Ashish Rai on NDTV Profit The Small & Midcap with Mahima Vachhrajani

Something that we are going to focus today on the small and mid cap show is OrientPro. Well, the company has approved acquisition of majority stake in Aria AI. Well, the cost of acquisition is around 135 crores and the stake that they're acquiring is around 67%. Now to discuss more about this acquisition and the business outlook for OrientPro, we have with us Mr. Ashish Rai, CEO of OrientPro Solutions, who joins us now. Welcome to the show, sir.

Hi, thank you. Thanks for having me.

Yeah. So Mr. Rai, my first question to you is that, you know you've acquired 67% in ARIA AI. Now I want to understand what kind of synergies are you expecting out of this particular acquisition?

Yeah, thanks Maima. So look, we've been for the last few years building out a global products and platforms player. Right. We've been reasonably successful so far. We're trusted by some of the largest banks and insurers across the globe in terms of the enterprise software offerings that we built up over time. As you see the world, the technology world at least is going through probably one of the most fundamental platform shifts that we've seen in a generation, maybe since the Internet or the coming of the mobile as well. It's a very major shift. We believe it is very relevant for our clients as well as the industry in general for us to really bring together a mature enterprise AI capability that comes through aria. ARIA AI. If you look back, I think there's obviously a lot of noise around foundation models and lot of success with foundation models that's come in. But bulk of value creation in the enterprise happens around the business workflows that our mission critical apps support. Right. So we bring together a highly mature enterprise AI framework, Enterprise AI offering and platform that ARIA AI has built up for banks and insurers. They're actually trusted by probably 100 plus banks and insurers across Asia. We bring that together with Orient Pro's enterprise application stack and we create the next generation of offerings for banks and insurers who trust us. So that's essentially what we are bringing together.

And Mr. Rai, so I want to understand that, you know, I was checking. The revenues for Aria AI have doubled over the past three years from 3 crores to 8 crores to now 20 crores almost. So do you see that this trajectory will be maintained? Do you see that the revenues will double by the end of FY25 as well?

Yeah, look, we feel very, very strongly about the potential for both our organizations coming together. And you put together probably one of the Most mature enterprise applications, enterprise software team in this part of the world in Asia, together with one of the, one of the sharpest AIML enterprise AIML teams together. We believe the potential is immense. We do expect ARIA to continue to grow because it's actually the 3x growth that the trajectory that they've been on the last couple of years. I believe that's reflective of the demand and there is a significant amount of untapped demand for, for a mature offering in the financial industry in the enterprise AI space. So I think we'll continue to do that. I believe there is a significantly larger opportunity we can tap in by both of us working together in terms of creating the next generation of offerings. So yeah, I mean that's from a longer term standpoint, enterprise AI is a trillion dollar opportunity. I think across banking and financial sector is one of the biggest spenders on tech. We are moving through one of the most fundamental shifts in the industry. So I believe we work together in terms of tapping into that demand. Time will tell how much and to what extent we can tap into it.

Understood. So going forward, let's say by, in a long term perspective, by FY25 or by the end of FY26, how much contribution from your total revenue do you expect out of this particular acquisition?

Yeah, look, I think it would be very hard to give out. We don't give out forward guidance that long, Maima, so I would sort of stay away from that question longer term. So Arian Pro side growing at 30 to 35% for the last several years. That side will keep growing. ARIA has been going 3x or so, it will keep growing. Right, so we don't give out forward guidances that way out.

Okay, so now I also want to understand that, you know, you recently raised a QIP of around you know, 377crore. So I believe that the 135crore that you're going to pay for this particular acquisition will be used from that qip. So the remaining amount, if you can elaborate on where this amount will be used, will it be used for further acquisitions? What are the plans with the fundraise?

Okay, yeah. So thanks Maima. So over the last couple of months we've actually done a preferential for about 200 crores and the QIP for 370. So we raised about 570 crores with a set of investors who are aligned to the vision of building out global products and platforms player that all employees building routers. We had a lot of marquee investors investing with us a Part of the proceeds obviously goes to M and A and we'll continue to sort of do that. But as an organization, you know, we've essentially been organically growing very strongly. A lot of the capital would go into funding the organic growth. We've expanded quite significantly. I think from a year back. Just the staff strength has gone up almost, I would say 50, 55%. The order book is very strong and we need to execute against it. So a lot of the capital would go into just for keeping the organic growth trajectory on. And then we'll continue to selectively do M and A where it makes sense in our strategic blueprint. So over the last, I would say six months, this is the third acquisition that we've done in very, very specifically targeted towards a gap we had in the strategic blueprint that we are serious about, about doing it right. So there is always a build versus buy choice when we're going after, you know, a very defined strategy that we have in terms of focusing on the select segments that we have. Right. So. So we'll continue to do that. So I suppose, you know, there'll always be some level of capital that will go into M and A and the rest of it goes into the organic growth needs of the enterprise.

Understood. Well, Mr. Rai, thank you so much for taking our time and speaking with us at NDTV Profit. We'll speak to you once the number for Q4 and FY24 come out.