Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Debt Investor Presentation (April 2024)
37 slides from Manappuram Finance's debt investor presentation, April 2024
Slide 1: Manappuram Finance Limited Roadshow Presentation – April 2024
MANAPPURAM FINANCE LIMITED Roadshow Presentation – April 2024
Slide 2: Presenters
Presenters Mr. V.P.Nandakumar Dr. Sumitha Nandan Mrs. Bindu A L Managing Director and CEO, Executive Director Chief Financial Officer, Manappuram FInance Manappuram Finance Manappuram Finance 2
Slide 3: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR IN ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. This presentation and the accompanying slides (the “presentation”) cont
Slide 4: Disclaimer
Disclaimer If a prospective investor is otherwise affiliated with a CMI, such that its order may be considered to be a “proprietary order” (pursuant to the SFC Code), such prospective investor should indicate to such CMI and the Joint Lead Managers when placing such order. Prospective investors who
Slide 5: Offering Summary
Offering Summary Issuer Manappuram Finance Limited (“MAFIL / Manappuram”) Issuer Ratings BB- Stable (S&P); BB- Stable (Fitch) Issue Size Benchmark Distribution Format Reg S Only (Drawdown off US$ 750mn EMTN Programme) Instrument Type Senior Secured Fixed Rate Notes; Ranking Notes to rank pari-passu
Slide 6: Table Of Contents
Table Of Contents Company Business 01 02 Overview Segments Key Credit Financial 03 04 Highlights Summary
Slide 7: Company – Overview
Company – Overview Leading diversified NBFC in India Key Highlights – MAFIL (Standalone) • Incorporated in 1992, Manappuram Finance Limited (“MAFIL / Manappuram”) is an Non-Banking Financial Company (NBFC) offering a diversified product portfolio including gold loans, home loans, AUM States / Branch
Slide 8: Company – Vision
Company – Vision To Become Financial Partner Of Choice For Under-banked Customers Across Their Lifecycle MANAPPURAM TODAY COMPANY DNA Operational rigor: Company has perfected the art of managing #2 lender in gold loans in India (core product), with a trusted appraisal, custodial and valuation risks
Slide 9: Company – Key Milestones
Company – Key Milestones FY18—Invested INR4.1bn (US$49mn) for 5.2% stake via open market purchase FY13—Invested INR1.4bn FY19—Acquired addl. 3% (US$17mn) for 5.9% equity stake by investing INR2.7bn stake (US$32mn) via open market Issuer changed from Acquired addl. 1.2% equity purchase Manappuram Gen
Slide 10: Company – Business Segment Overview
Company – Business Segment Overview Business Segments MSME and Housing USD mn / % share Gold Loans Vehicle Finance Microfinance Total Others Finance Standalone AUM 2,401 (73%) 433 (13%) 467 (14%) - - 3,302 (100%) Consolidated AUM 2,501 (51%) 433 (9%) 473 (10%) 1,287 (26%) 171 (4%) 4,865 (100%) Gold
Slide 11: Table Of Contents
Table Of Contents Company Business 01 02 Overview Segments Key Credit Financial 03 04 Highlights Summary
Slide 12: Gold loan – Snapshot
Gold loan – Snapshot #2 Market Player in Gold Loan Standalone Gold Loan AUM Gold Loan AUM ($ mn) Muthoot Finance 45% Gold AUM(1) FY23 2,401 2,394 Total NBFC c. US$16.4bn 2,299 2,294 2,177 Manappuram c. US$2.3bn Muthoot c. US$7.4bn Manappuram Others 14% 41% FY21 FY22 FY23 9MFY23 9MFY24 Average Loan T
Slide 13: Gold loan – Snapshot (cont’d)
Gold loan – Snapshot (cont’d) Gold collateral – tonnes (Consolidated)(1) Gold AUM Mix Classification (9MFY24) Region wise Rural-Urban 68.0 Rural Metro 65.3 North 21% 60.1 59.9 10% 58.2 15% East 15% Semi- Urban 34% West South 15% 55% Urban 35% FY21 FY22 FY23 9M FY23 9M FY24 Gold AUM per branch (US$'0
Slide 14: Vehicle and Equipment Finance – Snapshot
Vehicle and Equipment Finance – Snapshot Business Summary AUM Evolution (US$mn) 433 • Started commercial operations in January 2015. ATS (US$) Yield • The operations are a part of Manappuram Finance Ltd PVs 5,180 18% 296 and are carried out from existing gold loan branches 254 (283 branches) 198 CVs
Slide 15: On-lending, MSME & allied Business and Others – Snapshot
On-lending, MSME & allied Business and Others – Snapshot AUM Evolution – MSME & Allied Business (US$mn) On-lending Business – AUM Evolution (US$mn) 350 ATS (US$) Yield 123 105 MSME 6,627 19% 234 184 Secured 5,060 20% PL 105 Micro- Housing 6,506 20% 22 31 4 Unsecure 843 26% d PL FY21 FY22 FY23 9MFY23
Slide 16: Table Of Contents
Table Of Contents Company Business 01 02 Overview Segments Key Credit Financial 03 04 Highlights Summary
Slide 17: Key Credit Highlights
Key Credit Highlights 1 Attractive Industry Fundamental complemented by strong growth drivers 2 Retail focused NBFC with collateral based lending 3 Business model focused on diversification of loan products, geographies and sourcing 4 Strong origination strengthened by a prudent underwriting process
Slide 18: Favourable industry dynamics – Gold Loans
Favourable industry dynamics underpin stability and sustainable growth 1 potential – Gold Loans Gold NBFCs would benefit with the continuing shift via digitization and expansion into rural areas NBFCs credit growth better than banks Retail story driving NBFC credit growth Credit growth of retail vs
Slide 19: Favourable industry dynamics – Vehicle Finance and MSME
Favourable industry dynamics underpin stability and sustainable growth 1 potential – Vehicle Finance and MSME NBFC Auto Finance and MSME Financing continue to see strong growth forecasts going forward NBFC Auto Finance Growth NBFC MSME Financing Growth US$ bn) NBFCs auto finance to continue its robu
Slide 20: Retail focused NBFC with collateral based lending
2 Retail focused NBFC with collateral based lending Manappuram has pan India retail presence with live customer base of 6.6mn. Its large gold AUM with low LTV is backed by strong gold collateral Pan India Presence Pan India (MAFIL Presence standalone) Retail constitutes ~97% of Consolidated AUM as o
Slide 21: Business model focused on diversification of loan products, geographies and sourcing
Business model focused on diversification of loan products, geographies 3 and sourcing Attractive Business diversification via presence into the non-gold segments as part of its strategy to minimize its business risk profile – Non-gold segment constitutes 27% of overall loan book AUM segment wise mi
Slide 22: Strong origination strengthened by a prudent underwriting process
4 Strong origination strengthened by a prudent underwriting process Gold appraisal and underwriting process • MAFIL’s in-house staff conducts gold appraisal through various tests viz. Nitric acid, Touchstone, Sound test and Loan origination and sourcing Hallmark checking • Lead generation happening
Slide 23: Delinking gold business from gold prices: lower LTV and loan tenor
Well incorporated strategy of delinking gold business from gold prices 5 reflected in lower LTV and average loan tenor Manappuram has strong expertise in the gold loan business, and is proactively managing the risk exposure in this segment Average loan tenor over the years (Tenor in days) 118 100 82
Slide 24: Consistently strong financial performance and growth
Consistently strong financial performance and growth on the back of financial 6 discipline Manappuram has been able to demonstrate sustainable solid profitability Standalone AUM (US$m) Income from operations and Net profit (US$m) Income from operations Net profit (before OCI) 3,302 623 2,942 578 2,7
Slide 25: Consistently strong financial performance and growth
Consistently strong financial performance and growth on the back of financial 6 discipline Capital adequacy ratio (%) Networth (US$ mn) 2.56 2.26 2.14 2.23 2.16 2.5 1,400 33% 1,200 2 32% 1,000 1.5 31% 31% 1 0.5 800 1,205 0 1,082 600 29% 957 1,051 400 832 -0.5 -1 -1.5 200 0 -2 FY21 FY22 FY23 9M FY23
Slide 26: Access to a range of cost-effective funding sources
7 Access to a range of cost-effective funding sources Borrowing mix (9mFY24) Cost of borrowing (%) ECB 1.9% NCD & Bond 20.8% Term Loan from 9.1% 9.1% 8.0% 8.2% 8.5% Banks & FI 39.5% WCDL & Cash Credit from Banks 37.7% FY21 FY22 FY23 9M FY23 9M FY24 Well distributed Asset Liability Management Profile
Slide 27: Experienced management team backed by a competent board
8 Experienced management team backed by a competent board Board of Directors • Has ~45 years of work • Has ~40 years of experience • Senior external advisor to • Retired as the MD of LIC • Has ~30 years of experience experience in banking & Financial E&Y • Has held positions on the in RBI and 3 year
Slide 28: Experienced management team backed by a competent board
8 Experienced management team backed by a competent board Strong Corporate Governance Practices Committees of the Board of Directors Audit Committee Min. 3 directors; 2/3rd are independent directors; meets minimum 4 times a year for review of quarterly and annual financial results Min. 3 directors;
Slide 29: Table Of Contents
Table Of Contents Company Business 01 02 Overview Segments Key Credit Financial 03 04 Highlights Summary
Slide 30: Standalone Profit & Loss Statement
Standalone Profit & Loss Statement CAGR Particulars (US $mn) FY21 FY22 FY23 9m FY23 9m FY24 (FY21-23) Income From Operations 623 550 578 (4%) 433 519 Finance Expenses 207 168 181 (7%) 134 161 Net Interest Income 416 382 398 (2%) 299 358 Employee Expenses 75 97 121 27% 88 92 Depreciation & Amortizati
Slide 31: Standalone Balance Sheet
Standalone Balance Sheet Particulars (US $mn) FY21 FY22 FY23 9m FY24 Cash & Bank Balances 249 212 251 251 Investments 145 146 175 212 Loans & Advances 2,537 2,737 2,959 3,330 Fixed Assets 34 39 45 47 Other Assets 126 115 105 113 Total Assets 3,091 3,249 3,535 3,953 Equity Share Capital 20 20 20 20 R
Slide 32: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement CAGR Particulars (US $mn) FY21 FY22 FY23 9m FY23 9m FY24 (FY21-23) Income From Operations 763 730 805 2.8% 591 782 Finance Expenses 267 242 264 (0.7%) 193 251 Net Interest Income 495 488 542 4.6% 399 530 Employee Expenses 102 136 177 32.0% 128 142 Other Operating
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (US $mn) FY21 FY22 FY23 9m FY23 9m FY24 Cash & Bank Balances 351 325 366 588 371 Investments 41 51 64 50 87 Loans & Advances 3,194 3,490 4,120 3,669 4,681 Fixed Assets 35 44 54 49 57 Other Assets 155 163 156 177 171 Total Assets 3,776 4,073 4,760 4,532 5,367 Sh
Slide 34: Table Of Contents – Annexures
Table Of Contents Annexures 05
Slide 35: Microfinance – Financial Summary
Microfinance– Financial Summary AUM Evolution (US$ mn) Return Ratios 1,287 16.7% 1,120 972 802 715 2.6% 1.6% 1.3% 0.3% 0.2% FY21 FY22 FY23 9M FY23 9M FY24 FY21 FY22 FY23 ROA ROE Capital Adequacy Ratio NPA Analysis 3.5% 2.8% 2.5% 23.3% 20.8% 19.7% 1.1% 0.2% 0.0% FY21 FY22 FY23 FY21 FY22 FY23 GNPA % N
Slide 36: Housing Finance – Financial Summary
Housing Finance– Financial Summary AUM Evolution (US$ mn) AUM Mix % Home Loan LAP 171 ATS (US$) Yield 27% 30% 31% 32% 34% 132 121 5,060 18.5% 102 80 73% 70% 69% 68% 66% 7,470 16.6% FY21 FY22 FY23 9MFY23 9MFY24 FY21 FY22 FY23 9M FY23 9M FY24 GNPA % CRAR 5.9% 5.4% 53.4% 6.4% 38.7% 33.2% 33.8% 2.7% 24.
Slide 37: Thank You
—— Thank You in FINANCE LIMITED
Manappuram Finance — Debt Investor Presentation (April 2024) on 6ix