Iifl Finance Limited · NSE:IIFL
Iifl Finance — Q1 FY2020 Earnings Presentation
43 slides from Iifl Finance's earnings presentation, Aug 14, 2019
Slide 1: IIFL Finance cover letter to stock exchanges
IIFL FINANCE August 14, 2019 The Manager, Listing Department, The Manager, BSE Limited, Listing Department, Phiroze Jeejeebhoy Tower, The National Stock Exchange of India Ltd., Dalai Street, Exchange Plaza, 5 Floor, Plot C/1, G Block, Mumbai 400 001. Bandra - Kuria Complex, Bandra (E), BSE Scrip Cod
Slide 2: Results update
IIFL Finance Limited (formerly “IIFL Holdings Limited”) Press Release For immediate publication Mumbai, India August 14, 2019 Results update India Infoline Finance reported a consolidated profit after tax on continuing business of Rs 181 Cr, up 43% q-o-q and 2% y-o-y; and a total income on continuin
Slide 3: Loan assets under management and business highlights
India Infoline Finance had loan assets under management of Rs 34,920 Cr as at June 30, 2019, up 19%* y-o-y. The loan book growth has been positive in home loans, small ticket business loans, gold loans and microfinance. The company had a widespread presence of 2,110 branches as at June 30, 2019, spa
Slide 4: Comfortable liquidity position; group reorganization; awards
Comfortable liquidity position The Company opened a public issue of secured and unsecured redeemable non-convertible debentures (NCDs) on August 06, 2019, aggregating to Rs100 Cr, with a green-shoe option to retain over- subscription up to Rs900 Cr (aggregating to a total of Rs1,000 Cr). CRISIL has
Slide 5: About IIFL
About IIFL IIFL Finance Limited (Erstwhile “IIFL Holdings Limited”) (Bloomberg Code: IIFL IN, NSE: IIFL, BSE: IIFL) is one of the leading players in the Indian financial services space. Prior to the Composite Scheme of Arrangement (effective May 2019), IIFL Finance Limited was engaged in the busines
Slide 6: India Infoline Finance Limited
For the quarter ended June 30, 2019 India Infoline Finance Limited Subsidiary of IIFL Finance Limited August 14, 2019 1
Slide 7: Performance Overview
I: Performance Overview (i) Q1FY20 Results 3 (iii) Overview of Business 13 (iii)Product Segments 23 II: Ownership, Management and Governance 32 30 2
Slide 8: India Infoline Finance – Consolidated results (as per IND AS)
India Infoline Finance – Consolidated results (as per IND AS) Quarter ended June 2019 (NBFC, HFC and MFI) ₹ Cr Q1FY20 Q4FY19 Q-o-Q Q1FY19 Y-o-Y Loan book 25,792 27,525 (6%) 25,741 0% Assignment 9,128 7,379 24% 3,604 153% Assets under management * 34,920 34,904 0% 29,344 19% Interest income 1,156.6 1
Slide 9: India Infoline Finance – Ex-CV Proforma Consolidated results
India Infoline Finance – Ex-CV Proforma Consolidated results (as per IndAS) Quarter ended June 2019 (NBFC, HFC and MFI) ₹ Cr Q1FY20 Q4FY19 Q-o-Q Q1FY19 Y-o-Y Loan book 25,792 27,525 (6%) 25,741 0% Securitization / Assignment 9,128 7,379 24% 3,604 153% Assets under management 34,920 34,904 0% 29,344
Slide 10: India Infoline Finance – Consolidated Balance Sheet
India Infoline Finance – Consolidated Balance Sheet Quarter ended June 2019 (NBFC, HFC and MFI) As at As at ASSETS Jun 30 2019 LIABILITIES AND EQUITY Jun 30 2019 Unaudited Unaudited 1 Financial Assets 1 Financial Liabilities (a) Cash and cash equivalents 977.6 (a) Derivative financial instruments 40
Slide 11: Sharper focus on small ticket retail loans
Sharper focus on small ticket retail loans Quarter ended June 2019 AUM break-up (%) AUM (₹ Cr) Q1FY20 Y-o-Y Q-o-Q Capital ● Loan assets growth Market Home Loans 12,380 33% 2% Micro- driven by small ticket Finance, finance, 1% Business Loans 8,322 1% (2%) 7% retail home loans, gold Home Developer Loa
Slide 12: Funding costs rise, boarding yields rise in tandem
Funding costs rise, boarding yields rise in tandem Quarter ended June 2019 Cost of Funds (%) NIM (%) ● Capital adequacy at 22.1%, well above the minimum requirement 8.3% 11.1% ● Tier I Capital Adequacy 10.2% 9.4% 7.1% 6.5% 7.2% 6.7% 8.9% 9.3% 6.2% 6.3% 8.4% 8.6% Ratio stands at 18.4% against minimum
Slide 13: Through cycles, maintaining superior quality of assets
Through cycles, maintaining superior quality of assets Quarter ended June 2019 Gross NPA (%) Net NPA (%) ● GNPA as at Q1 FY20, was 2.0% and NNPA 180 150 120 90 DPD 90 DPD 180 150 120 90 DPD 90 DPD DPD DPD DPD DPD DPD DPD was 0.8% ● Under Ind AS, provision coverage (incl. standard 2.02% 2.00% 1.82% 1
Slide 14: Stable asset quality across products
Stable asset quality across products Quarter ended June 2019 Credit quality has been steady across key product segments, with overall gross NPA at ~2% or lower Core growth segments Synergistic segments Home loans Business loans Developer & Construction finance Gross NPAs (%) Gross NPAs (%) Gross NPA
Slide 15: Comfortable liquidity position
Comfortable liquidity position Quarter ended June 2019 Positive ALM mismatch across all buckets and comfortable liquidity position During last three quarters ₹ Cr Cumulative Outflow Cumulative inflow [] Cumulative mismatch Continue to maintain long- as a % of cumulative outflow term rating of AA (St
Slide 16: Well diversified funding mix
Well diversified funding mix Quarter ended June 2019 Resource profile is well diversified, with increasing share of assigned assets and bank loans Split of funding Borrowings 15,420 20,176 28,665 35,002 34,415 17,230 (₹ Cr) CBLO 4% 2% 5% Commercial Paper 16% 12% 18% 17% 7% 30% Assignment 7% 30% 4% 7
Slide 17: Recent liquidity measures by Govt/RBI for NBFC sector
Recent liquidity measures by Govt/RBI for NBFC sector Quarter ended June 2019 Onward Lending • Banks’ lending to NBFCs for on-lending to agriculture up to Rs 10 lakh and MSME and housing sectors up to Rs 20 lakh per borrower, is to be treated as priority sector lending (PSL). This will encourage ban
Slide 18: Overview of Business
I: Performance Overview (i) Q1FY20 Results 3 (iii) Overview of Business 13 (iii)Product Segments 23 II: Ownership, Management and Governance 32 30 13
Slide 19: Top-tier NBFC in India
Top-tier NBFC in India Company snapshot ₹ 34,920 Cr 85% Retail 2,110 18,514 Assets under Management 15% Wholesale Branches Employees 2.3% 18.4% / 22.1% 2.00% / 0.78% 131% Return on Assets Tier 1 / Total Capital Adequacy Gross NPAs / Net NPAs Provisioning of GNPA and 17.3% Return on Equity Unique adv
Slide 20: Our Product Portfolio
Our Product Portfolio As on June 30, 2019 Strategic focus on segments that are core strengths and have inter se synergies AUM (₹ Cr) Target customers Unique features Salaried / Self-employed Focused on affordable and non-metro housing segments 12,380 individuals Leverages underwriting skills d
Slide 21: Increasing diversification across products and customers
Increasing diversification across products and customers Business mix shifting towards a diversified mix of superior quality retail assets Diversified portfolio disperses exposure and balances cyclical vagaries AUM (₹ Cr) 3,289 9,867 16,176 22,281 34,904 34,920 4% 1% 1% 8% 7% 7% 6% 10% 14% Microfina
Slide 22: Vast physical network spread across the country
Vast physical network spread across the country ~85% of branches are in Tier 2 and Tier 3 locations Wide spread network across 25 states and over 600 locations Number of branches 2,110 1,947 1,161 191 Mar'11 Mar'15 Mar'19 Jun'19 Regional split of branches 35% South North 39% East West 11% 15% Bran
Slide 23: Ability to leverage physical presence and cross-sell
Ability to leverage physical presence and cross-sell One stop shop for retail customers, building relationship for life HOME LOAN MFI HEALTH INSURANCE 215k BUSINESS LOAN GOLD LOAN 11lakhs FIXED DEPOSIT 573k 25 lakhs LIFE INSURANCE CURRENCIES ₹ MUTUAL FUND DERIVATIVES EQUITIES FINANCIAL COMMODITIES P
Slide 24: End-to-end digitization through multiple innovations
End-to-end digitization through multiple innovations SOURCING Propensity-based targeting built on machine learning model Leads generated are communicated to individual branches to generate action High conversions: More than 15x of natural response rate ONBOARDING Tablet based on-boarding pro
Slide 25: Leveraging technology for superior credit underwriting
Leveraging technology for superior credit underwriting Ongoing Portfolio Tenure Norms Policy Checks Monitoring Delinquency Automated Driver Analysis Pricing Grid RISK MONITORING Work Experience Check Income Checks ITR Norm Check Loan Servicing Customer Service Bureau Checks Default Check LOAN MANAGE
Slide 26: Strong risk management framework under the Board's direct supervision
Strong risk management framework under the Board’s direct supervision Multi-level risk governance for efficient monitoring and control of product and entity level risks Scope Board of directors Authority Risk Strategy & Advisory on Risk Appetite Empower Approve large-ticket cases Risk Board Cred
Slide 27: Product Segments
I: Performance Overview (i) Q1FY20 Results 3 (iii) Overview of Business 13 (iii)Product Segments 23 II: Ownership, Management and Governance 32 30 22
Slide 28: Home loans – Product overview
Home loans – Product overview Affordable home loan Product Non-metro housing loan offering For home purchase, home renovation, home construction and plot purchase Affordable home loan: Salaried and self employed segment wherein household income is below ₹75k pm and are buying Customer proper
Slide 29: Home loans – Financial overview
Home loans – Financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 12,380 12,197 8,579 12.0% 10.3% 10.1% 10.8% 9.8% 9.3% 5,300 2,700 800 FY15 FY16 FY17 FY18 FY19 Q1FY20 FY15 FY16 FY17 FY18 FY19 Q1FY20 Onboarding Average Ticket Size (₹ Lakhs) Gross NPAs (%) 31.0 27.0 26.0 22.0 1.2%
Slide 30: Business loans – Product overview
Business loans – Product overview Product For business loans backed by cash flows offering Collateral must for loans of more than ₹ 50 Lakh; LTV up to 70% Customer MSME customers having established business performance segments Lending to manufacturing, trading and service sectors for workin
Slide 31: Business loans – Financial overview
Business loans – Financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 8,117 7,974 7,361 19.8% 6,000 16.3% 5,100 14.3% 13.4% 13.5% 14.3% 4,000 FY15 FY16 FY17 FY18 FY19 Q1FY20 FY15 FY16 FY17 FY18 FY19 Q1FY20 Onboarding Average Ticket Size (₹ Lakhs) Gross NPAs (%) 83.0 89.0 83.0 3.1%
Slide 32: Gold loans – Product overview
Gold loans – Product overview Product Loan against jewellery provided for personal & business use; offering On-boarding LTV < 75% Customer Salaried, self-employed and MSME businesses segments 70% are repeat customers AUM Gross/Net NPA Onboarding Tenor ₹ 6,583 Crore 0.5% / 0.3% Average Ticket
Slide 33: Gold loans – Financial overview
Gold loans – Financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 6,583 19.2% 19.2% 18.7% 18.1% 18.1% 18.5% 6,195 3,885 4,037 2,914 2,910 FY15 FY16 FY17 FY18 FY19 Q1FY20 FY15 FY16 FY17 FY18 FY19 Q1FY20 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 58 0.8% 53 55 43 46 48
Slide 34: Microfinance – Product overview
Microfinance – Product overview Product Small-ticket loans for purpose of income generation activities offering Customer Target segment is rural and semi-urban self-employed women formed into joint liability groups segments AUM Gross/Net NPAs States Total Customers Tenor ₹ 2,358 Crore 0.9% / 0.0
Slide 35: Microfinance – Financial overview
Microfinance – Financial overview Assets Under Management (₹ Crore) Boarding Yield (%) IIFL Finance IIFL Finance acquired control acquired control 2,286 2,358 26.5% 25.9% 24.4% 22.6% 22.0% 20.2% 840 110 238 58 FY15 FY16 FY17 FY18 FY19 Q1FY20 FY15 FY16 FY17 FY18 FY19 Q1FY20 Onboarding Average Ticket
Slide 36: Ownership, Management and Governance
I: Performance Overview (i) Q1FY20 Results 3 (iii) Overview of Business 13 (iii)Product Segments 23 II: Ownership, Management and Governance 32 30 31
Slide 37: Distinguished Board of Directors
Distinguished Board of Directors India Infoline Finance– Board of Directors V. K. Chopra, Chairman Nirmal Jain, Whole-time Director Chartered Accountant and Former Whole-Time MBA from IIM Ahmedabad, rank-holder CA Member, SEBI and Cost Accountant. Worked with Unilever for Former Chairman & MD
Slide 38: Management team and Marquee Investors
Management team with rich domain Marquee Investors experience and ownership India Infoline Finance IIFL Finance Limited Chief Executive Officer Sumit Bali Public & Others 13.7% Chief Financial Officer Prabodh Agrawal NRI 5.3% Promoters Chief Risk Officer Anujeet Kudva Domestic 29.0% Institution Comp
Slide 39: IIFL's brand and credibility substantiated by multiple awards
IIFL’s brand and credibility are substantiated by multiple awards IIFL Finance IIFL Finance ET Now & won has been awarded as a Broadcast One “Best ATL Campaign“ Award at “Great Place to Work” recognised mCube Awards for IIFL Bond certification from March 2019 to IIFL Group Campaign February 2020 as
Slide 40: Environment, Social and Governance (ESG) Initiatives
Environment, Social and Governance (ESG) Initiatives • KUTUMB E • Digital process • Green communication • Financial Inclusion S • First House- Housing for All • Affordable Housing • Women Empowerment • Diversity at Work Place • Employees Health and Safety • CSR activities Employees Organization • Le
Slide 41: Corporate Social Responsibility
Corporate Social Responsibility River Rejuvenation – Wardha, Maharashtra Financial Literacy – West Bengal IIFL Foundation took up the charge to rejuvenate the main Under IIFL foundation’s financial literacy initiative, two new river and its tributaries in Arvi taluka, to improve existing Financial L
Slide 42: Disclaimer
Disclaimer *For further details refer to section titled “Issue Related Information” on page 242 of the Tranche II Prospectus dated July 30, 2019. Allotment in the public issue of debt securities should be made on the basis of date of upload of each application into the electronic book of the stock e
Slide 43: Thank you
Thank you Published in August 2019 IIFL Finance Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate, Thane – 400604. This report is for information purposes only and does not construe to be any investment, legal or taxat