Sammaan Capital Ltd · NSE:SAMMAANCAP
Sammaan Capital — Indiabulls Housing Finance — Q3 FY2019-20 Earnings Presentation
66 slides from Sammaan Capital's earnings presentation, Feb 10, 2020
Slide 1: Indiabulls Housing Finance
Indiabulls HOUSING FINANCE
Slide 2: Contents
Contents Pg. No. 1. Shareholder Returns 03 2. Business Update 04 3. Performance Metrics 05 4. Asset Liability Maturity 06 5. Strong Track Record of Recoveries – Last 5 Years 07 6. Highlights of Developer Book 08 7. Spreads Sustained 09 8. Business Model: Completely Retail Focused 10 9. Appendix 11 2
Slide 3: Shareholder Returns
Shareholder Returns Indiabulls incorporated in January 2000 Sep 2004: IPO at ₹ 19 per share Raised ₹ 51.7 Cr Market cap at listing: ₹ 253 Cr Dividends Paid Total Dividend Paid by Indiabulls Housing Finance Dividend Per Share FY 05-06 ₹ 29 Cr ₹ 1.8 FY 06-07 ₹ 55 Cr ₹ 3.0 FY 07-08 ₹ 218 Cr ₹ 8.5 FY 08
Slide 4: Business Update
Business Update Key Financial Highlights: 9M FY19-20 vs 9M FY18-19 as per Indian Accounting Standards [IndAS] 9M FY 19-20 9M FY 18-19 Total Revenues 10,149 12,807 Net Interest Income 3,763 5,466 PAT 2,063 3,084 Key Financial Highlights: Q3 FY19-20 vs Q2 FY19-20 as per Indian Accounting Standards [In
Slide 5: Performance Metrics
Performance Metrics Particulars 9M FY 19-20 Loan Book 78,253 Net Debt to Equity 3.3x CRAR 29.0% Yield on Loans 11.81% Cost of Borrowings 8.85% Book Spread 2.96% Cost to Income Ratio 15.7% Total Provisioning as a % of Loan Book 2.01% Gross NPA 1.94% RoA [Annualised] 2.4% RoE [Annualised] 14.7% Amount
Slide 6: Asset Liability Maturity
Asset Liability Maturity 99,026 99,026 92,905 90,533 84,915 79,907 69,572 65,103 64,677 53,517 35,497 26,591 20,459 21,975 17,487* 18,407 16,517 7,428 2,680 3,723 272 787 1d-14d 15d-1m 1m-2m 2m-3m 3m-6m 6m-1yr 1yr-3Yr 3Yr-5Yr 5Yr-7yr 7Yr-10yr 10Yr+ Cumulative Inflows Cumulative Outflows The ALM abov
Slide 7: Strong Track Record of Recoveries – Last 5 Years
Strong Track Record of Recoveries – Last 5 Years Borrower Recovery Mumbai based premium residential developer 705 Noida based real estate developer 343 Delhi based commercial property developer 150 Delhi based leading real estate developer 90 Famous South Indian daily newspaper company 77 Leading to
Slide 8: Highlights of Developer Book
Highlights of Developer Book • No loans given on slum development rights • All loans in leading metros backed by high quality mortgage of prime plot/ building with sound resale value • Each borrower of the company has multiple lenders Due to the above factors, as demonstrated in the past, even NPA l
Slide 9: Spreads Sustained
Spreads Sustained Spreads Cost of Funds Loan Assets [₹ Cr] Loan Assets 7-Yr CAGR: 18% Own Book* 7-Yr CAGR: 14% 11.93% 11.81% 9.05% 1,06,330 8.85% 8.85% 8.97% 1,02,335 24,839 24,082 3.08% 2.96% 8.85% 8.85% 81,491 78,253 Sep 19 Dec 19 Sep 19 Dec 19 Sep 19 Dec 19 CoF Yield Spread Book Incremental Own B
Slide 10: Business Model: Completely Retail Focused [60% HL, 40% LAP]
Business Model: Completely Retail Focused [60% HL, 40% LAP] Proportion of Origination 40% 40% 20% 100% On-Balance Sheet Retention 8% 4% 20% 32% Co-origination Sell Down Total On-Balance Sheet Smart City Loans [20% on IBH Books] [10% on IBH Books] RoA HL LAP HL LAP HL LAP HL LAP Yield 9.75% 11.75% 8.
Slide 11: Appendix
Indiabulls HOUSING FINANCE Appendix
Slide 12: Financial and Operational Highlights
Financial and Operational Highlights 12
Slide 13: Business Summary
Business Summary • Balance Sheet : ₹ 1.05 Lakh Cr • Loans Outstanding : ₹ 1.02 Lakh Cr : [$ 14.41 Bn] • Loan Assets CAGR [7 years] : 18% • Cumulative Loans to Retail Customers : 11,63,499 • Cumulative Loans Disbursed till date : ₹ 2.68 Lakh Cr [$ 37.79 Bn] • Cost to Income Ratio [FY19] : 12.7% • Pro
Slide 14: Balance Sheet Assets
Balance Sheet Assets 9% 16% Loan Book Cash & Cash Equivalents Other Assets 75% 14
Slide 15: Asset Composition
Asset Composition Q2 FY 19-20 Q3 FY 19-20 35% 34% 65% 66% Housing Loans Non-Housing Loans 15
Slide 16: Liabilities Profile
Indiabulls HOUSING FINANCE Liabilities Profile
Slide 17: Liabilities
Liabilities 18% 5% 77% Shareholders' Funds Borrowings Other Liabilities 17
Slide 18: Diversified Liability Profile, Low Leverage
Diversified Liability Profile, Low Leverage 1,14,404 120 ,900 1,04,089 100 ,900 80,9 00 Borrowings 60,9 00 3.6 Net Gearing 40,9 00 3.3 20,9 00 900 Sep 19 Dec 19 Total Funding [₹ Cr] Dec 19 Sep 19 Bank Loans 35,700 40,509 Non-Convertible Debentures 39,446 43,622 ECB 4,861 4,934 Total Borrowing 80,007
Slide 19: Funding Mix
Funding Mix 4% 4% 5% 22% 22% 23% 35% 35% 34% 1% 0.4% 38% 38% 38% Jun 19 Sep19 Dec 19 Non-Convertible Debentures Commercial Papers Bank Loans Sell Down ECB ECB: External Commercial Borrowing 19
Slide 20: Micro ALM Details [Quarter-wise for next 10 years]
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Total Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Cash & Cash Equivalents 16,567 16,567 18,252 19,163 17,803 18,980 18,971 19,824 15,316 Customer Repayments 78,253 5,408 4,616 4,498 4,408 4,135 4,028 3,735 3,96
Slide 21: Micro ALM Details [Quarter-wise for next 10 years]
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Cash & Cash Equivalents 13,893 13,525 11,200 12,214 11,586 12,532 13,987 12,416 Customer Repayments 3,766 3,689 3,322 2,964 2,923 2,757 2,515 2,551 Non Current Assets
Slide 22: Micro ALM Details [Quarter-wise for next 10 years]
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q4FY24 Q1FY25 Q2FY25 Q3FY25 Q4FY25 Q1FY26 Q2FY26 Q3FY26 Cash & Cash Equivalents 13,850 15,432 17,112 18,613 20,238 21,630 22,024 22,539 Customer Repayments 2,356 2,243 2,278 2,189 1,722 1,419 821 374 Non Current Assets - -
Slide 23: Micro ALM Details [Quarter-wise for next 10 years]
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q4FY26 Q1FY27 Q2FY27 Q3FY27 Q4FY27 Q1FY28 Q2FY28 Q3FY28 Cash & Cash Equivalents 22,638 22,814 22,017 20,670 20,961 21,234 21,231 19,123 Customer Repayments 351 330 310 291 273 257 242 227 Non Current Assets - - - - - - - -
Slide 24: Micro ALM Details [Quarter-wise for next 10 years]
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q4FY28 Q1FY29 Q2FY29 Q3FY29 Q4FY29 Q1FY30 Q2FY30 Q3FY30 10+ Years Cash & Cash Equivalents 19,217 14,690 14,790 13,925 13,102 12,566 12,719 12,863 12,998 Customer Repayments 213 200 188 176 164 153 143 135 1,915 Non Current
Slide 25: Indian Home Loans Market
Indiabulls HOUSING FINANCE Indian Home Loans Market 25
Slide 26: Indian Housing Landscape
Indian Housing Landscape Regulator Government Push RERA has brought greater Housing for All by 2022, PMAY, etc. transparency and discipline Easier Credit Flow Fiscal Incentives Infrastructure status to housing; RBI, SEBI, Tax incentives and subsidies for IRDAI eased exposure norms to mortgage buyers
Slide 27: Housing Demand in India
Housing Demand in India • Estimated housing shortage: ~ 400 Lakh houses • Drivers of incremental demand: Current population growth Demand for 34 Lakh houses p.a. @ 1.3% p.a. Ongoing nuclearisation Demand for 25 Lakh houses p.a. @ 0.9% p.a. Rising income/aspirations – per Demand for 40-50 Lakh houses
Slide 28: Housing: From Social Objective to Centrepiece Economic Policy
Housing: From Social Objective to Centrepiece Economic Policy Housing sector has the ability to propel rural and urban economic activity - Housing sector: Country’s 4th largest employment provider* employing both semi-skilled and unskilled labour - Housing and the larger real estate sector has a hig
Slide 29: EMI Smaller than Rent Cheque: PMAY and Tax Incentive for Mid-Income Affordable Housing
EMI Smaller than Rent Cheque: PMAY and Tax Incentive for Mid-Income Affordable Housing Rental Yield v/s Home Loan Cost 5.0% 4.0% 3.4% 3.5% 3.9% 3.1% 3.4% 3.2% 2.3% 2.9% 2.6% 2.6% 2.7% 0.59% Rental yield Effective Interest Rate on Home Loans with PMAY [0.59%] Source: NHB; Industry reports Increasing
Slide 30: Growth Momentum in Residential Real Estate
Growth Momentum in Residential Real Estate • Over 2,50,000 units sold in CY2019, highest in the past four years1 • Stock of unsold inventory has fallen 38% since CY20142; 12% YoY decline in Q3 FY20 3 • YTS [years to sale] across top seven cities declined from 3.9 years in 2018 to 3.2 years in Sales
Slide 31: Commercial Office Space Absorption
Commercial Office Space Absorption • Gross office space leasing volume pan India in 2019 touched 69.4 million sq ft, registering a 40% YoY increase1 Pick-up in Leasing • CY2019 also witnessed record-high pre-leasing activity at 17.2 million sq ft, a 7.2% YoY growth1 • Average rental values across to
Slide 32: Regulatory Updates
Regulatory Updates • The government has constituted an AIF with a corpus of ₹ 25,000 Cr to provide last mile funding to stuck housing projects • Minimum ticket size for enforcement of SARFAESI reduced from ₹ 1 Cr to ₹ 50 lacs • Liquidity support of ₹ 30,000 to NHB for further lending to HFCs • 100%
Slide 33: Strong Structural Drivers and Government Focus
Strong Structural Drivers and Government Focus Measures in the last 45 months: Boost to the Housing Sector Pradhan Mantri Awas Subsidy eligibility under Pradhan Mantri Awas Yojana [PMAY] covers up to ₹ 12 lakh of home loan – reduces Yojana [PMAY] effective home loan rates to 0.59% for mid-income aff
Slide 34: Pan-India Brick-and-Mortar Branch Network
Pan-India Brick-and-Mortar Branch Network Head Master office Service Centers • Core credit Branches [MSC] committee • • • Regional credit hub • Loans above pre- • Service • Walk-in defined limits go to • Centers • Detailed credit the committee branches analysis • Customer • Customer interaction and
Slide 35: eHome Loans: Digitised Workflow, Analytics driven
eHome Loans: Digitised Workflow, Analytics driven Underwriting and Digital Payments Infrastructure Customer eHome Loan App and Portal IB Systems Toughpoints Application form Document upload e-sign Lead Sources Income proof directly Digitally enabled e-signs Data directly flows Basic information fill
Slide 36: eHome Loans: Digitised Workflow, Analytics driven
eHome Loans: Digitised Workflow, Analytics driven Underwriting and Digital Payments Infrastructure Sanctioning e-sign and instant Servicing Verifications Automated Credit Decisioning Disbursement Parallel reports Post application the following are On request for disbursement, customer Self Service t
Slide 37: Unique Franchise in Indian Mortgage Market
Unique Franchise in Indian Mortgage Market Consumer focused scalable lending model Strengths similar to Banks Scalability of Mortgage • Access to deep pools of capital: debt and equity • Focused on the most scalable and secure asset class: Home Loans • Funding efficiencies from AA+ credit rating • I
Slide 38: Conservative Loan Against Property Portfolio
Conservative Loan Against Property Portfolio 38
Slide 39: Loan Against Property Product Profile
Loan Against Property Product Profile Average Loan Size ₹ 73 Lakhs Maximum Loan to Value 65% Average Loan to Value 49% [at origination] Average Loan Term 7 years Primary Security Mortgage of property financed Repayment Type Monthly amortizing Average Age of Business 7 years Basis of Credit Appraisal
Slide 40: Smart City LAP: Technology-led cost-effective
Smart City LAP: Technology-led cost-effective Geographical Expansion through eHome Loans platform Minimum Loan Size ₹ 10 Lakhs Average Loan Size ₹ 25 Lakhs Maximum Loan Size ₹ 50 Lakhs Maximum Loan to Value 55% [at origination] Average Loan to Value 40% Maximum Loan Term 10 years Average Loan Term 5
Slide 41: Loan Against Property Myths
Loan Against Property Myths LAP Myth 2: Asset inflation is mainly responsible for LAP portfolio quality 28% 25% 27% 29% 19% 21% 21% 22% 19% 23% 20% 21% 3-Year Amortization Experience 11% for IBHFL 6% 7% 5% 2% 16% 14% 14% 3% 3% 5% 2% Contracted Amortization 23% 2008 2009 2010 2011 2012 2013 2014 2015
Slide 42: Static Credit Performance Analysis of LAP and HL Pools
Static Credit Performance Analysis of LAP and HL Pools 42
Slide 43: Retail Loan Book of Highest Quality
Retail Loan Book of Highest Quality Portfolio performance of all sold down pools of ₹ 60,708 Cr Initial Pool Details of Initial POS Average Sold Down Pool Loan Pool Number of Disbursement Ticket Size Months on 180+ dpd Principal Principal Amortisation 90+ dpd % Type Pools [₹ Cr] [at disbursement] Bo
Slide 44: Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sr. No Investor Sold Down Disbursement Sold Down MPS Pool Principal Amortisa- 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] Principal [₹ Cr] [₹ Cr] tion# 1 Bank 4 29-Oct-13
Slide 45: Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sr. No Investor Sold Down Disbursement Sold Down MPS Pool Principal Amortisa- 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] Principal [₹ Cr] [₹ Cr] tion# 26 Bank 6 21-Mar-1
Slide 46: Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sr. No Investor Sold Down Disbursement Sold Down MPS Pool Principal Amortisa- 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] Principal [₹ Cr] [₹ Cr] tion# 51 Bank 8 28-Mar-1
Slide 47: Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sr. No Investor Sold Down Disbursement Sold Down MPS Pool Principal Amortisa- 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] Principal [₹ Cr] [₹ Cr] tion# 77 Bank 6 31-Dec-1
Slide 48: LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments
LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sr. No Investor Sold Down Disbursement Sold Down MPS Pool Principal Amortisa- 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] Principal [₹ Cr] [₹ Cr] tion# 1 Bank 3 31-Dec-13 224.4
Slide 49: LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments
LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sr. No Investor Sold Down Disbursement Sold Down MPS Pool Principal Amortisa- 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] Principal [₹ Cr] [₹ Cr] tion# 28 Bank 14 26-Sep-17 706.
Slide 50: LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments
LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sr. No Investor Sold Down Disbursement Sold Down MPS Pool Principal Amortisa- 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] Principal [₹ Cr] [₹ Cr] tion# 55 Bank 15 27-Dec-18 291.
Slide 51: Home Loans and LAP Pool Performance Factsheet
Home Loans and LAP Pool Performance Factsheet Pass-Through Certificates HL Pools Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortis- 90+ 180+ Outstanding Sr No Investor Principal MPS CCR MCR QCR Date [₹ Cr] [₹ Cr] ation# dpd % dpd % Rating from [₹ Cr] 1 Bank
Slide 52: Corporate Social Responsibility
Corporate Social Responsibility 52
Slide 53: Indiabulls Foundation: Corporate Social Responsibility
Indiabulls Foundation: Corporate Social Responsibility Mahatma Awards For Excellence in Corporate Social Responsibility- 2019 Health JanSwasthya Kalyan Vahika Transforming Mokhada, Shahapur Transforming Talukas - Free primary healthcare facility provided at & Trimbakeshwar the doorsteps for the unde
Slide 54: Board of Directors, Ratings, Business Value Proposition, Key Ratios, Valuations, and Shareholding
Board of Directors, Ratings, Business Value Proposition, Key Ratios, Valuations, and Shareholding 54
Slide 55: Eminent and Experienced Board of Directors
Eminent and Experienced Board of Directors Board of Directors with pre-eminence and experience in diverse fields • Mr. Sameer Gehlaut : Executive Chairman • Mr. Gagan Banga : Vice Chairman, Managing Director and CEO • Mr. S.S. Mundra : Former Deputy Governor, The Reserve Bank of India • Justice Gyan
Slide 56: Credit Ratings and Auditors
Credit Ratings and Auditors Rating Agency Long Term Credit Rating CRISIL [an S&P Global Company] AA+ ICRA [a Moody’s Investors Service Company] AA+ CARE Ratings AA+ Brickwork Ratings AA+ Auditors Statutory Auditor S R Batliboi & Co. [Indian Member firm of Ernst & Young] Internal Auditor Grant Thornt
Slide 57: Productivity Ratios
Productivity Ratios FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 No. of 4,512 4,243 4,072 4,099 4,840 5,453 6,388 8,111 8,676 Employees Profit per 0.17 0.24 0.31 0.38 0.39 0.43 0.46 0.47 0.47 employee [₹ Cr] Asset per 3.71 5.85 8.09 10.84 11.82 14.02 16.23 16.26 15.00 empl
Slide 58: Key Financial Metrics
Key Financial Metrics FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Pre Tax RoAA 5.5% 4.9% 4.9% 4.8% 4.9% 4.9% 4.6% 4.3% 4.2% [%] Post Tax RoAA 4.1% 3.7% 3.8% 3.8% 3.7% 3.7% 3.6% 3.3% 3.0% [%] RoE [%] 17.2% 22% 26% 27% 29% 26% 26% 30% 24% Capital 23.87% 19.96% 18.58% 20.47%
Slide 59: Valuations and Returns
Valuations and Returns Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Dec-19 Market Price per Share 155 207 272 286 558 674 998 1,194 744 277* [₹] Dividend per Share [₹] 10 13 20 29 35 36 36 42 40 21 Dividend Yield [%] 6.5% 6.3% 7.4% 10.2% 6.3% 5.3% 3.6% 3.5% 5.4% 10.1% Market Capita
Slide 60: Shareholding Pattern
Shareholding Pattern 19.5% 21.5% 11.3% 47.7% Founder Foreign Institutional Shareholding MFs/Banks/IFI Public MF: Mutual Funds; IFI: Indian Financial Institutions As on 31st Dec, 2019 60
Slide 61: Detailed Financials
Indiabulls HOUSING FINANCE Detailed Financials 61
Slide 62: Consolidated Balance Sheet
Consolidated Balance Sheet The company had cash, cash equivalents and investments in liquid debt instruments of ₹ 16,567 Cr as at 31st Dec, 2019. The company receives income from its cash, cash equivalents and investments in liquid debt instruments through the quarter, most of which appears in ‘Othe
Slide 63: Consolidated Income Statement
Consolidated Income Statement The company had cash, cash equivalents and investments in liquid debt instruments of ₹ 16,567 Cr as at 31st Dec, 2019. The company receives income from its cash, cash equivalents and investments in liquid debt instruments through the quarter, most of which appears in ‘O
Slide 64: Update on OakNorth Bank
Update on OakNorth Bank • In Q1 CY19, OakNorth closed equity round with total capital raise of £335 Mn ($440 Mn), in primary from Softbank and £35 Mn ($45 Mn) in secondary from Clermont • IBHFL’s share of ~15.24%* is now valued at $458 Mn (IBHFL realised $117 Mn in Nov-17 through a part sale of its
Slide 65: Safe Harbour Statement
Safe Harbour Statement This document contains certain forward-looking statements based on current expectations of Indiabulls Housing Finance Ltd. management (“IBH”). These forward looking statements and any other projections contained herein are predictions and involve known and unknown risks, uncer
Slide 66: Thank you
Indiabulls HOUSING FINANCE Thank you
Indiabulls Housing Finance — Q3 FY2019-20 Earnings Presentation on 6ix