Arman Financial Services Limited · NSE:ARMANFIN
Arman Financial Services — H1 FY23 Earnings Presentation
41 slides from Arman Financial Services's earnings presentation, Nov 16, 2022
Slide 1: Cover letter to stock exchanges
________________________________________________________________________________________________________________________________________________________________________________________________ _Registered Office: 502-503, SAKAR III, OPP. OLD HIGH COURT, OFF ASHRAM ROAD, AHMEDABAD-380014, GUJARAT, IN
Slide 2: An Agile Arman - Q2 & H1 FY23 Investor Presentation
Arman Financial Services Limited An Agile Arman Q2 & H1 FY23 Investor Presentation November 2022
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Arman Financial Services Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for an
Slide 4: Contents
Contents Quarterly Business Update Page 4 - Page 8 About the Company Page 9 - Page 15 Presence in Attractive Retail Page 16 - Page 22 Lending Segments Efficient Liability Management Page 23 - Page 26 Strong Financial Performance Page 27 - Page 40 3
Slide 5: Quarterly Business Update
Quarterly Business Update 4
Slide 6: H1 FY23 Performance Highlights
H1 FY23 Performance Highlights* Assets Under Disbursement Shareholder’s Equity Profit Before Tax Profit After Tax Management INR 1,436 Crore INR 657 Crore INR 311 Crore INR 47 Crore INR 36 Crore CRAR (+58% Y-o-Y) (+69% Y-o-Y) (+237% Y-o-Y) (+323% Y-o-Y) Arman (Standalone): 51.21% Namra Finance: 22.5
Slide 7: Update on Fund Raise (1/2)
Update on Fund Raise (1/2) Company raised INR 115 crore via allotment of CCDs and OCRPS on a preferential basis • Allotment of 6,24,388 Unsecured Compulsorily Convertible Shareholding Pattern - Shareholding Pattern - Debentures (“CCDs”) on preferential basis to Investors Pre-Capital Raise Post-Capit
Slide 8: Update on Fund Raise (2/2)
Update on Fund Raise (2/2) Fund Raised on Net worth (INR Crore) Particulars 31-Mar-22 Particulars 28-Sep-22 Calculated as per IND-AS 311 CCDs INR 76.8 Crore 213 187 Equity Share Capital INR 213 Crore CCDs Outstanding 6,24,388 CCDs Total Shares 84,92,334 OCRPS INR 38.2 Crore Mar-21 Mar-22 Sep-22 Outs
Slide 9: Impact of RBI's New Microfinance Guidelines
Impact of RBI’s New Microfinance Guidelines Annual household Maximum FOIR of 50% Qualifying assets limit revised Removal of income limit raised considering all outstanding from 85% of net assets to 75% Pricing Cap to INR 3 Lakh loans of the household of the total assets • Increased annual • The regu
Slide 10: About the Company
About the Company 9
Slide 11: About Arman Financial Services
About Arman Financial Services About the Company Business Performance Presence in Attractive Retail Lending Segments • A diversified NBFC focusing on large under-served rural & semi-urban retail markets 3% 2% • Founded in 1992 by Mr. Jayendra Patel in Ahmedabad 14% Microfinance ^ • Listed on BSE in
Slide 12: Journey so Far
Journey so Far The Company has been supporting the small dreams of the brave hearts of India for 30 years… and • Disbursement • AUM crossed counting! crosses INR 750 INR 1,000 2022 Crore Crore • 100% Cashless • Raised INR 2021 115 Crore disbursements • Crosses 100 • Expanded into through branches ac
Slide 13: Geographical Footprint
Geographical Footprint Geographical AUM Mix Number of (Consolidated) H1FY23 H1FY22 Branches 6.9% Microfinance 253 204 10.2% 2 31.9% 15 MSME 56 45 10.7% 62 40 2W & Rural 2W 18 14 15 18.2% 76 63 Total 313 253 22.1% 40 Gujarat Uttar Pradesh Madhya Pradesh Maharashtra Rajasthan Others Number of Branches
Slide 14: Strong Underwriting Measures by Leveraging Digital Transformation
Strong Underwriting Measures by Leveraging Digital Transformation Instant Verification Of Key Details Traceability Superior Collection • The LOS* & LMS* System facilitates instant • Better customer traceability by 4D customer • Mobile-based collection at Point of transaction verification Verificatio
Slide 15: Eminent Board of Directors
Eminent Board of Directors Alok N. Prasad Jayendrabhai B. Patel Aalok J. Patel Chairman Vice Chairman & Managing Director Joint Managing Director A veteran banker with over 35 years of regulatory, banking and He has been an entrepreneur for 45 years. He was involved in a He has 16 years of banking a
Slide 16: Competitive Moat
Competitive Moat Focus on small ticket Diversifying Conservative Completely in house Business model retail loans to the products, operations operations with centered around large under served geographies, sources framework with bottom up driven conservative informal segment of funds and focus on ris
Slide 17: Presence in Attractive Retail Lending Segments
Presence in Attractive Retail Lending Segments 16
Slide 18: Product Offerings across Verticals
Product Offerings across Verticals 81%* 14%* 4%* 2%* Microfinance - JLG MSME Loans Two-Wheeler Loans Individual Business Loans Average Ticket Size : INR 45,000 Average Ticket Size: Average Ticket Size: Average Ticket Size: (Cycle 1 & 2 -INR 20 -30k INR 85,000 INR 70,000 INR 75,000 Cycle 3+ -INR 20-7
Slide 19: Microfinance Loans
Microfinance Loans (INR Crore) AUM* Disbursement Total Income Profit After Tax Avg. Ticket Size (INR) 1,190 540 129 22 45,190 35,555 742 318 74 5 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 *Includes Individual Business Loans • JLG model with small ticket loans (Avg. Ticket
Slide 20: MSME Loans
MSME Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 197 96 33 73,896 65,975 125 19 51 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 • Individual enterprise /working capital loans for small rural businesses in low competition • Disbursement: 100% Cashless areas • Cre
Slide 21: 2W and Rural 2W Loans
2W and Rural 2W Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 49 21 8 66,764 42 19 61,233 6 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 H1FY22 H1FY23 • Hypothecation (secured) loans given to self-employed /cash-salaried customer in the • Disbursement: 100% Cashless informal se
Slide 22: MSME Process Overview
MSME Process Overview MSME Process Overview Sourcing Underwriting Collections • In-house sourcing team (No DSAs) • Credit bureau check (CRIF & CIBIL) • Team member that does sales also • handles collections • Feet-on-Street sales team model Physical FI & PD by in house credit manager at residence &
Slide 23: Collection Efficiency
Collection Efficiency Microfinance MSME Two-Wheeler Total 98.4% 97.8% 98.3% 98.4% 98.4% 98.4% 97.8% 98.1% 96.3% 95.1% 96.7% 96.7% 98.4% 97.8% 98.2% 98.3% Jul-22 Aug-22 Sep-22 Oct-22 Jul-22 Aug-22 Sep-22 Oct-22 Jul-22 Aug-22 Sep-22 Oct-22 Jul-22 Aug-22 Sep-22 Oct-22 Update on Collections Two Particul
Slide 24: Efficient Liability Management
Efficient Liability Management 23
Slide 25: Strong Capitalization with Sufficient Liquidity
Strong Capitalization with Sufficient Liquidity Capital Adequacy Ratio ALM Position (in Months) 51.2% 22 23 48.8% 22 22 22 19 20 18 17 17 29.0% 20.3% 22.5% 18.7% 31-Mar-21 31-Mar-22 30-Sep-22 Q2 FY 2 2 Q3 FY 2 2 Q4 FY 2 2 Q1 FY 2 3 Q2 FY 2 3 Arman (Standalone) Namra Av g T e n u r e o f Ac t i v e A
Slide 26: Lending Profile
Lending Profile Borrowing Mix (%) Top 5 Lending Partners (INR Crore) 794 879 1,084 1,164 1,368 Top 5 Lenders % of Borrowings Lender 1 – NCD 12.6% 27.7% 26.0% 24.0% 27.0% 31.6% Lender 2 – Term Loans & PTC 12.5% 5.9% 3.2% Lender 3 – Term Loans 6.9% 8.0% 9.8% 11.0% Lender 4 – Term Loans & PTC 5.7% 24.4
Slide 27: Lending Partners
Lending Partners Bank Borrowings Non-Bank Borrowings Securitization Partners NCDs & ECB 26
Slide 28: Strong Financial Performance
Strong Financial Performance 27
Slide 29: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (INR Crore) Q2 FY23 Q2 FY22 Y-o-Y (%) Q1FY23 Q-o-Q (%) H1 FY23 H1 FY22 Y-o-Y (%) Income from Operations 91.6 50.3 78.4 170.0 99.6 Other Income 1.0 0.5 0.5 1.5 0.9 Gross Total Income 92.6 50.8 82.3% 78.9 17.4% 171.6 100.5 17.4% Finance Costs 36.1 19.7
Slide 30: Balance Sheet
Balance Sheet Particulars (INR Crore) Consolidated Standalone Particulars (INR Crore) Consolidated Standalone ASSETS Sep-22 Mar-22 Sep-22 Mar-22 LIABILITIES & EQUITY Sep-22 Mar-22 Sep-22 Mar-22 Financial Assets Equity Share capital 8.5 8.5 8.5 8.5 Cash and cash equivalents 223.5 75.5 90.8 31.0 Reser
Slide 31: Consolidated Business Performance
Consolidated Business Performance (INR Crore) AUM Disbursement Gross Total Income 1,388 1,436 380 93 1,233 337 79 296 76 1,045 266 278 910 59 51 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Net Total Income Pre-provision Operating Profit Pr
Slide 32: Consolidated Business Performance
Consolidated Business Performance Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 14.7% 14.9% 15.0% 51.7% 26.6% 26.0% 13.8% 13.5% 48.6% 23.8% 23.9% 23.9% 35.8% 36.8% 35.6% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Asset Qualit
Slide 33: Q2FY23 – Standalone Performance Update (2W & MSME)
Q2FY23 – Standalone Performance Update (2W & MSME) • Standalone AUM stood grew by 45.7% to INR 246 Particulars (INR Crore) Q2 FY23 Q2 FY22 Y-o-Y (%) Q1FY23 Q-o-Q (%) H1 FY23 H1 FY22 Y-o-Y (%) Crore as compared to INR 168 Crore Income from Operations 21.4 13.4 21.3 42.7 27.0 o With the revival seen i
Slide 34: Operational Highlights - Standalone Business
Operational Highlights - Standalone Business (INR Crore) AUM Disbursement Gross Total Income 246 62 21 21 20 229 58 211 54 9 55 49 8 4 4 4 189 47 47 168 46 16 12 13 14 49 11 42 3 3 197 50 53 16 165 182 43 16 16 140 35 38 127 10 11 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23
Slide 35: Q2FY23 – Microfinance Namra Finance Performance Update
Q2FY23 – Microfinance “Namra Finance” Performance Update Particulars (INR Crore) Q2 FY23 Q2 FY22 Y-o-Y (%) Q1FY23 Q-o-Q (%) H1 FY23 H1 FY22 Y-o-Y (%) • MFI AUM stood at INR 1,190 Crore registering a growth of 60.5% as compared to same period last year Income from Operations 70.4 37.4 57.4 127.7 73.9
Slide 36: Operational Highlights – Namra Finance (1/2)
Operational Highlights – Namra Finance (1/2) (INR Crore) AUM Disbursement Gross Total Income 1,159 1,190 317 71 1,022 280 242 56 58 856 220 223 742 43 37 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Net Total Income Pre-provision Operating
Slide 37: Operational Highlights – Namra Finance (2/2)
Operational Highlights – Namra Finance (2/2) Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 14.8% 53.0% 22.5% 22.5% 22.6% 23.2% 13.3% 13.3% 13.8% 21.5% 12.9% 44.0% 44.0% 42.0% 42.0% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 A
Slide 38: Strong Growth in AUM and Disbursements
Strong Growth in AUM and Disbursements Total AUM (INR Crore) Total Disbursements (INR Crore) 1,233 1,024 13% 4% 880 14% 778 4% 860 16% 814 12% 685 17% 10% 15% 12% 11% 6% 547 14% 509 10% 453 15% 83% 17% 13% 5% 82% 10% 20% 248 248 75% 75% 72% 79% 172 204 71% 26% 0% 3% 82% 33% 73% 32% 36% 70% 74% 64% 6
Slide 39: While Maintaining Cost Efficiency & Asset Quality
While Maintaining Cost Efficiency & Asset Quality Gross and Net Total Income Yield & NIM (%) Asset Quality (INR Crore) Demonetization COVID-19 Demonetization COVID-19 235 6.7% 215 28.7% 195 28.3% 27.4% 25.5% 24.4% 21.5% 22.9% 141 146 128 116 17.4% 16.5% 16.5% 14.0% 14.3% 14.2% 2.6% 2.6% 4.6% 3.3% 78
Slide 40: Annexure
Annexure • Gross Interest Income = Interest Income + processing fees / other charges • Net Interest Margins = Net Interest Income / Average AUM (On + Off -Book) • Yields = Gross Interest Income / Avg. AUM (On + Off Off-Book) • Cost-to -Income Ratio = Opex (excl. provisions) / Net Total Income • GNPA
Slide 41: Thank You
Thank You Contact Information Company: Arman Financial Services Limited CIN: L55910GJ1992PLC018623 Mr. Vivek Modi Chief Financial Officer (CFO) Email : vivek@armanindia.com www.armanindia.com Investor Relations Advisors: Strategic Growth Advisors Pvt. Ltd. CIN: U74140MH2010PTC204285 Ms. Krunali Shah
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