Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q2 FY22 Earnings Presentation
61 slides from Nippon Life India Asset Management's earnings presentation, Oct 26, 2021
Slide 1: Cover letter to exchanges: Investor Presentation
October 26, 2021 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, Fort, Mumbai 400 001 G Block, Bandra Kurla Complex, BSE Scrip Code: 540767 Bandra (East), Mumbai 400 051 NSE Scrip Symbol: NAM-INDIA Dear Sir(s), Su
Slide 2: Investor Presentation Q2 FY22
Investor Presentation Q2 FY22 October 2021
Slide 3: Highlights
Highlights Q2 MF QAAUM market share at 7.33% - up 21bps in H1 FY22 Q2 Profit after Tax at INR 2.1 billion - an increase of 47% Q2 Operating Profit at INR 1.9 billion - an increase of 46% Board approved interim dividend of INR 3.50 per share Share of Industry’s Retail folios rose from 10.2% to 12.5%
Slide 4: Key focus areas - Being Future Ready
Key focus areas - “Being Future Ready” 1 2 3 Superior fund Consolidate our Expansion of non- performance Passive strategy MF businesses Dominant position • AIF & PMS businesses Consistent improvement (70% share in market • Leverage NLI’s parentage in performance of key volumes) to grow Offshore segm
Slide 5: Industry AUM Trends
Industry AUM Trends A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 6: Quarterly AUM Trend
Quarterly AUM Trend Industry AAUM (INR bn) 36,194 33,179 10% 32,106 29,714 9% 9% 13% 27,604 8% 14% 14% 8% 16% 19% 30% 34% 33% 35% 33% 47% 42% 44% 40% 40% Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Equity Debt Liquid ETFs YoY growth led by inflows in debt & passive funds, and MTM gains in equities; also, H1
Slide 7: NAM India - Profile
NAM India - Profile One of the largest Asset Manager in India, with 26 years of track record NAM India AUM (as of Sep 30, 2021) INR 4.01 trillion Mutual Funds Managed Accounts International INR 2,694 bn* INR 1,227 bn INR 87 bn Advisory INR 30 bn 270+ 960+ ~82,000 9.6 mn 13.3 mn Locations Employees D
Slide 8: Nippon India MF - AUM Trends
Nippon India MF - AUM Trends A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 9: Quarterly AUM Trend
Quarterly AUM Trend QAAUM (INR bn) Market share 8.00% 2,655 2,404 7.80% 2,286 2,130 2,049 2,000 7.60% 7.6% 1,801 7.3% 7.40% 7.3% 7.2% 7.2% 7.2% 7.20% 7.1% 7.00% Jun-20 Dec-20 Jun-21 Mar-20 Sep-20 Mar-21 Sep-21 In Q2 FY22, MF market share improved by 21bps to 7.33% (vs. Q4 FY21) * Quarterly Average A
Slide 10: Quarterly AUM Mix
Quarterly AUM Mix NIMF AAUM (INR bn) 2,655 2,404 17% 2,286 2,130 17% 2,000 16% 12% 15% 14% 12% 12% 14% 17% 29% 30% 32% 31% 30% 43% 39% 41% 41% 39% Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Equity Debt Liquid ETFs AUM rose by 33% (vs. Q2 FY22); growth seen across asset classes * Quarterly Average Assets und
Slide 11: Fixed Income & Equity Assets
Fixed Income & Equity Assets Fixed Income AAUM (INR bn) 1,079 987 985 1,008 937 320 303 283 299 340 683 701 709 758 597 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Debt Liquid Equity (Incl. ETF) AAUM (INR bn) 1,450 1,206 1,289 986 1,058 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 * Quarterly Average Assets under Mana
Slide 12: Key focus areas
1 2 “Investor First” Digital initiatives Key focus areas 3 4 Leveraging ETF first mover advantage Continue to build on Retail Strength
Slide 13: Key focus areas: Investor First
1 “Investor First” Key focus areas
Slide 14: Investor First remains the core philosophy
“Investor First” remains the core philosophy Innovative and 1st-of-its-kind products in the offing Nippon India Nippon India S&P Nippon India Nifty Taiwan Equity Fund EV Index Fund Auto ETF Robust pipeline to further strengthen both active and passive offerings Nippon India CPSE Bond Nippon India In
Slide 15: Key focus areas: Digital initiatives
2 Digital initiatives Key focus areas
Slide 16: Future ready and riding the perpetual Beta
Future ready and riding the perpetual Beta Geared to serve customers end-to-end, digitally with a 360˚omni-channel approach, no matter where they are ACQUIRE SELL Digital acquisition through Complete suite of Digital Assets to serve the performance campaigns and diverse needs of customers across seg
Slide 17: Building Digitech Ecosystem
Building Digitech Ecosystem Digital KYC Business Process automation - RPA, OCR Chat Bot / IVR implementation Instant Folio creation Fund Accounting automation First level support through AI Finance & HR process Automation Customer Customer Operations Onboarding Servicing Transactions digitalized Dee
Slide 18: Digital Business
Digital Business Lumpsum & New SIP Registration Digital Purchases (lakhs)* Q2 FY22 7.4 55% Q2 FY21 4.8 ❑ Digital contribution-to-total NIMF purchase transactions stood at 53% in Q2 FY22 ❑ Digital SIP registrations contributed 46% of the total new SIPs registered in Q2 FY22 ❑ New Digital Lumpsum Purc
Slide 19: Key initiatives
Key initiatives Performance Campaign expansion to reach new horizons Successful use of Adobe Suite to increase quality & quantity Campaigns initiated on networks outside GDN, leveraging DV 360 Successful launch of Nippon India Flexi Cap NFO Whitelisted for Google’s Beta product- Performance Max- a S
Slide 20: Key focus areas: Leveraging ETF first mover advantage
Key focus areas 3 Leveraging ETF first mover advantage
Slide 21: Comprehensive portfolio of Passive Funds
Comprehensive portfolio of Passive Funds NIMF’s ETFs / Index Funds Fixed Income Equity Commodity Nippon India ETF Liquid BeES Nippon India ETF Gold BeES Nippon India ETF Long Term Gilt Nippon India ETF Nifty CPSE Bond Plus SDL - 2024 Maturity Nippon India ETF Nifty SDL - 2026 Maturity Nippon India E
Slide 22: Strong ETF portfolio
Strong ETF portfolio Large ETF product suite ~70% 58% 13% Volume Share Share of folios Market Share ❑ Only AMC in India with more than 19 years experience in managing ETFs ❑ Largest bouquet of 23 ETFs in the industry across Equities, Debts & Commodity (Gold) ❑ On QAAUM basis, NIMF ETFs managed asset
Slide 23: Volume leadership supports superior returns for investors
Volume leadership supports superior returns for investors NSE volume (Jul - Sep 2021) (INR mn) Nifty Bank ETFs & Mutual Funds Nifty 50 ETFs Gold ETFs Liquid ETFs Nifty Private Bank ETFs NIMF 215 201 137 1,157 SBI MF 38 49 47 - Kotak MF 13 92 12 - ICICI Prudential MF 24 8 13 54 HDFC MF 4 1 20 - Other
Slide 24: Continue to build on Retail Strength
Key focus areas 4 Continue to build on Retail Strength
Slide 25: Unique Investors
Unique Investors 3 out of 10 unique investors in the Industry invest with NIMF Industry NIMF Market share (%) (in million) 8.6 Sep 30, 2021 32% 26.7 6.9 Mar 31, 2021 30% 22.8 6.2 Sep 30, 2020 29% 21.3 Extensive distribution and a diversified product suite helped to add over 1.1 million investors vs.
Slide 26: Consistent expansion in investor base
Consistent expansion in investor base (Folios in million) 11.9% 11.1% 9.9% 9.7% 10.2% 13.3 11.4 9.3 9.2 10.0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Total Folios Market share 57.5% 51.2% 12.5% 42.0% 10.6% 11.5% 10.2% 10.0% 33.3% 31.0% 5.4 12.7 10.7 3.7 8.6 8.5 9.3 2.3 1.2 1.4 Sep-20 Dec-20 Mar-21 Jun-21
Slide 27: Retail segment is a key focus
Retail segment is a key focus Investor segment-wise breakup of AAUM (%) NIMF 28% 22% 50% Industry 23% 31% 45% SBI 15% 26% 59% HDFC 23% 36% 41% ICICI 18% 38% 44% Birla 23% 25% 53% Retail HNI Corporate NIMF is the only MF with a Retail market share / overall market share of >100% Source: AMFI; Calcula
Slide 28: Retail Assets
Retail Assets 68% of the Individual assets have a vintage of more than 12 months (Sep 30, 2021) Retail AAUM (INR bn) 777 696 643 586 520 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 “Retail Investor Classification” changed from INR 0.5 mn to INR 0.2 mn as per the guidelines issued by AMFI Source: Internal; Ca
Slide 29: Beyond 30 cities (B-30) Contribution
Beyond 30 cities (B-30) Contribution Higher AUM % sourced from B-30 locations as compared to Industry B-30 AAUM / Total AAUM (%) NIMF 17.9% Industry 16.5% B-30 segment has higher proportion of Equity Assets Focus on building B-30 AUM by leveraging on-ground presence Source: AMFI; Calculated on Month
Slide 30: Geographical De-risking
Geographical GeographicalDe-Risking De-risking Top 5 Cities Contribution (%) Beyond 15 Cities Contribution (%) ICICI 70% NIMF 19% SBI 76% Industry 31% HDFC 69% SBI 16% Industry 56% HDFC 17% NIMF 67% ICICI 17% Lower concentration of assets Higher Penetration in Smaller cities from Top 5 cities and to
Slide 31: Systematic Transactions
Systematic Transactions 3.6 3.4 3.3 3.3 3.2 Quarterly Book (INR bn) 18.9 18.8 Folios (mn) 17.7 17.0 17.5 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q2 FY22 Book (INR bn) As on Folios at 3.6 mn (+10%) Sep 30, 6.5 2021 AUM at INR 497 bn (+57%) 6.3 6.0 Annualized book of INR 78 bn Jul-21 Aug-21 Sep-21 In
Slide 32: Growth in retail asset base continues
Growth in retail asset base continues A new Digital Purchase every… A new SIP Purchase every… 12s 7s 20s 13s FY21 Q2 FY22 FY21 Q2 FY22 A new folio added every… A new ETF folio added every… 20s 3s 16s 3s FY21 Q2 FY22 FY21 Q2 FY22 * Frequency in seconds calculated with assumption of 252 days in a year
Slide 33: Risk Management - Philosophy
Risk Management - Philosophy
Slide 34: Enhanced conservative positioning
Enhanced conservative positioning In May 2020, Board decided that all NIMF’s schemes* will make fresh investments only in AA & above rated issuers Credit Rating Profile of NIMF’s Fixed Income assets Rating Sep 30, 2021 Mar 31, 2020 Repo / Cash / Sovereign / AAA / A1+ / AA+ / upto AA 98.8% 91.8% Sub
Slide 35: Distribution
Distribution A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 36: Strong Distribution
Strong Distribution Total base of empaneled distributors rose to approx. 82,000 80 92 87 81,700+ Banks National Distributors Alternate Mutual Fund (incl. PSU banks) Distributors Large base of MFDs - one of our biggest strengths 35
Slide 37: Leveraging Partnership with MFDs
Leveraging Partnership with MFDs Distributed Assets form 46% of NIMF’s AUM Overall Distribution Mix Distributed Assets Mix Banking Direct Distributed Distributors Channel Assets 22% 54% 46% Mutual Fund National Distributors Distributors 57% 21% De-risked distribution model Large share of the AUM is
Slide 38: Focus on Individual assets
Focus on Individual assets Distributed Assets (investor-wise) AUM (INR bn) Corporate 18% 657 Retail HNI 52% 367 29% 228 Retail HNI Corporate 82% of the Distributed Assets are contributed by Individual investors Source: AMFI; Calculated on Monthly Average AUM 37
Slide 39: Leaders in Investor Education
Leaders in Investor Education EDGE Learning Academy (Q2 FY22) Investor Education Unique Locations Mobile App MFx 42 T-30 Programs 16 Programs 1,900+ B-30 Investors 26 Programs Dedicated Investor Education App MFx 38
Slide 40: Other Businesses
Other Businesses A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 41: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) ❑ Category II & Category III AIFs across various asset classes ❑ Equity / Real Estate / Credit / Technology & Venture Capital FoF ❑ As on September 2021, raised commitments of INR 40 billion across funds ❑ Continue to deliver superior performance across all
Slide 42: Offshore Business - Creating expressways globally
Offshore Business - Creating ‘expressways’ globally AUM of INR 117 bn as on Sep 30, 2021 Leveraging Nippon Life’s Insurance Particulars Amount in INR bn global network Advisory 30 Managed 87 Total 117 Hokkaido Singapore Mauritius Dubai Singapore Sendai ❑ RAMS Equities Portfolio fund-UCITS ❑ IMSF - E
Slide 43: Wider international presence
Wider international presence 42
Slide 44: ESG Focus
A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 45: ESG Initiatives
ESG Initiatives Environment Social Governance • Climate Consciousness: To reduce • ESG Governance: NAM India has • Employee Health and Safety: NAM India operational environmental footprint, NAM instituted a ESG Taskforce for holistic ensures there is no usage of single-use plastic has undertaken sev
Slide 46: Sustainability at NAM - Customer Centricity in Focus
Sustainability at NAM - Customer Centricity in Focus Enabling a better financial future for our unitholders ❑ Putting Customer Privacy First ❑ Comprehensive Privacy policy covers aspects such as usage and collection of data, handling of data, sharing of personal information, retention of information
Slide 47: Financial Overview
Financial Overview A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 48: Financial Summary - As per IND AS
Financial Summary - As per IND AS Consolidated (INR mn) Particulars Q2 FY22 Q1 FY22 Q2 FY21 Revenue from Operations 3,279 3,023 2,587 Operating Expenditure 1,423 1,332 1,314 Fee & Commission Expenses 119 117 97 Employee benefits expense 732 697 679 Finance cost 11 9 12 Other Expenses 495 436 447 Dep
Slide 49: Financial Summary - As per IND AS
Financial Summary - As per IND AS Consolidated (INR mn) Particulars FY21 FY20 Revenue from Operations 10,621 12,030 Operating Expenditure 5,423 6,334 Fee & Commission Expenses 432 705 Employee benefits expense 2,713 3,024 Finance cost 44 57 Other Expenses 1,901 2,217 Depreciation 333 333 Core Operat
Slide 50: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Sept 30, 2021 March 31, 2021 Investment in NIMF’s schemes 25,417 23,496 - Equity 2,200 2,403 - Debt 23,217 21,093 Bank FDs and tax-free bonds 4,337 4,515 Other assets 2,385 1,765 Total 32,139 29,776 NIMF - NIMF - Other Other Bank FDs Equity
Slide 51: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases QAAUM / Branch QAAUM / Employee (INR bn) 12.8 13.8 11.7 11.5 10.4 2.1 2.0 2.0 2.3 2.8 Mar-18 Mar-19 Mar-20 Mar-21 Sep-21 Profit / Branch Profit / Employee (INR mn) 178.1 137.4 109.3 97.7 84.3 27.5 35.5 17.8 17.0 15.9 FY1
Slide 52: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR bn) 4.92 10.90 4.42 4.42 7.94 3.44 7.62 6.69 FY 18 FY 19 FY 20 FY 21 FY 18 FY 19 FY 20 FY 21 Total Dividend INR 8 per share in FY21 76% of FY21 earnings shared with shareholders Cumulative dividend of INR 27 bn in last 7 financial years
Slide 53: Thank you for your time! Stay safe!
Thank you for your time! Stay safe!
Slide 54: Annexure
A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 55: About Nippon Life Insurance
About Nippon Life Insurance A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 56: Profile
Profile ❑ Fortune 500 company (Rank 111 in 2020)1 ❑ Japan’s largest private life insurer & one of the largest in the world2 ❑ Total assets over US$ 774 bn3 ❑ 58 Asset Management related operations & 21 Insurance related operations Globally4 Asset Management Presence in India Life Insurance Sharehold
Slide 57: Nippon Life Group
Nippon Life Group Nippon Life Domestic Insurance Business Asset Management Business Overseas Insurance Business Taiju Life Nippon (82.6%) Reliance Nippon Life India Asset Revenues from insurance and Life Insurance Management reinsurance premiums (FY2020-21): (49.0%) $3.9bn (74.2%) GWP (FY2020-21): $
Slide 58: Board Of Directors
Board Of Directors A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 59: Profile of Board Members
Profile of Board Members… General Ved Prakash Malik (Retd.) (Independent Director) has worked in the Indian Army as Chief of the Army Staff from October 1, 1997 to September 30, 2000. He had dual responsibility of being an advisor to the Government as well as commander of 1.2 million strong Indian A
Slide 60: Profile of Board Members
Profile of Board Members Mr. Yutaka Ideguchi (Associate Director) is a Member of the Board of Directors, Senior Managing Executive Officer of Nippon Life Insurance Company (NLI). He has been involved in the areas of finance, International Planning & Operation in NLI. He has been a Regional CEO for A
Slide 61: Disclaimer
Disclaimer This presentation does not constitute a prospectus, an offering circular, an advertisement, a private placement offer letter or offer document or an offer, or a solicitation of any offer, to purchase or sell any securities under the Companies Act, 2013 and the rules made thereunder, the S
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