Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Debt Investor Presentation (December 2019)
32 slides from Manappuram Finance's debt investor presentation, December 2019
Slide 1: Manappuram Finance Limited Corporate Presentation
Manappuram Finance Limited Corporate Presentation December 2019 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Agenda
Agenda Section 1 MANAPPURAM FINANCE OVERVIEW Page 5 Section 2 COMPETITIVE STRENGHTS Page 10 Section 3 GOLD LOAN SEGMENT OVERVIEW Page 22 Section 4 FINANCIAL OVERVIEW Page 25 Appendix MICROFINANCE OVERVIEW Page 28
Slide 3: Manappuram Finance — overview
Manappuram Finance— overview Leading diversified NBFC in India Group structure • Incorporated in 1992, Manappuram is Non-Banking Financial Company (NBFC) Products under standalone entity Manappuram Finance offering a diversified product portfolio including gold loans, microfinance loans, vehicle and
Slide 4: Manappuram — product segment overview
Manappuram — product segment overview Issuer entity1 Subsidiaries Standalone AUM US$2,461m Gold loans Vehicle and equipment finance On-lending and other loans Microfinance loans Home loan finance US$2,147m US$187m US$127m US$668m US$81m AUM c.% of standalone AUM AUM c.% of standalone AUM AUM c.% of
Slide 5: Manappuram — consolidated performance overview
Manappuram — consolidated performance overview Strong financial performance with high return ratios Total AUM (US$m) 3,209 2,752 2,444 1,933 2,232 FY17 FY18 FY19 H1FY19 H1FY20 PAT (US$m) 107 131 96 96 60 FY17 FY18 FY19 H1FY29 H1FY20 ROE and ROA 24.7% 28.1% 22.1% 21.2% 18.9% 5.4% 4.9% 4.7% 6.0% 4.2%
Slide 6: Key corporate milestones
Key corporate milestones • Acquires 100% of Manappuram Insurance Brokers in 2016 • AUM grows to c.US$1.1bn (INR75bn) in 2011 and crosses over • 3,464 standalone branches in 22 states and 6 union territories c.US$1.4bn (INR100bn) in 2012 as of Sep, 2019 (4,491 consolidated branches and 4.7m live • Br
Slide 7: Agenda
Agenda Section 1 MANAPPURAM FINANCE OVERVIEW Page 5 Section 2 COMPETITIVE STRENGHTS Page 10 Section 3 GOLD LOAN SEGMENT OVERVIEW Page 22 Section 4 FINANCIAL OVERVIEW Page 25 Appendix MICROFINANCE OVERVIEW Page 28
Slide 8: Competitive strengths
Competitive strengths 1 Favourable industry dynamics underpin stability and sustainable growth potential 2 Retail focused NBFC, with collateral based lending 3 Well entrenched player in the gold loan NBFC market 4 Long business vintage with a business model that continues to diversify and adapt 5 Co
Slide 9: Favourable industry dynamics — Gold loan
1 Favourable industry dynamics underpin stability and sustainable growth potential— Gold loan Gold NBFCs would benefit with the continuing shift from unorganized to organized gold loan market Gold loan AUM Region-wise AUM split for gold loan NBFC (%)—FY19 45 40.7 20 West, 9% 40 35.5 35 32.8 14.6 15
Slide 10: Retail focused NBFC, with collateral based lending
2 Retail focused NBFC, with collateral based lending Pan India presence1 Gold loan customer base (m) Jammu & Kashmir, 10 Himachal Pradesh, 9 Chandigarh, 4 Delhi, 59 Uttarakhand, 8 2.6 Punjab, 75 Uttar Pradesh, 137 2.3 2.4 2.1 Haryana, 64 Assam, 18 Bihar, 23 Rajasthan, 94 Tripura, 2 Gujarat, 118 Jhar
Slide 11: Well entrenched player in the gold loan NBFC market
3 Well entrenched player in the gold loan NBFC market Manappuram has an estimated market share of c.18% among the gold loan NBFCs NBFC gold loan AUM (US$bn) Share of banks & non-banks in gold financing 100 12.8 80 11.5 10.2 US$bn 60 77 75 74 74 75 74 73 8.4 9.0 7.5 (%) 6.6 7.1 40 20 23 25 26 26 25 2
Slide 12: Long business vintage — track record across multiple business cycles
4 Long business vintage — track record across multiple business cycles Manappuram has focused equally on asset quality…1 2.02 1.77 0.54 0.55 0.67 0.55 0.32 0.19 0.31 0.33 FY17 FY18 FY 19 H1 FY19 H1 FY20 GNPA (%) NNPA (%) … as much as on asset growth Standalone AUM (US$m) 2,461 2,135 1,986 1,635 1,83
Slide 13: Business model focused diversification of loan products, geographies and sourcing
4 Business model focused diversification of loan products, geographies and sourcing AUM segment wise mix (US$m) 17 43 84 142 127 13% 89 187 158 1,575 1,661 2,147 1,835 87% FY17 FY18 FY19 H1FY20 Gold Vehicle Onlending and other loans Gold loan branches by region Gold AUM source evolution Sep -2019 Ea
Slide 14: Strategy of delinking gold business from gold prices
4 Well incorporated strategy of delinking gold business from gold prices 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 Earlier scenario– 12 month long tenure product Current revis
Slide 15: Consistently strong financial performance and growth
5 Consistently strong financial performance and growth on the back of financial discipline Gold loan portfolio yield 27.5% 25.3% 25.0% 24.3% FY17 FY18 FY19 H1 FY20 Standalone debt/equity (x) 2.9 3.2 2.7 2.8 2.8 FY17 FY18 FY19 H1 FY19 H1 FY20 Note: FY17 is as per IGAAP and FY18, FY19 and H1FY20 are a
Slide 16: Access to wide range of funding sources
6 Access to wide range of funding sources Consolidated borrowing mix (H1 FY20) Consolidate borrowing mix evolution (%) Subordinate 1.8 ECB, 1.8% 24.0 20.8 15.2 10.0 0.7 NCDs, 10.0% Bond, 0.7% 0.9 0.8 0.8 21.5 20.9 21.0 23.1 Commercial Cash Credit/ 16.2 20.7 28.4 18.0 Paper, 20.9% STL/WCDL, 38.3% 36.
Slide 17: Robust gold appraisal & safety systems with structured employee training
7 Robust gold appraisal & safety systems with structured employee training ExtensiveExtensive gold appraisal gold appraisal systemsystem In-house capabilities In-house training training capabilities Monitoring Monitoring andsystems and safety safety systems 1• Conducts tested methods for gold apprai
Slide 18: Experienced management team backed by a competent board
8 Experienced management team backed by a competent board Key managerial personal Board of Directors • Postgraduate in Science • Masters degree in • Former Chairman: HDFC • B. Sc.: Calicut University , • B.Com Kerala University, • Managing committee commerce Bank, Unit Trust of India & B.A. LLB : Ke
Slide 19: Agenda
Agenda Section 1 MANAPPURAM FINANCE OVERVIEW Page 5 Section 2 COMPETITIVE STRENGHTS Page 10 Section 3 GOLD LOAN SEGMENT OVERVIEW Page 22 Section 4 FINANCIAL OVERVIEW Page 25 Appendix MICROFINANCE OVERVIEW Page 28
Slide 20: Gold loan — overview
Sa AC QUNURED Quees> t jo ONE:
Slide 21: Gold loan segment: financial and operational summary
Gold loan segment: financial and operational summary Gold loan AUM (US$m) Disbursements (US$m) 12,684 2,147 1,835 1,575 1,661 8,805 7,432 7,121 FY17 FY18 FY19 H1 FY17 FY18 FY19 H1FY20 FY20 Gold AUM presence (H1 FY20) Gold AUM per branch (US$'000) Customer base & avg. loan ticket size Rural 1,000 2.6
Slide 22: Agenda
Agenda Section 1 MANAPPURAM FINANCE OVERVIEW Page 5 Section 2 COMPETITIVE STRENGHTS Page 10 Section 3 GOLD LOAN SEGMENT OVERVIEW Page 22 Section 4 FINANCIAL OVERVIEW Page 25 Appendix MICROFINANCE OVERVIEW Page 28
Slide 23: Consolidated financial performance and growth
Consolidated financial performance and growth Manappuram has been able to demonstrate sustainable profitability NIM, cost to income and net interest spread 59.1% 52.6% 43.7% 51.2% 47.4% 15.5% 14.2% 14.3% 13.2% 17.6% 13.4% 12.6% 12.0% 12.8% 12.0% FY17 FY18 FY19 H1 FY19 H1 FY20 1 NIM Cost to Income Sp
Slide 24: Consolidated profit & loss statement
Consolidated profit & loss statement Particulars (US$m) FY 17 FY 18 FY 19 H1 FY 19 H1 FY 20 Closing AUM 1,933 2,232 2,752 2,444 3,209 Income from operations 479 484 583 276 348 Finance expenses 165 146 187 87 114 Net interest income 314 338 396 189 234 Employee expenses 71 89 102 49 57 Other operati
Slide 25: Consolidated balance sheet
Consolidated balance sheet Particulars (US$m) FY 17 FY 18 FY 19 H1 FY 19 H1 FY 20 Cash & Bank balances 83 103 165 104 244 Investments 1 1 25 7 18 Loans & Advances 1,898 2,158 2,522 2,371 2,977 Fixed assets 26 44 52 43 73 Other assets 113 106 133 126 124 Total assets 2,121 2,411 2,896 2,650 3,437 Sha
Slide 26: Agenda
Agenda Section 1 MANAPPURAM FINANCE OVERVIEW Page 5 Section 2 COMPETITIVE STRENGHTS Page 10 Section 3 GOLD LOAN SEGMENT OVERVIEW Page 22 Section 4 FINANCIAL OVERVIEW Page 25 Appendix MICROFINANCE OVERVIEW Page 28
Slide 27: Appendix: Microfinance Overview
APPENDIX MICROFINANCE OVERVIEW
Slide 28: Micro finance — Industry and business overview
Micro finance — Industry and business overview
Slide 29: Favourable industry dynamics — Microfinance
Favourable industry dynamics underpin stability and sustainable growth potential— Microfinance Growth pace remains strong despite headwinds faced by the sector Share of MFIs in the overall book expected to improve further GLP1 25 Market size 20.8 (US$bn) 8.5 11.3 15.6 24.1 31.1 39.6 49.5 60.9 20 100
Slide 30: Successful diversification into microfinance and low-risk, high yield business model
Successful diversification into microfinance and establishment of a low-risk, high yield business model Excluding legacy state1 of Tamil Nadu, state-wise and district-wise portfolio Asirvad has stringent customer onboarding process exposure is limited to c.12% and c.1% respectively as of 30 Septembe
Slide 31: Microfinance: financial summary
Microfinance: financial summary AUM (US$m) MFI AUM – region wise breakup (H1 FY20) North 12% South 668 40% 543 West 14% 345 254 East FY17 FY18 FY19 H1 34% FY20 MFI disbursements region wise (H1 FY20) Customer base (m) 2.0 1.8 Urban 39% 1.5 1.2 Rural 61% FY17 FY18 FY19 H1 FY20 Note: FY17 is as per IG
Slide 32: Disclaimer
Disclaimer: This presentation and the contents therein are for information purposes only and does not and should not construed to be any investment or legal advice. Any action taken or transaction pursued based on the basis of the information contained herein is at your sole risk and responsibility
Manappuram Finance — Debt Investor Presentation (December 2019) on 6ix