Karur Vysya Bank Limited - Moneycontrol.comstatic-news.moneycontrol.com/static-mcnews/2018/01/Karur-Vysya-… · 52 Wk H/L (INR) 150/75 Volume Avg (3m K) 2157.4 Face Value (INR) 2

Initiating Coverage 20th December, 2017

Karur Vysya Bank Limited

PageIndia Equity Institutional Research II Initiating Coverage II 20th December, 2017

KARUR VYSYA BANK (KVB) is a south-based bank which started in 1916 in Karur, a textile town in Tamil Nadu. KVB primarily started as an SME bankand continues to position itself as a comprehensive player to cater to the needs of SME customers. Majority presence in semi-urban and rurallocations places the bank at the heart of SME financing. The bank over the years has withstood innumerable changes and challenges only to emergeprofitably as one of the leading regional banks in India. As of FY17, the bank had a network of 711 branches, having grown at a 10-year CAGR (FY08-17)of 10% while customer base over the last 7 years has grown at a CAGR of 13.5%. Of the total 711 branches, 377 (53%) are located in Tamil Nadu whichmakes the bank susceptible to geographical risk. Loan book of INR 442.4 bn which has grown at a 10-year CAGR (FY08-17) of 19.2% is fairly diversifiedamong corporate, retail, SME and agri. In addition to the highly secured nature of advances, we also like the relatively shorter maturity of the lendingbook (80% advances maturing in <3 years; 38% in <12 months) and the granularity (only ~18% of the loans are of ticket size of > INR 50 crore). In termsof asset quality, the bank’s gross NPA currently stands at 4.83% as of Q2FY18 while net NPAs stand at 3.24%. We believe the worst for KVB in terms ofasset quality will be over by H1FY19 post which we expect normalization of slippages. We like the bank’s strategy of initiating follow-up/recoveryprocess as soon as an account becomes 30 dpd thus effectively aiming at preventing slippages which takes precedence over preventing/recoveringNPAs. Taking into account that H2FY18 could see high slippages resulting in high provisioning expense for the whole year, we expect RoE to drop to4.4% (partially on account of an expanded equity base). However, we expect earnings to pick up FY19 onwards with RoE at 11.8%/14.0% for FY19/FY20.

Karur Vysya Bank Limited Back to the roots!

CMP

INR 116.8 Target

INR 145Potential Upside

24.2%Market Cap (INR Mn)

87,269Recommendation

BUYSector

Banking

SHARE PRICE PERFORMANCE

Shares outs (Mn) 727

Equity Cap (INR Mn) 1453

Mkt Cap (INR Mn) 87269

52 Wk H/L (INR) 150/75

Volume Avg (3m K) 2157.4

Face Value (INR) 2

Bloomberg Code KVB IN

MARKET DATA

SENSEX 33879

NIFTY 10478

MARKET INFO

Subdued macros + muted external demand coupled with realignment of lending focusaway from corporate dampened advances growth

At INR 442.4 bn as of Q2FY18, the 3-year advances CAGR stood at 7.6% which is muchbelow than the 10-year CAGR (FY08-17) of 19.2%. Over 2010-2012, the bank went outaggressively on corporate lending with the book growing at 31% in FY12 and forming 42.1%of the total advances. However, this same aggressive lending has come back to bite thebank as corporate loans have turned bad contributing majorly to the incremental assetquality pressures. Of the total slippages so far in FY18, mostly have come from thecorporate segment. The watch-list currently stands at INR 12 bn (forming 2-3% of totaladvances). With realignment of lending focus, the bank is going back to its roots to fundmore of small ticket SME and retail exposures. This coupled with latest capital raise of>INR 9 bn by way of rights issue should help the bank pursue better loan book growthover the coming years. Although the new MD & CEO, Mr. Seshadri, has guided for an in-line-with-the-system advances growth, we are factoring in a 12% CAGR over FY18-20E.

Asset quality deterioration to peak-out by H1FY19; expect normalization therefrom

Over FY08-16, the bank’s gross NPAs have remained under 2%. Even during economicallychallenging times, the bank’s asset quality has been stable owing to its tight creditunderwriting norms and proactive approach towards preventing slippages. Only since thelast two years (FY16/17) has there been a sharp rise in slippages, most of which isaccounted for by the corporate segment. Further, on account of having substantialexposure to the SME segment, demonetisation played its part in deterioration of assetquality in FY17. Over FY18-19, we expect asset quality issues to max out and we estimategross NPAs of 5.86% for FY18 considering our worst case scenario assumptions.Further, FY19 onwards, we expect asset quality to start improving on back of reduction inslippages and increasing recoveries/upgrades. As of Q1FY18, out of the total gross NPAs ofINR 18.07 bn, about INR 8-9 bn were accounted for by small accounts (SME + retail) whichare not as problematic and are expected to be recovered faster. As of Q2FY18, GNPAsstand at INR 21.36 bn.

Incremental focus on high quality underwriting; NIMs unlikely to be compromised: Thebank has shifted focus completely towards high quality underwriting. However, inconsonance with 3.81% NIM as of Q2FY18, our view is that the bank has decent enoughroom to pursue competitive activities, mostly in terms of pricing, in order to pursue andgarner high quality credit.

Particulars Sep 17 Jun 17 Mar 17

Promoters 2.07 2.08 2.08

FIIs 19.65 21.52 19.83

DIIs 22.26 21.72 21.94

Others 56.02 54.68 56.16

Total 100 100 100

SHARE HOLDING PATTERN (%)

Advances CAGR FY18-20E

12%

2

NII CAGR FY18-20E

10%

+91-22-6696 5555 / +91-22-6691 9576www.krchoksey.com

KRChoksey Researchis also available on Bloomberg KRCS<GO>

Thomson Reuters, Factset and Capital IQ

ANALYSTRaghav Garg, [email protected], +91-22-6696 5584

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Karur Vysya Bank SENSEX

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Incremental focus towards good quality credit will help drive improvement in asset quality and the resultant low credit costs will helpin driving up the ROA/ROE. We expect yield on advances to decline over time; factoring in a gradual decline to 10.4% by FY20 (-60 bpsover FY17), driving yield on interest earnings assets (IEA) contraction of 70 bps over FY18-20E. Owing to limited scope for reduction incost of funds going forward, sustenance of NIM will be a function of pricing. We are factoring in a ~50 bps reduction in FY18 CoF(H1FY18 being 6.03%) and expect that FY19/20 are unlikely to see any CoF improvement. Over FY18-20E, we expect NIMs to remain~3.5%. On account of chunky watch-list slippages, we expect FY18 provisioning expense to be exceptionally high – expecting creditcosts at 3% for FY18 (vs. 1.7% in FY17). However, on account of lower slippages, recoveries and an overall better lending book qualitythereafter, we expect credit costs to decline over time to 1.4% driving up RoA/RoE to 1.2%/14% by FY20E.

VALUATION: Karur Vysya Bank enjoys strong reputation and brand name in Tamil Nadu. Being a well-established bank amongst thetrading and small business community of Karur and other parts of Tamil Nadu, Andhra and Telangana, the bank has a sticky customerbase. Having said this, one might relate KVB to being a small community bank taking deposits from the local community only to fundloans that invest in local people and businesses. The value of such customer relationships and bonds is something that cannot bequantified but can only be imagined as to how qualitatively strong it is. KVB’s loan book growth, deposits growth and customer basegrowth over the last decade could act as proxy for the same. Going forward, we expect the bank to deliver growth in line with thesystem; system being its presence states of TN, AP and Telangana. Further, as the bank shuns large ticket corporate lending andincrementally focuses on low ticket SME and retail loans, we expect granularity to increase thereby reducing concentration risk (“lawof large numbers”).

From an asset quality perspective, we expect FY18 to be an exceptionally bad year for the bank on account of chunky slippages fromthe watch-list which includes ~INR 5.4 bn worth of NCLT cases. Overall exposure to the RBI-identified NCLT cases is ~INR 10.8 bn.Other than the NCLT cases, most of the pain emanates from the corporate lending carried out in distant history. Apart from thecorporate pain that will throw up an aberration in FY18/19 in form of high provisioning expense, asset quality on the retail and SMEbook stands pristine. Having started as an SME-finance bank catering majorly to local customers, we expect the bank’s century oldstanding to come in handy. Such a footing along with good underwriting expertise should provide the bank with a competitive edgeas it pursues growth on back of SME and retail lending. Asset quality control will be kept under check as the bank’s well-entrenchedrelationships with the local community will help in faster recoveries.

From valuation perspective, we’d like to take into account the bank’s 100 years of existence (and still going strong!). Over the lastdecade (FY08-17), the bank has delivered 19.2% CAGR in advances, 19.1% CAGR in deposits and an overall balance sheet CAGR of 18.8%.Despite the increasing competition from other banks, sudden burst of NBFCs and other financial institutions in last 4-5 years, KVB hasbeen able to improve NIMs by 80-90 bps. Had it not been for the chunky corporate slippages, the NIM could have been even higher.As the bank charts a granular lending strategy, we expect KVB to be able to defend its NIMs at 3.5%. NII CAGR over FY08-17 has been19.6% while PAT CAGR over the same period is 14.2%, impacted by high provisioning since FY14. We expect this trend to reverse FY19onwards as granularity-led strategy plays out and corporate related provisioning dies out. We reiterate FY18 will see exceptionallyhigh provisioning. We’d also like to highlight NII CAGR of 17.3% over FY14-17 against an advances CAGR of 6.4%. This has been giveneffect by expansion in NIMs on back of increasing share of SME and retail book as well as due to reduction in cost of funds due tosharp CASA pick-up. Regarding profitability, the bank over the last decade has delivered an average RoE of 17.5%, however for FY18we expect it to be suppressed on two accounts 1) high provisioning will impact PAT 2) recently concluded rights issue of INR 9 bn willexpand equity base. Based on our estimates, we expect the bank to return to 1.2%/14% RoA/RoE by FY20E.

Given the bank’s 100 years of operating history, ~20% CAGR over the last decade, conservative lending philosophy, visibilityregarding future trajectory, brand reputation and customer relationships/sticky customer base, we assign a multiple of 1.7x toFY20E ABVPS estimate, arriving at a target price of INR 145 per share, implying a potential upside of 24.2%.


3

Particulars FY2015 FY2016 FY2017 FY2018E FY2019E FY2020E

NIM (%) 2.9% 3.3% 3.6% 3.5% 3.5% 3.5%

RoA (%) 0.9% 1.0% 1.0% 0.4% 1.0% 1.2%

RoE (%) 10.9% 12.9% 12.5% 4.4% 11.8% 14.0%

EPS (INR) 37.5 46.6 9.9 3.5 10.1 13.3

BV (INR) 349.1 375.2 82.6 84.0 91.1 100.4

ABV (INR) 326.0 357.5 65.7 65.0 72.1 85.3

P/E (x) 12.4 9.9 11.7 33.4 11.5 8.8

P/BV (x) 1.3 1.2 1.4 1.4 1.3 1.2

P/ABV (x) 1.4 1.3 1.8 1.8 1.6 1.4

Exhibit 1: Financial snapshot

Source: Company, KRChoksey Research





India Equity Institutional Research II Initiating Coverage II 20th December, 2017

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Contents Page No.

Leadership change; comes with global banking experience; re-aligning focus towards spreads 5

Key takeaways from our recent interaction with the new MD/CEO 5

Back to the roots! - loan book to grow on back of SME and retail; share of corporate will shrink 6

Incremental corporate book likely to be stronger from asset quality perspective 7

Retail push is being driven by housing and mortgage loans 7

Culture change will be a BIG growth driver 8

FAVORABLE LOAN BOOK CHARACTERISTICS; INCREASING GRANULARITY TO HELP MITIGATE DEFAULT RISK

9

Corporate book quality 9

Concentration – “law of large numbers” 10

Granularity 10

Security – Share of secured advances has been increasing 11

Relative maturity – favorable ALM than most with 80% advances maturing in under 3 years 11

POSITIVE AND LARGEST INCOME GAP – AN INHERENT ADVANTAGE? 13

Industry exposure 14

Geographical distribution of credit 15

Asset quality issues should peak out over FY18/19; anticipating watch-list slippages to spoil the show 16

WL slippages will hurt in FY18; normalization to gradually set in FY19 onwards 16

Stress, apart from what’s recognized 17

Expect provisioning to be exceptionally high for FY18; will normalize FY19 onwards 18

Incremental focus on SME + retail will drive NIMs higher; new MD/CEO’s focus on expanding the spread 20

GRANULAR LOW TICKET/RETAIL DEPOSITS BASE + STRONG CASA 21

Operational costs to stay elevated for some time due to wage revisions and tech investments 22

Leveraging technology will help bring down costs, manual intervention and boost non-interest revenue 23

Fee income generation initiatives will be supplementary to profitability 24

VALUATION: VANTAGE POINT 1 / FUNDAMENTAL VALUE OF THE STANDALONE BANK 25

VALUATION: VANTAGE POINT 2 / ACQUISITION/MERGER PERSPECTIVE (JUST A VIEW!) 26

Key risks & challenges 29

Key Financials 30


Page

Leadership change; comes with global banking experience; re-aligning focus towards spreads

Mr. P R Seshadri is the new MD and CEO of Karur Vysya Bank, taking over the helm from the out-going ME/CEO Mr. Venkatraman. Mr.Seshadri is a senior banker with Commercial and Retail Banking experience of over 25 years spanning multiple geographies. He has aproven track record of building and leading large teams while executing and delivering complex business objectives. He hassignificant experience in working in highly regulated businesses/environment in Asia/UK.

He started his banking career with Citibank N.A., India in early 1991. He was involved with Citibank India in various capacities till 2005.He made significant contributions to Citibank’s businesses in India. From 2003-2005, he was the MD of Citi Financial ConsumerFinance India Limited, a pioneer in the consumer finance space and also one of the largest NBFCs of that time. Prior to this, he wasMarketing Director, Citibank India responsible for lending products and the development of structured products – e.g. securitisation.He also held the position of MD, Citi Financial Retail Services Limited – another Citi-owned NBFC.

In his capacity as Head of Banking Collections, Citibank N.A., he pioneered many of the collection practices commonplace in theindustry today. He was the principal architect of Citi’s Collection Code of Conduct – a documentation of best practices that has beenwidely emulated. In addition, while in India he held senior positions in retail and commercial (SME) businesses.

He moved to Singapore in 2005 as the MD and regional head of Lending Businesses, APAC. In this capacity he was responsible forCitibank’s Lending Businesses in 13 countries/territories across APAC. Subsequently, he was appointed as the MD and Head of Sales &Distribution, Citibank in APAC. In this capacity, he was responsible for sales/distribution of all of Citi’s products throughbranches/other non-branch channels. He was a key driver of the rapid changes to Citi’s sales and distribution model over this period.

More recently, he was CEO of NFC Bank Limited – a Global Payment Bank established in London to provide convenient and fast globalpayments capabilities while fully confirming to regulatory requirements – at reasonable costs – to payments services providers andmedium sized corp0rates in UK and elsewhere.

He is an alumnus of IIM-Bangalore and Delhi College of Engineering.

Key takeaways from our recent interaction with the new MD/CEO:

•Mr. Seshadri having experienced the global financial crisis will be more focused on net interest spreads and reducing concentrationrisk. Therefore, pricing is unlikely to be compromised upon.

•Mr. Seshadri took up the job at KVB since he wanted to move back to India for personal reasons. KVB has a history of long-tenureCEOs, mostly serving 3 terms (9 years).

•KVB is a retail borrower but a corporate/commercial lender. The bank is focusing on reducing the ticket size in the corporatesegment.

•Asset quality wise, the bank is witnessing good quality on the commercial and retail segment with NPA accretion at 90 bps and 60bps respectively. However on the corporate portfolio, NPA formation is high.

•Focus will be on high spreads and therefore the bank may price its loans slight higher. Growth is expected to be in line with theoverall credit demand.

•The bank is unlikely to witness any positive pick up from the cost of funds side as they have bottomed out more or less. NIMs goingahead will solely be driven by pricing.

•KVB’s management bandwidth and depth is unmatched in rural and semi-urban areas. The bank has been able to deploy high levelmanagement in these areas, unlike any other banks. This provides KVB locational advantage.

•The bank is pushing digital initiatives at the bank with a senior GM looking after tech investments like automated loan underwriting.

•The bank’s first area of focus is risk. It will take another 6 months to build a good risk team. The bank is currently looking to hire aChief Risk Officer.

•The bank does not expect or expect marginal recovery on the SRs.

•Opex for the year is likely to stay high on account of full impact of branch roll out in last year, rise in headcount + wage hikes. Longterm C/I target is 45%.


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Back to the roots! - loan book to grow on back of SME and retail; share of corporate will shrink

On a longer curve, KVB has seen a strong loan book growth with 10-year CAGR of 19.2% (FY08-17). Based in the heart of textilemanufacturing and trade, the bank is favorably positioned to take early advantage of upswings in economic activity, especially on theSME side of the book. However, in recent years, due to economic growth being sluggish along with prevailing subdued sentiment incorporate capex, loan book growth has slowed down with 5-year CAGR being 11.3% (FY12-17) and 3-year CAGR being 6.4% (FY14-17).Apart from the weak macros impacting growth, the bank’s conscious decision to reduce large ticket-size corporate lending has alsoplayed some part (due to weak asset quality and slippages). Excluding corporate, advances have grown at a 5-year CAGR of 14.6%(FY12-17). Going forward, the bank intends to increase focus on lending to SME and retail. The bank having started as an SME-financing bank a century ago enjoys core expertise in managing small-ticket exposures. The management in their most recentcommunication, addressed by the new MD/CEO Mr. Seshadri, has expressed that they want to take the share of small ticket-sizeexposures higher which gives a perspective of the strategy the bank is likely to pursue on the loan growth front. As of FY17, share ofcorporate book stood at 33% as opposed to 43.2% in FY12, whereas over the same period, the share of retail has increased from 9.2% to15% and that of commercial (SME) stood at unchanged 35% after having seen some decline over FY12-16. In light of the bank’s lendingstrategy, we expect advances to grow at 12% annually over FY18-20E.


6

94.2 104.1 135.0 178.1

239.5 294.8

339.9

361.1 390.8 409.1 458.2

513.1 574.7

34%

10%

30%32%

34%

23%

15%

6%8%

5%

12% 12% 12%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

100

200

300

400

500

600

700

Exhibit 2: Loan book growth has been sluggish in recent years..

Advances (Rs. Bn) Growth (%)

Particulars (INR Mn) FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 H1FY18

Corporate 76,976 100,826 110,786 125,091 134,325 136,275 134,995 145,140

Growth (%) 31% 10% 13% 7% 1% -1% 11%

Retail 16,425 19,543 35,022 42,490 48,386 58,593 61,362 69,080

Growth (%) 19% 79% 21% 14% 21% 5% 12%

Agri 20,932 37,672 53,860 60,166 61,385 69,622 69,543 77,730

Growth (%) 80% 43% 12% 2% 13% 0% 12%

Commercial 63,811 81,451 95,132 112,174 116,993 126,374 143,177 150,420

Growth (%) 28% 17% 18% 4% 8% 13% 13%

Total advances 178,145 239,492 294,801 339,921 361,089 390,844 409,077 442,370

Growth (%) 34% 23% 15% 6% 8% 5% 12%

Total advances (ex-Corporate) 101,168 138,666 184,015 214,830 226,764 254,569 274,082 297,230

Growth (%) 37% 33% 17% 6% 12% 8% 15%

Exhibit 3: Advances segmentation by end-use








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21% 24% 27% 32% 34% 35% 37% 37%

9% 11%13% 15% 17%

19%19%

19%

17% 15%14%

15% 15%

23%23%

23%

19% 15% 12% 9% 9%13% 13% 10%8%

7% 6% 5% 4%

20% 17% 17% 11% 15% 15% 15% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 H1FY2018

Exhibit 6: Composition of retail loan book (%) – Growth mostly driven by housing and mortgage loans

Housing Mortgage/LAP Vehicle Jewel Personal Education Others

Incremental corporate book likely to be stronger from asset quality perspective

With corporate segment taking a back seat, the bank will be highly selective in its lending approach. During FY17 there was slight de-growth in the corporate portfolio due to large scale prepayments and also due to the bank taking a cautious stance on lending amidincreased stressed assets in the banking system. Having learned from past mistakes, the bank will be focusing on small ticketcorporate exposures – currently (as of Q2FY18) 57% of the corporate exposure is made up of ticket size of more than INR 0.5 bn.Further, instead of participating in consortium lending where the bank has experienced significant asset quality issues, emphasis willnow be on being the sole banker where the bank can have greater control. The bank will also focus on significant collateral.Considering this, we do not expect any major asset quality issues from the incremental corporate book.

Though, taking a conservative view for the purpose of valuing the bank, we have factored in slippage of the whole of INR 12 bnwatch-list which comprises of 14 accounts over the next 2-4 quarters (i.e. H2FY18 – H1FY19).

Retail push is being driven by housing and mortgage loans

KVB’s retail portfolio has been growing on back of robust demand from housing and mortgage segments, both of which haveincreased their share in the total book. As opposed to 41% in FY14, the combined share of both the segments now stands at 54% as ofQ2FY18. Such change in retail book composition has come at the cost of other segments – vehicle loans, jewel loans, personalloans, education loans – which have lost their share. We view this transformation in the retail book in light of the bank traditionallybeing a secured lender, not only asking for primary security but for collateral as well.


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43% 42% 38% 37% 37% 35% 33%

9% 8% 12% 13% 13% 15% 15%

12% 16% 18% 18% 17% 18% 17%

36% 34% 32% 33% 32% 32% 35%

0%

20%

40%

60%

80%

100%

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Exhibit 4: De-risking and granularizing portfolio by shrinking corporate book has been a task in motion

Corporate Retail Agri Commercial

78% 81% 82%

22% 19% 18%

0%

20%

40%

60%

80%

100%

FY2014 FY2017 H1FY2018

Exhibit 5: SME and retail driving granularity – advances composition by ticket size (%)

< Rs. 50 crore > Rs. 50 croreSource: Company, KRChoksey Research







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Culture change will be a BIG growth driver

Traditionally, KVB had been a branch-based lender, selling lending products mostly to branch walk-in customers. More recently, thebank has been trying to change that culture by actively chasing customers outside of the branches. Currently, the bank has a strengthof about 1,000 DSAs on which the bank plans to build its “feet-on-street” strategy/model. While we believe this strategy to be aproactive and sound one, our concern is that it will play out over a longer period of time and that benefits in short-term are unlikelyto be visible. In addition to this, a sticky customer base will help in building sustained growth.


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40%

59%

43%

27%

19%

11%

49%

39%

23%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Exhibit 7: Segmental growth rates under retail portfolio – housing and mortgage/LAP have witnessed high growth (%)

Housing Mortgage/LAP Vehicle Jewel Personal Education







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FAVORABLE LOAN BOOK CHARACTERISTICS; INCREASING GRANULARITY TO HELP MITIGATEDEFAULT RISK

Corporate book quality

As of FY17, KVB had a corporate loan book of INR 13.5 bn, forming 33% of the total loan book, having grown atCAGR of 6% since FY12. Of the total industry exposure, textile accounts for 27% (9% of the total book) which is anatural outcome of the bank being based out of Karur which is a textile town. Exposure to textile sector stands atINR 37.7 bn. The other significant industry exposures for the bank are infra and metals which form 7% and 3%of the total book respectively. At INR 29.6 bn as of FY17, exposure to the infra sector has de-grown at 2% CAGRsince FY14 while exposure to metals at INR 11.9 bn has grown at 13% CAGR over the same period.

Over FY10-12, the bank carried out aggressive corporate lending during which the share of this segment alsoincreased. Having burned their fingers owing to corporate loans turning bad, the bank took a conscious decisionto curb corporate lending and stick to its roots of financing SME and retail loans. As a result, share of corporateloans as of FY17 stands at 33%, down from 43.2% in FY11. Within the corporate portfolio, the bank has emphasizedon generating quality and less risky business. This is evident from the fact that as opposed to 68% in FY10,working capital loans now make up 79% of the total corporate loans. Further, loans of >INR 1 bn ticket size formonly 32% of the corporate book which translates to a book size of INR 43.2 bn. This is only 10.6% of the totalloan book as of FY17. On the other hand, share of more granular corporate loans (of ticket size up to INR 0.5 bn)has increased from 39% in FY14 to 43% in FY17. We believe such developments over the years signify considerableefforts on part of the bank to safeguard its corporate exposures and protect its balance sheet.

Advantages of shorter-tenure/working capital loans:

Quicker re-pricing of loans which helps in avoiding interest rate risks as well as maintaining margins;

Reduces cash flow uncertainty as short-term predictability is greater (both for the borrower and lender);

Increases funds churn;

Helps containing asset quality


9

77.0

100.8110.8

125.1134.3 136.3 135.031.0%

9.9%12.9%

7.4%

1.5%-0.9%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

20

40

60

80

100

120

140

160

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Exhibit 8: Change of lending strategy is reflected in corporate segment growth..

Corporate loans (Rs. Bn) Growth (%)

43% 42%38% 37% 37%

35% 33%

0%

10%

20%

30%

40%

50%

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Exhibit 10: Share of corporate loans (%)

17%

26%

25%

32%

Exhibit 9: Corporate book break-up - Low ticket size/working capital corporate exposures place KVB

favorably

< Rs. 25 crore Rs. 25-50 croreRs. 50-100 crore > Rs. 100 crore

68%88% 83% 79% 79%

32%12% 17% 21% 21%

0%

20%

40%

60%

80%

100%

FY2010 FY2014 FY2015 FY2016 FY2017

Exhibit 11: Composition of corporate book by type (%)

Working capital loans (%)

Term loans (%)







Source: Company, KRChoksey ResearchSource: Company, KRChoksey Research


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Concentration – “law of large numbers”

Concentration towards top 20 borrowers has reduced substantially to 9% as of H1FY18 as against 26% in FY10mostly on account of the bank incrementally focusing on lower ticket size exposures (SME + retail) while at thesame time adopting a very selective approach towards corporate lending which tends to have large ticketexposures. We believe greater diversification/spreading risk over a larger number of accounts will protect thebank against default risk. Going forward, we expect the bank to stick to its lending philosophy and diversifyadequately enough to avoid concentration risks from building up.

Granularity

The bank classifies loans of ticket size up to INR 0.25 bn as commercial/SME loans whereas all loans above INR 0.25bn are classified as corporate loans. As of Q2FY18, exposures of ticket size of >INR 0.5 bn formed only 18% of thetotal loan portfolio as against 22% as of FY14 which represents the bank’s growing focus on granularizing theportfolio. Such level of granularity will help in insulating the bank’s balance sheet from external shocks and is apositive from concentration risk perspective. Of the total book of INR 409.1 bn as of FY17, advances only worthINR 76.95 bn can be categorized as large ticket size exposures. This book (of large ticket exposure) formed 22% ofthe total as of FY14 (~INR 76.3 bn), thus implying that most of the loan book growth has come from small ticketsize exposures.


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Exhibit 13: Loan book granularity

FY2014 FY2017 H1FY2018

% INR Mn % INR Mn % INR Mn

Corporate book break-up (%)

< INR 25 crore - - 17% 22,949 17% 24,674

INR 25-50 crore 39% 48,786 26% 35,099 27% 39,188

INR 50-100 crore 30% 37,527 25% 33,749 26% 37,736

> INR 100 crore 31% 38,778 32% 43,199 30% 43,542

Commercial book break-up (%)

< INR 5 crore 78% 87,496 78% 111,678 78% 117,328

> INR 5 crore, < INR 10 crore 11% 12,339 11% 15,749 11% 16,546

> Rs 10 crore, < INR 25 crore 11% 12,339 10% 14,318 10% 15,042

> INR 25 crore - - 1% 1,432 1% 1,504

Total loan book break-up (ticket size wise) (%)

< INR 50 crore 78% 263,616 81% 332,130 82% 361,092

> INR 50 crore 22% 76,306 19% 76,947 18% 81,278







26%

20%

17%

12% 12%11%

10% 10%9%

0%

5%

10%

15%

20%

25%

30%

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 H1FY18

Exhibit 12: 16% reduction in concentration towards top 20 borrowers


Page

Security – Share of secured advances has been increasing

From balance sheet safety and strength perspective, we find comfort in the fact that the share of secured loansstands at 99% and has only increased over the years. During times of hyper growth in unsecured retail lending, welike that KVB has stuck to its core principles and lending philosophy. Although secured advances may result inlower yields and NIMs, however the resultant better asset quality and lower credit costs will be more thancompensatory enough at the bottom-line profitability level.

Relative maturity – favorable ALM than most with 80% advances maturing in under 3 years


11

EXHIBIT 16: ASSET LIABILITY MANAGEMENT SCHEDULE – ADVANCES MATURITY PROFILE

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Maturity mix of advances (%)

1 day 4% 3% 4% 8% 10% 8% 7%

2 - 7 days 0% 0% 0% 1% 1% 0% 0%

8 - 14 days 1% 0% 0% 1% 1% 1% 1%

15 - 28 days 1% 1% 1% 2% 2% 2% 3%

29 days - 3 months 5% 6% 4% 9% 8% 7% 7%

>3 months, <=6 months 3% 3% 3% 8% 9% 8% 8%

>6 months, =12 months 26% 28% 33% 18% 14% 15% 12%

>1 year, =3 years 42% 41% 38% 36% 37% 41% 42%

>3 years, =5 years 10% 9% 8% 8% 9% 9% 10%

>5 years 9% 8% 8% 9% 10% 11% 10%

Total (%) 100% 100% 100% 100% 100% 100% 100%

Advances mix (%)

Advances maturing under a year (%) 39% 43% 46% 46% 45% 40% 38%

Advances maturing under 3 years (%) 81% 84% 84% 83% 81% 81% 80%

Advances maturing over 3 years (%) 19% 16% 16% 17% 19% 19% 20%

91%

86%

93% 92%95% 94%

96% 97% 98% 99% 99%

75%

80%

85%

90%

95%

100%

105%

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Exhibit 14: Share of secured advances (%)

99.2% 98.6% 98.3%

93.8%

96.3% 96.4%

87.1%

80%

85%

90%

95%

100%

Karur Vysya Bank City Union Bank Lakshmi Vilas Bank South Indian Bank DCB Bank Karnataka Bank Federal Bank

Exhibit 15: Comparative analysis of share of secured lending (%) – KVB has the highest share of secured advances









Page

Of the banks under comparison, KVB, LVB and CUB have the most favorable characteristics in terms of loan bookmaturity. For KVB, 80% of the advances mature in under 3 years (against 67% as of FY07). When looked at over alonger horizon (2007-2017), we may conclude that KVB has worked towards improving the maturity profile of itsadvances book.

Why is shorter-maturity better?

> From asset quality perspective, shorter-maturity loans provide more certainty and better visibility of cash flows tothe borrower so he is able to plan and service his/her interest obligations better and timely which ultimately benefitsthe bank/lender.


12

Exhibit 17: Comparison of advances maturity profile (FY2017) – Shorter is better!

ParticularsKarurVysyaBank

City Union Bank

DCB BankLakshmi

Vilas BankFederal

BankSouth

Indian Bank

Maturity mix of advances (%)

1 day 7% 0% 2% 1% 1% 2%

2 - 7 days 0% 4% 1% 2% 2% 1%

8 - 14 days 1% 3% 1% 4% 1% 1%

15 - 28 days 3% 2% 1% 2% 2% 3%

29 days - 3 months 7% 3% 4% 15% 8% 10%

>3 months, <=6 months 8% 5% 4% 4% 8% 10%

>6 months, =12 months 12% 11% 8% 9% 12% 15%

>1 year, =3 years 42% 54% 37% 43% 42% 14%

>3 years, =5 years 10% 8% 11% 6% 12% 7%

>5 years 10% 9% 30% 14% 13% 36%

Total (%) 100% 100% 100% 100% 100% 100%

Advances mix (%)

Advances maturing under a year (%) 38% 29% 22% 38% 34% 43%

Advances maturing under 3 years (%) 80% 83% 59% 80% 76% 57%

Advances maturing over 3 years (%) 20% 17% 41% 20% 24% 43%







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POSITIVE AND LARGEST INCOME GAP – AN INHERENT ADVANTAGE?

We are particularly enthused by the fact that KVB has the largest positive income gap amongst its peers which places the bank in avery advantageous position in a rising interest rate scenario. If such a scenario were to materialize going forward, NII for KVB will bepositively impacted due to its RSAs being larger than RSLs (positive income gap). Not to forget, larger GAP translates into largerbenefit and KVB amongst its peers has the largest positive income gap.

91-22-6696 5555 / 91-22-6691 9569www.krchoksey.com




13

ANALYSTRaghav Garg, [email protected], 91-22-6696 5527

Exhibit 18: Inter-relationship between GAP and ΔNII

Type of GAP Change in interest rates (Δr) Change in net interest income (ΔNII)

RSA = RSL Increase No change

RSA = RSL Decrease No change

RSA =/> RSL Increase NII increases

RSA =/> RSL Decrease NII decreases

RSA =/< RSL Increase NII decreases

RSA =/< RSL Decrease NII increases

Exhibit 19: INCOME GAP CALCULATION (INR Mn) FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Interest earning assets (rate sensitive assets/RSA)

maturing under a year 64,896 108,644 165,354 228,799 232,380 226,142 212,693 243,418

maturing under 3 years 126,283 211,957 295,184 364,831 377,166 383,281 399,911 445,786

maturing over 3 years 203,244 255,462 347,864 435,747 476,719 495,242 527,571 563,905

Interest bearing liabilities (rate sensitive liabilities/RSL)

maturing under a year 94,600 118,145 189,381 258,420 245,260 207,835 193,008 176,474

maturing under 3 years 164,233 212,660 292,735 339,364 311,040 284,765 288,793 287,445

maturing over 3 years 197,477 252,517 340,842 426,523 470,510 475,910 516,521 553,955

GAP (= RSA – RSL)

maturing under a year (%) -29,715 -9,501 -24,027 -29,620 -12,880 18,307 19,685 66,944

maturing under 3 years (%) -37,950 -703 2,448 25,467 66,126 98,516 111,118 158,341

maturing over 3 years (%) 5,767 2,945 7,022 9,224 6,209 19,332 11,050 9,950

Exhibit 20: ASSET LIABILITY MANAGEMENT SCHEDULE / INCOME GAP COMPARISON (INR Mn)

ALM/maturity profile of peers - FY2017

KarurVysyaBank

City Union Bank

DCB BankLakshmi

Vilas BankFederal

Bank

South Indian Bank

Interest earning assets (rate sensitive assets/RSA)

maturing under a year 243,418 125,678 47,360 94,897 357,139 277,302

maturing under 3 years 445,786 265,409 113,698 199,598 704,502 359,542

maturing over 3 years 563,905 308,552 216,356 323,806 1,015,324 658,191

Interest bearing liabilities (rate sensitive liabilities/RSL)

maturing under a year 176,474 93,748 112,157 163,253 409,663 236,535

maturing under 3 years 287,445 280,257 194,558 253,810 807,844 272,949

maturing over 3 years 553,955 306,467 205,650 323,265 1,025,619 680,753

GAP (= RSA – RSL)

maturing under a year (%) 66,944 31,930 -64,797 -68,356 -52,524 40,767

maturing under 3 years (%) 158,341 -14,849 -80,860 -54,213 -103,342 86,593

maturing over 3 years (%) 9,950 2,084 10,706 541 -10,295 -22,561





Page


14

Exhibit 21: Industry exposure (INR Crore) FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Mining & Quarrying 105 191 214 193 213 210 523 304

Food Processing 543 770 863 1,011 1,134 1,318 1,282 536

Beverages & Tobacco 101 97 103 79 91 77 122 112

Textiles 1,495 1,876 1,777 2,057 2,596 2,771 3,515 3,769

Leather And Leather Products 25 2 2 9 4 11 19 37

Wood And Wood Products 0 0 154 198 221 253 268

Paper And Paper Products 195 82 76 93 97 123 265 195

Petroleum 20 1 2 25 26 0 9 34

Chemicals And Chemical Products 381 478 494 473 698 641 720 522

Rubber, Plastic And Their Products 45 129 195 209 250 284 166 355

Glass & Glassware 0 0 9 5 5 56 40

Cement & Cement Products 46 177 95 92 91 82 375 385

Basic Metal And Metal Products 644 751 1,154 1,382 1,584 1,459 1,225 1,194

All Engineering 174 174 270 386 424 499 434 513

Vehicles, Vehicle Parts And Transport Equipments

249 236 256 214 313 380 369 397

Gems And Jewellery 86 129 217 252 356 378 342 445

Construction 60 39 105 134 276 307 406 371

Infrastructure 2,297 2,736 2,984 2,948 3,136 3,422 3,353 2,964

Other Industries 2,925 3,657 6,797 485 437 371 199 247

Others 4,284 6,526 8,600 19,502 22,296 24,133 25,843 28,749

Total 13,675 18,052 24,205 29,706 34,226 36,691 39,476 41,435

As % of total FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Mining & Quarrying 1% 1% 1% 1% 1% 1% 1% 1%

Food Processing 4% 4% 4% 3% 3% 4% 3% 1%

Beverages & Tobacco 1% 1% 0% 0% 0% 0% 0% 0%

Textiles 11% 10% 7% 7% 8% 8% 9% 9%

Leather And Leather Products 0% 0% 0% 0% 0% 0% 0% 0%

Wood And Wood Products 0% 0% 0% 1% 1% 1% 1% 1%

Paper And Paper Products 1% 0% 0% 0% 0% 0% 1% 0%

Petroleum 0% 0% 0% 0% 0% 0% 0% 0%

Chemicals And Chemical Products 3% 3% 2% 2% 2% 2% 2% 1%

Rubber, Plastic And Their Products 0% 1% 1% 1% 1% 1% 0% 1%

Glass & Glassware 0% 0% 0% 0% 0% 0% 0% 0%

Cement & Cement Products 0% 1% 0% 0% 0% 0% 1% 1%

Basic Metal And Metal Products 5% 4% 5% 5% 5% 4% 3% 3%

All Engineering 1% 1% 1% 1% 1% 1% 1% 1%

Vehicles, Vehicle Parts And Transport Equipments

2% 1% 1% 1% 1% 1% 1% 1%

Gems And Jewellery 1% 1% 1% 1% 1% 1% 1% 1%

Construction 0% 0% 0% 0% 1% 1% 1% 1%

Infrastructure 17% 15% 12% 10% 9% 9% 8% 7%

Other Industries 21% 20% 28% 2% 1% 1% 1% 1%

Others 31% 36% 36% 66% 65% 66% 65% 69%

Total 100% 100% 100% 100% 100% 100% 100% 100%







Page


15

Exhibit 22: Geographical distribution of credit (INR Crore)

FY2014 as % of total FY2015 as % of total FY2016 as % of total FY2017 as % of total

Andhra Pradesh 7,431 21.7% 4,591 12.5% 5,426 13.7% 5,703 13.8%

Chandigarh 36 0.1% 38 0.1% 38 0.1% 39 0.1%

Chhattisgarh 13 0.0% 14 0.0% 21 0.1% 24 0.1%

Delhi 2,150 6.3% 2,015 5.5% 2,157 5.5% 2,374 5.7%

Goa 26 0.1% 38 0.1% 61 0.2% 50 0.1%

Gujarat 1,361 4.0% 1,141 3.1% 1,264 3.2% 1,452 3.5%

Haryana 160 0.5% 167 0.5% 195 0.5% 301 0.7%

Jharkhand 18 0.1% 23 0.1% 31 0.1% 26 0.1%

Karnataka 1,372 4.0% 1,740 4.7% 2,027 5.1% 2,156 5.2%

Kerala 270 0.8% 428 1.2% 489 1.2% 708 1.7%

Madhya Pradesh 95 0.3% 107 0.3% 135 0.3% 157 0.4%

Maharashtra 3,496 10.2% 3,366 9.2% 3,527 8.9% 3,308 8.0%

Orissa 154 0.5% 135 0.4% 104 0.3% 124 0.3%

Pondicherry 165 0.5% 172 0.5% 178 0.5% 239 0.6%

Punjab 307 0.9% 292 0.8% 306 0.8% 297 0.7%

Rajasthan 129 0.4% 137 0.4% 89 0.2% 91 0.2%

Tamil Nadu 15,573 45.5% 16,549 45.1% 17,842 45.2% 18,615 44.9%

Telangana 3,757 10.2% 4,041 10.2% 4,022 9.7%

Uttar Pradesh 158 0.5% 372 1.0% 343 0.9% 328 0.8%

West Bengal 1,301 3.8% 1,609 4.4% 1,203 3.0% 1,423 3.4%

Total 34,215 100.0% 36,691 100.0% 39,476 100.0% 41,435 100.0%

Despite a well-diversified loan book based on end-use, geographical concentration still remains high for KVB. As of FY17, the bank had45% advances from Tamil Nadu, the bank’s native state, 14% from AP and 10% from Telangana. These 3 states (TN + AP + Telangana)collectively form a stronghold region for the bank. For the foreseeable future, we expect the bank to continue to focus on thesestates given the business opportunities they have to offer.

South64385%

North426%

East243%

West436%

Exhibit 23: Geographical spread by branches (%)

Metro, 26%

Urban, 21%Semi-

urban, 37%

Rural, 16%

Exhibit 24: Branch spread by area-type (%)






Source: Company, KRChoksey Research Source: Company, KRChoksey Research


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Asset quality issues should peak out over FY18/19; anticipating watch-list slippages tospoil the show

KVB was always a retail & SME finance bank, however lured by the economic boom, it started lending to corporates.Over 2008/09/10, a lot of textile accounts undertook heavy expansionary investments when the economy wasbooming. However soon after as the global economy plunged into the financial crisis of 2008-09, the textile industrieswere hit by a downturn in export demand from western countries, resulting in pressure on cash flows and ultimatelyon the banks. Besides textile, the bank also lent aggressively to other sensitive sectors and entered into large ticketconsortium lending over FY10-12 which were later severely impacted by the economic downturn. In July 2013, in orderto support the Indian rupee against further depreciation, the RBI effectively increased the interest rates by 300bps, thereby raising the cost of funds and raising concerns of higher borrowings costs for the corporate Indiaaffecting economic growth. As a consequence of such monetary tightening and widespread economic slowdown, alot of corporates who had undertaken debt financing were hit badly to the extent that they were unable to servicetheir debt obligations. This ultimately showed up in the banks’ asset quality, including KVB, which has deteriorated inrecent years.

From 1.86% in FY15, GNPAs have jumped to 3.59% as of FY17 and 4.83% as of Q2FY18. Most of the stress in the bank’slending book can be attributed to the aggressive corporate lending carried out by the bank in earlier years. DuringFY16, the bank sold a large chunk of its stress, worth about INR 8-9 bn, to ARCs and hence the reduction in NPAs.Slippages during FY17 jumped partially on account of demonetisation as majority of the bank’s customers inretail, SME and agri are in rural and semi-urban areas where activities are cash intensive. The note-ban had impactedsmall businesses severely, crippling their income generation and debt-servicing ability. While people were able todeposit cash, withdrawal became a challenge. However, to deal with non-corporate stress, the bank has a dedicatedrecovery & collections team. In addition to 3 existing collection centres, the bank recently opened another collectioncentre which will collectively focus on small ticket loans rather than leaving the collections process to the branches.We believe this strategy to have already started bearing fruit as asset quality on the commercial (SME) and retail bookstands superior. During Q2FY18, net slippage in commercial/SME was INR 0.35 bn (0.93% of the SME book) while retailnet slippage was INR 0.10 bn (~0.58% of the retail book). Corporate net slippage during Q2FY18 was INR 2.84 bn. Onthe corporate side, incremental stress (not classified as NPA) stands at INR 12 bn comprising of 14 accounts in totalwhich could slip into NPA category over the next 2-4 quarters.

WL slippages will hurt in FY18; normalization to gradually set in FY19 onwards

Slippages have been consistently high since FY16 as has been the banking system stress, although a large part of theFY16 slippage of INR 11.3 bn was sold to ARC. During FY17, gross slippage was INR 13.3 bn whereas recoveries andupgrades were relatively lower causing NPAs to shoot up. Q2/Q3/Q4FY17 particularly saw some slippages from largeaccounts wherein 2 accounts, worth about INR 3 bn, slipped during Q4 due to delay in SDR process. Nonetheless, weexpect incremental corporate exposure to be much better from asset quality and credit risk standpoint on accountof a) focus on lower ticket size exposures, b) avoiding consortium lending and c) lending to better rated corporates.However, for the purpose of our valuation, we have assumed the current WL to slip over the next 4 quarters. Beyondthis, the management does not expect any more chunky stress apart from routine normalized slippages. We expectasset quality issues to start subsiding FY19 onwards, thereby bringing down credit costs as well. What is comforting isthat almost all of the bank’s corporate exposure is collateral secured and hence we believe that chances of recoverywill be much higher. Consortium accounts which are now NPAs or stressed are expected to take longer time though.


16

2.82%

2.03% 1.95%1.72%

1.27% 1.33%

0.96%0.82%

1.86%

1.30%

3.59%

0.23% 0.18% 0.25% 0.23%0.08%

0.33% 0.37% 0.41%

0.78%0.55%

2.53%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%


Exhibit 25: Corporate slippages have dented asset quality…

GNPA (%) NNPA (%)







Page


17

Exhibit 26: Sharp uptick in slippages has hurt...

We estimate FY18 credit cost to be an outlier on account of WL slippages…

Our estimate of provisioning is based on our forecasted INR 17.8 bn worth of slippages during FY18 (+34% yoy) primarily onaccount of WL slipping into non-performing category. We also estimate that spillover of the WL slippage over to the next year, i.e.FY19, will be about INR 6 bn which will again keep credit costs under pressure during the first half of the year. However, with nomore exceptional stress beyond the WL, we expect gradual recovery in credit costs as well as profitability from H2FY19. Ourforecasts suggest that after a sharp rise during FY18, credit costs will subside FY19 onwards and end FY20 at ~1.4%.Consequently, our ROE during FY18 will be impacted on two accounts – a) high provisioning expense b) high equity base onaccount of recent rights issue worth INR 9 bn. For FY18, we are estimating an ROE of 4.4%. For FY19 and FY20, we expect it toturnaround sharply to 11.8% and14% respectively.

Stress, apart from what’s recognized

Apart from the stress recognized and classified as NPA, the bank has about Rs 3.1 bn under various restructuring schemes (2accounts under SDR worth INR 0.96 bn, 1 account under 5/25 worth INR 0.8 and 3 accounts under S4A worth INR 2.35 bn). WithINR 1 bn expected to slip into NPA from this (factored into our slippages + provisioning estimate), the remaining ~INR 3 bn isunlikely to be a cause of concern. Additionally, the bank has a standard restructured portfolio worth ~INR 7 bn (down 43.5% YoY)of which ~INR 4 bn is expected to perform satisfactorily while the remaining ~INR 3 bn is expected to slip into NPA (factored intoour slippages + provisioning estimate). SRs on the book amount to INR 4.9 bn as of Q2FY18, provisioned to the tune of INR 0.8 bn(INR 4.2 bn net o/s). Of the total o/s SRs, the bank expects to recover about 40-50%.

0.4 0.00.9 0.4 0.4 0.9 1.2

4.4 4.83.9

6.9

13.2

8.37.4

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0Exhibit 27: Total provisioning expense (INR Bn)

0.9%

0.4%

1.4%1.0%

3.0%

1.7%1.4%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5% Exhibit 28: Credit costs (%)






Source: Company, KRChoksey ResearchSource: Company, KRChoksey Research

0.8

0.8 1.2

0.5 1.

7

2.0

1.5

6.2

11.3 13

.3

0.9

0.7

0.9

0.6 0.8 2.

4

1.5 2.2

13.0

3.6

-0.1

0.1

0.3

-0.1 0.9

-0.4

-0.1

4.0

-1.7

9.7

-4

0

4

8

12

16

Gross slippages (INR Bn) Reductions (INR Bn)

Net slippages (INR Bn)

1.1% 1.2%

0.4% 0.5%

3.5%

-0.1% -0.1% -0.1%

1.2%

-0.5%

2.5%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Gross slippages (%) Net slippages (%)


Page

Expect provisioning to be exceptionally high for FY18; will normalize FY19 onwards

We expect provisioning expense to approximately double during FY18 to about INR 13.2 bn (+92% yoy) on account of provisioningtowards the expanded watch-list and NCLT cases (list 1 + 2). So far upto H1FY18, the bank has carried out provisioning worth INR 5.55bn, of which INR 3.17 bn has been specifically carried out against NPAs and NCLT cases. For FY18, we expect provisioning of INR 5.28bn against stressed/WL and another INR 5.27 bn based on assumption of 1.2% as normalized credit cost.

As of H1FY18, the bank has a total WL of stressed accounts worth ~INR 1 bn of which NCLT-related exposure stands at ~INR 5.4 bn andremaining INR 6.6 bn being non-NCLT exposure but identified as potentially stressful by the bank. Further, provisioning done so fartowards NCLT-related exposure stands at INR 2.88 bn with another 2.93 bn remaining to be provided by March 31st, 2018/FY18 to takePCR upto 54%. Therefore, we expect NCLT-related provisioning to the tune of INR 2.9 bn during H2FY18. Considering the worst casescenario, we have also assumed that the remaining INR 6.6 bn worth of watch-list/stressed accounts will slip into NPA category overthe next 2-4 quarters, i.e., over H2FY18 and H1FY19, and hence the bank would provide to the tune of 55% on this, which would shoreup the provisioning expense by INR 1.82 bn each in H2FY18 and H1FY19. Lastly, besides the exceptional stress (WL accounts) andrelated one-time high provisioning, we have assumed a normalized credit costs of 1.2% on advances (ex-WL). And therefore, we havearrived at a provisioning figure of INR 10.6 bn towards advances-related stress (NPA + WL + other identified stress). To this, we haveadded another INR 2.7 bn, of which INR 1.9 bn is accounted for by amortisation of loss on ARC sale and INR 0.2 bn as provisioningtowards standard assets.


18

Exhibit 29: Calculation of credit costs (all figures are in INR Mn unless stated otherwise)

Stress accounts (as per Q2FY18 presentation)SDR o/s (2 accounts) 9615/25 (1 account) 788S4A (3 accounts) 2,351Sale to ARC 0Total stress 4,100^ of which likely to slip into NPA 1,000

Standard restructured assets (as per Q2FY18 presentation)Amount o/s 7,036^ of which likely to slip into NPA 3,000

Total stress likely to slip (watch-list)of which under various restructuring schemes 1,000of which under standard restructured 3,000of which identified by the mgmt as stressed 8,000Total 12,000^ of which is NCLT exposure 5,400^ of which is non-NCLT exposure (assuming it will slip equally over H2FY18 & H1FY19) 6,600

NCLT exposures List 1 List 2 TotalTotal number of accounts (#) 4 5 9of which classified as standard 1 2 3of which classified as NPA 3 3 6Total NCLT exposure 6,800 3,980 10,780of which classified as standard (and included in the INR 12 bn WL as of Q2FY18) 3,000 2,400 5,400of which classified as NPA 3,800 1,580 5,380Provisioning so far (upto Q2FY18) 2,380 500 2,880Additional provisioning required 1,320 1,610 2,930Total provisioning 3,700 2,110 5,810PCR on NCLT exposure (%) 54% 53% 54%

Provisioning estimation on stressed accounts/watch-list H1FY18 H2FY18 FY18 FY19 FY20NCLT exposure classified as standard 2,930Non-NCLT exposure requiring immediate attention/provisioning 1,815 1,815PCR assumption (%) 55% 55%

Provisioning estimation [on advances ex-WL, assuming normalized credit cost] H1FY18 H2FY18 FY18 FY19 FY20Assumed normalized credit costs [annualized] 1.2% 1.2% 1.2%NPA provisioning on advances ex-WL 2,637 5,699 6,527

Total provisioning, including WL and NCLT accounts H1FY18 H2FY18 FY18 FY19 FY20Provisioning on stressed accounts/watch-list (incl. WL a/c) 540 4,745 5,285 1,815 0Provisioning on advances ex-WL, assuming normalized credit cost 2,630 2,637 5,267 5,699 6,527Total provisioning 3,170 7,382 10,552 7,514 6,527







Page

On the whole, our estimates suggest 3% credit costs for FY18. However post the one-time exceptional provisioning expense, weexpect credit costs to trend down drastically to 1.7%/1.4% by FY19/20.

Historically, upto FY17, the bank had witnessed a maximum credit cost of 1.7% in FY17. As had been guided earlier by the bank’s out-going MD/CEO Mr. Venkatraman, the watch-list was worth about INR 4.5 bn upto Q1FY18. Based on this scenario, credit costs wouldhave been much lower and as a result, profitability much better. However, on account of an upward revision in the quantum of thewatch-list to about INR 12 bn (+7.5 bn), our provisioning estimates have also increased sharply thereby denting profitability for FY18.However, we anticipate that most of the burden on account of provisioning will be borne in H2FY18 and that it should start to subsideFY19 onwards. We reiterate that our forecast is based on the assumption that the current outstanding WL of INR 12 bn will slipequally over the next four quarters, i.e., upto Q2FY19 and that the bank will provision for the corresponding slippage immediately tothe tune of 54-55%. Consequently, we expect EPS/RoE for FY18 to plummet to INR 3.5/4.4% followed by INR 10.1/11.8% in FY19.


19

0.9%

0.3% 0.3%0.4% 0.5%

1.4% 1.4%

1.0%

1.7%

3.0%

1.7%

1.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E FY2019E FY2020E

Exhibit 30: Credit costs to dent profitability in FY18 on account of exceptional stress

EXHIBIT 31: TOTAL STRESS (INR Mn) FY2016 FY2017 FY2018

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Total advances o/s 372,200 375,190 378,720 394,760 393,810 395,370 384,590 414,350 424,010 442,370

Asset quality:

Gross NPA 7,130 7,320 7,210 5,110 7,020 9,030 10,220 14,840 18,070 21,360

% of loans 1.92% 1.95% 1.90% 1.29% 1.78% 2.28% 2.66% 3.58% 4.26% 4.83%

Net NPA 3,230 3,550 3,600 2,160 3,060 5,650 6,380 10,330 11,890 14,070

% of loans 0.88% 0.96% 0.96% 0.55% 0.79% 1.44% 1.68% 2.53% 2.85% 3.24%

Standard restructured book 19,620 22,270 21,530 13,549 12,805 12,450 12,791 8,418 8,079 7,036

% of loans 5.27% 5.94% 5.68% 3.43% 3.25% 3.15% 3.33% 2.03% 1.91% 1.59%

SDR o/s 2,731 1,046 931 961

% of loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.71% 0.25% 0.22% 0.22%

5/25 o/s 760 768 757 788

% of loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.20% 0.19% 0.18% 0.18%

S4A o/s 541 2,084 2,351

% of loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.13% 0.49% 0.53%

SRs o/s 5,045 5,040 5,027 4,997

% of loans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.31% 1.22% 1.19% 1.13%

Total stress 22,850 25,820 25,130 15,709 15,865 18,100 27,707 26,143 28,766 30,203

% of loans 5.17% 5.84% 5.68% 3.55% 3.59% 4.09% 6.26% 5.91% 6.50% 6.83%








Page

Incremental focus on SME + retail will drive NIMs higher; new MD/CEO’s focus on expanding thespread

Over the last many quarters, the bank has worked towards maximizing its NIM on back of a strategy driven on two fronts – 1) pricingand 2) cost. On the pricing front, the bank has emphasized on lending to the higher-yielding SME and retail borrowers which isevident in how the loan book has transformed from having corporate share of >40% to 33% as of FY17 and even less as of Q2FY18.Given the strong location advantage the bank enjoys, sourcing >50% business from rural and semi-urban areas where pricing is not asmuch under pressure, sticky customer base, deployment of strong management bandwidth across branches and focus on expandingthe SME + retail pie further, we expect the incremental portfolio to yield higher. Mr. Seshadri, who comes with significant retailbanking experience, believes that higher NIMs/spreads protects a bank during bad times. We expect the bank’s NIMs to mirror hisviews gradually over time.

Low dependence on wholesale deposits - On the liability side, the bank is more of a retail borrower with only 10% of the term depositsbeing >INR 50 mn. In terms of concentration, top 20 depositors make up 7% of the total deposits. Such low ticket deposits havehelped the bank in granularizing the deposit base and containing cost of deposits, thereby boosting NIMs higher. CASA traction hasalso been strong with last 10-year CAGR being 19.1%. We expect spread on lending business to hold at 4.4% over the forecast horizonwhile overall NIMs will average at about 3.5% over FY18-20E.


20

10.4%11.5% 11.2% 10.8%

12.2% 12.3% 12.2% 12.0% 11.5% 11.0% 10.6% 10.5% 10.5% 10.5% 10.4%

6.8%7.4%

6.8% 6.4%

7.9% 8.0% 8.5% 8.3%7.4%

6.6%6.1% 6.0% 6.1% 6.1% 6.1%

2.7% 2.7% 3.0% 3.2% 2.9% 2.8% 2.7% 2.9% 3.3% 3.6% 3.8% 3.8% 3.5% 3.5% 3.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Exhibit 32: On account of increasing share of small-ticket loans and new leader’s focus, we believe NIMs will hold..

Yield on advances (%) Cost of funds (%) NIM (%)

3.6%

4.1%

4.4% 4.3% 4.2% 4.2%

3.7% 3.7%

4.1%4.4%

4.5% 4.5%4.4% 4.4% 4.3%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

Exhibit 33: Spread on lending (%)








Page

GRANULAR LOW TICKET/RETAIL DEPOSITS BASE + STRONG CASA


219

3.4

125.

5

151.

0

192.

7

247.

2

321.

1

386

.5

437

.6

44

6.9

500

.8

537.

0

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

100

200

300

400

500

600Exhibit 34: Total deposit base

Total deposits (Rs. Bn) Growth (%)

12.3

15.4

15.0

20.5

25.0

24.8

30.5

35.8

35.3

40

.3

49

.2

13.6

16.7

18.1

24.8

32.5

36.7

43.

9

54.1

63.

1

76.5

99

.7

0%

20%

40%

60%

80%

100%

Exhibit 35: CA/SA mix (INR Bn)

CA (Rs. Bn) SA (Rs. Bn)

13% 12%

10% 11% 10%

8% 8% 8% 8% 8%9%

15% 13% 12% 13% 13% 11% 11% 12% 14% 15% 19%

28%26%

22%24% 23%

19% 19%21%

22%23%

28%

0%

5%

10%

15%

20%

25%

30%

Exhibit 36: CASA traction has been strong, yielding NIM expansion..

CA (%) SA (%) CASA (%)

63% 62% 62% 61%

23% 23% 24% 23%

6% 6% 6% 6%

8% 9% 9% 10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q3FY17 Q4FY17 Q1FY18 Q2FY18

Exhibit 37: Granularity of deposits makes the bank a retail borrower

< Rs. 1.5 Mn Rs. 1.5 Mn - 10 Mn Rs. 10 Mn - Rs. 50 Mn > Rs. 50 Mn

11%

13%12%

13%12%

9% 9%

7%6%

7%

0%

2%

4%

6%

8%

10%

12%

14%

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Q1FY18 Q2FY18

Exhibit 38: Concentration of top 20 depositors (%)

Concentration of top 20 depositors (%)









Page

42.9% 42.7%

54.7%

47.6%46.0%

45.0%

35%

40%

45%

50%

55%

60%

Exhibit 39: Cost/income (%)

Operational costs to stay elevated for some time due to wage revisions and tech investments

The bank is pushing digital initiatives with a senior management person looking after tech investments in systems such asautomated/paperless loan underwriting, loan application calibration with credit scores, etc. that will help the bank in reducing turn-around time (TAT). For instance, recently the bank opened its first rural digital centre in an unbanked village in Erode district ofTamil Nadu. The centre is powered with high speed wi-fi connectivity and tablets to enable customers perform self-service banking.Going forward, the management has guided for most processes to be automated as opposed to them being carried out manuallycurrently. We believe this automation to pay-off in terms of enhanced operational efficiency and employee as well as branchproductivity over the medium-to-longer term. However, in near future, as the bank undertakes tech investments, we believe overallopex to stay slightly elevated, thereby impacting cost/income ratio. Furthermore, wage revisions and branch roll-out expensespillover are expected to put some pressure. We are assuming C/I of 46% for FY18 which should reduce gradually over the years onback of increased automation and reduced dependency on manual processes.

Exhibit 41: Infrastructure productivity has improved…


22

26.232.4 33.4

40.3

48.353.1 53.5

59.4 57.4 58.6 57.5

41.2

50.154.7

65.7

76.583.4 84.8

90.184.5 86.5 86.9

0

20

40

60

80

100

FY2007 FY2009 FY2011 FY2013 FY2015 FY2017

Loan per branch Assets per branch

2.12.6 2.6

3.23.9

4.2 4.4 4.65.0

5.4 5.5

3.44.1 4.3

5.3

6.26.6

6.9 7.07.4

8.08.4

0.0

2.0

4.0

6.0

8.0

10.0

FY2007 FY2009 FY2011 FY2013 FY2015 FY2017

Loan per employee Assets per employee

12 12 13 12 12 13 12 1311 11 10

-2

2

6

10

14


Exhibit 42: Manpower per branch (#) – Tech investments will require less manual intervention going forward








1.5%

1.6%

1.7%

1.8%

1.9%

2.0%

2.1%

2.2%

2.3%

FY2007 FY2009 FY2011 FY2013 FY2015 FY2017 FY2019E

Exhibit 40: Cost/Average total assets (%)




Page

1 6 15 40

168

722

854

0

100

200

300

400

500

600

700

800

900

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Q2FY18

Exhibit 45: Mobile transactions ('000s)

Leveraging technology will help bring down costs, manual intervention and boost non-interestrevenue


23

Exhibit 43: IT initiatives taken by the bank

BNA recyclers

Migration of cash deposit machines as recyclers with themachines functioning as ATMs also enabling cash withdrawalin the same machines and the cash deposited by thecustomers can be recycled for withdrawals.

Tablet based account openingImplemented on-line opening of SA and CA for individualsusing tablet systems based on Aadhar details, enablingimmediate enrolling of customers.

Multifunction KIOSKLaunched self-service KIOSKs for depositing outward chequesand automatic passbook printing.

Digitization of loan proposalsImplemented digitization of loan proposals, enabling quickertransition of loan documents in electronic form, therebyreducing turnaround time to process credit proposals.

Unified Payment Interface (UPI)Aims to initiate and simplify a payment in a secured manner viamobile application.

Bharat Interface for Money (BHIM)Facilitates simply, easy and quick/instant payment andcollection transactions across banks using a mobile number orpayment address.

National Electronic Toll Collection (NETC) - FASTAGElectronic Toll Collection is a secure and interoperable solutionfor NHAI toll collection. NETC system will reduce wait time attoll counters by eliminating manual intervention.

3,39

9

5,8

44

8,4

34

9,2

34

10,1

57

22,0

68

23,9

29

23,9

45

0

5000

10000

15000

20000

25000

30000

Exhibit 44: PoS terminals (#)

143

338 353 354 389 403444 457 485

0

100

200

300

400

500

600

Q4FY14 Q4FY15 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18

Exhibit 46: Bunch note recycler machines (#)










Page

Fee income generation initiatives will be supplementary to profitability

For FY17, the bank has earned INR 4.8 bn in commission and fees (+5% yoy). After having clocked an average annual growth rate of19% over FY08-16, fee income growth during FY17 was only 5% on account of subdued loan growth which was further impacted by a10% de-growth in disbursements. As has been reiterated by the management time and again, the bank has not been very aggressiveon the growth front citing low economic growth, systemic stress build-up and focus on shrinking corporate share. However, goingforward, as the bank re-aligns its focus on growth with foreseeable recovery in the economy, we expect KVB to generate higher andhealthier quantum of fee income. Plus, we expect Tami Nadu, Andhra Pradesh and Telangana, being key trade hubs, will witnesseconomic recovery earlier and faster than the rest of the country along with higher advances growth. This in turn should enable thebank in generating healthy loan processing fee. Besides this, the bank in recent past has given a boost to its PoS terminals whichgoing forward will help in originating non-interest revenue for the bank.


24

1.21.8

2.7 2.5 2.63.5

4.55.6 5.8

7.17.8

8.79.8

11.1

0.9 1.2 1.4 1.6 1.9 2.3 2.83.4

4.04.6 4.8 5.2

5.86.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Exhibit 47: Expect PoS terminals and improved loan growth to aid overall non-interest income

Non-interest income (Rs. Bn)

Commission, Exchange and Brokerage

26%

18%12%

24% 17%22%

21%18%

16%

5%

0%

5%

10%

15%

20%

25%

30% Exhibit 48: Growth in fee income (%)

Particulars (INR Mn) FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Advances maturing under a year

39,750 46,818 54,567 70,179 103,339 135,870 158,180 164,450 156,187 156,497

Total advances o/s 94,215 104,099 134,975 178,145 239,492 294,801 339,921 361,089 390,844 409,077

Advances carried forward 44,943 54,465 57,280 80,408 107,966 136,153 158,932 181,741 196,640 234,656

New advances (disbursements during the year)

49,272 49,634 77,695 97,737 131,526 158,649 180,990 179,348 194,204 174,421

Disbursements growth (%) 1% 57% 26% 35% 21% 14% -1% 8% -10%

Exhibit 49: Disbursements calculation









Page

2.2x

Average 2-yr forward P/ABV

- 1.4x

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

2.3

2.5

Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

Exhibit 51: 2-year forward P/ABV

VALUATION: VANTAGE POINT 1 / FUNDAMENTAL VALUE OF THESTANDALONE BANK

Strong local southern bank | 100 years and counting | exceptional provisioning on corporate slippages anaberration | fundamentals strong and intact!

Karur Vysya Bank enjoys strong reputation and brand name in Tamil Nadu. Being a well-established bankamongst the trading and small business community of Karur and other parts of Tamil Nadu, Andhra andTelangana, the bank has a sticky customer base. Having said this, one might relate KVB to being a smallcommunity bank taking deposits from the local community only to fund loans that invest in local peopleand businesses. The value of such customer relationships and bonds is something that cannot bequantified but can only be imagined as to how qualitatively strong it is. KVB’s loan book growth, depositsgrowth and customer base growth over the last decade could act as proxy for the same. Goingforward, we expect the bank to deliver growth in line with the system; system being its presence states ofTN, AP and Telangana. Further, as the bank shuns large ticket corporate lending and incrementally focuseson low ticket SME and retail loans, we expect granularity to increase thereby reducing concentration risk(“law of large numbers”).

From asset quality perspective, we expect FY18 to be an exceptionally bad year for the bank on account ofchunky slippages from the watch-list which includes ~INR 5.4 bn worth of NCLT cases. Overall exposure tothe RBI-identified NCLT cases is ~INR 10.8 bn. Other than the NCLT cases, most of the pain emanates fromthe corporate lending carried out in distant history. Apart from the corporate pain that will throw up anaberration in FY18/19 in form of high provisioning expense, asset quality on the retail and SME book standspristine. Having started as an SME-finance bank catering majorly to local customers, we expect the bank’scentury old standing to come in handy. Such a footing along with good underwriting expertise shouldprovide the bank with a competitive edge as it pursues growth on back of SME and retail lending. Assetquality control will be kept under check as the bank’s well-entrenched relationships with the localcommunity will help in recoveries.

From valuation perspective, we’d like to take into account the bank’s 100 years of existence (and stillgoing strong!). Over the last decade (FY07-17), the bank has delivered 19.2% CAGR in advances, 19.1% CAGRin deposits and an overall balance sheet CAGR of 18.8%. Despite the increasing competition from otherbanks, sudden burst of NBFCs and other financial institutions in 4-5 years, KVB has been able to improveNIMs by 80-90 bps. Had it not been for the chunky corporate slippages, the NIM could have been evenhigher. As the bank charts a granular lending strategy, we expect KVB to be able to defend its NIMs at3.5%. NII CAGR over FY07-17 has been 19.6% while PAT CAGR over the same period is 14.2%, impacted byhigh provisioning since FY14. We expect this trend to reverse FY19 onwards as granularity led strategyplays out and corporate related provisioning dies out. We reiterate FY18 will see exceptionally highprovisioning. We’d also like to highlight NII CAGR of 17.3% over FY14-17 against an advances CAGR of 6.4%.This has been given effect by expansion in NIMs on back of increasing share of SME and retail book aswell as due to reduction in cost of funds due to sharp CASA pick-up. We expect this trend to continue.Regarding profitability, the bank over the last decade has delivered an average RoE of 17.5%, however forFY18 we expect it to be suppressed on two accounts 1) high provisioning will impact PAT 2) recentlyconcluded rights issue of INR 9 bn will expand equity base. Based on our estimates, we expect the bank toreturn to 1.2%/14% RoA/RoE by FY20E.

Given the bank’s 100 years of operating history, ~20% CAGR over the last decade, conservative lendingphilosophy, visibility regarding future trajectory, brand reputation and customer relationships/stickycustomer base, we assign a multiple of 1.7x to FY20E ABVPS estimate of INR 85.3, arriving at a targetprice of INR 145 per share, implying a potential upside of 24.2%.


25

1.8x

Average 2-yr forward P/BV

- 1.3x

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

Exhibit 50: 2-year forward P/BV







Page

VALUATION: VANTAGE POINT 2 / ACQUISITION/MERGER PERSPECTIVE (JUST A VIEW!)

Going back to Kotak’s acquisition of ING Vysya Bank Ltd. may provide some perspective into why someone would acquire Karur VysyaBank. ING Vysya was acquired by Kotak Mahindra Bank at 2.1x times trailing book value (as of Sep-14), valuing each branch INR 0.3 bn.

While KVB does not enjoy any international tie-up through which it could garner international business (like ING-Vysya), but it surelydoes have a lot to offer by way of SME + retail focused lending, rural & semi-urban oriented business, granular loan book & depositbase, retail business focus, 6.6 million customers, 711 branches, strong asset quality barring the corporate book and a strong &trusted brand name amongst the local community of TN, AP and Telangana providing a sticky customer base.





26


Exhibit 52: Key reasons for Kotak’s acquisition of ING Vysya

Basis for acquisition Advantages/synergies to Kotak/Combined entity

Branch network

Complementarity and mix of branch network gave significantgeographical advantages to Kotak as a combined entity.

From having only 15% presence in south prior to the merger, thecombined entity would have 38% presence in south. This would leadto Kotak having a more balanced portfolio in terms of geographicalspread. Strong presence in AP gave a strong advantage to Kotak.

Product & customer segments

-Penetration into rural and semi urban areas where ING Vysya alreadyhad a deep presence.-SME business opportunity: ING’s significant presence across traderand small business community would be advantageous for Kotak andwould aid diversification in Kotak’s books in terms of products andcustomers.

International reachING’s international reach would help Kotak in securing internationalrelationships with MNCs, enabling servicing of Indian arms ofinternational customers.

Exhibit 53: KVB now versus ING Vysya at the time of acquisition (Figures in INR Mn)

Karur Vysya Bank (as of FY17)

ING Vysya Bank (as of Q3FY15)

NIM (%) 3.6% > 3.4%

PPOP margin (%) 55.0% > 43.2%

C/I (%) 45.0% < 56.8%

RoA (%) 1.0% > 1.0%

RoE (%) 12.5% > 8.5%

Total assets (INR Mn) 6,18,076 < 6,50,300

Total advances (INR Mn) 4,09,077 > 4,05,566

Business per employee (INR Mn) 13 < 74

Business per branch (INR) 133 < 1,484

Advances mix (%)

Corporate 33.0% > 31.9%

Retail 15.0% < 18.8%

Agri 17.0% > 11.1%

Commercial 35.0% < 38.1%

CA (%) 9.2% < 15.9%

SA (%) 18.6% > 15.9%

CASA (%) 27.7% < 31.8%

Asset quality

Gross NPA (%) 3.6% > 1.9%

Net NPA (%) 2.5% > 0.7%

Valuation - P/Bv (x) (trailing) 1.4 < 2.1*

*represents the multiple at which the bank was acquired by Kotak.


Page

VALUATION: VANTAGE POINT 2 / ACQUISITION/MERGER PERSPECTIVE (contd.)

In beginning to think about KVB as a potential acquisition target, we’d like to begin by outlining 3 broad motives a bigger/mega-bankmight have to pursue the acquisition –

1) Undervaluation – relative to true fundamental value.

2) Diversification – with the intent of reducing risk concentration, either geographical, product-wise, customer-wise or acombination of all.

3) Synergy – operational and/or financial – what potential value could the two firms create as a combined entity?

What does KVB offer?

1) As per our assessment of the bank’s fundamentals and prospects as a going standalone entity (see: VALUATION: VANTAGEPOINT 1 / FUNDAMENTAL VALUE OF THE STANDALONE BANK), we’d like to argue that at 1.4x FY17 BV and 1.1x FY20E BV, the bankis undervalued relative to some of the peers. Further, given the kind of profitability the bank can deliver on normalized basis (i.e.barring the exceptional impact of corporate + WL slippages and consequent provisioning), the bank is undervalued relative tosome of its peers. Given the direction the bank is heading in – granularizing assets and liabilities by focusing on retail, SME andsmall-ticket corporate exposures – we’d like to think of KVB as close to what City Union Bank is which trades at a significantlyhigher multiple.

2) KVB also offers diversification – with a large network of branches across south India, the bank offers a ready distributionnetwork for an acquirer looking to expand/diversify into south India. By carrying a granular, trading community-focused loanbook and a retail deposit franchise along with a sticky customer base, KVB is able to offer diversification in terms of product andcustomer segments. A corporate heavy private bank such as Axis Bank or ICICI Bank may benefit by acquiring a loan book that is~100% secured by primary security as well as collateral, where majority of the corporate loans are working capital loans, whereaverage ticket size is coming down thereby spreading risk of default and where a large part of the business originates from semi-urban and rural areas.

3) Synergies – With significant expertise in dealing with the trader/SME community, an acquirer will be able to learn from KVB’sbest practices and knowledge in terms of lending, geography and various other trends. Additionally, we believe the integratedbranch network coupled with cross-selling of products to each others’ customers will result in significant operating synergies.

View: Given the relative undervaluation to some of the peers, keeping in mind the diversification benefits and synergies KVB canoffer, we do not rule out KVB as an acquisition/merger candidate. Regarding its asset quality – most of the stress emanates from thecorporate book, ~INR 10.8 bn of which should be taken care of by June 2018 as that is when the resolution deadline for the 2nd list ofNCLT cases ends. From downside perspective, adding KVB’s estimated FY19 GNPA would add less than 75 bps worth of stress toexisting loan books (of Axis, ICICI and HDFC Bank). However, from a reward perspective, an acquirer would get a very granularbalance sheet, highly secured loan book, sticky customer base, large opportunity to cater to southern India’s SME and retail segmentwhere yields are higher and well-established access to south India through a ready and well-entrenched network of branches. Therecent capital raise of INR 9 bn along should provide adequate armour to cover for high provisioning during FY18/19 withoutdisturbing the growth plans. KVB as of today stands more or less shoulder to shoulder with ING Vysya at the time of Kotak-acquisition which happened at 2.1x trailing BV.





27


Exhibit 54: Profitability - RoE (%) FY2017 FY2018E FY2019E FY2020E

Karur Vysya Bank 12.5% 4.4% 11.8% 14.0%

Lakshmi Vilas Bank 13.3% 10.8% 12.5% 13.4%

Federal Bank 9.6% 10.2% 11.4% 12.7%

City Union Bank 14.9% 15.5% 15.6% 16.6%

Karnataka Bank 11.3% 9.3% 11.6%

DCB Bank 9.9% 10.7% 12.2% 13.9%

South Indian Bank 9.9% 7.5% 12.8% 14.3%

Exhibit 55: Peers valuation - P/Bv (x) FY2017 FY2018E FY2019E FY2020E

Karur Vysya Bank 1.4 1.4 1.3 1.2

Lakshmi Vilas Bank 1.3 1.3 1.1 1.1

Federal Bank 2.1 1.7 1.6 1.4

City Union Bank 3.3 2.8 2.5 2.2

Karnataka Bank 0.8 0.8 0.8 0.7

DCB Bank 2.6 2.3 2.1 1.9

South Indian Bank 1.2 1.2 1.0 0.9


Page

VALUATION: VANTAGE POINT 2 / ACQUISITION/MERGER PERSPECTIVE (contd.)

Is there a merger possibility with an NBFC seeking bank-door entry?

In thinking of KVB as an merger candidate, we are contemplating if there is a possibility of a merger with an NBFC. Shriram City UnionFinance’s merger with IDFC Bank would have given the former benefits of a banking license without having to apply for it; firstorder benefits being lower cost of funds. Apart from all the benefits in terms of extended geographical reach, product and customerdiversification benefits, we believe there could be tremendous financial synergies the combined entity could draw, especially theNBFC, through lower cost of funds. Apart from such obvious benefits, other synergies could come from tapping each otherscustomer base and cross-selling products.

For instance, combining Bajaj Finance with KVB would give us a combined loan book of INR 1,128.5 bn which would bring thecombined entity closer to some of the larger private sector banks mentioned above (exhibit 49). Apart from this, the pre-mergerNBFC part of the book would enjoy lower cost of funds post the merger, resulting in better/higher per unit profitability.

Although NBFCs have not acquired banks so far, but there have been mergers between NBFCs and banks.


28

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1961,3

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1,024

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Urban

158896

1,054

158793

9511,0

501,2

08

Semi-ur

ban278

1,509

1,787

278958

1,236

1,442

1,720

Rural

120943

1,063

120529

6491,0

711,1

91

Metro

26%28%

28%31%

30%27%

26%

Urban

21%19%

19%24%

23%22%

22%

Semi-ur

ban37%

32%33%

29%30%

30%31%

Rural

16%20%

20%16%

16%22%

21%

Corpor

ate

33%32%

33%29%

31%68%

50%42%

37%27%

30%

Retail

15%39%

27%9%

12%38%

26%43%

29%

Agri

17%14%

16%12%

15%7%

12%9%

13%

Comme

rcial

35%15%

25%31%

33%11%

23%13%

24%5%

20%

Branch

es (#)

7524,6

685,4

201,2

502,0

021,0

201,7

723,3

044,0

564,8

505,6

02

Emplo

yees (#

)7,4

0084,

04191,

44125,

31432,

71420,

12527,

52556,

61764,

01781,

12988,

529

Total a

ssets (

INR Mn

)6,1

8,076

86,38,

40292,

56,478

17,86,

48424,

04,560

21,50,

59927,

68,675

60,14,

67766,

32,753

77,17,

91583,

35,991

Advanc

es (IN

R Mn)

4,09,0

7755,

45,682

59,54,

75911,

30,805

15,39,

88213,

22,627

17,31,

70437,

30,690

41,39,

76746,

42,321

50,51,

398

Other

busin

ess pa

ramete

rs

Branch

prese

nce by

area ty

pe (#)

Branch

prese

nce by

area ty

pe (%)

Advan

ces mi

x (%)

40%36%

444797

576975 45% 55%

44% 56%

HDFC

Bank

IndusI

nd Ba

nkYes

Bank

Axis B

ankICIC

I Bank


Page

KEY RISKS & CHALLENGES

Blending into the skin: Mr. Seshadri was appointed MD and CEO of the bank effective September 4th, 2017. While Mr. Seshadri comeswith over 25 years of banking experience and a proven track record of building and leading large teams as well as executing complexbusiness objectives, his blending into the culture and skin of Karur Vysya Bank still remains to be seen.

Enlarged watch-list: Until Q1FY18, under the ex-CEO/MD, Mr. Venkatraman, watch-list guidance was for INR 4.5 bn. However, post Mr.Seshadri taking over the charge followed by subsequent reassessment of the portfolio and potential stress accounts, the watch-list asof Q2FY18 stands expanded at INR 12 bn which could slip into NPA category over the next 2-4 quarters. Consequently, provisioningexpense on account of WL slippages is expected to be exceptionally high during FY18 and to some extent in FY19 as well, which willsuppress profitability and return ratios. Our estimates, including valuation, take this into account.

Recovery from NCLT-referred cases: A handful of accounts form majority of the total exposure of ~INR 1.1 bn to RBI-identified NCLTcases (from list 1 & 2). Timely resolution of these cases remains a key risk and challenge. Of the handful number of exposures thatform majority of the total NCLT-exposure, a prominent power & steel company has word-class steel assets which could probablyattract a relatively lower haircut thereby providing some scope for higher recoveries. Another account which is a textile exposure hasbeen receiving a lot of interest from other companies and large funds which leads us to believe that recovery in this account could betimely.

NIM near all-time high: KVB’s NIM for Q2FY18 was 3.81%, nearing its all time high of 4.04% in Q4FY17. With WL slippages expected tomaterialize in coming quarters and increasing competition in the lending space, sustainability of current NIMs may be questioned. Mr.Seshadri who brings in his own lending philosophy is against diluting NIMs for the sake of growth. On the flip side, he is of the opinionthat spreads come in handy during bad times.

Geographical concentration: With 68% credit originating from 3 states of TN, AP and Telangana, we are of the view KVB is prone togeographical concentration risk. If that part of the country undergoes an adverse event/calamity, we believe KVB would be morethan proportionately impacted.


29






Page


30

PROFIT & LOSS ACCOUNT (INR Mn) FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E FY2019E FY2020E

Interest income 32,704 42,424 51,160 53,959 54,434 56,224 58,373 65,166 72,734

Interest expense 23,532 30,840 38,323 39,300 36,620 35,486 35,749 39,969 44,765

Net interest income 9,171 11,585 12,837 14,659 17,814 20,737 22,624 25,197 27,969

Non interest income 3,501 4,526 5,645 5,808 7,068 7,822 8,679 9,825 11,124

Total income 12,673 16,110 18,482 20,467 24,882 28,559 31,303 35,022 39,093

Operating expenses 5,416 7,622 10,104 11,034 11,851 12,850 14,399 15,935 17,592

Employee costs 2,644 3,436 5,279 5,471 5,474 6,080 6,596 7,157 7,765

Other operating expenses 2,772 4,186 4,824 5,564 6,377 6,770 7,803 8,778 9,826

Pre-provision profit 7,257 8,488 8,378 9,433 13,031 15,710 16,904 19,087 21,501

Provisions 938 1,234 4,423 4,806 3,914 6,875 13,210 8,334 7,419

Profit before tax 6,320 7,254 3,955 4,627 9,116 8,835 3,694 10,753 14,082

Tax expense 1,302 1,751 -341 72 3,440 2,775 1,160 3,377 4,423

Net profit 5,017 5,503 4,296 4,555 5,676 6,060 2,534 7,376 9,659

BALANCE SHEET (INR Mn) FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E FY2019E FY2020E

SOURCES OF FUNDS

Share capital 1,072 1,072 1,072 1,216 1,219 1,219 1,456 1,456 1,456

Reserves & surplus 26,010 29,780 32,192 41,244 44,511 49,138 59,702 64,865 71,626

Shareholders' funds 27,082 30,852 33,263 42,460 45,730 50,357 61,158 66,321 73,082

Borrowings 19,726 39,993 32,933 29,008 15,732 16,957 18,921 21,192 23,735

Deposits 3,21,116 3,86,530 4,37,577 4,46,903 5,00,789 5,36,998 5,99,215 6,71,121 7,51,656

Other liabilities & provisions 8,425 9,958 11,658 13,154 14,386 13,765 13,505 17,301 20,575

TOTAL LIABILITIES & EQUITY 3,76,349 4,67,333 5,15,432 5,31,525 5,76,637 6,18,076 6,92,799 7,75,935 8,69,048

USES OF FUNDS

Cash and cash equivalent 20,354 17,960 26,782 27,491 27,916 43,451 48,704 54,548 61,094

Investments 1,05,061 1,38,373 1,32,470 1,27,730 1,32,217 1,48,575 1,66,537 1,86,521 2,08,904

Advances 2,39,492 2,94,801 3,39,921 3,61,089 3,90,844 4,09,077 4,58,166 5,13,146 5,74,724

Fixed & other assets 11,442 16,199 16,258 15,214 25,661 16,973 19,392 21,719 24,325

TOTAL ASSETS 3,76,349 4,67,333 5,15,432 5,31,525 5,76,637 6,18,076 6,92,799 7,75,935 8,69,048






Exhibit 57: KEY FINANCIALS


Page


31

KEY RATIOS FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E FY2019E FY2020E

Growth rates

Advances (%) 34.4% 23.1% 15.3% 6.2% 8.2% 4.7% 12.0% 12.0% 12.0%

Deposits (%) 29.9% 20.4% 13.2% 2.1% 12.1% 7.2% 11.6% 12.0% 12.0%

Total assets (%) 33.3% 24.2% 10.3% 3.1% 8.5% 7.2% 12.1% 12.0% 12.0%

NII (%) 19.6% 26.3% 10.8% 14.2% 21.5% 16.4% 9.1% 11.4% 11.0%

Pre-provisioning profit (%) 20.8% 17.0% -1.3% 12.6% 38.1% 20.6% 7.6% 12.9% 12.6%

PAT (%) 20.7% 9.7% -21.9% 6.0% 24.6% 6.8% -58.2% 191.1% 31.0%

Balance sheet ratios

Credit/Deposit (%) 74.6% 76.3% 77.7% 80.8% 78.0% 76.2% 76.5% 76.5% 76.5%

CASA (%) 19.2% 19.2% 20.5% 22.0% 23.3% 27.7% 29.0% 30.0% 30.5%

Advances/Total assets (%) 63.6% 63.1% 65.9% 67.9% 67.8% 66.2% 66.1% 66.1% 66.1%

Leverage (x) 13.9 15.1 15.5 12.5 12.6 12.3 11.3 11.7 11.9

CAR - Tier I (%) 13.1% 13.1% 11.6% 13.6% 11.3% 11.9% 13.6% 13.2% 13.0%

CAR (%) 14.3% 14.4% 12.6% 14.6% 12.2% 12.5% 14.3% 13.9% 13.6%

Operating efficiency

Cost/income (%) 42.7% 47.3% 54.7% 53.9% 47.6% 45.0% 46.0% 45.5% 45.0%

Opex/total assets (%) 1.4% 1.6% 2.0% 2.1% 2.1% 2.1% 2.1% 2.1% 2.0%

Opex/total interest earning assets (%) 14.8% 16.9% 20.2% 21.4% 21.5% 21.4% 21.4% 21.1% 20.8%

Profitability

NIM (%) 2.9% 2.8% 2.7% 2.9% 3.3% 3.6% 3.5% 3.5% 3.5%

RoA (%) 1.5% 1.3% 0.9% 0.9% 1.0% 1.0% 0.4% 1.0% 1.2%

RoE (%) 21.2% 19.8% 13.5% 10.9% 12.9% 12.5% 4.4% 11.8% 14.0%

Asset quality

Gross NPA (%) 1.3% 1.0% 0.8% 1.9% 1.3% 3.6% 5.9% 5.8% 4.6%

Net NPA (%) 0.3% 0.4% 0.4% 0.8% 0.6% 2.5% 3.0% 2.7% 1.9%

PCR (%) 62.8% 53.0% 41.0% 56.1% 55.8% 28.9% 50.0% 55.0% 60.0%

Slippage (%) 0.5% -0.1% 0.0% 1.2% -0.5% 2.5% 3.2% 0.7% -0.7%

Credit cost (%) 0.4% 0.5% 1.4% 1.4% 1.0% 1.7% 3.0% 1.7% 1.4%

Per share data / Valuation

EPS (INR) 36.5 51.3 40.1 37.5 46.6 9.9 3.5 10.1 13.3

BV (INR) 196.8 287.8 310.3 349.1 375.2 82.6 84.0 91.1 100.4

ABV (INR) 191.0 277.7 297.3 326.0 357.5 65.7 65.0 72.1 85.3

P/E (x) 11.2 8.8 11.2 12.4 9.9 11.7 33.4 11.5 8.8

P/BV (x) 2.1 1.6 1.4 1.3 1.2 1.4 1.4 1.3 1.2

P/ABV (x) 2.1 1.6 1.5 1.4 1.3 1.8 1.8 1.6 1.4







Page


32

RoE Tree FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E FY2019E FY2020E

Interest earned 9.9% 10.1% 10.4% 10.3% 9.8% 9.4% 8.9% 8.9% 8.8%

Interest expended 7.1% 7.3% 7.8% 7.5% 6.6% 5.9% 5.5% 5.4% 5.4%

Net interest income 2.8% 2.7% 2.6% 2.8% 3.2% 3.5% 3.5% 3.4% 3.4%

Non-interest income 1.1% 1.1% 1.1% 1.1% 1.3% 1.3% 1.3% 1.3% 1.4%

Total income 3.8% 3.8% 3.8% 3.9% 4.5% 4.8% 4.8% 4.8% 4.8%

Operating expenses 1.6% 1.8% 2.1% 2.1% 2.1% 2.2% 2.2% 2.2% 2.1%

Pre-provisioning profit 2.2% 2.0% 1.7% 1.8% 2.4% 2.6% 2.6% 2.6% 2.6%

Provisions & contingencies 0.3% 0.3% 0.9% 0.9% 0.7% 1.2% 2.0% 1.1% 0.9%

Profit before tax (PBT) 1.9% 1.7% 0.8% 0.9% 1.6% 1.5% 0.6% 1.5% 1.7%

Tax expense 0.4% 0.4% -0.1% 0.0% 0.6% 0.5% 0.2% 0.5% 0.5%

Profit after tax (PAT) (RoA) 1.5% 1.3% 0.9% 0.9% 1.0% 1.0% 0.4% 1.0% 1.2%

Leverage (x) 13.9 15.1 15.5 12.5 12.6 12.3 11.3 11.7 11.9

RoE (%) 21.2% 19.8% 13.5% 10.9% 12.9% 12.5% 4.4% 11.8% 14.0%







Page


33

ANALYST CERTIFICATION:

I, Raghav Garg (B.Com, M.Com (Applied Finance)), research analyst, author and the name subscribed to this report, hereby certify that all of the views expressed in thisresearch report accurately reflect my views about the subject issuer(s) or securities. I also certify that no part of my compensation was, is, or will be directly or indirectlyrelated to the specific recommendation(s) or view(s) in this report.

Terms & Conditions and other disclosures:

KRChoksey Shares and Securities Pvt. Ltd (hereinafter referred to as KRCSSPL) is a registered member of National Stock Exchange of India Limited, Bombay StockExchange Limited and MCX Stock Exchange Limited. KRCSSPL is a registered Research Entity vides SEBI Registration No. INH000001295 under SEBI (Research Analyst)Regulations, 2014.

We submit that no material disciplinary action has been taken on KRCSSPL and its associates (Group Companies) by any Regulatory Authority impacting Equity ResearchAnalysis activities.

KRCSSPL prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies thatthe analyst covers.

The information and opinions in this report have been prepared by KRCSSPL and are subject to change without any notice. The report and information contained herein isstrictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any otherperson or to the media or reproduced in any form, without prior written consent of KRCSSPL. While we would endeavor to update the information herein on a reasonablebasis, KRCSSPL is not under any obligation to update the information. Also, there may be regulatory, compliance or other reasons that may prevent KRCSSPL from doingso. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulationsand/or KRCSSPL policies, in circumstances where KRCSSPL might be acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy orcompleteness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitationof offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receivethis report at the same time. KRCSSPL will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutesinvestment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securitiesdiscussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investmentobjectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Therecipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates orany other reason. KRCSSPL accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily aguide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actualresults may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. Ouremployees in sales and marketing team, dealers and other professionals may provide oral or written market commentary or trading strategies that reflect opinions thatare contrary to the opinions expressed herein, .In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to realor potential conflicts of interest.

Associates (Group Companies) of KRCSSPL might have received any commission/compensation from the companies mentioned in the report during the period precedingtwelve months from the date of this report for services in respect of brokerage services or specific transaction or for products and services other than brokerage services.

KRCSSPL or its Associates (Group Companies) have not managed or co-managed public offering of securities for the subject company in the past twelve months

KRCSSPL encourages the practice of giving independent opinion in research report preparation by the analyst and thus strives to minimize the conflict in preparation ofresearch report. KRCSSPL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection withpreparation of the research report. Accordingly, neither KRCSSPL nor Research Analysts have any material conflict of interest at the time of publication of this report.

It is confirmed that, Raghav Garg (B.Com, M.Com (Applied Finance)), research analyst and Amit Singh (B.E (Com), MMS-Finance), research associate, of this report havenot received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on anyspecific brokerage service transactions.

KRCSSPL or its associates (Group Companies) collectively or its research analyst do not hold any financial interest/beneficial ownership of more than 1% (at the end of themonth immediately preceding the date of publication of the research report) in the company covered by Analyst, and has not been engaged in market making activity ofthe company covered by research analyst.

It is confirmed that, Raghav Garg (B.Com, M.Com (Applied Finance)), research analyst and Amit Singh (B.E (Com), MMS-Finance), research associate, do not serve as anofficer, director or employee of the companies mentioned in the report.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or otherJurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject KRCSSPL and affiliates to any registrationor licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors.Persons in whose possession this document may come are required to inform them of and to observe such restriction.

Please send your feedback to [email protected] us at www.krchoksey.com

Kisan Ratilal Choksey Shares and Securities Pvt. LtdRegistered Office:

1102, Stock Exchange Tower, Dalal Street, Fort, Mumbai – 400 001.Phone: +91-22-6633 5000; Fax: +91-22-6633 8060.

Corporate Office: ABHISHEK, 5th Floor, Link Road, Andheri (W), Mumbai – 400 053.

Phone: +91-22-6696 5555; Fax: +91-22-6691 9576.






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Documents

Karur Vysya Bank Limited - Moneycontrol.comstatic-news.moneycontrol.com/static-mcnews/2018/01/Karur-Vysya-… · 52 Wk H/L (INR) 150/75 Volume Avg (3m K) 2157.4 Face Value (INR) 2