Nippon Life India Asset Management Ltd. · NSE:NAM_INDIA
Nippon Life India Asset Management — Q4 FY23 Earnings Presentation
56 slides from Nippon Life India Asset Management's earnings presentation, Apr 25, 2023
Slide 1: Investor Presentation (Revised) filing letter to exchanges
April 25, 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), Sub.
Slide 2: Investor Presentation Q4 FY23
Investor Presentation Q4 FY23 April 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 148% 96% 96% 73% 77% 70% 73% 49% 16% World Brazil Canada Germany India Japan Sweden United United Kingdom States Unique MF investors ▪ Mutual Fund penetration in India is low as % of GDP vs global average of 2.5% 2.6% >70% 1.6% 1.7%
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) 7.38%* 7.27%* 7.24%* 38,380 40,268 40,507 11% 13% 13% 13% 14% 14% 27% 21% 22% 49% 52% 52% Mar-22 Dec-22 Mar-23 Equity Debt Liquid ETFs ▪ Proportion of Equity assets and ETFs have increased over the last year ▪ Increase in Equity assets has been aided by strong re
Slide 14: Segment-wise Mix and Geographic Spread
Segment-wise Mix and Geographic Spread Segment-wise AUM T-30/B-30 AUM B-30 17% Retail 25% HNI 33% Corporate 42% T-30 83% ▪ Individual segment contributes to 58% of AUM ▪ B-30 locations contribute 17% of AUM Data as on Mar 2023 based on Monthly Average Assets under Management 13
Slide 15: Systematic Investments
Systematic Investments Monthly SIP flows (INR bn) SIP folios (million) 136 143 61 64 123 53 Mar-22 Dec-22 Mar-23 Mar-22 Dec-22 Mar-23 SIP AUM (INR bn) ▪ Steady growth witnessed in the monthly SIP flows (+16% YoY) ▪ At INR 143 bn, Mar 2023 recorded the 6,833 highest-ever monthly SIP flows 6,747 ▪ SIP
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 Manager in India, with 27 years of track record NAM India Mutual Funds Managed Accounts International AUM INR 2,869 bn* INR 673 bn INR 3.63 trn INR 89 bn (Advisory INR 20 bn) Locations Distributors Folios Employees Reach 270 91,000+ 19.6 mn ~1,000 Systema
Slide 18: Key Highlights (1/2)
Key Highlights (1/2) Rank Moved up 2 Ranks Higher in FY23 to become the 4th Largest AMC No.1 Non-Bank Sponsored MF in India AAUM Mar-23 QAAUM - INR 2,932 bn, up 3.5% YoY & Investor Base 0.12% QoQ Highest Investor Base – 19.6 mn Market share at 7.24% 14 bps YoY 3 bps QoQ Added 2.6 mn Investor folios
Slide 19: Key Highlights (2/2)
Key Highlights (2/2) ETF Profitability Mar-23 QAAUM - INR 700 bn Q4 FY23 Profit After Tax at Market share at 13.7% (↑23 bps QoQ) Rs1.98bn (↑13% YoY) Digital Customer Centricity 3.3 mn Digital transactions One of the Lowest Investor Contributed 57% to overall purchase complaints – 53 per mn Folios vs
Slide 20: Diversified Business
Diversified Business AUM spread across asset classes Optimal mix of Investors Equity constitutes 44% of MF AUM Higher share of retail AUM vs industry ETFs constitute 24% 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) 2,833 2,928 2,932 20% 23% 24% 12% 14% 13% 26% 18% 18% 42% 44% 44% Mar-22 Dec-22 Mar-23 Equity Debt Liquid ETFs ▪ Share of Equity AUM increased by 2 percentage points YoY to 44% ▪ Share of ETF AUM increased by 4 percentage points YoY to 24% Data based on Quart
Slide 22: Optimal mix of Investors
Optimal mix of Investors (INR bn) 2,779 2,930 2,929 50% 45% 44% (8.3%)* (7.6%)* (7.8%)* 22% 25% 26% (5.1%)* (5.6%)* (5.8)* 28% 30% 29% (8.7%)* (8.6%)* (8.6%)* Mar-22 Dec-22 Mar-23 Retail HNI Corporate Investor segment-wise AAUM ▪ NIMF’s Retail share at 29% is higher Retail than the industry average
Slide 23: Wide Reach
Wide Reach B-30 AAUM/Total AAUM B-30 Folios (mn) 11.5% 11.7% 11.7% NIMF 19.0% 7.3 7.5 6.5 Industry 16.9% Mar-22 Dec-22 Mar-23 B-30 MAAUM (INR bn) 8.1% 8.1% 7.7% 562 557 478 Mar-22 Dec-22 Mar-23 Source: AMFI; 22 Calculated on Monthly Average AUM
Slide 24: Wide Reach
Wide Reach (in million) Unique Investors Total Folios 13.1% 13.5% 13.5% 36.0% 36.2% 35.7% 19.0 19.6 13.2 13.5 17.0 12.0 Mar-22 Dec-22 Mar-23 Mar-22 Dec-22 Mar-23 Overall Distribution Mix ▪ NIMF has the largest investor base in the industry ▪ NIMF maintained its market share in Distributed Direct Ass
Slide 25: Strong Physical Distribution
Strong Physical Distribution Total base of empaneled distributors rose to over 91,000 with single Distributor concentration of <5% of assets 78 87 76 91,000+ 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: Strong Digital Presence
Strong Digital Presence Contemporary & Future-ready Digital Platforms – Providing Best-In-Class Experience for Investors, Distributors, Fintech Partners & Institutional Clientele Business Easy 2.0 App Business Easy on Investor Web & Mobile WhatsApp # Purchase Website with Cart Buying All-New NIMF In
Slide 28: Smart Customer Centric Interventions from NIMF
Smart Customer Centric Interventions from NIMF Real-time Smart Nudges & Tips Aimed to Drive Investors to Take Prudent Measures SIP Pause Intervention upon Cancellation Redemption to Switch Intervention • Out of the total SIP Cancellations initiated, smart • Out of the total Redemption requests initi
Slide 29: Strong Digital Presence
Strong Digital Presence Lumpsum & New SIP Registration Digital Purchases (mn)* FY23 3.3 300K FY22 3.0 908K+ 57% Total Digital Digital 3.3 mn Q4 FY23 Digital (New FY23 Business contribution to Purchase and SIP transactions total NIMF registrations) (New Purchase & Purchases & New transactions SIP reg
Slide 30: Steady Systematic Transactions
Steady Systematic Transactions Quarterly Book (INR bn) Folios (mn) 4.8 4.6 Q4 FY23 Book (INR bn) 4.0 10.5 10.5 11.2 32.2 29.1 21.3 Jan-23 Feb-23 Mar-23 Q4 FY22 Q3 FY23 Q4 FY23 SIP accounts continuing for >5 years As on Folios at 4.8 mn (+22% YoY) 60% Mar 31, 2023 AUM at INR 580 bn (+13% YoY) 24% Ind
Slide 31: Comprehensive Product bouquet
Comprehensive Product bouquet Mutual Fund AIF 17 schemes Active Passive 42 schemes* 41 schemes Public Equity Equity Real Estate Credit Equity (Index Market Cap based Funds/ ETFs) Sector Broad Market Thematic Tech FOF Sector International Thematic/Strategy International Fixed Income Offshore High gra
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 70% 61% 14% INR 700 bn INR 74 bn Volume Share* Share of folios Market Share ETF QAAUM Gold ETF QAAUM NSE volume (Jan - Mar 2023) (INR mn)** Nifty Bank ETFs Mutual Funds Nift
Slide 33: Nippon India Alternate Investments (NIAIF)
Nippon India Alternate Investments (NIAIF) Total Commitment Raised Mar-22 Dec-22 Mar-23 INR 44.7 bn INR 53.5 bn INR 56.2 bn ▪ Currently NIAIF offers products across 3 business lines namely Public Equity, RE Credit & Tech FoF ▪ Currently, fund raising is underway for two Public Equity AIFs ▪ Fund rai
Slide 34: Offshore Business - Creating 'expressways' globally
Offshore Business - Creating ‘expressways’ globally Key presence Singapore Dubai Japan (INR bn) 114 114 109 27 21 20 Advisory 88 93 89 Managed Mar-22 Dec-22 Mar-23 Other International Tie Ups Xtrackers India Govt. Bond UCITS ETF Godo Kaisha Genkai India Investment* Bualuang Bharata Fund Nippon India
Slide 35: Process Orientation - Equity Investments
Process Orientation - Equity Investments Risk Rating of Factor Analysis Securities Risk Optimization tool analyzing key factors Quantitative Investment and comparing the Assessment considering Business Philosophy – portfolio & Risk and Management The Nippon benchmark construct Risk Way Fund Casing O
Slide 36: Process Orientation - Fixed Income Investments
Process Orientation - Fixed Income Investments Key inputs to Portfolio Construction & Monitoring investment decisions ▪ Economic Analysis Selection Approval – Macro & Micro ▪ Pre-approved Universe ▪ Investment ▪ Security Committee - new ▪ Credit Research additions Categorization ▪ Liquidity Analysis
Slide 37: 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 construct
Slide 38: Investment Team
Investment Team 60 Members Investment Team Strength 27 16 Equity MF Fixed Income MF 15 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 37
Slide 39: ESG Focus
Le <> Nippon Life india Asset Management Ltd 3,
Slide 40: 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 41: CSR
CSR NAM contributed INR 140 mn towards CSR initiatives in FY23 Expected Number of Focus Area NGO Partners Beneficiaries from SDG Linkage current projects ▪ Vision Foundation of India 5500 Elderlies, community Promoting health ▪ Tata Memorial Centre-Advanced Centre for members from care Treatment, Re
Slide 42: Financial Overview
Le <> Nippon Life india Asset Management Ltd _ ,,
Slide 43: Financial Summary
Financial Summary Consolidated (INR mn) Change Change Particulars Q4 FY23 Q4 FY22 Q3 FY23 FY23 (YoY) (QoQ) Revenue from Operations 3,483 3,380 3% 3,538 -2% 13,498 Operating Expenditure 1,488 1,381 8% 1,494 0% 5,889 Finance cost 12 11 9% 11 9% 40 Fee & Commission 122 160 -24% 126 -3% 501 Employee ben
Slide 44: Financial Assets
Financial Assets Constituents of Financial Assets (INR mn) Mar 31, 2023 Mar 31, 2022 Investment in NIMF’s schemes 27,738 27,090 - Equity 2,695 2,694 - Debt 25,043 24,396 Bank FDs and tax-free bonds 3,605 3,995 Other assets 2,824 2,706 Total 34,167 33,790 NIMF - NIMF - Other Other Equity Equity Bank
Slide 45: Operating Metrics
Operating Metrics Benefits from operating leverage to manifest as AUM increases QAAUM / Branch QAAUM / Employee (INR bn) 14.8 15.3 15.3 10.4 11.5 2.0 2.3 2.9 2.9 2.9 Mar-20 Mar-21 Mar-22 Dec-22 Mar-23 Profit / Branch Profit / Employee (INR mn) 43.0 41.4 38.8 34.4 21.1 6.9 7.7 8.2 7.9 4.0 FY20 FY21 F
Slide 46: 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 47: Thank you for your time! Stay safe!
Thank you for your time! Stay safe! 46
Slide 48: Annexure
Le <> Nippon Life india Asset Management Ltd ,,
Slide 49: About Nippon Life Insurance
About Nippon Life Insurance 48
Slide 50: Profile
Profile ❑ Largest market share in Japan among private life insurers (in terms of premium income) ❑ Total assets over US$ 722 bn ❑ 57 Asset Management related & 21 Insurance related operations worldwide Asset Management Life Insurance Shareholding - 73.7%* Presence in India Shareholding - 49.0%* *As
Slide 51: Nippon Life Group
Nippon Life Group Nippon Life Insurance Business in Japan Asset Management Business Overseas Insurance Business Nissay Asset Taiju Life MLC Limited Management (85.0%) (80.0%) (100.0%) Nippon Reliance Nippon Wealth Life Nippon Life India Life Insurance (100.0%) Asset Management (49.0%) (73.7%) Bangko
Slide 52: Board of Directors
Board of Directors Le <> Nippon Life india Asset Management Ltd .,
Slide 53: 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
Slide 54: Profile of Board Members
Profile of Board Members Mr. B. Sriram (Independent Director) has 37 years of experience in all areas of Banking and Finance. He joined State Bank of India as a Probationary Officer in December 1981, and has held various key assignments within the Bank and the Group in Credit and Risk, Retail, Opera
Slide 55: 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 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
Nippon Life India Asset Management — Q4 FY23 Earnings Presentation on 6ix