Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — Investor Presentation (October 2018)
43 slides from Aavas Financiers's investor presentation, October 2018
Slide 1: Aavas Financiers Limited Investor Presentation – H1 FY19
AAVAS FINANCIERS LIMITED Investor Presentation – H1 FY19 October 2018
Slide 2: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Aavas Financiers Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securit
Slide 3: Our Background
Our Background Commenced operations in 2011 Regulated by National Housing Bank from Jaipur, Rajasthan (“NHB”) Initially promoted by Recognized by NHB for refinance Au Small Finance Bank (till 2016) facility Currently being run by professional management team backed by marquee Retail network of 186 b
Slide 4: Our Pillars of Strength
Our Pillars of Strength Improving Credit Ratings Experienced Board of Directors Professional Management Team Fully in-house Sourcing Model Technology and Data Analytics Diversified Shareholding base
Slide 5: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating Reaffirmed ICRA CARE CRISIL ICRA A+ / A+ / A+ / Sep-18 Sep-18 Sep-18 Sep-18 A1+ Positive Positive Stable Mar-18 A1+ CARE Sep-18 A1+ A/ A+ / BBB+ / Mar-16 Mar-17 Aug-12 Stable Stable Stable Mar-18 A1+ 5
Slide 6: Experienced Board of Directors
Experienced Board of Directors Krishan Kant Rathi Sandeep Tandon K. R. Kamath Chairman & Independent Director Independent Director Non-executive Nominee Director Qualifications: Chartered Accountant, Company Qualifications: Bachelor’s degree in Secretary Qualifications: Bachelor’s in Electrical comm
Slide 7: Professional Management Team
Professional Management Team • 17+ years of experience in Retail finance Sushil Kumar Agarwal • Former Business Head (SME and Mortgages), Au SFB Whole Time Director & CEO • Prior associated with Kotak Mahindra Prime, ICICI Bank, Au Small Finance Bank Ghanshyam Rawat - Co-Founder and CFO Avinash Kuma
Slide 8: Superior Business Outcome
Fully in-house Sourcing Model 1. Reduction in average TAT (days) In House execution model – Replicated across 8 States Turn around time is a key metric for employee incentives Lead generation and 21 Superior Business Outcome Risk management Collections sourcing 13 ▪ Focused direct sourcing ▪ In-hous
Slide 9: Technology and Data Analytics
Technology and Data Analytics Lead Generation Underwriting Operations Collections ▪ Majority of the leads ▪ Platform integration ▪ Platform integration ▪ Route optimization are logged in through with credit bureaus with credit bureaus for collection the sourcing app ▪ Quarterly scrub of ▪ Quarterly
Slide 10: Initial Public Offering
Initial Public Offering October 2018 ▪ Listing of Aavas Financiers Limited on BSE and NSE ▪ Listing Date : 8th October 2018 ▪ Total IPO size ₹ 16,403 Mn of which Primary is ₹ 3,600 Mn ▪ Raised ₹ 5,202 Mn from 34 high profile anchor investors 10
Slide 11: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Public Shareholders : 5th October 2018* 5th October 2018 Others, 4% Investor Details % Holding SBI Mutual Fund 7.52 FII, 9% AU Small Finance Bank 7.23 Kedaara Capital, 34% DII, 13% Amundi Funds SBI FM Equity India 1.65 DSP Blackrock Mutual
Slide 12: Award and Certifications
Award and Certifications ASSOCHAM Award ISO Certifications Certified with ISO 10002:2014 compliance standard in respect of customer satisfaction and complaint handling process pursuant to a certificate of registration (CCH 04 00002) dated June 13, 2018 and valid until June 12, 2021 Certified with IS
Slide 13: Housing Sector – Under-penetrated
Housing Sector – Under-penetrated Size of Opportunity Current Turmoil – Measures from Government and Regulator Long-term Government Support CLSS – Key Features
Slide 14: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (₹ Trn) Market Size ₹ 16.7 Trn +19% 34 CAGR (as on Mar-18) 29 24 20 5 year CAGR +18% 14 17 (FY13 - FY18) 12 9 10 6 6 7 Market Share Banks - 61% HFC’s & NBFC’s - 39% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (as on Mar-18) (P
Slide 15: Current Turmoil – Measures from Government and Regulator
Current Turmoil – Measures from Government and Regulator Increase in NHB Refinance Limit NHB has increased refinance limits for Banks/HFC’s from Rs. 2,40,000 Mn to Rs. 3,00,000 Mn for this year RBI increases single borrower exposure limit RBI has increased single borrower exposure limit for Banks to
Slide 16: Long-term Government Support
Long-term Government Support Demand Side Supply Side Interest Subsidy Scheme (CLSS – Credit Linked Subsidy Scheme) Income Tax Expenses ▪ Promotion of affordable housing for weaker section ▪ 100% tax deduction on affordable housing projects for developers to ▪ Interest rate subsidy scheme under Pradh
Slide 17: CLSS – Key Features
CLSS – Key Features Particulars EWS LIG MIG - I MIG - II Annual Household Income (Rs. Mn) Upto 0.3 0.3 – 0.6 0.6 – 1.2 1.2 – 1.8 Maximum Loan Amount Eligible for Subsidy (Rs. Mn) 0.6 0.6 0.9 1.2 Interest Subsidy (p.a.) 6.5% 6.5% 4.0% 3% Loan Tenure (years) 20 20 20 20 Maximum Interest Subsidy* (Rs.
Slide 18: Financial Performance
Financial Performance Key Business Parameters AUM and Disbursements Spreads and Margins Asset Quality Liability Franchise ALM - Surplus Key Ratios
Slide 19: Key Business Parameters
Key Business Parameters 75,407 units ₹ 62,870 Mn 108 districts ~50.53% Cumulative Housing Units Loan to Value Cumulative Disbursements Presence in 8 States Financed on portfolio 2,439 units ₹ 2,070 Mn 817 tehsils 75 branches Cumulative Housing Units Cumulative Disbursements Coverage in 8 States for
Slide 20: H1FY19 Performance Highlights
H1FY19 Performance Highlights AUM (₹ Mn) Disbursement (₹ Mn) PAT* (₹ Mn) +48.9% +37.3% +38.5% Average Loan Outstanding 47,592 10,888 655 per unit 7,931 473 31,970 ₹ 0.84 Mn Sep-17 Sep-18 Sep-17 Sep-18 H1FY17 H1FY18 Average Loan per unit Disbursed GNPA (%) ROA (%) ₹ 0.83 Mn Maintained -24 bps above 3
Slide 21: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT (₹ Mn) 40,730 20,512 929 +78% +65% CAGR CAGR +96% 26,935 13,916 CAGR 571 10,504 16,799 328 5,369 8,429 191 4,062 2,799 63 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 +51% +64% 47,592 10,888 621 CAGR
Slide 22: AUM – Category wise Break-up
AUM – Category wise Break-up Product Category (₹ Mn) Customer Category (₹ Mn) Segmental Breakup (₹ Mn) +48.9% Home Loan ATS +48.9% +48.9% 47,592 47,592 47,592 Sep 18 : 0.87 Mn Salaried ATS Retail ATS 16,806 31,970 31,970 31,970 35,678 Sep 17 : 0.89 Mn Sep 18 : 0.83 Mn Sep 18 : 0.84 Mn 10,106 47,274
Slide 23: Disbursement – Category wise Break-up
Disbursement – Category wise Break-up Product Category (₹ Mn) Product Category (₹ Mn) Home Loan ATS +37.3% Sep 18 : 0.90 Mn 10,888 Sep 17 : 1.01 Mn 7,931 7,187 70.3% 66.0% Mortgage Loan ATS 5,578 Sep 18 : 0.72 Mn Sep 17 : 0.93 Mn 3,701 29.7% 34.0% 2,354 H1FY17 H1FY18 H1FY17 H1FY18 Developer Loan ATS
Slide 24: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings (%) and Spreads Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 18.1% 14.6% 14.4% 14.2% 14.0% 13.9% 13.9% 16.5% 15.1% 14.7% 14.0% 13.9% 12.3% 11.4% 9.2% 10.5% 9.0% 8.8% 8.6% 8.6% 8.6% 9.5% 8.6% 8.6% Consistent Spreads Consistent Spreads 5.4
Slide 25: Margin and Cost Efficiency
Margin and Cost Efficiency Opex to ATA % Net Interest Income to ATA (%) PAT to ATA (%) 3.50% 3.45% 3.23% 8.13% 8.01% 8.23% 2.69% 2.63% 2.75% 2.85% 6.96% 2.28% Jun-16 Sep-16 Dec-16 Mar-17 Jun-16 Sep-16 Dec-16 Mar-17 Jun-16 Sep-16 Dec-16 Mar-17 3.83% 3.98% 3.90% 3.95% 8.84% 8.83% 8.76% 8.56% 2.89% 3.0
Slide 26: Asset Quality
Asset Quality Gross NPAs (%) Net NPAs (%) -24 bps -20 bps 0.79% 0.81% 0.68% 0.60% 0.55% 0.57% 0.48% 0.52% 0.43% 0.42% 0.34% 0.26% 0.22% 0.19% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-17 Sep-18 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-17 Sep-18 1+DPD (%) Segment-wise GNPAs Sep-17 Sep-18 8.5% 8.9% 7.3% 0.
Slide 27: Robust liability franchise – no exposure to Commercial paper
Robust liability franchise – no exposure to Commercial paper Diversified Funding Mix Floating Rate Assets & Liabilities (₹ Mn) As on Sep-18 Diversified Mix As on Sep-18 36 3% Terms Loans Floating Fixed Equity 13% Lenders Assignment 47,592 47,592 12% 48% NHB Refinancing 11+ years NCDs Average Borrowi
Slide 28: ALM - Comfortable Surplus
ALM - Comfortable Surplus Surplus Management (₹ Mn) Average tenor of outstanding borrowing (months) As on Sep-18 Incremental Q2 borrowings was for 154 months 3,303 1,649 <3months 1,654 5,611 3,016 <6months 136 136 2,595 127 9,998 4,506 <1year 5,492 106 21,735 <3years 7,462 14,273 80 30,048 <5years 2
Slide 29: Comfortable Liquidity Position
Comfortable Liquidity Position Well Capitalized for Growth (₹ Mn) Liquidity Position Sanctioned Debt ~ ₹ 12,000 Mn Cash & Cash Equivalents ~ ₹ 4,800 Mn 20,330 IPO Proceeds ~ ₹ 3,600 Mn Sanctioned Debt 5,500 – 6,000 Q1FY19 ~ ₹ 3,550 Mn Q2FY19 ~ ₹ 1,850 Mn Sept 18 Liquidity Principal Profit Debt Repay
Slide 30: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 222.0 15.2% 14.7% 186.0 10.2% 116.2 82.4 Sep-16 Sep-17 Sep-18 (Pre Sep-18 (Post Sep-16 Sep-17 Sep-18 Equity Infusion) Equity Infusion of Rs. 3,600 Mn) Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 54.1% 9.0 46.3% 8.1 30.7% 4.9
Slide 31: Ind-AS Transition
Ind-AS Transition Sr. No. Key Changes Impacted Line Item IGAAP Ind-AS 1 Net Fees Income Fees Income Booked upfront Amortized based on Effective Interest Rate 2 Credit Costs Credit Costs As specified by regulator Expected Credit Loss (ECL) Model Option value under Black Scholes pricing model 3 ESOP V
Slide 32: ECL Model – Key Differences
ECL Model – Key Differences Sr. No. Components NHB Regulations ECL Model • Standard Assets: Performing • Stage 1: Performing – 1 to 30 DPD • Sub-Standard Assets: NPA < 15 months 1 Asset Classification Norms • Stage 2: Under-Performing – 31 to 90 DPD • Doubtful Assets: NPA > 15 months • Stage 3: Non-
Slide 33: Annexures
Annexures Quarterly and Half Yearly Financial Performance PAT & Networth Reconciliation ECL Provisioning Historical Financials 33
Slide 34: Quarterly Financial Results
Quarterly Financial Results Particulars (₹ Mn ) Q2-CY Q2-PY Y-o-Y PY Q1-CY Q-o-Q CY Interest Income 1,529.6 1,184.9 1,412.9 Interest Expenses 621.8 474.6 581.4 Net Interest Income 907.8 710.3 27.8% 831.5 9.2% Non-Interest Income 109.9 95.6 58.2 Non-Interest Expenses 440.2 337.5 438.0 Provisions, Con
Slide 35: Half Yearly Profit and Loss Statement
Half Yearly Profit and Loss Statement Particulars (₹ Mn ) H1 FY19 H1 FY18 Y-o-Y Interest Income 2,942.5 2,034.2 Interest Expenses 1,203.2 901.6 Net Interest Income 1,739.3 1,132.6 53.6% Non-Interest Income 168.1 174.1 Non-Interest Expenses 878.2 611.1 Provisions, Contingencies and Write Offs 33.8 19
Slide 36: Half Yearly Balance Sheet
Half Yearly Balance Sheet 30-Sep-18 31-Mar-18 Particulars (₹ Mn ) (Ind-AS) (Ind-AS) Sources of Funds Share Capital 737.2 691.7 Reserves & Surplus 13,004.7 11,207.3 Borrowings 30,527.4 27,550.5 Deferred Tax Liability (Net) 311.4 113.5 Other Liabilities & Provisions 748.1 838.0 Total 45,328.7 40,401.0
Slide 37: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) H1 FY19 H1 FY18 Y-o-Y Q2 FY19 Q2 FY18 Y-o-Y FY 18 Net Profit as per IGAAP 620.8 410.8 51.1% 330.8 226.6 46.0% 929.3 Add / (Less) : Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financ
Slide 38: ECL Provisions
ECL Provisions Classification of the Assets based on the ECL computation under IndAS: Particulars (₹ Mn ) H1 FY19 H1 FY18 (Ind-AS) (I-GAAP) (Ind-AS) (I-GAAP) Gross Stage 3 GNPA 227.4 167.8 213.2 164.0 % portfolio in Stage 3 (GNPA%) 0.57% 0.44% 0.81% 0.67% ECL Provision Stage 3 36.4 39.9 34.1 45.4 Ne
Slide 39: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) H1 FY19 Net worth as per previous GAAP 12,745.6 Adjustments increasing/(decreasing) net worth as reported under previous GAAP: Adoption of EIR for amortisation of Income and expenses - financial assets at amortised cost / net interest on (195.9) credit imp
Slide 40: Historical Profit and Loss Statement
Historical Profit and Loss Statement Particulars (₹ Mn ) FY18 FY17 FY16 FY15 FY14 Revenue from Operations 4,563.4 3,051.3 1,908.8 1,036.8 543.1 Other Income 9.1 3.6 0.2 0.8 0.1 Total Revenue 4,572.5 3,054.9 1,909.0 1,037.6 543.2 Expenditure: Finance Cost 1,890.5 1,428.2 968.8 527.4 301.8 Employee Be
Slide 41: Historical Balance Sheet
Historical Balance Sheet Particulars (₹ Mn ) Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Equity and Liabilities Shareholder's Funds 10,984.7 5,663.3 2,038.2 1,014.4 554.1 Share Capital 691.7 581.6 383.8 329.2 299.2 Reserves and Surplus 10,290.6 5,081.6 1,654.3 685.2 255 Money received against share warrants
Slide 42: Historical Balance Sheet
Historical Balance Sheet Particulars (₹ Mn ) Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Assets Non-Current Assets 31,017.1 20,714.0 14,078.0 7,953.2 3,903.5 Fixed Assets 184.6 103.1 56.4 54.3 54.2 Non-Current Investments 137.9 7.50 - - - Loans and Advances 30,694.6 20,603.4 14,021.6 7,898.9 3,849.3 Current
Slide 43: Thank You !
Contact Us Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) CIN: L65922RJ2011PLC034297 Mr. Himanshu Agrawal investorrelations@aavas.in www.aavas.in Thank You ! Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 Ms. Payal Dave / Ms. Neha Shroff payal.dave@sgap
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