Iifl Finance Limited · NSE:IIFL
Iifl Finance — Q2 FY2021 Earnings Presentation
53 slides from Iifl Finance's earnings presentation, Nov 3, 2020
Slide 1: Cover letter to stock exchanges
IIFL FINANCE November 03, 2020 The Manager, The Manager, Listing Department, Listing Department, BSE Limited, The National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Tower, Exchange Plaza, 5 Floor, Plot C/1, G Block, Dalai Street, Bandra - Kurla Complex, Bandra (E), Mumbai 400 001. Mumbai 4000
Slide 2: Press Release: Results update
IIFL Finance Limited Press Release For immediate publication Mumbai, India November 3, 2020 Results update -PPOP for Q2FY21 at Rs 563 Cr (up 42% q-o-q and 103% y-o-y) -PAT for Q2FY21 at Rs 205 Cr (up 582% q-o-q and 178% y-o-y) - Income for Q2FY21 at Rs 857 Cr (up 27% q-o-q and 45% y-o-y) For the qua
Slide 3: Press release: AUM, asset quality and segment commentary
IIFL Finance had loan assets under management of Rs 40,843 Cr as at September 30, 2020, with the home loans segment constituting 32%, business loans 19%, gold 28% and microfinance 8% of the total AUM. The company’s annualized ROE and ROA for Q2FY21 stood at 17.1% and 2.4% respectively. The company r
Slide 4: Liquidity update and awards
Liquidity Update During the quarter, we raised Rs 1,402 Cr through term loans and refinance from banks. Loans of Rs 2,702 Cr were securitized/assigned during the quarter. Cash and cash equivalents and committed credit lines from banks and institutions of Rs 4,927 Cr were available as on September 30
Slide 5: About IIFL
About IIFL IIFL Finance Limited (Erstwhile “IIFL Holdings Limited”) (Bloomberg Code: IIFL IN, NSE: IIFL, BSE: IIFL) is one of the leading players in the Indian financial services space. Prior to the Composite Scheme of Arrangement (effective May 2019), IIFL Finance Limited was engaged in the busines
Slide 6: Quarterly Review IIFL Finance Limited
Quarterly Review Quarter ended September 30, 2020 (Q2FY21) IIFL Finance Limited Bloomberg: IIFL IN November 3, 2020
Slide 7: Agenda
1 Q2 FY21 2 Review of Financial key business performance segments 3 4 Strategy Corporate & update ESG
Slide 8: Key highlights for the quarter ended September 2020
Key highlights for the quarter ended September 2020.. Loan AUM RoE / RoA Profit after tax ₹40,843 Cr 17.1% / 2.4% ₹205 Cr Up 7% q-o-q Previous quarter 2.6% / 0.4% Up 582% q-o-q Cost to Income Gross / Net NPAs Provision coverage ratio* 34% 1.81% / 0.77% 114% Previous quarter 41% Previous quarter 1.95
Slide 9: IIFL Finance – Consolidated results (as per IND AS)
IIFL Finance – Consolidated results (as per IND AS) Quarter and half-year ended September 30, 2020 (NBFC, HFC and MFI) ` Cr Q2FY21 Q1FY21 Q-o-Q Q2FY20 Y-o-Y H1FY21 H1FY20 Y-o-Y Loan book 29,845 28,350 5% 24,907 20% 29,845 24,907 20% Assigned assets 10,998 9,985 10% 10,100 9% 10,998 10,100 9% Assets
Slide 10: Income analysis (Consolidated as per IND AS)
Income analysis (Consolidated as per IND AS) Quarter and half-year ended September 30, 2020 (NBFC, HFC and MFI) ` Cr Q2FY21 Q1FY21 Q-o-Q Q2FY20 Y-o-Y H1FY21 H1FY20 Y-o-Y Interest income 1,186.3 1,095.1 8% 932.8 27% 2,281.4 1,974.2 16% Interest expense (640.9) (622.5) 3% (581.7) 10% (1,263.3) (1,199.
Slide 11: IIFL Finance – Consolidated Balance sheet
IIFL Finance – Consolidated Balance sheet Unaudited as at September 30, 2020 (NBFC, HFC and MFI) ASSETS ₹ Cr LIABILITIES AND EQUITY ₹ Cr 1 Financial Assets 1 Financial Liabilities (a) Cash and Bank Balances 3,944 (a) Payables 131 (b) Receivables 26 (b) Borrowings (c) Loan Assets 29,539 - NCDs 12,314
Slide 12: Consistent financial performance and growth over years
Consistent financial performance and growth over years Loan AUM (₹ Cr) Total comprehensive income (₹ Cr) Annual Quarterly Annual Quarterly ● Average cost of borrowing declined 36 38,335 40,843 701 37,951 bps y-o-y and 23 bps 34,904 31,228 q-o-q 463 497 22,281 423 19,514 339 ● NIM on Balance Sheet 20
Slide 13: Robust and improving financial position
Robust and improving financial position Return on assets (%) Return on equity (%) Annual Quarterly Annual Quarterly Annualized ● ROE annualized has 16.9% 17.5% 17.1% 15.2% bounced back to nearly 13.3% FY19 level at 17.1%, 2.4% 11.1% 2.2% 1.9% 2.0% driven by ROA of 2.4% 1.6% 1.5% 2.5% 0.4% ● Capital
Slide 14: Diversified and granular asset portfolio
Diversified and granular asset portfolio Diversified AUM portfolio disperses exposure and balances cyclical vagaries (₹ Cr) 9,867 16,176 22,281 34,904 37,951 40,843 1% 2% 1% 2% 8% Commercial Vehicle 13% 7% Microfinance 9% 8% Capital Markets 10% 5% 1% 35% Home Loan 33% 32% 20% 24% 42% Commercial & Re
Slide 15: Loans sourced through own network
Loans sourced through own network .. 85% of branches are in Tier 2 and Tier 3 locations Wide spread network across 25 states and over 600 locations, with over 17000 employees Number of branches 2,377 2,383 1,947 1,161 Mar'15 Mar'19 Mar'20 Sep'20 Regional split of branches South, 35% West, 39% Open b
Slide 16: Superior asset quality maintained through cycles
Superior asset quality maintained through cycles…. Gross NPA (%) Net NPA (%) ● GNPA as at Q2FY21, was 1.81% and NNPA was 150 120 150 120 90 DPD 90 DPD 90 DPD 90 DPD 0.77% DPD DPD DPD DPD ● Under IndAS, provision coverage (incl. standard 2.31% assets provision) on NPAs 1.82% 1.71% 1.96% 1.95% 1.81% 0
Slide 17: Asset quality standards maintained in all business segments
Asset quality standards maintained in all business segments Credit quality has been steady across key product segments Core growth segments Synergistic segments Home loans Business loans Construction & Real Estate finance Gross NPAs (%) Gross NPAs (%) Gross NPAs (%) 4.4% 1.4% 1.4% 1.4% 3.8% 3.7% 3.3
Slide 18: Conservative provisioning across all segments
Conservative provisioning across all segments .. As at September 30, 2020 (NBFC, HFC and MFI) Loan Book Provision % Total Business Stage 1 Stage 2 GNPA Total Stage 1 Stage 2 GNPA Provision Home Loans 7,790.8 108.3 111.6 8,010.7 1.1% 13.3% 20.0% 124.9 Business Loans 5,633.3 397.3 200.6 6,231.1 3.0% 2
Slide 19: Collection efficiency is close to pre-Covid levels
Collection efficiency is close to pre-Covid levels.. Quarter ended September 30, 2020 (NBFC, HFC and MFI) IIFL Finance core product collection efficiency numbers (%)* 97% 98% 96% 96% 99% • With the moratorium 96% over in September 86% 86% 91% 94% 2020, collection 78% 77% 77% 75% 82% 78% efficiency f
Slide 20: Loan disbursements across segments have bounced back
Loan disbursements across segments have bounced back to nearly pre Covid levels Disbursement trends (` In Crs) Gold Loan Home Loan • Our Disbursements volumes for Home Loan and Gold Loan for Q2FY21 are 5,024 5,682 863 693 750 higher than pre 3,312 3,603 3,924 595 2,107 350 267 Covid levels Q1FY20 Q2
Slide 21: Well diversified liability profile
Well diversified liability profile.. Resource profile is well diversified, with increasing share of bank loans Outstanding borrowing (` Crs) Bonds/ NCDs investors split (%) 15,395 17,982 24,539 25,727 24,995 26,170 Retail Domestic , Others, 20.3% 8.2% CBLO Special Liquidity Finance Foreign Mutual In
Slide 22: Structural Liquidity- Surplus across all buckets
Structural Liquidity- Surplus across all buckets ` in Crores Surplus/ (Deficit) as a % of outflow (cumulative) 301% 114% 50% 55% 80% 45% 10% 9% 0% 38,940 32,431 38,940 29,290 29,635 20,366 26,617 14,288 14,052 9,194 6,685 4,580 7,938 3,599 5,925 4,449 897 2,144 Up to 14 days 1 month 2 months 3 month
Slide 23: Debt repayment obligation schedule, well covered
Debt repayment obligation schedule, well covered ` in Crores 9,000 Cash & cash equivalents as on September 30, 2020 3,944 Earmarked cash & cash equivalents (1,725) 8,000 8,169 Free cash & cash equivalents 2,219 7,330 Liquid investments/unutilised CC (+) 488 7,000 Undrawn credit lines (+) 2,220 6,561
Slide 24: Quarterly resource raising trend
Quarterly resource raising trend Term Loan/Refinance Bonds Assignment/Securitisation ` in Crores 6,862 5,445 5,024 2,308 4,104 2303 3721 2,856 1,882 2702 975 450 877 1,746 1,699 275 825 1,274 730 577 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 During the quarter: Raised ₹ 1,402 Cr through term loans and re
Slide 25: Agenda
1 Q2 FY21 2 Review of Financial key business performance segments 3 4 Strategy Corporate & update ESG
Slide 26: Our product portfolio
Our product portfolio As on September 30, 2020 Strategic focus on segments that are core strengths and have inter se synergies AUM (₹ Cr) Target customers Unique features Salaried / Self-employed Focused on affordable and non-metro housing segments 12,891 individuals Leverages underwriting ski
Slide 27: Home loans – product overview
Home loans – product overview Affordable home loan Product Non-metro housing loan offering For home purchase, home renovation, home construction and plot purchase Affordable home loan: Salaried and self employed segment wherein household income is below ₹75k pm and are buying Customer proper
Slide 28: Home loans – financial overview
Home loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) Self Employed Salaried 2,700 5,300 8,579 12,197 12,443 12,891 10.8% 35% 41% 10.4% 48% 54% 58% 59% 10.3% 10.1% 9.8% 9.3% 65% 59% 52% 46% 42% 41% FY16 FY17 FY18 FY19 FY20 Q2FY21 FY16 FY17 FY18 FY19 FY20 Q2FY21 Average
Slide 29: Business loans – product overview
Business loans – product overview Product For business loans backed by cash flows offering Collateral must for loans of more than ₹ 50 Lakh; LTV up to 70% MSME customers having established business performance Customer Lending to manufacturing, trading and service sectors for working capital
Slide 30: Business loans – financial overview
Business loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 8,117 7,805 7,899 7,361 19.6% 6,000 16.3% 16.5% 5,100 13.4% 13.5% 14.3% FY16 FY17 FY18 FY19 FY20 Q2FY21 FY16 FY17 FY18 FY19 FY20 Q2FY21 Onboarding Average Ticket Size (₹ Lakhs) Gross NPAs (%) 89.0 3.7% 83.0 3.2%
Slide 31: Gold loans – product overview
Gold loans – product overview Product Loan against jewellery provided for personal & business use; offering On-boarding LTV < 70% Customer Salaried, self-employed and MSME businesses segments 70% are repeat customers Onboarding AUM Gross/Net NPA Tenor 96% Collection Efficiency Average Ticket
Slide 32: Gold loans – financial overview
Gold loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 11,386 9,125 19.2% 19.6% 19.1% 18.7% 18.1% 18.1% 6,195 4,037 2,914 2,910 FY16 FY17 FY18 FY19 FY20 Q2FY21 FY16 FY17 FY18 FY19 FY20 Q2FY21 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 58 56 53 52 46 48 0.6%
Slide 33: Microfinance – product overview
Microfinance – product overview Product Small-ticket loans for purpose of income generation activities offering Customer Target segment is rural and semi-urban self-employed women formed into joint liability groups segments AUM Gross/Net NPAs States Total Customers Tenor 78% Collection Efficienc
Slide 34: Microfinance – financial overview
Microfinance – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 3,460 3,400 2,286 25.9% 24.4% 23.5% 840 22.6% 22.0% 22.1% 110 238 FY16 FY17 FY18 FY19 FY20 Q2FY21 FY16 FY17 FY18 FY19 FY20 Q2FY21 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 33 1.8% 27 1.5% 21 23 17 15
Slide 35: Construction & real estate projects analysis
Construction & real estate projects analysis basis 50 projects, with total principal outstanding of ₹4,023 Cr as at Q2FY21, accounting for 91% of IIFL CRE loans have been analyzed in detail. The balance 9% of CRE book is represented by very small projects. The analysis is based on stage of project c
Slide 36: 93% of finance is for residential projects
93% of finance is for residential projects, and 73% of projects are in advanced stages of completion Stages of construction No. of POS as at Stage projects 30 Sep % to total • 73% of funded projects are in Residential 47 3,740 93% advanced stages of completion or are already completed Land stage 1 7
Slide 37: Affordable residential projects contribute 77%
Affordable residential projects contribute 77% Project mix No. of POS as at What is the definition of Affordable Residential? Figs in Cr projects 30 Sep % to total •Projects where unit sales realisation is less than 2 Residential 47 3,740 93% Cr in Mumbai, less than 1 Cr in Delhi, Bengaluru, Afforda
Slide 38: High velocity suburbs of Mumbai and Gurgaon
High velocity suburbs of Mumbai and Gurgaon have 61% of funded projects Geography mix No. of POS as at Figs in Cr % to total projects 30 Sep Mumbai 16 2,097 52% Gurgaon 9 381 9% Noida 2 370 9% Delhi 2 351 9% Pune 5 223 6% Banglore 3 199 5% Hyderabad 2 120 3% Jaipur 3 93 2% Bhiwandi, Thane 1 79 2% Gh
Slide 39: 93% of funded developers have over 10 years track record
93% of funded developers have more than 10 years of successful track record RE Experience of Developers Relationship with IIFL No. of POS as at No. of No. of POS as at No. of No. of years No. of years projects 30 Sep Developers projects 30 Sep Developers 5-9 yrs 5 284 5 10-14 yrs 10 684 5 1-3 yrs 7
Slide 40: Agenda
1 Q2 FY21 2 Review of Financial key business performance segments 3 4 Strategy Corporate & update ESG
Slide 41: Business transformation update
Business transformation update Lending Institution to Lending Platform Loan assets assigned/ securitized (₹ Cr) transformation envisages a new business model which is Capital Optimized Value Innovation Assignment Securitisation 13,446 Driven (COVID) 11,793 1,605 9,275 1,889 While banks have capital
Slide 42: IIFL is uniquely placed for win win partnerships
IIFL is uniquely placed for win win partnerships IIFL Finance current partners IIFL is uniquely placed due to its Banks: Vast branch network to source, service & collect Strong online presence and proprietary technology Large base of existing customers Culture of innovation Win-Win propositi
Slide 43: Strategy for the emerging business model
Strategy for the emerging business model Operating Leverage Financial Leverage Physical branches Customer Co-lending and assignment to Gold loan custody ownership banks Fintech partners – Focussed on retail priority loans Sourcing / Underwriting with good demand from banks Digital properties Build t
Slide 44: Agenda
1 Q2 FY21 2 Review of Financial key business performance segments 3 4 Strategy Corporate & update ESG
Slide 45: Distinguished Board of Directors
Distinguished Board of Directors IIFL Finance – Board of Directors Nirmal Jain, Chairman & Whole-time Director R Venkataraman, Managing Director MBA from IIM Ahmedabad, rank-holder CA MBA from IIM Bangalore, B-Tech from IIT and Cost Accountant. Worked with Unilever for Kharagpur 5 years Worked
Slide 46: Management team and marquee investors
Management team with rich domain Marquee investors experience IIFL Finance Chief Financial Officer Rajesh Rajak Chief Risk Officer Sanjeev Shrivastav Compliance Officer Sneha Patwardhan IIFL Finance Limited Chief Strategy Officer Anujeet Kudva Public & Others IIFL Home Finance 18.8% Promoters 24.9%
Slide 47: Key digital initiatives during the quarter
Key digital initiatives during the quarter.. IIFL Finance is now launched on India’s leading payment platforms - Paytm, PhonePe, Bhim & Mobikwik to enable customers to pay their dues handily.. During the quarter, we have integrated our Sales Mobile Application with real time ITR validation, docume
Slide 48: Environment, Social and Governance (ESG) Initiatives
Environment, Social and Governance (ESG) Initiatives • As a responsible corporate, IIFL Finance aims to deliver sustainable growth through financial products and services that help satisfy unmet societal needs, enable a thriving society, conserve environment and create long-term value for all • The
Slide 49: ESG – Key environment initiatives
ESG – Key environment initiatives • Pioneered Green Building concept in partnership with housing developers through "Kutumb" platform Total numbers of Green projects – • It provides industry experts and housing developers, a platform to promote sustainable infrastructure. The benefits of Green build
Slide 50: ESG – Key Social Initiatives
ESG – Key Social Initiatives Sakhiyon ki Badi (Rajasthan) Covid-19 relief IIFL Foundation’s Sakhiyon ki Badi are community based learning centers operating across 11 districts of Rajasthan, aiming towards eradication of Female Illiteracy. This To help battle the Covid-19 crisis for flagship initiati
Slide 51: IIFL's brand and credibility recognized at various forums
IIFL’s brand and credibility recognized at various forums The Economic Times recognized IIFL Finance Limited' has been our Chairman as one of the 'Most awarded the ‘Golden Peacock Award IIFL Finance Promising Business Leaders of for Risk Management’ for 2019 receives Asia' for demonstrating exemplar
Slide 52: Rohit Sharma is IIFL Finance's Brand Ambassador
Ace cricketer Rohit Sharma is IIFL Finance’s Brand Ambassador #SeedhiBaat The language of money is at its elegant best when done the 'SeedhiBaat‘ way : By keeping our loan products simple; and the process transparent. By valuing the customer above all else; and displaying an un-wavering commitment t
Slide 53: Thank you
Thank you Published in November 2020 IIFL Finance Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate, Thane – 400604. This report is for information purposes only and does not construe to be any investment, legal or tax