The Exchanges

Q So, so where does your capital come from?

A So our capital comes from three sources, you know, of course, equity, which is the capital that we have raised. And like I said, internal accruals, we don't pay dividends. You know, we are confident that the company is definitely using that growth capital moving further. The entire, we are a, you know, very good cashflow accruing company. So the entire profits gets reinvested into the business. And third, of course, is the debt capital, which comes from banks. We have more than 50 lenders at this point of time. A combination of private sector banks, public sector banks, larger NBFCs, different types of instruments. It could be securitization, NCDs, some ECBs that we have taken, some impact funds which have invested in us. So it's a combination of all that which sort of works.

AI assessment note: “So our capital comes from three sources, you know, of course, equity”

Q And what was the private round valuation that you raised pre IPO?

A See the last round that we did just ahead of the IPO in early 2021, that was when one of our early investors exited completely. So Morgan Stanley invested in us in 2016. And, uh, when they decided to exit, we had, um, Sequoia, which led the round. So we sort of doubled up this investment in us. Sequoia came in 2017. They participated again in 2018. So they doubled up their investment in 2021. When sort of Morgan Stanley exited, and along with that, we also got a couple of new investors to join the table. So we had KKR, we had TVS Capital who was joining in, and we also had investors like Norwest who put in more and additional monies at that point of view. That valuation was about 10,300 crores. So, so that happened in early 2021. And, you know, then finally we did this IPO at about 13,000 crores.

AI assessment note: “That valuation was about 10,300 crores.”

Q Like few examples that the top cities can you give?

A So in Tamil Nadu, you know, we are there in very, very small locations like Edapadi, Nagarkoil, Takkalai, Tirichendur. In, um, you know, in, if you take Karnataka, we are there, uh, apart from the big cities, we are also there in many, many, uh, smaller cities. We are there in a lot of places in North Karnataka. In Maharashtra, we are there in places like Solapur, Sangli, Pandarpur. In Madhya Pradesh, we have about 40 branches today. So in Andhra Pradesh, which is often an ignored market, We have more than hundred branches only in Andhra Pradesh. So it's a large market. We believe that tier three to tier six or tier seven is a very big market because most larger financial institutions do not get there. And you know, we are displacing money lenders wherever that we go.

AI assessment note: “we are there in very, very small locations like Edapadi, Nagarkoil, Takkalai, Tirichendur.”

Q How do you and the promoter manage separate responsibilities so that you don't step into each other's shoes often?

A So over the last few years, what we have been doing is that we are in multiple states. So we exchange responsibilities based on states. So there are some states that I handle exclusively, some states that he handles exclusively. Of course, we are constantly, you know, in sync with each other in terms of Making sure that directionally we are right, and understanding the nuances of what works in a state, what has not worked in a state, and we also rotate this, so that he gets the experience of the states that I have handled, and I get the experience of the states that he has handled. So that has worked really well. Instead of, you know, one person pulling the engine, now there are two people, and even the team sees you as pretty much flexible between the two. Anybody can come for a review, anybody can ask questions, and anybody can You know, take it to the next level. That is an advantage that you are creating as an organization.

AI assessment note: “we exchange responsibilities based on states. So there are some states that I handle exclusively”

Q And how many new NBFCs are created in India every year?

A I don't have a specific number, but I'm assuming that it will be a few hundreds. But more than that, RBI has also been proactively cancelling a lot of different NBFCs which hold a license. The 10,000 number that I told you must have been about 13,000 plus three, four years back. So, there are consciously, 3004 thousand NBFC's license which have got cancelled over a period of time. And if you go to RBI's website, so, you know, I think every week or something like that, you keep getting mails from RBI, the following NBFC's license are cancelled. So, it's both ways, right? Net-net, I don't know if it's increasing, because net-net, I don't know if 10,000 serious players exist in this country. People got an NBFC license for various reasons in the past. But I think the way the regulations will evolve over a period of time, you may not have 10,000, you may have 2000 NBFCs, but pretty much serious in trying to penetrate and create an issue of what they want to do.

AI assessment note: “I don't have a specific number, but I'm assuming that it will be a few hundreds.”

Q How many cities you are present in today?

A See, we have three 69 branches as we speak, you know, branches are what, uh, like a bank branch or a smaller. So these are, you know, when we start with, we will start with 506 hundred square feet. You know, I think one thing that we are very conscious about it is given our customer base, you can't make the branch too sophisticated. People will have to relate to your brand. People will have to feel comfortable walking in. So if you're making it like too sort of sophisticated, they may not even walk into it. They will think this is for the rich. So, it's our, these are all asset light, uh, branches always, uh, rented. We don't own any of those premises. Rentals will be starting just about 15,000 rupees per month. So, because of being asset light, because of being very, very close to the ground, most of our branches break even in less than six to nine months. So, that's a, you know, pretty, you don't burn cash when you're opening, uh, the branches.

AI assessment note: “we have three 69 branches as we speak, you know, branches are what”