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Onelife Capital Advisors Ltd Management Discussions

16.35
(-1.86%)
Jul 11, 2024|12:00:00 AM

Onelife Capital Advisors Ltd Share Price Management Discussions

World and Indian Economy Overview

With the COVID-19 outbreak and Russias invasion of Ukraine, among other negative shocks that have affected the world economy over the previous three years, the situation is once again quite unclear. Financial markets have been shaken by the unexpected global economic failures of two specialized regional banks in the United States in mid-March 2023 and the loss of confidence in Credit Suisse, a major international bank. Depositors and investors have reconsidered the security of their holdings and have moved away from institutions and investments that they perceive to be vulnerable.

According to the IMFs most recent assessment of the "World Economic Outlook," growth will drop from 3.4% in 2022 to 2.8% in 2023 before leveling off at 3% in 2024. A particularly strong economic deceleration, from 2.7% in 2022 to 1.3% in 2023, is predicted for advanced economies. In a conceivable alternate scenario, the financial system continues to be stressed, resulting in a reduction in advanced economies growth below 1% and a worldwide growth rate of roughly 2.5% in 2023. On the back of decreasing commodity prices, global headline inflation in the baseline is predicted to decline from 8.7% in 2022 to 7% in 2023; however, underlying (core) inflation is predicted to decline more slowly. In most circumstances, the restoration of inflation to target is unlikely to occur until 2025. In spite of quick monetary tightening, inflation is proving to be persistent in many important economies, especially due to the robustness of labor markets in the face of a critical labor shortage. As a result, the majority of 2023 is likely to see monetary policy stay restrictive. This will slow down economic growth and probably raise unemployment rates across the board, but especially in the US and Europe.

Retail inflation in India, as measured by the Consumer Price Index, reached an eight-year high in April 2022 and persistently above the RBIs upper tolerance limit of 6.0% throughout a sizable portion of the year. The RBIs Monetary Policy Committee (MPC) unanimously decided to raise the repo rate by 40 basis points at an offcycle meeting in May 2022. Additional rate increases followed, leading to the sixth continuous rate increase since May 2022. During the fiscal year 2023 as a whole, the repo rate increased by 250 basis points, reaching a level of 6.5%. The reverse repo rate, meanwhile, stayed the same at 3.35%. As a result, in March 2023, retail inflation reached a 15-month low of 5.66%. The MPC reaffirmed its commitment to a gradual reduction of accommodating measures in April 2023 while maintaining the repo rate at 6.5 percent. The base effect contributed in part to the double-digit rise of 13.1% in Indias GDP during Q1FY2023. Due to rising inflation and poor demand, growth slowed down in Q2FY2023 and Q3FY2023, hitting 6.2% and 4.5%, respectively. Growth returned to 6.1% in Q4FY2023, raising the overall growth rate for the fiscal year to 7.2%. In FY2023, India will still be among the top economies with the strongest growth rates worldwide. Due to slowdown in domestic consumption and other external challenges, Indias GDP forecast for FY2024 was reduced by the International Monetary Fund (IMF) from 6.1% to 5.9%.

Indias growth estimate for FY2025 was also lowered by the IMF by 50 basis points to 6.3%. India will continue to be one of the worlds fastest-growing major economies notwithstanding these negative revisions. Due to solid macroeconomic fundamentals, the Indian economy has shown extraordinary resilience in the face of the worsening global scenario. India has become a desirable location for foreign investors thanks to measures to encourage ease of doing business, skilled labor, and the abundance of natural resources, as well as open FDI rules, a sizable domestic market, and expectations for robust GDP development. India is therefore anticipated to experience relatively faster growth in the future.

Financial Services Industry

India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises:

1. Commercial banks 2. Insurance companies

3. Non-banking financial companies 4. Co-operatives, pension funds 5. Mutual funds and 6. Other smaller financial entities

The Government has initiated various policies and schemes that are favorable for the growth of the financial service sector. The Government and RBI combined have launched the Credit Guarantee Fund Scheme for MSMEs by issuing guideline to banks regarding collateral requirements. It also introduced measures for setting up a Micro Units Development and Refinance Agency (MUDRA).

The financial services sector has proven over the last two years that it is capable of navigating unheard-of levels of instability. Financial services companies all around the world, from real estate to insurance to investment management to banking and capital markets, confronted the pandemic with amazing endurance and adaptability, assisting individuals, groups, and governments in getting back on their feet.

But the ascent continues to be upward. The Ukrainian conflict, inflation, supply-chain disruptions, and the potential for a regional or global recession are all recent geopolitical and economic challenges. However, 2023 also promises to be a year in which more regulations and requirements around transparency become market realities.

Non-Banking Financial Industry

According to a recent research from CRISIL, NBFCs are anticipated to see their AUM increase 11 12% this fiscal year, reaching a four-year high of Rs 13 lakh crore. It is also encouraging to note that the RBI and policymakers acknowledge the role that NBFCs play in fostering genuine economic activity and satisfying credit demand, particularly for the unbanked. Another encouraging development for the sector is the latest RBI Scale-based regulations, which will boost NBFCs standing to parity with other public sector NBFCs. We anticipate gaining additional operational flexibility under these new regulations to accommodate the rising credit demand and support Indias economic expansion.

In 2023, non-bank lenders will concentrate on restoring growth by improving asset quality supported by rising retail demand and liquidity, according to a recent analysis by ICRA. The MSME sector and other growing sectors will see more participation from NBFCs as part of the same. Additionally, more NBFCs will start investigating AI and machine learning for services or full-fledged applications when 5G services are introduced in the nation.

Its critical to overcome the major difficulties the NBFC sector is currently experiencing if development is to continue in 2023. The recent change of the RBIs securitization regulations, which say that loans with residual maturities of fewer than 365 days cannot be securitized, is one of these difficulties. Due to the shorter period of gold loans and MFI loans, we do believe that this may have an effect on the amount of securitization.

INDUSTRY OVERVIEW- COMPANY PERFORMANCE

The expertise of Onelife Capital Advisors Limited (OCAL) lies in identifying opportunities for growth and channeling investments, talents, customers and implement systems and processes to achieve the end objectives. To aid such businesses, your Company has developed industry specific software to gain depth and control over the business modules with systems and procedures to enhance customers journey, improve transparency and generate crucial buyer growth.

During the year, Onelife Capital Advisors Limited was in the process of developing and exploring the opportunities in the Broking services, E-commerce and Information technology (IT) Services. For gaining expertise in the IT sector, the Company has increased the employees in the IT team and trying to retain employees with maximum talent which will strive the company to grow in the IT, Artificial Intelligence (AI) and Data Science sectors. The Company is planning to diversify the business and increase the scope of growth of the Company as it has started growing in sectors of Financial Services after making the strategic investments in Dealmoney Group companies. The strategic objective is to build sustainable organizations that remain relevant to the agenda of the clients, while creating growth opportunities for the employees and generating profitable returns for the investors. Many of the businesses where we are operating and intend to operate are highly regulated. Hence, all our final management decision will be based on regulator and market growth considerations based on our business strengths.

The Onelife Capital Advisors Limited (OCAL) has developed many software during the past few years. Some of them are under the testing stages and few software are ready to use. The Company is using some of these software for testing purposes in its group companies. The highlights of some of the developed software are as under:

The Holding Company has developed many software and plans to market them under the common brand named “Ready” signifying the business readiness of our software and has a impressive portfolio of software developed in the Financial Services, Healthcare, Automobiles, Real Estate, Inventory Modules, Human Resources Management System, Franchise/Partner Management System, Lead and Marketing Management System.

The Broking software gives entire details about the back office operations, online e-KYC, investment in Mutual Funds and online/offline insurance and its premium comparison with different insurance companies. It gives details about the upcoming IPOs. The software also generates research reports of all the leading companies from different industries, and advice about the different products of the financial market. The company also gives advice for the loan syndication with the different banks/financial institutions and NBFCs.

The Healthcare software is named “Ready HMS”. This software gives entire details from the entry of the patients till he gets discharged from the hospital. It provides entire information about the patients, consumptions of the medicines, investigation reports, and visits of the doctors. It helps in providing details of TPA patients insurance company wise, age wise, etc. The software provides the online consultation with doctors, delivery of the medicines pan India basis, maintaining of the inventory at pharmacy and hospital consumables.

Automobile Software deals with Aggregator model, Dealer Model, Spare part Model and Garage Model. In brief one can engage with different dealers, garages and shops of the automobiles parts across India.

The Company has also developed software relating to Human Resources, processing of attendance, salaries and other different mandatory government records relating to staff.

The Real Estate modules gives the entire details builder wise, area wise, city wise, budget wise, property available, on sale and rental basis.

Partner Management System, Lead Management System and Marketing Management System, these software are generally used by the Financial Service segment, the broking franchises, and their sub-brokers. By use of LMS, the Company can track lead status and its conversion into the final business.

Moreover, the Companys Subsidiary namely Dealmoney Commodities Private Limited has received approval for merging with Dealmoney Securities Private Limited from the National Company Law Tribunal.

Hence, Dealmoney Securities Private Limited becomes the direct subsidiary Company of Onelife Capital Advisors Limited thus adding the richness of broking business and helping the Company to expand the boundaries into other market profiles.

During the FY your Companys standalone income stood at Rs. 570.36 Lakhs. The Company reported a Profit after Tax of Rs. 0.22 Lakhs. The consolidated income has decreased compared to last year from Rs. 648.28 lakhs to Rs. 542.32 Lakhs. With our ongoing strategy to keep growth and investments as the key focus area in place to handle future business, we are hopeful that all our efforts will converge into real value creation for all our stakeholders in the coming times.

The Company has subsidiaries namely “Eyelid Infrastructure Private Limited”, “Dealmoney Insurance Broking Private Limited”, “Dealmoney Distribution And Advisory Services Private Limited”, “Dealmoney Commodities Private Limited”, “Dealmoney Financial Services Private Limited”, and “Sarsan Securities Private Limited”.

The above subsidiary companies are engaged in the business of broking of shares, commodities and currencies. The companies are also engaged in the insurance business, both life and general (mediclaim and other non life insurance), investment in Mutual funds, advisory business. Sarsan Securities Private Limited is a NBFC and the company is exploring and trying to expand new opportunities in the NBFC sectors.

The fast pace of technology change and the need for technology professionals who are highly skilled in both traditional and digital technology areas are driving businesses to rely on third parties to realize their business transformation. Several new technology solution and service providers have emerged over the years, offering different models for clients to consume their solution and service offerings, such as data analytics companies, software-as-a-service businesses, cloud platform providers, digital design boutiques, and specialty business process management firms.

The Company is expanding in the IT sector knowing the importance of technology in the current scenario. The Company is in the process of development and upgradation of applications/softwares and exploring new ideas in the software development sector. Fresh and young minds are hired for the Company into the IT department to explore innovative and unsullied developments.

Internal Control Systems and Their Adequacy:

The Company has an Internal Control System commensurate with its requirement and size of business to ensure that the assets and interest of the Company assets are safeguarded. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid down system and policies are comprehensively and frequently monitored by your Companys management at all the levels of the originations. The Company has established well defined policies and process across the originations covering all major activities including authority for approvals in all cases where monetary decisions are involved, various limits and authorities are in place.

The Audit Committee of the Board of Directors review the Existing audit procedures and internal systems of control on an ongoing basis keeping in mind the organizations requirements, growth prospects and ever evolving business environment.

They also review the internal audit findings and recommendations and ensure that corrective measures are implemented.

Risks and Concern:

Risk is an integral part of the business and we aim at delivering superior shareholder value by achieving an appropriate balance between risks and returns. Our senior management identifies and monitors the risks on an ongoing basis and evolves process/ systems to monitor and control the same to contain the risks to minimum levels. Ongoing monitoring by our officials help in identifying risks early. The financial service industry is subject industry is subject to continuously evolving legislative and regulatory environment due to increasing stringent regulatory framework.

Human Resources:

Onelife Capital Advisors Limited is an organization where dynamic and progressive work culture is promoted and actively fosters a challenging work environment and encourages Entrepreneurship. With trust being the critical part of our business belief, we lay a strong emphasis on integrity, teamwork. Our Professional staff with diverse backgrounds brings varied talent, knowledge and experience to the Group, helping our business to remain competitive, achieve greater success and newer milestone.

Investor Relations:

We consider investor relations to be an important aspect of our business as we believe in building transparent and open relationship with our stakeholders. As a listed Company, we are now laying even greater emphasis on our investor relations program to provide our investors, analysts and other stakeholders with a complete and accurate picture of the Companys past and current performance and the prospects and strategies for the future.

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