Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q1 FY21 Earnings Presentation
56 slides from Nippon Life India Asset Management's earnings presentation, Jul 27, 2020
Slide 1: Cover letter to stock exchanges
¢ Nippon Life 1nd1a Asset Management Ltd July 27, 2020 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 Sc
Slide 2: Investor Presentation Q1 FY21
Investor Presentation Q1 FY21 July 2020 Goodgetsb~
Slide 3: 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 June 30, 2020) INR 2.74 trillion Mutual Funds Managed Accounts International INR 1,881 bn* INR 801 bn INR 55 bn Advisory INR 39 bn ••• * 1,r B; (_ _) (__) (__) (_ _) (__) ~290 Locations
Slide 4: 'Business As Usual' in unusual circumstances
‘Business As Usual’ in unusual circumstances ❑ Pandemic has induced major permanent changes in our “way of life” ❑ New CHALLENGES and uncharted OPPORTUNITIES ❑ In light of the ‘New Normal’, NAM India demonstrated resilience: ❑ Protection and nurturing of human capital - our greatest strength ❑ Reali
Slide 5: Key Highlights - Q1 FY21
Key Highlights - Q1 FY21… Recovery on track in uncertain times Fixed Income EOP AUM up 14% Q1 FY21 EOP AUM rose to INR 1,881 bn (vs. Q4 FY20) (+15% vs. Q4 FY20) Sub AA / unrated assets* down from 8.4% to 4.6% Q1 FY21 Total Income reduced by 7% to Total Operating Expenses fell by 24%; INR 3.4 bn due
Slide 6: Key Highlights - Q1 FY21
Key Highlights - Q1 FY21 Retail AUM contributed 24% of NIMF NIMF has 6.1 million Unique Investors; AUM vis-à-vis 19% for the Industry 29% market share in the Industry 100% operational during the lockdown; Digital contribution to total NIMF accruing benefits from early investments business transactio
Slide 7: Industry AUM Trends
Industry AUM Trends / ¢ Nippon Life India Asset Management Ltd
Slide 8: Industry - Quarterly AUM Trend
Industry - Quarterly AUM Trend Industry AAUM (INR bn) 26,776 27,037 25,506 25,689 7% 6% 24,628 5% 6% 7% 20% 20% 21% 22% 22% 31% 31% 32% 31% 32% 42% 42% 42% 43% 39% Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 ■ Equity ■ Debt ■ Liquid ■ ETFs Industry began Q1 at a much lower base due to sharp fall in March 202
Slide 9: Nippon India MF - AUM Trends
Nippon India MF - AUM Trends / ¢ Nippon Life India Asset Management Ltd
Slide 10: NIMF - Monthly AUM Trend
NIMF - Monthly AUM Trend Oct 2019 - Renamed as “Nippon India Mutual Fund” Highest 2,405 NIMF AAUM (INR bn) April 14, 2019 Peak pre-COVID19 2,352 2,210 Feb 2020 Recovery during Covid19 Lowest 2,210 1,906 2,156 2,171 1,886 June 2020 2,095 Sept 30, 2019 2,077 2,100 2,072 2,013 COVID19 1,970 1,983 17% i
Slide 11: NIMF - Quarterly AUM Trend
NIMF - Quarterly AUM Trend NIMF AAUM (INR bn) 2,226 12% 2,026 2,044 2,049 14% 13% 14% 1,801 15% 14% 16% 16% 14% 31% 19% 29% 27% 28% 29% 42% 43% 44% 42% 38% Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 ■ Equity ■ Debt ■ Liquid ■ ETFs AUM recovery impacted in Q1 due to Covid issues in March and April 2020 * Qua
Slide 12: NIMF - Fixed Income Assets
NIMF - Fixed Income Assets Fixed Income AAUM (INR bn) 1,022 873 875 895 863 337 275 322 323 348 685 598 553 573 514 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 ■ Debt ■ Liquid ❑ On an average, NIMF onboarded 120+ new institutional investors every quarter (Oct 2019 onwards) ❑ Out of top 100 corporates (S&P BS
Slide 13: NIMF - Equity Assets
NIMF - Equity Assets Equity (Incl. ETF) AAUM (INR bn) 1,157 1,100 1,119 1,100 871 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 ❑ Despite MTM impact on Equity AUM, net inflows was INR 10 bn in Q1 FY20 ❑ During the quarter, despite branch closure: ❑ added over 208,000 retail folios ❑ new SIP Purchases of more t
Slide 14: New Normal
I 0 ..----------------- 1 I 0 ----------------- I 2 I I Recovery on track I I Leading the Digital Adoption I ----------------~ ~---------------~ New Normal I 0 ------------------ 3 I 0 ----------------- I 4 I I Leveraging ETF first mover advantage I I Continue to build on Retail Strength I ~--------
Slide 15: New Normal
0 ..----------------- I 1 I 2 I Recovery on track I Leading the Digital Adoption ----------------~ New Normal 3 4 Leveraging ETF first mover advantage Continue to build on Retail Strength / ¢ Nippon Life India Asset Management Ltd
Slide 16: Recovery continues as planned despite turbulent times
Recovery continues as planned despite turbulent times A new Digital Purchase every… A new SIP Purchase every… 16s 11s 25s 22s FY20 Q1 FY21 FY20 Q1 FY21 A new ETF folio added every… FY20 243s 46s Q1 FY21 Despite branch closure, added ~3,500 investor folios every day in Q1 * Frequency in seconds calcu
Slide 17: Business activity remained uninterrupted
Business activity remained uninterrupted ❑ Seamlessly implemented Business Continuity Plan in March 2020 ❑ All business operations continue to be executed with 100% efficiency ❑ Support to Distribution partners ❑ Conducted more than 300 Online Training sessions for our distributors to ensure that th
Slide 18: New Normal
1 0 ----------------- I 2 I Recovery on track I Leading the Digital Adoption I ~---------------~ New Normal 3 4 Leveraging ETF first mover advantage Continue to build on Retail Strength / ¢ Nippon Life India Asset Management Ltd
Slide 19: Digital Business - Delivering Today, Ready for Tomorrow
Digital Business - Delivering Today, Ready for Tomorrow Lumpsum & New SIP Registration Digital Purchases (lakhs)* Q1 FY21 4.81 43% Q4 FY20 3.37 ❑ Digital contribution-to-total NIMF purchase transactions at 56% ❑ Digital Lumpsum Purchase Transactions grew 16% vis-à-vis Q4 FY20 ❑ New Digital SIP Purch
Slide 20: Transformation - 'Feet on Street' to 'Finger on Screen'
Transformation - “Feet on Street” to “Finger on Screen” SIP cancellation prevention: ____ _____ ___ ____ _____ _,.. Pureplay purchase on WhatsApp SIP Pause , , _____ _ ._,,.,,.. ...., _ ...,_u _ _ _ Liquid fund purchase SIP Journey =_,.._ ....... •••• •• =-"---- for retail investors intervention whe
Slide 21: Corporate Solutions Suite - A full spectrum Digital Asset
Corporate Solutions Suite - A full spectrum Digital Asset Full Spectrum Digital asset for the Institutional Business segment Capability to run Digital campaigns, generate leads, drive conversions, onboarding, transactions & servicing The 3 pillars of transformation Institutional Investor Acquisition
Slide 22: New Normal
1 2 Recovery on track Leading the Digital Adoption New Normal 0 ------------------ I 3 I 4 I Leveraging ETF first mover advantage I Continue to build on Retail Strength ~----------------~ / ¢ Nippon Life India Asset Management Ltd
Slide 23: ETF - Extensive investor base and activity
ETF - Extensive investor base and activity Large ETFs product suite ~76% ~36% ~15% Volume Share Share of folios Market Share ❑ Only AMC in India with more than 18 years experience in managing ETFs ❑ Largest bouquet of 19 ETFs in the industry across Equities, Debts & Commodity (Gold) ❑ On QAAUM basis
Slide 24: ETF - First Mover Advantage paying off
ETF - First Mover Advantage paying off Category leading - largest ETFs in Industry Nippon India ETF Gold BeES Nippon India ETF Bank BeES Nippon India ETF Junior BeES Nippon India ETF Liquid BeES Average daily volumes outpacing rest of the Industry NIMF ETF volume as a multiple of ‘Rest of the Indust
Slide 25: New Normal
1 2 Recovery on track Leading the Digital Adoption New Normal 3 0 ----------------- I 4 I Leveraging ETF first mover advantage I Continue to build on Retail Strength I ~---------------~ / ¢ Nippon Life India Asset Management Ltd
Slide 26: NIMF - Unique Investors
NIMF - Unique Investors 3 out of 10 unique investors in the Industry invest with NIMF Industry NIMF Market share (%) (in million) 6.1 June 30, 2020 29% 21.1 6.0 Mar 31, 2020 29% 20.8 5.9 June 30, 2019 30% 19.6 Sustained high market share in challenging conditions A testament to NIMF’s retail strengt
Slide 27: Focus on Retail & Small towns
Focus on Retail & Small towns Retail AAUM / Total AAUM (%) NIMF 24% Industry 19% SBI 13% HDFC 17% ICICI 14% Birla 19% Higher composition of Retail Assets in AUM at 24% vis-à-vis 19% for the Industry Source: AMFI; Calculated on Monthly Average AUM / ¢ Nippon Life India Asset Management Ltd 26
Slide 28: Retail Assets
Retail Assets 72% of the Individual assets have a vintage of more than 12 months (June 30, 2020) Retail AAUM (INR bn) 557 546 519 444 460 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 “Retail Investor Classification” changed from INR 0.5 mn to INR 0.2 mn as per the guidelines issued by AMFI Source: Internal; C
Slide 29: 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 17.3% Industry 15.4% 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 30: Geographical De-Risking
Geographical GeographicalDe-Risking De-risking Top 5 Cities Contribution* (%) Beyond 15 Cities Contribution* (%) ICICI 73% NIMF 19% SBI 72% Industry 24% HDFC 69% SBI 18% Industry 64% HDFC 16% NIMF 67% ICICI 14% Lower concentration of assets Higher Penetration in Smaller cities from Top 5 cities and
Slide 31: Systematic Transactions - Long & Stable Inflows
Systematic Transactions - Long & Stable Inflows Monthly Flows Tenure (SIP book) 9.00 5.0 8.00 8.1 4.5 7.00 7.6 7.5 6.00 7.2 7.0 4.0 5.00 3.5 83% 4.00 3.00 3.2 3.3 3.2 3.4 3.0 79% 3.2 2.00 2.5 1.00 - 2.0 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 - >5 years >10 years Book (INR bn) - Count (mn) Annualized boo
Slide 32: Risk Management - Philosophy
Risk Management - Philosophy / ¢ Nippon Life India Asset Management Ltd
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 June 30, 2020 Mar 31, 2020 Sovereign / AAA / A1+ / AA+ / Upto AA 90.0% 81.2% Repo / Cash 5.4%
Slide 34: Distribution
Distribution / ¢ Nippon Life India Asset Management Ltd
Slide 35: Strong Distribution
Strong Distribution Empaneled approx. 700 New Distributors in Q1 FY20; total base at over 76,900 Banks em bank Deutsche Bank IZI fl1c1c1 Bank Standard - - - - - 77 Chartered ~ HIDFC BANK " AXIS BANK National Distributors 96 l<A RVYIII [• HDFC securities Alternate (incl. PSU banks) , .. ~·~ I - Bank
Slide 36: Leveraging Partnership with IFA
Leveraging Partnership with IFA Distributed Assets form 48% of NIMF’s AUM Overall Distribution Mix Distributed Assets Mix Banking Direct Distributors Distributed 28% Independent Channel Assets Financial 52% 48% Advisors National 54% Distributors 18% De-risked distribution model Large share of the AU
Slide 37: Focus on Individual assets
Focus on Individual assets Distributed Assets (investor-wise) AUM (INR bn) Corporate 23% Retail 43% 390 307 HNI 214 34% Retail HNI Corporate 76% of the Distributed Assets are contributed by Individual investors Source: AMFI; Calculated on Monthly Average AUM / ¢ Nippon Life India Asset Management Lt
Slide 38: Leaders in Investor Education
Leaders in Investor Education EDGE Learning Academy (Q1 FY21) Investor Education Unique Locations Mobile App MFx ~------- ❖ N'oppon ln>,11,J Mutuatf'und 30 T-30 Programs 25 Programs 1,600+ B-30 Investors 5 Programs Recommended cours es view more > Dedicated Investor Education App MFx ◄~ Nippon Life
Slide 39: Other Businesses
Other Businesses / ¢ Nippon Life India Asset Management Ltd
Slide 40: 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 June 2020, commitments raised over INR 34 billion across funds ❑ Commitments and LOI’s of approx. USD 100 mn in Nippon
Slide 41: Offshore Business
Offshore Business AUM of INR 95 bn as on June 30, 2020 Leveraging Nippon Life’s Insurance Particulars Amount in INR bn global network Advisory 39 Managed 55 Total 95 Singapore Dubai Mauritius C: -- Hokkaido Singapore Sendai ❑ Best Idea's Fund SICAV -SIF ❑ IMSF - Equity Opp. Fund Kanazawa ❑ Cohesion
Slide 42: Increasing Global Presence
Increasing Global Presence South Korea . Japan Argentina ., e Strategic Partnership e Local - Distributor Empaneled a new Distributor for Latin America in Q1 FY21 ◄~ Nippon Life 1nd1a Asset Management Ltd 41
Slide 43: Financial Overview
Financial Overview / ¢ Nippon Life India Asset Management Ltd
Slide 44: Financial Summary - As per IND AS
Financial Summary - As per IND AS Consolidated (INR mn) Particulars Q1 FY21 Q4 FY20 Q1 FY20 Revenue from Operations 2,331 2,745 3,251 Operating Expenditure 1,365 1,222 1,799 Fee & Commission Expenses 94 198 252 Employee benefits expense 715 529 825 Finance cost 13 5 17 Other Expenses 439 402 629 Dep
Slide 45: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) June 30, 2020 March 31, 2020 Investment in NIMF’s schemes 19,340 16,804 - Equity 3,319 2,809 - Debt 16,022 13,994 Bank FDs and tax-free bonds 5,225 5,984 Other assets 1,529 1,575 Total 26,094 24,362 Other Other NIMF - NIMF - Assets Assets Ba
Slide 46: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR Bn) 7.94 4.42 4.42 7.62 3.44 2.98 6.85 6.69 FY 17 FY 18 FY 19 FY 20 FY 17 FY 18 FY 19 FY 20 Total Dividend paid INR 5 per share in FY20 84% of FY20 Earnings shared with Shareholders Paid cumulative dividend of INR 23+ bn in last 7 financ
Slide 47: Summary
Summary Recovery on track • NIMF’s AUM growth in line with the Industry • Onboarded 370+ institutional investors since Sept 2019 • Attracted fresh flows from 75+ HNIs / family offices Digital Ecosystem - “Feet on Street” to “Finger on Screen” • Contribution of Digital Assets grew significantly in Q1
Slide 48: Thank you for your time! Stay safe!
Thank you for your time! Stay safe! Goodgetsb~
Slide 49: Annexure
Annexure / ¢ Nippon Life India Asset Management Ltd
Slide 50: About Nippon Life
About Nippon Life / ¢ Nippon Life India Asset Management Ltd
Slide 51: About Nippon Life Insurance
About Nippon Life Insurance ❑ Fortune 500 company (Rank 125 in 2019)1 ❑ Japan’s largest private life insurer & one of the largest in the world2 ❑ Total assets over US$ 720 bn3 ❑ 50 Asset Management related operations & 21 Insurance related operations Globally4 Presence in India Asset Management Life
Slide 52: Nippon Life Group
Nippon Life Group NI SSAY 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 ~ ¢ Nippon 1ncl1a Mutual Fund Life Insurance Management reinsurance premiums (FY2020): ......
Slide 53: Board Of Directors
Board Of Directors / ¢ Nippon Life India Asset Management Ltd
Slide 54: 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 Ar
Slide 55: Profile of Board Members
Profile of Board Members Mr. Kazuyuki Saigo (Associate Director) is Managing Executive Officer, Regional CEO for Asia Pacific Head of India, and is responsible for operations in the Asia Pacific. He joined Nippon Life in 1988 and since then has held several leadership positions in the Nippon Life Gr
Slide 56: 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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