June 2025 concall summary of RNFI Services Ltd.

Financial Overview (H2 FY25 & Yearly):

Half-year revenue grew by 12%

Company Overview and Business Model:

RNFI provides last-mile delivery of financial inclusion and other services.
The company started in 2015 with INR 10 lakh capital, without external funding until its IPO, and has been profitable since its inception, growing through internal accruals.
Their business model revolves around the "RNFI platform". A field team sources interested sites, which undergo a digitized onboarding process and training to become active on the platform.

The platform handles fraud risk management, compliance, accounting, and support.
An enterprise team sources new clients and institutions, cross-selling products and integrating deeply with the platform.
The core mantra is "more the number of sites, more the number of products, more the number of clients, more the number of products," which is expected to drive significant revenue growth with only a percentage increase in costs.

Subsidiaries and Acquisitions:

RNFI Money: The forex business, which aims to secure an AD2 license for foreign remittance.

Paysprint Private Limited: A connected banking platform that recently raised INR 10 crore at a INR 120 crore valuation. RNFI's stake will increase from 55% to 68% after a promoter group share transfer. Paysprint is now profitable.

Payworld Digital Private Limited: RNFI recently signed an agreement to acquire this competitor, which enhances their network and includes a subsidiary with a PPI license. RNFI began managing some operations from April 1st and aims to turn the previously loss-making company around very soon.

Relicollect: The EMI collection business.

Payworld Money: The PPI license company.

Insurance Broker: The brokerage firm.

Most companies are profitable, with Payworld (newly acquired) and Relicollect (expanding) being exceptions, though their losses are not significant. All companies are expected to contribute to the bottom line in the future.

Vision, Growth Drivers, and Transparency:

1. The vision is to be a tech-driven distribution and last-mile service company leveraging its agent network.
2. The agent network operates on a win-on-case-basis, without fixed remuneration, allowing for profitable growth without extensive capitalization.
3. Major growth drivers include increased PAT and PAT margins.
4. The company aims to be transparent; all promoter and group shares are parked in a trust, and the Board of Directors is very independent.
5. They relinquished 12.7% of shares (valued at INR 20 crore) to demonstrate transparency and avoid conflicts of interest.
   Quarterly results will be provided from September, following LODR regulations.
6. Key management and independent directors were highlighted.
7. Significant work is being done on AI and ML to reduce operational costs in the near future.
8. They are focusing on boosting annuity income by increasing Sahayak ARPU and the number of Sahayaks.
9. The company emphasizes its strong marketing and training teams and its compliant operations.

Geographically, their reach is stronger in North and East India due to their Delhi base and initial lack of funding, but they are now expanding into the South.

Challenges Mentioned:

A GST demand of INR 17 lakh is being disputed, with confidence in winning the case.
DMT (Domestic Money Transfer) regulations impacted business volume but did not significantly affect the bottom line due to product changes and a diversified portfolio.
The company's DNA avoids burning money and prioritizes profitability and growth through reinvestment, rather than rapid expansion that might hit the balance sheet in the short term.

Main highlights of remaining concall

• And on the non-forex side sir, we've grown tremendously over the past 2 years. We anticipate to grow at the same pace over the next few
  years for now.
• We are coming up with 12 new products very, very soon.