Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q1 FY22 Earnings Presentation
61 slides from Nippon Life India Asset Management's earnings presentation, Jul 19, 2021
Slide 1: Cover letter to exchanges: Investor Presentation
July 19, 2021 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Dalal Street, Fort, Plot No. C/1, G Block, Mumbai 400 001 Bandra Kurla Complex, BSE Scrip Code: 540767 Bandra (East), Mumbai 400 051 NSE Scrip Symbol: NAM-INDIA Dear Sir(s), Re: In
Slide 2: Investor Presentation Q1 FY22
Investor Presentation Q1 FY22 July 2021
Slide 3: Highlights - Q1 FY22
Highlights - Q1 FY22 MF QAAUM market share up 13 bps to 7.25% MF QAAUM at INR 2,404 billion - an increase of 33% Increased base of Unique Investors at 7.5 mn - up 1.4 mn (vs. Jun ‘20) NIMF added 630k investors vs. 1.1 mn for the Industry in Q1 ETF folios added 1.4 million ETF folios in Q1 NIMF accou
Slide 4: Key focus areas - Being Future Ready
Key focus areas - “Being Future Ready” 1 2 3 Superior fund Consolidate our Expansion of non- performance Passive strategy MF businesses Dominant position • AIF & PMS businesses Consistent improvement (73% share in market • Leverage NLI’s parentage in performance of key volumes) to grow Offshore segm
Slide 5: Industry AUM Trends
Industry AUM Trends A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 6: Quarterly AUM Trend
Quarterly AUM Trend Industry AAUM (INR bn) 33,175 32,106 29,714 9% 9% 27,604 8% 14% 24,628 8% 14% 16% 7% 19% 22% 34% 33% 35% 33% 32% 44% 40% 42% 39% 40% Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Equity Debt Liquid ETFs Growth led by inflows in fixed income & passive funds, and MTM gains in the equities; al
Slide 7: NAM India - Profile
NAM India - Profile One of the largest Asset Manager in India, with 26 years of track record NAM India AUM (as of Jun 30, 2021) INR 3.79 trillion Mutual Funds Managed Accounts International INR 2,442 bn* INR 1,275 bn INR 71 bn Advisory INR 30 bn ~280 980+ ~80,000 8.8 mn 11.4 mn Locations Employees D
Slide 8: Nippon India MF - AUM Trends
Nippon India MF - AUM Trends A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 9: Quarterly AUM Trend
Quarterly AUM Trend QAAUM (INR bn) Market share 9.5% 2,404 2,336 2,226 2,286 2,130 2,026 2,044 2,049 2,000 8.7% 1,801 7.9% 7.6% 7.6% 7.3% 7.2% 7.2% 7.2% 7.1% 13bps Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 MF market share improved by 13bps to 7.25% in Q1 FY22 * Quarterly
Slide 10: Quarterly AUM Mix
Quarterly AUM Mix NIMF AAUM (INR bn) 2,404 2,286 2,130 17% 2,000 16% 1,801 15% 14% 12% 12% 14% 14% 17% 19% 31% 30% 32% 30% 29% 39% 41% 41% 39% 38% Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Equity Debt Liquid ETFs AUM rose by 33% (vs. Q1 FY21); growth seen across asset classes * Quarterly Average Assets und
Slide 11: Fixed Income & Equity Assets
Fixed Income & Equity Assets Fixed Income AAUM (INR bn) 987 985 1,008 937 863 303 283 299 340 348 597 683 701 709 514 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Debt Liquid Equity (Incl. ETF) AAUM (INR bn) 1,206 1,289 986 1,058 871 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 * Quarterly Average Assets under Manageme
Slide 12: Key focus areas
1 2 “Investor First” Digital initiatives Key focus areas 3 4 Leveraging ETF first mover advantage Continue to build on Retail Strength
Slide 13: Key focus areas: Investor First
1 “Investor First” Key focus areas
Slide 14: Investor First remains the core philosophy
“Investor First” remains the core philosophy NFO - Nippon India Nifty Pharma ETF • First ETF tracking Nifty Pharma index with exposure to top 10 Pharma companies on NSE • NFO launched in June 2021 • Strong digital push enabled easy access for investors and partners • Raised assets of approx. INR 500
Slide 15: Key focus areas: Digital initiatives
2 Digital initiatives Key focus areas
Slide 16: Shifts in Financial Services' digital ecosystem post COVID19
Shifts in Financial Services’ digital ecosystem post COVID19 Online Purchases - Value redefined: From novelty/leisure to necessity Increase in remote working Changing needs & expectations Virtual collaboration Increasing demand for online PRE: Offline concentrated PRE: Digital interaction products a
Slide 17: Building Digitech Ecosystem
Building Digitech Ecosystem Digital KYC Business Process automation - RPA, OCR Chat Bot / IVR implementation Instant Folio creation Fund Accounting automation First level support through AI Finance & HR process Automation Customer Customer Operations Onboarding Servicing Transactions digitalized Dee
Slide 18: Digital Business
Digital Business Lumpsum & New SIP Registration Digital Purchases (lakhs)* Q1 FY22 6.0 28% Q4 FY21 4.7 ❑ Digital contribution-to-total NIMF purchase transactions at 58% in Q1 FY22 ❑ Digital SIP registrations contributed 59% of the total new SIPs registered in Q1 FY22 ❑ New Digital SIP Purchase grew
Slide 19: Key initiatives
Key initiatives Performance Campaign expansion to reach new horizons Successful use of Adobe Suite to increase quality & quantity Campaigns initiated on networks outside GDN, leveraging DV 360 Successful launch of NFOs - Nippon India Pharma ETF Geotargeted campaigns with regional affinity products b
Slide 20: Leveraging ETF first mover advantage
Key focus areas 3 Leveraging ETF first mover advantage
Slide 21: Comprehensive portfolio of Passive Funds
Comprehensive portfolio of Passive Funds NIMF’s ETFs / Index Funds Fixed Income Equity Commodity Nippon India ETF Liquid BeES Nippon India ETF Gold BeES Nippon India ETF Long Term Gilt Nippon India ETF Nifty CPSE Bond Plus SDL - 2024 Maturity Nippon India ETF Nifty SDL - 2026 Maturity Nippon India E
Slide 22: Strengthening the ETF portfolio
Strengthening the ETF portfolio Large ETF product suite ~73% 51% 13% Volume Share Share of folios Market Share ❑ Only AMC in India with more than 19 years experience in managing ETFs ❑ Largest bouquet of 23 ETFs in the industry across Equities, Debts & Commodity (Gold) ❑ On QAAUM basis, NIMF ETFs ma
Slide 23: Consolidating leadership position further
Consolidating leadership position further NSE volume (Apr - Jun 2021) (INR mn) Nifty Bank ETFs & Mutual Funds Nifty 50 ETFs Gold ETFs Liquid ETFs Nifty Private Bank ETFs NIMF 247 363 186 1,034 SBI MF 35 28 65 - Kotak MF 11 62 22 - ICICI Prudential MF 21 19 20 24 HDFC MF 3 1 29 - Others 12 5 18 18 To
Slide 24: Continue to build on Retail Strength
Key focus areas 4 Continue to build on Retail Strength
Slide 25: Unique Investors
Unique Investors 3 out of 10 unique investors in the Industry invest with NIMF Industry NIMF Market share (%) (in million) 7.5 Jun 30, 2021 31% 23.9 6.9 Mar 31, 2021 30% 22.8 6.1 Jun 30, 2020 29% 21.1 Extensive distribution and a diversified product suite helped to add over 6 lakh investors vs. 11 l
Slide 26: Retail segment is a key focus
Retail segment is a key focus Investor segment-wise breakup of AAUM (%) NIMF 28% 22% 50% Industry 23% 31% 46% SBI 15% 26% 59% HDFC 22% 36% 42% ICICI 17% 38% 45% Birla 22% 25% 53% Retail HNI Corporate NIMF is the only MF with a Retail market share / overall market share of >100% Source: AMFI; Calcula
Slide 27: Retail Assets
Retail Assets 69% of the Individual assets have a vintage of more than 12 months (June 30, 2021) Retail AAUM (INR bn) 643 696 586 460 520 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 “Retail Investor Classification” changed from INR 0.5 mn to INR 0.2 mn as per the guidelines issued by AMFI Source: Internal; C
Slide 28: Beyond 30 cities (B-30) Contribution
Beyond 30 cities (B-30) Contribution Higher AUM % sourced from B-30 locations as compared to Industry B-30 AAUM / Total AAUM (%) NIMF 19.0% Industry 16.3% B-30 segment has higher proportion of Equity Assets Focus on building B-30 AUM by leveraging on-ground presence Source: AMFI; Calculated on Month
Slide 29: Geographical De-risking
Geographical GeographicalDe-Risking De-risking Top 5 Cities Contribution (%) Beyond 15 Cities Contribution (%) ICICI 71% NIMF 23% SBI 74% Industry 30% HDFC 69% SBI 17% Industry 58% HDFC 17% NIMF 62% ICICI 16% Lower concentration of assets Higher Penetration in Smaller cities from Top 5 cities and to
Slide 30: Systematic Transactions
Systematic Transactions Monthly Flows Book (INR bn) 8.00 7.00 6.00 6.7 6.6 6.6 5.00 6.2 5.9 4.00 3.00 2.00 1.00 - Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Annualized book of INR 70 bn Systematic folios rose to 3.4 million (+9%) as on June 2021 In volatile markets, folios with lower ticket size demonstrate
Slide 31: Growth in retail asset base continues
Growth in retail asset base continues A new Digital Purchase every… A new SIP Purchase every… 12s 9s 20s 18s FY21 Q1 FY22 FY21 Q1 FY22 A new folio added every… A new ETF folio added every… 20s 4s 16s 4s FY21 Q1 FY22 FY21 Q1 FY22 * Frequency in seconds calculated with assumption of 252 days in a year
Slide 32: Risk Management - Philosophy
Risk Management - Philosophy
Slide 33: Enhanced conservative positioning
Enhanced conservative positioning In May 2020, Board decided that all NIMF’s schemes* will make fresh investments only in AA & above rated issuers Credit Rating Profile of NIMF’s Fixed Income assets Rating Jun 30, 2021 Mar 31, 2020 Repo / Cash / Sovereign / AAA / A1+ / AA+ / Upto AA 99.0% 91.8% Sub
Slide 34: Distribution
Distribution A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 35: Strong Distribution
Strong Distribution Total base of empaneled distributors rose to approx. 80,000 77 95 88 79,700+ Banks National Distributors Alternate Mutual Fund (incl. PSU banks) Distributors Large base of MFDs - one of our biggest strengths 34
Slide 36: Leveraging Partnership with MFDs
Leveraging Partnership with MFDs Distributed Assets form 45% of NIMF’s AUM Overall Distribution Mix Distributed Assets Mix Banking Direct Distributed Distributors Channel Assets 21% 55% 45% Mutual Fund National Distributors Distributors 58% 21% De-risked distribution model Large share of the AUM is
Slide 37: Focus on Individual assets
Focus on Individual assets Distributed Assets (investor-wise) AUM (INR bn) Corporate 17% Retail 592 HNI 53% 30% 338 197 Retail HNI Corporate 83% of the Distributed Assets are contributed by Individual investors Source: AMFI; Calculated on Monthly Average AUM 36
Slide 38: Leaders in Investor Education
Leaders in Investor Education EDGE Learning Academy (Q1 FY22) Investor Education Unique Locations Mobile App MFx 19 T-30 Programs 7 Programs 940+ B-30 Investors 12 Programs Dedicated Investor Education App MFx 37
Slide 39: Other Businesses
Other Businesses A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 40: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) ❑ Category II & Category III AIFs across various asset classes ❑ Equity / Real Estate / Credit / Technology & Venture Capital FoF ❑ As on June 2021, raised commitments of approx. INR 38 billion across funds ❑ Nippon India Digital Innovation Fund - commitmen
Slide 41: Offshore Business - Creating expressways globally
Offshore Business - Creating ‘expressways’ globally AUM of INR 101 bn as on Jun 30, 2021 Leveraging Nippon Life’s Insurance Particulars Amount in INR bn global network Advisory 30 Managed 71 Total 101 Hokkaido Singapore Mauritius Dubai Singapore Sendai ❑ RAMS Equities Portfolio fund-UCITS ❑ IMSF - E
Slide 42: Wider international presence
Wider international presence 41
Slide 43: ESG Focus
A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 44: ESG Initiatives
ESG Initiatives NAM India became a signatory to UN-supported Principles for Responsible Investment Part of the ongoing commitment to foster ESG principles across the organisation Environment Social • Climate Consciousness: 10% reduction in energy • People-friendly policies: Health, Safety and Enviro
Slide 45: Strong Investment Management Framework
Strong Investment Management Framework Performance Scoring & Robust Research Fund Casing Monitoring • “Backbone of the investment process” • Ensures portfolio construction is strictly in line with the fund’s objectives, and is • Comprehensive scoring mechanism • 60+ strong investment team aligned to
Slide 46: Investment Stewardship
Investment Stewardship Stewardship responsibilities are critical component of our fiduciary duties ❑ Continuously engage with investee companies to understand and monitor aspects such as strategy and business outlook, financial performance, corporate governance issues and management evaluation, capi
Slide 47: Financial Overview
Financial Overview A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 48: Financial Summary - As per IND AS
Financial Summary - As per IND AS Consolidated (INR mn) Particulars Q1 FY22 Q4 FY21 Q1 FY21 Revenue from Operations 3,023 3,019 2,331 Operating Expenditure 1,332 1,441 1,365 Fee & Commission Expenses 117 141 94 Employee benefits expense 697 654 715 Finance cost 9 10 13 Other Expenses 436 566 439 Dep
Slide 49: Financial Summary - As per IND AS
Financial Summary - As per IND AS Consolidated (INR mn) Particulars FY21 FY20 Revenue from Operations 10,621 12,030 Operating Expenditure 5,423 6,334 Fee & Commission Expenses 432 705 Employee benefits expense 2,713 3,024 Finance cost 44 57 Other Expenses 1,901 2,217 Depreciation 333 333 Core Operat
Slide 50: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) June 30, 2021 March 31, 2021 Investment in NIMF’s schemes 22,094 23,496 - Equity 1,944 2,403 - Debt 20,150 21,093 Bank FDs and tax-free bonds 4,435 4,515 Other assets 2,392 1,765 Total 28,921 29,776 NIMF - NIMF - Other Other Equity Bank FDs
Slide 51: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases QAAUM / Branch QAAUM / Employee (INR bn) 12.8 11.7 12.4 10.4 11.5 2.1 2.0 2.0 2.3 2.4 Mar-18 Mar-19 Mar-20 Mar-21 Jun-21 Profit / Branch Profit / Employee (INR mn) 137.4 149.7 109.3 97.7 84.3 17.8 27.5 29.5 17.0 15.9 FY1
Slide 52: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR bn) 4.92 10.90 4.42 4.42 7.94 3.44 7.62 6.69 FY 18 FY 19 FY 20 FY 21 FY 18 FY 19 FY 20 FY 21 Total Dividend INR 8 per share in FY21 76% of FY21 earnings shared with shareholders Cumulative dividend of INR 27 bn in last 7 financial years
Slide 53: Thank you for your time! Stay safe!
Thank you for your time! Stay safe!
Slide 54: Annexure
A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 55: About Nippon Life Insurance
About Nippon Life Insurance A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 56: Profile
Profile ❑ Fortune 500 company (Rank 130 in 2020)1 ❑ Japan’s largest private life insurer & one of the largest in the world2 ❑ Total assets over US$ 774 bn3 ❑ 57 Asset Management related operations & 22 Insurance related operations Globally4 Asset Management Presence in India Life Insurance Sharehold
Slide 57: Nippon Life Group
Nippon Life Group Nippon Life Domestic Insurance Business Asset Management Business Overseas Insurance Business Taiju Life Nippon (82.6%) Reliance Nippon Life India Asset Revenues from insurance and Life Insurance Management reinsurance premiums (FY2020-21): (49.0%) $4.0bn (74.5%) GWP (FY2020-21): $
Slide 58: Board Of Directors
Board Of Directors A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 59: Profile of Board Members
Profile of Board Members… General Ved Prakash Malik (Retd.) (Independent Director) has worked in the Indian Army as Chief of the Army Staff from October 1, 1997 to September 30, 2000. He had dual responsibility of being an advisor to the Government as well as commander of 1.2 million strong Indian A
Slide 60: Profile of Board Members
Profile of Board Members Mr. Yutaka Ideguchi (Associate Director) is a Member of the Board of Directors, Senior Managing Executive Officer of Nippon Life Insurance Company (NLI). He has been involved in the areas of finance, International Planning & Operation in NLI. He has been a Regional CEO for A
Slide 61: Disclaimer
Disclaimer This presentation does not constitute a prospectus, an offering circular, an advertisement, a private placement offer letter or offer document or an offer, or a solicitation of any offer, to purchase or sell any securities under the Companies Act, 2013 and the rules made thereunder, the S
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