Investor Presentation Quarter ended March-2020 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 Industry Landscape About Grihashakti Business Highlights Risk Management Liquidity Management Financial Performance 2
Industry Landscape 3
Housing Finance Buoyed by demographics, unmet demand India's economy is poised to become third-largest by 2027 with $6 trillion GDP** Underpenetrated Market Incremental demand Growth potential GDP in PPP^ (US$ trillion) Credit-to-GDP ratio* India's Millennial as % of Workforce** KR UK US MY IN 69% 64% 15.7 200 198 51% 48% 164 11.8 150 150 137 36% 8.7 100 56 50 - 2016 2020 2025 1980 1990 2000 2010 2015 2019 2015 2019 2020 2025 2027 ‘We always over-estimate the Change that will occur in the next two years & underestimate the Change that will occur in the next ten.’ – Bill Gates 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 4 UK: United Kingdom US: United States MY: Malaysia IN: India)
Segment Opportunity Extending Small Ticket Loans in Tier 1 peripherals, Tier 2 & 3 towns Total Household Population Per Capita Income • Indian mortgage market is significantly underpenetrated. Mortgage to GDP Ratio at 10% $ 8,800 ~110 Mio Affluent • Rising trend of urbanization (at 34%) resulting in increasing GDP per capital ($) 2019 at US$ 2,242 • Improving affordability, nuclearisation of families, emergence of tier-II and tier-III cities, ease of financing, tax incentives to support growth • Government measures continue to help the sector. ~140 Mio Aspirer $ 3,000 (INR 27,500 crore in 2020-21 against INR 25,328 crore for 2019-20) under PMAY and extra budgetary allocation of INR 10,000 crore each for PMAY-Urban and PMAY-Rural. This, coupled with the tax incentives on self-occupied properties. • Grihashakti offers home loans, loan against property and rural mortgage products to retail $ 1,200 ~1,100 Mio Bottom of customers. Over 80% loans sourced during FY20 were extended to affordable segment the Pyramid 5 Source: KuntalShah –“India: Wealth Creation Story”, 2019
The HFC Advantage HFC vs. NBFCs Impetus for Long-term growth Consumer Tax incentives Consumer • Housing for all (Pradhan Mantri Awas Yojana) scheme to address urban housing Benefit shortage, CLSS to push affordable housing extended till Mar-21 Government subsidies & schemes • Home buyers recognized as financial creditors under IBC • RERA implementation – protecting interests of buyers Risk Weighted Lower risk weightage for Home • Union Budget 2020 has continued its focus on affordable housing segment. It has Assets Loans favoured both home buyers and developers in terms of tax incentives Developer Applicable across ticket sizes for SARFAESI • Tax holiday for real estate cos. involved in affordable projects Housing Finance Cos. • GST rates slashed for under-construction flats to 5% and affordable homes to 1%, effective from April 1, 2019 • Diversifies funding mix and Smart City Project - plan to build 100 smart cities NHB Refinance supplements bank borrowings • RERA regulation to enhance developer performance & transparency Regulatory / Government Support HFCs’ average loan life is ~7-8 Annuity Income • Relaxation in LTV norms and risk weight guidelines years • Grant of infrastructure status to affordable housing • Better access to funds with revised ECB regulation Valuation 100% secured business enhances • Enhanced Home Loan limit under Priority Sector Lending (PSL) premium valuation multiplier of the group • NHB refinancing limit for HFCs increased to INR 300 billion • Reduction in the minimum holding period for assets to be securitised • Asset purchase under government guarantee scheme 6
About Us – The Group 7
About Us Housing Finance arm of Fullerton India Fullerton Financial Holdings, Singapore (FFH) is a wholly Temasek Holdings (Private) Ltd. owned subsidiary of Temasek Holdings • Temasek is a global investment company, headquartered in Wholly owned subsidiary Singapore Fullerton Management Pte Ltd • FFH invests in and operates financial institutions in emerging markets Wholly owned subsidiary Fullerton India Credit Co. Ltd. (FICCL) is a wholly-owned Fullerton Financial Holdings Pte Ltd subsidiary of FFH Wholly owned subsidiary • FICCL was acquired by FFH in December 2005 Angelica Investments Pte Ltd • Launched Commercial Operations in January 2007 3.85% 96.15% • Pan-India presence established across 22 states and 3 union territories Fullerton India Credit Company Ltd. • Retail finance products for urban and rural households as Wholly owned subsidiary well as SMEs Fullerton India Home Finance Company Grihashakti, Fullerton India Home Finance Co. Ltd. is a Ltd. wholly-owned subsidiary of FICCL • Commenced operations in December 2015 8
FFH operates financial institutions in emerging markets Focused on SME and mass market customer segments CHINA Central CHINA 127 Community Banks 4 Provinces, 2400k Customers 41 Outlets 100k Cust INDIA MYANMAR 648 Branches DUBAI, UAE 51 Branches 3,200k Cust 6 outlets 223k Cust 34k Cust CAMBODIA POST BANK 103 Branches INDIA 129k Cust Digital MSME MALAYSIA 55K Cust Fullerton Home Finance^ 82 Branches 957 k Cust Fullerton Financial Holdings (FFH) has 8 operating financial services entities located across 6 countries. 9 *FFH is a wholly owned subsidiary of Temasek ^Fullerton Home Finance is a wholly owned subsidiary of Fullerton India
Fullerton India Credit Company A wholly-owned subsidiary of Fullerton Financial Holdings Established Customer Connect across Urban and Rural India Villages AUM (INR) Branches 58,000 24,805 Cr 648 Rating* Employees Customers 14,264 AAA > 3.6 Mio Consumer Personal Loans, Loans Against Property Urban MSME Commercial Vehicle Loans, Business Loans, Loans Against Property Rural Personal / Group Loans, Loans Against Property, Vehicle Loans Cross-Sell Life / General Insurance Digital Tapping expanded (newer & wider) segment of customers Multi-product offerings support a range of customer needs 10 Data as at FY 20. *Rating CRISIL, ICRA, CARE. (Temasek rated 'AAA/Stable' by S&P Global)
The Foundation For our Strategy and Culture Be the Company of choice in financial services for our customers, employees, communities and Vision stakeholders, recognized for innovation and high ethical standards . Agility Collaboration Innovation Values Diversity Integrity Excellence 11
Board & Management Team Strong Oversight and Guidance Board of Directors Milan Shuster Sudha Pillai Anindo Mukherjee Rakesh Makkar Rajashree Nambiar Independent Director Independent Director Chairman – Grihashakti, Non-Executive Director, CEO - Grihashakti, Non-Executive Director - Fullerton India Whole-time Director MD & CEO – Fullerton India Credit Co. Ltd Credit Co, Ltd Management Team Parag Shah Ram Kolli Rakesh Makkar Pankaj Malik GM – Head Business & Product Chief Risk Officer Chief Financial Officer CEO - Grihashakti, Whole-time Director FFH has senior level representation on the Board and various committees of Board 12
About Us - Our Journey 13
Our Journey So Far Steady asset growth, geographical expansion Rated ‘AAA’ by CARE Mar-20 Crossed AUM of INR 43 Bio Equity infusion of INR 2 Bio Nov-19 Aug-19 CRISIL ‘AAA’ Rated Jul-19 Crossed AUM of INR 30 Bio Closed securitization deal worth INR 2 Bio Jun-19 Expanded network to 60 Branches Crossed AUM of INR 35 Bio Mar-19 Enhanced network of 78 branches Rated AA+ by CARE Jan-18 SARFAESI Approval Nov-17 Crossed AUM of INR 15 Bio Started operations with 20 Sep-17 branches Nov-16 Crossed AUM of INR 10 Bio Sep-16 Team size of 425 Dec-15 Expanded – Added 20 more branches Jul-15 Received HFC license with equity infusion of INR 1 Bio 14
Grihashakti Overview Deepening presence in underserved segments AUM Customer Acc. Avg. Ticket Size Average Yield INR 43,016 Mio ~23,000 2.0 Mio 12.7% No. of branches Sales: Credit Home Loan AUM Salaried (Units) 58% 38% 78 3:1 C/I Net NPA Net Revenue Working Profit 55.1% 2.0% INR 2,369 Mio INR 1,065 Mio Financial Performance as of Mar-20 15
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