Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q2 FY21 Earnings Presentation
59 slides from Nippon Life India Asset Management's earnings presentation, Oct 27, 2020
Slide 1: Nippon Life India Asset Management Ltd - Exchange Letter
¢ Nippon Life 1nd1a Asset Management Ltd October 27, 2020 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Dalal Street, Fort, Plot No. C/1, G Block, Mumbai 400 001 Bandra Kurla Complex, BSE Scrip Code: 540767 Bandra (East), Mumbai 400 051 NSE
Slide 2: Investor Presentation Q2 FY21
¢ Nippon Life lndla Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited) Investor Presentation Q2 FY21 October 2020 Goodgetsb~
Slide 3: Wealth sets you free - one year of shareholding change
¢ Nippon 1nd1a Mutual Fund ~► ~qT.=t ~~tal ~am~ ¢ ra.'-~lot Elfos~1 ~~~~c-t ~s Wealth sets you free Completion of 1 year of shareholding change Oyears - n-otal Assets of ove d global 49 Lakh Crore 3 glomerate 3 . I Corporation , 1JPY=0.62 ¢ Nippon Life 1nd1a Asset Management Ltd 2 (Formerly Reliance
Slide 4: Key Events in the last 12 months
Key Events in the last 12 months… ❖ Nippon 1nd1a Mutual Fund Launched 1st IT ETF in India ❑ Wealth sets you Free ❑ Added 117,000 ETF folios ❑ Established the “NIMF” brand ❑ 27 out of S&P BSE 100 begun to reinvest ❑ Activated 170+ corporates ❑ Strengthened risk framework; ❑ Nippon India Digital Innov
Slide 5: Acquired sustainable long term assets
Acquired sustainable long term assets - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 Fixed Income products well placed across investment horizon I - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Investment Sept ‘20 AUM AU
Slide 6: NAM India - Profile
NAM India - Profile One of the largest Asset Manager in India, with 25 years of track record NAM India AUM (as of Sept 30, 2020) INR 2.77 trillion Mutual Funds Managed Accounts International INR 1,929 bn* INR 783 bn INR 55 bn Advisory INR 37 bn ••• * 1,r (__) (__) (__) (__) (__) ~290 Locations ~1,02
Slide 7: Key Highlights - Q2 FY21
Key Highlights - Q2 FY21… Business recovery continues in line with the Industry Q2 FY21 EOP AUM rose to INR 1,929 bn Equity (excl. Arbitrage) EOP AUM at (+18% vs. Q4 FY20) INR 707 bn (+28% vs. Q4 FY20) Total Operating Expenses fell by 20%; Q2 FY21 Total Income at INR 3.2 bn employee costs decreased
Slide 8: Key Highlights - Q2 FY21
Key Highlights - Q2 FY21 Retail AUM contributed 26% of NIMF NIMF has 6.2 million Unique Investors; AUM vis-à-vis 20% for the Industry 29% market share in the Industry Added over 151,600 ETF folios in Q2 Digital contribution to total NIMF vs. 97,600 in FY20 business transactions rose to 48% / ◄!► Nip
Slide 9: Industry AUM Trends
Industry AUM Trends / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 10: Industry - Quarterly AUM Trend
Industry - Quarterly AUM Trend Industry AAUM (INR bn) 26,776 27,037 27,603 25,689 6% 7% 8% 6% 24,628 7% 20% 19% 22% 20% 22% 31% 32% 33% 31% 32% 42% 42% 43% 39% 40% Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 ■ Equity ■ Debt ■ Liquid ■ ETFs Post sharp fall in March 2020, Industry witnessed steady growth drive
Slide 11: Nippon India MF - AUM Trends
Nippon India MF - AUM Trends / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 12: NIMF - Monthly AUM Trend
NIMF - Monthly AUM Trend Oct 2019 - Renamed as “Nippon India Mutual Fund” Highest NIMF AAUM (INR bn) 2,405 April 14, 2019 Peak pre-COVID19 2,352 2,210 Recovery during Covid19 continues Lowest Feb 2020 2,210 1,993 2,156 2,171 1,886 Sept 30, 2019 Sept 2020 2,095 2,100 2,077 2,072 2,013 COVID19 1,999 2
Slide 13: NIMF - Quarterly AUM Trend
NIMF - Quarterly AUM Trend NIMF AAUM (INR bn) 2,026 2,044 2,049 2,000 14% 13% 14% 1,801 14% 14% 16% 14% 16% 17% 19% 29% 27% 28% 30% 29% 43% 44% 42% 38% 39% Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 ■ Equity ■ Debt ■ Liquid ■ ETFs AUM recovery continues in line with the Industry * Quarterly Average Assets u
Slide 14: NIMF - Fixed Income Assets
NIMF - Fixed Income Assets Fixed Income AAUM (INR bn) 937 873 875 895 863 275 323 340 322 348 598 553 573 514 597 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 ■ Debt ■ Liquid ❑ On an average, NIMF onboarded 150+ new institutional investors every quarter (Oct 2019 onwards) ❑ 27 corporates in the S&P BSE 100 be
Slide 15: NIMF - Equity Assets
NIMF - Equity Assets Equity (Incl. ETF) AAUM (INR bn) 1,100 1,119 1,100 986 871 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 ❑ Growth in Equity assets driven by SIP flows and MTM gains ❑ During the quarter: ❑ added over 168,600 retail folios (net) ❑ new SIPs registered of more than 312,000 ❑ onboarded over 40
Slide 16: New Normal
0 1 .. ------------------ I 0 ----------------- I 2 I I Revival in business activity I Digital initiatives I ----------------J ~---------------J New Normal I 0 ------------------ 3 I 0 ----------------- I 4 I I Leveraging ETF first mover advantage I I Continue to build on Retail Strength I ~--------
Slide 17: New Normal
0 .. ------------------ I 1 2 I Revival in business activity Digital initiatives ----------------J New Normal 3 4 Leveraging ETF first mover advantage Continue to build on Retail Strength / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 18: Revival in business activity
Revival in business activity All branches are 100% ❑ Successfully expanded existing product suite (NFOs) operational through online and offline channels ❑ Conducted approx. 200 Online Training sessions Support for Distributors ❑ Engaged with ~10,000 partners, spread across IFAs and employees of Bank
Slide 19: Successfully launched New Products
Successfully launched New Products Nippon India Multi Asset Fund - AUM of over INR 8 billion as on Sept 2020 One of the largest digital NFOs in H1 FY21 Invests in domestic & foreign equity, Debt & Exchange Traded Commodity Derivatives and Gold ETF Attracted 80,000 investors across 370 locations Rece
Slide 20: New Govt. of India mandate
New Govt. of India mandate Post Office Life Insurance Fund and Rural Post Office Life Insurance Fund ~ ~am dln1 l\>sttiJ l..ifc lnsumnec ❑ Joint mandate to manage the investments of POLIF and RPOLIF for three years ❑ Only private sector AMC to receive this mandate ❑ 1st Government of India mandate p
Slide 21: Growth in investor base continues
Growth in investor base continues A new Digital Purchase every… A new SIP Purchase every… 16s 11s 25s 17s FY20 Q2 FY21 FY20 Q1 FY21 A new ETF folio added every… FY20 243s 36s Q2 FY21 Added over 2,400 investor folios every day in Q2 * Frequency in seconds calculated with assumption of 252 days in a y
Slide 22: New Normal
1 0 ----------------- I 2 I Revival in business activity I Digital initiatives I ~---------------J New Normal 3 4 Leveraging ETF first mover advantage Continue to build on Retail Strength / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 23: Digital Business - Delivering Today, Ready for Tomorrow
Digital Business - Delivering Today, Ready for Tomorrow Lumpsum & New SIP Registration Digital Purchases (lakhs)* Q2 FY21 4.8 31% Q2 FY20 3.6 ❑ Digital contribution-to-total NIMF purchase transactions at 48% in Q2 FY21 ❑ New Digital SIP Purchase grew 117% in Q2 FY21 vis-à-vis Q2 FY20 ❑ Nippon India
Slide 24: Digital Business - Key initiatives
Digital Business - Key initiatives Search Initiatives for New Acquisition Social Data Mining led Acquisition & Vernacular Acquisition Initiatives क Introduced Campaigns on Google and Facebook in क Search keywords realigned to attract millennials vernacular language Customised Search Campaigns pitchi
Slide 25: New Normal
1 2 Revival in business activity Digital initiatives New Normal 0 ------------------ I 3 I 4 I Leveraging ETF first mover advantage I Continue to build on Retail Strength ~----------------~ / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 26: Comprehensive portfolio of Passive Funds
Comprehensive portfolio of Passive Funds NIMF’s ETFs / Index Funds Fixed Income Equity Commodity Nippon India ETF Liquid BeES Nippon India ETF Gold BeES Nippon India ETF Long Term Gilt Domestic International Thematic / Nippon India ETF Hang Seng BeES Broad Market Sector Strategy Nippon India ETF Nif
Slide 27: ETF - Extensive investor base and activity
ETF - Extensive investor base and activity Large ETFs product suite 70% ~33% ~13% Volume Share Share of folios Market Share ❑ Only AMC in India with more than 18 years experience in managing ETFs ❑ Largest bouquet of 19 ETFs in the industry across Equities, Debts & Commodity (Gold) ❑ On QAAUM basis,
Slide 28: ETF - First Mover Advantage paying off
ETF - First Mover Advantage paying off Category leading - largest ETFs in Industry Nippon India ETF Gold BeES Nippon India ETF Bank BeES Nippon India ETF Junior BeES Nippon India ETF Liquid BeES Average daily volumes outpacing rest of the Industry NIMF ETF volume as a multiple of ‘Rest of the Indust
Slide 29: New Normal
1 2 Revival in business activity Digital initiatives New Normal 3 0 ----------------- I 4 I Leveraging ETF first mover advantage I Continue to build on Retail Strength I ~---------------~ / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 30: Unique Investors
Unique Investors 3 out of 10 unique investors in the Industry invest with NIMF Industry NIMF Market share (%) (in million) 6.2 Sept 30, 2020 29% 21.3 6.0 Mar 31, 2020 29% 20.8 6.0 Sept 30, 2019 30% 20.0 44% of the Industry’s incremental investors in H1 invest with NIMF Source: AMFI / ◄!► Nippon Life
Slide 31: Focus on Retail & Small towns
Focus on Retail & Small towns Retail AAUM / Total AAUM (%) NIMF 26% Industry 20% SBI 14% HDFC 19% ICICI 15% Birla 20% Higher composition of Retail Assets in AUM at 26% vis-à-vis 20% for the Industry Source: AMFI; Calculated on Monthly Average AUM / ◄!► Nippon Life 1nd1a Asset Management Ltd 30 (Form
Slide 32: Retail Assets
Retail Assets 69% of the Individual assets have a vintage of more than 12 months (Sept 30, 2020) Retail AAUM (INR bn) 546 519 520 444 460 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 “Retail Investor Classification” changed from INR 0.5 mn to INR 0.2 mn as per the guidelines issued by AMFI Source: Internal; C
Slide 33: Beyond 30 cities (B-30) Contribution
Beyond 30 cities (B-30) Contribution Higher AUM % sourced from B-30 locations as compared to Industry B-30 AAUM / Total AAUM (%) NIMF 18.2% Industry 16.1% B-30 segment has higher proportion of Equity Assets Focus on building B-30 AUM by leveraging on-ground presence Source: AMFI; Calculated on Month
Slide 34: Geographical De-risking
Geographical GeographicalDe-Risking De-risking Top 5 Cities Contribution (%) Beyond 15 Cities Contribution (%) ICICI 72% NIMF 25% SBI 72% Industry 24% HDFC 70% SBI 18% Industry 64% HDFC 16% NIMF 58% ICICI 14% Lower concentration of assets Higher Penetration in Smaller cities from Top 5 cities and to
Slide 35: Systematic Transactions
Systematic Transactions Monthly Flows Tenure (SIP book) Book (INR bn) 8.00 7.6 7.00 6.00 7.1 6.8 6.7 5.00 6.2 4.00 84% 3.00 79% 2.00 1.00 - Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 >5 years >10 years Annualized book of INR 74 bn In volatile markets, folios with lower ticket size demonstrated longer vintag
Slide 36: Risk Management - Philosophy
Risk Management - Philosophy / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 37: Enhanced conservative positioning
Enhanced conservative positioning In May 2020, Board decided that all NIMF’s schemes* will make fresh investments only in AA & above rated issuers Credit Rating Profile of NIMF’s Fixed Income assets Rating Sept 30, 2020 Mar 31, 2020 Repo / Cash / Sovereign / AAA / A1+ / AA+ / Upto AA 97.3% 91.8% Sub
Slide 38: Distribution
Distribution / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 39: Strong Distribution
Strong Distribution Empaneled over 400 New Distributors in Q2 FY21; total base at approx. 77,400 Banks cffibank Deutsche Bank IZI ICICIBank Standard 77 Chartered ■ HIDFC BANK j.,. AXISeANK National Distributors 93 l<A RVYII [• HDFC securities Alternate (incl. PSU banks) ) lmlitq;., 90 IRBL ANK • l!J
Slide 40: Leveraging Partnership with IFA
Leveraging Partnership with IFA Distributed Assets form 47% of NIMF’s AUM Overall Distribution Mix Distributed Assets Mix Banking Distributed Distributors Direct 26% Independent Channel Assets Financial 53% 47% Advisors National 54% Distributors 20% De-risked distribution model Large share of the AU
Slide 41: Focus on Individual assets
Focus on Individual assets Distributed Assets (investor-wise) AUM (INR bn) Corporate 21% Retail 442 47% 311 HNI 194 33% Retail HNI Corporate 79% of the Distributed Assets are contributed by Individual investors Source: AMFI; Calculated on Monthly Average AUM / ◄!► Nippon Life 1nd1a Asset Management
Slide 42: Leaders in Investor Education
Leaders in Investor Education EDGE Learning Academy (Q2 FY21) Investor Education Unique Locations Mobile App MFx 20 T-30 Investor Education 01100 t ouc h o f your Programs 18 Programs ~ggrhps 1,300+ B-30 Investors Completed Q 2 Programs Recommended courses Courses .~ view more > Dedicated Investor E
Slide 43: Other Businesses
Other Businesses / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 44: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) ❑ Category II & Category III AIFs across various asset classes ❑ Equity / Real Estate / Credit / Technology & Venture Capital FoF ❑ As on Sept 2020, commitments raised INR 34 billion across funds ❑ Commitments and LOI’s of approx. USD 100 mn in Nippon India
Slide 45: Offshore Business
Offshore Business AUM of INR 93 bn as on Sept 30, 2020 Leveraging Nippon Life’s Insurance Particulars Amount in INR bn global network Advisory 37 Managed 55 Total 93 Hokkaido Singapore Mauritius Dubai C: Singapore Sendai ❑ RAMS Equities Portfolio fund-UCITS ❑ IMSF - Equity Opp. Fund Feeder Kanazawa
Slide 46: Wider Global Presence
Wider Global Presence ~ Nordic Region Spain Japan ' Mauritius Peru Argentina , e Strategic Partnership e Local - Distributor e Institutional Distribution / ◄!► Nippon Life 1nd1a Asset Management Ltd 45 (Formerly Reliance Nippon Life Asset Management Limited)
Slide 47: Financial Overview
Financial Overview / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 48: Financial Summary - As per IND AS
Financial Summary - As per IND AS Consolidated (INR mn) Particulars Q2 FY21 Q1 FY21 Q2 FY20 Revenue from Operations 2,587 2,331 3,002 Operating Expenditure 1,314 1,365 1,643 Fee & Commission Expenses 97 94 135 Employee benefits expense 679 715 856 Finance cost 12 13 16 Other Expenses 447 439 559 Dep
Slide 49: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Sept 30, 2020 March 31, 2020 Investment in NIMF’s schemes 19,864 16,804 - Equity 2,810 2,809 - Debt 16,874 13,994 Bank FDs and tax-free bonds 4,928 5,984 Other assets 1,675 1,575 Total 26,287 24,362 Other Other NIMF - NIMF - Assets Assets Ba
Slide 50: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR Bn) 7.94 4.42 4.42 7.62 3.44 2.98 6.85 6.69 FY 17 FY 18 FY 19 FY 20 FY 17 FY 18 FY 19 FY 20 Total Dividend paid INR 5 per share in FY20 84% of FY20 Earnings shared with Shareholders Paid cumulative dividend of INR 23+ bn in last 7 financ
Slide 51: Thank you for your time! Stay safe!
¢ Nippon Life lndla Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited) Thank you for your time! Stay safe! Goodgetsb~
Slide 52: Annexure
Annexure / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 53: About Nippon Life
About Nippon Life / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 54: About Nippon Life Insurance
About Nippon Life Insurance ❑ Fortune 500 company (Rank 130 in 2020)1 ❑ Japan’s largest private life insurer & one of the largest in the world2 ❑ Total assets over US$ 740 bn3 ❑ 57 Asset Management related operations & 22 Insurance related operations Globally4 Presence in India Asset Management Life
Slide 55: Nippon Life Group
Nippon Life Group N I SSAY Nippon Life Domestic Insurance Business Asset Management Business Overseas Insurance Business Taiju Life Nippon Reliance Nippon - (82.6%) Life India Asset ~ • ::kffl ~lfrf ¢ sna?J•-7' Revenues from insurance and reinsurance premiums (FY2020): ¢ Nippon 1ncl1a Mutual Fund wt
Slide 56: Board Of Directors
Board Of Directors / ◄!► Nippon Life 1nd1a Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 57: Profile of Board Members
Profile of Board Members General Ved Prakash Malik (Retd.) (Independent Director) has worked in the Indian Army as Chief of the Army Staff from October 1, 1997 to September 30, 2000. He had dual responsibility of being an advisor to the Government as well as commander of 1.2 million strong Indian Ar
Slide 58: Profile of Board Members
Profile of Board Members Mr. Kazuyuki Saigo (Associate Director) is Managing Executive Officer, Regional CEO for Asia Pacific Head of India, and is responsible for operations in the Asia Pacific. He joined Nippon Life in 1988 and since then has held several leadership positions in the Nippon Life Gr
Slide 59: 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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