DigiSpice Technologies Ltd Management Discussions.

The Companys business activities fall into two primary segments, Digital Financial Services & Digital Technology Services.

Digital Financial Services (Spice Money): Spice Money is a wholly owned subsidiary of ‘DiGiSPICE Technologies Limited offering financial services primarily to Semi Urban and Rural India customers in a technology enabled assisted model.

Digital Technology Services (DiGiSPICE): DiGiSPICE Technologies is in the business of offering Digital Platforms and solutions for Telcos & Enterprises.


Market Opportunities

Digitals role in our lives has reached new heights, with more people spending significant time performing activities online than ever before. The average internet user spends 6 hours and 43 minutes online each day which equates to more than 100 days of connected time per internet user, per year. Simply put, that means we currently spend more than 40 percent of our waking lives using the internet.

The convergence of new technologies, data penetration and an increase in the number of mobile users are driving the new trends where Video streaming tops the trend chart closely followed by music streaming, social media surfing and online gaming.

Comparing Jan 2019 to Jan 2020:

• The number of people around the world using the internet has grown to 4.54 billion, an increase of 7 percent (298 million new users) compared to January 2019.
• Worldwide, there are 3.80 billion social media users in January 2020, with this number increasing by more than 9 percent (321 million new users) since this time last year.
• Globally, more than 5.19 billion people now use mobile phones, with user numbers up by 2.4 percent (124 million) over the past year.

The global mobile application market size was valued at US$106.27 billion in 2018 and is projected to reach US$407.31 billion by 2026, growing at a CAGR of 18.4% from 2019 to 2026 which offers a huge potential for the growth of OTT apps.

It is being observed that the worlds smartphone users downloaded more than 200 billion mobile apps in 2019, spending a total US$120 billion on apps and app-related purchases over the past 12 months. It also reveals that games account for the greatest share of mobile app downloads and drive 70 percent of worldwide consumer spend on mobile apps.

As per the latest data, Ericsson suggests that the worlds mobile internet users will consume more than half a trillion gigabytes of mobile data during 2020, with roughly two-thirds of that being used to stream and download video content. The next decade of digitization will look markedly different and industry will need to be well prepared to take advantage of the sweeping transformation taking place in consumer lives, enterprises and the broader economy.

Key Focus

Platform and Solutions which enable digital enterprise and transformation remains the key focus area for the organization.

DIGISPICE emphasizes on cpaaS, a cloud-based communication platform as a Service delivery model for its enterprise customer to seamlessly integrate with their own and third party applications and enable them to add real-time communication capabilities such as SMS, Voice, Video, email, WhatsApp, RCS, Facebook Messenger and Chat Applications, without building backend infrastructure and interfaces.

As an innovation-led company, our focus is on offering a Communication Platform to enterprises to provide personalized, contextualized and conversational communication to our customers across the complete customer lifecycle, through our inbuild business intelligence and analytics system. Our in-depth knowledge of digital domains, acute technical insight, customer-first approach and agile service delivery has helped us achieve a leading position in the digital industry.

Digital solutions remain as the key focus area for the organization. As an innovation-led company, our focus is on offering personalized and end to end solutions to the customer from Video / music Apps to Live Streaming and from Digital marketing to multiplayer gaming Services backed by in-house state of the art analytical platform.

1) Geographical Focus

• From geographical perspective in our existing business, Africa still is our focus area. With the digital advent, like everywhere, we have seen revenue shift in Africa too (Legacy to Digital Services). However, App revenues in Africa have grown in accordance of the trends and have grown by more than 200% from FY19 to FY21. We also continue to focus in India, Indonesia, Nepal and Bangladesh for launching our digital services.

2) Product Focus

• We continue to focus on our Multi-Channel Content Service Suite which offers white-label product & services to Telcos, enabling delivery of wide range of voice, video and Rich media content across genres such as music streaming, karaoke, video, games and other multimedia content.

• We are also very excited on Super App for Telecom Operators. A one-stop platform for telecom subscriber, which not only offer convenient customer care features but also offers the best of web experience to telecom customers through a curated set of apps & services for all their mobile application needs. Super app bundles together bill payments, customer service, entertainment, loyalty, marketplaces, travel, food, loans and many more services.

• Digital SDP "Horizon"- A unified digital service delivery platform, that enables 360-degree view of customers life cycle for telecom operators which helps in reducing customer churn, ensure revenue growth and streamline personalization through data science models. It encompasses content management module and Subscriber life cycle management module with strong marketing & promotion capabilities in form of personalized & segmented campaigns to users. Horizon helps from Customer Acquisition to consumption and finally retention.


Market Opportunities

Spice Money is an integral part of the Indian Fintech industry, which has been continually working towards making banking services more simplistic and people-friendly around the world by penetrating into regions where banking infrastructure was not very prevalent. Spice Money has connected Bharat to India since its inception.

By leveraging on the three main pillars of the Indian payment stack "JAM", Fintech has constructed a positive infrastructure around financial inclusion for Rural and Semi-Urban India by advancing financial solutions to people through Jan Dhan accounts, Aadhaar and Mobile technology (JAM) developed by governmental agencies.

Although India has seen an exponential rise in the number of bank accounts, there hasnt been a relative growth in the number of ATMs. To bridge this Gap, Spice Money is using the AEPS (Aadhaar enabled payment system) and mATM (Mini ATM) infrastructure of Banks/ NPCI/UIDAI, to enable last mile kirana stores & other small format stores to provide basic banking services such as Cash in and Cash out in Rural and Semi urban India.

With AEPSs growth alone being a staggering 4x from 2018 to 2020 (27,000 crores in FYI8 to 1,18,000 crores in FY20) [Source: NPCI website], AEPS growth in terms of CAGR is (including estimated) at 253% in terms of transaction, and 264% in terms of value.

Key focus

• Spice Moneys vision has been to create a firm digital infrastructure in India by empowering the countrys rural and semi-urban regions with the largest digital services platform.
• By leveraging the rise of mobile internet in the country, Spice Money took its first step in this direction by transforming your next door kirana store into a hub for digital banking services, and by making it accessible to everyone.
• Establishing itself as a leading player in the fast growing AEPS product, Spice Money is now launching multiple products with the objective of offering most services to a rural citizen within the village.
• Spice Money is now all set to launch a wide range of products in this space which will allow the rural citizens of India to access several digital services in remote villages.

Spice Money holds the following licenses and approvals:

Licenses Regulator Licenses Utility
PPI RBI It enables the opening of a semi-closed wallet of any customer to do the financial transaction within the specified limits.
Bharat Bill Payment RBI & NPCI It enables entities to hook on the BBPS platform as a customer operating unit or as a Biller operating unit to facilitate the Bill Payments.
IRCTC Principle Agency IRCTC It enables the appointment of Indian Railways Ticket booking counters anywhere in India.
GSP GSTN Central Government Entity It enables the enterprises to file their GST returns connectivity with GSP through
AUA/ KUA UIDAI Enables Aadhaar based KYC. This is under suspension by UIDAI due to the Supreme Court Order. However, Spice is in the process of becoming AUA/KUA through NPCI.
Corporate Agency license IRDA To provide Insurance cover to individuals/property/ organisations in General, Health and life segments.

Our key partners who we serve potentially cover 1 billion citizens in India :

Public and Private sector banks: Provide sound financial banking services conveniently.
Insurance companies: Penetration in rural areas and meeting our financial inclusion goals.
NBFCs: Enabling credit products in rural India.
Utility service providers: Facilitates easy online bill payments.
Telecom operators: Provides telecom services like top-ups.
Multiple enterprise categories like Microfinance NBFCs, Logistics, Banks etc: enabling hyperlocal and digital collections.

Business Performance & Outlook


Consolidated revenue for the financial year 2019-20 is Rs. 407.18 Cr as against Rs. 376.68 Cr in FY 2018-19. These revenues represent revenues from continuing businesses.

Companys Net loss for the year is Rs. 55.71 Cr. after providing a provision of Rs. 44.47 Cr on receivables (including Rs 36.07 Cr of receivable due from a customer under a long-term contract, the payment of which was linked to certain milestones) vis-a-vis profit of Rs 9.08 Cr. in the previous financial year 2018-19.

The profit for the year includes a loss of Rs. 0.39 Cr pertaining to discontinued business as against a loss of Rs 0.09 Cr in year 2018-19.

Apart from the provisions already made considering the impact of Covid 19 on the receivables position of the Company, the Management believes that there may not be any further significant impact of Covid 19 on the financial position and performance of the Company, in the long-term. The Company estimates to recover the carrying amount of all its assets including receivables and loans in the ordinary course of business, based on information available on current economic conditions. These estimates may change and be affected by the severity and duration of pandemic. The Company is continuously monitoring any material change in future economic conditions.


Over the last 30 months, we have on boarded retail entrepreneurs as m-ATMs. We refer to the entrepreneurs on-boarded as Spice Money Adhikaris (SMA)

• Registered customer service points have a towering CAGR of 96% in the last three yrs.
• Spice Money has served over 50 million loyal customers (as of March 2020) with approx two-third of them being repeat customers every month.
• By the end of FYI9, Spice Money launched Mini ATM (mATM) that allows customers to dispense cash at their nearest kirana store and the product has scaled and contributed a Gross Transaction Value in excess of Rs 2,700 cr during FY20.
• Spice Money is in the process of enabling microservices and Open API architecture - based digital technology platform.
• Enabled advanced product categories in financial services like Enterprise collection services, Insurance and Credit.
• Provides high-function services in non-financial domains.
• Our growing CSP network is a benchmark of their growing trust in Spice Money, which is also evident from the increase in GTV at CAGR of 91% in the last three years.

*In Cr (GTV)





Period Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4
GTV 1,542 1,557 1,482 1,721 1,975 2,568 4,278 5,574 7,480 8,661 9,393 10,696

Financial Performance:

Companys financial performance for fintech segment (Spice Money) is as follows:

(Rs. in lakhs)

Particulars March 20 March 19
Revenue 25,023 14,006
Profit/ (loss) before tax & interest 79 (629)

Financial Ratios

Key Ratios Units FY 2020 FY 2019 YOY %
Debtor Turnover Times 2.16 3.00 28%
Interest Coverage Ratio (1) Times -4.12 1.26 427%
Current ratio Times 1.61 1.60 -1%
Debt Equity Ratio Times 0.06 0.08 15%
Operating Profit Margin (%) (2) % -8% 1% 10%
Net Profit Margin (%) (3) % -9% 4% 13%
Return on Net worth (4) % -5% 2% 7%

1) Interest coverage Ratio : - Finance Cost/ EBIT (Earning before Interest, tax and exceptional items)

2) Operating profit Margin : EBIT/Revenue

3) Net Profit Margin : Net profit before exceptional items/ Revenue

4) Return on Net worth : Net profits before exceptional items/Equity

Key Ratios Units FY 2020 FY 2019 YOY %
Debtor Turnover Times 6.77 6.80 0%
Interest Coverage Ratio (1) Times -0.48 6.04 108%
Current ratio Times 1.08 1.41 23%
Debt Equity Ratio Times 0.11 0.19 43%
Operating Profit Margin (%) (2) % 0% 4% 5%
Net Profit Margin (%) (3) % -2% 2% 5%
Return on Net worth (4) % -4% 3% 7%

1) Interest coverage Ratio : - Finance Cost/ EBIT (Earning before Interest, tax and exceptional items)

2) Operating profit Margin : EBIT/Revenue

3) Net Profit Margin : Net profit from continuing operations before exceptional items/ Revenue

4) Return on Net worth : Net profits before exceptional items/(Equity including minority interest)

Internal Control Systems & Their Adequacy

The Company has a strong internal control systems commensurate to its size and scale of operations. The systems ensure efficiency, reliability, completeness of accounting records and preparation of reliable financial and management information. It also ensures compliances of all applicable laws and regulations and protection of the Companys assets. Company continue to work on using technologies to build better internal control systems. The Company has well defined and detailed procedures covering the activities of planning, review, risk management, investment etc.

The Company has appointed internal auditors to ensure that the internal control processes are evaluated for adherence and submit their reports directly to the Audit Committee with management responses, with special focus on key controls identified as part of IFC process and their continued relevance & effectiveness.

The companys focus on Governance is very high and continuous efforts are made to improve standards of Governance within the Company and at the Board level.

Material developments in Human Resources

‘Right people on the bus and wrong people off the bus has been the philosophy of the Company to ensure that the Company always has the right talent for the industry it is in. Recruiting and nurturing the best talent has always been a top priority and will continue to be the same for the organization. The Company continuously invests in the employees development of future leaders and having a robust succession plan at senior levels.

At the same time, the organization has also made the reporting structure and organization flat to support faster decision making and rapid growth. The best leaders have been assigned bigger roles with more responsibilities and a lot of emphasis and importance is given to continuous training and development of resources.

With more focus on innovation, we have also set up the transformation office where all innovative and transformative work happens. There were 690 employees in the Company including its subsidiaries as of 31st March 2020.

Health and safety measures

The Company continues to focus on the health and safety of its staff. It adheres to all necessary safety measures to prevent any untoward incidents and are very conscious of the overall well-being and health of its employees. We have also invested in Group Mediclaim and Accidental Insurance for the employees. Apart from physical well-being, we do consider mental hygiene an important factor making Yoga and meditation a crucial part of our training program too.

Risk Factors

The Companys business is subject to various certain generic and industry specific risks including those specified below:


infrastructure Pipe or customer value management: Telcos are facing dilemma on investing heavily on customer value management in competition with OTT player or provide services as infrastructure pipe, has brought in significant uncertainties.
Traditional VAS Revenue Declining: With the drive towards digitalisation and new technologies like 4G and 5G, ecosystem has posed uncertainties in terms of behaviours of subscribers.
Money repatriation from international Markets: Currency Devaluation Repatriation restrictions to India has resulted in long delays to get account receivables thus resulting in low cash flow at corporate level. The pandemic too has enhanced the delay, resulting in delay on repatriation of funds.
customer acquisition: CPaaS ecosystem continue to be relationship based and new customer acquisition cost are significantly high.
pandemic covid -19: In view of spread of Covidl9 epidemic, customers have been facing business uncertainties and stress over cash flows of our customers and this could adversely affect the companys ability to recover its account receivable from such customers.

spice money

The business of Spice Money involves Companys technology platform to which all the agents of Spice Money connect remotely to conduct many financial transactions and as such is inherently vulnerable to any IT/financial risks associated with banking systems in general and in particular the following specific risks also;

regulatory: Since the business is operated under licenses given by RBI, UIDAI, IRCTC, GSTN and Banks under the Banking Correspondence arrangement and are subject to the Rules & Regulations of Reserve Bank of India, any regulatory changes involving introduction and/or modifying existing rules governing, or new compliance requirements etc. may have an impact on the business.
Technological: The implementation of technology has certain inherent risks due to software and network driven concerns like data security, data access, firewall penetration and several others.
financial: Large numbers of financial transactions are often exposed to risks such as cyber fraud, although they are safeguarded through insurance, KYC norms and standardised processes.

cautionary statement

Statements in this report on Management Discussion and Analysis describing the Companys objectives, outlook, estimates, expectations, predictions, belief and management perceptions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to Companys operations include economic conditions in the market in which the Company operates, changes in the Government Regulations, Tax Laws and other statutory and incidental factors.

The Company assumes no responsibility in respect of the forward-looking statements herein which may undergo changes in future based on subsequent developments, information or events.