Transwarranty Finance Limited has informed the Exchange about Investor Presentation
TRANSWARRANTY FINANCE LIMITED ___________________________________________________________________________________________
TFL/SEC/2022-23/37
02/11/2022
The Manager, Corporate Relations Dept., BSE Ltd., P.J. Towers, Dalal Street, Fort Mumbai 400001
The Manager
Listing Department National Stock Exchange of India Ltd. Bandra Kurla Complex Bandra (East) Mumbai 400051
BSE Scrip Code: 532812
NSE Scrip Code : TFL
Dear Sirs,
Sub.:- Investor Presentation
Please find attached herewith the investor presentation for your information.
Thanking you,
Yours faithfully, For Transwarranty Finance Limited
Suhas Borgaonkar Company Secretary
CIN: L65920MH1994PLC080220 403, Regent Chambers, Nariman Point, Mumbai- 400021 • Tel: 6630 6090 / 2204 7965 Fax: 6630 0999 / 4001 0999 • e-mail : mail@transwarranty.com • website:www.transwarranty.com
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Innovative Social credit delivery in India through embedded finance for furthering financial inclusion, enhancing financial literacy and bridging the digital divide
Confidential
Transwarranty Finance Limited Investor Presentation – Nov 2022
A B O U T U S
The Story – How it began
2
Sibin Das
UBER Driver
Sibin Das, an UBER driver from Ernakulam had to renew his insurance (INR 28,000 /USD 360) for his car which is
his primary income source.
His credit score ( 550) is not a prime score for many banks to process the loan internally.
Being a cab driver, his monthly income was around INR 30,000. Taking care of household expenses and insurance
amount was not feasible.
Other NBFC require some security.
Money lenders are highly unorganized – high rate/ unethical collection
Lata Khatakdhond
House Help
Lata Khatakdhod, lives in suburbs of Mumbai.
Being a house help, she is not covered under the minimum wage act.
Employed in 4-5 house and earn around INR 3,000 – 4,000 (USD 60) per house hold.
With the onset of monsoon, she wanted INR 30,000 to fix her leaky roof of the 100 sq ft room. Being a New to Credit
customer, she does not have a credit track record
She uses a smart phone but only for call and WhatsApp
Photo for representation only: Indian Express
O P P O R T U N I T Y
3
Supply Credit Gap – Low Income household
Low income households face a huge challenge to access credit – opportunity for small ticket loans
Urbanisation , access to information an employment opportunities driving consumer demand and spending
High Income HH Have active bank accounts an regular steady income with goo credit score
Annual HH income
INR 10 lakh+
USD 14,200+
Middle Income HH New to credit customer (NTC) or first time credit score inquires, not usually own credit card.
INR 2.5-10 lakh
USD 3,500 -14,200
Low Income HH No active bank accounts, no previous credit history, mostly carries out informal cash transactions
INR < 2.5 lakh
USD < 3,500
Source: RedSeer Analysis and Estimates
34 Mn
(~12%)
154 Mn
(~50%)
117 Mn
(~38%)
Prime Credit Score Can get credit card, Shopping EMI, Instant personal loans, Deferred payment services, easily for convenience , shopping an ease of payments
Expensive Credit May not own credit card, however gets higher interest rate credit due to thin credit history to avail housing, travel , education loans etc.
Informal Credit Limited to no access to traditional credit gets informal small ticket loans for family needs.
O P P O R T U N I T Y
Small ticket – Big Potential
80% of loans disbursed by NBFC are below INR 50K
4
Upto INR 50K is the sweet credit spot
Source: Equifax
97% of the household reported a decline in household income during covid-19.
Growth in personal loan attributed to the increased need coming in from education and medical expenses.
Huge potential for smaller ticket size, customized product offering and faster turnaround.
A B O U T U S
India - A global FinTech Superpower
India has the highest FinTech adoption rate globally
5
Stagnant Market
Mature Market
Emerging Market
Internal KPMG Analysis – 2016-2020
O P P O R T U N I T Y
The Rise of Digital Economy - India
6
India has the highest FinTech adoption rate globally at 87% , lending segment potential to reach USD 1tn in the coming years
Amongst the fastest growing Fintech markets in the world with ~ 6,386 FinTech startups in India.
3rd Largest Fintech ecosystem globally
India fintech market opportunity is estimated to be USD 1tn by 2025 growing at CAGR of 31% during 2021-2025. Lending tech USD 616bn, Insuretech USD 339 bn and payments USD 208 bn
As of April 2022, India has 16 Fintech companies, which have gained ‘Unicorn Status’ with a valuation of over USD1 bn
In 2021, the country’s fintech startups raised around USD 8 Bn across 280 funding deals, a record high in both cases, average investment ticket size stood at $33 Mn
O P P O R T U N I T Y
Embedded Finance – game changer
Global embedded finance market estimated to be USD 7tn by 2030
7
Global Embedded Finance Market
India Opportunity
India’s embedded finance industry expected to reach USD 4bn in 2022.
Expected to grow around 30.4% between 2022-2029
Revenue from embedded finance sector expected to go from USD 4bn in 2022 to USD 21bn by 2029
Embedded Finance is a concept through which any non-financial organization of varying complexity and digital maturity (Individuals, Startups, Fintechs, Digital Businesses, or Large Enterprises) can offer financial services (cards, accounts, insurance, loans, investments) to its customers with the help of an Embedded Finance platform
A B O U T U S
The Story – next leg of growth
8
Shravandas
Proprietor
Shravandas runs a popular eatery, Vasant Sagar in Nariman Point.
Frequented by office goers everyday.
Order booking via a restaurant software, Major transaction in cash
He requires small credit limit to basically expand / buy raw materials
Dyanchand Yadav
Mateshwari stores
Dhyanchand runs a Kirana store in Navi Mumbai.
He stocks basis fast moving items to meet customer demand
He has aspiration to stock few high margin items/ or order in bulk and enjoy additional
discounts
Distributor approach him and punch in orders via an app and deliver at a later date
Photo for representation only:. Fictitious Name
A B O U T U S
Oroboro – The journey so far
9
Oroboro is the fintech arm of the RBI licensed NBFC – Transwarranty Finance Limited
Key Milestones
1997
Consumer Durables Financing
2008
Gold Loan
2022
Embedded Finance
2002
Personal Loans for Citibank
Business Expertise
2018
Digital Personal Loans (Oroboro)
28+
Years of Trade Pedigree
Trade Finance Syndication USD 5 bn ₹ 400 crs
IB/CF Syndication USD 100 mn ₹ 780 crs
GOLD LOANS USD 5 mn ₹ 34 crs
Offline/Online LOANS DISBURSED 1,50,000+
A B O U T U S
Company Highlights
Snapshot of Transwarranty Finance Ltd and its Subsidiary Vertex Securities Ltd
Our reputation: • Serving customers for the past 25 years. • TFL Listed on BSE & NSE and VSL on BSE • TFL has strong business association with large
corporates and over 500 SME / MSMEs
• Strong syndication track record across trade
finance, debt & equity & structured deals
10
Market Access & Channels: • Unique capabilities in debt, equity & structured transactions • Large number of MSME and retail clients • Lending focused on niche social impact and Fintech segments • Advisory business services for clients across the value chain
starting from trade finance to investment banking
• VSL has network of ~ 150 offices and ~ 20,000 registered
clients.
• Third Party Product distribution: Mutual funds, Bonds &
•
Debentures and Fixed Deposits IRDA approved Corporate Agency for life, general and medical insurance
Licenses & Regulatory: • TFL RBI licensed NBFC • VSL SEBI licensed Merchant Bank • VSL SEBI licensed Stocks, Commodity & Currency
Broker
• VSL member on BSE / NSE / NCDX / NMCE / MCX • Good track record with regulators
TFL Experience in Lending Business: • Consumer/ Personal loans • Focus on bridging the credit gap for financial
inclusion through Fintech
A B O U T U S
11
Oroboro – Performance glance for last 3 years
Digital loans paying the way for easy origination, assessment, disbursement and collection
Loans Disbursed 13,685 | ₹ 1,538 L $ 2 MN
Gender diversity
72%
*B2C
28%
Tenure 8w - 15m
Pin Codes
2,562
Loan ticket size ₹ 5,000 – ₹ 50,000 $65 – $ 650
Avg approval rate 20%
Rajasthan 65 | INR 2.98 L
Gujarat 406 | INR 42.47L
Maharashtra 3,118 | INR 404.05L
Karnataka 3,862 | INR 379.19 L
NCR 2,050 | INR157.87 L
Uttar Pradesh 33 | INR 1.41L
Madhya Pradesh 12 | 0.54L
West Bengal 58 | INR 3.41 L
Telangana 1,561 | INR145.92 L
Tamil Nadu 1,515 | INR140.50L
Kerala 1,005 | INR 259.84L
A B O U T U S
12
Market Scoping - Business Model based on value chain
Lead Generation
Online Lender
Credit Data Model
Full stack platform
Companies with heavy marketing try to reach customer through various available channels and pass leads to lenders
Zero paperwork and involves no face to face interaction, using technology to improve customer journey and achieve cost economies
New age fintech helps in generating credit score for those registered in their platform and connect to lenders
Building a digital lending marketplace – lead generation, loan application, custom scoring capabilities, risk assessment, API integration and inhouse NBFC
Oroboro USP • New age technology • • • • New age underwriting models •
Superior customer experience Seamless partner integrations Real time loan decision
Profitability business model and not cash burn. Fully regulated with RBI licensed NBFC – Transwarranty Finance Limited
•
• Own Collection team in place
Valuation
USD 3 bn
USD 1.5 bn
USD 1.5 bn
Topline
₹ 456 cr / $ 58 mn
₹ 78 cr / $ 10 mn
PAT
₹ -1,256 cr / $ -161 mn
₹ -181 cr / $ -23 mn
₹ 35 cr / $ 4.50 mn
₹ -8.9 cr / $ -1.15 mn
A B O U T U S
13
Oroboro – Tech enabled model enables to scale rapidly
Galloping towards new highs through B2C and B2B2C tie-ups
Oroboro’s – Two pronged approach to scaling.
B2C – direct souring of small ticket loans
B2B2C – becoming the embedded finance partner for emerging corporates with diverse product offering
446
2019
13,685 8,910
2022
B2C
Current Run Rate 3,000+ per month 2022 Avg Loan size ₹ 20,000 / $ 250
Avg Disbursement per month ₹ 60 mn / $.75 mn
Cumulative Per Year
10,19,986 2,73,156
2027
Expected Run Rate 21,000+ per month 2022
5,00,602 2,13,084
2025
B2B2C
A B O U T U S
Oroboro – gaining strong foothold
Associated as a preferred embedded finance partner with industry leaders
Geographical footprint
Expand to Tier 2 and Tier 3 cities
Automation to drive growth and making it easy to process.
B2C product and lending model
Build On-Balance sheet and Off Balance sheet capabilities.
Offering other products to augment the requirement of the customer
New B2B partnership & products
Improve and scale existing partnerships
Expand B2B partnership network
Structuring unique products to help B2B partner scale their business
Logistics
Transport aggregator
Electronics
Consumer durables opportunity
Retail/FMCG
Supply chain finance
14
Status:
LIVE and potential to scale
LIVE and potential to scale
LIVE and potential to scale
A B O U T U S
15
Operational Performance – FY 21-22 at a glance
On the road to growth trajectory
No of Loans Disbursed
Amount Disbursed ( Rs Lakhs)
8919
827.53
AUM ( Rs in Lakhs)
731.74
19
2020-21
2021-22
7
122.15
2020-21
2021-22
2020-21
2021-22
Cumulative Loans disbursed till 31-03-2022
281
Gold Loan
967
Consumer Loan
Personal Loan
10,151
0
2,000
4,000
6,000
8,000
10,000
12,000
Gold Loan
Consumer Loan
Personal Loan
Fee income (Rs in Lakhs) 280.59
112.62
2020-21
2021-22
C O N C L U S I O N
16
What makes us Unique Powered by fully regulated NBFC Transwarranty Finance Limited – listed on BSE and NSE
01
Reputation
Serving customers for over 28 years. Strong syndication track record across Trade Finance, Debt, Equity & Structured Finance Transactions
Both Corporate & Retail Clients. Advisory services for clients across the value chain VSL’s Network of 200 offices & 30,000+ clients.
Market Access & Distribution Channels
02
03
Lending Experience
Personal & Consumers Loans. Lending focused on niche social impact to bridge the credit gap and promote financial inclusion
All regulatory licenses required for smooth functioning of business present. Good track record with regulators. No barriers to entry with regards to regulation.
Licenses & Regulatory Compliances
04
Thank you!
GET IN TOUCH:
Transwarranty Finance Limited 403 Regent Chambers Nariman Point Mumbai – 400 021 India investors@transwarranty.com