SREI INFRASTRUCTURE FINANCE LIMITED INVESTOR PRESENTATION SEP 2015
WE ARE NOT JUST FINANCIERS! WE ARE PARTNERS IN HELPING BUILD BUSINESSES. WE PROVIDE MORE THAN JUST FINANCING. WE BRING INSIGHT, KNOWLEDGE, EXPERTISE AND CROSS-CATEGORY LEADERSHIP TO EVERY TRANSACTION.
DID YOU KNOW? 1 st Indian NBFC to access international markets for fund raising and 1 st Indian NBFC to be listed on the London Stock Exchange. st Promoted India's 1 st equipment banking Company Quippo. Quippo One of the largest infrastructure equipment rental company in the Country. Srei BNP Paribas India s largest construction and mining equipment financier with over ~30% market share. 1 st company to lay the ground for passive telecom infrastructure in India. Quippo Telecom The first company to enter into shared Passive telecom infrastructure in India. Quippo Telecom partnered with the Tata Teleservices and Viom has become one of the world s largest independent telecom infrastructure companies. 1 st to break new ground in rural IT infrastructure in India, under the National E-Governance Plan of the Government of India. Sahaj India s largest integrated rural network of over 27,600 Common Services Centres (CSC), touching the lives of ~ 280 million people across rural India. Power Distribution Sector Power Distribution Network with T&D losses of only 2.6 % against country average of 25%. 1 st PPP in Water Distribution Sector Swach - Awarded the prestigious Nangloi PPP contract by Delhi Jal Board, in partnership with JV partner Veolia Water for water treatment and distribution. INNOVATION AND PIONEERING INITIATIVES IS THE HALLMARK OF
DISCUSSION SUMMARY COMPANY OVERVIEW FINANCIAL OVERVIEW.. BUSINESS VERTICALS.. KEY BUSINESS HIGHLIGHTS. INFRASTRUCTURE EQUIPMENT GROUP SREI BNP PARIBAS. INFRASTRUCTURE PROJECT GROUP DEBT PORTFOLIO LOAN BOOK EQUITY PORTFOLIO INVESTMENTS CONSOLIDATED FINANCIALS...
VIOM DEAL UPDATE ATC TO ACQUIRE 51% STAKE IN VIOM NETWORKS AMERICAN TOWER CORPORATION TO ACQUIRE 51% CONTROLLING INTEREST IN VIOM NETWORKS LIMITED Selling Shareholders: Complete Exit: Kanoria Block (Srei -11.07%, others -7.19%) -18.26% Funderburk 6.39 % Others 3.67% Partial Exit: Tata Teleservices Ltd 19.63% IDFC PE Fund II 3.05% 51% ownership Non compete for Srei + Kanoria Block Cash Consideration Rs 7,296 crore Cash Consideration Rs 339 crore Srei along with the other Kanoria Block Shareholders, in consideration of sale of their entire shareholding in Viom and for the non-compete with American Tower in India, will receive Rs 2,952 crore. Srei s consideration including non compete in the said sale will be Rs 1,790 crore. The sale proceeds with have a significant beneficial impact on Srei s financials: Repayment of borrowings resulting in reduction in finance cost Release of capital resulting in improved Debt Equity Ratio and CRAR Improved profitability and value accretion to shareholders Copyrights Srei Infrastructure Finance Limited 2015 5
COMPANY OVERVIEW BUSINESS STRUCTURE FOCUSED INFRASTRUCTURE SOLUTION PROVIDER INFRASTRUCTURE EQUIPMENT GROUP INFRASTRUCTURE PROJECT GROUP EQUIPMENT FINANCING ASSET MANAGEMENT : DEBT EQUITY MEZZANINE CONSTRUCTION EQUIPMENT RENTALS EQUIPMENT VALUATION & AUCTIONS PROJECT FINANCE, INFRA DEBT FUND PE / VENTURE FUND, PROJECT EQUITY ADVISORY STRUCTURED FINANCE PROJECT ADVISORY CAPITAL MARKETS - INVESTMENT BANKING ADVISORY STRONG EXPERTISE ACROSS SECTORS - TRANSPORTATION, POWER, TELECOM, RURAL INFRASTRUCTURE, URBAN INFRASTRUCTURE, SEZ / INDUSTRIAL PARKS, PORTS END TO END INFRASTRUCTURE SOLUTIONS LEVERAGING OUR DEEP DOMAIN KNOWLEDGE ACROSS SECTORS AND STRONG RELATIONSHIPS IN THE INFRASTRUCTURE SPACE Copyrights Srei Infrastructure Finance Limited 2015 6
COMPANY OVERVIEW PRESENCE ACROSS INFRASTRUCTURE VALUE CHAIN AND VERTICALS INFRASTRUCTURE PROJECT GROUP THROUGH VARIOUS PRODUCT OFFERINGS : OFFERING Infra Finance Loan Book Equity Significant Road Assets Equity - Telecom Infra Equity - Social Infra 25 years of in-house expertise in Project Finance & Advisory. Disbursements of around Rs.282 bn from FY10 to H1FY16 Current portfolio of 8 significant road projects of close to 3,264 lane kms. Well diversified BOT Asset Portfolio spread across 7 states. JV with Tata Teleservices India s largest independent tower company with 42,533 towers & highest tenancy ratio of 2.51x Largest network of over 26,844 CSCs across 6 states in India INFRASTRUCTURE EQUIPMENT GROUP THROUGH ENTIRE EQUIPMENT LIFECYCLE : OFFERING Equipment Finance Construction Equipment Rentals Equipment Valuation & Auctions JV with BNP Paribas Market leader with ~30% market share Disbursements of around Rs.585 bn from FY10 to H1FY16 One of India s largest infrastructure equipment rental company focussed on Construction. Leading Player with Pan India presence and in-depth knowledge of Construction Equipment segment offering valuation and auctioning services Copyrights Srei Infrastructure Finance Limited 2015 7
COMPANY OVERVIEW FINANCIAL OVERVIEW CONSOLIDATED FINANCIALS H1FY16 FY15 Consolidated AUM 36,233 35,387 Net Income 401 1,114 PAT 35 129 Net Worth 3,208 3,174 ROAE (%) 2.6% 4.9% * CRAR (%) 18.5% 17.0% * Standalone SHAREHOLDING PATTERN SEP 2015 SHARE PRICE DETAILS As on 30/09/2015 NSE Market Capitalization 2,211 Market Price (Rs) 43.95 No of Shares Outstanding (mn) 503 52-Wk High / Low 60.50 / 30.10 INSTITUTIONAL HOLDING SEP 2015 Key Institutional Investors % Holding Promoters 59% Individuals 23% Treasury Stock 10% Fidelity 9.78 Vanguard Total International Stock index Fund 0.45 Japan Trustee Services Bank 0.34 Foreign Holding 13% Pvt Corp Bodies 5% Dimensional Emerging Markets Value Fund 0.33 Govt.Pension Fund Global 0.27 Wisdom Tree 0.26 Figures in Rs. crs Copyrights Srei Infrastructure Finance Limited 2015 8
COMPANY OVERVIEW STRATEGIC & FINANCIAL ALLIANCES Our Credentials - Leading financial institutions have invested in and/or financed Srei and its subsidiaries/jvs Copyrights Srei Infrastructure Finance Limited 2015 9
CORPORATE GOVERNANCE BOARD OF DIRECTORS Salil K Gupta Chief Mentor Hemant Kanoria Chairman & Managing Director Former Chairman, West Bengal Industrial Development Corporation Limited (WBIDC) Former President, The Institute of Chartered Accountants of India (ICAI) Honorary Board Member of the Centre for Global Dialogue & Co-operation CGDC, Vienna Council Member, Indo-German Chamber of Commerce Former Chairman - National Committee on Infrastructure of Federation of Indian Chambers of Commerce & Industry (FICCI) Former President, Calcutta Chamber of Commerce Served as Member in Regional Direct Taxes Advisory Committee, Government of India Former Member of Board of Governors, Indian Institute of Management, Calcutta (IIMC) New Delhi Institute of Management - Board of Governors IIT Guwahati - Member of Board of Governors on behalf Srei Sunil Kanoria Vice Chairman Senior-Vice President - elect of The Associated Chambers of Commerce & Industry of India (ASSOCHAM) Governing body Member of the Construction Industry Development Council (CIDC) Council Member of the Institute of Chartered Accountants of India (ICAI) Served as Member of the Working Group on Construction for the Xth Five Year Plan of Planning Commission, Govt. of India Member of Central Direct Taxes Advisory Committee Served as President in Hire Purchase & Lease Association - Kolkata (HPLA); Merchants Chamber of Commerce - Kolkata (MCC) and Federation of Indian Hire Purchase Association (FIHPA) S. Rajagopal Former CMD of both Bank of India & Indian Bank S. Chatterjee Dr. Punita Kumar Sinha Mr.T.C.A. Ranganathan Former Executive Director, Axis Bank Limited, Mumbai Extensive exposure in the area of International Banking having worked in SBI, London and Washington D.C Over 23 years experience in asset management in international and emerging markets. Former Chief Investment Officer (CIO), Blackstone Asia Advisors L.L.C. and also served as a Senior Managing Director in The Blackstone Group LP Served as CIO and Senior Portfolio Manager, NYSE listed India Fund Inc. and Asia Tigers Fund Inc. Over 38 years of experience of spanning career with SBI, held diverse assignments in International Banking, Investment Banking, Corporate Finance, Corporate consultancy and retail banking. He has also served as CMD of EXIM Bank of India Served on the BOD of Export Credit Guarantee Corporation of India Limited Dr.Tamali Sen Gupta Over 30 years experience in legal field and is a specialist in legal transnational transactions Extensive experience in the structure of Projects implemented under project finance and on foreign participation in the privatization of Infrastructure. Copyrights Srei Infrastructure Finance Limited 2015 10
COMPANY OVERVIEW SNAPSHOT OF OUR BUSINESS VERTICALS INFRA EQUIPMENT GROUP INFRA PROJECT GROUP EQUIPMENT FINANCE - SREI BNP PARIBAS INFRA FINANCE STRATEGIC INVESTMENTS Key Metric H1FY16 FY15 Total AUM 19,362 18,825 NIM 4.5% 4.9% ROAA 0.6% 0.9% ROAE 4.5% 7.2% CRAR 18.0 % 17.1% GROSS NPA 4.2% 4.7% NET NPA 3.2% 3.6% Figures in Rs. crs KEY STRATEGIC INVESTMENTS Key Metric H1FY16 FY15 Loan Portfolio 12,776 12,243 Gross Spread 2.6% 3.5% ROAA 0.4% 0.6% ROAE 2.3% 3.4% CRAR 18.5% 17.0% GROSS NPA 4.7% 4.6% NET NPA 3.6% 3.8% Telecom Infra VIOM 1,598 BOT Road Assets 307 Rural IT Sahaj 11 Other Investments 38 FEE BASED Key Metric H1FY16 FY15 Fee Income 36 161 # VIOM Telecom Infra (H1FY 16 ) Total No of Towers 42,533 Tenancy 2.51x Gross Revenue 2,532 EBIDTA Margin % 55% Cash Profit 597 # H1 FY 16 figures of Viom are estimated Significant Road BOT Asset Portfolio Total No of Projects 8 Operational Projects 5 To be Operational 3 Total Lane Kms 3,264 Current Cumulative Toll Revenue in H1FY 16 97 Sahaj (H1FY 16 ) Largest CSC network in India (~28% share) offering G2C, B2C & FI Services in 6 States. No. of CSCs 26,844 Sahaj Mandated Dist. 107 Population of Mandated Dist. (in Mn) ~ 400 SEZ & INDUSTRIAL PARK Over 2,991 acres of Land acquired for the development of SEZ & Industrial Parks. Mumbai SEZ / Industrial Park Industrial Park, WB Tamil Nadu SEZ 345 Acres 128 Acres 2518 Acres Copyrights Srei Infrastructure Finance Limited 2015 11
BUSINESS HIGHLIGHTS: H1 FY16 (CONSOLIDATED) Business Highlights Balance Sheet Profitability Loan Portfolio Analysis Group Disbursement stood at Rs.7,125 crs as compared to Rs.6,594 crs in same period previous year Equipment Finance disbursement was Rs. 3,972 crs in H1FY16 as compared to Rs.4,719 crs in H1FY 15 and Project Finance disbursement was Rs. 3,153 crs in H1FY16 as compared to Rs. 1,875 crs in H1FY 15 Net Worth * stood at Rs 3,208 crs against Rs 3,088 crs in same period previous year, Consolidated Borrowings stood at Rs 20,730 crs as against Rs. 20,048 crs in H1FY 15 Total Income stood at Rs, 1,650 crs as against Rs, 1,770 crs in same period previous year Profit Before Tax in H1FY16 is Rs 53 crs as compared to Rs 152 crs in same period previous year, Profit after Tax (after minority) is Rs 35 crs as against Rs. 92 crs in same period previous year Forex Loss in H1FY16 is Rs 12 crs, last year same period loss was Rs.13 crs. Interest Earning Portfolio of Equipment Financing is Rs 18,807 crs and that of Project Financing portfolio is Rs 13,587 crs Net NPA for Equipment Financing is 3.16% and for Project Financing is 3.63%. * Change in Net Worth is due to change in its definition in Companies Act 2013 Copyrights Srei Infrastructure Finance Limited 2015 12
EQUIPMENT GROUP THE SREI ECO-SYSTEM Sustainable Competitive Advantage ASSET LIFECYCLE ASSET PURCHASE ASSET DEPLOYMENT ASSET MANAGEMENT ASSET EXIT / RESALE STANDALONE NBFC / FINANCER SREI - END TO END SOLUTION PROVIDER ACROSS THE VALUE CHAIN LEVERAGING THE SREI ECO-SYSTEM TO DELIVER Assisting in right equipment purchase. Customized financial solutions Loans & Advances Operating Lease Equipment on Rentals Equipment Banking Captive Contracts Hiring Contracts & Match Making Leveraging relationships to improve deployment of assets during downtime. Asset Maintenance - 32 captive stockyards for face lifting of assets. Thus improving residual value of assets. Yard Management Equipment Refurbishment Valuation & Inspection Valuation & Auctioning services Asset disposal services Advising on asset disposal & resale options. SREI BNP Paribas ZAO SREI QUIPPO CE SOLUTION PROVIDER SREI BNP Paribas SREI INFRA QUIPPO CE QUIPPO CE QUIPPO AUCTION QUIPPO AUCTION MANAGING CUSTOMER RELATIONSHIPS THROUGH THE ENTIRE ASSET LIFECYCLE Copyrights Srei Infrastructure Finance Limited 2015 13
SREI BNP PARIBAS ABOUT US STRONG PEDIGREE Srei BNP Paribas, is a 50:50 joint-venture between Srei Infrastructure Finance Limited India s only private sector NBFC in the infrastructure space BNP Paribas Lease Group the largest leasing group in Europe with a presence in over 15 countries. MARKET LEADERSHIP Largest construction & mining equipment financier in India with over ~30 % market share, with a customer base of over 40,000 built and nurtured over last 24 years. Have entered in new sectors like information technology, healthcare, rural, logistics etc. to tap the attractive growth opportunity. Current AUM of Rs.19,362 crs as on 30th Sep, 2015. SREI Infrastructure Finance Ltd Leading Public Financial Institution in India Ownership BNP Paribas + Lease Group Amongst World s Largest Global Banks May 08 SREI Equipment Finance Pvt. Ltd. PRESENCE & TIE-UPs Pan-India distribution network of 87 branches including 16 state offices. Partnerships with all leading domestic & international equipment manufacturers & vendors. Full time employee base of close to 1,800 people as on 30th Sep, 2015. Copyrights Srei Infrastructure Finance Limited 2015 14
SREI BNP PARIBAS FINANCIAL SUMMARY LOAN BOOK 18,670 17,701 18,300 18703 18807 10,799 7,900 7719 3972 1749 FY13 FY14 FY15 Q1 FY16 H1FY'16 Interest Earning Assets Disbursements 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 4.4% 3.8% MARGIN ANALYSIS 4.6% 4.86% 3.5% 3.48% 4.2% 2.5% 4.50% 2.84% FY13 FY14 FY15 Q1 FY16 H1FY'16 Gross Interest Spread NIM RETURN RATIO & CRAR ASSET QUALITY # 20.0% 15.0% 10.0% 5.0% 0.0% 1.8% 16.5% 16.2% 17.1% 1.3% 17.1% 11.3% 0.9% 7.2% 16.4% 18.0% 0.5% 0.6% 4.1% 4.5% 2.0% 1.5% 1.0% 0.5% 0.0% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 4.78% 4.73% 4.63% 4.17% 2.84% 3.91% 3.64% 3.56% 3.16% 2.16% FY13 FY14 FY15 Q1 FY16 H1FY'16 FY13 FY14 FY15 Q1 FY16 H1FY'16 ROANW CAR ROAA # On Total Assets Gross NPA % Net NPA % Copyrights Srei Infrastructure Finance Limited 2015 15
SREI BNP PARIBAS FAR-REACHING DISTRIBUTION NETWORK BRANCH NETWORK ZONE WISE PORTFOLIO SPLIT March 2015 Sep 2015 2 21 6 3 2 5 4 2 3 10 11 1 8 3 9 10 3 1 1 Zones North East West South Rs.18,300 crs No. of branches Rs.18,807 crs Disbursements (1) Sep 2015(Rs.crs) 18 983 23 777 18 978 30 1234 89 3972 Note 1: Finance Amount Well spread branch network helps (i) to tap growing demand & (ii) develop customer insights Copyrights Srei Infrastructure Finance Limited 2015 16
SREI BNP PARIBAS EQUIPMENT FINANCE VERTICALS Target Segment- Target Segment- Target Segment- Target Segment- Target Segment- First time owners/buyers Medium & Large customers Project Owners Large Fleet Owners Large corporates & IT companies System integrators OEM s, banking & financial institutions Hospitals Diagnostic Centers Contract farmers Tractor owners Retail, SME players ( used for construction, miming equipment & technology ) Strategy- Grow Vendor Finance Grow Retail & SME Reduce Strategic Portfolio to 50% Balance Portfolio growth Strengthen technology Talent development Strategy- Focus on AAA & AA customers Grow Vendor Financing Strategy- Direct sourcing Approach high end customers Form alliances Strategy- Alliances & Vendor Financing Select Asset Strategy- Alliances with manufacturers Select Asset Construction & Mining IT Infrastructure Healthcare Infrastructure Rural Infrastructure Used Copyrights Srei Infrastructure Finance Limited 2015 17
SREI BNP PARIBAS BALANCE SHEET OVERVIEW Balance Sheet Summary (Rs crs) H1 FY16 H1 FY15 Q1 FY16 FY15 Interest Earning Assets (incl. securitised) 18,807 18,054 18,703 18,300 Securitised Assets 1,917 1,312 1,698 2,053 Net Worth 2,248 2,152 2,229 2,209 Borrowings 13,384 13,768 13,544 13,065 Other Assets (Net) (1,226) (775) (1,196) (935) Key Ratios Sep-15 Sep-14 Jun-15 Mar-15 Return on Avg. Net Worth 4.5% 9.8% 4.1% 7.2% Return on Avg. Assets on Books 0.6% 1.2% 0.5% 0.9% Leverage 5.8 6.3 6.0 5.8 CAR 18.0% 16.2% 16.4% 17.1% Copyrights Srei Infrastructure Finance Limited 2015 18
SREI BNP PARIBAS INCOME STATEMENT HIGHLIGHTS Income Statement (Rs crs) H1 FY16 H1 FY15 Q2 FY16 Q2 FY15 Q1 FY16 FY15 Disbursement 3,972 4,719 2,223 2,086 1,749 7,719 Income from finance activities (Net of OL Dep.) 1,126 1,163 578 586 548 2,320 Finance charges (excl Forex Impact) 707 725 351 365 356 1,443 NII 419 438 227 221 192 877 NPA Provision & Write off 170 151 98 85 72 336 Provision on Standard Asset 9 1 0 (1) 8 0 NII (Net of Provision) 240 287 129 137 112 540 Other Income 1 8 0 0 1 8 Operating Expenditure 167 141 86 80 81 323 PBT before Forex M2M 74 153 43 57 31 226 Forex M2M 2 (3) 3 (3) (1) (1) PBT 72 156 40 60 32 227 PAT 50 103 28 40 23 153 Key Ratios Sep-15 Sep-14 Jun-15 Mar-15 Yield on Avg. Funds 13.5% 14.3% 13.2% 14.3% Cost of Funds 10.6% 10.8% 10.7% 10.8% Interest Spreads 2.8% 3.6% 2.5% 3.5% NIM 4.5% 4.9% 4.2% 4.9% Gross NPA* 4.2% 4.6% 4.6% 4.7% Net NPA* 3.2% 3.5% 3.6% 3.6% * On Total Assets Copyrights Srei Infrastructure Finance Limited 2015 19
SREI INFRASTRUCTURE FINANCE LTD INFRASTRUCTURE PROJECT GROUP Focused Infrastructure Solutions Provider across the entire value chain & verticals STRONG PEDIGREE & CREDENTIALS More than 2 decades of experience in Infrastructure space. Srei was classified as Infrastructure Finance Company (IFC) in the year 2011 and was also notified as Public Financial Institution (PFI) by the Ministry of Corporate Affairs. WIDE SPECTRUM OF PRODUCT OFFERINGS Customized project financing solutions across various sectors in infrastructure domain. Structured financing solutions that mitigate risk and provide flexibility for meeting unique needs of the customers. Strategic equity solutions for key infrastructure projects. Project advisory solutions. Investment banking advisory solutions providing an efficient channel to access capital markets. STRONG FINANCING CAPABILITIES Diversified across various sectors - Power, Ports, Logistics, Transportation, Urban Infrastructure, Airport/Aviation and Telecom. H1FY 16 Loan book Rs.12,776 crs (FY10 H1FY 16 CAGR 27%) H1FY16 Investments Rs.2,634 cr Copyrights Srei Infrastructure Finance Limited 2015 20
SREI INFRASTRUCTURE FINANCE LTD KEY PRODUCT SEGMENTS Srei Infrastructure Finance Ltd FOCUSED INFRASTRUCTURE SOLUTIONS PROVIDER DEEP DOMAIN KNOWLEDGE AND STRONG RELATIONSHIPS ACROSS THE ENTIRE INFRASTRUCTURE SPACE PREFERRED PARTNER FOR MANAGING THE ENTIRE INFRASTRUCTURE PROJECT LIFECYCLE DEBT MEZZANINE EQUITY ADVISORY Customized project financing solutions - Project Finance Term Loan Syndicate Loan Lease Financing Sale & Lease Back Non-fund credit facilities Structured credit solutions that mitigate risk and provide flexibility for meeting unique needs of the customers Structured Debt Subordinated Debt Hybrid Equity Bridge Financing Strategic equity solutions for key infrastructure projects Transportation Telecom Infrastructure Power Rural IT Infrastructure SEZ & Industrial Parks Environment (Water & Waste Management) Project development & management solutions Advised more than 75 projects costing over Rs.75,000 crs. Investment banking advisory Mergers & Acquisitions Private Equity DCM, ECM & Corporate Advisory Copyrights Srei Infrastructure Finance Limited 2015 21
SREI INFRASTRUCTURE FINANCE LTD BALANCE SHEET OVERVIEW Balance Sheet Summary (Rs crs) H1 FY16 H1 FY15 Q1 FY16 FY15 Interest Earning Assets 13,587 12,353 12,119 12,853 Net Worth 2,695 2,651 2,685 2,657 Borrowings 13,896 12,994 13,202 13,696 Investments 2,650 2,886 2,922 2,839 Other Assets (Net) 670 717 1,186 947 Key Ratios Sep-15 Sep-14 Jun-15 Mar-15 Return on Avg. Net Worth 2.3% 4.4% 3.4% 3.4% Return on Avg. Assets 0.4% 0.7% 0.5% 0.5% Leverage 5.0 4.7 4.8 5.0 CRAR 18.5% 18.4% 16.8% 17.0% Copyrights Srei Infrastructure Finance Limited 2015 22
SREI INFRASTRUCTURE FINANCE LTD INCOME STATEMENT HIGHLIGHTS Income Statement (Rs crs) H1 FY16 H1 FY15 Q2 FY16 Q2 FY15 Q1 FY16 FY15 Disbursement 3,153 1,875 2,151 1,291 1,002 4,827 Income from finance activities (Net of OL Dep.) 915 980 463 435 452 1,835 Finance charges (excl Forex Impact) 783 753 402 370 381 1,511 NII 132 228 61 66 71 324 NPA Provision & Write off 50 95 36 8 15 271 Provision on Standard Assets 6 0 4 1 2 0 NII (Net of Provision) 76 132 21 57 53 52 Fee Based Income 28 23 21 20 7 131 Income from Investment 1 1 1 0 0 52 Other Income 21 18 12 10 8 36 Operating Expenditure 70 82 36 51 34 143 PBT before Forex M2M 55 92 18 37 37 129 Forex M2M 10 7 7 6 4 9 PBT 45 85 12 31 33 120 PAT 31 58 8 21 23 91 Key Ratios Sep-15 Sep-14 Jun-15 Mar-15 Yield on Avg. Funds 14.2% 16.3% 14.5% 14.9% Cost of Funds 11.5% 11.6% 11.3% 11.4% Interest Spreads 2.6% 4.7% 3.0% 3.5% Gross NPA* 4.7% 2.9% 4.8% 4.6% Net NPA * 3.6% 2.0% 3.9% 3.7% * On Total Assets Copyrights Srei Infrastructure Finance Limited 2015 23
GROUP BORROWING PROFILE IMPROVING SHARE OF RETAIL SEGMENT CURRENT BORROWING PROFILE Currently, the Major source of Funding is Wholesale Funding through Banks. Consortium for: Srei BNP Paribas 37 banks, SREI Infra 30 banks. STRATEGY TO REDUCE COST OF FUNDS Reducing Cost of Funds through diversifying with Wide Spectrum of Lenders. Exploring new avenue and Increasing the share of Retail Funding through options like NCDs. BORROWING PROFILE SREI BNP BORROWING PROFILE SREI INFRA Domestic Term Loans 15% Subordinates 9% Foreign Currency Loans 10% Debenture 8% Foreign Currency Loans 6% Debenture 14% Working Capital 52% Others 4% Working Capital 54% Domestic Term Loans 19% Others 1% Subordinates 8% Copyrights Srei Infrastructure Finance Limited 2015 24
PROJECT FINANCE LOAN BOOK ANALYSIS Loan Book Sectoral Breakup Power - 33% 120% 100% 4% 4% 6% 4% 4% Generation - 30% T&D - 3% 80% 60% 20% 20% 5% 5% 8% 11% 20% 23% 23% 5% 5% 5% 12% 11% 10% Operational - 18% Under Construction - 12% 40% 30% 27% 27% 25% 26% Captive - 6% 20% 33% 33% 30% 32% 33% Renewable - 1% IPP/Merchant 5% 0% Mar 14 Dec14 Mar 15 Jun-15 Sep-15 Power Communication Transportation Oil & Gas Captive Fuel 2.6% Linkage Coal / Gas 2.4 Social & Commercial Infra Others Copyrights Srei Infrastructure Finance Limited 2015 25
EQUITY INVESTMENTS PORTFOLIO SUMMARY Summary of Investments Investment in Subsidiaries/JV 638 Strategic Investment * Communic at ion 1598 Transportation 307 Energy 15 Rural IT 11 Others 38 Total Strategic Investment 1969 Treasury Stock (Srei Holding) @ 19 Equity Investment-Quoted 2 Equity Investment-Unquoted 6 Other Equity Investment 8 Total Investment 2634 * Investments held directly or through funds @ Treasury Stock represents stock of Srei (48.6 mn shares) held by a trust on behalf of the company. The present market value of these shares is approximately Rs. 214 crs. Rs.crs @ As on 30 th Sep, 2015 Copyrights Srei Infrastructure Finance Limited 2015 26
STRATEGIC INVESTMENTS TELECOM VIOM NETWORKS LTD TRANSPORTATION ROAD BOT PORTFOLIO SOCIAL RURAL SAHAJ SEZ/INDUSTRIAL PARK ENVIRONMENT MANAGEMENT
VIOM NETWORK COMPANY OVERVIEW STRONG PEDIGREE Viom Networks is a joint venture between Tata Teleservices Limited and Srei Infrastructure Finance Limited. Viom is India s largest independent telecommunication infrastructure service provider. Strong equity support from institutional investors such as Macquarie SBI Infrastructure Fund led consortium, GIC Investments Pte Ltd. Singapore, IDFC Private Equity and Funderburk Mauritius Ltd. (Oman Investment Fund) Strategic relationships with all leading telecom operators in India Tata Teleservices, Bharti Airtel, Aircel, MTS, Vodafone, Idea, Telewings and BSNL among others ASSET PORTFOLIO & FINANCIAL HIGHLIGHTS 42,533 high quality towers with an industry leading tenancy ratio of 2.51x. Well diversified presence across India Metro (11%), Circle A (36%), Circle B (40%) & Circle C (13%). 50% of towers less than 3 years old, leading to efficient performance. Majority of portfolio connected to grid power (97%) highest in the industry. 1,500 newly re-engineered ultra-light towers with 50% lower capex requirement, which are profitable even at single tenancy. H1 FY16 Financials (unaudited) Revenue* of Rs. 2,532 crs and EBITDA of Rs.932 crs with *EBIDTA margin (excl. energy) of 55 % and Cash Profit of Rs.597 crs. * Excludes prior period & extraordinary income BUSINESS MODEL Long term contracts Typically 10-20 year contracts with key tenants (including TATA Group, Aircel, MTS and Telenor) Difficult break clauses ROFO / Preferred customer status Revenue Visibility & Lock-Ins 12-15 years lock-ins with TATA Group 7 year lock-ins with Telenor, MTS and Aircel 5-7 year lock-ins with incumbent telcos Around 6 years of locked in predictable revenue of Rs.18,600 crs Tenancy Stickiness Strategic pan India tower locations Increasingly difficult new acquisitions leading to high entry barriers Copyrights Srei Infrastructure Finance Limited 2015 28
VIOM NETWORK ASSET PORTFOLIO-SCALABILITY & TENANT MIX 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 120 100 80 60 40 20 0 3400 SCALABILITY & TENANCY RATIO 1.62 18500 1.32 36407 2.05 38459 19 16 13 14 17 17 12 12 11 11 22 21 12 14 15 18 6 8 18 12 18 13 22 41 23 23 41 42 45 2.21 40403 40690 2.26 TENANCY MIX (%) 41956 42344 42533 2.09 2.2 38 34 32 FY11 FY12 FY13 FY14 FY15 H1 FY16 Tata Incumbents Others Uninor New Entrants 2.37 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 H1 FY16 Total No of Towers Tenancy Ratio (No of Tenants per Tower) 3.0 2.512.5 2.0 1.5 1.0 0.5 0.0 High Scalability No of Towers have increased from 3,400 towers in FY08 to 42,533 towers currently growing at a CAGR of 42%. Present tenancy of 1,00,448 growing at CAGR of 40 % over last 8 years. Tenancy Ratio - Highest Tenancy Ratio of 2.51x as compared to industry average tenancy ratio of 1.7x. Independent Tower Company Low dependence on Anchor Tenants with More than 67% of the tenancy is from Non-Tata service operators. Robust portfolio Mix - Share of incumbents and other operators increased from 18% to 41% from FY 11 to H1FY 16 Copyrights Srei Infrastructure Finance Limited 2015 29
VIOM NETWORK FINANCIAL HIGHLIGHTS Particulars (Rs Cr) FY11 FY12 FY13 FY14 FY15 H1FY 16 (unaudited) Total No of Towers 38,500 40,000 40,690 41,689 42,344 42,533 Tenancy Ratio (No of Tenants per Tower) 2.4 2.4 2.2 2.2 2.37 2.51 Revenues - Service Income 2,956 3,246 3,296 2,949 3,139 1,666 Revenues - Pass Through (Energy) 1,413 1,537 1,651 1,677 1,686 866 Total Revenue * 4,369 4,783 4,947 4,626 4,825 2,532 EBIDTA 1,361 1,545 1,860 1,764 1,801 932 *EBIDTA Margin % - W/O Pass Through 46.0% 47.6% 54% 56% 56% 55% Cash Profit 558 568 892 919 1,039 597 Total Debt 8,128 8,048 7,383 6,420 6,069 5,645 Strong annuity income with long term contracts. Lock-in revenues of more than Rs.186 bn. Incremental margins in the range of 50-70% due to better efficiency & lower capex. Strong cash profits & well managed capital structure. Net Debt reduction of more than Rs.2,000 crs over last 4 years to Rs.5,645 crs currently. * excl. prior period & extraordinary income Copyrights Srei Infrastructure Finance Limited 2015 30
EQUITY PORTFOLIO - INVESTMENTS TELECOM VIOM NETWORKS LTD TRANSPORTATION ROAD BOT PORTFOLIO SOCIAL RURAL SAHAJ SEZ/INDUSTRIAL PARK ENVIRONMENT MANAGEMENT
BOT ROAD ASSETS PORTFOLIO SUMMARY WELL DIVERSIFIED PORTFOLIO Execution Experience spread across 14 Road Projects on BOT/Annuity with over 5,400 lane Kms of Road Projects across India Well diversified BOT Asset Portfolio spread across 7 states such as Madhya Pradesh, Maharashtra, Uttar Pradesh, Kerala, Arunachal Pradesh, Odisha & Haryana. STRONG ANNUITY CASH FLOWS Out of Total 8 Projects in which Srei has significant economic interest, 5 projects are already operational with cumulative Annual Gross Revenue (TTM) of more than Rs. 259 crs in FY15. One BOT project became operational in June 15 and another one is expected to be fully operational by the end of FY16, thus resulting into strong Revenue growth & further Improved Cash Flows. % State Wise BOT Portfolio (Lane Km) Road BOT Asset Portfolio Total No of Projects* 8 Arunachal Pradesh No of Projects Operational 5 23% 12% 15% 25% 8% 6% 10% Kerala Madhya Pradesh Haryana Uttar Pradesh Odisha Maharashtra No of Projects - Under Construction 3 Total Lane Kms 3,264 Lane Km Operational 1,690 Lane Km Under Construction 1,574 Gross Revenue Realized per Lane km (for Q2 FY16) 0.057 crs * Projects where the Company has Significant stake Copyrights Srei Infrastructure Finance Limited 2015 32
BOT ROAD ASSETS PORTFOLIO SIGNIFICANT OPERATIONAL ASSETS Particulars 4/6 Laning of Thirssur - Angamali, NH-47 4 Laning of Indore Ujjain Road on SH-27 4 Laning of Rohtak-Bawal section of NH-71 4/6 Laning of Gaziabad- Aligarh Section of NH 91 6 Laning of Chandikhole Bhubaneswar Section of NH-5 Project Cost (Rs.crs) 726 331 1,039 2,176 1,774 Project Type Toll Toll Toll Toll Toll Concession Period (Yrs) 22 25 28 24 26 Project Road Length (Km) 65 49 83 125 67 Project Lane Km 260 196 332 500 402 State Kerala Madhya Pradesh Haryana Uttar Pradesh Odisha Awarding Authority NHAI MPRDC NHAI NHAI NHAI Project COD Dec-11 Nov-10 Sep-13 Jun-15 # Mar-16* 4 / 6 laning project, tolling started from the Appointed Date. # Partial COD achieved. Full COD expected on Apr 16 Copyrights Srei Infrastructure Finance Limited 2015 33
BOT ROAD ASSETS PORTFOLIO SIGNIFICANT OPERATIONAL ASSETS Total Toll Collection (Rs Crs) 97 61 60 66 72 71 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1FY16 Q2FY16 TOLL COLLECTIION (Rs.crs) Thirssur Angamali, NH-47 Indore Ujjain Road on SH-27 Chandikhole Bhubaneswar Section of NH-5 Rohtak-Bawal section of NH-71 Ghaziabad- Aligarh Section of NH 91 Total Q1FY15 21 6 19 15-61 Q2 FY15 22 5 18 15-60 Q3 FY15 24 6 19 17-66 Q4 FY15 28 6 20 18-72 Q1 FY16 25 6 20 18 2* 71 Q2FY16 25 5 20 17 30 97 * Toll commenced on 25 th June 2015 Copyrights Srei Infrastructure Finance Limited 2015 34
BOT ROAD ASSETS PORTFOLIO UNDER CONSTRUCTION ASSETS Particulars 2/4 Laning of Rimuli- Roxy-Rajamunda Section of NH 215 4 Laning of Solapur Maharashtra/ Karnataka Border Section of NH-9 2 Laning of Potin Pangin Section of NH-229 Project Cost (Rs.crs) 973 883 1662 Project Type Toll Toll Annuity Concession Period (Yrs) 19 25 17 Project Road Length (Km) 96 100 407 Project Lane Km 360 400 814 State Odisha Maharashtra Arunachal Pradesh Awarding Authority NHAI NHAI MoRTH Project COD June-18 Nov-16 54 months from appointed date Copyrights Srei Infrastructure Finance Limited 2015 35
EQUITY PORTFOLIO - INVESTMENTS TELECOM VIOM NETWORKS LTD TRANSPORTATION ROAD BOT PORTFOLIO SOCIAL RURAL SAHAJ SEZ/INDUSTRIAL PARK ENVIRONMENT MANAGEMENT
SAHAJ LARGEST CSC NETWORK IN THE COUNTRY SAHAJ E-VILLAGE A Unique Public Private Partnership to bridge the Urban-Rural Digital Divide in India Largest CSC Network in the country 26,844 CSCs across six sates West Bengal(WB), Uttar Pradesh (UP), Bihar, Assam, Tamil Nadu (TN) & Odisha Covering 400 mn people (37% of India s rural population) EXTENSIVE RURAL DISTRIBUTION PLATFORM Technology Leveraging Operating Model Robust technology platform offering real-time connectivity, efficient & quick service delivery Wide offering of Products & Services Wide Bouquet of Products & Services across G2C, BFSI, B2C & Education services. Highly leveraged to offer wide range of products & services McKinsey Operating Model for Growth Easy to use, high quality technology platform Spread of VLE touch-points Focus on Pull Services with strong partners Activation of G2C services across all states & increase financial inclusion presence STATE No of Outlets WB 6,448 UP 8,203 Bihar 5,410 Assam 2,833 TN 1,045 Odisha 2,905 Copyrights Srei Infrastructure Finance Limited 2015 37
SAHAJ A UNIQUE BUSINESS MODEL NATURAL MONOPOLY WITH STRONG ENTRY BARRIERS Exclusive mandate to operate CSC network across existing 6 states Strong experience and capabilities to effectively operate in rural conditions Established back-end infrastructure with limited execution risk and strong scale-up potential Established partnerships and tie-ups with leading product & services companies CURRENT & POTENTIAL PRODUCT & SERVICE OFFERGINS G2C B2C E-LEARNING NEW OPPORTUNITIES Land records, Income & Caste Certificates, registration & revenue collection, electoral services, employment exchange, passport, ration card, IT return, tax payments, certificates etc. Life & general insurance, Mutual Funds, utility bills, mobile & DTH recharges, financial inclusion, FMCG products, rural goods, Computer training, distance Computer education etc. Financial Inclusion BC White Label ATMs, Remittances Fabdeal, Amazon, Aadhar UIDAI / NPR, UTI PAN services etc Copyrights Srei Infrastructure Finance Limited 2015 38
SAHAJ TECHNOLOGY LEVERAGED OPERATIONAL MODEL G2C Service partners (State & Central) B2C Service partners (Financial Services, Education, Health Services, Rural Media & CUPS Cash management and information flow addressed through real Time Transaction and voucher based funds flow Real time monitoring and reconciliation Data centre Cash Services Village VLE in CSC Vouchers Voucher based cash management Copyrights Srei Infrastructure Finance Limited 2015 39
SAHAJ KEY ALLIANCE PARTNERS Copyrights Srei Infrastructure Finance Limited 2015 40
EQUITY PORTFOLIO - INVESTMENTS TELECOM VIOM NETWORKS LTD TRANSPORTATION ROAD BOT PORTFOLIO SOCIAL RURAL SAHAJ SEZ/INDUSTRIAL PARK ENVIRONMENT MANAGEMENT
SEZ & INDUSTRIAL PARKS KEY HIGHLIGHTS Srei ventured into greenfield development of Special Economic Zones and Industrial Parks in 2008-09 to capitalise on India s growing need for rapid industrial growth Engineering SEZ / Industrial Park, Mumbai Biotech, IT / ITeS SEZ, residential units, commercial,resort, etc, located on Alibag - Mumbai Road 60 Km from south Mumbai. Total Project Area: 350 acres (Phase 1) Acquired Area : 345 acres Bengal Auto Industrial Park Industrial Park near Kharagpur, West Bengal. In partnership with West Bengal Industrial Infrastructure Development Corporation (WBIIDC). Total Project Area: 325 acres Acquired Area : 128 acres Multi Product SEZ at Nanguneri, Tamil Nadu The total project area: 2518 acres. 1,700 acres for industrial processing zone. 818 acres for residential township / commercial and other non-processing activities. Phase 1 1104 acres launched Fully acquired Copyrights Srei Infrastructure Finance Limited 2015 42
EQUITY PORTFOLIO - INVESTMENTS TELECOM VIOM NETWORKS LTD TRANSPORTATION ROAD BOT PORTFOLIO SOCIAL RURAL SAHAJ SEZ/INDUSTRIAL PARK ENVIRONMENT MANAGEMENT
ENVIRONMENT MANAGEMENT KEY HIGHLIGHTS Srei Swach project provides an integrated solution to water and waste water management, solid waste management and recycling Business Model Provides cutting edge solutions with world class technology to water and waste water management, solid waste management and recycling to both public and private sectors Project Under Implementation Awarded with the prestigious Nangloi Water Supply (PPP) contract in Delhi, in partnership with JV partner Veolia Water The contract is of 15 years and around $ 85 million will be invested in the water treatment and distribution system. Project taken over during Sept 2013 from Delhi Jal Board (DJB) and is under implementation Global Technology Partners Copyrights Srei Infrastructure Finance Limited 2015 44
SREI INFRASTRUCTURE CONSOLIDATED BALANCE SHEET OVERVIEW Balance Sheet Summary (Rs crs) H1 FY16 H1 FY15 Q1 FY16 FY15 Net Worth 3,208 3,088 3,201 3,174 Borrowings 20,730 20,048 20,140 20,326 Interest Earning Assets 22,036 20,393 20,698 20,870 Investments 2,094 2,257 2,433 2,250 Other Assets 457 1,005 988 892 Key Ratios Sep-15 Sep-14 Jun-15 Mar-15 Return on Avg. Net Worth 2.6% 7.0% 3.5% 4.9% Return on Avg. Assets 0.3% 0.8% 0.4% 0.5% Leverage 5.7 5.6 5.6 5.7 EPS (Rs) (Annualised) 1.4 3.6 1.9 2.5 Book value (Rs) 63.8 61.4 63.6 63.1 Copyrights Srei Infrastructure Finance Limited 2015 45
SREI INFRASTRUCTURE CONSOLIDATED INCOME STATEMENT HIGHLIGHTS Income Statement (Rs crs) H1 FY16 H1 FY15 Q2 FY16 Q2 FY15 Q1 FY16 FY15 Income from Finance Activities 1,479 1,545 753 717 726 2,960 Income from equip. financing 563 582 289 293 274 1,160 Income from project financing 916 963 464 424 452 1,799 Finance charges (excl Forex Impact) 1,147 1,130 584 560 563 2,261 NII 332 414 169 157 163 699 Non Interest Income Income from Fee Based Activities 36 45 24 18 12 161 Income from Equipment Rental 11 83 5 42 6 152 Income from Investments 1 5 1 1 0 57 Others 21 22 14 13 7 45 Net Income 401 568 213 232 188 1114 Operating Expenditure 185 207 92 102 93 425 Provisions & Write offs 150 196 92 65 58 487 PBT before Forex M2M 66 164 29 65 37 202 Forex M2M 12 13 10 10 3 13 PBT 53 152 19 54 35 188 PAT (after Minority) 35 92 12 27 23 129 Copyrights Srei Infrastructure Finance Limited 2015 46
FOR ANY FURTHER QUERIES, PLEASE CONTACT: Sanjeev Sancheti Chief Strategy Officer Srei Infrastructure Finance Ltd. Tel: + 91 33 6602 3003 Email: ssancheti@srei.com Amit Agarwal AVP Investor Relations Srei Infrastructure Finance Ltd. Tel: + 91 33 6602 3003 Email : amit.agarwal1@srei.com Ammeet Sabarwal Dickenson Seagull IR Mobile: +91 9819576873 Email : ammeet.sabarwal@dickensonworld.com Disclaimer In this communication we have disclosed certain forward-looking information to enable investors to comprehend our future prospects and take informed investment decisions. This report and other statements written and/or verbal - that we periodically make/publish contain forward-looking statements that set out anticipated results based on the management's plans and assumptions for future growth and development of the organizations. We have tried wherever possible to identify such statements by using words such as anticipate, estimate, expects, projects, intends, plans, believe, and words of similar substance in connection with any discussion of future performance. We do not guarantee, warrant and/or recommend, express or implied, as to the accuracy or completeness of such assumptions and that these forward-looking statements will be realized, although we believe we have been prudent in assumptions which are subject to dynamic changes. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Prospective investors are recommended to take there decisions based on interpretations and assumption of such published forward looking statements.. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Moreover, neither we or any other company or subsidiary of the Srei Group, nor any of its officers, directors or employees accept any liability or responsibility in respect to the information or any assumptions expressed herein. The information contained herein has been prepared exclusively for informational purposes and is not an offer or solicitation of an offer to buy/sell the securities/instruments mentioned or to participate in any trading strategy or an official confirmation. This is not a research but it may refer to a research analyst/research report.. Information is subject to change without notice and we may not update this. Past performance is not indicative of future returns. This price information (if any) is provided solely for informational purposes and may differ substantially from price information available from other sources or an actionable price. Copyrights Srei Infrastructure Finance Limited 2015 47