Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q1 FY2024 Earnings Presentation
55 slides from Indostar Capital Finance's earnings presentation, Aug 2, 2023
Slide 1: Stock exchange filing cover letter
ICFL/LS/0084/2023-24 02 August 2023 BSE Limited National Stock Exchange of India Limited Listing Department, 1st Floor, Exchange Plaza, C-1, Block G, P J Towers, Dalal Street, Fort, Bandra Kurla Complex, Bandra, Mumbai - 400 001. (E), Mumbai – 400 051. Scrip Code: 541336 Symbol: INDOSTAR Sub.: Inves
Slide 2: IndoStar Capital Finance Investor Presentation
“Your Path To A Better Life” INDOSTAR CAPITAL FINANCE Investor Presentation June 2023
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by IndoStar Capital Finance Limited (the “Company’), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for
Slide 4: Key Performance Highlights – Q1FY24
Key Performance Highlights – Q1FY24 AUM Disbursements Gross Stage 3 Net Stage 3 CRAR Branches ₹ 8,062 crs ₹ 1,116 crs 6.6% 3.1% 34.4% CRAR 452 Branches Q1FY23: ₹ 8,247 crs Q1FY23 : ₹ 344 crs Q1FY23: 8.2% Q1FY23: 3.6% Q1FY23: 29.0% Q1FY23: 413 Net Total Income PAT NIMs ₹ 145.0 crs ₹ 38.9 crs 6.5% Q1F
Slide 5: IndoStar 2.0
IndoStar 2.0
Slide 6: “go-to” NBFC in Retail Lending
“go-to” NBFC in Retail Lending CV Finance Housing Finance Our wholly-owned subsidiary IndoStar Home Finance We provide financing for New/ Used CV, Construction engages in providing affordable home financing Equipment, Tractor & Used Car solutions to self-employed and salaried customers. 5
Slide 7: Strategy for INDOSTAR 2.0
Strategy for INDOSTAR 2.0 • Strengthened Core Management Team to focus on each of the business segments New Customer • Focused on serving the used CV market with higher yields Acquisition • Moving branch network into the hinterland, serving customers in tier 3 and tier 4 towns • Strengthened control
Slide 8: Exploring Opportunities in the Used CV Industry
Exploring Opportunities in the Used CV Industry Large CV Market: Used CV financing INR 5.6 Lakh Crores* under-penetrated, ~60% 336,521 270,553 279,903 331,486 391,544 450,416 516,089 with informal credit 13.3% 11.2% 15.2% 14.9% 14.3% 13.8% 19.4% 8% Market typically run Core focus of 11.5% IndoStar C
Slide 9: Commercial Vehicle Industry Trends & Market Forecast
Commercial Vehicle Industry Trends & Market Forecast Commercial Vehicle Unit Sales India (lakhs) CV Industry Trend Drivers & Expectations Units Sold Projections New Commercial Vehicles (CV) sales fell 45% over two years from 10.3L in FY’19 to 5.7L in FY’21, driven by a slowdown in +20.7% 12.5 econom
Slide 10: Indian Affordable Housing Finance Market Expected To Show Significant Growth
Indian Affordable Housing Finance Market Expected To Show Significant Growth Ticket Size (Rs) Players in Indian Mortgage Market Increasing Penetration in LIG & EWS Segments to Drive Growth 69% 41% Average LTS Affordable Housing Market MIG & Comprises of loans with ticket 17.1 10.2 35% > 15 Lacs HIG
Slide 11: Future Ready to Seize Affordable Housing Market Opportunity
Future Ready to Seize Affordable Housing Market Opportunity Management Team Geographical Focus Ecosystem Play › Seasoned management team › Geographical focus on South & › Remote access to customers supported by regional teams with West India with the cluster-based through HomeHub app conservative ba
Slide 12: Our Strategic Focus Areas
Our Strategic Focus Areas Maintaining consistent Investing in technology to Expanding Maintaining asset customer communication become more Agile & geographically quality Process Oriented Digitalization Strengthening controls Ensuring a robust Being agile and to minimize risk balance sheet future-rea
Slide 13: Strategic Performance Indicators
Strategic Performance Indicators
Slide 14: Key Target Areas
Key Target Areas Key Target Areas Plan Status • Opportunity to scale-up used CV disbursement due to both increased • Increase in Disbursement level from Q3 growth in used CV segment and our small base 2023 Business Business • Leverage our existing reach by increasing penetration to field/site to • T
Slide 15: Priority Sector Lending – Key Strategic Initiative
Priority Sector Lending – Key Strategic Initiative What is the RBI What is the qualifier to What are the priority What is the advantage guideline for Banks get an IndoStar loan sectors? to IndoStar? around PSL? tagged as PSL? Under RBI guidelines, loans given to 1) Domestic commercial banks Across t
Slide 16: Changing Portfolio Mix Driven by Retailisation Strategy
Changing Portfolio Mix Driven by Retailisation Strategy Break-up of Asset Under Management Retailisation Strategy Playing Out 12,054 10,150 8,998 9,658 7,813 8,062 15% Q1FY24 5,000 4,643 4,194 3,672 3,928 42% 4,908 46% 47% 47% 49% 51% 85% 551 5% 832 26% 1,899 8% 996 11% 1,623 16% 1,406 1,741 1,746 1
Slide 17: Retailisation Strategy Playing Out
Retailisation Strategy Playing Out Disbursements: CL vs Retail (₹ crs) Disbursements: Retail (₹ crs) 6,448 3,505 1,827 4,947 2,098 1,116 4,885 564 579 3,054 2,356 3,054 1,609 945 1,936 926 2,356 4,885 +187% 347 1,937 534 3,743 14 945 363 1,609 840 0 487 0 190 374 183 3,394 288 1,149 1,594 1,646 1,43
Slide 18: National Footprint Creating Runway for Growth
National Footprint Creating Runway for Growth No States 427 Branches Across 22 States 1 HIMACHAL PRADESH – 2 452 413 424 423 427 2 PUNJAB – 9 42 56 62 77 99 3 UTTARAKHAND – 9 1 67 75 73 38 4 HARYANA – 11 66 2 5 NEW DELHI – 2 3 4 6 UTTAR PRADESH- 31 5 304 293 288 284 315 7 RAJASTHAN – 29 6 14 8 GUJAR
Slide 19: Movement Non-performing Assets
Movement Non-performing Assets IndoStar Capital Finance (%) IndoStar Housing Finance (%) Gross Stage 3 Net Stage 3 Gross Stage 3 Net Stage 3 9.4% 9.1% 8.3% 8.1% 7.9% 1.9% 4.1% 4.1% 1.7% 3.8% 3.7% 1.4% 3.4% 1.2% 1.2% 1.3% 1.2% 1.1% 0.9% 0.9% Q1 FY23 Q2 FY23 Q3 FY23 Q4FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 F
Slide 20: Declining Non-performing Assets
Declining Non-performing Assets Consolidated NPA Trends (%) Total Provisioning as % of Loan Assets Gross Stage 3 Net Stage 3 Stage 3 Provision Coverage Ratio Provisioning as % of Loan Assets -1.6 8.2% 60.1% 7.8% 57.8% 56.2% 54.2% 53.7% 7.1% 6.8% 6.6% 3.6% 3.6% 2.9% 3.2% 3.1% 8.4% 8.1% 8.3% 7.8% 7.5%
Slide 21: Stable Net Stage 3 % in FY23
Stable Net Stage 3 % in FY23 Particulars (₹ crs) Q1FY24 Q4FY23 Q3FY23 Q2FY23 Q1FY23 Gross Stage 1 & 2 6,905 6,591 6,308 6,478 6,674 ECL Stage 1 & 2 292 294 265 268 271 Net Stage 1 & 2 6,613 6,297 6,043 6,210 6,403 ECL Provision % 4.2% 4.5% 4.2% 4.1% 4.1% Particulars (₹ crs) Q1FY24 Q4FY23 Q3FY23 Q2FY
Slide 22: Collection Efficiency
Collection Efficiency Overdue / Prepayments Collection efficiency Particulars (₹ crs) EMI Billing EMI collected Total Collection collections % Jul-22 226 191 118 309 136.7% Aug-22 205 178 88 267 130.3% Sep-22 214 186 108 294 137.5% Oct-22 203 172 79 251 123.5% Nov-22 222 172 165 337 151.8% Dec-22 26
Slide 23: Positive ALM on Cumulative Basis
Positive ALM on Cumulative Basis Particulars (₹ in crs) Jul-23 Aug-23 Sep-23 Q3 FY23 Q4 FY23 Q1 FY24 Opening cash & equivalents* 1,111 1,135 1,046 823 970 894 Loan repayment inflows [Principal] 108 109 110 338 339 386 Fresh borrowings 0 0 0 0 0 0 Total inflow 1,219 1,244 1,155 1,161 1,310 1,280 Liab
Slide 24: Diversified Borrowing Profile Supported by Capital Adequacy
Diversified Borrowing Profile Supported by Capital Adequacy Diversified Funding Mix (June 2023) Net-worth and Capital Adequacy Capital 29% 34% 33% 32% 34% Adequacy 35% 20% 3,050 3,086 3,112 3,151 2,995 1% 30% Net-worth (₹ crs) 0% 14% NCD Banks Securitisation Others CP Equity Q1 FY23 Q2 FY23 Q3 FY23
Slide 25: Credit Rating remains Strong
Credit Rating remains Strong Key Rating Drivers Strong Credit Ratings Demonstrated support from majority shareholders, Borrowing Type Rating Firm Ratings Brookfield & Everstone CRISIL AA (–) Term Loans Strong capitalisation with healthy net worth base CARE A+ CRISIL AA (–) Increased granularit
Slide 26: CV Finance
CV Finance
Slide 27: Commercial Vehicle Finance
Commercial Vehicle Finance AUM of ₹ 3,928 crs Average Ticket Size of ₹ 7.6 Lakhs Used Vehicle Disbursement of 93% in Q1FY24 vs 96% in Q4FY23 Presence across 22 States Average Loan to Value Ratio is 74.0% in Q1FY24 vis-à-vis 72.7% in Q4FY23 Disbursements Yield ~18.7% Gross Stage 3 of 7.5%
Slide 28: CV Finance : Key Operational Parameters
CV Finance : Key Operational Parameters AUM (₹ crs) AUM Mix (Geography –Wise) (%) North 20% 3,835 3,928 26% South 3,612 3,469 3,672 East West 20% 34% Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Average Ticket Size (₹ lakhs) Loan to Value (%) 7.6 74.0% 72.7% 6.8 69.6% 69.7% 68.5% 5.6 5.7 5.5 Q1FY23 Q2FY23 Q3F
Slide 29: CV Finance : Key Operational Parameters
CV Finance : Key Operational Parameters Disbursements (₹ crs) Disbursements Yield (%) 755 19.9% 19.8% 19.5% 657 19.1% 18.7% 334 203 240 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Disbursement Mix (Product –Wise) (%) Disbursement Mix (Geography –Wise) (%) Car North 4% Const
Slide 30: IT – Key Enabler for Control / Growth
IT – Key Enabler for Control / Growth IndoStar Connect – IndoStar Connect - Lending Software Payment Automation Onboarding Verification & Validation End to End services • Digital loan origination mobile and web • One click verification of proof of • Digital case credit assessment memo • A digitized
Slide 31: IndoStar Home Finance Private Limited
IndoStar Home Finance Private Limited
Slide 32: Affordable Home Financing Solutions
Affordable Home Financing Solutions IndoStar Home Finance Private Limited AUM of ₹ 1,741 crs Portfolio Average Ticket Size of ₹ 9 Lakhs Salaried: 50% and Self Employed 50% HF:71% and LAP: 29% Presence across 10 States Average Loan to Value Ratio: 48.39% Blended Yield ~15% Gross Stage 3 o
Slide 33: Focusing on Growing Housing Finance Book
Focusing on Growing Housing Finance Book Housing Finance – AUM Housing Finance – Disbursements (₹ crs) (₹ crs) 1,741 1,623 190 183 1,526 1,489 1,467 115 107 82 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 32
Slide 34: Housing Finance : Key Operational Parameters
Housing Finance : Key Operational Parameters Average Ticket Size (₹ lakhs) Live Accounts 21,975 20,162 8.9 9.0 18,409 7.8 7.7 17,556 7.5 17,089 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Loan to Value (%) Geographical Distribution (Value –Wise) (%) ANDHRA PRADESH 50.4% 11%
Slide 35: Housing Finance : Key Financial Parameters
Housing Finance : Key Financial Parameters AUM (₹ crs) Gross Stage 3 & Net Stage 3 (%) +20% 1,741 1.9% 1,623 1.8% 1,406 1.4% CRAR 1.3% 1.2% 996 1.1% 832 0.8% 0.9% 0.9% Gross Stage 3 73.41% Net Stage 3 Jun 23 0.7% FY 20 FY 21 FY 22 FY23 Q1FY24 FY 20 FY 21 FY 22 FY23 Q1FY24 PPOP & PAT (₹ crs) ROA & RO
Slide 36: Catering to Underpenetrated Segments Across Product Types
Catering to Underpenetrated Segments Across Product Types Characteristics Salaried Self Employed Textile loom workers Retail workers Small traders Kirana shop owners FMCG workers School teachers Tea & snack vendors Vegetable vendors Profession Small time Micro scale milk Manual labourers Helpers man
Slide 37: Process Excellence: Credit & Underwriting
Process Excellence: Credit & Underwriting Evaluation of Profile and Property Risk • Collecting KYCs -Aadhar, PAN, Credit history checks with bureaus. Assessment of LTV, FOIR • Assessment of employment / business stability Excluded from Portfolio • Banking Flows, establishing surrogates • RCU/FI ch
Slide 38: Process Excellence: Collections & Monitoring
Process Excellence: Collections & Monitoring Collection Process Pre Bounce / Delinquency Post Bounce / Delinquency • Use of Bounce prediction tool which provides with the pool of • Cases are allocated to branch sales RM/collections officers customers with high probability where focused efforts are p
Slide 39: Analytics driven Risk Management to control Delinquency
Analytics driven Risk Management to control Delinquency Key Risk Management Aspects Monitored Robust dashboards developed in the system to enable real time monitoring of mentioned parameters Lagged Dashboards are sent to branch managers to enable them to monitor their originated Roll Rate Analys
Slide 40: Financial Performance
Financial Performance
Slide 41: ICF Standalone - Income Statement
ICF Standalone - Income Statement Particulars (₹ in crs) Q1FY24 Q4FY23 Q-o-Q Q1FY23 Y-o-Y FY23 FY22 Y-o-Y Revenue from operations 241.2 236.0 258.5 968.9 1,042.2 Interest expenses 133.3 134.3 132.4 518.0 514.3 Net Interest Income 108.1 101.7 6% 126.1 (14%) 450.9 527.9 (15%) Other Income 0.1 3.9 0.2
Slide 42: ICF Standalone - Balance Sheet
ICF Standalone - Balance Sheet Equity & Liabilities (₹ in crs) Jun’23 Mar’23 Jun’22 Assets (₹ in crs) Jun’23 Mar’23 Jun’22 Financial Liabilities Financial Asset Cash and cash equivalents 623.2 165.0 255.1 Trade payables 5.8 7.4 1.2 Bank balance other than cash & cash equivalent 206.5 203.4 367.0 Deb
Slide 43: HFC - Income Statement
HFC - Income Statement Particulars (₹ in crs) Q1FY24 Q4FY23 Q-o-Q Q1FY23 Y-o-Y FY23 FY22 Y-o-Y Revenue from operations 59.3 50.6 55.4 208.3 144.6 Interest expenses 22.7 17.7 15.7 65.2 49.3 Net Interest Income 36.6 32.9 11% 39.7 (8)% 143.1 95.3 50% Other Income 0.2 0.3 0.2 0.9 0.2 Total Income 36.8 3
Slide 44: HFC - Balance Sheet
HFC - Balance Sheet Equity & Liabilities (₹ in crs) Jun’23 Mar’23 Jun’22 Assets (₹ in crs) Jun’23 Mar’23 Jun’22 Financial Liabilities Financial Asset Trade payables 23.3 23.9 11.7 Cash and cash equivalents 65.2 10.1 3.1 Debt Securities 30.6 0.0 48.9 Bank balance other than cash & cash equivalent 60.
Slide 45: Consolidated - Income Statement
Consolidated - Income Statement Particulars (₹ in crs) Q1FY24 Q4FY23 Q-o-Q Q1FY23 Y-o-Y FY23 FY22 Y-o-Y Revenue from operations 299.1 285.2 313.8 1,174.3 1,162.7 Interest expenses 154.4 150.4 148.1 580.3 539.5 Net Interest Income 144.7 134.8 7% 165.7 (13%) 594.1 623.2 (5%) Other Income 0.3 4.1 0.4 5
Slide 46: Consolidated - Balance Sheet
Consolidated - Balance Sheet Equity & Liabilities (₹ in crs) Jun’23 Mar’23 Jun’22 Assets (₹ in crs) Jun’23 Mar’23 Jun’22 Financial Liabilities Financial Asset Trade payables 5.8 7.9 12.9 Cash and cash equivalents 693.0 179.7 262.7 Debt Securities 1,898.0 1,108.9 1,661.7 Bank balance other than cash
Slide 47: Historical - Consolidated Income Statement
Historical - Consolidated Income Statement Particulars (₹ in crs) FY23 FY22 FY21 FY20 Revenue from operations 1,174.3 1,162.7 1,279.8 1,597.5 Interest expenses 580.3 539.5 708.6 863.4 Net Interest Income 594.1 623.2 571.2 734.1 Other Income 5.3 11.6 7.4 1.5 Total Income 599.4 634.8 578.6 735.5 Emplo
Slide 48: Historical - Consolidated Balance Sheet
Historical - Consolidated Balance Sheet Assets (₹ in crs) Mar’23 Mar’22 Mar’21 Mar’20 Financial Asset Cash and cash equivalents 179.7 80.3 279.2 168.4 Bank balance other than cash & cash equivalent 236.0 409.4 241.0 376.7 Loans 6,515.7 7,706.9 7,139.3 8,293.1 Investments 1,039.4 547.7 1,591.4 230.6
Slide 49: Historical - Consolidated Balance Sheet
Historical - Consolidated Balance Sheet Equity & Liabilities (₹ in crs) Mar’23 Mar’22 Mar’21 Mar’20 Financial Liabilities Trade payables 7.9 2.7 3.9 11.1 Debt Securities 1,108.9 1,977.9 2,012.8 2,089.5 Borrowings other than debt securities 4,539.2 4,245.5 3,994.8 5,052.5 Other financial liabilities
Slide 50: Ownership Structure and Management Team
Ownership Structure and Management Team
Slide 51: Large Global Private Equity Parentage
Large Global Private Equity Parentage Shareholding Pattern (As on June 2023) 21.98% Shareholders % 1.29% Promoters 74.99 BCP V Multiple Holdings Pte Ltd 56.20 1.74% (Brookfield) Everstone Group 18.79 74.99% Domestic Institutional Investors 1.74 ICICI Prudential Life Insurance 1.36 Company Limited Fo
Slide 52: Experienced Management Team - IndoStar
Experienced Management Team - IndoStar Karthikeyan Srinivasan Vinodkumar Panicker Shreejit Menon Chief Executive Officer - ICF Chief Financial Officer - ICF Chief Executive Officer - HFC o He has over 25 years of experience in the areas of Retail Sales, o He has a career span of over 35 years servin
Slide 53: Esteemed Board of Directors
Esteemed Board of Directors BOBBY PARIKH Naina Krishna Murthy Non-Executive Independent Director Chairman and Non-Executive Independent Director o She has more than two decades of experience in the legal o He has nearly three decades of experience in financial services sector. She is the Founder and
Slide 54: Esteemed Board of Directors
Esteemed Board of Directors Munish Dayal Aditya Joshi Non-Executive Director Non-Executive Director o He is Managing Director - Private Equity & Business Operations o He is MD in Brookfield's Private Equity Group and heads the PE at Brookfield Asset Management (BAM) and has over three for Brookfield
Slide 55: Thank You
COMPANY IndoStar Capital Finance Limited CIN: L65100MH2009PLC268160 Email: investor.relations@indostarcapital.com Website: www.indostarcapital.com Thank You INVESTOR RELATIONS ADVISORS Orient Capital (a division of Link Group) Mr. Nikunj Jain Mr. Amar Yardi +91 9769060608 +91 7045121239 nikunj.jain@
IndoStar Capital Finance — Q1 FY2024 Earnings Presentation on 6ix