Ugro Capital Limited · NSE:UGROCAP
Ugro Capital — Q4 FY24 Earnings Presentation
31 slides from Ugro Capital's earnings presentation, May 2, 2024
Slide 1: UGRO Capital Limited Q4'FY24 and FY24
UGRO Capital Limited Q4’FY24 and FY24 EMPOWERING MSME ECOSYSTEM NSE: UGROCAP | BSE: 511742 Slide 1
Slide 2: Safe Harbor
Safe Harbor This presentation has been prepared by UGRO Capital Limited (the “Company”) solely for your information. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation is for information purposes only and should not be deemed to constitute or
Slide 3: Company announces Equity Fund Raise of INR 1,332 Cr
Company announces Equity Fund Raise of INR 1,332 Cr Preferential Issue INR 1,332 Cr Equity Fund raise of ~ INR 1,332 Cr via Preferential issue Equity instrument: 1) CCD (Compulsorily Convertible Debentures) 2) Warrants Conversion structure: Both instruments shall convert into equities within 1
Slide 4: UGRO expands its embedded financing opportunity with MyShubhlife acquisition
UGRO expands its embedded financing opportunity with MyShubhlife acquisition Transaction Structure Transaction Rationale Embedded finance for Small Retailers is the future of direct digital 1 lending. The market is valued at INR 1.1 trillion UGRO wants to focus on the higher yielding retailer financ
Slide 5: Performance Highlights for Q4'FY24 and FY24
Performance Highlights for Q4’FY24 and FY24 Q4FY24 Q4FY23 FY24 FY23 AUM (INR Cr) 9,047 6,801 49% 9,047 6,081 49% EPS on current rate INR 13.39 per Net Disbursement (INR Cr)* 1,554 1,459 6% 5,867 4,641 26% share for FY24 Off-book AUM (%) 45% 40% 13% 45% 40% 13% Pre-Tax Profit (INR Cr) 56 34 66% 179 8
Slide 6: Key metrics for FY24
Key metrics for FY24 01 Asset 02 03 Asset 04 Liability & Profitability Growth Quality Co - lending AUM Net Total Income GNPA Borrowings As on Mar’24 : 9,047 Cr FY24 : 638.8 Cr As on Mar’24 : 2.0% As on Mar’24 : 4,653 Cr (+49% Y-o-Y) (+64% Y-o-Y) (+40 bps Y-o-Y) Co-lending Net Loans Originated PPOP N
Slide 7: We continue to deliver strong Net Loan Origination
We continue to deliver strong Net Loan Origination Amount in INR Cr Net loans originated increased to INR 1,554 Cr in Q4’FY24 from INR 1,552 Cr in Q3’FY24 and INR 1,459 Cr in Q4’FY23. 963 1,359 1,653 1,874 2,314 2,036 2,506 2,810 2,864 Gross Loans Originated 1,554 1,552 1,459 1,477 322 1,284 261 193
Slide 8: And strong AUM
And strong AUM Amount in INR Cr AUM increased to INR 9,047 Cr as on Mar’24 from INR 8,364 Cr as on Dec’23 (+8%) and INR 6,081 Cr as on Mar’23 (+49%). 49% 8% 9,047 8,364 1,112 12% 7,592 967 6,777 1,168 13% 849 1,037 6,081 750 632 7% 893 722 715 12% 798 813 5,095 670 9% 721 701 12% 585 4,375 746 636 5
Slide 9: Which is delivering operating leverage
Which is delivering operating leverage Amount in INR Cr Consistently increasing PBT over past 8 quarters 66% 56 46 41 36 34 22 18 10 8 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY24 Slide 9
Slide 10: Our collection efficiencies and portfolio performance remains stable
Our collection efficiencies and portfolio performance remains stable Current Month and Overall Collection Efficiency remains robust ECL Data (Mar’24) Current Month Collection (excluding overdue) / Current Month Demand (In Cr) Loan Exposure Loan Exposure (%) Total Collections* (including overdue) / C
Slide 11: Our collection efficiencies and portfolio performance remains stable
Our collection efficiencies and portfolio performance remains stable Stage 1 reaching stable state Provision Coverage Ratio 96% 95% 95% 94% 94% 49% 49% 49% 48% 48% Mar'23 June'23 Sep'23 Dec'23 Mar'24 Mar'23 Jun'23 Sep'23 Dec'23 Mar'24 Restructured Loans (standard portfolio) 1.1% 0.8% 0.6% 0.4% 0.3%
Slide 12: Tri-pronged liability strategy – on-balance sheet, co-lending and assignment continues to mature
Tri-pronged liability strategy – on-balance sheet, co-lending and assignment continues to mature Demonstrated ability to manage a prudent mix of on-balance sheet and off-balance sheet approach 1 On-Balance sheet Diversified Lender base across Lending Institutions – Banks, Large NBFCs and DFIs. Multi
Slide 13: Diversified Lender base and continued build-out of liability book
Diversified Lender base and continued build-out of liability book Total Debt (INR Cr) and Cost of borrowings Liability mix by lender profile Liability mix by product 10.58% 10.66% 10.61% 10.65% 10.70% 16% 2% 3% Cost of Borrowings 4,653 1% 1% 4,173 3,798 3,149 3,342 8% 28% Total Debt INR 45% Total De
Slide 14: Robust momentum of our co-lending platform continues
Robust momentum of our co-lending platform continues Increasing Mix of off - Book AUM Product wise Mix of off - Book AUM (Mar’24) On Book Portfolio Off Book Portfolio 2,385 2,936 813 632 1,168 1,112 6% 2% 29% 35% 40% 43% 45% 45% 45% 53% 48% 42% 64% 94% 98% 47% 52% 58% 36% Secured Business Micro Supply
Slide 15: Finance | Income Statement
Finance | Income Statement Income Statement (₹ Cr) Q4FY24 Q4FY23 Y-o-Y Q3FY24 Q-o-Q Interest Income 191.8 141.1 36% 182.8 5% Income on Co-Lending / Direct Assignment 122.4 62.4 96% 76.4 60% Other Income 16.2 13.7 19% 20.1 (19%) Total Income 330.4 217.2 52% 279.3 18% Interest Expenses 128.1 90.4 42%
Slide 16: Finance | Income Statement & ROA Tree
Finance | Income Statement & ROA Tree Income Statement (₹ Cr) FY24 FY23 Y-o-Y FY22 ROA Tree FY24 FY23 Interest Income 707.9 482.9 47% 272.1 As a % of Gross On Book AUM Income on Co-Lending / Direct Assignment 307.5 154.1 100% 26.9 Total Income 22.9% 21.4% Other Income 66.3 46.8 42% 13.1 Interest Exp
Slide 17: Finance | Balance Sheet
Finance | Balance Sheet Balance Sheet (₹ Cr) Mar-23 Mar-24 Balance Sheet (₹ Cr) Mar-23 Mar-24 Assets Liabilities Cash and Bank Balance 212 455 Trade payables 14 14 Loans 3,806 5,432 Debt securities 1,144 1,395 Investments 60 59 Borrowings (other than debt securities) 2,005 3,223 Other financial asse
Slide 18: Our journey to 4% RoA
Our journey to 4% RoA Change of ~160 bps 2.3% 150 75 50 50 ~4% RoA bps bps bps bps RoA FY24 YIELD COST OF BORROWING OPERATING LEVERAGE CREDIT COST In 8 Quarters EXPANSION DECREASE INCREASE Micro loan mix Aided by scale, On the back of increase (branch capital raise, Portfolio seasoning strong AUM ad
Slide 19: UGRO Overview
GRO UGRO Overview Slide 19
Slide 20: Building a large institution for small business financing is a real possibility
Building a large institution for small business financing is a real possibility Explosion of Credit in MSME Segment: INR 92 Trn MSME Credit Gap Presents a large Market Opportunity Total MSME Credit gap is INR 92 trn Credit Gap of our customer segment constitutes 95% FY17 FY23 Medium Enterprise No. o
Slide 21: UGRO's journey of Data-Tech driven lending to MSMEs over 5+ yrs
UGRO’s journey of Data-Tech driven lending to MSMEs over 5+ yrs Build phase Early Validations Maturing phase Growth Phase Data Repository-Mar 2024 Infrastructure build at inception during Covid, pivoted At Dec 2022, 87% of long term portfolio Become an industry to cash flow based underwriting models
Slide 22: Our Distribution continues to be powered by our GRO Score
Our Distribution continues to be powered by our GRO Score Ability to capture alternate data from banking and bureau… …to draw meaningful insights out of unorganized data... Artificial Intelligence GRO 2.0 GRO 3.0 Engineering of making Intelligent Credit Bureau Machines and Programs Credit Across Mul
Slide 23: GRO Score – Risk Bands Stacking up on Historical Portfolio
GRO Score – Risk Bands Stacking up on Historical Portfolio Default rates across score bands – All customers assessed Since Inception Score Band wise break up of recent disbursals (Oct 23 – Mar 24) 4.3% 5% A 13% 2.9% B 2.4% 2.1% 41% 1.8% C GRO Score A to C 1.2% 19% ~82% 1.0% D 0.7% E A B C D,E 22% Di
Slide 24: Sector Focused Approach, Multiple Products and Large Distribution Strength
Sector Focused Approach, Multiple Products and Large Distribution Strength Hospitality Supply Chain 23 Financing Prime Branches Light Engineering Secured Business Loans 127 Auto Components Micro Branches Business Chemicals Loans 500+ GRO Partners Our Product Food Processing Offering 60+ Anchors Educ
Slide 25: Of our addressable market, we serve a diverse set of customers
Of our addressable market, we serve a diverse set of customers Prime: Metro & Micro: Tier 3-6 Ecosystem (SCF & Partnership & Tier 1/2 Direct Digital Branches Machinery) Alliances Branches Collateral: Prime Collateral: Collateral: Standard Standard Collateral: Collateral: Prime Prime Collateral: FLDG
Slide 26: Resulting in a well diversified, granular and stable portfolio quality
Resulting in a well diversified, granular and stable portfolio quality Product Mix (AUM) Portfolio Concentration in key geographical areas Sector Mix* State wise AUM 12% coverage * 6% 23% 4% 20% 19% 1% 13% 8% 6% 10% 4% 7% 8% 23% 21% 13% 9% 11% 5% 8% Guaranteed by CGTMSE 24% 3% Secured Business Loans
Slide 27: Board, Management and Shareholding
Board, Management and Shareholding Slide 27
Slide 28: Institutionally Owned : Majority held by Institutional Investors
Institutionally Owned : Majority held by Institutional Investors Shareholding Pattern IFU: Investment arm of 16.4% Denmark govt. Other Public shareholders, 28.6% 28k+ shareholders 16.3% Insurance Companies, 2.6% Foreign Portfolio Investors, 2.2% Corporate (Family Offices, HNIs), 7.9% Promoter, 2.2%
Slide 29: Our Board is independently supervised by eminent Directors
Our Board is independently supervised by eminent Directors Satyananda Mishra – Shachindra Nath - Karnam Sekar – Hemant Bhargava – Rajeev K. Agarwal - Non-Executive Chairman Vice Chairman & Managing Independent Director Independent Director Independent Director Ex-Chairman, MCX, Ex-CIC, GOI, Director
Slide 30: Professionally Managed : 190+ years of cumulative experience
Professionally Managed : 190+ years of cumulative experience Amit Mande - Anuj Pandey - Kishore Lodha - Sunil Lotke – Sharad Agarwal – Chief Revenue Officer Chief Risk Officer Chief Financial Officer Chief Legal & Compliance Chief Operating Officer 20+ Years of Experience 20+ Years of Experience 20+
Slide 31: Thank You
Thank You www.ugrocapital.com Slide 31