Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>IPL 2023 concluded recently with record streaming views and TV viewership. This bodes well for the valuation of the IPL Lucknow franchise owned by <a href="https://www.smartkarma.com/entities/rpsg-ventures-limited" target="_blank" data-smartkarma-citation="entities:29022:1" rel="noopener">RPSG Ventures Limited (RPSGVENT IN)</a> ["RPSGV"]. </li>
<li>FMCG business is currently doing a run-rate of INR 400cr+ revenue, however, needs to scale up faster. To drive this, Too Yumm! has entered into a new category, traditional Namkeens.</li>
<li>The Firstsource Solutions business seems to be bottoming out. Operating margin has stabilized in the 11.5-12% range. FY23 revenues de-grew at -1.1% YoY as guided at -1% to -2%.</li>
</ul>


IPL 2023 concluded recently with record streaming views and TV viewership. This bodes well for the valuation of the IPL Lucknow franchise owned by RPSG Ventures Limited (RPSGVENT IN) ["RPSGV"]. 
FMCG business is currently doing a run-rate of INR 400cr+ revenue, however, needs to scale up faster. To drive this, Too Yumm! has entered into a new category, traditional Namkeens.
The Firstsource Solutions business seems to be bottoming out. Operating margin has stabilized in the 11.5-12% range. FY23 revenues de-grew at -1.1% YoY as guided at -1% to -2%.


RPSGV: Record Views of IPL Bodes Well for the Sports Business

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rpsg-ventures-limited" target="_blank" data-smartkarma-citation="entities:29022:1" rel="noopener">RPSG Ventures Limited (RPSGVENT IN)</a> ["RPSGV"] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.</li>
<li>Excluding one-off other income, <a href="https://www.smartkarma.com/entities/firstsource-solutions-ltd" target="_blank" data-smartkarma-citation="entities:3099:1" rel="noopener">Firstsource Solutions (FSOL IN)</a> reported weak Q3FY23 earnings led by sluggish growth and weak margins.</li>
<li>RPSGV remains a deep-value holding company that is trading at a discount of &gt;85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.</li>
</ul>



RPSG Ventures Limited (RPSGVENT IN) ["RPSGV"] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.
Excluding one-off other income, Firstsource Solutions (FSOL IN) reported weak Q3FY23 earnings led by sluggish growth and weak margins.
RPSGV remains a deep-value holding company that is trading at a discount of &gt;85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.


RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand

<ul>
<li>Key highlight of RPSG Ventures' (RPSGV) Q2FY23 results was the FMCG business which reported revenues of INR 125cr, suggesting an annualized run-rate of INR 500cr vs INR 430cr QoQ.</li>
<li>RPSGV is doing all the right things to scale up its FMCG business. Its Sports venture also holds lot of promise.</li>
<li>RPSGV's Venture Capital (VC) Fund that focuses on investing in D2C startups made a lucrative exit in one of its investments which generated 7x MOIC in just 4 years.</li>
</ul>


Key highlight of RPSG Ventures' (RPSGV) Q2FY23 results was the FMCG business which reported revenues of INR 125cr, suggesting an annualized run-rate of INR 500cr vs INR 430cr QoQ.
RPSGV is doing all the right things to scale up its FMCG business. Its Sports venture also holds lot of promise.
RPSGV's Venture Capital (VC) Fund that focuses on investing in D2C startups made a lucrative exit in one of its investments which generated 7x MOIC in just 4 years.


RPSG Ventures: FMCG Business Is Scaling Up; VC Business Is Germinating to the Next-Level

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rpsg-ventures-limited" target="_blank" data-smartkarma-citation="entities:29022:1" rel="noopener">RPSG Ventures Limited (RPSGVENT IN)</a> ["RPSGV"] is scaling up its FMCG and Sports business via Its Too Yumm! and Naturali brands in FMCG and IPL franchise in Sports.</li>
<li>Within Too Yumm!, RPSGV is now entering into the Indian Namkeens category - the largest category in salty snacks in India.</li>
<li>Within Sports, RPSGV's IPL franchise representing Lucknow, capital city of the India's largest state, Uttar Pradesh that comprises 15%+ of India's population, holds lot of promise to scale up. </li>
</ul>



RPSG Ventures Limited (RPSGVENT IN) ["RPSGV"] is scaling up its FMCG and Sports business via Its Too Yumm! and Naturali brands in FMCG and IPL franchise in Sports.
Within Too Yumm!, RPSGV is now entering into the Indian Namkeens category - the largest category in salty snacks in India.
Within Sports, RPSGV's IPL franchise representing Lucknow, capital city of the India's largest state, Uttar Pradesh that comprises 15%+ of India's population, holds lot of promise to scale up. 


RPSG Ventures: FMCG and Sports Business Have Significant Potential to Scale Up

<ul>
<li>We had highlighted in our prior note that IPL Media Rights for next 5Y (2023-27) could fetch a value of over INR 40,000cr.</li>
<li>The bidding concluded recently. Total value of IPL Media Rights came in at INR 48,390cr, well above the INR 40,000cr expectation and closer to our optimistic scenario of INR 50,000cr.</li>
<li>RPSGV's IPL team will receive INR 480cr+ per year from its share in media rights vs INR 300-350cr projected earlier. This improves IRR for RPSGV's investment in IPL team substantially. </li>
</ul>


We had highlighted in our prior note that IPL Media Rights for next 5Y (2023-27) could fetch a value of over INR 40,000cr.
The bidding concluded recently. Total value of IPL Media Rights came in at INR 48,390cr, well above the INR 40,000cr expectation and closer to our optimistic scenario of INR 50,000cr.
RPSGV's IPL team will receive INR 480cr+ per year from its share in media rights vs INR 300-350cr projected earlier. This improves IRR for RPSGV's investment in IPL team substantially. 


RPSG Ventures: IPL Media Rights Auction Update

India

RPSG Ventures Limited operates as a venture capital investment company. The Company focuses on information technology, business process outsourcing, real estate, and entertainment sectors. CESC Ventures serves customers in India.

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RPSG Ventures Limited (RPSGVENT IN)

RPSGV: Record Views of IPL Bodes Well for the Sports Business

RPSGV is trading at a huge holding company discount of 85%. As its Sports and FMCG business scale up, the discount can narrow significantly. Even...

Ankit Agrawal, CFA

RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand

RPSGV is trading at a deep holding company discount of >85%. Even if this discount narrows to 70%, the stock can double. Its FMCG and Sports...

Ankit Agrawal, CFA

RPSG Ventures: FMCG Business Is Scaling Up; VC Business Is Germinating to the Next-Level

RPSGV has made great strides in three large-TAM businesses - FMCG, Sports and VC. It has proven its mettle in all three businesses and is now at an...

Ankit Agrawal, CFA

RPSG Ventures: FMCG and Sports Business Have Significant Potential to Scale Up

RPSGV is available at a holdco discount of >80%. Its FMCG and Sports businesses has potential to scale up significantly.

Ankit Agrawal, CFA

RPSG Ventures: IPL Media Rights Auction Update

Strong bidding for IPL Media Rights has further validated our thesis on RPSGV. Now our thesis on RPSGV not just hinges on the FMCG business, but is...

Ankit Agrawal, CFA

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