TATA Capital Unlisted Shares

Annual Report Summary

Tata Capital Annual Report 2020-2021 Summary:

Tata Capital Limited ("TCL"), a subsidiary of Tata Sons Private Limited, is registered with the Reserve Bank of India as a Systemically Important Non-Deposit Accepting Core Investment Company. TCL primarily holds investments in its subsidiaries, which are mainly engaged in lending and offering a wide array of services/products in the financial services sector. The company aims to be a one-stop financial solutions partner, customer-centric, lending and innovation, and offers diverse products like Personal Loans, Home Loans, Business Loans, Loan Against Property, Wealth Products Distribution, Commercial and SME Finance, and Leasing Solutions.

The company reinforces its purpose and pillars through "Lead With Trust," "Faster Forward," "Better Together," "Capital & More," "Future Ready," and "Delivering Delight."

In FY 2020-21, Tata Capital focused on digital transformation, enhancing customer experience and data-driven decisions. Seamless digital platforms were launched and existing ones enhanced for instant loan disbursal. New platforms for retail and commercial loan customers were launched. Data analytics was augmented for faster and smarter decision-making.

New products were introduced, such as NFO Subscriptions to the Moneyfy app, which help customers diversify their portfolios. Version 2.0 of the Digital Platform was launched for MSMEs.

Tata Capital's CSR initiatives include cluster development programs, Pankh Scholarship program, ProAspire skilling initiative, Dhan Gyan financial literacy course, Aarogyatara and Cancer Cell healthcare initiatives, JalAadhar watershed management, Green Switch project for rural electricity, Ecosphere project for clean water, and the Covid Rehabilitation project (Mission Gaurav). The company recorded 1,53,271 beneficiaries in the year.

Awards and accomplishments include BFSI Digital Stallions for Moneyfy App campaigns, India Content Leadership Award for Best Website/Blog in Finance, ASSOCHAM Award for Digital Lending (TCFSL), ASSOCHAM Award - Runner up for Digital Lending (TCHFL), and ASSOCHAM Award for Digital Services (TCFSL), and ACEF Award for Tata Capital Commercial & SME App.

TCL recorded its highest ever PAT of Rs. 1,126 crore in FY 2020-21, 280% higher than the previous year. The company maintained asset quality with a provision coverage ratio of 65.4%, strengthened the balance sheet by reducing debt equity from 7.6 to 6.7 times, and increased total provisions against existing assets to 3.4%. Net income margins increased from 5.3% to 5.5%, and the cost to income ratio reduced from 42.4% to 38.8%.

Subsidiaries like Tata Capital Financial Services Limited (TCFSL), Tata Capital Housing Finance Limited (TCHFL), and Tata Cleantech Capital Limited (TCCL) all performed well. TCFSL worked on cost control and product mix, and our wealth management business saw improvements in their AUM. New customers were on-boarded on the Commercial and SME loan business. TCHFL focused on expanding its mortgage products and services. TCCL forayed into emerging sectors and secured over $120m of green lines from global Development Financial Institutions.

Priorities for the future involve aligning with the Group's principles, enforcing the One-Tata Philosophy, supporting the community through COVID-19 response programs, and expanding the geographical footprint. Rajiv Sabharwal is the Managing Director & CEO.

The board of directors declared an interim dividend on the CRPS for the period April 1, 2020 to March 31, 2021. An important action point from the board's report. The directors did not recommend any final dividend on the CRPS.

The company reports on its six Private Equity Funds: Tata Capital Growth Fund I & II, Tata Capital Healthcare Fund I & II, Tata Capital Innovations Fund, and Tata Capital Special Situations Fund. The Overseas Funds include Tata Capital Growth Fund Limited Partnership (“TCGFLP"), Tata Capital Growth Fund II LP (“TCGFIILP"), Tata Capital HBM Healthcare Fund | Limited Partnership (“TCHHFLP”), Tata Capital Healthcare Fund II (Feeder) LP (“TCHFIILP") and Tata Opportunities Fund Limited Partnership (“TOF”), are based in Singapore.

Tata Capital's investments in Subsidiaries (net of provisions) stood at Rs. 8,637 crore, as at March 31, 2021 (FY 2019-20: Rs. 8,564 crore), representing 82.15% of its total Assets (FY 2019-20: 83.88%).

Tata Capital continues to enhance its capabilities and processes in keeping with market and regulatory changes. Tata Capital participated in its seventh TBEM external assessment conducted by the Tata Business Excellence Group. TBEM Score in 2018 was 582, in 2020 absolute score was 624. This reflects a significant improvement in the journey of Excellence. All subsidiaries and businesses have been recognized as "Emerging Industry Leaders".

In 2020, Tata Capital raised its brand positioning by asking customers to "Count on Us". The message of positivity was spread through their social media campaign #WeCountOnYou. In the year 2021, the new Brand Campaign again extended a helping hand to those impacted by the pandemic.

In FY 2020-21, Tata Capital spent Rs. 2,152.51 lakh on CSR activities. The CSR budget for TCL standalone was Rs. 106.20 lakh. The Company is registered with the RBI as a CIC and has complied with all applicable laws and regulations. The Company did not hold or accept any public deposits.

A credit rating during the year under review showed rating agencies reaffirmed/issued ratings to the company. The Board of Directors has formed a Risk Management Committee to implement and monitor risk management plans. The Audit Committee provides additional oversight of financial risks and controls. Tata Capital has adopted hybrid cloud to ensure on demand scalability to support business growth at optimum cost and data lakes to provide single source of data across all reporting.

The financial statements have been prepared in accordance with Ind AS as notified under the Companies (Indian Accounting Standards) Rules, 2015.