Capri Global Capital Limited · NSE:CGCL
Capri Global Capital — Investor Presentation (February 2023)
66 slides from Capri Global Capital's investor presentation, February 2023
Slide 1: Responsible. Resilient. Ready. Corporate Presentation February 2023
Responsible. Resilient. Ready. CORPORATE PRESENTATION FEBRUARY 2023 CAPRIGLOBAL 1
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by Capri Global Capital Limited (the “Company”), have been prepared solely for information purposes only and does not constitute any offer or invitation, directly or indirectly, in any manner, or
Slide 3: Disclaimer (continued)
Disclaimer (continued) This Presentation is not a complete description of the Company. Certain statements in the Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. All forward-lookin
Slide 4: Capri Global: Profitable Lending With A Social Impact
Capri Global : Profitable Lending With A Social Impact A Non-Banking Financial Company (NBFC) with presence across high growth segments like MSME, Affordable Housing, Construction Finance segments. Forayed into Gold Loans in Aug’22. Promoted by first generation entrepreneur, Mr. Rajesh Sharma, Capri
Slide 5: Capri Global Group: Key Highlights
Capri Global Group: Key Highlights Q3FY23 Financial Highlights (Consolidated) Urban Retail, CF, and Car Loan Distribution 161 Branches in 15 States & UTs INR 374 Mn Q3FY23 Gold Loan Branches INR 86,525 Mn INR 1,398 Mn 9MFY23 INR 20,644 Mn 1 449 Branches in 7 States & UTs 2 Total AUM PAT Net Worth 3
Slide 6: Executive Summary: Our Journey
Executive Summary: Our Journey Expanding Business Housing Finance entry Gold Loan entry Verticals • Forayed into Housing Finance • Foray into Gold Loans ▪ Ventured into MSME lending • Branch network jumps to 66; announced in Feb’22, business Workforce count of 1,350 launched in Aug’22 • Medium term
Slide 7: Niche Player In Chosen Segments
NICHE PLAYER IN CHOSEN SEGMENTS CAPRIGLOBAL 7
Slide 8: CGCL Advantage: What Sets Us Apart
CGCL Advantage: What Sets Us Apart Retail Focused Model Focus on SENP Borrower Own Sourcing Model ❑ Small ticket size retail focused ❑ Strong focus on self employed non- ❑ 100% sourcing is done by regularly lending across MSME, Affordable professional borrower; carved out a trained in-house Direct S
Slide 9: Business Overview: Diversified Portfolio
Business Overview: Diversified Portfolio MSME Housing Finance Gold Loans Construction Indirect Lending Finance Product portfolio: Product portfolio: Home Product portfolio: Product portfolio: Product portfolio: Business loan against loans for – Purchase of Loan against gold jewellery Construction-li
Slide 10: AUM: Growth Has Rebounded
AUM: Growth Has Rebounded AUM Segmental Break Up (INR Mn) MSME CF HF IL MSME-CL Gold Loans 22% CAGR in 41,032 40,347 48,480 66,325 86,545 AUM FY19- Q2FY23 34,592 31,911 25,114 22,793 19,709 20,466 17,474 16,778 12,009 12,662 11,553 9,619 7,926 8,982 8,734 7,152 3,079 3,128 3,885 1,388 1,280 1,150 1,
Slide 11: AUM: Well Diversified Portfolio
AUM : Well Diversified Portfolio AUM Segmental Break Up MSME MSME-CL HF CF IL Gold Loans Gold Loan scaling up 3.4% 3.2% fast, medium term 6.4% 4.7% 8.3% target of Rs80bn 1.6% 19.1% CF and IL share to at 23.8% 18.0% 29.3% 21% 19.4% To stay one of the 22.3% 23.8% 26.3% fastest growing 19.3% 26.3% segm
Slide 12: Disbursals: Sustained Recovery in FY22
Disbursals : Sustained Recovery in FY22 Disbursals (INR Mn) MSME CF HF Gold Loans IL 9MFY23 28,425 12,714 25,456 42,856 18,105 43,914 disbursements have overtaken FY23 disbursements 9,192 14,467 9,230 6,757 7,845 7,561 10,464 5,090 1,662 9,237 8,858 968 3,725 7,741 10,128 2,511 4,172 4,216 3,065 11,
Slide 13: MSME: CGCL's Growth Driver
MSME: CGCL’s Growth Driver Average Ticket Size (On Portfolio) (INR Mn) Live Accounts (Nos.) 1.8 1.6 1.6 24,564 1.5 1.4 20,543 16,141 12,578 11,051 FY19 FY20 FY21 FY22 Q3FY23 FY19 FY20 FY21 FY22 Q3FY23 Loan to Value (%) 54 52 51 48 48 FY19 FY20 FY21 FY22 Q3FY23 CAPRIGLOBAL 13
Slide 14: Housing Finance: Strong Volume Driven Growth
Housing Finance: Strong Volume Driven Growth Average Ticket Size (INR Mn) Live Accounts 1.1 1.1 1.0 1.0 1.0 21,523 17,739 13,149 10,207 8,637 FY19 FY20 FY21 FY22 Q3FY23 FY19 FY20 FY21 FY22 Q3FY23 Loan to Value (%) 60 59 59 56 54 FY19 FY20 FY21 FY22 Q3FY23 CAPRIGLOBAL 14
Slide 15: Construction Finance: Focus On Niche, Small Ticket Loans
Construction Finance: Focus On Niche, Small Ticket Loans Average Ticket Size (INR Mn) Live Projects (Nos.) 188 89.3 82.2 83.7 146 151 70.2 69.4 134 126 FY19 FY20 FY21 FY22 Q3FY23 FY19 FY20 FY21 FY22 Q3FY23 CAPRIGLOBAL 15
Slide 16: Car Loan Distribution: Momentum Continues
Car Loan Distribution: Momentum Continues Pan-India coverage Pan-India Distribution Footprint through presence in 322 locations in o Distributing new car loan products of Union Bank of India, 1 7 29 States & UTs Bank of Baroda, HDFC Bank, IOB, Yes Bank, and Bank of 1 India. 11 11 4 o Asset light mod
Slide 17: Strong Growth Opportunities
STRONG GROWTH OPPORTUNITIES CAPRIGLOBAL 17
Slide 18: MSME Lending: A Huge Unexplored Opportunity
MSME Lending: A Huge Unexplored Opportunity MSME – Huge Addressable Credit Gap FY17 FY22 INR MSME Systemic 17.3 Tn 10.9 Tn 23.1 Tn Credit (INR) INR INR 19.4 Tn 52.0 Tn Non-Banks Market Addressable Credit Gap of INR 19.4 Tn 8% 10.4% refers to tappable portion out of INR 52 Tn Share of Informal Channe
Slide 19: MSME Lending: Small Loans, Big Opportunity
MSME Lending: Small Loans, Big Opportunity Geographical Distribution (Value-Wise) 1% 1% 2% MP 8% Rajasthan 30% Gujarat Focus Area 15% Delhi ❑ Self Employed Individuals – Provision stores, retail Maharasthra outlets, handicrafts etc. UP ❑ Small enterprises with inadequate income 20% Haryana documenta
Slide 20: Co-Lending Offers Further Growth Opportunities
Co-Lending: Co-Lending Offers Further Growth Opportunities Co-Lending Model : Salient Aspects Key Benefits To CGCL • Tie-ups with State Bank of India and Union Bank of • An additional opportunity at achieving scale. CGCL India for co-originating loans in the MSME segment can continue to focus on gen
Slide 21: Affordable Housing: Large Demand & Low Formal Financing
Affordable Housing: Large Demand & Low Formal Financing Ramp-up Expected in Indian Mortgage Market Housing Shortage – Socio Economic Group Wise (Loan Assets in INR Tn) 36.9 8% 31.0 26.1 12% 21.9 EWS 19.1 LIG 16.6 14.2 MIG & Above 80% Mar-17 Mar-18 Mar-19 Mar-20 Mar-21E Mar-22E Mar-23E ❑ Under penetr
Slide 22: Housing Finance: Capitalising on Affordable Housing Opportunity
Housing Finance: Capitalising on Affordable Housing Opportunity Focus Area Geographical Distribution (Value-Wise) 2% ❑ Serves middle and lower middle income population in Tier 2 and 3 cities through a network 9% MP of 127 branches. Gujarat 14% 39% ❑ Ventured in 2016 through its subsidiary – Capri Ma
Slide 23: Gold Loan: Strong Growth Opportunity
Gold Loan: Strong Growth Opportunity Large market growing Pvt banks, NBFCs gaining share, leading GL Potential for Capri to explore expected to grow at ~15% players growing in non south markets in N, W Gold loan market • Strong RoAs, low GNPAs (of Gold Loan Market Share large players) makes it an (I
Slide 24: Capri Gold Loans: Products Inspired By Service & Trust
Capri Gold Loans : Products Inspired By Service & Trust CAPRI SERVICE PROPOSITION MINIMUM DOCUMENTATION - KYC INSTANT DISBURSAL – TURNAROUND TIME 30 MINUTES ATTRACTIVE ROI WITH NO HIDDEN CHARGES LOAN VALUE STARTS FROM AS LOW AS Rs3,000/- DEDICATED RELATIONSHIP MANAGER – BECAUSE COMFORT IS IMPORTANT!
Slide 25: Capri Gold Loans: Branches As Of Dec'22
Capri Gold Loans : 449 Branches As Of Dec’22 70 109 90 70 MADHYA RAJASTHAN HARYANA GUJARAT PRADESH 55 36 19 MAHARASHTRA DELHI UTTAR PRADESH Note: State maps not comparable on scale CAPRIGLOBAL 25
Slide 26: Construction Finance: Building a Sustainable Future
Construction Finance: Building a Sustainable Future Focus Area Geographical Distribution (Value-Wise) ❑ Construction linked loans to small and midsize real 2% 1% 1% Mumbai MMR estate developers. 2% Ahmedabad 4% 4% Pune ❑ Comprehensive framework for project selection and 28% Bengaluru credit appraisa
Slide 27: Well-Positioned To Grow
WELL-POSITIONED TO GROW CAPRIGLOBAL 27
Slide 28: Network: Deepening Geographical Presence To Support Growth
Network: Deepening Geographical Presence To Support Growth Branch Expansion Has Picked Up Pace Strong Network Expansion Over Medium Term Non-Gold Loan Br. Gold Loan Branches ❑ With the launch of Gold Loan business in Aug’22, branch network expanded 1.9x over Q2FY23 to touch 610 branches. 449 ❑ Netwo
Slide 29: Operating Efficiency: Low-Cost Hub & Spoke Model
Operating Efficiency: Adopting Low-Cost Hub & Spoke Model Area Managers • Sales and Credit • Branch Manager Operations Relationship Managers (DSTs) Hub Spoke • • • FCU, Legal, Technical and • Credit Resource Collections • Direct connect with customers • Spoke branch functions Benefits of Hub & Spoke
Slide 30: Liability Mix: Diversified Borrowings
Liability Mix : Diversified Borrowings… INR Mn except stated SCB Borrowings Refinance NCDs 27,687 28,366 37,689 48,084 65,940 499 1,500 4,331 7,167 1,545 6,741 5,625 6,380 4,635 27,188 25,321 38,128 53,394 26,312 FY19 FY20 FY21 FY22 Q3FY23 o Nil exposure to short-term money market instruments. o Add
Slide 31: Through Multiple Lending Institutions
…Through Multiple Lending Institutions Borrowing Relationships with 21 Financial Institutions CAPRIGLOBAL 31
Slide 32: Well Capitalized For Medium Term Growth
Well Capitalized For Medium Term Growth Consolidated Networth (INR Mn) Capital Adequacy (%) CGHFL Surplus Inv. In CGHFL (incl. premium) CGCL CGHFL 13,827 15,392 17,173 19,225 20,644 50.8 47.0 43.5 38.0 37.7 38.8 15,605 34.2 31.2 29.5 14,645 24.2 14,523 13,077 11,755 3,250 3,250 1,750 1,750 1,750 3,2
Slide 33: Tech Assisted Unique Underwriting Process
TECH ASSISTED UNIQUE UNDERWRITING PROCESS CAPRIGLOBAL 33
Slide 34: Urban Retail: Unique Loan Origination And Underwriting Process
Urban Retail: Unique Loan Origination And Underwriting Process Business Credit FCU, Legal, Customer Operations Collection Origination Underwriting Technical Service ▪ Fully in-house ▪ Bureau check ▪ Fraud Check of ▪ Pre-disbursal ▪ Mandatory ▪ Customer visit on origination. ▪ Customised documents an
Slide 35: Construction Finance: Strong Checks At All Stages
Construction Finance : Strong Checks At All Stages Credit Appraisal and Due IC Approval and Selection Criteria Monitoring Diligence Documentation Promoter / Group ▪ Three levels of independent ▪ Detailed IC note proposed by ▪ Strong monitoring team of 15 appraisal – Business Stage, Local local credi
Slide 36: Leveraging Technology
Leveraging Technology Digital Payments Infrastructure and Technology Initiatives 01 Mobility Applications Integrated Payments including Sales and Evolved e-payment solutions for Collections Applications both disbursements & collections 02 CRM Customer Relationship through self service portal & effec
Slide 37: Building New Pipes For Faster Tech Journeys
Building New Pipes For Faster Tech Journeys Key Technology Enablers In-House Tech Artificial Machine Data Team Intelligence Learning Analytics Key Outcomes In Near Future CLM Analytics DSA Platform Customer Entire Tech Built Own OCR Built Own Data To create an Model Footprint and KYC Analytics alter
Slide 38: Strong Monitoring Mechanism
STRONG MONITORING MECHANISM CAPRIGLOBAL 38
Slide 39: Urban Retail: Robust Collection Mechanism
Urban Retail : Robust Collection Mechanism Collection Team (Urban Retail) Centralised Soft Delinquencies Hard Delinquencies Repossession and Tele-calling 1dpd – 59dpd Litigation 60dpd and above Liquidation • System driven • Dedicated in-house • Dedicated and • Hard delinquencies that • Specialised m
Slide 40: Extensive leverage of strong Digital and Analytical capabilities
1 Artificial Intelligence based Bot Calling to customers 2 State of the art Tele-calling set up with automated calling 3 Incentive Gamification Tool for collections employees Extensive leverage of strong Digital and 4 Live Collections Analytics Dashboard across hierarchy Analytical capabilities for
Slide 41: Strengthened Collections Engine with strategic pillars
Strengthened Collections Engine with 3 strategic pillars • Trainings for courtesy & problem-solving led communications Best-in-class Customer Engagement Quality • Live monitoring of customer discussions with on-roll trainers • Monthly tracking of contactability, invalid repayment accounts and custom
Slide 42: Construction Finance: Strong Checks At All Stages
Construction Finance : Strong Checks At All Stages Early Warning Signals through Compliances and Milestone Tracking • Site Inspection Reports • Follow-up for timely submission of Monthly MIS and • Cashflow Analysis Reports MIS analysis • Account Conduct Reports • Ensuring that all the collections ar
Slide 43: Asset Quality: Stage 3 + Restr. Asset Pool Declining
Asset Quality : Stage 3 + Restr. Asset Pool Declining INR Mn except stated ECL Analysis As Per IndAS (INR Mn) Q3FY23 Q2FY23 Q1FY23 Q4FY22 Q3FY22 Stage 1 & 2 - Gross 80,588 73,508 65,953 63,627 55,988 Stage 1 & 2 - ECL Provisions 1,234 1,248 1,260 1,325 944 Stage 1 & 2 - Net 79,354 72,260 64,693 62,3
Slide 44: NPA Analysis: Weathering Short Term Headwinds Well
NPA Analysis : Weathering Short Term Headwinds Well INR Mn except stated otherwise ECL Analysis As Per IndAS FY22 FY21 FY20 FY19 FY18 Stage 1 & 2 - Gross 63,627 45,411 39,151 40,431 28,135 Stage 1 & 2 - ECL Provisions 1,325 452 308 211 187 Stage 1 & 2 - Net 62,303 44,958 38,843 40,220 27,948 Stage 1
Slide 45: Asset Quality: Net NPAs Improving
Asset Quality : Net NPAs* Improving MSME (%) Housing Finance (%) 1.3 4.0 1.1 1.1 3.1 2.8 0.8 2.4 1.7 0.3 FY19 FY20 FY21 FY22 Q3FY23 FY19 FY20 FY21 FY22 Q2 FY23 Construction Finance & Indirect Lending (%) 0.2 0.1 0.1 0.1 *Net NPAs arrived at after considering only Stage 3 ECL - provisions. FY19 FY20
Slide 46: Credit Cost: One-off Bumps
Credit Cost : One-off Bumps Credit Cost (INR Mn) Credit Cost / Avg. AUM (%)* (Q2 & H1 not ann.) 1.84 1,057 1.37 1.19 Credit cost 607 0.94 beginning 530 0.87 to slowly 353 soften after 245 0.48 a sharp 165 increase in FY22 FY19 FY20 FY21 FY22 Q3FY23 9MFY23 FY19 FY20 FY21 FY22 Q3FY23 9MFY23 Loss Given
Slide 47: Collection Efficiency: High and Stable
Collection Efficiency : High and Stable Consolidated Collection Efficiency Stable Collection Efficiency o Our overall collection efficiency has remained high and stable. o The collection efficiency within retail segment is marginally lower than the overall collection efficiency. o The collection eff
Slide 48: Delivering Consistent Financial Performance
DELIVERING CONSISTENT FINANCIAL PERFORMANCE CAPRIGLOBAL 48
Slide 49: Over The Years…
Over The Years… NIM (%) : Holding Up Well In Rising Rate Cost-Income (%) : Impacted By Gold Loan Scenario* Roll-out 9.8 69.5 9.5 9.5 61.3 C/I ratio 9.1 49% in 46.6 9MFY23 38.4 40.1 adjusted for 8.5 35.2 8.5 the opex in gold loan vertical FY19 FY20 FY21 FY22 Q3FY23 9MFY23 FY19 FY20 FY21 FY22 Q3FY23 9
Slide 50: Over The Years…
Over The Years… Return on Average Assets (%) : Short term Return on Average Equity (%) : Short term Impact Impact 3.7 3.7 11.3 3.5 11.0 10.9 3.3 10.3 9.2 2.3 7.3 1.7 FY19 FY20 FY21 FY22 Q3FY23 9MFY23 FY19 FY20 FY21 FY22 Q3FY23 9MFY23 Total Assets (INR Mn) Capital Adequacy (%) (Standalone) 38.0 37.7
Slide 51: CGCL Consolidated Income Statement
CGCL Consolidated Income Statement Profit and Loss A/c (INR Mn) FY18 FY19 FY20 FY21 FY22 Interest income 3,219 5,307 6,700 6,735 8,396 Interest expenses 967 2,071 2,828 2,887 3,308 Net interest income 2,252 3,236 3,872 3,848 5,087 Other income 210 586 433 636 1,231 Fees 195 558 399 626 1,103 Other i
Slide 52: CGCL Consolidated Balance Sheet
CGCL Consolidated Balance Sheet Balance Sheet (INR Mn) FY18 FY19 FY20 FY21 FY22 Liabilities Paid-up equity 350 350 350 351 351 Reserves 12,166 13,477 15,042 16,822 18,873 Ample Networth 12,517 13,827 15,392 17,173 19,225 leverage room to continue Borrowings 15,661 27,687 28,366 37,689 48,084 deliver
Slide 53: CGCL Consolidated Earnings: Du Pont Analysis
CGCL Consolidated Earnings : Du Pont Analysis RoA Tree (%) FY18 FY19 FY20 FY21 FY22 Interest income 13.0 14.6 15.4 13.1 13.0 Interest expenses 3.9 5.7 6.5 5.6 5.1 Net interest income 9.1 8.9 8.9 7.5 7.8 Other income 0.8 1.6 1.0 1.2 1.9 Fees 0.8 1.5 0.9 1.2 1.7 Other income 0.1 0.1 0.1 0.0 0.2 Net in
Slide 54: CGCL Cons. Income Statement: Quarterly Comparison
CGCL Cons. Inc. Statement : Quarterly ComparisonINR Mn except stated Particulars Q3FY23 Q3FY22 Y-o-Y (%) Q2FY23 Q-o-Q (%) 32 31 Interest earned 3,004 2,192 37.0% 2,787 7.8% Interest expended 1,394 822 69.6% 1,258 10.8% Net interest income 1,610 1,370 17.5% 1,398 15.1% Non-interest income 772 346 123
Slide 55: Shareholding
Shareholding o Market capitalization^ : Rs133bn | US$ 1.63bn o Cons. Networth* (Q3FY23) : Rs20.6bn o Paid-up Equity : Rs351.7mn o FV : Rs2 o Dividend Per Share (FY22) : Rs0.50 ^Average of market capitalization on BSE and NSE as of 28th Jan’23 * Not adjusted for DTAs 1 US$ = ₹ 81.54 CAPRIGLOBAL 55
Slide 56: ESG: Making An Impact
ESG : MAKING AN IMPACT CAPRIGLOBAL 56
Slide 57: ESG Snapshot: Growing Responsibly
ESG Snapshot : Growing Responsibly Environment Social Governance ▪ Introduction of Sales Mobility app ▪ CGCL facilitates income generating ▪ Executive Management overseen by has digitized 50% of loan loans and housing loans for self- an independent Board of Directors origination to disbursal process
Slide 58: Social Impact In Charts: Facilitating Financial Inclusion
Social Impact In Charts : Facilitating Financial Inclusion Cumulative Cases Financed Since Inception Empowering Through Credit Access to and timely repayment of loans resulted in the 34,341 improvement of credit scores of borrowers. A pre- 26,163 6,630* cases pandemic Social Impact Study* by Capri G
Slide 59: Contributing To Change: Our Social Impact Reports
Contributing To Change: Our Social Impact Reports Social Impact Report 2019 Seeds of Change Report For a comprehensive insight on CGCL’s Social Welfare activities and Impact Studies, visit www.capriglobal.in and select the tab Social Welfare. CAPRIGLOBAL 59
Slide 60: Governance: Independent Board Guides Executive Management
Governance : Independent Board Guides Executive Management Audit Committee Risk Management Committee Oversees Company’s Formulates and financial reporting reviews policy on and financial operational, IT, and information disclosure people risk process Nomination and Remuneration CSR Committee Committ
Slide 61: Charting A Strong Growth Path Ahead
Charting A Strong Growth Path Ahead CAPRIGLOBAL 61
Slide 62: Leadership Team
Leadership Team CAPRIGLOBAL 62
Slide 63: Board of Directors & Strong Corporate Governance
Board of Directors & Strong Corporate Governance Corporate Governance Rajesh Sharma, MD & CFO Founder & Promoter with over 2.5 Philosophy decades of experience, Chartered Accountant o Good Board Practices Ajit Mohan Sharan, Independent Beni Prasad Rauka, Independent Director Director o Control Envir
Slide 64: Stable Leadership Team
Stable Leadership Team Retail Retail Corporate Functions Amar Rajpurohit (Business Head – Magesh Iyer (Chief Operating Ashok Agarwal (Director – Legal & MSME & Housing – Sales/Product) Officer) Ex - InCred Finance, Compliance) Previously practicing Ex-AU Financiers, Gruh Finance, Reliance Capital, I
Slide 65: Accolades
Accolades SAAT APNO KA WE HAVE BAGGED THE CAPRIGLOBAL. “gy” f GREAT PLACE TO WORK - CERTIFIED ™ Building and Sustaing High-Trust, High-Performance Culture’ EXCELLENCE AWARDS PROGRAM 2022 CAPRIGLOBAL
Slide 66: Thank you
Thank you For further information, please contact: Ravikant Bhat ravikant.bhat@capriglobal.in T: +91 72089 52880 Sheetal Khanduja Rajat Gupta sheetal@GoIndiaAdvisors.com rajat@GoIndiaAdvisors.com M:+91 97693 64166 M: +91 99718 97739 CAPRIGLOBAL 66
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