Sammaan Capital Ltd · NSE:SAMMAANCAP
Sammaan Capital — Indiabulls Housing Finance — Investor Presentation (November 2019)
65 slides from Sammaan Capital's investor presentation, Nov 11, 2019
Slide 1: Indiabulls Housing Finance
Indiabulls HOUSING FINANCE
Slide 2: Contents
Contents Pg. No. 1. Business Update 03 2. Liquidity Framework 04 3. Asset Quality: Conservative Provision Levels 05 4. Diversified Liability Profile, Low leverage 06 5. Effective Pass Through: Spread Stay Strong 07 6. Strengths of the Company versus Peers 08 7. Established Presence and Strong Operat
Slide 3: Business Update
Business Update Key Financial Highlights: H1 FY 19-20 vs H1 FY 18-19 as per Indian Accounting Standards [IndAS] H1 FY 19-20 H1 FY 18-19 Balance Sheet 1,11,618 1,39,804 Loan Book 82,135 1,14,903 Net Worth 18,700 17,350 Net Interest Income 2,776 3,435 PAT 1,511 2,099 Key Financial Highlights: Q2 FY 19
Slide 4: Liquidity Framework
Liquidity Framework 30-day Liquidity Coverage Ratio Liquid Assets Liquidity Coverage Ratio [LCR] 30-day Net Cash Outflows Stressed Outflows – Min. of [Stressed Inflow or 75% of Stressed Outflow] High Quality Liquid Assets From Minimum LCR Amount Dec 1, 2020 50% [₹ Cr] Liquid Assets 21,583 Dec 1, 202
Slide 5: Asset Quality: Conservative Provision Levels
Asset Quality: Conservative Provision Levels Q2 FY20 Q1 FY20 Gross Stage 3 1,611 1,662 % Portfolio in Stage 3 1.51% 1.47% ECL Provision Stage 3 472 416 Net Stage 3 1,139 1,246 Coverage Ratio % Stage 3 29% 25% Gross Stage 1&2 1,04,719 1,11,527 % Portfolio in Stage 1&2 98.49% 98.53% ECL Provision Stag
Slide 6: Diversified Liability Profile, Low Leverage
Diversified Liability Profile, Low Leverage 140 ,900 1,25,727 120 ,900 1,14,404 Borrowings 100 ,900 80,9 00 Net Gearing 3.8 60,9 00 40,9 00 3.6 20,9 00 900 Jun 19 Sep 19 Total Funding [₹ Cr] Sep 19 Jun 19 Bank Loans 40,509 44,139 Debentures and Securities 43,622 48,221 Commercial Papers 500 1,060 EC
Slide 7: Effective Pass Through: Spreads Stay Strong
Effective Pass Through: Spreads Stay Strong Spreads Cost of Funds Loan Assets [₹ Cr] Loan Assets 7-Yr CAGR: 19% Own Book 7-Yr CAGR: 16% 12.05% 11.93% 9.21% 8.91% 9.05% 1,13,189 1,06,330 8.85% 26,801 24,196 3.14% 3.08% 8.91% 8.85% 86,389 82,135 Jun 19 Sep 19 Jun 19 Sep 19 Jun 19 Sep 19 CoF Yield Spre
Slide 8: Strengths of the Company Versus Peers
Strengths of the Company Versus Peers Indiabulls Housing Finance Ltd. Average for Top 5 [H1 FY20] NBFC/ HFC Peers CRAR: 28.9% Capital Levels Tier 1: 22.5% CRAR: 18.3% [CRAR] Highest capital ratios among all non-bank financiers of Tier 1: 15.8% size in India 19.3% Liquidity as a % of Balance Sheet IB
Slide 9: Established Presence and Strong Operational Track Record
Established Presence and Strong Operational Track Record • In less than two decades, IBH has grown into the third largest housing finance company in India with a pan-India network of over 200 branches in 21 states • IBH has helped over 1 million families achieve their aspiration of owning a home, cu
Slide 10: New Asset-light Business Model: Retail Focused
New Asset-light Business Model: Retail Focused [60% HL, 40% LAP] Proportion of Origination 40% 40% 20% 100% On-Balance Sheet Retention 8% 4% 20% 32% Co-origination Sell Down Total On-Balance Sheet Smart City Loans [20% on IBH Books] [10% on IBH Books] RoA HL LAP HL LAP HL LAP HL LAP Yield 11.25% 13.
Slide 11: Co-origination Model
Co-origination Model • We have entered into co-origination arrangements with few public sector banks • Loans originated by IBH team under a jointly drawn up credit policy. IBH will also service the loan account through the life of the loan • 80% of the loan will be on the bank’s balance sheet and re
Slide 12: Appendix
Indiabulls HOUSING FINANCE Appendix
Slide 13: Financial and Operational Highlights
Financial and Operational Highlights 13
Slide 14: Business Summary
Business Summary • Balance Sheet : ₹ 1.12 Lakh Cr • Loans Outstanding : ₹ 1.06 Lakh Cr : [$ 15.19 Bn] • Loan Assets CAGR [7 years] : 19% • Cumulative Loans to Retail Customers : 11,48,432 • Cumulative Loans Disbursed till date : ₹ 2.62 Lakh Cr [$ 37.41 Bn] • Cost to Income Ratio [FY19] : 12.7% • Pro
Slide 15: Balance Sheet Assets
Balance Sheet Assets 7% 19% Loan Book Cash & Cash Equivalents Other Assets 74% 15
Slide 16: Asset Composition
Asset Composition Q1 FY 19-20 Q2 FY 19-20 36% 35% 64% 65% Housing Loans Non-Housing Loans 16
Slide 17: Liabilities Profile
Indiabulls HOUSING FINANCE Liabilities Profile
Slide 18: Liabilities
Liabilities 17% 2% 81% Shareholders' Funds Borrowings Other Liabilities 18
Slide 19: Funding Mix
Funding Mix 4% 4% 4% 22% 22% 22% 34% 35% 35% 4% 1% 0.4% 36% 38% 38% Mar 19 Jun 19 Sep19 Debentures and Securities Commercial Papers Bank Loans Sell Down ECB ECB: External Commercial Borrowing 19
Slide 20: Micro ALM Details
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Total Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Cash & Cash Equivalents 21,583 21,583 19,735 20,949 21,374 20,309 20,382 20,030 20,324 Customer Repayments 82,135 4,615 5,286 4,547 4,430 4,326 4,112 4,050 3,70
Slide 21: Micro ALM Details
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Cash & Cash Equivalents 14,704 13,004 12,380 9,810 10,727 10,090 10,927 12,240 Customer Repayments 4,069 3,674 3,564 3,276 3,024 2,883 2,684 2,566 Non Current Assets
Slide 22: Micro ALM Details
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q3FY25 Q4FY25 Q1FY26 Q2FY26 Cash & Cash Equivalents 10,666 12,019 13,516 15,117 16,519 18,672 20,123 20,537 Customer Repayments 2,538 2,340 2,234 2,248 2,204 1,780 1,439 650 Non Current Assets -
Slide 23: Micro ALM Details
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q3FY26 Q4FY26 Q1FY27 Q2FY27 Q3FY27 Q4FY27 Q1FY28 Q2FY28 Cash & Cash Equivalents 20,880 20,979 21,155 20,358 19,008 19,296 19,565 19,558 Customer Repayments 375 351 329 308 288 269 252 236 Non Current Assets - - - - - - - -
Slide 24: Micro ALM Details
Micro ALM Details [Quarter-wise for next 10 years] Amount in ₹ Cr Particulars Q3FY28 Q4FY28 Q1FY29 Q2FY29 Q3FY29 Q4FY29 Q1FY30 Q2FY30 10+ Years Cash & Cash Equivalents 17,444 17,532 12,998 13,092 12,221 11,391 10,848 10,994 11,130 Customer Repayments 221 207 193 181 169 158 146 136 2,071 Non Current
Slide 25: Indian Home Loans Market
Indiabulls HOUSING FINANCE Indian Home Loans Market 25
Slide 26: Indian Housing Landscape
Indian Housing Landscape Regulator Government Push RERA has brought greater Housing for All by 2022, PMAY, etc. transparency and discipline Easier Credit Flow Fiscal Incentives Infrastructure status to housing; RBI, SEBI, Tax incentives and subsidies for IRDAI eased exposure norms to mortgage buyers
Slide 27: Housing Demand in India
Housing Demand in India • Estimated housing shortage: ~ 400 Lakh houses • Drivers of incremental demand: Current population growth Demand for 34 Lakh houses p.a. @ 1.3% p.a. Ongoing nuclearisation Demand for 25 Lakh houses p.a. @ 0.9% p.a. Rising income/aspirations – per Demand for 40-50 Lakh houses
Slide 28: Housing: From Social Objective to Centrepiece Economic Policy
Housing: From Social Objective to Centrepiece Economic Policy Housing sector has the ability to propel rural and urban economic activity - Housing sector: Country’s 4th largest employment provider* employing both semi-skilled and unskilled labour - Housing and the larger real estate sector has a hig
Slide 29: EMI Smaller than Rent Cheque: PMAY and Tax Incentive
EMI Smaller than Rent Cheque: PMAY and Tax Incentive for Mid-Income Affordable Housing Rental Yield v/s Home Loan Cost 5.0% 4.0% 3.4% 3.5% 3.9% 3.1% 3.4% 3.2% 2.3% 2.9% 2.6% 2.6% 2.7% 0.59% Rental yield Effective Interest Rate on Home Loans with PMAY [0.59%] Source: NHB; Industry reports Increasing
Slide 30: Growth Momentum in Residential Real Estate
Growth Momentum in Residential Real Estate • Housing sales in 9M CY19 remained resilient despite depressed consumer sentiment and registered growth of 14% YoY across seven key Indian cities 1 • Stock of unsold inventory has fallen 5% YoY to 0.66 Mn units in Q3CY19 1 • Over 169,000 units were sold in
Slide 31: Commercial Office Space Absorption
Commercial Office Space Absorption • Net absorption up by 40% YoY during 9M CY19 across top seven cities to 33 mn sq. ft. 1 • 13.9 mn sq. ft. leased during Q3 CY19 across top seven cities, up 9% YoY 2 Pick-up in Leasing ‒ Hyderabad, Bengaluru, Pune and NCR account for ~80% of leasing activity 2 • Av
Slide 32: Strong Structural Drivers and Government Focus
Strong Structural Drivers and Government Focus Measures in the last 42 months: Boost to the Housing Sector Pradhan Mantri Awas Subsidy eligibility under Pradhan Mantri Awas Yojana [PMAY] covers up to ₹ 12 lakh of home loan – reduces Yojana [PMAY] effective home loan rates to 0.59% for mid-income aff
Slide 33: Pan-India Brick-and-Mortar Branch Network
Pan-India Brick-and-Mortar Branch Network Head Master office Service Centers • Core credit Branches [MSC] committee • • • Regional credit hub • Loans above pre- • Service • Walk-in defined limits go to • Centers • Detailed credit the committee branches analysis • Customer • Customer interaction and
Slide 34: eHome Loans: Digitised Workflow, Analytics driven
eHome Loans: Digitised Workflow, Analytics driven Underwriting and Digital Payments Infrastructure Customer eHome Loan App and Portal IB Systems Toughpoints Application form Document upload e-sign Lead Sources Income proof directly Digitally enabled e-signs Data directly flows Basic information fill
Slide 35: eHome Loans: Digitised Workflow, Analytics driven
eHome Loans: Digitised Workflow, Analytics driven Underwriting and Digital Payments Infrastructure Sanctioning e-sign and instant Servicing Verifications Automated Credit Decisioning Disbursement Parallel reports Post application the following are On request for disbursement, customer Self Service t
Slide 36: Unique Franchise in Indian Mortgage Market
Unique Franchise in Indian Mortgage Market Consumer focused scalable lending model Strengths similar to Banks Scalability of Mortgage • Access to deep pools of capital: debt and equity • Focused on the most scalable and secure asset class: Home Loans • Funding efficiencies from AA+ credit rating • I
Slide 37: Conservative Loan Against Property Portfolio
Conservative Loan Against Property Portfolio 37
Slide 38: Loan Against Property Product Profile
Loan Against Property Product Profile Average Loan Size ₹ 73 Lakhs Maximum Loan to Value 65% Average Loan to Value 49% [at origination] Average Loan Term 7 years Primary Security Mortgage of property financed Repayment Type Monthly amortizing Average Age of Business 7 years Basis of Credit Appraisal
Slide 39: Smart City LAP: Technology-led cost-effective
Smart City LAP: Technology-led cost-effective Geographical Expansion through eHome Loans platform Minimum Loan Size ₹ 10 Lakhs Average Loan Size ₹ 25 Lakhs Maximum Loan Size ₹ 50 Lakhs Maximum Loan to Value 55% [at origination] Average Loan to Value 40% Maximum Loan Term 10 years Average Loan Term 5
Slide 40: Loan Against Property Myths
Loan Against Property Myths LAP Myth 2: Asset inflation is mainly responsible for LAP portfolio quality 28% 25% 27% 29% 19% 21% 21% 22% 19% 23% 20% 21% 3-Year Amortization Experience 11% for IBHFL 6% 7% 5% 2% 16% 14% 14% 3% 3% 5% 2% Contracted Amortization 23% 2008 2009 2010 2011 2012 2013 2014 2015
Slide 41: Static Credit Performance Analysis of LAP and HL Pools
Static Credit Performance Analysis of LAP and HL Pools 41
Slide 42: Retail Loan Book of Highest Quality
Retail Loan Book of Highest Quality Portfolio performance of all sold down pools of ₹ 57,828 Cr Initial Pool Details of Initial POS Average Sold Down Pool Loan Pool Number of Disbursement Ticket Size Months on 180+ dpd Principal Principal Amortisation 90+ dpd % Type Pools [₹ Cr] [at disbursement] Bo
Slide 43: Home Loans Pool Performance Factsheet: Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortisa- Sr. No Investor Principal MPS 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] [₹ Cr] tion# [₹ Cr] 1 Bank 4 29-Oct-13
Slide 44: Home Loans Pool Performance Factsheet: Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortisa- Sr. No Investor Principal MPS 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] [₹ Cr] tion# [₹ Cr] 26 Bank 6 21-Mar-1
Slide 45: Home Loans Pool Performance Factsheet: Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortisa- Sr. No Investor Principal MPS 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] [₹ Cr] tion# [₹ Cr] 51 Bank 8 28-Mar-1
Slide 46: Home Loans Pool Performance Factsheet: Direct Assignments
Home Loans Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortisa- Sr. No Investor Principal MPS 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] [₹ Cr] tion# [₹ Cr] 51 Bank 21 29-Dec-
Slide 47: LAP Pool Performance Factsheet: Direct Assignments
LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortisa- Sr. No Investor Principal MPS 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] [₹ Cr] tion# [₹ Cr] 1 Bank 3 31-Dec-13 224.4
Slide 48: LAP Pool Performance Factsheet: Direct Assignments
LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortisa- Sr. No Investor Principal MPS 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] [₹ Cr] tion# [₹ Cr] 26 Bank 8 30-Jun-17 406.0
Slide 49: LAP Pool Performance Factsheet: Direct Assignments
LAP Pool Performance Factsheet: Experian Credit Bureau Direct Assignments [Sold Down] Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortisa- Sr. No Investor Principal MPS 90+ dpd % 180+ dpd % CCR MCR QCR Date [₹ Cr] [₹ Cr] tion# [₹ Cr] 51 Bank 20 12-Dec-18 138.
Slide 50: Home Loans and LAP Pool Performance Factsheet
Home Loans and LAP Pool Performance Factsheet Pass-Through Certificates HL Pools Initial Pool Details of Initial POS Sold Down Sold Down Disbursement Pool Principal Amortis- 90+ 180+ Outstanding Sr No Investor Principal MPS CCR MCR QCR Date [₹ Cr] [₹ Cr] ation# dpd % dpd % Rating from [₹ Cr] 1 Bank
Slide 51: Corporate Social Responsibility
Corporate Social Responsibility 51
Slide 52: Indiabulls Foundation: Corporate Social Responsibility
Indiabulls Foundation: Corporate Social Responsibility Health JanSwasthya Kalyan Vahika Transforming Mokhada, Shahapur Transforming Talukas - Free primary healthcare facility provided at & Trimbakeshwar the doorsteps for the underprivileged with 40 - Medical vans, clinics, health camps, nutrition mo
Slide 53: Board of Directors, Ratings, Business Value Proposition, Key Ratios, Valuations, and Shareholding
Board of Directors, Ratings, Business Value Proposition, Key Ratios, Valuations, and Shareholding 53
Slide 54: Eminent and Experienced Board of Directors
Eminent and Experienced Board of Directors Board of Directors with pre-eminence and experience in diverse fields • Mr. Sameer Gehlaut : Executive Chairman • Mr. Gagan Banga : Vice Chairman, Managing Director and CEO • Mr. S.S. Mundra : Former Deputy Governor, The Reserve Bank of India • Justice Gyan
Slide 55: Credit Ratings and Auditors
Credit Ratings and Auditors Rating Agency Long Term Credit Rating CRISIL [an S&P Global Company] AA+ ICRA [a Moody’s Investors Service Company] AA+ CARE Ratings AA+ Brickwork Ratings AA+ Auditors Statutory Auditor S R Batliboi & Co. [Indian Member firm of Ernst & Young] Internal Auditor Grant Thornt
Slide 56: Productivity Ratios
Productivity Ratios FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 No. of 4,512 4,243 4,072 4,099 4,840 5,453 6,388 8,111 8,676 Employees Profit per 0.17 0.24 0.31 0.38 0.39 0.43 0.46 0.47 0.47 employee [₹ Cr] Asset per 3.71 5.85 8.09 10.84 11.82 14.02 16.23 16.26 15.00 empl
Slide 57: Key Financial Metrics
Key Financial Metrics FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Pre Tax RoAA 5.5% 4.9% 4.9% 4.8% 4.9% 4.9% 4.6% 4.3% 4.2% [%] Post Tax RoAA 4.1% 3.7% 3.8% 3.8% 3.7% 3.7% 3.6% 3.3% 3.0% [%] RoE [%] 17.2% 22% 26% 27% 29% 26% 26% 30% 24% Capital 23.87% 19.96% 18.58% 20.47%
Slide 58: Valuations and Returns
Valuations and Returns Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Sep-19 Market Price per Share 155 207 272 286 558 674 998 1,194 744 224* [₹] Dividend per Share [₹] 10 13 20 29 35 36 36 42 40 15 Dividend Yield [%] 6.5% 6.3% 7.4% 10.2% 6.3% 5.3% 3.6% 3.5% 5.4% 13.4% Market Capita
Slide 59: Shareholding Pattern
Shareholding Pattern 11.6% 21.5% 11.6% 55.3% Founder Foreign Institutional Shareholding MFs/Banks/IFI Public MF: Mutual Funds; IFI: Indian Financial Institutions As on 30th Sep, 2019 59
Slide 60: Detailed Financials
Indiabulls HOUSING FINANCE Detailed Financials 60
Slide 61: Consolidated Balance Sheet
Consolidated Balance Sheet The company had cash, cash equivalents and investments in liquid debt instruments of ₹ 21,583 Cr as at 30th Sep, 2019. The company receives income from its cash, cash equivalents and investments in liquid debt instruments through the quarter, most of which appears in ‘Othe
Slide 62: Consolidated Income Statement
Consolidated Income Statement The company had cash, cash equivalents and investments in liquid debt instruments of ₹ 21,583 Cr as at 30th Sep, 2019. The company receives income from its cash, cash equivalents and investments in liquid debt instruments through the quarter, most of which appears in ‘O
Slide 63: Update on OakNorth Bank
Update on OakNorth Bank • In Q1 CY19, OakNorth closed equity round with total capital raise of £335 Mn ($440 Mn), in primary from Softbank and £35 Mn ($45 Mn) in secondary from Clermont • IBHFL’s share of ~15.24%* is now valued at $401 Mn (IBHFL realised $117 Mn in Nov-17 through a part sale of its
Slide 64: Safe Harbour Statement
Safe Harbour Statement This document contains certain forward-looking statements based on current expectations of Indiabulls Housing Finance Ltd. management (“IBH”). These forward looking statements and any other projections contained herein are predictions and involve known and unknown risks, uncer
Slide 65: Thank you
Indiabulls HOUSING FINANCE Thank you
Indiabulls Housing Finance — Investor Presentation (November 2019) on 6ix