Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q4 FY24 Earnings Presentation
55 slides from Nippon Life India Asset Management's earnings presentation, Apr 24, 2024
Slide 1: Investor Presentation cover letter to exchanges
April 24, 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), Sub.
Slide 2: Investor Presentation – Q4 FY24
Investor Presentation – Q4 FY24 Apr-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: 20% MF AUM (INR trillion) 19% % of GDP 16% 16% 15% 13% 12% 11% 11% 9% 9% 7% 55.0 37.7 40.0 32.2 22.7 24.6 24.7 18.6 12.1 13.6 9.0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Source: RBI, SEBI, MOSPI Note: a) AUM is based
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 3.1% ▪ Mutual Fund penetration in India is 2.6% low as % of GDP vs global average 2.4% 1.5% 1.6% ▪ S
Slide 7: Key enablers – Robust economic growth
Key enablers – Robust economic growth CAGR: 10% India GDP (INR trillion) YoY growth 18% 16% 13% 12% 11% 10% 11% 11% 8% 6% 272 294 235 189 201 198 154 171 -1% 112 125 138 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 ▪ India is now the 5th largest economy in the world ▪ GDP growth rate is am
Slide 8: Key enablers – Financialization of Savings
Key enablers – Financialization of Savings Gross Financial Savings (INR trillion) CAGR: 11% % of Household Savings 68.1% 60.5% 62.4% 58.9% 60.5% 59.9% 57.9% 55.1% 52.1% 51.5% 47.6% 31 30 23 26 15 16 21 23 11 12 13 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 No. of demat accounts (mn) ADTO
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 (mn) CAGR: 89% 66% 71% 1,312 61% 54% 46% 35% 838 29% 23% 460 15% 19% 54 223 125 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 FY19 FY20 FY21 FY22 FY23 FY24 ▪ Smartphone penetration (% of population) in Indi
Slide 12: Industry
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Slide 13: Quarterly AUM
Quarterly AUM Industry AAUM (INR trillion) 7.24%* 7.67%* 7.97%* 40.5 49.2 54.1 12.6% 12.3% 12.3% 13.7% 11.1% 10.8% 21.8% 20.8% 18.9% 51.9% 55.8% 58.0% Mar-23 Dec-23 Mar-24 Equity Debt Liquid ETFs ▪ Proportion of Equity assets have increased over the last year ▪ Increase in Equity assets has been aid
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 39% T-30 82% ▪ Individual segment contributes to 61% of AUM ▪ B-30 locations contribute 18% of AUM Source: AMFI Data based on MAAUM for the last month of the quarter 13
Slide 15: Systematic Investments
Systematic Investments Monthly SIP flows (INR bn) SIP folios (mn) 76 84 176 193 64 143 Mar-23 Dec-23 Mar-24 Mar-23 Dec-23 Mar-24 SIP AUM (INR bn) ▪ Steady growth witnessed in the monthly SIP flows (+35% YoY) ▪ At INR 193 bn, Mar-2024 recorded all- 10,717 time high monthly SIP flows 9,959 6,833 ▪ SIP
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 4,313 bn* INR 791 bn INR 5.24 trn* INR 134 bn (Advisory INR 22 bn) Locations Distributors Folios Employees Reach 263 1,01,400+ 24.3 mn 1,001 Uni
Slide 18: Key Highlights (1/2)
Key Highlights (1/2) Rank Maintained industry ranking of 4th Largest AMC based on QAAUM 1 Moved up two positions in FY24 to 4th in terms of Equity QAAUM - excluding Arbitrage No.1 Non-Bank Sponsored MF in India AAUM Mar-24 QAAUM -INR 4,313 bn, up 47.1% YoY& Investor Base 2 14.2% QoQ 3 Highest Invest
Slide 19: Key Highlights (2/2)
Key Highlights (2/2) ETF Profitability 6 Mar-24QAAUM -INR 1,115 bn 7 Q4 FY24 Profit After Tax at INR 3.43bn (↑73% YoY / 21% QoQ) Market share at 16.7% (↑135 bps QoQ) FY24 Profit After Tax at INR 11.07bn (↑53% YoY) Digital Customer Centricity 6.6 mn Digital transactions in FY24 One of the Lowest Inve
Slide 20: Diversified Business
Diversified Business Comprehensive Product bouquet AUM spread across asset classes Offerings across MF, AIF/PMS and Offshore Equity constitutes 49% of MF AUM Diverse MF offerings in active/passive space ETFs constitute 26% of MF AUM Wide reach Strong Physical & Digital Distribution Largest investor
Slide 21: AUM spread across asset classes
AUM spread across asset classes QAAUM (INR bn) 2,932 3,777 4,313 23.9% 24.6% 25.9% 13.3% 9.0% 9.1% 18.4% 17.8% 15.8% 44.4% 48.6% 49.2% Mar-23 Dec-23 Mar-24 Equity Debt Liquid ETFs ▪ Share of Equity AUM has increased over Mar-2023 level to 49% ▪ Share of ETF AUM has increased over Mar-2023 level to 2
Slide 22: Optimal mix of Investors
Optimal mix of Investors MAAUM (INR bn) 2,929 3,940 4,420 44% 40% 42% (7.8%)* (7.8%)* (8.5%)* 26% 29% 28% (5.8%)* (6.6%)* (6.7)* 29% 31% 30% (8.6%)* (9.0%)* (9.1%)* Mar-23 Dec-23 Mar-24 Retail HNI Corporate Investor segment-wise AAUM ▪ NIMF’s Retail share at 30% is higher Retail than the industry av
Slide 23: Wide Reach
Wide Reach B-30 AAUM/Total AAUM B-30 Folios (mn) 11.7% 12.1% 12.2% NIMF 19.5% 8.9 9.8 7.5 Industry 17.9% Mar-23 Dec-23 Mar-24 B-30 MAAUM (INR bn) 8.1% 8.7% 8.8% 791 862 557 Mar-23 Dec-23 Mar-24 Source: AMFI; 22 Calculated on MAAUM
Slide 24: Wide Reach
Wide Reach Unique Investors (mn) Total Folios (mn) 36.2% 36.9% 37.0% 13.5% 13.7% 13.7% 15.5 16.5 24.3 13.5 19.6 22.5 Mar-23 Dec-23 Mar-24 Mar-23 Dec-23 Mar-24 Overall Distribution Mix ▪ NIMF has the largest investor base in the industry Distributed ▪ NIMF’s market share in terms of total Direct Chan
Slide 25: Strong Physical Distribution
Strong Physical Distribution Total base of empaneled distributors rose to over 1,01,400 with highest single Distributor concentration at ~5% of assets 94 80 87 1,01,100+ Banks National Alternate Mutual Fund Distributors (incl. PSU banks) Distributors Mix of Distributed Assets Distributed Assets (inv
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: Demystifying Investments for the Next Gen
Demystifying Investments for the Next Gen With more than 66% of India’s Population below the age of 35 and Mutual Fund penetration at only 15%, we aim to simplify Mutual Funds for the next generation of Investors and nudge them to begin their Investment journey with NIMF Optimizing on Home Fun-Fluen
Slide 28: Industry Leaders in Mobile First Strategy
Industry Leaders in Mobile First Strategy India – One of the largest internet population with 700 Mn users* out which 80%+ access via mobiles. Mobile usage for NIMF digital Assets on Android is 87% & iOS is 13%. INVESTOR ENABLERS People’s Choice Platform – TheGo- For the Self-Serving Millennials to
Slide 29: Strong Digital Execution leading to 100% growth
Strong Digital Execution leading to 100% growth Lumpsum & New SIP Registration Digital Purchases (mn)* FY24 6.6 2X FY23 3.3 6.6 Mn Digital (New 60% Digital 19 New lumpsum Purchase and SIP contribution to 19/min Purchase or New FY24 FY24 registrations) total NIMF FY24 SIP registered transactions Purc
Slide 30: Steady Systematic Transactions
Steady Systematic Transactions Quarterly Systematic Book (INR bn) +301% Q4 FY24 Book (INR bn) 70.1 59.3 23.0 23.8 23.3 47.2 29.1 32.2 34.3 20.1 21.3 22.8 25.6 17.5 18.8 Jan-24 Feb-24 Mar-24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 FY24 FY24 SIP accounts c
Slide 31: Comprehensive Product Bouquet
Comprehensive Product Bouquet Mutual Fund AIF 20 schemes Active Passive Public Equity 43 schemes 43 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 61% 60% 17% INR 1115 bn INR 90 bn Volume Share* Share of folios^ Market Share^ ETF QAAUM Gold ETF QAAUM NSE volume (Jan - Mar 2024) (INR mn)** Nifty 50 ETFs Nifty Bank ETFs
Slide 33: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) Total Commitment Raised (Till date) Mar-23 Dec-23 Mar-24 INR 56.2 bn INR 60.3 bn INR 61.9 bn ▪ Currently offers products across four business lines namely Public Equity, Real Estate Credit, Performing Credit & Tech/VC ▪ Recently undertook first closing of T
Slide 34: Offshore Business - Creating 'expressways' globally
Offshore Business - Creating ‘expressways’ globally Key presence Singapore Dubai Japan 156 146 (INR bn) 21 22 109 20 Advisory 125 134 Managed 89 Mar-23 Dec-23 Mar-24 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 &benchmark considering Business Philosophy – construct Risk and Management Risk The Nippon Way Fund Casing Objective
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 65 Members Investment Team Strength 28 17 Equity MF Fixed Income MF 18 2 Managed Accounts Offshore Business ~1,000 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 FY24 Number of Beneficiaries from Focus Areas NGO Partners SDG Linkage projects in FY24 3,789 ▪ Tata Memorial Centres Healthcare Community members from ▪ Vision Foundation of India economically weaker section 3,830 Education & Skill ▪ Ekam Fo
Slide 41: Financial Overview
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Slide 42: Financial Summary
Financial Summary Consolidated Q4 Q4 Change Q3 Change Change Particulars (INR mn) FY24 FY23 FY24 FY23 (YoY) FY24 (QoQ) (YoY) Revenue from Operations 4,683 3,483 34% 4,233 11% 16,432 13,498 22% Operating Expenditure 1,865 1,488 25% 1,723 8% 6,849 5,889 16% Finance cost 16 12 33% 17 (6%) 62 40 55% Fee
Slide 43: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Mar 31, 2024 Dec 31, 2023 Investment in NIMF’s schemes 31,775 27,732 - Debt 27,818 23,994 - Equity 3,957 3,738 Bank FDs and tax-free bonds 3,542 3,579 Other assets 4,003 4,074 Total 39,320 35,385 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) 22.5 14.8 16.4 10.4 11.5 2.9 3.1 4.3 2.0 2.3 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Profit / Branch Profit / Employee (INR mn) 57.7 34.4 38.8 37.9 21.1 6.9 7.7 7.2 11.1 4.0 FY20 FY21
Slide 45: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR bn) Consolidated 17.5 10.37 11.8 11.5 6.84 7.16 10.9 4.93 6.7 3.44 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Total Dividend INR 16.50 per share in FY24 ~99% of FY24 earnings shared with shareholders Cumulative dividend of INR 51
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 Markets)
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 (NLI). 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 ha
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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