Ugro Capital Limited · NSE:UGROCAP
Ugro Capital — Q4 FY2023 Earnings Presentation
39 slides from Ugro Capital's earnings presentation, May 16, 2023
Slide 1: UGRO Capital Limited Q4'23 and FY23
UGRO Capital Limited Q4’23 and FY23 EMPOWERING MSME ECOSYSTEM NSE: UGROCAP | BSE: 511742 Slide 1
Slide 2: Safe Harbor
Safe Harbor This presentation has been prepared by UGRO Capital Limited (the “Company”) solely for your information. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation is for information purposes only and should not be deemed to constitute or
Slide 3: Click here
Click here Slide 3
Slide 4: Transitioning from Collateral Backed Lending to Cashflow Backed Lending
TRANSITIONING FROM COLLATERAL BACKED LENDING TO CASHFLOW BACKED LENDING Slide 4
Slide 5: New models & machine learning tools set to optimise lending market
[5 New models & machine learning tools set to optimise lending market Click here
Slide 6: Empowering MSME Lending with the Power of Data
EMPOWERING MSME LENDING WITH THE POWER OF DATA Slide 6
Slide 7: UGRO Capital – Scaling up through power of Data
UGRO Capital – Scaling up through power of Data Vast customer ecosystem with substantial data footprint, promising unprecedented data-driven learning and tremendous credit penetration opportunities PROCESSED LARGE VOLUME OF DATA SERVED WIDE CUSTOMER BASE SIGNIGICANT HEADROOM TO GROW Exponentially gr
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e Mathie Bannne Benner Diknke Click here
Slide 9: GRO Score 3.0 – Building Blocks
GRO Score 3.0 – Building Blocks India’s first statistical scorecard triangulating repayment history, banking behavior and GST returns data for holistic assessment of MSME, now live in production API LAYER FEATURE LAYER ALGO LAYER API integrations facilitating data flow directly from Knowledge-rich f
Slide 10: GRO Score – Risk Bands Stacking up on Historical Portfolio
GRO Score – Risk Bands Stacking up on Historical Portfolio Default rates across score bands – All customers assessed Since Inception Score Band wise break up of recent disbursals (Apr 22 – Sep 22) 2.6% 2.5% 6% 1% 5% 1.7% 1.5% A 1.2% 1.2% B GRO Score A & B C 0.8% ~88% 0.6% 32% 56% D E A B C D,E Disbu
Slide 11: The journey of empowering MSME ecosystem
The journey of empowering MSME ecosystem Russia Ukraine War Raised 340 Cr Series of Credit Crises Equity • ILFS Increasing Covid – 19 Interest Rate & • DHFL Wave 2 Global inflation • Yes Bank Operational Slow Down Covid – 19 6,081 Cr Partnered with CRISIL to Operational Shut down identify and shortl
Slide 12: Continuous Growth Journey on the back of our pillars of strength
Continuous Growth Journey on the back of our 3 pillars of strength Distribution is Set Underwriting is built out Liability is stable 193, 200, 10, 674, 83, 207, 8% 2% 15% 13% GST 14% 9% 554, 173, 254, FY23 Total on Q4’23 Total FY23 Net 12% Q4’23 Net 95, 12% book debt on book debt Disbursement Disbur
Slide 13: Business Update
GRO Business Update Slide 13
Slide 14: Performance Highlights for Q4FY23
Performance Highlights for Q4FY23 01 Asset 02 03 Asset 04 Liability & Profitability Growth Quality Co - lending AUM Net Total Income GNPA Borrowings As on Mar’23 : 6,081 Cr Q4’FY23 : 126.8 Cr As on Mar’23 : 1.6% As on Mar’23 : 3,149 Cr (+19% Q-o-Q) (+17% Q-o-Q) (1.7% as on Dec’22) (65+ lenders) (+10
Slide 15: Performance Highlights for Q4FY23
Performance Highlights for Q4FY23 FY23 FY22 Q4’FY23 Q4’FY22 AUM (INR Cr) 6,081 2,969 105% 6,081 2,969 105% Net Disbursement (INR Cr)* 4,641 2,251 106% 1,459 612 138% Off-book AUM 40% 16% 150% 40% 16% 150% Net Total Income %$ 12.2% 9.2% 33% 13.7% 10.4% 32% Cost to Income Ratio 62% 72% 13% 56% 73% 23%
Slide 16: AUM Trend (Product wise Q-o-Q)
AUM Trend (Product wise Q-o-Q) Amount in INR Cr AUM increased to INR 6,081 Cr as on Mar’23 from INR 5,095 Cr as on Dec’22 (+19%) and INR 2,970 Cr as on Mar’22 ( +105%). 105% 19% 6,081 715 12% 5,095 701 12% 4,375 746 567 9% 3,656 718 564 472 8% 458 620 465 2,970 338 2,589 397 18% 361 535 240 1,899 31
Slide 17: Loan Origination (Product wise Q-o-Q)
Loan Origination (Product wise Q-o-Q) Amount in INR Cr Gross loans originated increased to INR 2,314 Cr in Q4’FY23 from INR 1,874 Cr in Q2’FY23 (+23%) and INR 962 Cr in Q4’FY22(+140%). 140% 23% 2,314 193 8% 1,874 173 7% 1,653 148 134 193 1,359 963 42% 126 143 1,053 119 775 962 610 789 199 107 11% 50
Slide 18: Operating & Financial Metrics
Operating & Financial Metrics AUM (INR Cr) Gross Loans Originated / Disbursed (INR Cr) Total Income (INR Cr) & Portfolio Yield$ 6,081 16.7% 17.3% 17.4% 17.3% 2,314 16.4% 5,095 217 4,375 40% 1,874 3,656 1,653 190 35% 1,359 155 2,969 29% 21% 963 114 124 16% 71% 65% 60% 79% 84% Q4'22 Q1'23 Q2'23 Q3'23
Slide 19: Portfolio Performance
Portfolio Performance Slide 19
Slide 20: Well Diversified and Granular Portfolio
Well Diversified and Granular Portfolio Product Mix (AUM) Portfolio Concentration in key geographical areas Sector Mix* State wise AUM 12% coverage 1 6% 14% 5% 28% 17% 12% 2% 9% 8% 10% 6% 9% 8% 15% 23% 10% 31% 14% 10% 6% Prime - Secured Loans Prime - Unsecured Loans 14% Micro Enterprise Loan Supply
Slide 21: Collection Efficiencies, Portfolio provisioning (1/2)
Collection Efficiencies, Portfolio provisioning (1/2) Current Month and Overall Collection Efficiency remains robust ECL Data (Mar’23) Current Month Collection (excluding overdue) / Current Month Demand (In Cr) Loan Exposure Loan Exposure (%) Total Collections* (including overdue) / Current Month De
Slide 22: Collection Efficiencies, Portfolio provisioning (2/2)
Collection Efficiencies, Portfolio provisioning (2/2) Stage 1 has remained stable over last 5 quarters Provision Coverage Ratio 96.9% 48.6% 96.4% 38.0% 96.2% 96.1% 31.8% 26.9% 28.0% 95.6% Mar'22 June'22 Sep'22 Dec'22 Mar'23 Mar'22 June'22 Sep'22 Dec'22 Mar'23 Restructured Loans (standard portfolio)
Slide 23: Liability Update
GRO Liability Update Slide 23
Slide 24: Tri-pronged liability strategy – on-balance sheet, co-lending and assignment
Tri-pronged liability strategy – on-balance sheet, co-lending and assignment Demonstrated ability to manage a prudent mix of on-balance sheet and off-balance sheet approach 1 On-Balance sheet Diversified Lender base across Lending Institutions – Banks, Large NBFCs and DFIs. Multi product approach th
Slide 25: Lending as a Service (L-a-a-S) - Building India's largest Co–Lending platform
Lending as a Service (L-a-a-S) - Building India’s largest Co–Lending platform Increasing Mix of off - Book AUM • Secured Business Loans • Agreement under new co-lending regulation – Jun’21 On Book Portfolio Off Book Portfolio • Small Ticket Secured and Unsecured Business Loans 40% 16% 21% 29% 35% • A
Slide 26: Diversified Lender base and continued build-out of liability book
Diversified Lender base and continued build-out of liability book Total Debt (INR Cr) and No. of Active Lenders Cost of Borrowing Liability Mix 1% 50 55 63 67 66 5%4% 3,149 2,725 2,885 Count of Lenders 2,208 27% Total Debt INR 1,802 10.5% 10.5% 10.5% 10.6% 3,149 Cr 10.3% 63% Term Loan NCD Securitiza
Slide 27: Operating and Financial Performance
Operating and Financial Performance Slide 27
Slide 28: Finance | Income Statement
Finance | Income Statement Income Statement (₹ Cr) FY23 FY22 Y-o-Y Q4FY23 Q3FY23 Q-o-Q Q4FY22 Y-o-Y Interest Income 482.9 272.1 77% 141.1 133.1 6% 94.0 50% Income on Co-Lending / Direct Assignment 154.1 26.9 472% 62.4 42.9 45% 14.6 327% Other Income 46.8 13.1 257% 13.7 13.6 1% 4.3 221% Total Income
Slide 29: Finance | Balance Sheet
Finance | Balance Sheet Assets (INR Cr) Mar-22 Mar-23 Liability (INR Cr) Mar-22 Mar-23 Financial Assets Financial liabilities Cash and Bank Balance 188.4 211.8 Trade payables 7.1 14.1 Loans 2,451.1 3,806.4 Borrowings 1,802.2 3,148.9 Investments 69.4 60.1 Other financial liabilities 47.2 77.4 Other f
Slide 30: Board, Management and Shareholding
Board, Management and Shareholding Slide 30
Slide 31: Independently Supervised : Eminent Board of Directors
Independently Supervised : Eminent Board of Directors Satyananda Mishra – S. Karuppasamy - Abhijit Sen - Karnam Sekar – Hemant Bhargava – Non-Executive Chairman Chairman, Compliance Chairman, Audit Committee Independent Director Independent Director Ex-Chairman, MCX, Ex-CIC, GOI, Committee Ex-CFO, C
Slide 32: Professionally Managed : 190+ years of cumulative experience
Professionally Managed : 190+ years of cumulative experience Shachindra Nath - Amit Mande - Anuj Pandey - Kishore Lodha - Sunil Lotke – Vice Chairman & Managing Chief Revenue Officer Chief Risk Officer Chief Financial Officer Chief Legal & Compliance Director 20+ Years of Experience 20+ Years of Exp
Slide 33: Institutionally Owned : Majority held by Institutional Investors
Institutionally Owned : Majority held by Institutional Investors Shareholding Pattern* Fund raising update UGRO announced Equity Fund Raise of INR 340.5 Cr through mix of Qualified Institutional placement and 16.49% preferential allotment Other Public shareholders, 21.12% QIP Issue of INR 100.5 Cr -
Slide 34: Annexure
GRO Annexure Slide 34
Slide 35: Sector Focused Approach, Multiple Products and Large Distribution Strength
Sector Focused Approach, Multiple Products and Large Distribution Strength Hospitality Supply Chain 23 Financing Prime Branches Light Engineering Business Loans Secured by Property 75 Auto Components Unsecured Micro Branches Business Chemicals Loans 1,200+ GRO Partners Our Product Food Processing Of
Slide 36: Multi Pronged Distribution Channel with Product Yields and Avg. Ticket Size
Multi Pronged Distribution Channel with Product Yields and Avg. Ticket Size Prime Loan Branches Micro Loan Branches Branch-Led Channel – Catering through 95+ branches Product Avg. Ticket Yield % Avg. Ticket Yield % • Prime Loan Branches : 23 branches with origination through LAP 151L 12.9% 8L 20.9%
Slide 37: Lending as a Service (L-a-a-S)
Lending as a Service (L-a-a-S) Co-Lending is a value accretive model Example of 80:20 Co-Lending Partnership Model Customer ROI of 14.5% Benefits to Partner Benefits to UGRO (assumption) on INR 1 Lakh Institution Loan • Higher ROA & ROE on account of • Risk weight lower in case of Co- - Better lever
Slide 38: Lending as a Service (L-a-a-S) is a highly profitable model
Lending as a Service (L-a-a-S) is a highly profitable model Sample Illustration Assumptions for Calculation Particulars (INR Cr) Normal Scenario Co-lending Model Particulars Ratios On Balance Sheet On Book – 20% Off Book – 80% Total Loan Amount 1,00,000 20,000 80,000 1,00,000 Yield 14.5% Equity Capi
Slide 39: Thank You
Thank You www.ugrocapital.com Slide 39