Aurum Proptech Management Discussions


( i ) MAcRo oveRview global

The global economy exhibited resilience and strength despite unprecedented challenges such as the supply chain disruption, inflation and aggressive interest rate hikes by central banks. The global economic growth rate is anticipated to be 2.8% in 2023, witnessing a slight contraction from 3.4% in 2022, indicating an optimistic journey towards stability. Further, advanced economies are expected to grow by 1.3% and emerging economies are expected to grow by 3.9%. Inflation remained at multi-decade highs last year in advanced economies. There is also optimism as the forecast indicates a decrease in global inflation rates from

8.7% in 2022 to 7.0% in 2023. This is primarily due to a sharp reversal in energy and food prices. Crude oil prices are estimated to average USD 92/bbl in 2023 and USD 80/bbl in 2024, down from a projected USD 100/bbl in 2022.

Global IT spending in Enterprise software and IT services crossed USD 2 trillion and is estimated to reach USD 4.6 trillion in 2023. Macroeconomic headwinds are not slowing digital transformation. IT spending will remain strong, even as many countries are projected to have near-flat gross domestic product (GDP) growth and high inflation in 2023. We believe that India is expected to remain in a high growth trajectory, with the expectation of 6% GDP in 2023-24 which is also reiterated by the IMF. india

India has exhibited remarkable resilience in the face of global challenges, solidifying its position as a catalyst for global economic advancement. With a thriving economy that has now surpassed the UK to become the worlds fifth-largest, Indias success can be attributed to the public and private sectors endeavors to improve infrastructure and logistics, foster a favorable business environment and drive economic growth.

Indias economy remained relatively stable at 7.2% in 2022-23, with further acceleration in recovery expected in 2024 to 6.3%. With a keen emphasis on taxation designed to bolster economic growth and facilitate the funding of critical infrastructure development initiatives, our commitment to fiscal responsibility and long-term stability at both the

State and Central Government levels will propel India to the forefront of developing economies. By

2029, we are well-positioned to secure our spot as the third-largest economy in the world. Indias digital adoption continues in an accelerated way. The startup landscape in India has experienced exponential growth and India has become the third-largest startup ecosystem in the world. India is also home to more than 100 Unicorns and 23 of them emerged in 2022 itself.

(ii) inDusTRy oveRview indian iT industry

Despite an uncertain global economic environment, Indias IT sector maintained consistent revenue growth in 2022-23. This growth can be attributed to the pivotal role of technology in enabling businesses to adapt and remain resilient. Projections indicate that Indias technology industry, encompassing hardware, is expected to exceed USD 245 billion in revenue during 2023-24, exhibiting a year-on-year growth of 8.4% over 2021-22. Estimated exports for the same period stood at USD 194 billion, with an anticipated growth of 9.4% in reported currency terms and 11.4% in constant currency terms. The industry continues to be a net hirer, strengthening its position as the ‘Digital Talent Nation for the world.

Digital transformation remains a core strategic priority for 2022-23. The growth areas of technology segments will continue to focus on digital CX, digitization, cloudification, building SaaS-enabled products, cybersecurity and platformization – digital components that are increasingly being built into all deals, partnerships and M&As. The Government is also playing a key role as an enabler of technology by building public platforms, digital public infrastructure and other projects, making the

‘Digital India initiative a reality. indian Real estate industry

The Indian real estate landscape encompasses residential, commercial and retail segments, with residential properties commanding around 80% of the market share. The commercial segment encompasses office spaces, industrial parks and warehouses, while the retail segment comprises shops, malls and shopping complexes.

The real estate sector plays a vital role in the Indian economy, contributing approximately 6 to 8% of its GDP which is anticipated to reach 13% by 2025. Due to its substantial contribution to economic growth and job creation, the industry is now acknowledged as one of the countrys rapidly expanding sectors.

This in turn is positively influencing the demand for resilient data center infrastructure and consequently bolstering the market growth. It has become a vital element in the overall development of the nation.

Further, the estimated worth of the Indian real estate industry in 2023 is USD 265.18 billion, with projections indicating that it will soar to USD 828.75 billion by 2028, reflecting an impressive compound annual growth rate (CAGR) of 25.60%.

Real estate is the largest asset class across the world. The role of technology in the real estate industry has expanded dramatically in recent years as it is transforming the way we buy, sell and manage real estate properties. We believe that as technology continues to evolve, its impact on the industry is becoming increasingly significant leading to the emergence of PropTech. global PropTech

The global PropTech market, valued at USD 20.65 billion in 2022, is projected to grow at a CAGR of 17.04% and reach USD 53.07 billion by 2028. This expansion is expected to be fueled by increased investment, venture capital funding and a rising demand for advanced technologies like 5G and the Internet of Things (IoT) in the real estate sector. Improved urban planning and increased infrastructure funding are also significant growth drivers. The adoption of virtual reality (VR) and augmented reality (AR) is set to enhance engagement among brokers and developers, facilitating better decision-making. The market is likely to benefit from technological advancements driven by higher R&D spending and a focus on innovation, leading to breakthroughs. This is expected to create opportunities for new entrants and intensify market competition. To meet evolving consumer expectations, top companies are likely to launch new products with innovative features or competitive pricing, while new players aim to establish a market presence.

india PropTech

The Indian PropTech industry witnessed significant growth while undergoing a transitionary phase in the year 2022-23, primarily fueled by the increasing integration of technology in the real estate sector. The industry showcased promising outcomes due to its innovative solutions and favorable market conditions. Moreover, the future holds substantial opportunities for the Indian PropTech industry, as the Indian real estate market is projected to expand to a size of USD 1 trillion by 2030 and Aurum believes that PropTech is expected to reach USD 100 billion. According to research, India is home to 1,124 operational startups. These startups have contributed to increased transparency, more efficient transactions and improved user experiences. From 2009 to 2023, Indian PropTech startups successfully secured a remarkable USD 3.2 billion in funding through 255 deals.

Online property marketplaces and listing platforms witnessed significant growth, with millions of property listings and a growing user base. These platforms offered convenience and transparency, improving overall transaction efficiency. Property management and operations solutions also gained momentum, as demand increased for smart building technologies, IoT-enabled devices and energy management systems. These solutions optimized energy consumption, enhanced security and improved operational efficiency, resulting in cost savings and better tenant experiences.

Furthermore, property data analytics and market intelligence platforms emerged as a notable trend.

Leveraging big data and advanced analytics, these solutions provided valuable insights into property trends, investment opportunities and risk assessment. Just as FinTech redefined financial services, PropTech is on a trajectory to redefine real estate practices and create a more efficient, transparent and accessible property market.

( iii ) coMPAny oveRview Aurum group

Aurum Ventures is a homegrown, privately held real estate investment and development company in India. Founded in 1996 and headquartered in Mumbai, Aurum Ventures focuses on all aspects of value creation in real estate and PropTech businesses.

Aurum is an Impact Investor with a focus on long-life, high-quality assets in special situations in India.

Our investments are constructive and have high value in exit potential while being conservative in entry pricing, with each investment having a horizon of a decade.

APT overview

Aurum PropTech, a new age technology company has revolutionalized Majesco Limited as InsuranceTech company established in 2015. In March 2021, Aurum Real Estate Developers Limited, currently holding a majority share of 50.34%, rebranded the Company as a PropTech (Property Technology) company. With a focus on revolutionizing the real estate industry, Aurum PropTech provides a wide range of tech solutions/platforms that empower digitization of supply as well as demand discovery and fulfillment across the real estate value chain spanning rental, purchase, lending, investing and distribution, among others, by utilizing advanced algorithms, data analytics and automation to streamline property transactions, enhance market analysis and optimize property management processes. By doing so, the Company aims to provide stakeholders within the PropTech ecosystem with increased efficiency, transparency and overall value. evolution of Aurum shareholding

Date of Acquisition

Acquisition event shareholding (%) cumulative shareholding (%)
June 2021 Erstwhile 14.78 14.78
Promoter Stake
July 2021 Open Offer 20.26 35.04
May 2022 Rights Issue 15.30 50.34

Aurum PropTechs growth journey began in July 2021 and since then, the Company has acquired seven businesses. Aurum PropTechs integrated ecosystem now collectively boasts 13+ products and services, 80,000 home buyers, 2,000 Crore+ GTV, 520 SaaS customers, 4,300 RaaS customers, 7,500 channel partners, 600+ real estate developer relationships and a presence in 17+ cities.

(iv) TechnoLogy, cAPiTAL AnD seRvices (Tcs)

The residential and commercial segment constitutes

USD 345 billion market size. 75% of the PropTech market in India has immense potential with their strong capabilities in:

A Technology

A Capital

A Services

Aurum PropTech is nurturing a portfolio of exciting businesses that will lead the PropTech revolution in

India.

TechnoLogy

The real estate sector encompasses a wide array of asset classes, including residential, commercial, retail, office, industrial, and hospitality. Each class follows a unique lifecycle involving activities like buying/selling, leasing/managing, and designing/ building. Within this diverse landscape, software and technology have emerged as pivotal components, driving efficiency, operational optimization, and value creation across these asset classes and stages.

At Aurum, our focus lies in elevating the consumer experience, facilitating data-driven decision-making, streamlining operations, and curtailing costs. We achieve this through our innovative products such as:

indias largest ReAL esTATe cRM for developers & channel partners

Data science-driven solution that accelerates performance marketing & channel sales

Digital transaction platform for primary residential properties

cAPiTAL

PropTech is ushering in a revolutionary shift in the landscape of real estate transactions, investments and financing.

Emerging real asset segments such as co-living, managed living, senior living, managed retail and

E-commerce are fueling the need for specialized portfolio managers. This surge in demand is set to propel the expansion of Registered Investment Advisors (RIA) focused on real estate as a distinct asset class. Moreover, it presents an avenue to establish an Institutional Bond Market tailored for real estate opportunities. To meet the diverse demands of real estate financing, our portfolio encompasses a range of products including:

Tech-driven ReAL esTATe AsseT MAnAgeMenT coMPAny

A neo-realty investment platform seRvices

PropTech has introduced a new era of services catering to both businesses (B2B) and consumers (B2C) in the real estate industry. This innovative intersection of technology and real estate is transforming the way transactions, interactions and experiences unfold. Our products are perfectly suited to cater to the diverse needs of various classes.

Leading residential rental platform and PropTech brand in India

More details on page 18 one of the largest co-living operators in india

Automated valuation Model (AvM) powered transaction platform

(v) invesTMenTs

name of the company/Business

Product/offerings

Amount committed equity shareholding (%)
(in crore)

1. K2V2 Technologies

CRM and Broker Aggregation Tech for Real Estate

43 51

2. Integrow Asset Management

Tech-driven Real Estate Asset Management Company

25 49

3. Monk Tech Labs

SaaS Platform for Rental Management

37 51

4. HelloWorld Technologies India

One of the Largest Co-Living Companies in India

56 100

5. Aurum Analytica

Real Estate Data Analytics Company

45 100
6. Aurum WiseX (Tech Platform) Neo-Realty Investment Platform NA* 100
7. NestAway Technologies Residential Rental Platform 90 100

(vi) goveRnAnce, Risk AnD coMPLiAnce (gRc)

A cornerstone of the Companys operations, Governance, Risk, and Compliance (GRC) revolves around consistently exceeding stakeholder expectations through prudent actions and controls.

Our commitment to navigating uncertainties with integrity is paramount.

As our GRC initiative gains traction, we are resolutely focused on its growth and refinement in the coming years. Within this framework, Aurums core values of transparency, empowerment, speed, focus, diligence, passion and mutual care are not just upheld but synergized with exceptional performance.

In our drive to establish a robust GRC framework, each segment is entrusted to a senior leader within the organization. This exemplifies our unwavering dedication to implementing a robust governance structure, comprehensive risk management and a culture of unwavering compliance.

i. Intellectual Capital ii. Human Capital iii. Social and Brand Capital iv. Ecosystem Capital v. Financial Capital

i. intellectual capital

Aurums emphasis on Intellectual Property (IP) as a valuable asset reflects its understanding of the crucial role that innovation and technology play in the dynamic PropTech industry. By recognizing the significance of IP, the Company demonstrates its commitment to protecting its unique ideas, products and services and its determination to maintain a competitive edge.

The construction of a robust internal IP governance framework underscores Aurums proactive approach to managing and safeguarding its IP assets effectively. As a technology-driven leader in the PropTech space, Aurum understands the importance of staying ahead in the fast-paced technological landscape. By consistently adopting cutting-edge technologies, the Company positions itself at the forefront of innovation, enabling it to offer unique and valuable solutions to its clients and customers.

Through these strategic initiatives, Aurum demonstrates its commitment to maintaining a competitive advantage in the ever-evolving PropTech industry. By leveraging its IP assets, embracing cutting-edge technologies and fostering a culture of innovation, the Company is well-positioned to continue its growth and success in the market. As the PropTech industry continues to evolve, Aurums emphasis on intellectual property and technology-driven innovation ensures its relevance and continued leadership in the field.

ii. human capital

The culture of a company is a reflection of the values upheld by its team members. At Aurum, culture isnt just talked about; its lived and breathed by each individual.

Central to the Companys wealth is its human capital

– the people, practices, and processes that ensure legal, ethical, and socially responsible operations while effectively managing risks. In its commitment to the well-being of its team, Aurum has initiated diverse programs with distinct objectives. The ‘Culture and Domain initiative serves two purposes: (a) fortifying the Companys culture by fostering collaboration across functions, and (b) cultivating its talent pool to align with strategic goals. This paves the way for an inclusive work environment, enabling every employee to flourish as their authentic and realize their full potential.

Aurum is resolutely dedicated to crafting a workplace that champions diversity and inclusivity, ensuring everyone feels embraced and appreciated Over the past year, the Company has expanded its workforce, including subsidiaries, from 5 to 500 strong individuals. With a robust reservoir of future leaders, Aurum stands poised to achieve its long-term business aspirations with unwavering confidence To instill core values and enhance the skill set of our team, Aurum initiated a comprehensive integrated employee development platform Aurum Uni.

To achieve Aurums vision of revolutionizing the PropTech ecosystem, it is critical to foster collective intelligence within the ecosystem and harness the diverse expertise and perspectives of industry stakeholders. To leverage this collective potential within our ecosystem of companies, we launched

Aurum Uni, an integrated employee development platform. Aurum Uni aims to provide a comprehensive and unified platform for skill enhancement, knowledge sharing, and talent development across all companies in the Aurum PropTech ecosystem. iii. social and Brand capital

Aurum is deeply committed to ensuring customer satisfaction. The Company prioritizes customer centricity in its business model, organizational structure, and investment decisions to deliver exceptional value to its clients. At Aurum, we truly believe that the secret to growth is helping others grow. We are committed to contributing financially as well as through capital at the grassroot level for the marginalized communities through our IKIGAI, anchored by our six core pillars: Tree Plantation, Green Design, Nutritious Meals, Safe Man Hours, Girls Education and Medical Interventions. We recognize that integrating social, environmental and ethical responsibilities into the governance of our businesses ensures long-term success, competitiveness and sustainability.

iv. ecosystem capital

Transparency and trust serve as the foundational pillars of the Companys operations. Aurum is deeply committed to nurturing a culture infused with innovation and passion. To steer the ecosystem toward its envisioned path and to pave the way for a future defined by innovation and data-driven achievements within the integrated PropTech ecosystem, Aurum spearheads several impactful programs.

Aurum entrepreneurs Forum

Aurum Entrepreneurs Forum serves as a dynamic and forward-looking platform, where founders in the

Aurum PropTech Ecosystem converge every quarter. With unwavering dedication, these founders come together to foster collaboration, innovation, and the realization of a shared dream: the development of an Integrated PropTech Ecosystem that redefines future of real estate.

During each gathering, ideas are exchanged, synergies are forged, and cutting-edge technologies are explored. This forum not only provides a space for the founders to showcase their successes but also facilitates the exploration of collective opportunities and challenges within the realm of property technology.

Aurum entrepreneurs in Residence Program

A one-of-a-kind initiative in the PropTech industry, wherein we onboard and back entrepreneurs, who are building TRANSFORMATIVE products for the real estate industry.

At Aurum PropTech, we are cultivating an entrepreneurial ethos by collaborating with companies led by passionate founders.

We support entrepreneurs with capital, network and expertise. Moreover, its an avenue to unlock substantial value growth within your venture. You will have the autonomy to steer these businesses, assemble your teams and spearhead their triumph.

v. Financial capital

Aurum places significant emphasis on adept management of their financial capital, with a focus on liquidity, profitability, and sustainable growth. The Company has established a robust framework that centers around the maintenance of liquidity, pursuit of profitability, and the facilitation of consistent growth. By steadfastly adhering to this approach, the Company aims to achieve a seamless equilibrium between financial stability and profitability, propelling sustainable growth across its operations.

Financial Performance equity share capital

The Company has a single class of shares, namely equity shares with a par value of 5 each. In the fiscal year, the Companys share capital amounted to 1,968 Lakh.

Revenue

APT achieved a consolidated revenue of 12,687 Lakh from operations, reflecting a significant increase of 703.48% compared to the previous years figure of 1,579 Lakh. standalone

APT recorded a standalone revenue of 923 Lakh from operations for 2022-23, demonstrating a change from 165 Lakh in the previous year. The loss before tax for the fiscal year ending on March

31, 2023, amounted to 1,399 Lakh.

Profitability

The consolidated loss before exceptional items and tax for the year amounted to 5,107 Lakh as compared to 1,679 Lakh from the previous year. standalone

On a standalone basis, the recorded loss for the year ended was 1,124 Lakh, as compared to 852 Lakh in the previous year. The other comprehensive income for the year amounted to 2 Lakh as compared to a comprehensive loss of 2 Lakh in the previous year.

The total comprehensive loss for the year stood at 1,122 Lakh, as compared to 854 Lakh in the previous year.

non-current Assets Fixed Assets

At the end of the year, the tangible assets amounted to 3,719 Lakh. This figure incorporates a gross addition of 1,099 Lakh, primarily resulting from the acquisition of computers, office equipment, and other assets. Depreciation amounting to 543 Lakh was charged for the year.

The intangible assets at the end of the year amounted to 11,388 Lakh. This comprised goodwill valued at 7,790 Lakh, IT products developed at 888 Lakh, and balance other intangible assets acquired during business acquisitions. The Company capitalizes the costs incurred for the development of IT products, which typically involve expenses related to third-party vendors and direct employee costs of the product development team.

current Assets current investments and cash and Bank Balances

The total current investments and cash and bank balances for the year amounted to 730 Lakh. The net cash used in operations was 5,006 Lakh, indicating the cash outflow resulting from the Companys day-to-day activities. Additionally, the payment for the purchase of fixed assets amounted to 1,881 Lakh, reflecting the cash outflow for acquiring long-term assets. Moreover, the payment for investment in subsidiaries was 5,661 Lakh, representing the cash outflow associated with acquiring stakes in other companies.

shareholders Funds

Total shareholders funds for the year stood at

22,253 Lakh as compared to 16,808 Lakh in the previous year.

non-current Liabilities Provisions and non-current other Liabilities

For the year, non-current financial liabilities amounted to 6,283 Lakh. Additionally, non-current other liabilities for the year amounted to

269 Lakh, reflecting a change from 88 Lakh in the previous year.

current Liabilities Financial Liabilities

As of March 31, 2023, the current financial liabilities, which include trade payables, amounted to 8,629 Lakh, marking an increase from 2,394 Lakh in the previous year. other current Liabilities and Provisions

As of March 31, 2023, the total of other current liabilities and provisions reached 512 Lakhs, reflecting an increase from 171 Lakh in the previous year.

key Financial Ratios (consolidated Basis)

key Financial Ratios

2022-23 2021-22
(i) Operating Profit Margin (%) (2.92) (65.51)
(ii) Net Profit Margin (%) (28.99) (63.18)
(iii) Current Ratio 1.25 4.84
(iv) Debt Equity Ratio 0.02 0.00
(v) Return on Net Worth (%) (12.98) (6.64)
(vi) Interest Coverage Ratio (0.48) (56.17)
(vii) Debtors Turnover Ratio 9.63 4.07

Risk Management

The organizations GRC framework plays a vital role in mitigating enterprise risks, including technology, strategic, macroeconomic, key managerial personnel, competitive edge risks, clients and accounts risks, cybersecurity, data protection, and privacy risks, as well as contractual, execution, and delivery risks. By leveraging this comprehensive framework, the Company effectively manages and addresses these risks, ensuring a secure and stable operational environment, while successfully fulfilling its commitments.

Mergers and Acquisitions

Aurum PropTech has prioritized acquiring ventures that demonstrate potential for profitable growth within the focused domains of the PropTech ecosystem. The integration of cutting-edge digital technologies, including data analytics, blockchain/ NFT, AI, and IoT, holds tremendous promise for driving value creation in the industry. The Company thus remains committed to assessing opportunities within the identified focus areas, while also selectively developing in-house products and enhancing go-to-market capabilities.

The decision-making process of whether to acquire or build a particular capability is guided by the

GRC framework. This framework systematically evaluates each business opportunity based on various key parameters. These parameters include assessing market potential, competitiveness, the feasibility of building required capabilities, time to market, the potential for creating shareholder value, and alignment with the Companys vision for the PropTech ecosystem.

By adhering to this strategic approach and leveraging the GRC framework, Aurum PropTech aims to stay at the forefront of innovation in the PropTech sector, positioning itself for sustainable growth and delivering significant value to its stakeholders. The benefits of robust ecosystem, domain expertise, capital allocation and enterprise experience has embarked the Company on three growth strategies Data Monetization Streamlining consumer behavior and supply-demand dynamics to enhance efficiency and elevate customer experiences. Aurum leverages its network effect strategy to harness the synergistic potential of interconnected products, resulting in various advantages, including cost savings, enhanced customer value, expanded market penetration, data harmonization, and accelerated innovation.

Our Profitable Growth strategy revolves around a prudent yet proactive expansion of our current product portfolio. We embrace a methodical approach aimed at securing sustained profitability, which encompasses prudent resource allocation, disciplined management of cash flow, and a profit-driven orientation with a sharp focus on unit economics.

Aurums business endeavors are centered on achieving growth momentum, while concurrently enhancing unit economics.

internal control systems and their Adequacy

The Company has in place adequate internal financial controls commensurate with the size, scale, and complexity of its operations.

The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company believes that these robust systems, certification mechanisms for certifying adherence to various accounting policies, accounting hygiene, and accuracy of provisions and other estimates assures that the Companys internal controls are adequate. cautionary statement

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the

Companys operations include economic conditions affecting demand, supply, and price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws, and other statutes, and other incidental factors.

(MD&A is reliant on the following sources: World Economic Outlook, April 2023; IBEF; and Nasscom)