Wiki source code of Aditya Birla Capital Ltd

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4
5 = Company overview =
6
7 Aditya Birla Capital Limited (ABCL) (NSE:ABCAPITAL) is the holding company for the financial services businesses of the Aditya Birla Group.{{footnote}}https://www.adityabirlacapital.com/about-us{{/footnote}}
8
9 ABCL’s subsidiaries have a strong presence across Protecting, Investing and Financing solutions, ABCL is a universal financial solutions group catering to diverse needs of its customers across their life stages. Powered by more than 21,000 employees, the subsidiaries of ABCL have a nationwide reach with 850+ branches and more than 2,00,000 agents / channel partners and several bank partners.
10
11 As of March 31st, 2020, Aditya Birla Capital Limited manages aggregate assets under management over Rs. 3000 billion, has a consolidated lending book of approx. Rs. 600 billion and an active customer base of 20 million through its subsidiaries and joint ventures.
12
13 Aditya Birla Capital Limited is a part of the Aditya Birla Group, a US$ 48.3 billion Indian multinational, in the league of Fortune 500. Anchored by an extraordinary force of over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group operates in 36 countries across the globe.
14
15 == Company History ==
16
17 Originally incorporated in October 2007 under the Companies Act 1956, Aditya Birla Financial Services Private Limited received the certificate of registration from the Reserve Bank of India in May 2009 to commence the business as non-deposit taking NBFC.{{footnote}}https://www.adityabirlacapital.com/about-us/heritage-and-history{{/footnote}}
18
19 In December 2014, the company was converted from a private limited company to a public limited company, and was renamed as ‘Aditya Birla Financial Services Limited’.
20
21 During past one decade since its incorporation, the Company has come a long way to become one of the largest financial services players in India. Year 2017 marks a milestone, with the Company becoming a pure play listed holding company of all the financial services businesses of the Aditya Birla Group.
22
23 == Businesses ==
24
25 The company's business solutions come together to make Aditya Birla Capital{{footnote}}https://www.adityabirlacapital.com/about-us/our-businesses{{/footnote}}
26
27 **Aditya Birla Sun Life Insurance Company Limited**
28
29 ABSLI offers protection solutions, children’s future solutions, wealth with protection, health and wellness as well as retirement solutions.
30
31 **Aditya Birla Health Insurance Company Limited**
32
33 ABHI focuses on encouraging people to adopt a healthier lifestyle by using smart technology and innovative product & service offerings.
34
35 **Aditya Birla Wellness Private Limited**
36
37 ABWPL brings to you Multiply - India’s first Wellness and Rewards program that rewards you for staying healthy.
38
39 **Aditya Birla Insurance Brokers Limited**
40
41 ABIBL focuses on developing cost-effective and customized insurance packages while ensuring that the process of claim settlements is swift & painless.
42
43 **Aditya Birla Sun Life AMC Limited**
44
45 ABSLAMC is the investment manager for the 4th largest fund house in India, Aditya Birla Sun Life Mutual Fund
46
47 **Aditya Birla Sun Life Mutual Fund**
48
49 ABSLMF is India's fourth largest mutual fund house
50
51 **Aditya Birla Sun Life Pension Management Limited**
52
53 ABSPML offers customized solutions to help you plan a comfortable retirement
54
55 **Aditya Birla Money Limited**
56
57 ABML offers solutions for Broking, Portfolio Management Services, Depository & Repository Solutions and Distributor of other Financial offerings.
58
59 **Aditya Birla MyUniverse Limited**
60
61 ABMU offers the best deals on Personal Loans, Credit Cards, Home Loans, etc. & allows you to transact in a range of mutual funds.
62
63 **Aditya Birla PE Advisors Private Limited**
64
65 ABPEAPL offers investment management and advisory services to domestic and global investors
66
67 **Aditya Birla Finance Limited**
68
69 ABFL offers customized solutions in areas of Capital Markets, Infrastructure, Real Estate Finance, to name a few
70
71 **Aditya Birla Housing Finance Limited**
72
73 ABHFL offers housing finance solutions such as home loans, home improvement & construction loans, balance transfer, top-up loans etc.
74
75 == Retail Solutions ==
76
77 Explore Protecting, Investing & Financing solutions for Individuals{{footnote}}https://www.adityabirlacapital.com/about-us/our-solutions/retail-solutions{{/footnote}}
78
79 **Life Insurance**
80
81 Get that much needed mental and financial security against the uncertainties of life. Discover complete protection with its Life Insurance Solutions.
82
83 **Health Insurance**
84
85 The company's Health Insurance Solutions don't just protect you from unforeseen health expenses but also enable you to stay healthy. Know more.
86
87 **Multiply Wellness**
88
89 Multiply Wellness is India's first Wellness and Rewards Program that rewards you for staying healthy. The healthier you get, the better your rewards.
90
91 **Motor insurance**
92
93 Choose a motor insurance plan that comprehensively covers your vehicle in case of an unforeseen mishap.
94
95 **Travel Insurance**
96
97 The company offer travel insurance solutions that are best suited for your needs, so that when you travel you create only good memories.
98
99 **Mutual Funds**
100
101 Put your hard-earned money to work with Mutual Funds.
102
103 **Wealth Management**
104
105 The company's team is trained to hand-pick investment opportunities and carve out a portfolio that is as distinct as your life's goals and aspirations.
106
107 **PMS**
108
109 Portfolio Management is an exclusive service offered to its most discerning investor.
110
111 **Pension Funds**
112
113 Retirement plans to ensure that your employees have a comfortable retirement
114
115 **Stocks and Securities**
116
117 Invest for your business with stocks and securities management solutions
118
119 **Real Estate Investments**
120
121 Investing in Real Estate can be a great way to ensure your investment portfolio is diverse, and to optimize returns across asset classes.
122
123 **Home Finance**
124
125 Don’t compromise on your most important purchase. Explore housing finance solutions to buy the home you’ve always wanted.
126
127 **Personal Finance**
128
129 Be it your dream holiday or a makeover for your home, why settle for less when you can have the best with a simple personal loan?
130
131 **SME Finance**
132
133 Make way for your entrepreneurial dream or give your existing business a boost with its business loans.
134
135 **Real Estate Finance**
136
137 Choose from a selection of real estate financing solutions that best suit your requirements
138
139 **Loan Against Securities**
140
141 Choose from a wide variety of mortgage solutions
142
143 == Corporate Solutions ==
144
145 Explore Protecting, Investing & Financing solutions for Corporates.{{footnote}}https://www.adityabirlacapital.com/about-us/our-solutions/corporate-solutions{{/footnote}}
146
147 **Group Life Insurance**
148
149 Protect your employees with an ideal life insurance plan. Explore its Protecting solutions.
150
151 **Group Health Insurance**
152
153 Explore health insurance and wellness solutions for your employees
154
155 **Corporate General Insurance**
156
157 Explore insurance solutions against multiple business risks so that your business not only survives, but also thrives.
158
159 **Portfolio Management Services**
160
161 Custom made portfolio management solutions for your organization
162
163 **Pension Funds**
164
165 Retirement plans to ensure that your employees have a comfortable retirement
166
167 **Stocks and Securities**
168
169 Invest for your business with stocks and securities management solutions
170
171 **Mutual Funds**
172
173 Ideal investment solutions for your organization
174
175 **Private Equity**
176
177 The company play a vital role in helping companies looking to make substantial investments, predominantly in unlisted companies with high-growth potential.
178
179 **Real Estate Finance**
180
181 Choose from a selection of real estate financing solutions that best suit your requirements
182
183 **Corporate Finance**
184
185 The company offer a range of comprehensive financing solutions to meet your business requirements like Structured Finance, Project Finance, Working Capital.
186
187 **Loan Against Securities**
188
189 Mortgage solutions that are ideal for your business needs
190
191 **DCM & Loan Syndication**
192
193 Debt Capital Markets and Loan Syndication Solutions for your organization
194
195 = Business Segments =
196
197 == Aditya Birla Finance Limited (NBFC) ==
198
199 Aditya Birla Finance Limited (ABFL) is among India’s leading private and diversified non-banking financial services (NBFC) companies, offering end-to-end financing and wealth management solutions to a wide range of customers across the country. ABFL caters to varied financial requirements of a wide range of customers across retail, High Networth Individual (HNI), ultra HNI, micro enterprises, Small and medium enterprise (SME), large and mid-corporates.{{footnote}}https://www.bseindia.com/bseplus/AnnualReport/540691/5406910320.pdf{{/footnote}}
200
201 **Industry Overview**
202
203 NBFCs play an important role in the Indian financial system by complementing the banking sector and leveraging on their efficient and nimble operations, to promote their tailor-made products. Their role in promoting financial inclusion and catering to the needs of small businesses and specialised segments give an additional dimension to their importance.
204
205 Although the NBFC sector grew by 18% year-on-year in FY 19, the pace of expansion was lower in FY 19, mainly due to credit downgrades and liquidity squeeze within the sector. NBFC growth in H1 FY 20 moderated to 6% due to lower credit demand.
206
207 **Performance Review**
208
209 The overall lending book was at Rs 47,057 Crore as on 31st March, 2020, due to systematically reduced exposure/disbursement to the large and mid-corporate segment. The Retail, SME and Ultra HNI segments continue to constitute ~~50% of the portfolio from 47% in FY 18. ABFL has continued to focus on new disbursement in select growth segments. The retail and SME segments continue to grow, reiterating the successful strategy of diversifying the loan book as well as maintaining its focus on the high-margin retail segment.
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211 The Net Interest Margin (NIM) expanded by 38 bps to 5.29% in FY 20. This reflects an increased proportion of higher margin segments in the portfolio. Margin improvement is driven by a product mix change and repricing across the portfolio.
212
213 ABFL continued to focus on new disbursements in select growth segments. In the SME segment, ABFL continues to focus on secured Term Loan/Working Capital Demand Loan (TL/WCDL) segment, which grew 4% year-on-year, while broker funding de-grew 69% year-on-year and Loan again property and Lease rental discounting de-grew 9% year-on-year. In the Large and mid-corporate segment, strategic repayment/pre-payment consideration led to degrowth in structured finance (54% yearon-year) and construction finance (21% year-on-year).
214
215 During FY 20, ABFL’s revenue grew by 11% from Rs 5,607 Crore to Rs 6,202 Crore. Net Profit After Tax de-grew marginally from Rs 869 Crore to `821 Crore. Net worth expanded by 9% year-on - year from Rs 7,417 Crore to `8,078 Crore, led by internal accruals.
216
217 **Outlook**
218
219 With the uncertain growth and a slowdown in credit demand, NBFCs are expected to turn cautious, going forward. The sector faced liquidity pressure with higher funding cost and is expected to face headwinds for asset quality. The profitability of NBFCs is expected to be under pressure, with lower credit growth and higher credit cost. Business models of NBFCs will be tested for resilience as the economy gradually recovers from the pandemic. The players with their strong liability profiles and strong risk controls in the assets size, are expected to be better positioned.
220
221 ABFL, with its strong parentage and liquidity, is well-equipped to build future growth. ABFL foresees opportunity across the spectrum of its customers, out of which the SME and retail opportunity is estimated to be the largest. Besides the asset quality, effective implementation of technology and cost optimisation would remain the company’s key focus areas for achieving profitable and sustainable growth.
222
223 == Aditya Birla Housing Finance Limited ==
224
225 Aditya Birla Housing Finance Limited (ABHFL) is registered with the National Housing Bank as a housing finance company under the National Housing Bank (NHB) Act, 1987. ABHFL offers a comprehensive range of housing finance solutions such as Home loans, Home Extension Loans, Plot & Home Construction Loans, Home Improvement Loans, Loans Against Property, Construction Financing, Commercial Property Purchase Loan and Property Advisory Services.
226
227 **Industry Overview**
228
229 HFCs were undergoing a challenging period on the back of muted demand and emerging asset quality concerns. This was aggravated by the near halt in economic activities following the COVID-19 outbreak. The total housing credit outstanding stood at Rs 20.7 Lakh Crore, as on December 31, 2019. The pressure on asset quality is expected to mount due to the lockdown and the consequent impact on borrower cash flows and viability. The overall gross non-performing assets or GNPAs increased to 2.2% as on December 31, 2019 vs. 1.6% as on March 31, 2019 due to a deterioration across HFCs in the wholesale loan construction finance segment, given the tight liquidity faced by some developers with delayed projects and the reduced fund availability for the developers.
230
231 **Performance Review**
232
233 ABHFL continues to grow its loan book with an increasing focus on its retail mix. The Company's loan book grew 22% CAGR over the last two years from Rs 8,137 Crore in FY 18 to Rs 12,102 Crore in FY 20. The affordable housing loan book grew six times over last two years to ~~`2,250 Crore as on March 2020. The retail mix has improved from 89% to 95% over the last two years. The company's approach during FY 20 was to increase retailisation, achieve greater granularity and reduce construction finance exposure.
234
235 The business continues to focus on a systematic approach to build a healthy portfolio mix. The housing loan (including affordable) segment consists of 70% of the overall exposure, while construction finance comprises only 5%. Hence a large part of the margin expansion has been brought about by the expansion of the home loan segment, especially the affordable home loan segment. In construction finance, its average ticket size on a sanctioned project is Rs18 Crore, while based on outstanding balance, it is Rs9 Crore (Previous year: Rs13 Crore). In the affordable segment, its average ticket size is Rs13 Lakh.
236
237 Revenue grew 27% year-on-year to Rs 1,298 Crore, in line with an increase in its book size, while the net interest margin has been maintained at 3.04%. ABHFL reported Earnings Before Tax at Rs136 Crore against Rs 107 Crore in FY 19. The net worth has expanded from Rs1,190 Crore in FY 19 to Rs1,383 Crore in FY 20. A sum of Rs100 Crore was infused during the year to fund the loan book growth.
238
239 **Outlook**
240
241 Long-term growth outlook for the housing finance sector remains favourable owing to the Government of India’s focus on ‘Housing for All’ initiative, improved affordability and favourable demographics. These factors, coupled with the current low penetration levels, are likely to boost growth in the housing segment.
242
243 ABHFL is aiming to build a scalable and profitable book through the optimal product-sourcing-customer mix. The Company’s thrust is on building a robust technology platform for customer acquisition, offering quality customer service for better retention and creating operating efficiencies.
244
245 == Aditya Birla Sun Life AMC Limited (AMC) ==
246
247 Since 1994, Aditya Birla Sun Life AMC Limited (ABSLAMC) has been one of India’s leading fund managers. It caters to a diverse customer cross-section through a wide variety of investment solutions focused on regular income, wealth creation and tax savings, among others. ABSLAMC is India’s fourth largest mutual fund (excluding ETF), based on domestic Average Assets Under Management (AAUM) as published by Association of Mutual Fund Industry (AMFI) for the quarter ended March 2020.
248
249 **Industry Overview**
250
251 India’s mutual fund industry comprises 44 asset management companies. The top 5 asset management companies, contribute to 57% of industry’s AAUM (Source: Association of Mutual Funds in India.
252
253 In the current year, the industry witnessed 10% growth in annual average AUM (AAUM). AAUM grew from Rs 23,92,825 Crore in the year ended March 2019 to Rs 26,23,156 Crore in the year ended March 2020.
254
255 The Industry’s Equity Assets grew by 10% from Rs 9,95,132 Crore in the year ended March 2019 to Rs 10,97,413 Crore in the year ended March 2020. The share of equity AAUM in total industry AAUM touched 42%. SIP inflows and account addition continued to be encouraging. In March 2020, SIP inflows stood at ₹8,641 Crore against ₹8,055 Crore in March 2019. The number of outstanding SIPs accounts stood at 312 Lakh for March 2020 against 262 Lakh for March 2019.
256
257 Performance Review
258
259 ABSLAMC completed a successful 25 years of investing investor money in Indian capital markets.
260
261 The domestic AAUM of ABSLAMC expanded by 19% CAGR over 5 years to Rs 2,66,988 Crore in line with industry growth. ABSLAMC has grown faster than the industry in equity AAUM, with a 5-year CAGR at 25% vis-à-vis the 17% for industry. ABSLAMC continued to focus on growing high margin retail assets and Equity AAUM contributed 36% of the total domestic AAUM in FY 20 against its 23% in FY 16.
262
263 ABSLAMC has a strong growth across retail vectors in line with stated strategy. The total number of folios has grown at 25% CAGR over 5 years to touch 7.2 Million as on March 2020, much ahead of the industry 5-year CAGR at 17%, and highest amongst top 5 AMCs as on March 2019. The domestic equity AAUM at Rs 90,234 Crore, grew at a 5-year CAGR of 35% vis-à-vis the industry’s growth at 30%. The growth in equity AAUM over the last 5 years was second highest among the top 5 AMCs in India. The retail penetration is growing with Retail and HNI AUM at Rs 1,06,496 Crore. The SIP book size growth was in line with that of the industry at a 3-year CAGR of 24%, contributing to 38% of domestic equity and having a market share of 9.90%. The contribution from beyond top 30 cities (B30 cities) is at Rs 33,550 Crore, with a 5-year CAGR of 20% vis-à-vis industry’s 15%.
264
265 ABSLAMC continues to improve profitability over time. It reported PBT/AUM at 26 bps in FY 20, which has increased by 9 bps over the last 5 years. The net profit grew with a 2-year CAGR at 19% to touch Rs 494 Crore. ABSLAMC delivered Return on Equity at 38.9% in FY 20 against 32.3% in FY 18.
266
267 Outlook
268
269 An increase in awareness in general, but more particularly, its presence in smaller cities in the country, ensures that retail expansion will continue to be strong. ABSLAMC will continue to focus on increasing higher margin AUM and expanding its investor base. Growing contribution from beyond top 30 markets will remain a focus area, besides strengthening digital presence to help connect better with customers and enhance distribution.
270
271
272 Aditya Birla Sunlife Insurance Limited (Life Insurance)
273
274 Aditya Birla Sun Life Insurance Company Limited (ABSLI) is a 51:49 joint venture between the Aditya Birla Group and Sun Life Financial Inc., Canada’s leading international financial services organisation. ABSLI has contributed to the growth and development of the Indian life insurance industry, and is currently one of India’s leading private life insurance companies.
275
276 Industry Overview
277
278 The life insurance industry in India has witnessed a sea change over the past two decades. These changes include opening up to the private sector, new product regulations, increase in Foreign Direct Investment (FDI) limits, besides initiation of open architecture for bancassurance and issuance of policies in electronic form. The life insurance industry has evolved considerably, catering to the changing macro-economic landscape, customer needs and technological developments.
279
280 The industry has grown at a CAGR of 16% in Individual APE during FY 16 to FY 19, registering a growth of 6% during FY 20 due to the impact of the COVID-19 lockdown in March 2020. The impact of the lockdown is however expected to be transient in nature, and the insurance industry is expected to be back on the growth path, given its criticality to both individuals and the economic development of the country.
281
282 During FY 20, the insurance industry grew 18% YTD. February 2020 ended with growth of 6% for FY 20 as the top line was impacted due to the lockdown. Private insurance players witnessed a growth of 5% and LIC registered a growth of 8%. The private players market share in individual new business premium stood at 57% in FY 20.
283
284 Performance Review
285
286 ABSLI recorded individual new business premium growth at 10% in YTD February 2020, while the year ended with a flat growth as sales were impacted in the month of March 2020 due to the COVID-19 shutdown. Given its focus on creating value and driving profitability, the Group business de-grew by 13%. Group business continued to be value accretive In FY 20. ABSLI maintained its market share in Individual new business at 4.0%.
287
288 ABSLI has continued its journey of balanced channel mix with a pan-India presence across 2,750+ cities through 9,500+ bank branches and 395+ own branches, with a base of 82,000+ agents. ABSLI has eight key bancassurance partners (including HDFC Bank, DCB, KVB, Indian Bank etc.) and 460+ direct selling employees. ABSLI continues to drive growth through partnerships and gain operating leverage in proprietary channels. The proprietary channel witnessed an 8% CAGR in productivity over the last two years.
289
290 The value of new business is one of the most important value metrics in the life insurance industry, and measures profitability over the long-term. In FY 20, ABSLI achieved a gross margin of 33.8% (PY: 34.6%), while the net VNB margin was at 6.9% (PY: 9.8%). The gross margins are highly sensitive to interest rates, yet ABSLI has been able to largely maintain the gross margin rates with its improved product mix, despite falling interest rates.
291
292 The embedded value increased year-on-year to touch Rs 5,187 Crore from Rs 4,900 Crore in FY 19. ABSLI has reported a healthy Return on operating Embedded Value (RoEV) at 13.2%.
293
294 Assets under management (AUM) grew at 6% CAGR over the last 2 years from Rs 36,867 Crore to Rs 41,126 Crore led by a healthy in-force book, quality of business and new business growth. ABSLI has posted robust fund performance across categories against internal benchmarks, despite volatile market conditions. ABSLI maintained controlled opex by cost optimisation and productivity, with a stable FY 20 opex ratio at 15.9%, despite lower volumes in March 2020.
295
296 Assets under management (AUM) grew at 6% CAGR over the last 2 years from Rs 36,867 Crore to Rs 41,126 Crore led by a healthy in-force book, quality of business and new business growth. ABSLI has posted robust fund performance across categories against internal benchmarks, despite volatile market conditions. ABSLI maintained controlled opex by cost optimisation and productivity, with a stable FY 20 opex ratio at 15.9%, despite lower volumes in March 2020.
297
298 Outlook
299
300 While the global pandemic, volatile nature of capital markets and an economic standstill are certain to result in revenue loss in the short to medium term, the industry will make a sharp recovery eventually as structural drivers for growth are in place.
301
302 A few factors, which reiterate the healthy growth positioning and recovery for the industry in the next 3-5 years are – resilience by the insurance industry during the pandemic, favourable demographics, increasing investment in the sector and digitisation.
303
304 ABSLI is well-positioned to tap into the opportunities of the life insurance industry. It is expected to emerge stronger on the back of its wide distribution franchise, a successful multichannel strategy, a long history of product innovations and operational efficiency. ABSLI will focus on growing faster than the industry and gaining market share with a balance of channel and product strategy.
305
306
307
308 Aditya Birla Health Insurance Co. Limited
309
310 Aditya Birla Health Insurance Co. Limited (ABHICL) was incorporated in 2015 by a joint collaboration between Aditya Birla Capital Limited (ABCL) and MMI Strategic Investments (Pty) Ltd. with each holding 51% and 49% shares, respectively. ABHICL commenced its operations in October 2016, and is engaged in the business of health insurance. Its current product portfolio includes unique offerings such as chronic care and incentivised wellness.
311
312 Industry Overview
313
314 The health insurance segment in India is one of the fastest growing segments in the financial services sector. The health insurance industry registered a premium of Rs 56,792 Crore in FY 20, which translates into growth of 12% year-on-year. Standalone Health Insurers (SAHI) have outperformed the industry and grew at 27% in FY 20, with a gain in market share of 3.2% (CY market share 25.5% versus LY 22.3%). SAHI grew at a CAGR of 37% in last 5 years.
315
316 Performance Review
317
318 Over the past three years of its business operations, it has created a differentiated ‘Health First’ business model by moving from the traditional ‘buy and forget’ to ‘buy and engage’. Additionally, its differentiated health and wellness framework also emphasises on its holistic health management approach, focusing on disease prevention and wellness management.
319
320 The strength of ABHI’s business model, which is ‘Health first’, was evident from its strong performance across financial and non-financial parameters this year. The Company continues to be the fastest growing Health Insurer, having registered Gross Written Premium (GWP) of Rs 872 Crore in FY 20, growing by 76% year-on-year, covering 8.3 Million lives and translating to above 4x year-on-year in lives covered. The retail business grew by 94% and contributed to 72% in FY 20, against 65% in FY 19.
321
322 Since its inception, ABHI has followed a multi-channel distribution model across agency, broking, bancassurance, digital and direct marketing channels. It expanded its footprint from 800+ locations in FY 19 to 2,000+ locations in FY 20. The agency network consists of 24,900+ agents across 41 cities, with 76 branches. The bancassurance channel with nine bank partners, has delivered very strong growth in FY 20, contributing to 64% of retail GWP.
323
324 In terms of its service delivery model, ABHI has built a robust platform and tech-enabled health and wellness ecosystem, for providing a seamless experience throughout the customer journey. It has empanelled 6,500+ hospitals to enable cashless services across 750+ cities.
325
326 The quality of the book remains healthy. This is demonstrated by the claim and combined loss ratio, which has significantly reduced year-on-year. The overall claim ratio has reduced to 59% in FY 20, against 72% in FY 19, while the combined ratio has reduced to 134% vis-à-vis 149%. ABHI has achieved a combined ratio of 117% in Q4 FY 20 vis-à-vis 129% in Q4 FY 19.
327
328 In FY 20, ABHI underwrote a gross premium of ₹872 Crore compared to ₹497 Crore in FY 19. The retail business contributed ~~72% of the total GWP in FY 20, of which 93% was issued through the digitally enabled mode. ABHI posted a net ₹ 246 Crore loss in FY 20 in funding new business growth and creating a distribution network.
329
330 Outlook
331
332 Despite global near-term uncertainty due to COVID-19, the structural demand drivers are expected to continue supporting the long-term and sustainable growth of the industry. Increasing health awareness and growing insurance needs, fuelled by high out-of-pocket expenses, coupled with steep retail healthcare inflation, rising income levels and increasing incidence of chronic diseases, remain the key growth drivers of health insurance.
333
334 SAHI players are expected to grow higher than the industry average in the next 3-4 years. ABHI, driven by its 'health first' business model backed by a strong brand, unique Customer Value Proposition (CVP), diversified distribution network, digital ecosystem and capabilities is well ahead of the curve to exploit the growth opportunity. Going forward, the Company will focus on – 1) Customer acquisition and retention at scale; 2) Health Risk Management and 3) Health Management – as the key pillars to drive growth.
335
336
337 Aditya Birla Insurance Brokers Limited
338
339 Aditya Birla Insurance Brokers Limited (ABIBL) is a leading composite general insurance intermediary, licensed by the Insurance Regulatory and Development Authority of India (IRDAI). It specialises in providing general insurance broking and risk-management solutions for corporate and individuals alike. ABIBL also offers reinsurance solutions to insurance companies; and has developed enduring relationships with Indian and global insurers operating in India and many others in South Asia, the Middle East and Southeast Asia.
340
341 Industry Overview
342
343 The total general insurance industry recorded a premium of ~~₹1.89 Lakh Crore in FY 20 – a notable ~~12% growth over that of FY 19. This growth was largely led by a growth in Fire, Motor TP, Health Insurance (Retail & Group Insurance) and Crop Insurance. For the first time in several years, the Property segment (Fire & Engineering) witnessed hardening of rates in select industries, spurred by the IIB rates released by GIC Re due to sustained underwriting losses in that segment.
344
345 Performance Review
346
347 Aditya Birla Insurance Broker Ltd. (ABIBL) has been consistently outperforming the general insurance industry and gaining market share. Its non-life direct premium placement grew by 12% year-on-year from ₹3,681 Crore in FY 19 to ₹4,121 Crore in FY 20. Two main contributors for premium placement, the Health Insurance and Motor Insurance segments, grew by 22% and 9%, respectively. Its market share in direct non-life industry premium has shown marginal growth from 2.17% to 2.18%.
348
349 ABIBL’s overall premium grew by 13%, from ₹3,770 Crore to ₹4,242 Crore, revenue rose by 15% from ₹449 Crore to ₹515 Crore and profitability increased by 54% from ₹27.35 Crore to ₹42.10 Crore in FY 19 and FY 20, respectively.
350
351 Outlook
352
353
354 Insurance broking as a channel, represents customers and not insurers. This unique role of the broking channel is recognised by the regulator, insurers and customers. Despite the robust growth over the years, penetration and density have continued to remain low. Based on the industry and business performance mentioned, the broking channel is still evolving and needs to meet risk management requirements of customers comprehensively.
355
356 ABIBL will continue to focus on expanding its customer base in a cost-effective manner to grow its business. Various initiatives have been implemented for promotion and growth of the motor insurance business, with an increased focus on targeting renewal and rollover policies, and emphasis is being laid on enhancing corporate business, by targeting large corporate clients through its sector specific approach. Further, ABIBL aims to utilise the post-COVID scenario to capitalise and build on its digital assets, which are used across all the lines of business by several stakeholders.
357
358
359 Aditya Birla Money Limited
360
361 Aditya Birla Money Limited (ABML) is a broking and distribution player, offering equity and derivative trading through the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), besides Currency Derivative on (MCX-SX ). It is registered as a Depository Participant with both NSDL and CDSL, and provides commodity trading on MCX and NCDEX through its subsidiary. ABML launched India’s first end-to-end Aadhar-based paperless e-KYC platform for account opening and onboarding.
362
363 Industry Overview
364
365 The broking industry had a decent FY 20 in terms of Average Daily Turnover (ADTO) although stock prices witnessed sharp correction across the board. On a structural basis, the shift from physical savings to financial savings continues, wherein the equity market participation, could increase significantly in forthcoming years considering its substantial under-penetration.
366
367 Performance Review
368
369 Aditya Birla Money Ltd. (ABML) continued to focus on the retail investor segment, cost reduction, technology and client acquisition.
370
371 ABML total revenues for FY20 stood at Rs 171 Crore, led by higher broking income. Profit Before Tax improved from Rs 14 Crore in FY 19 to Rs 17 Crore in FY 20.
372
373 Outlook
374
375 The outlook for the industry is dependent upon key factors such as domestic and global economic growth, buoyancy in primary markets, lack of alternative investment opportunities and technological up-gradation.
376
377 A broad-based macro-economic recovery will lead to improved corporate profits, thus supporting higher stock prices and positive equity market sentiments. While FIIs have sold lately, India’s structural long-term attractiveness will attract foreign investors.
378
379 ABML will continue to focus on technology, drive client acquisition, widen its business partner network, rationalise cost and provide efficient trading tools and value-added research advice to its clients. The overall strategic focus is to create product and service differentiators across all segments.
380
381
382 Financial Highlights
383
384 .
385
386 Key financial for the year ending March 2020.
387
388 Consolidated revenue, grew 9%, year-on-year from Rs 16,570 Crore to Rs 18,028 Crore
389
390 Net profit (after minority interest) grew by 6% year-on-year to Rs 920 Crore from Rs 871 Crore
391
392 Overall lending book (NBFC and Housing Finance) stood at Rs 59,159 Crore
393
394 Gross premium (including health and life insurance) grew 11% year-on-year to Rs 8,882 Crore
395
396 Active customer base grew to ~~20 Million
397
398 Raised long-term borrowing of over Rs 15,000 Crore for lending business during the year
399
400
401 Quarterly result June 2020
402
403 Aditya Birla Capital reported nearly 27% fall in consolidated net profit at ₹198 crore for June quarter, 2020-21.{{footnote}}https://www.adityabirlacapital.com/about-us{{/footnote}}
404
405 [[https:~~/~~/www.livemint.com/companies/company-results/aditya-birla-capital-q1-result-net-profit-down-27-at-rs-198-crore-11596804759146.html>>url:https://www.livemint.com/companies/company-results/aditya-birla-capital-q1-result-net-profit-down-27-at-rs-198-crore-11596804759146.html]]
406
407 The holding company of the financial services businesses of the Aditya Birla group had a profit of ₹270 crore in the year-ago same period.
408
409
410 The revenue grew 9% year-on- year to ₹4,293 crore during April-June 2020-21, Aditya Birla Capital Ltd (ABCL) said in a release.
411
412
413 ABCL said the profit during April-June was higher than ₹144 crore in the preceding March quarter and it provided ₹62 crore as COVID-19 provisions on its lending businesses during the period under review.
414
415
416 "With 91% of its branches operational with strict health protocols, the company looked to normalise its operations through Q1FY21," it added.
417
418
419 Overall lending book (NBFC and Housing Finance) stood at ₹58,073 crore as on June 30, 2020.
420
421
422 The company is engaged in lending through NBFC and housing finance. It also has presence in life and health insurance segment and also caters to asset management services, among others.
423
424
425 References
426
427 {{putFootnotes/}}
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