Slide 1: Exchange filing cover letter
EW/Sec/2019/155 June 6, 2019 National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. Dear Sir/ Madam, Ref.:- Symbol: EDELWEISS Sub: Investor Presentation Please find enclosed the Investor Presentation for your information and record. Thanking you,
Slide 2: Edelweiss Financial Services Limited
Edelweiss Financial Services Limited June 4, 2019
Slide 3: Edelweiss – Our Journey
Edelweiss – Our Journey 2
Slide 4: We Started Edelweiss in 1996
We Started Edelweiss in 1996… 1996 Big Aspirations, Limited Capital! Only $ 100,000 net-worth Worked on advisory for high growth companies 3
Slide 5: Journey So Far: Our First Years
Journey So Far: Our First 8 Years Profit after Tax $ 1 Mn FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 • Foundation of Edelweiss as an Investment bank in 1996 with a capital base of $ 100,000 & 4 employees • Expanded int
Slide 6: The Next Years: Counter-Cyclical Diversification
The Next 8 Years: Counter-Cyclical Diversification Profit after Tax IPO $ 20 Mn $ 1 Mn FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 • Continued to build businesses with high quality talent • Seeded and nurtured diversifi
Slide 7: The Current years: Gaining Scale
The Current 8 years: Gaining Scale Profit after Tax $ 143 Mn IPO $ 20 Mn $ 1 Mn FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 • Focus is on scaling up existing businesses to a size so as to be amongst the top 5 players in each
Slide 8: Snapshot of Edelweiss Today
Snapshot of Edelweiss Today Balance Sheet Customer Assets Group Net Worth $ 7.8 Bn $ 28.9 Bn $ 1.3 Bn Market Cap Profit after Tax RoA $ 2.7 Bn $ 172 Mn 2.4% Profit after Tax and RoA is Ex-Insurance. Figures are as on March 31, 2019 7
Slide 9: India Tailwinds
India Tailwinds 8
Slide 10: India's Golden Age of compounding has started
India’s Golden Age of compounding has started USD Bn ~500 ~1,000 2,000 2,500 5,000 2000 2007 2015 2017 2025 …Will propel India to become the 3rd largest economy by 2025 9
Slide 11: It is a Great Time to be in India!
It is a Great Time to be in India! Fiscal deficit under control Steady GDP growth Inflation at stable levels Very Robust Macro Expansionary monetary and credit policy Indicators Structural reforms have set the base for a new era of growth 10
Slide 12: Irreversible trends of Financial Services
5 Irreversible trends of Financial Services 1 Financialization of Savings 2 Democratization of Credit These trends are not new – they have been under way 3 Privatization of Economy for nearly 4 Disintermediation of Banking System 25 years! 5 Localization of Financial services Our business segments t
Slide 13: Key Tenets of Our Business Model
Key Tenets of Our Business Model Strong. Steady. Sustainable. 12
Slide 14: Build a Strong, Steady and Sustainable Business
Build a Strong, Steady and Sustainable Business 1 Fortress Balance Sheet 2 Steady Earnings Through Diversification 3 Internal Ownership and Good Governance 4 Strong Global Partnerships 5 EdelGive Foundation 13
Slide 15: Fortress Balance Sheet
1 Fortress Balance Sheet $ Mn Customer Assets Balance Sheet Assets Net Worth FY19 28,886 FY19 7,754 FY19 1,253 60% 22% 17% CAGR CAGR CAGR FY12 1,078 FY12 1,911 FY12 413 Diversified Liability profile; Long Term Borrowings at 61% of total D/E (Ex Treasury Assets ) maintained conservatively at 4.4x Vol
Slide 16: Steady profit growth trend
2 Steady profit growth trend … Profit after Tax ($ Mn) 172 145 103 75 55 FY15 FY16 FY17 FY18 FY19 Our balance sheet only grew 19% in this period 15 * Profit after Tax is Ex- Insurance
Slide 17: Sustained through diversification
2 … sustained through diversification Business Segments ($ Mn) % Contribution to FY19 PAT Retail Mortgage 7% SME, ESOP and Other Business Loans 9% Structured Collateralised Credit 16% Wholesale Mortgage 23% Distressed Credit Business 30% Wealth Management and Asset Management 16% Capital Markets 5%
Slide 18: Culture of internal ownership and good governance
3 Culture of internal ownership and good governance Shareholding Pattern as on 31 st March’19 ~47% owned by Edelweiss Management High Corporate Governance Standards 13 member Board Employee Trust DIIs, Non 4.8% Institutions Promoter Majority Independent Director’s & Others Group 23.8% 33.0% Key boar
Slide 19: Backed by Strong Global Partnerships
4 Backed by Strong Global Partnerships Allianz Tokio Marine Edelweiss CDPQ Arthur Gallagher Bank of Singapore 18
Slide 20: Edelgive Foundation – Investing Back in our Community
5 Edelgive Foundation – Investing Back in our Community Education Livelihood Women Empowerment Empowering children Water and soil conservation, Promoting safety, gender through holistic learning skill development, financial justice, and economic approach, life skill & inclusion, livelihood generatio
Slide 21: Our Businesses
Our Businesses
Slide 22: We serve both borrowers and investors
We serve both borrowers and investors We provide Borrowers with We provide Investors with advice loans and access to capital markets to Deploy & Grow capital Balance Sheet of a Institution/Individual LIABILITIES ASSETS • Retail Credit • Wealth Management • Corporate Credit • Asset Management • Capit
Slide 23: Our Business Segments
Our Business Segments 1 2 3 Credit Advisory Insurance 22
Slide 24: 1. Credit Business
1. Credit Business
Slide 25: India Credit growth helped by expanding GDP & Increasing Credit Penetration
India Credit growth helped by expanding GDP & Increasing Credit Penetration… 2018 2025E GDP ~$ 2,500 Bn ~2.0x (multiple of 2018) Credit ~$ 1,750 Bn ~2.6-3.0x (multiple of 2018) Credit penetration ~68% ~85% Retail Credit expected to grow faster than Corporate Credit Corporate Credit ($ Bn) Retail Cre
Slide 26: Democratization of Credit is driven by several factors
…Democratization of Credit is driven by several factors Enabling Reforms like Jan Dhan and Mudra and GST Creation of relevant infrastructure like Aadhaar, RuPay and BHIM Improved Credit Underwriting mechanisms Better borrower data access through agencies like CIBIL Digitisation of collateral 25
Slide 27: Our Journey in Credit so far
Our Journey in Credit so far.. Corporate Distressed Retail Started in 2007 Global Financial Crisis in 2008 Started in 2011 paved way for us in setting up With an objective to build a ARC With Strong growth opportunity coupled Credit vertical with competitive with Significant under penetration advant
Slide 28: 2. Advisory Business
2. Advisory Business
Slide 29: Indian savings shifting to financial assets
Indian savings shifting to financial assets… Savings Distribution ($ Bn) FY 12 FY 18 CAGR Currency 15.2 67.6 28% Deposits 77.8 71.9 (1%) Claims on government (3.2) 11.8 NA Insurance funds 28.2 47.0 9% Shares and debentures 2.4 21.7 44% Provident and pension funds 13.8 50.3 24% Total 134.2 270.3 12%
Slide 30: Creating a sizable business opportunity
… Creating a sizable business opportunity 2018 2025E GDP $2.5 Trn 2x $5 Trn Stock of Wealth $8 Trn 2.5 x $20 Trn Household $3 Trn 2.7 x $8 Trn Financial Assets Advised Wealth $250 Bn 4x $1 Trn Demand is NOT a constraint! 29 Source: Edelweiss estimates
Slide 31: Our Advisory Business today
Our Advisory Business today Private Clients Institutional Clients Wealth Management Institutional Capital Markets Advisory Equities Investment Investment Management Banking Customers – Focal point of Risk our strategy Prime Services Management Alternative Mutual Funds Assets Multi Strategy Funds Ass
Slide 32: 3. Insurance Business
3. Insurance Business
Slide 33: India Insurance Opportunity
India Insurance Opportunity Significant under penetration and protection gap in Indian Life Insurance Segment Life Insurance Penetration Protection Gap 40% 92% 100% 88% 78% 70% 73% 80% 30% 56% 56% 60% 20% 18% 15% 40% 10% 16% 7% 6% 20% 4% 3% 3% 3% 0% 0% Taiwan Hong Kong Singapore Japan Thailand Malay
Slide 34: We have protected over 300,000 lives
We have protected over 300,000 lives Business Overview 13th Month Overall Renewal Rate Persistency 83% 80% • Fastest growing life insurance company in India - Long Term Value Creator 71% 71% • Expanded the reach to 90+ locations in India • Our 51% JV with Tokio Marine ensures both growth capital and
Slide 35: Way Forward
Way Forward 34
Slide 36: Our Key Growth Vectors Will be
Our Key Growth Vectors Will be… Retail Credit Wealth Management Asset Management Insurance 35
Slide 37: Our AIM is to
Our AIM is to… Consistently grow our Consolidated PAT by 20% - 25% annually Increase the share of retail credit assets to 2/3rd on our balance sheet Maintain leadership in all our Advisory businesses Achieve break-even in Life Insurance business by 2022 Become an exemplar for corporate governance in
Slide 38: Q&A
Q A 37