Satin Creditcare Network Ltd · NSE:SATIN
Satin Creditcare Network — Q1 FY23 Earnings Presentation
55 slides from Satin Creditcare Network's earnings presentation, Aug 3, 2022
Slide 1: Exchange intimation letter for Investor Presentation
August 3, 2022 To, The Manager, The Manager, National Stock Exchange of India Ltd., BSE Limited, Exchange Plaza, C-1, Block G, 25th Floor, P. J. Towers, Bandra Kurla Complex, Dalal Street, Bandra East, Mumbai-400051 Mumbai – 400001 Symbol: SATIN Scrip Code: 539404 Sub: Investor Presentation Dear Sir
Slide 2: Investor Presentation August 2022
Investor Presentation August 2022 DETERMINED. DEFINITIVE. DECISIVE.
Slide 3: Contents and Cautionary Statement
Contents 03 - 15 16 - 20 21 - 33 Business Update & New Initiatives Overview and Key Performance What makes Satin a Compelling Highlights Investment Story 34 - 44 45 - 53 Key Financial & Operational Metrices Company Background Cautionary Statement Any forward-looking statements about expected future
Slide 4: Business Update & New Initiatives
Business Update & New Initiatives
Slide 5: Reflecting Real Value of Subsidiaries
Reflecting Real Value of Subsidiaries Post Demonetization in 2016, the Company strategized to diversify out of unsecured MFI portfolio to secured product offerings through subsidiaries. The non- MFI portfolio has grown from 1.3% to 12.1% in last four years Subsidiaries Satin Housing Finance Ltd Sati
Slide 6: Strengthened the Asset Quality and Profitability
Strengthened the Asset Quality and Profitability The portfolio of the Company has been tested during various events viz demonetization, Assam, COVID-19 pandemic etc. The Company has been a progressive institution to proactively envisage strategies to maintain its asset quality During COVID-19 pandem
Slide 7: Key Business Updates (1/2)
Key Business Updates (1/2) AUM and Disbursement • Consolidated AUM remained at similar levels of Q4FY22 at Rs. 7,569 crore • Standalone AUM remained at similar levels of Q4FY22; stood at Rs. 6,389 crore as on Q1FY23 • The Company has written-off loans amounting to Rs. 275 crore during the quarter •
Slide 8: Key Business Updates (2/2)
Key Business Updates (2/2) ARC • During Q1FY23, the Company has sold 23,081 stressed loan assets of Rs. 100 crore (including principal and interest accrued) to an Asset Reconstruction Company for Rs. 87 crore • The Company will not do any further ARC transactions during the year Other Updates • Book
Slide 9: New Regulatory Framework by RBI
New Regulatory Framework by RBI The RBI issued directions namely ‘Reserve Bank Of India (Regulatory Framework for Microfinance) Directions, 2022 on 14th March’22. The directions are applicable from 01st April’22. Significance of the new Regulations • Changes are made to put all microfinance lenders
Slide 10: Update on Assam Portfolio
Update on Assam Portfolio • Assam cabinet approved relief to around 11 lacs microfinance borrowers On-book AUM (Rs. crore) (maximum up to Rs. 25,000 per borrower), who are making regular payments to banks (category 1) % of on- book 5.3% 4.4% 4.1% • The Bill is positive for the MFI Industry and the C
Slide 11: Business Trends
Business Trends… Rs. 7,569 crore Rs. 1,709 crore 27 Lacs 1,224 AUM* DISBURSEMENT in Q1FY23 ACTIVE CUSTOMERS NO. OF BRANCHES Asset under Management Trends (Q-o-Q) Disbursement Trends (Q-o-Q) 94 438 449 633 570 7,464 7,381 7,218 7,617 7,569 278 154 212 263 1,020 1,066 1,208 1,180 1,095 1,622 1,554 6,4
Slide 12: Trends in Collection Efficiency
…Trends in Collection Efficiency Collection Efficiency Trends Quarter on Quarter 87.8% 96.0% 99.7% 97.3% 81.8% Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23* CE% Collection Efficiency Trends in Key States – 53.6% of AUM CE % (Incl. Arrears) States Jan-22 Feb-22 Mar-22 Apr-22* May-22* Jun-22* Jul-22* Uttar Prad
Slide 13: Diversifying to Secured Assets – Future Upside Potential
Diversifying to Secured Assets – Future Upside Potential Non-MFI Portfolio • Non-MFI book of the Company includes the MSME and Housing Finance business • MSME Book grew from Rs. 378 crore in FY20 to Rs. 585 crore in Q1FY23 (i.e. 55% growth) • Housing Finance Book grew from Rs. 139 crore in FY20 to R
Slide 14: Update on SHFL
Update on SHFL Satin Housing Finance Limited AUM grew by 47% in Q1FY23 YoY SHFL had 2 successive profitable years despite Q1FY23 disbursement stood at Rs. 45 crore challenging business environment, PAT for Q1FY23 stood at Rs. 0.3 crore No Restructuring done No willful default or fraud since Quality
Slide 15: Update on Subsidiaries – TFSL & SFL
Update on Subsidiaries – TFSL & SFL Collection efficiency for Jun’22 stood at 101% Taraashna Financial Disbursement stood at Rs. 79 crore for Q1FY23 Services Sourcing business for SCNL under Nai Roshni Limited PAT for Q1FY23 stood at Rs. 0.2 crore AUM growth of 41% YoY in Q1FY23 Healthy
Slide 16: Objective Behind Amalgamation
Objective Behind Amalgamation The combined entity would be able to efficiently use the capital invested in the two entities and leverage the same In the combined entity, tax benefit will accrue to the business when TFSL sources loans for SFL TFSL has significantly wider distribution reach than SFL.
Slide 17: Overview
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Slide 18: Fostering Inclusive Growth
Fostering Inclusive Growth The history of SCNL goes back to 1990 when it started providing finance to the shopkeepers who were deprived of formal financing Today, after three decades of rich experience, SCNL has emerged as one of the leading and trusted Indian microfinance companies Headquartered in
Slide 19: Key Performance Highlights
Key Performance Highlights
Slide 20: Corporate Overview Standalone – Q1FY23
Corporate Overview Standalone – Q1FY23 Rs. 1,554 crore 25.4 Lacs 23 1,031 DISBURSEMENT LOAN ACCOUNTS STATES & UT’s BRANCHES OUTSTANDING 3.8 Lacs Rs. 6,389 crore Rs. 60 crore NO. OF LOANS DISBURSED AUM PROFIT AFTER TAX 22.6% 3.2% Rs. 41,000 14.7% CAPITAL ADEQUACY RETURN ON ASSETS^ AVERAGE TICKET SIZE
Slide 21: Corporate Overview Consolidated – Q1FY23
Corporate Overview Consolidated – Q1FY23 28.9 Lacs 1,224 LOAN ACCOUNTS BRANCHES OUTSTANDING Rs. 1,709 crore Rs. 7,569 crore 23 DISBURSEMENT STATES & UT’s AUM Rs. 345 crore Rs. 186 crore REVENUE NET INTEREST INCOME 20
Slide 22: What makes Satin a Compelling Investment Story
What makes Satin a Compelling Investment Story
Slide 23: What makes Satin a Compelling Investment Story
What makes Satin a Compelling Investment Story Leading MFI Player With Differentiated Product Offerings 01 Diversified Geographical Reach 02 03 Technology Prowess 04 Robust Underwriting Processes 05 Well-diversified Liability Profile 06 Ample Liquidity & Positive ALM 07 Strong & Experienced Manageme
Slide 24: Differentiated Product Offerings
1. Differentiated Product Offerings Business Correspondent SCNL Housing Finance SME Services Product features Taraashna Financial Satin Housing Finance Satin Finserv Limited MFI(1) as on Jun’22 Services Limited(2) Limited(3) (SFL)(4) Start Date May’08 (JLG) May’12 Feb’18 Mar’19 Upto Rs. 50,000 Ticke
Slide 25: Leveraging Distribution Outreach through Enhanced Product Financing
…Leveraging Distribution Outreach through Enhanced Product Financing Satin finances product purchase of solar lamps, bicycles, consumer durables etc. and grants loan for safe water and sanitation facilities Financing ~Rs. 47 crore during Q1FY23, business started picking up Enriching Lives Benefits
Slide 26: Diversified Geographical Presence
2. Diversified Geographical Presence …serving 27 lacs clients across India 59% 27.3 Lacs 28.9 Lacs Clients with Satin as Only No. of Active Clients No. of Loan Accounts Lender* 397 89,500 No. of Districts No. of Villages 77 3.1 Lacs No. of Regional Offices No. of Centres 23% 7,680 11,483 First Cycle
Slide 27: Leading to increasing footprints
…Leading to increasing footprints % of total AUM AUM Q1FY23 State FY16 Q1FY23 (Rs. crore) UTTAR PRADESH 40.9% 24.6% 1,865 BIHAR 17.7% 14.3% 1,084 2. Reducing exposure to traditional regions MADHYA PRADESH 15.5% 7.8% 594 PUNJAB 12.7% 6.8% 518 UTTARAKHAND 3.2% 1.6% 123 JAMMU & KASHMIR 0.1% 0.1% 5 90.2
Slide 28: And de-risking geographical concentration
…And de-risking geographical concentration To remain a PAN India Player Share of Top 4 States Reduced from 68% to 54% Limiting Exposure per district Average exposure per district % % of Top 10 Districts to AUM -21% 67.7 10.2 56.3 58.6 54.0 53.7 53.6 12.9 8.4 9.6 8.7 7.3 6.8 8.8 9.3 8.7 8.3 7.8 19 18
Slide 29: A Difference Powered by Technological Prowess & Processes
3. A Difference Powered by Technological Prowess & Processes… Turnaround Time : Game Changing Gold Standard Information Security. Customer Acquision to Disbursement Journey Digital Transformation Technology ISO 27001:2013 Certified reduced from 18 days to few minutes • Online real-time system • DMS
Slide 30: Robust Underwriting & Full-fledged in-house Internal Audit
4. Robust Underwriting & Full-fledged in-house Internal Audit Robust Underwriting Full-fledged in-house Internal Audit Real-time Credit Bureau checks to track loan history of the prospective clients, Credit Bureau scorecard for individual clients for better screening 99 Feedback based Zonal Auditors
Slide 31: Well-diversified Liability Profile
5. We have a well-diversified Liability Profile… …insulated from Capital Market Turbulence Product-wise Jun’22 Large Lender Base 59 Active Lenders 5.0% 1.0% Top 10 Lending Partners % Share as on 30th Jun’22 Bank of Maharashtra 9% Term Loan Bank of Baroda 9% 31.0% NCD 44.0% Blue Orchard Microfinance
Slide 32: Strong Capitalization with Ample Liquidity
6. Strong Capitalization with Ample Liquidity Healthy CRAR to Support Growth Opportunities Benefit of Positive ALM Continues 26.3 24.9 24.3 23.5 30.5% 27.8% 25.3% 16.9 22.6% 15.5 16.0 14.5 FY20 FY21 FY22 Q1FY23 FY20 FY21 FY22 Q1FY23 Avg. maturity of Assets Avg. maturity of Liabilities Static ALM as
Slide 33: Diversification with Allied Product Offerings
Diversification with Allied Product Offerings Taraashna Financial Services Ltd - TFSL Satin Housing Finance Ltd (SHFL) Satin Finserv Limited (SFL) » Acting as a business correspondent, TFSL » 100% retail book comprising of: » Incorporated in Aug’18, got license from RBI provides credit to clients in
Slide 34: Successfully Navigated Crisis During Legacy of 30 Years
Successfully Navigated Crisis During Legacy of 30 Years Implementation of best-in-class technology Strong Capitalization with Ample Liquidity • Reduced TAT • Capital Adequacy has improved from 18.3% in 2016 to 22.0% currently • Real-time data • Raised Rs 860 crore equity capital Learnings • Enha
Slide 35: Key Financial & Operational Metrices
Key Financial & Operational Metrices
Slide 36: Key Operation Metrics
Key Operation Metrics Districts, States and Branches Employees & Loan Officers 995 1,163 1,383 1,257 1,224 1,2241 6,382 6,296 8,152 8,090 8,774 7,6802 22 23 23 23 23 13,005 12,726 12,705 11,831 1,495 11,4833 18 1,325 1,790 1,537 9,004 1,536 404 1,344 383 388 397 340 302 11,148 10,612 10,736 10,419 9
Slide 37: Business Details – Consolidated
Business Details – Consolidated Particulars Q1FY23 Q1FY22 YoY% Q4FY22 QoQ% AUM (Rs. crore) 7,569 7,464 1.4% 7,617 -0.6% SCNL 6,389 6,444 6,409 On-book AUM* 5,042 5,143 5,145 Assignment 1,304 1,093 1,204 Business Correspondence 44 207 60 TFSL 674 671 724 SHFL 331(1) 224 318 SFL 176 125 166 AUM Mix (R
Slide 38: Key Standalone Financials
Key Standalone Financials Gross Income (Rs. crore) Cost to Income Ratio (%) 1,401 1,262 1,273 64.8% 58.0% 49.7% 662 22.3% FY20 FY21 FY22 Q1FY23* FY20 FY21 FY22 Q1FY23* NII and PAT (Rs. crore) Opex to Avg AUM (%) 824 NII 7.1% 659 656 6.0% 6.2% PAT 5.3% 512 156 40 60 -14 FY20 FY21 FY22 Q1FY23 FY20 FY2
Slide 39: Financial Details (Standalone)
Financial Details (Standalone)
Slide 40: Annexure - Financial Performance – Standalone
Annexure - Financial Performance – Standalone Particulars (Rs. crore) Q1FY23 Q1FY22 Q4FY22 FY22 FY21 Gross yield (1) 41.38% 18.69% 21.10% 18.44% 17.57% Financial Cost Ratio(2) 9.39% 9.53% 9.53% 8.86% 8.47% Net Interest Margin(3) 31.99% 9.16% 11.57% 9.58% 9.10% Operating Expense ratio(4)* 7.14% 5.73%
Slide 41: Annexure - P&L Statement – Standalone
Annexure - P&L Statement – Standalone Particulars (Rs. crore) Q1FY23 Q1FY22 YoY% Q4FY22 QoQ% FY22 FY21 YoY% Revenue Interest and Fee Income 266 291 263 1,109 1,031 (Loss)/Gain due to DA 13 - 39 50 110 Treasury Income* 375 15 22 65 66 BC Income 2 7 2 19 35 Other Operating Income 6 8 5 19 30 Total Rev
Slide 42: Financial Details (Subsidiaries)
Financial Details (Subsidiaries)
Slide 43: Annexure - P&L Statement – SHFL
Annexure - P&L Statement – SHFL Particulars (Rs. crore) Q1FY23 Q1FY22 Q4FY22 FY22 FY21 Revenue Interest and Fee Income 10.4 7.7 10.1 34.3 25.8 Treasury Income 0.4 0.1 0.2 0.8 0.3 Other income 1.0 0.6 1.4 3.0 3.5 Total Revenue 11.8 8.4 11.7 38.0 29.6 Expenses Finance cost 5.9 3.9 5.3 17.1 13.6 Employ
Slide 44: Annexure - P&L Statement – SFL
Annexure - P&L Statement – SFL Particulars (Rs. crore) Q1FY23 Q1FY22 Q4FY22 FY22 FY21 Revenue Interest and Fee Income 8.2 5.8 7.5 26.6 23.8 Treasury Income 0.1 0.0 0.3 0.6 0.4 Other income 0.6 0.1 0.2 0.4 0.6 Total Revenue 8.9 5.9 7.9 27.6 24.8 Expenses Finance cost 2.5 1.1 2.4 6.9 4.4 Employee bene
Slide 45: Annexure - P&L Statement – TFSL
Annexure - P&L Statement – TFSL Particulars (Rs. crore) Q1FY23 Q1FY22 Q4FY22 FY22 FY21 Revenue Total Revenue 18.9 13.6 19.6 69.7 59.3 Expenses Finance Cost 1.7 1.1 1.5 5.6 4.5 Employee Benefit Expenses 11.9 11.4 11.1 47.8 39.1 Credit Cost 2.7 7.9 7.0 33.4 11.3 Other Expenses 2.3 2.0 4.5 11.1 10.0 De
Slide 46: Company Background
Company Background
Slide 47: Key Milestones
Key Milestones Business Timeline 2016 2017 2018 2019 2022 Received NBFC license for TFSL & SFL amalgamation SHFL commenced lending in Started MSME Lending in Reached 27.1 lacs active Satin Finserv Ltd for MSME First joint motion application Feb18; BC agreement with FY17; Acquired TFSL in clients and
Slide 48: Key Milestones – Fund Raising Timeline
Key Milestones Fund Raising Timeline 2015 2016 2017 2018 2019/20 2022 Raised Rs. 41.5 crore Raised Rs. 250 crore In Apr’17, raised $10 Pref. Allotment: Exit of MV Mauritius Successfully from SBI FMO(3) via QIP in Oct’16; mn from ADB(4) ; Equity funding by completed (including warrants);
Slide 49: Our Business Model
Our Business Model Formation of Documentation Groups and Paper work MICROFINANCE… & BEYOND 01 06 02 Social impact financing Follow up Income Generating of solar lamps, loans Long Term Loans (LTL) Loans (IGL) bicycles, water and Training sanitation facilities etc. of Groups 05 03 Micro Small & Medium
Slide 50: With Customised Products as per Client Needs
…With Customised Products as per Client Needs Income Generation Loan Long Term Loan (Prarambh) (Vriddhi) Product Financing WASH Loan Ticket Size : Ticket Size : Ticket Size : Ticket Size : Rs. 10,000 – Rs. 30,000 Rs. 31,000 – Rs. 75,000 Rs. 5,000 – Rs. 22,000 Rs. 10,000 – Rs. 35,000 Tenure : 12 - 24
Slide 51: Making a Difference to the Community
Making a Difference to the Community In the last 5 years, the Company has spent more than Rs. 11 crore in order to create a meaningful impact and contribute to a range of aspects that help enhance the lives of the community A Step Towards Women Empowerment and Skilling and Financial Literacy Worksho
Slide 52: Awards and Accolades
Awards and Accolades Mr. HP Singh was conferred as the ‘Pillar of the BFSI Industry’ bestowed at the financial express Modern BFSI Summit 2022 Mr. HP Singh received the 'CEO of the Year - Micro Finance Company' Award Mr. HP Singh was conferred the Best CEO of the Year at 'Golden Globe Tigers'
Slide 53: Shareholding Pattern
Shareholding Pattern Shareholding as on 30th June, 2022 Update on Corporate Action Retail & Others • During Q3FY22, the Board of Directors of the 18.9% Company, considered and approved the fund raising Promoters by way of the Preferential Issue of Rs. 225 crore 36.7% Bodies Corporate • Successfully
Slide 54: ESG Snapshot
ESG Snapshot Environment Social Water and Sanitation (WASH) Loans • Our strength lies in our ground level knowledge and the strong bond that we have • SCNL has been constructively working towards safe water and sanitation in around 121 created with our stakeholders districts and more than 35,000 vil
Slide 55: Contact Information
Contact Information Company (Investors & Media) : Ms. Aditi Singh Ms. Shweta Bansal Head – Strategy DGM-Investor relations E: aditi.singh@satincreditcare.com E: Shweta.bansal@satincreditcare.com T: +91 124 4715 400 T: +91 124 4715 400 www.satincreditcare.com
Satin Creditcare Network — Q1 FY23 Earnings Presentation on 6ix