Ugro Capital Limited · NSE:UGROCAP

Ugro Capital — Investor Day (August 2022)

37 slides from Ugro Capital's investor day presentation, Aug 26, 2022

1. Slide 1: Investor Day

   Investor Day August 26, 2022 Slide Slide 01 1

2. Slide 2: U GRO Capital - Overview

   U GRO Capital - Overview About UGRO Vision / Mission Our Thesis h'ZKĂƉŝƚĂůůŝŵŝƚĞĚŝƐĂ^ĂŶĚE^ůŝƐƚĞĚ͕ Problem of MSMEs can be solved by ƚĞĐŚŶŽůŽŐLJĨŽĐƵƐĞĚ͕ƐŵĂůůďƵƐŝŶĞƐƐůĞŶĚŝŶŐƉůĂƞŽƌŵ͘ DŝƐƐŝŽŶ͗ ƌŝŶŐŝŶŐŚŽŵŽŐĞŶĞŝƚLJƚŽĂŶŽŶͲŚŽŵŽŐĞŶĞŽƵƐ^ĞĐƚŽƌ ƵŝůƚŽŶϱͲƉŝůůĂƌƐŽĨĂƚĂ͕dĞĐŚŶŽůŽŐLJ͕^ƚƌŽŶŐ ŽƌƉŽƌĂƚĞ'ŽǀĞƌŶĂŶĐĞ͕džƉĞƌŝĞŶĐĞĚD

3. Slide 3: India's First fully data driven Lending as a Service Company

   India’s First fully data driven Lending as a Service (LaaS) Company Business Loan Public Sector – Secured Banks Machinery Private Sector Micro and Small Business with Liability / Co-lending Partners Finance Banks 1 L to 5 cr credit need Business Loan Data – Unsecured Driven SFBs DƵůƟ 10 Co-lending C

4. Slide 4: Building India's largest lending platform: Lending as a Service

   ƵŝůĚŝŶŐ/ŶĚŝĂ͛ƐůĂƌŐĞƐƚŽʹ>ĞŶĚŝŶŐƉůĂƞŽƌŵ͗>ĞŶĚŝŶŐĂƐ^ĞƌǀŝĐĞ /ŶĐƌĞĂƐŝŶŐDŝdžŽĨKīŽŽŬhD •^ĞĐƵƌĞĚƵƐŝŶĞƐƐ>ŽĂŶƐ 1% 2% 4% 7% 16% 21% •ŐƌĞĞŵĞŶƚƵŶĚĞƌŶĞǁĐŽͲůĞŶĚŝŶŐƌĞŐƵůĂƚŝŽŶʹ:ƵŶ͛Ϯϭ •^ŵĂůůdŝĐŬĞƚ^ĞĐƵƌĞĚĂŶĚhŶƐĞĐƵƌĞĚƵƐŝŶĞƐƐ>ŽĂŶƐ •ŐƌĞĞŵĞŶƚƵŶĚĞƌŶĞǁĐŽͲůĞŶĚŝŶŐƌĞŐƵůĂƚŝŽŶʹEŽǀ͛Ϯϭ •^ĞĐƵƌĞĚƵƐŝŶĞƐƐ>ŽĂŶƐ •ŐƌĞĞŵĞŶƚ^ŝŶŐĞĚŝŶKĐƚ͛Ϯϭ 99

5. Slide 5: Business Model Evolving to Generate Significant Cash Flows

   ƵƐŝŶĞƐƐDŽĚĞůǀŽůǀŝŶŐƚŽ'ĞŶĞƌĂƚĞ^ŝŐŶŝĮĐĂŶƚĂƐŚŇŽǁƐ FY22 Q4FY22* Q1FY23* FY23P FY25P AUM (INR Cr) 2,969 2,969 3,656 7,000+ 20,000+ Off Book AUM % 16% 16% 21% 35% + ~ 50% Net Total Income % 9.3% 10.6% 10.5% ~ 13.0% ~ 15.0% Cost to Income Ratio % 71.8% 73.3% 72.1% ~ 60.0% ~ 45.0% Credit Cost % 1.5% 1.5% 1.

6. Slide 6: Lending as a service is a highly profitable model

   >ĞŶĚŝŶŐĂƐĂƐĞƌǀŝĐĞŝƐĂŚŝŐŚůLJƉƌŽĮƚĂďůĞŵŽĚĞů ^ĂŵƉůĞ/ůůƵƐƚƌĂƟŽŶ ƐƐƵŵƉƟŽŶƐĨŽƌĂůĐƵůĂƟŽŶ ParƟculars (INR Cr) Normal Scenario Co-lending ParƟculars RaƟos LŽan AŵŽƵnt ϭ͕00͕000 ϭ͕00͕000 zieůĚ ϭ4.5% Interest InĐŽŵe ϭ4͕500 2͕900 CŽͲůenĚinŐ spreaĚ inĐŽŵe Ͳ ϯ͕200 CŽst ŽĨ ŽrrŽwinŐ ϭ0.5% Interest Edžpense 8͕400 ϭ͕680

7. Slide 7: DataTech is at the centre of what we do

   DataTech is at the centre of what we do Slide Slide 07 7

8. Slide 8: Data can be the engine for SME credit in India

   It has been proven that data can be the engine for SME credit in India End to End MSME Digital Lending is now a reality /ĚĞŶƟƚLJ dĂdžĂŶĚ>ĞŐĂů&ŝůŝŶŐ ϮĞͲŽŵŵĞƌĐĞ Layer e-KYC Apps Embedded Credit ĂĚŚĂƌ <z ^ŝŐŶ EĞŽĂŶŬƐ 50% + of ^ŽĐŝĂůEĞƚǁŽƌŬƐ MSME and Retail loans to Payments ĐĐŽƵŶƟŶŐĂŶĚ move Digital in Őƌ

9. Slide 9: Evolved to a DataTech Company within 3 years of inception

   ǀŽůǀĞĚƚŽĂĂƚĂdĞĐŚŽŵƉĂŶLJǁŝƚŚŝŶϯLJĞĂƌƐŽĨŝŶĐĞƉƟŽŶ Technology Plaƞorms OperĂƟŽŶƐĂŶĚŽůůĞĐƟŽŶƐ • WeďΘMŽďiůe ďaseĚ appůiĐaƟŽns ĨŽr eaĐŚ • EͲ^iŐn AppůiĐaƟŽn͕EͲAŐreeŵenƚ͕ ďƵƐinesƐĐhanneů CƵstŽŵer Whatsapp ďŽƚ͕EͲNAC, inteŐraƟnŐŽn Žne ĐŽŵŵŽn • PaLJŵent ŐatewaLJinteŐraƟŽn ďƵƐiness půaƞŽrŵ + DatĂŶĂůLJƟĐƐ Powered by D

10. Slide 10: 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.. … and to draw meaningful insights out of unorganized data ĐƌŽƐƐDƵůƟƉůĞƉĂƌĂŵĞƚĞƌƐ ƌƟĮĐŝĂů/ŶƚĞůůŝŐĞŶĐĞ GRO 2.0 GRO 3.0 ŶŐŝŶĞĞƌŝŶŐŽĨŵĂŬŝŶŐ/ŶƚĞůůŝŐĞŶƚ Credit Credit Bureau DĂĐŚŝŶĞƐ

11. Slide 11: A large feature set

    A large feature set Machine generates 25,000+ data features from an applicant’s bureau record Model is objectively evaluated and bank statement before use Turnover and Borrowing mix and transaction intensity nature • Historical aggregation – several • Machine learning algorithms - help Balances and

12. Slide 12: Rigorous statistical method

    Rigorous statistical method Reject Approve 4.33% Reject : ~20% population, bad rate 2.74% • Parameter shortlisting and scorecard Approve: ~80% population, bad rate 0.24% weightage determined through statistical methods without any manual adjustment 1.19% • Validated on independent time frame 0.71% 0

13. Slide 13: Combining two critical elements of underwriting into one holistic model

    Combining two critical elements of underwriting into one holistic model Banking model - risk banks ("1" represents lowest risk) Gro Score 2.0 risk segments 1 2 3 4 5 6 7 8 9 10 Total 1 2 3 ("1" represents lowest risk) Credit model - risk bands 4 5 6 7 8 9 10 Total A B C D E Slide 138

14. Slide 14: GRO Score 2.0 – Proof of Concept

    GRO Score 2.0 – Proof of Concept Market Performance of Disbursed cases 30+ DPD % in 6 months 90+ DDP % in 6 months Score Disbursed cases Non Disbursed Band count cases count 4% 4% 9% 9% 8% 8% 3% A 2,352 4,885 6% 5% 5% 2% 2% 2% B 1,346 3,381 4% 3% 1% 2% 2% 1% 1% 1% 1% 1% C 585 2,779 0% D 228 1,360 A

15. Slide 15: Revolutionizing credit to MSMEs through data driven underwriting

    ZĞǀŽůƵƟŽŶŝnjŝŶŐĐƌĞĚŝƚƚŽD^DƐƚŚƌŽƵŐŚĚĂƚĂĚƌŝǀĞŶƵŶĚĞƌǁƌŝƟŶŐ 21,000+ Dec 2022 •'ƌŽ^ĐŽƌĞϯ͘Ϭ ƉƉůŝĐĂƟŽŶƐƉƌŽĐĞƐƐĞĚ 'ƌŽ^ĐŽƌĞϯ͘Ϭ •KŶĞƐĐŽƌĞĐŽŵďŝŶŝŶŐďƵƌĞĂƵ͕ďĂŶŬŝŶŐΘ'^dĚĂƚĂ ƐŝŶĐĞ:ƵůϮϭ 67,000+ Mar 2022 •ϳϲйŽĨƉƌŝŵĞďƌĂŶЌŬŽŶďŽĂƌĚĞĚƚŚƌŽƵŐŚ'ƌŽ^ĐŽƌĞ •ŶĂůLJƐŝƐŽĨĂĐĐĞƉƚƐΘƌĞũĞĐƚƐƐŚŽǁƐƚƌŝŬŝŶŐŽƵƚƉĞƌĨŽƌŵĂŶĐĞŽĨƐĞŐŵĞŶƚƐ͕ǀͬƐƌĞƐ

16. Slide 16: Our Risk Management Framework

    Our Risk Management Framework Data analytics lies at the heart of credit U GRO Capital is well placed to comply with RBI’s scale-based regulation for NBFCs and would be assessment and has enabled migration putting in place a supervisory risk evaluation and capital adequacy framework with comprehensi

17. Slide 17: Portfolio Provisioning, Collection Efficiency & Restructuring Highlights

    WŽƌƞŽůŝŽWƌŽǀŝƐŝŽŶŝŶŐ͕ŽůůĞĐƟŽŶĸĐŝĞŶĐLJΘZĞƐƚƌƵĐƚƵƌŝŶŐ,ŝŐŚůŝŐŚƚƐ KǀĞƌĂůůŽůůĞĐƟŽŶĸĐŝĞŶĐLJdƌĞŶĚ •dŽƚĂůƉƌŽǀŝƐŝŽŶƐĂƐŽĨ:ƵŶ͛ϮϮƐƚŽŽĚĂƚ༤ϰϵ͘ϰƌ;ϭ͘ϳйŽĨƚŚĞ>ŽĂŶdžƉŽƐƵƌĞͿ 9ϯ.0% 9ϯ.ϯ% 9ϯ.8% 9ϯ.9% 9ϯ.ϯ% •'EWͬEEWĂƐĂйŽĨŽŶͲŬhDƐƚŽŽĚĂƚϮ͘ϭϯйͬϭ͘ϱϳйĂƐŽĨ:ƵŶΖϮϮ •'EWͬEEWŽŶdŽƚĂůhDƐƚŽŽĚĂƐϭ͘ϳйͬϭ͘ϮйĂƐŽŶ:ƵŶΖϮϮ •DĂũŽƌŝƚLJŽĨƚŚĞƌĞƐƚƌƵĐƚƵ

18. Slide 18: Formidable Distribution Strength and Robust Technology Architecture

    Formidable Distribution Strength and Robust Technology Architecture Slide18 Slide 18

19. Slide 19: Multi-pronged approach led by tech capabilities

    DƵůƟƉƌŽŶŐĞĚĂƉƉƌŽĂĐŚůĞĚďLJƚĞĐŚĐĂƉĂďŝůŝƟĞƐ Branch-Led Channel Prime Loan Branches Micro Loan Branches ĂƚĞƌŝŶŐƚŽDŝĐƌŽĂŶĚ^ŵĂůůĞŶƚĞƌƉƌŝƐĞƐƚŚƌŽƵŐŚϵϱнďƌĂŶĐŚĞƐ Ticket Size ROI Ticket Size ROI •WƌŝŵĞ>ŽĂŶƌĂŶĐŚĞƐ͗ϮϬďƌĂŶĐŚĞƐǁŝƚŚůŽĂŶƐůĂƌŐĞůLJƐŽƵƌĐĞĚƚŚƌŽƵŐŚ LAP 50LͲϱϬϬ> ϭ2%Ͳϭ2.5% LAP Ϯ>ʹϮϱ> ϭϴйͲϮϯй ŝŶƚĞƌŵĞĚŝĂƚĞĐŚĂŶ

20. Slide 20: Catering to all credit needs of all MSMEs

    Catering to all credit needs of all MSMEs 20 Prime Branches Supply Chain Financing Secured LAP 76 Micro Branches 1,000+ GRO Partners Unsecured Business Loans Our Product 49 KīĞƌŝŶŐ īŽƌĚĂďůĞ>W Anchors 29 OEMs 32 Fintech Partners Machinery Loans Micro Enterprises Loans 685+ Sales Employees WWW.UGROCAP

21. Slide 21: System Architecture to support full-Suite SME Lending

    System Architecture to support full - Suite SME Lending 'ZKͲWůƵƐ 'ZKͲŝrĞĐƚ Intermediaries Direct Interface ŶƵďĞƌŝnjĞĚĚŝƐƚƌŝďƵƟŽŶŵŽĚĞůĨŽƌ ŝƌĞĐƚƚŽĐƵƐƚŽŵĞƌ;KŶůŝŶĞͿ &K^ŽƌŝŐŝŶĂƟŽŶĂŶĚŽŶďŽĂƌĚŝŶŐ ĐŚĂŶŶĞůʹǁĞŶƚůŝǀĞŝŶďĞƚĂƉŚĂƐĞ ^Ɛ͕ƐĂŶĚŽƚŚĞƌŝŶƚĞƌŵĞĚŝĂƌŝĞƐ ŝŶĞĐĞŵďĞƌϮϬϭϵ GRO Partnership and Supply Chain Alliances ^

22. Slide 22: Operating & Financial Performance

    Operating & Financial Performance Slide22 Slide 22

23. Slide 23: Well diversified and Granular Portfolio

    tĞůůŝǀĞƌƐŝĮĞĚĂŶĚ'ƌĂŶƵůĂƌWŽƌƞŽůŝŽ Product Mix WŽƌƞŽůŝŽŽŶĐĞŶƚƌĂƟŽŶŝŶŬĞLJŐĞŽŐƌĂƉŚŝĐĂůĂƌĞĂƐΎ Sector Mix* 17% 10% 52% 17% 18% 22% 9% 10% 5% 9% 8% 27% 14% 20% 11% 12% 11% ^eĐƵreĚ Priŵe LŽans ^ƵppůLJ Chain &inanĐe 8% UnseĐƵreĚ Priŵe LŽans MaĐhinerLJ LŽan 4% 5% 4% 14% 6% MiĐrŽ LŽans Partnerships anĚAůůianĐes R

24. Slide 24: Operating & Financial Metrics

    KƉĞƌĂƟŶŐΘ&ŝŶĂŶĐŝĂůDĞƚƌŝĐƐ AUM (INR Cr) Gross Loans Originated (INR Cr) dŽƚĂů/ŶĐŽŵĞ;/EZƌͿΘWŽƌƞŽůŝŽzŝĞůĚ$ нϭϲϲй нϮϯй нϯϭϭй нϰϭй ϯ͕656 ϭ͕ϯ59 ϭ6.0% ϭ6.4% ϭ6.7% 2͕969 ϭ5.8% ϭ5.7% 2͕589 2ϭ% ϭ͕05ϯ 96ϯ ϭϭ4 ϭ24 ϭ͕9ϯϯ 7% ϭ6% 79ϭ 85 ϭ͕ϯ75 4% 6ϯ 79% ϯϯϭ 5ϭ 2% 9ϯ% 84% 96% 98% Qϭ'22 Q2'22 Qϯ'22 Q4'22 Qϭ'2ϯ Qϭ'22

25. Slide 25: Annexures

    Annexures Slide25 Slide 25

26. Slide 26: Origination Process Walk Through

    Origination Process Walk Through Slide26 Slide 26

27. Slide 27: Login screen

    Login screen 1. User can login to DSA application using their existing user id and password. 2. Login can also be done with OTP sent on user registered mobile no. Click here for login; Insert the Employee Code here Enter your password OTP Page ¾ OTP Based Login; Enter username and click on OTP login

28. Slide 28: Dashboard

    Dashboard Approval Awaited: Showing all Final Approval Awaited : approval awaited LAF id with their Bucket of final approval LAF id. status. Pending LAF : All LAF id with their Principal Approval: LAF ID for current disposition status. principal approval with status. Slide28 Slide 28

29. Slide 29: Applicant Detail

    Applicant Detail Enter Applicant GSTIN no. & click on App will automatically fetch all the details Select applicant type. Take proof of GSTIN, ‘Continue’ of GSTIN and PAN information of the user. PAN and DATE OF INCORPORATION. Slide29 Slide 29

30. Slide 30: Final Submission

    Final Submission After adding Collateral , Document, and Co- Applicant, click on the Continue button to preview the Loan Application Co-applicant Click on Submit to process the Loan Application Slide30 Slide 30

31. Slide 31: Master Data Management Portal – Partnership & Alliances

    Master Data Management Portal – Partnership & Alliances Slide31 Slide 31

32. Slide 32: Customer Testimonies

    Customer Testimonies Slide32 Slide 32

33. Slide 33: Unnat – Arun, Owner, Healthcare

    Enabling Business Resilience and Expansion: Business Expansion Loans : Arun, Unnat Branch - Led Channel Organisation India has been battling the COVID-19 pandemic since its onset and has heavily relied on healthcare workers and medical professionals to provide medical relief and assistance, Unnat in

34. Slide 34: SDR Packaging – Partap Singh, Owner, Food Processing

    Enabling Business Expansion post-COVID: Machinery Loans : Partap Singh, SDR Packaging Ecosystem Channel Organisation COVID pandemic put business expansion aspirations of many entrepreneurs on a standstill. It became a challenge to think ahead of time to plan for expansion SDR Packaging of their busi

35. Slide 35: Aradhna Foundation – Hulikal Ramaswamy, Education

    Enabling Education Access for the Marginalized : Branch & Partnerships & Hulikal Ramaswamy, Aradhna Foundation Alliances Channel Organisation In India, 98 percent of residentials have a primary school (class I-V) within one kilometer and 92 percent have an upper primary school (class VI-VIII) within

36. Slide 36: Hotel Gavraan – Milind Prabhakar Padwale, Hospitality

    Enabling Entrepreneurial Growth : Branch & Partnerships & Milind Prabhakar Padwali, Hotel Gavraan Alliances Channel Organisation India is a country rich in food and delicacies. Each state can be connected to a specialty it is renowned for. As of 2020, the country had about 53,000 hotels and 70 lakh

37. Slide 37: Thank You

    Thank You www.ugrocapital.com

UGRO Capital — Investor Day (August 2022) on 6ix