Arman Financial Services Limited · NSE:ARMANFIN
Arman Financial Services — FY2024 Earnings Presentation
41 slides from Arman Financial Services's earnings presentation, May 2024
Slide 1: Arman Financial Services Limited Investor Presentation – May 2024
Arman Financial Services Limited Investor Presentation – May 2024 1
Slide 2: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Arman Financial Services Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for an
Slide 3: Contents
Contents Business Update Page 4 - Page 8 About the Company Page 9 - Page 15 Presence in Attractive Retail Page 16 - Page 22 Lending Segments Efficient Liability Management Page 23 - Page 26 Strong Financial Performance Page 27 - Page 40 3
Slide 4: Business Update
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Slide 5: FY24 Performance Highlights
FY24 Performance Highlights Assets Under INR 2,639 Crore Provisions INR 65 Crore Management and Write offs Cumulative Provisions stood at ~INR 90.2 Crore (+36% Y-o-Y) (covering 3.4% of the consolidated AUM, 4.2% on-book) INR 2,297 Crore GNPA: 2.88% Disbursement Asset Quality (+30% Y-o-Y) NNPA: 0.31%
Slide 6: Recent Fund Raises (1/2)
Recent Fund Raises (1/2) December – 2023 September - 2022 Company raised INR 230 crore via Shareholding Pattern as on 31 st Company raised INR 115 crore via allotment of CCDs March, on Fully diluted basis Qualified Institutional Placements of and OCRPS on a preferential basis Equity Shares Business
Slide 7: Recent Fund Raises (2/2)
Recent Fund Raises (2/2) Calculated as per IND-AS Net worth (INR Crore) Debt/Equity (x) # CRAR (%) 770 813 3.4 3.3 65.8% 62.7% 502 2.1 1.8 32.6% 35.2% 32.8% 365 25.6% 25.8% 26.4% Mar-23 Sep-23 Dec-23 Mar-24 Mar-23 Sep-23 Dec-23 Mar-24 Mar-23 Sep-23 Dec-23 Mar-24 Arman (Standalone) Namra #After adjus
Slide 8: Impact of RBI’s New Microfinance Guidelines
Impact of RBI’s New Microfinance Guidelines Annual household income limit raised to INR 3 Lakh • Increased annual household limit from INR 1.25 Lakh to INR 3 Lakh will provide more headroom to NBFC- MFIs to lend to more customers. • This will help microfinance lenders to service consumers from diver
Slide 9: About the Company
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Slide 10: About Arman Financial Services
About Arman Financial Services About the Company Business Performance Efficient Liability Management • A diversified NBFC focusing on large under-served rural & semi-urban • Consistent rating upgrades backed by strong financial & operating retail markets performance • Founded in 1992 by Mr. Jayendra
Slide 11: Journey so Far
Journey so Far 1992 1995 1998 2010 2018 • Company Incorporated • Listing on BSE – • Launched 2W Loans • Launched Microfinance • Raised PE funding • Started bill discounting Issue subscribed business from SAIF Partners & Machine leasing 22x 2017 2014-16 2013 2011 2019 • Launched MSME Loans • Demerged
Slide 12: Geographical Footprint
Geographical Footprint Geographical AUM Mix Number of (Consolidated) FY24 FY23 Branches 4% Microfinance 319 274 8% 2 27% 15 9% MSME 79 58 75 57 12% 2W & Rural 2W 4 4 33 71 9 15% 24% 86 Total 402 336 43 Gujarat Rajasthan Others 11 Uttar Pradesh Bihar Madhya Pradesh Maharashtra Number of Branches 402
Slide 13: Strong Underwriting Measures by Leveraging Digital Transformation
Strong Underwriting Measures by Leveraging Digital Transformation Loan Management Instant Verification Of Key Details • Loan Utilization check • The LOS* & LMS* System facilitates instant • Instant pre-closure and pre-settlement and its verification simulation for the customer to understand • KYC Va
Slide 14: Eminent Board of Directors
Eminent Board of Directors Alok N. Prasad Jayendrabhai B. Patel Aalok J. Patel Chairman Vice Chairman & Managing Director Joint Managing Director • A veteran banker with over 35 years of regulatory, banking and • He has been an entrepreneur for 45 years. He was involved in a • He has 16 years of ban
Slide 15: Competitive Moat
Competitive Moat Focus on small ticket retail loans to the large under served informal segment customer in rural & semi urban geographies Diversifying products, geographies, sources of funds and delivering growth by increasing volumes rather than ticket sizes Competitive Conservative operations fram
Slide 16: Presence in Attractive Retail Lending Segments
Presence in Attractive Retail Lending Segments 16
Slide 17: Product Offerings across Verticals
Product Offerings across Verticals 82%* 14%* 3%* 1%* Microfinance - JLG MSME Loans Two-Wheeler Loans Individual Business Loans Average Ticket Size : INR 46,500 Average Ticket Size: Average Ticket Size: Average Ticket Size: (Cycle 1 & 2 -INR 20k - 60k INR 77,000 INR 72,500 INR 80,500 Cycle 3+ -INR 20
Slide 18: Microfinance Loans
Microfinance Loans (INR Crore) AUM* Disbursement Total Income Profit After Tax Avg. Ticket Size (INR) 2,193 1,895 530 138 45,750 46,700 1,628 1,485 332 67 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 *Includes Individual Business Loans • Disbursement: 100% Cashless • JLG model with small ticket
Slide 19: MSME Loans
MSME Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 367 333 106 77,000 75,000 255 228 76 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 • Individual enterprise /working capital loans for small rural businesses in low competition • Disbursement: 100% Cashless areas • Credit Checks: C
Slide 20: 2W and Rural 2W Loans
2W and Rural 2W Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 77 69 17 18 72,500 69,500 61 54 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 • Hypothecation (secured) loans given to self-employed /cash-salaried customer in the • Disbursement: 100% Cashless informal segment in semi-
Slide 21: MSME Process Overview
MSME Process Overview MSME Process Overview Sourcing Underwriting Collections • In-house sourcing team (No DSAs) • Credit bureau check (CRIF & CIBIL) • Team member that does sales also • handles collections • Feet-on-Street sales team model Physical FI & PD by in house credit manager at residence &
Slide 22: Collection Efficiency
Collection Efficiency Microfinance MSME Two-Wheeler Total 96.3% 96.3% 96.5% 97.7% 98.7% 97.6% 95.5% 95.5% 95.6% 96.5% 96.6% 96.6% Jan-24 Feb-24 Mar-24 Jan-24 Feb-24 Mar-24 Jan-24 Feb-24 Mar-24 Jan-24 Feb-24 Mar-24 Two- Update on Collections Particulars (INR Crore) Microfinance MSME Wheeler Total • C
Slide 23: Efficient Liability Management
Efficient Liability Management
Slide 24: Strong Capitalization with Sufficient Liquidity
Strong Capitalization with Sufficient Liquidity Capital Adequacy Ratio ALM Position (in Months) 62.7% 19 19 19 19 19 17 17 17 17 16 48.8% 32.6% 32.8% 29.0% 25.6% 20.3% 18.7% 31-Mar-21 31-Mar-22 31-Mar-23 31-Mar-24 Q4 FY 2 3 Q1 FY 2 4 Q2 FY 2 4 Q3FY24 Q4 FY 2 4 Arman (Standalone) Namra Av g T enur e
Slide 25: Borrowing Profile
Borrowing Profile Borrowing Mix (%) Top 5 Lending Partners (INR Crore) 1,888 2,161 2,245 2,240 2,261 Top 5 Lenders % of Borrowings Lender 1 - TL & DA 18.70% 33.0% 33.9% 32.5% 35.7% 41.1% Lender 2 - NCD 8.56% Lender 3 - TL & DA 8.16% 2.0% 1.4% 1.3% 3.2% Lender 4 - TL 5.62% 19.7% 23.0% 5.1% 26.0% 19.7
Slide 26: Securitization
Securitization Non-Bank Bank Partners Borrowings Borrowings Lending Partnerships NCDs & ECB 26
Slide 27: Strong Financial Performance
Strong Financial Performance 27
Slide 28: FY24 Consolidated Profit & Loss Statement
FY24 Consolidated Profit & Loss Statement Particulars (INR Crore) Q4FY24 Q4FY23 YoY % Q3FY24 QoQ% FY24 FY23 YoY % • As of March 2024, Consolidated AUM Income from stands at ~INR 2,639 Crore, as against ~INR 182.9 149.3 168.8 661.5 423.9 Operations 1,943 Crore in March 23, registering strong Y-o-Y gr
Slide 29: Balance Sheet – 31st March 2024
Balance Sheet – 31st March 2024 Particulars (INR Crore) Consolidated Standalone Particulars (INR Crore) Consolidated Standalone ASSETS Mar-24 Mar-23 Mar-24 Mar-23 LIABILITIES & EQUITY Mar-24 Mar-23 Mar-24 Mar-23 Financial Assets Equity Share capital 10.5 8.5 10.5 8.5 Cash and cash equivalents 118.6
Slide 30: Consolidated Business Performance
Consolidated Business Performance (INR Crore) AUM Disbursement Gross Total Income 2,639 669 183 2,437 631 169 2,304 561 160 2,143 531 537 149 150 1,943 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Net Total Income Pre-provision Operating Pr
Slide 31: Consolidated Business Performance
Consolidated Business Performance Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 15.2% 27.0% 26.0% 25.7% 26.6% 28.3% 14.2% 14.1% 25.4% 25.9% 26.2% 13.4% 13.1% 25.1% 25.1% Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Asset Qualit
Slide 32: PAR Movement
PAR Movement PAR 31-90 (%) Movement GNPA (%) 8.3% 7.9% 7.8% 6.0% 6.9% 3.0% 3.7% 4.4% 4.1% 2.9% 3.7% 0.9% 2.4% 2.8% 0.5% 2.2% 5.0% 4.8% Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 4.6% 4.3% 4.5% 3.9% 4.7% NNPA (%) 2.1% 1.9% 2.3% 1.4% 2.1% 1.4% 1.6% 1.1% 1.1% 1.1% 0.9% 0.5% 0.6% 0.3% 0.3% 0.5% 0.7% 0.6% Mar-20
Slide 33: FY24 – Standalone P&L Statement (2W, MSME & LAP)
FY24 – Standalone P&L Statement (2W, MSME & LAP ) Particulars (INR Crore) Q4FY24 Q4FY23 YoY % Q3FY24 QoQ% FY24 FY23 YoY % • Standalone AUM grew by 41.5% Y-o-Y to ~INR 446 Crore as compared to ~INR 315 Crore Income from Operations 37.7 27.6 32.6 133.5 94.4 • Disbursement of ~INR 402 Crore in FY24, a
Slide 34: Standalone Business Performance
Standalone Business Performance (INR Crore) AUM Disbursement Gross Total Income* 446 135 34 391 15 30 31 359 79 28 4 343 101 27 5 315 79 95 4 66 69 84 4 4 61 14 81 23 17 14 367 120 30 312 24 26 27 255 276 291 81 79 23 67 67 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24# Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24# Q4FY
Slide 35: FY24 - Namra Finance Profit & Loss Statement
FY24 - Namra Finance Profit & Loss Statement • We steadily expanded and deepened our MFI Particulars (INR Crore) Q4 FY24 Q4 FY23 Y-o-Y (%) Q3 FY24 Q-o-Q (%) FY24 FY23 Y-o-Y (%) presence through our wholly owned subsidiary, Namra Finance. This involves Income from Operations 147.0 122.1 136.2 530.1 3
Slide 36: Microfinance Business Performance – Namra Finance (1/2)
Microfinance Business Performance – Namra Finance (1/2) (INR Crore) AUM Disbursement Gross Total Income 2,193 536 534 147 1,945 2,046 136 1,801 446 456 459 122 120 127 1,628 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Net Total Income Pre-
Slide 37: Microfinance Business Performance – Namra Finance (2/2)
Microfinance Business Performance – Namra Finance (2/2) Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 13.3% 13.6% 23.1% 23.0% 25.8% 24.9% 12.5% 21.9% 21.5% 21.5% 24.4% 23.8% 23.8% 12.0% 12.0% Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q4FY23 Q1FY24 Q2FY24 Q3FY
Slide 38: Strong Growth in AUM and Disbursements
Strong Growth in AUM and Disbursements Total AUM (INR Crore) Total Disbursements (INR Crore) 2,639 2,297 14% 3% 14% 1,943 1,767 3% 13% 13% 3% 3% 1,233 1,024 13% 83% 880 860 4% 778 14% 82% 814 16% 4% 685 17% 84% 12% 84% 11% 15% 6% 547 12% 10% 509 453 14% 10% 15% 83% 17% 13% 5% 10% 248 0% 248 3% 82% 1
Slide 39: While Maintaining Cost Efficiency & Asset Quality
While Maintaining Cost Efficiency & Asset Quality Gross and Net Total Income Yield & NIM (%) Asset Quality (INR Crore) Demonetization COVID-19 Demonetization COVID-19 Demonetization COVID-19 662 6.7% 28.7% 28.3% 27.4% 25.5% 26.7% 24.4% 25.2% 21.5% 22.9% 424 396 17.4% 16.5% 16.5% 15.9% 14.0% 14.3% 14
Slide 40: Annexure
Annexure • Gross Interest Income = Interest Income + processing fees / other charges • Net Interest Margins = Net Interest Income / Average AUM (On + Off -Book) • Yields = Gross Interest Income / Avg. AUM (On + Off Off -Book) • Cost-to -Income Ratio = Opex (excl. provisions) / Net Total Income • GNP
Slide 41: Thank You
Thank You Contact Information Company: Investor Relations Advisors: Strategic Growth Advisors Pvt. Ltd. Arman Financial Services Limited CIN: U74140MH2010PTC204285 CIN: L55910GJ1992PLC018623 Mr. Abhishek Shah Mr. Vivek Modi abhishek.shah@sgapl.net Chief Financial Officer (CFO) +91 9930651660 Email :
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