GRUH Presentation

8/13/2019 GRUH Presentation

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GRUH Finance LimitedGRUH Finance Limited(A Subsidiary of HDFC Limited)(A Subsidiary of HDFC Limited)

DEC 2013

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Profile Promoted by HDFC & AKFED on July 21, 1986

Commenced operations in 1988 from Ahmedabad

-

Regulated by National Housing Bank (NHB) Wholly owned

su s ary o eserve an o n a

Recognized by NHB for Refinance facility

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Profile Cumulative Housing Units Financed 246002

As on Dec. 31, 2013

Cumulative Disbursement of Rs.11342 Cr.

Cumulative Disbursement in Rural Areas(*) Rs. 4579 Cr.

Retail Network of 138 offices across 7 States.

Consistent track record of Dividend Payout

(*)Rural Areas are locations where populations is less than 50,000

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Profile

Outstanding LoanAssets of Rs. 6545 Cr.

s on ec. ,

Average Loan Outstanding Per Unit Rs. 5.06Lac Loan Disbursement during the period Rs.1825 Cr.

Average Loan Per Unit on Disbursement during the PeriodRs. 7.74Lac

. .

Gross NPAs Rs.29.93 Cr 0.46% of Outstanding LoanAssets of Rs.6545 Cr.

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Public Deposits :

y an

MAAA by ICRA

-

Subordinated NCD: AA+ by ICRA & CRISIL

Commercial Pa er : A1+ b ICRA & CRISIL

These rating indicates high safety with regard to timely

payment of interest and principal

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GRUHS Presence

Retail Offices

FY Nos.Rajasthan,10

No.ofRetailOfficesAsonDec.31,2013

-

2006 - 65

2010 - 95

Gujarat,40

Karnataka,15

Chhattisgarh,7

TamilNadu,5

2011 - 115

2012 - 120

2013 - 134

2014 - 138Madhya Pradesh,

20

Districts covered - 101Taluka serviced - 921

,

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FI, MF & Banks

0.57%

As on Dec. 31, 2013

n v ua s17.63%

2.10%

FII's16.92%

NRIs/OCBs

3.53%

59.27%

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As on Dec. 31, 2013

Shareholders : 18461Borrowers : 125045

Depositors : 53066

Savings Agents : 737e erra ssoc a es :

Staff Members : 535

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Stren ths Focus on individual home loans where default rates are low

- 92.24% of Loan Assets is towards Individual Home Loans

Average Loan To Value Ratio of 65%

Quality underwriting with experience of over 25 Years

a e an exper ence managemen average enor o

senior management in GRUH over 15 Years

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GRUH is a Trend-Setter First to commence Lending in Rural Areas 1988

First to introduce Tenure Based Pricing 1997

-

- 2002

rs o n ro uce ega ve mor ze oan ro uc

First to introduce Risk Based Pricing 2005

-Pricing linked to Credit Score

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Market Scenario Housing shortage of 18.78 mn units in Urban Areas & 43.67 mn in

Rural Areas.

31% of Countrys population is in Urban Areas, where shortage of

housing units is estimated at 18.78 mn units (Countrys population as

per Census 2011 is at 1.21 bn). Rural : Urban distribution is 69:31.

Mortgages contribute 8% of Indias GDP as compared to 14% in

China, 19% in Thailand, 24% in South Africa, 34% in Malaysia, 53%

in Singapore, 47% in Germany and 67% in USA(Source HOFINET)

Increasing Urbanisation

Growing segment of self-employed individuals

Growth in demand

Fiscal incentives on both interest and principal repayments

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Thin density at rural locations

Presence of PSU Banks and Local/Regional Co-operative Banks Delay in issue of construction permission at rural locations

Difficulty in verification of title documents at rural locations

Higher cost of operations

Small ticket loans and servicing of customers at scattered locations

Higher cost of collection

Repayment by borrowers through outstation cheques and payments

in collection account leads to dela in actual realisation of funds

Non-acceptance of Cash

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(Rs. In Crore)

Particulars

Ended on31/12/13

Ended on31/12/12

(%)

Loan Assets 6545 4995 31

Net Interest Margin 194 156 24

Non-Interest Ex enses 43 36 20

PAT 103 83 25

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Assets Profile

2.36%

1.30%

0.16%0.23%

0.30%

0.29% 0.31%0.47%

98%

99%

100%

0.74%

1.28%

4.63%

96%

97%

Deffered Tax Assets

96.45%96.88%

0.63%

94%

95%Fixed Assets

Current Assets

Investments

Loan Assets

93.97%

91%

92%

90%

Dec-13 Dec-12 Dec-11

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4.58% 4.30% 4.70%

3.24% 4.10% 4.09%100%

70%

80%

92.18% 91.60% 91.21%

40%

50%

Developer Loans

NRP Loans - Individuals

Home Loans - Individual s

10%

20%


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As on Dec. 31, 2013s. n rores

Retail Loans Fixed Rate Variable Rate TOTAL %

Annual Reducing 37.27 69.02 106.29 1.68

Monthly Reducing 6.12 6212.81 6218.93 98.20

Daily Reducing 0.00 7.72 7.72 0.12

Total 43.39 6289.55 6332.94 100.00

% of total portfolio 0.69 99.31 100.00

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Profile of CustomersAs on Dec. 31, 2013 2012 2011

No. of Incremental Loans 21994 18841 14960

o. o ve ccoun s 125045 108022 94017

Average Loan Disbursed per unit (Rs. In lac) 7.73 7.22 6.68

. . . .

Loan amount wise break up (%)

a u to Rs. 5 Lakhs . . .

b) more than 5 Lakhs up to 10 Lakhs 38.93 39.73 34.07

c) more than 10 Lakhs up to 30 Lakhs 16.17 13.52 9.05

d) more than 30 Lakhs 1.16 0.91 0.78

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Profile of CustomersAs on Dec. 31, 2013 2012 2011

oans ex en e n areas

a) Population is less than 50,000 47.50 48.78 42.82

, . . .

Average Loan to Value Ratio 62 63 65

Average Income of the Borrower 27233 34706 27583

Average Installment to Income Ratio 33 31 31

Average Fixed Obligation Ratio 37 36 35

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As on Dec. 31, 2013Self Em ployed

16.47%

In Em ploym ent62.46%

Businessmen19.41%

1.66%

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Loans Assets Distribution - StatesMaharastra

33.26%

Retail Loans as on Dec. 31, 2013

Gujarat

36.97% Karnataka.

Rajasthan.

Madhya Pradesh13.14%

Chhatishgarh2.60%

Tamilnadu1.89%

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Liabilit Profile120.00%

9.09% 9.52% 9.65%

80.00%

.

90.91% 90.48% 90.35%40.00%

60.00% Shareholders' Funds

Loan Funds

20.00%

0.00%


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Sources of Borrowin57.58%60.00%

70.00%

47.19%

53.41%

50.00%

NHB

CommercialPaper

22.73% 21.67%

30.00%

.

BankLoans

PublicDeposits

NCD

SubordinatedDebt

12.55%

9.38% 9.49%11.22%

15.40%13.96%

10.12%

1.34%

10.85%

0.88% 1.14%

10.00%

20.00% .

.. . . .

0.00%Dec13 Dec12 Dec11

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Borrowin ProfileTenure BaseAs on Dec. 31, 2013

(*) Average tenure 8.23 years

(**) Average tenure less than one year

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Balance SheetAs on Dec. 31, (Rs. in Crores)

2013 2012 Growth (%)

Sources of Funds

Share Capital 36 36 -

Reserves & Surplus 566 442 28

Borrowings 6018 4531 33

Current Liabilities & Provisions 166 148 12

6786 5157 32

Application of Funds

Investments 50 66 (24)

Current Assets 160 67 138

Deferred Tax Assets 20 17 18

6786 5157 32

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As on Dec. 31, (Rs. in Crores)2013 2012 Growth (%)

Interest income 589.42 452.05 30

Interest expenses 395.70 296.18 34

. .

Non-Interest Income 21.55 19.04 13

Non-Interest Expenses 43.11 36.04 20rov s on or ont ngenc es a e t

Written Off 20.90 16.97 23

Profit Before Tax 151.26 121.90 24

Provision for Taxation 47.90 39.08 23Profit After Tax 103.36 82.82 25

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Operating IncomeAs on Dec. 31, (Rs. in Crores)

2013 2012 Growth (%)

. .

Interest on Fixed Deposits and SLRInvestments 16.61 6.70 148

Surplus from deployment in Cash Management

Schemes/Dividends on Mutual Funds 0.85 3.81 (78)

. .

Fees and Other Charges 18.79 16.18 16

Bad Debts Recovered 0.20 1.02 (80)

er pera ng ncome . .

Non-Interest Income 21.57 19.13 13

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Loan Assets & NPAsAs on Dec. 31, (Rs. in Crores)

Loan Assets (Rs.) 6544.60 4995.11 31Provision for Standard Assets (Rs.) 28.68 22.38 28

Gross NPA (Rs.) 29.93 26.74 12

Provision for NPA (Rs.) 30.00 32.02 (6)

Net NPA (Rs.) 0.00 0.00 -

Ratios

Gross NPA as % to Loans 0.46 0.54 (15)

. . -

Coverage Ratio(%) 100.21 119.75 (16)

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Quarterly Financial ResultsAs on Dec 31, (Rs. In Crore)

Q3-CY Q3-PY Q2-CY YOY CY YOY PY

1. O eratin income 217.39 166.41 210.50 804.71 636.89

2. Other Operating Income 0.00 0.01 0.00 0.50 0.013. Total Income 217.39 166.42 210.50 805.21 636.90

. n eres an er arges . . . . .

5. Non-interest Expenses 14.01 12.46 16.46 53.31 45.79

6. Provision for Contingencies/Bad Debt Written Off 6.78 6.42 4.34 21.79 17.78

7. Total Expenditure 161.67 120.48 159.79 579.04 448.00

8. Profit Before Tax 55.72 45.94 50.71 226.17 188.90

9. Tax Expenses 20.48 17.05 16.36 59.75 50.51

10. Profit After Tax 35.24 28.89 34.35 166.42 138.39

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Key Financial Ratios

As on Dec. 31,

2013 2012 2011

Net Interest Margin / ATA (%) 4.17 4.38 4.74

Non Interest Expenses / ATA (%) 0.93 1.01 1.06

PBT/ATA (%) 3.26 3.42 3.46

PAT/ATA (%) 2.23 2.33 2.34

Cost to Income Ratio (%) 20.29 20.95 20.49

ATA = Average Total Assets

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As on Dec. 31,2013 2012 2011

Capital Adequacy Ratio (%) 17.07 14.22 14.41

Tier I 15.37 13.55 12.87

. . .

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As on Dec. 31,

2013 * 2012* 2011

Book Value (Rs.) 33.55 26.88 107.00

Earning Per Share (Rs.) 5.76 4.67 18.37

Return on Average Networth (%) 25.23 25.60 24.85

. . . .

Price to Book Value (Times) 7.61 8.83 5.22

* On face value of Rs.2/- per share. Face value of GRUHs Share have been sub-divided from Rs.10/- to Rs.2/- w.e.f.July 26, 2012.

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As on Dec. 31,

2013 2012 2011

Average No. of Employees 527 492 450

Average No. of Retail offices 134 126 116

Profit Per Employee ( Rs. in Lakhs) 26 22 19

Total Assets Per Employee ( Rs. in Lakhs) 1289 1048 889

oan sse s anage a e a ce s. n a s4884 3980 3238

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Rural Focus

Cumulative Rural Disbursement of Rs.4579 Cr.

(Rural location is a location where population is less than 50000.

A state is divided into districts and each District cover 10-15 Talukas and

each Taluka is a cluster of 80-100 villages)

Disbursed 117779 cases in rural segment

Servicing customers in 921 Taluka places in 7 States

s urse s. r. to 5 am es un er o en u ee

Rural Housing Finance Scheme of Government of India

Disbursed Rs.859.25 Cr. to 23026 families under Rural HousingFund

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Established under the National Housing Bank Act, 1987

NHB is a Wholly owned subsidiary of RBI

Regulatory Framework for HFC

,

Housing Finance Companies (NHB) Directions, 2010

Guidelines

NHB is empowered to

Frame policy in consultation with Government & RBI

Give directions to HFCs and their auditors

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A. Ca ital Ade uac

To maintain a minimum of Capital Adequacy Ratio of 12% consisting of Tier-I

and Tier-II capital (Tier-I - 6% & Tier-II 6%)

Total Tier-II capital not to exceed 100% of Tier-I capital

Deferred Tax Assets and Deferred revenue expenditure or preliminary expenses,

to the extent not written off to be reduced from the networth

The value of each asset/item is multi lied b the relevant risk wei hts to arrive at

risk adjusted value of assets

The aggregate to be taken into account for calculating minimum capital ratio

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B. Risk WeightRisk

Housing loans to individuals secured by mortgage of immoveable property, which areclassified as Standard Assets (Value


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Risk Weights (%) Based on Loan Amount and LTV Ratio(*)

Loan AmountLTV

< = 75% > 75% & 80% &


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C. Ceiling on the Loan to Value Ratio (LTV) on Housing Loans to Individuals

Amount of housing loan to individuals Maximum Loan to Value Ration ( LTV )

Upto Rs. 20 Lacs 90% on the housing loans

Above Rs. 20 Lacs and U to Rs.75 Lacs 80% on the housin loans

Above Rs.75 Lacs 75% on the housing loans

In case of loans granted against the collateral of gold jwellery the LTV ratio should not exceed 60%.

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D. Classification of Loan Assets

- A Loan Asset becomes Non-Performin Asset NPA if interest or installment is

overdue for 90 days or more

- An asset which has been classified as NPA for a period not exceeding 12

months from the date of being classified as NPA is classified as Sub-standard

Asset

- An asset which remains Sub-standard for a period exceeding 12 months shall be

classified as a Doubtful Asset

-

recoverability due to either non-availability of security, in case of secured loans

and advances; erosion in value of security, fraudulent act or omission on the part

of the borrower; the debt becoming time barred under Limitation Act, 1963;

inchoate or defective documentation

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Regulatory Norms. rov s on ng orms o

(a) On Standard Assets:

- 0.40% on Standard Housing Loan to Individuals

- .

- 1.00% on All other Standard Housing Loans to Individuals and other Commercial Real Estate

(b) On NPAs (Non Performing Assets)

- Sub-standard Assets: (Loan assets wherein the principal or interest on the loans is outstanding

for more than 90 days)

General provision of 15% on outstanding loans which are classified as Sub-standard Assets

- Doubtful Assets: (Loan assets which have continued in the Sub Standard category for a period

of more than a ear

Provision to the extent of 25% to 100% of secured portion depending upon the period for which

asset has remained doubtful.

(Up to 1 year 25%; 1 to 3 years 40%; and More than 3 years 100%)

-

100%)

The entire assets to be written off. If the assets are permitted to remain in the books for any

reason, 100% of the outstanding should be provided for.

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rov s on ng orms on oan sse s

Classification of Loan Assets No of Days Rate of

i. Standard Housing Loan to Individuals

ii. Standard Loans Commercial Real

Estate Residential Buildin s

-

-

0.40%

0.75%

iii. All other Standard Housing Loans to

Individuals and other Commercial Real

Estate

- 1.00%

Substandard 90 days to 454 days 15%

Doubtful

i. Upto 1 Years 455 days to 819 days 25%

.

iii. > 3 Years

1550 days & above 100%

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F. Acceptance Public Deposits- Deposits has the same meaning as u/s 45 I(bb) of the RBI Act.

- SLR to be maintained at 12.5% on non-exempt deposits

- HFC not to accept or renew any public deposit

Which is repayable on demand or on notice

Which is payable less than 12 months or payable later than 120 months

- Public Deposits Not to exceed 5 times of Net Owned Funds

-

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.

HFCs are required to limit the concentration of Credit/Investment subject to the following ceilings:

1 Lending to a single borrower 15% of owned fund

2 Lending to a group of borrower 25% of owned fund

3 Invest in shares of other companies 15% of owned fund

4 Invest in shares of a single group of companies 25% of owned fund

6 Lend to and invest in a single group of parties 40% of owned fund

,

of an HFC in the shares of another HFC (other than its subsidiary/ies) should not exceed 15% ofthe equity capital of the investee Company.

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This presentation may contain statements about events and expectations that may be forward looking, including those relating to

general business plans and strategy of GRUH Finance Limited (GRUH), its future outlook and growth prospects, and future

developments in its business and its competitive and regulatory environment. Actual results may differ materially from these forward

looking statements due to a number of risks and uncertainties, including future changes or developments in GRUH, its competitive

environment, its ability to implement its strategies and initiatives and respond to technological changes and political, economic

regulatory and social conditions in India. All financial data in this presentation is obtained from the Audited Financial Statements, basis

which the ratios are calculated. This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer,

invitation or a solicitation of any offer, to purchase or sell, any shares of GRUH and should not be considered or construed in any

manner whatsoever as a recommendation that any person should subscribe for or purchase any of GRUHs Shares. None of the

, ,

assurance or guarantee of future performance, nor that the assumptions on which such future projects, expectations, estimates or

prospects have been prepared are complete or comprehensive.

By accepting this presentation, the recipient acknowledges and agrees that this presentation is strictly confidential and shall not be

copied, published, distributed or transmitted to any person, in whole or in part, by any means, in any form under any circumstances.

jurisdiction in which it is located, and/or any other applicable laws, (ii) it is not a U.S. person, (iii) this presentation is furnished to it, and

has been received, outside of the United States, and (iv) it will not reproduce, publish, disclose, redistribute or transmit this presentation,

directly or indirectly, into the United States or to any U.S. person either within or outside of the recipients organization.

- nance . -

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Thank You

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