Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q2 FY24 Earnings Presentation
55 slides from Nippon Life India Asset Management's earnings presentation, Oct 30, 2023
Slide 1: Exchange filing cover letter
October 30, 2023 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, Fort, Mumbai 400 001 G Block, Bandra Kurla Complex, BSE Scrip Code: 540767 Bandra (East), Mumbai 400 051 NSE Scrip Symbol: NAM-INDIA Dear Sir(s), Su
Slide 2: Investor Presentation - Q2 FY24
Investor Presentation - Q2 FY24 Oct-2023
Slide 3: Agenda
Agenda 1 Macro Trends 2 Industry 3 Nippon Life India Asset Management Limited 4 ESG Focus 5 Financial Overview 6 Annexure 2
Slide 4: Macro Trends
Le <> Nippon Life india Asset Management Ltd ;
Slide 5: Industry AUM has grown rapidly over the last decade
Industry AUM has grown rapidly over the last decade CAGR for MF AUM: 16% MF AUM (INR trillion) 16% 16% 14% % of GDP 13% 12% 11% 11% 9% 9% 7% 37.6 39.3 31.4 21.4 23.8 22.3 17.5 10.8 12.3 8.3 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Source: RBI, SEBI Note: a) AUM
Slide 6: Under-penetration presents significant growth potential
Under-penetration presents significant growth potential MF AUM/GDP 112% 73% 74% 79% 60% 60% 59% 48% 14% World Brazil Canada Germany India Japan Sweden United United Kingdom States Unique MF investors ▪ Mutual Fund penetration in India is 2.5% 2.6% low as % of GDP vs global average 1.6% 1.7% ▪ Less t
Slide 7: Key enablers – Robust economic growth
Key enablers – Robust economic growth India is now the 5th largest economy in the world CAGR: 10% GDP (INR trillion) YoY growth 20% 15% 13% 12% 11% 11% 11% 11% 273 237 189 201 198 154 171 125 138 112 6% -1% 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Policy Reform
Slide 8: Key enablers – Financialization of Savings
Key enablers – Financialization of Savings Gross Financial Savings (INR trillion) CAGR: 11% % of Household Savings 68.9% 56.2% 58.9% 60.5% 60.5% 62.4% 57.9% 52.1% 51.5% 47.6% 31 45.2% 23 26 16 21 23 12 13 15 9 11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Slide 9: Key enablers – Favourable Demographics
Key enablers – Favourable Demographics ~60% of India’s population is in the working age group 65 yrs and above 7% 0-14 yrs 45-64 yrs 27% 20% 15-44 yrs 46% Source: NFHS-5; 2019-21 statistics 8
Slide 10: Key enablers – Increased awareness
Key enablers – Increased awareness Investor education and awareness initiative by AMFI The initiative has reached out to Indians across states and languages through TV, Digital, Print and other media 9
Slide 11: Key enablers – Easy accessibility
Key enablers – Easy accessibility Smartphone penetration in India UPI transaction volumes (million) CAGR: 147% 66% 83,751 61% 54% 46% 35% 45,968 29% 19% 23% 22,331 10% 15% 905 12,519 5,392 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 FY18 FY19 FY20 FY21 FY22 FY23 ▪ Smartphone penetration (% of
Slide 12: Industry
Industry Le <> Nippon Life india Asset Management Ltd __,,
Slide 13: Quarterly AUM
Quarterly AUM Industry AAUM (INR bn) 7.30%* 7.28%* 7.46%* 39,058 43,102 46,990 11.8% 12.4% 12.3% 14.3% 13.1% 12.3% 22.5% 22.8% 21.9% 51.4% 51.8% 53.5% Sep-22 Jun-23 Sep-23 Equity Debt Liquid ETFs ▪ Proportion of Equity assets and ETFs have increased over the last year ▪ Increase in Equity assets has
Slide 14: Segment-wise Mix and Geographic Spread
Segment-wise Mix and Geographic Spread Segment-wise AUM T-30/B-30 AUM B-30 18% Retail 26% HNI 33% Corporate 41% T-30 82% ▪ Individual segment contributes to 59% of AUM ▪ B-30 locations contribute 18% of AUM Data as on Jun 2023 based on Monthly Average Assets under Management 13
Slide 15: Systematic Investments
Systematic Investments Monthly SIP flows (INR bn) SIP folios (million) 67 71 160 58 147 130 Sep-22 Jun-23 Sep-23 Sep-22 Jun-23 Sep-23 SIP AUM (INR bn) ▪ Steady growth witnessed in the monthly SIP flows (+24% YoY) ▪ At INR 160 bn, Sep-2023 recorded all- 8,704 time high monthly SIP flows 7,936 6,353 ▪
Slide 16: Nippon Life India Asset Management
Nippon Life India Asset Management 15
Slide 17: NAM India at glance
NAM India at glance One of the largest Asset Managers in India, with track record of 28 years NAM India Mutual Funds Managed Accounts International AUM INR 3,525 bn* INR 716 bn INR 4.35 trn INR 110 bn (Advisory INR 20 bn) Locations Distributors Folios Employees Reach 265 95,600+ 21.3 mn 985 Unique I
Slide 18: Key Highlights (1/2)
Key Highlights (1/2) Rank Maintained industry ranking of 4th Largest AMC based on QAAUM 1 Improved industry ranking by 1 spot to 5th Largest based on Equity QAAUM No.1 Non-Bank Sponsored MF in India AAUM Sep-23 QAAUM - INR 3,506 bn, up 23.0% YoY & Investor Base Highest Investor Base – 21.3 mn 2 11.8
Slide 19: Key Highlights (2/2)
Key Highlights (2/2) ETF Profitability 6 Sep-23 QAAUM - INR 808 bn 7 Q2 FY24 Profit After Tax at INR Market share at 14.0% (↑16 bps QoQ) 2.44bn (↑19% YoY / 4% QoQ) Digital Customer Centricity 2.55 mn Digital transactions in H1 FY24 One of the Lowest Investor 8 9 Contributed 56% to overall purchase c
Slide 20: Diversified Business
Diversified Business AUM spread across asset classes Optimal mix of Investors Equity constitutes 47% of MF AUM Higher share of retail AUM vs industry ETFs constitute 23% of MF AUM HNI segment gaining traction Wide reach Strong Physical & Digital Distribution Largest investor base in the industry Lar
Slide 21: AUM spread across asset classes
AUM spread across asset classes (INR bn) 2,851 3,136 3,506 22.4% 23.5% 23.0% 14.4% 11.4% 11.0% 19.7% 20.5% 19.2% 43.5% 44.5% 46.8% Sep-22 Jun-23 Sep-23 Equity Debt Liquid ETFs ▪ Share of Equity AUM has increased over Sep-2022 level to 47% ▪ Share of ETF AUM has increased over Sep-2022 level to 23% D
Slide 22: Optimal mix of Investors
Optimal mix of Investors (INR bn) 2,905 3,265 3,618 47% 44% 42% (7.9%)* (7.5%)* (7.7%)* 24% 27% 28% (5.4%)* (6.0%)* (6.3)* 29% 30% 30% (8.7%)* (8.7%)* (8.9%)* Sep-22 Jun-23 Sep-23 Retail HNI Corporate Investor segment-wise AAUM ▪ NIMF’s Retail share at 30% is higher Retail than the industry average
Slide 23: Wide Reach
Wide Reach B-30 AAUM/Total AAUM B-30 Folios (mn) 11.7% 11.8% 11.5% NIMF 19.9% 7.8 8.2 7.1 Industry 17.5% Sep-22 Jun-23 Sep-23 B-30 MAAUM (INR bn) 8.6% 8.3% 719 7.8% 631 529 Sep-22 Jun-23 Sep-23 Source: AMFI; 22 Calculated on Monthly Average AUM
Slide 24: Wide Reach
Wide Reach (in million) Unique Investors Total Folios 13.5% 13.5% 13.6% 37.1% 36.9% 36.2% 20.1 21.3 14.1 14.6 18.6 13.4 Sep-22 Jun-23 Sep-23 Sep-22 Jun-23 Sep-23 Overall Distribution Mix ▪ NIMF has the largest investor base in the industry ▪ NIMF improved its market share in Direct Distributed terms
Slide 25: Strong Physical Distribution
Strong Physical Distribution Total base of empaneled distributors rose to over 95,600 with single Distributor concentration of <5% of assets 77 85 77 95,400+ Banks National Alternate Mutual Fund Distributors (incl. PSU banks) Distributors Mix of Distributed Assets Distributed Assets (investor-wise)
Slide 26: Focused Business Verticals for various segments
Focused Business Verticals for various segments Key Clients Group (KCG) ▪ Experienced Institutional sales team managing specific target segment of clients with focused business approach by maintaining relationship with Large corporate groups, Banks and financial Institutions and aim to enhance marke
Slide 27: Digital Ecosystem – Use of Integrated Commerce
Digital Ecosystem – Use of Integrated Commerce 26
Slide 28: Our Mobile First Strategy Across Bharat
Our Mobile First Strategy Across Bharat India – The second largest internet population with 770 Mn users; Mobile usage on Android @ 95% & iOS @ 4% People’s Choice Platform – For the Self-Serving Millennials The Go-to Transaction & Service Engine Transaction in all Funds ETF Interface Service Bouquet
Slide 29: Strong Digital Presence
Strong Digital Presence Lumpsum & New SIP Registration Digital Purchases (mn)* H1 FY24 2.55 69% H1 FY23 1.51 2.55Mn Digital (New 56% Digital 69% growth in H1 FY24 Purchase and SIP H1 FY24 contribution to 69% Digital Business registrations) total NIMF Transactions transactions Purchases & New (Purcha
Slide 30: Steady Systematic Transactions
Steady Systematic Transactions Quarterly Book (INR bn) Folios (mn) 6.0 Q2 FY24 Book (INR bn) 5.2 17.3 4.3 16.1 47.2 13.8 34.3 25.6 Jul-23 Aug-23 Sep-23 Q2 FY23 Q1 FY24 Q2 FY24 SIP accounts continuing for >5 As on Folios at 6.0 mn (+41% YoY) years 64% Sep 30, 2023 AUM at INR 779 bn (+40% YoY) 26% Ind
Slide 31: Comprehensive Product Bouquet
Comprehensive Product Bouquet Mutual Fund AIF 18 schemes Active Passive Public Equity 43 schemes 41 schemes Real Estate Credit Equity Equity (Index Market Cap based Funds/ ETFs) Structured Credit Sector Broad Market Thematic Sector Tech FoF International Thematic/Strategy International Fixed Income
Slide 32: ETF - Leadership position maintained
ETF - Leadership position maintained One of the largest bouquet of 25 ETFs in the industry across Equities, Debt & Commodities 67% 61% 14% INR 808 bn INR 78 bn Volume Share* Share of folios Market Share ETF QAAUM Gold ETF QAAUM NSE volume (Jul - Sep 2023) (INR mn)** Nifty Bank ETFs Nifty 50 ETFs Gol
Slide 33: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) Total Commitment Raised (Till date) Sep-22 Jun-23 Sep-23 INR 50.7 bn INR 57.5 bn INR 57.8 bn ▪ Currently offers products across four business lines namely Public Equity, Real Estate Credit, Structured Credit & Tech/VC FoF ▪ Launched “Nippon India Equity Opp
Slide 34: Offshore Business - Creating 'expressways' globally
Offshore Business - Creating ‘expressways’ globally Key presence Singapore Dubai Japan 122 130 (INR bn) 111 20 20 23 Advisory 102 110 89 Managed Sep-22 Jun-23 Sep-23 Other International Tie Ups Xtrackers India Govt. Bond UCITS ETF Godo Kaisha Genkai India Investment* Bualuang Bharata Fund Nippon Ind
Slide 35: Process Orientation - Investments
Process Orientation - Investments Risk Rating of Factor Analysis Securities Risk Optimization tool Quantitative analyzing key factors Assessment Investment and comparing the considering Business portfolio & Risk and Management Philosophy – benchmark construct Risk The Nippon Way Fund Casing Objectiv
Slide 36: PDCA Approach
PDCA Approach Plan Do Check Act ▪ Within fund ▪ Analysis and ▪ Monthly fund ▪ Adjustment in mandate (target prediction of review by the portfolio for return, risk, macro economy Fund better risk- benchmark, and market Management return investment ▪ Portfolio Team ▪ Refine theme, etc.), each construc
Slide 37: Investment Team
Investment Team 60 Members Investment Team Strength 27 15 Equity MF Fixed Income MF 16 2 Managed Accounts Offshore Business 900+ years Cumulative experience of Investment Team 19+ years Average tenure of CIOs with NAM India Dedicated Teams for Credit Research, Real Estate and Venture Capital 36
Slide 38: ESG Focus
Le <> Nippon Life india Asset Management Ltd — ;,
Slide 39: Vision
Social responsibility commitment aligned with UN SDGs Vision To create a sustainable future for our stakeholders by integrating environmental, social and governance (ESG) principles into our business operations, investment processes and stewardship ESG integration initiatives are focused on Topics i
Slide 40: CSR
CSR NAM contributed INR 140 mn towards CSR initiatives in FY23 Number of Focus Area NGO Partners Beneficiaries from SDG Linkage projects in FY23 ▪ Tata Memorial Centre-Advanced Centre for 4,042 Elderlies, community Promoting health Treatment, Research and Education in Cancer members from care (TMC-A
Slide 41: Financial Overview
Le <> Nippon Life india Asset Management Ltd 4,
Slide 42: Financial Summary
Financial Summary Consolidated (INR mn) Change Change Particulars Q2 FY24 Q2 FY23 Q1 FY24 FY23 (YoY) (QoQ) Revenue from Operations 3,975 3,316 20% 3,541 12% 13,498 Operating Expenditure 1,650 1,459 13% 1,611 2% 5,889 Finance cost 17 8 113% 13 31% 40 Fee & Commission 156 139 12% 135 16% 501 Employee
Slide 43: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Sep 30, 2023 Jun 30, 2023 Investment in NIMF’s schemes 27,747 29,586 - Debt 24,415 26,471 - Equity 3,332 3,115 Bank FDs and tax-free bonds 3,700 3,753 Other assets 3,395 3,087 Total 34,842 36,426 NIMF - NIMF - Other Other Equity Equity Asset
Slide 44: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases QAAUM / Branch QAAUM / Employee (INR bn) 18.4 16.4 14.8 10.4 11.5 2.3 2.9 3.1 3.6 2.0 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23 Profit / Branch Profit / Employee (INR mn) 50.2 38.8 37.8 34.4 21.1 6.9 7.7 7.3 9.7 4.0 FY20 FY21 F
Slide 45: Dividend History
Dividend History Earnings Per Share (INR) Dividend Payout (INR bn) 7.16 6.84 11.8 11.5 10.9 4.93 6.7 3.44 FY 20 FY 21 FY 22 FY 23 FY 20 FY 21 FY 22 FY 23 Total Dividend INR 11.5 per share in FY23 100% of FY23 earnings shared with shareholders Cumulative dividend of INR 41 bn in last 9 financial year
Slide 46: Thank you for your time!
<> Nippon Life indlis Asset Management Ltd / Thank you for your time! Le Good gets bcllere :
Slide 47: Annexure
Le <> Nippon Life india Asset Management Ltd ,,
Slide 48: About Nippon Life Insurance
About Nippon Life Insurance 47
Slide 49: Profile
Profile ❑ Largest market share in Japan among private life insurers in terms of premium income ❑ Total assets over JPY 87 Trillion ❑ 56 Asset Management related & 21 Insurance related operations worldwide * *As of March 31, 2023 Asset Management Life Insurance Shareholding - 73.5% Presence in India
Slide 50: Nippon Life Group
Nippon Life Group Nippon Life Insurance Business in Japan Asset Management Business Overseas Insurance Business Taiju Life MLC Limited (85.0%) Nissay Asset (80.0%) Management (100.0%) Reliance Nippon Nippon Life Insurance Wealth Life (49.0%) (100.0%) Bangkok Life Assurance Hanasaku Life Nippon Life
Slide 51: Board of Directors
Board of Directors Le <> Nippon Life india Asset Management Ltd <,
Slide 52: Profile of Board Members
Profile of Board Members.. Mr. Upendra Kumar Sinha (Independent Director & Chairman) a 1976 batch IAS officer of Bihar cadre, during his 3 decades plus of experience has held several responsible government positions in India, including as Joint Secretary (Banking) and Joint Secretary (Capital Market
Slide 53: Profile of Board Members
Profile of Board Members Mr. Ashvin Parekh (Independent Director) is a qualified Chartered Accountant and has set up the advisory firm that provides services to the Boards and the management of BFSI companies. Mr. Parekh retired as a Senior Partner from Ernst & Young in June 2013. Earlier, Mr. Parek
Slide 54: Profile of Board Members
Profile of Board Members Mr. Tomohiro Yao (Associate Director) is Regional CEO for Asia Pacific and Head of India at Nippon Life Insurance (Nippon). He is responsible for operations in the Asia Pacific. He is a seasoned professional with over 25 years of experience in the life insurance industry. He
Slide 55: 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
Nippon Life India Asset Management — Q2 FY24 Earnings Presentation on 6ix