Capri Global Capital Limited · NSE:CGCL
Capri Global Capital — Investor Presentation (September 2018)
47 slides from Capri Global Capital's investor presentation, September 2018
Slide 1: Corporate Presentation September 2018
CAPRI GLOBAL >), CAPITAL LIMITED ~ Simpler, Better, Faster Fulfilling Dreams, Uplifting Lives Corporate Presentation September 2018
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only and does not constitute an offer, solicitation or advertisement with respect to the purchase or sale of any security of Capri Global Capital Limited (the “Company”) and no part of it shall form the basis of or be relied upon in connection
Slide 3: Capri Global: Banking the Unbanked
Capri Global: Banking the Unbanked Total AUM* INR 28.4 billion MSME AUM 8,000+ INR 15.4 billion Live Accounts CF + IRL AUM INR 10.5 billion 1400+ Employees HL AUM INR 2.4 billion 8 Total Disbursements States INR 20.2 billion PAT 74 Branches INR 1 billion Net Worth INR 12.6 billion As on March 31st,
Slide 4: Small Loans: Niche Capabilities
Small Loans: Niche Capabilities MSME Construction Finance Housing Finance Indirect Lending 54.3 % of AUM 33.2 % of AUM 8.5 % of AUM 3.9 % of AUM • Focus on Tier II & III • Project outreach: • Affordable housing • NBFC Outreach: 3 cities; Customer 97 customers in Tier II • Financing to other outreach
Slide 5: Robust Governance & Risk Control Mechanism
Robust Governance & Risk Control Mechanism Regulator: RBI/NHB Board: Statutory Auditor: RMC and Audit committee Deloitte Independent Internal In-house Internal Auditor: Compliance Function Audit Function EY In-house Fraud In-house Legal In-house Technical In- house Credit Control Unit Team Team Coll
Slide 6: Credit Process
Credit Process Business Credit Legal, technical Operations Customer Service Collection Origination Underwriting and FCU • DST Salesforce • Bureau check • Fraud check of • Pre disbursal • Mandatory • Customer visits on • Doorstep Meeting • Customized Documents/ Checks welcome call to Bounce cases Bor
Slide 7: Technology Initiatives
Technology Initiatives Centralisation • Application • New LOS / LMS Scorecard • Regional • Mobility Processing Solution Units Automation Digitisation A positive impact on productivity andcost control A new generation cloud based platform with rule engine and mobility modules being implemented
Slide 8: Loan origination and Management System workflow
Loan origination and Management System workflow Capture Lead with Capture Detailed CIBIL Different Analyses and Different External information and Check Initiate Verifications Integrations for Quick Data Collect Documents Entry CREDIT Loan Disbursement Loan Decisioning Under- writing Loan Servicing
Slide 9: Growing Branch Network
Growing Branch Network States No. of branches 1 9 Maharashtra 23 2 Gujarat 17 9 Madhya Pradesh 12 16 11 Delhi NCR 10 22 Rajasthan 8 Haryana 2 1 Punjab 1 Karnataka 1 Total 74 Doubled branch network in Gujarat and Maharashtra; Expanded Branch network in Madhya Pradesh and Rajasthan
Slide 10: Shifting Towards Granular Loan Book
Shifting Towards Granular Loan Book Incremental Ticket Size on TotalPortfolio Incremental Ticket Size on TotalPortfolio Construction Finance (INR Mn) MSME (INR Mn) 212 7.9 195 146 5.4 4.1 97 1.7 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Client Base – Number of Live Accounts Client Base – Number of Liv
Slide 11: Moving Towards Higher Growth
Moving Towards Higher Growth Net Interest Margin (%) Pre-Tax RoCE (%) Spread (%) 5.6 14.7 5.07 4.93 19.7 14.8 10.4 3.22 11.6 9.3 8.5 5.7 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Return on Equity (%) Cost to Income Ratio (%) Capital Adequacy (%) 44 45 89 9.3 8.6 79.7 27 53 5.1 22 4
Slide 12: Strong Focus on MSME: 7x in 4 years
Strong Focus on MSME: 7x in 4 years NII (INR Mn) PAT (INR Mn) 1,040 2,100 952 852 1,681 1,671 1,495 1,301 581 436 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Loans & Advances (INR Mn) Total Assets (INR Mn) 30,107 MSME Construction Finance 15,592 12,138 19,861 10,541 7,571 13,204 11,641 5,057 6
Slide 13: Prudent Asset Mix
Prudent Asset Mix Disbursement Mix (INR Mn) AUM Mix (INR Mn) MSME CF IL HL MSME CF IL HL 8,240 15,413 7,915 7,230 12,027 5,990 9,427 4,760 7,484 5,999 3,058 2,922 2,786 5051 4,865 2,420 4,415 2,108 2,080 3,113 2311 2,450 1,100 1,100 65 65 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 All numbers
Slide 14: MSME: Small Loans, Big Opportunity
MSME: Small Loans, Big Opportunity Focus Area MSME Assets by Geography NCR 35% Micro Enterprise Small Enterprise • Self Employed Individuals – • Small enterprises with Provision stores, retail formal income outlets, handicrafts etc documentation; Sourced directly • Ticket Size: INR 5L–50 L • Ticket
Slide 15: MSME: Enabling Superior Growth
MSME: Enabling Superior Growth Disbursals (INR Mn) Average Ticket Size (INR Mn) 7,910 4.3 2.6 7,230 FY17 FY18 FY17 FY18 Direct Sourcing 55% 35% FY17 FY18
Slide 16: MSME: Social Impact Findings
MSME: Social Impact Findings Primary Applicants Entrepreneurs Previous Generation Female as 15% Borrowers/Co- borrowers 90% Male Borrowers 10% First GenerationFirst 86%Generation 85% Financial Inclusion Applied but Rejected 2% Repeat No Borrowing Faced Customers Constraints Borrowing 35% First Time
Slide 17: Construction Finance: Building a Sustainable Future
Construction Finance: Building a Sustainable Future Focus Area CF Lending Portfolio by Geography • Construction linked loans to small and Hyderabad Jaipur Others midsize real estate developers 1% 2% 2% MMR Chennai 38% • Comprehensive framework for project 3% NCR selection and credit appraisal 7% • C
Slide 18: Construction Finance: The Retail Way
Construction Finance: The Retail Way • Exposure to Mumbai region at 37% Addressing Concentration • Reduced average interest rates to in FY18 vs 69% in FY16 Risk 14-16% from 18-20% to target larger • 6 new geographies added in 2 years: developer audience Ahmedabad, Chennai, Vijaywada,etc • Aim to spe
Slide 19: Construction Finance: High Yield, Low Risk
Construction Finance: High Yield, Low Risk Disbursals (INR Mn) Average Ticket Size (INR mn) 8,240 277 5,990 99.2 FY17 FY18 FY17 FY18 Portfolio Yield (%) 17% 16% FY17 FY18
Slide 20: Housing Finance: Capitalising on Affordable Housing Opportunity
Housing Finance: Capitalising on Affordable Housing Opportunity Focus Area HF Lending Portfolio by Geography • Serves middle and lower middle income MP NCRNCR 7% 22%22% population in Tier 2 and 3 cities UP 1% • Ventures in 2016 through its subsidiary – Capri Global Housing Finance Limited Rajasthan
Slide 21: Housing Finance: Exponential Growth Potential
Housing Finance: Exponential Growth Potential Disbursals (INR Mn) Average Ticket Size (INR Mn) 1.5 2,404 1.1 65 FY17 FY18 FY17 FY18 Portfolio Yield (%) 13% 12% FY17 FY18 Note: FY18 was the 1st full year of operations
Slide 22: Housing Finance: Social Impact Findings
Housing Finance: Social Impact Findings Gender Inclusivity Loans to Underprivileged Male Borrower 4% EWS Middle Income 9% Group II 3% Middle Income GroupI 31% Female Lower Income Borrower/Co- Higher Income Group Group borrower 7% 50% 96%
Slide 23: Indirect Retail Lending: Unique Product Offering
Indirect Retail Lending: Unique Product Offering Focus Area AUM Disbursements Lending to small NBFCs engaged in INR 1,100 Mn INR 1,100 Mn o MSME Lending and Microfinance o Two Wheelers and Commercial Vehicles finance Hypothecation of receivables - 1 to Ticket Size Range Customers 1.2X cover INR
Slide 24: The 100% Secured Loans Benefit
The 100% Secured Loans Benefit Vertical Average LTV (%) Portfolio Yield MSME 52% 14.02% Housing Finance 47% 12.29% Vertical Security Cover (x) Portfolio Yield Construction Finance 2.54x 15.80% Indirect Retail Lending 1.20x 13.00% High security cover provides comfort against probable defaults; Averag
Slide 25: Strong Asset Quality
Strong Asset Quality As per IGAAP Provisions (INR Mn) GNPA% NNPA% Provisions Held Provisions Required 337.1 196.3 210.5 1.68% 1.44% 102.8 0.97% 0.88% 0.98% 0.88% 75.2 65.2 0.75% 0.84% 36.6 39.7 FY 15 FY 16 FY 17 FY 18 FY 15 FY 16 FY 17 FY 18 FY15 FY16 FY17 FY18 As per IND-AS Probability Of Default (
Slide 26: NPA Analysis: Prudent Lending Practises
NPA Analysis: Prudent Lending Practises CGCL (Standalone) FY16 FY17 FY18 GNPA Product Segment wise - FY18 (INR MN) 150 DPD 120 DPD 90 DPD Coverage NPA Recognition Norms Product Segment GNPA % NNPA % Ratio GNPA 97 178 439 NNPA 83 152 374 MSME 2.23% 1.93% 53.43% Provisions 14 26 64 Construction Financ
Slide 27: Liability Mix: The Low Cost Benefit
Liability Mix: The Low Cost Benefit Total Borrowings (INR Mn) & Borrowing Mix Steadily Declining Average Cost of Borrowing 1,960 7,280 15,520 17,590 11.82% 10.47% 10% 5% 10% 9.28% 10% 3% 7% 100% 83% 85% 87% FY16 FY17 FY18 FY16 FY17 FY18 Q1FY19 Credit ratings Banks Borrowings CP NCD 2018: Brickworks
Slide 28: Key Strategic Priorities and FY19 Guidance
Key Strategic Priorities and FY19 Guidance Expand branch network to over 90 FY19 Guidance locations by March 2019; 235 Branches over 5 years MSME + Construction Finance + Indirect INR 40,000 Mn Focus on Direct Sourcing in MSME as well Lending Loan Book as housing finance HFC Loan Book INR 9,000 Mn E
Slide 29: Leadership Team
Leadership Team Surender Sangar Vikas Sharma Vijay Gattani Hemant Dave Head – ConstructionFinance Business Head (MSME &HL) Senior Vice President - Credit Head of Operations Ex-MD – Tourism Finance Corporation Ex - Kotak Mahindra Bank, Dhanlaxmi Ex-ICICI Bank, Head of Credit & Ex - Kotak Mahindra Ban
Slide 30: Q1FY19
Q1FY19
Slide 31: Q1FY19 at a glance
Q1FY19 at a glance Consolidated numbers NII (INR Mn) PAT (INR Mn) AUM (INR Mn) 645.2 271.4 30,931 437.9 19,476 70.7 Q1FY18 Q1FY19 Q1FY18 Q1FY19 Q1FY18 Q1FY19 Capital Adequacy Ratio (%) Gross NPA (%) Net NPA (%) MSME + CF + IRL HF MSME + CF + IRL HF 50.88% 38.62% 1.15 1.17 1.77 1.91 0.22 0.19 0 0 Q1F
Slide 32: Performance Highlights: Transition to IND - AS
Performance Highlights: Transition to IND - AS Particulars As per IND-AS As per IGAAP YoY Growth INR Mn Q1FY19 Q1FY18 Q1FY19 Q1FY18 IND-AS IGAAP AUM 27,534 19,411 27,534 19,411 42% 42% Net Interest 592 432 568 409 28.3% 28.1% Income (NII) Net Interest 8.72% 8.86% 8.28% 8.43% NA NA Margin (NIM) Profi
Slide 33: Q1FY19 – Strong AUM & Disbursements Growth
Q1FY19 – Strong AUM & Disbursements Growth AUM - Segmental Breakup Disbursements - Segmental Portfolio Yield (%) (INR Mn) Breakup (INR Mn) 16,220 2,132 12,657 16 15.2 1,528 1,491 14 1,479 13.9 9,810 13 12.6 12.3 1260 985 6,619 3,641 1,260 138 0 199 0 0 Q1FY18 Q1FY19 Q1FY18 Q1FY19 Q1FY18 Q1FY19 MSME
Slide 34: Key Impact Areas under IND-AS
Key Impact Areas under IND-AS Financial item Indian GAAP Ind AS Impact on transition Impact going forward Financial assets at LGD computation to be Measured based on RBI Measured based on Increase in net-worth and amortized cost – performed on quarterly Guidelines expected credit loss no P&L impact
Slide 35: Provision on Loan Assets
Provision on Loan Assets Change in credit quality since initial recognition Stage 2 Underperforming Stage 3 Stage 1 (significant increase in credit risk Non performing Performing since initial recognition) (Credit impaired loan assets) Recognition of expected creditlosses 12-month expected credit lo
Slide 36: Expected Credit Loss Methodology
Expected Credit Loss Methodology Particulars CGCL Methodology Level of assessment: • The book has been classified as Construction finance, MSME, Machinery Loans for ECL purposes. Default definition: • 90 days past due has been considered as the default threshold for all loans. • Delinquency buckets
Slide 37: Expected Credit Loss Methodology
Expected Credit Loss Methodology Particulars CGCL Methodology • The analysis methodology has been used to create the LGD. The LGD takes into Loss Given Default account the recovery experience across accounts of a particular portfolio post (LGD) default. The recoveries are tracked and discounted to t
Slide 38: Well Positioned in High Growth Sectors
Well Positioned in High Growth Sectors
Slide 39: Business Model
Business Model Higher share of Direct Loan Sourcing vs DSA High NIM; Low Low Cost Ticket Segments Structure 100% secured Focus on Tier 2/3 cities Hub & Spoke model reaches loan book wide audience
Slide 40: MSME Lending: A Huge Unexplored Opportunity
MSME Lending: A Huge Unexplored Opportunity MSME credit to grow at 12-14% over 5 years: The NBFC Advantage in MSME Funding ICRA ▪ Lack of formal avenues for financing ensures low penetration from banks Non-bank share in MSME credit pie should expand to 22-23% ▪ Banks face issues in financing MSMEs d
Slide 41: Affordable Housing: Large Demand & Low Formal Financing
Affordable Housing: Large Demand & Low Formal Financing Housing Shortage Urban Housing shortage pegged to reach 34.1 million 43.7 96% shortage in units by 2022 EWS & LIG 95%+ of the shortage corresponds to Lower Income LIG, 40% 18.8 Group (LIG) & Economically Weaker Sections (EWS) EWS, 56% In 2015,
Slide 42: Appendix
Appendix
Slide 43: Board of Directors
Board of Directors Quintin E. Primo III Rajesh Sharma BhagyamRamani Non-Executive Chairman Managing Director Independent Director Co-founder & CEO of Capri Founder & promoter Ex- GM and Director of General Investment Group, Chicago Over 23 years of experience Insurance Corporation Over 3 decades of
Slide 44: Income Statement
Income Statement INR Mn FY17 FY18 Interest earned on loans 2,020.7 3,095.5 Interest earned on investments 30.9 32.6 Total interest earned 2051.6 3128.1 Total interest expended 379.9 1,020.4 - interest on borrowings 379.6 1,020.4 Net interest income 1671.8 2107.7 Non-interest income 299.2 818.9 - loa
Slide 45: Balance Sheet
Balance Sheet INR Mn FY17 FY18 Share Capital 350.3 350.3 Reserves and Surplus 11,256.3 12,235.7 Networth 11,606.5 12,586.0 Borrowings 7,278.6 15,742.7 Current liabilities and provisions 794.8 1,529.5 Other Non Current Liabilities and provisions 181.4 249.2 Total liabilities & stockholders'equity 19,
Slide 46: Key Partnerships
Key Partnerships Lenders Auditors & Advisors
Slide 47: Thank You
Thank You
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