Magma Fincorp Limited

Reaching New Heights in Retail Finance

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FY 1977

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INR in Cr

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Income Annual Disbursement

Magma

incorporated

Commenced financing business operations

Started retail financing

Acquired Consortium Finance

Diversification into general insurance and personal loan

distribution

Merger with Shrachi

High Growth

Phase

JV with ITL for Tractor financing

SME Loans business

launched on own books

…Over 3 decades of rich history in Indian financial services industry…

JV with HDI Gerling for General Insurance business

3

Commercial Vehicle Finance

Car and Utility Vehicle Finance

Used Commercial Vehicle Finance, Tractors & SME

Loans

Construction Equipment Finance

Asset Size – Rs 586 Cr

… Strong Focus on Vehicle Financing Business

Asset Size – Rs 3084Cr

Asset Size – Rs 2062 Cr

Asset Size – Rs 2260

Total Assets ~ Rs 9171 Cr

Other Assets – Rs 1179 Cr

Insurance Agency Business

Premium Size – Rs 38 Cr

4

Vision

Strategy

“To become India’s largest retail financing company”

� Focus on un-penetrated and un-contested rural and semi urban areas

� Around 77 % of the branches are rural / semi urban

� Growth in high yield product segments such as used vehicle financing

� Effective use of cross sell opportunities to expand share of the wallet

� Diversification into offering SME loans and insurance products

� Target on small and first time buyers

� Growth through combination of organic and inorganic routes

… Clear Vision and Effective Strategy

5

Significant market position* in Asset Financing (Q1 FY 10)

Market Share in New CV financing Market Share in New Car/UV financing

Market Share in CE financing

Magma

3.0%

Others

97.0%

� Market share based on internal estimates, based on All India industry sales for Car and Commercial Vehicles for Q1 FY 10

� Market share for CE based on internal estimate of industry sale for Q1 FY 10

Magma

2.3%

Others

97.7%

Magma

8.6%

Others

91.5%

* Market share figures shown above are as per company estimates.

6

Involved Customer

Management Process

An efficient and involved customer management process

“Deepen and

diversify client

relationships”

“Know your

customer”

“Grow with the

customer”

“Enable healthy

client growth”

Proximity to customers

Hands on sales force with close understanding

of customers’ financial status and requirements

Customer Analysis

Analysis of various customers to identify

attractive segments to be focussed on Flexible products

Flexible repayment terms to absorb any short term

fluctuations of repayment ability. Due consideration is

also given to intentions

Efficient loan processing and back office

operations ensure a faster turn around time for

customers

Healthy customer financials

Better vehicle utilization improves

operational efficiency

Repeat business and

referrals by existing

customers

… Objective to enrich customer lifetime value and build profitable lifetime

relationships

7

Magma At a Glance

� A strong presence across rural and semi-urban India with 148

branches in 20 states and 1 union territory

� Expertise in financing first time buyers and small enterprises

� Bouquet of fund based and fee based products

� Product offerings covering Commercial Vehicle, Passenger Cars and Utility

Vehicles, Construction Equipment Loans, Tractor Finance, SME Loans and

General Insurance

� Magma team strength of 4130 employees, including field force of 3138 employees

� Total Asset Size ~ Rs 9171 Cr

� Loan Assets of ~ Rs 7992 Cr

� Disbursement: Rs 1229 Cr for Q1 FY10

� 5-Yr CAGR of 34% in disbursements, 50% in income

� Capital Adequacy at 17.3% (March 2009), above norm of 10%.

8

Strong Financial Performance

867

13711820

2544

3513

1229

3673

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3500

4200

FY20

04

FY20

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09Q

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-10

Rs Cr

CAGR 34%

82 98152

278

471

625

142

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-10

Rs Cr

CAGR 50%

Annual Disbursement Income

Net Profit

CAGR 50%�Magma has posted disbursal of

Rs.1229 Cr in Q1 FY 10 almost same

as Q1 FY 09

�Income grew by 3% in Q1 FY10.

17.614.0

20.2

31.4

50.5

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FY20

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09Q

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-10

Rs Cr

CAGR 17%

9

Profile of Promoters

� Founded Shrachi Group – businesses in Financial Services, Realty, Agricultural Tools & Engineering

� Joined as co-promoters on merger of Shrachi Infrastructure Finance with Magma in FY07.

� The Todis have over 20 years of experience in financing business

Shravan Kumar Todi,Vice Chairman

Age 67 yrs, M.Com

Ravi Todi, Joint Managing Director

Age 40 Yrs, B.Com

� Promoted Magma Leasing along with Mayank Poddar

� Two decades of experience in retail finance business

� Looks after strategic policy formulation and execution, driving new business initiatives and guidance on day to day affairs of the company

Sanjay Chamria, Vice Chairman & Managing

Director Age 45 years, FCA

� 22 years experience in finance business

� Interests in realty sectors

� Role at Magma - Strategic & policy direction

Mayank Poddar, Chairman

Age 56 Years, B.Com

10

Equity Holding

Given its strong business and operating fundamentals, Magma has attracted significant interest from overseas investors

2004 Jun 2009

Promoters

49.2%

Others

23.0%Overseas

Investors

27.8%

Promoters

71.5%

Overseas

Investors

0.0%

Others

28.5%

11

Organisation Structure

Vice Chairman & Managing Director

Head-Insurance Business

Chief Financial Officer

Chief Information

Officer

Chief People Officer

Company Secretary

MIS & Control

Treasury

Audit Committee& sub-committees

Accounts & Taxation

National Sales Heads CE,

Suvidha and SME

National Business Vertical Heads

SBU HeadRecruitment

Head Admin & Corp Com.

Training

Performance & Compensation

Joint Managing Director (JMD)

SBU Product Heads

SBU Credit Head

SBU Recovery Head

Segregated teams - Sales, Credit & Collections

SBU Structure

Board of Directors

National Recovery Head (0-180)

National Credit & Ops Head

National ARD Head (180+)

IT Infrastructure

Project & Software

SBU OPS Head

12

Pan India Presence

148 Branches across 20 States & 1

Union Territory

� Pan India Presence

� Strong in East, North, South and Growing

Presence in West

� Focus on:

� Rural markets

� Semi-urban markets

South,

35East, 37

West, 31

North,

45

Markets Zones

Urban,

33

Rural, 62

Semi-

urban,

53

13

Disbursements Profile – By Geography/ Products

Passenger Cars and

Utility Vehicles 24%Strategic CE 4%

Const Equipment

26%

Used CV 3%Commercial

Vehicles 42%

Const

Equipment

24%

Strategic CE

7%

Commercial

Vehicles

30%

SME

6%

Used CV

3%

Tractors

4%

Passenger

Cars and

Utility

Vehicles

26%

Disbursements – Geographical MixDisbursements – Geographical Mix Disbursements – Product MixDisbursements – Product Mix

Apr- Jun 2009

�Well diversified portfolio – de-risked across geographical markets and products

ANDHRA PRADESH

14%WEST BENGAL

8%

CHHATTISGARH /

MP

14%

GUJARAT

4%

UP / UTTARANCHAL

7%

JHARKHAND /

BIHAR

8%

TAMIL NADU

1%

DELHI &

HARYANA

5%ORISSA

5% MAHARASHTRA

9%

KERALA

3%KARNATAKA

4%

DELHI & HARYANA

11%PUNJAB /

HP 12%

14

JCB INDIA

LTD

36%

CATERPIL

LER

6%

Others

18%

L&T-

KOMATSU

12%

TELCON

17%TATA

11%

TATA

81%

OTHERS

3%

M & M

1%

EICHER

7%

ASHOK

LEYLAND

8%

MARUTI

47%

OTHERS

17%

HYUNDAI

11%

TATA

10%

M & M

15%ITL

64%

TAFE

15%

EICHER

21%

CAR Tractor

CECV

Disbursements Profile – By Manufacturer

Apr- Jun 2009

15

Strong presence in its Niche Segments

Commercial Vehicle

•The First-Time Buyer & small customers owning 0-5 vehicles are prime customers; 90% of the portfolio is small road transport sector (SRTO), a priority segment as per RBI

Passenger Car & UV

•Semi Urban segment growth oriented; Rural segment – fast developing market.

•Over 25% portfolio is eligible under SRTO

Construction Equipment

The First-Time Buyer & Small Customers owning 0-1 equipments are target customers; Over 80% of portfolio under SME/SSE lendings

Retail Focus

16

Overview of Insurance Business

Distribution of Insurance Products

� Insurance business launched in FY 05

� Alliances with National Insurance, Royal

Sundaram, Bajaj Allianz, Oriental Insurance,

Reliance General Insurance & Kotak Life for

various products

� Key features:

� About 76% captive business & 24% of non-

captive business

� High proportion of renewal business, where

premium is collected through EMI

� Developed expertise in claims settlement and

back office operations

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44

87

128

160

38

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20

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160

180

FY 05 FY 06 FY 07 FY 08 FY 09 Q1 FY-

10

Rs Cr

CAGR 75%

General Insurance venture by Magma

� Foray into General Insurance through Joint Venture HDI-

Gerling in Jul 09

� HDI-Gerling is part of Talanx Group, which is the 13th largest player in Europe & 3rd largest Insurance group in Germany with a track record of over 100 years

� The new entity will be the first private sector general insurance

company headquartered in East Zone

17

Reinforcement of Collection Management

� In view of declining collection performance of industry peers and own portfolio growth, Magma proactively reinforced its collection management system in FY09

� By creating a separate Collection Function Vertical upto National Level

� Reinforcement of leadership at National/Zonal/SBU levels

• Two senior most Magma leaders appointed as National Collection Heads

• Collection team increased and leadership inducted from industry leaders

� A centralised direction and control of collection performance

� Through constant and rigorous portfolio monitoring and collection strategy

• With ground level staff at branches / different buckets

• Integration of normal collection, repo/sale and legal processes

� Suitably incentivising the FOS through innovative/special schemes

� During FY09, Magma created a separate asset reconstruction division for driving rapid recovery out of non performing loans

97

99

88.0

90.0

92.0

94.0

96.0

98.0

100.0

Q1 FY-09 Q1 FY-10

Collection Efficiency %

� Collection efficiency in Q1 FY10 has increased to 98.6% from 96.8% last year on the back of portfolio increase of almost 15%

18

Strong Financial Performance…Reaffirmed

� Bank Facilities

� With 19 consortium banks & institutions; includes all major banks operating in India

� Working Capital Facility and Term Loans/ Debentures of approx. Rs 3030 Cr

� Credit Rating

� Has consistently maintained high credit rating

� Rating under Basel II : PR1+ for short term and AA for Long & medium term by CARE.

� Securitisation Pool Rating : AAA (so) by CRISIL

� Secured Bonds : AA by CARE

� Commercial Paper / Short Term Debt : PR1+ by CARE

� Unsecured Long Term Debt : AA by CARE

� Unsecured Tier II Bonds/debentures : AA- by CARE

� Perpetual Debt : A+ by CARE

� Financing Arrangements

� Bilateral Securitisation with ICICI Bank, Punjab National Bank, IDBI Bank, UBI, State Bank of Patiala, UCO Bank, Dena Bank, SIDBI, IDFC, Kotak, SBICI & Axis Bank

� Securitisation through PTC route in market

• Major Investors: Mutual Funds such as , Deutsche Mutual, Morgan Stanley, PNB Principal MF, SBI MF, Reliance MF, Canbank, HDFC MF etc.

19

Alliance with Maruti Suzuki

� In FY 2007, Maruti Suzuki got into an Alliance with Magma

� Maruti is the largest Car manufacturer in India with over

50% share in the passenger car market

� Key Benefits

� Alliance gave Magma the status of Preferred Financier for

Maruti Suzuki

� It allowed Magma access to Maruti’s extensive dealer

network across India

� Access to large customer base to drive disbursement growth

� Facilitated Semi-urban & Rural Maruti customers access to

finance from Magma

� Monthly volume of maruti cars financed saw manifold

increase subsequent to tie up.

Magma Leasing

Limited

Maruti Suzuki

Acquiring

Consortium Finance

Alliance with

Maruti Suzuki

Merger with

Shrachi

Infrastructure

Finance

JV with HDI-

Gerling

JV with

International

Tractor Limited

20

JV with International Tractors Limited

� In FY 2008, Magma formed a Joint Venture with International Tractors Limited (ITL)

� ITL is amongst the top four manufacturers in India

� ITL sold approx. 30,000 in FY2009 , of which 95% were financed

� Magma holds 74% in the new company and ITL the balance 26%

� Key Benefits

� The JV has access to 500+ dealer outlets of ITL across the country mostly in rural areas

� The JV company is entitled to participate in all dealer promotional schemes

� The JV company is assured of a min 40% of business of ITL

� Opportunity for JV to look at other financing opportunities in the agri-sector

� Tractor Business Q1 FY 10: _______(Rs. _____).

Magma Fincorp

Limited

International

Tractor Limited

Magma ITL

Finance Limited

74% 26%

10SOUTH

23NORTH

40WEST

27EAST

Disbursement %ZONES

Disbursements – Geographical MixDisbursements – Geographical Mix

Acquiring

Consortium Finance

JV with International Tractor Limited

Merger with

Shrachi

Infrastructure

Finance

JV with HDI-

Gerling

Alliance with

Maruti Suzuki

21

JV with HDI Gerling AG, Germany

Acquiring

Consortium Finance

JV with International Tractor Limited

Merger with

Shrachi

Infrastructure

Finance

JV with HDI-

Gerling

Alliance with

Maruti Suzuki

Magma &

Associates

HDI-Gerling

International

Holding AG

Magma HDI General

Insurance Company

74% 26%

� Magma has signed a JV agreement with HDI-Gerling to enter into general insurance sector in India

� HDI-Gerling is part of Talanx Group, 3rd largest Insurance group in Germany

� Magma / Associates will hold 74% and HDI, balance 26%

� The JV will underwrite insurance business related to Motor, Fire, Engineering, healthcare and other general insurance products

� Expected commencement of business : FY11

� Key Benefits

� The JV will get a headstart in terms of Magma’s strong captive customer base and large distribution and servicing network

� Magma will become a corporate agent and earn commission income on the business that it will generate for the JV.

� The JV will enable cost efficiency for Magma by way of better utilisation of mannower and infrastructure resources

� JV will get the benefit of HDI’s unique product design, cost efficient operational management skills and excellent reinsurance platformwhich will help it to manage insurance risks better

22

Ongoing Alliances* – ability to work successfully with partners

Manufacturers

Banks

Insurance

Companies

National Insurance Company

Oriental Insurance Company

* Representative Listing of Labels

23

Oracle 10gApplication

Server

Oracle 10gApplication

Server

Oracle 10gDatabase Server

Web databaseContent

Client Data

Web

Server

Report

Writer

HO - KOLKATA Other Locations

Reportingdatabase

IT Platform – Overview of Architecture and Network

Service Provider

VPN CLOUD

Internet

Strong IT platform and branch network connectivity enables real-time processing &

information access

24

Magma – In Brief

Strong retail network across rural and semi urban IndiaStrong retail network across rural and semi urban India

Finances first time buyers and small enterprisesFinances first time buyers and small enterprises

Well-diversified product portfolio – adding new productsWell-diversified product portfolio – adding new products

Pan India presence and leveraging its wide networkPan India presence and leveraging its wide network

Strong financials and funding track recordStrong financials and funding track record

Fee based revenue stream – Asset Insurance and Credit CoversFee based revenue stream – Asset Insurance and Credit Covers

25

Looking Ahead…

Utilise infrastructure and resources for sustained business growthUtilise infrastructure and resources for sustained business growth

Emerge as a formidable retail finance player with strong brand

recall

Emerge as a formidable retail finance player with strong brand

recall

Expand product offerings & leverage distribution networkExpand product offerings & leverage distribution network

Leverage and increase field presence & brand equity in semi

urban and rural markets

Leverage and increase field presence & brand equity in semi

urban and rural markets

Strive for high-level IT enablement, operational efficiency and

sustainable margin on each product line

Strive for high-level IT enablement, operational efficiency and

sustainable margin on each product line

26

Disclaimer

Certain of the statements and figures included in this presentation may be forward looking statements

and/or based management’s current expectations and beliefs concerning future developments and their

potential effects upon Magma and its subsidiaries/ associates. There can be no assurance that future

developments affecting Magma and its subsidiaries/ associates will be those anticipated by management.

These forward-looking statements are not a guarantee of future performance and involve risks and

uncertainties and there are important factors that could cause actual results to differ, possibly materially,

from expectations reflected in such forward-looking statements. Magma does not intend, and is under no

obligation, to update any particular forward-looking statement included in this presentation.