shriram city ndr presentation september 2012 · 2013-10-08 · a growing msme segment with limited...

1

Investor Presentation

September 2012

2

Table of Contents

111

Annexures

Shriram City: An Overview

222

333

444

A1A1A1

A2A2A2

Key Growth Ingredients

Key Financials

Strong Future Value Drivers

Shareholding Details

Detailed Financials And Other Material

3

Shriram City: An Overview11

4

3446 52

80

134

0

50

100

150

FY08 FY09 FY10 FY11 FY12

Shriram City – Serving The Under Banked

4

Leveraging The “Shriram” Ecosystem – A Truly Trusted Brand

• Helps to reach out to over 927 locations, through– 575 owned branches and 352 shared locations

• Combined workforce of c.10,000 with a significant part having rich experience in the desired target segment as part of Shriram Chits’ operations

• Selective strategic partnership building inclusive growth channels

Robust Distribution Network and Sales Forceb• Shriram Chits provides a very important customer base for Shriram City

– 95% of the small enterprises customer base referred by Shriram Chits• Completely leveraged and imbibed all of Shriram Chits’ critical capabilities including

customer knowledge / database, systems and processes contributing in – Reducing risks, increasing efficiency and improving quality of loan book

A Strong Customer Basea

3

Highly Diversified Product Portfolio With Significant Scope For Growth2

Auto Loans

2 Wheeler Loans

Personal

Loans

Gold Loans(1)

Housing Finance

• Successful diversification of product offerings – from traditional

2 wheeler and auto financier to gold loans and personal loans and moving on to the high growth housing finance segment

• Succeeded in catering to highly tailored financing needs of slew of small enterprises Retail Offerings

• Locally drawn field force with personal knowledge of customers– Deal originators also responsible for portfolio quality

• Dedicated in house teams for pre lending field investigation and post lending appraisals

Tailored Credit Appraisal Techniquesa

• Shriram Group specializes in the financial services sector with c.4 decades of experience in the sector

• The growth of the Company is driven by a highly focused management team guided by an eminent board

Guided By An Experienced Managementc

Robust In – house Capabilities

• Average LTV lower/ equal to the industry average• Immovable assets & personal guarantees as collateral for

personal & Small Enterprises Finance• Positive cumulative ALM mismatch across all buckets

Stringent Risk Management Frameworkb

4

Leading Player In A High Growth Segment1

• Consistent growth of c.40% in AUMs for the last 4 years driven by small enterprises and underbanked semi – urban customers to meet their diverse credit needs across income generation, consumption as well as basic needs like housing

• Leader in the small enterprises segment, which sees very low level of competition

• 80% of branch network in underpenetrated segment across semi – urban India with huge potential for growth, consumption story driven by rising income levels

41% CAGR

AUM (INR Bn)Steadily Increasing AUM

Small Enterprise

Finance

Notes1. Gold Loans also includes loans to small enterprises

5

A 25 Year Growth Story

1986

ShriramCity wasestablished

1st preferential allotment of equity shares toPE Investors @ INR 160 per share

2nd preferential allotment of equity shares toPE Investors @ INR 400 per share.TPG invests in the holding Company

Focus on Retail Financing

2nd preferential allotment of equity shares to promoters @ INR 570 per share

Launched – 2 Wheeler and Auto Finance2002

2012

2010

2008

ShriramCity’s Net Worth touches INR 10 Bn

2003 Listed on Bombay Stock Exchange

2005 Listed on National Stock Exchange

2006 Launched – Small Enterprises Finance and Personal Finance

2007 Launched – Loan Against Gold

Launched subsidiary – Shriram Housing2011

6

Backed by an Integrated “Shriram Ecosystem”

• Established in 1974, Shriram Chits is one of the most trusted brands in the chits business in the country with a customer base of over 3 MM(1)

Huge Untapped Captive Potential

• Dominant presence in south and west India with a network of 388 branches

• Developed significant in –house capabilities over the years including client acquisition, credit appraisal and prudent risk management processes

• Established in 1979, Shriram Transport Finance Company (STFC) is India's largest player in commercial vehicle finance

• Pan-India presence through a network of 513 branches and tie ups with over 500 private financiers across the country

• Helped strengthen the Shriram brand amongst a highly potential target segment

• A JV between ShriramGroup and South Africa based Sanlam Life Insurance, the company started its operations in 2009

• A late entrant in the Indian insurance market, the business has successfully leveraged Shriram Group’s customer base

• Poised to expand outside Shriram’sexisting geographies and customer base through a well-defined cautious strategy

• One of the latest addition to ShriramGroup’s financial services business –Started operations in 2010 in partnership with Sanlam Group

• Focused on initial growth by tapping into Shriram Group’s huge captive transportation customers / businesses

Notes1. Total Customer base as on June 30, 2012

7

92.8%

5.2%2.1%

And Positioned To Continue On The Growth Trajectory

• “Shriram Group’s”experience and strength in dealing with and identifying the “right” target segment

Shriram City – Well Equipped to Tap the Opportunity

Challenges of Entry and Scale Up For Competition / New Entrants

• Customized Risk Management skills and localized comprehensive customer knowledge

• Ensuring last mile connectivity while keeping costs in check

• Balancing yields and portfolio risk assessment, with right mix of capital

• Ability to tackle regulatory changes –More severe in case of a monoline business

• Right team to lead the business backed by a robust technology platform

• True understanding of local dynamics for assessing credit needs

• Superior execution with excellent in – house expertise across loan origination, valuation and collection

• Difficult to replicate massive infrastructure/ network and unique access to Shriram eco-system – Shriram Chits and Shriram Transport

• Excellent reputation and track record with banks as well as retail customers for debt access

• Timely equity capital infusion by reputed shareholders to fund growth

• An experienced management backed by an eminent board

• Solid proprietary integrated ERP

• Mature multi – product lines to meet basic, income generating and consumption needs

35

45

55

65

FY88 FY94 FY00 FY05 FY10Urban Non-Food Rural Non-Food

AA

… Leading to increasing ambitions and credit needs

An Underpenetrated Housing Finance SegmentCC

Huge Addressable Potential Market… Driven By

% of Total Consumption Expenditure

Increasing Discretionary ExpenditureShare in Total Consumption Expenditure

Mortgages as % of GDP

A Growing MSME Segment With Limited Access to CapitalBB

31.2

26.1

24

27

30

33

FY07 FY11

Opportunity for Innovative products for the fast growing MSME segment

No. of MSMEs (MM) Finance Sources for MSMEs (%)

10 17 20 26 29 32 39 41 48

81 88104

0

30

60

90

120

Indi

a

Thai

land

Chi

na

Kor

ea

Mal

aysi

a

Sin

gapo

re

Taiw

an

Hon

gKon

g

Ger

man

y

US

A

UK

Den

mar

k

Self Finance/No Finance

Institutional Sources

Non-Institutional

Source: NSSO, Market Research Source: Ministry of MSME Annual Report 2012 Source: Market Research

Customer Acquisition Risk Management Expanding Reach Access To Capital Regulatory Hurdles Management and IT

8

With Steady Growth, Robust Returns And Superior Asset Quality

AUM Mix (Off Book and On Book) AUM (INR Bn)

2.92.5

3.3 3.1 3.1 3.1

0.0

1.0

2.0

3.0

4.0

5.0

FY08 FY09 FY10 FY11 FY12 Q1FY13

21.9

20.2

22.721.8

23.1 23.1

10.0

13.0

16.0

19.0

22.0

25.0


10.510.311.611.911.611.6

0.0

5.0

10.0

15.0


3446 52

80

134 149

0

80

160

FY08 FY09 FY10 FY11 FY12 Q1 FY13

CAGR: 41%

Liability Mix

Healthy NIMs (%) High RoAs (%) Steady RoEs (%) Cost To Income Ratio Under Check (%)

1.522.07 2.27

1.861.55 1.46

0.90 0.96 0.710.43

0.38 0.34

0

1

2

3

FY08 FY09 FY10 FY11 FY12 Q1 FY13

GNPA NNPA

51.2

46.5

35.638.1 38.4

35.1

30.0

36.0

42.0

48.0

54.0

60.0


Gold 39%

SmallEnterprises31%

Auto 14%

2 Wheelers11%

Personal 5%

Decreasing NPA Levels (%)

As of June 30, 2012

As of June 30, 2012

Retail Borrowings

Institutional Borrowings

Market Borrowings

Retail NCD19%

Retail Sub Debt6%

Retail Deposits0%

Public Issue NCD7%

Utilised Cash Credit Limits19%

Term Loans O/s37%

Institutional Sub Debt2%

Inst. NCD7%

Commercial Papers3%

9

Key Growth Ingredients22

10

Strong Fundamentals Gearing Growth

Focused Growth Strategy – Targeting High Growth Segment Backed By A Strong Consumption Story11

Unique Group Leverage44

Strong Asset Quality55

Healthy Balance Sheet66

Strong Management Backed By An Eminent Board77

33Strong Risk Management Capabilities and Niche In –house Credit Knowledge

22 Diversified Product Offerings

Reflected In Robust Financials And Steady Returns

11

5.7

3.14.0

14.8

12.0 11.2

0.0

4.0

8.0

12.0

16.0

Arhar Wheat Common PaddyFY98–FY06 CAGR FY06–FY12 CAGR

300391 401 400

8888 103 10078

113220 200

489

616

754 729

24 24 30 290

200

400

600

800

FY09 FY10 FY11 FY12Swarnajayanti Gram Swarozgar Yojana (SGSY) National Rural Employment Guarantee SchemesRural Housing Schemes Pradhan Mantri Gram Sadak Yojana (PMGSY)

Focused Growth Strategy: Targeting High Growth Segments Backed By A Strong Consumption Story

Last Mile Connectivity – A Key Growth Mantra

Strong Consumption And Growth Potential Driven By ….

Increased Government Spending Higher Minimum Support Prices

Potential in Indian MSMEs Still Untapped ….

INR Bn MSP CAGR (%)

NBFCs’ Share in MSME Funding Expected to Increase Significantly

1

Source: Planning Commission, Ministry of Rural Development Source: RBI, Ministry Of Agriculture

8 1441

83108

269

6225

0

100

200

300

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY20

MSME Market for NBFC (INR Bn)

Source: Analysis of MSME Loan markets for NBFCs, Frost & Sullivan, Jul-11

20% C

AGR

With Much Of The Financing Needs of the MSME Segment Being StillUntappedFinancing Sources For MSMEs

Non-Institutional

2.1%

Self Finance/

No Finance92.8%

Institutional Sources

5.2%

Source: MSME Ministry Annual Report 2012

12

Niche, Matured and Diversified Product Portfolio2

Notes1. Loan against gold includes loans to small enterprises – 59% MSME, 41% Retail2. As of June 30, 2012

Home LoansMSME Finance Retail Finance

Home Loans Total Loans Sanctioned(2)

INR 480 MMSmall Enterprises

Finance

31%

Two Wheelers

PersonalLoans

11% 5%

Auto Loans

14%

23% 16%

Average Tenor:15 Years

Average Yield: 15%

Average Ticket Size:INR 1,000,000

Average LTV:65%

Home Loans

Dec-2011

Two Wheelers

Dec-2002

Average Tenor:24 Months

Average Yield:24%–26%

Average Ticket Size:INR 35,000

Average LTV:70%

PersonalLoans

Jan-2006




Average LTV:NA

Dec-2005

Auto Loans

Average Tenor: 30 Months

Average Yield: 22%–24%

Average Ticket Size: INR 150,000

Average LTV:60%

Loan Against Gold

Oct-2006




Average LTV:60%

Loan Against Gold

39%(1)

Year of Commencement

Small Enterprise

Finance

Dec-2005




Average LTV:NA

13

1

2

3

4

5

• Origination, credit evaluation and collection through own team• Highly localized field force with excellent domain knowledge and personal knowledge of customers• Deal originators being responsible for the portfolio quality. c.50% of compensation linked to performance

"No Outsourcing Policy”

• Centralized broad policy formulation with decentralized decision making authority• Superior turn around time in loan processing and speedy approvals

Quick Credit Approvals

• Significantly positive cumulative ALM mismatch given longer borrowing tenors (c.30 months) versus shorter asset tenors (c.15 months)

• Adequate liquidity backup in the form of unutilized cash credit limits• Loan assets at Fixed rates and borrowings at an equal mix of fixed and floating rate loans

Mitigating Interest Rate, Liquidity and ALM Risk

• Proprietary integrated ERP – Linking business from origination point to the final settlement

Systematized Controls6

Strong In – house Credit Appraisal and Risk Management Capabilities

3

• Pre lending Field Investigation (FI) & the post lending appraisal by dedicated teams• Credit history of customers also sourced through other group companies – Shriram Chits

Field Investigation & Post Lending Verification

• Average LTV lower/ equal to the industry average• Immovable assets & personal guarantees as collateral for personal & Small Enterprises Finance• Credit team responsible for monitoring early warning signals

Loan to Value (LTV) and Early Warning Signals

14

Unique Group Leverage4

Expand Reach

ShriramCity

OwnedBranches

Shared Locations

575 352

Tap Group Customer

Base

Leverage Brand

Goodwill

The Shriram Ecosystem helps Shriram City to expand reach with minimal capital outlay

Optimum utilization of group’s existing branch network – Helps in focused expansion to other geographies

Select strategic partnerships building “Trusted”, inclusive growth channels – responsible for credit origination, servicing and recovery

Potential access to latent customer base through the Shriram group entities

Helps reduce customer acquisition cost

Also assists in credit appraisal and risk management purposes given access to previous credit history

“Shriram Brand” has high brand equity within its target segment – Leading to ‘near zero’ spend on advertising in both existing and new geographies

Brand Equity driven by high trust and service levels –In select target segments, borrowers are very concerned on “who is the lender?”

The unified brand also provide Shriram City access to funding at relatively competitive cost as the funding is considered to be for the “Shriram Group”

15

76%77%69%

54%

41%


Strong Asset Quality5

With Increasing Asset Coverage RatioConsistently Low NPA Levels

1.52%

2.07% 2.27%

1.86%1.55%

0.38%0.43%

0.71%0.90% 0.96%


GNPA NNPA

• High AUM growth of c.40% over last 5 years, without compromising quality– Evident from reducing Gross and Net NPA and increasing asset coverage ratio over the years

• Significant focus on getting ‘quality’ customers and keeping risks under check– Highly localized field force with incentive plans to ensure low default rates

– c.50% of the compensation by way of performance based incentives– Deal originators also responsible for monitoring early warning signals– Centralized policy making with decentralized implementation helps in speedy credit approvals and

lower delinquencies• Stringent provisioning norms translating into provisioning beyond minimum RBI requirement

16

13.8%18.1% 20.0%

16.4%13.8%

6.5%

7.7%6.6%

4.2%

20.3%

25.7% 26.6%

20.5%17.4%

3.6%

0%

8%

16%

24%

32%

FY08 FY09 FY10 FY11 FY12Tier I Tier II

64.9% 60.8%55.6%

59.6%54.3%

2.7% 6.2% 4.3% 11.9% 10.0%

35.7%28.5%40.1%33.0%32.4%

0.0%

25.0%

50.0%

75.0%

100.0%

FY08 FY09 FY10 FY11 FY12Retail Borrowings (Incl. Public Issue of NCD)

Institutional Borrowings Market Borrowings

Healthy Balance Sheet – Right Mix of Liabilities6

• Shriram City has been able to achieve an optimum liability mix by diversifying its funding sources

– Right mix of fixed / floating rate loans to match the asset profile • Successfully mitigated interest rate risk and ALM risk

– Retail liability are at fixed rates with average balance maturity of c.30 months– Institutional liability is a mix of floating and fixed, with higher focus on floating rates– Positive cumulative ALM mismatch across all buckets

• Strong 40+ banking relations – across nationalized banks, private Indian banks and foreign banks

• Strong retail reach covering 927 locations

Diversified Funding Mix With Balanced Pricing

PSL Status Assists in Securitization

Robust Capital Adequacy

18.4% 18.9%9.3% 12.6% 19.5%

81.6% 81.1%90.7% 87.4% 80.5%

0.0%

25.0%

50.0%

75.0%

100.0%

FY08 FY09 FY10 FY11 FY12On Book (AUM) Off Book (AUM)

Capital Adequacy Ratio (%)

Minimum CAR – 15%

Depositing NBFC – Good access to retail as well as private placement Markets

Fixed58%

Floating42%

17

Strong Management With Well Identified Responsibilities

7

Board of Directors

Managing DirectorMr. R. Duruvasan

Chief Operating OfficerMr. Y.S. Chakravarti

Chief Technical &Accounts Officer

Mr. R. Chandrasekkar

Chief Financial OfficerMs. Subhasri Sriram

Product Management

Credit

Legal Recovery

Market Analysis Accounts & Audit

Information Technology &

Innovation

Management Information

System

Back Office Administration

Risk Management & Compliance

Finance

Talent Engagement & Development

Internal Audit

Investor Relations

18

Backed By An Eminent Board7

• Two and a half decade career with Bank of America, mostly in theU.S., Hong Kong and Japan, including a stint as a Chief Executive of Bank of America in India

• Ex-Chairman of the American Chamber of Commerce, India and was on the Board of Governors of the National Institute of Bank Management and is a

• Part of the Shriram Group for over 3 decades• Was the CEO and Executive Director of Shriram Chits Ltd,

Hyderabad. Instrumental in the growth of the Company during his stint, growing from 16 branches to 202 branches

• His contribution has paved way for the Shriram Group to expand its deposit and NCD portfolio

R. DuruvasanManaging Director

• Head of Financial Institutions Group Operations in TPG Capital since June 2006

• Was Executive Vice- president and CFO of Standard Chartered First bank in Seoul, Korea

Ranvir Dewan

Arun DuggalChairman

S. Krishnamurthy

• Senior Banker with extensive experience of over 4 decades with the Reserve Bank of India and commercial banks

• Was Banking Ombudsman, Chennai for around two years

G.S. Sundararajan

• Whole time director of Shriram Capital Ltd, the Holding Company of Shriram Group's financial services and insurance business

• Leads the Banking initiative for the group which is one of the key value-enhancing forays in the near future for the group

Puneet Bhatia

• Managing Director and Country - Head, India for TPG Asia• Previous stints include ICICI Bank’s project and corporate Finance

group, Crosby Securities and chief Executive of the Private Equity Group GE Capital India

Sunil Varma

• A business consultant with an extensive consulting experience spanning over 30 years with Price Water House, Management Consultants and the IBM Consulting Group in India and Overseas

• Advised large multinational and domestic companies in areas of Corporate Governance, Financial Management, Efficiency Improvement

Vipen Kapur

• Rich and varied experience in international banking, including stints at Grindlays Bank (now Standard Chartered), Bank of America and affiliates of Chase Manhattan

• Was COO at Al Rushaid Group, overseeing various joint ventures, real estate operations, trading activities and international investments

VenkataramanMurali

• Fellow Member of the ICAI and ICWAI, he has more than 3 decades of experience in the areas of Finance, Accounts & Consultancy

• Nominated as “Technical Expertâ” by the Comptroller and Auditor General of India, New Delhi on the Audit Boards of Power FinanceCorporation Limited and Rural Electrification Corporation Limited

Lakshmi Pranesh

• A 1968 batch IAS officer, she was the Chief Secretary to the Government of Tamil Nadu (2002-05)

• Served as Government nominated Director in many corporations in the Public Sector

19

Key Financials33

20

Strong Long Term Growth While Maintaining Profitability

AuM (INR Bn)

Net Profit (INR MM)

Net Worth (INR MM)

Net Interest Income

Total Income (INR MM)

Earnings Per Share (INR)

46 52

80

134

34

149

0

52

104

156


8761,170

1,9432,406

3,425

1,034

0

1,200

2,400

3,600


4,4987,097

10,00012,121

17,482

0

6,000

12,000

18,000


3,4104,621

5,853

7,691

11,089

3,709

0

4,000

8,000

12,000


6,2409,350

11,07913,234

20,564

6,738

0

8,000

16,000

24,000


22 26

4149

69

20

0

30

60

90


AuM (INR Bn)

Net Profit (INR MM)

Net Worth (INR MM)

Net Interest Income (INR MM)

Total Income (INR MM)

Earnings Per Share (INR)

41% CAGR40% CAGR

35% CAGR

41% CAGR

34% CAGR

33% CAGR

18,282

21

Without Compromising On Quality And Sustainability

Net Interest Margin (%)

Return on Equity (%)

Cost To Income Ratio (%)

NPA Levels (%)

Return On Assets (%)

Capital Adequacy (%)

1.5

2.12.3

1.91.6 1.5

0.9 1.00.7

0.4 0.30.4

0

1

2

3


GNPA NNPA

21.9 20.222.7 21.8 23.1 23.1

0

10

20

30


10.5

10.311.611.911.6

11.6

0

5

10

15


38.435.1

38.135.6

46.5

51.2

0

20

40

60


3.12.5

2.9 3.1 3.13.3

0

1

2

3

4


13.8

18.120.0

16.4

13.812.6

20.3

25.7 26.6

20.5

15.817.4

12

17

22

27

FY08 FY09 FY10 FY11 FY12 Q1FY13Tier 1 CAR

(1)

(1)

Notes1. Annualized figures

22

Future Growth Drivers44

23

Establishing A Stronger Pan – India Presence

Under banked States Provide Huge Expansion Opportunity(1)

Andra Pradesh

45%

Tamil Nadu41%

Other Non- Chit Regions

5%Maharahstra7%

Karnataka2%

Growth Strategy

Notes:1. RBI Data as per 2001 Census

Dadra &Nagar Haveli

TripuraBihar

Chhattisgarh

Manipur

Uttar Pradesh

West BengalMadhya Pradesh

Orissa

AssamRajasthan

Maharashtra

Nagaland

Jharkhand

Andhra Pradesh

Arunachal Pradesh

Gujarat

Meghalaya

Tamil Nadu

Mizoram

Pondicherry

SikkimHaryana

Karnataka

Jammu & Kashmir

Kerala

Punjab

Heavily Under banked (>80% districts) Moderately Under banked (50%–80% districts)Adequately Banked (<50% districts)

Continued rollout of full range of products at all business outlets

Focus on building and tapping “long term customer relationships”across Shriram ecosystem

Consolidating position and operations in western and southern part of India

Entering newer markets such as eastern and northern part of India

New Market Entry – Only after evaluation of local market dynamics, ‘on ground’ credit assessment and

establishment of strong recovery mechanism

Majority of AUM Concentrated in South Indian States

24

Deeper Penetration Across Existing And Potential Customers

Ensuring Optimum Utilization Of Current Network

ShriramCity

Owned Branches

Shared Locations

575

352

Meeting The Needs Of The “Shriram Customer”

Current Customer Base of 3.92 MM(1)

• Significant opportunity to potentially cross sell Shriram City’s offering to the “Shriram” customer base

– “Shriram Ecosystem” to be one stop shop for all financial needs

• Current client relationships helps provide meaningful insights to the financial needs and hence the ability to provide highly tailored solutions

– A key differentiator for Shriram City

• Opportunity to improve disbursements / revenue per branch by introducing the entire financial solutions range while keeping costs under check

• The “Shriram” network provides the ability to have pilot launches across existing networks, without incurring branch set up costs

– Strong edge for Shriram City

Notes:1. Active customer base as of June 30, 2012

524425

345 316

684

0

185

371

556

742

927

Twowheelers

Loanagainst

gold

Smallenterprises

finance

Personalloans

Auto loans

No. of Branches

Significant Scope To Leverage Current Network

25

Shriram Housing Finance Limited – A Key Growth Driver

A Recent Addition To The Shriram City Portfolio

… Offering Significant Growth Opportunity, Driven By ….

22.75%77.25%

• Incorporated as a fully owned subsidiary in November 2010

• Commenced operations in December 2011

• In March 2012, Valiant invested c.INR 1.7Bn to pick up 22.75% stake

• In a short span of 6 months, SHFL has already sanctioned loans of c.INR 480 MM and currently operates through 35 branches

1017 20 26 29 32

39 4148

8188

104

0

30

60

90

120

Indi

a

Thai

land

Chi

na

Kor

ea

Mal

aysi

a

Sin

gapo

re

Taiw

an

Hon

gKon

g

Ger

man

y

US

A

UK

Den

mar

k

An Under Penetrated SegmentMortgages as % of GDP

With Strong Growth ProspectsMortgages as % of GDP

And An Increasing Influence Of HFCsHousing Credit Growth

0%

5%

10%

15%

20%

FY02 FY06 FY09 FY12P FY15P FY18P FY20P0%

10%

20%

30%

40%

50%

FY05 FY06 FY07 FY08 FY09 FY10 FY11Banks HFCs

Net WorthINR 1,453 MM

Total Loan Disbursed INR 252 MM

Source: Market Research, as of FY11 Source: BCG-IBA Report, Market estimates Source: ICRA

26

Appendix AShareholding Details

27

• Shriram Enterprise Holdings(1)

• Shriram Retail Holdings(2)

• Shriram Capital Ltd

• Van Gogh Ltd. (Chrys Capital)

• Norwest Venture Partners

• India Advantage Fund VI (ICICI Ventures)

• Bessemer Venture Partners

• Asiabridge Fund I LLC

• Acacia Partners

• Others

Promoters54.9%

FII4.0%

Others6.1%

Private Equity

Investors35.0%

Key Shareholders

Consistent track record and high growth potential has attracted reputed institutional and Private Equity investors to infuse growth capital

Shareholding As On June 30, 2012

34.18%

16.32%

4.39%

12.64%

8.28%

7.06%

4.77%

2.24%

4.00%

6.12%

Notes1. TPG holds 49% stake in Shriram Retail Holdings2. Shriram Retail Holdins has a 99% stake in Shriram Enterprise Holdings

28

Appendix BDetailed Financials And Other Material

29

Profit And Loss Statement

3,4252,4061,9431,170876Net Profit after Taxation

1,816 1,200 920 627 393 Provision for taxation

5,2423,6062,8631,7971,270Net Profit Before Taxation

6,037 4,114 3,298 2,928 2,265 Total Expenses

4,116 2,854 2,035 2,045 1,635 Other Expenses

1,783 1,185 1,217 781 517 Provisions and Write Offs

137 75 46 102 113 Depreciation

11,278 7,720 6,161 4,725 3,535 Total Income

189 29 308 104 125 Other Income

11,089 7,691 5,853 4,621 3,410 Net Interest Income

FY12FY11FY10FY09FY08All Figures in INR MM

30

Balance Sheet

85,399

084,891 1,712 7,009

93,612

158 55

294

85,399

0

73,278 7,583

65,695

12,121 11,437

-189 495

FY11

113,819 56,671 50,325 34,614 Total`

111000Misc Expenses Not Written Off112,874 56,345 49,861 34,043 Net Current Assets

1,904 1,171 778 427 Provisions12,024 4,639 3,313 2,844 Current Liabilities

126,802 62,155 53,952 37,314 Current Assets, Loans & Advances

131 112 31 -Deferred Tax Asset (Net)178 10 61 60 Investments525 204 372 511 Fixed and Intangible Assets(Net) (Including CWIP)

Application of Funds

113,819 56,671 50,325 34,614 Total

00063Deferred Tax Liability (Net)

96,226 46,671 43,228 30,053 Total Loan Funds8,560 5,310 4,183 3,734 Unsecured Loans

87,666 41,361 39,045 26,319 Secured Loans

17,593 10,000 7,097 4,498 Total Shareholders Funds16,138 9,280 6,205 3,776 Reserves and Surplus

844 -270 23 Optionally Convertible Warrants88 228 164 54 Stock Option Outstanding

524 492 459 644 Share CapitalSource of Funds

FY12FY10FY09FY08All Figures in INR MM

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Recent Regulatory Changes Impacting NBFC

Revised Securitisation

Guidelines: Applicable in Phased Manner by October

• NBFC to retain 5% of the amount, if the loan is for less than 2 year period and 10%, if it is of over 2 years

• Loan up to 2 years can be securitized only after payment of 3 monthly installments by the borrower, loans between 2- 5 years after 6 monthly installments and above 5 years, after 12 monthly installments

• Originating NBFCs to disclose investors, the weighted average holding period of the assets securitized and the level of their minimum retention requirement in the securitization

• NBFCs to follow stringent due diligence standards

• No credit enhancements for assignment transactions

Capital Adequacy Framework for Off-

Balance Sheet Items

• Risk weights for off balance sheet items - 100% for the second loss credit enhancement, for securitization of standard asset transactions provided by third party

Loan Against Gold• LTV not to exceed 60% for loans granted against collateral of gold

• Loans against gold not eligible for securitisation

Lending to Priority Sector

• Loans sanctioned w.e.f April 1, 2011 to NBFC for on lending shall not be eligible for classification as priority sector advances of Banks

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Disclaimer

This presentation is for information purposes only and does not constitute an offer, solicitation or advertisement with respect to the purchase or sale of any security of Shriram City Union Finance Limited (the “Company”) and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.

This presentation is not a complete description of the Company. Certain statements in the presentation contain words or phrases that are forward looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward looking statement. Any opinion, estimate or projection herein constitutes a judgment as of the date of this presentation, and there can be no assurance that future results or events will be consistent with any such opinion, estimate or projection. The information in this presentation is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the Company. We do not have any obligation to, and do not intend to, update or otherwise revise any statements reflecting circumstances arising after the date of this presentation or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

All information contained in this presentation has been prepared solely by the Company. No information contained herein has been independently verified by anyone else. No representation or warranty (express or implied) of any nature is made nor is any responsibility or liability of any kind accepted with respect to the truthfulness, completeness or accuracy of any information, projection, representation or warranty (expressed or implied) or omissions in this presentation. Neither the Company nor anyone else accepts any liability whatsoever for any loss, howsoever, arising from any use or reliance on this presentation or its contents or otherwise arising in connection therewith. This presentation may not be used, reproduced, copied, distributed, shared, or disseminated in any other manner. The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions.

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shriram city ndr presentation september 2012 · 2013-10-08 · a growing msme segment with limited...

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