#1Investor Presentation JANUARY 2018 SREI Together We Make To Happ 1012#2Highlights Q3 FY18 SREI Together We Make Tomorrow Happen CONSOLIDATED Disbursement 5% Trailing Quarter 19% QoQ Interest Earning Asset 6% Trailing Quarter 19% QoQ Net worth 3% Trailing Quarter 7% QoQ PAT 22% Trailing Quarter 56% QoQ ROA 0.97% December 2017 0.78% December 2016 ROE* 12.54% December 2017 8.78% December 2016 INFRASTRUCTURE FINANCE BUSINESS PORTFOLIO 0.51% Trailing Quarter 0.15% YOY PAT 12% Trailing Quarter 24% YOY NET NPA 2.1% December 2017 2.1% December 2016 * Calculated on Standalone Net Worth 2#3Industry Overview SREI Together We Make Toorow Happen#4Industry Overview - India Opportunity Proposed Government Expenditure To Boost Growth SREI Together We Make Tomorrow Happen Govt. providing significant push to infra development across segments 19% Growth in Infrastructure Spending INR Billion ...With the Following Focus for Next Year FY18 (BE) Infrastructure spending growth over FY17 19% CAGR 2,922 45% 3000 2,533 2500 342 139 1,996 326 2000 105 1,740 184 1054 133 77 1500 961 132 774 34% 33% 26% 24% 22% 19% 15% 1000 673 649 524 469 500 330 462 550 320 350 0 FY15 FY16 FY17 ■Railways ■Road Transport & Highways ■Rural Development ■Urban Development ■Power Coal FY18 (BE) Water Resources Coal Power Renewable Road Ports & Railways Overall Energy Transport Shipping & Highways ■Renewable Energy ■Water Resources Mines ■Civil Aviation Ports & Shipping Source: Central Statistics Office/RBI, Annual Budget Document, Govt of India; Feedback Analysis * Source: RBI ** Source: World Bank. Absolute numbers are calculated based on growth rates provided PE - Provisional Estimates; BE indicates Budgeted Estimates 4#5... With Significant Focus On Roads SREI Together We Make Tomorrow Happen The Union Cabinet recently cleared Rs 6.92 lakh crore project to develop 83,677 km highways in 5 years which includes the Bharatmala project thus providing much needed booster dose to the Road Industry. Total Highway Projects Expected Completion by 2021-22 BharatMala Bharat Mala Pariyojana Funding: Rs 2.09 lakh crore from Market, Rs 1.06 lakh crore from Private Investments and Rs 2.19 lakh crore from CRF/ToT/Toll. Asset Monetization: Government plans to raise Rs 34,000 crore through monetization of 82 operating highways under TOT & Rs 46,048 Crore from toll collections of NHAI. NHAI has tendered out 9 NH stretches of 680.64 km with potential monetization of Rs 6,258 crore. Rural roads-PMGSY Road Construction 83,677 km Total Capex Rs 6.92 Road Construction 34,800 km Total Capex Rs 5.35 lakh crore lakh crore Spending of Rs. 88, 185 crore envisaged under the PMGSY, by central and state government, to construct 1,09,302 km of rural roads over next 3 years. In addition, roads worth Rs 11,725 crore for 5,411 km of upgradation and new roads in 44 LWE districts to be completed by 2019-20. Note: PMGSY: Pradhan Mantri Gram Sadak Yojana; CRF: Central Road Fund; TOT: Toll-Operate-Transfer; LWE: Left Wing Extremism 50#6Volume in Units Industry Overview - India Opportunity Indian CE Market - Sustained Recovery SREI Together We Make Tomorrow Happen CME Sales Good Revival in the last two Financial Years following a three Year Decline | Strong Growth Outlook due to rise in government infra spending 8 year high 14% CAGR 125,000 109,500 23% CAGR 98,000 83,600 11% CAGR 78,000 69,000 64,110 63,550 58,000 55,500 53,500 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Source: Feedback Analysis 2016-17 I 2017-18E 2018-19E 2019-20E 6#7Company Overview SRE Together We Make Toner Happen#8Company Overview SREI Infrastructure Finance Ltd, a Kanoria foundation entity, is one of India's largest holistic infrastructure institutions delivering innovative solutions in the Infrastructure space. Gross Earning Asset (INR Cr) • It has been engaged in leasing and hire purchase / hypothecation financing of construction equipment and financing of infrastructure related projects. • The company has been in this business for nearly three decades, and with a customer base of 77,000 and over USD 7 bn of consolidated AUM. It is one of the largest player in the infrastructure segment. 20,946 18,638 17,671 17,990 18,364 SREI Together We Make Tomorrow Happen 25,417 14,321 14,369 13,725 12,853 11,798 10,457 FY 13 FY 14 FY 15 FY 16 FY 17 H1 FY18 Asset Finance ■Infra Finance 8#9Board of Directors SREI Together We Make Tomorrow Happen Hemant Kanoria - Chairman & Managing Director He has over 36 years of experience in industry, trade and financial services. He is currently serving as Board Member in the Indian Institute of Information Technology, Guwahati, Neotia University and New Delhi Institute of Management. Sunil Kanoria - Vice Chairman He has more than 28 years of experience in the financial services industry. He is the immediate past President of The Associated Chambers of Commerce & Industry of India, nominated Council member of The Institute of Chartered Accountants of India and the former Governing body member of the Construction Industry Development Council (CIDC). S. Rajagopal He is the former Chairman & Managing Director of Bank of India and Indian Bank and has more than 40 years of experience in the banking industry. Dr. Punita Kumar Sinha She has focused on investment management and financial markets during her 27 year career. She spearheaded some of the first foreign investments into the Indian equity markets in the early 1990s. Currently, she is the Founder and Managing Partner, Pacific Paradigm Advisors, an independent invest- ment advisory and management firm focused on Asia Malay Mukherjee He has over 40 years' of experience in the field of Banking and NBFC including Venture Funding, Factoring and Broking. He is the former Chief Executive Officer (CEO) and Managing Director of IFCI Limited and also the former Executive Director of Central Bank of India. R. K. Agarwal Mr. Ram Krishna Agarwal has over 40 years of experience in various fields like Audit, Taxation, Company Law, Consultancy etc. He has been a Partner with S. R. Batliboi & Co. (Member firm of Ernst & Young in India) since 1978 and was the Managing Partner of the Firm at the time of his retirement in June, 2013. S. Chatterjee A seasoned professional, he has over 45 years of experience in Retail, Commercial, Investment Banking and NBFC. Associated with the State Bank of India for 26 years, he has extensive exposure in the area of International Banking at SBI, London and as the Chief Representative in Washington DC having worked closely with IFC, World Bank and IMF. 9#10Organization Structure Board of Directors CEO Asset Finance (D.K. Vyas) CMD / VC SREI Together We Make Tomorrow Happen Chief Risk Officer CEO Infra Finance (Sameer Sawhney) Head - PR & Brand Chief Internal Auditor Company Secretary Head - Digital Transformation Advisory Committee Liability & Business Products & Marketing Treasury Management Chief Operating Officer Chief Financial Officers Chief People Officer Head - Legal Corporate Planning & Investor Group Relations Asset Financing & Leasing Solution Wholesale Credit International & Fund Business 110#11Key Businesses And Strategy Recap FY13 to FY16 Economic Slowdown Weak Business Sentiment High Volatility 27 Business Environment Balance Sheet Growth Investment Book Operating Philosophy SREI Together We Make Tomorrow Happen Improvement in economic activity NOW Investment cycle started with road sector Construction Equipment Finance Industry to grow with CAGR @ 19% • • Strengthen Core Business Asset Finance Wholesale Credit Strong risk management, Focus on asset quality Leverage Digitization for Customer Experience & Operational Efficiency RoE down GNPA peaked to from 10.03% high at to 2.7% Muted Portfolio Growth سار 4.83% Business Impact Sustainable Portfolio Growth 19% in 9MFY18 over FY17 Business numbers & ratios are of consolidated *On Standalone Networth Better Asset Quality GNPA at 2.5% Improved Profitability ROE* at 12.5% 11#12Asset Finance Business SREI The We Make Towarow Hasan 564#13Asset Finance Business An Established Leader Company Profile SREI Together We Make Tomorrow Happen Diversified Product Portfolio By Gross Earning Assets² Tippers, 8.3% IT & Allied Equipment, 3.7% Farm Equipment, 2.2% Medical & Allied Equipment, • • Leading financier in the Construction, Mining and allied Equipment ("CME") sector in India offering loans and leases for new as well as used equipment Promoted and 100% owned by Srei Infrastructure Finance Limited which has over 27 years experience in CE finance Over 32.7% market share¹ and customer base of 64,000+ current customers² CME³, 74.7% Other assets, 9.9% 1.2% • Distribution network of 89 branches across 21 states, 77 additional satellite locations and an employee base of 2,005 employees² Strategic pan-India penetration through 120 SEPs 24 and 191 OEMS partnerships² Present across Tipper, IT, Farm & Medical Equipment Financing segments Presence across Lifecycle of an Equipment Equipment Exit Equipment Acquisition 4 Equipment Lifecycle Second Life Financing Equipment Deployment • Gross Earning Assets of INR 254,171 Mn² with a 2.5 year CAGR of 15% 2 Equipment 3 Maintenance Source: Feedback Analysis; Gross Earning Assets: Aggregate of Earning Assets and assets derecognized by way of securitization and assignment of receivables outstanding Disbursements: Aggregate of loans and leases (both operating & finance lease) 1. For FY17; 2. As at Sept 2017; 3. CME includes used equipment; 4. Srei Entrepreneur Partners 13#14CME | Significant Opportunity Size Unit Sales (FY17) Road 8% Concrete 10% Current Focus Potential Market with Additional Focus Market Size (FY17) MHE 7% 흐름 MP 1% Earthmoving Warehouse 10% & Mining 64% ~INR 30,200 Cr New Equipment INR 30,200 Cr 60% ~INR 48,700 - 52,200 Cr Equipment Leasing Market Equipment Spares INR 6,500-7,000 Cr 13% Used Equipment INR 12,000 15,000 Cr 27% SREI Together We Make Tomorrow Happen Bulk of MSMEs are opting to finance their equipment ✓ Still at nascent stage, 6-8% of CME Market (FY17) vs 50-60% globally Associated tax benefit opportunities Reduced 18% GST slab¹ makes equipment Leasing attractive GST will Enable to be a Key Differentiator in the Equipment Leasing Market which will Further Drive Growth in the Industry Source: Feedback Analysis; Note: MHE: Material Handling Equipment; MP: Material Processors 1. For most products covered under CME Section 14#15CME Financing Industry: Poised for Growth SREI Together We Make Tomorrow Happen Disbursements are at a 5 year high | Strong Growth Likely to be Witnessed... Disbursement (INR Mn) CAGR for 3 years: 19% 470,000 CAGR for 3 years: 11% 405,000 350,000 280,000 223,000 204,000 195,000 215,100 2012-13 Source: Feedback Analysis; 2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19E 2019-20E 1. For most products covered under CME Section ...Dominated by NBFCs... By Disbursements (FY17) NBFCs Competitive Positioning Banks, 41% NBFCs, 59% Source: Feedback Analysis 1. Turn Around Time 2. Loan to Value ...With Diverse Customer Profiles... NBFCs Customer Breakdown by Disbursements (FY17) Hirer contractor, 14% ✓ Better geographic reach ✓ Offer faster TAT1 ✓ Tailor made schemes Higher LTV2 than banks ✓ Simple documentation ✓ Flexible terms Hirer, 29% Others, 8% Institutional, 49% 15#16Equipment Financing Industry: Poised for Growth SREI Together We Make Tomorrow Happen Current Market Size FY17 Disbursement (INR Bn) 280 152 61 19 180 26 Dominated by NBFCs Market Share of NBFCs within each segment (FY17) 65% 59% 62% 93% 47% CME Tipper IT Farm Medical CME Tipper IT Farm Medical Disbursement (INR Bn) 350 405 470 Estimated Market Size 340 280 152 238 284 247 222 200 180 61 70 80 92 26 32 38 47 CME Tipper IT Farm Medical ■FY17 ■FY18E ■ FY19E FY20E Source: Feedback Analysis 1. Historical CAGR for Farm and Medical disbursements is of FY15-17 (2 yr CAGR) Disbursements CAGR 11% 19% 31% 27% CME Tipper Growth 15% 13% IT ■FY14-17 ■FY17-20E 11% 9% 21% 19% Farm Medical 16#17Key Business and Strategy Market Leadership Position SEFL Has Leading Market Share By CME Equipment Finance Disbursements (FY17): INR 280,000 Mn SREI 32.7% 1 HDFC Bank 13.9% ICICI Bank 7.1% Tata Capital 6.7% HDB Financial 4.1% IndusInd Bank 3.5% Sundaram Finance 3.3% Others1 28.7% Sept-17 ...With an Expansive Branch Network... 6 2 3 6 3 3 10 1 11 10 5 SREI Together We Make Tomorrow Happen # Branches Since FY11, CME financing industry was dominated by NBFCs and select Banks ✓ Currently, SEFL is the only end to end solution provider across the entire CME value chain ✓ Disbursements of SEFL are the highest among the top five CME finance companies 7 (3 Well positioned to access customers in the growing Indian infrastructure financing sector Source: Feedback Analysis 1Others include: Kotak, Magma, Cholamandalam, Reliance, Axis, CITI, Yes Bank, SBI, Shriram, L&T, Hinduja, IIFL, PSUs etc. 17#18Key Business and Strategy Equipment Centric Model Pushed by Long Standing OEM Tie-ups SREI Together We Make Tomorrow Happen Holistic Business Model Providing End-to-End Solutions across Equipment Lifecycle OEMs are Key to Equipment-Centric Business Model Tata Hitachi Volvo Equipment Acquisition Financing of new and pre-owned Equipment Komatsu Equipment Deployment Equipment Maintenance Deploying financed equipment to projects TEREX JCB Bharat Benz (DICVPL) Hyundai SCHWING Stetter CNH Sany Kobelco Long-standing partnerships with leading OEMS Strategic Expansion of Network Equipment maintenance assistance through spare parts financing OEMS SREI SEPS1 Second Life Financing Equipment Exit Branded refurbished equipment financing solutions 77 stockyards across the country offer exit services efficiently Deep knowledge on diverse range of equipment Offer innovative financing solutions to customers, also meet future project requirements Strategic expansion through SEPS Partnered with 191 OEMs and 120 SEPS² 1. Srei Entrepreneur Partners 18#19Key Business and Strategy Wide Distribution Network and Strong Brand Name ✓ Vintage Reflects our Understanding of Business Sept-17 Wide Range of Customers SREI Together We Make Tomorrow Happen First Time Users (FTUS) 120 SEPS¹ 2,005 Employees 89 Branches; 77 Satellite Locations SREI First Time Buyers (FTBS) Fleet Owners gether We Make me Happen 21 States 64,000+ Current Customers² Mid-size Contractors 191 Vendors & Manufacturer Partnerships Large Corporations Project Owners Srei Entrepreneur Partners (SEPs) Exclusive distribution partners, SEPs, help in sourcing customers and ensuring regular repayment Local risk insight and ground presence facilitates: • Customer acquisition Screening Broadening of market coverage 120 SEPs across the country² 1 Srei Entrepreneur Partners 2 As at Sept-17 Customer Focussed Approach Leading to Retention Current Customers 25% CAGR 60,695 64,266 52,778 42,554 32,981 23,631 FY13 FY14 FY15 FY16 FY17 H1FY18 Over 60% of total disbursements were to repeat customers in FY15, FY16 & FY17 19#20Key Business and Strategy Effective Equipment Risk Management Framework 3 5 Distinct Customer Segments Cash Management Risk Interest Rate Risk Risk Matrix Risk Assessment Geographical Nuances Historical 2 Equipment Realization 4 Legal Recourse SREI Together We Make Tomorrow Happen Receivable Management Risk Management Framework Relationship Management + Model Portfolio Risk Liquidity Risk 3 Credit Risk 2 Equipment Management 3 Enabling Improved Asset Quality Bad debts written off, provisions and contingencies/Average Earning Assets (Annualized) 2.5% 2.1% 1.7% 1.0% 2 5.0% 5.0% 4.1% 3.8% 1.8% 3.0% 3.0% 1.6% 2.5% 2.3% 2.2% 2.0% 1.8% 1.6% FY 13 FY 14 FY 15 FY 16 Credit Cost FY 17 H1 FY18 FY13 FY14 FY15 FY16 FY17 H1FY18 ■GNPA NNPA A Robust Systemic Framework Evaluating Future Cash Flows, Quantitative and Qualitative Parameters Note: GNPA: Gross NPAs/Earning Assets; NNPA: Net NPAs/Earning Assets 20 20#21Digital Transformation Facilitating Process Efficiency Drive SREI Together We Make Tomorrow Happen Risk Management Comprehensive Technology Landscape Customer System Initiatives & Process Enablers Customer Service App • Automated credit . Online customer queries and services requests appraisal and delivery process Customer service CRM being developed through: • Online portals • Manage . Real time equipment location identification through GPS/GPRS devices Business Intelligence tool to manage portfolio risk by automating: • • Data Analytics Risk Prognosis using Algorithms to: . relationships Provide insights for customer strategy Analyse customer behaviour data Implement customer-centric business processes • Mobile applications Customised risk prognosis tools Use of handheld devices for efficient collection Data Centre ISO 27001 certified in Information security management system • Vendor & Channel Initiatives Develop a vendor portal to connect all other stake holders to the vendors 21#22Infrastructure Finance Business SREI Together We Make Tomorow Happen NH M M 1015#23Key Business and Strategy Infra Finance Business - Overview • • • Established Brand Wide Spectrum of Product Offerings Business of Strategic Importance Focused Infrastructure Solutions Provider More than 25 years of business existence Longstanding relationship with players across the infrastructure value chain • Customized debt financing • solutions and structured finance solutions Strategic mezzanine solutions for key infrastructure projects Project advisory solutions Classified as "Infrastructure Finance Company" (IFC) Notified as "Public Financial Institution" (PFI) by the Ministry of Corporate Affairs" SREI Together We Make Tomorrow Happen 23#24Key Business and Strategy Infra Finance Business - Grow Revenue & Improve Yield SREI Together We Make Tomorrow Happen Strategy aimed at delivering sustainable growth aligned with market opportunity, playing to our strength & delivering some diversification with low/modest balance-sheet growth Strengthen the Core through "Restacking" Grow Flow Biz X-Sell • Create Capacity for Growth . Further strengthen capability • High Yield • Special Situation Financing options for mid sized SREI customers to improve wallet share Financing options for mid sized SREI customers to improve wallet share Optimization of Low Yield Book Create a strong Distribution capability 24 24#25Key Business and Strategy Infra Finance Business - Key Opportunity Verticals سار Flow Typical Tenor 1-5years High Yield 2 Special Situation SREI Together We Make Tomorrow Happen Products Term loan capex funding, Bridge financing and receivable structure Typical Tenor 2-7 years Products HoldCo financing, Acquisition financing and growth capital Typical Tenor 2-5 years Products Last mile financing, Priority Financing, Asset stripping, Turnaround situations 25#26Key Business and Strategy Infra Finance Business - X-Sell Opportunity SREI Together We Make Tomorrow Happen The Group is well placed to monetize relationship with the mid-sized Asset Finance customers leveraging on the enablers already in place and some investment. Eligibility filters for SREI Clients Total number of clients 77,000 Clients with middle range financing requirement based on SREI data Clients with financing opportunities where SREI can play a part ~25-30% Stringent Credit filtering ~15-20% eligible clients -45-50% Marginal Cost Advantage over other newcomers Clients Brand Footprint Operational Capability Target -5% of client base Infrastructure 26 26#27Key Business and Strategy Infra Finance Business - Strengthening end to end Capability SREI Together We Make Tomorrow Happen End to end capability re-tooling will determine our success in repositioning Wholesale Credit business in front of the market ... Risk Appetite Statement to provide clarity... • • High Yield Special Situations Structure & Stressed Asset structures Origination • Industry Focus • • Industry Focus Relationship Strength Target List Approach Risk Management Process Balance Sheet Capacity Product / Capability Development • Recoveries • Risk Appetite Statement . Distribution • • Early Alert Mechanism Analytics Speed of Execution • Optimization of low return assets Fund Raising Enablement Tools to provide platform to succeed 27 22#28Key Business and Strategy Risk Management Framework • . - Digital On Boarding Solution – Dedupe, e- KYC and Fraud verification Machine Learning (ML)/Artificial Intelligence (AI) Asset FMV model & Asset Liability curve for timely decision Asset, Portfolio & Credit Risk Robust Risk ALM Risk Manage- ment . Grid policy • Exit Routes & Ring Fencing. Risk Sharing with OEM's / Vendors Management Operational Risk Management Digitization for Operational Excellence • Strong Contract Management • Trigger based Monitoring . SREI Together We Make Tomorrow Happen Balanced mix of floating and fixed rate loans Close Monitoring of Liquidity Tolerance Level ... Developing underwriting principles, improvements in the credit process and enhancing Risk MIS are immediate priorities 28#29Key Business and Strategy Liability Management and Diversified Funding Liability Management Target alternate tools of liquidity Diversified liability mix Optimized funding cost Retail NCD, Securitization - Enabler for lower COF Note: Consortium for: Srei Equipment Finance - 30 banks, SREI Infra- 27 banks. Securitisation & Assignment, 22.2% Domestic Borrowing-- Banks, 49.5%% Bank Borrowing,_ 68.4% Funding Sources SEFL (SEP 17) SREI Together We Make Tomorrow Happen NCDs, 13.1% Domestic Borrowing - FI: 7% ECB & FC Loans, 6.1% SIFL (DEC 17) Commercial Paper, 2.0% Debentures, 19.6% ICD, 0.4% CP, 6.1% ECB, 3.8% Domestic Borrowings- FI, 1.7% 29 29#30Equity Portfolio Summary SREI Together We Make Tomorrow Happen Non-current Investment Summary in Value (Rs Crs) Particulars TOTAL INVESTMENT IN SUBSIDIARIES/ ASSOCIATES Strategic Investment* Transportation Summary of Investments Non-current Investment Summary (%) Value (Rs Crs) 858 Total investment in Subsidiaries/ Associates, 52% 542 Energy 15 Rural IT 13 Others 229 Strategic Investment, 48% TOTAL STRATEGIC INVESTMENT 799 Equity Investment - Quoted 0.3 TOTAL NON-CURRENT INVESTMENT 1,658 * Investments held directly or through funds @As on 30st Sep, 2017 SREI Together We Make Tomorrow Happen Transportation, 33% Energy, 1% Rural IT, 1% Others, 14% 30#31BOT Road Asset Portfolio Summary BRNL Behtar Raaste Badhta Bharat SREI Together We Make Tomorrow Happen Bharat Road Network Ltd., a Srei Initiative, is a road BOT company in India, focused on development, implementation, operation and maintenance of roads/highways projects • Well Diversified Portfolio BRNL has a well diversified BOT Asset Portfolio spread across 6 states such as Madhya Pradesh, Maharashtra, Uttar Pradesh, Kerala, Odisha & Haryana Current portfolio consisting of six (6) BOT Projects, of which two (2) Projects are operational under Final COD, three (3) Projects are operational under Provisional COD and one (1) Project is under Construction Strong Cash Flows • Out of 6 projects in portfolio, 5 projects are revenue generating assets • Young assets portfolio with average residual life of 18 years and 6 months in comparison with average debt maturity profile of approximately ten (10) years * % State Wise BOT Portfolio (Lane Km) * Haryana, 16% Madhya Pradesh, 9% Operational Under Construction Maharashtra, 19% Kerala, 12% Uttar Pradesh, 24% Odisha, 19% Road BOT Asset Portfolio 5 1 Total Lane Kms Lane Km - Operational Lane Km - Under Construction 2095 1,622 473^ Annualized Toll Revenue (INR Bn) 5.4** *As on 31st March 2017. ^ includes under construction stretches of approx 12 lane kms of GAEPL and 60.72 lane kms at SJEPL Project for which we are awaiting final COD. **Toll Revenue considering annualized toll revenue of SJEPL and GAEPL in FY17* As of March 31, 2017 31#32Sahaj - Largest Retail Chain in the Country SREI Focusing on Delivering Products & Services to Rural Customers Together We Make Tomorrow Happen 82 138 119 1537 35250 Extensive Rural Distribution Platform 9027 178 10526 940 343 5017 231 110 37 2372 3812 4079 13 SAHAJ • Sahaj has ~72,113 Sahaj Mitr outlets rolled out across 23 states as on Dec 17 • Covering over 400 mn people (45% of India's rural population) Strong & Robust Technology Platform Technology Financial Services ⚫Life Insurance • Non-Life Insurance • Mutual Funds . Financial Inclusion Account Opening Unique Service Offerings Cash Deposits & Withdrawals Money Remittance Consumer Services • Electricity Bills •Mobile/DTH Recharge Product Distribution E-Learning & Skill Development •K-12 Supplementary • • Competitive Exam Preparation Skill Development Programmes G2C & e-Governance G2C services - Birth, Death, Caste certificates, Land records etc FastTag Electronic toll collection and RFID tagging & recharges PAN cards Strategy Leading To Growth Assist Assist a-Sahaj Products & Services Village Cash Real time transaction, monitoring and reconciliation End Consumers Products & Services Sahaj Mitr/Sahaj Param Mitr @ Retail Outlet rship e-Sahaj to Market d-Sahaj Sahaj Leading Bharat into a 'Smarter Future' Leveraging Technology novation Physical Supervision and Capacity building through Company Manpower e-Sahaj • Minimal Partially Assist ° Supervision • Role of Param Mitr Capacity building CRM support Self d-Sahaj . Direct to Customer CRM support • Mobile & web . Outreach 32#33Strategy Driver Plan to Deliver Higher ROE 1 Enhanced NII + 2 Lower Cost of Risk + 3 SREI Together We Make Tomorrow Happen Optimized Cost Higher ROE Optimize Business Mix Proactive Risk Management Stressed Portfolio Recoveries Improved Cross Sell Organization-wide Clarity on Risk Appetite Digital Tools High Asset Finance Growth Reduced Cost of Fund Stressed Portfolio Operating Leverage Recoveries 33 33#34Key Investment Highlights • Increased outlay for Infrastructure & • . affordable housing to boost demand for CME CME Finance expected to grow at a CAGR of 19% up to FY20 - Srei being the market leader is best positioned to ride this growth Strong Growth Outlook • • • Leverage experience of being into infra sector for the last 28 years Improved credit underwriting through better insight & data analytics through digitization Strategy beyond Asset writing - Down selling of portfolio to increase income through velocity Improving Underwriting Maximize return to Shareholders SREI Together We Make Tomorrow Happen Diversifying within Core Business • Expanding Segment CME - Material Handling Equipment, Tipper, Used Equipment and Spare Parts Expanding the Asset finance portfolio beyond the traditional CME segment i.e, Healthcare, IT, Rural Provide Asset life cycle solution Moving towards complete digitized platform to enhance customer experience Cost Improvement GROWTH DRIVERS Maximize return through • Focus on PSL portfolio – Increase Securitization - • Optimise borrowings and explore alternate avenues of funding to reduce cost. Operating Leverage - Larger scale will optimize cost 34 =4#35Financial Highlights July June May China America France O Japan Germany Amonch 29% Product 1 Product 2 Product 3 Product 4 SREI Together We Make Tomorrow Happen 100 O Arustica 75#36Financial Highlights SREI Equipment Finance Ltd - Growth Indicators 2,655 Net Profit (INR Mn), RoE¹ (%) and RoA¹ (%) 17.0% 2,335 Gross Earning Assets (INR Mn) SREI Together We Make Tomorrow Happen 254,171 209,459 186,381 176,705 179,901 183,643 12.2% 1,540 1,488 1,204 1,095 8.7% 7.3% 6.2% 5.3% 1.9% 1.5% 1.0% 0.8% 0.9% 1.2% FY13 FY14 FY15 FY16 FY17 H1FY18 FY13 FY14 FY15 FY16 FY17 H1FY18 Net Profit RoE RoA Margin Analysis² (%) Expense Ratios (%) 5.4% 5.4% 5.5% 5.6% 5.3% 4.9% 41.1% 35.0% 35.6% 33.8% 4.6% 29.1% 4.0% 4.0% 4.1% 26.2% 3.9% 3.0% 2.0% 2.0% 1.9% 1.8% 1.6% 1.4% FY13 FY14 FY15 FY16 FY17 H1FY18 FY13 FY14 FY15 FY16 FY17 H1FY18 -Spread NIM Cost to Income -Opex. 1 Annualized for 9MFY18 36#37Financial Highlights Balance Sheet - Consolidated SREI Together We Make Tomorrow Happen Balance Sheet Summary (Rs Crs) 9M FY18 9M FY17 H1 FY18 FY 17 Net Worth 4,775 4,473 4,659 4,531 Borrowings 31,632 26,359 30,169 26,204 Interest Earning Assets Investments Key Ratios 35,260 29,715 33,218 29,634 894 1,288 1,185 1,282 Dec-17 Dec-16 Sep-17 Mar-17 Return on Equity* 12.5% 8.8% 11.5% 8.8% Return on Asset 1.0% 0.8% 0.9% 0.8% Leverage 6.6 5.9 6.5 5.8 EPS (Rs) (Annualized) 7.1 4.8 6.5 4.8 Book Value (Rs) 94.9 88.9 92.6 90.1 * On Standalone Net worth 37 66#38Financial Highlights Income Statement - Consolidated SREI Together We Make Tomorrow Happen Income Statement (Rs Crs) 9M FY18 9M FY17 Q3 FY18 Q3 FY17 Q2 FY18 FY17 Income from Finance Activities 3,208 2,606 1,151 962 1,053 3,528 Income from equip. financing 1,981 1,368 727 540 649 1,909 Income from project financing 1,227 1,238 424 422 404 1,620 Finance charges 2,163 1,925 761 710 715 2,628 NII 1,042 681 393 253 336 896 Non Interest Income Income from Fee Based Activities 37 20 20 13 7 10 33 Income from Equipment Rental 163 125 69 55 48 165 Income from Investments 15 339 11 6 3 529 Others 13 42 10 5 50 Net Income 1,270 1,206 489 331 402 1,673 Operating Expenditure 525 423 195 167 166 546 Provisions & Write offs 332 522 130 69 65 101 772 PBT 416 261 162 99 137 360 PAT (after Minority) 268 181 105 67 86 243 38#39Financial Highlights SREI Equipment Finance Limited - SREI Together We Make Tomorrow Happen Income Statement (Rs Crs) 2013 2014 2015 2016 2017 H1FY18 Disbursement 10,810 7,729 7,720 9,159 11,715 8,309 Total Securitization and assignment of receivables o/s 2,828 2,039 2,053 2,936 4,002 4,665 Gross Earning Asset (1) 18,638 17,671 17,990 18,364 20,946 25,417 Earning Asset (2) 15,810 15,631 15,937 15,429 16,944 20,752 Net Worth (3) 1,789 2,030 2,200 2,319 2,462 2,568 13,546 13,096 13,065 11,854 12,932 16,484 Total Borrowing (4) Net Interest Income (5) 764 851 861 875 796 495 Operating Expenditure (6) 223 224 304 312 328 169 Bad Debt written off, Provision & Contingencies (7) PAT (8) 145 259 337 396 253 166 266 234 154 120 149 110 (1) Gross Earning Assets as of the last day of the relevant year/period represents aggregate of Earning Assets and assets derecognised by way of securitisation and assignment of receivables outstanding as of the last day of the relevant year/period as per the Restated Financial Information. (2) Earning Assets as of the last day of the relevant year/period represents Long-term Financial Assets, Current maturities of Long-term Financial Assets, Short-term Financial Assets, Trade Receivables, Net Block of Assets given on Operating Lease, Net block of Assets for Own Use (Plant and Machinery) and Balances in Deposits Accounts as per Restated Financial Information. Assets for Own Use (Plant and Machinery) represent assets for use under Joint Controlled Operations (3) Net Worth as of the last day of the relevant year/period represents aggregate of the paid-up share capital, share premium account and reserves and surplus (excluding revaluation reserve and cash flow hedge reserve) reduced by the aggregate of miscellaneous expenditure (to the extent not adjusted or written off) and accumulated loss (if any) as per the Restated Financial Information.. (4) Total Borrowings as of the last day of the relevant year/period represents aggregate of Long-Term Borrowings (including Current Maturities of Long-Term Borrowings) and Short-Term Borrowings as per Restated Financial Information (5) Net Interest Income represents Revenue from Operations in the relevant year/period as reduced by Finance costs, Depreciation, amortisation and impairment expenses on Assets given on Operating Lease and Assets for Own Use (Plant and Machinery), Brokerage and service charges and (Profit)/loss on sale of fixed assets (net) in such year/period as per the Restated Financial Information.. (6) Operating expenses represent Total expenses as reduced by Finance cost, Depreciation, amortisation and impairment expenses on Assets given on Operating Lease and Assets for Own Use (Plant and Machinery), Loss on sale of fixed asset (net) and Brokerage and Service charges for the relevant year/period as per the Restated Financial Information. (7) Bad debts written off, provisions and contingencies for the relevant year/period represent such expenses as per Restated Financial Information (8) PAT represents PAT for the relevant year/period as per the Restated Financial Information.. 39#40Financial Highlights SREI Equipment Finance Limited - Key Ratios SREI Together We Make Tomorrow Happen Key Ratios 2013 2014 2015 2016 2017 H1FY18 Yield on Average Earning Asset (1) 15.23% 15.09% 14.58% 14.57% 13.15% 13.33%* Cost of Borrowing (2) 10.62% 11.05% 10.63% 10.45% 10.17% 9.48% NIM % (3) 5.44% 5.42% 5.46% 5.58% 4.92% 5.26% Cost to income Ratio (4) 29.10% 26.21% 34.98% 35.58% 41.14% 33.81% Gross NPA/Earning Assets (5) 2.96% 4.97% 4.98% 2.95% 2.48% 2.21% Net NPA / Earning Assets (6) 2.25% 4.07% 3.83% 1.99% 1.76% 1.56% Return on Average Earning Assets (7) 1.89% 1.49% 0.98% 0.77% 0.92% 1.16% Return on Average Net Worth (8) 17.03% 12.23% 7.28% 5.33% 6.23% 8.71% Capital to Risk Asset Ratio (9) 16.08% 17.07% 16.99% 19.60% 18.59% 16.8% (1) Yield on Average Earning Assets (%) has been calculated as Yield for the relevant year/period as a percentage of Average of Earning Assets for such year/period. Yield represents Revenue from Operations for the relevant period as reduced by Depreciation, amortization and impairment on Assets given on Operating Lease and Assets for Own Use (Plant and Machinery) Brokerage and service charges and (Profit)/Loss on sale of fixed assets (net). (2) Cost of Borrowings (%) represents Interest cost and other related costs on borrowings for the relevant year/period as a percentage of daily average outstanding of borrowings for such year/period. (3) Net Interest Margin (%) represents Net Interest Income for the relevant year/period as a percentage of Average Earning Assets for such year/period. (4) Cost to Income Ratio (%) represents Operating expenses as a percentage of aggregate of Net Interest Income and Other income. Other income here excludes Profit on sale of fixed assets (net). (5) Gross NPAs/Earning Assets (%) represent Gross NPAs as of the last day of the relevant year/period as a percentage of Earning Assets as of the last day of the relevant year/period. (6) Net NPAs/Earning Assets (%) represents Net NPAs as of the last day of the relevant year/period as a percentage of Earning Assets as of the last day of the relevant year/period. (7) Return on Average Earning Assets (%) is calculated as PAT for the relevant year/period as a percentage of Average Earning Assets for such year/period. (8) Return on Average Net Worth (%) is calculated as PAT for the relevant year/period as a percentage of Average Net Worth for such year/period. 40 40#41Financial Highlights SREI Infrastructure Finance Limited - Balance Sheet Balance Sheet Summary (Rs Crs) Interest Earning Assets Net Worth Borrowings Investments SREI Together We Make Tomorrow Happen 9M FY18 9M FY17 H1 FY18 FY17 14,296 14,317 14,369 13,725 2,884 2,789 2,844 2,811 13,381 13,779 13,611 13,184 1,667 2,039 1,667 2,037 Balance Sheet Summary (Rs Crs) Dec-17 Dec-16 Sep-17 Mar-17 Return on Equity Leverage CRAR 4.4% 3.7% 4.2% 3.5% 4.6 4.9 4.8 4.7 18.1% 18.6% 18.1% 18.9% 41#42Financial Highlights SREI Infrastructure Finance Limited - Income Statement SREI Together We Make Tomorrow Happen Income Statement (Rs Crs) Disbursement Income from finance activities (Net of Dep.) Finance charges 9M FY18 9M FY17 Q3 FY18 Q3 FY17 Q2 FY18 FY 17 3,534 3,925 1,427 1,990 1,640 5,889 1,269 1,254 443 431 417 1,685 996 1,067 329 370 333 1,437 NII 273 187 115 61 84 248 Provision & Write off 76 347 45 5 17 547 Fee based income 19 7 5 2 5 14 Income from investment 6 334 6 1 0 524 Other Income 13 34 4 14 4 43 Operating Expenditure 101 99 36 33 33 134 PBT 133 115 49 40 44 148 PAT 93 75 34 26 30 96 96 Key Ratios Dec-17 Dec-16 Sep-17 Mar-17 Yield on Avg Funds 12.2% 12.1% 11.9% 12.2% Cost of funds 10.0% 10.4% 10.1% 10.6% Interest Spreads 2.2% 1.7% 1.9% 1.6% Gross NPA * 3.1% 3.1% 2.2% 3.2% Net NPA* 2.1% 2.1% 1.4% 2.0% * On Total Assets 42#43Annexures SREI Together We Make Tomorrow Happen#44Industry Overview - India Opportunity Other Equipments - Sustained Recovery Tippers Sales (Unit Sales) Farm Equipment (Unit Sales)² SREI Together We Make Tomorrow Happen 8% CAGR 68,450 16% CAGR 78,400 89,900 3% CAGR 9% CAGR 58,150 696,700 42,800 45,000 604,750 642,510 703,000 767,500 836,200 559,200 33,300 33,250 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19E 2019-20E 2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19E 2019-20E Used for transporting material (such as sand, gravel or demolition waste) and crushed aggregates for construction and infrastructure projects IT Equipment (Revenue, INR Bn)1 India has witnessed a significant rise in the use of IT equipment1, due to rising disposable incomes and reduced prices due to rapid innovation in technology Medical Equipment (Sales, INR Mn) 665 652 640 625 631 622 606 598 21% CAGR 19% CAGR 160,300 132,000 108,900 37,200 44,600 52,000 62,600 75,300 90,000 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19E 2019-20E 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19E 2019-20E • Tractors have the major share of the farm mechanisation market in India • There is room for sufficient growth in this segment with India being an agriculture-based economy Source: Feedback Analysis Note: Market Size is by Value of CME equipment sales Includes PC Segment, Printers, Enterprise networking, Servers, Storage Includes total sales of Tractor, Power Tillers and Combine Harvestors India is among the top 20 markets for medical devices Government commits to increase public health expenditure to 2.5% of the GDP, which is expected to provide a boost to the healthcare sector 44#45Disclaimer SREI Together We Make Tomorrow Happen Srei Infrastructure Finance Limited Disclaimer: - In this communication we have disclosed certain forward-looking information to enable investors to comprehend our future prospects and take informed investment decisions. This report and other statements – written and/or verbal - that we periodically make/publish contain forward-looking statements that set out anticipated results based on the management's plans and assumptions for future growth and development of the organizations. We have tried wherever possible to identify such statements by using words such as anticipate, estimate, expects, projects, intends, plans, believe, and words of similar substance in connection with any discussion of future performance. We do not guarantee, warrant and/or recommend, express or implied, as to the accuracy or completeness of such assumptions and that these forward-looking statements will be realized, although we believe we have been prudent in assumptions which are subject to dynamic changes. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Prospective investors are recommended to take there decisions based on interpretations and assumption of such published forward looking statements. . We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Moreover, neither we or any other company or subsidiary of the Srei Group, nor any of its officers, directors or employees accept any liability or responsibility in respect to the information or any assumptions expressed herein. The information contained herein has been prepared exclusively for informational purposes and is not an offer or solicitation of an offer to buy/sell the securities/instruments mentioned or to participate in any trading strategy or an official confirmation. This is not a research but it may refer to a research analyst/research report.. Information is subject to change without notice and we may not update this. Past performance is not indicative of future returns. This price information (if any) is provided solely for informational purposes and may differ substantially from price information available from other sources or an actionable price. Sanjeev Sancheti Chief Strategy Officer Srei Infrastructure Finance Ltd. Tel: +91 33 6602 3003 Email: [email protected] Amit Agarwal Vice President - Investor Relations Srei Infrastructure Finance Ltd. Tel: +91 33 6602 3003 Email: [email protected] 45 45#46Thank You SREI Together We Make Tomorrow Happen