all this growth, both from the organic as well as inorganic initiatives that we are working on. In fact, I didn't get a chance to update on my trip to New York where I talk to -- where things are going very well on the digital audio side. So that would also require support from the back end. So all these are coming together very nicely.

Okay, sir. And I wish you all the very best. Thank you to the management, the overall company, and we are doing wonderfully well, and I've seen proud to be the shareholder of the company. And so thousands of some more shareholders would be.

Next question comes from [ Varun Gandhi ], an Individual Investor.

Sir, I had a question regarding the financial statements of FY '20, where the cash flow from operations had significantly reduced. And due to a INR 300 crore odd outflow from -- cash flow from operations under the statement, short-term loans and advances. And if I go into the balance sheet, I could not see any effect for that same transaction.

Okay. Okay. So you are saying you're talking about the advances given to publishers. Maybe YSR, can you elaborate what is -- I mean exactly where does it come in? You talk about the statement.

Sure. Sure. [ Mr. Gandhi ], actually, if you go through the balance sheet as on March 31, '20, advances outstanding on 31st March '19 was INR 683 crores. These were the advances given by our 16 subsidiaries across the globe for media buying or other purchases. Out of that, some amounts were given as rational advances during this year, that is INR 305 crores we have given to the new parties as an advances that is outflow of cash in the cash flow. Whereas in some other companies, those concerned management respect to CEOs of the subsidiaries have taken a view on the setup of some advances as an impaired asset that amount goes to around INR 336 crores. So if you see the cash flow, we have paid new advances for new parties, INR 305 crore. If you add INR 683 crores with INR 305 crores, it is coming to INR 990 crores. Out of that, we have set out -- set apart INR 336 crores as an impaired asset in some other subsidiaries that is INR 336 crores. So if you reduce that, the net advances at a group level, if we take into account of the all 16 subsidiaries, came down to INR 652 crores. So if you see the balance sheet, there is a net reduction of INR 31 crores compared to the '19. But in cash flow, the actual cash flow of INR 304 crores in advance were given to the new parties.

Which is in line with what is usually done, I guess, yes. Correct.

Right, right. So it's a part of the basic business.

Correct. Exactly.

Yes. Yes. We have given new advances of INR 300 crores, INR 336 crores is set apart. So a net reduction is only INR 31 crores in the advances at a group level.

Were you able to understand -- is that -- does that clarify or should we kind of put it aside for [indiscernible]?

No, no. I just wanted to understand if it's the part of the business or was it a loan given to a subsidiary? So it's a part of the business.

No, it is part of the business, it is part of the business we keep on giving advances for media purchase to get the price leverage. We give advance to the vendors. So that is part of the business.

Got you. And my next question will be for Reddy, sir.

Yes, sir. Please, sir.

Sir, the shareholding -- the promoter shareholding has been at almost 37%. Now going forward, you have plans to raise more money?

Yes, sir.

And going forward, are we going to dilute the promoter shareholding? Or do you see any consolidation happening with regards to promoter shareholding?

There will be some consolidation that will happen with regards to -- because there is some -- there are some plans that we have that we want to do. So -- and this will not happen immediately, but it will take over the years, you will see promoters holding stock going back up again. I don't know if I've answered your question, but broadly, I can give you.

Yes, broad -- I got an idea. I'm actually optimistic about...

Yes. Yes, yes. We want -- we also, as promoters, we are also very keen on getting benefited by the growth of the company, obviously. It's just a matter of juggling a few things from our side that we have to do. So that is why that will happen though.

[Operator Instructions] Next question comes from [ Sandeep Sudhakaran ], an Individual Investor.

Yes. I have only 1 question. We used to come on television business channels after the quarterly results. So when can we expect that to start again?

Yes, see it used to be that -- yes, it's a good point. I used to be pretty much every quarter, on either ET Now or CNBC or sometimes both, a lot on NDTV actually, in the past. And then after the -- we had a few outstanding lawsuits with Daum and all that stuff. And so we kind of had to pull back and not do much at that time on that front. Since that is out of the way almost right now. So we feel it's time. So I'm just waiting for that event to happen and then we'll be back on. So I just don't want to give any room by being on TV and then saying something that would be used against us in a legal situation. Hence, we were trying to stay out. I think it's not very far. It's a very winded answer to a very straight question, I'm sorry, but it won't take too long, [ Sandeep ], it's fairly soon.

Like I remember like NDTV profit return and [ Prashant ] you were speaking. So yes hoping to see that soon.

Yes, not -- NDTV yes -- pretty much, yes, [ Prashant ] from NDTV was definitely one of that, yes.

Next question comes from [ Saundra Raju from Pro Financial ].

First, congratulations for quarterly results. My question is on the acquisition side sir. Could you please give an update on the current status of acquisition as and when do you see it materializing?

Which one?

Acquisition.

Acquisition. Yes, yes. Yes. I did talk about it, sir. Basically, like I said, we are in the process of due diligence, right? And before we make an acquisition, we have to check all the claims that the company that is selling makes. You have to look at their financials, you have to look at their legal contracts, you have to look at business so that they really have all those contracts that they claim. So it is a process. So we have hired a third party, 2 third parties to go in there to go there and actually start to check all the numbers. So this is being done by Ernst & Young and Tempus legal, as I mentioned during the call. And it is going very well. We're approximately from what I hear from those people, they say it is about 60% done, sir. So we are in the process now since the announcement, we're almost now 2 months. So give and take, I don't know how long it will take more. But my sense is it should not be too far. Once they give a green signal, then we'll move to the next stage of working through the definitive agreement, which will have -- which may take a week or 2. And once that is done, we will sign and the first thing we will do is inform the market and the shareholders through the market, through the exchanges, I mean. So to give you an exact date, even I don't know because it depends upon how quickly they respond to the questions pulled by the due diligence people and how well the whole thing. It is hard for us to give you a date. But usually, it takes about 4 months after signing. That depends upon company to company and complications -- I mean complexities in the company. So that's where it stands sir.

Next question comes from Deepak Poddar from Sapphire Capital.

Yes. Sir just wanted to understand, you spoke about strong profitability this year. So how would the cash flow? So can you throw some light on how do we see the cash flows in this year?

Yes, sir, that's very important, actually, as we are evaluating the same as we speak because we are -- whatever additional cash flows that we are achieving, we are -- there is enough business, so we are actually going after that. But I'm very positive that this year's cash flows will be much more than what we have ever seen in the past. No 2 thoughts on that. In terms of actual numbers, I don't have them handy with me. We will try and update that. It's clearly a little hard to predict as of now from a -- because you're doing more of a guidance, it may be hard to have a guidance on the cash flows because it depends on a few things. So some of the money would be used if there is a lot of money that's throwing at us, then we maybe use it towards the acquisition payment without doing too much dilution. And so since there are a few more acquisitions lined up. It all depends on what comes to when and how it adds up. So it may be very hard to predict exactly how it plays out. So I was only giving a guidance from a perspective of how the business is ramping up.

Okay. Okay. Understood. And something on your dividend policy. So what's the dividend payout we are looking at? Because we have been doing quite a good profitability last even 4, 5 years, around INR 400 crores, INR 500 crores. But dividend -- on the dividend side, I see like maybe 5 paise, 10 paise dividend we have given in 2020.

Correct. Yes. Yes. Agreed. The reason is, again, we are using part of the funds to clear off all debts and in all kinds of different situations in the past. So -- but going forward, we have already announced a dividend policy that has come out last year. So that would -- we would stick to the same policy in terms of the percentage of the profits will be distributed. But since it is a growth tech stock, as I'm sure you can appreciate, we feel part of it, we would like to put it back towards growth of the company because the markets are conducive and it's efficient use of capital. So we would like to not completely dividend out all the cash flows. We would like to keep some towards acquiring more business and growing the business because the -- it is important to scale up as well, sir. So that is the thinking there.

So what is the percentage of profit that you are looking to distribute as dividend?

That's roughly around 20% is what we have here. I think we have it in the policy. I'll have to double check that sir. I think about 20% is what we have at launch.

20%, okay. So okay, understood.

Next question comes from [ Suresh B. from Mars Capital ].

Thank you very much for posting a wonderful results for the last couple of quarters. And I have a couple of questions on Daum issue. And that is 1 thing and do we have any -- I mean near plans to -- I mean, buy shares from the open market for the -- I mean for employee stock option plan?

Yes, sir. Yes. Good questions. Very good questions. On the Daum, I think we have talked about it. We have -- we are in the process of closing out -- because the conversations are set, it's a matter of making that assignment towards -- assignment of cash towards that payout and close that issue. So it's not much really we have everything settled out. We have a settlement agreement ready to sign. It's a matter of wiring the money and closing it out. So I just started -- restarted the conversations with them to close it. So that's in the works that should happen next month or 2, maybe max, not more than that. So that is in the works. And then coming to your question regarding -- what was your second point again? I lost -- yes, on the employee cost. As we are working on registering the trust and getting a bank account and DEMAT account and all that is because it has been approved. So now it is in the process of getting -- doing all the requisite paperwork. And then once the paper work is done, we will look at it. Definitely, the idea is to be able to have shares in there to be -- for distribution to employees as we go forward. So that is the reason why we set up -- we will buy it from the market.

Okay. So I mean, how soon it is going to happen like to complete all the paper work and all like I mean? So I mean...

This is -- see, it should not be too long. I mean I don't know the timing wise. So actually, we have been after the ROC, registrar companies -- registration, not registrar, registration where we have to go in and register. I think maybe Manohar can update where we stand on that. And then once that is done, we will send a copy of the trust deed, with the trustees and all the guidances in that. Then we have to get a PAN number, then we have to get all those may take a couple of weeks, maybe a month max, not more than that.

Okay. And my last question. Currently, 8% of the shares are, I mean, still pledged, right? So where do we start like -- still...

Not 18%, I think there is some misunderstanding clarify that 18% of the promoter holding.

Okay. Yes, I got it. I will correct myself.

Promoters holding percentage is small, much smaller percentage of that. So these are -- this is promoter the requirements that they have for their own other needs nothing to do with the company.

Okay. So this is not for -- I mean, clearing the accessories and all? Nothing?

No, everything is paid off. There's no debt out, and this has not been used for company purpose.

Next question comes from [ Alok Nath ], an Individual Investor.

Am I audible?

Yes, yes, you're audible.

Sir, I'm really happy I mean like from last 2 quarters, I was trying to question you [indiscernible] I just finally got the turn. With all the recurring like updates and improvements and like every other investor I'm also very happy, sir. Thanks for all the updates. I just wanted 1 -- we are [indiscernible] in the receivables have a amount. That amount wise, like we are not able to utilize the ratio [indiscernible]. That was 1 question.

Okay, sir. Okay, sir. YSR garu, can you explain exactly what the results in the balance sheet means?

Reserves in the balance sheet are the result of establishment of product for a period of a year. Normally, when we get the profit, we mark that amount as reserve as a part of network. But similarly, whenever we are getting the profit, the money is utilized in the premium, and it is in the form of receivables, advances on the fixed asset, intangible asset. Normally, for example, this year, see if you say INR 400 crores profit, INR 400 crores is added to the reserve on the network side, INR 400 crores is invested in the form of different assets, that is -- if you see the balance sheet, right, so you can fixed assets, intangible assets, and investments to acquire new companies and the advances to give them for business purpose. So whatever results we are showing on the liability side of INR 3,400 crores is already invested in different forms of assets.

Okay. Let me kind of add another point. YSR garu, let me just add a little bit from a nonfinance perspective. Reserves doesn't mean cash reserves. So it means the funds that are in play in the company, am I correct sir?

Okay. Sir, and 1 more question. Actually, this question is the team as well, but mainly for you. So actually, Brightcom was mainly focused into the digital segment. So my main question like in the digital like if you see the past 10 years, there is like continuous improvement is happening and there's a lot of new technology and tension old when just getting outdated. So yes, now coming to break on those, since we are focusing purely in digital only, like how are you -- like -- how is the sales differs even like tomorrow, there might be a new software or new technology that may be completely new. So how is our team completely working on that? That is 1 question I have. And is there any plans for diversification? Or will we be focusing on digital only even for the future?

Great question, sir. This actually answers a lot of questions that people do raise as why there is so much money towards product development and all that. So the way we -- I'll give you a little -- it will take me 2, 3 minutes, so if you can allow me, see when we started the company, sir, we were looking at it from an engineer's paradigm as they call it, where you go build a product and you hope the market will buy. But we have changed from an engineer's paradigm to a marketeer's paradigm. From a mindset from the way that team works. So we have sales, we have account managers in the market who are working with the clients continuously, understanding their needs and accordingly, innovating on the product. So the innovation in the product doesn't happen just because the engineers had a bright idea, but it has to really address a future need of the client. So that loop has been closed years ago, in fact, to validate that, for example, the Brightcom solution that we came up with almost 3, 4 years ago, kind of becomes a bread-and-butter today was how the video advertising was taking off. And we felt that this is going to be how the market will move forward because, obviously, we are all watching more video. So we built out a programmatic solution for video for Brightcom and we were rated #1 in the world. We were as earliest networks to come up with a solution like that. So on the same line, the team is always looking -- there is a dedicated group that is continuously looking at evolution of the needs in the market and accordingly building products. And we do invest a portion of our money towards this because that's how we stay ahead, and that's how we are able to sustain over years. To give you a perspective, this company was started in 1998, and today, we are in 2001 -- 2021 rather. So it's almost 23 years. So for us to say and to be on top of it, the area we believe that it has to be driven by a market need, and it has to solve future market needs is what we feel is very good. And then we did try a few other things in between to do like an IoT product. Some of them did not work, obviously, because some do and some don't, but that is part of running a tech company because you will have a few -- and the spend is not so huge that it will impact the business altogether, but there is a same rational way to allocate these funds towards product development and how we run products is very, very critical sir. So it's a very deep, long question that we need to answer. And so the second question, I missed out. What was your second question again? I forgot.

That was which was 1 of the problem statement. So for that, like are we going to certify our company into other...

Yes, yes, yes. We -- see one thing we believe today is just like what Internet was in 1998 that tech enablement of all the different things in the world today would become -- would be driven by AI, IoT, whatever you want to call it, basically, the intelligent system not the world heuristic way of writing stuff but it completely, which is driven by smarter systems around that, including how advertising works or otherwise, is going to take they're going to take front stage for the next 20 years is what we believe. So it is important for us to invest in that. In fact, we have a small product, small team that is being at it for a while now for almost a year, 1.5 years. And we are doing a few areas. We have been doing a little bit on agriculture. We also have a product for digital advertising. So there is absolutely a lot of room for us to expand into that without deviating from the core. And if you broadly look at it, it comes down to data. It comes down to how data is collected, assimilated and used smartly for the benefit of the end user. So that is broadly the net-net of what we plan for.

And since you brought to notice, since like you said, you are even into agriculture. Do we have any product in agriculture?

No, no. So we are not. It's more to do with AI. And how data can go the size process. So it's that part of the AI part of agriculture. We're also doing for e-commerce. So across the different segments, but the core being how AI can be utilized from a profit-making perspective, not an experiment perspective. So whatever we are doing is profitable today within the AI as well.

Okay. And sir, and even now like you just said now data is the one thing which is very key here. Now that may change in the future or now it's been a lot of scope in data privacy. A lot of people are not willing to share their data. Like people are understanding the evaluation previously, like that importance was not on to this impact. So -- but for our ad business data is very important. So for that one, like -- like how we are like are there any plans for tackling that. Because for us, this was a very important, but I'm sure...

Yes, I think your point is well taken. We are extremely care -- take data privacy very seriously as a business across all, whether it is we follow all the best standards in terms of making sure there is no violation of any kind in the company. So it's very, very important. And that said, we are also -- we have a lot of ways of segmenting of approaching a potential -- end of the day, our service, when you look at it from an advertising perspective, is not infringement of privacy. It is more of facilitation of what you're looking for. Let me say you're trying to buy an airline ticket. And for you to get the right price elasticity is actually a service ticket or if you're trying to buy a new car, you get the best offer. So that is where the whole advertising and marketing comes from. Not trying to come into your space or trying to see what you're doing with your -- with your browsing behavior or such. So it is very important to be very smart and separated on how you handle this. Yes, there is a lot of debate on this at a very -- the highest level companies in the world. And we believe that offering the right solution to the right person is the key, and that can only be done through better technology. And hence, we do continue to invest in products and technology that will enable that.

Next question comes from Vipin Dwivedi from Blissful Life Enterprises Limited.

Sir, actually, as you mentioned many times in previous cons calls, that the Daum issue is settled. So is the Lycos now back to Brightcom? Or if yes, any plans to use this in the coming future?

Yes. Yes. All yes. This -- definitely, once we complete that transaction, Lycos cost will come back to us. It is not yet back to us. So the numbers that we have projected does not even include Lycos' number. So that is without Lycos. And so that is just to give you some perspective. And then once that comes, we'll have to see the state of where it is today as opposed to when it was transferred back to the no bank land it is today. So those things have to be examined. And accordingly, we'll have to see how to utilize all the assets that, that group has for the late.

Next question comes from [ Ayaan Biden ], an individual investor.

Since the last question I wanted to ask about Lycos is gone in fact, and I think you pretty much spelled it out and you have still not planned anything huge for it like and what which you all are going to take it in?

That's correct. We have ideas, but we'll have to wait for completion of the transaction before we start working on it.

Okay, okay. And I wanted to know, are we planning in the next -- sya in the next 6 to 9 months to list overseas?

List overseas is...

For foreign listing.

No, I understand, I understand yes know what you're saying. See, I mentioned in the last call about doing dilution at the subsidiary level. So if we can do at the subsidiaries, all the subsidiaries together, and in fact, we did 1 presentation that while I was in New York, we sent out, where we just included all the foreign subsidiaries, and we did not include [indiscernible]. And we put all the others together into it, and we presented it to a few investors. And we are looking to see if we can dilute that. But all these are 100% owed by us from the payer company today. So we may dilute at that level, whether we'll have to do through a listing or we'll have to do a private equity. We are open. There's no added fast tool yet. So whatever works for us, whatever gets us the best valuation from a parent perspective, we will go for it.

Okay. You all might even go in for private if you get good valuations, that is.

Yes. And the right valuation, if we get some funds into the company at the right valuation, we will do it.

Okay. So we are looking at this -- so we are open to it as and when we get a good valuation...

No, no. We are looking at raising funds at that level.

Next question comes from [ Srinivasa Govindarajan ], an individual investor.

My question was more financial and into Mr. YSR, see we have shown the receivables of INR 1,119 crores as of March 31, right? And the number of debtor days is around 143. So I'm pretty sure that some of these debtors are 180 days also. So are we providing for those debtors? Or I mean, how is that? Because in our balance sheet, I mean, assets like debtors that has construed the major part and if something goes wrong, then what is the -- what do you call the insurance for that?

YSR, you want to first one, and I can add to that.

First, let me examine about business segment, we are operating in 2 segments. One is digital marketing segment and the software segment. In digital marketing segment as of today, the receivables for about INR 913 crores, all are within 6 months. By average age of the receivables is 131 days. We are almost 100% recovering from the digital offering clients, whereas if you go to a software segment as of today, we have about INR 186 crores. Out of which, there are small 2, 3 parties are there above [indiscernible] as but we are regularly getting the money and getting the business from them. We are not worrying about the recovery. Due to this pandemic situation, there is a slight delay reason for at also we are 100% assured to get the payment. As of today, all are good and reserve -- receivable good receivable. This is what I can tell, I think the Reddy can add from business point of view.

So Srinivasa, the point is, I think -- I mean, YSR explained very well. The point is from the way business works, it is very common to have a gap between when we get funds and when we have to pay. So there is -- so we are able -- we are having to pay on a very short term, in fact, end of the month, every month for what was accumulated in that month. So that said, we are obviously -- it's taking time for us to get the funds. And 1 of the -- we have a very strong credit check policies across all our subsidiaries. We do not bring any advertiser on unless they have been vetted through a proper process or an agency on a list is being for process. So there's the risk of nonpayment does not exist. It is just a risk, there is just a delay and the preset term. So -- and it depends upon the kind of campaign depends upon -- so it's a mix of all these things that averages out to much lesser than 143 days if you only look at digital. It is looking at like 143 days, but because of the other part, it is getting all stretched up. This is broadly how it has worked out. And if you have questions, please go ahead and ask.

No, sir. It's more or less clear, but only this discounting work on this thing I mean on receivables like you are...

Yes, yes, yes. Yes, exactly. Yes, the light of credit, there's nothing but discounting of receivables. I think much except the fact that they are distributed across various geographies we thought it's better. It's hard to handle all these loans at different levels and use of funds. We are trying to do -- what we are trying to do is you were trying to do it at the parent level, where we get a central line, which covers all the receivable financing, that is.

Last question for the day comes from [ Laal Singh from Chadda Transworld ].

Mr. Reddy this is Hardeep Chadha. Congratulation, sir, on the fantastic quarter. I have 2 questions, Mr. Suresh Reddy. One is specific and 1 is more of a generic question. The first is with regards to the preferential issue done to a few foreign portfolio investors and few other investors at a price of effective price of INR 31.17. So I just wanted to know whether this price is pre-bonus or ex bonus price?

See, when we -- when it was originally signed, the intention of the company was to try to see if we can get that done pre-bonus and then issue share additional shares to them. But in for various reasons because you had to get approvals through shareholders and through exchanges. They have -- obviously, there are delays. And so we have talked to these SPIs, and we have told them this is a nature of the situation. And they have also seen how much demand there is for the business and stock has done well and so. So they are okay. So this will be the price now, which is after the bonus is issued. So this will be -- there will be -- they will not get any additional share.

Okay, wonderful. So the next question, Mr. Reddy is with regards to the frenzy that is happening, especially in the U.S. market with regard to the ad tech companies, so much money chasing by all the ad tech companies all of a sudden there's 1 specific company, which I would like to highlight because it is somewhere a lot of features are mattering with regards to our company. So there is ironSource. It is also based out of Israel. They have a...

Yes. I'm aware of it.

Yes. So they'll have revenue of $332 million, and our revenue was $380 million. They recently got a valuation of $11 billion, it is almost a 33x the revenue of that company. So if I think doing anything -- yes...

Yes, it's a banner story for a SPAC merger, sir. This is a banner -- yes, I'm acutely aware of this. And...

So my question, Mr. Reddy is that is -- that are we doing anything to sort of latch on to this frenzy and benefit from it?

Yes, we are. Yes. So I'm not able to elaborate anything on it yet. We are looking at all alternatives. If anything -- immediately, there is a development, we will inform the market. Definitely, we are looking at all options. Nothing is ruled out. So we are very acutely aware of all these different alternatives for financing that we have today.

Yes. Because I look at some of these companies, our company is 1 of the better place ones, the kind of valuation these companies are getting.

Definitely.

Thank you, everyone. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a pleasant evening. Thank you, sir.