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Asif Farooqui 10.1 5 = Summary =
Asif Farooqui 1.1 6
Asif Farooqui 10.1 7 * Aditya Birla Capital Limited is the holding company for the financial services businesses of the Aditya Birla Group.
8 * As of March 31st, 2020, Aditya Birla Capital Limited manages aggregate AUM over Rs. 3000 billion
9 * The subsidiaries of ABCL have a nationwide reach with 850+ branches and more than 2,00,000 agents / channel partners and several bank partners
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12 [[image:ABCAPITAL0.jpg]]
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15 = Company Overview =
16
Asif Farooqui 1.1 17 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}}
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19 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.
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21 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.
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23 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.
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Asif Farooqui 6.1 25
26 [[image:ABCAPITAL.jpg]]
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Asif Farooqui 1.1 29 == Company History ==
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Asif Farooqui 1.2 31 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}}
Asif Farooqui 1.1 32
33 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’.
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35 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.
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Asif Farooqui 1.2 37 == Businesses ==
Asif Farooqui 1.1 38
Asif Farooqui 1.2 39 The company's business solutions come together to make Aditya Birla Capital{{footnote}}https://www.adityabirlacapital.com/about-us/our-businesses{{/footnote}}
Asif Farooqui 1.1 40
Asif Farooqui 1.3 41 **Aditya Birla Sun Life Insurance Company Limited**
Asif Farooqui 1.1 42
43 ABSLI offers protection solutions, children’s future solutions, wealth with protection, health and wellness as well as retirement solutions.
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Asif Farooqui 1.3 45 **Aditya Birla Health Insurance Company Limited**
Asif Farooqui 1.1 46
47 ABHI focuses on encouraging people to adopt a healthier lifestyle by using smart technology and innovative product & service offerings.
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Asif Farooqui 1.3 49 **Aditya Birla Wellness Private Limited**
Asif Farooqui 1.1 50
51 ABWPL brings to you Multiply - India’s first Wellness and Rewards program that rewards you for staying healthy.
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Asif Farooqui 1.3 53 **Aditya Birla Insurance Brokers Limited**
Asif Farooqui 1.1 54
55 ABIBL focuses on developing cost-effective and customized insurance packages while ensuring that the process of claim settlements is swift & painless.
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Asif Farooqui 1.3 57 **Aditya Birla Sun Life AMC Limited**
Asif Farooqui 1.1 58
59 ABSLAMC is the investment manager for the 4th largest fund house in India, Aditya Birla Sun Life Mutual Fund
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Asif Farooqui 1.3 61 **Aditya Birla Sun Life Mutual Fund**
Asif Farooqui 1.1 62
63 ABSLMF is India's fourth largest mutual fund house
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Asif Farooqui 1.3 65 **Aditya Birla Sun Life Pension Management Limited**
Asif Farooqui 1.1 66
67 ABSPML offers customized solutions to help you plan a comfortable retirement
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Asif Farooqui 1.3 69 **Aditya Birla Money Limited**
Asif Farooqui 1.1 70
71 ABML offers solutions for Broking, Portfolio Management Services, Depository & Repository Solutions and Distributor of other Financial offerings.
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Asif Farooqui 1.3 73 **Aditya Birla MyUniverse Limited**
Asif Farooqui 1.1 74
75 ABMU offers the best deals on Personal Loans, Credit Cards, Home Loans, etc. & allows you to transact in a range of mutual funds.
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Asif Farooqui 1.3 77 **Aditya Birla PE Advisors Private Limited**
Asif Farooqui 1.1 78
79 ABPEAPL offers investment management and advisory services to domestic and global investors
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Asif Farooqui 1.3 81 **Aditya Birla Finance Limited**
Asif Farooqui 1.1 82
83 ABFL offers customized solutions in areas of Capital Markets, Infrastructure, Real Estate Finance, to name a few
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Asif Farooqui 1.3 85 **Aditya Birla Housing Finance Limited**
Asif Farooqui 1.1 86
87 ABHFL offers housing finance solutions such as home loans, home improvement & construction loans, balance transfer, top-up loans etc.
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Asif Farooqui 1.3 89 == Retail Solutions ==
Asif Farooqui 1.1 90
Asif Farooqui 1.3 91 Explore Protecting, Investing & Financing solutions for Individuals{{footnote}}https://www.adityabirlacapital.com/about-us/our-solutions/retail-solutions{{/footnote}}
Asif Farooqui 1.1 92
Asif Farooqui 1.4 93 **Life Insurance**
Asif Farooqui 1.1 94
95 Get that much needed mental and financial security against the uncertainties of life. Discover complete protection with its Life Insurance Solutions.
96
Asif Farooqui 1.4 97 **Health Insurance**
Asif Farooqui 1.1 98
Asif Farooqui 3.1 99 The company's Health Insurance Solutions don't just protect you from unforeseen health expenses but also enable you to stay healthy.
Asif Farooqui 1.1 100
Asif Farooqui 1.4 101 **Multiply Wellness**
Asif Farooqui 1.1 102
103 Multiply Wellness is India's first Wellness and Rewards Program that rewards you for staying healthy. The healthier you get, the better your rewards.
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Asif Farooqui 1.4 105 **Motor insurance**
Asif Farooqui 1.1 106
107 Choose a motor insurance plan that comprehensively covers your vehicle in case of an unforeseen mishap.
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Asif Farooqui 1.4 109 **Travel Insurance**
Asif Farooqui 1.1 110
111 The company offer travel insurance solutions that are best suited for your needs, so that when you travel you create only good memories.
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Asif Farooqui 1.4 113 **Mutual Funds**
Asif Farooqui 1.1 114
115 Put your hard-earned money to work with Mutual Funds.
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Asif Farooqui 1.4 117 **Wealth Management**
Asif Farooqui 1.1 118
119 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.
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Asif Farooqui 1.4 121 **PMS**
Asif Farooqui 1.1 122
123 Portfolio Management is an exclusive service offered to its most discerning investor.
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Asif Farooqui 1.4 125 **Pension Funds**
Asif Farooqui 1.1 126
127 Retirement plans to ensure that your employees have a comfortable retirement
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Asif Farooqui 1.4 129 **Stocks and Securities**
Asif Farooqui 1.1 130
131 Invest for your business with stocks and securities management solutions
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Asif Farooqui 1.4 133 **Real Estate Investments**
Asif Farooqui 1.1 134
135 Investing in Real Estate can be a great way to ensure your investment portfolio is diverse, and to optimize returns across asset classes.
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Asif Farooqui 1.4 137 **Home Finance**
Asif Farooqui 1.1 138
139 Don’t compromise on your most important purchase. Explore housing finance solutions to buy the home you’ve always wanted.
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Asif Farooqui 1.4 141 **Personal Finance**
Asif Farooqui 1.1 142
143 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?
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Asif Farooqui 1.4 145 **SME Finance**
Asif Farooqui 1.1 146
147 Make way for your entrepreneurial dream or give your existing business a boost with its business loans.
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Asif Farooqui 1.4 149 **Real Estate Finance**
Asif Farooqui 1.1 150
151 Choose from a selection of real estate financing solutions that best suit your requirements
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Asif Farooqui 1.4 153 **Loan Against Securities**
Asif Farooqui 1.1 154
155 Choose from a wide variety of mortgage solutions
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Asif Farooqui 1.4 157 == Corporate Solutions ==
Asif Farooqui 1.1 158
Asif Farooqui 1.5 159 Explore Protecting, Investing & Financing solutions for Corporates.{{footnote}}https://www.adityabirlacapital.com/about-us/our-solutions/corporate-solutions{{/footnote}}
Asif Farooqui 1.1 160
Asif Farooqui 1.5 161 **Group Life Insurance**
Asif Farooqui 1.1 162
163 Protect your employees with an ideal life insurance plan. Explore its Protecting solutions.
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Asif Farooqui 1.5 165 **Group Health Insurance**
Asif Farooqui 1.1 166
167 Explore health insurance and wellness solutions for your employees
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Asif Farooqui 1.5 169 **Corporate General Insurance**
Asif Farooqui 1.1 170
171 Explore insurance solutions against multiple business risks so that your business not only survives, but also thrives.
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Asif Farooqui 1.5 173 **Portfolio Management Services**
Asif Farooqui 1.1 174
175 Custom made portfolio management solutions for your organization
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Asif Farooqui 1.5 177 **Pension Funds**
Asif Farooqui 1.1 178
179 Retirement plans to ensure that your employees have a comfortable retirement
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Asif Farooqui 1.5 181 **Stocks and Securities**
Asif Farooqui 1.1 182
183 Invest for your business with stocks and securities management solutions
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Asif Farooqui 1.5 185 **Mutual Funds**
Asif Farooqui 1.1 186
187 Ideal investment solutions for your organization
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Asif Farooqui 1.5 189 **Private Equity**
Asif Farooqui 1.1 190
191 The company play a vital role in helping companies looking to make substantial investments, predominantly in unlisted companies with high-growth potential.
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Asif Farooqui 1.5 193 **Real Estate Finance**
Asif Farooqui 1.1 194
195 Choose from a selection of real estate financing solutions that best suit your requirements
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Asif Farooqui 1.5 197 **Corporate Finance**
Asif Farooqui 1.1 198
199 The company offer a range of comprehensive financing solutions to meet your business requirements like Structured Finance, Project Finance, Working Capital.
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Asif Farooqui 1.5 201 **Loan Against Securities**
Asif Farooqui 1.1 202
203 Mortgage solutions that are ideal for your business needs
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Asif Farooqui 1.5 205 **DCM & Loan Syndication**
Asif Farooqui 1.1 206
207 Debt Capital Markets and Loan Syndication Solutions for your organization
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Asif Farooqui 10.1 209
210 [[image:ABCAPITAL2.jpg]]
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Asif Farooqui 1.5 213 = Business Segments =
Asif Farooqui 1.1 214
Asif Farooqui 1.6 215 == Aditya Birla Finance Limited (NBFC) ==
Asif Farooqui 1.1 216
Asif Farooqui 1.6 217 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}}
Asif Farooqui 1.1 218
Asif Farooqui 1.6 219 **Industry Overview**
Asif Farooqui 1.1 220
221 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.
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223 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.
224
Asif Farooqui 1.6 225 **Performance Review**
Asif Farooqui 1.1 226
227 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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229 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.
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231 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).
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233 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.
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Asif Farooqui 1.6 235 **Outlook**
Asif Farooqui 1.1 236
237 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.
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239 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.
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Asif Farooqui 1.6 241 == Aditya Birla Housing Finance Limited ==
Asif Farooqui 1.1 242
243 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.
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Asif Farooqui 1.6 245 **Industry Overview**
Asif Farooqui 1.1 246
247 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.
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Asif Farooqui 1.6 249 **Performance Review**
Asif Farooqui 1.1 250
251 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.
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253 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.
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255 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.
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Asif Farooqui 1.6 257 **Outlook**
Asif Farooqui 1.1 258
259 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.
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261 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.
262
Asif Farooqui 1.6 263 == Aditya Birla Sun Life AMC Limited (AMC) ==
Asif Farooqui 1.1 264
265 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.
266
Asif Farooqui 1.6 267 **Industry Overview**
Asif Farooqui 1.1 268
269 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.
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271 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.
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273 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.
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Asif Farooqui 2.1 275 **Performance Review**
Asif Farooqui 1.1 276
277 ABSLAMC completed a successful 25 years of investing investor money in Indian capital markets.
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279 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.
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281 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%.
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283 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.
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Asif Farooqui 2.1 285 **Outlook**
Asif Farooqui 1.1 286
287 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.
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Asif Farooqui 2.1 289 == Aditya Birla Sunlife Insurance Limited (Life Insurance) ==
Asif Farooqui 1.1 290
291 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.
292
Asif Farooqui 2.1 293 **Industry Overview**
Asif Farooqui 1.1 294
295 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.
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297 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.
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299 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.
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Asif Farooqui 2.1 301 **Performance Review**
Asif Farooqui 1.1 302
303 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%.
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305 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.
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307 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.
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309 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%.
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311 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.
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313 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.
314
Asif Farooqui 2.1 315 **Outlook**
Asif Farooqui 1.1 316
317 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.
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319 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.
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321 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.
322
Asif Farooqui 2.1 323 == Aditya Birla Health Insurance Co. Limited ==
Asif Farooqui 1.1 324
325 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.
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327 Industry Overview
328
329 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.
330
Asif Farooqui 2.1 331 **Performance Review**
Asif Farooqui 1.1 332
333 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.
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335 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.
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337 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.
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339 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.
340
341 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.
342
343 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.
344
Asif Farooqui 2.1 345 **Outlook**
Asif Farooqui 1.1 346
347 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.
348
349 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.
350
Asif Farooqui 2.1 351 == Aditya Birla Insurance Brokers Limited ==
Asif Farooqui 1.1 352
353 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.
354
Asif Farooqui 2.1 355 **Industry Overview**
Asif Farooqui 1.1 356
357 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.
358
Asif Farooqui 2.1 359 **Performance Review**
Asif Farooqui 1.1 360
361 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%.
362
363 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.
364
Asif Farooqui 2.1 365 **Outlook**
Asif Farooqui 1.1 366
367 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.
368
369 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.
370
Asif Farooqui 2.1 371 == Aditya Birla Money Limited ==
Asif Farooqui 1.1 372
373 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.
374
Asif Farooqui 2.1 375 **Industry Overview**
Asif Farooqui 1.1 376
377 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.
378
Asif Farooqui 2.1 379 **Performance Review**
Asif Farooqui 1.1 380
381 Aditya Birla Money Ltd. (ABML) continued to focus on the retail investor segment, cost reduction, technology and client acquisition.
382
383 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.
384
Asif Farooqui 2.1 385 **Outlook**
Asif Farooqui 1.1 386
387 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.
388
389 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.
390
391 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.
392
Asif Farooqui 10.1 393
394 [[image:ABCAPITAL3.png]]
395
396
Asif Farooqui 2.1 397 = Financial Highlights =
Asif Farooqui 1.1 398
Asif Farooqui 4.1 399 **Key financial for the year ending March 2020.**
Asif Farooqui 1.1 400
401 Consolidated revenue, grew 9%, year-on-year from Rs 16,570 Crore to Rs 18,028 Crore
402
403 Net profit (after minority interest) grew by 6% year-on-year to Rs 920 Crore from Rs 871 Crore
404
405 Overall lending book (NBFC and Housing Finance) stood at Rs 59,159 Crore
406
407 Gross premium (including health and life insurance) grew 11% year-on-year to Rs 8,882 Crore
408
409 Active customer base grew to ~~20 Million
410
411 Raised long-term borrowing of over Rs 15,000 Crore for lending business during the year
412
Asif Farooqui 2.1 413 **Quarterly result June 2020**
Asif Farooqui 1.1 414
Asif Farooqui 2.1 415 Aditya Birla Capital reported nearly 27% fall in consolidated net profit at ₹198 crore for June quarter, 2020-21.{{footnote}}https://www.livemint.com/companies/company-results/aditya-birla-capital-q1-result-net-profit-down-27-at-rs-198-crore-11596804759146.html{{/footnote}}
Asif Farooqui 1.1 416
417 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.
418
419 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.
420
421 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.
422
423 "With 91% of its branches operational with strict health protocols, the company looked to normalise its operations through Q1FY21," it added.
424
425 Overall lending book (NBFC and Housing Finance) stood at ₹58,073 crore as on June 30, 2020.
426
427 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.
428
Asif Farooqui 2.1 429 = References =
Asif Farooqui 1.1 430
431 {{putFootnotes/}}
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