Max Financial Services Limited Investor Presentation November 2019 - PowerPoint PPT Presentation

Max Financial Services Limited Investor Presentation November 2019

SECTION I  Max Financial Services

Max Group Vision “To be the most admired corporate for service excellence” • Positive social impact • Culture of Service Sevabhav • Helpfulness • Mindfulness • Expertise • Entrepreneurship Excellence • Dependability • Business performance • Transparency • Respect Credibility • Integrity • Governance 3

Max Group – Overview Max Group - Sponsors 28.3% 40.9% 47.8% Companies Holding Real Estate, Manufacturing Life Insurance Business Health & Allied Business & Other businesses 50%* 51% 71.8% Operating Companies 100% 51%** 100% 100% 100% Relatively stable, profitable and dividend Growth businesses Entrepreneurial Ventures paying 4 * MHC to merge with Radiant to create 3rd largest Hospital chain ** True North to acquire Max’s stake(51%) in Max Bupa for 517 Cr

Evolution of Max Group Acquisitions, Demerger, Wider world of businesses through MVIL & Portfolio Group reinvented itself … Shifted from rebalancing : B2B to B2C businesses: Ventured into Manufacturing & • Acquisitions : 2 landmark acquisitions acquires trading businesses • Life Insurance: JV with NYL in 2001, monetized Vaishali & Saket city hospital Rs 938 Cr by replacing JV partner MSI in 2012 • Pharma : Penicillin-based drug • Demerger: Spilt into 3 entities, Max Financial, • Health Insurance: JV with Bupa in 2009 Max India & Max Ventures • Packaging Films : Max Speciality Films • Healthcare: JV with LHC in 2012, LHC equalize • Wider world of businesses : MVIL forays into • Electronics: Partnered with Avnet stake in 2014, invested 766 Cr Real Estate; NYL acquires 22.5% stake in MVIL; Toppan inducted as JV partner in Max • Cellular services: JV with Hutchison • Senior Living: Launched first community in Speciality Films Doon in 2013 • Paging services: Tie-up with Motorola • Re-balancing Portfolio : MHC to merge with • Fund Raised: Warburg invested 340 Cr in 2005; Radiant to create 3 rd largest Hospital chain; • Communication & Satellite: Comsat JV QIP - 1000 Cr in 2007; IFC invested 450 Cr in True North to acquire Max’s stake (51%) in Max 2007/09; Goldman Sachs invested Rs 522 Cr in • Printed Circuit Board: JV with Atotech Bupa for 517 Cr 2010 • Divestment: Divested 40% stake in Telecom Third wave: Corporate restructuring to business for a gain of 488 Cr Second wave : Group reinvented from a unlock value; Focus on wider world of B2B manufacturing conglomerate First wave: Early years, businesses through MVIL to a B2C company Started with Manufacturing and Rebalancing of portfolio (2000 – 2014) Businesses (1982 – 2000) (2015 – 2019) 5

Journey of Successful Partnerships Current JV Partners Marquee Investors Past JV Partners 6

Max Group – Senior Management Mohit Talwar • Vice-Chairman, Max Group • Managing Director, Max India Limited • Managing Director, Max Financial Services • Vice-Chairman, Max Ventures and Industries Ltd • Chairman, Max Specialty Films Prashant Tripathy Sahil Vachani • • Managing Director & CEO, Max Life Insurance MD & CEO, Max Ventures and Industries Limited • Director in Max Financial & Max Life Insurance Tara Singh Vachani Rajit Mehta • • Executive Chairman, Antara Senior Living Managing Director& CEO, Antara Senior Living • • Director in Max India & Max Healthcare Group role to oversee Max India New Growth Initiatives and Advisor for Max Group’s Human Capital Ashish Mehrotra Rajender Sud • • MD & CEO, Max Bupa Health Insurance CEO, Max Skill First Limited Ramneek Jain • CEO, Max Specialty Films 7

Max Group – Senior Management 1 USD 3.2 billion Revenues… 12 Mn Customers… 30,000 Employees… ~80 ,000 Agents 2 Strong growth trajectory even in challenging times; a resilient & diversified business model 3 Steady revenue growth and cost rationalization leads to strong financial performance 4 Well established board governance….internationally acclaimed domain experts inducted 5 Diversified ownership…..marquee investor base 6 Superior brand recall with a proven track record of service excellence 7 Strong history of entrepreneurship and nurturing successful business partnerships 8

Max Group : Continues to grow from strength to strength Group Revenue (USD mn) 3,448 2,935 2,409 2,034 1,779 FY15 FY16 FY17 FY18 FY19 Group EBITDA (USD mn) 130 * 121 118 * 102 88 FY15 FY16 FY17 FY18 FY19 9 * FY17 & FY19 EBITDA adjusted for one-off costs for conversion assumed 1 USD = INR 70

High pedigree of long term investor base Shareholding concentrated with Marquee Investors ▪ KKR Shareholding Pattern ▪ Baron Emerging Market Fund as on 30 th Sep 19 ▪ Norway Government Pension Fund ▪ New York Life Public 12.4% ▪ Vanguard Promoter ▪ Aberdeen 28.3% ▪ Jupiter ▪ FII- Others TVF (First Voyager) 22.8% ▪ Dimension ▪ Eastspring KKR 6.7% ▪ Mirae Mutual Fund ▪ Reliance Mutual Fund Mutual Funds ▪ HDFC Mutual Fund 29.7% ▪ Aditya Birla Sunlife Mutual Fund ▪ ICICI Prudential Mutual Fund ▪ Kotak Mutual Fund Number of outstanding shares: 26.94 Cr. ▪ Sundaram Mutual Fund ▪ DSP Mutual Fund ▪ UTI Mutual Fund 10

SECTION II  Max Life Insurance – Insurance Opportunity

Sustained policy support along with macro economic fundamentals aids growth of financial savings pool; Life Insurance at INR 35 Lakh Cr * of AUM is among preferred asset class in India Retail wealth in India - Increasing preference for avenues other than cash High Savings Culture….. and bank deposits Amount in INR lakh Cr Growth 0.4 2018 Vs 2015 0.5 0.5 0.5 0.4 0.4 0.3 17.7 16.1 13.2 15.1 14.2 14.7 13.9 18.7 15.0 14.4 12.6 11.9 10.6 9.3 42% 11% -2.9 Bank Deposits -3.3 -3.6 -3.8 -3.9 -4.7 45% -7.4 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 Gross Financial Savings Savings in Physical Assets Gold and Silver Financial Liabilities Source: Handbook of Statistics on Indian Economy 2016/2017/18 Household Savings flow - ~30% growth in financial assets flow in 2018 - 16% 12% Highest in last 5 years Insurance AUM 17% 2015 – 2018 Amount in INR Cr 5% 8% CAGR Direct Equities 10% 41% 6% 28% 47% 47% 49% 53% 55% 5% 4% Mutual Funds 9% 7% Cash 10% 59% 14% 53% 53% 51% 47% 45% 20% 26% Others 14% 2008 2010 2015 2016 2017 2018 Financial Assets Physical Assets 2015 2018 Source: Karvy India Wealth Report 2015/2016/2017/2018 Source: Handbook of Statistics on Indian Economy 2016/2017/18 Direct Equities excludes promoter holdings CAGR 12 X% * As of Dec 31, 2018

Significant opportunity for Life Insurance to grow in India on the plank of ensuring disciplined savings over a long term – Only asset class which is effective in addressing the gap Gap between other countries and India is significant for Life Insurance India lags behind other developed countries on Life Insurance penetration density Life Insurance Penetration Life Insurance Density (Premium as % of GDP), FY 2018 (Premium per capita – USD), FY 2018 8,204 17.5% 16.8% 4,320 6.7% 6.1% 2,629 221 54 2.7% 2.3% Taiwan Hong Kong South Korea Japan India China Hong Kong Taiwan Japan China India • Life Insurance inculcates disciplined savings mindset which help retain AUM for longer Long Term – For the mutual fund industry , only 40-45% ^ of the assets are more than 2 years old Nature of – For better Asset Liability management, Banks preference remains for shorter tenure deposits Savings – Investment in direct equities impacted by performance of stock market and does not ensure discipline 13 Source: IRDAI Annual Report 2016/2017/18, ^ AUM under equity finds by retail investors from AMFI website; Swiss Re, sigma No 3/2019 (based on respective financial year of the countries)

Urbanization, improving affluence, emergence of nuclear families will continue providing impetus to the Life Insurance industry India has witnessed rapid urbanization, aids Middle class is likely to increase rapidly, especially in Top 150 cities; Top 19 cities continue to hold bulk of affluence and emergence of nuclear families household savings as well affluent households Urban Population (%) Savings Estimated no. of Households* 2050 53% Total Savings Strugglers Next billion Aspirers Affluent Lakhs Cr.| % (<1.5L) (1.5L – 5L) (5L – 10L) (>10L) 2035 43% Increase (2016-25)^ 30% 20% 50% >100% 2011 31% Tier 1 9.9| 43% 75L 54L 34L 68L 19 cities with 20 lakhs+ pop. 2001 28% Tier 2 3.5 | 15% 40L 23L 12L 18L 35 cities with 10-20 1991 26% lakhs+ pop. Tier 3 35L 18L 9L 11L 1.5 | 7% 1981 23% 56 cities with 5-10 lakhs+ pop. 1971 20% Tier 4 92L 40L 19L 21L 3.1 | 14% 415 cities with 1-5 lakhs+ pop. * Based on Annual gross household income in ` 1961 18% Source: World Urbanization Prospects: The 2018 Revision, United Nations Source: Nielsen Analytics, Mumbai, India. MME: Metro, Town & Rural Skyline of India 2015-16 ^ Source: BCG: The New Indian 14