u gro capital | an...

U GRO Capital | An Overview

The Indian SME Lending Market

A large yet untapped market opportunity

2

61.0

64.4

FY18 FY19

FDI Net Inflows ($ B)

Investors Still Bullish On Long Term Growth Prospects

Despite Near-Term Headwinds, the Indian Economy is Anchored by Political Stability and Long-Term Structural Reforms

3

Sustained Growth Despite Near-Term Challenges

7.4%8.0% 8.2%

7.2%6.8%

5.0%5.9%

FY15 FY16 FY17 FY18 FY19 FY20F FY21F

Real GDP Growth Rate

-25

0

25

50

75

Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19

Consumer Confidence Perception

Current 1-Year

Consumer Confidence Improving Signaling Spending Growth Revival

Unprecedented Structural And Political Stability Facilitating Long Term Reforms

▪ Corporate Insolvency Resolution Process yieldedresolution of 94 cases with total claims settlement of$24.2B as of March 2019

▪ India’s new 15% tax rate (down from 35%) on newmanufacturers is the lowest amongst its peers, andwill drive growth for manufacturing-based SMEs

▪ PSU Banks have been consolidated for operationalefficiencies, coupled with a $7.8B capital infusion toreinvigorate the financial sector

The NBFC Liquidity Crunch is Transitional in Nature

▪ Current liquidity crunch an outcome of idiosyncraticgovernance issues in certain NBFCs

▪ Subsequent slowdown in the auto, SME segments re-emphasizes the critical role played by NBFCs

▪ Intervention from the Central Gov/RBI very likely –Increasing bank exposure limits, classification of creditfor on-lending to SMEs up to $28.5K as PSL

▪ The RBI has instituted a Partial Guarantee Scheme forNBFCs, with $5.6B sanctioned and $1.4B alreadydisbursed

▪ First government with an outright majority since 1984

▪ Geopolitical stability has been maintained despitesporadic flare-ups | India has moved to 4th on the Asia-Pacific Power Index

▪ Inflation (3.3% YoY rising to 4.0% by Sep ‘20) and thefiscal deficit are well under control

▪ India jumped from 77th to 63rd in the World Bank’s ease-of-doing-business index, the third year in a row that Indiahas been among the top 10 improvers in rank

The broader economy and the NBFC sector expected are expected to normalize in 2020

▪ Real Private Final Consumption Expenditure (PFCE) willincrease from 5.5% in 2019-20 to 7.0% in 2020-21

India Represents a Large, Significantly Underpenetrated Credit Market

One of the largest and fastest growing economies in the world

However, the credit to GDP ratio is still much lower than other markets

Leading to high credit growth in the country led by the NBFC sector

Significant government impetus for the growth of credit

14.1 13.9

9.010.9

8.210.0

17.915.6

18.816.6

14.6

21.2

FY13 FY14 FY15 FY16 FY17 FY18

Credit Growth Rate (%)

Bank NBFC

▪ Grant of universal banking, payment banking and small finance banking licenses

▪ Focus on financial inclusion – Jan Dhan Yojana1, Pradhan Mantri Awas Yojana2

▪ India Stack – Cashless, Paperless, Presence-less

▪ Credit guarantee scheme for MSMEs

4

25.120.2

10.35.5 4.2 4.0

China US India Japan Germany Russia

6.1% 2.1% 5.0% 1.9% 0.6% 1.7%

GDP PPP – $ T, Real GDP Growth

160.0%

73.6%44.8%

99.9%54.3% 49.1%

China US India Japan Germany Russia

Total credit to non-financial corporations as a % of GDP

154.3 178.6 212.9254.3

297.1338.6

385.7

FY14 FY15 FY16 FY17 FY18 FY19E FY20P

Total credit to the private non-financial sector ($ B)

The overall lending market in India is expected to grow at 10-11% with NBFCs growing at 15-17% over the

next 5 years

~$1T lending opportunity over the next 5-6 years | Significant head-room for many more banks and NBFCs to emerge !

1Jan Dhan Yojna: A govt initiative to ensure that every individual has a bank account; 2A govt initiative to ensure housing for all by incentivizing low cost housing and providing access to credit; 3set of APIs that allows businesses, startups to utilize an unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery (Aadhar, eKYC, Unified Payments Interface)

Source: IMF, BIS

NBFCs Have Certain Structural Advantages and Disadvantages Vis-à-vis Banks…

5

▪ 100 % foreign ownership permitted

▪ Ability to be nimble – lesser restrictions on branches, allowed businesses

▪ No obligation to lend to “priority” sectors or open branches in rural areas

▪ No requirement to maintain Cash Reserves/Statutory Liquidity

▪ Still very regulated – NBFC-ND SI1 as regulated as a bank

▪ Cannot offer liability products

▪ Higher capital adequacy ratios

▪ Higher cost of funding

NBFCs have over the years proved themselves to be nimbler and more specialized than traditional banks

1NBFC-NDSI are non-deposit taking NBFCs having total assets of greater than ₹ 500 Cr; which are classified as systemically important by the Reserve Bank of India

...Resulting in Significantly Higher Value Creation by NBFCs

16%

18%

4%

7%

9%

14%

-2%

-7%

-14%

-13%

11%

47%

3%

5%

3%

1%

15%

9%

19%

-20% 0% 20% 40% 60%

21%

23%

14%

12%

17%

28%

34%

3%

-6%

6%

19%

38%

25%

20%

16%

22%

33%

16%

18%

17%

12%

0%

3%

8%

13%

7%

2%

-51%

-23%

14%

22%

27%

18%

15%

17%

18%

17%

21%

-60% -40% -20% 0% 20% 40% 6

5-year AUM Growth (FY14-19) ROE (FY19) 5-year Annual Share Price Growth Rate

Mean: 23%

Mean: 15%

Mean: 19%

Mean: -1%

Mean: 13%

Mean: 3%

NB

FCs

Ban

ks

Public Sector Banks▪ ¾ of total credit▪ Limited by high NPA▪ Low CAAR (Basel-III)▪ High levels of

bureaucracy/ interference

NBFCs▪ Diversified geographical

presence ▪ Higher assessment

ability ▪ Limited by cost of funds

and capital investment

Private Banks▪ Increasing NPA▪ Limited Geo. reach▪ Limited assessment

ability as compared to a NBFC

• Constrained credit growth

• Structural issues

• Higher NPA

• Low rating and leverage

• Long term sustainable ROE is challenged

• Muted equity value creation.

• Healthy credit growth

• Current players are limited by credit availability, lower assessment ability & distribution reach.

• Pricing advantage & structural support available.

• Favorable demographics

• Increasing income

• Increasing debt appetite

• Faced with heavy price competition

• Needs strong capital base and a long gestation period

The NBFC Lending Market Can Be Broadly Divided Into Three Segments

7

Consumer

SME

Corporate,Infra,

Real Estate

Current Scenario Future Projection

------

-

+++

+

+

--

Scalable business with attractive returnsLow gestation period

50 M

29%

560 B

MSMEs in India

Contribution to India’s GDP

Gross Value Add (US$)

US$300 B | SME Credit Gap

20.123.7

45.02.9 0.7

Banks NBFCs Otherinstitutions

Total FormalSupply

TotalAddressable

Demand

Bridging the $300B gap will need $60-70B in incremental equity capital | Growth isn’t a challenge for small business financiers!

8

10% MSMEs with access to credit

Potential Addressable Credit Gap: ₹ 21.3 T growing at 7%+ per annum

Small Business Lending Isn’t a Small Business

₹ T

Difficult to understand businesses/cash flows

Fragmented set of customers

High dependence on the ecosystem

Lack of data

Challenges in lending to the SME segment…

High cost of customer acquisition

9

?

…leading to a Frustrating Borrowing Experience for Small Businesses

Time consuming offline process

Non-tailored credit assessment

Rigid collateral requirements

Product mismatch

Traditional Lenders remain unfocused on SMEs due to Business Model Diversity

Traditional Lenders continue to find mid market and large corporate more rewarding – not necessarily true!!

Product

Customized products based on the nature of business, non-financial parameters, end use, payment

capacity/ frequency of underlying customer

Loans against property, supply chain financing, unsecured loans

Loans against property, supply chain financing

DistributionOmnichannel

Ecosystem based lendingBranch/DSA led Branch/DSA led

Credit AppraisalSector specific approach,

Cash Flow Based Automated Review

One size fits allCollateral/Bureau score

One size fits allCollateral/Bureau score

Turn-Around Time 4-5 days 15-20 days 30-45 days

Documentation

Combining traditional and non-traditional sources. Use of

information available in public and private domains. Digital document

submission

Financial Statements, P&L Account, Balance Sheets, Bank

Statements

Project Reports. Projected financials, Bank Statements.

10

Specialized SME Lenders Traditional NBFCs Banks

Specialized SME Lenders are Better Positioned to Bridge the SME Credit Gap…

…a Trend Previously Witnessed in Consumer Finance

Specialists vs. Generalists | A comparison of value creation by select NBFCs over a 5-year period

On an average, specialized NBFCs have created long-term value for shareholders | These companies have leveraged their deep knowledge of their segments to generate faster AUM growth/better ROEs as compared to generalist NBFCs

AUM CAGR between FY14-19; ROE for FY1911

Stock returns scaled to 100

AUM Growth

ROE

3% 20% 9% 18% 12% 13%

NA 18% 13% 21% 19% 22%

Specialized NBFCS

10

68

139

333

351

511

08/14 08/15 08/16 08/17 08/18 08/19

Reliance Cap L&T Finance Magma Fincorp Cholamandalam Muthoot Manappuram

Technology is Essential to Achieve a Specialized Model at Scale

12

OPERATIONS

CREDIT UNDERWRITING

COLLECTIONS

DISTRIBUTION

▪ Quick and easy integration with distribution partners

▪ Paperless login enabled by API integrations and OCR

▪ Lower turn-around time

▪ Faster product launches and process iterations

▪ Direct to customer interface and pre-approved programs

▪ Access and process the large trove of private and public data

▪ Centralize underwriting knowledge

▪ Customized scorecards

▪ Automate processes to reduce errors and increase throughput

▪ Access and analyze surrogate data

▪ Comprehensive notification/trigger mechanism for best-in-class

client servicing

▪ Banking integration for automated disbursement, deductions

▪ Digital self service and support

▪ Digital process enablers such as eSign, eKYC, eStamping

▪ Processing at scale

▪ Automated, analytics led early warning systems

▪ Cash less EMI collections

▪ Geo-tagging of customers

Technology has created a new breed of fin-tech lenders in India | Digital lending to increase 10-15 times by 2023, scaling up to~$100B in annual disbursements

| Better Assessment| Shorter TAT | Personalized

Customer Journeys |

U GRO Lies at the Intersection of Technology Focused and Specialized NBFCs…

Fintech PlatformsSpecialized NBFCs

Sector Specialization

Product Specialization

Geographical Specialization

Supply Chain Platforms

Digital Lenders

Off-Balance Sheet Lenders

U GRO intends to create a specialized, scalable platform optimized for end-to-end lending13

▪ Scale a challenge

▪ Restricted to niches

▪ Opex heavy models

▪ High credit costs

▪ Liability challenged

▪ Mostly loss making

…Leveraging the Best of Both Worlds to Create a Truly Scalable Lending Model

Traditional – Fin-Touch Alternative – Fin-Tech

Adopting a hybrid model comprising best practices of

traditional lenders and modern fin-tech companies

Traditional credit assessment models like CIBIL scores

Alternate credit assessment models leveraging analytics + publicly available data

Physical processes such as visits to customersLeverage technology to automate processes

thus reducing manual errors

Focus on collateral driven lending Unsecured credit solutions

Limited to term loans Variety of loan products

14

The U GRO Incarnation

The Assimilation of Aspirations

15

Our Mission

‘To Solve the Unsolved’

India’s $600B+SME Credit Availability Problem

16

U GRO Capital | Who We Are

Knowledge Technology

Large Institutional Capital₹920Cr (~$130M) Of Equity Raised

Strong Corporate GovernanceBoard Controlled, Management Run

Experienced Management Team250+ Years of Experience

A highly specialized, technology enabled small business lending

platform

Deep domain expertise of target segments to better understand the customer

A scalable, data driven approach to ensure

dissemination of knowledge

17

26 years of experience in creating institutions across the financial services domain

Mr. Shachindra NathExecutive Chairman and Managing Director

18

Lending Capital Markets Asset Management Insurance

SME LendingBuilt India’s 4th largest Non-Banking Finance business, focused on SMEs with a book size of over USD 2.3 billion

Housing FinanceStarted the housing finance arm focused on funding the affordable housing segment

Retail BrokingCreated a platform with over 1,350 points of presence across India

Wealth ManagementJV with Macquarie providing wealth management solutions to ultra HNI clients

Investment BankingMid-market focused institutional equities and investment banking platform with presence in 8 countries

Asset ManagementLargest alternative asset management out of India : Over $ 21 B of AUM with presence across the US, Europe, Asia and Africa

Marquee funds included Northgate, IBOF, Landmark Partners and Quadria Capital

Life InsuranceLife insurance JV with AEGON NV of the Netherlands

Health InsuranceOne of India’s first specialized health insurance companies

Key Exits: Sale of the life insurance stake to Aegon, sale of the mutual fund business to Invesco, sale of Northgate to TCP, sale of Landmark Partners to the management team

▪ Core pillar of Religare’ssuccessful growth journey

▪ 6-year stint as the Group-CEO of Religare Enterprise

▪ Transitioned the companyfrom an operating loss of~USD 80 million in 2013 toUSD 50 million of netprofitability in 2016

▪ Presented the “CEO of theYear” award at the AsiaBanking, Financial Services& Insurance ExcellenceAwards in August 2015

▪ Started his entrepreneurialjourney in 2016.

Founder With Experience Creating Institutions Across Financial Services…

Manish Agarwal

Chief Risk Officer

AUM Managed: ₹ 1,200 B

Sandeep Kakar

Chief Growth Officer

AUM Managed: ₹ 150 B

Rajni Khurana

Chief Human Resources Officer

AUM Managed: NA

Anuj Pandey

Chief Operating Officer


Kalpesh Ojha

Chief Financial Officer

Liability Raised: ₹ 700 B

J Sathiayan

Chief Business Officer


Abhijit Ghosh

Chief Executive Officer


164employee

count

Fully formed

team

4/5Rated

employees

Deep and large ESOP

pool

19

…Supported by a Leadership Team With a Strong Track Record of Execution…

… and a Strong Second Layer Management Team

20

Arun AroraFraud Control

Dhruv SuriCorp Channels

Irem Sayeed Product & Strategy

Makarand MandkePolicy

Anshuman TiwariCredit (Secured)

Nilesh AsherCollateral Management

Shelvin MathewsCredit (Unsecured)

Subrata DasAnalytics

Sudhakar MogeraBFSI Partnerships

Vivek SeshadriStrategy & IR

Sunit VakhariaTechnology

Sunil LotkeLegal and Compliance

Strong Corporate Governance Framework Enshrined in the Articles…

▪ High degree of regulatory oversight and transparency

▪ An institution created with a long-term view, designed

for continued operational efficiency

▪ Access to permanent capital

▪ Deloitte appointed as the statutory auditor and PWC

appointed as the internal auditor

▪ Independent directors to comprise majority for perpetuity

▪ Any shareholder holding >10% to qualify for a board seat

▪ Key committees to be headed by an independent member

with required credentials

▪ The majority of the NRC, ALCO and Audit Committees to

comprise of independent directors

▪ Any proposed loan >1% of net worth or to a related party to

require unanimous approval of ALCO and the Board

▪ Board approved multi-layer credit authority delegation

▪ Removal of key management (including CRO, CFO) to

require 3/4th board approval

▪ Any significant action by the Company to need 3/4th

approval of the Board

Special Resolution of Shareholders required for effecting any changes to the AoAPromoters/Management do not have unfettered rights to divert business strategy

21

…Supervised by an Independent Board Comprising of Industry Luminaries

▪ Ex-Chairman, MCX, Ex-CIC, GoI, Ex-Director - SIDBI▪ Over 40 years with the Indian Administrative Services▪ Indian Administrative Services (Batch of 1973)▪ M.A., Utkal University, M.Sc., London School of Economics

▪ Ex – DMD, SIDBI, Board Member of Capital Small Finance Bank▪ Over 38 years with experience with SIDBI, UCO Bank and IDBI▪ PGDM from MDI▪ Currently a director with MUDRA, MFIN, NSCCL, Aye Finance,

member of the advisory committee at Ivy Cap and Lok Capital

▪ Board Member – ICRA, RBL Bank, Ex-Senior Partner, Deloitte▪ Over 30 years of experience with Deloitte, Vaish and Associates▪ CA from ICAI and a BA from Delhi University▪ Currently an independent director at ICRA, Shubham Housing, Indo

Ram Synthetics, Joyville Shaapoorji Housing

NK Maini - Chairman, Risk Management Committee

Satyananda Mishra - Chairman, CSR Committee

Ranjana Agarwal - Chairman, NRC Committee

Rajeev K. Agarwal - Chairman, Stakeholder Committee

▪ Ex-Whole Time Member, SEBI▪ Over 30 years with experience with SEBI, FMC, IRS▪ Indian Revenue Service (Batch of 1983)▪ B. Tech, IIT Roorkee

▪ Ex-CFO, Citi-India▪ Over 40 years of experience with Citi, CEAT, Tata▪ PGDM from IIM Kolkata and B. Tech from IIT Kharagpur▪ Advisor to EY, Independent Director at Trent, Cashpor

Microcredit, Kalyani Forge, India First Life Insurance

S. Karuppasamy - Chairman, Compliance Committee

▪ Ex-Executive Director, RBI▪ Over 40 years of experience with the RBI▪ PG Diploma in Bank Management, Indian Institute of Banking &

Finance, CAIIB (Honorary Fellow) & MA (Economics)▪ Currently a member of the RBI services board, and a director at

ARCIL and Vidharan (MFI)

Abhijit Sen - Chairman, Audit Committee

Independent Members of the Board

Specialization: Government Policies

Specialization: Credit, SME

Specialization: SEBI Regulations

Specialization: Finance Function

Specialization: RBI Regulations

Specialization: Audit, Tax

22

Specialization: Retail Banking

▪ Ex-Head of Branch Banking, HDFC Bank, Board Member Equitas▪ Over 30 years of experience at HDFC Bank and ANZ Grindlays Bank▪ B. Com from St. Xavier’s College Calcutta, MBA from Texas Christian

University and CA from ICAI▪ Currently a member of the Equitas Small Finance Bank board

Navin Puri

Amit GuptaNewQuest

Non-Executive Directors

Manoj SehrawatADV

Kanak KapurPAG

Chetan GuptaSamena

Formation of Chokhani Securities Preferential Allotment Qualified Institutional Placement

Birth of U GRO Capital Preferential Allotment

1994: Formation of Chokhani1995: Listing on the BSE2004-Present: 14-year track-record of profitability

₹ 4,350 M raised from global privateequity firms - ADV Partners,NewQuest and IndGrowth

₹ 1,120 M raised from public marketfunds, insurance companies

Acquisition of Chokhani SecuritiesRevamp of the management teamDemerger of the lending business ofAsia Pragati approved – ₹ 1,750 M

₹ 1,920 M raised from large familyoffices / HNIs through a preferentialallotment of shares

19

94

-2

01

7

De

c 2

01

7

De

c 2

01

7

Au

g 2

01

8

Disbursements started in

January, 19

May

20

18

23

Private Equity Funds Public Market Funds Insurance Firms Family Offices

Chhattisgarh Investments

MK Ventures

Group family

Taparia family

Jaspal Bindra

Backed by Diverse and Marquee Shareholders

Our Journey Thus Far

GRO-Plus

GRO-Chain

GRO-Direct

GRO-Xstream24

26 31

80

108

187

276

422

515

575

647

702 753

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

First Term Loan from a

Small Finance Bank

First Securitization

deal

Traditional and BFSI Channels Activated

Ecosystem Channel

Activated

SBI Co-Lending

Partnership

Bank of Baroda Co-

Lending Partnership

D2C Channel Announced –

Dec 2019 Launch

Completion of Asia Pragati Demerger

Crossed $100M in Disbursals

Crossed $10M in Disbursals Crossed $50M

in Disbursals

AUM Growth (₹ Cr)

First Digital Partnership

Signed

First NCD Issuance

Reached 100 employees

Received A/A1 Rating from Acuite

ICICI Co-Lending

Partnership

Crossed $100M in

AUM

First Term Loan from a

General Bank

U GRO Tech Module Development

First Machinery

Loans Partnership

Achieved Profitability for Q3 FY20

25

Focus on sustainable growth and building long-term partnerships during the current period of challenging market conditions

Metric

BFSI Partners

Disbursals

Employees AUM

GRO Partners

Ecosystem Partners

Customers

Branches

Secured

Co-Origination Partners

₹1,073Cr9

₹753Cr

3

67%

311

7,512

15164

26

Where We Stand Now

Data as of 31 December 2019

Know More, Grow More

Sector based approach to specialization

26

27

Deep Analysis of Macro and Micro Economic Factors…

Reached Targeted 8 Sectors

Future business prospects

Size of lending opportunity

Relative competition

lending

Impact of regulatory developments

180+ Sectors

20 Sectors

Interest coverage

Asset Turnover

ratio

Demand supply gap & cyclicality in

demand

Impact of change in

technology

Working Capital Cycle

Revenue Growth

EBITDA Margins

Upgrade & downgrade

ratio

Median rating

Gearing

Sector specific government

policy

Environmental issues

Input risk

Criteria

27

Criteria

An 18-month process involving extensive study of macro and micro economic parameters carried out in conjunction with market experts like CRISIL

…to Arrive at a Set of 8 Sectors

Focus on SME clusters in India

~50% - Contribution of the 8 sectors to the overall SME lending market in India

Validated independently by CRIF, CRISIL and the company distribution and underwriting teams

Selected sectors aside from Auto Components have been relatively less affected by the economic slowdown

28

Large lending opportunity

Lower impact of regulatory changes

Secular consumption driven growth

Low geographical concentration

Relatively less competition from

banks

Top 8 Sectors

Healthcare

Education

Chemicals

Food processing/

FMCG

Hospitality

Electrical equipment

and components

Auto components*

Light engineering

Halted disbursals to Auto Components sector

We Further Narrowed Down on Select Sub-sectors

Healthcare Education Chemicals

Food Processing/FMCG

HospitalityElectrical Equipment

and Components

Auto Components Light Engineering

Key sub-sectors: General nursing homes, eye clinics, dental clinics, diagnostic labs, radiology/pathology labs, pharma retailersKey clusters: NCR, Mumbai, Bengaluru, Hyderabad and Chennai

Key sub-sectors: Fine dining (standalone), QSRs, fine dining chains, manpower agencies, boutique hotels, guest housesKey clusters: NA

Key sub-sectors: K-12 schools, play schoolsKey clusters: NCR, Mumbai, Coimbatore, Chennai, Hyderabad and Pune

Key sub-sectors: Dyes and pigments, bulk and polymers, agrochemicalsKey clusters: Mumbai, NCR, Ahmedabad, Vadodara and Surat

Key sub-sectors: B2B, B2CKey clusters: NCR, Pune, Bengaluru, Chennai, Aurangabad and Rajkot

Key sub-sectors: Engine parts, drive transmission and steering parts, body and chassis, suspension and breaking parts, electrical parts, other equipment, tradersKey clusters: NCR, Mumbai, Kolkata, Hyderabad and Bengaluru

Key sub-sectors: Dairy and dairy products, non-alcoholic beverages,consumer foods, poultry, sea food, food and beverage tradersKey clusters: NCR, Mumbai, Chennai, Hyderabad and Pune

Key sub-sectors: Casting and forging, medical equipment and devices, pipes, process control instruments, tradersKey clusters: NCR, Chennai, Pune, Ludhiana, Bengaluru, Ahmedabad and Rajkot

29

Sub-sectors selected basis the contribution to the overall sector credit demand and risk profiles

India’s First Sectoral and Sub-sectoral Statistical and Expert Scorecards

30

A Seamless, Customized Customer Journey

31

File Flow for a Secured Loan

~8 segment specific statistical scorecards

Log-In

▪ Plug and play distribution module

▪ Machine learning based OCR software

Pre-defined Criteria Met?

Loan Approved Pre-approval checksQuarterly

Monitoring

Feedback Loop

▪ Defined ticket size, sectors, turn-over

▪ Geographical location▪ Borrowing history

~38 sub-segment specific

scorecards

▪ Legal Verification▪ Fraud Control Unit Check▪ Field Investigation▪ Valuation

Criteria1,000+ Parameters

evaluated

20+ Data Sources

Data Enrichment~Sub-sector Specific PD Templates

Statistical Scorecards

Expert Scorecards

In Principal Approval in 60

mins

Final Approval in 48 to 72 hours

Sub-sectorPolicies

Data and Analytics

Touch and Feel

Experience

Disbursement

Statement Analyzers

Utilization of Big Data to Arrive at U GRO’s Sectoral Scorecards

Default rate across score ranges

32

3.45%

1.23%

0.75%

0.56%

0.40%

0.45%

0.26%

0.12%

0.08%

0.00%

718

751

798

823

846

871

907

980

1,341

1,500

‘Bad rates’ across intervals8M+

850

60%+

70%

U GRO Behavioral ScoreParameters per loan

Loan records

GINI coefficient

‘Bads’ eliminated by removal of bottom 20% by score

Look-alike based application scores for each of our 8

sectors

Ability to estimate risk enables the company to

move to a risk-based pricing model

U GRO has received the 2020 Finnoviti Award for Business Model Innovation for the Development of Sector-specific Scorecards

Supplemented by Industry First ‘Expert Scorecards’ for all Sub-sectors

Parameters Factors Case A Case B Case C

Facilityrelated

Vintage of the entity 20% 15% 10%

Doctor’s Experience 20% 15% 10%

Arrangement with pharmacy unit 30% 30% 40%

NABH accreditation 30% 40% 40%

Operational

Share of IPD revenues in overall nursing home revenue 15% 20% 20%

Share of insurances cases in overall IPD admissions 15% 20% 20%

Govt empanelled cases in overall insurance admissions 10% 10% 10%

Occupancy rate 30% 20% 20%

Revenue per occupied bed 30% 30% 30%

Financial

Operating margins 15% 15% 15%

Return on Capital Employed 20% 20% 20%

Interest coverage 30% 30% 30%

Asset turnover ratio 20% 20% 20%

Receivable days 15% 15% 15%

33

Facility40%

Operational 40%

Financial20%

Case A: Less than 20 bedded nursing home

Facility30%

Operational 30%

Financial40%

Case B: 20-50 bedded nursing home

Facility20%

Operational 20%

Financial60%

Case C: 50-100 bedded nursing home

Sector: HealthcareSub Sector: Nursing Homes

▪ Combination of operating and

financial parameters

▪ Scorecards developed in

consultation with CRISIL market

experts

▪ Methodology

▪ 1,000+ personal interviews

across 9 locations

▪ Responses for over 50+ curated

questions for each sub-sector

Credit Risk – Supplemented by Enterprise Risk

34

Asset Liability Management

Liquidity equivalent to 6 months of liability and 2 months of advances to be maintained at all times

The one year bucket mis-match will be positive or equivalent to zero

Asset strategy influenced by liability strategy

Fraud Risk

Background/Fraud checks on all outsourcing partners, agencies and employees before onboarding

Seeding checks conducted regularly

Operational Risk

Standard operating procedures defined for all processes

End to end automation of processes to limit manual intervention

PORTFOLIO LEVEL RISK ENTERPRISE LEVEL RISK

Concentration

Secured loans to be ~70% of overall portfolio in FY20

Single sector concentration is capped at 25%, single geography is capped at 20%

The BFSI channel to be <20% of the overall portfolio in FY20

FCU Checks

An independent team with deep market expertise

Partnerships with multiple FCU agencies and Hunter

Property appraisal

Collateral specialist hired

2 valuation agencies appointed for loan disbursal > ₹ 1 Cr

FI verification

Personal visits by employees

Geo-tagging of customer location

End-to-end automation of FI initiation and completion

Early warning systems

Automated, analytics led, early warning systems basis proprietary rules framework incorporating social, sector, macro-economic feeds

Credit Process Enabled by Integrated Technology

35

An In-house Technology Platform that Enables Our Underwriting Process

36

Fintech-enabledFour Channels

CustomerAcquisition

CustomerOnboarding

360° view of the customer

Customer Management

Expert Scorecards

Early Warning Systems1

2

3

Bank/GST Statement Analyzer

Statistical Scorecards

ML-Enabled OCR

Distribution Module

LOS

LMS

Data Integrations

Fraud Control

8 sectoral statistical scorecards

38 sub-sectoral expert scorecards

25+ API integrations

Automated policy checks

Multiple industry firsts to enable a

60-minute in-principal approval

Completely seamless, paperless onboarding

Plug and Play Distribution Module

37

A Plug and Play Distribution

Module

GRO Partners BFSI Channel Corporates Customer

Customer ERPGRO App Partner LOS

A paperless, and seamless customer onboarding process

Multiple customer

touchpoints

GRO LOS

Data Enrichment Layer

No documents

needed

Customer Devices

Credit Evaluation

Authenticity Verification

Business Prominence

Collateral Valuation

OCR Technology with Machine Learning to Expedite Processing

38

150+Applications processed

80%+Savings in time to process

<5Central Ops resources

50+System coded validation

checks

100+Financial parameters stored per case

3,000+Pages machine-read

P&L Statement, Balance Sheet

7-10 pages ingested per income assessment instance

Extensive accounting checks on P/L and Balance sheet entries

Determines if OCR output needs curing or if repeat upload is needed

Based on Natural Language Processing and Machine Learning

System assisted curing window

Handles unstructured text semanticallyWork of over 1 day can be

compressed inside 60 mins

Ingestion Validation

Image Processing Curing

A Machine Learning Based OCR system

System capable of handling pdfs and scanned copies

Accordingly cases progress in the workflow

Integration with legacy software through RPA and APIs

Curing data used by ML engine for progressive improvement

Advanced Bank, GST and Bureau Analyzers to Size Up the Customer’s Cash Flows, Ability to Repay, Risk-Return Metrics and Estimate Loan Exposure

▪ ~ 100 different product variants basis bureau standard definitions classified into ROI/tenor buckets

▪ Product level ROI, tenor assumptions to compute obligations

▪ Product specific obligations computation encoded

▪ Process replicated for all financial applicants for footprint across both Commercial and Consumer bureaus

Category

Counterparty

State

Month

▪ 400+ data parameters

▪ Validate monthly sales, expenses, gross margins

▪ Insight into borrower's business network and concentration

▪ Digitization of sector identification

▪ State-wise break up providing information on operating markets

Overview

Aggregate

Transactions

Bounces

▪ Information related to bank statement analysis obtained from Perfios through an API integration customized to U GRO requirements

▪ Ability to validate business transaction trends (sales, expenses, margins), cheque bounce patterns, loan/EMI details, supplier & vendor identification and concentration

Bank Statement Analysis Bureau Record Analysis

GST Statement Analysis

39

Tradelines

Granular Details

▪ OFAC▪ Interpol (Red and Yellow Notices)▪ UN Sanctions and Wanted Lists▪ Development Bank Blacklists

(World Bank, ADB, KfW, AFDB)▪ NIA Terrorist Lists▪ Wanted List under COFEPOSA

AML

LOS▪ Case logged in through another

channel for same product▪ Rejected in last 6 months due to

default/ fraud

LMS▪ Automated existing customer

check▪ In case of duplication, good-bad

logic is run – checking bounces/ defaults in last 3 months

▪ Group exposure▪ Family exposure

Internal De-dupe

Comprehensive de-dupe including internal LMS de-dupe, AML, litigation search covering BIFR, NCLT, all district courts, high courts, supreme courts, DRT, DRAT, ITAT

BIFR

▪ Array of BIFR Cases▪ Status of the BIFR Case▪ Name of the Entity▪ BIFR Case Number / Year ▪ Address of the Entity▪ Last date of Order

NCLT

▪ Name of Advocate▪ Status of Case▪ Names of all parties ▪ Interim Orders▪ Date of Order▪ Order/Judgement

40

Comprehensive de-dupe including internal LMS de-dupe, AML, litigation search covering BIFR, NCLT, all district courts, high courts, supreme courts, DRT, DRAT, ITAT

Courts and Tribunals

▪ Access to court records of Indian District, High and Supreme Courts

▪ API Integration through eCourtsServices

▪ Comprehensive checks against database of 900,000+ cases

Fraud Checks and Litigation

Automated Policy Approvals Reducing Subjectivity in Credit Appraisal

41

| Highly flexible | Capable of handling complex computations and policies |

Automated comparison to policy

Computation of loan amount

and ROI

Machine learning based credit systems

Industry leading TAT and

productivity

No manual errors

Auto-escalation to relevant authorities

Parallel processing against

all policies to capture best fit

Large and Scalable Distribution Platform Enabled by Technology

42

43

Development of System Architecture for Full-Suite SME Lending

GRO-ProtectCore Engine

GRO-Xstream

Partnerships

Core LMSSystem of Records

GRO-Direct

Direct Interface

GRO-Chain

Supply Chain

GRO-Plus

Intermediaries

Anchor

Buyers

Suppliers

Banks/FIs/DFIs

Insurance/Mutual Funds/HNIs

NBFCs/Fintechs

An uberized distribution model capable of

onboarding DSAs, CAs and other intermediaries

Direct to customer (Online) channel – went live in beta phase in December 2019

Supply chain financing platform for vendor and

dealer/distributor financing

An online marketplace for large banks to partner with smaller NBFCs to either co-

originate or purchase assets

A comprehensive set of modules that will allow for maximal lending outreach within our mandate

Four Distribution Channels that Drive Our Asset Engine

44

▪ 311 intermediary GRO-Partners onboarded in 9branches across key SME clusters in India

▪ Facilitated by our proprietary GRO-Plus app, anUberized distribution model which enables GROPartners and allows Principle Approval within one hour

▪ U GRO’s BDMs achieve industry leading productivitiesand TATs through our tech-enabled approach

Traditional Channel | GRO-Plus

▪ Our Ecosystem Channel involves partnering withAnchor companies, to gain access to their base ofvendors for invoice-backed supply chain financing

▪ This model allows for credit provision to reach dealers,distributors and tier 2 suppliers who are not eligible fortraditional financing

▪ Development ongoing of GRO-Chain, an SCF platformfor vendor and dealer/distributor financing

Ecosystem Channel | GRO-Chain

▪ Partnerships spanning co-lending, onward lending andsecuritization. We have partnered with 26 BFSIs, withan emphasis on serving ‘bottom of the pyramid’ SMEs

▪ Driven by GRO-Xstream, an industry-first onlinemarketplace for large banks to partner with smallerNBFCs to either co-originate or purchase assets

BFSI Partner Channel | GRO-XStream

▪ Our proprietary Digital Lending Platform GRO-Directaims to allow SMEs to directly apply for credit,increasing borrowing ease and further reducing TATs

▪ Digital partnerships signed with several fintechmarketplaces, service providers and aggregators

Direct Digital Channel | GRO-Direct

U GRO’s distribution model is geared towards catering SMEs across all geographies and ticket sizes. We create tailored products which allow for highly structured deployment of capital – optimized for both the distribution channel and customer

Turnover: Up to ₹5 CrTicket Size: Up to ₹2 Cr

Turnover: Up to ₹1 CrTicket Size: Up to ₹50 L



Traditional Channels | A New Approach to the Old…

45

▪ Rigorous vetting of 1,200+ partnersto reach an initial list of 100 channel partners.

▪ Selection criteria:

₋ Track-record of 3+ years

₋ Infrastructure Readiness

₋ Portfolio performance

▪ Partners have a track-record of acquiring $700M+ per month

▪ Channel partners pay an onboarding fee – a first in the industry

Delhi

Jaipur

Hyderabad

Bangalore

Ahmedabad

Kolkata

Mumbai

Chennai

Branch Offices

Head Office

Locations identified through SME cluster analysis

and portfolio benchmarking

Partner Selection Criteria Partner App: An Industry First

Vijaywada

Coimbatore

Pune

NashikNagpur

Rajkot

VapiSurat

Baroda

Jodhpur

Indore

LudhianaChandigarh

Planned Branches

Value Proposition for Channel Partners

▪ Lower TAT : In principal approval in 1 hour

▪ Higher productivity: High conversion (~60%) post the in-principle approval

▪ Analytics-driven opportunity to cross-sell/top-up within their customer bases

▪ U GRO co-lends with larger banks, allowing partners to originate larger ticket sizes

▪ Payment within 7 days resulting in improved working capital management

…Leading to Higher Productivity Across the Value Chain

Traditional Model U GRO Model

Customer Journey

▪ Needs to fill lengthy forms, submit multiple documents to 7-10 NBFCs, wait 6-10 days for an in principal approval and then 30 days for a final approval post multiple rounds of follow-ups

▪ In-principal approval in 60 mins by submitting only the GST/PAN details, and financials to the DSA

▪ Post submission, disbursal in 4-5 days for 60-70 percent of cases

Partner Universe ▪ Mainly Direct Sales Agents▪ DSAs, Chartered accountants, Mutual

Fund/Insurance brokers

Turn-around time▪ Channel Onboarding: 1 week▪ Loan Onboarding: 30-45 days

▪ Channel Onboarding: 1 day▪ Loan Onboarding: 1 hour in-principal approval; 4-

5 days for disbursement

Role of a branch sales manager▪ Co-ordinating with the credit team, collecting

documents, relationship management▪ Managing relationships with the customer, and

the channel partner

FOS productivity▪ 2 secured files/month▪ 4-5 unsecured files/month

▪ 5-6 secured files/month▪ 9-10 unsecured files/month

Credit productivity▪ Manual CAM preparation, review of every logged

in file▪ Automated CAM, trigger-based review

46

Disrupting the traditional branch led model through technology

Partnership with a smart energy solutions platform

▪ Pre-approved program based on data analytics for unsecured & secured loans to energy product vendors

▪ Performance data of vendor partners with U GRO to be shared by the aggregator

— Vintage, location, transaction history

▪ Pay-outs to vendors routed through an escrow account created for the program

47

Independent vertical headed by the Chief Growth Officer

▪ Each sector to be led by a ‘sector head’

Develop partnerships in prioritized segments with key participants e.g. sector

specific lenders, industry bodies

▪ E.g. Anchor led supply chain financing, partnerships with equipment

suppliers

Dedicated “Growth Team” to build industry partnerships

Ability to go deep into the partner value chain

Hotel Franchisor(Anchor)

Receivable financing to their partner

ecosystem

Cross-sell of other products to the

franchisees

Ability to tap into the end consumer by providing travel

loans

Ability to tap into the partners’ network of distributors, dealers, suppliers and then eventually the end customer through an ecosystem-based lending strategy

Growth Channels | Ecosystem Based Lending

BFSI Partnership Channels | Ability to service the bottom of the pyramid

48

Symbiotic partnerships to cater to the MEL segment

Challenges faced by NBFCs:

▪ Given scale of NBFCs, their regional concentration and the target segment, access to credit for such NBFCs is limited

U GRO Solution:

▪ Create a steady liability solution for such NBFCs through multiple modes including direct lending, on tap assignment, co-lending and debt syndication

▪ Joint under-writing by U GRO and the partner NBFC

Advantage to U GRO

▪ Ability to create a large, granular micro-enterprise book without incurring significant opex

▪ First loss credit enhancement from the NBFC

The BFSI partnership channel is U GRO’s strategy to cater to the micro-enterprise segment without incurring high Opex costs

Large Corporates

Small and Medium

Enterprises

Micro Enterprises

U GRO target segment

Mainly located in large SME customers in metros/Tier 1

cities

Catered to by smaller regional NBFCs

Needs heavy investments in branches/feet on street

especially in Tier 2/3 cities

Mainly catered to by large banks

Ticket size > $7M

Our Innovation-Driven Digital Lending Platform

Product Development▪ Sectoral Need Gap

Identification based on Perception Maps

▪ E.g. Solutions available for Dentists Loan (Healthcare → Doctors) & Kirana Shop Loans (FMCG → Trading)

Marketing▪ Customer Data Identification▪ Push & Pull Marketing

Campaigns▪ Personalised Communication▪ Personalised on-boarding

journey (ChatBots)

Product and MarketingInnovation driven by Micro-Level

Focus within Sub-sectors

Sector-Focused Partnerships▪ Ecosystem Players▪ Aggregators▪ Web Portals Listings▪ Payment Gateways▪ Marketplaces▪ Industry Bodies/Associations

Direct To Customer Campaigns▪ Integrated Marketing Automation

Tool for campaign delpoyment▪ Medium: SMS/Flash Message

/WhatsApp/Voice Blasts/Email ▪ Outbound Calling with loan

solutions to optimise conversion

AcquisitionMicro–targeting of customer andpartner audiences for onboarding

▪ Based on Industry First Sector Specific Scorecards

▪ Pings other Tech Platforms for information gathering and validation via customized APIs

▪ Assisted models (Outbound Calling) to induce customers to convert

▪ Outsourced partners to collect documents and meet regulatory compliance

Underwriting/Fulfilment60 Mins Decisioning – 100% Digital

▪ Completely Digital Customer Servicing▪ No reliance on human interrvation ▪ Web-service based APIs for instant

query/request handing over app/web or IVR call

Customer ServiceChatbot based, integrated with

popular message apps (proposed)

49

Launched in Dec 2019

Distribution Network

50

Branches

BFSI Partners

GRO Partners

Ecosystem Partners

Co-lending Partners

9

26

311

21

3

20

45-50

800-1000

50-60

10-15

Current FY24P

Deep Sectoral Understanding

Leading to Tailor-made Product Solutions

51

Our Product Philosophy

To create sub-sector specific products by modulating the following attributes to meet customer requirements…

Loan Structuring

Collateral TenorAssessment Parameters

Pricing

Moving beyond conventional products offered by most NBFCs in the market…

52

Supply Chain Financing

Unsecured LoansSecured Loans

Mostly long tenor, loan against property

Short term working capital loans

30-90 day loans against invoices

A Holistic Product Solution…

PricingRate of Interest / Processing Fee

Methods of assessment| Financial |Banking | Turnover |

CollateralMovable/ Immovable

Property

TenorRepayment Frequency/

Repayment Period3

Sector based product

parameters

Loan structuringAbility to offer structured disbursement

and repayment solutions

Scenario: Hospitality/restaurants; franchise set up▪ 1st disbursal – transferred to master franchisee account –

repayment to start post 6 months▪ 2nd disbursal –for infrastructure development – repayment

post 6 months▪ 3rd Disbursal – as the first disbursal as a line of credit, valid for

12 months, quarterly bullet repayments

Scenario: Healthcare Retailers▪ Data on prospective borrower is provided by super distributor ▪ Includes monthly / yearly procurement and payment pattern

Sales and recovery report from the supplier / super distributor taken as document proofs

Scenario: Education▪ Repayment frequency to match the frequency of fee receipt ▪ If the fee is received once in a quarter, the EMI frequency can

also be structured accordingly

53

Scenario: Education Industry▪ Future fee receivables as primary collateral ▪ Institution building as the secondary collateral

Scenario: Type of collateral▪ ROI to vary basis collateral▪ Self occupied residential property to have lower ROI as

compared to vacant residential properties▪ K12 / Hospital buildings to have higher ROIs

…With Tailored Products for Each Sub-Sector

54

Sector Sub-sector Key Insights

Boutique Hotels

▪ Boutique hotels want a convenient and hassle-free loan process

▪ Business data available on digital marketplaces

▪ Very open to completely digital process

Hospitality

Healthcare

Food Processing& FMCG

Dental Clinics

FMCG Traders

Key PropositionsTarget Segment

Two/three star mid sized and budget hotels

Restaurants and QSRsQuick service

restaurants and fine dining restaurants

▪ Restaurants with different formats have highly disparate sources of income

▪ Broad range of margins across sub-types, affected in particular by owning a liquor license

▪ Pre-approved loan disbursement based on marketplace data e.g. trivago, MakeMyTrip etc.

▪ Parameters for loan decision include online rating, # of rooms, average room rate etc.

▪ Restaurant format-based eligibility approach -QSR standalone, QSR franchise and fine dining

▪ Scorecard approach with higher scores for owned property, liquor license, home delivery

Existing dental clinics

▪ Loan eligibility in this sector is quite margin reliant

▪ Dental clinics offering high end, very specialized services have higher margins

▪ Procedure based lending approach

▪ Liquid Income program available based on specialization of the dentist

▪ Parameters for loan decision include doctor’s qualifications, clinic vintage etc.

Kirana shops measuring a minimum of 200 sq. ft

▪ Outlook and repayment behavior have a strong correlation with shop size and business vintage

▪ Volume is very dependent on speed at which they can rotate stock

▪ Business and sourcing stability are also of critical importance

▪ Loans offered based mainly on floor area and business/shop vintage

▪ Further parameters monitored include supplier stability, quantity of stock maintained, inventory turnover etc.

Leading to a Portfolio that Caters to the Needs of a Diverse Set of Liability Providers

55

Liability is an ‘Art’ – U GRO is designed to perfect this Art..

Liability led asset strategy

▪ Build a diversified, granular book catering to prime/near prime customers

▪ Start with a primarily secured book and slowly build the unsecured part

▪ 95% of the book to be Priority sector/Impact lending

▪ Minimal asset-liability mismatch

Diversified Liability Base

▪ Diverse liability mix to include – all major banks, debentures, capital market and insurance companies

▪ Access funding from new sources of funding such as multilateral agencies, impact funds, development bank etc.

▪ A mix of on and off-balance sheet assets

56

Active engagement with stakeholders

▪ Enhance ratings through close partnerships with rating agencies and by creating a diverse and secure lending book

▪ Early conversations with banks to secure debt and co-lending partnerships

| Build loan book starting from high equity/low leverage to higher leverage over a period of time | Achieve low cost of borrowing basis high credit rating over a period of time |

U GRO’s asset strategy would lead to a low cost of capital

Key tenets of our liability strategy

Our Liability Strategy | A Tri-Pronged Approach

57

U GRO PlatformKnowledge | Technology

U GRO Capital Larger Banks/NBFCs

Balance-sheet Co-origination

Insurance Firms/Mutual Funds

Assignment

| Ability to generate significant fee income | More competitive interest rates | Ability to cater to customers of all risk profiles | Increased scale | Minimize ALM mismatch |

Partnerships already signed with SBI, ICICI Bank and Bank of Baroda

Specialized programs for DFIs/multi-lateral organizations

Policy of actively securitizing the loan book to ensure that the mismatch in the greater than 5-year bucket is funded by

equity

Co-origination with larger banks to originate higher

ticket loans

Healthcare, education, female entrepreneurs, clean energy

Co-origination Partnerships with Three of the Largest Banks in India

Bank of Baroda(Loan Book: $67B)Secured Business Loans Signed October 5, 2019

State Bank of India(Loan Book: $312B)

Small Ticket SBL & UBL Signed November 8, 2019

58

ICICI Bank(Loan Book: $84B)Secured Business Loans Signed December 13, 2019

Co-origination is a value accretive strategy

Customer pays a single blended rate of 12%

The Co-lending bank receives 80% of the loan

at an ROI of 10.5%

U GRO receives 20% of the loan at an ROI

of 12%

U GRO also receives the differential

between the ROI received on the 80% of the loan and the bank rate as a fee

(i.e. 1.5% on the 80%)

Numbers provided are for illustrative purposes only

▪ U GRO achieves a high total income per loan with this model, leading to a higher ROE▪ Co-origination provides a channel for quasi-liability at an attractive cost of debt▪ U GRO’s income from 80% of the loan is classified as fee income, for which there are no

capital adequacy requirements▪ The full responsibility for origination, underwriting and collections (if required) lie with U

GRO Capital▪ Co-lending model allows U GRO to better cater to varying risk classes

Example of Co-origination Model

Sustained and Controlled Early Growth

59

60

Progression of Growth Metrics

82

300

702

1,073

FY19 Q1 FY20 Q2 FY20 Q3 FY20

Total Disbursals (₹ Cr)

80

276

575

753

FY19 Q1 FY20 Q2 FY20 Q3 FY20

AUM (₹ Cr)

49525

6,395

7,487

FY19 Q1 FY20 Q2 FY20 Q3 FY20

Number of Customers

76

131

232

311

FY19 Q1 FY20 Q2 FY20 Q3 FY20

GRO Partners

3

11

15

21

FY19 Q1 FY20 Q2 FY20 Q3 FY20

Ecosystem Partners

10

19 19

26

Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20

BFSI Partners

61

16%

18%

10%

15%

17%

10%

9%5%

Sectoral Mix*

Electrical Equipment

Education

Food Processing

Hospitality

Light Engineering

Auto Components

Chemicals

Healthcare

Portfolio Snapshot (As on Dec 31, 2019)Geographical Mix*

*Includes Traditional and Ecosystem Channels

▪ Delhi/NCR▪ Karnataka▪ Gujarat▪ Telangana▪ Maharashtra▪ Rajasthan▪ West Bengal▪ Tamil Nadu▪ Haryana▪ Uttar Pradesh▪ Punjab▪ Chhattisgarh

21%

12%

7%

8%

14%9%

8%

9%

1%

1%

5%

3%

67%

33%

Secured Mix

Secured

Unsecured

Well diversified by geography and sector | Majority secured book, with unsecured running down faster through end FY20

Presence in 100+ cities across India

Balance Sheet

▪ Remain liquid with ₹277 crores of

immediate liquidity on the balance sheet

▪ ₹66 crores obtained from the conversion

of warrants in Q3

▪ CRAR: 88.9%

▪ GNPA: 0.07%

62

Balance Sheet (₹ Lakhs) Q3 FY20 Q2 FY20

Financial Assets 106,436 91,682

Loans 74,722* 56,729

Cash and Investments 23,317 29,310

Other Financial Assets 8,398 5,643

Non-Financial Assets 4,941 4,882

Total Assets 111,377 96,564

Financial Liabilities 20,942 13,434

Trade/Other Payables 905 825

Borrowings & Debt Securities 16,690 9,359

Other Financial Liabilities 3,347 3,251

Non-Financial Liabilities 364 397

Total Equity 90,071 82,733

Equity Share Capital 7,053 5,690

Other Equity 83,018 77,043

Total Liabilities + Equity 111,377 96,564

*AUM as of Q3 is ₹753Cr, the ‘Loans’ figure adjusts for net payouts and ECL as per Ind-AS

Income Statement

63Ind-AS accounting standards have been in place since Q1 FY20

Income Statement (₹ Lakhs) Q3 FY20 Q2 FY20 QoQ Q3 FY19 YoY

Interest Income 2,389 1,517 57.5% 1,014 135.6%

Other Operating Income 501 649 -22.8% 599 -16.4%

Less: Financing Costs 523 116 350.8% 39 NA

Net Income 2,366 2,050 15.4% 1,574 50.3%

Operating Expenses 1,683 2,410 -30.1% 1,238 35.9%

Provision 104 250 -58.4% 2 NA

Profit Before Tax 579 (611) NA 334 73.3%

PBT after Exceptional Items 579 (347) NA 334 73.3%

Less: Tax (110) (22) NA (19) NA

Profit/(Loss) for the period 689 (325) NA 353 95.1%

Other Comprehensive Income (Net

of Tax)(6) 3 NA - NA

Total Comprehensive Income 683 (322) NA 353 93.4%

▪ Operating income has increased as a result of

expansion of loan book

▪ The reduction in operating expenses as

compared to Q2 FY20 is primarily due to us

having previously incurred one-time expenses

that were not present in Q3

u gro capital | an...

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