Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q3 FY24 Earnings Presentation
55 slides from Nippon Life India Asset Management's earnings presentation, Jan 29, 2024
Slide 1: Exchange filing cover letter
January 29, 2024 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 – Q3 FY24
Investor Presentation – Q3 FY24 Jan-2024
Slide 3: Agenda
Agenda 1 Macro Trends 2 Industry 3 Nippon Life India Asset Management Limited 4 ESG Focus 5 Financial Overview 6 Annexure 2
Slide 4: Macro Trends
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Slide 5: Industry AUM has grown rapidly over the last decade
Industry AUM has grown rapidly over the last decade CAGR for MF AUM: 16% MF AUM (INR trillion) 16% 16% 14% % of GDP 13% 12% 11% 11% 9% 9% 7% 37.6 39.3 31.4 21.4 23.8 22.3 17.5 10.8 12.3 8.3 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Source: RBI, SEBI Note: a) AUM
Slide 6: Under-penetration presents significant growth potential
Under-penetration presents significant growth potential MF AUM/GDP 112% 73% 74% 79% 60% 60% 59% 48% 14% World Brazil Canada Germany India Japan Sweden United United Kingdom States Unique MF investors ▪ Mutual Fund penetration in India is 2.5% 2.6% low as % of GDP vs global average 1.6% 1.7% ▪ Less t
Slide 7: Key enablers – Robust economic growth
Key enablers – Robust economic growth India is now the 5th largest economy in the world CAGR: 10% GDP (INR trillion) YoY growth 18% 16% 13% 12% 11% 10% 11% 11% 6% 272 235 189 201 198 154 171 112 125 138 -1% 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Policy Reform
Slide 8: Key enablers – Financialization of Savings
Key enablers – Financialization of Savings Gross Financial Savings (INR trillion) CAGR: 11% % of Household Savings 68.9% 60.5% 62.4% 58.9% 60.5% 57.9% 56.2% 52.1% 51.5% 45.2% 47.6% 31 23 26 15 16 21 23 9 11 12 13 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Slide 9: Key enablers – Favourable Demographics
Key enablers – Favourable Demographics ~60% of India’s population is in the working age group 65 yrs and above 7% 0-14 yrs 45-64 yrs 27% 20% 15-44 yrs 46% Source: NFHS-5; 2019-21 statistics 8
Slide 10: Key enablers – Increased awareness
Key enablers – Increased awareness Investor education and awareness initiative by AMFI The initiative has reached out to Indians across states and languages through TV, Digital, Print and other media 9
Slide 11: Key enablers – Easy accessibility
Key enablers – Easy accessibility Smartphone penetration in India UPI transaction volumes (million) CAGR: 147% 66% 71% 83,751 61% 54% 46% 35% 45,968 29% 23% 15% 19% 12,519 22,331 905 5,392 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 FY18 FY19 FY20 FY21 FY22 FY23 ▪ Smartphone penetration (% of
Slide 12: Industry
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Slide 13: Quarterly AUM
Quarterly AUM Industry QAAUM (INR trillion) 7.27%* 7.46%* 7.67%* 40.3 47.0 49.2 12.6% 12.3% 12.3% 13.7% 12.3% 11.1% 21.5% 21.9% 20.8% 52.2% 53.5% 55.8% Dec-22 Sep-23 Dec-23 Equity Debt Liquid ETFs ▪ Proportion of Equity assets have increased over the last year ▪ Increase in Equity assets has been ai
Slide 14: Segment-wise Mix and Geographic Spread
Segment-wise Mix and Geographic Spread Segment-wise AUM T-30/B-30 AUM B-30 18% Retail 27% HNI 34% Corporate 40% T-30 82% ▪ Individual segment contributes to 60% of AUM ▪ B-30 locations contribute 18% of AUM Data as on Jun 2023 based on Monthly Average Assets under Management 13
Slide 15: Systematic Investments
Systematic Investments Monthly SIP flows (INR bn) SIP folios (million) 176 71 76 136 160 61 Dec-22 Sep-23 Dec-23 Dec-22 Sep-23 Dec-23 SIP AUM (INR bn) ▪ Steady growth witnessed in the monthly SIP flows (+30% YoY) ▪ At INR 176 bn, Dec-2023 recorded all- time high monthly SIP flows 9,959 8,704 6,747 ▪
Slide 16: Nippon Life India Asset Management
Nippon Life India Asset Management 15
Slide 17: NAM India at glance
NAM India at glance One of the largest Asset Managers in India, with track record of 28 years NAM India Mutual Funds Managed Accounts International AUM INR 3,937 bn* INR 752 bn INR 4.81 trn INR 125 bn (Advisory INR 21 bn) Locations Distributors Folios Employees Reach 260 98,000+ 22.5 mn 989 Unique I
Slide 18: Key Highlights (1/2)
Key Highlights (1/2) Rank Maintained industry ranking of 4th Largest AMC based on QAAUM 1 No.1 Non-Bank Sponsored MF in India AAUM Dec-23 QAAUM - INR 3,777 bn, up 29.0% YoY & Investor Base Highest Investor Base – 22.5 mn 2 7.7% QoQ 3 Market share at 7.67% 40 bps YoY 21 bps QoQ Added 1.2 mn folios in
Slide 19: Key Highlights (2/2)
Key Highlights (2/2) ETF Profitability 6 Dec-23 QAAUM - INR 929 bn 7 Q3 FY24 Profit After Tax at INR Market share at 15.4% (↑134 bps QoQ) 2.84bn (↑39% YoY / 16% QoQ) Digital Customer Centricity 1.7 mn Digital transactions in Q3 FY24 One of the Lowest Investor 8 9 Contributed 61% to overall purchase
Slide 20: Diversified Business
Diversified Business AUM spread across asset classes Optimal mix of Investors Equity constitutes 49% of MF AUM Higher share of retail AUM vs industry ETFs constitute 25% of MF AUM HNI segment gaining traction Wide reach Strong Physical & Digital Distribution Largest investor base in the industry Lar
Slide 21: AUM spread across asset classes
AUM spread across asset classes (INR bn) 2,928 3,506 3,777 23.3% 23.0% 24.6% 14.0% 11.0% 9.0% 18.2% 19.2% 17.8% 44.5% 46.8% 48.6% Dec-22 Sep-23 Dec-23 Equity Debt Liquid ETFs ▪ Share of Equity AUM has increased over Dec-2022 level to 49% ▪ Share of ETF AUM has increased over Dec-2022 level to 25% Da
Slide 22: Optimal mix of Investors
Optimal mix of Investors (INR bn) 2,930 3,618 3,940 45% 42% 40% (7.6%)* (7.7%)* (7.8%)* 25% 28% 29% (5.6%)* (6.3%)* (6.6)* 30% 30% 31% (8.6%)* (8.9%)* (9.0%)* Dec-22 Sep-23 Dec-23 Retail HNI Corporate Investor segment-wise AAUM ▪ NIMF’s Retail share at 31% is higher Retail than the industry average
Slide 23: Wide Reach
Wide Reach B-30 AAUM/Total AAUM B-30 Folios (mn) 11.7% 11.5% 12.1% NIMF 20.1% 8.2 8.9 7.3 Industry 17.8% Dec-22 Sep-23 Dec-23 B-30 MAAUM (INR bn) 8.1% 8.6% 8.7% 719 791 562 Dec-22 Sep-23 Dec-23 Source: AMFI; 22 Calculated on Monthly Average AUM
Slide 24: Wide Reach
Wide Reach (in million) Unique Investors Total Folios 36.0% 36.2% 36.9% 13.5% 13.6% 13.7% 14.6 15.5 21.3 22.5 13.2 19.0 Dec-22 Sep-23 Dec-23 Dec-22 Sep-23 Dec-23 Overall Distribution Mix ▪ NIMF has the largest investor base in the industry Direct Distributed ▪ NIMF improved its market share in Chann
Slide 25: Strong Physical Distribution
Strong Physical Distribution Total base of empaneled distributors rose to over 98,000 with highest single Distributor concentration at ~5% of assets 88 78 86 97,800+ Banks National Alternate Mutual Fund Distributors (incl. PSU banks) Distributors Mix of Distributed Assets Distributed Assets (investo
Slide 26: Focused Business Verticals for various segments
Focused Business Verticals for various segments Key Clients Group (KCG) ▪ Experienced Institutional sales team managing specific target segment of clients with focused business approach by maintaining relationship with Large corporate groups, Banks and financial Institutions and aim to enhance marke
Slide 27: Digital Ecosystem – Use of Integrated Commerce
Digital Ecosystem – Use of Integrated Commerce 26
Slide 28: All-New Portfolio Dashboard - Launched Q3 FY24
All-New Portfolio Dashboard - Launched Q3 FY24 INVESTOR PORTFOLIO DASHBOARD Empowering investors with a 360° Portfolio View and thoughtful features : Intelligence Deployed for Investors to Make the Right Decisions ➢ Intelligence-embedded Smart Asset – Driving Higher Engagement & Retention with Intel
Slide 29: Strong Digital Presence
Strong Digital Presence Lumpsum & New SIP Registration Digital Purchases (mn)* 9M FY24 4.25 76% 9M 2.41 FY23 4.25Mn Digital (New 58% Digital 2.2X growth in 224% 9M FY24 Purchase and SIP 9M FY24 contribution to 9M FY24 Digital New SIPs registrations) total NIMF registrations vis-à- transactions Purch
Slide 30: Steady Systematic Transactions
Steady Systematic Transactions Quarterly Systematic Book (INR bn) +239% Q3 FY24 Book (INR bn) 59.3 47.2 18.7 19.5 21.0 29.1 32.2 34.3 20.1 21.3 22.8 25.6 17.5 18.8 Oct-23 Nov-23 Dec-23 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 FY24 SIP accounts continuing for
Slide 31: Comprehensive Product Bouquet
Comprehensive Product Bouquet Mutual Fund AIF 19 schemes Active Passive Public Equity 43 schemes 41 schemes Real Estate Credit Equity Equity (Index Market Cap based Funds/ ETFs) Structured Credit Sector Broad Market Thematic Sector Tech FoF International Thematic/Strategy International Fixed Income
Slide 32: ETF - Leadership position maintained
ETF - Leadership position maintained One of the largest bouquet of 25 ETFs in the industry across Equities, Debt & Commodities 64% 61% 15% INR 929 bn INR 84 bn Volume Share* Share of folios^ Market Share^ ETF QAAUM Gold ETF QAAUM NSE volume (Oct - Dec 2023) (INR mn)** Nifty 50 ETFs Nifty Bank ETFs G
Slide 33: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) Total Commitment Raised (Till date) Dec-22 Sep-23 Dec-23 INR 53.0 bn INR 57.8 bn INR 60.3 bn ▪ Currently offers products across four business lines namely Public Equity, Real Estate Credit, Structured Credit & Tech/VC FoF ▪ Recently undertook final closing
Slide 34: Offshore Business - Creating 'expressways' globally
Offshore Business - Creating ‘expressways’ globally Key presence Singapore Dubai Japan 146 (INR bn) 130 21 114 20 21 125 Advisory 93 110 Managed Dec-22 Sep-23 Dec-23 Other International Tie Ups Xtrackers India Govt. Bond UCITS ETF Godo Kaisha Genkai India Investment* Bualuang Bharata Fund Nippon Ind
Slide 35: Process Orientation - Investments
Process Orientation - Investments Risk Rating of Factor Analysis Securities Risk Optimization tool Quantitative analyzing key factors Assessment Investment and comparing the portfolio & considering Business Philosophy – benchmark construct Risk and Management Risk The Nippon Way Fund Casing Objectiv
Slide 36: PDCA Approach
PDCA Approach Plan Do Check Act ▪ Within fund ▪ Analysis and ▪ Monthly fund ▪ Adjustment in mandate (target prediction of review by the portfolio for return, risk, macro economy Fund better risk- benchmark, and market Management return investment ▪ Portfolio Team ▪ Refine theme, etc.), each construc
Slide 37: Investment Team
Investment Team 60 Members Investment Team Strength 27 17 Equity MF Fixed Income MF 14 2 Managed Accounts Offshore Business 900+ years Cumulative experience of Investment Team 20+ years Average tenure of CIOs with NAM India Dedicated Teams for Credit Research, Real Estate and Venture Capital 36
Slide 38: ESG Focus
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Slide 39: Vision
Social responsibility commitment aligned with UN SDGs Vision To create a sustainable future for our stakeholders by integrating environmental, social and governance (ESG) principles into our business operations, investment processes and stewardship ESG integration initiatives are focused on Topics i
Slide 40: CSR
CSR NAM contributed INR 160 mn towards CSR initiatives in 9M FY24 Number of Focus Area NGO Partners Beneficiaries from SDG Linkage projects in 9M FY24 ▪ Tata Memorial Centre-Advanced Centre for Treatment, Research and Education in Cancer 3,102 Elderlies, community (TMC-ACTREC) Healthcare members fro
Slide 41: Financial Overview
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Slide 42: Financial Summary
Financial Summary Consolidated (INR mn) Change Change Particulars Q3 FY24 Q3 FY23 Q2 FY24 FY23 (YoY) (QoQ) Revenue from Operations 4,233 3,538 20% 3,975 7% 13,498 Operating Expenditure 1,723 1,494 15% 1,650 4% 5,889 Finance cost 17 11 54% 17 -2% 40 Fee & Commission 156 126 24% 156 0% 501 Employee be
Slide 43: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Dec 31, 2023 Sep 30, 2023 Investment in NIMF’s schemes 27,732 27,747 - Debt 23,994 24,415 - Equity 3,738 3,332 Bank FDs and tax-free bonds 3,579 3,700 Other assets 4,074 3,395 Total 35,385 34,842 NIMF - NIMF - Other Other Equity Equity Asset
Slide 44: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases QAAUM / Branch QAAUM / Employee (INR bn) 19.8 14.8 16.4 10.4 11.5 2.3 2.9 3.1 3.8 2.0 Mar-20 Mar-21 Mar-22 Mar-23 Dec-23 Profit / Branch Profit / Employee (INR mn) 53.4 38.8 37.9 34.4 21.1 6.9 7.7 7.3 10.3 4.0 FY20 FY21
Slide 45: Dividend History
Dividend History Dividend Payout (INR bn) Earnings Per Share (INR) 7.16 11.8 6.84 11.5 10.9 4.93 6.7 3.44 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Total Dividend INR 11.5 per share in FY23 100% of FY23 earnings shared with shareholders Cumulative dividend of INR 41 bn in last 9 financial years Includ
Slide 46: Thank you for your time!
<> Nippon Life indlis Asset Management Ltd / Thank you for your time! Le Good gets bcllere :
Slide 47: Annexure
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Slide 48: About Nippon Life Insurance
About Nippon Life Insurance 47
Slide 49: Profile
Profile ❑ Largest market share in Japan among private life insurers in terms of premium income ❑ Total assets over JPY 87 Trillion ❑ 56 Asset Management related & 21 Insurance related operations worldwide * *As of March 31, 2023 Asset Management Life Insurance Shareholding - 73.5% Presence in India
Slide 50: Nippon Life Group
Nippon Life Group Nippon Life Insurance Business in Japan Asset Management Business Overseas Insurance Business Taiju Life MLC Limited (85.0%) Nissay Asset (80.0%) Management (100.0%) Reliance Nippon Nippon Life Insurance Wealth Life (49.0%) (100.0%) Bangkok Life Assurance Hanasaku Life Nippon Life
Slide 51: Board of Directors
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Slide 52: Profile of Board Members
Profile of Board Members.. Mr. Upendra Kumar Sinha (Independent Director & Chairman) a 1976 batch IAS officer of Bihar cadre, during his 3 decades plus of experience has held several responsible government positions in India, including as Joint Secretary (Banking) and Joint Secretary (Capital Market
Slide 53: Profile of Board Members
Profile of Board Members Mr. Ashvin Parekh (Independent Director) is a qualified Chartered Accountant and has set up the advisory firm that provides services to the Boards and the management of BFSI companies. Mr. Parekh retired as a Senior Partner from Ernst & Young in June 2013. Earlier, Mr. Parek
Slide 54: Profile of Board Members
Profile of Board Members Mr. Tomohiro Yao (Associate Director) is Regional CEO for Asia Pacific and Head of India at Nippon Life Insurance (Nippon). He is responsible for operations in the Asia Pacific. He is a seasoned professional with over 25 years of experience in the life insurance industry. He
Slide 55: 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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