HDFC Asset Management Company Limited Update 26 November 2019 1 - PowerPoint PPT Presentation

HDFC Asset Management Company Limited Update 26 November 2019 1

Background and Opportunity 2

India – the third largest in household savings globally 4,840 billion 2,000 39.00 Annual Net Household Savings in USD bn (Bar out of scale) 36.1 Savings Household Savings Rate (%) 34.00 1,500 1,413 29.00 HOUSEHOLD SAVINGS (USD BILLION) 24.00 HOUSEHOLD SAVINGS RATE 1,000 19.00 17.2 467 15.5 15.1 500 395 14.00 235 189 137 10.2 124 116 9.9 87 78 9.00 50 48 30 29 8.5 8.5 25 1 7.6 7.2 - 6.9 6.6 -12 -26 4.00 3.5 2.8 2.3 1.7 0.3 -0.8 -500 -0.9 (1.00) 3 Source: OECD, FRED, RBI, IMF

Indian Household Savings pattern High Savings Culture… ..Shift to Financial Assets.. Growing Household Savings (INR Tn) (1) % of Gross Household Savings (1) 100% 80% 47% 49% 50% 18.1 55% 55% 59% 60% 60% 13.2 14.5 15.6 14.5 15.0 14.2 40% 53% 51% 18.7 50% 45% 45% 41% 15.0 14.4 20% 40% 12.6 11.9 10.6 9.3 0% -2.9 -3.3 -3.6 -3.8 -3.9 -4.7 FY12 FY13 FY14 FY15 FY16 FY17 FY18 -7.4 (5) FY12 FY13 FY14 FY15 FY16 FY17 FY 18 Gross Financial Savings Savings in Physical Assets Financial Liabilities Gross financial savings Savings in physical assets (inc Gold/Silver) …With Increasing Preference for Mutual Funds Mutual Fund AUM Reducing the Gap with Bank deposits (2) Mar-13 to Sep-19 CAGR: 19% Mutual Fund AUM: 21% (INR Tn) Bank Deposits: 11% 140.0 129.1 125.6 114.7 120.0 10% 100.0 77.8 80.0 67.2 60.0 40.0 ____________________ 24.5 21.4 23.8 (1) Source: RBI, CRISIL Research; (2) Source: AMFI, RBI, CRISIL Research. Sep-2019 Deposits as per RBI provisional 20.0 8.3 7.0 numbers - 4 FY13 FY14 FY18 FY19 Sep-19 Mutual Fund AUM Bank Deposits

Mutual Fund AUM Growth – India v World 5 year CAGR growth in MF AUM 30.0% 26.8% 25.2% 25.0% 20.0% 15.0% 12.2% 11.0% 9.7% 8.9% 10.0% 7.0% 6.3% 5.7% 5.5% 4.7% 4.4% 5.0% 3.8% 3.7% 2.9% 2.7% 2.7% 2.0% 1.0% 0.0% -0.3% -0.5% -1.4% -5.0% -4.0% Source: IIFA (as of 31 March 2019) 5

AUM as % of GDP, Market Cap AUM as % of GDP Equity AUM as % of Market Cap 140% 137% 100% 90% 120% 80% 103% 72% 100% 70% 60% 80% 75% 50% 48% 65% 50% 59% 60% 55% World Average 55% 40% World Average 36% 32% 32% 31% 42% 36% 30% 27% 40% 29% 20% 20% 18% 20% 13% 11% 11% 9% 7% 7% 10% 6% 6% 5% 4% 0% 0% Australia France UK Germany China India USA Brazil S.Africa Japan Korea Chile Italy Mexico Australia France UK Germany India Chile Italy China Korea USA Brazil S. Africa Japan Mexico Source: IMF (GDP, CY 2018), IIFA (MF AUM, CY 2018:Q4); Bloomberg (Market-Cap CY 2018:Q4). Balanced/mixed funds are assumed to be composed of 70% equity. Only open-ended funds have been considered. 6

Global vs Indian AUM, Market Cap, GDP USD Trillion India World India Share (%) Mutual Fund Assets 0.37 50.4 0.73% Equity-oriented 0.13 25.2 0.53% Market Cap 2.08 69.4 3.00% Equity AUM as % of MCap 6.4% 36.3% GDP 2.72 84.74 3.21% AUM as % of GDP 13.5% 55.1% • India’s share of global GDP and Market Cap is in excess of 3%, however its share in Mutual Fund Assets is 0.73% • India’s equity-oriented AUM as a % of Market Cap is 6.4% as against the global average of 36.3% • India’s AUM as a % of GDP is 13.5% as against a global average of 55.1% 7 Source: Bloomberg, IMF, IIFA. As of CY 2018:Q4

The Opportunity India Population: 1,320 mm The opportunity size GDP Rs 168 Trillion 1,050mm 440mm Bank Account PAN Card Gross Household Savings Holders Holders (21.9%) Rs 36.8 Trillion as of 31 Mar 2018 as of 31 Mar 2019 Financial Savings Rs 18.7 Trillion (51%) 59 mm 20mm Income Tax Mutual Return filers Fund Investors Rs 9.5 Trillion Rs 9.2 Trillion as of 30 Sep 2019 as of 31 March 2019 Bank Deposits + Currency Balance (50%) 8 Source: RBI, IT website, AMFI

Mutual Fund Industry and HDFC AMC 9

Industry - AUM and Net Sales 25% 34% 35% 36% 43% 42% 43% 43% 43% 23.8 24.3 24.5 2.3 1.9 2.1 22.0 21.4 Mar-14 to Sep-19 CAGR: 0.8 1.5 Overall: 22%; Equity: 36%; Debt:8%; Liquid: 26% 4.7 4.7 4.4 17.5 3.4 3.9 0.5 3.1 7.0 7.1 12.3 7.3 8.0 7.3 10.8 0.2 AUM ( ₹ trn) 0.2 2.0 7.6 8.3 1.6 0.2 1.3 5.8 5.3 10.5 10.4 10.2 4.7 9.2 9.2 6.3 4.3 3.7 2.1 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 Sep-19 Arbitrage AUM: ₹ 0.75 trn Equity Debt Liquid Others Equity as a % of Total Q2FY20 Arbitrage net flows: ₹ 163 bn Yearly net sales Quarterly net sales 2,608 Net Sales ( ₹ bn) 1,173 958 1,187 1,070 938 809 159 761 326 283 238 395 393 241 128 128 229 227 108 96 171 98 74 17 (1) (11) (29) (113) (49) (94) (156) (88) (486) (1,244) (711) FY14 FY15 FY16 FY17 FY18 FY19 Q2FY19 Q1FY20 Q2FY20 ____________________ 10 Source: AMFI AUM excluding FOF – domestic; equity includes equity-oriented hybrid funds; ‘Other’ includes Gold ETFs, other ETFs and FOF – investing overseas. From April 2018, Arbitrage is included in 'Other' category, except for computation of CAGR of equity-oriented AUM.

Individual / Institutional MAAUM, SIP Flows, B-15/B30 MAAUM of Individual Investors (1)(2)(3) SIP Flows (1) MAAUM of B-15/B-30 (1)(2) 13.5 21.1 24.4 26.2 27.4 28.4 10.1 16% 16% 16% 17% 19% 15% 15% 15% 16% 39.2 41.4 47.2 54.8 70.9 77.5 82.1 83.4 85.2 (MAAUM in ₹ tn) B15 B30 (SIP contribution in ₹ bn) 83 81 81 (MAAUM ₹ trn) 77 21.8 20.8 21.6 20.7 71 18.4 11.8 11.8 11.0 15.5 11.3 (46%) (46%) (45%) (47%) 11.0 (49%) 43 11.4 10.1 10.2 (54%) 31 7.6 7.4 6.5 (55%) (54%) 13.5 5.0 14.0 13.8 13.0 4.3 4.0 4.0 (56%) 11.7 (55%) (54%) 3.8 (54%) 3.1 (53%) 3.6 (51%) 8.5 2.2 1.9 (46%) 6.2 5.6 1.4 3.9 (45%) (46%) (44%) Mar-14Mar-15Mar-16Mar-17Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 Mar-14Mar-15Mar-16Mar-17Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 Apr-16 Mar-17 Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 T-30 B-30 Individual Investors Institutional Investors No. of SIP Accounts (mm) T-15 B-15 Share of B-15 MAAUM Individual Folios (mm) Share of B-30MAAUM ____________________ (1) Source: AMFI, (2) Based on monthly average AUM (3) Percentages in brackets denote % share of total 11

HDFC AMC at a glance 55% Assets Under Non-Equity Oriented 45% Equity-Oriented Assets Assets Management (1) ₹ 2011 bn ₹ 1,651 bn ₹ 3,662 bn US$ 28.4 bn US$ 23.3 bn US$ 51.7 bn 9.4 mm ₹ 110 bn Live Accounts (1) PMS & SMA AUM (1) (3) 213 Branches (1)(2) ; 1,217 E mployees (1) 80k+ Empaneled ₹ 2,180 bn Distribution Partners Individual MAAUM (1) ____________________ (1) As of Sep 30, 2019 / for Sep 2019 ; (2) Includes one representative office in Dubai; (3) Includes advisory mandates 12 (2) Source: Internal. USD/INR conversion rate: ₹ 70.8688

Total AUM and Market Share Total AUM (1) Market Share in Total AUM (2) ₹ billion YoY 25% HDFC MF, Sep-2019 14.9% 3,662 3,567 3,439 2,920 2,926 June-2019 Sep-2018 HDFC MF, HDFC MF, 2,306 14.7% 13.3% 1,656 1,506 1,089 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 ____________________ (1) Source: Internal (2) Source: Internal, AMFI 13

Actively Managed Equity-oriented AUM and Market Share #1 Market Share in Actively Managed Equity-oriented Actively Managed Equity-oriented AUM (1) AUM (2) ₹ billion HDFC MF YoY 11 % Sep-2019 15.8% 1,689 1,643 1,637 1,476 1,449 Sep-2018 June-2019 957 HDFC MF HDFC MF 16.0% 675 16.2% 629 406 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 ____________________ (1) Source: Internal (2) Source: AMFI, Internal 14 Actively managed equity-oriented AUM excludes index and arbitrage funds from equity-oriented funds

AUM by Segment – HDFC AMC and Industry HDFC AMC MF AUM by Segment (1)(3) Industry AUM by Segment (2)(3) Sep-2019 Sep-2019 Others Others 1.8% 9.4% Liquid 26.6% Liquid 19.0% Equity Equity 42.5% 45.1% Debt Debt 26.6% 29.1% Sep-2018 June-2019 Sep-2018 June-2019 Others Others Others Others 1.4% 8.5% 6.9% 1.5% Liquid Liquid 15.6% 23.8% Liquid Equity Equity Liquid 17.9% Equity 41.9% 43.3% 19.3% Equity 47.7% 50.7% Debt 32.3% Debt Debt Debt 27.1% 33.3% ____________________ 29.0% (1) Source: Internal (2) Source: AMFI (3) From April 2018, Arbitrage is included in other category 15

Individual Investors – no of Accounts & MAAUM Number of Live Individual Accounts (in millions) (1) Individual MAAUM % of Total (1) YoY 10% YoY 9% 624 931 945 1,350 1,863 1,985 2,167 2,214 2,180 9.39 64.5% 9.20 9.03 63.0% 62.2% 8.62 59.2% 8.05 57.4% 56.3% 56.0% 54.6% 54.1% 52.8% 6.15 5.55 5.14 4.44 (2) Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Mar-19 Jun-19 Sep-19 Industry Sep-19 Individual MAAUM (Rs bn) (1) Individual customer prefer equity-oriented schemes and stay invested for longer periods ____________________ (1) Source: Internal (2) Source: AMFI 16

Most Preferred Choice of Individual Investors Individual Assets Market Share (Sep-19) Individual Assets Market Share (June-19) Individual Assets Market Share (Sep-18) 15.7% 15.1% 14.0% 15.6% 13.6% 13.6% 9.8% 10.4% 9.9% 9.4% 9.1% 8.9% 8.6% 8.7% 7.8% HDFC ICICI Pru ABSL Nippon SBI HDFC ICICI Pru SBI ABSL Nippon HDFC ICICI Pru SBI ABSL MF Nippon MF MF MF MF MF MF MF MF MF MF MF MF MF MF Source: AMFI , based on monthly average AUM 17