Transcription
U GRO Capital Q4 FY21 & Full year FY21 Earnings PresentationTech focused Small Business Lending PlatformUGROCAP 511742June 30th,2021‘To Solve the Unsolved’India’s 600B SME Credit Availability Problem
Safe HarborThis presentation has been prepared by UGRO Capital Limited (the “Company”) solely for your information. By accessing this presentation, you are agreeing tobe bound by the trailing restrictions.This presentation is for information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issueany securities, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it or any part of it or the fact of itsdistribution form the basis of, or be relied upon in connection with, any contract or commitment therefor.In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India.There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinion, projection, forecast orestimate set forth herein, changes or subsequently becomes inaccurate. However, the Company may alter, modify or otherwise change in any manner thecontent of this presentation, without obligation to notify any person of such change or changesThe financial information in this presentation may have been reclassified and reformatted for the purposes of this presentation. You may also refer to thefinancial statements of the Company available at www.ugrocapital.com before making any decision on the basis of this information.Certain statements contained in this presentation that are not statements of historical fact constitute forward- looking statements. These forward- lookingstatements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results ofoperations and financial condition of the Company. Such forward-looking statements are not guarantees of future performance and involve risks anduncertainties, and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Companypresently believes to be reasonable in light of its operating experience in recent years but these assumptions may prove to be incorrect.Potential investors must make their own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and mustmake such independent investigation as they may consider necessary or appropriate for such purpose.This presentation and its contents are for general information purposes only, without regard to any specific objectives, financial situations or informationalneeds of any particular person and should not be distributed, published or reproduced, in whole or part, or disclosed by recipients directly or indirectly to anyother person.
Table of Contents01Executive Summary06Knowledge02U GRO Capital - Overview07Technology03Strong Corporate Governance08Multi-pronged Distribution04Experienced Management09Financial & Operating Metrics andPortfolio Overview05Large Institutional Capital10Strategy & Long-Term Goals
Executive Summary
Where we stand nowMetric 1,317 Cr2973%AUMActive Lenderson BookSecured* 952 Cr6,605Net WorthCustomers700 361GROPartnersEmployees 2,514 Cr 782 CrCumulativeDisbursalsTotal Debt34 (2,000 )Branches(Pin-codes)Focus in the Q4 was on operationalising 25 Micro Branches and scaling disbursement through our distribution channelsData as of 31st March 2021*Includes quasi-secured portfolio5
Executive SummaryAll Fig in CrFY218611,317 AUM stood at 1,317 Cr as on Mar’21 ( 861 Cr ason Mar’20). 53% increase on Y-o-Y basis921.5952.4 Branches934Total Gross Disbursement for FY21 was 1,147 Crand Disbursements (considering only incrementalAUM in SCF1) was 639 CrLenders729AUMNet worth NII for the year FY21 stood at 102.8 Cr in FY21compared to 65.2 Cr in FY20. 58% increase onY-o-Y basis NII was 27.5 Cr in Q4 FY21 ( 22.5 Cr in Q4 FY20). 22% on a Y-o-Y basis165361Interest Income78.9147.4Interest Expense13.744.6NII65.2102.8 Diversified lender base of 29 active lenders withaddition of 22 new lenders in FY21Operating Expense77.977.0 Credit Cost10.219.6Borrowing costs on a sequential downtrend;average cost of debt stood at 10.4% in Q4 FY21compared to 11.6% in Q4 FY203.312.1Liability Management Portfolio Yield14.3%15.5%Borrowing Cost11.6%10.4%1Supply Chain Financing GNPA stood at 2.72% and NNPA stood at 1.75% Collection efficiencies was at 93% in Branch-ledchannel, 100% in Machinery Finance and 97% forPartnership & Alliances channel in Mar’21. Selectively restructured around 6.0% of ourportfolio for fundamentally sound businesses withshort term cash flow issuesNet Interest IncomeEmployeesPBTCredit CostsAUM and DisbursementFY20 Profitability PBT stood at 12.1 Cr in FY21 compared to 3.3 Crin FY20. 266% increase on a Y-o-Y basis PAT stood at 28.7 Cr in FY21 compared to 19.5Cr in FY20. 47% increase on a Y-o-Y basis Remained profitable in all the four quarters of FY21despite COVID impactNet WorthOperating Expense Cost to Income ratio has been trendingdownwards, stood at 71% in FY21 compared to85% in FY20Net worth stood at 952 Cr in Mar-21 and CRARwas 65% Debt-to-equity ratio stood at 0.80x indicating along runway for growth as we leverage our balancesheetLeadership functions combined & optimized tobring in cost and operating synergies6
U GRO Capital - Overview
U GRO Capital Who we areA highly specialized, technology enabled small business lending platformabcStrong Corporate GovernanceExperienced Management TeamLarge Institutional CapitalBoard Controlled, Management Run250 Years of Experience 130M Of Equity RaiseddeKnowledgeTechnologyDeep domain expertiseData driven approachWe aspire to capture 1% market share of the total MSME lending market by 20258
Our Mission‘To Solve the Unsolved’India’s 600B MSME Credit Availability Problem9
Our Business ModelDistribution ChannelsLiability SourcesBranch Channel GRO-PlusTraditional Balance SheetPrime and Micro branches across Tier I to Tier VIlocations, serving a broad demographic of MSMEsLending using funds from banks; PSL nature of booksto aid in obtaining bank financingKnowledge MeetsTechnologyEcosystem Channel GRO-ChainCo-originationPartnerships with Anchors to lend to MSMEs in theirbusiness ecosystemsCo-originate loans with larger banks to maintain astrong liquidity position and generate fee incomePartnerships & Alliances GRO-XstreamPartnerships with corporate partners, fintechs andNBFCs for a range of intermediated sourcingDirect Digital Channel GRO-DirectProprietary digital lending platform supplemented bypre-qualified leadsSpecialized Programs with DFIsFintech-EnabledProduct UnderwritingImpact led financing in partnerships with DFIs insectors like healthcare, education, clean energyAssignmentSecuritization of portions of the loan portfolio so itcan be purchased by MFs/Insurance Firms/BanksU GRO’s distribution and liability strategies are both powered by proprietary technology modules10
Strong Corporate GovernanceBoard led Management run Institution
Strong Corporate Governance framework enshrined in the Articles High degree of regulatory oversight andtransparency An institution created with a long-term view,designed for continued operational efficiency Access to permanent capital Over 80% owned by Institutional Investors Any proposed loan 1% of net worth or to a relatedparty to require unanimous approval of ALCO and theBoard Board approved multi-layer credit authoritydelegation Removal of key management (including CRO, CFO) torequire 3/4th board approval Any significant action by the Company to needapproval of the Board3/4th As per our AoA & MoA, we shall appoint a StatutoryAuditor with good reputation, and preferablyhaving international affiliates. MSKA & Associates appointed as the statutoryauditor and Deloitte appointed as the internalauditor Independent directors to comprise majority forperpetuity Any shareholder holding 10% to qualify for a boardseat Key committees to be headed by an independentmember with required credentials The majority of the NRC, ALCO and AuditCommittees to comprise of independent directorsSpecial Resolution of Shareholders required for effecting any changes to the AoAPromoters/Management do not have unfettered rights to divert business strategy12
supervised by an Independent Board comprising of Industry luminaries (1/2)Shachindra Nath – Executive Chairman and MDSatyananda Mishra - Chairman, CSR Committee 26 years of experience in creating institutions across the financialservices domain 6-year stint as the Group-CEO of Religare Enterprise Qualified lawyer and a University Rank holder from BHU (India) Ex-Chairman, MCX, Ex-CIC, GoI, Ex-Director - SIDBI Over 40 years with the IAS (Batch of 1973) M.A., Utkal University, M.Sc., London School of EconomicsSpecialization:Personnel MgmtSpecialization:Credit, SMENK Maini - Chairman, Risk Management CommitteeAbhijit Sen - Chairman, Audit Committee Ex – DMD, SIDBI Over 38 years with experience with SIDBI, UCO Bank and IDBI Currently a director with MUDRA, MFIN, NSCCL, Aye Finance,member of the advisory committee at Ivy Cap and Lok Capital PGDM from MDI Ex-CFO, Citi-India Over 40 years of experience with Citi, CEAT, Tata Advisor to EY, Independent Director at Trent, Cashpor Microcredit,Kalyani Forge, India First Life Insurance PGDM from IIM Calcutta; B. Tech from IIT KharagpurSpecialization:Finance FunctionS. Karuppasamy - Chairman, Compliance CommitteeRanjana Agarwal - Chairman, NRC CommitteeSpecialization:Audit, Tax Board Member – ICRA, Ex-Senior Partner, Deloitte Over 30 years of experience with Deloitte, Vaish and Associates Currently an independent director at ICRA, Shubham Housing, IndoRam Synthetics, Joyville Shaapoorji Housing Chartered Accountant; BA from Delhi UniversityLegend: Independent Directors, Non-executive DirectorsSpecialization:RBI Regulations Ex-Executive Director, RBI Over 40 years of experience with RBI Member of the RBI services board, & director ARCIL & Vidharan(MFI) PGD in Bank Mgmt; IIBF; CAIIB (Honorary Fellow) & MA (Economics)13
supervised by an Independent Board comprising of Industry luminaries (2/2)Navin PuriSpecialization:Retail Banking Rajeev K. Agarwal - Chairman, Stakeholder CommitteeEx-Head of Branch Banking, HDFC BankOver 30 years of experience at HDFC Bank and ANZ Grindlays BankCurrently a member of the Equitas Small Finance Bank boardCA, B. Com – St. Xavier’s Calcutta; MBA - Texas Christian University Specialization:SEBI RegulationsEx-Whole Time Member, SEBIOver 30 years with experience with SEBI, FMC, IRSIndian Revenue Service (Batch of 1983)B. Tech, IIT RoorkeeChetan GuptaManoj Sehrawat Managing Director at Samena Capital Board Member of RAK Logistics, Softlogic Holding & Tejas Networks CFA, CAIA; Master’s in Mgmt (Finance) from Univ of Mumbai Partner at ADV 22 years of exp in FS across PE investments, structured finance, distress debtacquisition & resolution, corporate & financial restructurings Chartered Accountant; B.Com (Hons) – Delhi UniversityKanak KapurAmit Gupta Partner and PM at PAG 27 years of experience in financial services across investment banking,trading & distressed asset investment. MBA – NYU Stern School of Business Founding Partner of NewQuest Was the Non-Executive Director of Ujjivan Financial Services Limited B.Tech. - REC, Kurukshetra University. PGDM – IIM Bengaluru, KarnatakaLegend: Independent Directors, Non-executive Directors14
Experienced ManagementOver 250 years of combined experience
Founder & Leadership Team have execution expertise of setting-up large institutionShachindra NathExecutive Chairman & Managing DirectorExperience – 26 yearsAnuj PandeyChief Risk OfficerExperience – 22 yearsSandeep ZanvarChief Financial & Operations OfficerExperience – 20 yearsAmit GuptaChief Treasury OfficerExperience – 18 years350 employeecountFully formedteamPia ShomeChief People OfficerExperience – 15 yearsJ SathiayanChief Business OfficerExperience – 29 yearsSunil LotkeChief – Legal & ComplianceExperience – 18 years4/5RatedemployeesNirav ShahChief Strategy OfficerExperience – 16 yearsDeep and large ESOPPool which vest basis RoA andAuM Performance16
Large Institutional CapitalBacked by Marquee Institutions & reputed lenders
Inspite of several headwinds, U GRO has demonstrated a robust growth trajectoryDec’2017 – Aug’2018U GROBirthFundRaisePrivate Equity FundsRaised Rs 920 crore of Capital from multiplePE investors of global nt started in Jan’2019Public Market FundsAcquisition of Chokhani SecuritiesRevamp of the management teamDemerger of the lending business ofAsia Pragati approved – 25MDec’2019Crossed Rs 1,000 crore incumulative disbursementChhattisgarhInvestmentsInsurance Firms1,000 CrMilestrone 2,000 CrMilestoneDec’2020Crossed Rs 2,000 crore incumulative disbursementFamily OfficesGroupfamilyJaspal BindraTaparia family18
Backed by strong Equity and Debt PartnersShareholding Pattern on a Fully Diluted basis (March-21)Others20.8%Promoter2.7% Management ESOPs4.8%20.4%Liability Backed by Top Banks & Financial InstitutionsPublic Sector BanksPrivate Sector BanksMajority of U GRO’sshareholding isinstitutionally owned12.5%DFI20.4%18.3%SFBs and NBFCs and others19
KnowledgeSector based approach to specialization
Specialized MSME Lenders are better positioned to bridge the MSME Credit GapSpecialized MSME LendersTraditional NBFCsBanksProductCustomized products based on thenature of business, non-financialparameters, end use, paymentcapacity/ frequency of underlyingcustomerLoans against property, supplychain financing, unsecured loansLoans against property, supplychain financingDistributionOmnichannelEcosystem based lendingBranch/DSA ledBranch/DSA ledCredit AppraisalSector specific approach,Cash Flow BasedAutomated ReviewOne size fits allCollateral/Bureau scoreOne size fits allCollateral/Bureau scoreTurn-Around Time4-5 days15-20 days30-45 daysDocumentationCombining traditional and nontraditional sources. Use ofinformation available in public andprivate domains. Digital documentsubmissionFinancial Statements, P&LAccount, Balance Sheets, BankStatementsProject Reports. Projectedfinancials, Bank Statements.21
U GRO Lies at the intersection of Specialized NBFCs and FinTechsSector SpecializationSpecializedNBFCsProduct SpecializationGeographical SpecializationSupply Chain PlatformsDigital LendersFintechPlatformsOff-Balance Sheet LendersU GRO intends to create a specialized, scalable platform optimized for end-to-end lending22
Deep analysis of Macro and Micro Economic Factors 180 SectorsDemandsupply gap &cyclicality indemandWorkingCapitalCycleImpact ofchange intechnologyInput riskSector specificgovernmentpolicyEnvironmentalissuesMedian ratioRevenueGrowthEBITDAMarginsUpgrade &downgraderatio20 SectorsFuturebusinessprospectsSize dingImpact ofregulatorydevelopmentsReached Targeted 8 Sectors Micro EnterpriseAn 18-month process involving extensive study of macro and micro economic parameters carried out in conjunction with marketexperts like CRISIL23
to arrive at a set of Specialized Sectors 8 sectors & Micro Enterprises and theirallied 200 ecosystems Focus on Micro & Small Businesses clustersin India 50% - Contribution of the 8 sectors to theoverall MSME lending market in India Partnership with CRISIL to deep dive intosub-sectoral developments on a monthlyand quarterly basisMicro-Enterprise isa sector in itselfMicroEnterprisesKeen focus on lending to MSMEsLarge lendingopportunityLower impact ofregulatory changesRelatively lesscompetition from banksSecular consumptiondriven growthLow geographicalconcentration24
These sectors were further narrowed down based on their ecosystemsKey sub-sectors: General nursinghomes, eye clinics, dental clinics,diagnostic labs, radiology/pathologylabs, pharma retailersKey clusters: NCR, Mumbai,Bengaluru, Hyderabad and ChennaiHealthcareChemicalsEducationKey sub-sectors: B2B, B2CKey clusters: NCR, Pune, Bengaluru,Chennai, Aurangabad and RajkotKey sub-sectors: Fine dining(standalone), QSRs, fine dining chains,manpower agencies, boutique hotels,guest housesKey clusters: NAElectrical Equipmentand ComponentsHospitalityKey sub-sectors: Dairy and dairyproducts, non-alcoholic beverages,consumer foods, poultry, sea food,food and beverage tradersKey clusters: NCR, Mumbai, Chennai,Hyderabad and PuneKey sub-sectors: Kirana stores, familyrun businesses, first generationentrepreneursKey clusters: Mumbai, Kolkata, NCR,Hyderabad, Bengaluru and numerousTier II and Tier III locationsMicroenterprisesKey sub-sectors: Dyes and pigments,bulk and polymers, agrochemicalsKey clusters: Mumbai, NCR,Ahmedabad, Vadodara and SuratKey sub-sectors: K-12 schools, playschoolsKey clusters: NCR, Mumbai,Coimbatore, Chennai, Hyderabadand PuneFood Processing/FMCGKey sub-sectors: Casting and forging,medical equipment and devices,engine parts, drive transmissions etc.Key clusters: NCR, Chennai, Pune,Kolkata, Ludhiana, Bengaluru,Ahmedabad and RajkotAuto & LightEngineeringSub-sectors selected basis the contribution to the overall sector credit demand and risk profiles25
GRO Score 2.0, a superior underwriting framework, launched to make our selectionsharperWe are on track to achieve 100% digital underwriting in SME lendingEvaluation ofrepaymenthistoryBusinessassessment usingtransaction dataForecasting offuture cashflowGro Score 2.0 - first credit score combining commercial and consumerbureau with bank statement now in placeFirst in-house prototype is readySystemgenerateddigital PDFirst prototype readyGRO Score combines Credit Bureau Data & Banking Data and providessuperior performance through use of ML modelsGRO 2.0 combines credit bureau & banking data into one modelBankingCredit bureauPace of borrowingHistory of raisingcostly debtTransactionintensityBalances andutilization Combines entity individual banking into ONE modelProduct mixDefault with primelendersTurnoverCash withdrawalsand deposits Trained on own data – eliminates “look-alike” sector definition biasOverduesBusiness activityunder individualPurchasesCheque bounces &bank charges No specific bureau dependencyFrequency ofdefaultCredit card usageCounterparties &relative strengthsEcommerce Potentially 28% higher approval rates with similar or lesser riskNature of pastborrowersNBFC/ PSUrelative contributionPayment cyclesUtility payments26
“Risk Management” through ‘Expert Scorecards’ for all Sub-sectors (1/2) Post filtering out the various sub-sectors, its very important to scale the risk associated with an entity present in the sub-sector The entity is observed through various parameters and their associated weightages The parameters and their associated weightages vary widely across sectors and subsectors, and can vary within subsectors too (e.g. traders of medicalequipment as compared to manufacturers of the same) The efficacy of parameters, factors and weightages are monitored and back-tested at regular intervals. Adjustments can be informed by market changes or accrual of incremental subsector specific knowledgeParameterEntity relatedCase Study 1:Light Engineering& MedicalEquipmentManufacturersRevenue relatedCost & EfficiencyFactorWeightageVintage of the entity25%Experience of Promoter25%Category of equipment manufactured by the firm50%Share of revenues from exports25%Share of bidding versus regular orders30%Client concentration (of top 3 customers)15%Average length of relationship with top 3 customers10%Concentration of top 3 vendors/raw material suppliers10%Average length of relationship with top 3 suppliers10%Receivable days50%Certification and awards (related to quality)35%Rejection rate15%27
“Risk Management” through ‘Expert Scorecards’ for all Sub-sectors (2/2)ParameterEntity relatedService relatedCase Study 2: EducationK-12 SchoolsStaff relatedRevenue relatedCost relatedFactorWeightageVintage of the school30%School Principal’s Experience25%Association with any reputed brand/group25%Exam Board with which the school is affiliated10%Typical income profile of students’ families10%Sources of non-fee income30%Provision of transport facilities45%Availability of Smart Boards and Robotics Lab25%Average overall experience of teachers20%Teacher attrition rate20%Average student to teacher ratio35%Pass rate of students in board exams25%Number of Students25%Capacity utilization20%Number of operational shifts15%Average fees relative to other schools of the same exam board10%Proportion of students who delay fee payment10%Frequency of fee payment10%Average annual tuition fee increase10%Average annual increase in teachers’ salary40%Employee costs as a proportion of revenue60%28
Advanced Bank, GST and Bureau Analyzers to Size Up the Customer’s Cash Flows,Ability to Repay, Risk-Return Metrics and Estimate Loan Exposure 400 data parameters Validate monthly sales, expenses, gross margins Insight into borrower's business network andconcentration Digitization of sector identification State-wise break up providing information on operatingmarketsCategoryStateCounterpartyMonthGST Statement AnalysisBouncesAggregate Information related to bank statement analysisobtained from Perfios through an API integrationcustomized to U GRO requirements Ability to validate business transaction trends(sales, expenses, margins), cheque bouncepatterns, loan/EMI details, supplier & vendoridentification and concentrationBank Statement AnalysisTransactionsTradelinesBureau Record AnalysisOverviewGranular Details 100 different product variants basis bureau standarddefinitions classified into ROI/tenor buckets Product level ROI, tenor assumptions to computeobligations Product specific obligations computation encoded Process replicated for all financial applicants for footprintacross both Commercial and Consumer bureaus29
TechnologyCredit Process Enabled by Integrated Technology
Technology is essential to achieve a Specialized Model at ScaleCREDIT UNDERWRITINGDISTRIBUTION Quick and easy integration with distribution partnersPaperless login enabled by API integrations and OCRLower turn-around timeFaster product launches and process iterationsDirect to customer interface and pre-approved programsOPERATIONS Comprehensive notification/trigger mechanism for best-in-classclient servicing Banking integration for automated disbursement, deductions Better Assessment Shorter TAT PersonalizedCustomer Journeys Access and process the large trove of private and public dataCentralize underwriting knowledgeCustomized scorecardsAutomate processes to reduce errors and increase throughputAccess and analyze surrogate dataCOLLECTIONS Automated, analytics led early warning systems Cash less EMI collections Geo-tagging of customers Digital self service and support Digital process enablers such as eSign, eKYC, eStamping Processing at scaleTechnology 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 disbursements31
Technology platform to power the multi-pronged distribution channelsPlatformaGRO-PlusTechnology PlatformsBranch LedbGRO-ChainSupply ChaincGRO-XstreamPartnershipsdGRO-DirectDirect InterfaceAn uberized distribution modelcapable of onboarding DSAs,CAs and other intermediariesSupply chain financingplatform for vendor anddealer/distributor financingNew Technology Initiatives Web-portal for DSAs (Onboarding,Servicing & Training) APIs & Portal for Affiliates (LeadCollection, Management & AffiliateServicing) Revamped Gro-Micro Application API Framework for partner integration Stand-alone LMS Web Version of Onboarding app to bedevelopedAn online marketplace forlarge banks to partner withsmaller NBFCs to either cooriginate or purchase assets New Self Service portal (Upload &Manage) API Infrastructure for partnersDirect to customer (Online)channel – went live in betaphase in December 2019 Customer Direct Channel Self- Service Portal for Direct & Branchcustomers (View, Service Loans &Payments)GRO-ProtectCore LMSCore EngineSystem ofRecords32
Platforms further integrated with rich data enrichment layerGRO Partners & DirectDistributionA Plug and PlayDistributionModuleGRO AppPartnership & AlliancesPartner LOSEco SystemCustomer ERPDigital DirectCustomer DevicesMultiplecustomertouchpointsGRO LOSAll process aredigitized &underwritingpowered byML & AIData EnrichmentLayerDue Diligencepowered by APIsTechnologyPlatformsInfrastructureData Analysis &ComputingA paperless, and seamless customer onboarding & underwriting process supplemented by physical underwriting33
Distribution NetworkCreating multi-channel distribution
Multi pronged approach led by Offline presence and Tech capabilitiesaBranch Led Channel GRO-Plusb Tier 1-2 Branches – 9 Branches with loans largelysourced by DSAs Tier 3-6 Branches - Launched 25 new branchesacross 5 states. Loans to be directly sourced byFOS.cTurnover: 0.2-200 CrTicket Size: 0.005-3 Cr60% - 70% of AssetsTurnover: 2-200 CrTicket Size: 0.1-3 Cr FinTech Parnterships – Partnership with FinTechsto orginate loans. Loans quasi secured with FLDG. Supply Chain Financing – Anchor and itsecosystem financing of Supply Chain Machinery Finance – Secured Loans to machinebuyers with a charge on machines20% - 25% of Assetsd Direct Digital Channel GRO-DirectPartnerships & Alliances GRO-XStream Co-lending – Joint lending parnerships with NBFCson the downstreamEcosystem Channel GRO-ChainTurnover: 0.2-200 CrTicket Size: 0.01-5 Cr10% - 15% of AssetsTurnover: 0.2-200 CrTicket Size: 1-15 lakhs5% - 10% of Assets Digital Lending Platform – Allows MSMEs todirectly apply for credit further reducing TATs Beta Phase launched in Dec’19 – Full scale rollout to happen in 2022 Direct Assignment & Portfolio Acquisition –Upstream or downstream direct assignement toBanks & NBFCs respectivelyU GRO’s distribution model is geared towards catering MSMEs across all geographies and ticket sizesTailored products allow for highly structured deployment of capital – optimized for both the distribution channel and customer35
aBranch Led Network of 34 Branches spread across the countryTotal 34 BranchesTier 1-2 BranchesHead OfficeTier 1-2 BranchesRajasthan 9 Branches across 8 states in top metro cities Locations identified through SME cluster analysisand portfolio benchmarking Distribution led by DSAsAjmerKotputliSikarJhotwaraJagatpuraTier 3-6 BranchesDelhiJaipurGujaratTier 3-6 Micro BranchesOdhavHimatnagar AhmedabadBarodaNadiadMehsanaMumbai 25 Branches commissioned in Jan’21 – spreadacross 5 states Top locations with history of low delinquency &high loan demand identified Distribution through Feet on Street manpoweremployed on U GRO rollsKarnatakaBommasandraPeenyaMysoreRR nnaiTamil 6
aBranch Led Loan Products curated to cater to the entire pyramid of ging 10%PrathamSecured UnSecured 10-14%14-18%SanjeevaniSaathi 18%GRO Micro25-250 lacs75-300 lacs10-25 lacs1-25 lacsNA10-25 lacsNA1-5 lacs37
bEcosystem Channel – SCF Products1Anchor LedVendorFinancingDistributor /Dealer FinancingRetailerFinancingVendor 2DealerAnchorReceives faster paymentReduces cost of capital by leveraging anchor’scredit ratingLiberty to choose when to use Minimises WC investmentOff-balance sheet fundingLower financing costReap early payment discount Provides much needed WC for purchase ofinventoryLower cost of funds than other WC loansAvail cash discount from vendorNon-Anchor LedSales InvoiceDiscountingPurchase InvoiceDiscounting No corporate acceptance requiredDownloadable app for invoice level managementSeamless virtual escrow account repaymentsAutomated limit updation and settlementAdditional Product OfferingPre-shipmentPost-ShipmentAnchor led models based on bill discounting from corporates anddelivery confirmation38
bEcosystem Led Channel – Supply Chain Finance (SCF)Supply financing across the ecosystem value chain of the Anchor i.e. right from supplier of raw materials to the retailerWe have a diverse pool of anchorsApproach to supply chain financingAddition of financiallysound anchors with proventrack record of goodconduct of businessAnchorAdditionEco-systemFinancingStrive to improve ouroperational parameters& become the financer ofchoiceGetting access to theentire eco-system ofupstream &downstream valuechain partnersQuickOperations--- and many more39
bMachinery Finance Positioned to tap the opportunity across the value chainHolistic approach to Machinery Finance to tap all the aspects of the Machinery Finance value chainApproved List of Machinery that we Finance OEMsDealershipsCustomerOEMs as U GRO’sLeadsDealership DrivenSalesRepeat PurchaseApprove OEMs thathave steady streamof order book Actively developrelationship with allthe approved OEMs Onboard OEMs aspartners for leadgeneration & salesCompany ownedDealerships – SingleRM covers multipledealers & cases arepassed to U GRO forfinancing3rd Party ownedDealerships – RM’sregularly meetdealers to finance allcases Plastic/injection moldingLight EngineeringPharmaMedical Equipment Allied sector – Printing,Packaging & Gensets,Stabilizer, Scissors,compressorsProduct DetailsField Staff activelyremains connectedwith the pastcustomersHigh focus ontapping repeatpurchasesLoan Ticket Size10 lacs to 300 lacsProduct Y
Table of Contents 01 Executive Summary 06 Knowledge 02 U GRO Capital - Overview 07 Technology 03 Strong Corporate Governance 08 Multi-pronged Distribution 04 Experienced Management 09 Financial & Operating Metrics and Portfolio Overview 05 Large Institutional Capital 10 Strategy & Long-Term Goals
