Corporate Presentation – FY15
Disclaimer This presentation has been prepared by and is the sole responsibility of Capital First Limited (together with its subsidiaries, referred to as the “ Company ”). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer or recommendation 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 contractor commitment therefore. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Certain statements contained in this presentation that are not statements of historical fact constitute “forward-looking statements.” You can generally identify forward-looking statements by terminology such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “objective”, “goal”, “plan”, “potential”, “project”, “pursue”, “shall”, “should”, “will”, “would”, or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Important factors that could cause actual results, performance or achievements to differ materially include, among others: (a) material changes in the regulations governing our businesses; (b) the Company's inability to comply with the capital adequacy norms prescribed by the RBI; (c) decrease in the value of the Company's collateral or delays in enforcing the Company's collateral upon default by borrowers on their obligations to the Company; (d) the Company's inability to control the level of NPAs in the Company's portfolio effectively; (e) certain failures, including internal or external fraud, operational errors, systems malfunctions, or cyber security incidents; (f) volatility in interest rates and other market conditions; and(g) any adverse changes to the Indian economy. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. Corporate Presentation 2
Agenda Overview of the Company Changing Asset Composition Product Offering Credit Processes Credit Rating and Capital Position Board of Directors Shareholding Pattern Financial Results Corporate Presentation 3
Company’s Vision To be a leading financial services provider- admired and respected for high corporate governance, ethics and values. To primarily provide Micro, Small and Medium Enterprises in India with debt capital to support the growth of the MSME sector. To finance the growing aspirations of the Indian Consumers with favourable demographics. Corporate Presentation 4
Overview • Capital First is a Non-Banking Finance Company listed on NSE and BSE, with a record of consistent growth & profitability. • The company has consistently increased its MSME and Retail financing from 10% on March 31, 2010 to 84% as on March 31, 2015. • CFL has loan Asset Under Management of Rs. 119.75 bn as on March 31, 2015. • CFL has a strong distribution setup across India covering customer at 222 towns with an employee base of 1070 as on March 31, 2015. • The Capital Adequacy is 23.5% (post dividend) as on March 31, 2015. • The Gross and Net NPA of the Company stood at 0.69% and 0.17% respectively as on March 31, 2015. • The Company’s long term credit rating (Bank Facilities, NCD and Subordinated Debt) is rated highly at AA+ by rating agencies. Corporate Presentation 5
Agenda Overview of the Company Changing Asset Composition Product Offering Credit Processes Credit Rating and Capital Position Board of Directors Shareholding Pattern Financial Results Corporate Presentation 6
Capital First – Transformation from Wholesale to Retail NBFC 119.75 bn MSME and Retail Assets Wholesale Assets 96.79 bn 16% 19% 75.10 bn 84% 26 61.86 bn % 81% 44 • Company’s Assets under 27.51 bn % 74 Management reached close % to Rs. 120 billion. • Company raised Rs. 1.78 56 billion as fresh equity 9.35 bn • Number of customers 28 % • Warburg Pincus from Warburg Pincus (Rs. financed since inception % acquired majority 1.28 bn) and HDFC crossed 1.1 million. 10 72 stake* Standard Life (Rs. 0.50 % • Capital First raised Rs. 3,000 • Long Term Credit % • Infused Rs. 1.00 bn as bn)* million of primary equity Rating (Bank Credit, primary equity* 90% • Company’s housing capital through QIP* NCD & Sub-Debt) • Capital First is formed • Launched credit finance subsidiary upgrade from A+ to • Total Capital (Tier1+Tier2) at • Long Term Credit scoring for CD acquired HFC license AA- Rating (Bank Credit, Rs. 22.39 billion (post • Launched Gold from NHB* • Amalgamated NBFC dividend) as of 31 March NCD & Sub-Debt) Loan business • Wholesale subsidiary with • Closed Broking Business* upgrade from AA- to 2015 • Divested Forex NBFC Holding Company* AA+ business *Corporate actions FY10 FY11 FY12 FY13 FY14 FY15 Corporate Presentation 7
Agenda Overview of the Company Changing Asset Composition Product Offering Credit Processes Credit Rating and Capital Position Board of Directors Shareholding Pattern Financial Results Corporate Presentation 8
MSME Segment in India Micro, Small and Medium enterprises form a large part of the Indian Economy. They generate • employment and act as a catalyst for socio-economic transformation in India There are more than 29 million MSME enterprises across India employing more than 69 million • people % of total number of MSME players in India* Public / Private Limited Companies 0.2% Partnerships/ Proprietorships / Cooperatives 4.7% Largely Proprietorship, Partnerships 95.1% Proprietorships • MSMEs account for 45% of the Indian Industrial output and 40% of the total exports. Corporate Presentation Source: “Micro, Small and Medium Enterprise Finance in India – A Research Study on Needs, Gaps and Way Forward” by IFC, Nov 2012 Corporate Presentation 9
Challenges faced by MSMEs in India • MSME sector, especially the unorganized micro and small enterprises, lack in support from the existing ecosystem, owing to their small scale which in turn is an impediment to their growth. Some of the key challenges faced by MSMEs are mentioned below – FINANCE INFRASTRUCTURE & PEOPLE • Absence of adequate and timely supply of finance • Low Production Capacity and lack of Advanced for working capital Technology to cater to rise in demand • High cost of credit • Limited ability for expansion and modernization • Collateral Requirements • Lack of proper transportation and warehouse • Limited Access to Equity Capital • Lack of Skilled Manpower LEGAL, TAX & COMPLIANCE OPERATIONS • Limited knowledge of legal structuring • Local Disturbances (dealing with interested parties) • Complexity of labour laws (PF, ESIC, Factories Act) • Cost and quality of Power ( Fluctuations, consistent outages, self financed generators) • Taxation issues related to export and import • Poor roads, efficient transportation of raw material • Limited resources to meet reporting requirements of large number of compliances like Income Tax • Packaging, pricing and marketing of goods returns, Service Tax returns, VAT returns, Central • Squeezed by larger customers (principals) on Excise returns, Cess Returns etc. delayed payment terms. Corporate Presentation 10
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