Investor Presentation Fullerton India Home Finance Co. Ltd. No part - - PowerPoint PPT Presentation
Investor Presentation Fullerton India Home Finance Co. Ltd. No part of it may be circulated, quoted, or reproduced for distribution outside the organization without prior written approval from Fullerton India Home Finance Co. Ltd. AGENDA
No part of it may be circulated, quoted, or reproduced for distribution outside the organization without prior written approval from Fullerton India Home Finance Co. Ltd.
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"We always over-estimate the Change that will occur in the next two years & underestimate the change that will
36% 48% 51% 64% 69%
2015 2019 2020 2025 2027
India's Millennial as % of Workforce**
Incremental demand
199 171 151 134 56
100 150 200
1980 1990 2000 2010 2015 2018
Credit-to-GDP ratio*
KR UK US MY IN
Underpenetrated Market
Source –** Morgan Stanley ^PwC – GDP at purchasing power parity (PPP) adjusts for price level differences providing a better measure of the volume of goods and services produced. *BIS (KR: Korea UK: United Kingdom US: United States MY: Malaysia IN: India)
India's economy is poised to become third-largest by 2027 with $6 trillion GDP**
8.7 11.8 15.7
2016 2020 2025
GDP in PPP^ (US$ trillion)
Growth potential
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Source: *Mirae Asset Management **McKinsey ~ORF ^CRISIL [Housing portfolio of HFC’s total outstanding] ~Morgan Stanley #Anarock McKinsey Global Institute defines India’s middle class as households with real annual disposable incomes between 200,000 and 1 million rupees.
sectors driving up employment and income levels
credit buoyed by favourable demographics and urbanization
India’s 9% Mortgage-to-GDP ratio in 2016 estimated at ~17% by 2026 (Morgan Stanley)
430 mio in 2015 600 mio by 2030 Rapid urbanization* 64 mio in 2018 114 mio by 2022 Housing shortage~ 250 mio in 2015 583 mio by 2030 Growing middle class**
Key Drivers for Housing Sector Growth Housing Sector Multiplier Effect
INR 6.3 tn in 2018 INR 14.8 tn by 2023 HFC Housing Loans^ Household size# 4.85 in 2006 4.44 in 2016 Housing Sector*
Service Sector Skilled Labour Architects, Designers & Engineers Banking & Finance Primary Sector Raw Materials Manufacturing Sector Construction Materials Fiscal Impact Higher Income Increased Tax Revenue
houses by 2022
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Home Buyers Real Estate Developers HFCs
1%, effective from April 1, 2019
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Temasek Holdings (Private) Ltd. Fullerton Financial Holdings Pte. Ltd. Fullerton India Credit Company Ltd. Fullerton India Home Finance Company Ltd.
Wholly owned subsidiary Wholly owned subsidiary Wholly owned subsidiary
Fullerton Financial Holdings, Singapore (FFH) is a wholly owned subsidiary of Temasek Holdings
headquartered in Singapore
emerging markets
Fullerton India Credit Co. Ltd. (FICCL) is a wholly-
3 union territories
as well as SMEs Grihashakti, Fullerton India Home Finance Co. Ltd. is a wholly-owned subsidiary of FICCL
incorporated in January 2003 as a wholly owned subsidiary by Temasek Holdings Pte Ltd
across 6 countries
bring financial services to the underserved in emerging markets
DUBAI, UAE INDIA Central CHINA CHINA MYANMANR CAMBODIA POST MALAYSIA
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Multi-product offerings support a range of customer needs
Consumer Urban MSME Rural Cross-Sell
Personal Loans, Loans Against Property Commercial Vehicle Loans, Business Loans, Loans Against Property Personal / Group Loans, Loans Against Property, Vehicle Loans Life / General Insurance
Established Customer Connect across Urban and Rural India
AUM (INR)
Customers
Branches
Employees
Villages
Rating*
Data as at FY19. *Rating CRISIL, ICRA, CARE. (Temasek rated 'AAA/Stable' by S&P Global)
Be the Company of choice in financial services for our customers, employees, communities and stakeholders, recognized for innovation and high ethical standards.
Agility Diversity Collaboration Integrity Innovation Excellence
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Anindo Mukherjee
Chairman – Grihashakti, Non-Executive Director - Fullerton India Credit Co. Ltd
Rakesh Makkar
CEO - Grihashakti, Whole-time Director
Milan Shuster
Independent Director
Rajashree Nambiar
Non-Executive Director, MD & CEO – Fullerton India Credit Co. Ltd
Board of Directors Management Team
Pankaj Malik
Chief Financial Officer
Parag Shah
Chief Risk Officer
Shyam Reddipalli
GM – Head Business & Product
Rakesh Makkar
CEO - Grihashakti, Whole-time Director
FFH has senior level representation on the Board and various committees of Board
Note - As at August 2019
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Jul-15 Dec-15 Nov-16 Sep-17 Mar-19 Jan-18 Rated AA+ by CARE Received HFC license with equity infusion of INR 1 Bio Started operations with 20 branches Sep-16 Crossed AUM of INR 10 Bio Team size of 425 Nov-17 SARFAESI Approval Crossed AUM of INR 15 Bio Crossed AUM of INR 30 Bio Expanded – Added 20 more branches Expanded network to 60 Branches Jun-19 Crossed AUM of INR 35 Bio Enhanced network of 78 branches Jul-19 Equity infusion of INR 2 Bio Team size of 780+ Aug-19 CRISIL ‘AAA’ Rated Closed securitization deal worth INR 1,756 Mio
Grihashakti is a wholly-owned subsidiary of FICCL
professionals, and MSME firms
improvement & extension, home construction, loan against property, loans for commercial property, construction finance, Lease Rental Discounting
network of associates and direct selling agents
external environment, customer data, bureau trends
Established customer connect in 78 branches across India
RAJASTHAN
GUJARAT
MUMBAI
REST OF MAHARASHTRA
KARNATAKA
MADHYA PRADESH
AP & TELANGANA
UTTAR PRADESH
TAMIL NADU
PUNJAB
HARYANA
DELHI
WEST BENGAL
UTTARAKHAND
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Strong Parentage Experienced Management Team Strong footprint in Tier 2/3 towns Established niche in self-employed segment Expertise in handling new-to-credit/ borrowers from informal segment Strong Risk Governance Framework Comfortable Liquidity Position
AAA rated. Steady infusion of capital Industry veterans form part of Board and Senior Leadership team
Geographically diversified, sizeable play basis network of 78 branches and ~600 active channel partners Leverage parent’s understanding of credit and distribution in underserved markets, product programs customized for SENP Pro-active monitoring based on external environment, customer data, bureau trends. Robust delinquency management – from early warning signals to effective SARFAESI implementation
Diversified lender base, low reliance on short term funding, well-managed ALM Region specific specialty teams on board – underwriting, collateral management, valuation policy. Sturdy portfolio across market cycles
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Q1FY19 Q1FY20
AUM (INR Mio)
Net Revenue (INR Mio)
Q1FY19 Q1FY20
Operating Profit (INR Mio)
Q1FY19 Q1FY20
NNPA (%)
Q1FY19 Q1FY20 301
469
56%
96
150
56%
1.4
1.5
Q1FY19 Q1FY20 Q1FY19 Q1FY20 22,260
36,960
66%
11.8K
~18.9K
60%
68.0
68.1 Cost-to-Income (%) ...despite pressure on cost of funds and business coming to a 3-month halt in Q3FY19
0.1% 0.1%
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Product Share Product Suite
Fulfil dream of
– Purchase of New and Resale
Improvement
Construction
and Home Construction Loans
Loans
Expand Business /Working Capital
Property (LAP)
Discounting
commercial property - New and Resale
construction of commercial property
Access to developers
Financing
Finance (CF)
Programs customized for self-employed segment
Program
Program
Program
Program
Program
HL 58% LAP 40% CF 2% Closing AUM (Jun-19)
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Rural Urban Digital Process
direct sourcing
in current regions
Fund
underwriting and better turnaround
efficiency, faster customer response rate
monitoring, customer service and control
21 Alliances with online loan aggregators and FinTechs Alliances with online loan aggregators and FinTechs Tap existing customer base Tap existing customer base Up-sell to quality FIHFC customers Up-sell to quality FIHFC customers CIBIL watch, Bureau scrub for HL CIBIL watch, Bureau scrub for HL Retention base selling Retention base selling Staff Loans & Referrals Staff Loans & Referrals Deriving Customer Lifetime Value for Retention Deriving Customer Lifetime Value for Retention
Strengthening the Alternate Channel Digital Platform
party online marketplaces
partner websites
with Fin-Techs
access to partners
Paperless Processing Paperless Processing Mobile Sourcing Solution Mobile Sourcing Solution Growing the pie Growing the pie
bank statements
income tax returns
business rule engine
sanction capabilities
cases and provide instant financial sanction to salaried segment
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Risk principles and standards Definitions of roles and responsibilities Governance structure
Key Components
Establish common principles and standards for the management and control of all risks across the
Provide a shared framework to improve awareness
Provide clear accountability and responsibility for risk management
Key Objectives Key Principles
Balancing risk and return Responsibility and Accountability Anticipation of Future Risks
Standards Ensuring Portfolio Quality
Management Information System Credit Bureau Policy Credit Exposure Norms Credit Assessment and Eligibility Norms Provisioning and Asset Classification Stress Tests and Periodic Reviews Portfolio on Bureau Watch Triggers Collections and Recovery Norms Data Analytics
Board of Directors Risk Oversight Committee Chief Executive Officer
Policy Approvals Portfolio Purchases & Sell-Offs Risk Credit FCU, Legal, Technical
Chief Risk Officer
Collections Analytics
Policy
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Managing Risk
Formation of Credit Committee Improvised Credit Policy Enhanced Credit Underwriting - Geography specific collateral management, city-specific limits
Framework to identify and track delinquencies, followed by remedial action Risk-based Analytics Scorecard, Risk Segmentation of collections SARFAESI initiated on 100% eligible cases Strengthened Collections team with senior hiring Strengthened Fraud Control Unit and property appraisal process
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i. Diversification (across instruments lender category) ii. Matching asset-liability tenors iii. Maintenance of adequate buffers
i. NHB Refinance ii. ECB/ Masala Bond iii. Retail Bonds Stable Funding profile
(INR bio)
27 30
70% 74% 26% 23% 4% 3%
Mar-19 Jun-19
Bank Loans NCD CP
This presentation has been prepared by Fullerton India Home Finance Company Limited (the “Company”) solely for your information. This presentation is for information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any securities, 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 upon in connection with, any contract or commitment therefor. The financial information in this presentation may have been re- classified and reformatted for the purposes of this presentation. You may also refer to the financial statements of the Company available at https://www.grihashakti.com/home.aspx, before making any decision on the basis of this information. This presentation contains statements that may not be based on historical information or facts but that may constitute forward-looking statements. These forward looking statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Company presently believes to be reasonable in light of its operating experience in recent years but these assumptions may prove to be incorrect. Any opinion, estimate or projection constitutes a judgment as of the date of this presentation, and there can be no assurance that future results or events will be consistent with any such opinion, estimate or projection. The Company does not undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company. No representation, warranty, guarantee or undertaking, express or implied, is or will be made as to, and no reliance should be placed on, the accuracy, completeness, correctness or fairness of the information, estimates, projections and opinions contained in this presentation. Potential investors must make their own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent investigation as they may consider necessary or appropriate for such purpose. This presentation does not constitute and should not be considered as a recommendation by the Company that any investor should subscribe for, purchase or sell any of Company's securities. By viewing this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the Company. None of the Company, book running lead managers, their affiliates, agents or advisors, the placement agents, promoters or any other persons that may participate in any offering of any securities of the Company shall have any responsibility or liability whatsoever for any loss howsoever arising from this presentation or its contents or otherwise arising in connection therewith. This presentation and its contents are confidential and should not be distributed, published or reproduced, in whole or part, or disclosed by recipients directly or indirectly to any other
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This presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this presentation. This presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded.
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