Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q1 FY25 Earnings Presentation
54 slides from Nippon Life India Asset Management's earnings presentation, Jul 19, 2024
Slide 1: Exchange cover letter for investor presentation
July 19, 2024 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, Fort, Mumbai 400 001 G Block, Bandra Kurla Complex, BSE Scrip Code: 540767 Bandra (East), Mumbai 400 051 NSE Scrip Symbol: NAM-INDIA Dear Sir(s), Sub.:
Slide 2: Investor Presentation – Q1 FY25
Investor Presentation – Q1 FY25 Jul-2024
Slide 3: Agenda
Agenda 1 Macro Trends 2 Industry 3 Nippon Life India Asset Management Limited 4 ESG Focus 5 Financial Overview 6 Annexure 2
Slide 4: Macro Trends
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Slide 5: Industry AUM has grown rapidly over the last decade
Industry AUM has grown rapidly over the last decade CAGR for MF AUM: 20% MF AUM (INR trillion) 19% % of GDP 16% 16% 15% 13% 12% 11% 11% 9% 9% 7% 55.0 37.7 40.0 32.2 22.7 24.6 24.7 18.6 12.1 13.6 9.0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Source: RBI, SEBI, MOSPI Note: a) AUM is based
Slide 6: Under-penetration presents significant growth potential
Under-penetration presents significant growth potential MF AUM/GDP 123% 96% 79% 83% 65% 61% 53% 60% 17% World Brazil Canada Germany India Japan Sweden United United Kingdom States Unique MF investors 3.1% ▪ Mutual Fund penetration in India is 2.6% low as % of GDP vs global average 2.4% 1.5% 1.6% ▪ S
Slide 7: Key enablers – Robust economic growth
Key enablers – Robust economic growth CAGR: 10% India GDP (INR trillion) YoY growth 18% 16% 13% 12% 11% 10% 11% 11% 8% 6% 272 294 235 189 201 198 154 171 -1% 112 125 138 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 ▪ India is now the 5th largest economy in the world ▪ GDP growth rate is am
Slide 8: Key enablers – Financialization of Savings
Key enablers – Financialization of Savings Gross Financial Savings (INR trillion) CAGR: 11% % of Household Savings 68.1% 60.5% 62.4% 58.9% 60.5% 59.9% 57.9% 55.1% 52.1% 51.5% 47.6% 31 30 23 26 15 16 21 23 11 12 13 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 No. of demat accounts (mn) ADTO
Slide 9: Key enablers – Favourable Demographics
Key enablers – Favourable Demographics ~60% of India’s population is in the working age group 65 yrs and above 7% 0-14 yrs 45-64 yrs 27% 20% 15-44 yrs 46% Source: NFHS-5; 2019-21 statistics 8
Slide 10: Key enablers – Increased awareness
Key enablers – Increased awareness Investor education and awareness initiative by AMFI The initiative has reached out to Indians across states and languages through TV, Digital, Print and other media 9
Slide 11: Key enablers – Easy accessibility
Key enablers – Easy accessibility Smartphone penetration in India UPI transaction volumes (mn) CAGR: 89% 75% 1,312 66% 71% 61% 54% 46% 838 35% 29% 460 19% 23% 54 223 125 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 FY19 FY20 FY21 FY22 FY23 FY24 ▪ Smartphone penetration (% of population) in Indi
Slide 12: Industry
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Slide 13: Quarterly AUM
Quarterly AUM Industry AAUM (INR trillion) 7.28%* 7.97%* 8.20%* 43.1 54.1 59.0 12.4% 12.3% 12.3% 13.1% 10.8% 10.1% 22.8% 18.9% 18.2% 51.8% 58.0% 59.4% Jun-23 Mar-24 Jun-24 Equity Debt Liquid ETFs ▪ Proportion of Equity assets have increased over the last year ▪ Increase in Equity assets has been aid
Slide 14: Segment-wise Mix and Geographic Spread
Segment-wise Mix and Geographic Spread Segment-wise AUM T-30/B-30 AUM B-30 18% Retail 27% HNI 34% Corporate 39% T-30 82% ▪ Individual segment contributes to 61% of AUM ▪ B-30 locations contribute 18% of AUM Source: AMFI Data based on MAAUM for the last month of the quarter 13
Slide 15: Systematic Investments
Systematic Investments Monthly SIP flows (INR bn) SIP folios (mn) 84 90 193 213 67 147 Jun-23 Mar-24 Jun-24 Jun-23 Mar-24 Jun-24 SIP AUM (INR bn) ▪ Steady growth witnessed in the monthly SIP flows (+44% YoY) ▪ At INR 213 bn, Jun-2024 recorded all- 12,438 time high monthly SIP flows 10,717 7,936 ▪ SI
Slide 16: Nippon Life India Asset Management
Nippon Life India Asset Management 15
Slide 17: NAM India at glance
NAM India at glance One of the largest Asset Managers in India, with track record of ~30 years NAM India Mutual Funds Managed Accounts International AUM INR 5,069 bn* INR 815 bn INR 6.04 trn* INR 151 bn (Advisory INR 23 bn) Locations Distributors Folios Employees Reach 263 1,04,300+ 26.3 mn 1,046 Un
Slide 18: Key Highlights (1/2)
Key Highlights (1/2) Rank 1 Maintained industry ranking of 4th Largest AMC based on QAAUM No.1 Non-Bank Sponsored MF in India AAUM Jun-24 QAAUM - INR 4,838 bn, up 54% YoY & Investor Folio Base 2 12% QoQ 3 Highest Investor Base – 26.3 mn Market share at 8.20% | +93 bps YoY / +24 bps QoQ Added 2.0 mn
Slide 19: Key Highlights (2/2)
Key Highlights (2/2) ETF Profitability 6 Mar-24 QAAUM - INR 1,295 bn 7 Q1 FY25 Profit After Tax at INR Market share at 17.8% (+108 bps QoQ) 3.32 bn (+41% YoY / -3% QoQ) Digital Customer Centricity 2.8 mn Digital transactions in Q1 FY25 One of the Lowest Investor 8 9 Contributed 68% to overall purcha
Slide 20: Diversified Business
Diversified Business Comprehensive Product bouquet AUM spread across asset classes Offerings across MF, AIF/PMS and Offshore Equity constitutes 50% of MF AUM Diverse MF offerings in active/passive space ETFs constitute 27% of MF AUM Wide reach Strong Physical & Digital Distribution Largest investor
Slide 21: AUM spread across asset classes
AUM spread across asset classes QAAUM (INR bn) 3,136 4,313 4,838 23.5% 25.9% 26.8% 11.4% 9.1% 8.5% 20.5% 15.8% 14.9% 44.5% 49.2% 49.8% Jun-23 Mar-24 Jun-24 Equity Debt Liquid ETFs ▪ Share of Equity AUM has increased over Jun-2023 level to 50% ▪ Share of ETF AUM has increased over Jun-2023 level to 2
Slide 22: Optimal mix of Investors
Optimal mix of Investors MAAUM (INR bn) 3,265 4,420 5,093 44% 42% 42% (7.5%)* (8.5%)* (8.9%)* 27% 28% 28% (6.0%)* (6.7%)* (6.9)* 30% 30% 30% (8.7%)* (9.1%)* (9.2%)* Jun-23 Mar-24 Jun-24 Retail HNI Corporate Investor segment-wise AAUM ▪ NIMF’s Retail share at 30% is higher Retail NIMF than the indust
Slide 23: Wide Reach
Wide Reach B-30 AAUM/Total AAUM B-30 Folios (mn) 11.8% 12.2% 11.8% NIMF 19.6% 9.8 10.3 7.8 Industry 18.1% Jun-23 Mar-24 Jun-24 B-30 MAAUM (INR bn) 8.3% 8.8% 9.0% 999 862 631 Jun-23 Mar-24 Jun-24 Source: AMFI; 22 Calculated on MAAUM
Slide 24: Wide Reach
Wide Reach Unique Investors (mn) Total Folios (mn) 36.9% 37.0% 37.4% 13.5% 13.7% 13.8% 16.5 17.5 24.3 26.3 14.1 20.1 Jun-23 Mar-24 Jun-24 Jun-23 Mar-24 Jun-24 Overall Distribution Mix ▪ NIMF has the largest investor base in the industry Distributed ▪ NIMF’s market share in terms of total Direct Asse
Slide 25: Strong Physical Distribution
Strong Physical Distribution Total base of empaneled distributors rose to over 1,04,300 with highest single Distributor concentration at ~5% of assets 97 78 87 1,04,100+ Banks National Alternate Mutual Fund Distributors (incl. PSU banks) Distributors Distributed Assets (channel-wise) Distributed Ass
Slide 26: Focused Business Verticals for various segments
Focused Business Verticals for various segments Key Clients Group (KCG) ▪ Experienced Institutional sales team managing specific target segment of clients with focused business approach by maintaining relationship with Large corporate groups, Banks and financial Institutions and aim to enhance marke
Slide 27: All-inclusive and fully capable Digital Ecosystem
All-inclusive and fully capable Digital Ecosystem Digi Serve: Investor Features: 1. Update Email ID /Mobile No/FATCA/DOB 1. Family Portfolio 2.Update/Add/Delete Nominee 2. Cart Buying 3. Statement of Account & Account Balance 3. Risk assessment 4. Mandate Registration 4. Goal Planner 5. Bank details
Slide 28: Strong Digital Presence
Strong Digital Presence Lumpsum & New SIP Registration Digital Purchases (mn)* Q1 FY25 2.82 2.8X Q1 FY24 1.06 Digital Business 68% Digital 30/min Every two seconds 2.82 Mn Q1 FY25 transactions Q1 FY25 contribution to Q1 FY25 a Lumpsum (New Purchase + total NIMF Purchase or a New New SIP Purchases &
Slide 29: Steady Systematic Transactions
Steady Systematic Transactions Quarterly Systematic Book (INR bn) Q1 FY25 Book (INR bn) 70.1 75.3 59.3 47.2 24.1 25.4 25.8 32.2 34.3 20.1 21.3 22.8 25.6 29.1 17.5 18.8 Apr-24 May-24 Jun-24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 FY24 FY24 FY25 SIP acc
Slide 30: Comprehensive Product Bouquet
Comprehensive Product Bouquet Mutual Fund AIF 20 schemes Active Passive Public Equity 43 schemes 43 schemes Real Estate Credit Equity Equity (Index Market Cap based Funds/ ETFs) Structured Credit Sector Broad Market Thematic Sector Tech VC International Thematic/Strategy International Fixed Income O
Slide 31: ETF - Leadership position maintained
ETF - Leadership position maintained One of the largest bouquet of 25 ETFs in the industry across Equities, Debt & Commodities 61% 60% 18% INR 1,295 bn INR 109 bn Volume Share* Share of folios^ Market Share^ ETF QAAUM Gold ETF QAAUM NSE volume (Apr - Jun 2024) (INR mn)** Nifty 50 ETFs Nifty Bank ETF
Slide 32: Nippon India Alternative Investments (NIAIF)
Nippon India Alternative Investments (NIAIF) Total Commitment Raised (Till date) Jun-23 Mar-24 Jun-24 INR 57.5 bn INR 61.7 bn INR 65.1 bn ▪ Currently offers products across four business lines namely Public Equity, Real Estate Credit, Performing Credit & Tech VC ▪ Fund raising currently underway for
Slide 33: Offshore Business - Creating 'expressways' globally
Offshore Business - Creating ‘expressways’ globally Key presence Singapore Dubai Japan 174 (INR bn) 156 23 122 22 20 Advisory 134 151 Managed 102 Other International Tie Ups Xtrackers India Govt. Bond UCITS ETF Godo Kaisha Genkai India Investment* Bualuang Bharata Fund Nippon India Taiwan Equity Fun
Slide 34: Process Orientation - Investments
Process Orientation - Investments Risk Rating of Factor Analysis Securities Risk Optimization tool Quantitative analyzing key factors Assessment Investment and comparing the portfolio &benchmark considering Business Philosophy – construct Risk and Management Risk The Nippon Way Fund Casing Objective
Slide 35: PDCA Approach
PDCA Approach Plan Do Check Act ▪ Within fund ▪ Analysis and ▪ Monthly fund ▪ Adjustment in mandate (target prediction of review by the portfolio for return, risk, macro economy Fund better risk- benchmark, and market Management return investment ▪ Portfolio Team ▪ Refine theme, etc.), each construc
Slide 36: Investment Team
Investment Team 65 Members Investment Team Strength 27 16 Equity MF Fixed Income MF 20 2 Managed Accounts Offshore Business ~1,000 years Cumulative experience of Investment Team 20+ years Average tenure of CIOs with NAM India Dedicated Teams for Credit Research, Real Estate and Venture Capital 35
Slide 37: ESG Focus
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Slide 38: Vision
Social responsibility commitment aligned with UN SDGs Vision To create a sustainable future for our stakeholders by integrating environmental, social and governance (ESG) principles into our business operations, investment processes and stewardship ESG integration initiatives are focused on Topics i
Slide 39: CSR
CSR NAM contributed INR 160 mn towards CSR initiatives in FY24 Number of Beneficiaries from Focus Areas NGO Partners SDG Linkage projects in FY24 3,790 ▪ Tata Memorial Centres Healthcare Community members from ▪ Vision Foundation of India economically weaker section 3,859 Education & Skill ▪ Ekam Fo
Slide 40: Financial Overview
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Slide 41: Financial Summary
Financial Summary Consolidated Q1 Q1 Change Q4 Change Particulars (INR mn) FY24 FY25 FY24 (YoY) FY24 (QoQ) Revenue from Operations 5,050 3,542 43% 4,683 8% 16,432 Operating Expenditure 1,970 1,610 22% 1,864 6% 6,849 Finance cost 16 13 22% 16 -1% 62 Fee & Commission 179 135 33% 172 4% 620 Employee be
Slide 42: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Jun 30, 2024 Mar 31, 2024 Investment in NIMF’s schemes 35,129 31,775 - Debt 30,380 27,818 - Equity 4,749 3,957 Bank FDs and tax-free bonds 3,570 3,542 Other assets 4,343 4,003 Total 43,042 39,320 NIMF - NIMF - Other Other Equity Equity Asset
Slide 43: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases QAAUM / Branch QAAUM / Employee (INR bn) 25.2 22.5 14.8 16.4 10.4 11.5 2.9 3.1 4.3 4.6 2.0 2.3 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Jun-24 (INR mn) Profit / Branch Profit / Employee 69.2 57.7 34.4 38.8 37.9 21.1 7.7 11.0 1
Slide 44: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR bn) Consolidated 17.5 10.37 11.8 11.5 6.84 7.16 10.9 4.93 6.7 3.44 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Total Dividend INR 16.50 per share in FY24 ~99% of FY24 earnings shared with shareholders Cumulative dividend of INR 51
Slide 45: Thank you for your time!
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Slide 46: Annexure
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Slide 47: About Nippon Life Insurance
About Nippon Life Insurance 46
Slide 48: Profile
Profile ❑ Largest market share in Japan among private life insurers in terms of premium income ❑ Total assets over JPY 97 Trillion ❑ 60 Asset Management related & 21 Insurance related operations worldwide * *As of March 31, 2024 Asset Management Life Insurance Shareholding – 72.9% Presence in India
Slide 49: Nippon Life Group
Nippon Life Group Nippon Life Domestic Insurance Business Asset Management Business Global Insurance Business Nippon Life Insurance Company MLC Limited (80.0%) Nissay Asset TAIJU LIFE INSURANCE Management Corporation (100.0%) (85.0%) Reliance Nippon Life COMPANY LIMITED Insurance Company Limited (49
Slide 50: Board of Directors
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Slide 51: Profile of Board Members
Profile of Board Members Mr. Upendra Kumar Sinha (Independent Director & Chairman) a 1976 batch IAS officer of Bihar cadre, during his 3 decades plus of experience has held several responsible government positions in India, including as Joint Secretary (Banking) and Joint Secretary (Capital Markets)
Slide 52: Profile of Board Members
Profile of Board Members Mr. Ashvin Parekh (Independent Director) is a qualified Chartered Accountant and has set up the advisory firm that provides services to the Boards and the management of BFSI companies. Mr. Parekh retired as a Senior Partner from Ernst & Young in June 2013. Earlier, Mr. Parek
Slide 53: Profile of Board Members
Profile of Board Members Mr. Tomohiro Yao (Associate Director) is Regional CEO for Asia Pacific and Head of India at Nippon Life Insurance (NLI). He is responsible for operations in the Asia Pacific. He is a seasoned professional with over 25 years of experience in the life insurance industry. He ha
Slide 54: Disclaimer
Disclaimer This presentation does not constitute a prospectus, an offering circular, an advertisement, a private placement offer letter or offer document or an offer, or a solicitation of any offer, to purchase or sell any securities under the Companies Act, 2013 and the rules made thereunder, the S
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