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Results for Quarter ended December 31, 2010
February 5, 2011
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Industry update
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010 2
Performance highlights – Quarter ended Dec 31, 2010
Overall consolidated financial performance
Overall consolidated financial performance
¸ For the quarter, Income stood at `4,596 mn, up 59% yoy and 35% qoq
¸ EBIDTA margin was 47.8% as compared to 39.9% in the previous quarter
¸ PAT stood at `671 mn up 13% yoy and 24% qoq
Equities Broking and related
¸ Average daily turnover was around `62 bn, up 66 % yoy, up 34 % qoq
¸ IIFL market share in NSE was 4.2% during the quarter
¸ The Wealth Management business continues to grow. The assets under advisory are over `150 bn
¸ During the quarter, our Investment Banking team handled Qualified Institutional Placements (QIPs) of
three mid‐sized companies
Financing and Investing
¸ The aggregate loan book size increased to around `30 bn from `25.7 bn in the last quarter
¸ NPAs on the book continue to remain less than 1%
Insurance, Marketing and Distribution
¸ Insurance premium mobilization in the quarter was around `666 mn, up 7 % yoy
¸ During the quarter, share of ULIP has increased from 8% to 26%
Results for Quarter ended December 31, 2010 3
Financial highlights: Quarter ended Dec 31, 2010
Results for Quarter ended December 31, 2010 4
Financial highlights: April to December, 2010
Results for Quarter ended December 31, 2010 5
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Industry update
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010 6
Equities
¸ M k t h
Market share on NSE increased to 4.2% in Q3FY11
NSE i d t 4 2% i Q3FY11
¸ Average daily turnover up 66% yoy in Q3FY11 to around `62 bn
¸ Present in over 2,700 business locations through branches and sub‐brokers
¸ We launched of our latest version of the Trader Terminal which has a lightning fast execution speed,
world class user interface and a single‐click access to our world‐class research
Results for Quarter ended December 31, 2010 7
Commodities
¸ C
Commodities market share increased to 2.1% in Q3FY11
diti k t h i d t 2 1% i Q3FY11
¸ Average daily turnover up 79% yoy in Q3FY11 to around `8 bn
¸ The commodities market turnover has increased by 12% over the last quarter
3,000 1.4%
2,000
1.2%
1,000
‐ 1.0%
Dec 09 Mar 10 June 10 Sep 10 Dec 10 Dec 09 Mar 10 June 10 Sep 10 Dec 10
Results for Quarter ended December 31, 2010 8
Research
¸ Over 150 stocks under coverage
g
¸ Our in‐depth, thematic research has been well received. Our recent research reports include:
¸ INCH Chartbook: Sizing Up India and China
¸ India Gas: High on Gas
India Gas: High on Gas – A detailed analysis on how natural gas will transform India
A detailed analysis on how natural gas will transform India’ss energy
energy
consumption
¸ Singapore Commodities – A detailed report on three leading Singapore‐based commodity
traders
¸ IIFL’s 2nd Global Investors’ Conference, ‘Enterprising India II’ is scheduled to be held in Mumbai
this month. We have received an overwhelming response from global investors, corporates and
eminent leaders
Research offerings – a few reports
Research offerings a few reports
INCH Chartbook: High on Gas: How natural Three leading Discover Sri Lanka: A Black Diamond: A Rigorous company
Sizing Up India and gas will transform India’s Singapore-based primer on this promising detailed analysis of research that goes far
China energy consumption commodity traders market India’s coal industry beyond the basics
Results for Quarter ended December 31, 2010 9
Insurance
¸ bl d`
Insurance premium mobilization in Q3FY11 was around `666 mn, up 7% yoy
¸ During the quarter, share of ULIP has increased from 8% to 26% due to launch of new low
charge products by manufacturers
¸ The changes made by the regulator will benefit the consumers and strengthen the fundamentals
Th h d b th l t ill b fit th d t th th f d t l
of the industry in the long term
600
Q2FY11 Q3FY11 507 0
507.0
500 479.0 471.1
1%
18% 417.0
26% 400 366.4
8% 300
1%
200
73% 73%
100
Endowment
Guaranteed return ULIPs ULIP Pension Health 0
Dec 09 Mar 10 Jun 10 Sep 10 Dec 10
Results for Quarter ended December 31, 2010 10
Financing and Investing
¸ Th l D b 31 2010 i dt d `30 b
The loans portfolio as on December 31, 2010 increased to around `30 bn
tf li
¸ 99% of the loan portfolio is secured against collateral of mortgages, shares, debentures and
other securities
¸ Mortgages contribute to 52% of the lending book, followed by margin funding, loan against
b f h l d b k f ll db f d l
securities and personal loans at 27%, 20% and 1% respectively
35
29.7 Q2FY11 Q3FY11
30
25 5
25.5 1%
2%
25 20%
21%
19.5
20
16.3 43%
15 52%
12.0
27%
10 34%
0 Personal Loan
Personal Loan Mortagage
Mortagage Loan
Loan
Mortgage Loan
Mortgage Loan
Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Margin Funding LAS/Debenture
Results for Quarter ended December 31, 2010 11
Financing and Investing
¸ NPA
NPAs on the books continue to remain less than 1%
th b k ti t i l th 1%
¸ Net interest margin and loan spreads, both are at healthy levels
¸ During the quarter, we commenced Healthcare Financing. The products being offered include
project financing for brown field expansion medical equipment & ancillary equipment finance re‐
project financing for brown field expansion, medical equipment & ancillary equipment finance, re
finance on existing equipment
Net Interest Margin and Loan Spread (%) Gross and Net NPA (%)
Gross NPA Net NPA
0.9%
NIM Spread
0.8% 0.8%
16%
13 8%
13.8% 0.7%
14% 12.8% 0.7% 0.7%
12% 0.6% 0.6%
10.3%
0.5% 0.5%
10% 0.5%
0.5% 0.4%
8% 7.2% 0.4%
9 0%
9.0%
6% 7.6% 0.3%
7.0%
4% 4.9% 0.2%
2% 0.1%
0%
0.0%
FY10 Q1FY11 Q2FY11 Q3FY11
FY10 Q1FY11 Q2FY11 Q3FY11
Results for Quarter ended December 31, 2010 12
Wealth management
¸ Assets under advisory over `150 bn
Assets under advisory over `150 bn
¸ Introduced Family Office – A multi‐manager investment platform offering a complete wealth
structuring solution including inter‐generational transfer, to clients
¸ Have continuously invested in upgradation of systems, technology and processes and built a
Have continuously invested in upgradation of systems, technology and processes and built a
robust platform supporting multiple asset classes
Product Platform
Separate Demat
Results for Quarter ended December 31, 2010 13
Investment banking
¸ Our Investment Banking team handled Qualified Institutional Placements (QIPs) of three mid
Our Investment Banking team handled Qualified Institutional Placements (QIPs) of three mid‐
sized companies
¸ The company continues to invest in strengthening its investment banking team and infrastructure
¸ The deal flow in primary and secondary market has declined significantly during the quarter
The deal flow in primary and secondary market has declined significantly during the quarter
Deal Snapshot: 9MFY11
Parabolic Drugs Limited
Talwalkars Better Value Videocon
Fitness Limited Industries Limited 2010
2010 2010
Member of the
Sole BRLM Lead Manager Syndicate
Results for Quarter ended December 31, 2010 14
International Operations
¸ IIFL
IIFL commenced broking operations in Colombo and Singapore
d b ki ti i C l b d Si
¸ The company donated its entire first week commissions from trading operations in SGX to
Community Chest, Singapore
¸ IIFL received FSA License in London, UK for advising on investments and arranging deals in
d d f d d d l
investments for eligible counterparty and Professional Investors
London
New York
Dubai Colombo
Singapore
Results for Quarter ended December 31, 2010 15
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Industry update
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010 16
Evolution
1995 ¸ Commenced operations as an Equity Research firm Income (`
( mn))
¸ Launched research products of leading Indian 11,239 11,055
1997 companies, key sectors and the economy 9,280 8,775
¸ Client included leading FIIs, banks and companies
¸ Acquired membership of DGCX 756
2006 ¸ Commenced the lending business
492
217
¸ Commenced institutional equities business under IIFL
2007 ¸ Formed Singapore subsidiary, IIFL (Asia) Pte Ltd FY05 FY06 FY07 FY08 FY09 FY10 9MFY11
Networth (`
( mn))
¸ Launched IIFL Wealth
h d lh
2008 ¸ Transitioned to insurance broking model 16,053
17,995
14,892 15,447
¸ Acquired registration for Housing Finance
2009 ¸ SEBI in‐principle approval for Mutual Fund
¸ Obtained Venture Capital license
Obtained Venture Capital license
3,251
1,943
¸ Received membership of the Singapore Stock Exchange 522
2010 ¸ Received membership of the Colombo Stock Exchange
FY05 FY06 FY07 FY08 FY09 FY10 H1FY11
9MFY11
Results for Quarter ended December 31, 2010 17
Business Model
Insurance
Retail Affluent
Credit & finance
CUSTOMER
SEGMENTS Wealth management
Wealth management
Corporate Institutional
Asset management
Investment banking
• Investment banking • Institutional equities
• Corporate debt • Derivatives
Results for Quarter ended December 31, 2010 18
Corporate Structure
India Infoline Ltd.
(Bloomberg: IIFL IN)
India Infoline
India Infoline India Infoline
India Infoline Media & IIFL Wealth
Investment Marketing IIFL (Asia) Pte IIFL Realty IIFL Capital IIFL Ventures
Commodities Research Management
Services & Services
Services
* The above chart does not cover all group companies
Results for Quarter ended December 31, 2010 19
Vision and Strategy
Vision
“To become the Most Respected Company in the financial services space”
Results for Quarter ended December 31, 2010 20
Management Team
¸ TTeam with impeccable academic and professional credentials
ith i bl d i d f i l d ti l
¸ Open door, transparent and performance oriented culture
¸ Increasing level of employee ownership
Management Team
Consumer Finance
Consumer Finance Pratima Ram
Pratima Ram Operations Narendra Jain
Narendra Jain
Verticals Corporate Functions
Results for Quarter ended December 31, 2010 21
Corporate governance
Eminent independent directors of group companies
Name Designation Brief Profile
• Joined State Bank in 1968 and became chairman in 2002
A.K. Purwar Independent Director • Became Chairman of Indian Banks Association in the year 2005‐06
y g y
• Received CEO of the year’ and ‘Outstanding Achiever of the year’ award
• Chartered Accountant and partner of Khimji Kunverji & Co
Nilesh Vikamsey Independent Director • Part of the Managing Council and heading the Corporate Members
Committee of the Chamber of Tax Consultants (CTC)
• Director and Chief Executive of LIC Housing Finance Limited ‐1998 to 2002
Kranti Sinha
Kranti Sinha Independent Director
Independent Director • Concurrently was the MD of LICHFL Care Homes
Concurrently was the MD of LICHFL Care Homes
• Served as Deputy President of Governing Council of Insurance Institute
• Joined the ‘Indian Police Service’ in 1967
M. N. Singh Independent Director • Worked as the chiefs of the crime branch of Mumbai Police, State CID and
Anti‐Corruption Bureau
Category‐wise shareholding (%) Board Committees
Results for Quarter ended December 31, 2010 22
How we differentiate ourselves
• Promoted by first generation professional entrepreneurs
Managerial depth
• Highly qualified and experienced Management team
• Net worth approximately `18 bn
Well‐capitalized
• Significant unutilized capacity to leverage
• Present at over 2,700 business locations across 500 cities across India
Present at over 2 700 business locations across 500 cities across India
Distribution reach
• Global footprint covers Colombo, Dubai, New York and Singapore
• The top management is driven by pride and reward of ownership
Owner‐mindset
Owner mindset
• To think and work like an owner is part of organization’s DNA
• Uniquely placed with proprietary front, mid and back office software
Technology edge
• Effectively harnessed technology to provide superior customer experience
Effectively harnessed technology to provide superior customer experience
• De‐risked and diversified business model across multiple revenue streams
De‐risked
• Multiple products across all segments of financial services
Results for Quarter ended December 31, 2010 23
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Industry update
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010 24
Equities
Daily cash market turnover (US$bn)
Daily cash market turnover (US$bn) Daily derivatives market turnover (US$bn)
Daily derivatives market turnover (US$bn)
Source: Bloomberg, IIFL Research Source: Bloomberg, IIFL Research
Institutional Share of cash market volumes Increasing share of derivatives turnover in market
Source: Bloomberg, IIFL Research. Based on provisional data from the exchanges Source: Bloomberg, IIFL Research
Results for Quarter ended December 31, 2010 25
Insurance
APE yoy growth (%) – Dec 2010 APE market share (%) – Dec 2010
Source: IRDA Source: IRDA
APE growth YTD yoy (%) – Dec 2010 Annual life insurance premiums in USD bn (2008)
1
1
5
6
8
11
22
49
53
66
96
111
181
343
578
Source: AMFI Source: AMFI
AUM by asset class (` bn) Domestic equity MFs have seen net outflows YTD (` bn)
Source: AMFI Source: IIFL Research
Results for Quarter ended December 31, 2010 27
Capital raising and Fund flows
Capital raised through QIPs (` bn) Capital raised through IPOs (` bn)
Source: Bloomberg, IIFL Research Source: Bloomberg, IIFL Research
Net FII flows (US$bn) FDI inflows (US$bn)
Source: Bloomberg, IIFL Research Source: RBI, CMIE, IIFL Research
Results for Quarter ended December 31, 2010 28
Thank you
India Infoline Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B‐23, Thane Industrial Area, Wagle Estate, Thane – 400604.
Tel.: +(91 22)4007 7000 Fax: 2685 0451.
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the purchase and sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your responsibility alone and India
Infoline Ltd (hereinafter referred as IIL) and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences of such
action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, but do not represent that
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person from any inadvertent error in the information contained in this publication.
publication The recipients of this report should rely on their own investigations.
investigations IIL and/or
its subsidiaries and/or directors, employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.
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