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Muthoot Finance Ltd (89UO)

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Thursday 14 November, 2019

Muthoot Finance Ltd

Non Regulatory (Q2 FY20 Results)

RNS Number : 4513T
Muthoot Finance Limited
14 November 2019
 

      Kochi, November 13, 2019:  

 

Consolidated Loan Assets Under Management increased by 13% YoY at Rs.40390crs for H1 FY20

Consolidated Profit after Tax increased by 42% YoY at Rs.1472crs for H1 FY20

Standalone Loan Assets Under Management increased by 11% YoY at Rs.35731crs for H1 FY20

Standalone Profit after tax increased by 42% YoY at Rs.1388crs for H1 FY20

 

Consolidated Results of Muthoot Finance Ltd

Muthoot Finance Ltd's Consolidated Loan Assets under management achieved a YoY increase of 13% at Rs.40390crs as against last year of Rs.35835crs for H1 FY20. Consolidated Profit after tax achieved a YOY increase of 42% of Rs.1472crs as against last year of Rs.1033crs for H1 FY20

 


H1 FY20

H1 FY19

YOY %

Q2 FY20

Q1 FY20

QoQ %

FY19

YTD %

Group Branch Network

5190

4765

9%

5190

5092

1.9%

5020

3%

Consolidated Gross Loan Assets of the Group (Rs. In crores)

40390

35835

13%

40390

40228

0.4%

38304

5%

Consolidated Profit of the Group (Rs. In crores)

1472

1033

42%

909

563

61%

2103


Contribution in the Consolidated Gross Loan Assets of the Group

Muthoot Finance

35250

32132

10%

35250

35406

-0.4%

33746

4%

Subsidiaries

5140

3703

39%

5140

4822

7%

4558

13%

Contribution in the Consolidated Profit of the Group

Muthoot Finance

1375

971

42%

853

522

63%

1946


Subsidiaries

97

62

56%

56

41

37%

157


 

 

Standalone Results of Muthoot Finance Ltd and its subsidiaries

 

Muthoot Finance Ltd (MFIN), the largest gold financing company in India in terms of loan portfolio, registered an increase in net profit of 42%, at Rs.1388crs for H1 FY20 as against Rs.975crs in the previous year.  Loan Assets stood at Rs.35731crs as at September 30, 2019 as against Rs.32319crs as at September 30, 2018, Y-o-Y growth of 11%.

 

Muthoot Homefin (India) Ltd (MHIL), the wholly owned subsidiary, increased its loan portfolio to Rs.2098crs as against previous year of Rs.1775crs, a YoY increase of 18%. During Q2 FY20, loan portfolio increased by Rs.110crs, QoQ growth of 6%. Total revenue for Q2 FY20 & H1 FY20 stood at Rs.91crs & Rs.152crs as against previous year total revenue of Rs.55crs & Rs.104crs . It achieved a profit after tax of Rs.14crs & Rs.20crs in Q2 FY20 & H1 FY20 as against previous year profit of Rs.11crs & Rs.21crs. Its Stage III Asset on Gross Loan Asset % as on September 30, 2019 stood at 1.10%.

M/s. Belstar Microfinance Private Limited (BMPL) , an RBI registered micro finance NBFC and Subsidiary Company where Muthoot Finance holds 70.01% stake, grew its loan portfolio to Rs.2107crs as against last year of Rs.1381crs, a YoY increase of 53%. During Q2 FY20, loan portfolio increased by Rs.169crs. It achieved a profit after tax of Rs.28crs & Rs.51crs in Q2 FY20 & H1 FY20 as against previous year profit after tax of Rs.16crs & Rs.29crs. Its Stage III Asset on Gross Loan Asset % as on September 30, 2019 stood at 1.02%.

Muthoot Insurance Brokers Pvt Limited (MIBPL), an IRDA registered Direct Broker in insurance products and a wholly owned subsidiary company generated a total premium collection amounting to Rs.71crs & Rs.132crs in Q2 FY20 & H1 FY20 as against Rs.67crs & Rs.116crs in the previous year. It generated a Profit after Tax of Rs.4crs & Rs.7crs in Q2 FY20 & H1 FY20 as against Rs. 4crs & Rs.6crs in the previous year.

 

The Sri Lankan subsidiary - Asia Asset Finance PLC. (AAF) where Muthoot Finance holds 72.92% stake, increased its loan portfolio to LKR 1314crs as against last year of LKR 1124crs, a YoY increase of 17%. During Q2 FY20, loan portfolio increased by LKR 24crs. Total revenue for Q2 FY20 & H1 FY20 stood at LKR 86crs & LKR 166crs as against previous year total revenue of LKR 69crs & LKR 138crs. It generated a profit after tax of LKR 3crs & LKR 5crs in Q2 FY20 & H1 FY20 as against previous year profit after tax of LKR 2crs & LKR 4crs.

Muthoot Money Ltd (MML), became a wholly owned subsidiary of Muthoot Finance Ltd in October 2018. MML is a RBI registered Non- Banking Finance Company engaged mainly in extending loans for vehicles. The operations are now centered in Hyderabad. Recently, Company has started extending loans for Commercial Vehicles and Equipments. During Q2 FY20, it has increased its loan portfolio to Rs.426crs. During Q2 FY20, loan portfolio increased by Rs.34crs. Total revenue for Q2 FY20 & H1 FY20 stood at Rs.17crs & Rs.31crs.

 

Management Quote

Commenting on the results M G George Muthoot, Chairman stated, "We are glad to announce that consolidated loan assets of the Group grew by 13% at Rs.40390crs during H1 FY20 as against last year of Rs.35835crs. Consolidated Profit increased by 42% at Rs.1472crs during H1 FY20 as against last year of Rs.1033crs."

 

Speaking on the occasion George Alexander Muthoot, Managing Director said, "During the quarter, the Company got rated by 3 International Credit Rating agencies - Fitch Ratings at "BB+/Stable", S&P Global at "BB/Stable" & Moody's Investor Service at "Ba2/Stable . In October 2019, Company raised 450 Million USD through issuance of 6.125% Senior Secured Notes making the first private sector NBFC to make a debut issue under 144A/Reg. S mode"

 

Financial Highlights (MFIN) :


H1 FY20

H1 FY19

YOY %

Q2 FY20

Q2 FY19

YoY %

Q1 FY20

QoQ %


(Rs.in Crs)

(Rs.in Crs)


(Rs.in Crs)

(Rs.in Crs)


(Rs.in Crs)


Total Income

3999

3283

22%

2141

1650

30%

1859

15%

Profit Before Tax

1864

1500

24%

1047

745

41%

817

28%

Profit After Tax

1388

975

42%

858

484

77%

530

62%

Earnings Per Share(Basic) Rs.

34.64

24.38

42%

21.41

12.09

77%

13.23

62%

Loan Assets

35731

32319

11%

35731

32319

11%

35816

-0.24%

Branches

4540

4370

4%

4540

4370

4%

4502

1%

 

Particular

H1 FY20

H1 FY19

Q2 FY20

Q2 FY19

Q1 FY20

Return on Average  Loan assets

7.87%

6.33%

9.59%

6.11%

6.05%

Return on Average Equity

27.23%

23.57%

33.74%

22.70

21.70%

Book Value Per Share (Rs.)

264.48

219.65

264.48

219.65

243.02

 

Particular

Q2 FY20

Q2 FY19

Q1 FY20

Capital Adequacy Ratio

27.11

25.92

24.72

Share Capital & Reserves (Rs. in Crs)

10599

8790

9743

 

Business Highlights (MFIN):

Particular

H1 FY20

H1 FY19

Growth (YoY)

Branch Network

4540

4370

4%

Gold Loan Outstanding (Rs. in Cr)

34,942

32037

9%

Credit Losses (Rs. in Cr)

17

5

240%

% of Credit Losses on Gross Loan Asset Under Management

0.046%

0.015%

207%

Average Gold Loan per Branch (Rs. In Cr)

7.70

7.33

5%

No. of Loan Accounts (in lakh)

81

82

-1%

Total Weight of Gold Jewellery pledged (in tonnes)

171

168

2%

Average Loan Ticket Size

43041

39294

10%

No. of employees

25091

23888

5%

 

Other Highlights:

 

1.  Public Issue of Non-Convertible Debentures

 

During October 2019, Company successfully completed 21st Public Issue of Non-Convertible Debentures raising Rs.459crs.

 

2.  Muthoot Finance obtains credit ratings from three International Credit Rating Agencies - FITCH RATINGS, S&P GLOBAL RATINGS and MOODY'S INVESTOR SERVICE

 

Muthoot Finance Ltd has been assigned Long Term rating of 'BB+' with 'Stable' Outlook by Fitch Ratings. S&P Global Ratings has assigned a Long Term rating of 'BB' with 'Stable' Outlook. Moody's Investor Service has assigned 'Ba2' Corporate Family Rating with 'Stable' Outlook.

 

According to Fitch Ratings report, 'The ratings take into account Muthoot Finance's well-established franchise in the niche segment of gold-backed financing, its low credit losses and satisfactory leverage. '

 

According to S&P Global Ratings report, 'The ratings on Muthoot Finance are driven by the company's very strong capital and earnings, with the risk-adjusted capital ratio at above 45%. Muthoot Finance also has a strong market position in loans against gold although it is relatively small in the overall financial sector in India.'

 

According to Moody's Investor Service report, 'Rating takes into account the company's (1) leading franchise and well established track record in lending against the gold jewelry segment in India, and (2) strong solvency metrics, including asset quality, capital and profitability'

3.  Muthoot Finance Ltd raises USD 450 million from International Bond Markets First Private Sector NBFC debut issue in Rule 144A / Reg S format

Muthoot Finance Ltd ("MFIN" or "Company"), the largest gold loan company in India, has successfully priced a USD 450 Million Fixed Rate Senior Secured issuance in 144A / Reg S format for a 3 year tenor at 6.125%. MFIN bond transaction marks the first international bond by a NBFC to debut in 144A / Reg S market, allowing it to tap the US investor base in addition to Asia and Europe. The proceeds will be used for permitted purposes including onward lending in accordance with RBI's ECB Guidelines and other applicable laws.

 

The Company engaged with investors during an extensive deal roadshow across Singapore, Hong Kong, London and US. Backed by strong investor feedback, the transaction was launched with an initial price guidance of 6.375% area. Following a strong order book momentum supported by high quality real money investors, the Company was able to tighten pricing by 25bps to 6.125%.

 

The final order book was in excess of USD 1.2 Billion with oversubscription of more than 2.5x. The transaction witnessed 37% participation from Asia, 28% from Europe & Middle East and 35% from US with 88% investments from asset managers, 6% from Insurance & Pension Funds and 6% from others.

 

The bonds will be listed on International Securities Market of the London Stock Exchange.

 

Earlier this month, Company had obtained issuer rating Long Term rating of 'BB+' with 'Stable' Outlook by Fitch Ratings, 'BB' with 'Stable' Outlook by S&P Global Ratings and  'Ba2' Corporate Family Rating with 'Stable' Outlook by Moody's Investor Service.

 

Deutsche Bank and Standard Chartered Bank acted as the Joint Global Coordinators and Joint Book Runners for the issue.

 

M.G.George Muthoot, Chairman, on this inaugural issue stated "The response from international bond investors to our debut international bond issue once again reiterates the robustness and long track record of our  gold loan business  and is a recognition of India's retail credit story. This fund raise will enable us in further diversifying and strengthening our sources of funding. We look forward to strengthening our partnership with global investors"

 

About Muthoot Insurance Brokers Pvt Limited:

 

MIBPL is a wholly owned subsidiary of Muthoot Finance Ltd. It is an unlisted private limited company holding a license to act as Direct Broker from IRDA since 2013.It is actively distributing both life and non-life insurance products of various insurance companies. During Q1 FY20, it has insured more than 433,000 lives with a first year premium collection of Rs.358million under Traditional, Term and Health products. The same was 445,000 lives with a first year premium collection of Rs.347 Million in Q1 FY19 respectively.

 

Key Business Parameters

Particulars

H1 FY20

H1 FY19

Q2 FY20

Q2 FY19

Q1 FY 20

FY 19

Total Premium Collection (Rs. In millions)

 

1315

1165

 

709

670

 

606

2676

No. of Policies

 

11,67,009

998,786

 

725,805

548,410

 

441,204

2,240,560

 

 

About Muthoot Homefin (India) Limited:

 

MHIL is a Housing Finance Company registered with The National Housing Bank (NHB). It is a wholly owned subsidiary of Muthoot Finance Limited. 

 

MHIL's prime goal is to contribute towards financial inclusion of LMI families by opening doors of formal housing finance to them. Its focus is on extending Affordable Housing Finance. MHIL would be concentrating primarily on retail housing loans in the initial stages. It operates on a 'Hub and Spoke' model, with the centralized processing based out of Corporate Office at Mumbai. MHIL has operations in 14 states and 2 Union territories - Maharashtra (including Mumbai), Gujarat, Rajasthan, Madhya Pradesh, Kerala, Karnataka, Telangana, Andhra Pradesh, Haryana, Chandigarh, Uttar Pradesh, Chattisgarh, Punjab, Tamil Nadu, Delhi and Pondicherry.

 

MHIL has long term debt rating of AA- (Stable) for its bank limits which indicates "High degree of safety with regard to timely servicing of financial obligations and carry very low credit risk" and short term debt rating of 'A1+' for its Commercial Paper programme which indicates "Very strong degree of safety regarding timely payment of financial obligations and carry lowest credit risk" from ICRA Ltd.

 

CRISIL Ltd assigned long term debt rating of AA (Stable) which indicates "High degree of safety with regard to timely servicing of financial obligations and carry very low credit risk."

 

Key Financial Parameters                                                             (Rs. In Millions)                                                                    

Particulars

H1 FY20

H1 FY19

Q2 FY20

Q2 FY19

Q1 FY20

FY 19

No. of branches

103

73

103

73

101

96

No. of Sales Offices

132

132

132

132

132

132

No. of Employees

407

287

407

287

401

382








Loan Portfolio

20975

17754

20975

17754

19875

19075








Capital Adequacy Ratio

45%

45%

45%

45%

45%

47%








Total Revenue

1523

1040

908

553

620

2257

Total Expense

1242

749

716

414

530

1746

Profit Before Tax

282

291

192

139

90

511

Profit After Tax

202

210

139

105

62

363

Shareholder's Funds

4143

3789

4143

3789

4004

3942

Total Outside Liabilities

17142

14065

17142

14065

16173

15530

Total Assets

21285

17854

21285

17854

20177

19472








Stage III Loan Assets

219

138

219

138

160

142

% Stage III asset on Gross Loan Asset

1.10

0.78

1.10

0.78

0.81

0.74

Stage III ECL Provision

192

26

192

26

56

22

ECL Provision

272

96

272

96

134

37

ECL Provision as a % of Gross Loan Asset

1.36

0.54

1.36

0.54

0.68

0.19

 

About Belstar Microfinance Private Limited (BMPL):

 

BMPL was incorporated on January 1988 at   Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as "NBFC-MFI" by RBI effective from 11th December 2013. Muthoot Finance holds 70.01% of equity share capital of BMPL. BMPL was acquired by the 'Hand in Hand' group in September 2008 to provide scalable microfinance services to entrepreneurs nurtured by 'Hand in Hand's' Self Help Group (SHG) program. The Company commenced its first lending operations at Haveri District of Karnataka in March 2009 to 3 SHGs, 22 members for INR 0.2million.

 

In the last ten years of its operations, BMPL primarily relied on taking over the existing groups formed by Hand in Hand India. BMPL predominantly follows the SHG model of lending. Effective January 2015, BMPL started working in JLG model of lending in Pune district, Maharashtra.

 

As of September 30, 2019, BMPL operations are spread over 11 states and 1 UT (Tamil Nadu, Karnataka, Madhya Pradesh, Maharashtra, Kerala, Odisha, Chattisgarh, Gujarat, Rajasthan, Bihar, Uttar Pradesh and Pondicherry). It has 441 branches, with 82 controlling regional offices and employing 3309 staff. Its gross loan portfolio has grown from INR 0.20 million in March 2009 to INR 21,074 million in September 2019. For H1 FY 20, its Net Profit after Tax was Rs.509million and had a net worth of Rs.4509million.

 

Key Financial Parameters





(Rs. In Millions)

 

Particulars

H1 FY20

H1 FY19

Q2 FY20

Q2 FY19

Q1 FY20

FY 19

No. of branches

498

305

498

305

441

400

No. of Employees

3837

2305

3837

2305

3309

2876








Gross Loan Portfolio

21074

13806

21074

13806

19385

18419








Capital Adequacy Ratio

24%

24%

24%

24%

23%

26%








Total Revenue

2348

1575

1270

836

1079

3681

Total Expense

1657

1189

887

628

769

2650

Profit Before Tax

693

386

383

207

310

1031

Profit After Tax

509

286

281

161

229

729








Shareholders' Funds

4509

2850

4509

2850

4243

4002

Total Outside Liabilities

17586

13409

17586

13409

15655

16437

Total Assets

22095

16259

22095

16259

19898

20439








Stage III Loan Assets

213

134

213

134

224

211

% Stage III asset on Gross Loan Asset

1.02

0.97

1.02

0.97

1.16

1.15

Stage III ECL Provision

191

110

191

110

203

188

ECL Provision

301

155

301

155

271

264

ECL Provision as a % of Gross Loan Asset

1.45

1.13

1.45

1.13

1.40

1.43

 

About Asia Asset Finance PLC, Sri Lanka:

 

Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance Ltd on December 31, 2014.  The company formerly known as Finance and Land Sales has been in operation for over 48 years, evolving to serve the growing needs of people of Sri Lanka.

 

As on September 30, 2019, total holding in AAF by Muthoot Finance stood at 90 million equity shares representing 72.92% of their total capital. AAF is a Registered Financial Company based in Sri Lanka a fully licensed, deposit-taking institution registered with the Central Bank of Sri Lanka and listed in the Colombo Stock Exchange.

 

AAF is in lending business since 1970.  At present the company is involved in Retail Finance, Hire Purchase & Business Loans and has 25 branches across Sri Lanka. It has total staff strength of 549 currently. In 2015, it entered the space of Gold Loans with assistance of Muthoot Finance.

 

Key Financial Parameters







LKR in millions

Particulars

H1 FY20

H1 FY19

Q2 FY20

Q2 FY19

Q1 FY20

FY 19

 

LKR/INR

0.387005

0.42834

0.387005

0.42834

0.38980

0.39578

 








 

No. of Branches

25

17

25

17

24

23

 

No. of Employees

549

493

549

493

559

553

 








 

Loan Portfolio

13143

11237

13143

11237

12904

12569

 








 

Capital Adequacy Ratio

21

21

21

21

21%

19%

 








 

Total Revenue

1655

1380

857

693

798

2869

 

Total Expenses

1592

1319

822

664

770

2775

 

Profit Before Tax

63

61

35

29

28

94

 

Profit After Tax

54

38

29

22

25

101

 








 

Shareholders' Funds

2158

1897

2158

1897

2129

1953

 

Total Outside Liabilities

12340

10511

12340

10511

12237

11946

 

Total Assets

14498

12408

14498

12408

14366

13899

 

 

About Muthoot Money Limited:

 

Muthoot Money Ltd (MML), became a wholly owned subsidiary of Muthoot Finance Ltd in October 2018. MML is a RBI registered Non- Banking Finance Company engaged mainly in extending loans for vehicles. The operations are now centered in Hyderabad. Recently, Company has started extending loans for Commercial Vehicles and Equipments.

 

As on September 30, 2019 it has a total loan portfolio of Rs. 4263Million.

 

 

Key Financial Parameters:                                         (Rs in millions)   

Pariculars

H1 FY 20

Q2 FY20

Q1 FY 20

FY 19

No. of branches

24

24

24

21

No. of employees

277

277

245

247






Gross Loan Portfolio

4263

4263

3927

3107






Capital Adequacy Ratio (%)

24

24

26

32






Total Revenue

311

169

142

156

Total Expense

258

126

133

149

Profit Before Tax

53

43

9

7

Profit After Tax

32

32

(0.4)

3






Stage III Loan Assets

38

38

12

-

% Stage III asset on Gross Loan Asset

0.90

0.90

0.30

-

Stage III ECL Provision

10

10

12

-

ECL Provision

52

52

48

15

ECL Provision as a % of Gross Loan Asset

1.21

1.21

1.23

0.47






Shareholders' Funds

1067

1067

1035

1035

Total Outside Liabilities

3455

3455

3116

2317

Total Assets

4522

4522

4151

3352

                                                                                                                                         

 

 


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