Project Hermes

Business Teaser
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2
01
Project Hermes
Overall Business Overview
Wide Range Of Product Offerings Fulfilling Unmet Credit Demand
Diversified Income stream from Gold Loans and JLG Loans, enabling superior portfolio yields

Product Composition
Gold Loan (AUM Mix) as per H1 FY25 MFI/Group

4 States 183 Branches 5 States 95 Branches

With 183 Branches, Hermes has grown substantially over Strategic operational benefits:
last 2 years
56%
Focused on underserved villages where Enhances overall Focus on ticket size
competition is negligible with no or 1 competitor return as it is a high of ~INR 40 - 50k
35% yield avenue
Loan Tenor 3 – 12 months
Focus has been on
Interest Rates Up to 26.0% p.a. increasing penetration with
number of villages growing
Loan- to- Value 68% - 75%
~80% in 6 months

7%
2%

HL/LAP Consumer Loans

Contributes a small proportion of overall business

4 States 42 Branches 63%

13K+
Active Loans 37%
Strategic operational benefits:
Enhances risk profile as Helps in volume growth
lending is secured as ticket sizes are higher Secured
4
Unsecured
02
Project Hermes
Gold Loan Business
Overview
Gold Loan Business : One of the Fastest Growing amongst the Industry
Overview
Distribution Strength 225 Branches
❖ A gold loan extending arm with specialization in providing secure and efficient
❖ 183 Branches and 4 States/UTIs as of Jan’25
financial solutions through gold-backed lending
❖ Leveraging its expertise in the valuation and management of gold assets, the
target company offers flexible loan products tailored to meet customer needs Key Highlights
❖ Impeccable portfolio quality with zero
delinquency
Key Highlights (Sep’24) Product Overview
❖ Weighted avg interest rate is ~24.0%
❖ AUM 1,119 Cr ❖ ATS (at portfolio INR ~60k
level) ❖ Rural and semi-urban areas will remain Existing States
❖ AUM/ Branch 6.1 Cr ❖ Loan Tenor 3-12 months in focus
❖ Gold loans in rural areas are borrowed Nascent States

❖ Long Term Rating* BBB+/Stable ❖ Interest Rates Upto 26% p.a. for agriculture, PSL asset for banks

Live Loan Accounts (1,93,866) - % Break up AUM Mix by Tenure (INR Cr)* AUM Mix by State (INR Cr)
W.R.T Average Ticket Size % of Sep’24 AUM
532

4%
6% INR 9 Cr
7% INR 85 Cr 0.8%
343 7.6%
11%
244

72% INR 1021 Cr

91.6%

<50K 50K-1L 1L-1.5L 1.5L-2L >2L 1-3 months 4-7 months 8+ months Andhra Pradesh Telangana Others

*At entity level; Other States include Karnataka, Tamil Nadu and Orissa
6
Business Updates Sep’24 | Gold Loans

4 States 183 ~1.09 Lakh ~62,000+

Presence in 4 States & 38 Operating Branches Active Loans Active Borrowers
Districts

INR 6,076 Cr ~6.26 Lakh INR 1,119 Cr INR 6.11 Cr

Value of Loans Number of Loans Loan Portfolio AUM per Branch
Disbursed Disbursed

INR 2.62 Cr 23.6% 0% 1,176

AUM per Loan Officer Yield GNPA & NNPA Number of Employees
Hermes : 2x increase in Branch Productivity despite rapid scale of branch network
Average Gold Loan Per Branch (INR Cr.)

6.60 6.73
6.49
6.30 6.21
6.11

5.00

3.99 3.99
3.77

2.94 2.90

Jun-23 Aug-23 Sep-23 Dec-23 Jan-24 Mar-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24

8
03
Peer Benchmarking
Gold Loan Business
 Benchmarking Branch Growth and Economics of Hermes against Peers
3
1 Hermes’s branch growth significantly outpace peers over the last 2 year …and Branch Productivity is at par with Industry levels in a short time
2 Yr AUM/ Branch (INR cr)
CAGR 2% 0% 43% 1% 5% 18% 25% 41%
17.8
5000
4854 16.0
~90% of the branches
have a 5 Year+ vintage
4500

4044 14.0
given little addition in
4000
number of branches
12.0

3500

3000 2745 10.0

8.0
2500

2000
6.0 6.1
6.0

5.2 4.8
1500
3.9 3.6
1000 902 4.0

1000

670
1.6
500
286 183 2.0

0
0.0

Muthoot MFL IIFL Kosamattam MM Indel KLM Hermes Muthoot MFL IIFL Kosamattam MM Indel KLM Hermes

2 Nascent stage %
ofof
allBranches
branchesadded in last 2isyears
as Hermes relatively new Hermes : Massive Headroom for AUM and PAT growth 4
Branch Addition over last 2 years 16.0

Vintage wise AUM/ Branch (INR cr) No. of

Branches
50% 14.0

~INR 2.4 Cr Rs 22 Cr
Highest Branch
12.0

Growth Potential for 24% of branches

36% 10.0 AUM
28% 8.0
7.5 7.1
6.0

4.9
4.0

2.7
10% 0.7
5% 5% 2.0

0% 1% 20 11 13 47 92
-

Muthoot MFL IIFL Kosamattam MM Indel KLM Hermes

< 3 months 3-6 months 6 months- 1 Yr 1 Yr- 2 Yr >2 Yr

Hermes’s branch growth significantly outpace peers. Branch productivity is already above most peers despite operations commencing only since Apr’22
 Benchmarking ROA metrics of Hermes against Peers in FY24
1 Hermes’s NIM – One of the best in the industry Stellar Asset Quality leading to lowest Credit Costs 3

1.2
15.2% 16.0%
1.2
1.9% 2.0%

1.8%

1
13.0% 12.6%
14.0%

11.6%
1.6%

1.4%
10.7%
12.0%

0.8

9.6% 10.1% 0.8

1.4%

10.0%

1.2%

6.8%
0.6 1.0%
0.6 8.0%

6.0%
0.7% 0.8%

0.4
0.4

0.6%

4.0% 0.4%
0.3% 0.4%

0.2

2.0%
0.2

0.2% 0.2%
0.2%

0.0%
0 0.0%
0 0.0%

Muthoot MFL IIFL Kosamattam MM Indel KLM Hermes Muthoot MFL IIFL Kosamattam MM Indel KLM Hermes

2 Cost to Income Ratio at 45% despite higher branch additions Delivering stellar ROA higher than most of the peers 4
1.2 90%

81%
7.00%

6.2%
80%

5.8%
1

62% 64% 70% 6.00%

0.8

53% 53% 60%

5.00%

4.4%
45%
42%
50%

4.00%

0.6

40%

3.0%
30% 3.00%

0.4 30%

2.1% 2.2% 2.3%

20%
2.00%

1.4%
0.2

1.00%
10%

0 0%

0.00%

Muthoot MFL IIFL Kosamattam MM Indel KLM Hermes Muthoot MFL IIFL Kosamattam MM Indel KLM Hermes

Hermes’s ROA is higher than most of its peers, due to its robust NIM profile.
Profitability is expected to drive up due to operational efficiency and productivity enhancement expected going forward
* Metrics FY24 for all companies; ROA considered on Average AUM; MM refers to Muthootu Mini
04
Project Hermes
MFI Business Overview
MFI Business : One of the Fastest Growing NBFC
Overview Geographic Presence

❖ A microfinance loans arm of an established NBFC disbursing loans to groups of 6- ❖ HQ in Hyderabad;

10 people within a 30km radius of the branch
❖ 95 Branches and 5 States/UTIs
❖ Leveraging robust understanding of financial product requirements for the
customers in the microfinance space ❖ ~6,000 villages

Key Highlights (Sep’24) Key Highlights

❖ AUM 706 Cr ❖ Yield on advances* ~27% ❖ Business viability and profitability is
intact
❖ GNPA* 0.0% Existing States
❖ AUM/ Branch 7.4 Cr ❖ Impeccable portfolio quality
❖ Employees* 682 Nascent States
❖ Long Term Rating BBB/Stable ❖ Rural areas will remain in focus
❖ Active Borrowers ~1.9 lakhs

Ticket Wise Portfolio - % Break up AUM Growth since Inception (INR cr) Interest Rate wise AUM Mix (INR Cr)
W.R.T Average Ticket Size % of Sep’24 AUM % of Sep’24 AUM
706 1%
654
11%

17%

72% 99%
132

<30K 30K-50K 50K-70K FY23 FY24 H1FY25 Upto 15% 20-25% 25-30%

* H1FY25 annualized
13
Business Updates Sep’24 | MFI Business

5 States 95 ~2.35 Lakh ~1.90 Lakh

Presence in 5 States & 26 Operating Branches Active Loans Active Borrowers
Districts

INR 1,068 Cr ~2.36 Lakh 706 Cr INR 7.44 Cr

Value of Loans Number of Loans Loan Portfolio AUM per Branch
Disbursed Disbursed

INR 1.42 Cr 27.18% 0% 682

AUM per Loan Officer Yield % GNPA & NNPA Number of Employees
Stellar Portfolio Growth Demonstration

Robust AUM Growth (INR Cr)… …Driven by Conscious Efforts to Churn Disbursement according to Business Cycles

706
656
674 Balanced with superior
portfolio quality with right
applicants’ selection
264
162

FY23 FY24 H1 FY25

…and focusing on a targeted Customer Base

Superior customer pool

136,122 in the target segment,
- Selected through robust
132 underwriting standards
- Constant reassessment of its
37,618 target market/customer
29983 segment and coordinated
actions to scale
FY23 FY24 H1 FY25 FY23 FY24 H1 FY25

Growth driven by deep understanding of customer behavior in their target segment and regional dynamics
05
Peer Benchmarking
MFI Business
 Benchmarking Branch Growth and Economics of Hermes against Peers (as of Mar’24)
1 Hermes’ branch network has crossed 100 in just ~2 years …and Branch Productivity is at par with the industry despite nascent stage3
2 Yr AUM/ Branch (INR cr)
CAGR 21% 18% 18% 10% 18% 14% 26% 7% N/A

1700
1642
9.9
1500

1379
1297 8.8 9.0
1236 8.3
1300

7.3 7.5 7.3

1015 975 6.8
6.2
1100

900

700

340
500

145
300

104
100

-100

Spandana Annapurna Fusion Satin Belstar Arohan Pahal Svasti Hermes Spandana Annapurna Fusion Satin Belstar Arohan Pahal Svasti Hermes

2 Nascent stage %
ofof
allBranches
branchesadded in last 2isyears
as Hermes relatively new Hermes: Massive Headroom for AUM and PAT growth 4
16.0

Branch Addition over last 2 years Vintage wise AUM/ Branch (INR cr) No. of
88% 14.0

Branches
Rs 14 Cr
~INR 3.4 cr per branch
12.0

Highest
10.0

Growth Potential for 38% of branches Branch AUM

8.0 7.7
8.0

37%
6.0

4.6
32% 29% 28% 28% 4.0

23% 0.9 1.7

17% 2.0

13%
11 3 26 52 12
-

< 3 months 3-6 months 6 months- 1 Yr 1 Yr- 2 Yr >2 Yr

Spandana Annapurna FusionSatin CreditcareBelstar Arohan Pahal Svasti Hermes

Hermes’ branch growth significantly outpace peers. Branch productivity is at par with peers despite operations commencing only since Nov’22
 Benchmarking ROA metrics of Hermes against Peers in FY24
1 Hermes’s NIM – At par with the industry despite nascent operations Stellar Asset Quality leading to lowest Credit Costs 3

1.2 4.5%

1.2 13.3% 14.0%

3.9%
12.6% 12.5% 12.6% 12.5%
12.0%
4.0%

12.0%
1

3.4% 3.5%
1 3.5%

10.0% 10.1% 2.9% 2.9%

8.9% 10.0% 0.8 2.8% 3.0%

0.8

2.5%

8.0%

0.6

0.6

6.0% 1.6% 1.7% 2.0%

0.4
1.4% 1.5%

0.4

4.0%

1.0%

0.2
0.2

2.0%

0.5%

0 0.0% 0 0.0%

Spandana Annapurna Fusion Satin Creditcare Belstar Arohan Pahal Svasti Hermes Spandana Annapurna Fusion Satin Creditcare Belstar Arohan Pahal Svasti Hermes

2 % of Branches
Cost to Income Ratio added in
at 23% despite last 2 branch
higher years additions Delivering stellar ROA higher than all of the peers 4
1.2 70.0%

60.0% 12.00%

10.2%
60.0%

52.6%
1

49.7% 10.00%

50.0%

41.6% 43.2%
40.7%
0.8

39.8%
36.5% 40.0%
8.00%

0.6

30.0%
6.00%

4.9% 4.9% 4.7% 5.0%

22.9% 4.2%
0.4

20.0%
4.00%

3.2%
2.4% 2.2%
0.2

10.0% 2.00%

0 0.0%

0.00%

Spandana Annapurna Fusion Satin Creditcare Belstar Arohan Pahal Svasti Hermes Spandana Annapurna Fusion Satin Creditcare Belstar Arohan Pahal Svasti Hermes

Hermes’s ROA is higher than its most peers, due to its robust NIM profile, coupled with healthy asset quality resulting in low credit cost. Profitability is
expected to drive up due to operational efficiency and productivity enhancement expected going forward
* Metrics FY24 for all companies; ROA considered on Average Assets
06
HL/ LAP
Business Overview
Business Updates Sep’24 | Other Business

4 States 42 13,438 12,790

Presence in 4 States & 23 Operating Branches Active Loans Active Borrowers
Districts

INR 292 Cr ~15,136 175 Cr INR 4.18 Cr

Value of Loans Disbursed Number of Loans Disbursed Loan Portfolio AUM per Branch
Unsecured – INR 125 Cr Unsecured – 11,890 Unsecured – INR 36 Cr
LAP/HL – INR 167 Cr LAP/HL – 3,246 LAP/HL – INR 139 Cr

INR 0.73 Cr 25% 0.3% 335

AUM per Loan Officer Yield % GNPA Number of Employees
Thank you