Aditya Birla Capital Investor Presentation September 2024 PDF

Ref: No. ABCL/SD/MUM/2024-25/SEPTEMBER/11 20 September 2024 BSE Limited National Stock Exchange of India Ltd th Phiroze Jeejeebhoy Towers,...

Ref: No. ABCL/SD/MUM/2024-25/SEPTEMBER/11 20 September 2024 BSE Limited National Stock Exchange of India Ltd th Phiroze Jeejeebhoy Towers, Exchange Plaza, 5 Floor, Dalal Street, Plot. C/1, Mumbai 400 001 G-Block, Bandra-Kurla Complex, Bandra (East), Scrip Code: 540691 Mumbai 400 051 Scrip ID: ABCAPITAL Symbol: ABCAPITAL Dear Sir/ Madam, Sub: Intimation under Regulation 30 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) Pursuant to Regulation 30 of the SEBI Listing Regulations, please find attached “Investor Presentation” which will also be posted on our website https://www.adityabirlacapital.com/investor-relations/announcements-and-updates. The above is for your information, records and dissemination please. Thanking you, Yours sincerely, For Aditya Birla Capital Limited SANTOSH Digitally signed by SANTOSH GURUDAS GURUDAS HALDANKA HALDANKAR Date: 2024.09.20 R 15:32:56 +05'30' Santosh Haldankar Company Secretary & Compliance Officer Encl.: As above Cc: Luxembourg Stock Exchange Citi Bank N.A. Market & Surveillance Dept., Custodial Services P.O. Box 165, L-2011 Luxembourg, FIFC, 11th Floor, C-54 & 55, G Block Grand Duchy of Luxembourg Bandra Kurla Complex Bandra (East), Mumbai 400 051 Citi Bank N.A. Listing Agent Depositary Receipt Services Banque Internationale à Luxembourg SA 388 Greenwich Street 69 route d'Esch 14th Floor, New York, L - 2953 Luxembourg NY 10013 Grand Duchy of Luxembourg  Investor Presentation September 2024 01 Strong growth foundation of the Indian economy with a tectonic shift… FORMALIZATION STRUCTURAL DIGITAL PUBLIC DEMOGRAPHIC RISING & DIGITISATION REFORMS INFRASTRUCTURE DIVIDEND FOREIGN CAPITAL 613"/>POPULATION 613"/> FY19-24 over FY14-19 (AUGUST 2024) INFRA 71% ` 1.97 tn ACCOUNT 24.3% PLI SCHEME AGGREGATOR INCREMENTAL SMART PHONE PENETRATION FOR 15 SECTORS FINANCIAL DATA CONTRIBUTION TO SHARING GLOBAL WORKFORCE Source: PIB-Govt of India, NPCI, Statista, EY, DPIIT- Govt. of India 02 …leading to a robust growth in the financial services sector Enablers USD bn 2000 2023 change Credit Total credit 125 2,525 20x Insurance Under penetration Savings Capital Markets MSME credit 2 74 37x Identity layer - JAM trinity Enabling transformative Mortgage credit 10 370 37x Digital stack networks - Account aggregator, OCEN, credit bureaus Financial Literacy MF AUM 32 630 20x Scale delivery at low cost Inter-operability of frameworks Life insurance Shifts Sophisticated products & 10 110 11x individual premium financial innovation Health & wellness-based engagement General insurance 3 30 10x premium Source: RBI, AMFI, IRDAI data 03 Aditya Birla Group: A leading global conglomerate A USD 66* bn conglomerate Consolidated market cap of USD 113 # bn Across 6 continents and 40+ countries 180+ state-of-the-art manufacturing units globally 187,000+ employees of over 100 nationalities 300 mn+ loyal customer base Present across wide range of sectors from cement, metal, fashion to financial services, textile and trading 04 *At 31 March 2024; based on FY22 constant currency. #At 30th June’2024/ Q1’FY25 End Aditya Birla Capital: Diversified Financial Services Platform Promoter & Grasim Industries Promoter Group 52.6% 16.3% Aditya Birla Listed Capital Limited Listed 100% 100% 51% 45% 46% Aditya Birla Finance Aditya Birla Housing Aditya Birla Sun Life Aditya Birla Sun Life Aditya Birla Health Finance 100% Insurance 51% AMC Insurance Non-Bank Financial Company Housing Finance Life Insurance Asset Management Standalone Health Company Insurance Listed 74% 100% Aditya Birla Money Aditya Birla ARC 74% Stock & Securities Stressed asset platform broking Above is not intended to show the complete organizational structure and entities therein. It is intended to describe the key businesses of Aditya Birla Capital. 05 Shareholding at Sep 13, 2024 Our key drivers of strength… Aditya Birla Group Strong Brand Seamless Large growth Wide range of name & Parentage access to opportunities financial products resonating Trust debt and within the ABC and (loans, investments, equity capital extended ABG insurance and ecosystem payments) …enable us to fulfil financial needs of our customers across lifecycles 06 Aditya Birla Capital Ltd. Diversified financial services play NBFC Among the top 5 diversified NBFCs with AAA1 rating & well diversified portfolio of ₹ 1.06 trillion2 HFC HFC Full stack player with AAA3 rating & AUM of ₹ 184.20 billion2 AMC Leading non-bank AMC with AUM of ₹ 3.32 trillion4 Life One of the leading private life insurers with ₹ 172.60 billion total premium5 Health Fastest growing SAHI player with a Unique “Health First” Model and GWP of ₹ 37.01 billion5 07 1. ICRA, CRISIL, India ratings and CARE (Long term rating) 2. At Mar 31, 2024 3. ICRA, CRISIL and India ratings (Long term rating) 4. In Q4 FY24 5. In FY24 OUR STRATEGY 08 Drive Quality and Profitable Growth… One Customer ONE ABC One Experience ONE P&L One Team …By Leveraging Data, Digital and Technology 09 ONE CUSTOMER: Build Deep Understanding of Customer Needs… ~30 million Customers1 INVESTMENTS INSURANCE 360o Solutions Customised Customer solutions (driven preferences by customer insights) Customer Centricity Customer type Intuitive journeys Seamless (Retail, SME, (convenience of delivery PAYMENTS Mid & large corporates) usage) LOANS …to provide simple and holistic financial solutions in a seamless way 10 1. At June 30, 2024 Aditya Birla Capital Ltd. ONE EXPERIENCE: Omni Channel Architecture... ABCD-D2C platform Robust & agile for customers Udyog Plus-B2B digital platforms platform for MSMEs B2D platform for channel partners One ABC 825 co-located branches Dedicated customer service locations across 231 locations managers for cross sell One Experience Channel 200K+ channel Partner partners 1,505 branches across businesses1 …providing complete flexibility to customers to choose preferred channel of interaction 11 1. At June 30, 2024 ABCD: D2C platform for customer acquisition Simplicity Unique and engaging design | Uncluttered Layout | Intuitive Navigation | Jargon Free Language | Ease of Action My Track Unified View of bank accounts, deposits, loans, mutual funds, stocks | Instant Health Check with a “Selfie” | Track and Categorize spends Everything Finance One Platform for all things finance | In house manufacturing advantage Omnichannel from Day 1 Digital, Virtual & Branch coverage | Gen AI powered chatbot and voice- search | Real time Co-browsing Payments Multi Account Payment | Pre-verified bank transfers | UPI International | RuPay on UPI | Multi-mode receipt 20+ Product categories,~ 2.0 million customer registrations1 12 1. At Sep 20, 2024 UDYOG PLUS: Addressing 360o needs of MSMEs Architecture Programs Financial Growth Solutions Solutions Business Lending Offline to Online Unsecured business loans discovery Pre-approved loans Account, HRMS & Supply Chain Payroll Software Financing Business Channel Finance Networking Vendor Finance Pre-approved programs Tax solutions & Insurance & Advisory Investment Solutions Travel Solutions Health insurance Life Insurance MF, Digi-gold, FD 1 million+ registrations, ~ ` 26 billion+ AUM1 13 1. At June 30, 2024 ONE TEAM: Enriching Lives. Winning as ONE Own Customer Jointly Drive Cross-sell & ensure across Businesses Seamless Delivery Work Together to Uphold FAIR (Focused, Deliver Complete & Agile, Innovative and Result Comprehensive Solutions Oriented) Values Senior Team Incentives ONE TEAM Inculcate ‘Winning as One’ aligned with ABCL mindset among people Performance 14 Aditya Birla Capital Ltd.  "Strong growth momentum across businesses over the last 2 years 15 NBFC: Healthy growth with strong asset quality AUM (₹ bn) 38% CAGR Among top 5 diversified NBFCs in India with specific focus on SME segment 1,056.39 805.56 551.80 AUM grew by CAGR of 38% over two years ~ 53% of AUM comprises business loans to SMEs Mar'22 Mar'23 Mar'24 70%+ of the overall portfolio is secured Asset Quality PCR 39.5% 46.2% 49.9% Prudent risk management practices with strong emphasis on return of capital 8.98% Pan-India presence with 412 branches GS2 & GS3 5.84% 4.49% Maintained healthy credit cost of 1.43% in Q4 FY24 Mar'22 Mar'23 Mar'24 Delivered RoA of 2.46% in FY24 and RoE of 17.1% in FY24 Return on Assets 2.45% 2.46% 2.30% Grow the portfolio at CAGR of 25% and deliver sustainable RoA between 2.5%-3% across cycles FY22 FY23 FY24 16 HFC: Robust loan book growth AUM (₹ bn) 23% CAGR Full stack player: 49% prime, 40% affordable and 11% construction finance in AUM 184.20 121.28 138.08 Portfolio grew by CAGR of 23% over two years Monthly disbursement run rate of ` 10 billion+ Mar'22 Mar'23 Mar'24 Asset Quality Focus on quality of origination (95% retail disbursement at CIBIL >700 & NTC1) PCR 31.1% 31.9% 33.0% ~10% of retail disbursements from ABG,ABC ecosystem 8.75% GS2 & GS3 4.99% Pan-India presence with 135 branches covering 85% of TAM 2.91% Delivered RoA of 1.92% and RoE of 13.87% in FY24 Mar'22 Mar'23 Mar'24 Return on Assets Built significant capacity in technology, digital, people and distribution 1.94% 1.92% 1.72% Target portfolio CAGR of 25% over next 2-3 years; FY22 FY23 FY24 potential for further acceleration in growth 17 1. New to credit AMC: Healthy growth in AUM and retail franchise QAAUM (₹ tn) 6% CAGR 2.96 3.32 2.75 Mutual fund AUM of ` 3.32 trillion ( ↑ 21% y-o-y ) with a market share of 6.9%1 Q4 FY22 Q4 FY23 Q4 FY24 Equity AUM of ` 1.52 trillion ( ↑ 31% y-o-y ) with 45.8% of overall mix Individual MAAUM (₹ tn) Healthy growth across monthly SIP flows and Individual MAAUM 12% CAGR 1.73 Extensive distribution franchise with 81,000+ MFDs & 305+ NDs 1.38 1.40 Strengthened retail sales & distribution and equity investment team Mar'22 Mar'23 Mar'24 Passive AUM at ` 289.02 billion Monthly SIP Flows (₹ bn) Profit after tax of ` 7.80 billion in FY24 (↑ 31% y-o-y) 18% CAGR 12.52 8.95 10.03 Mar'22 Mar'23 Mar'24 18 1. Source : AMFI Life Insurance: Healthy growth with strong quality Individual FYP (₹ bn) 18% CAGR 30.74 22.12 30.23 Individual FYP1 at ` 30.74 billion in FY24 (2 yr CAGR: 18%) Group new business premium at ` 45.54 billion in FY24 (2 yr CAGR: 19%) FY22 FY23 FY24 New Banca tie-ups with IDFC First Bank, Axis Bank and Bank of Group NBP (₹ bn) Maharashtra 19% CAGR 13th month persistency2 of 88% in Mar’24 (Mar’23: 87%) 45.54 32.23 41.89 61st month persistency2 of 65% in Mar’24 (Mar’23: 54%) VNB3 margin at 20.2% in FY24 with absolute VNB at ` 6.97 billion FY22 FY23 FY24 Delivered RoEV of 18.8% in FY24 EV (₹ bn) 23% CAGR 115.39 76.09 90.14 Endeavour to grow individual FYP at CAGR of 25%+ Mar'22 Mar'23 Mar'24 and maintain VNB margin at 18%+ 19 1. First year premium + 10% of Single premium 2. 12month rolling block as per revised IRDAI Circular 3. Value of New Business ( Individual + Group Risk) Health Insurance: Unique ‘Health First’ model GWP (₹ bn) 46% CAGR Fastest growing standalone health insurer with a 2-year CAGR of 46% 37.01 27.17 17.27 Market share of 11.2% among SAHI players Unique product proposition incentivising wellness FY22 FY23 FY24 Early traction in the latest offering Activ One with 100% HealthReturns Market share in SAHI Launched Industry first Digital Health assessment crossing 130K+ users 10.4% 11.2% 8.3% Health-data based WellBeing score crossed 1.6 million+, enabling hyper- personalized engagement by leveraging health ecosystem FY22 FY23 FY24 Well-diversified distribution mix with 18 bank partners & 1,20,000+ agents Combined Ratio 127% 110% 110% Achieve combined ratio of 100% by FY26 FY22 FY23 FY24 20 Consolidated Revenue and PAT Consolidated Revenue1,2 (` bn) Consolidated Profit After Tax2 (` bn) 29% CAGR 37% CAGR 390.50 29.02 299.99 20.57 236.33 15.45 FY22 FY23 FY24 FY22 FY23 FY24 1. Consolidated segment revenue; for Ind AS statutory reporting purpose Asset management, wellness business and health insurance (from October 21, 2022) are not consolidated and included under equity accounting 2. Reported PAT in FY23 includes fair value gain of ` 2,739 crore as Aditya Birla Health Insurance ceased to be a subsidiary and has been accounted as a joint venture and FY 24 includes gain of Rs. 433 crore on sale of shares in AMC through OFS 21 Strategic Strategic update: Simplification of corporate structure 22 Proposed amalgamation of ABFL with ABCL Rationale Simplification of structure by reducing number of legal entities Creation of a unified large operating NBFC with greater financial strength and direct access to capital Likely stakeholder value enhancement from potential elimination in holdco discount Increased operational efficiencies & synergy benefits The proposed amalgamation will result in compliance with Scale Based Regulations of RBI which requires mandatory listing of ABFL by September 30, 2025 Approved by the Board in Mar’24, received no objection from RBI and stock exchanges 23 Resultant structure Promoter & Grasim Industries Promoter Group 52.6% 16.3% Aditya Birla Capital Limited Listed (NBFC-ICC) Listed 100% 51% 45% 46% Aditya Birla Housing Aditya Birla Sun Life Aditya Birla Sun Life Aditya Birla Health Finance 100% Insurance AMC Insurance Housing Finance Life Insurance Asset Management Standalone Health Company Insurance Listed 74% 100% Aditya Birla Money 74% Aditya Birla ARC Stock & Securities broking Stressed asset platform Above is not intended to show the complete organizational structure and entities therein. It is intended to describe the key businesses 24 of Aditya Birla Capital. Shareholding at Sep 13, 2024 THANK YOU 25 Disclaimer The information contained in this presentation is provided by Aditya Birla Capital Limited (“ABCL or the Company”), formerly known as Aditya Birla Financial Services Limited, to you solely for your reference. Any reference herein to "the Company" shall mean Aditya Birla Capital Limited, together with its subsidiaries / joint ventures/affiliates. This document is being given solely for your information and for your use and may not be retained by you and neither this presentation nor any part thereof shall be (i) used or relied upon by any other party or for any other purpose; (ii) copied, photocopied, duplicated or otherwise reproduced in any form or by any means; or (iii) re-circulated, redistributed, passed on, published in any media, website or otherwise disseminated, to any other person, in any form or manner, in part or as a whole, without the prior written consent of the Company. This presentation does not purport to be a complete description of the markets conditions or developments referred to in the material. Although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to change without notice, its accuracy, fairness or completeness is not guaranteed and has not been independently verified and no express or implied warranty is made thereto. You must make your own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent investigation as you may consider necessary or appropriate for such purpose. Neither the Company nor any of its directors, officers, employees or affiliates nor any other person assume any responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information or opinions contained herein, and none of them accept any liability (in negligence, or otherwise) whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. Any unauthorised use, disclosure or public dissemination of information contained herein is prohibited. The distribution of this presentation in certain jurisdictions may be restricted by law. Accordingly, any persons in possession of the aforesaid should inform themselves about and observe such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. The statements contained in this document speak only as at the date as of which they are made and it, should be understood that subsequent developments may affect the information contained herein. The Company expressly disclaims any obligation or undertaking to supplement, amend or disseminate any updates or revisions to any statements contained herein to reflect any change in events, conditions or circumstances on which any such statements are based. By preparing this presentation, neither the Company nor its management undertakes any obligation to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. This document is for informational purposes and private circulation only and does not constitute or form part of a prospectus, a statement in lieu of a prospectus, an offering circular, offering memorandum, an advertisement, and should not be construed as an offer to sell or issue or the solicitation of an offer or an offer document to buy or acquire or sell securities of the Company or any of its subsidiaries or affiliates under the Companies Act, 2013, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, each as amended, or any applicable law in India or as an inducement to enter into investment activity. No part of this document should be considered as a recommendation that any investor should subscribe to or purchase securities of the Company or any of its subsidiaries or affiliates and should not form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This document is not financial, legal, tax, investment or other product advice. The Company, its shareholders, representatives and advisors and their respective affiliates also reserves the right, without advance notice, to change the procedure or to terminate negotiations at any time prior to the entry into of any binding contract for any potential transaction. This presentation contains statements of future expectations and other forward-looking statements which involve risks and uncertainties. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition, and future events and plans of the Company. These statements can be recognised by the use of words such as “expects,” “plans,” “will,” “estimates,” or words of similar meaning. Such forward- looking statements are not guarantees of future performance and involve risks and uncertainties and actual results, performances or events may differ from those in the forward-looking statements as a result of various factors, uncertainties and assumptions including but not limited to price fluctuations, actual demand, exchange rate fluctuations, competition, environmental risks, any change in legal, financial and regulatory frameworks, political risks and factors beyond the Company’s control. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of the management of the Company on future events. No assurance can be given that future events will occur, or that assumptions are correct. The Company does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. 26