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SRG HOUSING FINANCE LTD
.Always wilh you
TM NO.: 2339164
SRG HOUSING FINANCE LIMITEOCORPORATE OFFICE: 1046, 10th Floor, Hubtown Solaris, N. 5. Phadke Marg,
Vijay Nagar, Andheri (E}, MUMBAI- 400 069, Maharashtra (INDIA)
CIN NO. : L65922RJ1999PLC015440 E-MAIL: connect@srggroup.net
Ref: SCRIP ID- SRGHFL,SCRIP CODE-534680,ISIN NO - INE559N01010
Date: 19.12.2018To,The GM (Listing)BSE Ltd.
Phiroze Jeejeebhoy Towers,Dalal Street,Mumbai- 400001
Respected Sir,
Subject: Corporate Presentation
With reference to the above mentioned kind! f ctCompany.
' y in the attached Corporate Presentation of the
Kindly take the same on record and acknowledge the receipt.
Thanking You,
With Regards,
For SRG Housing Finance Limited
?;_s?'CompanySecretaryM.No.: A40754
REGO. OFFICE: 321, S.M. LODHA COMPLEX, SHASTRI CIRCLE, UDAIPUR 313001 (RAJASTHAN)PHONE: 0294-2561882, 2412609, E-MAIL: srghousing@gmail.com WEBSITE: www.srahousing.com
INVESTOR PRESENTATION
NOVEMBER 2018
SRG HOUSING FINANCE LIMITED
Disclaimer
2
The information contained in this presentation is only current as of its date. Please note that the past performance of the company is not and should not be considered as, indicative of future results.
This presentation may contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects and future developments in our sector and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words ‘may’, ‘will’, ‘should’, ‘expects’, ‘plans’, ‘intends’, ‘anticipates’, ‘believes’, ‘estimates’, ‘predicts’, ‘potential’ or ‘continue’ and similar expressions identify forward looking statements. All forward looking statements are subject to risks, uncertainties and assumptions that could cause actual results, performances or events to differ materially from the results contemplated by the relevant forward looking statement. The factors which may affect the results contemplated by the forward looking statements could include, amongst others, future changes or developments in (i) the Company’s business, (ii) the Company’s competitive environment, and (iii) political, economic, legal and social conditions in India.
The Company 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. Company 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.
Index
3
Overview 4
Business Model 7
Industry Dynamics 11
Outlook 21
Financial Statements 24
Annexure 27
Overview
5
Business Overview
• Incorporated in 1999, SRG HOUSING FINANCE LIMITED (SRG) is a NHB registered housing finance company engaged in Individual
Housing Loan and Loan Against Property
• Focus on providing loans in rural and semi-urban areas and has operations in 4 major states of India
• Promoters and senior management have more two decades of experience in offering financing in rural areas • Holds a distinction of first company in India to get migrated from BSE SME platform to BSE main board
Key facts and figures
Business Mix (%) Customer Profile (%) Loan Mix (%)
70.71
25.50
3.79
Individual Home Loans (%) LAP (%) Project Loans (%)
80.58
19.42
Self Employed (%) Salaried (%)
82.46
17.54
Rural Urban
NO. OF HOUSEHOLDS SERVED
~5000
BRANCHES
32
LOAN BOOK
Rs. 247.96 CRORES
NO. OF EMPLOYEES
169
AVERAGE TENURE AVERAGE TICKET SIZE
Rs.5.75 lakhs 7.00 years
Note: SRG’s erstwhile name VITALISE FINLEASE PRIVATE LIMITED; All numbers as on 30th September 2018
6
Our Business Presence
RAJASTHAN (19)
Banswara Bhilwara Jaipur
Sagwara Aspur Fatehnagar
Salumber Ajmer Chittogarh
Rajsamand Kota Sumerpur
Dungarpur Sirohi Bijainagar
Bhinder Jodhpur Phalodi
Udaipur
MADHYA PRADESH (6)
GUJARAT (6)
MAHARASHTRA (1)
Mandsaur Ratlam Manasa
Neemuch Shamgarh Ujjain
Ahemdabad Surat Vadodara
Palanpur Mehsana Nadiad
Mumbai
Year Branches (Nos.)
FY14 9
FY15 9
FY16 15
FY17 19
FY18 29
FY19* 32
Note: 5 new branches are coming soon in the state of Madhya Pradesh and Rajasthan
Journey till date
Crossed an Asset Under Management (AUM) of Rs.200.28
Crores
2018
Rating BBB in March 2018 by brickwork
2018
2017
1st private placement post listing in March 2017 and 1st private placement of NCD in
August 2017
2016
ISO 9001:2008 Certified Company for Quality Management
system of Loan Process
2016
Sanctioned and Refinanced From
National Housing Bank twice in the same year
2015
Notified by ministry of finance to be
Treated as “Financial Institution” under SARFAESI Act 2002
2015
Migrated to BSE main board being India’s 1st
Company to get migrated
2012
Listed on BSE SME Platform being the 1st Company in Rajasthan
to be listed on SME Platform
2002-2004
Got license from NHB being the 1st company
In Rajasthan to get NHB license. Converted into public company
1999-2000
Incorporate as Vitalise Finlease Pvt. Ltd and subsequently changed the name to SRG Housing Finance Ltd.
SRG HOUSING FINANCE LIMITED IS: FIRST COMPANY IN RAJASTHAN TO GET REGISTERED WITH NATIONAL HOUSING BANK FIRST COMPANY IN RAJASTHAN TO GET LISTED ON BSE SME PLATFORM FIRST COMPANY IN INDIA TO GET MIGRATED FROM BSE SME PLATFORM TO BSE MAIN BOARD
Business Model
5 days 3 days
9
Business Model
Sourcing Credit
Appraisal Sanction Disbursal Collection and
recovery mechanism
Loan offerings
Housing Loan - Individuals
LAP
Housing Loans - Builders
Loan Mix (%)
70.71
25.50
3.79
LTV (%)
37.79
42.06
27.09
Avg Ticket Size (Rs. in Lakhs)
4.89
9.34
185.00
Loan account flow
Borrowing Mix BANKS (68.22%)
FI’s
(19.90%)
NCD
(9.67%)
NHB (2.21%)
Risk management
Note: All numbers as on 30th September 2018
10
Key Financial Highlights
7.57
200.28
FY12
FY18
4.05
145.96
FY12
FY18
0.78
18.12
FY12
FY18
0.44
13.19
FY12
FY18
4.11
142.82
FY12
FY18
0.32
9.62
FY12
FY18
Loan Disbursement
CAGR 72.62%
CAGR 80.64%
CAGR 76.25%
CAGR 81.75%
CAGR 68.92%
CAGR 76.33%
Consistent growth trajectory
Loan Portfolio
Profit Before Tax
Net Interest Income - NII
Loan Approvals
Profit After Tax
Note: Listed on BSE since 2012. All figures in Rs. Crores
Industry Dynamics
12
81 78 75
73 70 66
1967 1977 1987 1997 2007 2017
India’s favourable demographic profile
51,416
60,652 69,430
77,805
86,767
95,223
103,924
113,863
125,089
2009 2010 2011 2012 2013 2014 2015 2016 2017
CAGR 11.8%
519
650
817
997
1,180
1,339
1967 1977 1987 1997 2007 2017
CAGR 1.9%
CAGR 1.4%
India’s population (In million)
Steady growth in population on a large base
India’s Rural population (%)
Rural share still dominant in the total population Rising per-capita disposable income leads to higher demand for goods & services
Per-capita Disposable Income (in Rs.)
Source: World Bank, Census
13
Latent demand for housing finance to result in growth
Rural house condition (%)
86.7
78.7
61.3
48.4 47.5
24.7
16.2 10.9
UnitedKingdom
UnitedStates
Spain China Ireland Brazil Russia India
~11 mn dilapidated houses (7%) suggests strong demand for reconstruction
46
48
7
Good Livable Dilapidated
5.5
5.3
4.9
1991 2001 2011
Mortgage penetration (% of GDP)
Lower mortgage penetration (% of GDP) vis-à-vis developed and developing nations suggests room for expansion
Average family size of Indian households
Nuclear family concept leads to higher demand for houses
Source: World Bank, BIS
Source: PNB, NHB,RBI 14
Expected growth in HFC’S loan portfolio and market share
57 56
56 55 54 53
43 44 44 45 46 47
FY15 FY16 FY17 FY18E FY19E FY20E
Banks (%) HFC's(%)
HFC’s loan portfolio growth (%) Market share in housing loans (%)
6.3 7.4
8.8 10.4
12.4 14.4
16.8
19.9
23.4
27.7
32.6
FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E FY21E FY22E
Strong deal origination, customer centricity and diverse channels of sourcing to drive higher growth over the next five years
Faster turnaround time on loans and end to end solution by HFC’s has led to increase in market share
+18% CAGR 18-20% CAGR
Opportunity Size in Rural India
Rs. 30,57,000 crores
15
Rural housing shortage presents big opportunity for HFC’s players
Housing Credit Opportunity based on Shortfall Rural
Households living in non-serviceable and temporary house
2.02
Households living in obsolescent houses
0.75
Households living in congested houses and requiring new houses
1.13
Households that are homeless 0.42
Additional shortages (from 2012 to 2017)
0.05
Total Housing Shortage (In Crores) 4.37
Average Loan per unit in Rural India (Lakhs)*
7.0
Opportunity Size in Rural India (Rs. Lakh Crores)
30.57
Source: www.ras.org.in, Assumption, RBI
Shortage of Houses in Rural
SRG
Lower mortgage penetration at state level
Rs.247.96 crores
14 13
10
8 8
10 10
7 6 6
State-wise mortgage penetration(%)
SRG Operations Opportunity lies ahead for SRG given the huge
addressable market
16
Drivers of growth
Limited availability of housing finance for low-income customers
Housing credit % to GDP still lower
Tax incentives for individuals
Growing demand of small ticket housing loans from
EWS and LIG segments*
Pradhan Mantri Awas Yojna (PMAY) initiatives
Urbanization, growth of nuclear
families, rising incomes etc.
* EWS - Economically Weaker Sections | LIG - Low Income Group
17
Key business strategies
Increasing the scale of operations
Expanding Resource Base Low Loan-to-Value (LTV)
Company is expanding its Branch Network in North West Region of the Country. Focus areas of the company will be Tier II & Tier III Cities of Rajasthan, Maharashtra, Gujarat and Madhya Pradesh.
The Company has received refinance from National Housing Bank under its Refinance Scheme. Further the Company has already been sanctioned loans from many banks. Company is also planning to raise funds by way of various capital market instruments.
The Company has been able to achieve and maintain a low average Loan-to-Value (LTV) of 38.82% (Q2FY19) on back of its strategy to lend towards construction of individual units only excluding land acquisition cost
Technology
The Company has been successful in deploying the best in class technology which has enabled it to lower its turnaround time for disbursement of loans.
18
Strong and consistent performance
11.90 11.77 11.70 11.50 11.25 11.18 11.00 11.00
23.00 22.78 22.75 22.75 22.75 22.70 22.50 22.43
11.10 11.01 11.05 11.25 11.50 11.52 11.50 11.43
4
8
12
4
19
34
Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19
Borrowing Cost (%) Lending Rate (%) Spread (%) (RHS)
66.13 81.83
100.04 125.04
155.07
200.28 224.49
247.96
2.75 2.68 2.84
3.24 3.26 3.14
2.87 2.92
0
1
1
2
2
3
3
4
0
125
250
375
Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19
AUM (Crs) Net Interest Margin (%)
65.37
58.03
38.73
44.29
52.29
35.30 34.47 34.83
Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19
Cost to income Ratio (%)
1.10
1.57
1.32 1.27 1.27 1.50
1.76 1.72
0.57
1.21
0.62 0.69 0.64 0.50 0.50 0.47
Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19
Gross NPA (% AUM) Net NPA (% AUM)
Spread remain higher with lower cost
Operational Efficiencies in Check
Growth in AUM and rise in NIM
Prudent Risk Management Policies Aids in Lower NPA”S
19
Sound financial position
12.9 13.15 13.15 11.61 10.56
23.67 23.15 23.23 22.58 22.08
10.77 10.00 10.08
10.97 11.52
4
8
12
4
19
34
FY14 FY15 FY16 FY17 FY18
Borrowing Cost (%) Lending Rate (%) Spread (%) (RHS)
26.4 38.68 53.28
81.83
200.28
13.58 12.55 12.3
9.67 10.97
0
4
8
12
0
100
200
300
FY14 FY15 FY16 FY17 FY18
AUM (Rs. Crore) Net Interest Margin (%) (RHS)
50.14 49.33
55.23 53.44
42.78
30
40
50
60
FY14 FY15 FY16 FY17 FY18
Cost/Income Ratio (%)
0.96 1.04 1.01
1.57 1.50
0.73 0.76 0.70
1.21
0.50 0.0
0.5
1.0
1.5
2.0
FY14 FY15 FY16 FY17 FY18Gross NPA (% AUM) NNPA (% AUM)
Spread remain higher with lower cost
Operational Efficiencies in Check
Growth in AUM and rise in NIM
Prudent Risk Management Policies Aids in Lower NPA”S
20
9.12
10.82 12.00
10.75
25.49
FY14 FY15 FY16 FY17 FY18
4.75 4.33
3.72
3.15
5.82
FY14 FY15 FY16 FY17 FY18
Strong improvement in return profile
Return on Average Equity (%) Return on Average Assets (%)
Outlook
22
29
38
46
55
70
FY18 FY19E FY20E FY21E FY22E
200
350
500
750
1,000
FY18 FY19E FY20E FY21E FY22E
Vision 2022 – An achievable path laid for growth
Targeting 5x AUM growth and 2x branch network growth
Loan Book (Rs. crore) Branch Network (In No.)
23
• The geographical expansion is on track, targeting to 38 branches by FY19E vs. 29 branches in FY18
• The demand for houses in rural exceeds the supply, widening the shortage as housing constructions targets are unmet
• Plans to raise equity in FY19 to reach comfortable base of Rs.100 Crore – to help in getting more leverage and further improvement in credit rating
• Leveraging technology like ERP to enhance operations thus reducing turnaround time from loan origination to documentation, disbursement, etc.
Strong growth levers in place
Financial Statements
25
Rs. Crore FY14 FY15 FY16 FY17 FY18
Interest Income 4.74 6.84 10.2 14.04 29.39
Financial Cost 1.33 2.39 4.04 5.74 11.27
Non Interest Income 0.00 0.03 0.05 0.51 4.87
Operating Expenses 1.66 2.13 3.35 4.47 9.35
Depreciation 0.05 0.07 0.08 0.31 0.44
Profit Before Tax (PBT) 1.69 2.26 2.76 4.02 13.19
Taxes 0.50 0.73 0.90 1.32 3.58
Profit After Tax (PAT) 1.19 1.53 1.86 2.71 9.62
Key Financial Ratios
Net Interest Income (NII Rs. Crore) 3.41 4.45 6.17 8.30 18.12
Net Interest Margin (%) 13.58 12.55 12.30 9.67 10.97
AUM (Rs. Crore) 26.40 38.68 53.28 81.83 200.28
New Approvals (Rs. Crore) 17.18 30.13 27.07 51.53 145.96
Disbursements (Rs. Crore) 16.11 25.39 27.31 47.37 142.82
Borrowing Cost (%) 12.90 13.15 13.15 11.61 10.56
Lending Rate (%) 23.67 23.15 23.23 22.58 22.08
Spread (%) 10.77 10.00 10.08 10.97 11.52
Cost/Income Ratio (%) 50.14 49.33 55.23 53.44 42.78
Gross NPA (% AUM) 0.96 1.04 1.01 1.57 1.50
NNPA (% AUM) 0.73 0.76 0.70 1.21 0.50
Return on Average Assets (RoAA %) 4.75 4.33 3.72 3.15 5.82
Return on Average Equity (RoAE %) 9.12 10.80 12.00 10.75 25.49
Earnings per share (EPS Rs.) 1.48 1.43 1.65 2.38 7.40
Profit & Loss Statement
26
Rs. Crore FY14 FY15 FY16 FY17 FY18
Assets
Loans 26.40 38.68 53.28 81.83 200.28
Total Investments 0.00 0.00 0.84 0.32 0.42
Other Assets 3.56 2.23 5.23 30.30 17.04
Total Assets 29.96 40.91 59.35 112.45 217.74
Equity & Liabilities
Shareholders' Funds 13.68 14.71 16.40 33.97 41.50
Borrowings 15.52 24.89 41.29 75.04 166.96
Liabilities & Provisions 0.76 1.31 1.66 3.44 9.28
Total Equity & Liabilities 29.96 40.91 59.35 112.45 217.74
Productivity Ratios
Number of Employees 19 18 35 55 140
Nos of Branches 9 9 15 19 29
Profit Per Employee (Rs. Crore) 0.06 0.09 0.05 0.05 0.07
Asset Per Employee (Rs. Crore) 1.39 2.15 1.52 1.49 1.43
Financial Metrics
Pre-Tax ROAA (%) 6.76 6.40 5.52 4.69 7.99
Post-Tax ROAA (%) 4.75 4.33 3.72 3.15 5.82
Return on Average Equity (ROAE %) 9.12 10.80 12.00 10.75 25.49
Capital Adequacy Ratio (%) 61.30 50.34 49.91 72.71 33.38
Balance Sheet
Annexure
Board of Directors
28
Mr. Vinod K. Jain is an experienced Managing Director (Promoter) with a vision to fuel
SRGHFL to be the next big participant in Housing Finance
Industry in India. He has with his deep financial prowess and
effective team management capabilities pioneered the
growth of Company with utmost honesty and integrity.
Mr. Vinod K. Jain Managing Director
Ms. Seema Jain is serving as Non-Executive Director to the
Board since the inception of the Company. She has excellent
leadership, management and organizational skills.
Ms. Seema Jain (DIN: 00248706)
Mr. Nishant Badala is an Independent Director of the
Company. He has completed the Masters in Commerce from
University of Udaipur. He is a Chartered Accountant and
Company Secretary by profession, having expertise in
the field of accounting, legal and taxation.
Mr. Nishant Badala (DIN:06611795)
Mr. Vikas Gupta is an Independent Director of the Company. He has done his
Bachelors of Commerce from Mohan Lal Sukhadia University. Udaipur. He also holds a degree
in Law (LLB).He is registered with Commissioner of Income tax.
Udaipur as Income Tax Practitioner. He has diverse
exposure in Tax consultancy and all related financial Services.
Mr. Vikas Gupta (DIN:05280808)
Mr. Ashok Kabra is an Independent Director of the Company. He has done his
Masters in Commerce. He has diverse exposure of more than 12 years in corporate finance,
stock broking, investments and financial services etc.
Mr. Ashok Kabra (DIN:00240618)
Senior management team
29
Mr. Modi has more than 25 years of experience in ensuring financial
strengthening to the individuals and organizations via audit and strategic planning. His in-depth knowledge about the financial
system and various derivatives is unparalleled. He is with the
company since 2012.
Mr. Ashok Modi Chief Financial Officer
Mr. Murdia has 15 years of experience into Sales and
Marketing and has build robust business models in sectors like
finance, insurance, telecom etc. He has an expertise in channel
management where he researches into identifying cum
building new market opportunities. He has been
working with the company since 2010.
Mr. Lavang Murdia Chief Marketing Officer
Mr. Singhvi is retired as a Senior Manager-Bank of Baroda with 36
years experience. His educational credentials include B.SC, M.COM, MBA, CAIIB. He is
involved in procedures and policies making financial
transaction less cumbersome. The strategies adopted by him have helped in building up of
customer network.
Mr. Dilip K. Singhvi GM-Operations
Ms. Nagar is an associate member of Institute of Company
Secretaries of India and also possesses LLB degree. She is
handling Compliance, Equity & Debt Financing matters. Her deep insights and research
mindset has helped company to find newer innovative ways to
expand and flourish. She joined the company in the year 2015.
Ms. Sunaina Nagar CS and Chief Investment Relation Officer
Awards & Recognition
30
Times Network Award for “Excellence in Marketing of Housing Finance Company” ET NOW Award for “Fastest Growing
Housing Finance Company of the year”
SKOCH ORDER OF MERIT for Top 100 SMEs in India
Mine India “Excellence Award”
Stock information
31
• Market cap (INR) – 290.6 Crore (As on 18th Dec18)
• Shares outstanding – 13.0 mn (As on 30th Sep 2018)
• BSE code: 534680
• Bloomberg code: 0596730D:IN
Shareholding Pattern as on 30th Sep 2018
40
60
80
100
120
140
160
180
200
220
Apr-
17
May-1
7
Jun-1
7
Jul-
17
Aug-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
Mar-
18
Apr-
18
May-1
8
Jun-1
8
Jul-
18
Aug-1
8
Sep-1
8
Oct-
18
Nov-1
8
SRG Sensex
As on 18th Dec 2018
58.2%
0.3%
3.2%
38.4%
Promoters FPI Bodies Corporate Retail
138
121
Relative Stock Price Vs Sensex
Contact Us
32
Ms. Sunaina Nagar (Chief Investor Relations Officer) sunaina@srggroup.net +91-22-62215307
Investor Relations Contact
1046, 10th Floor,Hubtown Solaris, N.S.Phadke Marg, Near East West Flyover, Andheri (E), Mumbai, Maharashtra - 400 069.
Corporate Office
321, S.M. Lodha Complex, Near Shastri Circle, Udaipur, Rajasthan, 313001. CIN No: L65922RJ1999PLC015440 www.srghousing.com info@srghousing.com +91-0294-2561882 / 2412609
Registered Office
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