IIFL Finance Limited Roadshow Presentation - Bloomberg: IIFL IN
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IIFL Finance Limited
Roadshow Presentation Bloomberg: IIFL IN
Public Issue of Unsecured Subordinated Redeemable NCDs
March 2021I: About IIFL Finance Limited
II: Financial Performance
III: Issue Structure
35IIFL - India’s leading financial services group
IIFL’s journey - Building an integrated platform around “retail” customers over two decades
Beginning: Launched Launched Listing on
Probity Research www.indiainfoline.com www.5paisa.com NSE & BSE
1995 1999 2000 2005
Investment by Investment by Launch of IIFL Private Building of strong Commencement of
Carlyle Fairfax Wealth Management Institutional Equities team Lending Business
2011 2010 2008 2007 2006
Investment by
Demerger into 3 Merrill Lynch
Acquisition of
separate listed
Samasta MFI
entities
Demerger of 5paisa
Incorporation of IIFL Investments by
Capital
Asset Management CDC and General Atlantic
2011 2016 2017 2019 TodayCompany snapshot
For the nine months ended December 31, 2020 (Consolidated)
Total Comprehensive
Loan AUM RoE / RoA*
Income
₹422,641 Mn 12.4% / 1.7%
Up 17% y-o-y
₹ 4,662 Mn
FY20 12.2% / 1.6%
Up 6% y-o-y
Cost of Funds Gross / Net NPAs Cost to Income
9.1% 1.61% / 0.77% 36%
down 30 bps y-o-y FY20 2.31% / 0.97% FY20 52%
CRAR: Total/Tier I (%) Provision Coverage Ratio Employees / Branches
21.4/18.0 260% 18,083 / 2439
FY20 17.6/13.1 FY20 128%
*RoE and RoA quarterly numbers are annualised 4Our product portfolio
As on December 31, 2020 (Consolidated)
Strategic focus on segments that are core strengths and have inter se synergies
AUM (₹ Bn) Target customers Unique features
Salaried / Self-employed Focused on affordable and non-metro housing segments
134.4
individuals Leverages underwriting skills developed over time
HOME
Medium, Small and Predominantly lending to business owners backed by cash flows and
CORE GROWTH
77.9
SEGMENTS
Micro Enterprises collateral
BUSINESS
Small-ticket loans with very low delinquencies
122.1 Individuals Competitive advantage over peers given the vast branch network and
GOLD segment experience
High-yielding granular portfolio dominated by Self Help Groups (SHGs)
Rural self-employed
39.2 of women for income generating activities
women
Presence across 17 states
MICROFINANCE
Lending to residential projects and developers with a focus on affordable
43.2 Developers
SEGMENTS
NON-CORE
CONSTRUCTION & housing
REAL ESTATE
Lending to HNIs, corporates, private trusts, etc. looking to monetize their
5.8 Individuals / HNIs
CAPITAL
investments to raise capital
MARKETS
Core growth segments account for around 88% of assets under management
5Distinguished Board of Directors
IIFL Finance – Board of Directors
Nirmal Jain, Chairman & Whole-time Director R Venkataraman, Managing Director
MBA from IIM Ahmedabad, rank-holder CA MBA from IIM Bangalore, B-Tech from IIT
and Cost Accountant. Worked with Unilever for Kharagpur
5 years
Worked with ICICI Bank, Barclays, GE Capital
Founded and led IIFL since 1995
Co-founder of IIFL
Chandran R, Non-Executive Director Nagarajan Srinivasan, Non-Executive Director
Managing Director, Hamblin Watsa Investment Head of South Asia, CDC Advisers
Counsel Ltd.
Director & CEO, Fairfax India Holdings Corp. More than 30 years of investing and financial
MBA from University of Toronto, B. E from IIT Madras services experience
V. K. Chopra, Independent Director A K Purwar, Independent Director
Chartered Accountant and Former Whole-Time Chairman of Tadas Wind Energy Private Limited
Member, SEBI & Eroute Technologies Private Limited
Former Chairman & MD - Corporation Bank
Former Chairman, State Bank of India
and SIDBI
Geeta Mathur, Independent Director
Nilesh Vikamsey, Independent Director
Co-chair for the India Chapter of Women Corporate
Senior Partner at Khimji Kunverji & Co
Directors Foundation
Past President of The Institute of Chartered
Chartered Accountant with over 20 years of
Accountants of India
experience as a Finance professional
6Backing of marquee investors - supported by highly
experienced senior management..
Nirmal Jain (Chairman)
Promoters Others
MBA from IIM Ahmedabad,
24.98% 29.86% 15.46% 29.70% rank-holder CA and Cost
Accountant.
Worked with Unilever fof
Kotak Mahindra Bank
Founded and led IIFL
since 1995
IIFL Finance Limited (Issuer)
(Formerly IIFL Holdings Ltd.) Rajesh Rajak (CFO)
(Public listed)
22+ years of work experience
Prior to this, he was SVP-
heading Business Finance
100.00% function with HDFC Bank Ltd.,
IIFL Home Finance Limited where he has been for the
past 14 years
25.00%
Sanjeev Srivastava (CRO)
74.09%
Samasta Microfinance Limited Chartered Accountant
Industry veteran with 20
years of experience within
financial services
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 7
Company.I: About IIFL Finance Limited
II: Financial Performance
III: Issue Structure
35
35Consistent financial performance and growth over years
For the nine months ended December 31, 2020 (Consolidated)
Loan AUM (₹ Bn) Total comprehensive income (TCI) (₹ Mn)
Annual
● Loan AUM has grown 423
9,113*
17% y-o-y, driven 349
379
7,846^
primarily by core 312
products gold loans, 4,952 4,662
affordable home loans
and micro & small
business loans
FY18 FY19 FY20 9MFY21
● Profit after tax (PAT) FY18 FY19 FY20 9MFY21
for the 9 months grew
NIM on avg. loan book (%)
by 6% y-o-y
● NIM on avg. loan book 9.2%
8.6%
has increased to 9.2%, 8.3%
7.1%
driven by higher share
of gold loan assets and
falling cost of funds
FY18 FY19 FY20 9MFY21
• 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
9
• ^FY19 TCI includes profit on sale of divestment of commercial vehicle (CV) business of Rs. 1,153 Mn.Robust and improving financial position
For the nine months ended December 31, 2020 (Consolidated)
Return on assets (%) Return on equity (%)
Annual Annual
Annualized
● ROE annualized for 9 Annualized 12.6% 12.2% 12.4%
months was near to 10.3%
FY19 level at 12.4%, 2.4%
driven by ROA of 1.7% 1.8% 1.6% 1.7%
FY18 FY19 FY20 9MFY21
FY18 FY19 FY20 9MFY21
● Capital Adequacy
Capital adequacy ratio (%)# Cost to income (%)
Ratio (CAR) stands at
stands at 21.4% for Tier 1 Tier 2
IIFL Finance 52%
44%
38% 36%
18.3%
21.4%
17.6%
18.0%
13.1% 13.1% FY18 FY19 FY20 9MFY21
FY19 FY20 9MFY21
• 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
10The portfolio mix is becoming increasingly retail and
granular
Diversified AUM portfolio disperses exposure and balances cyclical vagaries (₹ Bn)
161.8 222.8 349.0 379.5 422.6
2% 1% 2%
Commercial Vehicle 13%
8% 14% 12% 10%
Capital Markets Commercial & Real Microfinance 9%
7% 9%
Estate
21% 18%
24% Business Loan
30%
18% Gold Loan 24% 29%
33%
13%
35% Home Loan 33% 32%
24%
0%
FY15 FY17 FY19 FY20 Q3FY21
Loan AUM (₹ Bn) Q3FY21 Y-o-Y
Home Loans 134.4 9%
Gold Loans 122.1 61% ● Small ticket retail loans accounted for 90% of total loan AUM.
Business Loans 77.9 (2%)
Secured 54.1 7% ● Loan assets growth y-o-y driven by small ticket gold loans,
Unsecured 23.8 (19%) microfinance loans and affordable home loans.
Microfinance 39.2 33%
Core Segments (A) 373.6 21% ● Construction & real estate Finance has declined on y-o-y basis
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%
11Loans 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
Number of branches
2,377 2,439
1,947
1,161
Mar'15 Mar'19 Mar'20 Dec'20
Open branches
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
12Superior asset quality maintained through cycles….
Gross NPA (%)
120 DPD 90 DPD 90 DPD
● GNPA as at 9MFY21, was
1.61% and NNPA was 2.31%
1.96%
0.77%. 1.71% 1.61%
● Excluding discontinued FY18 FY19 FY20 9MFY21
business of Healthcare
Equipment Finance (HCF), Net NPA (%)
the GNPA stands at 1.4%
and NNPA at 0.7%, 120 DPD 90 DPD 90 DPD
0.97%
0.79% 0.77%
0.63%
FY18 FY19 FY20 9MFY21
Note: FY19 onwards numbers are as per IND AS. Prior years’ numbers are as per IGAAP
13Well diversified liability profile..
Resource profile is well diversified, with increasing share of bank loans
Outstanding borrowing (` Bn)
153.9 179.8 245.3 261.4 257.3 263.0
CBLO
Bonds/ NCDs investors split (%)
5% 2%
Commercial Paper 8%Refinance11%
16% Public,
18% Others, 17.7%
21% 9.0%
0% 35% 6%
Mutual
1% Foreign Funds,
42% 0.7%
Bonds 37% Investors ,
34% 49.2%
3% 32% Banks/FIs,
22.2%
39%
Insurance
27% Cos, 2.0%
50% 52%
48% 46%
34% 33% Term Loans
Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Dec'20
14Current credit rating
BRICKWORK
Long Term:
BWR AA+ -
Outlook: Negative
CRISIL
Long Term:
Short Term:
CRISIL AA
CRISIL A1+
Outlook: NegativeI: About IIFL Finance Limited
II: Financial Performance
III: Issue Structure
35Issue structure
Issuer IIFL Finance Limited (“Company” or “Issuer”)
Public Issue of Unsecured Subordinated Redeemable Non-Convertible Debentures of
Instrument & face value of Rs.1,000/- each for an amount of Rs. 100 Crores (Base Issue Size) with
Issue Size 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
Brickwork AA+/Negative | CRISIL AA/Negative
Credit Rating 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
For the purpose of onward lending, financing and for repayment/prepayment of
Use of interest and principal of existing borrowings – At least 75% of the Net Proceeds of
Proceeds the Issue.
For General Corporate Purposes – up to 25% of the Net Proceeds of the Issue.
Issue Opens: March 03, 2021
Issue Period Issue Closes: March 23, 2021*
*with an option of early closure
Listing & Proposed to be listed on BSE and NSE
Depositories NSDL and CDSL
17Specific 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
Unsecured Subordinated Redeemable Non-Convertible
Nature of Indebtedness
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 NCDsAllocation 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 Banker Registrar Debenture Trustee 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
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)
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.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.
22Thank you
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
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