Not National, But Facing Regional Competition: BLS E-services’ Lokanath Panda  

As India’s payments and banking infrastructure rides on a digitisation stack, courtesy the UPI and Aadhaar, more conventional financial services are being offered digitally to enable financial inclusion. BLS e-services, a subsidiary of BLS International, is one such company that offers technology-enabled digital services in India, encompassing business correspondent services and e-government services. BLS E-services accounts for the largest share (20 per cent) of the business correspondence services sought by the State Bank of India.  

In an exclusive conversation with Outlook Business, BLS E-services’ Chief Operating Officer Lokanath Panda shares the company’s plans to grow organically and inorganically, opportunities lying ahead and challenges it faces as it grows across various business segments. 

Edited excerpts: 

It’s been six months since the public listing. How does BLS E-services look to grow from here on? 

As a business facilitator, we source loans and deposits for private banks. This business is likely to grow fast in the coming years. Under this, we help private banks by providing them with leads from retail (individuals) and small & medium businesses, in both urban and rural places, who are looking for agricultural and commercial loans. 

In the later part of FY24, we also started a new business segment called doorstep banking in alliance with the public sector banks. We have already engaged with 40,000 customers across 25 states in 2,300 pin codes. We expect to service 10,000 pin codes by FY25 end. 

We are also tying up with a lot of insurance companies to source policies for them. 

What is the company’s strategy for acquisitions? 

We are looking for synergetic businesses that will help the company grow further in the areas that it is already doing business in. We are looking for businesses across insurance, loan disbursement and business correspondence domains.  

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Have you set some criteria for these candidates? 

They must be profit-earning companies. As a company, we are focused on revenue and profit. We would prefer the companies we acquire to contribute straightaway to the group’s profit from day 1. 

How do you see competition in this space with a lot of players entering the business correspondence landscape? 

Due to the scale at which we operate and the multiple domains we have our presence in, we do not see direct competition at a national level. However, we might be doing some things very well in certain states, but in some states, we do face some competition at a regional level. However, with the kind of M&A (merger and acquisition) activities we plan, we expect consolidation to happen in that space. 

What are the biggest challenges that you need to address at BLS E-services? 

In this business, there are two principal issues we face. Firstly, we see a huge gap in skills. To be able to scale the activities, we need to continuously train people in debt recovery and compliance needs. This remains to be a big challenge. 

Another problem is infrastructure. The work we do involves us dealing in far-flung locations across the country. But we are addressing this by getting more services from banks and providing multiple types of devices. 

Lastly, the company saw a significant dip in profitability in the quarter preceding the listing. Has that impaired the company’s forward outlook? 

That happened because a major contract with the Punjab state government ended in the previous quarter. Recently, we were awarded a new contract. The business pipeline looks good now.