CAPTRUST

Merging New-Age Fintech with Traditional Lending CAPITAL TRUST LIMITED Q1 FY2022 INVESTOR PRESENTATION August 2021 Disclaimer Certain statements in this document that are not historical facts are forward looking statements. Such forward- looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors that could cause actual results to differ materially fromthose contemplated by the relevant forward-lookingstatements. Capital Trust Limited will not be in any way be responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances. 2 TABLE OF CONTENTS COMPANY OVERVIEW 04-11 COMPETITIVE ADVANTAGES 12-17 DIGITAL JOURNEY 18-20 RURAL DOORSTEP-FINTECH 21-26 FINANCIALS 27-36 KEY PARTNERSHIPS 37-39 CAPITAL IMPACT 40-41 Capital Trust - Financing with a Tech-Touch Balance Company Snapshot • Being India’s first "Rural Doorstep-Fintech Company,” we are focused on providing financial inclusion services to underserved India by merging fintech and traditional financing. • Our digitized rural financing model offers income generating micro loans to MSMEs and caters to over 116403customers across 73 districts through 244 branches in 10 states in India. Our Vision To become the first fully digitalised and most trusted consumer service point in rural India that redefines the rules of MSME financing. Our Mission As we continue to address the growing capital needs of the underserved markets of To encourage self-sufficiency and entrepreneurship in the underserved part of India by using ‘low-cost, high-tech’ digital finance processes. India, we have reached a tipping-point in our digital transformation journey, propelling us into the next phase of growth to help us serve more customers, better. 5 Capital Trust – Numbers at a Glance PORTFOLIO NET WORTH CAPITAL ADEQUACY GROSS NPA* NET NPA BRANCHES EMPLOYEES ₹ 337 Cr ₹ 117 Cr 45.2% 3.8% 0.0% 244 1728 *Stage 3 ECL Assets 6 Capitalising on the Underserved Market Opportunity Annual Household Income > ₹17 Lakh ₹ 10-17 Lakh Banks and MSME Focused NBFCs ₹3.5-10 Lakh ₹2 -3.5 Lakh Capital Trust Limited Debt Shortfall in Micro of MSME: 87 Lakh Crore ($117Bn) ** < ₹2 Lakh Microfinance Institutions *NCAER-CMCR Annual Income Data **IFC Report on MSMEs (Nov 2018) 7 Target Audience Graduated from Microfinance 8% of the Microfinance clients graduate yearly from the Microfinance sector and hit a wall New to Organized Credit Replacing traditional informal sources of financing (local moneylenders)which currently account for MISSING 84% of all financing to MSMEs MIDDLE ‘Micro’ of the MSME Unserved by MFIs (owing to RBI guidelines) and banks / large NBFCs (owing to no formal income documentation) Clients Needing Instant Credit With 100% digital processes, company is able to disburse loans in a matter of hours from onboarding 8 Our Clientele KiranaStores Dairy and Livestock Farmers Grocery Vendors Small Eateries Textile Stores Handicraft Manufacturers Utility Stores Salons Flower Vendors 9 Increasing our Reach in Rural India 40 12 branches opened in 11 Eastern UP in Q1 FY22 4 31 65 26 10 29 8 20 10 Capital Digital Initiative: Our Products Addressing a wide spectrum of customers, across needs and affluence Product Name Capital Magic Loan Micro Business Loan Type of Loan Unsecured Digital Business Loan Unsecured Digital Business Loan Ticket Size (₹) 30,000 –40,000 60,000 Tenure 12-18 months 24 months ROI 40% 32% Repayment Digital followed by physical cash collection Digital followed by physical cash collection Why CTL? Production Optimization - Branchbanking -Human connect - Small Ticket Size -High Yield - Easeof gettingloan -Quick turnaround time - Short Tenure -Digital Collection Enabled - Unsecuredloan -Transparency with connect app - Optimal EMI amount -Full Cash Collection Setup - Multiutilitybusinessloan -Paperless Process - Short Turn-Around-Time -Geo-tagged and Analytics backed 11 Creating a Competitive Advantage to Increase Stakeholder Value 1. Unique Business Model 3. Prudent Risk Management • With a deep understanding of target • Our conservative thought process towards customer segments, lean cost structures and financial engineering has helped us differentiated business models we cater to transform underwriting and decision making, underserved segments of the economy. thereby, helping drive competitive advantage and robust risk management. • Our one-of-a-kind business model finds the perfect balance between technology and • Further, our risk management frameworks traditional financing, something not many pro-actively detect, manage and mitigate other companies can do. internal and external risks. Investing in Capital Trust 2. Technology Driven Operational Efficiency 4. Strong Governance • By leveraging technology to penetrate • Being a publicly listed NBFC for the last 35 underserved segments, we have capitalized years, we have built a robust governance on the inability of banks to rapidly scale model to maintain stakeholder trust and operations and customize rigid policies in improve resilience to survive in testing times. regard to providing business loans in rural • This has enabled us to develop strategic India. partnerships with key ecosystem players and • This transformation is helping us create an leverage technology for meeting the agile and scalable business model. demands of new consumers. 13 1. Unique Business Model Financing the Overlooked Void TICKET SIZE UNSECURED SECURED ANNUAL INCOME > ₹ 10 Lakh New Age Fintechs Large SME Funding NBFCs / Banks > ₹ 10 Lakh MSME ₹ 1Lac -10 Lakh Geographical Specialized MSME NBFCs Product Specialized MSME NBFCs ₹ 3.5 -10 Lakh ₹ 30,000 –1Lac ₹ 2 -3.5 Lakh Microfinance ₹ 20,000 –60,000 NBFC-MFIs < ₹ 2 Lakh Only player offering unsecured individual business loans in the ticket size of ₹ 30,000 -1 Lac 14 2. Technology Driven Operational Efficiency Enabling Improved Disbursements & Collections 100% 100% 100% 100% 100% 100% 100% 96% 94% 95% 96% 91% 90% 91% 91% 88% 88% 81% 79% 75% 73% 65% 54% 60% 50% 53% 57% 46% 48% 53% 54% 45% 35% Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Companywide Collection Efficiency New CDL Collection Efficiency* Digital Collection as % Age of Collection** With our newly developed automated disbursement engine and algorithmic credit scorecard, our disbursements have increased consistently. Further, our turnaround time has improved to 48 hours as on Q1 FY21. *Capital Digital Loans disbursed post April 2020 (automated credit engine backed) ** Collection% when bank clearance data is received (NACH clearance + Advance collection) 15 3. Prudent Risk Management Conservative ALM Practices and Diversified Funding Book BC, 11% DFI, 5% NBFC, 14% Public Sector PTC, 5% Term Loan, 28% Banks, 23% DIVERSIFICATION DA, 16% ACROSS… CC, 2% Private Sector Sub-Debt, 14% ICD, 4% Banks, 58% NCD, 10% OD, 10% Instruments Funders Asset Liability Position Update* Q1FY22 (Actual) Q2FY22 (Expected) Q3FY22 (Expected) Q4FY22 (Expected) Quarterly Collections (₹ Cr.) 73.3 80.3 66.6 47.7 Quarterly Repayments (₹ Cr.) 53.8 55.2 50.8 37.6 Quarterly Surplus (₹ Cr.) 19.5 25.1 15.8 10.1 Monthly Surplus (₹ Cr.) 6.5 8.4 5.3 3.4 * Assuming no incremental disbursements 16 4. Strong Governance Being a Publicly Listed Systemically Important NBFC, We Try to Create Sustainable Value for Stakeholders BOARD Accountable for overall management and performance MANAGING DIRECTOR & CEO 1. Mr. Yogen Khosla Mr. Yogen Khosla 2. Mr. Sanjv Syal 3. Mr. Govind Saboo Delegate management of day-to-day affairs Manage 4. Mr. Pawan Dubey strategy, 5. Mr. Vahin Khosla business plans 6. Ms. Suman Kukrety Reporting COMPANY SECRETARY and policies approved by Reporting/accountability ofcorporate governance, Board Stakeholder Audit & Risk Board and management matters Relationship Management EXECUTIVE TEAM Committee Committee Management Reporting Corporate Nomination and oversight Internal Auditor Social and Responsibility Remuneration External Auditor EMPLOYEES Committee Committee Governance at Capital Trust is designed to align our purpose and value creation model to seize market opportunities and to create sustainable value. In this spirit, the Board provides leadership to drive integrated thinking and formulate requisite strategies to direct the Company to its desired aspiration. 17 Pioneers of Digital Transformation in Rural India Ready to Capture Next Phase Of Growth in Evolving Rural Ecosystem More Rural Internet Users (277 Mn) than Urban (227 Mn): Indian internet is more rural and local than ever Growing 3x Faster Than Urban India: Ready to capture rural digital growth as one of the first in the industry to introduce 100% digital processes Registering 45% Growth in Internet Usage: With digital focus; best in class technology and analytics we have 100% paperless processing 18% Growth in Rural Smartphone Penetration: Poised to make most of upcoming potential with no manual processes and clients more mobile first than ever 19 Evolution of Capital Trust’s Digital Business Model 2015 2016 2017 2018 2019 2019 2020 2020 2021 NOW 2012 Decision to go 100% Issuance ofGeo-Tagged Decision to go 100% Incorporation of AI Enabled Launch of AI Enabled Cashless Disbursements Digital Receipts rather Cashless Collection as Credit Engine (automated Geo-Tagged Client (First in rural industry) than physical passbook first mode of payment decision making with credit Route Mapping for signing (First in rural industry) scoring of borrower. Done increased operational (First in rural industry) on Income, Credit History efficiency and Debt servicing capacity) Launch of client-facing Capital Connect RURAL Launch of Capital Sales smartphone app Introduction of AI Enabled DOORSTEP-FINTECH smartphone app with (First in rural industry) Physical Visit Engine COMPANY real-time information at (automated income input Start of 100% paperless processes: staff fingertips analysing client industry, sales no physical signature required (First in rural industry) and margin) from sourcing to disbursement (First in rural industry) PROACTIVE RATHER THAN REACTIVE: Capital Trust is emerging as Thought and Innovation leaders capturing the changing rural landscape 20 Meaning: Rural Doorstep-Fintech 1. LEAD GENERATION Generate lead by door to door canvasing Geotaggingofbusinessandresidentialpremise Mobile number verification through OTP Handholding of client through digital onboarding 2. HYBRID CREDIT UNDERWRITING QR Code scan of Aadhaar Card Automated credit bureau check Physical Verification of business and residence premise Business and cash flow analysis Physical Visit Engine Credit Engine 3.DIGITAL DISBURSEMENT Telephonic Verification E-Sign / Signing of Terms and Conditions E-NACH Penny-drop verification Disbursement into bank account 4. COLLECTION Automated client allocation based on client geo-tagged residence Automated outbound dialling, installment reminder message Monthly NACH payment Payment enabled through company app Cash collection if digital payment not received DIGITAL PROCESS PHYSICAL PROCESS 22 3 Pillars of Capital Trust 2. HYBRID DUAL CREDIT Automated credit (credit bureau checks and preset algorithms) supplemented with Traditional Safeguards of Branch Banking (physical verification of residence, business premise and cash flow analysis) 1. TECHNOLOGY 3. BUSINESS INTELLIGENCE Use of Technology for faster, Use of Advanced Statistical Models confidential, transparent and better ₹ and predictive analysis before enhancement of credit profile with sanctioning a loan and after for low risk and better returns performance evaluation 23 1. Technology One of the first NBFCs to start cashless disbursement of all Cashless Disbursement & loans since 2015 and cashless collection as primary mode Collection of repayment since 2019 Automated closing of company and all branch books at Automation of Daily Cash 6PM daily through collation of issued Digital Receipts Book Through Digital (SMSs sent to client on collection of any repayment) Receipts Staff and client-facing smartphone applications Staff Facing and Client with access to all details regarding the loan to Facing Applications promote transparency and authenticity All new staff onboarding through paperless, Digitalized HR digitalized processes with joining Onboarding formalities done within hours 100% paperless processes. From onboarding to disbursement all Paperless Processes processes are digitalized and through the application with no scope of any manual input into system 24 2. Hybrid Dual Credit Instant in-principal approval by automated credit decisioning system with no manual intervention at client doorstep. Final approval subject to positive physical verification of cash flow and disposable income Disbursement Telephonic No exceptions or manual Verification by HO intervention permitted Credit Team Algorithmic Credit Verification of documents Rule Engine & uploaded into system and Physical Visit Engine re-assessment of cash flow Physical Verification of client during call Automatic rejection in case by Field Credit Team of any deviation from prescribed credit policies Automated Credit Ground level authentication Bureau Check by physical verification of home, business and income. QR Code Scanning of Link-up with Equifax to All details uploaded into app Aadhaar By Field Team review past credit history. Hard rejection in case of negative credit bureau Automatic uploading of client history data into system. Location geo- tagged and case rejected if client residence is beyond 20kms from branch • Decision communication flow and all processes are automated • Technology used at all stages of loan cycle eliminating requirement of physical movement of documents • All processes time stamped and tracking of cases available on live basis 25 3. Business Intelligence CREDIT ENGINE Automated decision making with Credit Scoring of the borrower based on Income, Credit History and Debt servicing capacity. The STAFF ENGINE engine calibrates regional Integrated tool for real time differences in performance using monitoring of current staff pin-code level data availability and projected staff sufficiency at branch level by PHYSICAL VISIT ENGINE looking at past attendance this Enablement of Independent engine predicts staff shortfall in Credit Officer’s data entry with times to come backend automated decision making. System automatically DISBURSEMENT ENGINE calculates Household Income based on standardized business Developed Real-Time system of size, industry margin and automated controls on expected expenses disbursement to avoid risk build up in branches. This engine helps monitor internal and external parameters and ensures automatic stoppage of branch/staff disbursement where collection parameters fall below a prescribed level 26 Product-Wise Portfolio ₹795Cr ₹725Cr ₹555Cr ₹471 Cr ₹401 Cr ₹337 Cr 795 723 338 555 235 194 166 134 143 FY 17 FY 18 FY 19 FY 20 FY 21 Q1FY22 Capital Digital Initiative* Legacy Portfolio** *Started 2019: Further split into Capital Magic, Micro Business Loan **Stopped in 2019:Further split into Microfinance, Micro-Enterprise, Secured-Enterprise Loan 28 State-Wise Portfolio ₹795Cr ₹725Cr 13 62 7 37 ₹555Cr 272 165 ₹471 Cr 48 ₹401 Cr 99 12 106 ₹337 Cr 50 115 6 90 65 5 2 2 5 51 257 83 65 22 72 57 43 21 70 48 70 62 151 33 189 99 80 31 66 86 71 82 85 68 37 FY 17 FY 18 FY 19 FY 20 FY 21 Q1FY22 BIH PUN ODI MP RAJ UP JH UKH CH DEL 29 Portfolio Quality (₹in Crores) Stage 3 ECL 90+ 8% 18% 7.5% 7.1% 52 25 7% 16% 15.3% 22 14% 6% 37 12% 5% 35 35 17 4.8% 33 32 10% 29 14 4.3% 14 3.8% 4% 27 8.7% 7.7% 7.5% 8% 3.4% 22 7.5% 7.2% 7.5% 10 3% 6.4% 9 6% 2.4% 1.9% 2% 4.7% 4.6% 5 5 11 4% 3.4% 7 2.8% 1.1% 1% 2.1% 4 2.1% 5 2% 3 0.8% 0% 0.1% 0% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Companywide 90+ Capital Digital Initiative 90+ Stage 3 ECL Stage 3 ECL % - Own bookdataofStage 3 ECL; Own + Off book data of 90+ Companywide 90+ % Capital Digital Initiative 90+ % - Company has restructured₹33 Cr portfolio 30 Portfolio Quality – New Capital Digital Loans Robust portfolio quality of loans which have disbursed post April 2020 (automated credit engine enabled ) (₹in Crores) Total Disbursed: Portfolio Outstanding: 30+ DPD: 90+ DPD: ₹ 152.0 Cr ₹ 94.5 Cr 2.8% 0.3% 5% 105 95 4% 72 3% 2.8% 2% 22 1% 0 0.2% 0.3% 00..00%% 0% Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 New Capital Digital Loans 90+ 30+ 31 Outstanding Provisions Cumulative Provisions of ₹ 55.6 Crores which accounts for 21.9% of the On-Balance Sheet Portfolio (₹in Crores) As on Particulars Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 31.03.2021 Standard Provisions (Stage 1 & 2) 6.8 6.5 5.8 4.4 4.4 4.7 COVID & Other Provisions (Including Stage 3) 13.7 16.0 6.8 31.1 31.1 50.9 Cumulative Provision Balance 20.5 22.5 12.6 35.5 35.5 55.6 Impairment Charged to P&L 5.9 1.7 4.2 23.5 35.3 20.1 32 Key Highlights & Ratios Asset Under Management (₹in Crores) Net Worth (₹in Crores) 631 577 155 162 155 157 158 157 509 471 467 430 427 401 122 131 117 337 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Capital Adequacy Ratio (%) Leverage (in X) 3.5 46.7% 47.9% 49.8% 51.2% 46.6% 45.2% 2.5 41.6% 37.1% 2.1 1.8 2.0 1.9 25.5% 1.6 1.6 1.5 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 33 Key Highlights & Ratios Borrowings (₹in Crores) Cost of Borrowing (%) 428 386 324 14.1% 14.2% 14.2% 13.2% 13.4% 13.1% 13.1% 13.0% 13.1% 272 255 259 234 237 228 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Net Interest Margin (%) (Annualised) Operating Cost to AUM Ratio (%) (Annualised) 14.2% 12.1% 10.7% 12.1% 9.6% 11.6% 11.0% 15.9% 15.1% 16.9% 14.5% 8.2% 7.8% 10.8% 12.4% 13.0% 9.2% 7.9% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 34 Quarterly Consolidated P&L Update Q1FY22 (₹in Crores) Particulars Q1 FY22 Q1 FY21 YoY % Q4 FY21 QoQ % Total Income 22.8 28.2 -19% 28.1 -19% Total Expense (excluding tax) 41.7 25.4 64% 61.5 -32% Profit / Loss before tax -19.0 2.8 -779% -33.3 -43% Profit / Loss after tax -13.8 2.1 -757% -26.2 -47% Net Worth 116.9 156.6 -25% 130.7 -11% Micro-Business Loan 75.9 97.8 -22% 86.8 -13% Capital Magic Loan 67.5 38.3 76% 79.4 -15% Capital Digital Initiative 143.4 136.1 5% 166.2 -14% Micro-Enterprise Loan 184.9 280.5 -34% 222.0 -17% Secured Enterprise Loan 4.4 22.6 -81% 5.4 -19% Microfinance Loan 4.7 27.6 -83% 7.5 -37% Legacy Portfolio 194.0 330.7 -41% 234.9 -17% Total Assets Under Management (AUM) 337.4 466.8 -28% 401.1 -16% On-Book Portfolio 254.4 328.4 -23% 280.5 -9% Off-Book Portfolio 83.0 138.4 -40% 120.5 -31% Total Assets Under Management (AUM) 337.4 466.8 -28% 401.1 -16% 35 Quarterly Consolidated Balance Sheet Update June 21 (₹in Crores) Assets June-21 Mar-21 Mar-20 Liabilities And Equity June-21 Mar-21 Mar-20 Financial Assets Financial Liabilities Cash and Cash Equivalents 27.2 38.5 34.4 Trade Payables 0.5 0.5 0.8 Bank Balances other than cash & 41.1 40.9 29.2 Debt Securities 44.0 55.5 0 cash Equivalents Borrowings other than Debt Trade Receivables 1.3 1.7 0.6 137.3 156.6 226.4 Securities Deposits 0 0 0.3 Loan Portfolio 196.3 242.6 304.5 Subordinate Liabilities 44.8 44.8 44.7 Investments 41.5 41.0 37.9 Lease Liabilities 0.2 0.2 2.1 Other Financial Assets 5.8 5.3 13.7 Other Financial Liabilities 6.1 9.8 20.2 Total Financial Assets 313.3 370 420.2 Total Financial Liabilities 233.0 267.5 294.5 Non-Financial Liabilities Current Tax Liabilities (Net) 0.1 1.2 0 Non-Financial Assets Provisions 1.5 1.4 1.2 Current Tax Assets (Net) 3.5 2.9 2.3 Other Non-Financial Liabilities 4.9 7.5 2.2 Deferred Tax Assets (Net) 35.6 30.3 23.8 Total Non-Financial Liabilities 6.5 8.9 3.3 Property, Plant and Equipment 1.8 1.9 2.2 Right to use Asset 0.2 0.2 1.8 Equity Intangible Assets 0.1 0.2 0.1 Equity Share Capital 16.2 16.2 16.2 Other Non-Financial Assets 1.8 1.6 1.9 Other Equity 100.7 114.5 138.2 Total Non-Financial Assets 43.1 37.1 32.1 Total Shareholders Fund 116.9 130.7 154.5 Total Assets 356.4 407.1 452.3 Total Liabilities and Equity 356.4 407.1 452.3 36 Long-Term Funding Partnerships MSME Client through Business Correspondent Relationship Benefits of Long-Term Funding Secured Leveraging EnablesRaiseOf On-TapFunding IncreaseOfROE Partner’s Equity At Right Time BalanceSheet 38 Equity, Debt & Direct Assignment Partnerships Equity: 1 Public Sector Banks: 5 Private Sector Banks: 2 DFI / NBFCs: 9 39 Capital Plus Working with a Double-Bottom Linemission, company does a lot of good on ground level Encouragement of Increase in self-sufficiency financial and discipline entrepreneurship Facilitating financial Mitigation of inclusion of the financial Financial Literacy unbanked and volatility un-serviced 41 THANK YOU Vinod Raina Chief Financial Officer Vinod.raina@capitaltrust.in Vahin Khosla Executive Director Vahin.khosla@capitaltrust.in Pushpa Mani/Vikash Verma IR Consultants Email: capital.trust@dickensonworld.com Contact no.: +91 9911684123/9664009029 42