Aditya Birla Group : A strong parentage

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2 Aditya Birla Group : A strong parentage A USD 40 billion Indian multinational, Aditya Birla Group is in the league of fortune 500 Operating in 36 countries across 6 continents deriving over 50% of revenue from overseas operations Among the largest and the most reputed business houses in India Flagship listed companies: Aditya Birla Nuvo (Conglomerate), Grasim & Ultratech (VSF & Cement), Hindalco - Incl. Novelis (Aluminium & Copper), Idea Cellular (Telecom) Ranked 4 th in global top companies for leaders & 1 st in Asia Pacific (Source: Aon Hewitt, Fortune Magazine & RBL ) Ranked 1 st in Nielsen s Corporate Image Monitor Occupying pole position for 3 consecutive years Anchored by 120,000 employees from 42 nationalities. Trusted by 1.2 Mn shareholders & 160 Mn customers Global positioning Largest Indian MNC with manufacturing operations in the US Aluminium VSF World s largest aluminium rolling unit World s largest manufacturer Carbon Black World s largest in terms of capacity Cement Among top 10 manufacturers in the world Leadership Position Top 3 Top 5 In India Aluminium, Cement, Carbon Black, VSF, VFY, Branded Apparels, Copper, Chlor-alkali, Insulators (in terms of capacity/production/sales) Telecom (in terms of wireless revenue market share) Life Insurance (in private sector in terms of AUM) Asset Management (in terms of average AUM) Our Values Integrity, Commitment, Passion, Seamlessness, Speed 2

3 Aditya Birla Financial Services A significant non-bank financial services group 3

4 Aditya Birla Financial Services (ABFS) Market Positioning Among the top 5 fund managers in India Diversified Portfolio Having 10 lines of businesses AUM USD 27.5 billion 1 (` 164,995 Crore : 35% y-o-y) A significant non-bank financial services group NBFC Lending Book USD 3 billion (` 17,550 Crore : 52% y-o-y) Revenue USD 1.3 billion (` 7,926 Crore : 19% y-o-y) Earnings before Tax USD 141 million (` 849 Crore : 17% y-o-y) Note 1 : Includes AUM of Life Insurance, Private Equity and quarterly average AUM of Asset Management business 4

5 ABFS : Our Vision To be a leader and role model in a broad based and integrated financial services business Committed to being a leader in all facets of our businesses Building leadership on pure merit, endeavour to be best in class Striving to meet all the life & health assurance, savings, wealth management and financing needs of customers Integrated play to gain competitive edge and derive synergies 5

6 ABFS is progressing as envisioned Diversified with 10 lines of businesses AUM reaches USD 27.5 billion Foray in Life Insurance business through JV with Sun Life, Canada Launched India s largest online money management portal Lending book reaches USD 3 billion Foray in the NBFC business Acquisition of schemes of Apple Entered retail broking through acquisition of Apollo Sindhoori MyUniverse mutual fund Foray in Housing Finance business Foray in Mutual Fund business Consolidation of financial services businesses under one Aditya Birla Nuvo Acquisition of Alliance mutual fund Launched Private Equity Fund Acquired mutual fund schemes & portfolio accounts from ING Mutual Fund IFC became strategic financial investor in MyUniverse Signed MoU with MMI Holdings to enter health insurance business in India Building leadership position, entering strategic partnerships and investing in promising sectors 6

7 NBFC Life Insurance Asset Management Insurance Advisory Private Equity Broking Wealth Management Housing Finance Health Insurance* Online Money Management ABFS : A significant non-bank financial services group Power of One Broad based and Integrated Play Among the top 5 fund managers in India Managing assets worth ` 1,64,995 Crore and lending book worth ` 17,550 Crore Diversified portfolio with 10 lines of businesses* Anchored by 10,700 employees & trusted by over 6 million customers Nation wide customer reach through 1,350 branches / touch points and 127,500 agents / channel partners *Signed MoU with MMI holdings (a leading South African insurance based financial services group) to enter health insurance business in India Meeting almost all the non-banking financial products and services requirements of customers 7

8 ABFS : Sound growth in AUM and earnings Assets under Management ( ` Crore) 1,64,995 51,445 57,825 83,471 88,309 88,371 1,07,539 1,22,362 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Mar'15 3,500 4,778 5,860 Revenue ( ` Crore) 6,304 6,542 6,378 6,637 7,926 Earnings before Tax ( ` Crore) FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY

9 ABFS : Our Brands and Structure Aditya Birla Nuvo Limited (ABNL) # Aditya Birla Finance (NBFC) (100%) Aditya Birla Housing Finance (100%) 74% 100% Birla Sun Life Asset Management (51%) Birla Sun Life Insurance Co. Ltd. Aditya Birla Financial Services Ltd. Aditya Birla Private Equity (100%) Aditya Birla Insurance Brokers (50.01%) Aditya Birla Money (75%) # Aditya Birla Money Mart (100%) Aditya Birla Money MyUniverse (100%) Note : Percentage figures indicated above represent ABNL s shareholding in its subsidiaries # Listed 9

10 Aditya Birla Finance Limited A leading NBFC in India 10

11 Aditya Birla Finance Limited (ABFL) Market Positioning One of the India s pioneer & most reputed NBFCs Well Diversified Portfolio Mortgages, Corporate Finance, Capital Market, Infrastructure Finance and Debt Syndication Experienced Management Over 200 man years of domain expertise in financial services Lending Book USD 3 billion (6 years 75%) A leading NBFC in India Strong Parentage Support Capital Infusion of ` 1,720 Crore in past 6 years to support growth Robust Risk Management Leading to healthy book and Return ratios 11

12 ABFL : Journey Foray in NBFC business- Engaged in Capital Market & Corporate Finance segments Certified as ISO 9001:2008 across all its core functional processes by BSI, a leading global independent business services organization Lending book reaches USD 3 billion 2015 BGFL renamed as Aditya Birla Finance ICRA upgrades long term rating to AA+ BGFL was merged with Aditya Birla Nuvo a move to consolidate financial services businesses under one roof Diversified its portfolio by foray in Mortgages & Infra Finance segments India Ratings & Research assigns long term rating of AA+ & short term rating of A1+ Diversified its portfolio and expanded its lending book while keeping risk under control 12

13 ABFL : Product Suite Capital Market Corporate Finance Mortgages Infrastructure Finance Providing finance against capital market securities to the customers to meet their liquidity requirements Customized financing solutions to meet working capital and growth finance needs of SMEs, mid and large corporate clients Customized property backed loans to fund growth capital requirements for business Project & structured funding to infrastructure & other emerging sectors. Debt syndication team help raise debt & equity funding Loan against shares SME Loans Loan Against Property Project Finance Promoter Funding Structured Finance Lease rental discounting Mezzanine Finance Loan against mutual fund Working Capital Loans Construction Finance Bridge Finance Loan against Life Insurance policies IPO financing Margin trade funding ESOP financing Term Loans Supply Chain Financing Solutions Corporate Bills discounting Treasury Risk Solutions Commercial property purchase loan Corporate Loans Loan syndication Debt Capital Market 13

14 ABFL : Growth and diversification of lending book Lending book reached USD 3 billion mark Lending book (` Crore) Grew at a robust CAGR of 75% since Mar 09 11,550 17,550 Built a well diversified portfolio for 8,000 sustainable growth ,850 3,425 Strong capital support from parent & Mar'09 Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Mar'15 internal accruals funding growth Net worth grew 12x from ` 211 Crore in Mar 09 to ` 2,585 Crore in Mar 15 Capital of ` 1,720 Crore was infused during this period to support growth Corporate Finance 16% FY09 Others 29% Capital Market 55% Mortgages 29% FY15 Others 1% Capital Market 24% More than 80% of lending book is secured Infra Finance 23% Corporate Finance 23% 14

15 ABFL : Robust growth in earnings and book value Revenue (` Crore) Earnings Before Tax (` Crore) 1, , FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Net Profit after Tax (` Crore) Net Worth (` Crore) 2, , , FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY09 FY10 FY11 FY12 FY13 FY14 FY15 15

16 ABFL : Healthy Credit Quality and Return Ratios 39% Opex to Net Interest Income (%) 35% 36% 31% 29% Return on average Assets (ROA) (%) 2.19% 2.11% 2.00% 1.92% 1.85% FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Return on average Equity (ROE) (%) Gross NPA Net NPA 14.3% 14.6% 13.1% 11.4% 10.2% FY11 FY12 FY13 FY14 FY15 Provision Coverage Ratio 1.16% 1.23% 1.29% 0.90% 0.84% 0.83% 0.58% 0.32% FY12 FY13 FY14 FY15 28% 33% 55% 64% Growth accompanied by robust credit appraisal and risk management practices 16

17 Spread Analysis FY12-13 FY13-14 FY14-15 Total Income / Average Loan Book 13.8% 13.5% 13.1% Interest Cost / Average Loan Book 8.4% 8.3% 8.2% Net Interest Income (Incl. Fee income) 5.4% 5.1% 5.0% Opex / Average Loan Book 1.9% 1.5% 1.5% Provisioning & Write-offs / Average Loan Book 0.6% 0.8% 0.5% ROA 1.92% 1.85% 2.0% NPA provisioning norms at ABFL are more stringent than RBI norms for NBFCs Provision in excess of RBI norms is ` 49 Crore as on 31 st Mar 15 17

18 Summary and Key Ratios FY12-13 FY13-14 FY14-15 Capital Adequacy Ratio (Minimum 15% as per RBI) 17.51% 18.54% 16.94% Tier-I 12.92% 14.47% 13.98% Tier-II 4.59% 4.07% 2.96% Borrowings (` Crore) 6,867 9,647 14,594 Leverage (x) 6.4x 5.5x 5.6x No. of Employees Average Revenue per Employee (` Crore) Healthy borrowings Profile Borrowings Mix (31 st Mar 15) Long term debt rating of AA+ from ICRA, CARE & India Ratings A1+ rating for short term debt NCD's 25% Sub Debt 4% Out of total borrowings 73% is long term Well placed ALM strategy CP's 16% Cash Credit / WCDL 11% Term Loans (Banks) 44% 18

19 Expanding Foot Print & increasing brand awareness Presence expanded from 9 cities in 2011 to 21 cities in 2015 Targeting to expand the reach to 30 cities in next two years Deepening penetration in current & new geographies with multi locations Ludhiana Jaipur Chandigarh Delhi / Noida / Gurgaon A balanced mix of Tactical and above the line marketing for greater Brand Awareness Ahmedabad Rajkot Indore Surat Mumbai / Navi Mumbai Pune Nagpur Hyderabad Raipur Kolkata Bhubaneswar Bengaluru Coimbatore Chennai 19

20 ABFL : Key Enablers for future growth Enablers across segments to support planned growth Capital Market Corporate Finance Mortgages Infrastructure Finance Enhancing geographical footprint across locations Keeping focus on existing relationships in promoter segment with selective Mid-cap Promoter funding & Structured Finance Augment online capabilities to build retail customer base Focus on customer retention & enhanced utilisations Focus on structured funding & syndication in strength areas Build a strong SME vertical Leverage existing customer base through direct marketing Capitalising on Aditya Birla Group ecosystem for supply chain funding Loan Against Property Deeper penetration in current geographies with multiple locations Expanding retail book through DSA Lease rental discounting Focus on large ticket transactions with premier customers Construction Finance Deeper relationships with top developers Upsizing exposure to known pedigreed corporate groups Moving up the customer value chain through Underwriting & syndication to provide one stop solution DCM transactions to facilitate penetration in the low risk NCD/Bond Market Other enablers for future growth Expanding product portfolio Effective use of technology to enhance productivity Broad base liability mix Leveraging preferred employer brand to attract & retain talent 20

21 Experienced Management Team Rakesh Singh, Chief Executive Officer 21 years of financial services experience with domain expertise in SME & commercial finance, Commercial Real Estate & Mortgage Lending, consumer lending products, capital market offerings & wealth management products Joined ABFL as CEO in July 2011 and in a short span has transformed the business. Prior to this he has spent 16 years in Standard Chartered Bank including as Value Centre General Manager & Head SME Banking business India & South Asia. Director on the Board of Aditya Birla Housing Finance Limited Member of CII and FICCI. Honorary Member on the Advisory Board of London Education Management Consultants. On the Board of studies for Narsee Monjee Institute of Management Studies Executive Program in Business management from IIM Calcutta, MBA (Marketing) & Post graduation in International Relations from University of Lucknow Tushar Shah, Chief Executive Officer, Infrastructure Project & Structured Finance 20 years of relevant experience in financial services Under his leadership, Aditya Birla Finance has taken rapid strides in Project linked lending, Structured Finance, Debt Capital Markets & Syndication. Prior to joining Aditya Birla Finance in 2011, Tushar was the Chief Operating Officer of IL&FS Financial Services Ltd, where he was responsible for business development and managed debt assets of USD 1.6 billion Bachelor of Law from Mumbai University & member of the Institute of Chartered Accountants of India since 1988 Sachinn Joshi, Chief Financial Officer More than two decades of rich experience in financial services As a CFO of ABFL, he is responsible for providing strategic leadership to the function A 12 year stint with IL&FS Investsmart Ltd. as CFO, COO & Executive Director Finance & Operations Worked as Executive Director & CFO at Angel Group as part of the core team responsible for all strategic business decisions Business Leadership Program from IIM Calcutta, a law graduate and a qualified Chartered Accountant and Cost Accountant 21

22 Board of Directors Mr. Bishwanath Puranmalka Mr. Puranmalka has many years of experience in implementation and running of Viscose Staple Fibre plant at Nagda (M.P.), Urea plant in U.P., Copper Smelter in Gujarat and Exports Division of Grasim in Delhi. He has also looked after the development of Captive Power Plants Qualification : F.C.A., F.C.S. and L.L.B Mr. Darius J. Kakalia As a commercial Lawyer, Mr. Kakalia has an extensive transaction practice and court practice with expertise in corporate commercial matters, setting up of Joint Ventures, Mergers and Acquisitions, ADR s and GDR s as well as real estate transactions and disputes and litigations related to these sectors and areas of practice. Over the years he has specialized in the power sector, acting for large Power Companies and has advised consortiums for the bids with respect to the 4000 Mw Ultra Mega Power projects that have recently been proposed by the Power Corporation of India. He has regularly appeared before the MERC, the Bombay High Court and in the Supreme Court of India with respect to various litigations relating to disputes in the power sector. Qualification : B. Com, L.L.B. Mr. Ajay Srinivasan Mr. Srinivasan has rich and vast experience of 20 years in Financial Services Sector. He was previously with Prudential Corporation Asia as the Chief Executive, Fund Management, based in Hong Kong. He was with Prudential Corporation since 1998 and has held various positions starting as managing Director, Prudential ICICI Asset Management Company Ltd. He moved to set up Prudential s Fund Management business in Asia in 2001 and from a standing start expanding the business to 10 markets and to become one of the leading fund managers in Asia with close to US$ 70 Billion in Funds under management. Qualification : M.B.A. from IIM-Ahmedabad 22

23 Board of Directors Continued Mr. Jitender Balakrishnan Mr. Balakrishnan is an Adviser to IDBI Bank and was Deputy Managing director and group head of IDBI Bank, responsible for complete credit advances of USD 25 billion. He served as a member on IDBI s Credit Committee, Asset Liability Management Committee and investment Committee. He has wide experience in sectors like Oil and Gas, Refineries, Power, Telecom, Airports, Roads, Ports, Steel, Cement, Fertilizers, Petrochemical, Hotel, Pharmaceuticals, Paper. Qualification : B.E. (Mech) from National Institute of Technology (NIT), Madras University. Post Graduate Diploma in Industrial Management, Bombay University Mr. Ashwani Kumar Puri He is a financial and accounting professional with extensive experience in investment/ acquisition and advisory services, valuation and decision analysis, business and financial restructurings, dispute analysis and forensics. He was with PriceWater House Coppers for 34 years, 22 of these as Partner/ Executive Director and has served in various positions. His select Financial Services Clients include Asian Development Bank, Asset Reconstruction Company (India) Limited, Cerberus, Citigroup, Deutsche Bank, ICICI bank, IDBI, IFCI, Industrialization Fund for Developing Countries/ Denmark, Standard Chartered Bank, USAID, WL Ross & World Bank. Qualification : Chartered Accountant, the Chartered Institute of Management Accountants, London Ms. Alka Barucha Ms. Barucha began her career with Mulla & Mulla & Craigie Blunt & Caroe and joined Amarchand & Mangaldas as partner in In 2008, she co-founded Bharucha & Partners which, since inception, has been ranked by RSG Consulting, London among top 30 firms in India. For years Ms. Alka has been ranked by Chambers Global, Legal 500 and Who s Who Legal etc. amongst India s leading lawyers. Her core areas of expertise are M&A, joint venture, private equity, banking & finance, establishment of mutual funds, providing regulatory advice to FIIs, foreign venture capital investors, merchant bankers & other financial intermediaries. She has experience in financial services, telecommunications, power & logistics sector and has also represented trans-national corporations for investments in retail, defence & manufacturing space. Qualification : B.A. (Hons) and LL.B from University of Bombay & LL.M from University of London. She is also practicing as a Solicitor, High Court, India and Supreme Court of England and Wales. 23

24 Aditya Birla Finance Limited Business Segments 24

25 ABFL : Capital Market Portfolio Securities based lending market size has doubled in 4 years ABFL improved its ranking from # 6 in 2011 to # 1 in Dec 14 and Market Leader Crossed ` 4,000 Crore mark Portfolio diversification, client selection & active management key to sustainable growth its market share has almost doubled Focus on HNI segment Broad base sourcing channel & asset classes Selective underwriting and active review of loan book Gross disbursement of ` 8,750 Crore loans in FY15 Capital Market Portfolio (` Crore) Capital Market Portfolio Mix (FY15) 2,750 3,200 4,150 Retail Lending 33% Promoter Funding 35% ,250 1,625 Broker Funding 21% Loan against bonds 11% Mar'09 Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Mar'15 25

26 ABFL : Corporate Finance Portfolio Steady growth in loan book across key segments Reached ` 4,000 Crore mark Leveraging Aditya Birla Group (ABG) eco-system for supply chain funding. Knowledge being deployed to fund supply chain of other large Corporate Number of accounts grew more than 4 times in past four years Large sanctioned pipeline Focus on increasing distribution channels and footprint Funding to ABG vendors contribute to 23% of loan book. Gross disbursement of ` 9,100 Crore loans in FY15 Corporate Finance Portfolio (` Crore) Corporate Finance Portfolio Mix (FY15) ,650 2,700 4,000 Term Loan 51% Channel / Vendor Finance 22% WCDL 23% Bills Discounting 4% Mar'09 Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Mar'15 26

27 ABFL : Mortgages Portfolio Commenced in 2011 Grew multi-fold in past three years Largest contributor to ABFL s loan book Crossed ` 5,000 Crore mark Deepening geographical presence in existing & new locations Focus on expanding retail footprint : ~ 30% of book is retail Almost 100% of loan book is secured with NIL NPA Key relationships established with Premier Developers Gross disbursement of ` 3,350 Crore loans in FY15 Mortgages Portfolio (` Crore) Mortgages Portfolio Mix (FY15) 5,075 Construction Finance 16% Commercial Purchase 7% 1,400 2,970 Lease Rental Discounting 34% Loan against Property 43% 65 Mar'12 Mar'13 Mar'14 Mar'15 27

28 ABFL : Infrastructure Finance Portfolio Commenced in 2011 Grew multi-fold in past three years Crossed ` 4,000 Crore mark Well diversified portfolio across sectors Strong focus on risk control Well diversified portfolio across products Project Finance (50%), Corporate Loan (28%), Others (22%) Gross disbursement of ` 2,450 Crore loans in FY15 Debt Capital Market & Debt syndication of ` 1,700 Crore in FY15 Infra Finance Portfolio (` Crore) 4,025 Infra Developers 8% Power Distribution 2% Infra Finance Portfolio Mix Ports 4% Airports 2% (FY15) Logistics 6% Infra EPC 3% Power Gen. Renewable 18% Power Gen. Hydro 4% 2,530 2, Mar'12 Mar'13 Mar'14 Mar'15 Others 13% SEZ & Indl. Parks 4% Manufacturing 13% Healthcare 3% Power Transmission 5% Power Gen. Thermal 7% Roads 8% 28

29 Aditya Birla Finance Limited Annexure 29

30 Profit & Loss (` Crore) FY12-13 FY13-14 FY14-15 Revenue from operations 715 1,201 1,776 Other Income Total Income 720 1,203 1,780 Finance Costs ,106 Employee Benefit Expenses Other Expenses Depreciation & Amortisation Provisions & Write offs (net) Total Expenses ,370 Profit Before Tax Provision for Taxation Net Profit after Tax

31 Balance Sheet ( ` Crore) FY12-13 FY13-14 FY14-15 Equity Share Capital Preference Share Capital Reserves & Surplus ,534 Net Worth 1,079 1,769 2,585 Long term borrowings 3,216 4,739 8,786 Short term borrowings 3,124 3,916 3,945 Current Portion of long term debt ,863 Other non-current liabilities Other current liabilities Total Equities & Liabilities 8,203 11,906 17,957 Net Fixed Assets Non-Current Investments Deferred Tax Assets (net) Long term loans & advances 3,416 5,347 9,446 Short term loans & advances 3,974 6,093 7,653 Current Investments Other Current Assets Total Assets 8,203 11,906 17,957 31

32 Disclaimer Certain statements made in this presentation may not be based on historical information or facts and may be forward looking statements including, but not limited to, those relating to general business plans & strategy of Aditya Birla Finance Limited ("ABFL"), its future outlook & growth prospects, future developments in its businesses, its competitive & regulatory environment and management's current views & assumptions which may not remain constant due to risks and uncertainties. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in ABFL's business, its competitive environment, its ability to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in the countries in which ABFL conducts business. Important factors that could make a difference to ABFL s operations include global and Indian capital market conditions, pricing in ABFL s principal markets, changes in Government regulations, tax regimes, competitors actions, economic developments within India and the countries within which ABFL conducts business and other factors such as litigation and labour negotiations. This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of ABFL or ABNL's shares. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation to the shares shall be deemed to constitute an offer of or an invitation by or on behalf of ABFL / ABNL. ABNL / ABFL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this presentation, unless otherwise specified is only current as of the date of this presentation. ABFL / ABNL 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. Unless otherwise stated in this document, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. ABNL / ABFL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation may not be copied and disseminated in any manner. INFORMATION PRESENTED HERE IS NOT AN OFFER FOR SALE OF ANY EQUITY SHARES OR ANY OTHER SECURITY OF ABFL or ABNL This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada or Japan. These materials are not an offer of securities for sale in or into the United States, Canada or Japan. Copyright 2015 Aditya Birla Nuvo Ltd. Aditya Birla Finance Limited Corporate Identity Number U65990GJ1991PLC Regd. & Corporate Office: One India Bulls Center, Tower I, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai Website: or nuvo-investors@adityabirla.com 32