iifl finance limited...microfinance commercial vehicle 161.8 222.8 349.0 379.5 small ticket retail...

March 2021

IIFL Finance Limited

Public Issue of Unsecured Subordinated Redeemable NCDs

Bloomberg: IIFL IN Roadshow Presentation

I: About IIFL Finance Limited

III: Issue Structure

35

II: Financial Performance

IIFL - India’s leading financial services group

IIFL’s journey - Building an integrated platform around “retail” customers over two decades

Beginning:

Probity Research

Launched

www.indiainfoline.com

Launched

www.5paisa.com

1995 1999 2000 2005

Listing on

NSE & BSE

2011 2016

Incorporation of IIFL

Asset Management

2017

Acquisition of

Samasta MFI

Demerger of 5paisa

Capital

Today

Investments by

CDC and General Atlantic

2006 2007

Commencement of

Lending Business

Building of strong

Institutional Equities team

2008 2011

Launch of IIFL Private

Wealth Management

Investment by

Carlyle

Investment by

Merrill Lynch

2010

Investment by

Fairfax

2019

Demerger into 3

separate listed

entities

4

Loan AUM

₹422,641 Mn Up 17% y-o-y

Cost to Income

36% FY20 52%

Gross / Net NPAs

1.61% / 0.77% FY20 2.31% / 0.97%

RoE / RoA*

12.4% / 1.7% FY20 12.2% / 1.6%

Employees / Branches

18,083 / 2439

Cost of Funds

9.1% down 30 bps y-o-y

Total Comprehensive

Income

₹ 4,662 Mn Up 6% y-o-y

CRAR: Total/Tier I (%)

21.4/18.0 FY20 17.6/13.1

*RoE and RoA quarterly numbers are annualised

Company snapshot For the nine months ended December 31, 2020 (Consolidated)

Provision Coverage Ratio

260% FY20 128%

Our product portfolio As on December 31, 2020 (Consolidated)

HOME

BUSINESS

GOLD

MICROFINANCE

CAPITAL

MARKETS

CONSTRUCTION &

REAL ESTATE

AUM (₹ Bn) Target customers

134.4 Salaried / Self-employed

individuals

Focused on affordable and non-metro housing segments

Leverages underwriting skills developed over time

Unique features

Core growth segments account for around 88% of assets under management

77.9 Medium, Small and

Micro Enterprises

Predominantly lending to business owners backed by cash flows and

collateral

122.1 Individuals

Small-ticket loans with very low delinquencies

Competitive advantage over peers given the vast branch network and

segment experience

43.2 Developers Lending to residential projects and developers with a focus on affordable

housing

39.2 Rural self-employed

women

High-yielding granular portfolio dominated by Self Help Groups (SHGs)

of women for income generating activities

Presence across 17 states

5.8 Individuals / HNIs Lending to HNIs, corporates, private trusts, etc. looking to monetize their

investments to raise capital

CO

RE

GR

OW

TH

SE

GM

EN

TS

NO

N-C

OR

E

SE

GM

EN

TS

Strategic focus on segments that are core strengths and have inter se synergies

5

IIFL Finance – Board of Directors

Distinguished Board of Directors

Nirmal Jain, Chairman & Whole-time Director

MBA from IIM Ahmedabad, rank-holder CA

and Cost Accountant. Worked with Unilever for

5 years

Founded and led IIFL since 1995

R Venkataraman, Managing Director

MBA from IIM Bangalore, B-Tech from IIT

Kharagpur

Worked with ICICI Bank, Barclays, GE Capital

Co-founder of IIFL

Geeta Mathur, Independent Director

Co-chair for the India Chapter of Women Corporate

Directors Foundation

Chartered Accountant with over 20 years of

experience as a Finance professional

Nilesh Vikamsey, Independent Director

Senior Partner at Khimji Kunverji & Co

Past President of The Institute of Chartered

Accountants of India

Nagarajan Srinivasan, Non-Executive Director

Head of South Asia, CDC Advisers

More than 30 years of investing and financial

services experience

V. K. Chopra, Independent Director

Chartered Accountant and Former Whole-Time

Member, SEBI

Former Chairman & MD - Corporation Bank

and SIDBI

A K Purwar, Independent Director

Chairman of Tadas Wind Energy Private Limited

& Eroute Technologies Private Limited

Former Chairman, State Bank of India

Chandran R, Non-Executive Director

Managing Director, Hamblin Watsa Investment

Counsel Ltd.

Director & CEO, Fairfax India Holdings Corp.

MBA from University of Toronto, B. E from IIT Madras

6

Backing of marquee investors - supported by highly

experienced senior management..

7

100.00%

74.09%

25.00%

IIFL Finance Limited (Issuer) (Formerly IIFL Holdings Ltd.)

(Public listed)

IIFL Home Finance Limited

Samasta Microfinance Limited

Promoters

24.98% 29.86% 15.46%

Others

29.70%

Note: All data as on 31st December, 2020

With effect from July 27, 2020, Clara Developers Private Limited ceased to be the subsidiary of the

Company.

Nirmal Jain (Chairman)

MBA from IIM Ahmedabad,

rank-holder CA and Cost

Accountant.

Worked with Unilever fof

Kotak Mahindra Bank

Founded and led IIFL

since 1995

Rajesh Rajak (CFO)

22+ years of work experience

Prior to this, he was SVP-

heading Business Finance

function with HDFC Bank Ltd.,

where he has been for the

past 14 years

Sanjeev Srivastava (CRO)

Chartered Accountant

Industry veteran with 20

years of experience within

financial services



35


35

8.3%

7.1%

8.6%

9.2%

FY18 FY19 FY20 9MFY21

● Loan AUM has grown

17% y-o-y, driven

primarily by core

products gold loans,

affordable home loans

and micro & small

business loans

● Profit after tax (PAT)

for the 9 months grew

by 6% y-o-y

● NIM on avg. loan book

has increased to 9.2%,

driven by higher share

of gold loan assets and

falling cost of funds

Consistent financial performance and growth over years For the nine months ended December 31, 2020 (Consolidated)

• Note: FY19 onwards numbers are as per IND AS. FY18 is iGAAP

• * FY18 TCI number is of erstwhile IIFL Holdings Limited (Consolidated) i.e. Including IIFL Finance Limited, IIFL Wealth Management Limited and IIFL Securities Limited

• ^FY19 TCI includes profit on sale of divestment of commercial vehicle (CV) business of Rs. 1,153 Mn.

9,113*

7,846^

4,952 4,662


Annual

Total comprehensive income (TCI) (₹ Mn)

9

NIM on avg. loan book (%)

312

349 379

423


Loan AUM (₹ Bn)

2.4%

1.8% 1.6% 1.7%


Annual

Annualized

● ROE annualized for 9

months was near to

FY19 level at 12.4%,

driven by ROA of 1.7%

● Capital Adequacy

Ratio (CAR) stands at

stands at 21.4% for

IIFL Finance

Robust and improving financial position For the nine months ended December 31, 2020 (Consolidated)

• Note: FY19 onwards numbers are as per IND AS. FY18 is iGAAP

• # FY19 reinstated based on IND AS Financials of IIFL Finance Limited, post giving effect to merger

Return on assets (%)

10.3%

12.6% 12.2% 12.4%


Annual

Return on equity (%)

13.1% 13.1% 18.0%

FY19 FY20 9MFY21

Tier 1 Tier 2

21.4% 17.6%

Capital adequacy ratio (%)#

18.3%

10

38% 44%

52%

36%


Cost to income (%)

Annualized

The portfolio mix is becoming increasingly retail and

granular

Diversified AUM portfolio disperses exposure and balances cyclical vagaries (₹ Bn)

0%

35% 33% 32% 24%

13%

18% 24% 29% 33%

30%

24% 21% 18%

7% 9% 9% 14% 12% 10% 2% 1% 2%

8% 13%

FY15 FY17 FY19 FY20 Q3FY21

422.6

Capital Markets

Gold Loan

Home Loan

Commercial & Real

Estate

Microfinance

Business Loan

Commercial Vehicle

161.8 222.8 349.0 379.5

● Small ticket retail loans accounted for 90% of total loan AUM.

● Loan assets growth y-o-y driven by small ticket gold loans,

microfinance loans and affordable home loans.

● Construction & real estate Finance has declined on y-o-y basis

11

Loan AUM (₹ Bn) Q3FY21 Y-o-Y

Home Loans 134.4 9%

Gold Loans 122.1 61%

Business Loans 77.9 (2%)

Secured 54.1 7%

Unsecured 23.8 (19%)

Microfinance 39.2 33%

Core Segments (A) 373.6 21%

Capital Market Finance 5.8 16%

Construction & Real Estate 43.2 (7%)

Non-core Segments (B) 49.0 (5%)

Loan AUM (A+B) 422.6 17%

Loans sourced through own network ..

85% of branches are in Tier 2 and Tier 3 locations

Wide spread network across 25 states and over 600 locations, with over 18,000 employees

1,161

1,947

2,377 2,439

Mar'15 Mar'19 Mar'20 Dec'20

Branches are strategically located in business districts in small towns/cities offering a significant opportunity for IIFL Finance

to capture the credit market in these locations

Number of branches

12

Open branches

1.71% 1.96%

2.31%

1.61%


0.79% 0.63%

0.97% 0.77%


Superior asset quality maintained through cycles….

Gross NPA (%)

● GNPA as at 9MFY21, was

1.61% and NNPA was

0.77%.

● Excluding discontinued

business of Healthcare

Equipment Finance (HCF),

the GNPA stands at 1.4%

and NNPA at 0.7%,

120 DPD

Net NPA (%)

Note: FY19 onwards numbers are as per IND AS. Prior years’ numbers are as per IGAAP

90 DPD 90 DPD

120 DPD 90 DPD 90 DPD

13

48%

34% 33%

46% 50% 52%

34%

39%

27%

32%

42% 37%

0%

1%

3%

6%

8% 11%

18%

21%

35%

16%

5% 2%

Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Dec'20

Resource profile is well diversified, with increasing share of bank loans

Refinance

CBLO

Term Loans

Bonds

Well diversified liability profile..

Public, 17.7%

Mutual Funds, 0.7%

Banks/FIs, 22.2%

Insurance Cos, 2.0%

Foreign Investors ,

49.2%

Others, 9.0%

14

Commercial Paper

Outstanding borrowing (` Bn)

153.9 179.8 245.3 261.4 257.3 263.0

Bonds/ NCDs investors split (%)

Current credit rating

CRISIL

BRICKWORK

Long Term:

CRISIL AA

Outlook: Negative

Short Term:

CRISIL A1+

Long Term:

BWR AA+

Outlook: Negative -


35



Issue structure

17

IIFL Finance Limited (“Company” or “Issuer”) Issuer

Instrument &

Issue Size

Public Issue of Unsecured Subordinated Redeemable Non-Convertible Debentures of

face value of Rs.1,000/- each for an amount of Rs. 100 Crores (Base Issue Size) with

an option to retain oversubscription up to Rs. 900 Crores aggregating up to Rs. 1,000

Crores which shall be eligible for Tier II Capital

Credit Rating

Brickwork AA+/Negative | CRISIL AA/Negative

Instruments with such ratings are considered to have a high degree of safety

regarding timely servicing of financial obligations and carry very low credit risk

Use of

Proceeds

For the purpose of onward lending, financing and for repayment/prepayment of

interest and principal of existing borrowings – At least 75% of the Net Proceeds of

the Issue.

For General Corporate Purposes – up to 25% of the Net Proceeds of the Issue.

Issue Period Issue Opens: March 03, 2021

Issue Closes: March 23, 2021* *with an option of early closure

Listing &

Depositories

Proposed to be listed on BSE and NSE

NSDL and CDSL

Specific terms & conditions of the issue

Series I II III

Frequency of Interest Payment Annual Monthly At Maturity

Minimum Application Rs. 10,000 (10 NCDs) across all series

Face Value/ Issue Price (Rs/NCD) Rs. 1,000/-

Tenor 87 months 87 months 87 months

Coupon (% per annum) 10.00% 9.60% NA

Effective Yield (% per annum) 10.00% 10.03% 10.03%

Amount (Rs/Per NCD) on Maturity Rs. 1,000 Rs. 1,000 Rs. 2,000

Nature of Indebtedness Unsecured Subordinated Redeemable Non-Convertible

Debentures

Mode of Interest Payment Through various modes available

Note: Our Company shall allocate and allot Series I NCDs wherein the Applicants have not indicated the choice of the relevant NCD Series.

All categories of Investors can subscribe to all Series of NCDs

Allocation ratio

Category Investor type Allocation

Category I Institutional Portion 10% of the Tranche I Issue Size

Category II Non-Institutional Portion 10% of the Tranche I Issue Size

Category III High Net Worth Individual Investors Portion 40% of the Tranche I Issue Size

Category IV Retail Individual Investors Portion 40% of the Tranche I Issue Size

Issue team

Lead Managers

Debenture Trustee

Banker

Registrar

Stock Exchanges

Investment considerations

Return, Tenor and Frequency

10.00% p.a. For Tenor of 87 months available with various interest payment options like monthly,

annual and cumulative

Liquidity

Proposed to be listed on BSE Ltd and NSE. (BSE shall be the designated Stock Exchange)

Trading will be in dematerialized form only

Taxation

No TDS since the holding will be in demat mode

Safety

Instrument rated AA with Negative Outlook - carrying high degree of safety regarding timely

servicing of financial obligations

Allotment on first come first serve basis

For further details refer to section titled “Issue Related Information” on page 244 of the Tranche I Prospectus dated February 24, 2021.

Allotment in the public issue of debt securities should be made on the basis of date of upload each application into the electronic book

of stock exchange. However on the date of oversubscription, the allotment should be made to the applicants on proportionate basis.

The allotment in the Issue shall be made on the basis of date of upload of each application into the

electronic book of the stock exchanges. However, on the date of oversubscription, the allotments

should be made to the applicants on proportionate basis

Ease of investment

UPI mechanism added for retail investors (application amount of upto Rs. 2 lacs)

DISCLAIMER: IIFL Finance Limited, subject to market conditions and other considerations is proposing a public issue of unsecured subordinate redeemable non-

convertible debentures (“NCDs”) and has filed the Shelf Prospectus dated February 24, 2021 and the Tranche I Prospectus dated February 24, 2021

(“Prospectus”) with the Registrar of Companies, Maharashtra at Mumbai, National Stock Exchange of India Limited, BSE Limited and SEBI. The

Prospectus is available on our website at www.iifl.com, on the website of the stock exchanges at www.nseindia.com, www.bseindia.com, on the

website of SEBI at www.sebi.gov.in and the respective websites of the lead managers at www.edelweissfin.com, www.iiflcap.com and

www.equirus.com. Investors proposing to participate in the issue, should invest only on the basis of the information contained in the Prospectus.

Investors should note that investment in NCDs involves a high degree of risk and for details relating to the same, please refer to Prospectus, including

the section on “Risk Factors” beginning on page 24 of the Shelf Prospectus.

DISCLAIMER CLAUSE OF BSE: It is to be distinctly understood that the permission given by BSE should not in anyway be deemed or construed that

the Prospectus has been cleared or approved by BSE nor does it certify the correctness or completeness of any of the contents of the Prospectus. The

investors are advised to refer to the Prospectus for the full text of the Disclaimer Clause of the BSE.

DISCLAIMER CLAUSE OF USE OF BSE ELECTRONIC PLATFORM: It is to be distinctly understood that the permission given by the BSE to use

their network and software of the Online system should not in any way be deemed or construed as compliance with various statutory requirements

approved by the Exchange; not does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the

statutory and other requirements; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its

management or any scheme or project of this Company.

DISCLAIMER CLAUSE OF NSE: It is to be distinctly understood that the permission given by NSE should not in anyway be deemed or construed that

the Offer Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Offer

Document. The investors are advised to refer to the Offer Document for the full text of the Disclaimer Clause of the NSE.

DISCLAIMER CLAUSE OF USE OF NSE ELECTRONIC PLATFORM: It is to be distinctly understood that the permission given by NSE should not in

any way be deemed or construed that the Prospectus has been cleared or approved by NSE nor does it certify the correctness or completeness of any

of the contents of the Prospectus. The investors are advised to refer to the Prospectus for the full text of the Disclaimer Clause of NSE.

DISCLAIMER CLAUSE OF BRICKWORK: Brickwork Ratings has assigned the rating based on the information obtained from the issuer and other

reliable sources, which are deemed to be accurate. Brickwork has taken considerable steps to avoid any data distortion; however, it does not examine

the precision or completeness of the information obtained. The rating assigned by Brickwork should be treated as an opinion rather than a

recommendation to buy, sell or hold the rated instrument and Brickwork shall not be liable for any losses incurred by users from any use of this report

or its contents. Brickwork has the right to change, suspend or withdraw the ratings at any time for any reasons

DISCLAIMER CLAUSE OF CRISIL: CRISIL ratings reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the

rated instrument and CRISIL does not guarantee the accuracy, adequacy or completeness of the information reviewed. CRISIL ratings are not a

recommendation to invest / disinvest in any and should not be construed as an expert advice or investment advice or any form of investment banking

within the meaning of any law or regulation. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to

the subscribers/users/transmitters/distributors of this product.

22

Thank you

23

Published in March 2021

IIFL Finance Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate,

Thane – 400604

iifl finance limited...microfinance commercial vehicle 161.8 222.8 349.0 379.5 small ticket retail...

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