Trucap Finance Limited · NSE:TRU
Trucap Finance — Dhanvarsha Finvest — FY2022 Earnings Presentation
40 slides from Trucap Finance's earnings presentation, May 30, 2022
Slide 1: Earnings Presentation cover letter to BSE
@ Dhanvarsha@ May 30, 2022 To, The General Manager Department of Corporate Services BSE Limited P.J. Towers, Dalal Street, Mumbai - 400 001. Scrip Code: 540268 Subject: Earnings Presentation Dear Sir/Madam, This is to inform you that the Board of Directors of Dhanvarsha Finvest Limited at its meetin
Slide 2: Dhanvarsha
34 Dhanvarsha
Slide 3: Disclaimer
Disclaimer This presentation is not a prospectus, a statement in lieu of a prospectus, an offering circular / memorandum, an advertisement, an offer, an invitation to offer or an offer document in terms of the Companies Act, 2013, the Securities and Exchange Board of India (Issue of Capital and Disc
Slide 4: Financial & Business Update
NY Financial & Yu“ Business Update
Slide 5: Key Highlights
Key Highlights Asset Under Management (AUM) Disbursement 3,060 4,144 A G R 6% C R 18 % C AG 59 4 1,044 867 373 86 Mar'20 Mar'21 Mar'22 Mar'20 Mar'21 Mar'22 Total Revenue Customer Count 33,427 R 700 R CAG C A G 91% 811% 244 7,168 192 403 Mar'20 Mar'21 Mar'22 Mar'20 Mar'21 Mar'22 INR Million
Slide 6: Key Highlights (continued)
…continued Pre-Tax Profit Gross NPAs 107 A G R 9% C 3 308 bp 6.10% s 55 4.24% 3.02% 17 Mar'20 Mar'21 Mar'22 Mar'20 Mar'21 Mar'22 Net Worth* Number of Lenders 1,739 29 AG R th % C w 13 6 Gro 29x 993 9 311 1 Mar'20 Mar'21 Mar'22 Mar'20 Mar'21 Mar'22 * Net worth post capital infusion completed in May’2
Slide 7: Product Portfolio & Capital Efficiency
Product Portfolio & Capital Efficiency
Slide 8: Increasing Focus on Capital Efficiency in MSME & Gold Loans
Increasing Focus on Capital Efficiency in MSME & Gold Loans… AUM MSME Business Loans Gold Loans Personal Loans LAP 373 1,044 3,060 18% 4% 33% 44% 17% 78% 18% 40% 32% 7% 9% Mar'20 Mar'21 Mar'22 AUM Off Balance Sheet Progression 122 3.9% - - Mar'20 Mar'21 Mar'22 INR Million
Slide 9: Through A Differentiated Approach in Lending
Through A Differentiated Approach in Lending… Capital efficiency & risk management at the fore Own balance sheet lending Preferred Sourcing Partnerships with FLDG Lending as a Service Small ticket Solid sourcing in new geographies High IRR generating business with very low acquisition cost with shar
Slide 10: With Lending as a Service in MSME Business & Gold Loans
With Lending as a Service (L-a-a-S) in MSME Business & Gold Loans… Last Mile Financial Inclusion Highly Accretive Partnerships Capital Efficiency & Profitability Benefit for Dhanvarsha Dhanvarsha Partnerships Ecosystem Benefit for Dhanvarsha Sourcing partnership with large lenders to Co-Lending with
Slide 11: Coupled with Increasing Credibility with Lenders
Coupled with Increasing Credibility with Lenders… 29 Cumulative Number of Lenders 9 1 Mar'20 Mar'21 Mar'22 Calypso Citrus Maanaveeya Reflecting the rising credibility in Dhanvarsha amongst marquee Indian lenders
Slide 12: And Potential Refinancing of Higher Cost Funding
And Potential Refinancing of Higher Cost Funding... INR Million INR Million Name of lender Loan Amount Rate Maturity Debentures Loan Amount Rate Maturity NBFC 1 500 14.0% Sep’22 Debenture 1 1,500 11.6% Sep’22 NBFC 2 1,100 12.4% Oct’22 Debenture 2 1,500 11.3% Dec’22 NBFC 3 1,500 14.0% Mar’23 Total 3,
Slide 13: Should Lead to Further Decline in Cost of Debt
…Should Lead to Further Decline in Cost of Debt Reduction in Cost of Debt 12.5% 12.1% 11.8% Mar'20 Mar'21 Mar'22 Last 2 years have seen close to 70bps drop in Cost of Debt Leverage remains conservative at 1.6x as of Mar’22 Post capital raise in May’22, leverage will be down to 1.2x, offering substan
Slide 14: Distribution Strategy
= 2 Distribution Strategy Aman
Slide 15: Omni-channel Distribution Strategy for Substantial Scale
Omni-channel Distribution Strategy for Substantial Scale Experiential Centres Technology Assets Captive Sales Team Direct Selling Agents Offers a superior value Differentiated assets Dhanvarsha has a Strong network of proposition to MSME to scale organic Feet on Street team ~350 DSAs across customer
Slide 16: Focused Distribution of Branches to Drive Growth
Focused Distribution of Branches to Drive Growth… 48 37 # 48 Experiential Multi-city Presence Centres today Single-city Presence 8 Mar'21 Mar'22 As on Date India’s overall formal gold financing penetration is ~10% with penetration in the western and northern states being even lower. However, the abo
Slide 17: Digital Strategy: Key Tenets
Digital Strategy: Key Tenets Build Future Multi-Product Collaborative User Ready Organization Penetration Acquisition Risk Mitigation Connecting Assets Build a future ready Leverage various Collaborate with Focus on data Connecting all organization digital platforms partners to driven underwriting d
Slide 18: Technology Ecosystem and Loan Origination and Management System
Technology Ecosystem and Loan Origination and Management System (LOMS) Dhanvarsha Core: LOMS B2B App B2C Apps Digital Assets Third Party API Integrations Loans & Payment Micro Loans & Loans & Value Credit Health Added Services CRM System User Facing LOS & LMS Applications Workflow Reporting & Leads
Slide 19: Approach to Algorithm Based Underwriting
Approach to Algorithm Based Underwriting Improved Credit Decision Credit Underwriting Model Each Borrower is rated for ~PD1 System based objective underwriting Overlay of human judgement for higher ticket size loans Faster and Predictable Delivery Credit Underwriting Process Standardised credit fram
Slide 20: DhanSetu: B2B Digital Platform for Channel Partners
DhanSetu: B2B Digital Platform for Dhanvarsha Channel Partners to aid Seamless Customer Onboarding and Tracking… Salient Attributes DhanSetu App (B2B Customer Onboarding) Offline to Online Channel Empowering channel partners to Rule Engines: distribute all financial offerings - Pincode Serviceabilit
Slide 21: Web-App Platform for Dhanvarsha Channel Partners
Enhanced by Launch of Web-App Platform for Dhanvarsha Channel Partners to Drive Accessibility Unlock Earnings Easy & Real Time Tracking Get a chance to unlock Track total loans disbursed additional earnings by you in a given through referral and time-frame and check promotion programs conversion rat
Slide 22: Money Rabbit: Omni Channel Digital Platform for MSMEs
Money Rabbit: Dhanvarsha’s Omni Channel Digital Platform for MSME’s and Blue-Collar Work Force Virtual & Physical Card Get your own personalized Ru-pay card which can be used at any Credit Health Check Tool online/offline merchants Get to know your latest Bureau Score and other Micro Loans credit de
Slide 23: Asset Quality and Risk
2 Asset Quality and Risk SOA
Slide 24: Robust Asset Quality and Collection Efficiency
Robust Asset Quality and Collection Efficiency Gross NPA Net NPA 6.10% 2.85% 2.29% 4.24% 2.02% 3.02% Mar'20 Mar'21 Mar'22 Mar'20 Mar'21 Mar'22 • LAP loans which are part of the legacy book and in run-off mode since Sep’19 are roughly 6.2% of the loan book as on date. We expect LAP loans will conserv
Slide 25: In-House Collection Vertical with Strong Controls
In-House Collection Vertical with Strong Controls INR Million Prepayments Collection efficiency (%) Demand Collections Collection Month & foreclosure without prepayments raised received efficiency (%) received* & foreclosures Mar’20 9.9 9.0 18.5 91% 277% Mar’21 17.0 15.4 10.5 90% 152% Mar’22 97.2 84
Slide 26: Risk and Governance
Risk and Governance …driven by a team with strong experience Risk mitigated portfolio approach… in risk and controls ~84% of AUM is backed by MSME Business & • Mr. Mahendra Servaiya is one of the most Gold loans resulting in robust asset quality experienced members of the core team with 3+ decades o
Slide 27: Comprehensive Risk Management Framework
Comprehensive Risk Management Framework Action Undertaken Aspects Covered Objective Achieved / To Be Achieved Risk Assessment Framework Credit, liquidity, solvency, Common standards for financial, and information management of various risks security risks at portfolio level Independent unit for inte
Slide 28: Standardised Branch Score Card: Mitigate Risk and Maintain Quality Service
Standardised Branch Score Card: Mitigate Risk and Maintain Quality Service Standard Branch Audit Score Branch Score Matrix Card Mechanism Standard scoring process which follows Risk Rating weighted average mechanism based upon risk rating of 12 comprehensive High C parameters and 130 checkpoints Med
Slide 29: Financials
NY Financials SLA
Slide 30: Balance Sheet
Balance Sheet INR Million • Strong liquidity profile coupled Balance Sheet Mar’20 Mar’21 Mar’22 with an un-levered balance sheet will support higher Financials Assets 422.3 1,681.6 4,362.3 disbursement trajectory. Cash and Investments 93.8 684.6 778.2 • Company anticipates Gross Loans 372.3 1,044.2
Slide 31: Income Statement
Income Statement INR Million • 516% y-o-y increase in profit, Income Statement Mar’20 Mar’21 Mar’22 driven by healthy disbursement trajectory and increasing operating Interest Income 64.1 122.2 454.6 efficiency. Less: Finance Cost 16.8 42.3 243.5 • Investments in technology and branch infrastructure
Slide 32: Governance & Mission
2 Governance & Mission AON
Slide 33: We Enable Businesses by Lending Hand, Head & Heart
We don’t just Lend Money. We Enable Businesses by Lending ‘Hand’, ‘Head’ & ‘Heart’ Ecosystem We are true business partners to our customers Growth & Wealth & Scalability Wellbeing For us, business are communities first. We help building ‘Social Capital’ We give equal importance to both ‘Social’ & ‘C
Slide 34: Incremental Impact Achieved in Solving Access to Credit
Incremental Impact Achieved in Solving Access to Credit Borrowers Percentage of Loan Split by Occupation Disbursement Salaried 32% Self-Employed, 67% 20% 80% Inclusivity New to Credit Borrowers Cumulative Borrowers: Livelihoods Improved Non-Tier 1 Location 12,900+ 26,400+ ~1,77,000+ Based upon cumul
Slide 35: Focus on Governance
Focus on Governance Independent and Eminent Board Comprising of Industry Stalwarts Rakesh Sethi Nirmal Momaya Atwood Porter Collins Rajiv Kapoor KP Raghuvanshi Non-Executive Chairman Independent Director Non-executive Director Non-executive Director Independent Director Past experience: Past experie
Slide 36: Led by a Professional Management Team
Led by a Professional Management Team… Sanjay Kukreja Rohan Juneja Chief Financial Officer Managing Director & CEO • 27+ years experienced professional • 17+ years of experience, in India & US. • CA with 27+ years of experience in • An investment banker, hedge fund FP&A, Profit Center Operations, ma
Slide 37: Who Bring Substantial Experience in the Financial Services Space
…who bring Substantial Experience in the Financial Services Space Lalit Chendvankar Namita Pradhan Chief Compliance Officer Human Capital Management 16+ years robust experience in handling • 6+ years - a seasoned HR professional Mergers & Acquisitions, IPOs, Corporate • Previously associated with Ob
Slide 38: Backed by a Promoter Group with Rich Heritage
Dhanvarsha is Backed by a Promoter Group with Rich Heritage Group’s businesses Dhanvarsha Finvest Limited is a Bombay Stock Exchange Limited listed NBFC provides credit to the underbanked MSME sector in India About the group • Wilson Group’s history traces back up to Pre-Independence • Diversified c
Slide 39: Shareholding Pattern
Shareholding Pattern Substantial management ownership in the company Public 28.9% Promoter 60.8% FII 10.3% Shareholding on fully diluted basis as on May’22, including CCDs issued in November 2020 and April 2021
Slide 40: Thank You
Thank You