TOWARDS A ROBUST, SUSTAINABLE AND PROFITABLE GROWTH Magma Fincorp Limited
Investor Presentation – Q4 & FY20
AND PROFITABLE GROWTH Magma Fincorp Limited Investor Presentation - - PowerPoint PPT Presentation
TOWARDS A ROBUST, SUSTAINABLE AND PROFITABLE GROWTH Magma Fincorp Limited Investor Presentation Q4 & FY20 Company Overview 1 Financial Performance Q4 & FY20 2 Business Strategy 3 Business enablers to drive sustainable growth
Investor Presentation – Q4 & FY20
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Note: We have used various abbreviations, nomenclature, financial & non-financial ratios in this presentation. These may differ from the customary
for the definition or description of such abbreviations, nomenclature, financial & non-financial ratios.
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Company into 32nd year of retail Financing business AUM1 – ₹ 16,134 Crore Evenly spread across India North 37%, East 20% West 18%, South 25% Diversified product portfolio Asset-backed finance (Cars, CV, CE, Used Assets, Agri Finance), SME Finance, Affordable Housing Finance and General Insurance Strong technology platform systems & processes Robust risk management framework ~ 3 Million customers serviced since inception > 2 Million Active customer Pan India presence across 21 States
1 - As on 31 March, 2020 CV- Commercial Vehicles, CE- Construction Equipment
Strong management team with extensive industry experience
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Customer Focus Underserved ‘Rurban’ India
Taxi / Truck driver /
Small Farmers Small trader / fleet operator, factory / shop
with working capital needs Self employed customer with informal income sources (Home / Car buyer) Customers with informal income and low eligibility for bank loans
Recognised and Trusted Brand in ‘Rurban’ India
Core strengths- Widespread presence, deep ‘Rurban’ insight, robust technology for faster customer acquisition, loan servicing and effective cross-sell
Rurban includes Rural and Semi-Urban locations
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Customer Segments Illustrative Asset Profile1
First Time Buyers Self Employed Non Professionals Small & Medium Entrepreneurs Limited banking / credit history Average Ticket Size (Rs lakh) Average Loan to Value Ratio Average Tenure (months) ABF: Commercial Finance2 4-6 75-80% 40-45 ABF: Agri Finance3 3-4 65-70% 45-50 SME Finance4 17-20 NA 30-35 AHF: Affordable Housing Finance5 9-13 50-60% 150-180 General Insurance
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ABF AUM1: ₹ 10,395 crs Total AUM1: 16,134 Cr. SME Finance AUM1: ₹ 1,859 crs
Zone-wise Breakup Rural-Urban Breakup Diverse Product Offerings
AHF* AUM1: ₹ 3,880 crs
South, 25% North, 37% East, 20% West, 18% Rural, 25% Semi Urban, 43% Urban, 32%
1 - As of 31st March, 2020; 2- For FY20 * Split between MFL (₹ 597 crs) and MHF (₹ 3,283 crs)
General Insurance GWP2 :₹ 1,294 crs
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Wide retail presence through hub and spoke model
Delhi,6 Uttarakhand,3 Uttar Pradesh,40 Bihar, 18 Jharkhand, 8 West Bengal,18 Chhattisgarh,17 Odisha,15 Telangana,10 Andhra Pradesh,17 Puducherry,1 Tamil Nadu,10 Himachal Pradesh,3 Punjab,9 Haryana,19 Rajasthan,26 Gujarat,18 Madhya Pradesh,25 Maharashtra,33 Karnataka,16 Kerala,15
Wide retail presence through hub and spoke model Digital footprint enables Field Executives to conduct business from channel/customer locations, leading to better sales productivity, deepens market coverage and improves channel and customer experience Strong customer engagement through large team
Toll free Inbound/Outbound Customer Call Centre for servicing and cross sell
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327 Branches as on 31st March, 2020 Asset Light Branch Network
Do the right thing
Invite ideas and inspiration from all
Treat pepole equally
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economy, however government interventions improved the liquidity scenario in Q3FY20.
contract 3.2%-5% in FY21.
Sub-debt for Stressed MSMEs, Equity Infusion via fund, etc. should provide help to resume march to normalcy.
NBFCs / HFCs to sacrifice growth, prune balance sheets and become asset light.
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Our Strategy
employee productivity re-focus, IT enablement and renewed customer engagement.
distribution and 97% of receivables are either secured by collateral or have a sovereign guarantee cover. Business & Liquidity Management
YoY to ₹16,134 crs.
Contribution of safest asset class, Affordable Housing Finance, increases to 24% (PY 19%).
locations (as on 12-Jun-20).
comfortable Liquidity of over ₹1,600 Crore as on 31st May 2020.
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Customer engagement
subvention, PMAY scheme etc.
impact and support they need. Employee engagement
families. Moratorium & COVID-19 Provisioning
and @0.3% on SME portfolio.
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Opex Management
Profitability and Balance Sheet strength
crore
Priorities for FY21
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Values in Rs crore
15 Disbursement AUM
37% 39% 36% 21% 17% 11% 7% 4% 17% 23% 25% 38% 11% 8% 12% 21% 18% 18% 20% 16% 6,716 7,287 8,757 6,428 FY17 FY18 FY19 FY20 Cars / CV / CE Agri Used Assets Affordable Housing SME & Others Focus
products 75% Focus products 46% 39% 38% 38% 32% 19% 16% 11%
8% 12% 16% 19% 25% 18% 17% 19% 24% 12% 12% 13% 12% 16,468 15,801 17,029 16,134 FY17 FY18 FY19 FY20 Cars / CV / CE Agri Used Assets Affordable Housing SME & Others
Focus products 42% Focus products 60%
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Lead-To-Disbursal TAT reduction powered by Digital Workflows, STP and automated checkers Robotic Process Automation for delivering scale to recon activities in back-
CRM: Omni-channel 360 degree view of Customer across various mediums
Facebook, LinkedIn and Twit t er WhatsApp Chatbot: launched for Customer-service and Channel- engagement; Website ChatBot launched for facilitating dialog on moratorium Digital document delivery: Achieved across 11 vernacular languages to customers
LOS: End-to-End Digital Loan Processing powered by engines for real-time decisioning, API driven ecosystem engagement with FinTechs, automated workflows, rules for multi-bureau analysis, analytical scorecards, digital NACH and eSign BYOD: Empowered Field-force with Bring-Your-Own-Device to securely access corporate applications using personal mobile devices Digitial Collections: Over 75% of monthly collections via digital modes of NACH, PDC, RTGS, UPI, Net Banking, Debit Cards, Google Pay, PhonePe and PayTM
Credit Rule Engine: 2/3rd
credit underwriting is Straight-Through-Processed and digital Approved Data Marts: for Risk Analytics, Cross Sell and Financial Analytics
Work-From-Home enabled through secured infrastruc- ture encompassing hardened laptops, Firewalls, Virtual Private Network, Mobile Device Management and 24x7 Security Operations Center
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Values in Rs crore
Leads 3K to 12K Instant 48% 1/2 4x 4x 4x IMPACT Servicing TAT 7days to 7mins Net Promoters Score 28% to 48% Call Handling Time 8mins to 4mins Customer Interactions 10K to 40K Disbursal per month 35 crs to 150 crs
Key Initiatives :
Tat reduction through automated STP (Straight Through Processing) initiatives
finance business
for customers
364 536 704 1141 47% 31% 62% FY 17 FY 18 FY 19 FY 20
Cross-Sell (in crs)
Value % increase 28% 35% 38% 30% 40% May-19 July-19 Sep-19 Dec-19 Feb-19
Magma NPS
Parameter FY19 Net NPA 3.1% NIM 8.4% NCL# 1.5% Opex Ratio# 4.1% AUM ₹ 17,029 crs Disbursement ₹ 8,757 crs Profit Before Tax ₹ 442 crs
CRAR 24.9% 18 FY20 Before COVID 4.2% 7.7% 2.4% 4.1% ₹ 16,134 crs ₹ 6,428 crs ₹ 199 crs 25.9%
# Premium paid under Credit Guarantee scheme clubbed with NCL.
FY20 After COVID 4.2% 7.7% 3.1% 4.1% ₹ 16,134 crs ₹ 6,428 crs ₹ 83 crs 25.9%
Values in Rs crore
19 Segment AUM as of 31 March 2020 % of AUM under Moratorium (May exit) Collection Efficiency (Apr-20) Collection Efficiency (May-20) COVID-19 Provision amount COVID-19 Provision as % of AUM ABF 10,395 84% 94.6% 136.1% 96 0.9% AHF 3,880 53% 95.0% 92.1% 15 0.4% SME & Others 1,859 56% 92.4% 92.3% 6 0.3% Total 16,134 73% 93.9% 112.2% 117 0.7% Note: 1. Customers availing moratorium (by value) for March-20 was 26% and for April was 64%. 2. MTD Collections as on 16-Jun-20 is ~81% of Mar-20 MTD Collections, assuming 100% billing (ABF: 86%; AHF: 74% & SME: 73%)
34% 18% 4% 5% 26% 48% 21% 13% 16% 17% Q4 FY19 Q4 FY20
Affordable Housing SME & Others Used Assets Agri Cars / CV / CE QoQ Disbursement YoY Change in Disbursement Mix
2,586 1,312
assets, Affordable Housing and SME from 62% to 78% Focus products 62% Focus products 78%
Values in Rs crore
2,586 2,089 1,014 2,014 1,312 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 20
38% 37% 36% 33% 32% 11% 10% 10% 9% 8% 19% 20% 21% 23% 25% 13% 13% 12% 12% 12% 19% 20% 22% 23% 24% Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Cars / CV / CE Agri Used Assets SME & Others Affordable Housing 17,029 16,574 92% 88% 8% 12% FY19 FY20 On-Book Assets Off-Book Assets 1,887 16,134 17,029 14,247 15,645 1,383
Values in Rs crore
17,312 16,134 Focus products 60% Focus products 51% 16,463
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Particulars Q1 FY20 Q2 FY20 Q3 FY20 FY19 FY20 Gross Stage 1 and Stage 2 Assets 15,282 13,653 13,790 14,898 13,333 ECL Provision – Stage 1 and 2 300 286 277 293 291 Stage 1 and Stage 2 Coverage Ratio (%) 2.0% 2.1% 2.0% 2.0% 2.2% Gross Stage 3 Assets 814 928 987 747 914 Net Stage 3 Assets 523 599 647 472 580 Gross Stage 3 Assets (%) (~ GNPA) 5.1% 6.4% 6.7% 4.8% 6.4% Net Stage 3 Assets (%) (~NNPA) 3.3% 4.2% 4.5% 3.1% 4.2% Stage 3 Coverage Ratio (%) 35.8% 35.4% 34.4% 36.8% 36.5%
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Values in Rs crore
8% 8% 8% 8% 7% 45% 49% 56% 61% 57% 4% 5% 5% 6% 6% 29% 32% 31% 25% 30% 14% 6% Mar-19 June-19 Sep-19 Dec-19 Mar-20 Perpetual & Sub Debt Term Loan incl. PTC NCD Working Capital Commercial paper 12,686
Capital facilities are long term in nature, though shown as repayable in 6m-12m bucket for purpose of ALM).
capital market: 17%. Instrument Rating Short term Debt A1+ (CARE & CRISIL) Long term Debt AA- (CARE, ICRA & India Ratings)
12,441 13,290
Balance Sheet Debt based on MFL Consolidated financials; Values in Rs crore.
On Balance Sheet Debt 13,133 11,987
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Borrowing Mix as at 31 March 2020 Particulars Fixed Rate Borrowings Floating Rate Borrowings MFL 44% 56% MHFL 15% 85% Consolidated 40% 60% Fresh Borrowings in FY20 Instrument MFL MHFL Consolidated Term Loans including PTC/PCG 3,672 962 4,634 NCDs 551
Direct Assignment 1,000 282 1,282 Total 5,223 1,244 6,467 24
Values in Rs crore
1,578 1,542 1,846 2,507 (692) 1,925 1,910 434% 252% 191% 153%
18% 16%
400% (1,400) (700)
1,400 2,100 2,800
1 month 2 month 3 month 6 month 1 year 3 year 5 year Cumulative Mismatch (Rs Crs) Cumulative Mismatch (%)
Note:
mismatch in 6 - 12 months time bucket, well within generally accepted mismatch in this bucket
Based on MFL Standalone numbers; Values in Rs crore.
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Based on MHFL Standalone numbers; Values in Rs crore.
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246 281 287 309 9 180 301 392% 358% 212% 138% 1% 13% 17% 0% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450%
100 150 200 250 300 350 1 month 2 month 3 month 6 month 1 year 3 year 5 year > 5 year Cum Gap Cum Gap (%)
Note:
15.4% 12.8% 20.7% 23.0% 5.0% 4.5% 4.1% 2.9% FY17 FY18 FY19 FY20 Tier 1 Tier 2 2,125 1,925 2,690 2,694 47 47 54 54 FY17 FY18 FY19 FY20 Reserves and Surplus Share Capital
Net Worth Capital Adequacy*
17.3%
* Subject to RBI guidelines
2,172 20.4% 1,972 2,748 24.9%
2,744 25.9%
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Values in Rs crore Note: FY17 numbers are as per I-GAAP; FY18, FY19 and FY20 numbers are as per Ind-AS
Particulars Q4FY20 Q3FY20 Q4FY19 FY20 FY19 Net Revenue 308 318 335 1,272 1,372 Expenses# 162 164 171 674 679 Operating Profit 147 154 164 598 693 Net Credit Loss (Normal) # 30 126 37 398 251 Profit Before Tax (before COVID-19 provision) 117 28 127 199 442 Additional Provision - COVID-19 117 117 Profit Before Tax 28 127 83 442 Tax (Normal) (4) 7 40 19 138 Opening DTA impact due to change in tax rates 36 36 Profit After Tax (31) 21 87 28 303 Share of profit in Joint Ventures / Associates (4) 2 (2) (1) 1 Consolidated Profit After Tax (36) 22 85 27 304 RoA
0.5% 2.0% 0.2% 1.9% RoE
3.3% 12.7% 1.0% 13.0%
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* Re-formatted for better analysis
# Premium paid under Credit Guarantee scheme clubbed with NCL
Values in Rs crore
Particulars 31-Mar-20 31-Dec-19 31-Mar-19 Cash and Cash Equivalents 708 1,384 957 Loans and Advances 13,555 14,091 15,007 Other Assets 784 757 623 Fixed Assets 193 201 203 Total Assets 15,240 16,432 16,789 Borrowings 11,987 12,686 13,133 Other Liabilities 504 971 912 Share Capital 54 54 54 Reserves & Surplus 2,694 2,721 2,690 Total Liabilities 15,240 16,432 16,789
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Values in Rs crore
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Product-wise AUM Contribution
Disbursal % (Value)
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Values in Rs crore
52% 53% 53% 33% 26% 15% 10% 7% 22% 32% 37% 60% 4781 5345 5877 4055 FY17 FY18 FY19 FY20 Cars / CV / CE Agri Used Assets 55% 54% 56% 49% 27% 24% 16% 13% 17% 22% 28% 38% 11,513 11,080 11,591 10,395 FY17 FY18 FY19 FY20 Cars / CV / CE Agri Used Assets Total
Used Asset Disbursement (Units) Used Asset Disbursement (Rs. in Crs)
3 Yr CAGR – 26% 3 Yr CAGR – 27% 32
Values in Rs crore
33,851 45,378 61,412 67,164 FY17 FY18 FY19 FY20 1,174 1,710 2,190 2,426 FY17 FY18 FY19 FY20
Cross sell Disbursement Direct Business % of total ABF Disbursal (Units)
42% in FY20
improving
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Values in Rs crore
364 536 704 1055 FY 17 FY 18 FY 19 FY 20
22% 32% 35% 42% FY 17 FY 18 FY 19 FY 20 FY Volume (in cr) % Increase FY17 364 FY18 536 ↑ 47% FY19 704 ↑ 31% FY20 1,055 ↑ 50%
* FY 20 - Q2 disbursals curtailed with a view on liquidity; Q4 disbursals impacted by lockdown in March
EWI Trend for ABF CPMI Trend for ABF
EWI: Early Warning Indicators are the 0+% of each quarterly portfolio with 1 Quarter Lag (Tractor Non-Monthly structure is with 2 Quarter Lag) CPMI: Continuous Portfolio Monitoring Indicator is a composite index of 4 indices monitoring the 60+% movement of quarterly portfolio at different time lag
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16.7% 10.7% 5.9% 4.2% 2.9% 8.0% 7.9% 8.0% 8.3% 10.2% Mar-16 Mar-17 Mar-18 Mar-19 Feb-20 Overall ABF EWI % Overall ABF EWI Benchmark % 13.9% 11.0% 7.3% 4.1% 5.6% 4.7% 4.5% 4.5% 4.3% 5.0% Mar-16 Mar-17 Mar-18 Mar-19 Feb-20 Overall ABF CPMI % Overall ABF CPMI Benchmark %
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‘MScore’ Proprietary Credit Scorecard Integrated Rule Engine Disbursement Disbursals curtailed to focus only on high quality assets in current stressed times for MSMEs
Aberration in Q2 FY20 numbers due to change in ALM strategy and in Q4 FY20 due to COVID-19 induced lockdown in March
36 API enabled digital workflow platform Empowering SMEs with government schemes like interest subvention and credit guarantee
Values in Rs crore
1,208 1,348 1,789 1,018 FY17 FY18 FY19 FY20
Prudence adopted in unsecured SME business given tough macro conditions AUM Geographical Diversification Geographically well diversified portfolio
East, 21% North, 17% South, 34% West, 28% 37
Values in Rs crore
1,920 1,959 2,278 1,859 FY17 FY18 FY19 FY20
ID = 0+ bkt % for cases sourced in last 6 months on 1 month lag basis including current month . ED = 60+ bkt % for cases sourced in last 12 months on 3 month lag basis including current month.
ID & ED Trend for SME Finance
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0.8% 0.6% 0.5% 0.4% 0.2% 0.6% Mar-16 Mar-17 Mar-18 Mar-19 Feb-20 ID% ID Target 1.2% 1.4% 1.4% 1.6% 1.7% 1.3% Mar-16 Mar-17 Mar-18 Mar-19 Feb-20 ED% ED Target
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* AHF includes HL, LAP and CF Values in Rs crore
40 Disbursement
Disbursement (# Nos. Accts)
167 201 647 827 473 385 407 521 87 8 38 7 FY17 FY18 FY19 FY20 HL LAP CF API enabled digital workflow; integrated rule engine National Presence 19 States and 103 Branches 53% of customers sourced in FY20 are new to credit 51% PMAY penetration in fresh Home Loan
727 594 1,092 1,355 5,659 5,527 13,008 16,981 FY17 FY18 FY19 FY20
25% 27% 38% 47% 72% 72% 60% 53% 3% 1% 1% 1% FY17 FY18 FY19 FY20 HL LAP CF
* AHF includes HL, LAP and CF Values in Rs crore
41 Product Mix AUM
3,035 2,762 3,160 3,880 3,035 2,762 3,160 3,880 FY17 FY18 FY19 FY20
Go Home Loan Go Direct
Key Takeaways
HL does not include Construction Finance. Direct Biz means Business directly generated by Magma employees without help from DDSAs / NDSAs / Brokers, and includes Cross-sell
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24% 26% 34% 61% 67% Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
HL Ratio (Units)
33% 33% 43% 76% 80% Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Direct Ratio (Units)
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Salaried Formal 20% Salaried Informal 5% S/E Formal 30% S/E Informal 45% North 37% South 25% West 33% East 5%
Customer Mix Geographical Distribution Collateral Mix
Residential 76% Self Under Construction 17% Commercial 6% Builder under construction 2%
ID = 0+ bkt % for cases sourced in last 6 months on 1 months lag basis including current month . ED = 30+ bkt % for cases sourced in last 12 months on 2 month lag basis including current month.
ID & ED Trend for AHF Y-o-Y & Q-o-Q improvement in ED and ID for Affordable Housing Finance
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5.2% 4.7% 1.3% 0.7% 0.2% 0.80% Mar-16 Mar-17 Mar-18 Mar-19 Feb-20 ID% ID Benchmark 2.7% 3.7% 1.3% 0.4% 0.6% 1.0% Mar-16 Mar-17 Mar-18 Mar-19 Feb-20 ED% ED Benchmark
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187 382 313 167 201 647 827 233 454 431 222 353 400 481 42 142 130 87 8 38 7 FY14 FY15 FY16 FY17 FY18 FY19 FY20
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Transformation Phase Initial Ramp Up LAP & CF MHF in reckoning Affordable Home Loans & Retail LAP 462 978 874 476 561 1,085 1,315
“The company has consciously transformed towards building the granular long term affordable housing book”
Values in Rs crore Construction Finance Loan Against Property Home Loan 41% 50% 9% 63% 37% 0.1% 223% 28%
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Values in Rs crore
33% 80% 67% 20% FY16 FY17 FY18 FY19 FY20 Direct Sourcing Channel sourcing 824 1808 992 1448 139 27 FY16 FY17 FY18 FY19 FY20 HL LAP CF 1,955 1,790 1,809 2,429 3,283 874 475 562 1,085 1,315 Go Direct 80% Go Home Loan 55% 55% 44% 1% 42% 51% 7%
Sourcing Mix AUM
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3.9% 4.7% 5.4% 1.8% 1.6% FY16 FY17 FY18 FY19 FY20 2.8% 3.2% 2.6% 1.2% 0.97% FY16 FY17 FY18 FY19 FY20
GNPA NNPA Best in Class upper quartile portfolio quality in Affordable Housing Finance
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Middle Income Group II Middle Income Group I Low income Group Economically Weaker Section Household Income 3 lakhs 6 lakhs 18 lakhs 12 lakhs > INR 30 lakhs INR 6 - 15 lakhs INR 2 - 5 lakhs INR 16 - 30 lakhs Average Loan Ticket Size
MHF Customer segment
new to credit customers buying first home
Tier 3 towns
Informal, Self Employed-Professional, Salaried
with Average Ticket Size of 9-13 lakhs
Note: According to RBI classification, cities with a population in the range of 50,000 to 100,000 are classified as tier 2 cities, while those with a population of 20,000 to 50,000 are classified as tier 3 cities
Values in Rs crore
Wide retail presence through hub and spoke model Technology enabled solutions leading to industry best productivity, national coverage and best in class customer experience Strong customer engagement through large team
Toll free Inbound/Outbound Customer Call Centre for servicing and cross sell
103 Branches as on 31st March, 2020 Asset Light Branch Network
Deep presence in select geographies pan India through hub and spoke model,
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51 Parameter FY20* Disbursement IRR 13.8% Gross NPA 1.6% Net NPA 0.97% Opex Ratio 3.6% FY19* 13.1% 1.8% 1.2% 3.9% AUM
FY18* 13.3% 5.4% 3.3% 3.1%
PAT
ROA 1.5% 1.6% 1.9% ROE 10.4% 10.4% 11.5% FY17* 14.0% 4.7% 3.7% 2.8%
1.9% 13.1% FY16* 13.9% 3.9% 3.1% 3.1%
1.3% 9.5%
*Note: Performance for FY16 and FY17 as per I-GAAP; FY18 to FY20 performance as per Ind-AS
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19% 12% 9% 14% 33% 17% 13% 12% 96 430 555 427 423 560 1,026 1,294 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Consolidation Phase Initial Ramp Up Responsible Growth
83% 26%
“The company has registered growth rate higher than industry growth rate for 3 years in a row”
GWP
Industry Growth Rate
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Values in Rs crore
Portfolio Type FY13 FY17 FY20 CAGR over FY17 Industry CAGR
91.1% 80.5% 79.5% 45.0% 11.3% 8.9% 18.8% 16.4% 38.7% 11.4% 0.0% 0.7% 4.0% 161.8% 18.2% Crop Insurance 0.0% 0.0% 0.0% 0.0% 16.1% Total 100% 100% 100% 45.5% 14.0% Motor Insurance Commercial Insurance Health Insurance “Retail franchise contributing 83.2% of total business, increasing focus on health” 54
Reinsurer Rating (S&P or equivalent Global Rating) FY17 FY21 A- and above 3 9 Below A- 9 Total 12 9
95 358 483 FY17 FY19 FY21 Fire Capacity
“Reinsurance capacities backed by strong reinsurers; capacity at par with mid-size peer companies” 55
Offices & Channel Partners FY16 FY17 FY18 FY19 FY20 Number of Branches 80 80 125 169 170 Agents + POS* + MISP# 1,751 1,867 2,790 5,028 6,558 Corporate Agents 1 3 5 7 13 OEM Tie-ups 1 1 6 Number of Districts where policies are issued : 534 Number of Districts where claims are serviced : 604
*POS – Point of Sale, #MISP – Motor Insurance Service Provider
Generating business from over 70% districts with the ability to service claims in more than 80% districts in India through strong use of technology” 56
35.3% 14.1% 45.9% 45.8% 0.0% 18.7% 16.2% 16.8% FY17 FY20 CA# Agency* OEM Corporate Sales
# Corporate Agency; reduced dependence on captive business, *includes Direct & others
#
“Reducing dependence on Corporate Agency – Magma Group and increasing share from OEM relationships” 57
Number of policies (in lacs)
“Technology leading to smoother distribution experience; Rule based automated systems for checks and control” 58
13% 63% 75% 24% 5% 1% 49% 30% 24% 14% 2% FY16 FY18 FY20 Portals Branch Central Hub Manual ICN
3.4 6.6 16.2
Accelerated gravitation towards portalsleading to quicker TATs Shift away from lengthier TAT channels
“More than 80% of the Investment Corpus is invested in AAA rated securities” 59
866 900 1,137 1,462 2,285 3.4 3.5 4.4 4.7 5.4 FY16 FY17 FY18 FY19 FY20$ Investment Corpus Leverage Ratio @
@ - Closing Investment corpus by closing capital, $Partial allotment of share Application money considered in closing capital Values in Rs crore
8.69% 8.46% 8.21% 8.38% 7.40% Yield %
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Values in Rs crore
Particulars FY16 FY17 FY18 FY19 FY20 Gross Written Premium 427 423 560 1026 1294 Net Earned Premium 373 327 335 385 708 Net Incurred Claims 319 259 277 272 597 Net Commission 12 4 (12) (29) (63) Management Expenses 126 143 154 258 373 Underwriting Loss (85) (78) (85) (105) (180) Investment & Other Income 78 85 91 107 201 Investment write-off/Provision (10) (19) PBT (7) 7 6 (8) 2 PAT (12) 6 5 1 (6) Key Ratios Retention Ratio 78% 77% 67% 50% 61% Combined Ratio 126.8% 123.6% 120.2% 112.1%* 120.7% Solvency Ratio# 1.78 2.07 2.01 1.58 1.71 Other Details Share Capital & Reserves$ 258 258 258 308 384* Accumulated Losses (39) (32) (28) (26) (32) “Lowest accumulated losses in the initial 8 years of operation. For other second wave peer companies, it ranges between Rs.175 crores to Rs.1000+ crores ”
Note : *FY19 Combined ratio is post one time TP transaction, #Solvency ratio excludes share application money pending allotment, $Share Application money pending allotment of
Ind AS Particulars Q4 FY20 Q4 FY19 Q3 FY20 FY20 FY19 Gross Written Premium 345.4 358.5 358.3 1,293.9 1,025.8 Net Written Premium 200.4 224.2 227.4 790.2 516.9 Net Earned Premium 193.9 188.2 180.9 708.3 384.9 Net Claims Incurred 162.2 165.6 156.6 597.5 272.0 Net Commission (12.1) (14.6) (21.6) (62.9) (28.9) Management Expenses 89.8 76.0 93.3 355.2 247.4 Impairment loss 10.9 8.3 0.1 18.6 10.4 Underwriting Profit (56.9) (47.1) (47.5) (200.1) (115.9) Investment & Other Income 52.9 33.4 52.4 205.8 107.4 Profit Before Tax (4.0) (13.7) 4.8 5.7 (8.4) Taxes 7.9 (9.7) 0.1 8.8 (9.7) (-)Current Taxes (including MAT Credit) 7.9 (11.0) (0.1) 7.8 8.7 (-)Deferred Taxes 0.1 1.3 0.2 1.0 (18.4) Profit After Tax (11.9) (4.1) 4.8 (3.1) 1.3
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Values in Rs crore
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Operational and Business Units (design and operating effectiveness) 1st line of defense Independent Assurance by Internal Audit 3rd line of defense Independent Risk Management Unit Risk Management Committee Audit Committee ITSC Credit Governance, Operational Risk, Fraud Risk, InfoSec and Compliance 2nd line of defense Components of Risk Management Overarching principles and execution Risk Governance
Operating controls and compliance
Credit underwriting strategies
Analytics driven portfolio management
Capital and Liquidity Management
ALCO Board of Directors
Risk Management Committee ALCO Risk Management Committee Audit Committee ALCO Risk Management Committee ITSC Audit Committee ALCO Risk Management Committee
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Minimum disruption
has ensured minimum disruption of its planned activities during the crisis Key initiatives by the Risk team
per plan
COVID-19 situation
discussions with the business units for mitigating the same
support functions for better fraud prevention
improve credit processes / re design lending and collection strategies Road ahead
During the end of financial year, we have been faced with unprecedented health and economic crisis on account of COVID-19 which has led us to fine tune our existing risk strategy due to the uncertain conditions. 64
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Mayank Poddar Chairman Emeritus and Whole time Director
guidance to the Management/Board
financial sector. Sanjay Chamria VC and MD
and execution.
leads management team Narayan K Seshadri Chairman He is on the Board of companies including Clearing Corporation of India Limited, PI Industries Limited and SBI Capital Markets Limited
Promoter Directors Non Executive Independent Directors
VK Viswanathan Director He served as the Chairman and Managing Director of Bosch Ltd. He currently serves on board of various reputed Indian corporates as an Independent Director. Vijayalakshmi R Iyer Director Previously served as an Executive Director
Central Bank of India, Chairperson and Managing Director of Bank of
Time Member (Finance and Investment) in the IRDAI. Bontha Prasad Rao Director Mr Rao has served as the Chairman and Managing Director
Bharat Heavy Electricals Limited. He is currently the Managing Director of Steag Energy Services India, subsidiary of Steag Energy Services Germany Sunil Chandiramani Director He is a Management Consultant & CEO
NYKA Advisory Services. Earlier, he was associated with Ernst & Young LLP in various capacities for 25
various Indian corporates as an Independent Director
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Joined
Title and Previous Company
Manish Jaiswal MD & CEO - HFC, CEO - SME
Jun-2017 Head, Risk Advisory, Research and SME Ratings, CRISIL
Rajive Kumaraswami MD & CEO - MHDI
Jun-2016 Chief Representative Officer - India Liaison office, SCOR Re, India
Harshvardhan Chamria Chief Digital Officer
Sep-2014 Chief Strategy Officer- Housing and SME, Magma Fincorp Limited
Rajneesh Mishra Chief People Officer
Jan-2019 Vice president- HR, Bajaj Finserv Limited
Deepak Patkar CEO - ABF
Sep-2018 Chief Risk Officer, Fullerton India Credit Company Limited.
Kailash Baheti Chief Financial Officer
Oct-2011 CEO, Century Extrusions Limited
Sanjay Chamria VC and MD
Business CEO / Functions Support Functions
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Magma Housing Finance Limited Magma HDI General Insurance Company Limited Magma Fincorp Limited 100% 35.41% Shareholding (31-Mar-2020)
Promoters, 24.40% Overseas Bodies, 9.67% FII, 27.39% Domestic Investors, 6.18% Public, 32.36%
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AUM Assets Under Management: On-Book & Off-Book Loan Assets Average AUM (AAUM) Average of XXing and closing AUM FOS / Field Officer Feet on Street ABF Asset Backed Finance AHF Affordable Housing Finance HL Home Loan LAP Loan against property SME Small & Medium Enterprises NDSA Non-dealer Direct Selling Agent DDSA Dealer Direct Selling Agent Direct Biz Direct Biz means Business directly generated by Magma employees without help from DDSAs / NDSAs / Brokers, and includes Cross-sell Mortgage Direct Biz Business through connectors is included in Direct business ATS Average Ticket Size Mortgage ATS Disbursals during the month / Number of first time disbursals ODPOS Overdue + Principal Outstanding NIM Net Interest Margin: [Total Income (incl. Other Income)– Interest Expenses]/Average AUM Yield Weighted average yield on Loan Assets including Off-Book Loan assets CoF Cost of Funds: Weighted average cost of borrowings including securitization Opex / AUM% Opex / Average AUM Total Assets On B/S Assets of MFL (Consolidated) NCL
Gross Stage 3 Assets % Gross Stage 3 Assets / Closing AUM (On-book) Net Stage 3 Assets % (Gross Stage 3 Assets – ECL Provision – Stage 3) / (Closing AUM (On-book) – ECL Provision Stage 3) ECL Estimated Credit Loss RoA PAT (excluding OCI) / Average AUM RoE PAT (Excluding OCI) / (Net worth - Goodwill) Networth Equity Share Capital + Reserves & Surplus BVPS Book Value per share: (Net worth-Goodwill) / No. of Equity shares outstanding EPS Earnings Per Share (Diluted) MITL Magma ITL Finance Limited (Merged with MFL) MHF Magma Housing Finance Limited (100% Subsidiary) MHDI Magma HDI General Insurance Company Limited (Joint Venture) SENP Self-employed Non Professional SEP Self-employed Professional NIP No income Proof GWP Gross Written Premium GDPI Gross Direct Premium Income
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Particulars Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Net Revenue 266 268 309 1,098 1,250 Expenses# 138 138 145 573 597 Operating Profit 128 130 164 525 653 Net Credit Loss (Normal)# 20 123 39 382 250 Additional provision - COVID-19 109 109 Profit Before Tax (1) 7 125 34 403 Tax (Normal) (3) 1 39 7 128 Opening DTA impact due to change in tax rates 37 37 Profit After Tax (35) 5 87 (10) 275
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* Re-formatted for better analysis
# Premium paid under Credit Guarantee scheme clubbed with NCL
Values in Rs crore
Particulars 31-Mar-20 31-Dec-19 31-Mar-19 Cash and Cash Equivalents 648 1,133 933 Loans and Advances 11,183 11,866 13,138 Other Assets 948 837 730 Fixed Assets 176 185 187 Total Assets 12,955 14,021 14,988 Borrowings 10,109 10,952 11,750 Other Liabilities 331 518 682 Share Capital 54 54 54 Reserves & Surplus 2,461 2,497 2,502 Total Liabilities 12,955 14,021 14,988
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Values in Rs crore
Particulars Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Net Revenue 41 50 34 179 131 Expenses 24 26 26 101 82 Operating Profit 17 24 8 78 49 Net Credit Loss (Normal) 10 3 (1) 16 2 Additional provision - COVID-19 7 7 Profit Before Tax (0) 21 9 54 47 Tax (Normal) (2) 6 3 13 13 Opening DTL impact due to change in tax rates (1) (1) Profit After Tax 3 15 6 43 34 74
* Re-formatted for better analysis Values in Rs crore
Corporate Social Responsibility Magma has received 14 awards since 2015 for the various CSR activities covering Education, Health and Environment Sustainability. The latest recognition was received in Jan 2020 at IPE Best CSR Practice Awards’2020 – for Innovation in CSR – Magma Highway Heroes Information Technology
Magma has received 11 awards for Corporate Communications from leading forums. The recent ones are: The latest recognition was received in November 2019 from League of American Communications Professionals (LACP) Spotlight Awards, for Annual Report Design Corporate Communication
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Mid Day meal, M-Education, Swayam Programmes Magma Highway Heroes
drivers per year
Magma M-Care – Mobile health Camps Magma M- Scholar
Scholarship to meritorious students from poor families
families badly effected during COVID-19
daily wage earner community
around 400 meritorious students from humble background
has received the job offers from prestigious corporate house Group level CSR activities are managed by Magma Foundation
at Rural India. More than 1 Lac people benefitted.
camps at COVID-19 effected areas in FY 21
NCR, Maharashtra, Jharkhand, Andhra, Haryana and Rajasthan)
meals to approx. 80 kids living in the nearby villages
Swayam – COVID-19 relief activity
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This presentation has been prepared by Magma Fincorp Limited (the “Company”), for general information purposes only, without regard to any specific
invitation, directly or indirectly, in any manner, or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefor. This presentation does not solicit any action based on the material contained herein. Nothing in this presentation is intended by the Company to be construed as legal, accounting or tax advice. This presentation has been prepared by the Company based upon information available in the public domain. This presentation has not been approved and will not or may not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India. This presentation may include statements which may constitute forward-looking statements. The actual results could differ materially from those projected in any such forward-looking statements because of various factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. This presentation contains certain forward-looking statements relating to the business, financial performance, strategy and results of the Company and/or the industry in which it operates. Forward-looking statements are statements concerning future circumstances and results, and any other statements that are not historical facts, sometimes identified by the words including, without limitation "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements, including those cited from third party sources, contained in this presentation are based on numerous assumptions and are uncertain and subject to risks. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Neither the Company nor its affiliates or advisors or representatives nor any of its or their parent or subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this presentation or the actual occurrence of the forecasted developments. Forward-looking statements speak only as of the date of this presentation and are not guarantees of future performance. As a result, the Company expressly disclaims any
any change in events, conditions, assumptions or circumstances on which these forward looking statements are based. Given these uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements.
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The information contained in these materials has not been independently verified. None of the Company, its directors, promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or
directly or indirectly, from any use of this presentation or its contents or otherwise in connection with this presentation, and makes no representation or warranty, express or implied, for the contents of this presentation including its accuracy, fairness, completeness or verification or for any other statement made
representation in this respect, whether as to the past or the future. Past performance is not a guide for future performance. The information contained in this presentation is current, and if not stated otherwise, made as of the date of this presentation. The Company undertakes no obligation to update or revise any information in this presentation as a result of new information, future events or otherwise. Any person/ party intending to provide finance/ invest in the shares/ businesses of the Company shall do so after seeking their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. This presentation is not a prospectus, a statement in lieu of a prospectus, an offering circular, an advertisement or an offer document under the Companies Act, 2013, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, or any other applicable law in India. This presentation is strictly confidential and may not be copied or disseminated, in whole or in part, and in any manner or for any purpose. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and if given or made, such information
applicable securities laws. Neither this document nor any part or copy of it may be distributed, directly or indirectly, in the United States. The distribution of this document in certain jurisdictions may be restricted by law and persons in to whose possession this presentation comes should inform themselves about and
located outside the United States and you are permitted under the laws of your jurisdiction to receive this presentation. This presentation is not an offer to sell or a solicitation of any offer to buy the securities of the Company in the United States or in any other jurisdiction where such offer or sale would be unlawful. Securities may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, in to or within the United States absent registration under the United States Securities Act of 1933, as amended (the “Securities Act”), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or
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