Executive Summary / Key Takeaways

• Diginex Limited is strategically transforming into a leading Sustainability RegTech provider, leveraging AI, blockchain, and data analytics to address the rapidly expanding Environmental, Social, and Governance (ESG) and supply chain compliance market.
• The fiscal year ended March 31, 2025, was pivotal, marked by a 57% revenue increase to $2.0 million, driven by a significant one-off software license fee and a strategic shift towards recurring subscription revenues from its core diginexESG and diginexLUMEN platforms.
• A robust M&A strategy is underway, with Memoranda of Understanding to acquire Matter DK ApS, Resulticks Global Companies Pte. Limited, and IDRRA Cyber Security Ltd. (Findings), aiming to significantly enhance AI, data management, and cybersecurity capabilities.
• The company's balance sheet saw a dramatic improvement, shifting from $23.0 million in net liabilities to $4.6 million in net assets, with cash increasing to $3.1 million and no interest-bearing debt as of March 31, 2025, bolstered by its January 2025 IPO and subsequent warrant exercises.
• Despite operating losses, Diginex is positioning itself for long-term growth by capitalizing on increasing global ESG regulatory mandates and investor demand, while actively managing operational costs and pursuing strategic partnerships and geographical expansion, including a planned dual listing on the Abu Dhabi Securities Exchange.

The ESG Imperative and Diginex's Vision

The global business landscape is undergoing a profound transformation, driven by the escalating importance of Environmental, Social, and Governance (ESG) factors. Global challenges such as climate change and societal inequalities have propelled ESG from a niche concern to a paramount strategic imperative for businesses and governments worldwide. This shift is reflected in the burgeoning ESG investment industry, which currently commands $30-40 trillion in assets under management and is projected to grow to $35-50 trillion by 2030. Concurrently, regulatory bodies across the European Union, United Kingdom, Singapore, and Hong Kong are increasingly mandating standardized and transparent ESG disclosures, creating a complex compliance environment that demands sophisticated technological solutions.

Diginex Limited, an impact technology business, is at the forefront of this evolution. The company’s core mission is to empower organizations to address pressing ESG, climate, and sustainability issues by enhancing transparency in corporate social responsibility and climate action. Its strategy centers on developing accessible, affordable, and intelligent software-as-a-service (SaaS) solutions, complemented by expert advisory services, to streamline sustainability data collection, evaluation, and reporting. This approach is designed to democratize sustainability reporting, making it achievable for companies of all sizes.

Technological Foundation and Differentiated Edge

Diginex’s competitive advantage is deeply rooted in its proprietary technology suite, which integrates blockchain, machine learning, and data analytics to deliver tangible benefits to its clients.

diginexESG and diginexCLIMATE: Streamlining Sustainability Reporting

The flagship diginexESG platform is an accredited, cloud-based solution offering end-to-end ESG reporting. It guides companies through a comprehensive 5-step journey, from materiality assessment to collaborative report publishing. The platform leverages machine learning to automate materiality assessments, significantly reducing the time and cost associated with traditional consulting approaches. A blockchain-enabled audit trail provides immutable records of data activity, enhancing transparency and data integrity, which is crucial for credible reporting and external validation.

diginexESG is ISO-27001 Certified and SOC 2 certified, demonstrating its commitment to information security. It is also an official partner of leading global reporting initiatives such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the World Economic Forum. While initially targeting Small and Medium-Sized Enterprises (SMEs) with its accessible pricing (starting from $5,000 per annum for up to 3 users, an increase from its initial $99/user/month in December 2020), its feature set has expanded to cater to larger, more complex organizations, including global commercial banks like HSBC . The platform also offers a self-guided 7-day free trial, a key differentiator from many competitors that require initial sales engagement.

Integrated within diginexESG is diginexCLIMATE, a proprietary carbon footprint calculator based on GHG protocols. This module allows companies to seamlessly calculate their Scope 1, 2, and 3 carbon footprints as part of their overall ESG reporting, providing a unified solution for climate action and disclosure.

diginexLUMEN and diginexAPPRISE: Unveiling Supply Chain Risks

diginexLUMEN is a powerful tool for comprehensive supply chain risk assessments, with a specific focus on critical social governance issues such as forced labor, gender risk, and child labor. It uniquely validates supplier information against direct worker feedback, utilizing proprietary algorithms to generate risk scores and automatically generate corrective action plans. This approach moves beyond traditional, often slow and expensive, in-person audits, providing real-time, actionable insights.

The integrated diginexAPPRISE application is a multilingual "worker voice" tool that collects standardized data directly from workers in global supply chains. Its use of QR codes helps protect worker anonymity, encouraging broader participation, and its auditory and visual representation in local languages ensures accessibility for illiterate workers. This web-application-based solution avoids mobile charges associated with telephone-based services, further enhancing its reach in complex and opaque supply chains.

Research & Development and AI Innovation

Diginex is actively investing in research and development, particularly in AI functionality. The company has secured government funding from Hong Kong to develop AI capabilities within diginexESG, in collaboration with a leading financial institution and leveraging OpenAI's platform. The initial focus is on helping companies comply with sustainability disclosure requirements set by the International Sustainability Standards Board (ISSB) and International Financial Reporting Standards (IFRS). These AI-powered compliance solutions are designed to deliver multi-variant drafting, automated risk reduction, future-proofing against new regulations, and enhanced scalability for users. This strategic investment in AI is intended to streamline ESG reporting processes, driving efficiency and transparency in corporate social responsibility and climate action.

Strategic Evolution and Growth Drivers

Diginex has undertaken a deliberate strategic shift, reallocating resources from one-off customization projects towards the growth of its recurring revenue-generating software subscriptions for diginexESG and diginexLUMEN. This pivot is aimed at building a more sustainable and predictable business model. The company's white-label strategy, where it develops customized versions of its platforms for other companies to offer as their own service, is a key component of this growth.

Strategic partnerships and distribution agreements are central to Diginex's market penetration. The company has established alliances with prominent professional services firms and financial institutions, including HSBC (HSBC), Russell Bedford, Aikya Business Solution Private Limited (for Malaysia expansion), Baker Tilly Singapore, and Forvis Mazars LLP (for diginexLUMEN distribution). These partnerships are crucial for expanding client acquisition and leveraging established networks to reach diverse customer bases.

Aggressive M&A and Global Expansion

Diginex is pursuing an aggressive inorganic growth strategy through targeted acquisitions to strengthen and diversify its technology and data capabilities.

• Matter DK ApS: On May 23, 2025, Diginex signed an MOU (followed by a definitive agreement on August 18, 2025) to acquire Matter DK ApS, an ESG data company specializing in sustainability data and analytics for the investment industry. Valued at $13 million in an all-share deal, this acquisition is expected to integrate Matter's advanced ESG data analytics, benchmarking, and reporting capabilities, offering more comprehensive solutions to financial institutions.
• Resulticks Global Companies Pte. Limited: On June 5, 2025, Diginex signed an MOU for a cash and share acquisition of Resulticks, a leader in real-time, AI-driven customer engagement and data management solutions. This significant transaction, valued at $2 billion, aims to substantially enhance Diginex's capabilities in advanced data management and artificial intelligence, enabling targeted sustainability marketing at scale. The due diligence period for this acquisition was extended to October 31, 2025.
• IDRRA Cyber Security Ltd (Findings): A non-binding MOU was signed on August 12, 2025, to acquire Findings, a cybersecurity and compliance automation company, for up to $305 million in shares and cash. This acquisition is intended to expand Diginex's footprint in the cybersecurity sector and establish it as a leader in compliance data verification and regulatory compliance automation.

Beyond acquisitions, Diginex is actively expanding its global presence. A binding Memorandum of Understanding was signed on March 17, 2025, with Nomas Global Investments-L.L.C-S.P.C and Al Noor Legal Consultants FZE to facilitate expansion in the UAE and broader Gulf Cooperation Council (GCC) region. This initiative includes a planned dual listing of Diginex's ordinary shares on the Abu Dhabi Securities Exchange (ADX) and a potential capital raise of up to $250 million from GCC institutional investors. While the ADX listing process is ongoing and expected to take "a few more months if not longer," it underscores Diginex's commitment to increasing exposure to regional and international investors.

Financial Performance: A Transformative Year

The fiscal year ended March 31, 2025, marked a period of significant financial transformation for Diginex. The company reported a 57% increase in total revenue, reaching $2.0 million, up from $1.3 million in the prior year. This growth was primarily driven by a $0.9 million one-off license fee from granting a non-exclusive right to distribute a white-label version of diginexESG in Malaysia. Excluding this, underlying software subscription and license fees remained broadly stable at $0.4 million for both 2025 and 2024. Advisory fees also saw a modest increase to $0.3 million, reflecting a $0.1 million improvement year-over-year.

Conversely, revenue from customization projects declined by $0.3 million to $0.4 million, an expected outcome of the company's strategic decision to reallocate resources towards the development and expansion of its core diginexESG and diginexLUMEN platforms, prioritizing recurring revenues over one-off mandates.

General and administrative expenses increased by $1.0 million to $10.3 million for the fiscal year ended March 31, 2025, primarily due to higher professional fees associated with the company's Initial Public Offering (IPO) and a share-based payment expense related to preferred shares issued under an anti-dilution clause. However, these increases were partially offset by cost reductions in employee benefits (a $0.2 million decrease, largely from reduced share option expenses), IT development, and audit fees, demonstrating a disciplined approach to cost management. The company reported a net loss of $5.2 million for the year, an increase from the $4.9 million net loss in the prior year, reflecting ongoing investments in growth and IPO-related expenses.

Strengthening the Balance Sheet and Liquidity

Diginex's balance sheet underwent a significant transformation, moving from net liabilities of $23.0 million at March 31, 2024, to net assets of $4.6 million at March 31, 2025. This dramatic improvement was primarily driven by the capitalization of shareholder loans and advances, convertible loan notes, and redeemable preferred shares, all triggered by the company's IPO in January 2025. The cash position also strengthened considerably, rising to $3.1 million at March 31, 2025, from $0.1 million in the prior year. Crucially, as of March 31, 2025, the company held no interest-bearing debt instruments.

The IPO, which closed on January 23, 2025, generated gross proceeds of $10.60 million (including the over-allotment option), with net proceeds of $9.01 million. Further bolstering liquidity, Rhino Ventures Limited exercised all Tranche 1 IPO Warrants on July 22, 2025, injecting an additional $11.54 million into the company. Diginex also has four out of six tranches of IPO warrants outstanding, maturing between July 2025 and April 2026, which, if fully exercised, could provide up to $60 million in proceeds. The company has also received recent non-interest-bearing advances from Rhino Ventures, totaling $8 million, intended for future warrant exercises.

Competitive Landscape: Niche Innovation vs. Scale Giants

The ESG reporting and data management software market is fragmented and rapidly evolving, characterized by a mix of legacy enterprise software companies, dedicated ESG tech start-ups, and consulting/auditing firms with tech capabilities. Diginex positions itself as a specialized, agile ESG tech start-up, differentiating through its accessible, affordable, and intelligent solutions.

Diginex's diginexESG stands out with its deliberate pricing strategy, making it accessible to companies of all sizes, a contrast to many high-cost platforms designed for large enterprises with substantial in-house sustainability expertise. The offering of a self-guided 7-day free trial further lowers the barrier to entry, while its ISO and SOC 2-certified infrastructure provides a competitive edge by meeting rigorous bank-grade security standards.

In the supply chain sustainability space, diginexLUMEN is unique in its specific focus on social governance issues (e.g., forced labor, child labor, gender risk) and its innovative use of worker voice data to validate corporate disclosures. Its integrated diginexAPPRISE tool, with its multilingual, auditory, and visual features, and anonymous QR code access, offers a distinct advantage in reaching informal workers in complex supply chains, surpassing many traditional survey or telephone-based services.

While larger, more diversified competitors like SAP (SAP), IBM (IBM), Microsoft (MSFT), and Salesforce (CRM) offer broader enterprise solutions with integrated ESG modules, Diginex's specialized focus allows for deeper expertise and more tailored solutions in niche ESG areas. These larger players benefit from extensive resources, global reach, and established customer bases, which can lead to superior operational efficiency and R&D investment. However, their broader focus can sometimes result in less agile development or less specialized depth in specific ESG compliance areas compared to Diginex. In the advisory space, Diginex benefits from a material market supply-demand imbalance, as increasing regulatory requirements outpace the availability of skilled professionals. Diginex's ability to combine significant technical expertise with deep subject matter knowledge also provides a competitive advantage in custom development projects, as evidenced by its work with government agencies.

Risks and Challenges

Investing in Diginex Limited carries inherent risks. The company has a limited operating history and has incurred operating losses since its inception, with no assurance of future profitability. Its revenue is highly dependent on the continued importance and adoption of ESG reporting requirements by businesses and governments. Any slowdown in this trend could adversely affect its financial performance.

Operational risks include cybersecurity incidents, which could harm its reputation and lead to significant costs, given the sensitive data it handles. The company's operations in Hong Kong expose it to potential intervention or influence from the Chinese government, which could impact its business, ability to raise capital, or even necessitate a costly relocation. Furthermore, the evolving legal landscape in Hong Kong and the potential for delisting under the Holding Foreign Companies Accountable Act (HFCAA), despite its U.S.-based auditor, pose material risks.

The substantial influence of controlling shareholders (officers and directors beneficially owning approximately 51.60% of outstanding shares, or 42% assuming all IPO Warrants exercised) could lead to decisions not always aligned with the interests of other shareholders. The company's shares may also experience volatility and thin trading, affecting liquidity. Finally, the aggressive acquisition strategy, while promising, carries integration risks, and there is no guarantee that these new ventures will meet their financial or strategic targets.

Conclusion

Diginex Limited is strategically positioning itself as a critical enabler in the burgeoning ESG and sustainability RegTech market. The company's recent IPO, coupled with a significant strengthening of its balance sheet and a clear strategic pivot towards recurring software revenues, underscores a transformative period. Its differentiated technology, particularly the AI-powered diginexESG and the worker-voice-enabled diginexLUMEN, offers compelling solutions in a market driven by increasing regulatory mandates and investor demand for transparency.

The ambitious M&A strategy, targeting Matter, Resulticks, and Findings, signals a clear intent to expand its capabilities in AI, data management, and cybersecurity, creating powerful synergies that could solidify its competitive moat. While the company faces the inherent challenges of an early-stage enterprise, including ongoing operating losses and competitive pressures from larger players, its focused innovation, strategic partnerships, and global expansion initiatives, including the planned ADX dual listing, provide a compelling long-term investment thesis. The ability to execute on these strategic acquisitions and effectively integrate new technologies will be paramount to capitalizing on the vast opportunities within the evolving global sustainability landscape and delivering sustained shareholder value.