Corporate Presentation September, 2017
Disclaimer: This presentation is intended solely for viewing. No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from Vistaar Financial Services Pvt. Ltd. Figures rounded off to the nearest digit across the presentation. Figures and ratios have been regrouped wherever necessary.
Our Vision, Mission, Values & 5 Principles Our Vision
Our Mission
Our vision is to be a catalyst to the underserved so that they can achieve greater economic and social well-being. Specifically, we offer a full range of financial services customised to fulfill their every business requirement and move them into the mainstream.
We shall achieve our vision by deeper understanding of specific customer segments, to fulfil their financial needs through customized products and simple processes
Our Customer is at the Centre of everything that we do
5 Principles I hold myself Accountable for my Performance
I will treat Colleagues the way I expect to be treated
Our Values Customer Centricity Transparency Team Work
Ethics
My colleagues and I will deliver greater results, working together, than in isolation Each of my actions will be to the highest standards of Integrity & Ethics
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A Specialist MSME Lending Player Loan Portfolio of `1,183 Crores
What we do We provide loans to the Micro, Small & Medium Enterprises (“MSME”) primarily in the rural & semi-urban areas
Presence in 13 States through 215 Branches
Customer Segment
Haryana Our Belief (01) We believe in the power of MSMEs as engines of economic growth that will drive India forward
Textiles
Small Mfg. Units
Unique Characteristics of the Company First player to use Unique Credit Methodology to disburse loans to small entrepreneurs & address credit demand gap in the sector Presence in rural & semi-urban areas Company is run by professionals with deep industry knowledge
Hotel/Bakery
Kirana/Retail Shops Agri Allied Activities
Impact Created by Vistaar is Both Economic & Social Cumulative amount of loans disbursed: >₹2,300 Crs.
Cumulative no. of entrepreneurs serviced: >1.75 Lakhs
Employment generated (direct & indirect): ~5 Lakhs
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Vistaar: A Brief History • Raised capital of ₹250 Crs. • Raised Capital of ₹10 Crs. • Launched specialised Products - Small Business Mortgage Loans - Small Business Hypothecation Loans
• Portfolio increased by more than two fold to ₹243 Crs.
• Credit rating upgraded from ‘[ICRA]BBB+’ to ‘[ICRA]A-’
• Expanded operations in Gujarat
• Entered in Uttar Pradesh, Uttarakhand, Haryana, Odisha & AP
• Branch number doubled to 81
• Launched new product - Bill discounting
FY14
FY12
FY16
FY11
FY13
FY15
• Founded in Apr’10
• Raised Capital of ₹40 Crs.
• Raised Capital of ₹160 Crs.
• Raised ₹15 Crs. capital
• Expanded Operation in Maharashtra
• Started Operations in Karnataka & Tamilnadu
• Aug 2012 – Operating break even achieved
• Crossed ₹100 Crs. Portfolio
• Entered in Madhya Pradesh, Rajasthan & Chhattisgarh • Raised ₹308 Crs. debt
FY17 • Portfolio increased to ₹1,124 Crs. • Raised ₹495 Crs. debt (incl. ₹125 Crs. from Mutual Fund)
• Portfolio increased to ₹516 Crs. 4
Target Customer Segment of Vistaar Vistaar’s Focus Target Segments Constitute Majority of the Demand Gap Medium & Large Enterprises
Mainly Banks & Large NBFCs
Small Businesses
Vistaar – Target segment
Productive Poor
Microfinance Institutions & Self Help Groups
Breakup of MSME sector* (Number of units)
Others 28%
Vistaar's focus target segments 72%
Current focus target segments of Vistaar (1) ► ► ► ► ► ► ►
Textiles / Auto/Power-looms Agri allied activities Kirana stores (2) Hotels / Restaurants Agro / Food processing Light engineering Other retail stores
Breakup of Credit Demand in MSME sector* Others 22%
Vistaar's focus target segments 78%
Focus target segments of Vistaar constitute 72% of the total MSME business units & 78% of the total MSME sector credit demand Sources : * Data from Ministry of MSME, Company analysis Notes : (1) Vistaar also targets other segments in addition to these focus segments (2) Kirana Stores are small unorganized retail stores, with merchandizing similar to Mom and Pop stores
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Vistaar Has Uniquely Positioned Itself to Cater to MSME Sector Effectively
Strong People Practices Timely & sizable capitalisation
Strong Professional Management
Strong Governance Structure
Marquee Investors
Cost optimisation & timely funding
Driving growth systematically
Proven Business Model Unique Credit Methodology
Well Diversified Debt Profile
Proactive Board
Right customer selection
Strong Processes, Controls & IT Minimising risks
6
Vistaar’s “5 Step Process” Addresses MSME Segment Effectively 5
4
Continuous refinement of product and credit methodology
In-depth study of a sector to determine unique credit methodology Income assessment through nontraditional documents
Collateral taken for moral suasion
3
1
Reference checks- supply chain players, neighbors
2
7
Fully Integrated Client Protection Principles In The Business Model Client Protection Principles Appropriate Product Design & Delivery Prevention of Overindebtedness
Transparency Responsible Pricing Fair & Respectful Treatment of Clients
Privacy of Client Data Effective Client Resolution
Vistaar’s Approach Sector specific approach Templatization for different trade segments Direct selling 100% dual credit bureau check Cash flow based lending Loan summary schedule to customers Impart credit literacy through videos Competitive pricing Reasonable RoAUM Sales SOP Collections code of conduct
Sharing of data only with specific consent Toll free numbers for complaints Board level review of customer complaints and resolution
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Products Offering to Suit Varied Needs of MSMEs Requirement >>
Short Term Capital
Long Term Business Loan
Bill Discounting
Small Business Mortgage Loan
Loan Size (`)
1,00,000 to 25,00,000
1,00,000 to 25,00,000
Repayment Frequency
Bullet
Monthly
Tenor
Up to 90 days per Bill, Limit valid up to 1 year
24 to 120 Months
Security
Unsecured
Property
Products >>
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Effective Risk Management & Governance Key Aspects
Management Strategy
Asset Quality
• Diversified portfolio across geographies & sectors • Provisioning norms are more conservative than RBI’s requirements • Amongst the lowest NPA levels in the industry
Liquidity Risk
• Sound liquidity management & stable funding partners • Raised capital through both equity & debt markets (Term Loans, CC, NCDs, PTCs)
Interest Rate Volatility
• Good asset liability management system in place • Borrowing at variable rates & lending at fixed rate
Management Systems
• Robust Core Banking Solution & other reporting systems in place • Timely reporting of critical data points to help decision making
Competition
• Increasing branch network across varied geographies • Less competition from mainstream sources of finances (Banks & NBFCs)
Capital Adequacy & Profitability
• Strong CAR of 45% (as of Sep’17) – well above RBI’s requirement • Profitable since last five years at continuous increasing growth rate
Corporate Governance
• Well established policies & procedures across functions • Professional Board with strong profile of Independent Directors
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Diversified Presence: Scaling Up In A Sustainable Manner States 215 Branches Spread Across 13 States (as of Sep’17)
3
4
FY12
FY13
FY14
Madhya Pradesh (30)
21
40
FY12
FY13
81 FY14
Odisha (05)
Telangana (05)
Andhra Pradesh Karnataka (07) (36) Tamil Nadu (46)
FY15
FY16
FY17
Sep'17
132
198
201
215
FY15
FY16
FY17
Sep'17
No. of Loan Accounts (‘000)
Chhattisgarh (04)
Maharashtra (32)
13
Branches
Rajasthan (15) Gujarat (19)
12
7
2
Uttarakhand Haryana Haryana (04) (01) (04)
12
13
14
27
FY12
FY13
FY14
55
79
79
64
FY15
FY16
FY17
Sep'17
2.1
2.3
2.1
FY16
FY17
Sep'17
Employees (‘000)
0.3
0.4
0.8
FY12
FY13
FY14
1.3 FY15
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Performance Highlights Disbursements (` Crs.)
Portfolio Growth (` Crs.)
670
600
1,124 844
434 302
515
201 41 FY12
107 FY13
36 FY14
FY15
FY16
FY17
H1-FY18
FY12
111 FY13
Profit Before Tax (` Crs.)
243 FY14
FY15
38.8 22.9
15.1
FY12
(2.7)
1.6
FY13
FY14
FY15
FY16
* CAGR for 5 years Note: H1-FY18 nos. are provisional & unaudited
FY17
FY16
FY17
H1-FY18
509
541
557
FY16
FY17 H1-FY18
Networth (` Crs.)
50.5
0.22
1,183
H1-FY18
231 18
58
59
FY12
FY13
FY14
FY15
12
Well Diversified Debt Profile & Stable Funding Partners Source Mix: Rs. 682 Crs. Outstanding as of Sep’17 No. of Lenders
International FIs 26% Banks 46%
03
18
Domestic FIs 28% 10
Note: (1) Above outstanding nos. includes Off Balance Sheet & excludes car loans (2) Logos shown of major lenders
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Support From Marquee Investors Since Inception To Support Growth
Rs. 250 Crs. in Aug’15 Rs. 160 Crs. in May’14 Rs. 40 Crs. in Jul & Aug’12 Rs. 10 Crs. in Apr’11 Rs. 15 Crs. in Apr & Aug’10
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Our Founders Mr. Hegde was a Director – Microfinance and Micro enterprises businesses in Fullerton India Credit Company, as a core member of the team which conceptualized, developed and started the Micro Business from mid-2007. Prior to that, Mr. Hegde had worked in ICICI Group between 1992 and 2007, in the Rural and Micro banking Group with a range of responsibilities covering strategy to execution. During this phase, he worked very closely with the microfinance sector, lending to over 80 MFIs in the country with an aggregate exposure of over Rs. 3,000 Crore. In his initial years in ICICI, he worked for Project Financing in the Agri Business Division, responsible for implementing a special project, namely Agriculture Commercialisation & Enterprise (ACE) programme for USAID. Prior to ICICI, Mr. Hegde had also worked in Bank of Maharashtra for 8 years in Agriculture Finance in Karnataka and Maharashtra. Mr. Brahmanand Hegde Exe. Vice Chairman & Co-Founder
He completed his Post Graduate in M.Sc. from University of Agricultural Sciences, Bangalore in 1983 and qualified CAIIB from Indian Institute of Bankers, Mumbai.
Mr. Nishtala is a Business Operations Specialist, who headed the Microfinance and Microenterprises Business of Fullerton India and was a core member in the team which conceptualized, developed and started the Microfinance Business of the company from early 2008.
Earlier, he was responsible for coordinating the rollout of Fullerton India’s 800-branch network including technology, people and premises. Prior to this Mr. Nishtala had worked for over 20 years in the Eicher Group in a variety of sectors including commercial vehicles, tractors and auto components, in various functions ranging from Sales and Marketing, Strategic Planning and Implementation. He was head of Corporate Strategy, and worked with the owners in re-structuring the group’s portfolio. He also spearheaded the acquisition and integration of a Design company in the US, to accelerate the Group’s Engineering Services Business. Mr. Ramakrishna Nishtala MD & CEO, Co-Founder
He completed his Post Graduation in Industrial Engineering from NITIE, Mumbai in 1986 and Graduation in Mechanical Engineering from Jawaharlal Nehru Technological University, Kakinada, Andhra Pradesh.
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Board of Directors
Mr. C.B. Bhave Non-Executive Chairman & Independent Director
Mr. Sandeep Farias Nominee Director, Elevar Equity
Ms. Radhika Haribhakti
Mr. James Abraham
Independent Director
Independent Director
Mr. Ash Lilani Nominee Director, Saama Capital
Note: Board of Directors also includes the Founders
Mr. Sumir Chadha
Mr. Badri Pillapakkam
Nominee Director, WestBridge Capital
Nominee Director, Omidyar Network
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Management Team
Mr. Sudesh Chinchewadi
Mr. Praveen Arora
EVP, Chief Financial Officer & CS
EVP, Chief Business Officer
Mr. Nikhil Bandi
Mr. Mohan K Pattabhiraman
Sr. VP- Chief Information Officer
Sr. VP- Internal Audit Head
Mr. Dhananjay Tiwari EVP, Chief Risk Officer
Dr. Ashok Nagpal Sr. VP- Strategic Initiatives & Operations Head
Mr. T.K. Srinath EVP, Chief Human Resources Officer
Mr. Mahesh S.G. Sr. VP – Rollout & PIP Business (Northern States)
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Awards & Recognitions
“IFC – Mint Strategy Award” in September 2016
“CEO with HR Orientation” by Vijayavani - BFSI award to Mr. Brahmanand Hegde, MD & CEO in September, 2015
“Segment Leadership & Financial Inclusion” by SKOCH Award in June, 2016
“Most Influential CFOs of India” by CImA, London to Mr. Sudesh Chinchewadi, CFO & CS in July, 2015
“Best Financial Reporting for FY17, FY16 & FY15 – Medium Business” award by Times Network & CMO Asia
“The India CFO Award for Excellence in Finance in a Start-Up” by IMA to Mr. Sudesh Chinchewadi, CFO & CS in May, 2016
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Happy MSME Customers Impact by Vistaar’s Loan
Customer & Profile Mr. Balasubramaniyam, Power loom owner Perundurai, Erode dist., Tamil Nadu
No. of Power looms 52 26 Pre Loan
Mr. Surekha Sunil Teli, Kirana Shop owner (primarily sells oil) Rabakavi, Bagalkot dist., Karnataka
50
Mr. Siddeshwar Kambale, Small Shop owner (sells bags & sports goods) Rabakavi, Bagalkot dist., Karnataka
24
40
Annual Revenue Household Surplus
30 20 10
Post Loan
4 Rs. Lakhs p.a.
36 3
15 1
-
Pre Loan
19 14
Annual Revenue Household Surplus 11
9 4
4 3 3 2 2 1 1 -
Post Loan
3
Rs. Lakhs p.a. 3
13 2
2 2 1
1
1
(1)
-
Pre Loan
Post Loan
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Version: Website 08-Nov-2017
