Iifl Finance Limited · NSE:IIFL
Iifl Finance — Q3 FY2021 Earnings Presentation
70 slides from Iifl Finance's earnings presentation, Jan 29, 2021
Slide 1: Exchange cover letter: press release and presentation on Q3FY21 results
"Ay, 4 I/F L FINANCE January 29, 2021 The Manager, The Manager, Listing Department, Listing Department, BSE Limited, The National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Tower, Exchange Plaza, 5 Floor, Plot C/1, G Block, Dalal Street, Bandra - Kurla Complex, Bandra (E), Mumbai 400 001. Mumb
Slide 2: IIFL Finance Results update
IIFL Finance Limited Press Release For immediate publication Mumbai, India January 29, 2021 IIFL Finance Results update IIFL Finance Limited consolidated results for the quarter ended December, 2020 (Q3FY21) Total income - Rs 919 Cr (Up 7% q-o-q and 58% y-o-y) Pre-provision operating profit (PPOP) -
Slide 3: Financial performance review; Business segment review
Financial performance review IIFL Finance had loan assets under management of Rs 42,264 Cr as at December 31, 2020, with the home loans segment constituting 32%, gold loans 29%, business loans 18% and microfinance loans 9% of the total AUM. The company’s annualized ROE and ROA for Q3FY21 stood at 18
Slide 4: Construction & real estate; Liquidity position; Co-lending tie-ups
Construction & real estate IIFL Asset Management Limited (IIFL AMC) has executed a binding term sheet with a renowned global alternate investment manager (Investor) for 33.3% contribution by the Investor in the AIF, subject due diligence to the satisfaction of the Investor. The AIF will have sponsor
Slide 5: Awards and recognition
IFL Finance received the award for 'Most Admired Service Provider in Financial Sector' at the ET Now World BFSI Awards IIFL Finance featured in ‘India’s Best Workplaces in BFSI 2020’ – Top 25 list The Economic Times recognized our Chairman as one of the 'Most Promising Business Leaders of Asia
Slide 6: About IIFL
About IIFL IIFL Group is one of the leading players in the Indian financial services space. Prior to the Composite Scheme of Arrangement (effective May 2019), IIFL Finance Limited (Erstwhile “IIFL Holdings Limited”) (Bloomberg Code: IIFL IN, NSE: IIFL, BSE: IIFL) was engaged in the business of finan
Slide 7: Performance review Q3FY21
Performance review Quarter ended December 31, 2020 (Q3FY21) Bloomberg: IIFL IN IIFL Finance Limited January 29, 2021
Slide 8: Agenda: Key highlights
I. Q3FY21 Financial performance i. Key highlights ii. Financial performance and growth iii. Asset quality iv. Liquidity position II. Business segments review III. Technology, Alliances and other updates
Slide 9: Key highlights for the quarter ended December 2020
Key highlights for the quarter ended December 2020.. Loan AUM RoE / RoA* Profit after tax ₹42,264 Cr 18.4% / 2.6% ₹ 268 Cr Up 3% q-o-q Previous quarter 17.1% / 2.4% Up 26% q-o-q Cost of Funds Gross / Net NPAs Provision coverage ratio# 9.0% 1.61% / 0.77% 170% down 10 bps q-o-q Previous quarter 1.81%
Slide 10: Agenda: Financial performance and growth
I. Q3FY21 Financial performance i. Key highlights ii. Financial performance and growth iii. Asset quality iv. Liquidity position II. Business segments review III. Technology, Alliances and other updates
Slide 11: Consolidated results (as per IND AS)
IIFL Finance – Consolidated results (as per IND AS) Quarter and nine months ended December 31, 2020 (NBFC, HFC and MFI) ` Cr Q3FY21 Q3FY20 Y-o-Y Q2FY21 Q-o-Q 9MFY21 9MFY20 Y-o-Y Interest income 1,184.5 965.2 23% 1,186.3 (0%) 3,454.8 2,939.4 18% Interest expense (611.3) (599.1) 2% (640.9) (5%) (1,874
Slide 12: Income analysis (Consolidated as per IND AS)
Income analysis (Consolidated as per IND AS) Quarter and nine months ended December 31, 2020 (NBFC, HFC and MFI) ` Cr Q3FY21 Q3FY20 Y-o-Y Q2FY21 Q-o-Q 9MFY21 9MFY20 Y-o-Y Assets under management 42,264 36,015 17% 40,843 3% 42,264 36,015 17% Assigned assets (11,371) (10,114) 12% (10,998) 3% (11,371)
Slide 13: Consolidated Balance sheet
IIFL Finance – Consolidated Balance sheet Unaudited as at December 31, 2020 (NBFC, HFC and MFI) ASSETS ₹ Cr LIABILITIES AND EQUITY ₹ Cr 1 Financial Assets 1 Financial Liabilities (a) Cash and Bank Balances 4,484 (a) Payables 116 (b) Receivables 54 (b) Borrowings (c) Loan Assets 30,649 - NCDs 9,803 (
Slide 14: Consistent financial performance and growth over years
Consistent financial performance and growth over years Loan AUM (₹ Cr) Total comprehensive income (₹ Cr) Annual Quarterly ● Loan AUM has grown 42,264 17% y-o-y and 3% q-o- 37,951 38,335 40,843 701 34,904 q, driven primarily by 31,228 463 497 core products micro & 22,281 423 19,514 small business loa
Slide 15: Robust and improving financial position
Robust and improving financial position Return on assets (%) Return on equity (%) Annual Quarterly Annual Quarterly Annualized 18.4% ● ROE annualized has Annualized 16.9% 17.5% 17.1% 15.2% crossed FY19 level at 13.3% 2.6% 18.4%, driven by ROA 2.4% 11.1% 2.2% 1.9% 2.0% of 2.6%. The same for 1.6% 1.5%
Slide 16: Loan disbursements across segments higher than pre Covid levels
Loan disbursements across segments are higher than pre Covid levels.. Disbursement trends (` In Crs) Gold Loan Home Loan 5,682 1,318 5,024 4,909 3,312 3,603 3,924 750 863 595 693 2,107 350 267 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Business
Slide 17: Agenda: Asset quality
I. Q3FY21 Financial performance i. Key highlights ii. Financial performance and growth iii. Asset quality iv. Liquidity position II. Business segments review III. Technology, Alliances and other updates
Slide 18: Superior asset quality maintained through cycles
Superior asset quality maintained through cycles…. Gross NPA (%) Net NPA (%) ● GNPA as at Q3FY21, was 1.61% and NNPA was 150 DPD 120 DPD 90 DPD 90 DPD 150 DPD 120 DPD 90 DPD 90 DPD 0.77%. Not considering Supreme Court deferment order, proforma GNPA was 2.31% 2.87% and NNPA 1.82% 1.71% 1.96% 1.95% 1.
Slide 19: Asset quality standards maintained in all business segments
Asset quality standards maintained in all business segments Credit quality has been steady across key product segments Core growth segments Synergistic segments Home loans Business loans Construction & Real Estate finance Gross NPAs (%) Gross NPAs (%) Gross NPAs (%) 4.4% 1.4% 1.4% 1.4% 3.8% 3.7% 1.1
Slide 20: Conservative provisioning across all segments
Conservative provisioning across all segments .. As at December 31, 2020 (NBFC, HFC and MFI) ` in Crores Loan Book Provision % Stage 1 Stage 2 GNPA Stage 1 Stage 2 GNPA Total Business Total Provision 0-30 dpd 30-90 dpd 90+ dpd 0-30 dpd 30-90 dpd 90+ dpd Home Loans 8,285.1 382.8 96.2 8,764.0 1.2% 8.5
Slide 21: Collection efficiency bounced back to near pre Covid levels
Collection efficiency across segments have bounced back to near pre Covid levels Collection Efficiency trends (%) – moratorium period from Mar-Aug 2020 Gold Loan Home Loan 93% 95% 97% 66% 75% 81% 90% 36% Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Business Loans Microfinance 85% 75% 98%
Slide 22: Agenda: Liquidity position
I. Q3FY21 Financial performance i. Key highlights ii. Financial performance and growth iii. Asset quality iv. Liquidity position II. Business segments review III. Technology, Alliances and other updates
Slide 23: Well diversified liability profile
Well diversified liability profile.. Resource profile is well diversified, with increasing share of bank loans Outstanding borrowing (` Crs) Bonds/ NCDs investors split (%) 15,395 17,982 24,539 26,141 25,734 26,302 Public, Others, 17.7% 9.0% Mutual CBLO Foreign Funds, Investors , 0.7% 49.2% 5% 2% Ba
Slide 24: Structural Liquidity - Surplus across all buckets
Structural Liquidity- Surplus across all buckets ` in Crores Surplus/ (Deficit) as a % of outflow (cumulative) 534% 133% 140% 151% 111% 46% 18% 16% 0% 39,382 34,797 39,382 31,293 30,108 21,473 26,623 15,951 14,671 10,565 7,606 5,492 4,065 7,557 3,168 4,217 641 2,354 Up to 14 days 1 month 2 months 3
Slide 25: Debt repayment obligation schedule, well covered
Debt repayment obligation schedule, well covered ` in Crores Cash & cash equivalents as on December 31, 2020 4,484 Earmarked cash & cash equivalents (1,848) 9,383 Free cash & cash equivalents 2,636 8,700 Liquid investments/unutilised CC (+) 672 Undrawn credit lines (+) 1,831 7,658 Aggregate liquidit
Slide 26: Debt resource raising trend
Debt resource raising trend Term Loan/ Refinance Bonds Refinance ` in Crores 4,555 700 3,987 500 425 2,721 2,856 975 1,402 3,062 1,005 152 1,746 825 550 999 275 425 180 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 During the quarter: IIFL’s long term credit rating from CRISIL, ICRA and CARE are AA (Outlook:
Slide 27: Agenda: Business segments overview and mix
I. Q3FY21 Financial performance II. Business segments review i. Overview and mix ii. Home loan iii. Business loan iv. Gold loan v. Microfinance vi. Update on commercial & real estate III. Technology, Alliances and other updates
Slide 28: Our diversified product portfolio
Our diversified product portfolio As on December 31, 2020 Strategic focus on segments that are core strengths and have inter se synergies AUM (₹ Cr) Target customers Unique features Salaried / Self-employed Focused on affordable and non-metro housing segments 13,445 individuals Leverages under
Slide 29: The portfolio mix is becoming increasingly retail and granular
The portfolio mix is becoming increasingly retail and granular Diversified AUM portfolio disperses exposure and balances cyclical vagaries (₹ Cr) 16,176 22,281 34,904 37,951 42,264 2% 1% 2% Commercial Vehicle 13% 8% 14% 12% 10% Capital Markets Commercial & Real Microfinance 9% 7% 9% Estate 21% 18% 2
Slide 30: Loans sourced through own network
Loans sourced through own network .. 85% of branches are in Tier 2 and Tier 3 locations Wide spread network across 25 states and over 600 locations, with over 17000 employees Number of branches 2,439 2,377 1,947 1,161 Mar'15 Mar'19 Mar'20 Dec'20 Regional split of branches South, 35% West, 39% Open b
Slide 31: Agenda: Home loan
I. Q3FY21 Financial performance II. Business segments review i. Overview and mix ii. Home loan iii. Business loan iv. Gold loan v. Microfinance vi. Update on commercial & real estate III. Technology, Alliances and other updates
Slide 32: Home loans – industry overview
Home loans – industry overview Indian Mortgage market is expected to be INR 36.9 Trillion by Mar 2023^ Rising demand for housing in tier-II-III cities is expected to result into INR INR 11 surge in construction 21Trillion Trillion which will increase the focus of financiers on + urban areas. Total
Slide 33: Home loans – product overview
Home loans – product overview Affordable home loan Product Non-metro housing loan offering For home purchase, home renovation, home construction and plot purchase Affordable home loan: Salaried and self employed segment wherein household income is below ₹75k pm and are buying Customer proper
Slide 34: Home loans – financial overview
Home loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) Self Employed Salaried 2,700 5,300 8,579 12,197 12,443 13,445 10.8% 35% 41% 10.3% 10.2% 48% 54% 58% 60% 10.1% 9.8% 9.3% 65% 59% 52% 46% 42% 40% FY16 FY17 FY18 FY19 FY20 Q3FY21 FY16 FY17 FY18 FY19 FY20 Q3FY21 Average
Slide 35: Agenda: Business loan
I. Q3FY21 Financial performance II. Business segments review i. Overview and mix ii. Home loan iii. Business loan iv. Gold loan v. Microfinance vi. Commercial & real estate III. Technology, Alliances and other updates
Slide 36: Business loans (MSME) – industry overview
Business loans (MSME) – industry overview Micro segment: Biggest beneficiary of fresh disbursals with lowest default rates MSME Exposure by ticket size NPA rates across MSME segment Total MSME Exposure - ₹ 17.75 lakh crores PSU NBFCs Private Banks (as on Jan’20) 29.2% Very small (< ₹10L) 5% 25% 12%
Slide 37: Business loans – product overview
Business loans – product overview Product For business loans backed by cash flows offering Collateral must for loans of more than ₹ 50 Lakh; LTV up to 70% MSME customers having established business performance Customer Lending to manufacturing, trading and service sectors for working capital
Slide 38: Business loans – financial overview
Business loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 8,117 7,805 7,788 7,361 19.6% 6,000 16.3% 17.5% 5,100 13.4% 13.5% 14.3% FY16 FY17 FY18 FY19 FY20 Q3FY21 FY16 FY17 FY18 FY19 FY20 Q3FY21 Onboarding Average Ticket Size (₹ Lakhs) Gross NPAs (%) 89.0 3.7% 83.0 2.5%
Slide 39: Agenda: Gold loan
I. Q3FY21 Financial performance II. Business segments review i. Overview and mix ii. Home loan iii. Business loan iv. Gold loan v. Microfinance vi. Update on commercial & real estate III. Technology, Alliances and other updates
Slide 40: Gold loans – industry overview
Gold loans – industry overview Industry Gold Loans – Organized Market (₹ bn) 4,180 27% 3,601 3,262 2,875 25,000 tonnes 2,315 2,508 of gold is held by Indian Households (65% in Rural India) 73% FY17 FY18 FY19 FY20E FY21P FY22P NBFC Banks Gold loans expected to growth at a higher rate amongst all as
Slide 41: Gold loans – product overview
Gold loans – product overview Product Loan against jewellery provided for personal & business use; offering On-boarding LTV ~ 71% Customer Salaried, self-employed and MSME businesses segments 70% are repeat customers Onboarding AUM Gross/Net NPA Tenor 93% Collection Efficiency Average Ticket
Slide 42: Gold loans – financial overview
Gold loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 12,212 19.2% 18.7% 19.6% 18.8% 9,125 18.1% 18.1% 6,195 4,037 2,914 2,910 FY16 FY17 FY18 FY19 FY20 Q3FY21 FY16 FY17 FY18 FY19 FY20 Q3FY21 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 58 56 59 53 46 48 0.6%
Slide 43: Agenda: Microfinance
I. Q3FY21 Financial performance II. Business segments review i. Overview and mix ii. Home loan iii. Business loan iv. Gold loan v. Microfinance vi. Update on commercial & real estate III. Technology, Alliances and other updates
Slide 44: Microfinance – industry overview
Microfinance – industry overview Overall MFI to grow by 25-26% in FY22* (₹ bn) MFI growth is expected to pick up by 25-26% in FY22 978 744 773 567 355 136 198 231 Out of the total FY15 FY16 FY17 FY18 FY19 FY20 FY21P FY22P disbursement expected in the FY21, 80% to come in the second half of the year
Slide 45: Microfinance – product overview
Microfinance – product overview Product Small-ticket loans for purpose of income generation activities offering Customer Target segment is rural and semi-urban self-employed women formed into joint liability groups segments AUM Gross/Net NPAs States Total Customers Tenor 93% Collection Efficienc
Slide 46: Microfinance – financial overview
Microfinance – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 3,400 3,920 2,286 25.9% 24.4% 840 22.6% 22.3% 22.0% 22.1% 110 238 FY16 FY17 FY18 FY19 FY20 Q3FY21 FY16 FY17 FY18 FY19 FY20 Q3FY21 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 27 2.2% 21 23 17 17 1.5% 15
Slide 47: Agenda: Update on commercial & real estate
I. Q3FY21 Financial performance II. Business segments review i. Overview and mix ii. Home loan iii. Business loan iv. Gold loan v. Microfinance vi. Update on commercial & real estate III. Technology, Alliances and other updates
Slide 48: Construction & real estate financing
Construction & real estate financing Transfer of real estate credit assets to an Alternate Investment Fund (AIF) IIFL Asset Management Limited (IIFL AMC) has executed a binding term sheet with a renowned global alternate investment manager (Investor) for 33.3% contribution by the Investor in the AIF
Slide 49: 93% of finance is for residential projects; 76% in advanced stages
93% of finance is for residential projects, and 76% of projects are in advanced stages of completion No. of POS as at Stages of construction Stage projects 31 Dec % to total Residential 45 3,413 93% • 76% of funded projects are in Land stage 1 76 2% advanced stages of completion or are already compl
Slide 50: Affordable residential projects contribute 75%
Affordable residential projects contribute 75% No. of POS as at % to What is the definition of Affordable Residential? Figs in Cr projects 31 Dec total •Projects where unit sales realisation is less than 2 Residential 45 3,413 93% Cr in Mumbai, less than 1 Cr in Delhi, Bengaluru, Affordable 36 2,744
Slide 51: High velocity suburbs of Mumbai and Gurgaon have 61% of funded projects
High velocity suburbs of Mumbai and Gurgaon have 61% of funded projects Geography mix No. of POS as at % to Figs in Cr projects 31 Dec total Mumbai 15 1,815 49% Noida 2 391 11% Gurgaon 2 346 9% Delhi 9 342 9% Pune 4 199 5% Banglore 3 197 5% Hyderabad 2 118 3% Jaipur 3 95 3% Bhiwandi, Thane 1 79 2% G
Slide 52: 92% of funded developers have more than 10 years track record
92% of funded developers have more than 10 years of successful track record RE Experience of Developers Relationship with IIFL No. of POS as at No. of No. of POS as at No. of No. of years projects 31 Dec Developers No. of years projects 31 Dec Developers 5-9 yrs 5 280 5 1-3 yrs 7 253 6 10-14 yrs 10
Slide 53: Agenda: Technology, Alliances and other updates
I. Q3FY21 Financial performance II. Business segments review III. Technology, Alliances and other updates i. Technology and Alliances ii. Social impact iii. Corporate and others
Slide 54: Strategy driven by technology and partnerships
Strategy driven by technology and partnerships Simplified product Digital Players offerings Strategic partnerships Focused, simple with Fintech ecosystem products to keep costs players to harness low & facilitate rapid innovations in our scale up business model Digital platform Partnerships Self lea
Slide 55: Business loans: Complete digital journey
Business loans: Complete digital journey Customer on- Underwriting Collections boarding Input parameters Data used by model Automated Financial data Cloud telephony Name Bureau data Automated communication Mobile no. GST data Digital notices share Email Alternate data Litigation mangmt. system Need
Slide 56: Home loan mortgages: Digital up selling for customer retention
Home loan mortgages: Digital up selling for quality customer retention A complete paperless journey with no human touch points Pool Selection Digital Interface ` 10 Cr disbursed Identification of Customer details fetched from till 21st Jan 2021 eligible pool through Parent loan data analytics ATS 3
Slide 57: Gold loans: End to end digital on-boarding, sanction and disbursal
Gold loans: End to end digital on-boarding, sanction and disbursal e-KYC • Data Capture and KYC upload • Past credit default checks or • Fraud & negative profile check • Valuation Loan officer visits customer’s home KYC & valuation is done at Upload KYC docs comfort of customer’s home Customer can r
Slide 58: Microfinance: Key technology initiative Geo Analytics
Microfinance: Key technology initiative Geo Analytics • Spotways - AI based field force automation and geo analytics system • It gives location based information which provides greater context and perspective to the available data • It identifies areas for business expansion • Map BC points and bank
Slide 59: Our recent partnerships with banks
Our recent partnerships with banks.. Bank Name Product Sourcing Home Loan Sourcing Gold Loan Co-lending Business Loan & Business Loan Sourcing Servicing Sourcing Servicing Nature of agreement Co-Lending agreement arrangement arrangement Funding by Partnering 100% 100% 80% bank All services from sour
Slide 60: Agenda: Social impact
I. Q3FY21 Financial performance II. Business segments review III. Technology, Alliances and other updates i. Technology and Alliances ii. Social impact iii. Corporate and others
Slide 61: Home loan: Aiming for inclusive growth
Home loan: Aiming for inclusive growth IIFL is firmly committed to support economic activity and financial inclusion through its loan offerings while adapting to changes in the external environment. 100,000+ loans to 42,900+ families first-time home buyers benefitted under CLSS 1,000+ Cr. subsidy 33
Slide 62: IIFL Home Finance contribution to Environment Sustainability
IIFL Home Finance contribution to Environment Sustainability- Green affordable housing impact by green value partners • Pioneered Green Building concept in IGBC preliminary certified / certified projects under partnership with housing developers management – 7398 units through "Kutumb" platform • It
Slide 63: Microfinance & Retail business loans
Microfinance & Retail business loans Microfinance & Retail business loans are for income generating activities 88% of these 8 benefited 15.6 lakhs+ families customers stay in the rural area benefited in 17 states with of the country financial intervention Supports self-employed 10,000+ of dairy farm
Slide 64: Gold loan: Supporting small ticket borrowers
Gold loan: Supporting small ticket borrowers Gold loans are essentially small-ticket business loans 67% of gold loan are of less 64% of the branches are located in tier II, III cities and than ₹ 50,000 value rural areas 87% of loans are towards 73% of loans given to small end use that classify as PS
Slide 65: Agenda: Corporate and others
I. Q3FY21 Financial performance II. Business segments review III. Technology, Alliances and other updates i. Technology and Alliances ii. Social impact iii. Corporate and others
Slide 66: Distinguished Board of Directors
Distinguished Board of Directors IIFL Finance – Board of Directors Nirmal Jain, Chairman & Whole-time Director R Venkataraman, Managing Director MBA from IIM Ahmedabad, rank-holder CA MBA from IIM Bangalore, B-Tech from IIT and ICWA. Kharagpur Worked with HUL for 5 years Worked with ICICI Ba
Slide 67: Management team with rich domain experience; Marquee investors
Management team with rich domain Marquee investors experience IIFL Finance Chief Financial Officer Rajesh Rajak Chief Risk Officer Sanjeev Srivastava Compliance Officer Sneha Patwardhan IIFL Finance Limited IIFL Home Finance Public & Others Chief Executive Officer Monu Ratra 19.2% Promoters Chief Fi
Slide 68: Environment, Social and Governance (ESG) Initiatives
Environment, Social and Governance (ESG) Initiatives • As a responsible corporate, IIFL Finance aims to deliver sustainable growth through financial products and services that help satisfy unmet societal needs, enable a thriving society, conserve environment and create long-term value for all • The
Slide 69: Social: Sample CSR projects
Social Sample CSR projects Chauras Sakhiyon ki Badi (Rajasthan) IIFL Foundation’s Sakhiyon ki Badi are community based learning centers operating Chauras is a learning centre cum across 11 districts of Rajasthan, aiming towards eradication of Female Illiteracy. This crèche for children of migrant f
Slide 70: Thank you
Thank you Published in January 2021 IIFL Finance Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate, Thane – 400604. This report is for information purposes only and does not construe to be any investment, legal or taxa