Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q3 FY21 Earnings Presentation
59 slides from Nippon Life India Asset Management's earnings presentation, Jan 27, 2021
Slide 1: Investor Presentation cover letter to exchanges
¢ Nippon Life 1nd1a Asset Management Ltd January 27, 2021 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Dalal Street, Fort, Plot No. C/1, G Block, Mumbai 400 001 Bandra Kurla Complex, BSE Scrip Code: 540767 Bandra (East), Mumbai 400 051 NSE
Slide 2: Investor Presentation Q3 FY21
¢ Nippon Life lndla Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited) Investor Presentation Q3 FY21 January 2021 Goodgetsb~
Slide 3: Highlights - Q3 FY21
Highlights - Q3 FY21… Q3 FY21 Profit after Tax at INR 2,119 mn - an increase of 42% Total Operating Expenses fell by 22%; Total Income at INR 3,988 mn employee costs decreased by 18% - an increase of 11% Over 150,000 ETF folios added in Q3 Digital contribution to total NIMF (YTD approx. 419,000) vs.
Slide 4: Highlights - Q3 FY21
Highlights - Q3 FY21 Q3 FY21 EOP AUM rose to INR 2,207 bn Equity EOP AUM at INR 800 bn (+35% vs. Q4 FY20) (+45% vs. Q4 FY20) Retail AUM contributed 26% of NIMF NIMF has 6.2 million Unique Investors; AUM vis-à-vis 21% for the Industry 29% market share in the Industry r Over 260 new institutional inve
Slide 5: Key focus areas - Being Future Ready
Key focus areas - “Being Future Ready” 1 2 3 Superior fund Consolidate our Expansion of non- performance Passive strategy MF businesses Dominant position Measures taken in the (76% share in market • Explore new volumes) categories in AIF & past quarters have PMS resulted in a positive • Leverage Nip
Slide 6: Industry AUM Trends
Industry AUM Trends ◄) Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 7: Quarterly AUM Trend
Quarterly AUM Trend Industry AAUM (INR bn) 29,714 26,777 27,037 27,604 8% 6% 7% 24,628 8% 7% 16% 20% 20% 19% 22% 35% 31% 32% 33% 32% 40% 43% 42% 39% 40% Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 ■ Equity ■ Debt ■ Liquid ■ ETFs Post sharp fall in March 2020, Industry witnessed steady growth driven by fresh
Slide 8: NAM India - Profile
NAM India - Profile One of the largest Asset Manager in India, with 25 years of track record NAM India AUM (as of Dec 31, 2020) INR 3.52 trillion Mutual Funds Managed Accounts International INR 2,207 bn* INR 1,251 bn INR 65 bn Advisory INR 36 bn * (__) (__) (__) (__) (__) ~290 Locations ~1,000 Emplo
Slide 9: Nippon India MF - AUM Trends
Nippon India MF - AUM Trends ◄) Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 10: Monthly AUM Trend
Monthly AUM Trend Oct 2019 - Renamed as “Nippon India Mutual Fund” Highest NIMF AAUM (INR bn) 2,405 April 14, 2019 Peak pre-COVID19 Recovery continues 2,352 2,210 2,213 Lowest Feb 2020 Dec 2020 2,210 2,213 1,886 2,156 2,171 2,132 Sept 30, 2019 2,100 2,095 2,077 2,072 2,045 2,013 COVID19 1,999 2,009
Slide 11: Quarterly AUM Trend
Quarterly AUM Trend NIMF AAUM (INR bn) 2,130 2,044 2,049 2,000 13% 14% 1,801 15% 14% 16% 16% 14% 14% 17% 19% 27% 28% 32% 30% 29% 44% 42% 39% 39% 38% Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 ■ Equity ■ Debt ■ Liquid ■ ETFs AUM recovery continues in line with the Industry * Quarterly Average Assets under Ma
Slide 12: Fixed Income & Equity Assets
Fixed Income & Equity Assets Fixed Income AAUM (INR bn) 937 987 875 895 863 303 322 323 340 348 573 597 683 553 514 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 ■ Debt ■ Liquid Equity (Incl. ETF) AAUM (INR bn) 1,119 1,100 986 1,058 871 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 * Quarterly Average Assets under Manage
Slide 13: New Normal
0 pa---------------- I 1 0 ----------------- I 2 I Diversified Product Suite I Digital initiatives I I ----------------~ ~---------------~ New Normal I 0 ------------------ 3 I 0 ----------------- I 4 I I Leveraging ETF first mover advantage I I Continue to build on Retail Strength I ~--------------
Slide 14: New Normal
0 P---------------- I 1 2 Diversified Product Suite Digital initiatives I ----------------~ New Normal 3 4 Leveraging ETF first mover advanta e Continue to build on Retail Strength ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 15: Diversified Product Suite
Diversified Product Suite Building up the Passive & ETF product suite ❑ Nippon India ETF Nifty CPSE Bond Plus SDL - 2024 Maturity ❑ First-of-its-kind ETF (amongst non-govt mandates) - Open-ended target maturity scheme ❑ Invests in AAA rated CPSE bonds & State development Loans (SDLs) ❑ Nippon India
Slide 16: New Normal
1 0 ----------------- I 2 I Diversified Product Sui e I Digital initiatives I ~---------------~ New Normal 3 4 Leveraging ETF first mover advanta e Continue to build on Retail Strength ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 17: Building Digitech Ecosystem
Building Digitech Ecosystem Digital KYC Business Process automation - RPA, OCR Chat Bot / IVR implementation Instant Folio creation Fund Accounting automation First level support through AI Finance & HR process Automation Customer Customer Operations Onboarding Servicing I/I Deutsche Bank ORACLE' HU
Slide 18: Comprehensive footprint
Comprehensive footprint Ahead-of-the-curve and intelligent Digital ecosystem - A Perpetual Beta Digital Ecosystem Hinterlands & Towns Enterprise Asset Suite Metros & Tier 1 Cities •- ·:_- . ~ --. Core Strategic Pillars .;C i,· Build ~-- strong online presence to Business Easy 2.0 App Tier 2 & 3 Citi
Slide 19: Digital Business
Digital Business Lumpsum & New SIP Registration Digital Purchases (lakhs)* Q3 FY21 4.1 39% Q3 FY20 3.0 ❑ Digital contribution-to-total NIMF purchase transactions at 52% in Q3 FY21 ❑ New Digital SIP Purchase grew 62% in Q3 FY21 vis-à-vis Q3 FY20 ❑ Nippon India Passive FlexiCap FoF ❑ NIMF & its partne
Slide 20: Key initiatives
Key initiatives Performance Campaign expansion to reach new horizons Successful use of Adobe Suite to increase quality & quantity Campaigns initiated on networks outside GDN, leveraging DV Successful launch of NFOs - Nippon India ETF Nifty CPSE 360 Bond Plus SDL and Nippon India Passive Flexicap FOF
Slide 21: New Normal
1 Di ital initiati s New Normal 0 ------------------ I 3 I 4 I Leveraging ETF first mover advantage I ont1nue t buil n R tail tren h ~----------------~ ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 22: Comprehensive portfolio of Passive Funds
Comprehensive portfolio of Passive Funds NIMF’s ETFs / Index Funds Fixed Income Equity Commodity Nippon India ETF Liquid BeES Nippon India ETF Gold BeES Nippon India ETF Long Term Gilt Nippon India ETF Nifty CPSE Bond Plus SDL - 2024 Maturity International Domestic Nippon India ETF Hang Seng BeES Th
Slide 23: Further strengthening the ETF portfolio
Further strengthening the ETF portfolio Large ETF product suite ~76% ~31% ~13% Volume Share Share of folios Market Share ❑ Only AMC in India with more than 19 years experience in managing ETFs ❑ Largest bouquet of 20 ETFs in the industry across Equities, Debts & Commodity (Gold) ❑ On QAAUM basis, NI
Slide 24: First Mover Advantage paying off
First Mover Advantage paying off NSE volume (Oct - Dec 2020) (INR bn) Mutual Funds Nifty 50 ETFs Nifty Bank ETFs Gold ETFs Liquid ETFs NIMF 25.3 29.7 16.3 89.9 SBI MF 3.3 5.1 4.4 - Kotak MF 1.1 4.5 2.0 - ICICI Prudential MF 1.7 1.8 1.9 1.6 HDFC MF 0.2 0.3 4.0 - Others 1.2 0.6 1.5 1.7 Total 32.9 42.0
Slide 25: New Normal
1 Di ital initiati s New Normal 0 ----------------- I 4 I L era 1n ETF 1rst mov r a vanta e I Continue to build on Retail Strength I ~---------------~ ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 26: Unique Investors
Unique Investors ~3 out of 10 unique investors in the Industry invest with NIMF Industry NIMF Market share (%) (in million) 6.2 Dec 31, 2020 29% 21.5 6.0 Mar 31, 2020 29% 20.8 5.9 Dec 31, 2019 29% 20.3 Despite volatility, share in overall investor base remained stable driven by extensive distributio
Slide 27: Focus on Retail & Small towns
Focus on Retail & Small towns Retail AAUM / Total AAUM (%) NIMF 26% Industry 21% SBI 14% HDFC 20% ICICI 16% Birla 21% Higher composition of Retail Assets in AUM at 26% vis-à-vis 21% for the Industry Source: AMFI; Calculated on Monthly Average AUM ◄!► Nippon Life 1nd1a Asset Management Ltd 26 (Former
Slide 28: Retail Assets
Retail Assets 69% of the Individual assets have a vintage of more than 12 months (Dec 31, 2020) Retail AAUM (INR bn) 586 546 520 444 460 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 “Retail Investor Classification” changed from INR 0.5 mn to INR 0.2 mn as per the guidelines issued by AMFI Source: Internal; Ca
Slide 29: Beyond 30 cities (B-30) Contribution
Beyond 30 cities (B-30) Contribution Higher AUM % sourced from B-30 locations as compared to Industry B-30 AAUM / Total AAUM (%) NIMF 17.5% Industry 16.0% B-30 segment has higher proportion of Equity Assets Focus on building B-30 AUM by leveraging on-ground presence Source: AMFI; Calculated on Month
Slide 30: Geographical De-risking
Geographical GeographicalDe-Risking De-risking Top 5 Cities Contribution (%) Beyond 15 Cities Contribution (%) ICICI 73% NIMF 18% SBI 74% Industry 29% HDFC 71% SBI 17% Industry 59% HDFC 16% NIMF 63% ICICI 14% Lower concentration of assets Higher Penetration in Smaller cities from Top 5 cities and to
Slide 31: Systematic Transactions
Systematic Transactions Monthly Flows Book (INR bn) 8.00 7.00 7.1 6.8 6.7 6.00 6.6 5.00 6.2 4.00 3.00 2.00 1.00 - Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Annualized book of INR 80 bn In volatile markets, folios with lower ticket size demonstrated longer vintage Due to public holidays from Nov 28 - 30, ce
Slide 32: Growth in retail asset base continues
Growth in retail asset base continues A new Digital Purchase every… A new SIP Purchase every… 16s 13s 25s 24s FY20 Q3 FY21 FY20 Q3 FY21 A new ETF folio added every… FY20 243s 36s Q3 FY21 ◄!► Nippon Life 1nd1a Asset Management Ltd 31 * Frequency in seconds calculated with assumption of 252 days in a
Slide 33: Risk Management - Philosophy
Risk Management - Philosophy ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 34: Enhanced conservative positioning
Enhanced conservative positioning In May 2020, Board decided that all NIMF’s schemes* will make fresh investments only in AA & above rated issuers Credit Rating Profile of NIMF’s Fixed Income assets Rating Dec 31, 2020 Mar 31, 2020 Repo / Cash / Sovereign / AAA / A1+ / AA+ / Upto AA 97.6% 91.8% Sub
Slide 35: Distribution
Distribution ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 36: Strong Distribution
Strong Distribution Total base of empaneled distributors rose to approx. 77,500 Banks cffibank Deutsche Bank IZI fl1c1c1Bank Standard 75 Chartered ~ HDFC BANK A AXIS BANK National Distributors 95 KA V Ill ~. HDFC securities Alternate (incl. PSU banks) ' ~~~ .,,_ Bank O·I ~ndllSJ 90 b uLBANK ..- Digi
Slide 37: Leveraging Partnership with MFDs
Leveraging Partnership with MFDs Distributed Assets form 45% of NIMF’s AUM Overall Distribution Mix Distributed Assets Mix Banking Direct Distributed Distributors Channel Assets 25% Mutual Fund 55% 45% Distributors National 55% Distributors 20% De-risked distribution model Large share of the AUM is
Slide 38: Focus on Individual assets
Focus on Individual assets Distributed Assets (investor-wise) AUM (INR bn) Corporate 18% Retail 499 50% HNI 322 32% 182 Retail HNI Corporate 82% of the Distributed Assets are contributed by Individual investors Source: AMFI; Calculated on Monthly Average AUM ◄!► Nippon Life 1nd1a Asset Management Lt
Slide 39: ESG Agenda
ESG Agenda ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 40: ESG practices and opportunities
ESG practices and opportunities Environment Social Governance Digital initiatives CSR Board committees and policies • 88% transactions executed • Contributed INR 105 million to • Separation of the board’s through paperless platforms the PM Cares Fund and the CM Relief Fund towards Covid relief super
Slide 41: Leaders in Investor Education
Leaders in Investor Education EDGE Learning Academy (Q3 FY21) Investor Education Unique Locations Mobile App MFx 22 T-30 Programs 17 Programs 970+ B-30 Investors Total l Comple ted Q 5 Programs Courses 2 Recommended courses Courses ~•.~ ~ <--· view more > Dedicated Investor Education App MFx ◄!► Nip
Slide 42: Other Businesses
Other Businesses ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 43: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) ❑ Category II & Category III AIFs across various asset classes ❑ Equity / Real Estate / Credit / Technology & Venture Capital FoF ❑ As on Dec 2020, raised commitments of approx. INR 35 billion across funds ❑ Launched 6th long-only equity scheme - Nippon Ind
Slide 44: Offshore Business
Offshore Business AUM of INR 102 bn as on Dec 31, 2020 Leveraging Nippon Life’s Insurance Particulars Amount in INR bn global network Advisory 36 :------- ----- ------ ----- Managed 65 1 ! Total 102 I I ! I I Hokkaido Singapore Mauritius Dubai Singapore Sendai ❑ RAMS Equities Portfolio fund-UCITS ❑
Slide 45: Wider Global Presence
Wider Global Presence Nordic Region Japan Peru Argentina e Strategic Partnership e Local - Distributor e Institutional Distribution ◄!► Nippon Life 1nd1a Asset Management Ltd 44 (Formerly Reliance Nippon Life Asset Management Limited)
Slide 46: Financial Overview
Financial Overview ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 47: Financial Summary - As per IND AS
Financial Summary - As per IND AS Consolidated (INR mn) Particulars Q3 FY21 Q2 FY21 Q3 FY20 Revenue from Operations 2,685 2,587 3,031 Operating Expenditure 1,303 1,314 1,670 Fee & Commission Expenses 101 97 120 Employee benefits expense 665 679 814 Finance cost 10 12 19 Other Expenses 449 447 627 De
Slide 48: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Dec 31, 2020 March 31, 2020 Investment in NIMF’s schemes 22,459 16,804 - Equity 3,289 2,809 - Debt 19,170 13,994 Bank FDs and tax-free bonds 4,653 5,984 Other assets 1,814 1,575 Total 28,926 24,362 NIMF - Other Other Bank FDs / tax-free bond
Slide 49: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases 1111 QAAUM / Branch QAAUM / Employee (INR bn) 13.0 12.8 11.7 10.8 10.4 2.3 2.1 2.0 2.0 2.1 Mar-17 Mar-18 Mar-19 Mar-20 Dec-20 1111 Profit / Branch Profit / Employee 34.6 (INR mn) 27.3 24.8 24.4 21.1 6.8 4.4 4.5 4.2 4.0 F
Slide 50: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR Bn) 7.94 4.42 4.42 7.62 3.44 2.98 6.85 6.69 FY 17 FY 18 FY 19 FY 20 FY 17 FY 18 FY 19 FY 20 Total Dividend paid INR 5 per share in FY20 84% of FY20 Earnings shared with Shareholders Paid cumulative dividend of INR 23+ bn in last 7 financ
Slide 51: Thank you for your time! Stay safe!
~► Nippon Life lndla Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited) Thank you for your time! Stay safe! odgets6~
Slide 52: Annexure
Annexure ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 53: About Nippon Life
About Nippon Life ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 54: About Nippon Life Insurance
About Nippon Life Insurance ❑ Fortune 500 company (Rank 130 in 2020)1 ❑ Japan’s largest private life insurer & one of the largest in the world2 ❑ Total assets over US$ 740 bn3 ❑ 57 Asset Management related operations & 22 Insurance related operations Globally4 Presence in India Asset Management Life
Slide 55: Nippon Life Group
Nippon Life Group Nippon Life Domestic Insurance Business Asset Management Business Overseas Insurance Business Taiju Life Nippon (82.6%) Reliance Nippon Life India Asset Revenues from insurance and (!) ❖ Nippon 1ncfo Mutual Fund NIPF111'1 ,,_. Life Insurance Management 11'4'.:il'~•"'-E reinsurance
Slide 56: Board Of Directors
Board Of Directors ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 57: Profile of Board Members
Profile of Board Members… General Ved Prakash Malik (Retd.) (Independent Director) has worked in the Indian Army as Chief of the Army Staff from October 1, 1997 to September 30, 2000. He had dual responsibility of being an advisor to the Government as well as commander of 1.2 million strong Indian A
Slide 58: Profile of Board Members
Profile of Board Members Mr. Kazuyuki Saigo (Associate Director) is Managing Executive Officer, Regional CEO for Asia Pacific Head of India, and is responsible for operations in the Asia Pacific. He joined Nippon Life in 1988 and since then has held several leadership positions in the Nippon Life Gr
Slide 59: 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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