IIFL Holdings Ltdcontent.indiainfoline.com/admin/PDF/corporate_presentation_INR_Q3… · IIFL Holdings Ltd [Bloomberg Code: IIFL IN ] Investor Presentation April 2016 . 17.5 19.6

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IIFL Holdings Ltd [Bloomberg Code: IIFL IN ]

Investor Presentation

April 2016

17.5 19.6

21.5

25.6 29.5

FY12 FY13 FY14 FY15 9MFY16

India’s leading integrated financial services player

Home loans, gold loans, commercial vehicle, capital market, medical equipment finance and SME business loans

Retail focused loan book of `172.7bn ($2.6bn) as on Dec 31, 2015 High quality assets with net NPA of 0.6% Capital adequacy ratio of 18.0% as on Dec 31, 2015 with Tier I capital at 11.9%

Consumer finance (NBFC)

Discretionary & non-discretionary accounts, wealth advisory, family office and asset management

Leading wealth manager in India with total assets under advice of `867.0bn ($13.1bn) as on Dec 31, 2015 Eight overseas offices in Houston, New York, London, Geneva, Dubai, Mauritius, Singapore and Hong Kong

Wealth management

Equity, commodities, currency broking – retail and institutional, distribution of mutual funds, insurance, investment banking

Leading broking house with wide distribution network. Premier broker for FIIs, DIIs, private equity funds & banks Largest non-bank insurance distributor with mobilized premium of `1.4bn ($21.4 mn) during 9MFY16.

Agency

Net-worth (` bn) Profit after tax (` bn) Return on equity (%)

IIFL Group Key Businesses

IIFL Group Key Financials

2

1.3

2.7 2.8

4.5

3.7


7.7%

14.7% 15.1%

19.0% 17.6%


Affluent

Corporate

Retail

Institutional

Wealth Management

Asset Management

Real Estate

Investment Banking

Financing

Broking, Insurance,

Mutual Fund

Institutional equities

India Investment Advisory

Our service offerings are across customer segments

3

1.1

1.9 2.1

3.0

2.4


67

94 109

147

173


Loan book (` bn)

As on Dec 31, 2015:

• Aggregate loan book stood at `172.7bn ($2,608mn), up 25% y-o-y

• Profit after Tax at `891.3mn ($13.5mn), up 15% y-o-y

• Gross NPA at 1.56% and net NPA at 0.61%

• Total provision coverage (including standard asset provision) as a % of Gross NPA is 85.3%

• Long-term credit rating by ICRA AA/stable, CARE AA, Brickworks AA+/stable and short-term rating by ICRA A1+

Profit after tax (` bn)

Diversified loan book NBFC Wealth Agency

Indicative Portfolio Yield (%) – Q3FY16

13-14%

13-15%

10-12%

18-20%

18-20%

14-17%

11-13%

Medical Equipment

Loan against Property

Home Loan

Gold Loan

Mortgage Corporate

Commercial Vehicle

Capital Market

Currency conversion rate: 1 USD = `66.2 (as at December 31, 2015).

4

ROE (%)

7.3%

12.1% 12.6%

15.9% 14.9%

15.9% 17.2%

FY12 FY13 FY14 FY15 Q1FY16* Q2FY16* Q3FY16*

7.4%

9.5%

6.5% 6.7%

5.5% 5.9% 5.7%

FY12 FY13 FY14 FY15 Q1FY16 Q2FY16 Q3FY16

62.7% 64.4%

50.7% 45.7% 48.0% 46.7% 44.2%

FY12 FY13 FY14 FY15 Q1FY16 Q2FY16 Q3FY16

NIM (%) Cost to Income (%)

*Figures for first, second and third quarter of fiscal year ended March 31, 2016 are annualised.

Operating parameters improving NBFC Wealth Agency

5

1.7%

2.0%

1.8%

2.0%

1.7% 1.8%

1.9%

FY12 FY13 FY14 FY15 Q1FY16* Q2FY16* Q3FY16*

ROA (%)

15.5% 14.6%

12.7% 11.3% 10.9%

13.3% 11.9%

FY12 FY13 FY14 FY15 Q1 FY16 Q2 FY16 Q3 FY16

73.8%

115.4%

94.4% 87.2%

76.5%

94.0% 85.3%

FY12 FY13 FY14 FY15 Q1 FY16 Q2 FY16 Q3 FY16

0.40%

0.17%

0.33%

0.54%

0.81%

0.51%

0.61%

FY12 FY13 FY14 FY15 Q1 FY16^ Q2 FY16^ Q3 FY16^

0.56% 0.49%

0.86%

1.27%

1.62%

1.42% 1.56%

FY12 FY13 FY14 FY15 Q1 FY16^ Q2 FY16^ Q3 FY16^

Total provision coverage (incl. std asset provision) (%)

Gross NPA (%) Net NPA (%)

^ Gross and Net NPAs based on 150 day NPA recognition norms (ex-HFC).

Operating parameters NBFC Wealth Agency

6

Tier I (%)

Borrowing mix (%) – FY13 Borrowing mix (%) – Q3FY16

Term Loans 43%

Commercial

Paper 35%

Secured NCD 12%

Unsecured

NCD 7%

Overdraft/

Cash Credit 3%

Diversified borrowing mix

NBFC Wealth Agency

Portfolio mix^ (%) – Q3FY16 Portfolio mix^ (%) – FY13

^Loan book. #Others include corporate loans, SME loans and unsecured loans.

7

Term Loans 39%

Secured NCD 25%

Commercial

Paper 22%

Unsecured

NCD 7%

CBLO 4%

Overdraft /

Cash Credit 2%

Capital Market

20%

Commercial Vehicle

9%

Gold 16% Medical

Equipment 3%

Mortgage Retail 37%

Mortgage Corporate

13%

Others# 2% Capital

Market 14%

Commercial Vehicle

1%

Gold 41%

Medical Equipment

3%

Mortgage Retail 31%

Mortgage Corporate

10%

1.1

1.6

2.4

4.6 4.2


229.2

381.7

579.8

708.9

867.0


Total assets (` bn) Income (` bn) Profit after tax (` mn)

• Emerged as one of the largest and fastest growing Wealth Management companies in India

• Q3FY16 income at `1.6bn ($24.1mn), up 32% y-o-y and 9MFy16 income at `4.2bn ($62.8 mn), up 39% y-o-y

• Growth is from various business segments – distribution services, asset management, advisory & wealth structuring solutions

• General Atlantic, a leading global growth equity firm, has made strategic investment to become minority shareholder in IIFL Wealth

• Winner of many prestigious awards including:

‘Best Private Bank for High Net Worth Clients’ by Euromoney Private Banking Survey, 2015

‘Outstanding Private Bank , South Asia (Highly Commended)’ by Private Banker International Global Wealth Awards, 2015

‘Best Private Bank - India’ by The Asset Triple A Private Banking, Wealth Management and Investment Awards, 2015; winner for five consecutive years

Trust, Innovation and Growth NBFC Wealth Agency

8

157

304

512

1,115 1,232


3,304 3,238

1,942 2,138

1,420


52.6 50.4 56.2

71.0 67.3


0.87

0.77 0.73 0.72 0.73


• Leading broking and advisory services provider for retail and institutional clients

• Well known for research - coverage of over 500 stocks

• Offers wide range of financial products - life insurance, mutual funds, NCDs, tax-free bonds, IPOs through its distribution network including business associates

• Amongst the top 6 MF distributors in the country

• Leading non-bank distributor for life insurance in the country

• Healthy investment banking pipeline. During FY16, completed the IPOs for Manpasand, Power Mech Projects, preferential allotment in Glenmark Pharma

• During the quarter, IIFL’s investment banking franchise closed `500 million private placement of NCDs and `650 million QIP of Astra Microwave Products. The team did `833 million QIP of Deepak Nitrite, a leading chemical company in India

No. of equity broking customers (mn)

Quality research and technology NBFC Wealth Agency

IIFL Research report discusses life insurers which are likely to create value for their parent entities.

A deep dive into rural economy: why migration away from agriculture is the only solution

9

Average daily turnover (` bn) Weighted first premium (` mn)

9MFY16 9MFY15 Y-o-Y

Q3FY16 Q3FY15 Y-o-Y

` mn $ mn ` mn $ mn ` mn $ mn ` mn $ mn

Fund Based activities 20,938 316 17,545 265 19% 7,047 106 6,285 95 12%

Financial Products distribution 4,756 72 3,740 56 27% 1,977 30 1,435 22 38%

Capital Market activities 3,055 46 3,178 48 -4% 888 13 988 15 (10%)

Other income 87 1 53 1 64% 28 0.4 20 0.3 40%

Total Income 28,836 436 24,516 370 18% 9,940 150 8,728 132 14%

Less: Operating cost 1,915 29 1,153 17 66% 743 11 517 8 44%

Less: Employee cost 5,110 77 4,496 68 14% 1,752 26 1,528 23 15%

Less: Other expenses 2,986 45 2,967 45 1% 995 15 1,017 15 (2%)

EBITDA 18,825 284 15,900 240 18% 6,450 97 5,666 86 14%

Less: Interest 12,294 186 10,491 158 17% 4,290 65 3,738 56 15%

Less: Depreciation and amortization

498 8 434 7 15% 168 3 137 2 23%

Profit before tax 6,033 91 4,975 75 21% 1,992 30 1,791 27 11%

Less: Provision for taxation 1,985 30 1,634 25 21% 620 9 585 9 6%

Profit after tax before minority 4,048 61 3,341 50 21% 1,372 21 1,206 18 14%

Less: Minority Interest {includes profit / (loss) of associates}

301 5 185 3 63% 105 2 83 1 27%

Profit after tax 3,747 57 3,156 48 19% 1,267 19 1,123 17 13%

For the nine month period ended Dec 31, 2015 For the quarter ended Dec 31, 2015

IIFL Holdings Ltd* results

10

*Consolidated financial results for the listed company.


India Infoline Finance Ltd consolidated results

11

9MFY16 9MFY15 Y-o-Y

Q3FY16 Q3FY15 Y-o-Y


Loan book 172,664 2,608 137,952 2,084 25% 172,664 2,608 137,952 2,084 25%

Securitised assets 11,322 171 9,975 151 14% 11,322 171 9,975 151 14%

Assets under management 183,986 2,779 147,927 2,234 24% 183,986 2,779 147,927 2,234 24%

Total interest income 19,004 287 17,082 258 11% 6,635 100 6,037 91 10%

Less: Interest expense 11,760 178 10,159 153 16% 4,094 62 3,612 55 13%

Net Interest Income 7,244 109 6,924 105 5% 2,541 38 2,425 37 5%

Other income 1,244 19 504 8 147% 437 7 151 2 189%

Total income 8,488 128 7,428 112 14% 2,978 45 2,577 39 16%

Less: Operating expense 3,925 59 3,503 53 12% 1,317 20 1,191 18 11%

Less: Loan losses & Provision

828 13 637 10 30% 296 4 214 3 38%

Profit before tax 3,735 56 3,288 50 14% 1,365 21 1,171 18 17%

Profit after tax 2,437 37 2,210 33 10% 891 13 776 12 15%


IIFL Wealth Management Ltd consolidated results

12

9MFY16 9MFY15 Y-o-Y

Q3FY16 Q3FY15 Y-o-Y


Income from operations 3,858 58 2,960 45 30% 1,458 22 1,195 18 22%

Other income 299 5 39 1 667% 140 2 13 0 977%

Total Income 4,157 63 2,999 45 39% 1,598 24 1,208 18 32%

Less: Employee cost 1,176 18 855 13 38% 448 7 303 5 48%

Less: Admin and other expenses

1,111 17 955 14 16% 532 8 364 6 46%

EBITDA 1,870 28 1,189 18 57% 618 9 541 8 14%

Less: Interest 172 3 64 1 169% 43 1 33 1 30%

Less: Depreciation and amortization

22 0.3 8 0.1 175% 8 0.0 3 0.1 167%

Profit before tax 1,676 25 1,117 17 50% 567 9 505 8 12%

Less: Provision for taxation 444 7 365 6 22% 118 2 161 2 -27%

Profit after tax 1,232 19 752 11 64% 449 7 344 5 31%

Board of Directors

• Nirmal Jain

Founder and Chairman

• R. Venkataraman

Co-Promoter & Managing Director

• Nilesh Vikamsey

Independent Director, Senior Partner at M/s K. K & Co.

• A. K. Purwar

Independent Director, Ex-Chairman of SBI

• S. Narayan

Independent Director, Former Economic Advisor to the Prime Minister of India

• Kranti Sinha

Independent Director, Ex-CEO, LIC Housing Finance

• Chandran Ratnaswami

Non-Executive Director, MD – HWIC

• Geeta Mathur

Independent Director , CFO of Helpage India

• Rajashree Nambiar, NBFC

MBA from Bajaj, over 2 decades of banking experience with ANZ and Standard Chartered

• Monu Ratra, HFC

MBA from LBSIM, New Delhi, over 16 years of mortgage finance, earlier with HDFC, ICICI and Indiabulls

• Karan Bhagat, Wealth Management

MBA from IIM Bangalore, over 14 years of financial services experience, earlier with Kotak Wealth

• H Nemkumar, Institutional Equities

CA, Former Country Head of CLSA, over 2 decades of capital market experience

• Prasanth Prabhakaran, Retail

Products

MBA from IRMA, over 18 years of financial services experience, earlier with Kotak Retail Broking

Business Heads

• Ashok Jha Retired IAS, Former Finance Secretary,

Government of India

• Keki Mistry Vice Chairman, CEO of HDFC Ltd.

• Sat Pal Khattar Singapore-based prominent Lawyer and Investor

• Keki Dadiseth Former Chairman of HUL

• Somasekhar Sundaresan Eminent Lawyer, Partner, M/s J. Sagar Associates

• S. Venkatachalam Career banker with Citibank, Chairman, Oracle India

Advisory Board

Unmatched management depth and governance structure

13

• All businesses headed by qualified professionals with relevant and vast experience

• Organization wide culture of compliance and audit

• 2,500 business locations across India, global footprint in 8 major financial centers

• Customer base of over 3 million and growing

• In-house team has developed key applications for all businesses

• Prudent mix of in-house and outsourced products and services

• Multiple revenue stream from diversified businesses, good mix of fee and funding income

• Caters to all customer segments from retail to affluent, corporate and institutional clients

Governance & managerial depth Distribution reach

Cutting-edge proprietary technology Diversified and de-risked model

Competitive advantage due to management and distribution reach

14

IIFL Group

Strategic thrust on digitization for all aspects of business

IIFL Markets App

• Only app to have real time price updates in

equities, currencies & commodities,

• Ability to execute trades, IPO/OFS

• 500,000 downloads since launch in Feb’ 15

• Over 12,500 users on Google Play Store have

accorded it a rating of 4.4 out of 5, the best

in the peer group.

Mobile App for employees

• Employee on-boarding

• Attendance

• Leave management

• Performance appraisal

• HR Dashboard

Digitized supply chain financing

• Tie-up with Flipkart and Snapdeal --

largest online shopping portals in India

• Automated decision engine

• Instant “Approval in Principle”

• Digitization of end-to-end loan

management process

Tablet based loan origination and collection

• Digital On-boarding

• Instant Approval in Principle

• Field level collection automation

• Real-time accounting & receivable

management

• Automatic & Online Reconciliation

15

Corporate structure

IIFL Holdings Ltd*

NBFC

India Infoline Finance Ltd

[IIFL]

(98.87%)

India Infoline Housing

Finance Ltd

(WOS of IIFL)

Wealth

IIFL Wealth Management Ltd [IIFLW]

(76.77%)

IIFL Asset Management Company Ltd

(WOS of IIFLW)

International subsidiaries

Agency

India Infoline Ltd

(99.99%)

India Infoline Commodities

Ltd

(WOS)

India Infoline Insurance

Brokers Ltd

(90%)

IIFL Facilities Services Ltd

(WOS)

*Chart depicts only key businesses and subsidiaries of IIFL Holdings Limited and not all the businesses and subsidiaries. WOS – Wholly owned subsidiary ^Non-Resident Indian (Non-repatriable) #As of December 31, 2015

General Atlantic deal Fairfax Group open offer

• The open offer was successfully completed,

which enabled Fairfax Group to raise its

stake in the company.

• The effective shareholding of Fairfax Group

increased to 35.9% including 5.18% off-shore

derivative instruments.

• As required by SEBI to ensure that the

acquisition does not lead to change in

control; Fairfax has given an undertaking to

SEBI that their voting rights post the

acquisition will be restricted to 25% of the

equity.

• General Atlantic (GA), a leading global

growth equity firm, will make strategic

investment in IIFL Wealth.

• GA will invest up to `963 Cr through a

combination of fresh equity shares and

warrants and buy equity shares worth `159

Cr from IIFL Wealth employees though a

secondary transaction.

• Upon consummation of the transaction,

IIFL Holdings Ltd will own 53.9% of IIFL

Wealth on a fully diluted basis; GA will

hold 21.6% and IIFL Wealth employees

will own the remaining 24.5%.

16

Shareholding pattern#

Promoter 29.3%

Foreign Investors

17.7%

Fairfax Group 35.8%

Domestic Institutions

0.7%

NRI^ 2.1%

Public & Others 14.4%

17

Thank you

Published in April 2016 © IIFL Holdings Ltd. 2016-17. IIFL Holdings Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate, Thane – 400604. Tel.: +(91 22)4007 7000 Fax: 2685 0451. This report is for information purposes only and does not construe to be any investment, legal or taxation advice. It is not intended as an offer or solicitation for the purchase and sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your responsibility alone and IIFL Holdings Ltd. and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences of such action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, but do not represent that it is accurate or complete. IIFL Holdings Ltd. or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this publication. The recipients of this report should rely on their own investigations. IIFL Holdings Ltd. and/or its subsidiaries and/or directors, employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.

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IIFL Holdings Ltdcontent.indiainfoline.com/admin/PDF/corporate_presentation_INR_Q3… · IIFL Holdings Ltd [Bloomberg Code: IIFL IN ] Investor Presentation April 2016 . 17.5 19.6