Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q4 FY21 Earnings Presentation
49 slides from Indostar Capital Finance's earnings presentation, Jun 17, 2021
Slide 1: Regulation 30 filing cover letter
INDOSTAR ICFL/LS/0068/2021-22 17 June 2021 BSE limited National Stock Exchange of India limited listing Department, 1st Floor, Exchange Plaza, C-1, Block G, P J Towers, Dalal Street, Fort, Sandra Kurla Complex, Mumbai - 400 001 Sandra (E), Mumbai - 400 051 Scrip Code: 541336 Symbol: INDOSTAR Sub.: R
Slide 2: Q4 & FY21 Results Update
INDOSTAR CAPITAL FINANCE LIMITED Q4 & FY21 Results Update 17 June 2021
Slide 3: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) have been prepared by IndoStar Capital Finance Limited (“IndoStar” or the “Company”) solely for information purposes and do not constitute an offer to sell or, recommendation or solicitation of an offer to subscribe for or
Slide 4: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 5: Strategy
Strategy • To build a 100% retail company • To reduce the Corporate book to less than 10% of AUM by March 22 • To build a profitable retail platform with growth potential to deliver excellent value to all stakeholders • To focus on collections and enhance asset quality • To open smart branches with
Slide 6: NBFCs – Multiple Challenges
NBFCs – Multiple Challenges IL&FS Sluggish CV Demonetisation COVID19 crisis GDP downcycle IMPACT Disruptions to economic Asset quality activity deterioration Liquidity challenges Growth 4
Slide 7: What IndoStar did to manage the challenges
What IndoStar did to manage the challenges 1. Strengthened Balance Sheet • Brought Brookfield as partner with Rs.1225 crs. primary capital and strengthened Capital adequacy and Liquidity • Created additional provisions to overcome Covid impact 2. Reduced Corporate Lending Exposure • On track to beco
Slide 8: Tackling Covid
Tackling Covid We continue to be digitally prepared from origination to Digital Preparedness servicing in a WFH situation We continue to monitor risk closely and will take proactive Risk Assessment actions wherever required While collections have been hampered due to lockdowns, our bounce rates are
Slide 9: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 10: Q4FY21 in Perspective
Q4FY21 in Perspective • Retail disbursements quickly reached Pre-Covid levels • Continued reduction in Corporate lending book • Obtained CRISIL Credit Rating of AA (-) with stable outlook even in the current challenging environment • Strengthened partnership with ICICI Bank with renegotiated commerc
Slide 11: Strong Liquidity & ALM
Strong Liquidity & ALM Particulars Apr-21 May-21 Jun-21 Q2 FY22 Q3 FY22 Q4 FY22 Opening Cash & Equivalents* 17,331 15,970 15,392 9,953 8,867 6,431 Loan repayment inflows [Principal] 762 808 729 2,578 3,485 3,678 Total Inflow 18,093 16,778 16,121 12,531 12,352 10,109 Liability Repayment [Principal] C
Slide 12: Diversified Funding Profile
Diversified Funding Profile Funding Mix - Dec 2020 Funding Mix - Mar 2021 NCD 19% NCD 22% Equity 36% Equity 38% Banks 31% Banks 30% CP 2% CP 2% Securitisation Securitisation 10% 10% Incremental Funding Mobilized Strong Credit Ratings ₹ mn Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Borrowing Type Rating Firm Ra
Slide 13: Steady reduction in the Corporate book
Steady reduction in the Corporate book Corporate Lending AUM (₹ mn) 48,665 44,803 45,270 43,067 36,267 31,646 28,687 29,287 24,760 22,872 19,096 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 11
Slide 14: Retail collections performance update
Retail collections performance update Retail Month Billing Total Collections % Jan-20 2,267 2,350 103.60 Feb-20 2,122 2,209 104.10 Mar-20 2,232 1,462 65.50 Apr-20 2,130 154 7.20 May-20 2,134 389 18.30 Jun-20 2,219 1,023 46.10 Jul-20 2,234 1,450 64.90 Aug-20 2,211 1,565 70.80 Sep-20 2,182 2,008 92.00
Slide 15: Post integration branch rationalisation on course
Post integration branch rationalisation on course 218 branches across 19 states * Some branches have multiple operating segments 322 233 233 217 218 212 215 305 222 222 207 202 208 207 55 48 49 64 65 48 10 10 10 10 44 10 10 10 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 SME Finance Housing Fina
Slide 16: Q4FY21 performance: Key Highlights
Q4FY21 performance : Key Highlights Strong Retail Franchise ~ 78% of AUM (v/s 71% in Execution of Retailisation Theme Mar-20) ICICI partnership AUM ~ ₹ 6,193 mn Comfortable liquidity; ~31% of Borrowings Strong Capitalisation & CRAR 35% Liquidity Debt : Equity ratio of 1.6x Net Revenue fr
Slide 17: Q4 & FY21: Consolidated Profit & Loss Statement
Q4 & FY21: Consolidated Profit & Loss Statement Particulars (₹ mn) Q4FY21 Q3FY21 QoQ % Q4FY20 YoY % FY21 FY20 YoY % Revenue from Operations 2,792 3,353 -17% 3,334 -16% 12,870 15,989 -20% Interest Expenses (1,584) (1,785) -11% (1,942) -18% (7,060) (8,607) -18% Net Revenue from Operations 1,208 1,568
Slide 18: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (₹ mn) Mar-21 Dec-20 QoQ % Mar-20 YoY % Equity 36,983 40,046 -8% 26,806 38% Borrowings 60,076 71,236 -16% 71,419 -16% Other Liabilities 3,757 3,086 22% 3,061 23% Total Liabilities 1,00,816 1,14,368 -12% 1,01,286 - Loan Assets 71,393 75,515 -5% 82,930 -14% Treas
Slide 19: Q4FY21: Business Segment Performance
Q4FY21: Business Segment Performance Corporate CV SME Housing ^ Particulars (₹ mn) Consolidated Lending Finance Finance Finance Revenue from Operations 577 1,292 536 192 2,792 Interest Expenses (350) (490) (227) (126) (1,584) Net Interest Income 227 802 309 66 1,208 People Costs 18 243 45 24 380 Ope
Slide 20: FY21: Business Segment Performance
FY21: Business Segment Performance Corporate CV SME Housing ^ Particulars (₹ mn) Consolidated Lending Finance Finance Finance Revenue from Operations 3,401 5,549 1,823 1,338 12,870 Interest Expenses (1,780) (2,365) (946) (531) (7,060) Net Interest Income 1,621 3,184 877 807 5,810 People Costs 73 796
Slide 21: Q4FY21: Quarterly Performance Trend (1/2)
Q4FY21: Quarterly Performance Trend (1/2) AUM (₹ mn) Loan Disbursements (₹ mn) On-book Loans Off-book Loans Corporate Retail Total 8,635 96,899 98,098 7,324 90,842 88,645 6,611 13,968 13,813 83,976 13,016 13,130 12,583 4,769 8,495 6,340 82,930 84,285 77,826 75,515 71,393 2,152 868 2,045 1,842 984 77
Slide 22: Q4FY21: Quarterly Performance Trend (2/2)
Q4FY21: Quarterly Performance Trend (2/2) NPA* PAT (₹ mn) GNPA NNPA 4.8% 4.7% 472 4.4% 316 242 2.9% 2.8% 3.8% 3.8% 2.1% 2.1% Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 1.8% -4,214 -3,171 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 * GNPA & NNPA (restated) represents Stage 3 Assets Net worth (₹ mn) Return Ratios^ & C
Slide 23: Asset Quality
Asset Quality Gross NPA (₹ mn) Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Corporate Lending 1,546 1,546 1,546 1,076 - CV Finance 2,336 2,445 578 805 2,900 SME Finance 237 153 180 261 382 Housing Finance 63 64 69 138 159 Total 4,182 4,207 2,372 2,280 3,441 Net NPA (₹ mn) Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Co
Slide 24: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 25: Retailisation Strategy On track
Retailisation Strategy On track AUM: CL vs Retail (%) Disbursements: CL vs Retail (%) 7,324 868 2,152 6,611 8,635 96,899 98,098 90,842 88,645 83,976 71% 71% 73% 75% 72% 78% 87% 89% 95% 98% 29% 29% 27% 25% 28% 22% 13% 11% 5% 2% Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q
Slide 26: Retail Business Volume
Retail Business Volume Retail AUM (₹ mn) Retail Disbursements (₹ mn) 70,989 71,595 68,617 68,160 67,116 8,495 8,310 8,305 8,538 9,152 9,911 17,482 17,530 6,340 17,495 17,994 18,338 5,302 4,769 4,833 2,603 45,197 45,760 42,584 2,045 41,014 38,866 1,201 777 856 850 827 1,992 4 760 1,316 679 709 429 64
Slide 27: CV Finance (1/3)
CV Finance (1/3) CV Finance – Monthly Disbursement Trend (₹ mn) 2,310 1,596 1,374 1,396 944 679 574 280 284 7 23 2 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 CV Finance AUM ₹ 38,866 mn AUM of ICICI Bank tie-up ₹ 6,193 mn 25
Slide 28: CV Finance: Profit and Loss (2/3)
CV Finance : Profit and Loss (2/3) Particulars (₹ mn) Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Revenue from Operations 1,456 1,511 1,459 1,287 1,292 Interest Expenses (759) (707) (642) (526) (490) Net Interest Income 697 804 817 761 802 People Costs 193 187 182 184 243 Operating Expenses 152 100 157
Slide 29: CV Finance: Key ratios (3/3)
CV Finance : Key ratios (3/3) Branches & Employees Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Revenue from Operations* 15.2% 16.0% 15.7% 15.1% 15.1% 350 1,734 1,635 1,643 1,606 2,000 Net Interest Income* 7.3% 8.5% 8.8% 8.9% 9.4% 300 1,532 1,463 1,443 250 1,500 Operating Expenses* 3.6% 3.0% 3.6% 4.0% 4.
Slide 30: SME Finance (1/3)
SME Finance (1/3) SME Finance – Monthly Disbursement Trend (₹ mn) 744 685 563 485 414 418 200 126 103 4 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 SME Finance AUM : ₹ 18,338 mn Assigned Portfolio : ₹ 4,282 mn 28
Slide 31: SME Finance: Profit and Loss (2/3)
SME Finance: Profit and Loss (2/3) Particulars (₹ mn) Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Revenue from Operations 428 436 419 432 536 Interest Expenses (266) (245) (232) (242) (227) Net Interest Income 162 191 187 190 309 People Costs 44 39 42 47 45 Operating Expenses 31 17 16 20 37 Pre-provisio
Slide 32: SME Finance: Key ratios (3/3)
SME Finance : Key ratios (3/3) Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Branches & Employees Revenue from Operations* 13.0% 12.8% 12.6% 12.6% 15.3% Net Interest Income* 4.9% 5.6% 5.6% 5.5% 8.8% 93 89 87 89 89 88 87 Operating Expenses* 2.3% 1.6% 1.8% 1.9% 2.3% Cost / Income 46.1% 29.3% 31.3% 35.2% 26.
Slide 33: Housing Finance (1/3)
Housing Finance (1/3) Housing Finance – Monthly Disbursement Trend (₹ mn) 489 362 376 336 278 303 270 193 206 64 0 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Housing Finance AUM : ₹ 9,911 mn Assigned Portfolio : ₹ 1,503 mn 31
Slide 34: Housing Finance: Profit and Loss (2/3)
Housing Finance: Profit and Loss (2/3) Particulars (₹ mn) Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21* Q4 FY21 Revenue from Operations 261 261 285 600 192 Interest Expenses (141) (136) (132) (138) (126) Net Interest Income 120 125 153 462 66 People Costs 63 53 51 53 24 Operating Expenses 36 21 27 26 38 Pre-prov
Slide 35: Housing Finance: Key Ratios (3/3)
Housing Finance : Key Ratios (3/3) Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Branches & Employees Revenue from Operations* 14.6% 13.9% 14.7% # 14.9% 9.8% # Net Interest Income* 6.7% 6.7% 7.9% 7.9% 3.4% 329 319 319 294 271 275 274 Operating Expenses* 5.6% 4.0% 4.0% 4.0% 3.1% Cost / Income 83.0% 59.5% 5
Slide 36: FY21 Restructuring Snapshot
FY21 Restructuring Snapshot AUM under Total no No. of Total AUM % of no. of % of Restructure FY21 of Restructured Restructured Restructured Accounts accounts accounts AUM (₹ mn) (₹ mn) VF 72,314 1,580 38,866 1,614 2.2% 4.2% SME 2,664 133 18,338 1384.6 5.0% 7.6% AHF 14363 184 9,911 144.58 1.3% 1.5% T
Slide 37: Corporate Lending (1/3)
Corporate Lending (1/3) Corporate Lending AUM (₹ mn) AUM Breakup: RE vs. Non-RE 48,665 10% 44,803 45,270 43,067 18% 16% 19% 18% 36,267 31,646 28,687 29,287 24,760 22,872 19,096 84% 82% 90% 82% 81% Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q4FY20 Q1FY21 Q2FY21 Q3FY2
Slide 38: Corporate Lending: Profit and Loss (2/3)
Corporate Lending: Profit and Loss (2/3) Particulars (₹ mn) Q4 FY 20 Q1 FY 21 Q2 FY 21 Q3 FY 21 Q4 FY 21 Revenue from Operations 1,077 1,000 991 834 577 Interest Expenses (610) (529) (488) (414) (350) Net Interest Income 467 471 503 420 227 People Costs 27 23 15 17 18 Operating Expenses 8 4 59 9 32
Slide 39: Corporate Lending: Key ratios (3/3)
Corporate Lending : Key ratios (3/3) Q4 FY 20 Q1 FY 21 Q2 FY 21 Q3 FY 21 Q4 FY 21 Revenue from Operations* 14.3% 13.6% 13.7% 13.5% 10.0% Net Interest Income* 6.2% 6.4% 7.0% 6.8% 3.9% Operating Expenses* 0.5% 0.4% 1.0% 0.4% 0.9% Cost / Income 7.7% 5.8% 14.7% 6.2% 21.8% Pre-provision Operating Profit
Slide 40: Leveraging technology and data analytics
Leveraging technology and data analytics Digital Lending Value Chain Analytics Driven Digital Sourcing Decision Digitization Digital Servicing Monitoring & Collections Self service and assisted BRE algorithms integrated EMI reminder through 1 1 1 Automated payment journeys through mobile with Bureau
Slide 41: FY22 Outlook
FY 22 Outlook • Substantial growth capital to pursue calibrated growth • Strong ALM and Low Leverage • Focus on high yield Used CV & affordable housing • Hub and Spoke Smart branch expansion - deeper penetration in Tier 2/3 cities • Digitisation to help improve TAT and customer service • Re-started
Slide 42: CSR Initiatives
CSR Initiatives Women Environment Education Sanitation Empowerment Partnership with • 12 students diagnosed with • Education scholarship • Sanitation infrastructure • Land identified for 15 NGOs ASD granted educational given to 50 adolescent build in government Miyawaki plantation scholarship girls
Slide 43: COVID Relief Support
COVID Relief Support United Way India Habitat for Humanity India • Provided 150 PPE Kits for • 231 Family essential Kits, Health care workers in 450 Health kits provided to Kasturba Hospital, KEM, Sion visually impaired families, Hospital, Bhabha Hospital, officers of police force in TN, Rajawadi Ho
Slide 44: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing Several years of experience and in-depth understanding of the specific industry and geographic regions Separate business & credit heads for each vertical Strong alignment through large ESOP program 20+ years of 30+ years of experi
Slide 45: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing Several years of 24 years of Several years of experience with experience in experience with financial financial SME, Institutions 20+ years of Institutions commercial experience in banking, and Previously Siva S. Previously financ
Slide 46: Strong & Distinguished Board
Strong & Distinguished Board 14 committees composed of independent and non-independent directors and also employees1 Distinct and delineated responsibilities to ensure good corporate governance Strong capital sponsorship also providing access to best industry practices and international corpor
Slide 47: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 48: Shareholding Pattern
Shareholding Pattern Shareholding# @ 31 March 2021 Brookfield 52.06% Public 6.69% Indostar Capital Mauritius 41.26%^ # Excluding CCPS ^ includes ECP II & ECP III ESOP is 4.37% of diluted shares capital (excluding CCPS) Source – NSE, Company data 46
Slide 49: For Further Queries
For Further Queries Salil Bawa Head Investor Relations Contact No: +91 9987644008 Email – sbawa@indostarcapital.com Email - investor.relations@indostarcapital.com Media Contact Snigdha Nair Adfactors PR Email - snigdha.nair@adfactorspr.com; indostar@adfactorspr.com
IndoStar Capital Finance — Q4 FY21 Earnings Presentation on 6ix