Investor Presentation Q1 FY 2018 MUTHOOT HOMEFIN (INDIA) LIMITED
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures, and financial results, are forward looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. While every effort is made to ensure that this presentation conforms with all applicable legal requirements, the company does not warrant that it is complete, comprehensive or accurate, or commit to its being updated. No part of the information provided herein is to be construed as a solicitation to make any financial investment and is provided for information only. Any person/ party intending to provide finance / invest in the shares/businesses of the Company shall do so after seeking their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. In no event shall the company be liable for any damages whatsoever, whether direct, incidental, indirect, consequential or special damages of any kind or including, without limitation, those resulting from loss of profit, loss of contracts, goodwill, data, information, income, expected savings or business relationships arising out of or in connection with the use of this presentation. 2
CONTENTS Indian Housing Finance Industry 4 Housing for All 9 Low and Middle Income (LMI) Housing in India 10 About Muthoot Homefin 12 Senior Management 13 Segmentation and Product Offerings 16 Focus Areas 19 20 Our Potential Customers 21 Business Model Business Performance & Projections 23 Key Differentiators Target Market Segment 26 3
INDIAN HOUSING FINANCE INDUSTRY Ever increasing Home Loan Market in India Yearly ( ₹ in billions) 200.00 176.66 180.00 160.00 147.7 140.00 123.18 120.00 105.8 100.00 89.5 75.2 80.00 63 54.8 60.00 45.2 40.5 36.7 40.00 20.00 0.00 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 (P) Source: CRISIL, Housing Finance Report, October 2016 4
INDIAN HOUSING FINANCE INDUSTRY Low penetration of Mortgage Market in India as compared to the other World Economies Mortgage as a % of GDP 100.00 88 90.00 81 80.00 70.00 60.00 48 50.00 41 39 40.00 32 29 26 30.00 20 17 20.00 9 10.00 0.00 India Thailand China Korea Malaysia Singapore Taiwan Hong Kong Germany UK USA Source: European Mortgage Federation 5
INDIAN HOUSING FINANCE INDUSTRY Increase in Urban Population Urban Population in India (in lakhs) 9000.00 8140 8000.00 7000.00 6000.00 5000.00 5900 3770 4000.00 3400 2900 3000.00 2200 2000.00 1000.00 0.00 1991 2001 2008 2011 2014 2050(P) Projected Growth in Urban Population @ 1.92% CAGR up to Year 2050 Source: McKinsey Global Institute, India Census 2011 6
INDIAN HOUSING FINANCE INDUSTRY I n creasing Share of HFCs & NBFCs in the Home Loan Market 100 80 60 40 39% 39% 39% 37% 36% 36% 34% 31% 30% 27% 25% 20 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 (P) 0 HFCs & NBFCs Banks Source: CRISIL, Housing Finance Report, October 2016 7
INDIAN HOUSING FINANCE INDUSTRY Indian Mortgage Market backed up by strong demand drivers o Rise in Working Age Population is a favourable sign for Housing Finance Industry o Increase in disposable income helps people invest in real estate o Development in urban areas is pulling rural crowd to cities Consequently, Mortgage/GDP ratio is expected to increase, thereby offering a significant value proposition Source : Industry Research 8
HOUSING FOR ALL – 4 VERTICALS The Mission will be implemented through four verticals giving option to beneficiaries, ULBs and State Governments. These four verticals are as below: Subsidy for Affordable Housing Affordable Housing "In situ" Slum beneficiary-led Redevelopment through Credit Linked in Partnership individual house Subsidy construction - Using land as a - with private - For individuals of - Interest resource sector or public EWS category subvention sector including requiring individual subsidy for EWS & - With private participation Parastatal LIG,MIG-1 & MIG-2 house agencies for new house or - State to prepare a incremental - Extra FSI/TDR/FAR separate project housing if required to make - Central Assistance for such projects financially per EWS house in beneficiaries viable affordable housing projects where 35% - No isolated/ of constructed splintered houses are for beneficiary to be EWS category covered. Source: NHB - PMAY , Housing for All (Urban), Credit Linked subsidy Scheme, 26 th April 2017 9
LOW AND MIDDLE INCOME (LMI) HOUSING IN INDIA Potential Market for housing LMI segment in India still untapped (Mn Units) in 2012-17 to a large extent Housing Units (in millions) o Low penetration levels in the LMI segment o Rising proportion of working age population (nearly 2/3rd of population is in the 15 to 64 years age group) and increasing nuclearisation of families Rural o Lesser access to institutional sources of housing 43.7 18.78 finance for EWS & LIG group borrowers Urban o Shortages in Rural Housing and Urban housing are in the EWS & LIG income groups Source: NHB, http://www.tradingeconomics.com/india/population-ages-15-64-percent-of-total-wb-data.html 10
LOW AND MIDDLE INCOME (LMI) HOUSING IN INDIA Affordable housing would be driving the demand in Indian housing sector forming a major portion of required housing units Income ( ₹ p.a.) Customer Segment Size of unit (Sq Mt) Housing Type < ₹ 3.0 Lakhs EWS Up to 30 Low Cost / Affordable ₹ 3.0 Lakhs - ₹ 6.0 Lakhs LIG Up to 60 Affordable ₹ 6.0 Lakhs - ₹ 12.0 Lakhs MIG-1 Up to 90 Affordable ₹ 12.0 Lakhs - ₹ 18.0 Lakhs MIG-2 Up to 110 Affordable Source : Industry Research, IMF, European Mortgage Federation 11
ABOUT MUTHOOT HOMEFIN Focused on Affordable Housing o Muthoot Homefin (India) Limited (MHIL) is a professionally managed company focusing on affordable housing segment, to fulfil the aspirations of lower and middle income (LMI) families o Our prime goal is to contribute towards financial inclusion of LMI families by opening doors of formal housing finance to them Operational Framework o Focus is on Affordable Housing o Concentrate primarily on retail housing loans in the initial stages Would operate on a ‘Hub and Spoke’ model, with the centralized processing at Corporate Office, o to begin with Experienced Management Promoted by Muthoot Finance Ltd (MFIN) – India’s Largest Gold Loan company o o Ramratthinam S, an industry veteran with over 25+ years experience in Retail Lending Industry is heading MHIL, backed by a team of experienced and knowledgeable professionals from the Housing Finance Industry 12
SENIOR MANAGEMENT Mr. Ramratthinam S – Chief Executive Officer Ramratthinam has over 25 + years of experience in the retail lending industry and has exposure to all secured and unsecured lending. He has handled the functions of Sales, Credit, Operations, Risk and Treasury in his earlier work assignments. He has worked with Companies like Sundaram Finance, Citicorp Finance, Centurion Bank of Punjab and he was the Chief Risk Officer at Dewan Housing Finance Corporation Limited, prior to joining Muthoot Homefin Limited. He has participated in various forums, panel discussions conducted by NAREDCO, NHB, World Bank, IFC, etc. both locally and internationally in pushing the agenda of housing reforms, particularly in India. Mr. Ashish Ranka - Chief Financial Officer Ashish Ranka is a Chartered Accountant by qualification. He brings with him an expertise of Finance & Accounts, Taxation, Compliance, Treasury Management, Fund Raising and Business Strategy. Before joining Muthoot Homefin (I) Ltd, he was with L&T Finance Holdings ltd and India Infoline Ltd. He is working as CFO and looks after Finance, Accounts and Fund Raising. Mr. Anil Jain – Head – Credit & Risk Management Anil Jain, a Chartered Accountant by qualification, brings in 16 years of work experience in diversified fields of Credit, Operations, Risk Management, Accounts & Finance and Real Estate Advisory in the mortgage industry. He joined the company in September 2015. Before joining the company, he worked with ICICI HFC, Deutsche Postbank HFC, Real Estate advisory and portal company Indiahomes.com. 13
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