INVESTOR PRESENTATION Q1 FY20 COMPANY OVERVIEW 2 COMPANY OVERVIEW - PowerPoint PPT Presentation

INVESTOR PRESENTATION Q1 FY20

COMPANY OVERVIEW 2

COMPANY OVERVIEW • $10M PE investment • Acquisition of Microfinance subsidiary • Listing on NSE Ventured into MSME funding Ventured into Microfinance • Incorporation • Advisory to foreign banks • Listing on BSE 1985 2008 2012 2016 2019 As on 30.06.2019 Public 15.68% FII Promoter Credit Rating: Clients: Branches: Bank Borrowings: Q1 Loss: AUM: Employees: 17.27% 66.17% BBB+ 251 (₹ 11 Crores) 1.63 Lacs 1720 ₹ 428 Crores ₹ 631 Crores 3

CAPITAL TRUST USP Hybrid Fintech Model With Dual Credit Automated credit (credit bureau checks and preset algorithms) is supplemented with traditional safeguards of branch banking (physical verification of residence, business premise and cash flow analysis) One Stop Financial Institution Pioneer in Cashless Policies Strategically placed rural focused NBFC with a 100% Among the first NBFCs in the sector to undertake owned Microfinance subsidiary. Operating in a sector 100% cashless disbursement since April 2015 and with high entry barriers, company provides loans from conduct 100% cashless repayments for all loans ₹10,000 - ₹5,00,000 disbursed post May 2019 (except Microfinance) Extensive Rural Branch Network Publicly Listed NBFC 251 branches in 68 districts and 10 states Listed on BSE and NSE and following highest encapsulating ‘feet on street’ model levels of corporate governance Technology Existing Client Engagement Potential Automated systems and processes from on- 2,00,000 live clientele can act as referral-cum-agent boarding to disbursement with no for on-boarding and collection exceptions. Auto-generation of branch cash books through collation of issued Digital Receipts 4

TARGET SEGMENT 5

SERVING THE UNSERVED Annual Income > ₹ 17Lakh Banks and Large NBFCs ₹ 10-17 Lakh ₹ 3.4-10 Lakh ₹ 1.6-3.4 Lakh < ₹ 1.6 Lakh Microfinance Debt Shortfall in Microfinance + Micro of MSME: 11.1 Lac Crore** *NCAER-CMCR Annual Income Data 6 **IFC Report on MSMEs (Nov 2018)

FINANCIAL INCLUSION? Formal Income Income Proof Filing Taxes Debt 7

TARGET CLIENTELE Microfinance Through Capital Trust Microfinance, its 100% owned subsidiary Graduated from Microfinance 8% of the Microfinance clients graduate from the Microfinance sector each year and come and hit a wall New to Organized Credit Replacing traditional informal sources of MISSING financing (local moneylenders) which MIDDLE currently account for 84% of all financing to MSMEs ‘Micro’ of the MSME Clients who cannot be served by Microfinance institutions (owing to RBI guidelines) and are unable to be served by banks / large NBFCs (owing to lack of formal income documentation) 8

BUSINESS MODEL 9

GEOGRAPHICAL FOOTPRINT Growth Focused States (New client sourcing) Collection Only States (No new client sourcing) Branches: 251 Districts: 68 States: 10 10

PRODUCTS Micro Rural Loan AUM: ₹525 Crore Ticket Size: ₹10,000 - ₹1,05,000 Interest Rate: 26+% Tenure: 3 months – 3 years All new disbursements through banking channels Monthly Cashless NACH Repayment (older variant cash collection) Microfinance Loan Secured Enterprise Loan AUM: ₹68 Crore AUM: ₹38 Crore Ticket Size: ₹20,000 - ₹30,000 Ticket Size: ₹1,00,000 - ₹5,00,000 Interest Rate: 25% ₹ Interest Rate: 28-30% Tenure: 2 years Tenure: 3 – 4 years Joint Liability Individual Loan Fortnightly Cash Repayment Fortnightly / Monthly Cash Repayment Now discontinued 11

MICRO RURAL LOAN Flexible Loan Quick Disbursement Flexi tenure loan can be used for unorganized sector, Automated credit decision based on analysis of client working capital, education, two wheeler, medical, credit bureau data, alternative data and internally consumer and other needs developed credit algorithms First of Its Kind Digital Repayment Loan in Rural India Hybrid of Fintech & Traditional Banking Created owing to client demand for faster turn- Credit analysis using technology but safeguarded around-time, non availability of short term loans and by physical visit of staff within 24 hours of bank antiquated rigid financial offerings return to collect missed installment in cash Strong collection focus with Requirement to have self Geo-tagging and mapping of legal action initiation through occupied residence within client to a particular branch as Section 138 of NI Act on 25kms of branch premise part of on-boarding process client becoming 90 DPD 12

SMART CREDIT Instant in-principal approval by automated credit decisioning system with no manual intervention at client doorstep. Final approval subject to positive physical verification of cash flow and disposable income Disbursement Physical Verification No exceptions or manual intervention permitted by Field Credit Team Algorithmic Credit Ground level authentication by physical verification of Rule Engine home, business and income. All details uploaded into app Automated Credit Automatic rejection in case Bureau Check of any deviation from prescribed credit policies. QR Code Scanning of Link-up with Equifax to System provides in-principal review past credit history. Aadhaar By Field Team approval at this stage Hard rejection in case of negative credit bureau Automatic uploading of client history data into system. Location geo- tagged and case rejected if client residence is beyond 25kms from branch • Decision communication flow and all processes are automated • Technology used at all stages of loan cycle eliminating requirement of physical movement of documents • All processes time stamped and tracking of cases available on live basis 13

INFORMATION TECHNOLOGY PROWESS One of the first NBFCs to start cashless disbursement of all loans since 2015. Also started process of cashless Cashless Disbursement & repayment for all loans (expect Microfinance) in 2019 Collection Automated closing of company and all branch books at Automation of Daily Cash 6PM daily through collation of issued Digital Receipts Book Through Digital (SMSs sent to client on collection of any repayment) Receipts Client application with access to all details regarding the loan to promote transparency Capital Connect and authenticity All staff have access to Capital Sales, the company application, Staff Empowered with that provides real-time information in even the most remote Company App locations. All warehousing of information on cloud Smart credit enabling client on-boarding and in-principle Automated Client On- approval from scanning of client’s Aadhar card at his doorstep. Boarding Through App No manual entry allowed for any clients 14

PORTFOLIO UPDATE 15

PRODUCTWISE PORTFOLIO 795 725 800 631 120 555 700 89 56 38 55 600 68 500 125 304 Secured Enterprise 400 Microfinance 90 Micro Rural 619 300 581 525 95 200 340 93 100 116 0 FY '16 FY '17 FY '18 FY '19 Q1 FY '20 16

PORTFOLIO QUALITY COMPANYWIDE As on 30.06.19 AUM (₹ Cr.) NPA (₹ Cr.) NPA (%) Non-Demonetization Impacted 517.3 6.6 1.3% Demonetization Impacted 113.6 14.9 13.0% Total 630.9 21.5* 3.4% 17 * Rs. 20.7 Cr has been provided against the same

LIQUIDITY POSITION 18

ASSET LIABILITY POSITION UPDATE Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 (Expected) (Expected) (Expected) (Expected) Quarterly Collection (Cr.) 151.4 134.9 118.0 106.3 Quarterly Repayment (Cr.) 99.7 96.3 78.3 68.1 Quarterly Surplus (Cr.) 51.7 38.6 39.6 38.2 Monthly Surplus (Cr.)* 17.2 12.9 13.2 12.7 Borrowing Profile: • Average Tenure of Borrowings: 51 months Term Loans 11% • Average Tenure of Loans Given: 33 months 18% NCD 71% • No exposure to Commercial Paper or any other Subordinate Debt short term borrowing Cash Credit 19 *Assuming no incremental disbursements

BUSINESS PARTNERSHIP WITH IDFC FIRST Micro Rural Loan Benefits to CTL: Leveraging of Long term IDFC First Bank’s On-Tap Funding relationship with balance sheet a bank Opportunity to Enables raise of Opening door for provide products Increase of ROE equity at right other such not currently time partnerships envisaged 20

FINANCIALS 21

IMPACT OF SHIFT FROM IGAAP TO IND-AS Fee Income On Loan Loss and Employee Stock Sourcing Cost On Origination Provision Origination Options Recognized Upfront on Amortized using Straight Incurred Loss Approach Included in Share Capital and IGAAP Sourcing Date Line Basis Security Premium Amortized Across Amortized Across Expected Credit Loss Adjusted from Share Capital IND-AS Agreement Tenor Agreement Tenor Using EIR Approach and Security Premium Affect Income From Operations Finance Cost Other Expenses Reserves and Surplus 22