Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — 9M FY23 Earnings Presentation
40 slides from Aavas Financiers's earnings presentation, Feb 3, 2023
Slide 1: Cover letter to stock exchanges
Ref. No. AAVAS/SEC/2022-23/843 Date: February 03, 2023 To, To, The National Stock Exchange of India BSE Limited Limited Dept. of Corporate Services The Listing Department Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Mumbai – 400001 Mumbai – 400051 Scrip Symbol
Slide 2: Investor Presentation – 9M FY23
AAVAS FINANCIERS LIMITED Investor Presentation – 9M FY23
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Aavas Financiers Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securit
Slide 4: Our Background
Our Background Commenced operations in 2011 Regulated by Reserve Bank of India (“RBI”) from Jaipur, Rajasthan Supervised by National Housing Bank (“NHB”) Currently being run by professional management team backed by Recognized by NHB for refinance marquee private equity players facility Kedaara Capi
Slide 5: Our Pillars of Strength
Our Pillars of Strength Professional Management Team Experienced Board of Directors In-house Execution Model Technology and Data Analytics Improving Credit Ratings Diversified Shareholding Base
Slide 6: Aavas 3.0: Continued Journey of Becoming India's Most Respected Affordable Housing Finance Business
Aavas 3.0: Continued Journey of Becoming India’s Most Respected Affordable Housing Finance Business Aavas 1.0 Aavas 2.0 Aavas 3.0 2012 2016 2023 Proof of concept of the affordable Perfecting the model and building a foundation Scaling and Evolution housing finance model under AU’s to scale under pri
Slide 7: Aavas 3.0: Key Leadership Elevations
Aavas 3.0: Key Leadership Elevations • Sachinder Bhinder elevated to the role of CEO • Ghanshyam Rawat elevated to the role of President and • Been with Aavas for over 3 years as CEO of Aavas’ MSME CFO Business • Joined Aavas in 2013 as CFO • 25+ years of experience, including as EVP and Business •
Slide 8: Aavas 3.0: Expansion of Executive Committee
Aavas 3.0: Expansion of Executive Committee Nishant Sharma Manas Tandon Promoter Nominee Director Promoter Nominee Director Sushil Kumar Agarwal Sachinder Bhinder Managing Director Chief Executive Officer Ghanshyam Rawat Ashutosh Atre President and Chief Financial Officer President and Chief Risk Of
Slide 9: Professional Management Team
Professional Management Team Sushil Kumar Agarwal – MD Sachinder Bhinder – CEO Ghanshyam Rawat – Ashutosh Atre – President • 21+ yrs of experience in • 25+ years of experience President & CFO & Chief Risk Officer retail financial services • Prior associated with • 30+ years of experience • 30+ years
Slide 10: Experienced Board of Directors
Experienced Board of Directors Sandeep Tandon Soumya Rajan Kalpana Iyer Chairperson of Board, Independent Independent Director & Chairperson of Independent Director & Chairperson Director & Chairperson of Stakeholders Nomination & Remuneration Committee of Audit Committee Relationship Committee Qual
Slide 11: Superior Business Outcome: In-house Execution Model
In-house Execution Model 1. Reduction in average TAT (days) In-house execution model – Replicated across the states Turn around time is a key metric for employee incentives Lead generation and Risk management Collections sourcing 13.4 13.1 Superior Business Outcome 10.6 10.0 ▪ Focused approach to di
Slide 12: Technology and Data Analytics
Technology and Data Analytics Lead Generation Underwriting Operations Collections ▪ Majority of the leads ▪ Platform integration ▪ E-disbursement & E- ▪ Route optimization for are logged in through with credit bureaus repayment facility at all collection personnel the sourcing app ▪ Quarterly scrub
Slide 13: IT Transformation – Project GATI and UNNATI
IT Transformation – Project GATI and UNNATI (End to End digital journey from origination to servicing) Guiding Principles Key Objectives ▪ Be a digital first, technologically advanced & agile 1 2 3 organization ▪ Transform loan origination & customer service Linear Growth with Be a “Bank” by Create
Slide 14: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating Reaffirmed ICRA CARE ICRA Dec-22 A1+ AA / AA / Dec-22 Dec-22 Stable Stable CARE Dec-22 A1+ A/ A+ / INDIA RATINGS Mar-16 Mar-17 Stable Stable Dec-22 A1+ 13
Slide 15: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 31st Dec 2022 31st Dec 2022 Investor Details % Holding Others, 7.66% Capital Group^ 8.34 Wasatch Global Investors^ 7.19 UTI Asset Management^* 3.51 Kedaara Capital, Kotak Mahindra Asset Management^* 3.23 23
Slide 16: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (₹ Trn) Market Size ₹ 27.0 Trn (as on Jun-22) 26.0 27.0 20.7 22.9 18.4 YoY Growth +15% 13.4 15.8 (as on Jun-22) Banks - 15%, HFCs & NBFCs - 16% Market Share Banks - 68% HFCs & NBFCs - 32% Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Jun-22 (as o
Slide 17: Measures from Government and Regulator
Measures from Government and Regulator Hike in Policy Rate After witnessing 190bps hike in repo rate during H1FY23, RBI’s MPC has further hiked repo rate by 35 bps in 3rd quarter to 6.25% . MPC also decided to remain focused on withdrawal Resolution Framework 2.0 of accommodation to ensure that infl
Slide 18: Financial Performance
Financial Performance Key Business Parameters Geographical Distribution Spreads and Margins Asset Quality Liability Franchise Key Ratios
Slide 19: Performance Highlights
Performance Highlights AUM* (₹ Mn) Disbursement (₹ Mn) Gross Stage 3 (%) +23.3% +48.7% # includes 0.19% with DPD 59 bps upto 90 but categorized as 130,887 GNPA/Gross Stage 3 on 106,126 34,428 account of RBI notification 1.72% 1.13%# 23,150 0.89% 0.19% 0.94% 0.83% Average Amount^ per Active Loan Acco
Slide 20: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT* (₹ Mn) +29% +15% 113,502 +40% 3,575 CAGR CAGR 36,022 CAGR 94,543 2,903 77,961 29,304 26,569 2,491 26,724 59,416 20,512 1,761 40,730 932 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Data as per Ind-AS
Slide 21: AUM Break-up
AUM Break-up Product Category Occupation Category Customer Category ATS : ₹ 0.86 Mn ATS : ₹ 0.70 Mn ATS : ₹ 0.89 Mn 28.4% 0.1% 39.7% ATS : ₹ 6.70 Mn 31-Dec-21 60.3% 99.9% 71.6% ATS : ₹ 0.93 Mn ATS : ₹ 0.84 Mn ATS : ₹ 0.73 Mn ATS : ₹ 0.91 Mn ATS : ₹ 0.87 Mn 0.1% 29.9% 39.7% ATS : ₹ 8.82 Mn 31-Dec-22
Slide 22: Disbursement Break-up – Product Category
Disbursement Break-up – Product Category 9M FY22 9M FY23 ATS : ₹ 0.83 Mn ATS : ₹ 0.82 Mn 35.8% 34.8% 64.2% 65.2% ATS : ₹ 1.09 Mn ATS : ₹ 1.13 Mn Disbursement include 12.7% of mortgaged-backed MSME Loans Disbursement include 14.2% of mortgage-backed MSME Loans classified under Other Mortgage Loans cl
Slide 23: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 100 2012 Maharashtra 48 2012 Gujarat 44 2012 Madhya Pradesh 46 2013 Delhi 6^ 2013 Haryana & Punjab 18 2017 Chhattisgarh 8 2017 Uttar Pradesh 23 2018 Uttarakhand 9 2018 Himachal Pradesh 4 2020 Orissa 4 2021 Karnataka 11 2021 T
Slide 24: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings and Spreads (%) Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 16.49% 13.16% 12.99% 12.90% 12.79% 12.65% 13.04% 15.12% 12.67% 12.85% 14.72% 13.99% 13.75% 13.63% 13.16% 12.65% 11.41% 10.48% 9.51% 7.40% 8.63% 8.74% 7.25% 7.17% 8.44% 7.03% 6.
Slide 25: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 6.82% 7.42% 7.71% 3.22% 3.49% 6.15% 2.89% 2.62% 2.80% 2.82% 3.01% 2.55% 3MFY21 H1FY21 9MFY21 FY21 3MFY21 H1FY21 9MFY21 FY21 3MFY21 H1FY21 9MFY21 FY21 7.80% 8.11% 8.23% 3.37% 3.58% 6.93% 2.64% 3.25% 2.88% 3.21% 3.34% 3.45% 3MFY22 H1FY22 9MFY22 FY22
Slide 26: Asset Quality
Asset Quality Gross Stage 3 (%) Net Stage 3 (%) DPD upto 90 DPD above 90 DPD upto 90 DPD above 90 1.72% 1.33% 1.14% 0.89% 1.08% 1.10% 1.13%* 0.96% 0.99% 0.17% 0.19% 0.70% 0.77% 0.84% 0.84% 0.87% 0.26% 0.86% 0.72% 0.31% 0.13% 0.14% 0.24% 0.21% 0.83% 0.82% 0.93% 0.94% 0.68% 0.63% 0.63% 0.71% 0.73% 0.5
Slide 27: Robust Liability Management
Robust Liability Management Diversified Funding Mix Prime Lending Rate hiked by 125 bps in 9M FY23 Loan Assets & Borrowings (₹ Mn) As on Dec-22 Further increase of 35 bps w.e.f. 05th Jan 2023 As on Dec-22 Terms Loans 30 Lenders Floating Fixed Equity 13.5% Diversified Mix Assignment No exposure to Co
Slide 28: ALM Surplus
ALM Surplus Surplus Management* (₹ Mn) Average tenor of outstanding borrowing (months) As on Dec-22 16,430 <3months 4,036 12,394 24,595 <6months 7,667 16,928 143 33,276 135 134 <1year 17,219 130 16,057 126 127 66,077 <3years 48,687 17,390 92,196 <5years 74,149 18,047 111,810 <7years 87,347 24,463 12
Slide 29: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (₹ Mn) As on Dec-22 Cash & Cash Equivalents 14,682 High Quality Un-availed CC Limits 1,100 Liquidity of Documented & Un-availed Sanctions from NHB - ₹ 15,782 Mn Documented & Un-availed Sanctions from other Banks 12,100 Total Liquidity Position 27,882 Partic
Slide 30: Net Securitization Volume
Net Securitization Volume ₹ 6,647 Mn ₹ 5,496 Mn ₹ 7,784 Mn ₹ 6,625 Mn 2,981 3,054 2,967 2,579 2,397 2,234 2,077 1,749 1,509 1,590 1,424 991 1,000 0 0 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 29
Slide 31: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 13.59% 12.24% 12.70% 337.7 398.4 294.6 Dec-20 Dec-21 Dec-22 9MFY21 9MFY22 9MFY23 Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 38.3 30.4 51.12% 50.90% 49.22% 25.5 1.86% 0.70% 0.28% Dec-20 Dec-21 Dec-22 9MFY21 9MFY22 9MFY23 Data
Slide 32: Annexures
Annexures Quarterly Profit & Loss Statement Balance Sheet PAT Reconciliation ECL Provisioning Networth Reconciliation ESG 31
Slide 33: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (₹ Mn ) Q3 FY23 Q3 FY22 Y-o-Y Q2 FY23 Q-o-Q Interest Income on Loans (incl. Processing Fee) 3635.4 2,863.7 26.9% 3357.9 8.3% Interest Income on Fixed Deposits 237.0 174.6 197.6 Reversal Income on Earlier Assigned Loans (287.2) (208.6) (268.8) Upfronting
Slide 34: Nine Monthly Profit & Loss Statement
Nine Monthly Profit & Loss Statement Particulars (₹ Mn ) 9M FY23 9M FY22 Y-o-Y Interest Income on Loans (incl. Processing Fee) 10193.2 8364.8 21.9% Interest Income on Fixed Deposits 631.2 454.6 Reversal Income on Earlier Assigned Loans (803.9) (572.3) Upfronting Income on Fresh Assigned Loans 1070.6
Slide 35: Balance Sheet
Balance Sheet Particulars (₹ Mn ) 31-Dec-22 31-Mar-22 Sources of Funds Share Capital 790.4 789.4 Reserves & Surplus 30,698.4 27,297.1 Borrowings 91,613.1 80,119.8 Deferred Tax Liability (Net) 455.7 353.6 Other Liabilities & Provisions 2,137.4 1,644.0 Total 125,695.1 110,203.8 Application of Funds Lo
Slide 36: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) 9M FY23 9M FY22 Y-o-Y Q3 FY23 Q3 FY22 Y-o-Y Net Profit as per IGAAP 2,787.1 2,334.4 19.4% 987.7 786.5 25.6% Add / (Less) : Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial asse
Slide 37: ECL Provisions
ECL Provisions Particulars (₹ Mn ) 31-Dec-22 31-Dec-21 31-Mar-22 Gross Stage 1 102,743.1 80,721.0 87,571.0 During FY22, resolution plan was implemented for certain % portfolio in Stage 1 96.74% 94.34% 96.04% borrower accounts as per RBI’s Resolution Framework 2.0 ECL Provision Stage 1 231.7 203.7 21
Slide 38: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) 31-Dec-22 31-Mar-22 Net worth as per previous GAAP 29,137.1 26,133.3 Adjustments increasing/(decreasing) net worth as reported under previous GAAP: Adoption of EIR for amortisation of Income and expenses - financial assets at (307.1) (410.1) amortised cost
Slide 39: Environmental, Social & Governance
Environmental, Social & Governance Pillars for Sustainable Future Key Quarterly Updates EDGE certificate for first lot of self-built Green homes Green Planet Nurturing Workplace First ever project by IFC & EDGE in collaboration with Aavas for self-built Green homes not just in India but at Create a
Slide 40: Thank You !
Contact Us Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) CIN: L65922RJ2011PLC034297 Mr. Ghanshyam Gupta investorrelations@aavas.in www.aavas.in Thank You ! Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 www.sgapl.net 39