Trucap Finance Limited · NSE:TRU
Trucap Finance — Dhanvarsha Finvest — Q3 FY22 Earnings Presentation
45 slides from Trucap Finance's earnings presentation, February 2022
Slide 1: Dhanvarsha
3 Dhanvarsha
Slide 2: Disclaimer
Disclaimer This presentation is not a prospectus, a statement in lieu of a prospectus, an offering circular / memorandum, an advertisement, an offer, an invitation to offer or an offer document in terms of the Companies Act, 2013, the Securities and Exchange Board of India (Issue of Capital and Disc
Slide 3: Financial & Business Update
NY Financial & Ya“ Business Update
Slide 4: Key Highlights
Key Highlights 34.6 Mn 3.4x 4.1x 12 Mn AUM Disbursement Y-o-Y growth Y-o-Y growth 5.3x 10.3x Y-o-Y growth Y-o-Y growth 0.4 Mn 23,952 Profit Customers All figures in US$. Exchange rates as on period end.
Slide 5: Financial Update
Financial Update US$ Million • Solid balance sheet with robust liquidity, Particulars Dec’20 Dec’21 Y-o-Y Change high capital adequacy, and low leverage. AUM 10.4 34.6 232% • Disbursement of US$ 34.6 million, up 300% Y/Y led by MSME Gold & FLDG Disbursement 3.0 12.0 300% backed loans. CRAR% 83.2% 47
Slide 6: Dhanvarsha is a Rapidly Growing Lending Business
Dhanvarsha is a Rapidly Growing Lending Business AUM (US$ Mn) 34.6 32.0 11.4% 17.7 12.3% 14.3 39.2% 10.4 Dec'20 Mar'21 June'21 Sep'21 Dec'21 37% • Strong traction in MSME Business and Gold loans with first full quarter of co-lending partnership with CBOI. • Cautious approach to unsecured MSME Busine
Slide 7: Disbursements: Increasing Delivery from Tech & Branch Roll-out
Disbursements: Increasing Delivery from Tech & Branch Roll-out… Quarterly Disbursement (US$ Mn) 9-month Disbursement (US$ Mn) 37.8 12.1 3.0 6.5 0.4 0.7 Dec'19 Dec'20 Dec'21 9MDec'19 9MDec'20 9MDec'21 *Given emergence of omicron threat, the company consciously slowed down loan disbursements in the mo
Slide 8: Robust Growth in Interest and Total Income
…Have Led to Robust Growth in Interest and Total Income… Interest Income (US$ Mn) 1.8 1.6 0.8 0.7 0.4 Dec'20 Mar'21 June'21 Sep'21 Dec'21 Total Income (US$ Mn) 2.7 2.0 1.5 0.9 0.7 Dec'20 Mar'21 June'21 Sep'21 Dec'21 Exchange rates as on period end
Slide 9: Along with Increasing Efficiency
…Along with Increasing Efficiency Cost to Income (%) Earnings’ Trajectory* 0.41 82.3% 0.35 80.4% 75.9% 0.24 53.9% 48.5% 49.3% 0.12 0.01 -0.04 Sep'20 Dec'20 Mar'21 June'21 Sep'21 Dec'21 Sep'20 Dec'20 June'21 Sep'21 Dec'21 Mar'21 • Strong traction in MSME Business and Gold loans along with maturing of
Slide 10: Supported by Conservative Leverage with Increasing Credibility
Supported by Conservative Leverage with Increasing Credibility… Cumulative Number of Sanctioned Facilities Value of Sanction Amounts (US$ Mn) 25 9.1 8.2 19 6.7 13 4.1 9 3.5 3 Dec'20 Mar'21 June'21 Sep'21 Dec'21 Dec'20 Mar'21 June'21 Sep'21 Dec'21 8x+ increase in number of facilities Reflecting the r
Slide 11: Leading to Decline in Cost of Debt
…Leading to Decline in Cost of Debt Reduction in Cost of Sanctions 12.5% 12.3% 11.9% 11.5% Mar'21 June'21 Sep'21 Dec'21 Last 4 quarters have seen close to Leverage remains conservative at ~1.15x, 100bps drop in Cost of Sanctions. with sufficient Headroom.
Slide 12: Superior Asset Quality and Collection Efficiency
Superior Asset Quality and Collection Efficiency Particulars Dec’20 Dec’20* Sep’21 Dec’21 180+ DPD 90+ DPD Gross NPA % 2.35% 7.93% 2.92% 2.95% Net NPA % 0.86% 4.97% 1.38% 1.79% Gross Performing Assets % 97.6% 92.1% 97.1% 97.1% Collection Efficiency** % 94% 94% 257% 245% GNPA and NNPA are reported on
Slide 13: Robust in-House Collection Vertical with Strong Controls
Robust in-House Collection Vertical with Strong Controls US$ Million Prepayments Collection efficiency Collection Demand Collections Month & Foreclosure (%) without prepayments Efficiency (%) raised received Received* & foreclosures Apr-21 0.6 0.5 0.3 83% 150% May-21 0.5 0.5 0.4 84% 168% Jun-21 0.7
Slide 14: Conservative Underwriting Processes: Built for the Customer Segment
Conservative Underwriting Processes: Built for the Customer Segment Standard • Case evaluation benchmarks are objective parameters and processes • Plug-and-play model which can be adapted to different products, cohorts and partnerships Significantly • 95%+ of documentation is digital and can be acco
Slide 15: Risk and Governance
Risk and Governance …driven by a team with strong experience Risk mitigated portfolio approach… in risk and controls ~37% of AUM is backed by Gold resulting in superior • Mr. Mahendra Servaiya is one of the most asset quality experienced members of the core team with 3+ decades of banking experience
Slide 16: Comprehensive Risk Management Framework
Comprehensive Risk Management Framework Action Undertaken Aspects Covered Objective Achieved / To Be Achieved Risk Assessment Framework Credit, liquidity, solvency, Common standards for financial, and information management of various risks security risks at portfolio level Back-Test PL Portfolio Wo
Slide 17: RAS Framework
RAS Framework Type of Metric Aspects Covered Thresholds Q1FY22 Q2FY22 Q3FY22 Overall Capital Adequacy Buffer (Min. capital adequacy being 15%) >=30% >=20% & <30% <20% 82.7% 49.5% 47.0% Solvency Tier-1 Capital Buffer (Regulation states min 12% in event >18% 15-18% 12-15% NA NA NA of GL=> 50% AUM) Ret
Slide 18: Product Suite and Distribution Strategy
Product Suite and Distribution Strategy
Slide 19: A Differentiated approach in lending
A Differentiated approach in lending… Capital efficiency & risk management at the fore Own balance sheet lending Preferred Sourcing Partnership with FLDG Lending as a Service Small ticket Solid sourcing in new geographies High IRR generating business with very low acquisition cost with share of inte
Slide 20: Lending as a Service Will Enable Superior Capital Efficiency
Lending as a Service (L-a-a-S) Will Enable Superior Capital Efficiency Superior Growth enabled by Lending-as-a-Service enhances Capital Efficiency on Balance Sheet • Sourcing partnerships with large lenders to realize • Dhanvarsha contributes between 5% to 20% last-mile credit inclusion & capital ef
Slide 21: L-a-a-S: Partnerships in Play Central Bank of India & More
L-a-a-S: Partnerships in Play Central Bank of India & More The company has partnered with Central Bank of India in Madhya Pradesh for Co-lending of up to US$ 13.4 million to MSME Gold loan customers. The company has recently also partnered with EZ Capital for co-lending in Delhi NCR to gold loan cus
Slide 22: Product Distribution: Omni-channel Strategy for Substantial Scale
Product Distribution: Omni-channel Strategy for Substantial Scale Financial Inclusion Technology Assets Experiential Centres Captive Sales Team Direct Selling Agents Centres Differentiated assets Offers a superior Dhanvarsha has a Capex light business Strong network of to scale organic value proposi
Slide 23: Pioneering the Distribution of Financial Products by Leveraging Robust Technology
Pioneering the Distribution of Financial Products by Leveraging Robust Technology 9:41 MoneyRabbit® – an AI-powered proprietary credit health and Hi Mohana, financial wellness platform that also enables borrowing by MSMEs & Get Micro Loan Credit Score in 5 Minutes Build and Monitor individual borrow
Slide 24: Evolution of Money Rabbit: Omni Channel Digital Platform
Earn No Paperwork Cashbacks Evolution of Money Rabbit: Dhanvarsha’s Omni Channel ` ` Digital Platform for MSME’s and Blue-Collar Work Force Earn Rewards Pay Bills Through Wallet Need Help? Home Credit Health Wallet 31,700+ 150k+ Subscriptions User Data for Credit Health Insights Distribution partner
Slide 25: Money Rabbit: Omni Channel Digital Platform for MSMEs
Money Rabbit: Dhanvarsha’s Omni Channel Digital Platform for MSME’s and Blue-Collar Work Force Virtual & Physical Card Get your own personalized Ru-pay card which can be used at any Credit Health Check Tool online/offline merchants Get to know your latest Bureau Score and other Micro loans credit de
Slide 26: Money Rabbit: Credit Health and Financial Wellness Tool
Money Rabbit: Credit Health and Financial Wellness Tool Demystifying credit score for masses and in turn promoting financial literacy and inclusion Financial Wellness and Credit Health platform for Dhanvarsha’s target audience (as some may not be using Bureau Reports often nor have knowledge of them
Slide 27: Powered by a Robust Data Science & Engineering Stack
Powered by a Robust Data Science & Engineering Stack Real Time Data Access Big Data Engineering AI & ML Actionable Insights Robust & Scalable Automation of Cloud Based Predictive On-demand Business Aggregation APIs Attribution APIs Models & Score Cards via Insights & Analytics Decision APIs • Multip
Slide 28: DhanSetu: Digital Platform for Channel Partners
DhanSetu: Digital Platform for Dhanvarsha Channel Partners to aid Seamless customer onboarding and tracking Easy & Real Time Unlock Earnings: Tracking: Get a chance to Track Total Loans unlock additional disbursed by you in a earnings through given time-frame and referral and promotion check convers
Slide 29: An Integrated LOS and LMS (LOMS)
An Integrated LOS and LMS (LOMS) Focusing on Automation A world class platform enabling seamless onboarding, underwriting, servicing, monitoring and on-time collections. CHANNELS Co-Lending Financial Digital Call Center DSA/FOS Branches CUSTOMER ONBOARDING Partners Inclusion Stores Marketing LENDING
Slide 30: Physical Presence Across 7 Key Markets in India
Physical Presence Across 7 Key Markets in India… # 34 Experiential Centres as at 31 Dec 2021 India’s overall formal gold financing penetration is ~10% with penetration in the western and northern states being even lower. However, the above two markets together hold ~45% of the gold in the country. S
Slide 31: Experiential centers & Door-Step Disbursement
Experiential centers & Door - Step Disbursement The company through ‘experiential centers’ and digitally optimized ‘door-step disbursement’ offers a superior value proposition to customers in MSME gold financing. The company has disbursed more than US$ 20.2 million of gold loans through experiential
Slide 32: Dhanvarsha Financial Inclusion Stores: Distribution with Scale
Dhanvarsha Financial Inclusion Stores: Distribution with Scale Personal Loans and Business Loans - Leveraging existing neighbourhood stores and community centers to ease access to credit services Business Model: Key attractions of the format • Neighborhood stores that help take credit • Capex light
Slide 33: Preferred Sourcing Partnerships
Preferred Sourcing Partnerships: A Risk-Mitigating Strategy to Enhance Reach and Product Bouquet Preferred Sourcing Partnership partnerships with FLDG (first loss default guarantee) specifically in MSME business loans. Partners in Preferred Sourcing Partnership are chosen after extensive due Persona
Slide 34: Financials
= Financials
Slide 35: Balance Sheet
Balance Sheet US$ Million • Strong liquidity profile coupled Balance Sheet Dec’20 Sep’21 Dec’21 with an un-levered balance sheet will support higher Financials Assets 15.5 44.0 46.2 disbursement trajectory. Cash and Investments 5.7 12.7 12.7 • Company anticipates Gross Loans 10.4 32.0 34.2 continued
Slide 36: Income Statement
Income Statement US$ Million • Robust growth in profit of 33% Q-o-Q Income Statement (INR Million) Dec’20 Sep’21 Dec’21 and 454% Y-o-Y, driven by healthy disbursement trajectory. Interest Income 0.4 1.6 1.8 • Investments in technology and Less: Finance Cost 0.1 0.7 1.0 branch infrastructure starting
Slide 37: Governance & Mission
Ya Governance & Mission y=
Slide 38: We don't just lend money. We enable businesses
We don’t just lend money. We enable businesses by lending ‘hand’, ‘head’ & ‘heart’ Ecosystem We are true business partners to our customers Growth & Wealth & Scalability Wellbeing For us, business are communities first. We help building ‘Social Capital’ We give equal importance to both ‘Social’ & ‘C
Slide 39: Incremental Impact Achieved in Solving Access to Credit
Incremental Impact Achieved in Solving Access to Credit Women Borrowers Percentage of Loan Cumulative Number Split by Occupation Disbursement of Women Borrowers 7,934 Salaried 18% Self-Employed, 561 82% 20 57 23% 77% 2018 2019 2020 2021 Inclusivity New to Credit Borrowers Cumulative Borrowers: Livel
Slide 40: Focus on Governance & Best Practices
Focus on Governance & Best Practices Independent and Eminent Board comprising of industry stalwarts High governance standards Rakesh Sethi Rajiv Kapoor Nirmal Momaya KP Raghuvanshi Statutory Auditor Bansal Bansal & Co. Non-Executive Chairman Independent Director Independent Director Independent Dire
Slide 41: Led by a Professional Management Team
Led by a Professional Management Team… Karan Desai Rohan Juneja Joint Managing Director Joint Managing Director • Ex-investment banker with 15+ years • 17+ years of experience, in India & US. of experience • An investment banker, hedge fund • Previously worked at Bank of manager and Head of Strategy
Slide 42: Who bring substantial experience in the financial services space
…who bring substantial experience in the financial services space Lalit Chendvankar Namita Pradhan Chief Compliance Officer Human Capital Management 16+ years robust experience in handling Mergers • 6+ years - a seasoned HR professional & Acquisitions, IPOs, Corporate Restructuring, • Previously ass
Slide 43: Dhanvarsha is backed by a promoter group with rich heritage
Dhanvarsha is backed by a promoter group with rich heritage Group’s businesses Dhanvarsha Finvest Limited is a Bombay Stock Exchange Limited listed NBFC provides credit to the underbanked MSME sector in India About the group • Wilson Group’s history traces back up to Pre-Independence • Diversified c
Slide 44: Shareholding Pattern
Shareholding Pattern Substantial management ownership in the company Public 29.2% Promoter 62.7% FII 8.1% Shareholding on fully diluted basis including CCDs issued in November 2020 and April 2021
Slide 45: Thank You
Thank You