Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — 9M FY21 Earnings Presentation
35 slides from Aavas Financiers's earnings presentation, Jan 21, 2021
Slide 1: Aavas Financiers Investor Presentation Cover Letter to Exchanges
A gvqs FINANCIERS LTD SAPNE AAPKE, SAATH HAMAARA Ref. No. AAVAS/SEC/2020-21/616 Date: January 21, 2021 To, To, The National Stock Exchange of India Limited BSE Limited The Listing Department Dept, of Corporate Services Exchange Plaza, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalai Street, Fo
Slide 2: Investor Presentation - 9M FY21
AAVAS FINANCIERS LIMITED Investor Presentation - 9M FY21
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the "Presentation"), which have been prepared by Aavas Financiers Ltd. (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securit
Slide 4: Our Background
Our Background Commenced operations in 2011 Regulated by Reserve Bank of India ("RBI") from Jaipur, Rajasthan Supervised by National Housing Bank ("NHB") Currently being run by professional management team backed by Recognized by NHB for refinance marquee private equity players facility Kedaara Capi
Slide 5: Our Pillars of Strength
Our Pillars of Strength y Experienced Board of Directors y Professional Management Team y In-house Execution Model y Technology and Data Analytics y Improving Credit Ratings y Diversified Shareholding Base
Slide 6: Experienced Board of Directors
Experienced Board of Directors Sandeep Tandon Soumya Rajan Kalpana Iyer Chairman & Independent Director Independent Director Independent Director Qualifications: Bachelor's in Electrical Qualifications: Bachelor's in Mathematics & Qualifications: Chartered Accountant Engineering from University of S
Slide 7: Professional Management Team
Professional Management Team Sushil Kumar Agarwal - Managing Director & CEO Ghanshyam Rawat - Chief Financial Officer • 19+ years of experience in retail financial services • Experience in financial services & allied sectors • Prior associated with Kotak Mahindra Prime, ICICI Bank & Au Small • Prior
Slide 8: In-house Execution Model
In-house Execution Model 1. Reduction in average TAT (days) In-house execution model - Replicated across the states Turn around time is a key metric for employee incentives Lead generation and 21.1 Risk management Collections sourcing <U E ■ Focused approach to directly ■ In-house underwriting team
Slide 9: Technology and Data Analytics
Technology and Data Analytics Lead Generation Underwriting Operations Collections ■ Majority of the leads ■ Platform integration ■ E-disbursement & E- ■ Route optimization for are logged in through with credit bureaus repayment facility at all collection personnel the sourcing app ■ Quarterly scrub
Slide 10: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating ICRA Limited upgraded the Long-Term rating from A+/Positive to AA-/Stable on 18thAugust 2020 Reaffirmed f \ f— CARE ICRA ICRA Dec-20 A1+ A A -/ A A -/ Dec-20 Dec-20 Stable Stable CARE Dec-20 A1+ A/ INDIA RATINGS Mar-17 A+ / Ma
Slide 11: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 31st December 2020 31st December 2020 Others, 2.66% Investor Details % Holding Capital GroupA 6.76 Wasatch Global AdvisorsA 5.68 Nomura Asset Management 4.37 Kotak (Offshore) Asset M anagem ent 2.45 FII, 31
Slide 12: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (^ Trn) Market Size ^ 21.2 Trn (as on Mar-20) 21.2 19.2 YoY Growth +11% 12.3 14.2 16.5 (as on Mar-20) Banks -15%, HFCs & NBFCs - 3% 8.8 10.4 Market Share Banks - 66% HFCs & NBFCs -34% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 (as on Ma
Slide 13: Measures from Government and Regulator
Measures from Government and Regulator Continued Pause in Policy Rate RBI's MPC voted unanimously to maintain status-quo (repo rate @ 4%) even in the December meeting and continued with its accommodative stance for as long as necessary to revive growth. Revision of Risk Weights for Individual Housin
Slide 14: Financial Performance
Financial Performance y/ Key Business Parameters Y Geographical Distribution Y Spreads and Margins ^ Asset Quality y Liability Franchise */ Key Ratios
Slide 15: Performance Highlights
Performance Highlights AUM (K Mn) Disbursement (K Mn) Gross Stage 3 (%) 88,226 71,951 20,682 Average AmountAper Active 16,441 Loan Account as on Dec-20 ^ 0.84 Mn Dec-19 Dec-20 9MFY20 9MFY21 Dec-19 Dec-20 PAT* (K Mn) NIM (%) ROA (%) Average AmountAper Disbursed Loan Account in 9MFY21 ^ 0.93 Mn 1,893
Slide 16: Healthy Business Growth
Healthy Business Growth AUM (^ Mn) Disbursements (^ Mn) PAT* (^ Mn) * Data as per IGAAP 15
Slide 17: AUM Break-up
AUM Break-up Agvqs Product Category Occupation Category Customer Category ATS : ^ 0.83 Mn ATS : ^ 0.68 Mn ATS : ^ 0.86 Mn 0.3% ATS : ^ 6.81 Mn 31-Dec-19 ATS : ^ 0.91 Mn ATS : ^ 0.82 Mn ATS : ^ 0.67 Mn ATS : ^ 0.86 Mn ATS : ^ 0.84 Mn 0.2% ATS : ^ 7.83 Mn 31-Dec-20 ATS : ^ 0.92 Mn ATS : ^ 0.83 Mn Reta
Slide 18: Disbursement Break-up - Product Category
Disbursement Break-up - Product Category 9M FY20 ATS : ^ 0.79 Mn ATS : ^ 0.57 Mn ATS : ^ 1.05 Mn ATS : ^ 1.07 Mn Home Loan Other M ortgage Loan ATS : Average Amount (at the time of Sanction) per Disbursed Loan Account 17
Slide 19: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 88 2012 Maharashtra 44 2012 Gujarat 37 2012 Madhya Pradesh 39 2013 Delhi 6A 2013 Haryana & Punjab 15 2017 Chhattisgarh 5 2017 Uttar Pradesh 16 2018 Uttarakhand 9 2018 Himachal Pradesh 4 2020 Total 263 Data as on 31st December
Slide 20: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings and Spreads (%) • Yields (%) • COB (%) Spreads (%) Yields (%) • COB (%) Spreads (%) 18.13% 13.75% 13.85% 13.78% 13.74% 13.63% 13.62% 13.52% 13.42% •----------- ------------ ------------ --------- — •------------- ------------- - _ 8.74% 8.79% 8.75% 8.68%
Slide 21: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 8.54% 8.80% 9.37% 9.32% 3.58% 3.64% 3.06% 2.93% 4.00% 3.89% 3 .81% 3M FY19 H1FY19 9M FY19 FY19 3M FY19 H1FY19 9M FY19 FY19 3M FY19 H1FY19 9M FY19 FY19 8.69% 8.66% 4.03% 4.05% 3.75% 8.10% 8.16% 3.17% 3.38% 3.28% 3 42 % 3.38% 3M FY20 H1FY20 9M FY20 F
Slide 22: Asset Quality
Asset Quality Gross Stage 3 (%) Net Stage 3 (%) 1.00% * 0.72% 0.62% 0.58% 0.57% 0.34% 0.32% 0.32% Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 1+DPD (%) Segment-wise Gross Stage 3 (%) Dec-19 Dec-20 8 . 21% 6.20% 4.25% 3.92% 3.39% 2.43% 1.50% Jun-1
Slide 23: Robust Liability Franchise
Robust Liability Franchise Diversified Funding Mix Loan Assets & Borrowings (^ Mn) As on Dec-20 As on Dec-20 31 Lenders ■ Terms Loans Floating Fixed Equity Diversified Mix ■ Assignment No exposure 88,226 88,226 to Commercial Papers ■ NHB Refinancing Incremental Q3 FY21 borrowings ■ NCDs ^ 9,356 Mn f
Slide 24: ALM Surplus
ALM Surplus Surplus Management* Mn) Average tenor of outstanding borrowing (months) As on Dec-20 6,763 <3months 3,092 <6months 143 <1year <3years <5years <7years <10years Assets Liabilities Surplus * Data as per IGAAP 23
Slide 25: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (^ Mn) As on Dec-20 Cash & Cash Equivalents 19,670 High Quality Un-availed CC Limits 1,220 Liquidity of Documented & Un-availed Sanctions from NHB - ^ 20,890 Mn Documented & Un-availed Sanctions from other Banks 5,850 Total Liquidity Position 26,740 Particu
Slide 26: Net Securitization Volume
Net Securitization Volume ^ 5,385 Mn ^ 6,802 Mn ^ 6,647 Mn ^ 3 , 9 0 6 Mn 4 --------------------------------------------------------------- ► -4-------------------------------------------------------------- ► 4 -------------------------------------------------------------- ► -4----------------------
Slide 27: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (^) 13.03% 12.24% 10.93% Dec-18 Dec-19 Dec-20 9MFY19 9MFY20 9MFY21 Capital Adequacy Ratio (%) Earning Per Share* (^) Tier I Tier II 25.5 67.80% 23.9 57.88% 51.12% Dec-18 Dec-19 Dec-20 9MFY19 9MFY20 9MFY21 Data of Capital Adequacy Ratio is as per IGAA
Slide 28: Annexures
Annexures Quarterly and Nine Monthly Profit & Loss Statement Balance Sheet PAT Reconciliation ECL Provisioning Networth Reconciliation 27
Slide 29: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (^ Mn ) Q3 FY21 Q3 FY20 Y-o-Y Q2FY21 Interest Income (incl. Processing Fee & FDR Interest) 2,577.4 2,019.6 27.6% 2,430.2 6.1% Gain on derecognition of financial instruments under 405.3 263.3 184.4 amortized cost category Non-Interest Income 117.7 110.4 8
Slide 30: Nine Monthly Profit & Loss Statement
Nine Monthly Profit & Loss Statement Particulars (^ Mn ) 9M FY21 9M FY20 Interest Income (incl. Processing Fee & FDR Interest) 7,294.1 5,716.4 27.6% Gain on derecognition of financial instruments under amortized 589.7 676.7 cost category Non-Interest Income 256.6 287.7 Interest Expense (incl. Financ
Slide 31: Balance Sheet
Balance Sheet Particulars Mn ) 31-Dec-20 31-Mar-20 Sources of Funds Share Capital 783.9 783.2 Reserves & Surplus 22,313.4 20,196.1 Borrowings 64,810.1 53,520.4 Deferred Tax Liability (Net) 286.3 317.0 Other Liabilities & Provisions 2,607.9 1,763.7 Total 90,801.6 76,580.4 Application of Funds Loan As
Slide 32: PAT Reconciliation
PAT Reconciliation Particulars (^ Mn ) 9M FY21 9M FY20 Y-o-Y Q3 FY21 Q3 FY20 Y-o-Y Net Profit as per IGAAP 1,998.5 1,614.2 23.8% 728.1 586.1 24.2% Add / (Less): Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial asset
Slide 33: ECL Provisions
ECL Provisions Particulars (^ M n) 31-Dec-20 31-Dec-19 As per an interim order dated 03-Sep-20, Hon'ble Supreme Gross Stage 3 704.6 323.4 Court has directed that accounts which were not declared % portfolio in Stage 3 1.00% 0.57% as NPA till 31-Aug-20 shall not be declared as NPA till ECL Provision
Slide 34: Networth Reconciliation
Networth Reconciliation Particulars Mn ) 31-Dec-20 Net worth as per previous GAAP 21,370.5 Adjustments increasing/(decreasing) net worth as reported under previous GAAP: Adoption of EIR for amortisation of Income and expenses - financial assets at amortised cost / net interest on credit impaired loa
Slide 35: Contact Us
Contact Us Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) CIN:L65922RJ2011PLC034297 Mr. Himanshu Agrawal investorrelations@aavas.in www.aavas.in 34