About Rosmerta Digital Services Limited

Rosmerta Digital Services Limited, a subsidiary of Rosmerta Technologies Limited (“RTL”), has been engaged in providing digitally enabled services and digitally enabled channel sales of automotive component & accessories. The company initially offered vehicle registration services to Original Equipment Manufacturers (OEMs) and has since diversified into a comprehensive range of services, including garage services, last-mile delivery service, selling of automotive components and accessories, etc. The Company benefits from the extensive expertise of its Corporate Promoter, which was founded in 2006 in transport services and road safety in India, they leverage a robust infrastructure in the automobile industry.

Rosmerta Technologies Limited (RTL) and its wholly owned subsidiaries boast over 3,254 employees across pan India. The Banker of the company is ICICI Bank Limited.

E-SERVICES INDUSTRY
E-services, or electronic services, involve using Information and Communication Technologies (ICTs) to perform various tasks across different domains. These services leverage the power of the internet and digital technologies to provide efficient, accessible, and convenient solutions to users. The application of e-services spans multiple areas, including banking, governance, retail, healthcare, compliance and more.

Indian Scenario E-Governance
India stands as a testament to the transformative power of digital services, with over 900 million internet subscribers making it one of the largest and fastest-growing markets for digital consumers. The Indian government has launched numerous initiatives to promote e-services, contributing to significant advancements in various sectors.

Over the years, both State Governments and Central Ministries in India have launched numerous eGovernance initiatives to enhance public service delivery. Initially focusing on computerizing government departments, these efforts have evolved to emphasize citizen-centricity, service orientation, and transparency.

The National e-Governance Plan (NeGP), focused on transforming government through technology and driving electronic delivery of services, includes 31 projects consisting of education, health, banking,  jurisdiction, agriculture etc. The ultimate vision of the NeGP plan is to make public services more accessible to citizens near their locality at affordable costs.

A research shows exponential growth in e-governance adoption in India, driven by digital payments and UIDAI, key elements of the Jan Dhan-Aadhaar-Mobile (JAM) trinity. Social benefit transfers via Direct Benefit Transfer (DBT) have also increased by 192% since 2015, reflecting widespread adoption across major government programs.

Indian Automotive Industry
The Indian automobile industry has historically been a good indicator of how well the economy is doing, as the automobile sector plays a key role in both macroeconomic expansion and technological advancement. The two-wheelers segment dominates the market in terms of volume, owing to a growing middle class and a huge percentage of India’s population being young. Moreover, the growing interest of companies in exploring the rural markets further aided the growth of the sector. The rising logistics and passenger transportation industries are driving up demand for commercial vehicles. Future market growth is anticipated to be fueled by new trends including the electrification of vehicles, particularly three-wheelers and small passenger automobiles.

India enjoys a strong position in the global heavy vehicles market as it is the largest tractor producer, second-largest bus manufacturer, and third-largest heavy truck manufacturer in the world. India’s annual production of automobiles in FY23 was 25.9 million vehicles. India has a strong market in terms of domestic demand and exports. In January 2024, the total passenger vehicle sales reached 3,93,074*. Passenger vehicles saw the highest ever sales in the month of January posting a growth of 14% compared to January 2023. In FY23, total automobile exports from India stood at 47,61,487. This sector's share of the national GDP increased from 2.77% in 1992-1993 to around 7.1% presently. It employs about 19 million people directly and indirectly.

India is also a prominent auto exporter and has strong export growth expectations for the near future. In addition, several initiatives by the Government of India such as the Automotive Mission Plan 2026, scrappage policy, and production-linked incentive scheme in the Indian market are expected to make India one of the global leaders in the two-wheeler and four-wheeler market by 2022.

The Indian passenger car market was valued at US$ 32.70 billion in 2021, and it is expected to reach a value of US$ 54.84 billion by 2027 while registering a CAGR of over 9% between 2022-27. In January 2024, the total production of passenger vehicles*, 3W, 2W, and quadricycles was 2.32 million units. In April-January FY24, the total production of passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles was 23.36 million units.

In the third quarter of 2023-24, total production of passenger vehicles*, commercial vehicles**, three wheelers, two wheelers, and quadricycles was 7.13 million units. India accomplished a significant milestone, with the sale of 13,25,112 EVs in FY24 (till January 2024).

The automobile industry is dependent on various factors such as the availability of skilled labour at low cost, robust R&D centres, and low-cost steel production. The industry also provides great investment opportunities and direct and indirect employment to skilled and unskilled labour. The electric vehicles industry is likely to create five crore jobs by 2030.
Addressing the automotive industry's needs, MHI has extended the tenure of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by one year, offering incentives for determined sales over five consecutive financial years from 2023-24 to 2027-28, with disbursement occurring in the subsequent financial year. The scheme has proven successful, attracting proposed investments of US$ 8.1 billion (Rs. 67,690 crore) against the target estimate of US$ 5.1 billion (Rs. 42,500 crore) over five years, with US$ 1.6 billion (Rs. 13,037 crore) already invested by December 31, 2023.

In August 2022, the Indian government launched India’s first double-decker electric bus in Mumbai. Looking long term, the government feels it is necessary to overhaul the country’s transportation system. It is working to create an integrated electric vehicle (EV) mobility ecosystem with a low carbon footprint and high passenger density with an emphasis on urban transportation reform. The government's strategy and policies are intended to promote greater adoption of electric vehicles in response to growing customer demand for cleaner transportation options.
In CY 23, the Indian Automobile Sector recovered from the effects of the COVID-19 pandemic, posting single-digit growth across Passenger Vehicles, Commercial Vehicles, and Two Wheelers, along with a notable recovery in Three Wheelers, aided by supportive government schemes. The Indian auto industry anticipates continued growth in FY24 as well.

Indian Automotive Components Industry
India has become the fastest-growing economy in the world in recent years. This fast growth, coupled with rising incomes, a boost in infrastructure spending and increased manufacturing incentives, has accelerated the automobile industry. The two-wheeler segment dominated the automobile industry because of the Indian middle class.

Significant demand for automobiles also led to the emergence of more original equipment and auto components manufacturers. As a result, India developed expertise in automobiles and auto components, which helped boost international demand for Indian automobiles and auto components. Hence, the Indian automobile industry has a considerable impact on the auto component industry.

India’s auto component industry is an important sector driving macroeconomic growth and employment. The industry comprises players of all sizes, from large corporations to micro entities, spread across clusters throughout the country. The auto components industry accounted for= 2.3% of India’s GDP and provided direct employment to more than 1.5 million people. By 2026, the automobile component sector will contribute 5-7% of India's GDP. The Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 million by 2026.

The industry is a leader in exports and provides jobs to over 3.7 crore people. From FY16-FY22, the industry registered a CAGR of 6.35% and was valued at US$ 56.50 billion in FY22. In 2023-24 (AprilSeptember), the export value of auto components/parts was estimated at US$ 10.4 billion. North America, which accounts for 33% of total exports, increased by 2%, while Europe and Asia, which account for 33% and 24% of total exports, increased by 12% and declined by 4%, respectively. The key export items included drive transmission and steering, engine components, body/chassis, suspension and braking etc.

Due to the high development prospects in all vehicle industry segments, the auto component sector is expected to see double-digit growth in FY22. The industry is expected to stand at US$ 200 billion by FY26.

India’s auto components industry’s market share has significantly expanded, led by increasing demand for automobiles by the growing middle class and exports globally. Due to the growth in demand for Indian auto components, several Indian and international players have entered the industry. India’s auto component industry is broadly classified into organised and unorganised sectors. While the unorganised sector consists of low-valued items and mostly serves the aftermarket category, the organised sector serves OEMs and includes high-value precision instruments.

The automobile component industry turnover stood at Rs. 2.9 lakh crore (US$ 36.1 billion) in H1 2023- 24 the industry had revenue growth of 12.6% as compared to H1 2022-23. Domestic OEM supplies contributed ~66% to the industry’s turnover, followed by domestic aftermarket (~12%) and exports ~22.3%), in FY23. The component sales to OEMs in the domestic market grew by 13.9% to US$ 30.57 billion (Rs. 2.54 lakh crore). In H1 2023-24, exports of auto components grew by 2.7% to Rs. 85,870 crore (US$ 10.4 billion). The aftermarket for auto components grew by 7.5% in H1 2023-24 reaching Rs. 45,158 crore (US$ 5.5 billion).

As per the Automobile Component Manufacturers Association (ACMA) forecast, auto component exports from India are expected to reach US$ 30 billion by 2026.

The auto component industry is projected to record US$ 200 billion in revenue by 2026. In fiscal year 2023-24 (April-January), the total number of automobiles sold was 19.72 million units. In (April-January) 2023-24, the total production of passenger vehicles, commercial vehicles, threewheelers, two-wheelers, and quadricycles was 23.36 million units.

The rapidly globalising world is creating newer opportunities for the transportation industry, especially while shifting towards electric, electronic and hybrid cars, which are deemed more efficient, safe and reliable modes of transportation. Over the next decade, this will lead to newer verticals and opportunities for auto component manufacturers. To help them adjust to the shifting dynamics of the sector, the Indian government has already offered various production incentives. India is also investing heavily in electric car infrastructure.

Manufacturers in this industry are focusing on developing sustainable solutions, lightweight materials, and efficient production processes to meet the evolving needs of the automotive sector. Additionally, there is a growing emphasis on digitalization and data analytics to optimize operations and enhance product performance.

As the automotive industry continues to evolve, the auto components sector will play a crucial role in shaping the future of mobility. Collaboration with automakers, investment in research and development, and adaptation to changing regulations will be key factors for success in this dynamic and competitive market.

According to ICRA, the domestic passenger vehicle (PV) market is expected to expand by six to nine percent in the current fiscal year compared to the previous year. In concrete numbers, the PV sector is projected to achieve sales of 4.2 million units in the ongoing financial year.

The Indian government is exempting imports of capital goods and machinery essential to produce lithium-ion cells used in EV batteries from customs duty. This, coupled with the shift in global supply chains, will help the Indian global automotive component trade to expand 4-5% yearly to US$ 80 billion by 2026. Moreover, the Indian auto component industry is the third largest in the world.

Indian EV Industry
India's electric vehicle (EV) sector is experiencing rapid growth, fuelled by government incentives, rising environmental concerns, and technological advancements. With initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, India aims to significantly increase EV adoption, revolutionizing its transportation landscape towards sustainability and innovation.

India has established an objective to elevate the proportion of electric vehicle (EV) sales to 30% in private cars, 70% in commercial vehicles, 40% in buses, and 80% in two-wheelers and threewheelers by the year 2030. This equates to an ambitious objective of 80 million EVs on Indian roads by 2030. Additionally, India strives for complete domestic EV production through the 'Make in India' initiative.

In 2023, electric vehicle sales in India saw a significant increase of 49.25%, reaching 1.52 million units. Although the sector is still in its early stages, it is steadily gaining traction. According to Fortune Business Insights, the Indian EV market is forecasted to expand from US$ 3.21 billion in 2022 to US$ 113.99 billion by 2029, with a 66.52% CAGR.

The shift towards electric vehicles on a global scale will create fresh opportunities for automotive suppliers. The Indian EV battery market is projected to surge from US$ 16.77 billion in 2023 to a remarkable US$ 27.70 billion by 2028.

On the infrastructure side, as of February 2024, there are 12,146 operational public EV charging stations nationwide, Maharashtra has the highest number of EV charging stations, followed by Delhi and other states. A recent Confederation of Indian Industry (CII) report emphasized the necessity of establishing at least 1.32 million charging stations in India by 2030 to facilitate the rapid growth of electric vehicles, requiring over 4,00,000 installations annually.

Major industry players are striving to improve electric vehicle charging infrastructure, Hyundai Motor India is enhancing accessibility to electric vehicles nationwide, expanding its ultra-fast EV charging network with 11 new stations strategically located in cities including Mumbai, Pune, Ahmedabad, Hyderabad, Gurugram, and Bangalore, as well as along major highways. Maharashtra targets 10% share of EVs in all new vehicle registrations by Dec 2025. Karnataka has set a goal to electrify 100% of three and four-wheeler cargo vehicles by December 2030.

ROSMERTA DIGITAL SERVICES LIMITED COMPETITIVE STRENGTHS
1. Early entrant in Digital Registration services
2. Their Technology :
  i. URJA Software
3. Agreements with OEMs
4. Pan India Presence
5. Domain Knowledge

ROSMERTA DIGITAL SERVICES LIMITED GROWTH STRATEGIES
1. Expansion of Vehicle Ownership Experience target segments
2. Expansion of M2M KYC
3. Auto aftermarket retail network expansion
4. Entering OES parts distribution for retail aftermarket
5. Growth in accessories distribution

ROSMERTA DIGITAL SERVICES LIMITED RISK FACTORS & CONCERNS
1. Majority of their geographical wise revenues from operations for the last 3 years is majorly derived from Karnataka and Maharashtra.
2. They depend on a single customer for a significant portion of their revenues.
3. They are dependent on the performance of the Automobile Sector.