#1Where the mind is without fear, And the head is held high. Edelweiss Financial Services Limited Q2FY17 Investor Presentation * Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय ओलम्पिक OLYMPIC ASSOCIATION#2Contents 1 OVERVIEW & BUSINESS APPROACH 2 PERFORMANCE HIGHLIGHTS 3 BUSINESS HIGHLIGHTS 4 ENTERPRISE UPDATE 5 DETAILED FINANCIALS * 2#3OVERVIEW & BUSINESS APPROACH * Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय अलब्धिक OLYMPIC ASSOCIATION#4Our Vision * "To be a Respected Financial Services firm with a Portfolio of High Quality Growth Businesses" * 4#5Our Business Approach Leadership Culture Culture that promotes entrepreneurship and innovation without compromising on institutionalization Risk & Governance Zero tolerance policy towards Compliance & Risk Good mix of Wholesale & Retail Creates scalability along with profitability Diversification De risked model enhances sustainability Strong Enterprise Functions Backbone of our high growth businesses * LO 5#6Diversification Strategy Led to a Unique Business Model... BANK NON-BANK DIVERSIFIED MONO LINE EDELWEISS Credit Non Credit Insurance WELL DIVERSIFIED Unique Model that is "Scalable, Stable and Profitable" 6 *#7One of the Leading Diversified Financial Services Firms Wholesale CREDIT BUSINESSES Present across the spectrum of Retail • Structured Collateralized Credit • Retail Mortgage One of the top 5 Diversified Financial Services Firms (INR Cr) • Distressed Assets •Wholesale Mortgage • Agri & Rural Finance • Loan Against Shares On Balance Sheet Assets ~ 35,800Cr • SME & Others Assets under Management ~ 38,000 Cr NON CREDIT BUSINESSES Strong product franchise serving diverse client needs • Wealth Management Assets under Advice ~44,200 Cr • Agri Services & Others • Asset Management • Capital Markets • Balance sheet Management Unit & Liquidity Management # of clients # of employees INSURANCE # of offices 10,00,000+ 6,437 238 One of the fastest growing Life Insurance companies Crossed Milestone of 10 Lakh Customers & INR 1,00,000 Cr Assets * 7#8As we stated in the FY16 investor presentation, over the next four years.. Our aim is to grow our diversified business model to achieve... • · . Grow PAT consistently at 25% Consolidated RoE to 16-18% Ex Insurance RoE to 19-20% Ex Insurance RoA to 2.3-2.5% Ex Insurance Cost to Income ratio to 50% • GNPA below 2% • Capital Adequacy Ratio >16% • Enhance long term credit rating to AAA * 8#916 17 8 10 17 16 12 29 17 24 Q2FY17 PERFORMANCE HIGHLIGHTS 16 14 7 18 14 20 17 16 8 19 13 16 2 17 27 32 37 24 32 18 23 2 19 13 10 13 Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय औलब्धिक OLYMPIC ASSOCIATION *#10Key Financial Highlights - Q2 FY17 Consolidated PAT growth of 51%; Ex Insurance PAT growth of 38% Ex Insurance PAT CAGR of 36% for last 4 years Consolidated RoE improved to 15.2%; Ex Insurance RoE improved to 19.9% Book Value/ Share: INR 48 10 *#11Consolidated Q2 PAT Growth of 51% & Ex Insurance PAT Growth of 38% YOY (INR Cr) Q2FY17 Q2FY16 Growth FY16 FY15 PAT Consolidated 144 96 51% 414 329 PAT Ex Insurance 166 120 38% 519 381 With 22% growth in Assets Balance 35,822 29,445 22% 32,145 27,072 Sheet Non Linear growth in Profitability * 11#12Key Performance Parameters (Ex Insurance) (INR Cr) Q2FY17 | Q1FY17 FY16 FY15 FY14 PAT 166 155 519 381 272 Net Revenue/Average Assets 9.3% 8.6% 7.8% 8.5% 7.2% RoE 19.9% 19.4% 18.6% 15.6% 12.2% RoA 2.2% 2.0% 1.8% 1.9% 1.9% Cost to Income Ratio 57% 57% 60% 60% 59% Gross NPA 1.46% 1.4% 1.4% 1.3% 0.9% Net NPA 0.47% 0.5% 0.5% 0.4% 0.2% 12 *#13Key Performance Parameters For Q2FY17 PAT growth (YoY) Credit Book Growth (YoY) Edelweiss (Ex Insurance) Private Banks NBFC/ DFS 38% 23% 19% 23%* 18% 19% Net Revenue/ Average Assets 9.3% 5.7% 10.1% RoA 2.2% 1.8% 2.2% RoE 19.9% 15.0% 15.6% Cost to Income Ratio 57% 45% 39% Gross NPA Net NPA Collateral Cover 1.46% 1.60% 2.71% 0.47% 0.71% 0.93% 2.2x 1 - 1.25X 1.5-2X *Credit Book excludes Distressed Assets; Competition numbers based on published results and management analysis (List included at the end) 13 *#14PAT growth trajectory Profit after Tax INR Cr 70 69 57 46 48 51 35 46 39 40 42 46 51 29 29 89 88 90 72 62 68 78 79 56 58 61 46 46 Q3'FY12 Q4'FY12 Q1'FY13 Q2'FY13 Q3'FY13 Q4'FY13 Q1'FY14 Q2'FY14 Q3'FY14 Note: CAGR based on Trailing Twelve Month basis Q4'FY14 Ex-Insurance PAT 166 154 155 133 120 111 98 86 103 83 83 88 88 91 144 140 122 106 96 96 Q1'FY15 Q2'FY15 Q3'FY15 Q4'FY15 Q1'FY16 Q2'FY16 Q3'FY16 Consolidated PAT Ex Insurance PAT CAGR of 36% for last 4 years Q4'FY16 Q1'FY17 Q2'FY17 14 *#15RoA Attribution (Ex Insurance) * Q2FY17 FY16 FY15 Net Interest Income 5.8% 5.1% 5.5% Interest | 12.4% 12.8% 12.0% Treasury 2.0% 1.2% 2.2% Interest Cost -8.6% -8.8% -8.6% Non-interest income 3.5% 2.7% 2.9% Fee & commission | 2.9% 2.4% 2.7% Other income 0.6% 0.3% 0.2% Expenses -5.9% -5.2% -5.7% Employee cost -2.9% -2.5% -2.9% Depreciation & amortization | -0.3% -0.3% -0.3% Operating expenses -2.0% -1.7% -1.8% Provisions -0.7% -0.6% -0.6% PBT 3.4% 2.6% 2.8% Tax -1.2% -0.8% -1.0% PAT 2.2% 1.8% 1.9% 15#16Both credit and non-credit PAT witnessing steady growth PAT INR Cr 144 2-year CAGR 96 80 00 106 38% 79 Credit 56 59 30% Non Credit 35 41 Insurance -11 -24 -21 Q2FY15 Q2FY16 Q2FY17 * 16#17BUSINESS HIGHLIGHTS - H1 FY17 Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय अलब्धिक OLYMPIC ASSOCIATION *#18Diversified Mix of Businesses CREDIT NON CREDIT INSURANCE Present across : Wholesale • Structured . Collateralized Credit Distressed Assets • Wholesale Mortgage Retail • • Retail Mortgage Agri & Rural Finance ⚫ Loan Against Shares . • SME & Others Strong product franchise serving diverse client needs: • Wealth Management • Asset Management • Capital Markets Agri Services & Others • Balance sheet Management Unit & Liquidity Management One of the fastest growing life insurance companies * 18#19Financial Snapshot (INR Cr) Credit Business Non Credit Profit EoP Equity After Tax RoE 2,903 203 18.0% 987 118 23.2% Total (Ex Insurance) 3,890 321 19.6% Insurance 873 -37 Consolidated 4,763 284 15.1% Based on Management Estimates; ROE is calculated on Average Equity * 19#20BUSINESS HIGHLIGHTS - CREDIT * Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय अलब्धिक OLYMPIC ASSOCIATION#21Credit Business at a glance Credit Business Capital Employed Net Interest Margin INR (Cr) 24,860 6.9% Net Interest Income 750 Cost to Income 41% Provisions 101 PAT 203 Gross NPA 1.46% Net NPA 0.47% RoE 18.0% RoA 2.1% * Credit Non Credit Insurance Balance Sheet Based on Management Estimates; EARC (Edelweiss Asset Reconstruction Company) has now become a subsidiary of EFSL. Consequently, Capital Employed includes Distressed Assets in EARC Gross & Net NPA calculated on Credit Book excluding Distressed Assets 21 21#22Credit business is a mix of differentiated and scalable assets... Structured Collateralized Credit • Customized credit solutions, with high collateral cover * Loan Against Shares 2,627 SME & Others 1,755 Structured Collateralized Credit • 10% 7% 7,446 30% Distressed Assets Agri & Rural Finance 743 3% Retail Mortgage 2,918 12% Wholesale & Retail Mortgage Largest Asset Reconstruction Company in India, with more than 7 years of history in distressed assets space • Caters to wide a range of residential developers Catering to retail home buyers and business • owners Agri & Rural Financing $10 bn unorganized market; Highly scalable, unoccupied by institutional players. Includes Micro Finance solutions to clients in Tier III/IV cities and rural areas Loan Against Shares • Caters to retail customers in Capital Market Distressed Asset Wholesale Mortgage 5,860 24% 3,511 14% SME & Others • Highly scalable, focus area for future growth Credit Non Credit Insurance Distressed Asset is higher by INR 2,300 cr due to EARC (Edelweiss Asset Reconstruction Company) becoming a subsidiary Balance Sheet 22#23Present across Retail, SME and Wholesale segments Wholesale Credit • Comprises of · Collateralized Lending to Corporate • Distressed Assets • Wholesale Mortgage • Began credit operations in 2007 • • A robust risk management approach tested over 2 downturns Wholesale credit around INR 16,800 cr Credit Retail & SME Credit • · • Comprises of • Retail Mortgage Agri & Rural Financing Loan Against Shares SME & Others Commenced operations in 2011 Small Ticket Housing Loans launched in FY13; Rural Finance in FY14 • Retail credit around INR 8,000 cr • Controlled growth, focus on credit quality • Operations in 50 cities Profitable, scalable multi-line credit business Non Credit Insurance * Balance Sheet 23#24Business Strengths Client Centric Solutions . Ability to understand client needs and structure products to suit their needs • Strong client relations Proactive Risk Management • • Three tier risk management approach - Business risk team supplemented by Global risk team & Global Risk Committee Robust underwriting and credit appraisal processes Good Asset Quality • NPAs in check even in tough market conditions · Comfortable asset cover * Credit Non Credit Insurance Balance Sheet 24 225#25Credit - Improving Parameters At the end of H1FY17 H1FY16 FY16 FY15 Average Interest Yield 16.2% 16.0% 16.2% 15.8% Average Cost of Borrowing 10.5% 10.8% 10.7% 10.9% Interest Spread 5.7% 5.3% 5.5% 4.9% Net Interest Margin 6.9% 6.6% 6.8% 6.7% I 50 cities & 44 cities & Retail Credit Presence* | 3,100 villages 3,100 villages 1,800 villages 45 cities & 3,400 villages 36 cities & 750 villages Retail Finance Spreading Footprint Through Small-ticket Home Loans, SME & Rural Finance Credit Non Credit * Insurance Balance Sheet 25#26Credit - Robust Asset Quality At the end of (INR Cr) H1FY17 H1FY16 | FY16 FY15 Credit Book | 21,349* 17,321 20,014 15,036 Pvt. Banks NBFCs Gross NPA I 312 250 281 196 1.60% 2.71% Gross NPA % 1.46% 1.45% 1.40% 1.31% Net NPA % 0.47% 0.44% 0.47% 0.38% 0.71% 0.93% Total Provision Held 289 233 247 184 Total Provision Cover 92% 93% 88% 94% Average Collateral cover on Wholesale book I 2.2x 2.1x 2.1x 2.3x | 1 -1.25X 1.5-2X Average Loan-To-Value on Retail book ~47% ~51% ~50% ~52% Average LTV of LAP portfolio at 44% vs 65 % of the industry Median ticket size at 36 Lacs vs 1.2 cr in the industry Credit Non Credit * Excludes Distressed Assets; Provision Policy moved to 120+ DPD; Housing Finance Co. continues to follow 90+ DPD Insurance Balance Sheet 26 *#27Wholesale Credit - Evaluation Approach • Counter Party Promoter Pedigree • Group Relationship • Execution Capability . • Collateral • Hybrid Collateral Pool • Ring fenced Structure . Ease of enforcement Group Financial Standing • • · Asset Liability Profile Cash Flow & Liquidity • Valuation based on . Liquidity • Economic Value Credit History Regulatory Checks • Real time monitoring Environment Scan . Cash Flows Fundamentals • • • Business Performance · Underlying Asset Stress testing • Periodic • Event Based Escrow Ring Fenced Control Robust underwriting framework with multilevel approval process... Credit Non Credit Insurance * Balance Sheet 27#28Overview of Distressed Assets in India • Total outstanding Loans as of March 16 are US$ 1.1 Tn • Estimated total stressed assets of US$130 bn (12%) . Largest stressed assets comprise infrastructure, steel, textiles and construction Stressed Assets Market Estimates 46% 43% 7% 37% 7% 9% 29% 28% 9% 8% Additional 10% on 7% Textiles 12% 12% account of Willful defaulters and fraud cases 30% 28% Steel 8% 8% 21% Infra 9% 8% Credit Edelweiss estimates Mar 11 Mar 12 Mar 13 Non Credit Mar 14 Mar 15 * Insurance Balance Sheet 28#29Key Success Factors for Asset Reconstruction Business CAPITAL ARC Platform TURNAROUND FINANCIAL STRUCTURING EXPERTISE & RESOLUTION • Domain knowledge and expertise to create Platform • • • Capital for debt purchase and last mile funding Ability to financially and operationally turnaround stressed assets Ability to find strategic buyers & sell businesses partly fully to unlock value Extensive coverage & being first port of call for Banks and Turnaround assets Robust risk management practices Credit * Non Credit Insurance Balance Sheet 29 29#30Asset Reconstruction Business - Journey so far • Asset Reconstruction business started in 2008 • • Till 2013, kept building the team and processes, buying few assets and invested in understanding the space Created a team with diversified skill sets and experience across all major asset classes • Good understanding of this business coupled with deep Banking relationships • Platform has significant experience in stressed assets investing and turnaround capabilities Ability to identify distressed assets, pick at appropriate valuation and potential of resolution • When the opportunity came in 2013-14, we scaled up since infrastructure was already present Credit Non Credit Insurance Balance Sheet 30 *#31Expanding Asset Reconstruction Business Asset Reconstruction Company Assets Under Management (INR Cr) 9,200 CAGR: 63% 20,000 27,100 31,100 • Currently EARC is the largest asset reconstruction company in India, managing assets of INR 31,000 cr., acquired from 51 banks Focused on delivering a long term risk adjusted returns akin to LP GP model (Limited Partner & General Partner) • Team size of 75 people across investments, resolution, legal & platform . Capital deployed more than 3,500 cr. FY14 FY15 FY16 H1 FY17 • * Edelweiss Asset Reconstruction Company • Expecting to add 1,000-1,200 cr every year for next 3-4 years . Building capability on operational turnaround • Team in place to provide value added services Creating an advisory board and a network of senior industry experts Credit Non Credit Insurance Balance Sheet 31 *#32Partnership with CDPQ - One of North America's largest Pension Fund Managers Distressed Asset Capital Investment (INR cr) 84 158 583 1,550 2,641 3,511 • • CDPQ to target an investment of close to INR 5,000 cr over four years in India's Stressed Assets and Specialised Credit sector, along with EARC This partnership aims to channel between INR 12,000-14,000 cr (including CDPQ's INR 5000 cr and investments from Edelweiss Group and other institutional investors) CDPQ to invest upto INR 500 cr over 4 years for 20% stake in Edelweiss Asset Reconstruction Company Funds will be funnelled towards restructuring, reviving and resolving of stressed assets FY12 FY13 FY14 FY15 FY16 H1 FY17 * Credit Non Credit Insurance Balance Sheet 32 Edelweiss Asset Reconstruction Company#33M 8,000 BUSINESS HIGHLIGHTS - NON CREDIT * Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय अलब्धिक OLYMPIC ASSOCIATION#34Non Credit Business at a glance Numbers are Management Estimates Non Credit Capital Employed INR (Cr) 10,090 Net Revenue 697 Cost to Income 74% PBT 184 PAT 118 RoE 23.2% RoA 2.2% * Credit Non Credit Insurance Balance Sheet 34#35Non Credit Business Mix • Multi asset class platform offering structured customized solutions Wealth Management Asset Management Capital Markets . . . • • Focus on OPDO (Owner, Promoter, Director, Officer) segment Present in Ultra High Net worth/ High Net worth/ Mass Affluent segment Total AuA (INR Crs): 44,200 (UHNI: 26,300/HNI 6,900/Mass Affluent: 11,000) Equity focus: 2 segments Mutual Fund and Alternatives Total AUM of INR 6,900 cr Credit focus: Asset Reconstruction Company, Special Opportunities fund Entire spectrum of corporate advisory services - Fixed Income Advisory, Mergers & Acquisitions, Equity Capital Markets, Private Equity Syndication Leader in Debt Capital Markets & domestic institutional broking Warehousing, procurement services and other Agri services Agri Services Balance sheet Management Unit & Liquidity Management . Liquidity Management • Asset Liability Management Credit * Non Credit Insurance Balance Sheet 35#36Wealth Management - Growth Opportunity . Rising wealth in India is creating immense opportunity in wealth management space • Owner, Promoter, Director, Officer (OPDO) market is the new emerging client segment • Edelweiss wealth has unique business model that straddles all client segments across multiple product lines with focus on suitability, portfolio and operational risk management • Edelweiss Wealth offers financial planning for family offices, Real Estate offering, Estate planning and offshore advisory, enabling stronger penetration into this market . Edelweiss has emerged as one of the largest wealth manger in India • Average yield on AuA of ~0.8% - 1.0% • 80+ Offices • 800+ Relationship Managers No. of clients UHNI HNIS Mass Affluent Sep '16 300+ 5,500+ 370,000+ Credit Non Credit Insurance Balance Sheet 36 *#37Wealth Management AUA increased 5x in 3 years (INR Cr) 8,900 29,500 5x 17,750 44,200 Edelweiss Wealth Gaining significant traction across client segments • Good mix of product and advisory solutions for customized needs • Differentiated Client experience - hybrid model with expert financial advisors and digital platform • Best Private Banking Solution at Asia-Pacific Structured Products & Derivatives Awards 2015 ⚫ Best Equity Broking House (mid-size) at ‘BSE – Dun & Bradstreet Equity Broking Award 2015' UHNI Clients by AUA Segment (Nos.) AUA Segment 100cr+ FY 14 FY 15 FY 16 H1 FY17 25cr 100cr Sep '16 30+ ~ 90 * Credit Non Credit Insurance Balance Sheet 37#38- Asset Management – Gaining scale Asset Management Assets Under Management (INR Cr) CAGR: 41% 2,900 3,000 5,000 6,900 FY14 FY15 FY16 H1 FY17 • Two business segments: • Mutual fund AUM: INR 2,450 cr • Alternative Assets AUM: INR 4,450 cr • Received approvals for acquisition of JP Morgan schemes, from Securities and Exchange Board of India (SEBI) • Acquired Ambit AIF, subject to requisite approvals. • AUMS likely to touch ~INR 15,000 cr post • completion of above acquisitions High quality diversified asset base • Asset base: Equity (67%) & Fixed Income (33%) . Strong distribution network • 99% of our AMC assets are outperforming the benchmarks over a 3 year cycle (Source: Value Research) * Credit Non Credit Insurance Balance Sheet 38#39Capital Markets: Leadership position in the market Broking Average Daily Volume (INR Cr) 6,700 5,000 5,200 3,100 • One of the largest domestic institutional broking company • Robust fundamental research covering ~227 stocks among 27 sectors representing ~77% of total market cap • • • Rated Best Brokerage in India for Roadshows and company visits Bull of the Year Award by Zee Business Market Analyst Awards Best Equity Broking House (mid-size) Award Significant investment in technology in new business lines Edelweiss is #1 BEST BROKERAGE IN INDIA FOR ROADSHOWS AND COMPANY VISITS ASIAMONEY BROKERS POLL 2015 Aslemoney annual Brokers Pull is the largest Asis focused equity services gemider Edelweiss FY14 FY15 FY16 H1 FY17 • Investment Banking & Advisory (Number of deals) 114 100 61 53 FY14 FY15 FY16 H1 FY17* • Ranked 1st in Initial Public Offering (IPO) in Retail & HNI category . Edelweiss Fixed Income Advisory strengthened its position at the top of the public issuance league tables with total issuance volume of INR 218bn. - Lead arrangers to 5 out of the 6 Debt issues in the 2nd quarter including DHFL/ India Bulls Edelweiss ranked first with a ~ 30% market share, in Q2 FY 17. Managed IPOs like ICICI Prudential Life Insurance Company Limited, Equitas Holdings Ltd. et al Sole financial advisor HDFC Life Stake sale to Premji Invest INR 1,990mm Equitas Holdings Limited equitas Book Running Lead Manager IPO INR 21,766.8mm ING ING VYSYA BANK Advisor to the Board of ING Vysya Bank on its merger with CC kotak INR 150,331mm ICICI Prudential Life Insurance ICICI PRUDENTIALT Book Running Lead Manager IPO INR 60,567.9 mm Credit Non Credit Source: Thomson Reuters, Prime Database; * Includes All Private & Public Deals, as reported by Prime Database Insurance Balance Sheet * 39#40Expanding Agri Services business Agri Services Number of warehouses 122 265 291 FY15 FY16 H1FY17 • One of the few organised players providing end to end business solutions in the Agri value chain • 291 warehouses under management with capacity of over 11 lacs MT • • Warehousing Development and Regulatory Authority (WDRA) accreditations received for 3 warehouses - likely to create strong differentiation in market Received National Accreditation Board for Testing and Calibration Laboratories (NABL) Accreditation for our state-of-the-art laboratory at Vashi • ISO 9001-2008 * Credit Non Credit Insurance Balance Sheet 40#41Balance Sheet Management Unit Balance Sheet Management Unit (INR Cr) 4,420 Key Objectives • Create liquidity cushion through investment in High Quality Liquid Assets 1,765 • 1,134 Asset Liability Management 411 . Manage Treasury assets Gsecs Liquidity cushion Fixed & Tax Others Assets • Corporate Fixed Assets and Investments Balance Sheet Management Assets as % of Total Assets 21.3% 21.5% 19.8% 17.3% • ☐ Sep '13 Sep '14 Sep '15 Sep '16 Balance Sheet Management Assets as a percentage of Total Assets has been decreasing consistently over years Focus on increasing Liquidity cushion in line with Balance Sheet growth * Credit Non Credit Insurance Balance Sheet 41#42BUSINESS HIGHLIGHTS - INSURANCE * Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय अलब्धिक OLYMPIC ASSOCIATION#43Key Milestones Started Operations July 2011 Highest startup capital INR 550 Crs 2013 45 Branches 3,401 Agents 1,275 Employees 18 Products 55 Cr Premium H1 2017 71 Branches 17,753 Agents 1,986 Employees 27 Products 145 Cr Gross Premium 2016 71 Branches 15,490 Agents 1,943 Employees 26 Products 310 Cr Gross Premium Credit Non Credit Insurance Balance Sheet 43 *#44Insurance Strategy defined by Products ● Focused on new product development & launch of Total Secure + • Distribution • Continued focus on Need Based Selling (Brand: Vijaypath) Agency-led multi-channel distribution approach with emphasis on productivity • Focus on building direct capability specifically online • Aim to be industry leader on sales productivity Investments • Providing superior returns through top performing funds Technology • Provide unique and enhanced customer experience across all touch points Generate operating efficiencies across the organization Efficient Strong focus on being cost-efficient Credit Non Credit Insurance Balance Sheet 44 44 *#45Fastest Growing Individual Annual Premium Equivalent Individual Annual Premium Equivalent CAGR Growth since H1 FY13 37% 7% 2% Edelweiss Tokio Life Insurance Peer Set Industry 56 Persistency (Individual & Group Business combined) 61 • 71 FY14 FY15 FY16 Individual Annual Premium Equivalent - INR 50 Crs for H1 FY17 For Q2 FY17 13th month persistency stands at 62% 9th Rank amongst all the private insurers in FY16 as against 16th rank in FY15 (Source: IRDAI public disclosures) * Credit Non Credit Insurance Balance Sheet 45#46Customer Centric Approach - Wide Variety of Products Product Mix Customer centric approach Credit Traditional Par, 23% Traditional Non Par, 51% Group, 12% ULIP, 14% • • Unique need based selling approach Strong investment performance to provide superior returns to customers • Edelweiss Tokio Funds have been rated top performers by Morningstar with all Individual Unit Linked Insurance Plan Funds rated in top decile as on Sep'16 • Provide enhanced customer experience through investment in processes and technology * Non Credit Insurance Balance Sheet 46#47Rapidly Growing & Stable Platform Balanced channel mix with focus on agency Direct Business, 9% Brokers, 11% Corporate Agent, 8% Banca, 10% A Responsible brand • Winner, Agency Efficiency award at India Insurance Awards, 2016 • Winner, "Top 100 Infosec Maestros Awards" in 2015 • "Yamraj to the Rescue", won the National Gold in the public service category at the Outdoor Advertising Awards, 2015 Credit Non Credit Agency, 63% Lambi life ki zaroorat? Follow traffic rules or follow me Insurance Balance Sheet 47 *#48Pan India Presence Punjab/ Himachal Pradesh / Uttarakhand 6 branches Rajasthan/ Haryana 6 branches Delhi (NCR) 6 branches Uttar Pradesh 6 branches At the end of I H1FY17 FY16 FY15 FY14 Number of Personal Financial Advisors 17,753 15,490 10,421 7,255 Number of Branches I 71 in 61 cities I 71 in 59 in 58 in 61 cities 49 cities 48 cities | West Bengal / Orissa / Assam 6 branches Gujarat 7 branches Mumbai 7 branches Rest of Maharashtra / Goa 6 branches Tamil Nadu / Kerala 5 branches Bihar Jharkhand 5 branches Madhya Pradesh / Vidharbha / Chhatisgarh 5 branch Andhra Pradesh / Telengana / Karnataka 6 branches * Credit Non Credit Insurance Balance Sheet 48#49Insurance Edelweiss Tokio Life Insurance Company Limited Standalone (ETLI) (INR Cr) H1FY17 H1FY16 FY16 FY15 Gross Premium Income 145 92 310 193 Investment Income & Other Income 88 45 87 97 Total Income 233 137 397 290 Total Expenses 305 197 552 361 Profit Before Tax -72 -60 -155 -71 Profit After Tax -72 -60 -155 -71 Edelweiss' Share in PAT Net Worth* -37 -45 -104 -53 873 504 939 569 Tokio Marine has infused INR 527 Cr in FY16 for 23% stake Credit Non Credit Insurance * Includes unrealised gains on equity and mutual fund investments per IRDA norms * Balance Sheet 49#50BALANCE SHEET * * Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय अलब्धिक OLYMPIC ASSOCIATION#51Key Highlights - Balance Sheet 1 On-Balance Sheet: INR 35,800 Cr; Total assets managed: INR ~118,000 Cr 2 ALM maintained Balance 3 Comfortable capital adequacy ratio at 18.1% Sheet 4 Diversified Liability mix 5 Stable business model reflected in credit ratings * Credit Non Credit Insurance Balance Sheet 51#521 ~ $18.0 billion of Assets As on 30 Sep 2016 Assets on Balance Sheet Distressed Assets Book (ARC Assets) Funds under Management (Asset Management) Assets Under Advice (Wealth Management) Total Assets INR Cr USD bn 35,800 5.4 31,100 4.7 6,900 1.0 44,200 6.7 1,18,000 17.8 Credit Non Credit Insurance Balance Sheet 52 Numbers are rounded to closest hundred *#53• 2 Comfortable Asset-Liability Profile % of Assets and Liabilities Assets Liabilities Sep'16: INR 35,822 Cr 100% 76% 100% 56% 73% 38% 31% 53% 12% 38% 29% 12% Asset Specific 0-3 Mnth 3-6 Mnth 6-12 Mnth 1-3 years 3+ years Borrowing Positive asset-liability matching across durations Asset Liability Committee manages and monitors ALM, Interest Rate Risk and Liquidity Credit Non Credit Insurance Balance Sheet 53 *#543 Strong capital position 3,434 Tier I Networth (INR Cr) 4,192 Liability Structure, Sep'16 (INR Cr) 4,655 Tier I 4,655 FY15 FY16 H1FY17 • Steady growth in Net worth over the last several years . Sub Debt issued to improve Tier II Capital • D/E (Excluding Treasury Assets): 5.1 • Consolidated Risk Weighted Assets (As a % of Gross Assets): 78% Tier II 1,159 Total Capital 5,814 Risk Weighted Assets 32,161 Consolidated Capital Adequacy 18.1% Credit Non Credit Insurance Balance Sheet Networth = Equity + Reserves - Deferred Tax Assets * 54 54#554 Diversified Sources of Borrowings Others* Retail Asset Specific Borrowing Bank Mutual Funds Total Borrowings FY11 INR 7,858 Cr . Steady diversification in sources of borrowings • Lower dependence on debt market borrowings • Exploring alternative sources of Liabilities Credit * Others includes Provident Fund, Insurance & Corporate 5% 5% 14% 26% 50% H1FY17 INR 30,974 Cr 5% 15% 14% 31% 35% * Non Credit Insurance Balance Sheet 55#56Share of Long Term funds increasing Long Term Liabilities INR (Cr) 16,948 14,475 11,473 6,641 Long Term Liabilities Breakup Sub-debt 10% Term Loan 30% NCD 60% FY14 FY15 FY16 H1FY17 Long Term as % of Total Liabilities 41% 43% 45% 47% Average Tenure (years) 3.4 • Long Term Liabilities growing in line with Asset Profile • Contracted Long Term Liabilities with Insurance Companies, Banks & Mutual Funds • Edelweiss Housing Finance Non Convertible Debenture Subscribed on Day 1 - ~ 80% demand for 10 year • Raised INR 502 cr from International Markets, through "Masala" Bonds in current quarter Credit Long Term Liabilities (LTL): Liabilities >1 year Non Credit Insurance * Balance Sheet 56#57Liquidity Cushion at ~INR 3300 Cr is 9% of Balance Sheet Including off Balance sheet lines INR (Cr) 3,300 2,900 • A well diversified liquidity cushion comprising of: 400 1,700 FY14 FY15 FY16 H1 FY17 • • Banking Lines . ⚫ Fixed Deposits • Government Securities, Mutual Funds etc Steady growth in liquidity cushion to provide for any liquidity event . Continually evaluate the composition through various instruments to ensure immediacy, relevance and cost efficiency * Credit Non Credit Insurance Balance Sheet 57#585 Stable Business Model Reflected in Credit Ratings Rating agency Purpose (debt programme) Rating CRISIL Short term CRISIL A1+ A STANDARD & POOR'S COMPANY ARE Ratings Short term CARE A1+ Professional Risk Opinion ICRA Brickwork Short term [ICRA] A1+ Long term BWR AA+ ARE Ratings Long term CARE AA Professional Risk Opinion ICRA Long term [ICRA] AA * Credit Non Credit Insurance Balance Sheet 58#59ENTERPRISE UPDATE Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय औलब्धिक OLYMPIC ASSOCIATION *#60Awards Marketing campaign of the Year 2016 - CMO Asia #iAmTeamIndia Olympics campaign wins Marketing campaign of the year 2016 Best Corporate Governance - India At CFI.co Corporate Governance Awards 2016 Edelweis Best Equity Capital Markets House and Best Broker Award at the Finance Asia Country Awards 2016 CEdelweiss Dual win for Edelweiss at FinanceAsia India Country Awards 2016 Best Equity Capital Markets House Best Broker COUNTRY AWARDS 2016 FinanceAsia Special Jury Award for serving MSMEs 2015 (Edelweiss Retail Finance Limited) At MSME Banking Excellence Awards PCJ Congratulations! PC Edelweiss CIMSME MSME BANKING EXCELLENCE Piyush Goyal Ranked Amongst India's Best Corporate Brands 2016 in the The Economic Times Consumer Survey Edelweiss Retail Finance wins the "Special Jury Award for Serving MSMEs at MSME BANKING EXCELLENCE AWARDS-2015 Edelweiss Edelweiss #IAmTeamIndia Olympics Campaign wins 66 MARKETING CAMPAIGN OF THE YEAR 2016 99 CMO ASIA EDELWEISS WINS BEST CORPORATE GOVERNANCE INDIA AWARD FOR THE SECOND TIME! Edelweiss Corporate Governance Awards by Capital Finance international (CF) 100 MOST VALUABLE BRANDS OF THE YEAR 2016 * 60 60#61Awards and Recognition AsiaRisk Awards 2016 Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM AWARDS 2016 Awards 2016 wealth finance2016 business awards Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM AWARDS 2016 Hearly Congratulations! Edelweiss Structured Products awarded the India House of the Year Award at the Asia Risk Awards 2016, Singapore Edelweiss Financial Services awarded Best Leading Diversified Financial Services - India at the Wealth&Finance 2016 Business Awards. NA USI E CO Lambi life ki zaroorat ? Follow traffic rules or follow me Edelweiss Tokio * Edelgive Foundation awarded best Financial Inclusion Awards for Institutions & Philanthropic Trusts for Advancing Financial Inclusion By Channelizing CSR Budgets into Financial Aids by CNBC - TV 18 Winner at Indian Brand Convention, BAM Award 2016 for Best CSR Campaign; Gold at Asia Pacific Customer Engagement Award 2015-16 for Successful use of CSR 61#62Edelweiss Social Media Campaigns: #YourKnowledgeQuotient Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM #YourKnowledgeQuotient What is repo rate? a Used by monetary authorities Used by monetary authorities to control inflation to control deflation C Used by monetary authorities to control both d None Lucky winners stand a chance to win Shopping Vouchers worth Rs. 500! T&C: Entries after 7p.m. today will not be accepted. 236 Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM Deepa Malik Shot-put F53 Silver medallist at Paralympics'16! WishingtheParalympics 2016 What does the bear and the bull stand for? Edelweiss TRADE 2016 INDIAN OLYMPIC TEAM Edelweiss #DebunkFinanceMyth EUR Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM #DebunkFinanceMyth Medicare will cover all health expenses Truth Medicare doesn't cover all health related expenses. There are many costs which are not covered under medical insurance and the burden of these costs fall directly on the person. 100 0.0108 A. Bear means stocks are falling & the Bull means stocks are rising. B. The Stock Market is opened and closed. C. Bear means stocks are rising & Bull means stocks are falling. #ScoringSunday 4438 Refer & Win +Edelweiss Tokio Life TotalSecure+ A protection plan that gives you the dual benefit of lifelong security and critical illness protection ❝❝AB LIFE KO MILEGA +99 62 *#63EdelGive Foundation - Key Highlights Education Impacted over 300,000 lives in 13 states Supported 85 Non-Governmental Organizations. Brought INR 67 cr into philanthropy Empowering children through holistic learning approach, life skill & research and advocacy Livelihood Water and soil conservation, skill development, financial inclusion livelihood generation for communities Women Empowerment Promoting safety, gender justice, and economic empowerment of women and girls Quality education for underprivileged children in schools Financial inclusion for women The Protection of Women from Domestic Violence Edelweiss employees, families and clients have given 15,500+ hours in volunteering * 63#64Shareholding Pattern Non Institutions Employee Trust 5.4% Foreign Institutions & Companies 17.5% 32.3% TOP INSTITUTIONAL SHAREHOLDERS ABOVE 1%* (AS ON SEP 30, 2016) Name Percent 1 Carlyle 8.2% 2 BIH SA 5.3% Promoters 44.8% & Employees 3 Fidelity 4.9% 4 SAIF Advisors 3.1% 5 Amansa Investments 1.4% 6 Ashoka PTE 1.1% Significant Institutional Ownership Holding of known affiliates have been clubbed together for the purpose of this information * 64#6516 17 8 10 17 17 16 14 12 29 24 7 27 18 14 32 20 17 37 16 8 24 19 13 32 16 2 18 17 23 2 16 19 13 13 10 13 DETAILED FINANCIALS Edelweiss PROUD SPONSOR 2016 INDIAN OLYMPIC TEAM भारतीय औलब्धिक OLYMPIC ASSOCIATION *#66Consolidated Results * (INR Cr) FY17 FY17 FY16 FY17 FY16 FY16 Q2 Q1 Q2 H1 H1 Annual Fee and Commission Income 240 171 148 411 311 697 Fund based Income 1,232 1,221 1,026 2,453 1,982 4,218 Premium from Life Insurance Business 85 53 57 138 88 300 Other Operating Income 40 27 16 67 30 87 Other Income 4 7 1 11 5 14 Total Revenue 1,601 1,479 1,248 3,080 2,416 5,316 Employee Benefits Expense 276 248 213 524 425 882 Financial Costs 709 699 638 1,408 1,243 2,620 Depreciation & Amortization 23 23 21 46 41 90 Change in life ins. policy liability - actuarial 87 55 49 142 72 256 Other Expenses 269 240 188 509 359 849 Total Expenses 1,364 1,265 1,109 2,629 2,140 4,697 Profit Before Tax 237 214 139 451 276 619 Tax Expenses 97 83 48 180 95 236 Profit After Tax 140 131 91 271 181 383 Share of Minority Interests in Profits -4 -9 -5 -13 -6 -31 Profit After Tax and Minority Interest 144 140 96 284 187 414 Diluted EPS (in INR) (FV INR 1) 1.65 1.63 1.11 3.26 2.18 4.85 Book Value per Share (in INR) (FV INR 1) 48 47 42 48 42 45 66#67Consolidated Results ex-Insurance INR in million FY17 FY17 FY16 FY17 FY16 FY16 Q2 Q1 Q2 H1 H1 Annual Fee and Commission Income 240 171 148 411 311 697 Fund based Income 1,185 1,180 1,008 2,365 1,939 4,132 Other Operating Income 40 27 16 67 30 86 Other Income 7 11 13 Total Revenue 1,469 1,385 1,172 2,854 2,284 4,928 Employee Benefits Expense 236 214 184 450 367 754 Financial Costs 708 699 637 1,407 1,243 2,619 Depreciation & Amortization 21 21 19 42 37 83 Other Expenses 224 207 160 431 300 698 Total Expenses 1,189 1,141 1,000 2,330 1,947 4,154 Profit Before Tax 280 244 172 524 337 774 Tax Expenses 97 83 48 180 95 236 Profit After Tax 183 161 124 344 242 538 Share of Minority Interests in Profits -17 -6 -4 -23 -19 Profit After Tax and Minority Interest 166 155 120 321 231 519 Diluted EPS (in INR) (FV INR 1) 1.89 1.85 1.4 3.69 2.71 6.22 * 67#68Consolidated Financials - Balance Sheet (INR Cr) Sep 16 Mar 16 Sep 15 Mar 15 Equity and Liabilities Shareholders' Funds 4,093 3,760 3,391 3,246 Equity 4,008 3,675 3,306 3,161 Preference 85 85 85 85 Minority Interest 755 612 365 286 Borrowings 30,974 27,773 25,688 23,540 Total 35,822 32,145 29,445 27,072 Assets Credit Book Assets 24,860 20,014 17,321 15,036 Fixed Deposits and Cash & Bank Balances 2,858 3,116 1,288 3,356 Government Bonds 4,420 4,866 4,950 4,323 Other Assets 3,684 4,149 5,885 4,357 Total 35,822 32,145 29,445 27,072 EARC (Edelweiss Asset Reconstruction Company) has now become a subsidiary of EFSL. * 68#69Safe Harbor DISCLAIMERS: This presentation and the discussion may contain certain words or phrases that are forward-looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies ("Edelweiss"). Actual results may vary significantly from the forward-looking statements contained in this presentations due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India and outside India, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the businesses of Edelweiss as well as the ability to implement its strategy. The information contained herein is as of the date referenced and Edelweiss does not undertake any obligation to update these statements. Edelweiss has obtained all market data and other information from sources believed to be reliable or are its internal estimates, although its accuracy or completeness can not be guaranteed. The presentation relating to business wise financial performance, ex-insurance numbers, balance sheet, asset books of Edelweiss and industry data herein is reclassified/regrouped based on Management estimates and may not directly correspond to published data. The numbers have also been rounded off in the interest of easier understanding. Tangible RoE- ex insurance is computed post dividend on Preference Shares. PAT ex-ins - is excluding Minority Interest. Tangible Equity does not include Insurance networth, Deferred tax assets, Preference capital, Employee Trust Shares and Minority. Prior period figures have been regrouped/reclassified wherever necessary. All information in this presentation has been prepared solely by the company y and has not been independently verified by anyone else. This presentation is for information purposes only and does not constitute an offer or recommendation to buy or sell any securities of Edelweiss. This presentation also does not constitute an offer or recommendation to buy or sell any financial products offered by Edelweiss. Any action taken by you on the basis of the information contained herein is your responsibility alone and Edelweiss or its directors or employees will not be liable in any manner for the consequences of such action taken by you. Edelweiss and/or its directors and/or its employees may have interests or positions, financial or otherwise, in the securities mentioned in this presentation. The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. For purpose of comparison, following Banks & NBFCS/DFS are considered Private Banks: HDFC, Kotak, Axis, Yes, IndusInd, ICICI Bank NBFCS/DFS: Bajaj Finserv, L&T Finance, Mahindra Finance, IIFL; Shriram Transport Finance, Shriram City Union, Reliance Capital, JM Financial, Motilal Edelweiss Financial Services Limited Corporate Identity Number: L99999MH1995PLC094641 For more information, please visit www.edelweissfin.com or drop us an e-mail on [email protected]. * 69