Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q2 FY2020 Earnings Presentation
79 slides from Edelweiss Financial Services's earnings presentation, Sep 12, 2019
Slide 1: Cover letter to BSE: Investor Presentation
EVV/Sec/2019/328 September 12,2019 BSE Limited P J Towers, Dalal Street, Fort, Mumbai- 400 001. Dear Sirs, Ref.:- Symbol: EDELVVEISS Sub: Investor Presentation Please find enclosed the Investor Presentation in US Dollar on Earnings Updates for the quarter and half year ended September 30, 2019. Kind
Slide 2: Edelweiss Financial Services Limited Q2FY20 Earnings Update
US $ version Edelweiss Financial Services Limited Q2FY20 Earnings Update
Slide 3: Contents
Contents 1 Quarterly Performance Highlights 2 Business Performance Highlights 3 Liquidity Management 4 Balance Sheet Highlights 5 ESG at Edelweiss 6 Addenda 2
Slide 4: Quarterly Performance Highlights – Q2FY20
Quarterly Performance Highlights – Q2FY20
Slide 5: Financial Snapshot – Q2FY20
Financial Snapshot – Q2FY20 $Mn EOP Equity Profit after Tax Total Pre Minority 1,396 10 Credit 829 5 Asset Reconstruction 316 10 Advisory 30 7 Insurance 134 (10) BMU & Corporate 87 (4) Minority Interest (MI) 297 2 Total Consolidated Post MI 1,100 7 Total Ex-Insurance Post MI 1,024 13 4 Equity includ
Slide 6: Q2FY20 Overview
Q2FY20 Overview 1 In line with our stated strategy of focusing on enhancing capital light business model: • Signed co-origination agreements with SBI,CBI and PNB in addition to BOB signed last quarter • Securitized retail credit book of $99 Mn during the quarter 2 Asset Reconstruction business conti
Slide 7: Key Actions Taken - Liquidity, Asset Quality and Balance Sheet
Key Actions Taken - Liquidity, Asset Quality and Balance Sheet Liquidity • We continue to maintain liquidity at ~17% of balance sheet; No change anticipated in our stated liquidity plan • Overall Liquidity maintained at $1,188 Mn including undrawn bank lines of $141 Mn Asset Quality • We have provid
Slide 8: Launch of Completion Financing Platform
Launch of Completion Financing Platform • Launched India’s first completion financing platform for the real estate sector • Platform will house funds that will buy out existing real estate loans and provide requisite completion financing; Funds will be managed by Edelweiss’ Alternative Asset Managem
Slide 9: Fund Raise in EGIA - $150 Mn Target Raise
Fund Raise in EGIA - $150 Mn Target Raise • Sanaka Growth SPV I Ltd (part of Sanaka Capital) has committed to invest ~$44 mn of growth equity in EGIA in the form of compulsorily convertible instrument • We and Sanaka are in talks with other investors alongside for a further investment of ~$31 mn in
Slide 10: We Continue to Forge Strong Partnerships
We Continue to Forge Strong Partnerships CDPQ Tokio Marine Allianz Bank of Singapore We are proud to have been chosen by partners who embody the highest standards of quality and governance 9
Slide 11: PPOP Remains Adequate For Enhanced Credit Costs
PPOP Remains Adequate For Enhanced Credit Costs PPOP Credit costs ($Mn) 400 358 350 324 300 250 258* 211 200 132 150 104 126* 96 100 65 45 50 23 129 19 63 0 FY15 FY16 FY17 FY18 FY19 H1FY20 While the enhanced credit costs will impact P&L for FY20, we do not expect any balance sheet impact on account
Slide 12: PAT Distribution Across Businesses
PAT Distribution Across Businesses ($Mn) Q2FY19 Q1FY20 Q2FY20 Total Consolidated Post MI PAT 39 19 7 Credit 30 16 5 Asset Reconstruction 5 9 6 Advisory 11 10 7 Insurance (7) (7) (6) BMU & Corporate - (8) (6) Total Ex-Insurance Post MI PAT 46 26 13 Balance Sheet 8,408 7,712 7,036 11
Slide 13: Key Profitability Ratios
Key Profitability Ratios Ex-Insurance Q2FY19 Q1FY20 Q2FY20 PPOP 4.6% 4.0% 2.8% Credit Costs 0.9% 1.9% 1.5% RoA 2.5% 1.7% 1.0% RoE 19.1% 10.2% 5.1% Cost to Income Ratio 47% 50% 56% Consolidated Q2FY19 Q1FY20 Q2FY20 RoA 1.9% 1.0% 0.5% RoE 14.7% 6.8% 2.6% Cost to Income Ratio 61% 67% 73% Ex-Insurance R
Slide 14: Diversified Business Model…
Diversified Business Model… Business Segments ($Mn) Q2FY20 Pre MI PAT % Contribution Retail Credit 4 23% Corporate Credit 1 4% Asset Reconstruction Business 10 54% Wealth Management and Capital Markets 5 28% Asset Management 2 11% BMU & Corporate (4) (20%) Total Ex- Insurance Pre MI PAT 19 100% Insu
Slide 15: Steady Growth in Customer Assets
Steady Growth in Customer Assets As on 30th September, 2019 (rounded off to nearest 100) $Bn YoY Growth Customer Assets 28.6 7% Assets under Advice (Wealth Management) 15.3 10% Funds under Management (Asset Management) 4.9 2% Asset Reconstruction (ARC) Assets under Management 5.4 (5%) Assets under C
Slide 16: Debt Equity Ratio declines further to 3.4x
Debt Equity Ratio declines further to 3.4x D/E (Excluding Treasury Assets) 5.2 5.2 5.0 5.0 4.4 3.7 3.4 FY15 FY16 FY17 FY18 FY19 Q1FY20 Q2FY20 15
Slide 17: Business Performance Highlights – Credit
Business Performance Highlights CREDIT Retail Credit – Corporate Credit
Slide 18: Credit Business Mix
Credit Business Mix Capital As on 30th September, 2019 Employed % ($Mn) Retail Credit 2,138 48% Retail Mortgage 1,142 26% Blend of loans to home owners and home buyers SME & Business Loans 541 12% Under-served and highly scalable market, key focus area ESOP and Margin Financing 416 9% Catering to cu
Slide 19: Credit Business at a Glance
Credit Business at a Glance Credit Business ($Mn) Q1FY20 Q2FY20 Capital Employed 4,806 4,427 Average Interest Yield 15.9% 14.6% Average Cost of Borrowing 10.3% 10.5% Net Interest Margin 7.0% 5.6% Net Interest Income 88 65 Cost to Income 41% 49% Pre Provisioning Operating Profit 52 34 Credit Costs 31
Slide 20: Credit Business Performance Snapshot
Credit Business Performance Snapshot Q2FY20 ($Mn) Total Retail Corporate EOP Capital Employed 4,427 2,138 2,289 EOP Equity 829 354 475 Net Interest Income 65 31 34 PAT 5 4 1 Net Interest Margin 5.6% 5.6% 5.7% Cost to Income 49% 48% 49% RoA 0.4% 0.8% 0.1% RoE 3.2% 6.9% 0.8% 19 All figures are Pre MI;
Slide 21: Asset Quality at a Glance
Asset Quality at a Glance As on 30th September,19 ($Mn) Q1FY20 Q2FY20 Credit Book 4574 4,205 Of which Stage 3 106 115 ECL Provision 118 114 Of which Stage 3 50 45 Specific Provision Cover 47% 39% Total Provision Cover 111% 99% Gross NPA 2.33% 2.73% Net NPA 1.24% 1.66% 20 Credit Book excludes assets
Slide 22: Retail Credit
Retail Credit Capital Employed SME Retail Mortgage ($Mn) Secured Unsecured HL LAP Average Yields % 14% 23% 11% 13% Median Ticket Size ($Mn) ~0.14 0.01 0.02 0.03 2,918 Average LTV ~75% -85% - ~50%-60% 2,402 2,138 Locations (#) 108 100 Loan Book - Geographical Split 19% 15% 1% 34% 33% 43% 4% 51% Q2FY1
Slide 23: Corporate Credit
Corporate Credit Capital Employed Structured Wholesale ($Mn) Collateralised Mortgage Credit Average Yields % 15% - 17% 17% - 19% 2,985 Portfolio Granularity 67 accounts 162 projects Typical Ticket size $14-18 Mn 2,403 2,289 Exposure in Top 10 Accounts 22% Top 10 Accounts Others Q2FY19 Q1FY20 Q2FY20
Slide 24: Business Performance Highlights – Advisory
Business Performance Highlights ADVISORY Wealth Management – Asset Management – Capital Markets
Slide 25: Advisory Business Performance Snapshot
Advisory Business Performance Snapshot Wealth Asset Capital Q2FY20 ($Mn) Total Management Management Markets Net Revenue 36 18 9 10 PAT 7 5 2 1 Cost to Income 71% 64% 66% 88% PAT Yield - 13 bps 16 bps - Assets under Assets under Assets under Custody and Advice Management Customer Assets ($Bn) Cleari
Slide 26: Wealth Management
Wealth Management Assets Under Advice As on Number of AUA Number of 30th Sept’19 Clients ($Mn) RMs ($Mn) Ultra High Net ~2,410 11,813 161 Worth Individuals 15,081 15,251 Affluent Investors ~525,300 3,438 781 13,978 Wealth AUA Breakup 27% 26% 30% 29% 26% 96,300 73% 74% 70% 71% 74% Q2FY19 Q1FY20 Q2FY2
Slide 27: Asset Management
Asset Management Alternative Assets – Private Credit ($Mn) Public Markets ($Mn) Mutual Fund Multi Strategy Funds and PMS 2,759 2,787 2,150 948 849 736 1,882 1,542 1,556 Q2FY19 Q1FY20 Q2FY20 Q2FY19 Q1FY20 Q2FY20 Alternative Assets AUM as on 30th Sep 19 Deployment in Alternative Assets till Date 14% D
Slide 28: Net New Flows in Wealth and Asset Management
Net New Flows in Wealth and Asset Management Wealth Management AUA Movement in Q2FY20 Asset Management AUM Movement in Q2FY20 ($Mn) ($Mn) 467 (297) (62) 6 101,100 15,081 15,251 5,135 5,079 Opening AUA Net New Market Closing AUA Opening AUM Net New Market Closing AUM Money Movement Money Movement 27
Slide 29: Capital Markets
Capital Markets Key Equity Capital Market & Advisory Transactions Private Equity Placement Initial Public Offering Buyback July 2019 July 2019 September 2019 Sole Financial Advisor BRLM Sole Manager Key Debt Capital Market Transactions Public Issue Public Issue Public Issue Public Issue August 2019
Slide 30: Business Performance Highlights – Asset Reconstruction
Business Performance Highlights Asset Reconstruction
Slide 31: Asset Reconstruction Business Performance Snapshot
Asset Reconstruction Business Performance Snapshot ($Mn) Q1FY20 Q2FY20 AUM 6,715 6,653 EOP Capital Employed 1,221 1,240 EOP Equity 305 316 Net Interest Income 29 25 Credit Costs 4 2 PAT 15 10 Net Interest Margin 11.2% 8.3% Cost to Income 22% 28% RoA 5.8% 3.4% RoE 22.3% 13.1% 30 All figures are Pre M
Slide 32: Asset Reconstruction Overview
Asset Reconstruction Overview AUM Funding profile of Edelweiss’s Contribution in ARC ($Mn) ($Mn) Edelweiss Contribution Investors Contribution 22% 26% Equity Debt $1,245 mn Participatory NCDs 52% 5,701 5,489 5,408 ARC Recoveries ($Mn) 152 117 95 1,033 1,217 1,245 Q2FY19 Q1FY20 Q2FY20 Q2FY19 Q1FY20 Q
Slide 33: Resolution Strategy and Top Industry Exposures
Resolution Strategy and Top Industry Exposures SRs Issued : Resolution Strategy wise Break-up SRs outstanding : Top 10 industry exposure % Steel Power 12% Restructuring Infrastructure 26% 23% 9% Real Estate 39% NCLT Paper Enforcement Textiles 14% 3% 12% 4% Chemicals Exited 4% 6% 8% Ship Building 26%
Slide 34: Strong Sourcing Ability and a Robust Pipeline
Strong Sourcing Ability and a Robust Pipeline Deals in pipeline spread across sectors Deep Banking Relationships Real Estate • Our Asset Reconstruction business has 14% Steel acquired assets from over 65 banks/FIs Hotels since inception 40% 11% Textiles • Knowledge of the portfolios of banks Enginee
Slide 35: Model on Revenue Stream
Model on Revenue Stream Sources of Revenue Management Fees & Incentive Redemption and Upside on ownership of Security Receipts Management Fees Incentive Upside Sharing Fees to ARC for carrying An income for the asset Upside sharing is the sharing activities as trustee to manager to expedite and of t
Slide 36: How do ARC Economics work?
How do ARC Economics work? Assuming asset with book value $200 is sold to ARC at $100 - Bank contributes $85 and ARC $15 Assuming a time period of 5 years Case 1 Case 2 Case 3 Recovery Assumption (A) 100 125 150 Management Fee @ 2% p.a. (B) 10 10 10 Recovery Incentive @ 1.5% of recovery (C = 1.5%*A)
Slide 37: Snapshot of ARC Economics for H1FY20
Snapshot of ARC Economics for H1FY20 $Mn H1FY20 Nominal Value of debt acquired 16,160 Price paid @ avg. 50% discount 7,897 Capital Employed 1,240 Net Interest Income 54 PAT 25 NII of 9.6% on average capital employed and RoA 4.5% and RoE of 17.3% for H1FY20 36 Debt Acquisition and Price paid details
Slide 38: Business Performance Highlights – Insurance
Business Performance Highlights INSURANCE Life Insurance – General Insurance
Slide 39: Life Insurance Performance Snapshot
Life Insurance Performance Snapshot ($Mn) Q2FY19 Q2FY20 Y-o-Y Growth Net Premium Income 25 31 21% Investment Income & Other Income 2 6 185% Total Business 28 37 34% Profit After Tax (11) (8) - Minority (5) (4) - Edelweiss’ Share in PAT (5) (4) - Net Worth 139 118 121 branches and 46,306 PFAs across
Slide 40: Life Insurance – Long Term Value Creation
Life Insurance – Long Term Value Creation Product Mix Solvency Ratio New Business Premium Q2FY20 219% 229% 211% 25% 45% 9% 21% Traditional Non Par ULIP Group Traditional Par FY18 FY19 H1FY20 Channel Mix 13th Month Overall Rate Persistency New Business Premium Q2FY20 80% 83% 78% 8% Agency Banca & Cor
Slide 41: Life Insurance Scaling Rapidly
Life Insurance Scaling Rapidly Collected Individual Annual Premium Equivalent Number of Policies Issued (Individual business ) CAGR growth since FY17 (in 000) 39% 21 17 24% 12 15% Edelweiss Tokio Peer Set Industry Q2FY18 Q2FY19 Q2FY20 Life Insurance • Collected Individual Annual Premium Equivalent (
Slide 42: General Insurance
General Insurance Product Mix - Q2FY20 Channel Mix – Q2FY20 7% 7% Online 21% 24% Motor Agency 11% 19% Motor Dealers Health & PA Broker 9% Edelweiss Retail Others Corporate Direct 55% 47% • Gross Written Premium at $8 Mn - growth of 67% YoY • Contribution of profitable Motor Own Damage line is 63% -
Slide 43: Liquidity Management
Liquidity Management Ge E Edelweiss s protect
Slide 44: Maintained Sufficient Liquidity
Maintained Sufficient Liquidity $Mn FY 16 FY 17 FY 18 FY 19 H1FY20 Available Liquidity 566 821 1,500 1,429 1,188 Balance Sheet Size* 3,876 5,220 7,328 7,342 6,876 Liquidity % 15% 16% 20% 19% 17% 43 * Excludes Asset Specific Borrowings (ASB)
Slide 45: Cash Flow Plan
Cash Flow Plan Particulars ($Mn) Q3FY20 Q4FY20 Q1FY21 Q2FY21 Opening Available Liquidity (A) 1,188 1,132 1,245 1,203 Inflows Asset EMIs and Repayments 283 396 255 212 Securitization 141 141 141 - Fresh Borrowings 354 297 241 354 Total Inflows (B) 778 835 637 566 Outflows Total Borrowings Repayments
Slide 46: Assets in each Period Adequately Covering the Liabilities
Assets in each Period Adequately Covering the Liabilities ($Mn) Assets Liabilities Gap Upto 1 year 2,165 1,995 170 1-3 years 2,348 2,179 170 3 years+ 2,363 1,302 1,061 Total gap represents our equity base 45 3 years+ liabilities exclude Equity; Assets and Liabilities don’t include ASB
Slide 47: Balance Sheet Highlights
Balance Sheet Highlights Ge E Edelweiss s protect
Slide 48: Diversified Borrowing Profile By Instruments…
Diversified Borrowing Profile By Instruments… 40% 44% 44% 57% 57% NCDs Bank Loans 31% 29% 39% CPs 40% 43% 29% 27% 17% 3% 0% FY16 FY17 FY18 FY19 H1FY20 Total Borrowings 3,259 4,468 6,332 6,112 5,474 ($Mn) Negligible CP exposure as on 30th September, 2019 47 Borrowings exclude CBLO for all the above p
Slide 49: …And By Source
…And By Source 36% 33% Bank 43% 47% 49% Retail 16% 17% 12% MF 24% 27% 44% 33% 41% PF, Insurance 16% 10% & FIs 12% 13% 14% 6% 7% FY16 FY17 FY18 FY19 H1FY20 Total Borrowings 3,259 4,468 6,332 6,112 5,474 ($Mn) Increasing focus on retail borrowings in the total liability mix 48 Borrowings exclude ASB f
Slide 50: Increasing Percentage of Long Term Borrowings
Increasing Percentage of Long Term Borrowings % of Total Borrowings (excl ASB) 63% 64% 61% 54% 44% FY16 FY17 FY18 FY19 H1FY20 49
Slide 51: Positive ALM Across Durations
Positive ALM Across Durations Assets Liabilities 100% 100% % of Assets and Liabilities 66% 62% 33% 24% 19% 31% 2% 21% 16% 2% Asset Specific 0-3 months 3-6 months 6-12 months 1-3 years 3+ years Borrowing • BMU manages ALM under the aegis of Asset Liability Committee 50
Slide 52: Comfortable Capital Adequacy Ratio
Comfortable Capital Adequacy Ratio Capital Structure as on 30th Sept, 2019 ($Mn) Core Equity Tier I 1,176 15.6% Capital Adequacy Ratio Additional Tier I 49 0.6% 21.1% Tier II 366 4.9% Total Capital 1,591 51 Capital Adequacy Ratio is based on RBI norms for NBFCs; Tier II includes CDPQ investment of $
Slide 53: Debt to Equity Ratio Reduced Further
Debt to Equity Ratio Reduced Further Capital Structure as on 30th Sept, 2019 ($Mn) Total Debt 5,474 Less: Treasury Assets 659 Net Debt (Ex-Treasury Assets) 4,815 Equity 1,396 D/E ratio (Ex- Treasury Assets) 3.4x 52 Total Debt excludes ASB ; Equity includes CDPQ investment of $147 Mn
Slide 54: Our Risk Governance Structure…
Our Risk Governance Structure… Oversight by Board Risk Committee Global Risk Committee Business Risk Group Risk & Assurance Enterprise Risk Management Council • Implementation of risk • Risk aggregation and • Define Organization risk framework for specific monitoring framework & appetite businesses
Slide 55: …Ensures Prudent Risk Management and Responsible Growth
…Ensures Prudent Risk Management and Responsible Growth Market Risk Regulatory Reputational Business Risk Credit Risk Liquidity Risk Risk Risk Physical Technology Operational & Infrastructure People Risk Fraud Risk Risk Process Risk Risk Enterprise risk management approach: 11 Risk Framework 54
Slide 56: 13 Member Board Comprises Majority of Independent Directors
13 Member Board Comprises Majority of Independent Directors Mr. K Chinniah Mr. Biswamohan Mahapatra Independent Director Independent Director • Served as Managing Director & Global Head • Former RBI Executive Director, chaired various committees of RBI Infrastructure, Portfolio, Strategy & Risk Grou
Slide 57: Significant Institutional Ownership
Significant Institutional Ownership Shareholding Pattern as on 30th September, 2019 Key Shareholders above 1% Percent 1 BIH SA 4.3% Employee 2 Pabrai Investment Funds 3.6% Trust 3 Wellington Management 2.6% DIIs, Non 4.8% Promoter Group 4 LIC 2.1% Institutions & Others 5 HDFC Mutual fund 2.0% 23.7%
Slide 58: ESG at Edelweiss
ESG at Edelweiss
Slide 59: Our Framework is based on the United Nations Sustainable Development Goals
Our Framework is based on the United Nations Sustainable Development Goals People Focused Goals No Poverty, Zero Hunger & Quality Education Gender Equality Economic Growth Planet Focused Goals Affordable & Clean Energy Responsible Consumption Climate Support 58
Slide 60: EdelGive Foundation - Unique Philanthropic Platform
EdelGive Foundation - Unique Philanthropic Platform PARTNERSHIPS CAPACITY BUILDING IMPACT Non-Financial Support Foundations Build Stronger Organizations Organizational Capacity Towards a high impact social sector EdelGive platforms EdelGive Non-Profit Corporates Foundation Organization Enhanced Soci
Slide 61: EdelGive Funding Partners
EdelGive Funding Partners We have partnered with some of the largest foundations, Corporates and HNIs through our innovative models focused on collaboration 60
Slide 62: EdelGive is supported by Funding Partners of Four Categories
EdelGive is supported by Funding Partners of Four Categories International Foundations Bill and Melinda Gates Foundation Savannah Wisdom Children’s Investment Fund Foundation Ford Foundation Dalyan Foundation British Asian Trust International Funders Burgundy Asset Management atDta General Atlantic
Slide 63: EdelGive NGO Partners
EdelGive NGO Partners Education Working to improve Student Learning Outcomes by leveraging Government systems Empowerment Women Working to enable economic and social empowerment of women Livelihoods 62 Working to improve livelihoods in agrarian communities through water related interventions
Slide 64: EdelGive Foundation - Key Metrics
EdelGive Foundation - Key Metrics Employee Engagement Employee Engagement % More than 70% engaged in financial and nonfinancial giving Man Hours spent till date 33,170 hrs Field Visits till date 168+ Capacity Building – Non financial support Employees provided skills and time pro bono in over 100+ p
Slide 65: Addendum to Q2FY20: Business Strategy Going Forward
Addendum to Q2FY20 Earnings Update Business Strategy Going Forward
Slide 66: Edelweiss Business Group Structure
Edelweiss Business Group Structure Edelweiss Financial Services Ltd Credit Advisory Insurance • Retail Credit • Wealth Management • Life Insurance • Corporate Credit & Capital Markets • General Insurance • Asset Management & Asset Reconstruction Six businesses across three ring fenced verticals • Ou
Slide 67: Edelweiss Strategy FY20-23
Edelweiss Strategy FY20-23 Line of Business Strategy Benefits Retail Credit • Will work largely in partnership with • Equity Release: Equity in the Corporate Credit will be banks for Co-origination released as we wind down the book Corporate Credit • Showcase our workout capabilities • Financing : G
Slide 68: Retail Credit
Retail Credit Key Metrics Business Strategy H1FY20 $Mn • Continue our focus on growing in niche segments especially in SME and Affordable Housing Loans in partnership with banks Capital Employed 2,138 Equity 354 • Move from Tech-enabled to Tech-first approach – revamp of customer outreach and delive
Slide 69: Corporate Credit
Corporate Credit Key Metrics Business Strategy H1FY20 $Mn • Book is going through a down cycle and is expected to reverse in next 3-4 quarters Capital Employed 2,289 Equity 475 • Asset Management vehicles have proved to be a better source of long term stable and flexible capital for non-granular, hi
Slide 70: Asset Management & Asset Reconstruction Business
Asset Management & Asset Reconstruction Business Key Metrics Business Strategy H1FY20 $Mn • We manage ~$11,730 Mn of combined customer assets with our capital contribution of ~$1,415 Mn AUM 11,728 Equity 326 • Continue to maintain dominance in Asset Reconstruction business with the opportunity in mi
Slide 71: Wealth Management and Capital Markets
Wealth Management and Capital Markets Key Metrics Business Strategy H1FY20 $Mn • Achieved leadership position especially in affluent segment which is one of the fastest growing segments AUA 15,251 AUC 3,042 • Strong technology platform and product capabilities already built Equity 20 • Ability to sc
Slide 72: Insurance
Insurance Life Insurance Life Insurance Business Strategy H1FY20 $Mn • Increase Protection and Non Par products share to boost margins Equity 118 • Multi-channel distribution strategy while ramping up proprietary channels like Direct and Agency PAT (18) Embedded Value 207 • Our 51% JV with Tokio Mar
Slide 73: Addendum to Q2FY20: Indian Real Estate Snapshot
Addendum to Q2FY20 Earnings Update Indian Real Estate Snapshot
Slide 74: There Is Significant Pessimism Around Real Estate..
There Is Significant Pessimism Around Real Estate.. 1 Liquidity squeeze has created a severe cash crunch for most developers 2 Many projects are stuck for lack of last-mile financing 3 Undelivered homes, along with one or two cases of fraud, have created a very negative perception in the market 4 Ge
Slide 75: Reform-Led Revival in Sales Volumes…
Reform-Led Revival in Sales Volumes… Sales Trend 250 200 GST RERA Units in Thousands 150 100 DEMONETISATION 50 0 H1-2011 H1-2012 H1-2013 H1-2014 H1-2015 H1-2016 H1-2017 H1-2018 H1-2019 -7% CAGR +11% CAGR Sales from 2011 to 2017 Last 2 years 74
Slide 76: …has Rationalised Inventory Levels, Helped by Flat Pricing
…has Rationalised Inventory Levels, Helped by Flat Pricing Trends Selling Price and inventory levels 1,100 Unsold Inventory Pricing 6,000 85 Unsold Inventor, Units in Thousands 5,000 71 900 Pricing ($/sft) 4,000 57 700 3,000 42 2,000 28 500 1,000 14 300 0 H1-2011 H2-2011 H1-2012 H2-2012 H1-2013 H2-2
Slide 77: Balance Restored in Residential vs Commercial RE Asset Class Mix
Balance Restored in Residential vs Commercial RE Asset Class Mix Value of Assets Under Construction Residential Commercial 2011 2013 2017 2019 Q2 $160 Bn $234 Bn $257 Bn $278 Bn 14% 18% 23% 25% 75% 82% 86% 77% 2011 - 2013 2017 - Present • Rapid growth in Residential RE, led largely by • Investment i
Slide 78: Assets under watch is only ~2x of current stressed debt
Assets under watch is only ~2x of current stressed debt Developer Financing (Total Book) $Bn Banks 46.7 NBFCs 28.3 Total 75.0 • Estimated stress of ~15% translates to a book of $11.3 Bn • $11.3 Bn of total stressed debt would need ~40% of completion financing - ~$4.5 Bn • Government and other privat
Slide 79: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
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