Slide 1: An Agile Arman: Q4 & FY23 Investor Presentation
Arman Financial Services Limited An Agile Arman Q4 & FY23 Investor Presentation June 2023
Slide 2: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Arman Financial Services Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for an
Slide 3: Contents
Contents Quarterly Business Update Page 4 - Page 8 About the Company Page 9 - Page 15 Presence in Attractive Retail Page 16 - Page 22 Lending Segments Efficient Liability Management Page 23 - Page 26 Strong Financial Performance Page 27 - Page 41 3
Slide 4: Quarterly Business Update
Quarterly Business Update 4
Slide 5: FY23 Performance Highlights
FY23 Performance Highlights* Assets Under Disbursement Shareholder’s Equity Profit Before Tax Profit After Tax Management INR 1,943 Crore INR 1,767 Crore INR 365 Crore INR 125 Crore INR 94 Crore CRAR (+58% Y-o-Y) (+73% Y-o-Y) (+175% Y-o-Y) (+195% Y-o-Y) Arman (Standalone): 32.61% Namra Finance: 25.6
Slide 6: Recent Fund Raise – September 2022 (1/2)
Recent Fund Raise – September 2022 (1/2) Company raised INR 115 crore via allotment of CCDs and OCRPS on a preferential basis • Allotment of 6,24,388 Unsecured Compulsorily Convertible Shareholding Pattern - Shareholding Pattern - Debentures (“CCDs”) on preferential basis to Investors Pre-Capital Ra
Slide 7: Recent Fund Raise – September 2022 (2/2)
Recent Fund Raise – September 2022 (2/2) Fund Raised on Net worth (INR Crore) Particulars 31-Mar-22 Particulars 28-Sep-22 Calculated as per IND-AS 365 CCDs INR 76.8 Crore 187 213 Equity Share Capital INR 213 Crore CCDs Outstanding 6,24,388 CCDs Total Shares 84,92,334 OCRPS INR 38.2 Crore Mar-21 Mar-
Slide 8: Impact of RBI's New Microfinance Guidelines
Impact of RBI’s New Microfinance Guidelines Annual household Maximum FOIR of 50% Qualifying assets limit revised Removal of income limit raised considering all outstanding from 85% of net assets to 75% Pricing Cap to INR 3 Lakh loans of the household of the total assets • Increased annual • The regu
Slide 9: About the Company
About the Company 9
Slide 10: About Arman Financial Services
About Arman Financial Services About the Company Business Performance Presence in Attractive Retail Lending Segments • A diversified NBFC focusing on large under-served rural & semi-urban retail markets 3% 2% 13% • Founded in 1992 by Mr. Jayendra Patel in Ahmedabad Microfinance ^ • Listed on BSE in
Slide 11: Journey so Far
Journey so Far The Company has been supporting the small dreams • Raised INR 115 Crore through of the brave hearts of India for 30 years… and allotment of CCDs counting! and OCRPs on 2023 preferential basis • Namra 2022 Finance • Disbursement recieved the crosses INR 875 2021 highest ever Crore grad
Slide 12: Geographical Footprint
Geographical Footprint Geographical AUM Mix Number of (Consolidated) FY23 FY22 Branches 9.5% Microfinance 274 236 3 10.4% 29.8% 15 MSME 58 50 67 10.6% 43 2W & Rural 2W 4 6 27 63 16.0% 76 23.7% Total 336 292 42 Gujarat Uttar Pradesh Madhya Pradesh Maharashtra Rajasthan Others Number of Branches 336 ~
Slide 13: Strong Underwriting Measures by Leveraging Digital Transformation
Strong Underwriting Measures by Leveraging Digital Transformation Instant Verification Of Key Details Traceability Superior Collection • The LOS* & LMS* System facilitates instant • Better customer traceability by 4D customer • Mobile-based collection at Point of transaction verification Verificatio
Slide 14: Eminent Board of Directors
Eminent Board of Directors Alok N. Prasad Jayendrabhai B. Patel Aalok J. Patel Chairman Vice Chairman & Managing Director Joint Managing Director A veteran banker with over 35 years of regulatory, banking and He has been an entrepreneur for 45 years. He was involved in a He has 16 years of banking a
Slide 15: Competitive Moat
Competitive Moat Focus on small ticket Diversifying Conservative Completely in house Business model retail loans to the products, operations operations with centered around large under served geographies, sources framework with bottom up driven conservative informal segment of funds and focus on ris
Slide 16: Presence in Attractive Retail Lending Segments
Presence in Attractive Retail Lending Segments 16
Slide 17: Product Offerings across Verticals
Product Offerings across Verticals 82%* 13%* 3%* 2%* Microfinance - JLG MSME Loans Two-Wheeler Loans Individual Business Loans Average Ticket Size : INR 45,000 Average Ticket Size: Average Ticket Size: Average Ticket Size: (Cycle 1 & 2 -INR 20 -50k INR 75,000 INR 70,000 INR 75,000 Cycle 3+ -INR 20-7
Slide 18: Microfinance Loans
Microfinance Loans (INR Crore) AUM* Disbursement Total Income Profit After Tax Avg. Ticket Size (INR) 1,628 1,485 332 67 45,750 36,500 1,022 840 173 18 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 *Includes Individual Business Loans • JLG model with small ticket loans (Avg. Ticket Size – INR 45
Slide 19: MSME Loans
MSME Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 255 228 73 75,000 70,000 165 140 45 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 • Individual enterprise /working capital loans for small rural businesses in low competition • Disbursement: 100% Cashless areas • Credit Checks: CI
Slide 20: 2W and Rural 2W Loans
2W and Rural 2W Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 61 54 15 65,000 69,500 46 43 12 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 • Hypothecation (secured) loans given to self-employed /cash-salaried customer in the • Disbursement: 100% Cashless informal segment in semi-
Slide 21: MSME Process Overview
MSME Process Overview MSME Process Overview Sourcing Underwriting Collections • In-house sourcing team (No DSAs) • Credit bureau check (CRIF & CIBIL) • Team member that does sales also • handles collections • Feet-on-Street sales team model Physical FI & PD by in house credit manager at residence &
Slide 22: Collection Efficiency
Collection Efficiency Microfinance MSME Two-Wheeler Total 98.3% 98.3% 98.4% 98.3% 98.6% 98.5% 96.7% 96.8% 96.9% 98.3% 98.3% 98.4% Feb-23 Mar-23 Apr-23 Feb-23 Mar-23 Apr-23 Feb-23 Mar-23 Apr-23 Feb-23 Mar-23 Apr-23 Update on Collections Two Particulars (INR Crore) Microfinance MSME Total Wheeler • Co
Slide 23: Efficient Liability Management
Efficient Liability Management 23
Slide 24: Strong Capitalization with Sufficient Liquidity
Strong Capitalization with Sufficient Liquidity Capital Adequacy Ratio ALM Position (in Months) 48.8% 22 22 22 22 19 18 17 17 17 17 32.6% 29.0% 25.6% 20.3% 18.7% 31-Mar-21 31-Mar-22 31-Mar-23 Q4 FY 2 2 Q1 FY 2 3 Q2 FY 2 3 Q3 FY 2 3 Q4 FY 2 3 Arman (Standalone) Namra Av g T e n u r e o f Ac t i v e A
Slide 25: Lending Profile
Lending Profile Borrowing Mix (%) Top 5 Lending Partners (INR Crore) 1,084 1,164 1,368 1,518 1,888 Top 5 Lenders % of Borrowings Lender 1 – Term Loans & DA 14.6% 26.0% 24.0% 27.0% 29.3% 33.0% Lender 2 –Term Loans 8.9% 5.9% 3.2% Lender 3 – NCD 8.0% 8.0% 1.9% 2.0% Lender 4 – Term Loans & PTC 5.4% 24.4
Slide 26: Lending Partners
Lending Partners Bank Borrowings Non-Bank Borrowings Securitization Partners NCDs & ECB 26
Slide 27: Strong Financial Performance
Strong Financial Performance 27
Slide 28: Q4 & FY23 Consolidated Profit & Loss Statement
Q4 & FY23 Consolidated Profit & Loss Statement Particulars (INR Crore) Q4 FY23 Q4 FY22 Y-o-Y (%) Q3 FY23 Q-o-Q (%) FY23 FY22 Y-o-Y (%) Income from Operations 149.3 75.7 103.0 423.9 235.0 Other Income 0.0 0.2 0.0 0.0 0.0 Gross Total Income 149.3 75.8 97.0% 103.0 44.9% 423.9 235.0 80.4% Finance Costs
Slide 29: Balance Sheet as on March 2023
Balance Sheet as on March 2023 Particulars (INR Crore) Consolidated Standalone Particulars (INR Crore) Consolidated Standalone ASSETS Mar-23 Mar-22 Mar-23 Mar-22 LIABILITIES & EQUITY Mar-23 Mar-22 Mar-23 Mar-22 Financial Assets Equity Share capital 8.5 8.5 8.5 8.5 Reserves & Surplus 357.2 204.2 220.
Slide 30: Consolidated Business Performance
Consolidated Business Performance (INR Crore) AUM Disbursement Gross Total Income 1,943 631 149 1,642 1,388 1,436 478 103 1,233 380 93 337 76 79 278 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Net Total Income Pre-provision Operating Profi
Slide 31: Consolidated Business Performance
Consolidated Business Performance Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 19.2% 35.8% 36.8% 35.6% 33.3% 34.6% 14.7% 14.9% 15.0% 14.8% 26.6% 26.0% 26.4% 26.9% 23.9% Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Asset Qualit
Slide 32: PAR Movement
PAR Movement PAR 31-90 (%) Movement GNPA (%) 8.3% 7.9% 7.8% 6.0% 4.1% 6.9% 3.0% 3.7% 4.1% 2.8% 0.6% 0.9% 3.7% 5.0% 0.5% 2.4% 4.8% 0.0% 4.5% Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 3.9% 4.7% 3.0% 4.3% NNPA (%) 2.9% 1.1% 1.4% 2.1% 1.1% 1.9% 2.1% 0.1% 1.4% 0.3% 0.3% 1.1% 0.3% 0.9% 0.6% Mar-19 Mar-20 Mar-21
Slide 33: Q4 & FY23 – Standalone Profit & Loss Statement (2W & MSME)
Q4 & FY23 – Standalone Profit & Loss Statement (2W & MSME) • Standalone AUM grew by 49.3% YoY to INR 315 Crore Particulars (INR Crore) Q4 FY23 Q4 FY22 Y-o-Y (%) Q4 FY23 Q-o-Q (%) FY23 FY22 Y-o-Y (%) as compared to INR 211 Crore Income from Operations 27.4 19.7 23.5 94.4 63.3 • An improved credit dem
Slide 34: Standalone Business Performance
Standalone Business Performance (INR Crore) AUM Disbursement Gross Total Income 315 95 27 275 14 4 246 61 22 229 69 21 21 20 211 58 62 49 58 3 47 55 4 4 4 46 9 19 8 12 255 81 23 197 217 18 165 182 50 53 50 16 16 16 43 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY2
Slide 35: Q4 & FY23 – Namra Finance Profit & Loss Statement
Q4 & FY23 – Namra Finance Profit & Loss Statement Particulars (INR Crore) Q4 FY23 Q4 FY22 Y-o-Y (%) Q3 FY23 Q-o-Q (%) FY23 FY22 Y-o-Y (%) • Company demonstrated a robust growth on account of resurgent demand and greater emphasis on sourcing, underwriting, and technology Income from Operations 122.1
Slide 36: Microfinance Business Performance – Namra Finance (1/2)
Microfinance Business Performance – Namra Finance (1/2) (INR Crore) AUM Disbursement Gross Total Income 1,628 536 122 1,367 1,190 409 1,159 1,022 81 317 71 280 56 58 223 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Net Total Income Pre-prov
Slide 37: Microfinance Business Performance – Namra Finance (2/2)
Microfinance Business Performance – Namra Finance (2/2) Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 20.5% 34.9% 36.0% 36.9% 33.9% 32.2% 14.8% 14.7% 13.3% 13.8% 23.1% 23.2% 23.8% 22.5% 22.6% Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY
Slide 38: Strong Growth in AUM and Disbursements
Strong Growth in AUM and Disbursements Total AUM (INR Crore) Total Disbursements (INR Crore) 1,943 1,767 13% 3% 13% 3% 1,233 13% 1,024 4% 880 860 814 778 14% 16% 4% 685 17% 84% 12% 84% 15% 10% 14% 11% 6% 547 12% 509 453 15% 83% 10% 17% 13% 5% 10% 82% 204 20% 72% 79% 248 248 75% 75% 172 71% 26% 0% 3%
Slide 39: While Maintaining Cost Efficiency & Asset Quality
While Maintaining Cost Efficiency & Asset Quality Gross and Net Total Income Yield & NIM (%) Asset Quality (INR Crore) Demonetization COVID-19 Demonetization COVID-19 424 6.7% 28.7% 28.3% 27.4% 25.5% 26.7% 24.4% 21.5% 22.9% 252 235 17.4% 215 16.5% 16.5% 15.9% 195 14.0% 14.3% 14.2% 2.6% 4.6% 2.6% 3.3
Slide 40: Annexure
Annexure • Gross Interest Income = Interest Income + processing fees / other charges • Net Interest Margins = Net Interest Income / Average AUM (On + Off -Book) • Yields = Gross Interest Income / Avg. AUM (On + Off Off-Book) • Cost-to -Income Ratio = Opex (excl. provisions) / Net Total Income • GNPA
Slide 41: Thank You
Thank You Contact Information Company: Arman Financial Services Limited CIN: L55910GJ1992PLC018623 Mr. Vivek Modi Chief Financial Officer (CFO) Email : vivek@armanindia.com www.armanindia.com Investor Relations Advisors: Strategic Growth Advisors Pvt. Ltd. CIN: U74140MH2010PTC204285 Ms. Krunali Shah