• The year FY18 was the second year of successful execution of a strategy aimed at taking Return on Equity (RoE) from below 10% to sustainable top quartile level in the industry. This strategy is successfully executed through a combination of clear management intent, an efficient and well-oiled execution engine and an evolving result-oriented culture.
  • For FY18, disbursements went up by 68% whereas focused loan book grew by 28% from Rs. 63,978 cr. on March 31, 2017 to Rs. 82,114 cr. on March 31, 2018.
  • The Average AUM of the Mutual fund business went up from Rs. 39,300 cr. in FY17 to Rs. 65,932 cr. in FY18. For the Wealth management business, Average AUS increased from Rs. 13,623 cr. in FY17 to Rs. 18,347 cr. in FY18. This remarkable growth helped turn our asset management businesses.
  • Our asset quality improved substantially with Gross NPAs at 4.80% on March 31, 2018 vs 7.11% on March 31, 2017. Remarkably, Net NPAs showed a marked improvement YOY from 5.02% to 2.34%. Conservative provisioning policy and a sharp and relentless focus on collections on due dates led to these outcomes. We are hawkishly monitoring this aspect of your Company’s activities.
  • RoE increased to 15.03% for FY18 from 12.31% in previous year. This RoE is delivered after raising Rs. 3,000 cr. through Preferential allotment to our parent and QIP.
  • Excellent growth in focused businesses, excellent fee income stream, strict cost control and improvement in asset quality with accelerated provisioning is leading to an excellent and sustainable trajectory of RoE improvement.
  • Our massive investments in a strong digital and data analytics roadmap capturing every aspect of the customer journey are targeted to help us achieve seamless customer on-boarding, efficiency and productivity gains. Data intelligence will be used to unlock every part of RoE tree. Our commitment is to build a Company which delivers sustainable RoE for years, through a culture of “Results” not “Reasons”.
  • Being in the ‘Right Businesses’ forms an important part of the strategy, in which your Company has identified 5 core businesses and exited out of all non-core businesses. The core businesses were identified based on a 3-filtered approach – industry attractiveness, company profitability and the ability to extract value from it. Your Company’s intent is to grow market share, improve margins and profitability and become distinctive in each of its core businesses.
  • Your Company believes that cycles form an inevitable part of any business. Whether these cycles are related to interest rates, business, environment or credit, it is imperative for a company to be prepared for all eventualities. Especially as a hedge against interest rate cycles, your Company has established ‘fees’ as a second line of income. Fee income generation happens through various modes such as processing fees, subvention income, cross selling income, advisory fees and underwriting fees among others. The Company believes that this alternate source of income will act as a great stabiliser in helping us counter any unforeseen adverse cycles.
  • Your Company is focusing on building a well-diversified book. The strong sell down capabilities have helped your Company to limit the wholesale book growth without slowing down the business. As a result of which, wholesale book has reduced from 62% to 56%. The sell down engine that your Company has put in place ensures that the retailisation does not happen at the cost of business. For FY19 as well, your Company’s attention will be on increasing the rural and retail housing portfolio, as the trends in these sectors look increasingly promising.
  • Continuing on the upward trajectory, your Company increased its market share in Farm Equipment Finance from 6.8% to 12.5% in FY18. Your Company displayed healthy growth in disbursements by 107% and book by 28% over the previous year. This growth has been achieved on the basis of improved collections with absolute reduction in Non-Performing Assets (NPAs) by Rs. 344 cr. over the year. In the coming year, your Company expects to build on these gains further and capture greater market share while improving its portfolio quality through better collections.
  • Through rigorous execution of digital proposition on the ground and domain expertise, your Company has been able to increase its market share in Two wheeler finance from 5.9% to 8.2%. With this clear strategy in place, your Company has grown the business by 70% and book by 57% through increased penetration in the identified branches. With the implementation of 100% automated credit decisioning, your Company has been able to improve collection efficiencies and reduce NPA.
  • Your Company has been able to increase disbursements by 105% and book by 113% during the year. This was on the back of increasing penetration in existing geographies and opening of new geographies in existing states and new states such as Bihar, Assam and Tripura. New geographies entered into in the previous year have contributed 37% to the business during the last quarter. In the current year, your Company will continue to focus on expansion in selected geographies and increase business while maintaining and enhancing its portfolio quality.
  • The Infrastructure Finance business, focused on sectors such as renewables, roads and transmission, witnessed a healthy growth in its book size and disbursement. An efficient down-selling desk, through increase in its sell down volume by 70%, kept the overall infrastructure finance book growth at 11%. Disbursement grew by 37% from Rs.13,220 cr. to Rs. 18,053 cr. in FY18. Fee income grew by 74% during the year.
  • Home Loans and LAP registered a 23% growth in YOY disbursements from Rs. 2,979 cr. in FY17 to Rs. 3,679 cr. in FY18. This was backed by over 100% growth in home loan disbursements in Q4 FY18 on account of better traction in retail conversion of home loans for real estate financed projects.
  • During the year, your Company established itself as one of the key lenders in real estate financing with a clear focus on Category A & B developers across 6 cities. Your Company’s Real Estate Finance business registered significant growth in loan disbursement of Rs. 7,107 cr. and a loan book of Rs. 10,092 cr.
      • The average AUM of your Company in Mutual Fund business increased by 68% to Rs. 65,932 cr. during FY18 as against Rs. 39,300 cr. in FY17. This has helped your Company garner a market share of 2.86% in FY18 as compared to 2.15% in FY17. Your Company’s Mutual Fund business outperformed the industry growth rate of AAUM, with Equity to AUM ratio reaching to 58%. A strong investment performance is expected in FY19, coupled with strong inflows into the core products.

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