Hello Ishmohit,
In your opinion which are the few themes in India which will continue to play out in the medium term?
I am positive about these themes

• Infrastructure
• Renewable Energy
• Ethanol, Biofuel capex
• Maritime: Cargo Handling, Ports operations and Ship Building

Not sure about the below themes which have already given massive returns recently

• Railways (IMEC uncertainity in short term)
• Auto Ancillaries
• EMS (P/E has exploded in last 6 months , and earnings growth does not match that)

Not thinking ahead makes one prone to errors of judgement… lack of big ticket releases owing to the cricket world cup in the first half of Q3 and the actors strike in hollywood notwithstanding, we have salman and ranbir to shake things up from mid november… I am not too gung-ho about the 699 monthly plan as upon reading the fine print it has a lot of ifs and buts… but well tried to the company management…

As long as good content gets generated this appears to be a reliable money making machine, post merger it has higher market share and caters to the luxury, premium and now with tweaks in f&b and rationalizing of ticket prices, attempting to tap the value seeking customers as well… for me, this dip appears to be a perfect opportunity to add positions for bigger targets … I am pre-empting an INHS in the weekly charts and as always, prone to pulling the trigger before time

Established in 2013 Network People Services Technologies Limited (NPST) is a Fintech Company focusing on Digital Payment Solutions like UPI, IMPS, Mobile Banking & Wallets to Banks and Payment Companies.
NPST is an authorised Merchant Payment Service Provider, approved by NPCI, providing payment solution to aggregators, merchants and users across various segments. NPST operate as “NPCI Approved Merchant PSP” digitizing Merchant acquiring space under the brand name of “TimePay”.

Currently, the company is providing its services under two verticals i.e. Technology Service Provider (TSP) and Third Party Payment Application Provider (TPAP).

Technology Service Provider (TSP) (For Banks & Financial Institutes)

1. Switch Products IMPS | UPI | Mobile Banking Solution (Revenue model: Licensed model)
2. Super App – integrated Mobile App for Banking services (Revenue model: Pay per transaction)
3. Qynx – Merchant switch (Revenue model: Subscription): Qynx is a Digital Merchant platform for banks that provides a complete suite of services and products to manage and operate Merchants of various sizes and categories. The solution provides an end-to-end product stack to digitise your merchant network and increase revenue potential through digital offerings. A must-have product for banks & fintech to create merchant stickiness to acquire new business.
4. ODR

Third Party Payment Application provider (TPAP) (For Payment Aggregator and Merchants)

1. EVOK – UPI (API) engine (Revenue model: Pay per transaction): TimePay Evok is an API based Payment platform empowering business with flexibility of real-time UPI transactions and innovative payment channel integrated with reconciliation module. Delivering UPI payment solution being one of the approved TPAP.
2. UPI plug-in
3. Payout solution
4. Merchant ODR

Notes on Timepay app: this is actually called the payee business, where we give the APIs to our merchants or payment aggregators, where the sponsor bank is Cosmos. As part of this ecosystem, it is mandatory that we have a PSP application in the market. So, it was a mandate piece due to which we actually brought that application in market. We never promoted. We never pushed it, because our focus was always this API business, the merchant business.

API business (EVOK): when we give the API, we give it to payment aggregators and payment gateway on the bank platform. So, we play a technology API role in this particular segment. And those who are authorised to acquire merchants in market, or those who are merchants in market, those who need collection technology on UPI, or they need collection API, where they can collect funds for the services and the goods they sell in market. Or, re-sell those things, like payment aggregators and payment gateways.

So, these are the guys who take services from us. In order to do that, in order to manage the platform, right from the compliance, the reconsideration, the technology fees, the infrastructure, and the support system, the operations, there is a whole gamut of business that has to be built around it. And there is a cost around it. So, for that, we charge our payment aggregators and merchants on a SaaS model.

And I would say that those who are in merchant aggregation business, there are 30 odd accounts that we have in this particular segment, including something like PayG, EaseBuzz, or we are already in the final stage with Cashfree. So, these are the guys who would be using our services.

They have processed 4200 crore volume via their API in this quarter. It is only 0.1% of the total API business.

How NPST helps banks as TSP? We provide the interoperability switch between NPCI and bank. Okay, so every bank who wants to be on the UPI ecosystem, they need a partner like us. Because this is not the engine which is part of their core banking. This is a separate engine altogether which connects the bank’s core banking with the NPCI ecosystem and only then they participate in the UPI applications such as you transacting on a Canara Bank account on a Google Pay app. So, you need a processing engine in Canara Bank to connect to NPCI, only then Canara Bank will be in Google Pay app.

Revenue Split: Two third portion is from Evok business and one-third is from other business.

New area of growth:

1. When we acquire new bank accounts for example in UPI Switch, so whenever we have a new business around UPI Switch that is where our contribution to this particular percentage you mentioned will increase so State Bank of Mauritius India Limited is one, one account around UPI Switch we have acquired.
2. Qynx which is a merchant acquiring platform.
3. If they can acquire e-commerce or gaming customers then their revenue may increase with API business.

Extra Notes:

1. Launched 6 products in the Global Fintech Fest. Got a lot of inquiries. Going into POC stage with some customers.
2. They got State Bank of Mauritius India Limited order in this quarter. It’s a big order that will have an impact across TSP as well as API business.
3. Launched “Super App Canara ai1” with 100 Lakh+ User Base
4. Processing 390 Lakh+ Daily UPI Transactions as TSP for Banks

Results:

Risks:

1. Business is a little complicated to understand.
2. HDFC and SBI already have their partners. They control the real volumes in the market.
3. Government banks might be the only probable customers for their super app business.
4. Technology might become obsolete with time. NPCI keeps on introducing new tech.
5. Overpriced at 85 PE.

Investment Rationale:

1. Technology business growing with the UPI volumes.
2. They have an aspiration to achieve the top five digital transaction volumes in India in the next 5 years.
3. Currently they are handling 0.1% of the API volume. They have ample room for growth.
4. Management has relevant industry experience.

It would be great if people from the industry could share more insights on this API business (EVOK). As far as I can understand this is an actual area of growth for them.

Disclosure: Not invested
Current Market Cap: 1300 cr.

Texmaco Rail and Engineering

1. The company held a vote among its shareholders on October 23, 2023, and they approved a plan to issue more shares.
2. On October 26, 2023, the Capital Issue Committee of the company’s directors met and decided to issue new shares to two parties:

• They gave 27,02,700 shares to a company called M/s Adventz Finance Private Limited in exchange for Rs. 39,18,91,500 in cash.
• They also gave 6,75,675 shares to an individual named Shri Saroj Kumar Poddar in exchange for Rs. 9,79,72,875 in cash.

3. Each of these new shares is valued at Rs. 145, as approved by the shareholders and in accordance with certain regulations.
4. As a result of this share issuance, the company’s total number of shares has increased from 32,18,69,895 shares to 32,52,48,270 shares.

60cr every year is optimistic target and add to that their D/E is already at 1.2. Interest rates will continue to remain high for the next 9-12 months and so I think they will go for equity dilution (pledge, sell stake, warrants, rights issue, preferential allotment etc).

But either way, servicing the existing debt will be challenging for the company and could easily spiral out of control, if not serviced properly