Dear Shareholders and Friends,
In the financial year 2017-18, your Company embarked in pursuit of new business opportunities. It is a matter of great pride and satisfaction to me, and a testament to Indiabulls’ execution capabilities that within the span of a year we have made rapid strides in our new business of consumer finance. Further, in line with the group’s strategy to be adequately capitalized, your Company raised Rs. 20 Bn through rights’ issue in March 2018 and Rs. 20.6 Bn through preferential issue in May 2018. The Company has so far received Rs. 5 Bn from the rights issue and balance Rs. 15 Bn will be received in FY 2018-19.
In the first year of its operation, IVL Finance has obtained high long-term and short-term credit ratings from leading credit rating agencies. The company has obtained Long Term Credit Rating of “AA” from CARE Ratings - this is the first time that a lending entity in India has been initiated at such a high credit rating. The company has also obtained the highest short term credit rating of ‘A1 ’ from CRISIL, ICRA, CARE Ratings and Brickwork Ratings. This is the result of your company’s strong management team, high corporate governance standards and its robust technology driven lending business model which represents many firsts in the Indian consumer lending space.
IVL Finance Limited launched the world’s first end-to-end personal loan fulfilment app “Dhani” in November 2017, where a customer could avail an instant personal loan. We have built a robust infrastructure to facilitate a fully mobile app driven loan origination process for personal loans. The simplicity and the end-to-end online fulfilment model have helped us reduce turnaround time, thus increasing efficiency and reducing operational expenses. I believe that the enhanced customer experience, customized product offerings and access to increased database will help in swifter customer acquisition and faster on-boarding of customers.
In a short span, the Company has lanched multiple App and web based product offerings for its customers.
Aadhaar, world’s largest biometric ID system has been the backbone of the Government’s Digital India thrust. This has brought about phenomenal changes in the entire ecosystem of how lending is done in our country. This coupled with how under-penetrated India is currently for credit, is providing vast headroom for growth in the Indian lending market space, and is fuelling growth for lenders like IVL Finance.
The digital lending opportunity in India is vast and according to Boston Consulting Group’s report [Digital
Lending - A
$ 1 Trillion opportunity over the next 5 years, July 2018] disbursals in the next five years is slated to top USD 1 Trillion. The company is targeting this opportunity, and with its app based lending platform it is ideally positioned to cater to this demand.
In our first year of operations, we have made a sizable disbursal of Rs. 13.4 Bn of Personal Loans. Moving forward, I strongly believe digitization and Indiabulls group’s expertise in lending will prove to be a differentiating factor helping the firm leap ahead of its peers.
Your Company has also ventured into Micro, Small & Medium Enterprises (MSME) business lending during FY 2018, tapping into the immense opportunity offered by this segment. Credit penetration is quite low in this segment, with only 7% of the MSMEs (in numbers) having availed credit. With about 55 million MSMEs in the country, accounting for about 37.5% of the GDP, the scope for credit growth is quite immense. To SMEs, we offer both secured and unsecured loans. In FY 2018, we have made disbursals of Rs. 32.1 Bn in this space. As of 31st March 2018, total Assets Under Management stands at Rs. 40 Bn.
Your Company has made a sizable upfront investment in setting up the requisite systems, including the technology platform, credit score based lending models and data analytics. This has helped us undertake data driven underwriting and digitize the lending process, which further enabled us to transform customer experience and also drive cost efficiencies for the company. The niche positioning of your Company along with good market knowledge, and large unmet demand, is likely to drive strong portfolio growth from this segment, going forward.
Corporate Social Responsibility: Indiabulls Foundation
Indiabulls’s CSR arm, Indiabulls Foundation has undertaken number of social initiatives in areas of Health, education, nutrition and sanitation. During the year, under a Nutrition Programme - “Paushtik Aahar” - Indiabulls Foundation provided Nutrition Supplement to 30,000 underprivileged individuals such as malnourished children, pregnant women and lactating mothers across Maharashtra state. All these individuals belong to socially and economically backward families. This includes tribal, slum, abandoned/street children and children from orphanages & rehabilitation centers. Apart from these institutions, Indiabulls Foundation also distributes Paushtik Aahar through its free mobile medical vans and charitable clinics.
The Path Ahead
Indiabulls Ventures is well positioned to capture upto 5% of the market share in the digital lending space over the next few years. We will continue to work on cutting edge technologies, innovate, learn, scale up and remain in a high growth phase for many years to come.
Chairman and Founder