Satin Creditcare Network Ltd · NSE:SATIN

Satin Creditcare Network — Q2 FY2023 Earnings Presentation

54 slides from Satin Creditcare Network's earnings presentation, Oct 28, 2022

  1. Slide 1: Intimation of Investor Presentation to Stock Exchanges

    October 28, 2022 To, The Manager, The Manager, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, 25th Floor, P. J. Towers, Bandra Kurla Complex, Dalal Street, Bandra East, Mumbai-400051 Mumbai – 400001 Symbol: SATIN Scrip Code: 539404 Sub: Investor Presentation Dear Sir

  2. Slide 2: Investor Presentation October 2022

    Investor Presentation October 2022 DETERMINED. DEFINITIVE. DECISIVE.

  3. Slide 3: Contents and Cautionary Statement

    Contents 03 - 15 16 - 20 21 - 33 Business Update & New Initiatives Overview and Key Performance What makes Satin a Compelling Highlights Investment Story 34 - 44 45 - 52 Key Financial & Operational Metrices Company Background Cautionary Statement Any forward-looking statements about expected future

  4. Slide 4: Business Update & New Initiatives

    Business Update & New Initiatives

  5. Slide 5: Key Business Updates (1/2)

    Key Business Updates (1/2) Restructured Book • Restructured book has reduced from Rs. 1,151 crore i.e. 21.4% as on Sep’21 to 6.4% of on-book AUM as on Sep’22 amounting to Rs. 318 crore. The reduction is due to Rs. 495 crore of collections and Rs. 338 crore of write-offs done • Out of Rs. 318 crore,

  6. Slide 6: Key Business Updates (2/2)

    Key Business Updates (2/2) Collection Efficiency • Cumulative collection efficiency for Q2FY23 stood at 100.2% (excluding restructured portfolio), representing ~94% of on-book portfolio • Collection efficiency of restructured portfolio for Q2FY23 stood at 77.7%, representing ~6% of on-book portfolio

  7. Slide 7: Pain from Pandemic completely taken care of

    Pain from Pandemic completely taken care of Collection: Rs. 128 crore • Restructured book reduced from Rs. 1,151 crore as on Sep’21 to Rs. 318 crore as on Sep’22; in percentage terms reduced from Collection: Rs. 98 crore 21.4% to 6.4% of on-book portfolio • During last one year, collected Rs. 495 cr

  8. Slide 8: Breakup of Restructured Book

    Breakup of Restructured Book Incl. Assam Non-Morat Morat* Particulars (Rs. crore) Total (Repayment of 12 months) (Repayment of 6 months) POS 317.5 165.3 152.2 Current 197.2 135.0 62.2 PAR 1-90 69.5 15.5 54.0 Par 90+ 50.8 14.8 35.9 Provision 75.8 20.2 55.6 Excl. Assam Non-Morat Morat* Particulars (Rs

  9. Slide 9: New Regulatory Framework by RBI

    New Regulatory Framework by RBI The RBI issued directions namely ‘Reserve Bank Of India (Regulatory Framework for Microfinance) Directions, 2022 on 14th March’22. The directions are applicable from 01st April’22. Significance of the new Regulations • Changes are made to put all microfinance lenders

  10. Slide 10: Update on Assam Portfolio

    Update on Assam Portfolio • Update on AMFIRS • Assam cabinet approved relief to around 11 lacs microfinance borrowers (maximum up to Rs. 25,000 per borrower), who are making regular payments to banks (category 1) Q2FY23 Update • The Bill is positive for the MFI Industry and the Company is expecting

  11. Slide 11: Business Trends

    Business Trends… Rs. 7,575 crore Rs. 1,709 crore 26.8 Lacs 1,237 AUM* DISBURSEMENT in Q2FY23 ACTIVE CUSTOMERS NO. OF BRANCHES Asset under Management Trends (Q-o-Q) Disbursement Trends (Q-o-Q) 438 449 633 570 570 7,381 7,218 7,617 7,569 7,575 278 154 145 212 263 1,066 1,208 1,180 1158 1,095 1,622 1,5

  12. Slide 12: Trends in Collection Efficiency

    …Trends in Collection Efficiency Collection Efficiency Trends Quarter on Quarter 99.7% 100.2% 96.0% 97.3% 87.8% Q2FY22 Q3FY22 Q4FY22 Q1FY23* Q2FY23* CE% Collection Efficiency Trends in Key States – 54.0% of AUM CE % (Incl. Arrears) States Apr-22* May-22* Jun-22* Jul-22* Aug-22* Sep-22* Uttar Pradesh

  13. Slide 13: Diversifying to Secured Assets – Future Upside Potential

    Diversifying to Secured Assets – Future Upside Potential Non-MFI Portfolio • Non-MFI book of the Company includes the MSME and Housing Finance business o MSME Book grew from Rs. 378 crore in FY20 to Rs. 603 crore in Q2FY23 (i.e. 60% growth) o Housing Finance Book grew from Rs. 139 crore in FY20 to R

  14. Slide 14: Update on SHFL

    Update on SHFL Satin Housing Finance Limited AUM grew by 47% in Q2FY23 YoY to reach Rs. SHFL had 2 successive profitable years despite 362 crore challenging business environment, PAT for Q2FY23 Q2FY23 disbursement stood at Rs. 59 crore stood at Rs. 0.5 crore No Restructuring done No willful default

  15. Slide 15: Update on Subsidiaries – TFSL & SFL

    Update on Subsidiaries – TFSL & SFL  Collection efficiency for Sept’22 stood at 101% Taraashna  Disbursement stood at Rs. 64 crore for Q2FY23 Financial  Sourcing business for SCNL under Nai Roshni Services Limited  PAT for H1FY23 stood at Rs. 0.3 crore  Slow down in BC business to achieve Princ

  16. Slide 16: Objective Behind Amalgamation

    Objective Behind Amalgamation The combined entity would be able to efficiently use the capital invested in the two entities and leverage the same In the combined entity, tax benefit will accrue to the business when TFSL sources loans for SFL TFSL has significantly wider distribution reach than SFL.

  17. Slide 17: Overview

    2 © —_ Ss is Oo > e)

  18. Slide 18: Fostering Inclusive Growth

    Fostering Inclusive Growth The history of SCNL goes back to 1990 when it started providing finance to the shopkeepers who were deprived of formal financing Today, after three decades of rich experience, SCNL has emerged as one of the leading and trusted Indian microfinance companies Headquartered in

  19. Slide 19: Key Performance Highlights

    Key Performance Highlights

  20. Slide 20: Corporate Overview Standalone – Q2FY23

    Corporate Overview Standalone – Q2FY23 Rs. 1,564 crore 24.8 Lacs 23 1,039 DISBURSEMENT LOAN ACCOUNTS STATES & UT’s BRANCHES OUTSTANDING 3.6 Lacs Rs. 6,417 crore Rs. 55 crore NO. OF LOANS DISBURSED AUM PROFIT AFTER TAX 24.1% 3.0% Rs. 43,000 12.8% CAPITAL ADEQUACY RETURN ON ASSETS^ AVERAGE TICKET SIZE

  21. Slide 21: Corporate Overview Consolidated – Q2FY23

    Corporate Overview Consolidated – Q2FY23 28.3 Lacs 1,237 LOAN ACCOUNTS BRANCHES OUTSTANDING Rs. 1,709 crore Rs. 7,575 crore 23 DISBURSEMENT STATES & UT’s AUM Rs. 360 crore Rs. 216 crore REVENUE NET INTEREST INCOME 20

  22. Slide 22: What makes Satin a Compelling Investment Story

    What makes Satin a Compelling Investment Story

  23. Slide 23: What makes Satin a Compelling Investment Story

    What makes Satin a Compelling Investment Story Leading MFI Player With Differentiated Product Offerings 01 Diversified Geographical Reach 02 03 Technology Prowess 04 Robust Underwriting Processes 05 Well-diversified Liability Profile 06 Ample Liquidity & Positive ALM 07 Strong & Experienced Manageme

  24. Slide 24: Differentiated Product Offerings

    1. Differentiated Product Offerings Business Correspondent SCNL Housing Finance SME Services Product features Taraashna Financial Satin Housing Finance Satin Finserv Limited MFI(1) as on Sep’22 Services Limited(2) Limited(3) (SFL)(4) Start Date May’08 (JLG) May’12 Feb’18 Mar’19 Upto Rs. 50,000 Ticke

  25. Slide 25: Leveraging Distribution Outreach through Enhanced Product Financing

    …Leveraging Distribution Outreach through Enhanced Product Financing Satin finances product purchase of solar lamps, bicycles, consumer durables etc. and grants loan for safe water and sanitation facilities Financing ~Rs. 97 crore during H1FY23, business started picking up Enriching Lives Benefits 

  26. Slide 26: Diversified Geographical Presence

    2. Diversified Geographical Presence …serving 27 lacs clients across India 58% 26.8 Lacs 28.3 Lacs Clients with Satin as Only No. of Active Clients No. of Loan Accounts Lender* 397 89,500 No. of Districts No. of Villages 76 3.1 Lacs No. of Regional Offices No. of Centres 24% 6,996 10,555 First Cycle

  27. Slide 27: Increasing exposure to newer states

    …Leading to increasing footprints % of total AUM AUM Q2FY23 State FY16 Q2FY23 (Rs. crore) UTTAR PRADESH 40.9% 25.6% 1,939 BIHAR 17.7% 14.3% 1,081 2. Reducing exposure to traditional regions MADHYA PRADESH 15.5% 7.5% 567 PUNJAB 12.7% 6.6% 501 UTTARAKHAND 3.2% 1.6% 125 JAMMU & KASHMIR 0.1% 0.1% 6 90.2

  28. Slide 28: And de-risking geographical concentration

    …And de-risking geographical concentration To remain a PAN India Player Limiting Exposure per district % of Top 10 Districts to Networth Particulars FY18 FY19 FY20 FY21 FY22 Q2FY23 No. of Districts - JLG 306 359 397 388 404 397 120 88 79 % of Districts with <1% 71 68 92.5% 96.4% 96.5% 95.8% 97.3% 96

  29. Slide 29: Technology Prowess

    3. Technology Prowess AePS Mode Website UPI 2.0 Aadhar enabled Payment System, a strong • Payment gateway on the SCNL • First in the industry to launch UPI 2.O lever to facilitate digital repayment of loan website autopay installments during the center meetings • Clients temporarily migrating for •

  30. Slide 30: Continuous Process Re-engineering

    4. Continuous Process Re-engineering Aadhar E-Sign Strengthening the loan Robust new customer origination journey onboarding process • Another big step towards making the entire business • 2 step OTP authentication process at • MFI scores being used as process paperless to digitize the the time of K

  31. Slide 31: Well-diversified Liability Profile

    5. We have a well-diversified Liability Profile… …insulated from Capital Market Turbulence Product-wise Sep’22 Large Lender Base 57 Active Lenders 3.7% 0.3% Top 10 Lending Partners % Share as on 30th Sep’22 Term Loan Bank of Maharashtra 10% 40.2% NCD 37.1% Buyout State Bank of India 8% Commercial pa

  32. Slide 32: Strong Capitalization with Ample Liquidity

    6. Strong Capitalization with Ample Liquidity Healthy CRAR to Support Growth Opportunities Benefit of Positive ALM Continues 26.3 24.9 24.3 23.5 30.5% 27.8% 25.3% 24.1% 17.0 15.5 16.0 14.5 FY20 FY21 FY22 Q2FY23 FY20 FY21 FY22 Q2FY23 Avg. maturity of Assets Avg. maturity of Liabilities Static ALM as

  33. Slide 33: Diversification with Allied Product Offerings

    Diversification with Allied Product Offerings Taraashna Financial Services Ltd - TFSL Satin Housing Finance Ltd (SHFL) Satin Finserv Limited (SFL) » Acting as a business correspondent, TFSL » 100% retail book comprising of: » Incorporated in Aug’18, got license from RBI provides credit to clients in

  34. Slide 34: Successfully Navigated Crisis During Legacy of 30 Years

    Successfully Navigated Crisis During Legacy of 30 Years  Implementation of best-in-class technology  Strong Capitalization with Ample Liquidity • Reduced TAT • Capital Adequacy has improved from 18.3% in 2016 to 24.1% currently • Real-time data • Raised Rs 885 crore equity capital Learnings • Enha

  35. Slide 35: Key Financial & Operational Metrices

    Key Financial & Operational Metrices

  36. Slide 36: Key Operation Metrics

    Key Operation Metrics Districts, States and Branches Employees & Loan Officers 995 1,163 1,383 1,257 1,224 1,2371 6,382 6,296 8,152 8,090 8,774 6,9962 22 23 23 23 23 13,005 12,726 12,705 11,831 1,495 10,5553 18 1,325 1,790 1,537 9,004 1,270 404 1,344 383 388 397 340 302 11,148 10,612 10,736 10,419 7

  37. Slide 37: Business Details – Consolidated

    Business Details – Consolidated Particulars Q2FY23 Q2FY22 YoY% Q1FY23 QoQ% AUM (Rs. crore) 7,575 7,381 2.6% 7,569 0.1% SCNL 6,417 6,315 6,389 On-book AUM* 4,996 5,371 5,042 Assignment 1,390 795 1,304 Business Correspondence 32 149 44 TFSL 612 682 674 SHFL 362(1) 246 331 SFL 184 138 176 AUM Mix (Rs.

  38. Slide 38: Key Standalone Financials

    Key Standalone Financials Gross Income (Rs. crore) Cost to Income Ratio (%) 1,401 1,273 1,262 64.8% Excl. Fair value 987 58.0% change for 49.7% investment it is 64.3% 32.2% FY20 FY21 FY22 H1FY23* FY20 FY21 FY22 H1FY23* NII and PAT (Rs. crore) Excl. Fair value change for Opex to Avg AUM (%) NII PAT i

  39. Slide 39: Financial Details (Standalone)

    Financial Details (Standalone)

  40. Slide 40: Annexure - Financial Performance – Standalone

    Annexure - Financial Performance – Standalone Particulars (Rs. crore) H1FY23 Q2FY23 Q2FY22 Q1FY23 FY22 FY21 Gross yield (1) 30.78% 20.31% 18.73% 41.38% 18.44% 17.57% Financial Cost Ratio(2) 8.90% 8.44% 9.36% 9.39% 8.86% 8.47% Net Interest Margin(3) 21.88% 11.87% 9.37% 31.99% 9.58% 9.10% Operating Ex

  41. Slide 41: Annexure - P&L Statement – Standalone

    Annexure - P&L Statement – Standalone Particulars (Rs. crore) Q2FY23 Q2FY22 YoY% Q1FY23 QoQ% H1FY23 H1FY22 YoY% FY22 Revenue Interest and Fee Income 262 274 266 528 565 1,109 (Loss)/Gain due to DA 39 1 13 52 - 50 Treasury Income* 12 16 375 387 30 65 BC Income 1 6 2 3 13 19 Other Operating Income 10

  42. Slide 42: Financial Details (Subsidiaries)

    Financial Details (Subsidiaries)

  43. Slide 43: Annexure - P&L Statement – SHFL

    Annexure - P&L Statement – SHFL Particulars (Rs. crore) Q2FY23 Q2FY22 Q1FY23 FY22 FY21 Revenue Interest and Fee Income 13.0 7.8 10.4 34.3 25.8 Treasury Income 0.4 0.3 0.4 0.8 0.3 Other income 0.8 0.2 1.0 3.0 3.5 Total Revenue 14.1 8.2 11.8 38.0 29.6 Expenses Finance cost 7.0 4.0 5.9 17.1 13.6 Employ

  44. Slide 44: Annexure - P&L Statement – SFL

    Annexure - P&L Statement – SFL Particulars (Rs. crore) Q2FY23 Q2FY22 Q1FY23 FY22 FY21 Revenue Interest and Fee Income 9.2 6.3 8.2 26.6 23.8 Treasury Income 0.1 0.1 0.1 0.6 0.4 Other income 0.6 0.1 0.6 0.4 0.6 Total Revenue 9.9 6.5 8.9 27.6 24.8 Expenses Finance cost 2.7 1.3 2.5 6.9 4.4 Employee bene

  45. Slide 45: Annexure - P&L Statement – TFSL

    Annexure - P&L Statement – TFSL Particulars (Rs. crore) Q2FY23 Q2FY22 Q1FY23 FY22 FY21 Revenue Total Revenue 16.4 15.9 18.9 69.7 59.3 Expenses Finance Cost 1.6 1.4 1.7 5.6 4.5 Employee Benefit Expenses 10.1 11.8 11.9 47.8 39.1 Credit Cost 2.1 6.0 2.7 33.4 11.3 Other Expenses 2.1 2.4 2.3 11.1 10.0 De

  46. Slide 46: Company Background

    Company Background

  47. Slide 47: Key Milestones

    Key Milestones Business Timeline 2016 2017 2018 2019 2022 Received NBFC license for SHFL commenced lending in Reached 27.1 lacs active Satin Finserv Ltd for MSME TFSL & SFL amalgamation Started MSME Lending in FY17; Feb18; BC agreement with clients and AUM of Rs. 4,882 business; reached AUM of 1 ini

  48. Slide 48: Key Milestones – Fund Raising Timeline

    Key Milestones Fund Raising Timeline 2015 2016 2017 2018 2019/20 2022  Raised Rs. 41.5 crore  Raised Rs. 250 crore  In Apr’17, raised $10  Pref. Allotment:  Exit of MV Mauritius  Successfully from SBI FMO(3) via QIP in Oct’16; mn from ADB(4) ; Equity funding by completed (including warrants);

  49. Slide 49: Our Business Model

    Our Business Model Formation of Documentation Groups and Paper work MICROFINANCE… & BEYOND 01 06 02 Social impact financing Follow up Income Generating of solar lamps, loans Long Term Loans (LTL) Loans (IGL) bicycles, water and Training sanitation facilities etc. of Groups 05 03 Micro Small & Medium

  50. Slide 50: With Customised Products as per Client Needs

    …With Customised Products as per Client Needs Income Generation Loan Long Term Loan (Prarambh) (Vriddhi) Product Financing WASH Loan Ticket Size : Ticket Size : Ticket Size : Ticket Size : Rs. 10,000 – Rs. 35,000 Rs. 31,000 – Rs. 75,000 Rs. 5,000 – Rs. 22,000 Rs. 10,000 – Rs. 35,000 Tenure : 12 - 24

  51. Slide 51: Making a Difference to the Community

    Making a Difference to the Community As a purpose driven organization, it has always been our constant endeavor to align our objectives with the Sustainable Development Goals in order to contribute to the range of aspects that are the blueprints to achieving a better and more sustainable future for

  52. Slide 52: Awards and Accolades

    Awards and Accolades  Mr. HP Singh was conferred as the ‘Pillar of the BFSI Industry’ bestowed at the Financial Express Modern BFSI Summit 2022  Mr. HP Singh received the 'CEO of the Year - Micro Finance Company' Award  Mr. HP Singh was conferred the 'Best CEO of the Year' at Golden Globe Tigers

  53. Slide 53: ESG Snapshot

    ESG Snapshot Environment Social Water and Sanitation (WASH) Loans • Our strength lies in our ground level knowledge and the strong bond that we have • SCNL has been constructively working towards safe water and sanitation in around 121 created with our stakeholders districts and more than 35,000 vil

  54. Slide 54: Contact Information

    Contact Information Company (Investors & Media) : Ms. Aditi Singh Ms. Shweta Bansal Head – Strategy DGM - Investor Relations E: aditi.singh@satincreditcare.com E: Shweta.bansal@satincreditcare.com T: +91 124 4715 400 T: +91 124 4715 400 www.satincreditcare.com

Satin Creditcare Network — Q2 FY2023 Earnings Presentation on 6ix