Decoding BillDesk’s FY22 financials and shareholding pattern

BillDesk remained in the limelight since the announcement of its acquisition by Prosus-owned PayU in August 2021 for $4.7 billion. However, the deal fell through due to some unfulfilled conditions in October last year. The impacts of this deal cancellation would be seen in the numbers of ongoing fiscal, for now let's go through its FY22 financials.

BillDesk’s revenue from operations grew 15% to Rs 2,443 crore during the fiscal year ending March 2022 in contrast to Rs 2,124 crore in FY21, as per its consolidated annual financial statements with the Registrar of Companies (RoC).

BillDesk charges fees on the processing and settlement services of electronic transactions — and collections from these services accounted for around 77% of the total operating revenue. This income grew 17.9% to Rs 1,878.6 crore during the last fiscal. It  also manages loyalty programs for its clients and collection from this vertical increased 8.5% to Rs 258.3 crore in FY22 from Rs 238.2 crore in FY21.

BillDesk also cornered Rs 236 crore from the sale of PINS and e-top up subscriptions and Rs 70 crore from commission, advisory and technical services among others. Besides operating income, it also earned Rs 71 crore via interest and gain on financial assets which helped its total collection to surpass Rs 2,500 crore.

Heading towards expenses, bank fees and service charges turned out to be the single largest cost center for the company, contributing 85.5% to the total expenditure. This cost surged 21.7% to Rs 1,963 crore in FY22 from Rs 1,613 crore in FY21.

Employee benefits expenses inclined 18.8% to Rs 181.2 crore during FY22 while IT infrastructure costs (data, communication, server hosting and other related costs) went up 9.8% to Rs 32.1 crore during the same period.

Unlike other cash burning fintechs, BillDesk spent only Rs 2.7 crore on marketing and sales promotion. In the end, its overall expenditure spiked 22% to Rs 2,295 crore in FY22 as compared to Rs 1,880 crore in FY21.

As the surge in expenses outpaced revenue growth, BillDesk’s profits contracted 39% to Rs 149.6 crore in FY22 from Rs 245.5 crore in FY21. Cash inflows of the company also dipped 63.4% to Rs 39.8 crore during the last fiscal year.

General Atlantic holds a 14.81% stake in BillDesk followed by Wagner Limited and Visa International which own 13.66% and 13.12% shares respectively. Co-founders - M N Srinivasu, Ajay Kaushal and Karthik Ganapathy hold nearly 31% of the cap table.

Further, Claymore Investments (Teamsek), Clearstone Venture and Springfield Venture command 8.87%, 6.68% and 3.42% shares. The complete shareholding pattern of the company can be seen below:

Coming to ratios, EBITDA margin and ROCE weakened by 656 and 554 BPS respectively to 10.22% and 8.82% in FY22. On a unit level, BillDesk spent Re 0.94 to earn a rupee of operating revenue.

The two decades old BillDesk competes with Razorpay which witnessed a 76% growth in scale to Rs 1,481 crore in FY22 with a 19% growth in its profits. Another competitor CCAvenue’s operating revenue surged 91.4% to Rs 1,294 crore while its profits went up 22% to Rs 75.7 crore during the period.

For Billdesk, while the impact of the failed deal on its profitability will be difficult to quantify, there is no doubt that the issue would have been more than just a distraction for senior management. However, as the numbers attest, the firm remains the leader by a distance in its space, and will no doubt look to recover on the margins front this year. However, having come so close to a change of ownership, the existing management is expected to focus on internal operations in a big way, to prevent any more damage from the failed deal. A cooling market for fundraising might also give it the breather it needs to forget about other potential suitors for a while and focus on the knitting.