Shriram Finance Limited · NSE:SHRIRAMFIN
Shriram Finance — Merger or Acquisition (December 2021)
25 slides from Shriram Finance's merger presentation, Dec 13, 2021
Slide 1: Exchange filing cover letter for investor presentation
SEC/FILING/BSE-NSE/21-22/68A-B December 13, 2021 BSE Limited National Stock Exchange of India Limited P. J. Towers, Listing Department Dalal Street, Fort, Exchange Plaza, 5th Floor, Mumbai – 400 001. Plot no. C/1, G- Block, Scrip Code: 511218 Bandra-Kurla Complex, Mumbai – 400 051. NSE Symbol: SRTRA
Slide 2: Investor Presentation
CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL 13th December 2021 Investor Presentation
Slide 3: Agenda
CONFIDENTIAL Agenda 1 Core Objectives 2 2 Transaction Structure & Details 3 3 Merger Rationale and Operational Synergies 6 4 Key Financial & Operational Metrics 19 5 Key Synergy Estimates 21 6 Advisors 22 1
Slide 4: Core Objectives
CONFIDENTIAL Core Objectives A Attain Leadership position in NBFC space with an INR 1.5 tn AUM and the merged entity becomes the largest retail finance NBFC in the country B Superior Customer Acquisition, Engagement & Retention in each of our business as competition increases for unbanked/underserve
Slide 5: Transaction Structure
CONFIDENTIAL Transaction Structure Existing Structure as at 13th December 2021 SBCPL SFVPL TPG 9.47% 20% 70.56% 9.44% Shriram Capital Merger Limited (SCL) 26.04%* 33.86% 76.63% 74.56% 99.99% 100% Shriram Shriram City Shriram Shriram Life SCCL Others Transport Union General Merger 44.56% 85.02% Shrir
Slide 6: Transaction Details
CONFIDENTIAL Transaction Details • SCL & Shriram City Union will merge into Shriram Transport and the merged entity will be called ‘Shriram Finance Limited’ • Shriram Housing Finance will become a subsidiary of Shriram Finance with 85.02% holding Resultant Structure • Shriram Finance will continue t
Slide 7: Resultant Structure
CONFIDENTIAL Resultant Structure Other Public SOT SFVPL Shareholders 1.88 % Promoter - Holding 18.23 % 79.89 % Shriram Finance 44.56 % 85.02 % Shriram Automall Shriram Housing SFVPL – Shriram Fnancial Ventures (Chennai) P Ltd SOT – Shriram Ownership Trust 5
Slide 8: Merger Rationale and Operational Synergies (1 of 2)
CONFIDENTIAL Merger Rationale and Operational Synergies (1 of 2) • Attaining leadership position in the NBFC space and being the largest retail financing NBFC in India Leadership • Combined loan assets ~INR 1.5 tn Position • Enable better leverage resources like distribution network and client base
Slide 9: Merger Rationale and Operational Synergies (2 of 2)
CONFIDENTIAL Merger Rationale and Operational Synergies (2 of 2) • Diversified retail lending book with complementary nature of products and mitigating any counter Diversification cyclical risk • Significant scaling in size & reach • Reorganising lending and insurance businesses to decouple business
Slide 10: Leading Inclusive Finance Player with Diversified Retail Product Suite
CONFIDENTIAL Leading Inclusive Finance Player with Diversified Retail Product Suite and Focus on Serving the Underserved Personal Sector Vehicle MSME Two Wheeler Gold Housing Others Loans CV, CE, PV, Enterprise Two Wheeler | Loan against Home Loan & W.Cap loans Products Tractors | Personal Loans Fin
Slide 11: Creating Large and Complementary Network
CONFIDENTIAL Creating Large and Complementary Network… 6.4 million+ active customers with minimal overlap allowing cross-sell opportunities 1825 971 Branches* STFC SCUF Branches GU4 GU3 STFC SCUF Total GU1 TN and Pondicherry 415 258 673 GU2 TS, AP, OD 222 316 538 GU3 GU2 GU3 MH, GA, UP, BR and JH 38
Slide 12: Coupled with a Strong Digital Presence Driving Digital Adoption
CONFIDENTIAL …Coupled with a Strong Digital Presence Driving Digital Adoption Touching 2 lives every second through Mobile / Web MyShriram Shriram City Digital transactions per ~480K month on Mobile and Web platforms Collections through Mobile INR ~100 bn app for both STFC & SCUF One data residence
Slide 13: Transformative Integration
CONFIDENTIAL Transformative Integration • Both entities have a similar work culture which will enable seamless HR integration Customer Segments & • Unified leadership will ensure working towards common vision Cultural Alignment in place • Focus on common TAM - Unbanked & Under-banked across Rural &
Slide 14: Our Vision for Technology
CONFIDENTIAL Our Vision for Technology To make our consumers lives better everyday by creating technology-led, data-driven businesses to scale exponentially, by offering differentiated customer-centric products and services, leveraging our core pillars that we have built over the years – Integrity,
Slide 15: Digital – Driving Business
CONFIDENTIAL 1 Digital – Driving Business Touching 2 lives every second through Mobile / Web Over 4.8 lakhs digital transactions per month on Mobile and Web platforms INR 6 bn 18,000 customers INR 12.7 bn INR 15 bn Customer focused Instant 2w loan worth of SCUF B2C collections STFC B2C collections I
Slide 16: Key Digital Transformation Initiatives
CONFIDENTIAL 2 Key Digital Transformation Initiatives Digital Presence Digital Engagement Digital Business • Lead Form • Website • Wish list • Digital lending business • Mobile App • Pre Approved • Insurance Policy management • Paid media – FB | Instagram | • SMS / Email – With Link to • Marketplace
Slide 17: Key Technology Enablers – Digitized Workflows
CONFIDENTIAL 3 Key Technology Enablers – Digitized Workflows An integrated platform covering all businesses of Shriram coupled with end-to-end digitized workflow is a step towards achieving exponential growth of the group Income Verification & Customer on boarding Qualify the customers Digital KYC O
Slide 18: Embarked on the Journey of “Shriram One” App – Key Objectives
CONFIDENTIAL 4 Embarked on the Journey of “Shriram One” App – Key Objectives Communication • Digital Workflow touch points • Personalized customer nudges Product Support Customer Service • Retention and re-tapping • WhatsApp based service – instant response • Referral management • DIY process One Da
Slide 19: Liabilities Strategy
CONFIDENTIAL Liabilities Strategy Benefits of • ALM’s of both the entities perfectly matched across buckets Combined • Excess liquidity maintained across both entities as a policy. Can be rationalized to bring down negative carry Liability & Treasury • Larger treasury expected to give scale benefits
Slide 20: Leadership Team of Merged Entity
CONFIDENTIAL Leadership Team of Merged Entity Vice Chairman Mr. Umesh Revankar Managing Director and CEO Mr. Y.S. Chakravarti WTD & Chief Finance Officer Mr. Parag Sharma Head – Chief Chief Head Head of Head of Head – Legal Chief Risk Synergy & Digital Technology Retail GU 1 Lead Internal Corporate
Slide 21: Key Financial and Operational Metrics (Proforma)
CONFIDENTIAL Key Financial and Operational Metrics (Proforma) INR STFC SCUF Merged (Proforma) AUM 1,172 bn 296 bn ~1,500 bn Networth / PAT 216 bn / 25 bn 81 bn / 10 bn 297 bn / 35 bn RoA/RoE 2.0% / 12.6% 3.1% / 13.2% 2.4% / 12.7% No. of Branches / 2,634* / 2.1 mn 971 / 4.3 mn 3,605 / 6.4 mn Customer
Slide 22: Key Milestones, Expected Timelines and Approvals Required
CONFIDENTIAL Key Milestones, Expected Timelines and Approvals Required Upto ~2 months Upto ~7 months ~1 month Regulatory NCLT Filings & Board Approval Filings & ROC Filing Approvals Approvals • Approval of the • SEBI/Stock Exchange • Filing of Scheme • ROC Filing transaction and other • RBI • NCLT a
Slide 23: Key Synergy Estimates
CONFIDENTIAL Key Synergy Estimates • Superior growth supported by wallet share expansion • Reduction in Overall Acquisition cost • 7/10 STFC customers & 5/10 SCUF customers due to unified databases and have taken different loans/insurance from Shriram SuperApp architecture Ecosystem; aim is to get t
Slide 24: Advisors
CONFIDENTIAL Advisors ICICI Securities Limited; Transaction Advisors Morgan Stanley India Company Private Limited Tax Advisors Ernst & Young LLP Legal Advisors J&M Legal Drushti R. Desai (Registered Valuer), Bansi S. Mehta & Co.; Valuation Advisors Ernst & Young Merchant Banking Services LLP HSBC Se
Slide 25: Thank You
CONFIDENTIAL Thank You 23
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