Ugro Capital Limited · NSE:UGROCAP
Ugro Capital — Q3 FY2023 Earnings Presentation
38 slides from Ugro Capital's earnings presentation, Jan 25, 2023
Slide 1: UGRO Capital Limited Q3'FY23 Investor Presentation
UGRO Capital Limited Q3’FY23 Investor Presentation NSE: UGROCAP | BSE: 511742 Slide 1
Slide 2: Safe Harbor
Safe Harbor This presentation has been prepared by UGRO Capital Limited (the “Company”) solely for your information. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation is for information purposes only and should not be deemed to constitute or
Slide 3: About UGRO
About UGRO Catalyzing the future of credit access for MSMEs Slide 3
Slide 4: 5,000 Crore Milestone Achieved
5,000 Crore Milestone Achieved Slide 4
Slide 5: Data + Technology is the engine for MSME Credit
It has been proven that Data + Technology is the engine for MSME Credit in India End to End MSME Digital Lending is now a reality Identity Tax and Legal Filing B2B e-Commerce Layer Apps Aadhar E KYC E Sign Embedded Credit Neo Banks Social Networks 50% + of Payments Accounting and MSME and Agri Tech
Slide 6: UGRO Capital - Overview
UGRO Capital - Overview About UGRO Vision / Mission Our Thesis • U GRO Capital limited is a BSE and NSE listed, Mission: Problem of MSMEs can be solved by technology focused, small business lending platform. ‘To Solve the Unsolved’ • Bringing homogeneity to a non-homogeneous Sector • Built on 5-pill
Slide 7: India's First fully data driven Lending as a Service Company
India’s First fully data driven Lending as a Service (LaaS) Company AUM Branches Customers Employees Lenders Off-Book AUM Gro Partners Anchor + OEMs 5,095 Cr 95+ 38,000+ 1,500+ 65+ 1,750+ Cr 1,000+ 115+ Business Loan Public Sector – Secured Banks Liability / Co-lending Partners Micro and Small Busin
Slide 8: Evolved to a Data Tech Company within 3 years of inception
Evolved to a Data Tech Company within 3 years of inception Technology Platforms Operations and Collections • Web & Mobile based • E-Sign Application, E- applications for each Agreement, Customer business channel WhatsApp bot, E-NACH integrating on one Data Analytics • Payment gateway integration + c
Slide 9: Data driven proprietary scoring model powered by AI / ML Models
Data driven proprietary scoring model powered by AI / ML Models Ability to capture alternate data from banking and bureau… …to draw meaningful insights out of unorganized data... Artificial Intelligence GRO 2.0 GRO 3.0 Engineering of making Intelligent Credit Bureau Machines and Programs Credit Acro
Slide 10: Deep analysis of Macro and Micro Economic Factors to develop sector focus
Deep analysis of Macro and Micro Economic Factors to develop sector focus Sector focused approach with ability to address all credit needs of MSMEs Hospitality Supply Chain 23 Financing Prime Branches Light Engineering Business Loans Secured by Property 75 Auto Components Unsecured Micro Branches Bu
Slide 11: Multi pronged Distribution led by Tech Capabilities
Multi pronged Distribution led by Tech Capabilities Prime Loan Branches Micro Loan Branches Branch-Led Channel – Catering through 95+ branches Ticket Size ROI Ticket Size ROI • Prime Loan Branches : 23 branches with origination through LAP 50L-500L 12%-12.5% 0.5L - 25L 18% - 23% intermediated channe
Slide 12: Tri-pronged liability strategy
Tri-pronged liability strategy – on-balance sheet, co-lending and assignment Demonstrated ability to manage a prudent mix of on-balance sheet and off-balance sheet approach 1 On-Balance sheet Diversified Lender base across Lending Institutions – Banks, Large NBFCs and DFIs. Multi product approach th
Slide 13: Lending as a Service - Building India's largest Co-Lending platform
Lending as a Service (L-a-a-S) - Building India’s largest Co–Lending platform Increasing Mix of off - Book AUM Off - Book Volumes (INR Cr) % Mix 1% 2% 4% 7% 16% 21% 29% 35% 724 590 343 47% 304 52% 329 99% 98% 96% 93% 84% 79% 71% 65% 151 46% 381 53% 286 48% 178 54% Apr-21 Jun'21 Sep'21 Dec'21 Mar'22 J
Slide 14: Diversified Lender base and continued build-out of liability book
Diversified Lender base and continued build-out of liability book Total Debt (INR Cr) and No. of Active Lenders Cost of Borrowing Liability Mix 0.3% 50 55 63 67 67 5% 7% Count of Lenders 2,725 2,885 Total Debt INR 2,208 28% 2,885 Cr 1,764 1,802 10.5% 10.5% 10.5% 10.3% 60% 10.1% Term Loan NCD Securit
Slide 15: Key Highlights for Q3'FY23
Key Highlights for Q3’FY23 Slide 15
Slide 16: Performance Highlights for Q3'FY23
Performance Highlights for Q2’FY23 01 Asset 02 03 Asset 04 Liability & Profitability Growth Quality Co - lending AUM Net Total Income GNPA Borrowings As on Dec’22 : 5,095 Cr Q3’FY23 : 108.0 Cr s on Dec’22 : 1.7% s on Dec’22 : 2,885 Cr (+16% Q-o-Q) (+24% Q-o-Q) (stable Q-o-Q) (65+ lenders) (+97% Y-o-
Slide 17: AUM Trend (Product wise Q-o-Q)
AUM Trend (Product wise Q-o-Q) AUM increased to INR 5,095 Cr as on Dec’22 from INR 4,375 as on Sep’22 (+16%) and INR 2,589 Cr as on Dec’21 ( +97%) 97% 16% 5,095 746 15% 4,375 718 564 11% 3,656 458 9% 620 465 2,970 338 7% 397 2,589 18% 361 535 240 356 523 253 9% 1,934 170 1,528 30% 287 10% 183 1,261
Slide 18: Loan Origination (Product wise Q-o-Q)
Loan Origination (Product wise Q-o-Q) Gross loans originated increased to INR 1,874 Cr in Q3’FY23 from INR 1,653 Cr in Q2’FY23 (+13%) and INR 1,053 Cr in Q3’FY22(+78%) 286 159 646 834 612 917 1,100 1,166 78% 13% 1,874 148 8% 1,653 134 7% 193 1,359 126 143 775 41% 1,053 119 962 610 199 11% 789 107 70
Slide 19: Operating & Financial Metrics
Operating & Financial Metrics AUM (INR Cr) Gross Loans Originated / Disbursed (INR Cr) Total Income (INR Cr) & Portfolio Yield$ 2,589 2,969 3,656 4,375 5,095 16.7% 17.3% 17.4% 1,874 16.0% 16.4% 1,653 190 7% 16% 21% 29% 1,359 35% 155 1,053 963 114 124 93% 85 84% 79% 71% 65% Q3'22 Q4'22 Q1'23 Q2'23 Q3
Slide 20: Roadmap to FY25 - Business Model evolving to generate significant Cashflows
Roadmap to FY25 - Business Model evolving to generate significant Cashflows Q1FY23* Q2FY23 3 * Q3FY23* FY23P FY25P AUM (INR Cr) 3,656 4,375 5,095 7,000+ 20,000+ Off Book AUM % 21% 29% 35% 35% 50% Net Total Income %4 10.5% 4 11.3% 4 12.9% 4 13.0% 15.0% Cost to Income Ratio % 72.1% 62.7% 63.9% 60.0% 4
Slide 21: Portfolio Performance
Portfolio Performance Slide 21
Slide 22: Well Diversified and Granular Portfolio
Well Diversified and Granular Portfolio Product Mix (AUM) Portfolio Concentration in key geographical areas Sector Mix* State wise AUM 15% coverage 1 15% 29% 17% 22% 11% 10% 3% 10% 7% 3% 9% 15% 6% 7% 30% 13% 5% 10% 21% Prime - Secured Loans Prime - Unsecured Loans 7% 14% Micro Enterprise Loan Supply
Slide 23: Collection Efficiencies, Portfolio provisioning
Collection Efficiencies, Portfolio provisioning Current Month and Overall Collection Efficiency remains robust Current Month Collection (excluding overdue) / Current Month Demand Total Collections* (including overdue) / Current Month Demand 95% 100% 94.3% 93.9% 93.9% 93.9% 93.8% 93.7% 93.9% 97.7% 97
Slide 24: Operating and Financial Performance
Operating and Financial Performance Slide 24
Slide 25: Finance | Income Statement & ROA Tree
Finance | Income Statement & ROA Tree Income Statement (₹ Cr) Q3FY22 Q3FY23 Y-o-Y Q2FY23 Q-o-Q Key Ratios (Annualized) Q3FY22 Q2FY23 Q3FY23 As a % of Gross On Book AUM Interest Income 73.4 133.1 81% 115.7 15% Total Income 16.3% 21.7% 22.6% Income on Co-Lending / Direct Assignment 6.2 42.9 587% 28.4
Slide 26: Finance | Income Statement & ROA Tree
Finance | Income Statement & ROA Tree Income Statement (₹ Cr) 9MFY22 9MFY23 Y-o-Y FY22 Key Ratios (Annualized) 9MFY22 9MFY23 As a % of Gross On Book AUM Interest Income 178.1 341.8 92% 272.2 Total Income 14.4% 20.8% Income on Co-Lending / Direct Assignment 12.3 91.7 644% 28.5 Net Total Income 8.1% 1
Slide 27: Board and Management Team
Board and Management Team Slide 27
Slide 28: Institutionally Owned : Majority held by institutional investors
Institutionally Owned : Majority held by institutional investors Shareholding Pattern (Dec-22) Promoter Others 2.9% 13.6% Shares Held by Employee Trust 1.8% 21.4% Individuals + NRIs 17.0% 21.4% (New Quest acquired by TPG) 13.1% 8.8% Slide 28
Slide 29: Independently Supervised : Eminent Board of Directors
Independently Supervised : Eminent Board of Directors Satyananda Mishra – S. Karuppasamy - Abhijit Sen - Karnam Sekar – Hemant Bhargava – Non-Executive Chairman Chairman, Compliance Chairman, Audit Committee Independent Director Independent Director Ex-Chairman, MCX, Ex-CIC, GOI, Committee Ex-CFO, C
Slide 30: Professionally Managed : 190+ years of cumulative experience
Professionally Managed : 190+ years of cumulative experience Shachindra Nath - Amit Mande - Anuj Pandey - Kishore Lodha - Sunil Lotke – Vice Chairman & Managing Chief Revenue Officer Chief Risk Officer Chief Financial Officer Chief Legal & Compliance Director 20+ Years of Experience 20+ Years of Exp
Slide 31: Annexure
GRO Annexure Slide 31
Slide 32: Co-lending (LaaS)
Co-lending (LaaS) win-win situation for UGRO and its Partners Slide 32
Slide 33: Lending as a Service (L-a-a-S)
Lending as a Service (L-a-a-S) Co-Lending is a value accretive model Example of 80:20 Co-Lending Partnership Model Customer ROI of 14.5% Benefits to Partner Benefits to UGRO (assumption) on INR 1 Lakh Institution Loan • Higher ROA & ROE on account of • Risk weight lower in case of Co- - Better lever
Slide 34: Lending as a Service is a highly profitable model
Lending as a Service (L-a-a-S) is a highly profitable model Sample Illustration Assumptions for Calculation Particulars (INR Cr) Normal Scenario Co-lending Model Particulars Ratios On Balance Sheet On Book – 20% Off Book – 80% Total Loan Amount 1,00,000 20,000 80,000 1,00,000 Yield 14.5% Equity Capi
Slide 35: GRO Score 2.0
GRO Score 2.0 Evolution and Proof of Concept Slide 35
Slide 36: Revolutionizing credit to MSMEs through data driven underwriting
Revolutionizing credit to MSMEs through data driven underwriting 48,000+ Dec 2022 • Gro Score 3.0 Applications processed Gro Score 3.0 • One score combining Bureau, Banking & GST data since July 21 1,45,000+ Mar 2022 • 76% of prime branch book on boarded through Gro Score Proof of Concept • Analysis
Slide 37: GRO Score 2.0 – Analysis of accepts and rejects
GRO Score 2.0 – Analysis of accepts and rejects Portfolio Performance across time horizon 30+ DPD % in 6 months 90+ DPD % in 6 months Not Score Disbursed Write Disbursal Disbursed band count rate% Mix 9% 3% count 8% 3% 3% 3% 8% 8% 7% 7% 2% 3% A 11,582 6,547 36.1% 52.8% 6% 6% 2% 5% 4% 4% 5% 1% 1% 2%
Slide 38: UGRO Capital Limited Registered Office Address
UGRO CAPITAL LIMITED Registered Office Address: Equinox Business Park, Tower 3, 4th Floor, LBS Road, Kurla (West), Mumbai - 400070 CIN: L67120MH1993PLC070739 E-mail: investorrelations@ugrocapital.com | Website: www.ugrocapital.com Slide 38