Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Shareholder Meeting (September 2024)
37 slides from Edelweiss Financial Services's shareholder meeting presentation, Sep 27, 2024
Slide 1: Cover letter to stock exchanges: 29th AGM presentation
EW/Sec/2024-25/197 September 27, 2024 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: 29th Annual General Meeting -
Slide 2: Edelweiss Financial Services Limited 29th Annual General Meeting
Edelweiss Financial Services Limited 29th Annual General Meeting
Slide 3: Contents
Contents Highlights of the year gone by 3 Our key priorities - Journey from 2020 to 2024 9 Intrinsic Value - Our compass 29 2
Slide 4: Highlights of the year gone by
Highlights of the year gone by Consol PAT Customer Reach Customer Assets Net Debt 22% YoY 35% YoY 13% YoY 20% YoY Nuvama value unlock and listing Allotted 30% EFSL holdings in Nuvama to Shareholders of Edelweiss 3
Slide 5: Edelweiss at a glance – year ended Mar 24
Edelweiss at a glance – year ended Mar 24 Net Worth Ex-Insurance PAT BVPS INR 6,216 Cr INR 661 Cr INR 48 (FV ₹1) Net Debt Liquidity as a % of Debt INR 13,090 Cr 16% 4
Slide 6: Diversified with seven high-quality businesses
Diversified with seven high-quality businesses Edelweiss Financial Services Ltd (EFSL) Alternative Asset Housing General Life Mutual Fund Reconstruction NBFC Asset Mgt Finance Insurance Insurance Edelweiss Edelweiss Edelweiss Asset ECL Finance Nido Home Zuno General Edelweiss Life Alternative Asset
Slide 7: Healthy profitability: Ex-Insurance PAT at INR 661 Cr
Healthy profitability: Ex-Insurance PAT at INR 661 Cr PAT for the year in INR Cr Alternative Asset Asset EFSL Consol Mutual Fund Management Reconstruction 421 355 210 318 344 38 159 18 Mar 23 Mar 24 Mar 23 Mar 24 Mar 23 Mar 24 Mar 23 Mar 24 22% YoY 32% YoY 112% YoY 12% YoY 6
Slide 8: Earnings distribution across businesses
Earnings distribution across businesses INR Cr Year Ended Business Mar 24 Mar 23 Alternative Asset Management 210 159 Mutual Fund 38 18 Asset Reconstruction 355 318 NBFC 150 139 Housing Finance 19 16 General Insurance (123) (125) Life Insurance (157) (199) Corporate 36 80 EFSL Consolidated PAT (Pre
Slide 9: Robust balance sheet with well capitalised businesses
Robust balance sheet with well capitalised businesses Business Metric Value Asset Reconstruction Capital Adequacy 60.3% NBFC Capital Adequacy 42.4% Housing Finance Capital Adequacy 39.1% General Insurance Solvency Ratio 172% Life Insurance Solvency Ratio 179% 8
Slide 10: Our Key Priorities - Journey from 2020 to 2024
Our Key Priorities - Journey from 2020 to 2024 9
Slide 11: Our key priorities - Journey from 2020 to 2024
Our key priorities - Journey from 2020 to 2024 1 Reduce wholesale book and improve asset quality in NBFC 2 Reduce debt 3 Continue to focus on robust growth in businesses 4 Unlock value in businesses 10
Slide 12: Our key priorities - Journey from 2020 to 2024
Our key priorities - Journey from 2020 to 2024 1 Reduce wholesale book and improve asset quality in NBFC 2 Reduce debt 3 Continue to focus on robust growth in businesses 4 Unlock value in businesses 11
Slide 13: Wholesale assets in NBFC reduced by 70% over last 4 years
1 Wholesale assets in NBFC reduced by 70% over last 4 years INR Cr 70% 13,500 10,370 3,950 Mar 20 Mar 22 Jun 24 12
Slide 14: Significant improvement in NBFC's GNPA
1 Significant improvement in NBFC’s GNPA ~600 bps 7.9% 2.1% Mar 21 Jun 24 13
Slide 15: Our key priorities - Journey from 2020 to 2024
Our key priorities - Journey from 2020 to 2024 1 Reduce wholesale book and improve asset quality in NBFC 2 Reduce debt 3 Continue to focus on robust growth in businesses 4 Unlock value in businesses 14
Slide 16: Net debt reduced by ~INR 27,000 Cr over last 5 years
2 Net debt reduced by ~INR 27,000 Cr over last 5 years INR Cr Business Mar 19 Jun 24 NBFC 24,800 4,715 Housing Finance 4,470 1,750 Alternative Asset Mgt. 135 420 Asset Reconstruction 4,830 1,855 Corporate 11,000 9,115 Total Debt 45,235 17,855 (less) Liquidity and Liquid investment* 5,300 5,145 Net D
Slide 17: Next steps on debt reduction
2 Next steps on debt reduction INR 17,855 Cr Consol Debt INR 8,740 Cr INR 9,115 Cr Debt in Businesses Corporate Debt Businesses are well capitalized Will focus on reducing Debt is serviceable corporate debt 16
Slide 18: Potential levers for corporate debt reduction
2 Potential levers for corporate debt reduction Nuvama stake* INR 3,300 Cr Stake sale in Alternative INR 2,000 Cr Asset Mgt. Potential Stake sale in Mutual INR 2,000 Cr Levers Fund/Insurance Treasury and Property INR 1,700 Cr Other Investments INR 2,200 Cr 17 * Sold ~6% Nuvama stake amounting to ~IN
Slide 19: Our key priorities - Journey from 2020 to 2024
Our key priorities - Journey from 2020 to 2024 1 Reduce wholesale book and improve asset quality in NBFC 2 Reduce debt 3 Continue to focus on robust growth in businesses 4 Unlock value in businesses 18
Slide 20: Robust growth in underlying businesses
3 Robust growth in underlying businesses INR Cr Business Metrics Mar 20 Jun 24 Growth Alternative Asset FP AUM 11,000 32,350 3.0x Management Mutual Fund Equity AUM 6,500 52,500 8.0x General Insurance GWP* 160 936 6.0x Life Insurance Gross Premium* 1,050 1,953 2.0x Asset Reconstruction Cum. Recoverie
Slide 21: This growth has led to consistent value creation for EFSL
This growth has led to consistent value creation for EFSL 20
Slide 22: Value in Asset Management Businesses
3 Value in Asset Management Businesses Figures in INR Cr Business Value Metrics Jun 24 CAGR* AUM 56,350 25% Alternative Asset 8,000 – 10,000 Management FP AUM 32,350 29% PAT 230^ 73% Metrics Jun 24 CAGR* AUM 1,36,000 45% Mutual Fund 4,600 – 5,600 Equity AUM 52,500 63% PAT 53^ 144% 21 *CAGR from FY20
Slide 23: Value in Insurance Businesses
3 Value in Insurance Businesses Figures in INR Cr Business Value Metrics Jun 24 CAGR* General Insurance GWP 936^ 52% 3,400 – 4,400 AUM 1,143 36% Metrics Jun 24 CAGR* Life Insurance Gross Premium 1,953^ 16% 5,000 – 6,000 EV 1,998 10% ~INR 3,600 Cr - capital infused since Poised for breakeven in FY27
Slide 24: Value in Credit Businesses
3 Value in Credit Businesses Figures in INR Cr Business Value Metrics Jun 24 ARC Equity 3,235 3,200 – 3,600 CAPAD 64.2% Metrics Jun 24 NBFC Equity 3,414 3,400 – 3,600 CAPAD 43.4% Metrics Jun 24 Housing Finance Equity 811 1,400 – 1,600 CAPAD 36.0% 23
Slide 25: EFSL Value – Businesses and Investments
3 EFSL Value – Businesses and Investments INR 29,300 Cr INR 7,200 Cr INR 36,500 Cr EFSL Share in Businesses Investments INR 14,100 Cr INR 3,300 Cr Asset Mgt. Stake in Nuvama INR 8,100 Cr INR 1,700 Cr Insurance Treasury & Property INR 7,100 Cr INR 2,200 Cr Credit Other Investments 24
Slide 26: Our key priorities - Journey from 2020 to 2024
Our key priorities - Journey from 2020 to 2024 1 Reduce wholesale book and improve asset quality in NBFC 2 Reduce debt 3 Continue to focus on robust growth in businesses 4 Unlock value in businesses 25
Slide 27: Value unlock – our ideology
4 Value unlock – our ideology Unlocking at opportune times creating a win-win-win situation for all stakeholders Business EFSL Shareholders Higher focus on business specific Strengthens the imperatives Opportunity to directly balance sheet participate in the Flexibility to attract Accelera
Slide 28: Nuvama value unlock – a success story
4 Nuvama value unlock – a success story Unlocked value for shareholders in Nuvama last year – a win-win-win for all stakeholders Primary Capital Infusion of INR 700 Cr Improved governance standards with a diversified Board and independent Nuvama regulatory oversight Flexibility to attract indu
Slide 29: Guided by our ideology, we will continue to unlock value
4 Guided by our ideology, we will continue to unlock value Update on EAAA Plan a stake sale of 10-20%; expect to raise INR 1,500 - 2,000 Cr This stake sale will aid in – Debt reduction Establishing market value of for EFSL the business Given market buoyancy and positive feedback received, we are bui
Slide 30: Intrinsic Value – Our Compass
Intrinsic Value – Our Compass 29
Slide 31: Why Intrinsic Value?
Why Intrinsic Value? Reflects the estimated holistic worth of the business considering both quantitative and qualitative parameters Markets in the mid-term may over or undervalue businesses, but eventually align in the long-term Investments for business scale-up can temporarily impact profitability
Slide 32: Our methodology to calculate Intrinsic Value
Our methodology to calculate Intrinsic Value Holistic assessment of businesses considering both current quantitative (such as operating and financial metrics) and qualitative (such as differentiating factors, technology, management team, underlying risk and governance) parameters and future outlook
Slide 33: Performance across key business metrices
Performance across key business metrices INR Cr Business Metric FY24 FY23 Growth • Fee Paying AUM 32,200 23,200 39% Alternative Asset Mgt • Assets Under Management (AUM) 54,700 46,500 18% • Equity AUM 43,700 27,100 61% Mutual Fund • Assets Under Management (AUM) 1,27,000 1,05,000 21% • Gross Written
Slide 34: Edelweiss' share in Intrinsic Value and YoY movement
Edelweiss’ share in Intrinsic Value and YoY movement INR Cr Business Intrinsic Value Edelweiss’ Share YoY Change Alternative Asset Mgt 9,000 9,000 61% Mutual Fund 5,100 5,100 21% General Insurance 3,900 3,900 22% Life Insurance 5,500 4,200 8% Asset Reconstruction 3,400 2,100 2% NBFC 3,500 3,500 - Ho
Slide 35: To summarize, we will continue to …
To summarize, we will continue to … 1 Create value by growing and scaling up businesses 2 Unlock value at opportune times creating a win-win-win for all stakeholders 3 Be financially strong and resilient by further reducing debt 34
Slide 36: 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 37: Safe Harbour
Safe Harbour Slide 4,5,6: EFSL ex-insurance PAT is post-MI. PATs for businesses are pre-MI Slide 4: Net worth includes MI, investment in CCD by CDPQ of INR 166 Cr Slide 4,15: Available Liquidity includes high quality liquid assets Slide 4,15,33: Debt includes accrued interest, liabilities on market
Edelweiss Financial Services — Shareholder Meeting (September 2024) on 6ix