Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Shareholder Meeting (September 2022)
32 slides from Edelweiss Financial Services's shareholder meeting presentation, Sep 2, 2022
Slide 1: Exchange intimation: 27th Annual General Meeting presentation
EW/Sec/2022/166 September 2, 2022 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001. Mumbai – 400 051. Scrip Code: - 532922 Symbol:– EDELWEISS Dear Sir/Madam, Sub: 27th Annual General Meeting - Pres
Slide 2: Edelweiss Financial Services Limited 27th Annual General Meeting
Edelweiss Financial Services Limited 27th Annual General Meeting
Slide 3: Contents
Contents Overview Key highlights for FY22 Update on focus areas 2
Slide 4: Edelweiss at a glance – Year ended Mar 22
Edelweiss at a glance – Year ended Mar 22 Net Worth Ex-Insurance PAT BVPS INR 8,457 Cr INR 405 Cr INR 72 (FV ₹1) Liquidity Customer Assets INR 5,500 Cr INR 3,57,700 Cr 3
Slide 5: We are a diversified company across eight businesses
We are a diversified company across eight businesses Edelweiss Financial Services Ltd (EFSL) Credit Asset Management Insurance Asset Wealth Housing Alternative Reconstruction General Management NBFC Mutual Fund Life Insurance Finance Asset Mgt Insurance ECL Finance Edelweiss Edelweiss Edelweiss Edel
Slide 6: Key highlights for FY22
Key highlights for FY22 1 Steady performance across businesses – upward trend across key metrics 2 Growth in customer franchise enabled by digital ecosystems and synergistic partnerships Significant improvement in asset quality; aided by strong wholesale recoveries and high retail 3 collection effic
Slide 7: EFSL Ex-Insurance PAT increased 29% YoY
1 EFSL Ex-Insurance PAT increased 29% YoY Profit After Tax for the Year in INR Cr EFSL Asset Asset ex-Insurance Credit Management Reconstruction 405 315 253 186 112 67 33 19 Mar 21 Mar 22 Mar 21 Mar 22 Mar 21 Mar 22 Mar 21 Mar 22 6 EFSL ex-insurance PAT for year ended Mar 21 has been commensurately
Slide 8: Earnings distribution across businesses
1 Earnings distribution across businesses INR Cr Year ended Business Mar 22 NBFC 98 Housing Finance 14 Mutual Fund 20 Alternatives Asset Management 47 Asset Reconstruction 253 Life Insurance (206) General Insurance (105) EFSL share in Wealth Management 97 BMU & Corporate (6) (Less) Minority sharehol
Slide 9: Customer reach nearly doubled in 2 years
2 Customer reach nearly doubled in 2 years Total Customer Customer AssetsReach (in Lakhs) (INR Cr) Customer Reach (# in lakhs) 49 3,57,700 41 2,80,800 2,06,500 26 Mar 20 Mar 21 Mar 22 Mar 20 Mar 21 Mar 22 Growth of ~20% YoY Growth of ~27% YoY 8
Slide 10: Significant improvement in asset quality
3 Significant improvement in asset quality Asset Quality (%) GNPA NNPA 6.7 5.8 2.5 1.8 Mar 21 Mar 22 Total provision cover improved to 189% as on Mar 22 from 70% as on Mar 21 9
Slide 11: Robust balance sheet with well-capitalised businesses
4 Robust balance sheet with well-capitalised businesses Reduction in debt by ~30% over last 2 years; net D/E improved to 2x Strong capitalization across businesses; well above regulatory requirements Comfortable liquidity of INR 5,500 Cr at ~23% of debt 10
Slide 12: Update on focus areas
Update on focus areas 1 List Edelweiss Wealth Management and unlock value for shareholders 2 Reduce Wholesale book 3 Reduce debt at Corporate and ECLF 4 Scale up Asset Management and Insurance businesses 5 Create and unlock value – our Intrinsic Value framework 11
Slide 13: Edelweiss Wealth Management – value unlock for shareholders
1 Edelweiss Wealth Management – value unlock for shareholders Edelweiss Securities Limited (ESL) is the legal entity under which Edelweiss Wealth Management (EWM) is housed Transaction rationale - Win-Win for all stakeholder For ESL - Independent listed business with flexibility to attract business-
Slide 14: Edelweiss Wealth Management – value unlock for shareholders
1 Edelweiss Wealth Management – value unlock for shareholders Proposed ESL ownership structure post demerger 30% EFSL Shareholders on a pro rata basis 14% Edelweiss Group 56% PAG Consideration for demerger • Post demerger, 1,05,28,746 ESL shares (FV of INR 10) shall be allotted to EFSL shareholders
Slide 15: Wholesale book reduced by ~30% in the past 2 years
2 Wholesale book reduced by ~30% in the past 2 years ECLF wholesale loan assets (incl SRs) (INR Cr) 13,000 11,200 9,370 6,000 3,500 2,000 1,000 Mar 20 Mar 21 Mar 22 Mar 23 Mar 24 Mar 25 Mar 26 Further reduction by ~60% in the next 2 years aided by strong demand in real estate 14
Slide 16: Debt across businesses
3 Debt across businesses Debt (INR Cr) Business Mar 22 NBFC 10,400 Housing Finance 2,300 Asset Reconstruction 3,350 Wealth Management 3,530 BMU & Corporate 5,550 Gross Borrowings 25,130 (Less) liquid / treasury assets 5,500 Net Borrowings 19,630 15
Slide 17: Planned reduction in ECLF debt over next 4 years
3 Planned reduction in ECLF debt over next 4 years ECLF Debt (INR Cr) – largely wholesale Reduced INR 8,000 Cr over 2 years Target of further reducing INR 9,000 over next 4 years 17,000 13,000 9,000 5,500 2,500 1,000 - Mar 20 Mar 21 Mar 22 Mar 23E Mar 24E Mar 25E Mar 26E Planned debt reduction align
Slide 18: Planned reduction of corporate debt over next 4 years
3 Planned reduction of corporate debt over next 4 years Corporate Debt (INR Cr) Reduced INR 5,500 Cr over 3 years Target of further reducing INR 5,500 over next 4 years 11,000 9,500 7,500 5,500 4,200 3,000 1,500 - Mar 19 Mar 20 Mar 21 Mar 22 Mar 23E Mar 24E Mar 25E Mar 26E 17
Slide 19: Potential cashflow expected for repayment of corporate debt
3 Potential cashflow expected for repayment of corporate debt INR Cr Stake monetisation ~1,500 – 2,000 • 14% of EWM Stake sale in underlying business ~1,000 – 2,000 • ETLI & EHFL Treasury Assets ~600 – 800 Liquidation of Corporate Assets ~2,000 - 2,500 • Credit assets & Investments ECLF equity relea
Slide 20: Significant growth across key businesses
4 Significant growth across key businesses Fastest growing amongst the top 15 Asset Management Companies in the industry and top 10 in the fixed income segment with continued leadership in debt passives segment India’s leading Alternative Asset manager with AUM growth of 15x over the past 7 years, c
Slide 21: Amongst the fastest growing AMCs over last 4 years
Mutual Fund 4 Amongst the fastest growing AMCs over last 4 years Mutual Fund AUM (INR Cr) Mutual Fund Industry Rank (#) 85,000 13 28,000 17 17,000 23 Mar 18 Mar 20 Mar 22 Mar 18 Mar 20 Mar 22 Aspiring to be amongst the top 10 AMCs 20
Slide 22: The largest player in alternatives in India
Alternative Asset Mgt 4 The largest player in alternatives in India Alternative Asset Mgt AUM (INR Cr) 30,500 #1 Private Debt player in India 21,700 One of the only two Asian players featured in PDI list of the top 100 fund raisers globally for 2021 12,000 4th largest by capital raise over 10 years
Slide 23: Robust growth with superior business quality
Life Insurance 4 Robust growth with superior business quality LI – Gross Premium for the year (INR Cr) LI – Individual APE (INR Cr) 420 1,460 323 1,030 251 620 Mar 18 Mar 20 Mar 22 Mar 18 Mar 20 Mar 22 Total premium grew at a CAGR of 23% against industry growth of 11% since Mar 18 22
Slide 24: Amongst the fastest growing with a robust digital platform
General Insurance 4 Amongst the fastest growing with a robust digital platform GI – Gross Premium for the year (INR Cr) GI – Customer Reach (# millions) 360 2.10 160 0.80 1 0.04 Mar 18 Mar 20 Mar 22 Mar 18 Mar 20 Mar 22 Gross premium grew at ~5x of industry growth since Mar 18 23
Slide 25: Create and unlock value – our Intrinsic Value framework
5 Create and unlock value – our Intrinsic Value framework INR Cr Business Metric Amount NBFC Book Value 4,000 Housing Finance Book Value 800 Asset Reconstruction Book Value 2,600 Mutual Fund Assets under Management 88,000 Alternative Asset Management Assets under Management 36,250 Life Insurance Emb
Slide 26: Value creation aided by high growth and quality businesses
5 Value creation aided by high growth and quality businesses INR Cr Business Business Intrinsic Value Edelweiss’ share NBFC 4,000 - 4,800 3,200 - 3,800 Housing Finance 1,400 - 1,600 1,400 - 1,600 Asset Reconstruction 3,100 1,900 Mutual Fund 2,600 – 4,400 2,600 – 4,400 Alternative Asset Management 3,
Slide 27: In summary, we will…
In summary, we will… 1 Create and enhance value in our underlying businesses 2 Unlock this value towards creating a win-win for the business and shareholders 3 Be financially strong and resilient by reducing debt and holding comfortable liquidity 26
Slide 28: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 29: Safe Harbour
Safe Harbour Slide 3: Net worth is including MI, investment in CCD by CDPQ of INR 866 Cr and excluding Edelweiss Wealth Mgt equity Slide 3: Ex-Insurance PAT is excluding MI Slide 3: BVPS has been computed by taking into account potential stake dilution from convertible instruments in NBFC Slide 3,10
Slide 30: Annexure
Annexure 29
Slide 31: Business highlights
Business highlights • NNPA improved to 1.96% as on Mar 22 from 2.31% on Dec 21 and 6.83% on Mar 21 • Retail collection efficiency at 96% for the quarter ended Mar 22 NBFC • Strong wholesale recoveries of ~INR 1,600 Cr in the quarter ended Mar 22, momentum expected to continue • NNPA improved to 1.46
Slide 32: Business highlights
Business highlights Asset • Robust recoveries of ~INR 6,900 Cr during the year; 11% from retail portfolio Reconstruction • Share of retail assets in capital employed grew ~4x YoY to ~14% as on Mar 22 • Gross premium grew at 66% QoQ & 20% for the year Life Insurance • Dominant share of Traditional Pa
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