Professional Documents
Culture Documents
AR Content
AR Content
Governance Reports
Directors Report
Report of the Directors
on Corporate
Governance
Management
Discussion and
Analysis Report
Assets under
Management (AUM)
8.08%
Financial
Statements
Standalone
Consolidated
Revenue
NIM growth
18.33%
22.25%
292bps
5-year CAGR
5-year CAGR
5-year period
5-year CAGR
5-year CAGR period (2011-12 to 2015-16)
Page 1
The result is that today we are reaching out to more customers, faster
turnaround time, better credit decisions, reducing operating cost and cost
of finance; and improving return on assets and equity
Our strategy has made us fleet-footed, flexible and future fit to attract,
service and retain a large customer base for the long term.
Page 2-5
Vision
To become Indias largest retail asset finance company
Mission
Continue service excellence in retail financing to bring happiness and prosperity to all
Values
Openness and transparency: We will foster honesty and frankness in all our dealings and
be clearly discernable with everybody we deal with.
Integrity and credibility: We will act with the utmost intellectual and financial uprightness
and will be seen acting as such.
Fairness and impartiality: We will be just in our dealings with others and practice empathy.
Trust and respect for people: We will recognise and demonstrate through our actions, our
inherent belief in the dignity that every human being is entitled to.
Demanding excellence: We will, in demanding excellence of ourselves and others, exceed
all expectations and overcome perceived barriers.
Products portfolio
First Time
Buyers
FINANCI
NG
Commercial
Finance
CUSTOMER SEGMENTS
Self
Small &
Employed
Medium
Non
Entrepreneur
Professionals
s
*
*
Limited
banking /
credit history
*
SOLUTIO
NS
Agri Finance
SME Finance
Mortgage
Finance
General
Insurance
*
*
*
*
Pan-India presence
We are headquartered in Kolkata (India) with an extensive network comprising 252 234
branches across 20 21 states and one union territoryterritories.
We operate through a hub-and-spoke model with wide coverage leading to
presence in point of sales, enabling sourcing from 1,900 talukas and 2,900
locations.
We have a state-of-the-art toll free inbound/outbound customer delivery centre for
customer servicing and cross-selling.
Region-wise distribution of
branch network
North 26%
Rural - 35%
West 26%
Semi-Rural Urban 44%
South 25%
Urban - 21%
East 23%
As on 31 March 2016 [Pie chart representation with above data]
Business partners
We are a preferred financing partner for over 25 leading automotive OEMs like Eicher
Motors, Tata Motors, Honda, Mahindra & Mahindra, JCB, Volvo, TAFE, Maruti, John
Deere, Caterpillar and Escorts among others.
We have a diversified liability profile comprising bank lines (22 25 banks), capital
markets and securitization transactions. Our evenly spread profile across all three
funding channels allows us to balance channel-wise exposure.
Listing information
We are listed on the National Stock Exchange (NSE Ticker: MAGMA) and the Bombay
Stock Exchange (BSE Ticker: 524000).
Rs. 18,183
crore
Assets under
management as on
March 31, 2016
Disbursements in
2015-16
Loan book as on
March 31, 2016
94.84%
AA+
Collection efficiency
as on March 31,
2016
Rs. 1,771.48
crore
Market capitalization as
on March 31, 2016
Re. 0.80
Dividend per share
for a face value of
Rs. 2
Page 6-7
-29%
2012-13
8,678
2014-15
10,115
(` in Crores)
2015-16
7,180
2013-14
19,703
2014-15
21,175
(` in Crores)
2015-16
19,607
2013-14
17,877
2014-15
19,567
(` in Crores)
2015-16
18,183
2013-14
2,117
(` in Crores)
2014-15
2,386
2013-14
9,081
Y-o-Y
2012-13
18,378
-7.4%
Y-o-Y
7.1%
2012-13
16,240
Y-o-Y
Revenue
2011-12
1,080
5.0%
2012-13
1,701
Y-o-Y
2015-16
2,506
2012-13
145
14.0%
Y-o-Y
2013-14
160
2014-15
187
(` in Crores)
2015-16
213
2014-15
16.3
(%)
2015-16
18.7
2014-15
95.2
(%)
2015-16
94.8
2014-15
6.16
2015-16
6.97
2014-15
232
(No.)
2015-16
234
2014-15
490,000
(No.)
2015-16
[475,000]
2012-13
16.8
2013-14
16.6
+240 bps
Collection efficiency
2011-12
100.5
2012-13
98.2
2013-14
95.7
-38 36 bps
Net interest spreadmargin
2011-12
4.05
2012-13
5.48
2013-14
5.51
(%)
+81 bps
Branch network
2011-12
200
2012-13
275
2013-14
274
Customer base
2011-12
289,600
2012-13
390,000
2013-14
440,000
Employee strength
2010-11
5,700
2011-12
7,300
2012-13
2013-14
9,760
9,790
Product-wise loan
book
Break-up of asset
under management
(No.)
2014-15
[9070]
Equipment 7.99%
Equipment 7.99%
Tractor 18.76%
Tractor 18.76%
Mortgage 18.52%
Mortgage 18.52%
Used Vehicles
Used Vehicles
11.24%
11.24%
SME Loans 9.52%Car SME Loans 9.52%
and Utility Vehicle
4.90%
Commercial Vehicle
9.07%
Construction
Equipment 7.99%
Tractor 18.76%
Mortgage 18.52%
Used Vehicles
11.24%
SME Loans 9.52%
As on 31 March 2016 [Pie chart representation with above data]
Page 8-9
Diversified portfolio: Our product portfolio comprises products across asset finance,
agri finance, SME finance, mortgage finance and general insurance. No single product
contributes over [25]% to our overall income, minimising risk exposure.
Page 10-11
Outcome
We are now more integrated with our customers and their changing
aspirations
There is more accountability and ownership across the organization
Decision-making is now more well-informed and quick
Learning and productivity curves are rising
Cost structure is more rationalised
Channel management is seamless
Direct business has increased, leading to higher yields
PEOPLE
PROCESS
Growth drivers
Customers with informal income sources and low
eligibility for bank loans
Customers with no established credit track record
Customers with limited banking transactions
Small factory owner/contractor, trader/shop owner
with working capital needs ( SME/LAP customer)
Small fleet operator (taxi/truck/equipment buyer)
Self
employed
non
professional
s
Small &
medium
entrepreneu
rs
Limited
banking /
credit
history
First time
buyers
Overarchi
ng
Objective
Strategic
Imperativ
es
branch managers
Incentives aligned to drive direct
business / cross-sell and customer
service
TECHNOLOGY
CUSTOMER
Page 14-15
Chairmans statement
Dear Shareholders,
In my last letter to you, I had dwelt extensively on how we are focusing on our
fundamentals to bring equality of opportunity to the economically disenfranchised. As
a part of that long-term initiative, we restructured our business model during the year
to strengthen customer connect, help accelerate financial inclusion, and remain future
fit.
The global economic scenario is still volatile, leading to slow credit offtake and an
overall environment of caution. The countrys macro-economy is stable and anchored
in the governments commitment to fiscal consolidation. The government has
undertaken multiple initiatives to revive the economy. These initiatives will augur well
for the overall financial ecosystem, going forward.
The expected normal monsoon, implementation of the Seventh Pay Commission
Recommendations and the One Rank One Pension are expected to bolster
consumption in the rural and semi-urban India, leading to more credit offtake. In
addition, the revamped Mahatma Gandhi National Rural Employment Guarantee Act
(MGNREGA) and direct cash transfers will also lead to better cash flows in the hands of
those close to the bottom of the pyramid.
Over the years, we have built a distinct capability for providing financial solutions to
the underserved and under-banked customers. These customer segments have very
limited access to the formal lending ecosystem, mainly because they do not have
adequate documentation and knowledge of banking procedures. We have developed a
well-diversified product portfolio and a widespread pan-India distribution coverage
that primarily caters to these customer segments.
We have significantly enhanced the depth and breadth of our pan-India footprint, right
up to the taluka level, with over 7,000 field force straddling 1600 talukas and 2900
locations in the country. We are providing financial solutions right at their doorsteps.
Our technological innovation helps accelerate faster customer acquisition, portfolio
servicing and effective cross-sell.
We are merging operations, simplifying processes and migrating to a paradigm of
better and faster credit decision by delegation of authority and enhanced use of
technology at the field level. Better channel management, local accountability and
ownership and finally more direct business and cross-selling are some of the other
areas in which we are putting a lot of emphasis upon. The broad levers that drive our
sustained and profitable growth are ROA enhancement, OPEX reduction, low cost of
finance?? and robust asset quality.
Our performance
During FY 2015-16, we reported ` 2,506 Crore revenue compared to ` 2,386 Crore in
FY 2014-15 owing to our customer-centric strategy, deeper pan-India reach and
enriched product basket. Our consolidated PAT for the year was` 213 Crore --- 14%
growth vis--vis 187 Crore last year ---- owing to improvement in efficiency (lower
opex ratio) and higher contribution of profitable products. Moreover, the Board has
recommended a dividend at a payout ratio of [10]% as in the previous years, subject
to the approval of shareholders.
Growing profitably
Improving asset quality: We calibrated our portfolio according to product-customergeography mix. We implemented a refined credit screening and processes to optimize
portfolio performance; and put in place product-wise early warning indicators and loss
tracking mechanisms to reduce delinquencies.
Declining operating cost: We enhanced productivity through technology enablers,
automation and process simplification. We reduced customer acquisition cost by
focusing on direct sourcing, improving cross-sell and elevating customer services.
Reducing Cost of Fund (COF): We put in place a judicious mix of non-convertible
debentures (NCDs), commercial papers, bank lines and securitisation to reduce COF,
limit concentration and minimise liquidity risk. We diversified our mix of debt market
investors and increased the share of priority sector lending (PSL).
Bettering Return on Assets (ROA): We have undertaken multiple initiatives to
strengthen profitability across products and branches. We have increased the share of
higher risk-adjusted yield products (Used Assets /SME /Mortgage Finance), enabling us
to better our ROA.
Future preparedness
Future preparedness at Magma is ultimately about a shift in mindset. Our people
performed commendably in a difficult macro scenario, because each one of us
believed that a tougher and fitter Magma needed to be built. We stood our ground,
despite headwinds and focused on incremental innovation to bring consistency in
service delivery. Going forward, we will continue to focus on innovation and
digitization of business processes to bring globally-benchmarked services to the
doorsteps of customers in need.
Our commitment remains unwavering to the underserved Rurban India. Have we
accomplished our task? Not yet. We are, however, well on our way.
In this context it is pertinent to iterate that being future fit is not a decorative
wordplay for us. We test our competitiveness everyday on ground, battling rain and
shine, across large parts of a diverse nation, reaching out to people in need; and
helping them take firm strides forward.
The journey is long and arduous; nevertheless, exciting. On behalf of the entire
leadership team, I would like to thank all Magmaites for their contribution. I am also
grateful to all our stakeholders for supporting our vision and for their good wishes.
Sanjay Chamria
Vice Chairman and Managing Director
Besides, Mr. Gupta also co-founded Blue Ocean Capital & Advisory Services. He is a B.Tech
and AMP.
Total years with Magma: 7
Board committee membership and chairmanship: 6
Other companys directorships: 10
Satya Brata Ganguly
Independent Director
Mr. Ganguly is on the Boards of various reputed Indian corporate and public bodies as an
Independent Director. He was the Chairman and CEO of Exide Industries Limited and was
awarded the title of Chairman Emeritus of Exide Industries. Mr. Ganguly is a chemical
engineer by profession.
Total years with Magma: 5
Board committee membership and chairmanship: 8
Other companys directorships: 6
Ritva Laukkanen
Non-Independent Director
Ms. Laukkanen has over 30 years of experience in international investment and financial
markets with focus on emerging markets and development finance. She is an alumnus of
Helsinki School of Business Administration, London Business School and Harvard University.
Total years with Magma: 1
Board committee membership and chairmanship: Nil
Other companys directorships: Nil
Srenik Singhvi
Additional Director
Mr. Singhvi is an advocate with nearly four decades of experience handling Civil and Criminal
cases. He is enrolled with the West Bengal Bar Council and currently practices at the High
Courts all over India, the Supreme Court of India, DRT, Consumer Forums, FEMA and conduct
Arbitrations. He is a legal counsel to a large number of corporate houses.
Board committee membership and chairmanship: Nil
Other companys directorships: 1
Ms. Laukkanen has over 30 years of experience in international investment and financial
markets with focus on emerging markets and development finance. He is an alumnus of
Helsinki School of Business Administration, London Business School and Harvard University.
Total years with Magma: 1
Board committee membership and chairmanship: Nil
Other companys directorships: Nil
Page 18-19
Mr. Sanjay Chamria (Managing Director) was recognised as the CEO with HR Orientation of
the Year by Genius Consultants Ltd., in association with The Times of India.
Magma Fincorp was awarded the prestigious ET Bengal Corporate Awards 2016 in the
category of Highest Job Creator (above Rs. 1000 Crores).
Mr. Kaushik Sinha (Vice President Corporate Communication, CSR &admin) was
recognised as one of the 100 most Impactful CSR Leaders in India by World CSR Day.
Magma Fincorp was honoured with the prestigious Asia Pacific HRM Congress Awards 2015
in the category of Best Corporate Social Responsibility Practices.
Mr. Suryakant Mishra (Team Member Corporate Communication) won an award for Best
Corporate Presentation in Corporate Communications Segment at Asia Pacific Conference
on Changing Business Practices in Current Environment, 2016.
Magma Fincorp received the HR Excellence Award, 2015 for Strong Commitment,
recognised by Confederation of Indian Industry.
Magma Fincorp was awarded at the Dataquest Business Technology Awards in the
Analytics category for its business intelligence solution, BEAM.
Magma Fincorp Annual Report, 2015 bagged the Gold Award and ranked 39th at the LACP
Spotlight Awards 2015 (USA). Magma has been rated as one of the best among top brands
for the 5th year in a row.
Magma Fincorp received the prestigious FINNOVITI Award 2016 in the mobility segment
for Magma Sales Mobility Solution project. It was jointly organised by Banking Frontiers and
Deloitte.
Ms. Janet Gasper Chowdhury (Chief People Officer) was recognised as one of the 100 Most
Talented Global HR Leaders at the 23rd edition of the World HRD Congress, hosted by
CHRO Asia.
Ms. Janet Gasper Chowdhury (Chief People Officer) was honoured as one of the 100 Most
Influential HR Leaders in India by CHRO Asia.
Details of our LACP for Mission India and Auto Lease Award (Sarmistha to share)
Page 18-19-20-21-22
Early warning
indicators (EWI)
In house team
At Magma, credit management plays a significant role in appraising asset quality and
ensuring profitability. It provides an insight into customer credibility, since a major
portion of our customers consists of the countrys rural and semi-urban population.
Product risk, along with the capability and intention to service the instalments are
core to our lending process.
We are consistently upgrading our credit screens comprising customer selection and
credit acceptance criteria to address a wide range of customers. This also helps us
taking prompt and uniform actions. The credit appraisal process comprises de-dupe,
field investigation, risk containment exercises, evaluation of financial documents,
visits to the customers and reference checks, among others. Technological
upgradation and frequent visits have further facilitated the process.
The risk management department provides rich data analytics support to credit
management, which helps it frame credit policies.
Key features, 2015-16
Addressed 114,712 proposals within limited timelines during FY 2015-16
Reduced turnaround time from [9.74] days in FY 2014-15 to [9.75] days in
FY 2015-16
Conducted market analysis to measure demand and delinquency trends
Analysed the market trends on the basis of three parameters product categories,
customer profile and geographies
Institutionalised the audit of customer files at the branch levels following disbursal
Fastened the process by providing technological back-up
Strengthened monitoring to enhance portfolio strength, irrespective of the external
environment
Conducted periodic portfolio quality and credit screen appraisals in line with
evolving market conditions
Took prompt preventive measures according to Early Warning Indicators (EWI),
provided by the risk-governance team
Visited customers more frequently to understand their problems and customised
the instalments in case of problems
Implemented a monthly review mechanism to improve credit effectiveness in line
with external realities, and a bottom-up approach from the zones to the national
level involving the risk management team
Way forward
5.9%
11.2%
9,559+
Early delinquency in FY
2015-16
Infant delinquency in
FY 2015-16
At Magma, treasury management plays a very critical role as lending is our core
business. It ensures sufficient liquidity at the best cost to meet business requirements.
Our diversified fund sources minimise concentration risk and allow smooth and
consistent flow of funds, subsequently improving the credit rating.
Magmas treasury function comprises three core operational areascore treasury,
securitisation and banking operations.
Core treasury: It focuses on procurement of low-cost funds through short-term and
long-term financial instruments from the banking sector, financial institutions and debt
capital markets.
Securitisation: It is responsible for securitisation and assignment of our loan asset
portfolio and receivables to banks and institutions in exchange for superior rates.
Banking operations: It manages the physical and electronic flow of funds from
multiple locations to the head office and vice versa.
We have the choice to borrow from a consortium of 22 public and private sector
banks. Besides, we have the access to capital market funding from a wide spectrum of
lenders, including mutual funds, insurance companies, pension/provident funds and
corporate, among others. Moreover, other unsecured debt includes commercial
papers, perpetual debt, subordinate debt and preference capital.
Key features, 2015-16
Grew the loan portfolio to Rs. 18,183 cr as on 31st March, 2016, compared to Rs.
19,567 cr as on 31st March, 2015
Maintained a judicious mix of short term and long term borrowings to ensure
minimal gaps in Asset Liability Mix (ALM)
Net Interest Margin (NIM) stood at around 6.97%, as against 6.16% in FY 2014-15,
owing to efficient treasury management
Capital adequacy ratio stood at 18.7% and Tier-I capital adequacy stood at 14.6%
Maintained NIS at around 6.3%, as against 5.9% in 2014-15 by way of efficient
treasury management
Sold `1,838 Crores of portfolio during FY 2015-16, of which 5761% is qualified for
priority sector lending to banks, easing capital requirement
Tie-up with banks for direct cash deposits improved operational efficiency and
reduced risk
Borrowing cost stood at 9.99% as a result of proactive negotiation
Way forward
2011-12 2012-13
Capital Adequacy
Ratio (%)
21.19
16.77
Tier 1 (%)
14.08
10.59
[Create worm graph with above data]
Rs 19.67 crore
2013-14
2014-15 2015-16
16.62
11.52
16.3
11.09
9.99%
18.7
14.60
Credit ratings
Instrument
Short term Debt
Long term Debt
Subordinate
Debt
Perpetual Debt
Rating
A1+
AAAAAA-/A+A+
Way forward
94.84%
Collection efficiency in
FY 2015-16
Page 23
13-15%
9-10%
US$ 22.7
bn
Growth expected
in the M&HCV
(Truck) segment
in FY 2017
Growth expected
in the passenger
vehicle (domestic
+ exports)
segment over
the medium term
19-22%
17%
20-22%
Indias general
insurance
business is
currently at US$
11.7 billion
premium per
annum; and is
growing at a
healthy rate of
17%.
Long-term
growth outlook
for the Housing
Finance sector
remains
favourable owing
to the
Government of
Indias focus on
Housing for All by
2022; and
favourable
regulations
pushing overall
housing credit
growth to 20-
Indias
construction
equipment
industry's
revenues are
estimated to
reach US$ 22.7
billion by 2020
8-9%
Growth expected
in tractor
segment over
22% from FY
2017 onwards
(Source: ICRA and IBEF)
For design, we need to give icons to the relevant industry in the boxes, the number has to be
in the context of the specific industry/ sector we are speaking of.
Page 24-25-26-27-28-29
Construction
equipment
(CE)
Tractors
Insurance
Housing
finance
Product 1
First-time buyers accounted for the major business share of 65% of vehicles
financed by us
Outlook
Our realigned business model will improve our profitability in each segment
We aim to boost our profitability by enhancing the quality of our CV portfolio
We want to penetrate deeper into rural areas to touch more customers
We will proactively increase our retail business in this segment as it provides higher
returns
We will consistently strengthen our relationship with OEM partners
Going forward, the commercial vehicle segment is poised to grow owing to continuing
trend towards replacement of ageing fleet and pre-buying before BS-IV is
implemented across India.
Performance review
CV business disbursement (Rs
Crores)
Contribution to the total
disbursement (%)
y-o-y Magma growth (%)
y-o-y industry growth (%)
Average ticket size (Rs000)
Average loan to value (%)
2014-15
934
2015-16
299
9.23
4.17
(12.00)
-(22.47)
733
85
(67.96)
8.37
15.21
89
Product 2
2014-15
2,479
24.51
2015-16
1689
23.52
6.77
3.89
446
71
(31.88)
7.24
(433)
73
Product 3
2015-16
828
8.19
379
5.28
(12.59)
(13.53)
2,206
80
(54.24)
14.89
1,970
81
Product 4
Tractors
At Magma, we offer tractor finance for agricultural, as well as commercial use. As an
extension of our semi-urban and rural focus policy, we concentrated on farmers
owning less than six acres of agricultural land. Although we have witnessed de-growth
in the tractor sector, generally the yield on tractor financing is higher than some of
our other products. We work with some of the most reputed industry players like
Mahindra &Mahindra, TAFE, John Deere, New Holland and ITL, among others.
Key features, 2015-16
We encountered de-growth in tractor segment, owing to crop failure across various
geographies in India
Financed over 34,953 tractors, compared to 48,900 in FY 2014-15
Average loan size in this segment was around Rs. 3.52 lac with average loan tenure
of 68 44 months
Net interest spread stood at 9.48%, compared to 9.05% in 2014-15
Collection efficiency stood at 89%, as against 91.67% in the previous year
Outlook
We aim to deepen our penetration, leveraging our realigned business model.
We will also strengthen distribution network, strategic OEM relationships,
enhancing dealer experience and increasing product offerings.
Going forward, the Governments thrust towards uplifting the nations rural sector is
expected to boost rural Indias economic health, consequently improving its
consumption capacities. Shortening of replacement cycle, coupled with other factors
such as increasing rural wages, scarcity of farm labour as well as long-term trend of
improvement in minimum support prices (MSPs) is also likely to aid growth in industry
volumes.
Performance review
Tractor business (Rs Crores)
Contribution to the total
disbursement (%)
y-o-y Magma growth (%)
y-o-y industry growth (%)
Average ticket size (Rs000)
Average loan to value (%)
Suvidha (Refinance)
2014-15
1706
16.87
2015-16
12.19
16.97
7.91
(13.04)
349
63
(28.57)
(10.61)
352
68
Our Suvidha programme finances used commercial vehicle. Primarily, we finance firsttime buyers and 2-15-years-old commercial vehicles through a number of schemes,
2014-15
1,418
14.02
2015-16
1014
14.0212
12.82
450
73
(28.51)
420
75
Product 6
SME loans
We are among the top five players in the market to service SME unsecured loans. We
offer need-based unsecured financing to small-and-medium enterprise customers for
capital as well as project funding requirements. We cater to requirement limit up to Rs
35 lacs. We analyse the financials of prospective customers based on their cash flows
(achieved and prospective) as well their reputation, location, industry and
delinquencies.
Key features, 2015-16
Collection efficiency of the refinance segment was 97.66%, compared to 97.81% in
FY 2014-15.
Net interest spread stood at 8.09%, as against 7.93% in FY 2014-15.
Average ticket size per transaction was Rs 19.61 lac; average repayment tenure
was 32 months
We penetrated into new regions and encouraged cross-selling to enhance
profitability
Outlook
We want to leverage the emerging opportunities in India that will support the
development and diversification of the SME sector.
We aim to penetrate deeper into rural and semi-urban areas to increase the
customer base
Offer more customised loans to ensure customer satisfaction
2014-15
1,018
10.07
2015-16
1,151
16.02
26.14
2,417
12.99
1,961
Product 7
Rs 427.37
crore
[96.4]%
Magmas
settlement Claim
Premium income
Disposal ratio
in 2015-16
(claims received
settled by
claimed
settledrecieved)
80
[381]
Branches
as on 31st
March 2016
Team size
as on 31st
March 2016
Product 8
Housing finance
Magma forayed into the housing finance business with the acquisition of GE Money
Housing Finance in February 2013. We started with the aim to leverage the mortgage
opportunities in the rural and semi-urban areas, catering to people with informal
sources of income. We offer loans for residential and commercial collaterals, both
inside and outside municipal limits, covering he entire reach and netowrk of Magma
group, with 88 dedicated offices for the Magma Housing Finance company. Loans are
available for existing as well as new to Magma customers through our entire network
of MFL branches and channle partners.
We provide home loans for builder flats, resale transactions, residential plot purchase,
and home improvement purpose. We offer Loan Against Property (LAP) to support a
wide range of personal and business loan purposes. Besides, we also cater to
developers in small markets through financing small-ticket projects at various stages
of construction.
Key features, 2015-16
Assets Under Management (AUM) increased to Rs [3368] Crores, compared to Rs
[2848] Crores in FY 2014-15
Disbursements touched Rs 1430 Crores, compared to Rs 1732 Crores in FY 201415, however, in terms of number of units, there was a growth from [5858] units to
[7384] units.
Average ticket size per transaction was Rs 19.90 Lac
Net interest spread stood at 3.94%, compared to 3.38% in FY 2014-15
We targeted small builders and projects in outskirts or upcountry markets to cater
to the affordable housing space
The key marketing activities was driven through a lot of in branch events. We
regularly invited existing and referral customers to our branches every month and
offered them spot loan sanctions, which lead to almost one in six loans coming
from these cross sell activities
Outlook
We want to leverage existing rurban branch network and unique over 5 lakh
customers, for their unmet Home loans and Loan against property needs with a
deeper penetration.
The objective is to make Magma an Affordable housing loan company, with our
focus on small locations, small loans, mostly for captive home or working capital
needs of informal income customers, with properties being within municipal limits
as also in Town and Country planning zones as well as Gram Panchayat areas.
With the introduction of tablets provided to our business executives, we should be
able to reduce the processing and turnaround times, besides a juch superior
service to our channels and customers.
We have already reduced the turnaround time (TAT) from 22 days to 15 19 days.
And now we want to bring it to down further this year, with simplified, robust and
technology driven processes.
We will be focusing on rurban SENP customer, with average ticket size in sub-Rs 20 lakh
range this year, increasing our home loans penetration, getting more direct business form
existing customers and new customers, leveragin the entire Magma network. We intend
capturing the growth in the smaller locations, with smaller ticket affordable housing
segment and the still untapped demand from Tier II/III cities, where customers of
this profile are not adequately catered to, due to informal and partly documented
income sources.
[18]%
[26]%
Increase in number of
disbursements of
housing finance
business
[149]
Number of housing
finance branches
Page 30-31
Post restructuring, our field officers were made responsible to perform all three
functions sales, credit and collections, together. We conducted training exercises
for 3600 field officers at their respective branch offices to equip them and make
them understand the importance of executing all three roles with similar efficiency.
They were trained on sales, credit and collections to develop their functional skills
and domain knowledge, making them ready for the transformational journey. The
objective was to develop end-to-end accountability among the workforce.
We have provided our field officers with user-friendly tabs to streamline the process
and save time. Therefore, relevant training has also been given to them to utilise
this technology in the best possible way.
We also conducted trainings through our online channel portal to ensure all-round
development, anytime, anywhere.
We continued our marquee event, Rendezvous across [18+3] locations with over
[4116] participants.
We also celebrated important days of the year like Womens Day and Diwali to
emphasise on work-life balance, as well as to strengthen the bond between
employees.
Quarterly, we identify about 50-60 field officers who perform outstandingly, and
they are called by our Managing Director (MD). He personally congratulates them
for their achievements and this direct acknowledgement motivates them.
We send regular videos to people and have started communicating in vernacular
languages to strengthen the communication process.
[9000]+
Team strength
as on 31st
March, 2016
[410]
[17143]
Number of
training
programmes
conducted
during FY
2015-16
Person day of
training
imparted
during FY
2015-16
Page 32-33
Online submission of
field investigation
reports
Cash collection at
customer location, on
spot money receipts
and instant reporting
of collections to
central database
External credit
databases embedded
in BI/sales interfaces
Result: Improved
Result: Enhanced
customer experience,
customer service, faster
better product design
credit appraisal and
inputs
robust cash management
BI & Data
Document
Portals for
Analytics
Management Channel
Support
Partners and
INS Agency
4000+
Tablets distributed
during FY 2015-16
Page 34-35
NBFC category. This would also help us to establish our brand & create high brand
recall in long run.
We follow a three-pronged marketing strategy, focusing mostly on below the line (BTL)
& relevant digital initiatives supported by strong internal activities.
BTL activities
During the year, we deepened our penetration into clusters and villages, with our
sales team now present in about 1,800 Talukas. At a ground level, we took a host of
marketing initiatives to engage existing consumers by streamlining direct, cross
selling and up selling to the customer base at one side, whereas on the other side, we
have constantly improved our relationships with channels/ intermediaries &
strengthen OEM partnerships.
In-branch activities: We conducted activation campaigns at our branches for our
existing customers. We also took several initiatives to educate and update people
about our financial products and solutions. These measures helped us to stay close to
our customers and strengthened our relationship with them.
Large format loan melas: We organised several loan melas in collaboration with
15-20 OEMs (passenger cars, utility vehicles, construction equipment and tractors).
We conducted these across various locations covering the entire Magma spread and
offered entire bouquet of financial products and solutions of Magma in order to
provide one stop solutions to end consumers. We have experienced high footfalls in
these kind of activations and earned lot of local media coverage
In line with large format events, we have also organised series of small scale
activation campaigns e.g. health check-up camps, promotional canopy events camps,
etc across targeted geographies to build brand awareness amongst the target
audience and introduced Magma to them through local opinion leaders.
Digital Initiatives
Digital marketing is one of the most important pillar of marketing at Magma. Digital
has complimented BTL by creating thought leadership in online domain in respective
product categories. In recent times with our significant efforts on Search Engine
Optimisation (SEO), we have significantly improved our ranking in google search and
have created positive effects on web based target audience.
Apart from SEO, our cutting edge social media campaigns based on core thought
process of Celebrating Dreams during peak business seasons has helped us to
maximise brand recall & enhanced emotional brand connect with stakeholders,
consumers & channel partners. One of our social media campaign '#27YrsOfCelebratingDreams - Disha Ki Kahani' with 92K+ views was a 1st of its kind
in Magma which went viral in online social media framework & increased our brand
awareness.
In order to provide best-in-class customer service, we have also positioned our major
social media platforms i.e. Facebook & Twitter, as a Listening Platform for our end
customers. This is in line with latest digital trends which has opened up another
channel for customers to connect with us and improved service delivery level towards
maximum customer satisfaction.
Engagement through internal activities
Constant internal engagement and hands-on trainings to our sales teams, equipped
with latest tools and technologies were pillars behind the success of our business.
Frequent communication helps them to stay updated about their business targets and
access to tools & knowledge which helps them to promote any particular offer in a
customised manner, aligned to specific clusters. The core idea here is to realign our
strategies according to region-specific offerings.
Engaging channel partners through channel portal
Considering Channels as one of the most important contributor to our business, we
have made a state of art web-based channel portal https://magmapartner.magma.co.in/
to provide maximum convenience & improve our service delivery to our channel partners.
Several engagement activities have been carried out to strengthen our relationship with
channel partners.
Outlook
Going forward, we want to create market leaderships in terms of activating targeted
geographies where we have limited foothold and creating Thought Leadership in
respective online categories.
Our core objective is to become bigger, better and stronger.
Page 36-37
Social Initiatives
Aiding truck drivers
We have been encouraging millions of truck drivers to turn into entrepreneurs by
financing their purchase of commercial vehicles. Our focus is to help truckers derive
superior mileage, gain better earnings and prosper.
We collaborated with Petroleum Conservation Research Association (PCRA), a
Government of India undertaking to launch a nation-wide training programme on best
driving practices. This initiative provides training to a batch of 15 truckers, resulting in
energy and oil saving. The sessions range from theoretical to practical lessons,
comprising road experiments, videos and dialogue in local languages. The truckers are
honoured with Certification of Excellence at the end of the programme.
As we focused on some transportation hubs, we noticed inadequate toilet facilities
and lack of hygiene in many transport nagars. In the first phase, we installed porta
cabins and e-toilets in 13 such transport nagars. Regular workshops are held in these
porta cabins to help improve driving habits for better mileage and fuel conservation.
Besides, we also organise bi-monthly free consultation, diagnosis and basic
medication, posture correction and de-stress workshops at these cabins.
M-Scholar Supporting talent
We initiated a scholarship scheme for bright students, M-Scholar, as a part of our
commitment to encourage education. We are providing financial assistance to 50
meritorious students from economically-marginalised families, whose parents are daily
wage earners. This will enable them to meet their education-related expenses, while
pursuing higher studies.
The scholarship is applicable for Indian students who have appeared in senior
secondary board exams and wish to pursue undergraduate and postgraduate studies
at any recognised college/ university in India. Despite hardships, these students have
managed to enrol in reputed institutes like IIT, ISM and NIT, among others.
Annamrita Sponsoring midday meal programme
The Government of India instituted midday meal programme to feed thousands of
disadvantaged children and bring them to schools.
ISKCON Food Relief Foundation (IFRF) implemented this programme under the brand
name Annamrita in select schools in Delhi, Maharashtra, Rajasthan, Andhra Pradesh,
Madhya Pradesh, Uttaranchal, Haryana, Jharkhand, Assam and West Bengal. IFRF has
already served 20 lac meals to underprivileged students and supported midday meal
scheme in 134 schools under Kolkata Municipal Corporation (KMC).
In support of Annamrita, we are sponsoring meals for 750 students from KMC schools
for a complete school year.
Ekal Vidyalaya Project Promoting education
Education is the foundation that strengthens the future of the young generation and
nurtures their leadership ability.
We have partnered with the Friends of Tribal Society for their literacy project and have
adopted several rural schools across the country. Ekal Vidyalaya is an innovative
concept of One Teacher Schools (OTS), where a single trained teacher regularly
educates children between 6-14 years for three hours using informal methods. The
school curriculum is tailored to teach basic literacy and life skills to children and help
them develop self-confidence to succeed in life.
M-ART Encouraging art and artists
At Magma, we organise a two-day workshop called M-ART across various cities in the
country to encourage upcoming talented artists. Promising artists participate in this
programme and colour the canvases with great enthusiasm.
Providing financial assistance
We offer financial assistance to economically-disadvantaged people suffering from
various diseases like leukaemia, cancer and tuberculosis, among others.
We have been supporting victims of natural calamities like Aila in Bengal, Uttarakhand
tragedy, Nepal earthquake and Chennai floods, among others.
Swayam Fostering social benefits
At Magma, we run a volunteering programme, Swayam that encourages employees to
drive social wellbeing. We encourage our employees to contribute their time and
Corporate information
Board of Directors
Mr. Mayank Poddar
Chairman
Mr. Sanjay Chamria
Vice Chairman and Managing Director
Mr. Narayan K Seshadri
Non Executive Independent Director
Mr. Nabankur Gupta
Non Executive Independent Director
Mr. Satya Brata Ganguly
Non Executive Independent Director
Mr. Sanjay Nayar
Non Executive Director
Ms. Ritva Kaarina Laukkanen
Non Executive Director
Mr. Srenik Singhvi
Additional Director
Chief Financial Officer
Mr. Atul Bansal
Mr. Mayank Poddar
Chairman
Mr. Sanjay Chamria
Vice Chairman and Managing Director
Mr. Neil Graeme Brown
Non Executive Independent Director
Mr. Narayan K Seshadri
Non Executive Independent Director
Mr. Nabankur Gupta
Non Executive Independent Director
Mr. Kailash Nath Bhandari
Non Executive Independent Director (up to
14th May, 2014)
Mr. Satya Brata Ganguly
Non Executive Independent Director