SBFCNSE25 January 2025

Sbfc Finance Limited has informed the Exchange about Investor Presentation

SBFC Finance Limited

Date: 25th January, 2025

National Stock Exchange of India Limited, Exchange Plaza, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai – 400051. NSE Symbol: SBFC

BSE Limited, Phiroze Jeejeebhoy Towers, 21st Floor, Dalal Street, Mumbai – 400001. BSE Equity Scrip Code: 543959

Sub: Investor Presentation

Dear Sir/Madam,

In furtherance to our letter dated 22nd January, 2025 intimating about Earnings Conference Call, please find attached the investor presentation which will be referred during the earnings call scheduled to be held on Monday, 27th January, 2025 with investors in connection with the financial results of the Company for the quarter and nine months ended 31st December, 2024.

We request you to take this on record.

Thanking you,

Yours faithfully, For SBFC Finance Limited

Namrata Sajnani Company Secretary & Chief Compliance Officer

Encl: a/a

Registered Office: Unit No. 103, 1st Floor, C&B Square, Sangam Complex, Andheri Kurla Road, Village Chakala, Andheri (East) Mumbai - 400 059

T. : +91-22-67875300 • F : +91-22-67875334 • www.SBFC.com • Email: complianceofficer@sbfc.com CIN No : L67190MH2008PLC178270

SBFC Finance Limited

Investor Presentation Q3 FY 2025

Safe Harbor

This presentation and the accompanying slides (‘Presentation”), which have been prepared by SBFC Finance Limited (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.

This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.

Forward looking statements concerning the Company's future business prospects and business profitability are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, government policies and actions regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of the forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company.

Executive Summary – Q3 FY25

Asset Under Management

8,148

+30%

+6%

Gross NPA

2.70%

Disbursement1

699

YoY

QoQ

Branches

197

-2%

+4%

+20

Yield/Spread

17.81% / 8.50%

Opex to AAUM

4.62%

+32 bps

+1 bp

+63 /+66 bps

+12 / +13 bps

-86 bps

+2 bps

PAT

RoAAUM

4.49%

RoATE

12.75%

+38%

+5%

+18 bps

-7 bps

+198 bps

+8 bps

1Secured MSME All figures are in Rs. crore

197 branches 157 Cities 16 States 2 UTs

Executive Summary

Team: Experienced, cycle-tested, professional management with strong corporate governance backed by marquee investors

Focused Segment: Offering Secured MSME loan to small businesses with focus on ₹5 lakh - ₹30 lakh ticket size

Opportunity: Market size (₹5 lakh - ₹30 lakh MSME financing) of ₹3.21 lakh crore, growing at 24%2

Pan-India Footprint: Diversified pan-India network with presence in 16 states & 2 UTs

Credit Underwriting: Understanding of segment with a tested credit underwriting and risk management framework

1 As of Mar-24 (Source – CRIF Data); 2 CAGR period over FY18 to FY24 (Source – CRIF Data)

4 4

SBFC Focus Segment – Customers Borrowing ₹5 Lakh to ₹30 Lakh Large segment within MSME of ₹3.2 lakh cr and growing at CAGR 24%

Segment

Market Size1 (₹ tn)

CAGR2 (%)

% of Market

>₹1 cr

₹0.5 – 1 cr

₹0.3 – 0.5 cr

₹0.05– 0.3 cr

<₹0.05 cr

Total

4.2

1.3

1.1

3.2

0.6

10.4

13.7%

17.2%

20.7%

24.4%

27.7%

18.5%

40%

13%

10%

31%

100%

Focus Segment

Source: CRIF Data; 1 As of Mar-24; 2 CAGR period over FY18 to FY24

Our Journey

Investment by Clermont and Arpwood group

778

2018

AUM of INR 1000cr

1,156

2019

All figures in ₹ Cr

AUM

PAT

100 Branches

1,648

2020

CARE, ICRA Ratings Upgraded us to ‘AA-’ in Q2 FY25. 1,50,000 customers

8,148

Equity Listing on NSE and BSE. India ratings upgraded us to ‘AA -’ Included in MSCI Global Small Cap Index

6,822

237

251

1,00,000 customers 150 Branches 150 cr PAT Credit rating upgraded to ‘A +’

50,000 customers

2,221

3,192

4,943

150

2021

2022

2023

2024

Q3 2025

Management Experienced, cycle-tested, professional management

Aseem Dhru

Mahesh Dayani

Narayan Barasia

Pankaj Poddar

Sanket Agrawal

MD & CEO

Chief Business Officer

Chief Financial Officer

Chief Risk Officer

Chief Strategy Officer & IR

Sumeet Ghai

Ganesh Vaidya

VM Maneesh

Sai Prashant Menon

Namrata Sajnani

Chief Human Resource Officer

Chief Technology Officer

Chief Operating Officer

Chief Collection Officer

Chief Compliance Officer & CS

Surekha Marandi Ex Executive Director, RBI

Board of Directors Strong corporate governance backed by long term investors

Independent

Neeraj Swaroop Chairman of the Board Ex CEO – SCB, Singapore

Ravi Venkatraman Ex Executive Director & CFO, Mahindra & Mahindra Financial Services

John Mescall Managing Director Clermont Group

Managing Director

Aseem Dhru MD & CEO

Rajesh Agrawal Jt. Managing Director, Ajanta Pharma

Koni Uttam Nayak Ex Senior Vice President, Visa Direct Organization at Visa

Jonathan Tatur Senior Vice President Clermont Group

Shareholding

Category of Shareholders

% Share#

Promoter

Clermont Group

Other Major Shareholders

SBI Mutual Fund

Amansa Capital

Malabar Funds

Aditya Birla Sun Life

54.75%

8.55%

4.09%

2.57%

Management & Employees hold 9% of diluted share capital

# Non-diluted Status as on December 31, 2024

Shareholding Pattern

14.23%

16.46%

4.92%

54.75%

Promoters

Foreign Portfolio Investors

Mutual Funds, AIF, Insurance, Banks

Individuals, Bodies Corporate

Business Momentum Delivering Consistent AUM Growth

CAGR: 46%

4,943

18%

79%

3,192

20%

73%

Simplify graphic

YoY : 30%

QoQ : 6%

7,715

16%

8,148

16%

6,822

15%

6,266

15%

84%

83%

Mar-22

Mar-23

Mar-24

Q3 FY 24

Q2 FY 25

Q3 FY 25

Secured MSME

LAG

Others

Secured MSME

LAG

Others

All figures in ₹ Cr.

AUM

Business Momentum – Secured MSME

AUM

YoY: 29%

ATS in ₹ Lakhs

Disbursement Value

Disbursement Volume

YoY: -2%

YoY: -4%

QoQ: 7%

QoQ: 4%

6,365

6,781

713

672

699

7,605

QoQ: 3%

7,080

7,326

5,246

9.38

9.49

9.54

Q3 FY 24

Q2 FY 25

Q3 FY 25

Q3 FY 24

Q2 FY 25

Q3 FY 25

Q3 FY 24

Q2 FY 25

Q3 FY 25

AUM Secured MSME All figures in ₹ Cr

Business Momentum Co-origination – Validates our profitable origination

Co-origination Disbursement (₹ Cr)

Co-origination AUM (₹ Cr)

19%

17%

18%

21%

135

114

124

1,322

1,407

962

Q3 FY 24

Q2 FY 25

Q3 FY 25

Q3 FY 24

Q2 FY 25

Q3 FY 25

1Percentage is on Total Secured MSME Loans

Business Momentum No concentration risk & well distributed growth

Present in 16 states, 2 UTs covering 157 cities via 197 branches

Driven by steady rise in AUM per branch

1 12 3

10 6

23 6

Branch Mix

South

East

15.6%

38.0%

₹8,148 Cr AUM Mix

33.7%

12.6%

South North

East West

# Branches

123

<12 months

>12 & <36 months

>36 months

₹ Cr

197

Q3 FY 24

Q2 FY 25

Q3 FY 25

Vinatage =<12M

12M<Vintage<36M

Vintage>=36M

Technology Landscape

Lead Generation

Feet on Street

• Digital Form • • Mobile App •

Customer Reference

Cloud Services

Security Layer

Web Layer

Data/DMS & Presentation Layer

Customer Onboarding

• OKYC/EKYC • PAN Verification • ITR Verification • Legal Verification • Banking Check • Property Valuation • Bureau Check • Udyam Verification

Credit Underwriting

Pre-Disbursal

Loan Disbursal

Loan Servicing

• PD with customer • CAM Summary Assessment

• Online Valuation report

assessment

• BRE based Customer

segmentation

• E-Nach • E-Sign • Document verification on

• Digital Disbursal IMPS/RTGS/NEFT • WhatsApp based

digital platform • BRE based system

Deviations

welcome Kit delivery • Digital document storage

• Customer App • CRM Platform • Call Center • WhatsApp • Digital Collection • Collections App • Robotic Processes • BBPS enabled payments • Payment Aggregators

API Integration Layer

Compliance & Regulatory

Monitoring & Logging

Credit Underwriting Tailored to service underserved, underbanked informal customers

Most small businesses in India have challenges

Partial Income Proof

Limited Commercial Credit History

Collateral with local nuances

•

• •

SBFC's business model, backed by experience in this segment

Credit officer spends time to understand income & cash flow (documented + non-documented) at family level Evaluation of historical asset creation

SBFC customers are often first-time commercial borrowers with past consumer loans Reference check from the neighbourhood, locality and their customer and suppliers

Local team with knowledge of local nuances and local collateral dynamics Spouse or parent act as co-borrower on all loans

Bank Statements with Limited Transactions

• Analytics driven ‘customer segmentation’ •

Triangulation of income sources from multiple data points

Small scale businesses lack resilience

• •

Focus on services/ trading/ retailing businesses Customer with businesses in essential services - less impacted by macro down-cycles

Deep understanding of customer behavior (over 85K MSME customers) & strong knowledge of local markets (16 states, 2 UTs)

Credit Underwriting Quality borrowers with credit score above 700

Over 85% AUM from customers with CIBIL >7001

Granular loan book with high quality collateral1

0/-1

<650

> 650 & < 700

7.9% 2.1% 7.7%

7.5% 1.2% 6.6%

6.8% 0.9% 5.8%

94% AUM secured by self occupied residential / commercial property

41.6% LTV

> 700

82.3%

84.7%

86.4%

100% co-borrower Spouse, parent acting as one

94% women Borrowers / co-borrowers

No industry >10% Sector exposure not more than 10% of our loan portfolio

CIBIL Score

Mar'23

Mar'24

Dec'24

> 700

> 650 & < 700

<650

0/ -1

1Pertains to secured MSME Loans

Credit Indicators

Gross NPA %1

2.38%

2.69%

2.70%

Net NPA %2

1.36%

1.63%

PCR

43.5%

40.2%

Q3 FY 23-24

Q2 FY 24-25

Q3 FY 24-25

Q3 FY 23-24

Q2 FY 24-25

Q3 FY 24-25

1+ DPD %3

5.61%

6.33%

6.52%

Collections Efficiency %4

97.47%

98.04%

97.88%

Q3 FY 23-24

Q2 FY 24-25

Q3 FY 24-25

Q3 FY 23-24

Q2 FY 24-25

Q3 FY 24-25

Note: 1. 2. 3. 4.

Gross NPA% (Stage 3%) as per IND AS (including EIR adjustment). Net NPA% is as per IND AS. 1+ DPD % is for secured MSME at AUM level Collections efficiency defined for Standard Secured MSME loans as “amount of EMI received during the month, restricted to a max of 1 EMI per loan divided by EMI demand for the current month”

ECL Provisions Summary

As on December 31, 2024 Gross Loans Outstanding ECL Provision Net Loans Outstanding ECL Provision %

As on September 30, 2024 Gross Loans Outstanding ECL Provision Net Loans Outstanding ECL Provision %

As on December 31, 2023 Gross Loans Outstanding ECL Provision Net Loans Outstanding ECL Provision %

All figures in ₹ Cr

Stage 2 199 11 188 5.61%

Stage 2 212 11 201 5.18%

Stage 2 241 13 229 5.21%

Stage 1 6,701 38 6,663 0.56%

Stage 1 6,322 35 6,287 0.56%

Stage 1 5,151 32 5,119 0.62%

Stage 3 191 77 114 40.22%

Stage 3 181 73 108 40.17%

Stage 3 132 57 74 43.46%

Total 7,091 126 6,965 1.77%

Total 6,715 119 6,596 1.78%

Total 5,524 102 5,422 1.84%

Collections Approach In-house, on-ground collections teams – 98% collected digitally

Rework icons

On-ground Teams

Scalable Structure

Adaptable collection strategy as per loan stage

Branch staff from local area

Branch area- limited radius

quick attention to customer issues

In-house legal team

Backed By Tech

Analytics early warning

Delta/ Omega for focused efforts

Loan Stage

Normal

• Call center autodial

Independent collection vertical dedicated to ensure collection efficiencies

Initial stages of delinquency

• Soft collections + SMS reminders • Initiate recovery in case of

default

NPA

• Legal action if unable to recover

Tele Calling

Field Collection

Legal collection

Real-time mobile tracking

Call centre - autodial

Financial Performance Quarterly Trends in KPIs

(₹cr)

6,266

AUM

7,715

8,148

Yield

17.69%

17.81%

Spread

8.37%

8.50%

7.84%

17.18%

Q3 FY 24

Q2 FY 25

Q3 FY 25

Q3 FY 24

Q2 FY 25

Q3 FY 25

Q3 FY 24

Q2 FY 25

Q3 FY 25

Opex to AAUM

Gross NPA

Cost/Income

45.35%

39.63%

39.86%

5.48%

4.60%

4.62%

2.38%

2.69%

2.70%

RoAAUM

12.67%

4.56%

10.77%

4.31%

12.75%

RoATE

4.49%

Q3 FY 24

Q2 FY 25

Q3 FY 25

Q3 FY 24

Q2 FY 25

Q3 FY 25

Q3 FY 24

Q2 FY 25

Q3 FY 25

Financial Performance Trends in KPIs – 9M

AUM

(₹cr)

6,266

8,148

Yield

17.70%

Spread

8.38%

16.88%

7.49%

9M FY 24

9M FY 25

9M FY 24

9M FY 25

9M FY 24

9M FY 25

Opex to AAUM

Gross NPA

RoAAUM

Cost/Income

47.17%

40.10%

10.96%*

12.58%

RoATE

5.48%

2.38%

2.70%

4.54%

4.67%

3.97%

9M FY 24

9M FY 25

9M FY 24

9M FY 25

9M FY 24

9M FY 25

*The company has received an equity infusion of Rs. 600 crore in Q2 FY 24

Sources of Borrowing

Diversified Borrowing Mix

Lenders to the Company

1.0%

17.4%

32.5%

19.0%

10.1%

Public Sector Banks

18.8%

0.0%

6.4%

10.6%

13.4%

14.3%

2.6%

3.6%

5.5%

7.3%

37.5%

Private Sector Banks

NCD Financial Institutions Securitization FCNB

Private Sector Bank Public Sector Banks Foreign Bank Co-Origination

NCD Financial Institutions Securitization FCNB

Private Sector Bank Public Sector Banks Foreign Bank Co-Origination

Q3 FY24

Q3 FY25

AA– (Stable)

Financial Institutions (FIs)

Foreign Banks

NCD

ALM – December 2024

Upto 3 months

646

Upto 6 months

Upto 1 Year

Upto 3 Years

Upto 5 Years

5+ Years

All figures in ₹ Cr

1,329

1,145

2,144

1,893

3,028

4,566

4,766

4,896

6,577

8,161 8,161

Liablilities

Asset

Surplus

683

999

1,135

200

1,681

SBFC – 9M FY25 Performance

Size and Growth

Distribution

Granular Book

Asset Quality

Liability Profile

Profitability

8,148 AUM YoY +30%

6,781 Secured MSME AUM YoY +29%

197 # Branches

4,125 Employees

99% % Secured

9.43* | 0.94* Average Ticket Size: Secured MSME / LAG (Lakh)*

2.70% GNPA YoY +32 bps

1.63% NNPA YoY +27 bps

2,820 Tangible Net worth

251 PAT YoY +53%

CRAR 38.4% Capital Adequacy

4.54% Return on AAUM YoY +57 bps

1,905 Secured MSME Disbursal Value YoY -8%

16 States & 2 UTs Pan India presence

1,64,220 # live customers

0.96% Credit Cost YoY +15 bps

9.32% Cost of Borrowing YoY -7 bps

20,212 Secured MSME Disbursal Volume YoY -5%

100% in-house Sourcing

LTV 41.6% / 62.4% Secured MSME / LAG

40.22% PCR

AA- (Stable) Credit rating

Note: All values in ₹ Cr unless stated otherwise, All metrics as of / for 9M FY25 unless stated otherwise;

17.70% Yield YoY +82 bps

8.38% Spread YoY +89 bps

Summary Financial Statements – Profit & Loss Statement for Q3 FY25

Particulars

Interest Income on Loans Interest Income other than on Loans Fee & Other Income Total Income Finance Cost Operating Expenses Pre-Provisioning Operating Profit Credit Cost Tax Expense Profit after Tax Basic EPS (Not Annualized) Diluted EPS (Not Annualized)

All figures in ₹ Cr

December 2024

Quarter Ended

September 2024

December 2023

281 8 25 314 100 85 129 19 26 84 0.78 0.76

225 12 27 264 85 81 98 12 22 64 0.60 0.58

301 6 26 333 106 90 137 19 30 88 0.82 0.80

Growth (%)

Q-o-Q

Y-o-Y

7.2%

34.0%

6.0%

26.2%

5.8%

39.3%

4.9%

37.6%

Summary Financial Statements – Profit & Loss Statement for 9M FY25

Particulars

All figures in ₹ Cr

Nine Month Ended

Growth (%)

Y-o-Y

36.7%

27.6%

52.7%

53.3%

December 2024

December 2023

618 42 80 740 262 225 253 33 56 164 1.64 1.60

845 22 78 945 301 258 386 53 82 251 2.33 2.29

Annual

March 2024

866 52 102 1,020 351 306 363 47 79 237 2.35 2.29

ROE Tree

Ratios

Q3 FY25

Q2 FY25

Q3 FY24

9M FY25

9M FY24

Interest Income on Loans/ Average Loan Book

17.81%

17.69%

17.18%

17.70%

16.88%

Fee & Other Income/ Average AUM

Borrowing Cost/ Average Borrowings

Spread

1.31%

9.31%

8.50%

1.39%

9.32%

8.37%

1.83%

9.34%

7.84%

1.41%

9.32%

8.38%

Net Interest Margin/ Average AUM

10.27%

10.21%

10.26%

10.23%

Operating Expenses/ Average AUM

Credit Cost/ Average AUM

Profit after Tax/ Average AUM

Leverage (Avg AUM/ Avg Tangible Equity)

4.62%

0.97%

4.49%

2.84

4.60%

1.03%

4.56%

2.78

5.48%

0.83%

4.31%

2.50

4.67%

0.96%

4.54%

2.77

1.93%

9.39%

7.49%

9.67%

5.48%

0.81%

3.97%

2.76

RoATE

12.75%

12.67%

10.77%

12.58%

10.96%

Balance Sheet

Particulars

Assets Cash and Bank Balances Receivables Loan Assets Investments Other financial assets Current & Deferred tax assets (Net) Property, Plant and Equipment etc. Other non-financial assets Total Assets Liabilities and Equity Derivative Instrument Payables Borrowings Other financial liabilities Non-Financial Liabilities Equity & Reserves Total Liabilities and Equity

All figures in ₹ Cr

As On

December 2024

September 2024

448 14 6,965 257 4 8 307 7 8,010

2 13 4,813 93 9 3,080 8,010

259 27 6,596 281 56 6 302 6 7,533

3 13 4,413 125 12 2,967 7,533

THANK YOU!

PRIVATE & CONFIDENTIAL

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