MAHINDRA(&(MAHINDRA(TO:(RAMESH(IYER((

FROM:(NANYANG(CONSULTANCY(

1(

Agenda(

1.  Problem(Statement(2.  Company(vision(3.  RecommendaKon(4.  OpKon(Analysis(5.  ImplementaKon(6.  Timeline(7.  KPI(8.  Financial(Analysis(9.  Risk(10. Conclusion((

2(

Problem(statement(

•  No(presence(in(the(urban(markets;(products(provide(low(margins(

•  Government(programs(providing(new(avenues(for(growth(

•  AspiraKons(to(be(a(global(player(

•  Should(Mahindra(finance(sKck(to(its(core(market?(

•  How(could(Mahindra(leverage(technology(to(take(part(in(the(government(programs?((

•  Should(Mahindra(enter(the(internaKonal(landscape?(

!  What(should(Mahindra’s(strategy(be(in(the(future(?((

Current(situaKon( Challenges(

3(

Company(Vision(

Mahindra’s(Vision(

Top(be(among(50(globally(admired(

brands(

Leading(financial(services(provider(in(semi(urban(and(rural(

India(

Transform(rural(lives(and(drive(posiKve(change(in(the(communiKes(

Build(on(your(internaKonal(

presence(of(M&M((

SKck(to(core(strength(of(presence(in(the(rural(market(Expand(to(semi(urban(areas((Tier(two(ciKes)(((

4(

Focus(on(rural(and(semi(urban(markets(

RecommendaKons(

Mahindra’s(vision(

•  Expand(in(the(untapped(rural(villages((250K)(

•  Focus(on(Tier(2(ciKes(in(India(such(as(Bhopal,(Bhuj(

•  UKlize(the(strength(of(Tech(Mahindra((in(house(experKse)(

•  Increase(brand(awareness(–(Missed(call(campaign((

!  Mahindra(finance(should(focus(on(its(rural(and(semi(urban(market;(to(become(a(global(player(it(should(leverage(on(its(exisKng(partners(

Expand(in(the(global(arena(

Leverage(on(technology(

•  Leverage(on(partners(and(parent(company(name(to(enter(South(Africa’s(financial(landscape(

5(

OpKon(Analysis(

Core(competency(

of(Mahindra(

Brand(name(

Product(porgolio(

Customer(base(

Good(balance(sheet(

•  Op#on&1:&&Expand(towards(the(urban(market(of(India((•  Market(too(compeKKve(•  Decrease(in(profitability(rate(

•  Op#on&2:&Focus(on(Partner(with(governmental(organizaKon(to(become(a(part(of(Jan(Dhan(yojna(•  Governmental(banks(more(preferred(by(

government(in(India(such(as(SBI,(UBI,(PBI(

•  Op#on&3:&&Go&back&to&the&core&vision&of&being&a&rural&+&Semi&urban&bank&

6(

IMPLEMENTATION(1:((THE(RURAL(STRATEGY((TIER(III)(

RelaKonship(Approach((

•  Have(local(village(reps(or(coilingual(reps(that(villagers(trust(•  Crossiselling(of(products((tractors,(loans)(((

Packaged(Offerings(

•  Offer(packaged(deals(for(customers(on(farm(equipment,(loans(for(farm(equipment,(home(loans(

Technology(Usage(

•  Incorporate(technology(chip(to(assess(insurance(premiums(

(((((Ex:(Snapshot(in(the(US(market(•  Missed(calls(from(farmers(to(receive(weather(and(

technical(informaKon((80%(feature(phones)(((•  Ex:(Unilever(for(product(sales((((

!  Lock(in(farmers(in(rural(areas;(build(trust(in(M&M(brand(as(a(complete(soluKons(provider(

7(

IMPLEMENTATION(2:((THE(SEMIiURBAN(STRATEGY((TIER(II)(

SegmentaKon(•  Focus(on(farmers(living(in(Ker(II(ciKes(with(higher(

spending(power((Bhopal,(Jalna,(Bhuj,(Satara,(Trichy)(

Technology(Usage(

•  Partner(with(telecom(provider(to(enable(mobile(banking(geared(towards(loan(payments(

(((((Ex:(MiPesa(

Packaged(Offerings(

•  Offer(packaged(deals(for(customers(on(farm(equipment,(loans(for(farm(equipment,(home(loans(

!  Leverage(on(strong(M&M(brand(equity(as(a(auto(company((

8(

IMPLEMENTATION(3:((INTERNATIONAL(

South&Africa South&Korea ChinaBrand&presence 10 9 8

Regulatory&restrictions 8 7 2

Leverage&of&market 7 4 8

Competitors 8 5 3

Financing&growth&potential 7 6 6

TOTAL 40 31 27

!  Emphasis(on(SA(while(progressively(moving(to(China(in(the(long(run(

Entry(Order:((SA(((((((((((((((((((((((((((((((((((SK(((((((((((((((((((((((((((((((((((Bangladesh(((((((((((((((((((((((((((((((((((China(

End(2015( 2020(

9(

IMPLEMENTATION(3:((INTERNATIONAL(

Market(Presence(

•  Next&Steps:&Set(up(a(banking(subsidiary(/(leverage(on(bargaining(power(of(product(presence&&

Untapped(Markets(

•  Next&Steps:&Enter(agrarian(economies(where(our(products(are(currently(sold((

•  Ex:(Bangladesh(•  Progressively(enter(emerging(Asian(countries(((((((JV(with(local(financing(companies(((((((Ex:(Indonesia,(Vietnam(

!  Harness(on(the(brand(equity(of(the(Mahindra(Group(product(presence(globally(

10(

KPIs(

Rural( •  Number(of(product(line(uptake/per(customer(•  Increase(in(customer(base(quantum(

Semi(urban(•  Acceptance(rate(of(MiPesa(service((70%)(•  Decrease(in(NPA((decrease(by(4%)(

InternaKonal(•  %(market(share(of(M&M(product(line(asset(financing(•  Number(of(new(market(penetraKon((

11(

TIMELINE(

STRATEGY STAGETraining'of'sales'/'service'staff XChips'in'tractors X X X X XMissed'call'campaign'infrastructureMobile'banking'rollout XPackaged'deal'rollout XTaskforce'regulatory'research XNegotiations'with'local'partners XEvaluation'of'new'market'opportunities X X X

2020

Rural

Semi1rural

International

20162015 2017 2018 2019

12(

Risks(

Types&of&Risk& Defini#on& Likelihood& Impact& Mi#ga#on&

Economic( Economic(downturn(in(India(

Medium( High( DiversificaKon(of(revenue(stream((

Brand(Equity( Semi(urban(customer(believes(the(bank(to(be(too(rural(focused(

Low( Medium( Local(branding(

Product(Risk( What(if(financing(soluKons(are(not(appealing(to(foreign(customer(

Low( Medium( Re(focus(on(service(providing(acKvity((

Legal(risk( Regulatory(issues(in(foreign(markets(

Low( Medium( Minority(stake(in(Local(lender(

13(

Financial(analysis(

i40(

i30(

i20(

i10(

0(

10(

20(

30(

40(

2016( 2017( 2018( 2019(

NI(

CumulaKve(

•  Number(of(vehicles(in(South(Africa(100K(•  Margin(2%((•  Conversion(rate(of(Indian(village(20%(•  Margin(rate(3%((

(

•  IRR(:(19%((•  Break(even(4(years(

14(

Financial(analysis(

2016 2017 2018 2019Training'costs 1 1.5 2 2.5IT 10 5 5 5Partnership 5IT'maintenance 1 1 1

Creation'SA'subsidiary 25Legal'costs 2 1IT 15 15 15 15Marketing 5 3 2 2

Revenue'from'India 6 9 12 15Revenue'from'SA 20 21 35 40

NI J32 J1.5 22 29.5Cumulative J32 J33.5 J11.5 18

15(

Focus(on(rural(and(semi(urban(markets(

Conclusion(

Mahindra’s(vision(

•  Expand(in(the(untapped(rural(villages((250K)(

•  Focus(on(Tier(2(ciKes(in(India(such(as(Bhopal,(Bhuj(

•  UKlize(the(strength(of(Tech(Mahindra((in(house(experKse)(

•  Increase(brand(awareness(–(Missed(call(campaign((

!  Mahindra(finance(should(focus(on(its(rural(and(semi(urban(market;(to(become(a(global(player(it(should(leverage(on(its(M&M(Group(

Expand(in(the(global(arena(

Leverage(on(technology(

•  Leverage(on(partners(and(parent(company(name(to(enter(South(Africa’s(financial(landscape(

16(

Shukriya(

17(