Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Investor Day (December 2023)
48 slides from Manappuram Finance's investor day presentation, Dec 19, 2023
Slide 1: Annual Analyst Meet - H1 2024
Gold Vehicle Home Micro MSME Finance Finance Finance Finance Finance Annual Analyst Meet - H1 2024
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include The company assumes no responsibility Any person/ party intending to provide Actual results could differ materially statements, which may constitute to publicly amend, modify or revise any finance / invest in the shares/businesses from those expre
Slide 3: Deep Management Bench - Key Managerial Personnel
DEEP MANAGEMENT BENCH Key Managerial Personnel Mr. V. P. Nandakumar Mrs. Sumitha Nandan Mr. B.N. Raveendra Babu Managing Director and CEO Executive Director MD – Asirvad Micro Finance Ltd • Postgraduate in Science • MBBS from Rajiv Gandhi University of • Managing committee member of Science ASSOCHAM
Slide 4: Deep Management Bench - Key Business Heads
DEEP MANAGEMENT BENCH Key Business Heads Mr. Vijayakumar KB Mr. Ratheesh PM Mr. Vipin TS Business Head - MSME Business Head- Micro Home Finance Business Head - Secured Personal Loan • 20 years of work experience and • 13 years of work experience and worked in various departments such as • 16 years o
Slide 5: Financial Highlights Q2 - FY2024
FINANCIAL HIGHLIGHTS Q2 - FY2024 Investor Presentation 5
Slide 6: Key Performance Highlights for Q2 FY2024
KEY PERFORMANCE HIGHLIGHTS FOR Q2 FY2024 Consol business performance: 37% YoY Gold Loan Growth and Segment AUM and increase in PAT, 27 % Excellent liquidity Yields Asset Quality growth in AUM YoY and 21.6 % RoE • Consolidated AUM for QE Sep’23 • Gold Loan AUM has grown by 1% • MSME and allied busine
Slide 7: AUM Mix
AUM MIX Q2 FY24 Q1 FY24 Q2 FY23 1% 4% 7% 2% 6% 2% 3% 3% 6% 7% 3% 8% 23% 53% 56% 25% 26% 63% Gold MFI HFC VEF Onlending MSME Gold MFI HFC VEF Onlending MSME Gold MFI HFC VEF Onlending MSME Particulars (Rs. Mn) Q2 FY24 Q1 FY24 Q-o-Q % Q2 FY23 Y-o-Y % Gold 1,99,934 1,98,136 1% 1,86,902 7% VEF 31,432 27
Slide 8: Consolidated Financial Overview – Q2 FY2024
CONSOLIDATED FINANCIAL OVERVIEW – Q2 FY2024 Particulars (Rs. Mn) Q2 FY24 Q1 FY24 Q-o-Q Q2 FY23 Y-o-Y H1FY24 H1FY23 Y-o-Y Consolidated AUM (Rs. Bn) 390 371 5.1% 307 27.0% 390 307 27.0% Net Interest Income 14,673 13,779 6.5% 11,679 25.6% 28,451 21,653 31.4% OPEX 6,182 6,068 1.9% 5,525 11.9% 12,249 10,
Slide 9: Consolidated Operational Overview – Q2 FY2024
CONSOLIDATED OPERATIONAL OVERVIEW – Q2 FY2024 Particulars Q2 FY24 Q1 FY24 Q-o-Q Q2 FY23 Y-o-Y Gold AUM (Rs. Bn) 208 206 1.0% 192 8.4% Gold Tonnage 59 59 -0.2% 63 -5.3% Gold Branches (Nos) 4,044 4,039 0.1% 3,897 3.8% Gold Customers (In Mn) 2.5 2.4 2.0% 2.4 2.1% Non-Gold AUM (Rs. Bn) 181 165 10.2% 115
Slide 10: Business Wise Financial Parameters and Asset Quality – H1 FY24
BUSINESS WISE FINANCIAL PARAMETERS AND ASSET QUALITY – H1 FY24 AUM (Rs in Particulars PAT (Rs Mn) CRAR RoA GNPA NNPA Credit Cost Mn) Standalone 2,66,960 8,008 30.71% 5.34% 1.56% 1.35% 0.34% Gold Loan 1,99,934 7.39% 1.44% 1.34% 0.11% Vehicle & Equipment Financing 31,432 1.52% 2.55% 2.11% 0.68% On-len
Slide 11: Strong Liabilities Franchise
STRONG LIABILITIES FRANCHISE Consol Borrowing Mix Standalone Borrowing Mix (30th Sep, 2023 - Rs. 3,22,372 Mn) (30th Sep, 2023 - Rs. 2,23,330 Mn Q2FY24 Q2FY24 2% 3% 1% 0% 1% 18% 20% 28% 40% 37% 50% WCDL/CC Term Loan WCDL/CC Term Loan NCD & Bonds ECB Commercial Paper NCD & Bonds ECB Commercial Paper S
Slide 12: Independent Board Bench
INDEPENDENT BOARD BENCH Board of Directors Dr. Shailesh J Mehta | Mr. S. R. Balasubramanian | Mr. Abhijit Sen| Independent & Non-Executive Director Independent & Non-Executive Director Independent and Non-Executive Director • B-tech in ME from IIT- B, MSc in Operations, PhD • Holds a Bachelor degree
Slide 13: Shareholding and Stock Performance
SHAREHOLDING AND STOCK PERFORMANCE Shareholding Pattern (as on 30th Sep, 2023) Stock Data Top Shareholders holding more than 1% Market Cap as on 18-Dec-23 ₹ 14,490 Crs 26% (other than promoters) % 35% BOFA Europe 2.95 Stock Price as on 18-Dec-23 171.20 1% BNP Paribas 2.82 52 Week (High/Low) ₹ 177.45
Slide 14: Manappuram Finance Limited Vehicle & Equipment Finance
Manappuram Finance Limited Vehicle & Equipment Finance
Slide 15: Executive Summary – Sep 23
EXECUTIVE SUMMARY – SEP 23 • No of Live Loans : • Total AUM Rs.3,143 Cr 1,77,795 • CV - Rs.1,693 Cr • Presence in 23 states • Disbursed In Q2-FY24 - • Auto - Rs.760 Cr through 280 Branches • Live Customer Count : Rs. 759 Cr • TW - Rs.530 Cr 1,75,212 • FE - Rs.160 Cr Loan Count & Assets Under Disburs
Slide 16: Vehicle and Equipment Finance Business Strategy
VEHICLE AND EQUIPMENT FINANCE BUSINESS STRATEGY PROFIT OPTIMIZERS Covering 3000+ Co- Increase penetration located Gold loan into Rural and Semi branches for collection Urban locations Analytics Mobility Solution Deep Penetration and marketing distribution Deeper penetration in Use of Analytics for O
Slide 17: MAFIL Loan Origination Process
MAFIL LOAN ORIGINATION PROCESS Bureau Check, Credit Deal Sourcing/PD FCU Check, Credit Approval by Underwriting by and Data Entry Dedupe, CAM Business Team Credit Team preparation Welcome Letter Physical File Disbursement Post Sanction issued to dispatch to HO, Process and Documentation customer Val
Slide 18: MAFIL Credit Underwriting Process
MAFIL CREDIT UNDERWRITING PROCESS Step 5: Deal Step 4: Grading Step 1: CAM Step 2: Tele- Step 3: recommendatio Customer and Verification verification Reference n/ escalation to deviation Process (TVR) Checks Business team marking, if any for final decision MAFIL POST DISBURSEMENT MONITORING PROCESS
Slide 19: Collection Mechanism
COLLECTION MECHANISM NO NO Customer Dues CRM Dues Segmentation BOT Calling Paid Calling Paid (i.e.DPD) NO Dues Asset Asset Verification Dues Field Collection Paid Repossession Paid Visit YES NO Asset Released Asset Disposition Legal Recovery 1 Annual Analyst Meet 9
Slide 20: MAFIL – Vehicle and Equipment Finance Senior Management
MAFIL – VEHICLE AND EQUIPMENT FINANCE | SENIOR MANAGEMENT Mr. Digbijay Mr. Hemant Patil Mr. Sathyanarayan Rao Mr. Ajay Shelke Bandyopadhyay CAR Business Head FE Business Head TW Business Head CV & CE Business Head • BFSI Experience of 20 • BFSI Experience of 26 • BFSI Experience of 26 • BFSI Experie
Slide 21: MSME & Allied Business
MSME & Allied Business MSME & Allied Business
Slide 22: Evolution of MSME and Allied Business
EVOLUTION OF MSME AND ALLIED BUSINESS AUM reached the level of Rs 2639 Verticals turned to be crores. Growing profitable, and AUM portfolio with stable reached Rs 1945 asset quality (1.9% crores level with GNPA). For secured AUM reached the good asset quality. business GNPA of level of Rs 871 Each d
Slide 23: Key Strengths
KEY STRENGTHS Nationwide presence in Rural & Semiurban locations Scalability of Business with Cross-Sell Good Asset Quality Self-reliant Business -Operational Autonomy Advanced Technology Integration Good Governance & Management 2 Annual Analyst Meet 3
Slide 24: MSME & Allied Business
MSME & ALLIED BUSINESS MSME Micro Home Finance Secured Personal Loan • Focused on giving loans to self • Focused on giving loans to self • Focused on giving loans to self employed / business individuals employed Non-professionals, Salaried employed professionals & Non- who primarily include traders,
Slide 25: Origination & Sourcing of Loans
ORIGINATION & SOURCING OF LOANS Direct sourcing through our employees and most of the leads generated through direct marketing activities. Cross selling to existing gold loan customers having good track record (60-65% gold loan customers). Digital marketing campaigns through social media like Facebo
Slide 26: Underwriting of Loans
UNDERWRITING OF LOANS Decentralized underwriting and disbursement for lower ticket size loans in branch level. Minimum 2 level assessment of collateral by Sales Executive and Branch Credit Head. External evaluation on need-basis. Well experienced employees imparted with online and on the job trainin
Slide 27: Ensuring Asset Quality
ENSURING ASSET QUALITY Post Disbursement 100% Oversight done by; ▪ Regional Operation Head (within 72 Hrs of Disbursement.) ▪ Regional Credit Head (within 72 Hrs of Disbursement.) ▪ Regional Civil and Legal oversight (100% of the files disbursed in previous month) ▪ National Operation Head 30% of th
Slide 28: Customer Service Collection
CUSTOMER SERVICE COLLECTION Strong customer relationship management with dedicated in-house local collection team. CRM tool integrated with loan management system to built relationship with customer from beginning Relationship officer is assigned to each customer immediately on loan disbursal and sa
Slide 29: Lending Indicators
LENDING INDICATORS Parameters MSME Micro HF Secured PL Average LTV % 32% 33% 35% Average Customer Income Monthly (Rs) 58,000 42,800 30,600 Average EMI -Rs 14,800 12,800 11,500 Average Ticket Size (Lakhs) 5.9 5.2 4.2 EMI to Income Ratio 26% 30% 38% 2 Annual Analyst Meet 9
Slide 30: MSME and Allied Business Updates (Secured)
MSME AND ALLIED BUSINESS UPDATES (SECURED) AUM EVOLUTION (Rs Cr) Ticket Size (Rs Lakhs) Disbursement (Rs Cr) 497 2,297 441 440 2,043 5.5 5.5 5.2 5.1 5.2 1,735 4.7 364 1,384 1,147 249 980 210 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q1 FY23 Q2 FY
Slide 31: MSME and Allied Business Updates (Secured)
MSME AND ALLIED BUSINESS UPDATES (SECURED) AUM EVOLUTION (Rs Mn) AUM MIX (%) MSME Micro-Housing Secured PL ATS (INRL) Yield 22,973 20,430 14% 13% 19% 18% 19% 19% 19% 19% 17,349 17,349 20% 26% 13,842 4.2 21% 38% 38% 39% 38% 38% 37% 11,474 9,801 8,277 5.5 19% 65% 61% 2,505 43% 43% 43% 43% 43% 44% 5.9
Slide 32: MSME and Allied Business Updates
MSME AND ALLIED BUSINESS UPDATES AUM EVOLUTION (Rs Mn) AUM MIX (%) MSME Micro-Housing Secured PL Unsecured PL ATS (INRL) Yield 26,388 4% 5% 7% 9% 0.7 25% 11% 11% 13% 12% 23,196 16% 18% 17% 17% 17% 17% 17% 19,447 19,447 18% 22% 4.2 21% 15,262 33% 36% 35% 35% 35% 32% 12,348 35% 10,415 8,713 5.5 19% 58
Slide 33: MAFIL – MSME and Allied Business Senior Management
MAFIL – MSME and Allied Business| SENIOR MANAGEMENT Micro Home Finance MSME Secured Personal Loan Each Divisions leading by separate Business Head along with various functional heads in Credit, Operations, Risk, Audit, Vigilance and MIS. Mr. Ratheesh PM – Business Mr. Vijayakumar KB- Business Mr. Vi
Slide 34: Manappuram Home Finance Limited
MANAPPURAM HOME FINANCE LIMITED
Slide 35: Manappuram Home Finance Ltd – Our Journey
MANAPPURAM HOME FINANCE LTD – Our Journey 2014 Acquired the Company named Milestone and changed its name as Manappuram Home Finance Pvt Limited in 2014 2015 Started operations in January. Shifting of registered office to Kerala from Maharashtra 2015 2016 Opened 33 branches in 7 States booked AUM 201
Slide 36: Business Updates for Q2FY24
BUSINESS UPDATES FOR Q2FY24 42% YoY 90% YoY 50% YoY Rs. 1,305 Crore Rs. 165 Crore 23,308 Assets Under Disbursement No. of Customers Management 1,555 47.42% Rs. 84 Lakhs Employees LTV AUM on Employees Rs. 5.94 Lakhs 17.58% 1.43% Avg Ticket Size Yield on AUM ROA 3 Annual Analyst Meet 6
Slide 37: Our Customers
OUR CUSTOMERS Self Employed Non Informal Formal AUM BY OCCUPATION Professionals Salaried Salaried 3% 20% Self employed non professionals Informal Salaried customers Individuals their salary is does not have any proper income having challenge to approach not fully meet the need of documents to show c
Slide 38: Our Value Propositions
OUR VALUE PROPOSITIONS Who are our customer •Middle level income customers •Self Employed & informal Salaried •New to credit •First time home buyers Access • Understanding customer's needs via well trained sales executives Customer needs • Suggesting right size of loans through holistic evaluation o
Slide 39: Manappuram Home Finance Ltd – Who are we
MANAPPURAM HOME FINANCE LTD – Who are we ▪ Affordable housing finance company with presence in 12 states. ▪ Focused business area tier 3 and tier 4 cities. ▪ Home loans to first time home buyers with focus on self employed and informal individuals having income Rs.35k pm. ▪ 65% of book comprise of h
Slide 40: Sourcing
SOURCING Sourcing Channels ❑ MAFIL (Gold Loan Branches) ❑ Asirvad (Micro Finance Branches) ❑ Referral Agents ❑ Construction Community ❑ Marketing Activities ❑ Social Media ❑ DSA Decentralized Underwriting ❑ Digital onboarding and verification of initial set of documents.(KYC , BEAURO Reports, HUNTER
Slide 41: Credit Underwriting Process
CREDIT UNDERWRITING PROCESS Risk Control Mechanisms ❑ Lower LTV ❑ Lower loan tickets ❑ Local understanding of profile and properties ❑ Centralized Credit monitoring ❑ Centralized Operations Oversight Collection Mechanisms ❑ NACH Activated customers 94% ❑ Customer Relationship Team helping to make a
Slide 42: Asirvad Microfinance
ASIRVAD MICROFINANCE MSME & Allied Business
Slide 43: Evolution of Asirvad Micro Finance
EVOLUTION OF ASIRVAD MICRO FINANCE Backed by Manappuram Finance providing strong financial and operational support Built to take advantage of the large addressable market and credit gap Deep understanding of customer behavior; strong knowledge of the local market and regional dynamics AUM Growth: 30
Slide 44: Most Diversified MFI in Terms of Geographical Spread
MOST DIVERSIFIED MFI IN TERMS OF GEOGRAPHICAL SPREAD WITH STRONG SOURCING CAPABILITIES Wide network of branches AUM Mix Q1FY24 14% 1738 branches 29% 13% 22 states, 4 UTs & 450 districts 5% 11% 6% 7% 9% 8% Tamil Nadu Bihar West bengal Karnataka Uttar Pradesh Rajasthan MP Kerela Others Branch Mix Q1FY
Slide 45: Most Diversified MFI in Terms of Geographical Spread
MOST DIVERSIFIED MFI IN TERMS OF GEOGRAPHICAL SPREAD WITH STRONG SOURCING CAPABILITIES Lowest share of Top 3 States in AUM & widest presence (FY 23) MANAPPURAM TODAY COMPANY DNA Target: No District with >1% concentration 74% >1% in AUM 53% 55% 48% Target: No State with >10% concentration 37% >10% in
Slide 46: Prudent Risk Management – Underwriting
PRUDENT RISK MANAGEMENT WITH CRISIS TESTED UNDERWRITING AND COLLECTION CAPABILITIES - UNDERWRITING Expertise in underwriting MANAPPURAM TODAY MFI customers basis combination of traditional and alternate COMPANY data DNA House Income & ID Proof Assets Existing EMI Type Expenditure Data Gathering Data
Slide 47: Prudent Risk Management – Collections
PRUDENT RISK MANAGEMENT WITH CRISIS TESTED UNDERWRITING AND COLLECTION CAPABILITIES - COLLECTIONS Collection Strategy Digital Collection Capabilities MANAPPURAM TODAY COMPANY DNA INR 930 Cr Digital Collection - Monthly Collection Model (FY 22-23) - Physical visit by FDAs to collection cash - Pre-det
Slide 48: Thank You
Thank You Manappuram Finance Limited, IV / 470 (old) W638A (New), Manappuram House, Valapad, Thrissur Kerala, India, Pin code : 680567 Mrs. Bindu A.L. Mr. Susil Kumar Mishra Nikunj Seth CFO Head – Investor Relations & Treasury Het Choksey Advisors Contact No: +914873050000 Contact No : +919967405163