Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — FY2021 Earnings Presentation
62 slides from Nippon Life India Asset Management's earnings presentation, Apr 27, 2021
Slide 1: Covering letter to stock exchanges
April 27, 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: I
Slide 2: Investor Presentation FY21
Investor Presentation FY21 April 2021
Slide 3: Highlights - FY21
Highlights - FY21 Highest-ever Profit after Tax at INR 6.8 billion - an increase of 64% Highest-ever dividend of Rs. 8 per share (Interim dividend of Rs. 3 and proposed final dividend of Rs. 5) NIMF added over 9 lakh unique investors vs. 20 lakh for the Industry Approx. 1.4 million ETF folios added
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 (72% 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) 32,106 29,714 9% 27,037 27,604 8% 7% 24,628 8% 14% 16% 7% 19% 20% 22% 34% 35% 32% 33% 32% 42% 42% 39% 40% 40% Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Equity Debt Liquid ETFs Post sharp fall in March 2020, Industry witnessed steady growth driven by fresh flows in
Slide 7: NAM India - Profile
NAM India - Profile One of the largest Asset Manager in India, with 25 years of track record NAM India AUM (as of Mar 31, 2021) INR 3.52 trillion Mutual Funds Managed Accounts International INR 2,218 bn* INR 1,263 bn INR 70 bn Advisory INR 33 bn ~290 ~1,000 ~78,400 9.3 mn 10.0 mn Locations Employees
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: Monthly AUM Trend
Monthly AUM Trend Oct 2019 - Renamed as “Nippon India Mutual Fund” NIMF AAUM (INR bn) Recovery continues Peak pre-COVID19 2,303 Lowest 2,210 Mar 2021 1,886 Feb 2020 2,300 2,303 Sept 30, 2019 2,256 2,210 2,213 2,132 2,077 2,072 2,100 33% 17% 2,045 COVID19 1,999 2,009 1,993 1,970 1,983 impact 1,906 1,
Slide 10: Quarterly AUM Trend
Quarterly AUM Trend NIMF AAUM (INR bn) 2,286 2,130 2,049 2,000 16% 1,801 15% 14% 14% 12% 16% 14% 14% 17% 19% 31% 28% 32% 30% 29% 42% 39% 39% 41% 38% Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Equity Debt Liquid ETFs AUM recovery continues in line with the Industry * Quarterly Average Assets under Management
Slide 11: Fixed Income & Equity Assets
Fixed Income & Equity Assets Fixed Income AAUM (INR bn) 987 985 895 863 937 303 283 323 340 348 597 683 701 573 514 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Debt Liquid Equity (Incl. ETF) AAUM (INR bn) 1,100 1,058 1,206 871 986 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 * Quarterly Average Assets under Management
Slide 12: New Normal
1 2 Diversified Product Suite Digital initiatives New Normal 3 4 Leveraging ETF first mover advantage Continue to build on Retail Strength
Slide 13: New Normal - Diversified Product Suite
1 Diversified Product Suite New Normal
Slide 14: Diversified Product Suite
Diversified Product Suite Strengthened Passive & ETF product suite in Q4 FY21 • Launched in Mar 2021, fund predominately invests in State Nippon India ETF Nifty SDL - Development Loans (SDLs) 2026 Maturity • Manages assets of over Rs. 2.5 billion • Invests in 5-year Government securities; tactical p
Slide 15: New Normal - Digital initiatives
2 Digital initiatives New Normal
Slide 16: 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 17: Comprehensive footprint
Comprehensive footprint Ahead-of-the-curve and intelligent Digital ecosystem - A Perpetual Beta Digital Ecosystem Hinterlands & Towns Enterprise Asset Suite Metros & Tier 1 Cities Core Strategic Pillars Build strong Tier 2 & 3 Cities online Business Easy 2.0 presence to App Simply Save Invest Easy A
Slide 18: Digital Business
Digital Business Lumpsum & New SIP Registration Digital Purchases (lakhs)* Q4 FY21 4.7 38% Q4 FY20 3.4 ❑ Digital contribution-to-total NIMF purchase transactions at 53% in FY21 (56% in Q4 FY21) ❑ Digital SIP registrations contributed to 59% of the total new SIPs registered in FY21 ❑ New Digital SIP
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 Successful launch of NFOs - Nippon India ETF Nifty CPSE 360 Bond Plus SDL and Nippon India Passive Flexicap FOF
Slide 20: New Normal - Leveraging ETF first mover advantage
New Normal 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 ~72% ~42% ~13% Volume Share Share of folios Market Share ❑ Only AMC in India with more than 19 years experience in managing ETFs ❑ Largest bouquet of 22 ETFs in the industry across Equities, Debts & Commodity (Gold) ❑ On QAAUM basis, NIMF ETFs
Slide 23: Consolidating leadership position further
Consolidating leadership position further NSE volume (Jan - Mar 2021) (INR mn) Nifty Bank ETFs & Mutual Funds Nifty 50 ETFs Gold ETFs Liquid ETFs Nifty Private Bank ETFs NIMF 372 356 254 1,057 SBI MF 39 26 104 - Kotak MF 18 88 25 - ICICI Prudential MF 62 25 31 20 HDFC MF 3 2 53 - Others 24 3 27 18 T
Slide 24: New Normal - Continue to build on Retail Strength
New Normal 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) 6.9 Mar 31, 2021 30% 22.8 6.0 Mar 31, 2020 29% 20.8 Extensive distribution and a diversified product suite helped to add over 9 lakh investors vs. 20 lakh for the Industry in FY
Slide 26: Focus on Retail & Small towns
Focus on Retail & Small towns Retail AAUM / Total AAUM (%) NIMF 28% Industry 22% SBI 15% HDFC 21% ICICI 17% Birla 22% Higher composition of Retail Assets in AUM at 28% vis-à-vis 22% for the Industry Source: AMFI; Calculated on Monthly Average AUM 25
Slide 27: Retail Assets
Retail Assets 66% of the Individual assets have a vintage of more than 12 months (Mar 31, 2021) Retail AAUM (INR bn) 643 586 520 444 460 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 “Retail Investor Classification” changed from INR 0.5 mn to INR 0.2 mn as per the guidelines issued by AMFI Source: Internal; Ca
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 17.9% 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 72% NIMF 23% SBI 74% Industry 30% HDFC 69% SBI 17% Industry 58% HDFC 17% NIMF 62% ICICI 15% 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 6.8 6.7 6.6 6.6 5.00 6.2 4.00 3.00 2.00 1.00 - Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Annualized book of INR 79 bn In volatile markets, folios with lower ticket size demonstrated longer vintage Source: Internal Systematic Book is based o
Slide 31: Growth in retail asset base continues
Growth in retail asset base continues A new Digital Purchase every… A new SIP Purchase every… 16s 12s 25s 20s FY20 FY21 FY20 FY21 A new ETF folio added every… FY20 243s 16s FY21 * Frequency in seconds calculated with assumption of 252 days in a year 30
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 Mar 31, 2021 Mar 31, 2020 Repo / Cash / Sovereign / AAA / A1+ / AA+ / Upto AA 98.2% 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. 78,400 75 95 89 78,100+ 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 46% of NIMF’s AUM Overall Distribution Mix Distributed Assets Mix Banking Direct Distributed Distributors Channel Assets 22% 54% 46% National Mutual Fund Distributors Distributors 21% 57% 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 547 52% HNI 325 31% 182 Retail HNI Corporate 83% of the Distributed Assets are contributed by Individual investors Source: AMFI; Calculated on Monthly Average AUM 36
Slide 38: ESG Agenda
ESG Agenda A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 39: ESG practices - People, Planet, Profit
ESG practices - “People, Planet, Profit”… Environment Governance Digital initiatives Board committees and policies • 88% transactions through paperless platforms • Corporate Governance philosophy entails • ~70% customer requests processed via non face- attainment of the highest levels of integrity,
Slide 40: ESG practices - People, Planet, Profit (Social)
ESG practices - “People, Planet, Profit” Social CSR • Promoting education & skill development, healthcare, rural & community development including disaster relief, training to promote Olympic Sports and conservation of environment • Contributed INR 143 million for these goals (incl. PM CARES Fund, A
Slide 41: Leaders in Investor Education
Leaders in Investor Education EDGE Learning Academy (Q4 FY21) Investor Education Unique Locations Mobile App MFx 40 T-30 Programs 13 Programs 1,550+ B-30 Investors 27 Programs Dedicated Investor Education App MFx 40
Slide 42: Other Businesses
Other Businesses A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 43: 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 Mar 2021, raised commitments of approx. INR 37 billion across funds ❑ Launched and closed two new schemes ❑ 6th long-on
Slide 44: Offshore Business - Creating expressways globally
Offshore Business - Creating ‘expressways’ globally AUM of INR 103 bn as on Mar 31, 2021 Leveraging Nippon Life’s Insurance Particulars Amount in INR bn global network Advisory 33 Managed 70 Total 103 Hokkaido Singapore Mauritius Dubai Singapore Sendai ❑ RAMS Equities Portfolio fund-UCITS ❑ IMSF - E
Slide 45: Wider international presence
Wider international presence 44
Slide 46: Exclusive collaboration with Cathay SITE
Exclusive collaboration with Cathay SITE NAM India signed LoI with Cathay SITE, Taiwan’s largest asset manager, in April 2021 ❑ Tie-up is part of NAM India’s strategy to expand its product portfolio and offer world-class products to Indian and international investors ❑ Jointly explore areas for deve
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 (Quarterly)
Financial Summary - As per IND AS Consolidated (INR mn) Particulars Q4 FY21 Q3 FY21 Q4 FY20 Revenue from Operations 3,019 2,685 2,745 Operating Expenditure 1,441 1,303 1,222 Fee & Commission Expenses 141 101 198 Employee benefits expense 654 665 529 Finance cost 10 11 5 Other Expenses 566 449 402 De
Slide 49: Financial Summary - As per IND AS (Annual)
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) Mar 31, 2021 March 31, 2020 Investment in NIMF’s schemes 23,496 16,804 - Equity 2,403 2,809 - Debt 21,093 13,994 Bank FDs and tax-free bonds 4,515 5,984 Other assets 1,765 1,575 Total 29,776 24,362 NIMF - Other Other Bank FDs Equity NIMF - A
Slide 51: Operating Expenses
Operating Expenses Continued cost efficiencies contributed to lower operating expenses Fee & Commission expenses Employee expenses (INR mn) (INR mn) 3,105 3,024 2,935 2,583 2,713 2,572 705 432 FY 18 FY 19 FY 20 FY 21 FY 18 FY 19 FY 20 FY 21 Scheme-related expenses Other expenses (INR mn) (INR mn) 1,
Slide 52: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases QAAUM / Branch QAAUM / Employee (INR bn) 13.0 12.8 11.7 11.5 10.4 2.3 2.1 2.0 2.0 2.3 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Profit / Branch Profit / Employee 34.4 (INR mn) 27.3 24.8 24.4 21.1 6.9 4.4 4.5 4.2 4.0 FY17 FY18 F
Slide 53: 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 28+ bn in last 7 financial yea
Slide 54: Thank you for your time! Stay safe!
Thank you for your time! Stay safe!
Slide 55: Annexure
A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 56: About Nippon Life Insurance
About Nippon Life Insurance A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 57: 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$ 723 bn3 ❑ 57 Asset Management related operations & 22 Insurance related operations Globally4 Asset Management Presence in India Life Insurance Sharehold
Slide 58: 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 (FY2019-20): (49.0%) $6.0bn (74.5%) GWP (FY2019-20): $
Slide 59: Board Of Directors
Board Of Directors A <2 Nippon Life inci Asset Management Ltd (Formerly Reliance Nippon Life Asset Management Limited)
Slide 60: 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 61: 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 62: 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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