Indian Economy Overview
Indias economy is projected to grow by 6.9% in 2024 and 6.6% in 2025, driven by strong public investment and resilient private consumption. This 2024 growth forecast is an upward revision from the previous 6.2% prediction made by the U.N. in January. Inflation in India is expected to decrease from 5.6% in 2023 to 4.5% in 2024. The Indian economy showcased robust growth, expanding by 8.2% in FY 2023-24 compared to 7.0% in FY 2022-23, securing the 5th position in the worlds GDP rankings for 2024. Key sectors like information technology, services, agriculture, and manufacturing fuelled this growth, leveraging Indias domestic market, skilled labor force, and expanding middle class. Key metrics: Real GDP in FY 2023-24 was estimated at Rs 173.82 Crore, with a growth rate of 8.2%, while nominal GDP stood at Rs 296.58 Lakh Crore. Indias foreign exchange reserves reached a record high of USD 645.6 Billion in March 2024, reflecting stability and surplus in balance of payments. The credit quality of Indian companies remained strong between October 2023 and March 2024 following deleveraged Balance Sheets, sustained domestic demand and government-led capital expenditure. Rating upgrades in H2 FY 2023-24 continued to surpass the rating downgrades. UPI transactions in India posted a record 56% rise in volume and 43% rise in value in FY 2023-24.
Exports of goods and services were expected to reach USD 900 Billion in FY 2023-24, with notable growth in merchandise and services exports. Outlook: India is projected to maintain its status as the fastest-growing major economy, driven by rising demand, moderate inflation, stable interest rates, and robust foreign reserves. The economy is expected to surpass USD 4 Trillion by FY 2024-25. Indias economy likely expanded at 8% through FY 2023-24, and growth in the current year is projected at 7%, V Anantha Nageswaran, Chief Economic Adviser to the government, said at an event organised by National Council of Applied Economic Research (NCAER) in May 2024. This positive outlook is fueled by strong government investment, continued consumer spending, and a boom in sectors like pharmaceuticals. Notably, India is achieving this robust growth even amidst a lukewarm global economic climate. This demographic surge, coupled with its status as the fastest-growing economy, is expected to drive substantial demand for E-services, Banking Correspondent Services, and Assisted E-commerce services. The expanding population will require enhanced digital infrastructure and financial services to cater to a larger, increasingly tech-savvy consumer base. This presents both opportunities and challenges for businesses and policymakers.
Business Correspondents
Overview: The Business Correspondent (BC) industry operates on a commission-based model, receiving payment either as a percentage of the transaction value or a fixed fee per transaction, as per the agreement. Several factors are anticipated to drive the growth of the BC industry. These include the expanding reach of BCs in rural areas, the rise in Basic Savings Bank Deposit Accounts (BSBDA) and deposits, and the increasing volume and value of transactions processed by BCs. Key metrics: In the first quarter of FY 2022-23, banks added 2,796 ATMs, significantly up from 1,486 in FY 2021-22 and comparable to the 2,815 in FY 2020-21. All new bank accounts in rural India are now opened digitally, reflecting the ongoing digital transformation in the banking sector. By 2026, digital payments will constitute 65% of all payments. As of December 1, 2023, total assets in the public and private banking sectors were USD 1688.15 Billion and USD 1017.26 Billion, respectively, with public sector banks holding 58.32% of the total banking assets. Additionally, Indias digital lending market has grown at a CAGR of 39.5% over the past decade and is projected to surpass USD 720 Billion by 2030, capturing nearly 55% of the total USD 1.3 Trillion digital lending market opportunity in the country. The growth deposit in India has increased with 82% over the last six years.
India has also focused on increasing its banking sector reach, through various schemes like the Pradhan Mantri Jan Dhan Yojana and Post payment banks. Schemes like these coupled with major banking sector reforms like digital payments, neo-banking, a rise of Indian NBFCs and fintech have significantly enhanced Indias financial inclusion and helped fuel the credit cycle in the country. The digital payments system in India has evolved the most among 25 countries with Indias Immediate Payment Service (IMPS) being the only system at level five in the Faster Payments Innovation Index (FPII). Indias Unified Payments Interface (UPI) has also revolutionised real-time payments and strived to increase its global reach in recent years. Number of transactions through BCs witnessed a growth of 23% CAGR while value of transaction witnessed a growth of 32% from FY 2015-16 to FY 2021-22.
Amount transacted in BSBDA accounts through BCs increased over the years
Number of transactions in Basic Savings Account through BCs
Between FY 2016-17 and FY 2021-22, banking outlets in villages grew at a CAGR of 33%, with 98% operated by business correspondents in FY 2021-22. RBI guidelines mandate that 25% of new banking outlets be in unbanked rural areas. Consequently, the share of transactions through BCs rose from 52% in FY 2016-17 to 60% in FY 2021-22, driven by the establishment of rural banking outlets and doorstep services in remote areas.
Presence of banking outlets in villages
Number of transactions in Basic Savings Account through BCs
Outlook: The Indian banking industry has been on an upward trajectory aided by strong economic growth, rising disposable incomes, increasing consumerism and easier access to credit. It is expected to increase at a CAGR of 19% from FY 2022-23 to FY 2024-25. Digital modes of payments have grown by leaps and bounds over the last few years. As a result, conventional paper-based instruments such as cheques and demand drafts now constitute a negligible share in both the volume and value of payments. The governments Direct Benefit Transfer (DBT) schemes, the ability to facilitate various bill payments, and the provision of value-added services such as Aadhaar and mobile number seeding contribute significantly to the industrys expansion. Additionally, the growth in microfinance lending through BCs is expected to boost their revenue streams. Collectively, these factors are poised to enhance the size and scope of the BC industry, making it a crucial component in driving financial inclusion and economic development in underserved regions.
E-governance
Overview: The launch of the Unified Payments Interface (UPI) has revolutionised digital payments, making transactions seamless and accessible. Initiatives like the Government e-marketplace (GeM) have streamlined procurement processes, enhancing transparency and efficiency. The Aadhaar-based Direct Benefit Transfer (DBT) system has ensured timely and direct delivery of subsidies to beneficiaries, reducing leakages and corruption. Furthermore, the DigiLocker platform has facilitated secure online storage and sharing of documents, simplifying access to government services. These advancements, underpinned by the Digital India initiative, are driving the nation towards more inclusive, efficient, and transparent governance. Key metrics: The E-government Development Index (EGDI) is a weighted average of normalized scores on three key dimensions of e-government: the scope and quality of online services (Online service index or OSI), the development status of telecommunication infrastructure (Telecommunication infrastructure index or TII), and the inherent human capital (Human capital index or HCI). Indias e-government Development Index (EGDI) score of 0.5883 is notably lower compared to countries like China (0.8119), Russia (0.8162), Brazil (0.7910), and South Africa (0.7357), despite having a relatively strong online service index (OSI) score of 0.7934. However Indias rank is improving in e-governance. It has improved to 105 in 2022 from 118 in 2014.
Indias scores are low compared to other countries providing government service online
| Particulars | EGDI | OSI |
| China | 0.8119 | 0.8876 |
| Russia | 0.8162 | 0.7368 |
| Brazil | 0.7910 | 0.8964 |
| South Africa | 0.7357 | 0.7487 |
| India | 0.5883 | 0.7934 |
Advantages: E-governance enhances the delivery and efficiency of government services through efficient management, empowering citizens with access to information, reducing corruption, increasing transparency, and reducing paperwork and red-tapism, which together improve convenience for citizens and businesses, reduce costs while growing revenues, increase government legitimacy, and facilitate better planning and coordination across different government levels.
Outlook: The market is driven by the increasing demand for transparency, efficiency, and accountability in public administration. With the rapid advancements in digital technologies and the growing adoption of e-services globally, the e-governance market is expected to witness substantial growth. Key trends include the integration of artificial intelligence, blockchain, and big data analytics into government systems, which enhance decision-making and service delivery. Governments worldwide are investing heavily in digital infrastructure to support these initiatives, aiming to improve citizen engagement and streamline administrative processes. The market is projected to expand significantly over the next decade, supported by continuous technological innovation and increasing public expectations for efficient and transparent governance.
Assisted e-services
Increasing digital literacy and smartphone penetration are enabling more users, particularly in rural and underserved areas, to access e-services through intermediaries. The rise of business correspondents and digital service agents is expanding the reach of banking, financial services, and government schemes. Additionally, the integration of artificial intelligence and machine learning is enhancing the efficiency and personalization of assisted services. Government initiatives promoting digital inclusion and the expansion of digital infrastructure are further fueling market growth. Overall, these trends are leading to a more inclusive and accessible e-services landscape.
Assisted e-services in India offer numerous opportunities for enhancing service delivery and improving access to various governmental and financial services, particularly in underserved areas. Some key opportunities include financial inclusion, government services, healthcare, education, agriculture, employment, digital payments, commerce and retail, and citizen services. By leveraging assisted e-services, India can significantly improve service delivery, promote inclusivity, and drive socio-economic development across diverse sectors
Opportunities
The assisted e-services market presents numerous opportunities for growth and development Financial inclusion: With a significant portion of the population in rural and remote areas increasing access to formal banking services, assisted e-services can provide additional products and services through intermediaries such as business correspondents.
Digital literacy: Expanding digital literacy initiatives can enhance the adoption of e-services. Training programs for intermediaries and users can drive higher engagement and usage rates.
Government schemes: The delivery of government schemes and subsidies through digital platforms can be streamlined with the help of assisted e-services, ensuring timely and efficient distribution of benefits to the intended recipients. Healthcare services: Telemedicine and digital health services can be facilitated through assisted platforms, providing remote consultations, medical advice, and health monitoring to underserved populations.
E-governance: As governments increasingly digitize their services, assisted e-services can help citizens navigate online portals, access public services, and complete necessary documentation, enhancing overall accessibility and efficiency. Microfinance and insurance: Assisted e-services can support the growth of microfinance and insurance sectors by reaching out to unbanked and underbanked populations, offering tailored financial products and risk management solutions.
Retail and e-commerce: Local intermediaries can facilitate e-commerce transactions, helping customers place orders, make payments, and receive deliveries, thereby expanding the reach of online retail to rural areas.
Education and skills development: Assisted e-services can provide access to online educational resources, skill development programs, and vocational training, contributing to workforce development and empowerment.
Threats
Banking correspondent (BC) business model face several threats that can impact its effectiveness and sustainability. Some of the key threats include operational risk, regulatory and compliance risks, financial risks, technological risks and human resource risks. In addition, one of the major risk is the change in governments or RBIs policy with respect to financial inclusion aspect which can significantly impact the overall Business Correspondent segment.
Mitigating these threats involves implementing robust risk management practices, investing in technology and training, ensuring regulatory compliance, and building strong relationships with customers and stakeholders.
| Operational risk | BCs may be involved in fraudulent activities, including misappropriation of funds, identity theft, and unauthorized transactions |
| Regulatory and compliance risks | Handling large amounts of cash can pose security risks, including theft and robbery BCs must comply with banking regulations, anti-money laundering (AML) laws, and know your customer (KYC) requirements. Non-compliance can lead to penalties and legal action Changes in regulations can impact the viability of the BC model, requiring continuous adaptation and potentially increasing operational costs |
| Financial risks | BCs often operate on thin margins, and fluctuations in revenue can affect their sustainability. |
| This is particularly challenging in underserved or rural areas with lower transaction volumes Extending credit or providing financial products through BCs involves credit risk, especially if due diligence is not adequately performed | |
| Technological risks | BCs are vulnerable to cyber attacks, including hacking, phishing, and data breaches, which can compromise sensitive customer information. |
| Rapid technological advancements require continuous investment in new technologies and training, which can be challenging for BCs with limited resources. |
Similarly, e-governance services, while enhancing efficiency and accessibility of government services, face a variety of threats that can undermine their effectiveness and security. Some of the key threats to e-governance services include political and social risks, privacy concerns, legal and regulatory risks, cybersecurity risks. technical risks, operational risks and human resource risks.
Under the cybersecurity risks, unauthorized access to sensitive government data can lead to significant privacy violations and misuse of personal information. Cyber attacks such as hacking, ransomware, and malware can disrupt e-governance services and compromise system integrity.
Regarding the technical risks, Hardware or software failures can result in service outages, affecting the availability of e-governance services. Errors in data entry, processing, or storage can lead to inaccurate or corrupt data, impacting decision-making and service delivery. Additionally, rapid changes in technology require continuous upgrades and investments, which can be challenging to maintain.
In terms of the operational risks, Inadequate IT infrastructure, especially in rural or remote areas, can limit the accessibility and reliability of e-governance services. Further, incompatibility between different government systems can hinder the seamless delivery of services and data sharing. And bureaucratic inefficiencies and slow adoption of new technologies can impede the effectiveness of e-governance initiatives.
Looking at the human resource risks, lack of skilled personnel to manage and operate e-governance systems can lead to operational inefficiencies and increased vulnerability to cyber threats. Additionally, inadequate training and awareness programs for both employees and citizens can result in misuse or underutilization of e-governance services.
Failure to comply with relevant laws and regulations, including data protection and privacy laws, can lead to legal penalties and loss of public trust. And frequent changes in regulations can create uncertainty and require continuous adaptation of e-governance systems and processes.
Limited financial resources can impede the development, implementation, and maintenance of robust e-governance systems. Furthermore, E-governance projects can face budget overruns due to unforeseen complexities, leading to financial strain and potential project delays or failures.
If we analyse the Political and Social Risks, any changes in government or political instability can disrupt e-governance initiatives and priorities. Inequities in access to technology and digital literacy can exacerbate the digital divide, leaving certain groups underserved by e-governance services.
A comprehensive approach is required to mitigate these threats which includes robust cybersecurity measures, continuous training and capacity building, regulatory compliance, stakeholder engagement, and ensuring equitable access to technology.
About BLS E-Services
BLS E-Services, a subsidiary of BLS International, stands as a leading technology-enabled digital service provider in India, offering a diverse range of services that encompass Business Correspondent (BC/ Rural banking outlets) services, Assisted E-services, and E-Governance Services. These offerings are all geared towards grass-roots empowerment, revolutionizing how essential services are accessed.
Through its robust network, BLS E-Services plays a pivotal role in facilitating access to a wide spectrum of essential public utility services, social welfare programs, healthcare, finance, education, agriculture, and banking services. This array of services caters to governments (G2C) and businesses (B2B), while also catering to the diverse needs of citizens (B2C) across urban, semi-urban, rural, and remote areas. Operating within a unique integrated business model, BLS E-Services bridges the digital gap in areas with low internet penetration by offering solutions through phygital strategy, i.e., physical, and digital.
BLS E-Services offers a range of citizen-centric services across several states in India. Through its dedicated and web-enabled portal, BLS provides convenient access to a variety of government and service partner offerings. This comprehensive platform delivers end-to-end integrated solutions for accessing these services efficiently. With just a click, individuals can avail themselves of various government services using the BLS platform. The company facilitates online verification of certificates issued by multiple departments, streamlining the verification process for users.
Our service portfolio
Business Correspondent (BC) services
E-governance services
Assisted E-Services
Our financial overview
Analysis of the consolidated profit and loss statement
For FY 2023-24, the companys total revenue increased by 25.7% YoY to Rs. 309.6 Crores as against Rs. 246.3 Crores in FY 2022-23. EBITDA for FY 2023-24 was at Rs. 49.9 Crores compared to Rs. 36.3 Crores in FY 2022-23, a growth of 37.6%. EBITDA margin for FY 2023-24 stood at 16.1% versus 14.7% in FY 2022-23, margin expansion of 139 bps.
PBT before exceptional items in FY 2023-24 grew robustly by 54.5%, at Rs. 45.7 Crores, as compared to Rs. 29.6 Crores. and PAT in FY 2023-24 grew by 65.0%, at Rs. 33.5 Crores compared to Rs. 20.3 Crores. PAT Margin expanded by 258 bps to 10.8% in FY 2023-24 from 8.2% in FY 2022-23.
| Particulars (Rs Crores) | FY24 | FY23 | YoY |
| Total revenue | 309.6 | 246.3 | 25.7% |
| EBITDA | 49.9 | 36.3 | 37.6% |
| EBITDA margin (%) | 16.1% | 14.7% | 139 bps |
| PBT before exceptional items | 45.7 | 29.6 | 54.5% |
| PBT margin (%) | 14.8% | 12.0% | 275 bps |
| PAT | 33.5 | 20.3 | 65.0% |
Key business highlights
In February 2024, the company successfully completed its listing on BSE and NSE, with over Rs 300 Crores IPO. The net proceeds from the IPO will be deployed to strengthen the technology infrastructure, consolidate the existing platform, funding for setting up BLS Stores and also for inorganic opportunities.
During the year, we have also increased our reach and network to over 100,000 touchpoints and more than 1,000 BLS Stores.
During the year, we collaborated with the National Health Authority for the Ayushman Bharat Quality Check (QC) in Uttar Pradesh, under the visionary National Digital Health Mission, heralds a new chapter in healthcare accessibility.
The year also witnessed we facilitating over 133 Million transactions worth more than Rs. 72,700 Crores through our 21,000+ BC centers. In addition, we generated leads of over Rs. 580 Crores of loans and deposits in a quarter for our partners in the private sector banking space through our Business Facilitator model.
During the year, we commenced door-step-banking services for elderly population in 25 States/ UTs. The year also witnessed signing business facilitation agreements with private banks such as HDFC, Kotak and Karur Vysya Bank.
Business correspondent RFPs wins with Indian Overseas Bank, Indian Bank, Baroda Gujarat Gramin Bank and Baroda Rajasthan Kshetriya Gramin Bank Penetrating in rural region through various initiatives including CSP+ project covering 200+ gram panchayats in Orrisa, Ayushman Bharat Quality Check and initiation of Aadhaar demographic update service in Karnataka BLS E-Services expanded its assisted e-services with the addition of Hospicash & Wellness drive with over 22,000 customer enrollments In FY 2023-24, we launched BLS Store mobile application We tied up with India Post Payments Bank (IPPB) through the Directorate of Electronic Delivery of Citizen Services (EDCS), E-Governance Department of Personnel and Administrative Reforms (DPAR), Govt of Karnataka (GoK),
Key ratios
| S. NO. Ratio | As at March 31 2024 | As at March 31 2023 | Reson for variation |
| 1 Current ratio | 4.69 | 1.10 | The increase is primarily due IPO funds received |
| 2 Debt-equity ratio | 0.02 | 0.05 | Essentially because of increase shareholders fund due to IPO |
| 3 Debt service coverage ratio | 3.76 | 0.20 | Increase in profits and decrease in outstanding debts |
| 4 Return on equity ratio | 20.11% | 33.33% | Primarily rise in shareholders equity after the IPO |
| 5 Trade receivable turnover ratio | 13.89 | 18.16 | Primarily increase in revenue and receivables |
| 6 Trade payable turnover ratio | 10.68 | 9.55 | Change in product mix |
| 7 Net capital turnover ratio | 2.42 | 91.32 | Increase in revenue and rise in current assets from IPO funds |
| 8 Net profit ratio | 11.12% | 8.36% | Increase in profits and revenue |
| 9 Return on capital employed | 27.25% | 28.24% | |
| 10 Inventory turnover Ratio | 23.97 | 27.72 | Change in product mix |
Risk management
The growth of e-business and modern trade presents a significant opportunity for BLS to expand its operations. The Company is focused on enhancing its e-commerce and B2C citizen services capabilities to capitalize on this trend. The COVID-19 pandemic has accelerated the shift towards digital purchasing behaviours, necessitating adaptation to meet evolving customer needs.
Prioritising operational efficiency and effectiveness, the company adopts a risk management approach to safeguard assets, assess and mitigate risks and ensure transparent disclosure of necessary information. Oversight of the risk management plan, encompassing risks related to visa services and digital operations, is carried out by the risk management committee.
Emphasising liquidity risk management, the company aims to maintain adequate liquidity to meet financial obligations promptly. Cash flows from operations are crucial for fulfilling financial commitments, including lease liabilities.
The Company identifies key risks pertinent to its business, recognizing the potential emergence of new risks in the future. The dynamic business environment, along with macroeconomic, geopolitical shifts and system vulnerabilities, underscores the importance of risk management. By focusing on the most critical risks and continuously monitoring and evaluating risk management efforts, the Company strives to navigate uncertainties effectively.
A steadfast commitment to risk management is integral to the Companys long-term success. By proactively identifying and addressing relevant risks, the Company safeguards its assets, fosters stakeholder trust and delivers value to its customers.
Human resources
The Company considers its dedicated and motivated employees as its greatest asset. It provides competitive compensation, fosters a healthy work environment and acknowledges employee performances through a structured reward and recognition program. The Company aims to cultivate a workplace where each employee can realise and achieve their full potential. Encouraging individuals to undertake voluntary projects beyond their regular scope of work promotes learning and nurtures creative thinking. As of March 31, 2024, the Companys employee strength stood at 39.
Internal control systems and their adequacy
The Company believes that safeguarding of assets and business efficiency can be prolonged by exercising adequate internal controls and standardising operational processes. The internal control and risk management system is structured and applied in accordance with the principles and criteria established in the corporate governance code of the organisation. It is an integral part of the general organisational structure of the Company and involves a range of personnel who act in a coordinated manner while executing their respective responsibilities. The Board of Directors offers its guidance and strategic supervision to the Executive Directors and management, monitoring and support committees. The control and risk committee and the head of the audit department work under the supervision of the Board appointed Statutory Auditors.
Cautionary statement
This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.
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