EW/Sec/2024-25/238
October 29, 2024
BSE Limited National Stock Exchange of India Limited
P J Towers, Exchange Plaza,
Dalal Street, Fort, Bandra Kurla Complex, Bandra (E),
Mumbai – 400 001. Mumbai – 400 051.
Scrip Code: 532922 Symbol: EDELWEISS
Dear Sir/Madam,
Sub: Business Update
Please find enclosed herewith the update on Strategic Overview of Businesses (in INR) of
the Company.
Kindly take the same on record.
Thanking you,
Yours faithfully,
For Edelweiss Financial Services Limited
Digitally signed
TARUN by TARUN
KHURANA
KHURANA Date: 2024.10.29
13:59:33 +05'30'
Tarun Khurana
Company Secretary
Encl.: as above
Edelweiss Financial Services Limited
Corporate Identity Number: L99999MH1995PLC094641
Registered Office: Edelweiss House, off. C.S.T. Road, Kalina, Mumbai - 400 098 Tel No.: +91 022 4079 5199
Email: cs@edelweissfin.com Website: www.edelweissfin.com
Edelweiss Financial Services Limited
Strategic Overview on Businesses
Contents
1 Building Blocks & Future Plans
3
2 Strategic Overview on Businesses
11
2
Building Blocks & Future Plans
1
Asset Management
2
Insurance
3
Credit
4
Corporate Debt
3
1 Significant intrinsic value creation in EAAA
INR Cr
ARR AUM H1 PAT
44,900 124
32,000
22,000
53
Sep 20 Sep 22 Sep 24 Sep 20 Sep 22 Sep 24
20% CAGR 123% CAGR
Intrinsic value grew 3x in 5 years; value unlock process in pipeline 4
1 Mutual Fund – scale up in profitability driven by rising equity AUM
INR Cr
AUM H1 PAT
1,40,500
41
92,000
44,000
11
Sep 20 Sep 22 Sep 24 Sep 20 Sep 22 Sep 24
34% CAGR 84% CAGR
Intrinsic value grew 5x in 5 years; building preparedness for value unlock and listing 5
2 Insurance businesses on track to breakeven by FY27
INR Cr
Capital Infused since Intrinsic Value
inception created
Sep 20 Sep 22 Sep 24
Zuno General GWP* 100 280 480
~950 Cr
Insurance
Intrinsic Value 650 2,250 4,000
*For half year
Sep 20 Sep 22 Sep 24
Life Insurance ~2,750 Cr EV 1,255 1,775 2,000
Intrinsic Value 2,500 4,750 5,500
Breakeven – an important step in value recognition
6
3 Credit businesses – to focus on double digit ROE
INR Cr
Well-capitalized businesses Target double digit
…but low ROEs
having strong equity… ROE
ARC 3,326 11% • Build an asset-light
growth platform
NBFC 3,319 2% • Scale with tech-driven
co-lending
• Enhance productivity
Nido 813 1%
and efficiency
Total 7,458 6%
7
4 Reduction in consol net debt
INR Cr
70%
40,000
18,400
11,810
Mar 19 Mar 22 Sep 24
Reduced by ~INR 28,000 Cr in last 5 years
8
4 Next steps on debt reduction
Consol Net Debt
INR 11,810 Cr
Business Corporate
INR 6,330 Cr INR 5,480 Cr
• Businesses well capitalized Focus on corporate net
debt reduction
• Self-sufficient ALM
9
4 Corporate net debt to be reduced through stake sales
INR Cr
EAAA
Mutual Fund
5,480
4,300
3,200
Sep 24 Sep 25E Sep 26E
10
Strategic Overview on Businesses
Diversified with seven high-quality businesses
INR Cr
Edelweiss Financial Services Ltd
Equity EFSL Stake H1 PAT
EAAA 869 100% 124
Mutual Fund 243 100% 41
Asset Reconstruction 3,326 60% 176
NBFC 3,319 100% 37
Nido Home Finance 813 100% 3
Zuno General Insurance 304 100% (21)
Life Insurance 825 78% (103)
12
EAAA
Pioneered into alternatives with the first private credit fund in 2010
AUM 24%
INR 57,250 Cr CAGR
One of the leading Private Credit and Real Assets managers in India
3,500+ Unique LPs across India, North America & EMEA, with ~750 repeat PAT 69%
clients; ~50% of AUM from offshore clients
INR 243 Cr^ CAGR
Only Indian Alternatives player to consistently feature in "Top PDI Fund
Raisers" for 3 consecutive years
Way Ahead
Stake sale of 10-20%, expect to raise INR 1,500- Significant operating cash flows & profitability
2,000 Cr and exploring subsequent listing over the next five years, 20%+ CAGR
13
CAGR from FY20; ^Trailing twelve months
Mutual Fund
Amongst the fastest growing AMCs, 13th largest in the country AUM 43%
INR 1,40,500 Cr CAGR
Market leader in debt passives and amongst the top 10 AMCs in fixed
income segment
Equity AUM 63%
INR 59,200 Cr CAGR
Dedicated senior team exclusively focused on Factor Investing, with a
track record of 15+ years
PAT 135%
Diversified product offerings across equity, debt, hybrid and passive fund CAGR
INR 56 Cr^
categories
Way Ahead
Double AUM in the next 5 years to Onboard a strategic Investor and subsequently
INR 3 Lakh Cr; 2/3rd share from Equity list the business
14
CAGR from FY20; ^Trailing twelve months
Asset Reconstruction
Dominant player with ~25% market share, primarily focused on
‘Revival’/‘Reconstruction’ of assets
Cumulative Recoveries
of INR 55,000 Cr over
Deeply cyclical business, with double-digit ROE during cycles of high last 8 years
stressed assets and the next 4-5 years of single-digit ROE when there is
limited availability of stressed assets
CAPAD Net D/E
Currently business focused on recoveries while pivoting to an asset light 70% 0.2x
model
Way Ahead
Focus on asset light deals; resume focus once Utilize surplus cashflow for buyback and
capex cycle revives dividend
15
NBFC
Historically focused on wholesale lending, pivot to asset-light SME lending Ongoing CLM partnership with
Central Bank of India, IDFC First
and Standard Chartered
Building an asset-light, retail credit portfolio through partnerships with
financial institutions
Wholesale Book 70%
~75% of retail disbursements over the last two years were via co-lending INR 3,750 Cr from FY20
model (CLM)
Way Ahead
Strengthen asset-light model with focus on Continue to wind down wholesale book through
higher retail disbursements via CLM recoveries, sell-downs and settlements
16
Nido Home Finance
Affordable housing finance player with a granular portfolio predominantly
consisting of retail home loans
Ongoing CLM partnership with
Targeting low-income, new to credit and informal-income customer BOB, SBI, Standard Chartered
segments and UCO Bank
Focus on capital efficient, asset-light model by partnering with multiple
banks to maximize ROE and optimize leverage Cumulative disbursement of
>INR 5,000 Cr over last 5 years
Tech led scalability for co-lending – built a dedicated automated platform
for steady-state sell down
Way Ahead
Ramp up retail disbursements via CLM; Onboard a strategic Investor and subsequently
achieve double digit ROE in next 18 months list the business
17
Zuno General Insurance
One of the fastest growing InsurTech in the industry, with robust tech
architecture built for agility, scalability and efficiency, focusing on Motor
and Health segments
GWP 50%
Differentiated approach with focus on Innovation, Efficient Operating INR 988 Cr^ CAGR
Model & Customer Experience
Strategy anchored around product innovation in Usage Based Insurance– Digital Digital
1st to launch Driving Behavior based Motor Insurance Issuance Payments
99.7%* 95.6%*
~INR 950 Cr of capital infused since inception
Way Ahead
Continue robust growth trajectory
Achieve breakeven by FY27 and subsequently
(2x+ of industry) with equal focus
build readiness for listing
on quality & efficiency
18
CAGR from FY20; ^Trailing twelve months; *For Q2FY25
Life Insurance
One of the youngest life insurers with strategic focus on 3 pillars - Quality,
Efficiency and Customer Centricity
Gross Premium 15%
Built scale over the years through a well-balanced, multi-channel INR 1,983 Cr^ CAGR
distribution approach
Transformed tech ecosystem with cloud and analytics, focused on
Claim 13M
enhancing end-to-end digital experiences
Settlement Persistency
99%* 78%*
~INR 2,750 Cr of capital infused since inception; achieved Embedded
Value (EV) breakeven in FY23
Way Ahead
Focus on growth with an optimal
Achieve breakeven by FY27 and subsequently
product mix and balanced distribution
build readiness for listing
while being capital efficient
19
CAGR from FY20; ^Trailing twelve months; *For Q2FY25
Safe Harbour
DISCLAIMER :
This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative,
based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate
companies (“Edelweiss”). Actual results may vary from the forward-looking statements contained in this presentations due to various
risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India and outside India,
volatility in interest rates and in the securities market, new regulations and Government policies that may impact the businesses of
Edelweiss as well as the ability to implement its strategy. The information contained herein is as of the date referenced and Edelweiss
does not undertake any obligation to update these statements. Edelweiss has obtained all market data and other information from
sources believed to be reliable or are its internal estimates unless otherwise stated, although its accuracy or completeness can not be
guaranteed. Some part of the presentation relating to business wise financial performance, ex-insurance numbers, balance sheet,
asset books of Edelweiss and industry data herein is reclassified/regrouped based on Management estimates and may not directly
correspond to published data. The numbers have also been rounded off in the interest of easier understanding and readability.
Numbers have been re-casted wherever required. Prior period figures have been regrouped/reclassified wherever necessary. FY18
onwards, numbers are as per IndAS. All information in this presentation has been prepared solely by the company and has not been
independently verified by anyone else.
This presentation is for information purposes only and does not constitute an offer or recommendation to buy or sell any securities of
Edelweiss. This presentation also does not constitute an offer or recommendation to buy or sell any financial products offered by
Edelweiss. Any action taken by you on the basis of the information contained herein is your responsibility alone and Edelweiss or its
directors or employees will not be liable in any manner for the consequences of such action taken by you. Edelweiss and/or its
directors and/or its employees may have interests or positions, financial or otherwise, in the securities mentioned in this presentation.
Edelweiss Financial Services Limited Corporate Identity Number: L99999MH1995PLC094641
For more information, please visit www.edelweissfin.com
20
Safe Harbour
Slide 4,5,6: Intrinsic Value Numbers are indicative and based on management estimates
Slide 4: ARR AUM is the sum of NAV of the live funds and balance Callable Capital from the live funds. Prior period numbers are
indicative and based on management estimates
Slide 5,14: AUM, MF Equity AUM are rounded off to nearest 100; Prior period AUM numbers included strategies under Alternative
categories. MF Equity AUM includes strategies under Hybrid categories.
Slide 7,12: Net worth includes MI
Slide 8,9,10: Debt includes accrued interest and excludes CBLO and securitisation liabilities
Slide 12: Business PATs are pre-MI. Equity stakes are rounded off to nearest integer
Slide 15: Net D/E is calculated as Net Debt (excluding Available Bank Lines) / Equity. Numbers rounded off to nearest 10
Slide 15: Cumulative recoveries since FY16
Slide 16: Pursuant to the RBI circular on “Investments in AIF”, prior period Wholesale Loan Assets figures have been revised
to include AIF Investments in addition to gross loan book and SR
Slide 16: Total retail disbursements via CLM in FY23, FY24 and H1FY25
Slide 17: Cumulative disbursements since FY20
Slide 19: 13th Month Persistency is on premium basis for Individual (Regular Premium+ Limited Payment Premium). Persistency figures
corresponds to policies issued in Sep to Aug period.
21
