Shriram Finance Limited · NSE:SHRIRAMFIN

Shriram Finance — Shriram Transport Finance Company — Investor Presentation (March 2022)

53 slides from Shriram Finance's investor presentation, March 2022

  1. Slide 1: Shriram Transport Finance Company Ltd Corporate Presentation

    Shriram Transport Finance Company Ltd Corporate Presentation March 2022

  2. Slide 2: Contents

    Contents 3 Company Overview 7 Business Model/Competitive Strengths 10 Market Dynamics & Growth Strategy 15 Organizational Structure 22 Performance Track Record 33 Recent Performance – Q4 FY22 2

  3. Slide 3: Company Overview

    COMPANY OVERVIEW

  4. Slide 4: Company Snapshot

    Company Snapshot Leading player in organized high yield pre-owned CV financing segment Diversified Portfolio – PCV’s, Construction Equipment, Tractor Financing Over 2.11 mn customers Working Capital Loans, Others, 0.1% Large network of 1,854 Branch offices and 775 rural centres Business Loan, 1.1% 1

  5. Slide 5: Corporate History

    Corporate History  Securitised Rs. 87.57  Merger of Shriram bn during FY 2010.  Tied up with Investment Ltd. Citicorp for CV  Successfully raised and Shriram financing under Rs. 5.84 bn through Overseas Finance Portfolio QIP with domestic & Ltd. with SFC; PAT Management international crosses Rs.

  6. Slide 6: Corporate History (Contd.)

    Corporate History(Contd.)  Successfully raised Rs. 13.5 Bn through  Raised Rs. 14.92 bn  Raised maximum issuance of through right issue in permissible US$ ‘Masala Bonds’ – August 2020 750 million Senior Secured  Raised Rs. 36.69 through ECB bn and Rs. 16.53 bn Rupee route during the through issu

  7. Slide 7: Business Model / Competitive Strengths

    BUSINESS MODEL / COMPETITIVE STRENGTHS

  8. Slide 8: Strategic Presence In High Yield Used CV Segment

    Strategic Presence In High Yield Used CV Segment CV Financing Business Model Pre-Owned New Age of Truck 1 2 3 4 5 6 7 8 9 10 11 12 Lending Rates 14-16% 16-24% 12-16%  Small truck owners (less than 5 trucks) with  Existing customer base upgrading to new trucks Target Segment underdeveloped banking

  9. Slide 9: Valuation Expertise & Relationship Based Model

    Valuation Expertise & Relationship Based Model Knowledge Driven Valuation Model Critical Success Factor Vehicle Assessment Loan Amount Valuation EMI Old CVs 60-70% LTV Ratio Repayment Ability New CVs 75-80% LTV Ratio STFC has right mix of scale and skill Awareness of load structure / business mix Re

  10. Slide 10: Market Dynamics & Growth Strategy

    MARKET DYNAMICS & GROWTH STRATEGY

  11. Slide 11: Strong Industry Potential – Commercial Vehicles

    Strong Industry Potential – Commercial Vehicles Market Potential (Rs. bn) Trucks (mn)  Market for second hand truck financing is under penetrated with 55-60% of the market with private financiers / money lenders who 3,717 29% charge high interest rates 31%  Stringent traffic regulations in major c

  12. Slide 12: Strong Industry Potential – Other Portfolio Segments

    Strong Industry Potential – Other Portfolio Segments Construction Passenger Vehicle’s Tractor Financing Automall Equipment Market Size Rs. 800 billion Rs. 4,400 billion Rs. 1,200 billion NA (FY23) Infra spends in 11th 5- year plan/ PM Gati Shakti Access to ready Key Driver Personal Mobility is Incre

  13. Slide 13: Transportation Model – Multiple Financing Opportunities

    Transportation Model – Multiple Financing Opportunities Hub and Spoke Transportation Model Long Haul Medium Haul Short Haul Last Mile >800 kms 350-800 kms 50-350 kms <50 kms Load re-distributed from few large hubs in major regions of the country to large number of touch points in the hinterland CV L

  14. Slide 14: Growth Strategy

    Growth Strategy  Strengthening presence  Introduction of top-up and expanding reach products like finance for tyres, working capital and  Increase penetration into engine replacement rural and urban centers Target AUM (Rs. bn)  Economies of scale -  Build partnerships with incremental cost of n

  15. Slide 15: Organizational Structure, Management Team & Board of Directors

    ORGANIZATIONAL STRUCTURE, MANAGEMENT TEAM & BOARD OF DIRECTORS

  16. Slide 16: Well-entrenched Pan India Network

    Well-entrenched Pan India Network Zonal Split of Branches Abbreviations Zone Zone Name Branches AHBBZ Ahmedabad Business Zone 659 BANBZ Bangalore Business Zone 693 CHBBZ Chennai Business Zone 502 Branch Network Branch Customers Private Rural Employees Business Team Offices Financiers Centres 16

  17. Slide 17: Professional Management Team with Vast Industry Experience

    Professional Management Team with Vast Industry Experience Umesh Revankar • Joined as an Executive Trainee in 1987. He has been associated with Shriram Group for over 35 years and has shouldered various responsibilities and worked in several key roles of business operations. Vice Chairman & Managing

  18. Slide 18: Professional Management Team with Vast Industry Experience

    Professional Management Team with Vast Industry Experience Nilesh Odedara • Joined in 1997. Joint Managing • Holds a degree in BBA. Director • Over 25 Years experience in Shriram. Sudarshan Holla • Joined in 1991. Joint Managing • Holds a degree in BBM and MBA. Director • Over 30 Years experience in

  19. Slide 19: Professional Management Team with Vast Industry Experience

    Professional Management Team with Vast Industry Experience • Over 30 Years experience in finance industry. K. Ravisankar • Holds a degree in BCom, and is ACA and ICWA President • Heads RBI and Tax Compliance functions. Vivek Madhukar • Joined in 2011. Achwal • Is a qualified Company Secretary and ho

  20. Slide 20: Board of Directors

    Board of Directors Subramanian • Member of Indian Administrative Service (IAS – retired). Lakshminarayanan Chairman • Served at senior positions in the Ministry of Home Affairs, Ministry of Communication & IT etc Umesh Revankar • Joined as an Executive Trainee in 1987. He has been associated with Sh

  21. Slide 21: Board of Directors (Contd.)

    Board of Directors (Contd.) • Is a Non-Executive, Non-Independent Director on our Board. He is a Commerce graduate from Andhra Y. S. Chakravarti University • Started his career in Shriram Chits Pvt. Ltd., Andhra Pradesh in June 1991 as an executive trainee, and rose Additional to the position of Chi

  22. Slide 22: Performance Track Record

    PERFORMANCE TRACK RECORD

  23. Slide 23: Strong Financial Track Record

    Strong Financial Track Record FY16 FY17 FY18 FY18 FY19 FY20 FY21 FY22 P&L Metrics (Rs. mn) IGAAP IGAAP IGAAP IndAS IndAS IndAS IndAS IndAS Interest Income (Incl . Securitiza tion) 101,953.3 107,305.8 121,435.5 132,710.3 154,441.4 164,773.1 173,346.6 191,806.2 Less : Interest Expenses 50,743.8 52,094

  24. Slide 24: Strong Financial Track Record

    Strong Financial Track Record Balance Sheet Metrics (Rs. FY15 FY16 FY17 FY18 FY18 FY19 IndAS FY20 IndAS FY21 IndAS FY22 IndAS mn) IGAAP IGAAP IGAAP IGAAP IndAS - On Books 4,92,271.4 6,18,783.7 6,54,628.7 7,96,729.2 8,00,013.7 8,50,847.3 1,085,017.1 1,161,916.0 1,256,990.3 - Off Books 98,811.40 1,08,

  25. Slide 25: Healthy Asset Quality (as per IGAAP)

    Healthy Asset Quality (as per IGAAP) Particulars (Rs. mn) FY14 FY15 FY16 FY17 FY18 Gross NPA 14,505.0 18,941.4 38,702.4 54,084.4 73,763.9 Net NPA 3,029.1 3,791.2 11,437.0 16,590.0 21,311.4 Gross NPA (%) 3.86% 3.80% 6.18% 8.16% 9.15% Net NPA (%) 0.83% 0.79% 1.91% 2.65% 2.83% Coverage ratio (%) 79.12%

  26. Slide 26: Healthy Asset Quality (as per IndAS)

    Healthy Asset Quality (as per IndAS) Particulars (Rs. mn) FY18 FY19 FY20 FY21 FY22 YoY (%) Gross Stage 3 90,842.1 86,222.7 91,797.1 82,952.1 88,875.5 7.14% ECL provision-Stage 3 30,953.2 29,670.0 31,886.5 34,885.3 44,415.0 27.32% Net Stage 3 59,888.9 56,552.7 59,910.6 48,066.8 44,460.5 -7.50% Gross

  27. Slide 27: Access to Low Cost Funds

    Access to Low Cost Funds Funding Mix as % of Overall Liabilities Reta il Ba nks/Ins titutions 80.60% 81.50% 85.40% 87.18% 86.80% 84.76% 80.86% 19.40% 18.50% 14.60% 12.82% 13.20% 15.24% 19.14% FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22  Strategic mix of retail deposits and institutional funding match

  28. Slide 28: Credit Rating as on March 31, 2022

    Credit Rating as on March 31, 2022 Credit Rating Agency Instruments Ratings as on 31.03.2022 CARE Ratings Ltd Commercial Paper CARE A1+ CARE Ratings Ltd Non-convertible debentures CARE AA+/Stable CARE Ratings Ltd Subordinated debt CARE AA+/Stable CRISIL Bank Loan Long-term CRISIL AA+/Stable CRISIL B

  29. Slide 29: Shareholding Pattern as on March 31, 2022 vs March 31, 2021

    Shareholding Pattern as on March 31, 2022 vs March 31, 2021 No. of shares outstanding: 270.52 mn No. of shares outstanding: 253.06 mn Details of Promoters/Promoters Group* Holding (%) Details of Promoters/Promoter Group* Holding (%) Shriram Capital Limited 26.04% Shriram Capital Limited 26.46% Shrir

  30. Slide 30: Has Attracted Strong Interest from Quality Investors

    Has Attracted Strong Interest from Quality Investors  Consistent track record and high growth potential has attracted reputed institutional and private equity investors to infuse growth capital  Last Four fund raising : 1. On November 25, 2021, allotted 1.736 mn equity shares of face value of Rs.

  31. Slide 31: List of Key Shareholders

    List of Key Shareholders Key Shareholders Current Shareholding % (Mn Shares) Shriram Capital Limited 70.44 26.04 Life Insurance Corporation of India 18.00 6.66 Fidelity Investment Trust Fidelity Series Emerging Markets Opportunities Fund 11.45 4.23 Sanlam Life Insurance Limited 7.54 2.79 Government

  32. Slide 32: Well-Capitalized Balance Sheet

    Well-Capitalized Balance Sheet Networth (Rs. mn) CRAR (%) Book Value (Rs.) 20.27% 21.99% 22.50% 22.97% 17.38% 17.56% 16.94% 16.87% 793.59 852.30 958.61 598.35 697.99 101,318 112,922 125,720 135,479 158,087 179,775 215,407 259,046 446.60 497.71 554.12 FY16* FY17* FY18* FY18 FY19 FY20 FY21 FY22 FY16*

  33. Slide 33: Recent Performance

    RECENT PERFORMANCE

  34. Slide 34: Business Update

    BUSINESS UPDATE  The collections for Q1 FY22, Q2 FY22, Q3 FY22 and Q4 FY22 were 91.04%, 99.03%,101.17% and 104.28 % of the demand respectively.  The Company had implemented resolution plans (Resolution 1.0 and Resolution 2.0) to relieve COVID 19 pandemic related stress to 39,410 borrower accounts

  35. Slide 35: Business Update

    BUSINESS UPDATE Additional Expected Credit Loss (ECL) provision on Loans on account of COVID – 19 Particulars Amt (Rs. mn) Covid -19 Provision held on January 01, 2022 28,525.00 Less:- Amount utilised from ECL provision created as management overlay on account of COVID -19 for writeoff# 7,999.20 Cov

  36. Slide 36: Merger Update

    MERGER UPDATE  The Board of Directors of the Company in its meeting held on 13th December, 2021 had approved a Composite Scheme of Arrangement and Amalgamation (“Scheme”) involving amalgamation of Shriram Capital Limited (after de-merger of a few undertakings from the said Shriram Capital Limited)

  37. Slide 37: Performance Highlights – Q4 FY22 vs Q4 FY21

    Performance Highlights – Q4 FY22 vs Q4 FY21 Total Income 13.11 % Q4 FY22 Rs 50,875.9 mn Q4 FY21 Rs 44,978.7 mn Net Interest Income* 22.16 % Q4 FY22 Rs 26,278.2 mn  Cost to income ratio *including Direct assignment Income at 20.00 % in Q4 Rs. 492.0 Mn (Q4 FY21 Rs. 71.1 Mn) Q4 FY21 Rs 21,511.2 mn FY2

  38. Slide 38: Performance Highlights – FY22 vs FY21

    Performance Highlights – FY22 vs FY21 Total Income 10.54 % FY22 Rs 192,742.3 mn FY21 Rs 174,364.0 mn Net Interest Income* 14.07 % FY22 Rs 93,160.6 mn Cost to income ratio at *including Direct assignment Income FY21 Rs 81,671.0 mn  19.89 % in FY22 as Rs. 2,291.5 Mn (FY21 Rs. 860.1 Mn) compared to 21

  39. Slide 39: Performance Highlights – Q4 FY22 vs Q4 FY21

    Performance Highlights – Q4 FY22 vs Q4 FY21 AUM 8.36 % Q4 FY22 Rs 1,270,408.6 mn Q4 FY21 Rs 1,172,428.3 mn Gross Stage 3 assets 7.14 % Q4 FY22 Rs 88,875.5 mn Q4 FY21 Rs 82,952.1 mn  CRAR at 22.97 % as of Q4 FY22 compared to 22.50% as of Q4 FY21. Net Stage 3 assets 7.50 % Q4 FY22 Rs 44,460.5 mn Q4 F

  40. Slide 40: AUM Break-up

    AUM Break-up Particulars (Rs. mn) Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q4 FY21 YoY (%) QoQ (%) FY22 FY21 YoY (%) Loan Portfolio - On Books Balance sheet assets 1,065,121.3 1,025,031.0 997,366.3 969,732.9 927,102.1 14.89% 3.91% 1,065,121.3 927,102.1 14.89% Securitised assets 191,869.0 208,224.7 209,421.3

  41. Slide 41: Segment-wise AUM Break up

    Segment-wise AUM Break up . Working Others, 0.05% Capital Loans, 1.30% = HCVs and CEs, 47.29% = Business Loans, 1.07% = Tractors, 2.50% Q4FY22 = Passenger Vehicles, 20.57% = M&LCVs, 27.22% ~ Working Capital Loans, 2.32% = Business Loans, 1.74% = Tractors, 2.72% ™ Passenger Vehicles, 20.99% Others, 0

  42. Slide 42: Branch & AUM distribution – Q4 FY22 vs Q4 FY21

    Branch & AUM distribution – Q4 FY22 vs Q4 FY21 Branch (Nos.) AUM (Rs in bn) Total Branch 1,854 Total AUM Rs 1,270.4 bn Total Branch 1,817 Total AUM Rs 1,172.4 bn Urban branches represents places where population in more than 10 Lakh Semi-urban branches represents places where population in between 1

  43. Slide 43: Provision Analysis

    Provision Analysis Q4 FY22 Q3 FY22 Particulars (Rs. in mn) Q2 FY22 Q1 FY22 Q4 FY21 QoQ (%) FY22 FY21 YoY (%) (day wise)* (day wise)* Gross Stage 3 88,875.5 103,581.1 94,367.1 96,584.2 82,952.1 -14.20% 88,875.5 82,952.1 7.14% ECL provision-Stage 3 44,415.0 52,054.2 45,831.8 42,648.8 34,885.3 -14.68%

  44. Slide 44: P&L Statement

    P&L Statement Particulars (Rs. mn) Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q4 FY21 YoY (%) QoQ (%) FY22 FY21 YoY (%) Interest income 50,542.9 48,109.5 46,814.5 46,339.3 44,676.4 13.13% 5.06% 191,806.2 173,346.6 10.65% Interest expended 24,264.7 24,229.8 24,886.3 25,264.8 23,165.2 4.75% 0.14% 98,645.6 91,675

  45. Slide 45: Balance Sheet

    Balance Sheet Particulars (Rs. mn) Mar-22 Dec-21 Sep-21 Jun-21 Mar-21 YoY (%) QoQ (%) I. ASSETS Financial Assets Cash and cash equivalents 106,624.4 124,957.5 102,573.7 107,176.7 110,509.3 -3.52% -14.67% Bank Balance other than above 56,927.2 56,436.0 53,361.2 53,056.6 53,908.9 5.60% 0.87% Derivativ

  46. Slide 46: Balance Sheet (Continued)

    Balance Sheet (Continued) Particulars (Rs. mn) Mar-22 Dec-21 Sep-21 Jun-21 Mar-21 YoY (%) QoQ (%) II. Liabilities and Equity Financial Liabilities Payables 1,687.0 1,427.3 1,614.2 1,331.1 1,534.3 9.95% 18.20% Debt Securities 412,565.5 396,278.3 375,322.1 407,022.7 400,618.7 2.98% 4.11% Borrowings (o

  47. Slide 47: Key Metrics – Q4 FY22

    Key Metrics – Q4 FY22 P&L Metrics (Rs. mn) Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q4 FY21 YoY (%) QoQ (%) FY22 FY21 YoY (%) Interest Income 50,542.9 48,109.5 46,814.5 46,339.3 44,676.4 13.13% 5.06% 191,806.2 173,346.6 10.65% Less: Interest Expenses 24,264.7 24,229.8 24,886.3 25,264.8 23,165.2 4.75% 0.14% 9

  48. Slide 48: Borrowing Profile as on March 31, 2022 vs March 31, 2021

    Borrowing Profile as on March 31, 2022 vs March 31, 2021 Rs 1,144.97 bn Rs 1,061.96 bn 48

  49. Slide 49: Borrowing Profile as on March 31, 2022 vs December 31, 2021

    Borrowing Profile as on March 31, 2022 vs December 31, 2021 Rs 1,144.97 bn Rs 1,126.23 bn 49

  50. Slide 50: ALM statement on March 31, 2022

    ALM statement on March 31, 2022 Over one Over 2 Over 3 Over 6 Over one Over 3 to Particulars (Rs. Bn) One month month to 2 months to 3 months to months to year to 3 Over 5 years Total 5 years months months 6 months one year years Total Outflows 54.84 23.98 48.42 70.26 204.20 533.61 141.81 367.43 1,4

  51. Slide 51: About Us

    About Us About Shriram Transport Finance Co. Ltd. Shriram Transport Finance Co Ltd. is one of the largest asset financing NBFCs in India with Assets on Balance sheet of Rs. 127,041 crores. The company is a leader in organized financing of pre-owned trucks with strategic presence in 5-10 year old tru

  52. Slide 52: For any Investor Relations queries please contact

    Contact Us For any Investor Relations queries please contact Sanjay K. Mundra Shriram Transport Finance Co. Ltd Email: smundra@stfc.in Tel. No. +91-22-4095 9507 52

  53. Slide 53: Thank You

    eSHRIRAM Transport Finance Company Limited A WINNING RELATIONSHIP

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