Ladies and gentlemen, good day and welcome to Aadhar Housing Finance Limited Q4 and FY 2025 analyst conference call, hosted by JM Financial Institutions Authorities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal and repeat after pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ajit Kumar from JM Financial. Thank you, and over to you, sir.
Thanks for the chance. Good evening, everyone. On behalf of JM Financial, I welcome everyone to 4Q FY 2025 earnings conference call of Aadhar Housing Finance Limited. From the management team, we have with us today Mr. Deo Shankar Tripathi, Executive Vice Chairman, Mr. Rishi Anand, MD and CEO, Mr. Rajesh Viswanathan, Chief Financial Officer, and Mr. Sanjay Moolchandani, Head Financial Officer. We will start with opening remarks, and then we will open the floor for Q&A. I'll now hand over the call to MD and CEO, sir, for his opening remarks. Over to you, sir.
Thank you so much, Ajit. Very good evening, ladies and gentlemen. On behalf of Aadhar Housing Finance, I extend a very warm welcome to all of you. This year has been a landmark in our journey, defined by strong performance. We are proud to announce that our AUM has reached INR 25,531 crores, representing a remarkable year-on-year growth of 21%. This outstanding milestone not only reflects our continued momentum but also reaffirms our leadership position in the affordable housing finance sector. We have consistently delivered strong performance in every quarter while maintaining our position in the affordable housing finance industry. This sector has seen substantial growth this year with strong support from government and rise in demand for affordable housing. We believe affordable housing will continue to be the cornerstone of India's housing finance industry.
Moving on to Aadhar's performance for the quarter and for the financial year ending 2025, we clocked an AUM of INR 26,531 crores, crossing a key milestone of 25,000 crores, a significant growth of 21% YoY. We continue to maintain our position as India's leading low-income housing finance provider. Disbursements stood strong at INR 8,192 crores, a growth of 16% YoY. Quarter four disbursement at INR 2,556 crores has shown a growth of 18% YoY, a growth of 21% YoY in quarter one at INR 245 crores. While maintaining this growth momentum, we continue to focus on maintaining our book quality. Our portfolio continues to be entirely focused on retail secured loans with minimal exposures to corporates and developers. Our GNPA has declined by 3 basis points to 1.05% on YoY basis, supported by a stable collection efficiency of 100% +.
Our average loan-to-value ratio is at 59%, easily catering to the salaried segment, constituting 56% of our portfolio, with an average fixed price of INR 1,000,000. Home loans make up a substantial majority of the AUM, accounting for 74%, while non-home loans remain at 26%. Our deeper infrastructure strategy has been instrumental in driving both meaningful outreach and operational efficiency. By focusing on high-potential underserved regions, particularly smaller districts and talukas, we have been able to scale our presence effectively while maintaining a lean operational structure. This has translated in aligning our long-term objectives of sustainable growth and prudent resource allocation. As highlighted in the last quarter, State Bank of India has not only strengthened our foothold in these target segments but also laid a strong foundation for our future expansion.
On the geographical front, our geographical conference has shown substantial growth over the past year, now spanning 21 states and covering 547 districts, supported by a robust network of more than 580 branches. In FY 2025, we added 57 new branches, which has significantly enhanced our capacity to serve a wider customer base, which has now reached 2.99 lakh live customers. Another milestone we have achieved this quarter is our entry to the Northeast, with its first branch in Guwahati, marking our pivotal step in our mission to provide homeownership accessible to the underserved communities. Our expansion to Guwahati aligns with Aadhar Housing Finance Limited's vision of financial inclusion and government's housing-for-all mission. Our portfolio remains well-diversified, with no single state accounting for more than 14% of our total AUM. This balanced exposure underscores our prudent risk management approach while supporting our strategic goal of sustainable and inclusive growth.
On technology front, we have led from start by leveraging a TCS enabled core system to fully digitize our processes. We have implemented advanced data science solutions to streamline operations end-to-end. Over the past four years, we have focused on expanding data insights across teams, starting with basic decision and evolving towards advanced analytical support for better decision-making. With this strong foundation in place, we are now moving towards deeper insights through AI and machine learning, unlocking smarter, more transformative outcomes. This shift will further enhance data quality, governance, and compliance. On the liability side, we continue to focus on our diversification strategy, and in the third quarter, we have explored ECB as an option. Rajesh will be speaking a little more about it.
The affordable housing finance sector has witnessed a strong growth momentum in the recent quarter, contributed to urbanization and rising demand for housing loans, along with significant push given by the government. Union Budget 2025 provides a strong boost to the affordable housing finance sector through measures that directly benefit institutions like us. Key initiatives such as reduced personal income tax rates, enhanced funding for Pradhan Mantri Awas Yojana, revival of the interest rate subsidy scheme, credit guarantee program, and allocation to the Swami Fund are designed to increase home loan accessibility and affordability for low and middle-income groups. To conclude, I would like to emphasize that Aadhar Housing Finance stands well-positioned to continue its growth journey, backed by a strong operational foundation, expanding footprint, and robust technology infrastructure.
With supportive government policies, rising demand for affordable housing, and our commitment to financial inclusion, we are confident in sustaining our leadership in the sector. As we move forward, we remain focused on delivering value to our stakeholders while deepening our impact in underserved communities. I would now like to hand over to our CFO, Rajesh Viswanathan, to take you through the financial performance of the quarter and the year.
Thank you, Rishi. Good evening, everyone. I would like to take you through the financial performance of Q4 FY 2025 and full year 2025. As we exited FY 2025, our AUM has grown by 21% on a YoY basis, and as Rishi said, we have crossed the mark of INR 25,000 crores, and we are the first low-income housing finance to do so. Our overall borrowings as of 31st of March 2025 stood at INR 16,388 crores, compared to INR 13,960 as of 31st March 2024, with borrowings that have grown by 17% on a YoY basis. Borrowing mix as of 31st March 2025 is 53% from banks. NHB share is 23%. NCD share is 21%. As Rishi said, we have done our first ECB issuance, and the ECB share is 3%. The ECB that we did was for $50 million.
We did it in quarter four FY 2025, and this is a fully hedged transaction that we have carried out. This is carried out at a SOFR plus 156 basis points, and the full all-in hedged cost comes in around 8.1%. Our incremental borrowings for FY 2025 stood at INR 5,024 crores. We have around 53 borrowing relationships among National Housing Bank, banks, housing finance banks, mutual funds, and DFIs. We have drawn a total of INR 1,100 crores, INR 1,100 crores from NHB in FY 2025, of which the affordable housing finance share is around 16%. The blended cost at which the INR 1,100 crores was borrowed was around 7.9%. The overall exit cost of funds at FY 2025 stood at 8.2%. In terms of fixed and floating nature, 79% of our borrowings is floating, and 76% of our assets are floating. Fund-ground submissions as of 31st March 2025 is INR 891 crores.
Liquidity as at the end of the year stood at INR 2,200 crores, which is about 10.7% of the loan book. Portfolio yield for the full year as we exited was about 13.9%. In terms of spread as we exited, we have exited at a spread of 5.7%, which is what we had also highlighted in our previous calls. Our cost-to-income ratio at FY 2025 stood at 36.4% as compared to 33.5% in FY 2024. As we had mentioned in our earlier calls, we were looking at reducing our cost-to-income in the full year on 80 basis points-100 basis points, and we have shown improvement of 104 basis points.
Further, as you would note, there is a movement in the overall OpEx in quarter four as compared to quarter three, but as we had indicated in prior calls, what we have done is we have tried to spread the OpEx to a great extent among quarter three and quarter four to ensure that there is no lumping up in quarter four. This was, as you would remember, had happened in last year quarter four. Compared to that, in this year, the OpEx, which is basically the contracts which we run from periods of November to March, is spread over two quarters. GNPA as of 31st of March is 1.04%, and this is one of the best performances in terms of GNPA in the last three to four years the company has demonstrated, as an improvement of three basis points of GNPA on an AUM basis.
The provision coverage ratio on stage three currently stands at 34.5%. Capital adequacy ratio for FY 2025 is 44.1%, and for Tier 1 and Tier 2 20 is 0.5%. For FY 25, the overall full year PAT came in at INR 912 crores compared to INR 750 crores in FY 2024. Overall growth is 22%. PAT for quarter four FY 2025 stood at INR 225 crores versus INR 202 crores in quarter four FY 2024, which is a growth of 21% on a YoY basis. We are focusing on maintaining a healthy book and delivering consistent performance on a quarterly basis. With that, we can open up for questions.
Thank you very much. We would now like to open the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Renish from ICICI . Please go ahead.
Yeah, hi sir. I'm with some of the technical numbers. So just two things. One on this upper yield, so technically in a quarter-based cycle, there have to be moving parts. One of those is the fixed out rate, then the payback change, and also the compound interest. Because generally, the prime housing loans will get repriced lower and lower in line with the correct fact. So if you look at our yields in Q4 exit, how do you see yields are continuing, let's say, over the next two to three quarters, considering all these two to three moving parts?
Renish, if you look at our overall book yields, it has been quite consistent on a quarterly basis for the last three quarters. As we had said, the full year yields are around 50 basis points lower than the book yield. In quarter four also, we have been quite good at managing to get incremental yields of around 15.5%-13.55%, which is quite similar to what we had in quarter three. Yes, as you correctly said, some of the prime housing finance companies obviously do a lot of aggressive booking in quarter four, and the BT out rate, as we exited the year, we had a 6.5% BT out, which was a drop from 6.9% in quarter four of last financial year.
To fix in some of the steps that we had taken on BT Out is something that has helped us to stem the BT route by about 50 basis points on a quarter-on-quarter basis.
I mean, in a scenario where there could be higher BT Out rates going ahead, and in order to sustain 20% growth, obviously, we have to cut into the price war. In that scenario, I mean, how complementary or how competent we are as to be able to sustain this growth in terms of sustained housing?
Renish, I can come in here, Rishi here. Renish, as Rajesh said, we have taken multiple steps already with the central retention scheme in place, multiple other measures with respect to data analytics pulling in into the retention scheme. All those measures have been taken, and we can see initial results of 6.9%, closer to 7%, pulling to about 6.5%. Vision is to take it to an annualized number of 6%. What we have also interestingly done is, and you are right in the way you are looking at it, what we have done is ourselves, we have now divided the country into something less effective this financial year, but I do not mind speaking about it right now, into urban and emerging locations. The top, I would say, 15 cities, which will contribute about 100 branches of ours, is now urban, which contributes to my top line.
In emerging, we have three categories of branches, which is typically about 400 odd branches, so emerging A, B, and C. The strategies for emerging A, B, and C for all four kinds of different locations is completely different. When I say strategy, I mean the TPIs, I mean the yield, I mean the BT out strategy, the branch strategies. All the strategies for every branch category is illustratively, let's say, emerging C location, which will be typically a tier 4 or 5 location. I have a maximum TPI cap. I have a BT out cap. I have incremental yields, which will be much higher than what an urban or an emerging A will be giving to me.
As we move ahead, I think the strategy of ours, which is going to play a bigger role in defining how Aadhar is going to maintain its current levels of spreads or even BT out for that matter.
Got it. Rishi sir, just a quick question. Would you be able to share the yield difference between urban and emerging A, B, C? I mean, let's say, 40 basis points-50 basis points on top, the difference with each location, or how is it?
While I will, as I told you, I will indicatively give you the differential in yields overall. You can just bear with me for a second.
Sure, sir. Renish will come up to you, we'll just pull it and we'll be giving him the call, and we'll pick up the next questions, if you don't mind.
Yeah, we will give you a question in this call only. Just give us a moment.
You can move to the next question, and I'll come back to you.
Thanks, Renish.
The second question, again, is on the asset quality. Obviously, this quarter, we have seen a pretty sharp decrease. When we look at the phase two update, the assets are steadily increasing with the kind of market by worse than 300, even much more than 3.6 last quarter, last year. Is there any specific reason, or I mean, do you just want to be a moment here and there?
I think, honestly, Renish, we should not read too much into the stage two. Honestly, as a company, we have been a company which shows lower entry and higher stage two always. There is also one more thing which I would want to share, because included in stage two is some of our assets which were full-time restructuring we had done at the time of COVID.
On a, this case is what you call it, conservative basis, we provide provision of 10%, and we also show them at stage two, though they are stage one assets. The impact of that is even between 0.6%-0.7%. Obviously, stage two pictures seeing a 4%, about 0.6%-0.7% will pertain to assets which are actually stage one, but we show it as a stage two because we carry a stage two provision as per argument of 10%. It is about four years since restructuring has happened on account of OTR. Probably somewhere in FY 2026, we may take a view or a call of moving this stage two to stage one.
Got it. All these accounts are regularly doing accounts with it, right?
Yeah, this 0.6%-0.7% which I mentioned are actually stage one in terms of actual DPD, but I show it, I classify it as stage two for the purpose of reporting.
Got it.
Okay. Renish, if I can now, I have let me show on your key list that you had required. If I can indicate it, I can tell you your urban locations between yields will be in the range of 5%. Your emerging A, B, C, as I told you, will be in the range of 14%-16%.
Got it. Okay.
That's how the combined 13.5%-13.6% is.
As Rishi said, the reason of us going on the emerging A, B, and C is primarily to ensure that our next year yields also fall into the same range as we exited in the current financial year. We would like to maintain yields at similar levels as we end up, maybe a -5%-6% is fine. Otherwise, we would like to maintain similar levels.
Got it. Got it. This is actually very, very helpful and useful to know, sort of the wanting to. Thank you very much for your insights.
Thank you, Renish.
Thank you. The next question is from the line of Yash from Citi Group. Please go ahead.
Hi sir. Thanks for taking the question. On the borrowing side of the almost 70%-90% of the floating rate borrowings, can we see a split on what the quarter is linked to, and what would be the quantum of improvement which you can see in sort of 1 Q of FY 2026?
If you look at it on the quarter bank borrowings or even on the total borrowings, if you see about 18% of them will be linked to short-term rates like repo rate. For example, let's take the bank borrowing. Out of the total bank borrowing, approximately 18% is linked to capital repos or T-bills, but obviously, the pass-on will be almost immediate. We are, for example, out of the total bank borrowings, one-year MCLR is 20%, and six-month MCLR would be 40%, and three-month will be a further 30%. In that sense, it is widely distributed, and only about 18% is where we get immediate benefit. The bigger benefit will obviously start coming in when the MCLR starts moving. What we have seen is that two bids have happened, and we have not seen much movement in the MCLR.
Honestly, I do not see MCLR moving needles so much at the end of 1 Q. Maybe just in quarter two, we will see some movement in MCLR. There will be a change in happiness, of course. Maybe MCLR headline of the funds may change, but before that, we get passed on to us moving on, whether we come into three, six, or 12-month MCLR refinance. Probably we will see it happen somewhere in quarter two. As far as the interest rate drops are concerned, I think a lot of public experts have spoken on that. As and when the drop happens, approximately 18% benefit comes immediately to us. In terms of fixed and floating assets, approximately 74%-75% of my assets are also floating, and they calculate RPLR on a continuous basis.
As and when the RPLR needs to get passed on, we will, as per the mandatory calculation board, pass it on to the customers. We do not see much of a benefit on any movement in interest rate because our borrowing floating and our asset floating are more or less on a matched basis.
Okay. So basically, from 2Q onwards, you could see some meaningful drop in borrowings with fixed yields.
Yes, to be very honest, you may have a lag effect before we get it, and we may pass it on. Beyond that, I do not think neither we are building anything internally also on that.
Got it. And just secondly, asset quality more from the MFI quarter. I believe in the last call also, we have indicated around 9,000-10,000 customers with MFI overlap. And now with the Tamil Nadu things coming in, so any risk to the customers there, we have around 56-57 branches in there. So anything incremental from the states, we could see MFI exposure.
Yes, you're right. Our numbers were about 9,000-odd customers, 9,096 customers who had MFI exposure. That number has dropped to about 7,077 customers now. So loan space is closed. For Tamil Nadu, I think it is too early to read what is going to happen. Yes, we have branches. As we speak to this, things are perfectly okay. Our recovery efforts, wherever applicants are, are completely online. Complete support from the government machinery like the DMs or the police, wherever exists, is coming in even as close as today morning. We do not see any issue happening as we move ahead.
That's all my side. Thank you so much.
Thank you, Yash.
Thank you. The next question is from the line of Sonal from Asian Market Securities. Please go ahead.
Yeah, thanks for the opportunity there, and congrats on the quarter. Just I had one question on the yields. So when we look at it as % of market assets, it has come down to 12.3%. So there is some drop, but the reported numbers, they stand pretty much similar, you know, at 13.9%. What kind of experience does this bring?
I think, to be very honest, I would want to see the number 12.8%. I wouldn't be able to. If you can pick it up offline and you can publish it, I would be more than happy to help you on that.
Sure. Thank you.
Thank you. The next question is from the line of Abhishek Kumar Jain from AlfAcurate. Please go ahead.
Thanks for the opportunity and congrats for the answer. The government and the yields have secured growth targets for.
Abhishek, in terms of growth targets, since we will maintain our AUM guide from 20%-21%, disbursement guide growth of about 18%-19%, and a PAT of about 20-21%.
On the NPA front, we believe that we should be around 1.00% and 1.01%, 1.02%.
That's right.
Where you are targeting the growth, whether you are the emerging market or you are at this point?
Our primary growth is going to come from emerging markets. As I explained in the previous call, during the previous call, emerging is going to contribute to higher composition of our growth.
What is the current rural mix of the loan?
Current straight of the current one is we do not do rural, yes, Abhishek, just to clarify. We do only urban. Urban and emerging straight, I can tell you, is about 55% current is from the urban locations, and balance is from the emerging locations. We would look at maintaining 55% should eventually, in a couple of years, should go to about from emerging and 45% from urban. It will reverse as we move ahead.
How is the demand situation as well as rural and state applied in effective analysis?
Demand, whether it is urban or whether it is emerging, not rural again, is emerging, is more or less similar. It is all about how do we reach there, where is competition playing a larger role. In urban locations, competition plays a larger role. The moment you move to emerging A, B, C kind of locations, the competition intensity goes down. Hence, the probability of higher conversion ratios applies in emerging locations.
Okay. Thank you.
Most welcome.
Thank you. The next question is from the line of Siraj Khan from Ascendant Capital. Please go ahead.
Hello. Audible?
Yes, sir. Siraj, please.
Thanks for the opportunity and good numbers. Sir, the reason is with regards to the pre-cost credit for Q4 was elevated. I mean, it was YoY last year. Last Q4, we had the recovery positive number. This year, we have a positive number. I wanted to know, were there any write-offs, elevated write-offs, negative write-offs of that?
No, no. This is not a negative write-off, as asked by one of the analysts. This is primarily because of the movement of one stage two. Stage two, if you look at it on a year-on-year basis, would have moved to about 30%. And second is basically your standard asset provision would have increased because the AUM increases significantly in quarter four. Last year, the stage two improvement was fairly significant in quarter four versus quarter four. That is why there was a reversal of provision in quarter four. This year, that much benefit did not flow through in terms of stage two improvement. That is why we are seeing a small credit cost of about INR 5 crores-INR 6 crores going into the P&L.
Okay. Q4, we did not have any write-offs.
It will be standard write-offs, which, for example, if you sell an asset, for example, if there is a haircut of 10% on an asset, 10% write-offs will happen. We have not taken any additional provisional write-off or potential write-offs which we take. Normally, we take potential write-offs once a year. We have not done anything of that sort in quarter four.
Okay. So I just wanted that number. That was the Q4 write-off or FY 2025 write-off?
This would be approximately INR 8 crores- INR 9 crores in quarter four.
Full year?
Full year would be INR 32 crores would be in full year.
Okay. Next for the asset complaint, one question I had was on the sourcing specifically in the Southearn region. So many of the PMs that I have seen, they are in the Southearn market. They have seen the Tamil Nadu market has seen a little bit of a slowdown. Karnataka is also facing some issues. In Madhya Pradesh, there were some increases seen. There are some tremors of very, very low-level asset quality issues. Are you seeing anything in these markets, Madhya Pradesh or maybe South India? Anywhere in any of the south of Kashmir, we see some asset quality issues, very early signs in the 30 DPD- 60 DPDs, anything of that sort?
Since you mentioned, Siddhar, since Tamil Nadu, we are not seeing any issue. As I see the numbers, Karnataka, no issue. Andhra Pradesh on a growth trajectory. Tamil Nadu on a growth trajectory. States, and if you recall my last, in the last quarter also, I mentioned the states which historically have been poor credit behavior, continued to be poor credit behavior, which is in the East of the country. You have Kerala continued to be that. Madhya Pradesh, again, growth trajectory, complete growth trajectory, no early indications from any of the states that you mentioned. Neither in bouncing, any negative indications, nor in 1+, nor in NPA.
Thank you. Finally, on the assets, year-on-year, cost to income has come down. What are the drivers here that we expect this year? What are the drivers which affect both cost to income and affect risk to AUM?
I think when we put this 120 basis points of cost to income, I think I had said that we wanted to be around 150 basis points in two years, to be very honest. And we already are now at 120 basis points in year one. I think, to be very honest, next year we will have around a 20 basis points-50 basis points sort of drop in cost to income. The driver over here predominantly is that majority of our expansion has already happened. The incremental expansions that we do, about 50-60 branches expansion that we do, about 60%-65% of the branch expansion will happen in emerging PNC, which are smaller offices, where the cost of setting up these offices is predominantly lower. The remaining 30%-60% will happen in the bigger offices.
The second thing is, obviously, since we have invested significantly three, four years back in standard as well as in technology, that benefit of that is seen right across the company, whether it is sourcing, whether it is credit, the number of files that we can handle, technical in terms of turnaround time. Basically, the sheer productivity, not only of the sales case, but also of the non-sales case, has stepped up. That is the reason for the incremental 100 basis points of business. The OpEx demand probably from three years ago is not the same opacity we are seeing, benefits of productivity. That is a driver that is constantly working, whether it is frontline sales productivity or productivity right across all the business support functions.
Thank you. That was the question. If you could provide, what was the lobbying function and the sensitive development risk for the year? And the files per officer?
Files per officer, or volume per officer. Okay. Third number I will try and clarify. Login to sanction for the year was one second. Just give me a moment. Yes. Okay. So login to sanction was 60%, and sanction to disbursement was 62%.
Okay. The corresponding action number is currently available?
Previous year, it was the login to sanction was 61.8 in FY 2024. In FY 2025, it was 60. Sanction to disbursement was 62, sorry, 62.5, and now end of 2025, it is 62. So more or less similar in terms of numbers.
More or less.
Yeah.
The volume per employee, the officer file number?
For the sales, right? For the sales, it is 1.15 per sales officer.
That was very helpful. I think I'm back in.
This is for the frontline sales.
Yes, I understand. It's ROs, so you are talking about.
Yeah, that's right. You got it right, yeah.
Thank you. The next question is from the line of Nidresh Jain from Investec. Please go ahead.
Thank you for the opportunity. Credit rating, how is the conversation with credit agencies on the possibility of credit rating? That is my first question, and then I have some follow-up questions.
Okay. Credit rating has also informed me just earlier. We are already engaged with both the credit agencies. I foresee that this rating upgrade should not be prolonged for too long, while obviously it is a decision that will be taken at their management level or the rating committee level. We have had good rounds of meetings, even as late as last weekend, so that is something.
Sure. Because in terms of size and the financial metrics, we are doing quite good. We have also reached the quarter number of INR 100 crore of size.
That's what both the rating agencies also tell us, yeah. I will leave it up to their judgment.
Second, if you can share incremental loan size for Q4, incremental loan size?
Incremental yields have come in around 13.45%. Incremental size on a blanket basis is INR 13 lakhs. HL is about INR 15 lakhs, and INR 9 lakhs is non-home loan.
In terms of sourcing mix for the full year or for the quarter, if you can share the sourcing mix between in-house, DSA, and connectors?
The split I will put out, but broadly, if I may tell you, in-house, which used to be 54% last year, has grown to 59%. So almost 60% is now in-house. The balance is external between DSAs and connectors, yeah.
Of the 41% you are talking with DSA, you would see in the retail 25%. The balance would be what we call connectors total?
Connectors over retail DSA. The point which we wanted to mention over here is our Aadhar Mitra program, which if you remember, we have been always talking about it for the last three, four years. We have seen good traction for Aadhar Mitra offtake, and the disbursement contribution in Aadhar Mitra now is almost 13%-14% for FY 2025. To put it into perspective, in FY 2022, it was about 22%. And FY 2024, it was again about 22%. There has been a significant movement both in the number of Aadhar Mitras that we have and the contribution that Aadhar Mitras are making to the overall disbursement mix. As you would know, Aadhar Mitra is only a referral model where the states have actually closed by my internal sales team, and hence these are all counted as internal businesses.
So 59% internal is group Aadhar Mitra?
Yeah. Aadhar Mitra is a referral program of providing leads by internal general. It's just a lead provider.
Sure. The last question is, if you could get one point for sales officer, what are the steps we are taking to improve this? Because this productivity here is on an industry level or sourcing productivity is broadly here only. When let's say we want to build INR 10,000 crore books, etc., this will come up with a constraint for reaching that particular size, and we will require thousands of employees. How are we thinking about improving this productivity?
See, this is a direct correlation of this 1.1 file per sales officer linked to the acquisition with the company. We realize that we understand the data, we understand the IQ of our current employees. We have launched multiple programs right from handholding to internal schemes of the growth trajectory, etc., just to ensure. We have seen early results, very positive results, at least in the last three quarters. We have seen increases. The attrition rates have dropped. The moment the attrition rates drop, and if you were to look at numbers in the current quarter or the last month, for example, they have gone up. I will not say substantially, but you can see a trajectory moving northwards. It is directly correlated to attrition. We have started to achieve attrition, which will eventually lead to a higher salary.
Sure. Thank you for that information.
Thank you, sir.
Thank you. The next question is from the line of Abhishek M to HSBC Please go ahead.
Yeah. Hello. I'm on the phone. Hello.
Audible. You're audible. Yes, please.
Yeah. Hi. Thank you. Thanks for taking my question. Can you give a sense of the balance transfer that you are seeing? How much is being put out right now? Has that increased or remained the same over the last, say, one year?
Abhishek, our balance transfer out annualized March is 6.49%, which has dropped from a previous year. Previous year, it was 6.93%. From a 6.93%, it dropped to 6.49%.
This is on the number of files basis. If you are holding 100 files, 6.9 are being delayed out. 6.4. Or is it from value?
This is AUM value.
AUM basis. Right. See, as per my understanding, a lot of larger agencies are trying to build an affordable housing book, and they are trying to approach customers who have been with you and your peers for three years, over the course of the record. They want to offer lower rates, given their own lower cost of funds and OpEx and all that. Is that not increasing in instance, and that is why your BT out rate is coming down? Or is it some calculation thing that is contributing to this? It's important to understand how you are able to retain these customers when the competition from large peers is increasing.
Yeah. There are multiple things, Abhishek, that you play around when BT out is out. One is internally, we have taken multiple measures right from having an internalized retention team, some analytics working towards highlighting the consumer as red, yellow, green, and amber, etc. There are multiple things from an internal retention team with the centralized retention team of Northern Mumbai. Any customer across 500, across the 60 branches, across the branch, our BT out is immediately reflected. We understand the reason of his BT out. If he is a good customer, green customer, we look at our own spreads and accordingly maybe look at the customer. If he needs top-up, based on our policy, we look at that. That is one. Second is, while you mentioned large housing finance companies, etc., everybody has a certain risk society, as we understand.
There are certain large companies who are not very comfortable with certain CRIF scores. There are companies which are not comfortable with self-employed, no income proof underwriting. There are certain large housing finance companies that are comfortable with this kind of property. My consumer size, it is a mix of a lot of things, a generic statement that one large company can come and take care of. We know it does not work like that. It is a combination of all these three things. Third, when we talk about larger companies looking at our consumers, this is primarily going to happen only or is happening, I would say, primarily in the emerging A and urban locations. That is why our shift is towards the emerging B,C. That is going to balance out completely. That is actually already you can see the numbers panning out.
For example, versus the last year, they quoted almost 7% of our BT out to about 6%-6.5% today.
Thank you for that. That was very comprehensive.
Thank you very much.
Yeah. So another quick question on your sourcing. So you explained that almost 59%-60% of the business is through your channel partners. Even in internal Aadhar Mitras, can you sort of pinpoint, is it Aadhar Mitras that is taking the growth to 54%, going to 59%, and directly given to that? Or would you like more on your internal questions as well?
My fastest growing channels, Abhishekar, Aadhar Mitra, and my direct sourcing, those two of them combined are the fastest growing channels for me.
Sure. Sure, sir. Sure. Thank you so much for those answers. Thank you. All the best.
Thank you. The next question.
Thank you. Thank you.
The next question is from the line of Parth from Nomura. Please go ahead.
Hi. Congratulations for the good question. Just two basic questions. You mentioned that the share of emerging markets is going to improve going ahead to 55% from the current level to 56%. We also see a decrease in the non-home loan segment. Do you see any incrementally improving effect on the yields both in these regions and geographies? From that, since you're growing in the emerging market segment, can we expect some improvement in the share of self-employed customers and LIG customers and other particularly employee disadvantaged in terms of cost?
Yeah. I think, as you explained, overall, the strategy of moving into or splitting the people into emerging and urban emerging one to three is to maintain the healthy yields that we currently have. I think the idea is to maintain the yields that we currently have. To be very honest, we do not expect the yields to grow significantly from where we are currently. In terms of the yields itself, it is a fair achievement. Whatever benefit we get from emerging B and C is where the yields will be slightly more strong. The business of that starts growing significantly in year one and in year two. That is where you will see some correction. For that, we also have urban locations where correction will be high. It is a sort of a setup that we have. That is why I think holding yields is a fair assumption.
The second question that you had was on consumer profiles. The consumer profile, what is going to happen is, as we move ahead in this strategy, our self-construction business will go up. Our self-employed business will go up. The more you focus on emerging B and C locations, these are smaller district centers where more of self-employed customers are available, which gives us an upside on managing. What are we trying to protect by doing broadly? If I can give you a couple of points. One is we are trying to protect our emerging locations, sorry, urban locations with a bigger size move northward. Cost of construction is high. Cost of labor is high, so on and so forth. At the emerging locations, the cost of construction is comparatively lower. I will be able to manage my business rate.
As Rajesh explained, urban locations, you will have a slight contraction on yields, on spreads, whereas in emerging locations, that is where you will be able to manage. A complete balance of business size and complete balance of spreads is what urban and emerging is going to give me.
Sure. That is helpful, sir. Just a quick question was on the fact that since you will be going into emerging segments, will you see a rise in the EWS and LIG income group, and will it have an impact on even impacting the self-employed side?
Okay. First, let me clarify to everybody on the call, including you, that we are already in these locations. We are not going to these locations. What I have done is I have split my 600 branches where I am available to it into two categories. I am not going to venture out into new locations. From a pure strategic and from a business size perspective, yield perspective, I have to distribute not only the branches, but even my teams. I'm trying to put the best and the strongest team on the emerging side, whereas urban locations are more or less on auto mode right now. That's what I'm doing. Will my cost enhance? Because at this point, it will not, because this is the business that I've already been doing.
Sure. That is helpful. Just one last question. Your top states like Rajasthan, UP, Maharashtra, and even Gujarat is now at 11%, sorry, not Madhya Pradesh, Gujarat. Do you plan to change your threshold of maintaining first AUM at just 14% to EBITDA higher threshold once you are seeing improved growth in the key?
No. We have, as managers, we have strategically decided that whether it is distribution, whether it is incremental reimbursement, or whether it is AUM, it will not breach the 14% mark. Maybe that's between here and there, 14-14.5%. That's the range we will be around.
Okay. Thank you. This is very helpful. Congratulations.
Thank you. Yes. Thanks.
Thank you. Ladies and gentlemen, this will be the last question today. This is from the line of Shreya Shivani from CLSA. Please go ahead.
Yeah. Thank you for the opportunity. Apologies, I've joined in late, so I'm not sure if this has been discussed already. I want to understand how much liquidity are you holding on balance sheet right now in terms of three months, six months? Is it possible right now? Because it's in FY 2024, there would be 1%-2% if any benefit can come through from reducing this on our spreads, sorry, on our margins, etc. Some commentary on that, please. Thank you.
Our overall liquidity that we had at the year-end could have been INR 2,200 crores, which is approximately 10% of the loan book. If you look at it at March and last year, it would have been on a similar line. Typically what happens is in intervening quarters, this typically is in the range of 8%-9%. At the end of the year, it becomes 10% because there are significant drawdowns, which occur at the end of the quarter, which get utilized in the start of the next quarter. Typically what we would like to keep, which is we would like to keep this in the levels of about 8% to be very good. To be very honest, we would like to measure that more as a percentage of borrowing mix.
We would like to keep somewhere about 8%-10% of the borrowing mix. Obviously, this gets decided by the ALCO in terms of the liquidity in the market. If the liquidity becomes tight, we would like to keep it at a higher percentage. Otherwise, 8%-10% is balance sheet liquidity. On top of that, we will always have underlying lines. For example, on balance sheet liquidity was INR 2,200 crores. We also had underlying lines of about INR 900 crores.
Got it. Got it. So broadly then, you are pretty much in range, and this will not really dramatically shift from where we are right now, right?
It will give you a rate of about 1%-2%, to be very honest, but not significantly.
Got it. This is very useful. Thank you so much. All the best.
Thank you. Ladies and gentlemen, as this was the last question today, I would now like to hand the conference over to the management for closing comments.
Thanks a lot. I thank all the participants for joining in. I would like to apologize also for uploading the presentation a bit late. We had some problems at the site for upload. We will ensure that the next slides will give you a slightly more bigger lead time for reading the presentation. I hope all the questions have got answers. If there are any unanswered questions, you can always reach out to the investor relations, sorry, email ID, and we will be happy to answer questions. Thanks a lot, and have a good day.
Thank you so much.
Thank you. I'm Priya from JM Financial Institutional Securities Limited. I've concluded this conference. Thank you for joining us, and you.