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IDFC Ltd.

BSE: 532659 Sector: Financials
NSE: IDFC ISIN Code: INE043D01016
BSE 00:00 | 20 Oct 52.05 0.05
(0.10%)
OPEN

52.75

HIGH

52.75

LOW

50.60

NSE 00:00 | 20 Oct 52.00 -0.05
(-0.10%)
OPEN

52.10

HIGH

52.75

LOW

50.55

OPEN 52.75
PREVIOUS CLOSE 52.00
VOLUME 398343
52-Week high 62.60
52-Week low 28.30
P/E 520.50
Mkt Cap.(Rs cr) 8,309
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 52.75
CLOSE 52.00
VOLUME 398343
52-Week high 62.60
52-Week low 28.30
P/E 520.50
Mkt Cap.(Rs cr) 8,309
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IDFC Ltd. (IDFC) - Chairman Speech

Company chairman speech

Dear Shareholders

A difficult financial year for our economy with sluggish growth was overwhelmed byCovid-19 towards the end. The crisis globally and domestically brought on by thepandemic is truly unprecedented. Uncertainty surrounding extent of its adverse impact onhuman lives and damage to economies threatens to reorder the very basis of human socialand economic interactions across the globe. Poor visibility on a timeframe for a cure orpreventive further complicates assessment of its impact and our ability to prognosticatepotential recovery. However witnessing the herculean efforts resources commitment andwill of political medical and social stakeholders across the globe to surmount thischallenge gives me hope that this crisis will be behind us sooner than later.

Nevertheless to unlock value for all of you we continued steadfast on our chartedstrategic direction of divesting non-retail businesses and investing to grow our retailbusinesses i.e. IDFC FIRST Bank and IDFC Asset Management Company (AMC).

We have now completely exited our nonretail businesses. We exited private equitybusiness managed by IDFC Alternatives last fiscal itself. We divested our entire 81.5%stake in the Infrastructure Debt

Fund to the National Investment and Infrastructure Fund and/ or its affiliates. Thesale was consummated in two tranches - 51.5% was sold last fiscal and the balance 30% wassold this fiscal.

We had signed an agreement to sell IDFC Securities to Dharmesh Mehta and a group offinancial investors. It took us greater part of the fiscal to obtain clearances andapprovals and it was only in June '20 that the deal saw its final closure.

IDFC FIRST Bank is progressing well towards its stated goal of becoming a mass retailbank both on assets side as well as liabilities.

Our bank's retail loans (including inorganic portfolio) constitute 61% of loans as on31st March 2020 compared to 37% a year ago. Retail loans increased 40% to Rs. 57310crores as on 31st March 2020 from Rs. 40812 crores as on 31st March 2019. Wholesale loansdecreased 27% to Rs. 39388 crores as on 31st March 2020 from Rs. 53649 crores as on 31stMarch 2019. Within wholesale infrastructure loans decreased by 31%.

CASA ratio of the bank improved to 31.9% as on 31st March 2020 from 11.4% as on 31stMarch 2019. CASA deposits increased to Rs. 20661 crore as on 31st March 2020 from Rs.7893 crores as on 31st March 2019 an increase of 162% over the year. In fourth quarterof the fiscal CASA growth of Rs. 4458 crores despite Covid-19 and other issues wasparticularly impressive. The fixed deposit program of the bank was assigned the highestsafety rating of FAAA by CRISIL.

Net Interest Margin of our bank improved to 4.2% in the last quarter of the fiscal ascompared to 3.0% in the last quarter of previous fiscal.

IDFC FIRST Bank has been investing to expand its branch network which stands at 464branches and 356 ATMs across the country as on 31st March 2020.

In June '20 to further strengthen its capital adequacy to ensure better preparednessto cope with uncertainties unleashed by Covid-19 our bank raised additional capital ofRs. 2000 crore. To ensure compliance with RBI regulations of maintaining 40% promoterstake in the first 5 years of operations of the bank we contributed Rs. 800 crore to thecapital raise. This additional capital raise enhanced the capital adequacy ratio of ourbank now to northwards of 15%.

In addition to contributing to the capital raise of our bank we also distributed Rs.3.15 per share as dividend during the fiscal.

Our AMC continued to further 'retailise' its growing franchise diversify its productsand capabilities enhance customer engagement and invest in digital technologies andinfrastructure that positions it well for long term growth. Our mutual fund crossed thecoveted Rs. 1 lakh crore assets under management (AUM) milestone and entered the ranks ofthe top 10 within the industry in terms of total AUM.

Overall average AUM in the last quarter of the fiscal grew about 50% as compared tothe same quarter last fiscal significantly outperforming industry growth of around 11%.In the last quarter of the fiscal the market share (excluding liquid funds) of our AMCimproved by 1.2% to reach 4.3% while total market share improved by 0.9% to reach 3.8%.

Our mutual fund steadily built its franchise with the number of active investors servedgrowing by around 7%. It increased the number of active distributors of fixed income fundsby 29% added over 2.2 lakh new folios and about 1.40 lakh new systematic investment plans(SIPs). Independent fund ranking agencies and media houses recognised and highlighted ourfund performances and honoured us with awards.

On June 12 2020 the Reserve Bank of India (RBI) constituted an Internal Working Groupto review extant ownership guidelines and corporate structure for Indian private sectorbanks. The mandate of the working group among other issues includes study of the currentregulations on holding of financial subsidiaries through non-operative financial holdingcompany (NOFHC) and suggesting the manner of migrating all banks to a uniform regulationin the matter including providing a transition path; and examining and reviewing thenorms for promoter shareholding at the initial/licensing stage and subsequently alongwith the timelines for dilution of the shareholding.

The Internal Working Group has to submit its report by September 30 2020. Thispotentially is a very important development and decisions taken by the RBI post this willdetermine the strategic direction for us. Your Board and the management team have devotedconsiderable time in evaluating strategic options for unlocking value. We are hopeful forthe best outcome for all of you.

To conclude notwithstanding a challenging financial year and uncertainties unleashedby Covid-19 towards the end of the year our employees have worked very hard to create astrong robust and vibrant platform. I take this opportunity to thank each one of them fortheir sincere efforts.

I also thank each one of you - our valued shareholders for placing your faith andconfidence in us. I look forward to your continued support.

Vinod Rai

Independent Non-Executive Chairman

.