Release Date: February 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Apollo Finvest (India) Ltd (BOM:512437, Financial) reported a significant increase in Assets Under Management (AUM), which has tripled in the past quarter.
- The company has established numerous partnerships with Non-Banking Financial Companies (NBFCs), enhancing scalability and compliance.
- Apollo's technology infrastructure is a key strength, facilitating faster and more efficient partnerships and integrations.
- The company is expanding its tech team to further bolster its technological capabilities.
- Apollo Finvest (India) Ltd (BOM:512437) is focusing on hiring experienced senior professionals to drive the company to the next level.
Negative Points
- Revenue has not increased proportionately with the AUM, primarily because the AUM increase occurred mid-quarter.
- The company is currently listed only on the Bombay Stock Exchange (BSE) and not on the National Stock Exchange (NSE), limiting its market exposure.
- There was a noted decrease in fee and commission income, raising concerns about client retention and income diversification.
- Interest expenses have been noted, indicating the company may soon need to take on external debt to scale up further.
- The company has faced challenges in transitioning from working with Loan Service Providers (LSPs) to focusing more on NBFCs, which may impact its traditional business model.
Q & A Highlights
Q: Are Swiggy and Zomato still using Apollo Finvest's platform for digital disbursement of loans?
A: No, Swiggy and Zomato have never used our platform. They were mentioned as examples of platforms that could potentially get into digital lending in the future. (Mikhil Innani, Managing Director & CEO)
Q: Why is Apollo Finvest listed only on BSE and not NSE?
A: The company has been listed for over 30 years, and at the time of listing, BSE was more popular. Hence, the decision was made to list on BSE. (Mikhil Innani, Managing Director & CEO)
Q: What is the reason for the purchase of a residential property amounting to INR2.75 crore?
A: This is a legacy transaction from before the current management took over. We have been liquidating such assets over time to focus solely on digital lending. (Mikhil Innani, Managing Director & CEO)
Q: Why has the fee and commission income reduced compared to the previous year?
A: The reduction is due to partners utilizing committed capital, resulting in higher interest income instead of fee and commission income. (Mikhil Innani, Managing Director & CEO)
Q: Has Apollo Finvest started taking debt from other institutions to scale up?
A: Not yet, but we expect to start taking on external debt soon as our AUM continues to rise. (Mikhil Innani, Managing Director & CEO)
Q: What led to the shift from the LSP model to working with NBFCs?
A: The shift is due to regulatory guidelines and the realization that working with regulated entities like NBFCs is more scalable and compliant. (Mikhil Innani, Managing Director & CEO)
Q: What is the typical co-lending ratio between Apollo Finvest and its NBFC partners?
A: The typical co-lending ratio is 80/20, with Apollo Finvest contributing 80% and the NBFC partner contributing 20%. (Mikhil Innani, Managing Director & CEO)
Q: What types of loans are being co-lended with NBFCs?
A: The focus is primarily on unsecured loans, as we have not yet found a scalable model for secured lending using technology. (Mikhil Innani, Managing Director & CEO)
Q: Why are fee and commission expenses negative in both this quarter and the last quarter?
A: This is due to extra provisioning done in the previous quarter, which has been reversed in the current quarter. (Mikhil Innani, Managing Director & CEO)
Q: How does Apollo Finvest ensure compliance and maintain its company culture?
A: Compliance is ensured by focusing on long-term goals and avoiding shortcuts. The company culture emphasizes hiring good human beings who are smart and creating an environment where they can succeed. (Mikhil Innani, Managing Director & CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
