Ladies and gentlemen, good day and welcome to the Q4 FY 2023 earnings conference call of Aditya Birla Capital 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 an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Vishakha Mulye, CEO, Aditya Birla Capital Limited. Thank you, and over to you, ma'am.
Thank you so much. Good evening, everyone, and welcome to the earnings call of Aditya Birla Capital for Q4 of FY 2023. Joining me today are our senior members of my team, Bala, Rakesh, Tushar, Pankaj, Kamlesh, Mayank, Pinky, Vijay, and Sanchita. I will cover our strategy and approach across businesses, and Vijay will cover, you know, key financial highlights, followed by a discussion on performance of our key businesses by respective CEOs. The Indian economy continues to remain resilient amidst a volatile global macroeconomic environment. The growth momentum is visible in increasing industrial output and capacity utilization, strong improvement in services and manufacturing PMI, and rise in GST collections. Indian financial sector remains healthy and stable. Though inflation remains elevated, it has moderated from its peak. We expect these positive trends in industry to continue and Indian economy to perform well in FY 2024.
At Aditya Birla Capital, we follow one ABC, one P&L approach to focus on quality and profitable growth by leveraging data, digital, and technology. The three pillars of our approach are one customer, one experience, and one team. We have a strong presence across protecting, investing, financing, and advising that is PIFA offerings. We have adopted a one customer approach to build deep understanding of our customer profiles and provide them best-in-class solutions across PIFA. Our endeavor is to provide a one experience across channels and enhance seamless delivery of our products. We follow an omni-channel architecture for distribution and provide complete flexibility to our customers to choose the channel through which they wish to interact with us. We focus on working together as one team by leveraging synergies to drive cross-sell and deliver complete and comprehensive solutions to our customers.
We have also aligned the incentive structure of our senior management team to reflect this approach. This approach has helped us to accelerate our growth trajectory, build scale, and increase market share across our businesses. We continue to expand our branch network. We added 75 branches during the quarter, and our total branches count was 1,295 as on March end. We have 584 co-located branches across 155, One ABC locations where customers receive assistance to achieve their financial goal. We will continue to increase our presence on One ABC locations. We follow a digital-first approach for product innovation, customer selection, and seamless onboarding and improving service delivery. In our AMC business, about 75% of our customers were onboarded digitally in FY23. In our life business, 77% of the renewals were done digitally.
In our health insurance business, 87% of the business is delivered by auto underwriting. We leverage our data, digital, and technology across our businesses and have taken various initiatives to further strengthen our proposition. We have recently formed a wholly owned subsidiary, Aditya Birla Capital Digital, which will develop an omni-channel B2C platform. This platform will serve existing customers, acquire new customers, and act as one-stop solution to deliver PIFA solutions to all our customers. The virtual engagement channel of this platform has already gone live in March. We are collaborating with NPCI to develop and promote digital payments, which will enhance our customer transaction experience. We have recently launched inFinance, our innovative engagement program to partner with startups and co-create solutions for enhancing customer journeys and increasing the operational efficiency across our businesses. A comprehensive digital platform for MSME ecosystem, Udyog Plus went live in March.
It offers a paperless digital journey for business loans and loan disbursement up to INR 10 lakh. Udyog Plus has been integrated with the government and private e-commerce websites to provide credit facilities to the sellers on these platforms. We have seen more than 2,500 registrations on Udyog Plus within a month of its launch. We see a favorable prospect for the Indian economy in the near and medium term. We expect India's domestic consumption and investment drivers to continue to support healthy GDP growth. Our strong parentage provides us seamless access to capital, both equity and debt. An extended ABG and ABCL ecosystem gives us multiple opportunity to accelerate our growth.
Going forward, we will follow our One ABC, One P&L approach to continue to grow and build scale in each of our businesses. In our NBFC business, we will focus on building a granular portfolio by growing our personal and consumer loans and secure and unsecured businesses. We will build differentiated offerings for MSMEs and scale up our Udyog Plus to acquire new customers and tap into ABG ecosystem. In our HFC business, we will grow both prime and affordable business segments with a focus on quality origination. We will continue to deliver sustainable growth and ROA in the medium term in both our lending businesses. In the AMC business, we will work towards increasing equity market share. We will aim to increase our presence in passive and alternate businesses.
In life insurance business, we will grow the traditional style segment with a focus on diversifying our distribution mix, increasing our productivity, and improving the persistency across cohorts. We will continue to deliver sustainable growth in embedded value and VNB in the medium term. In health insurance business, we will leverage our differentiated Health First model for better risk selection and risk pool management, diversify our distribution mix, and utilize our digital capabilities for hyper-personalization at scale. We intend to make investments with primary objective of supporting growth in our lending and insurance businesses and to strengthen our digital offerings. Our board of directors have approved today raising funds of an amount up to INR 3,000 crore subject to the requisite approval. I request Vijay to cover the financial performance for Q4 and financial year 2023. Over to you Vijay.
Thank you, Vishakha, and good evening, everyone. We delivered a strong performance for FY 2023 with accelerated growth momentum across our businesses. The total revenue grew by 31% year-on-year to INR 9,146 crores in Q4 and 27% year-on-year to INR 29,999 crores in FY 2023. Consolidated profit after tax grew by 35% year-on-year to INR 609 crore rupees in Q4 and 33% year-on-year to INR 2,057 crore rupees in FY 2023. The consolidated profit after tax in FY 2023 excludes the fair value gain related to investment in Aditya Birla Health Insurance. In our NBFC business, we continued with the strong momentum of disbursement and granularization of our book. Disbursement for the quarter grew by 19% sequentially and 58% year-on-year to INR 15,598 crores in Q4 of FY 2023.
This helped the loan book to grow 46% year-on-year and 10% sequentially to INR 80,556 crore as of March end. Loans to retail MSME, SME, and HNI segments now constitute 67% of our portfolio. ROA of our NBFC business was 2.45% and ROE was 14.76% in FY 2023. In our housing finance business, disbursements increased by 29% sequentially and 36% year-on-year to INR 1,790 crore during Q4 of FY 2023. The loan portfolio grew by 6% sequentially and 14% year-on-year to INR 13,808 crore as of March end. ROA was 1.94% and ROE stood at 13.16% in FY 2023.
Coming to our AMC business, the average AUM was INR 2,75,204 crore, of which equity AUM was about 42% in the current quarter. With our continued focus of growing passive and alternate asset segments, passive AUM was about INR 28,200 crore at March end, which is about 2.8 times the passive AUM as of March end last year. The growth momentum in our life insurance business continues with 37% year-on-year growth in retail first year premium, which was significantly ahead of the industry growth of 19% year-on-year in FY23. Group new business premium grew by 30% year-on-year in FY23. We achieved a net VNB of about INR 800 crore in FY23, which was more than 2 times the net VNB in FY22.
Our net VNB margin increased by 801 basis points year-on-year to 23% in FY23. Embedded value was INR 9,014 crore as of March end. In our health insurance business, our unique and differentiated Health First model helps us to deliver industry-leading growth of over 67% year-on-year in FY23 among standalone health insurance. The market share of ABHI among standalone health insurance increased by 210 basis points to 10.4% in FY23. Combined ratio improved from 127% in FY22 to 110% in FY23. With that, I will now hand over the call to Rakesh to take us through the NBFC business performance in detail.
Thanks, Vijay, and good evening, everyone. In our NBFC business, we saw strong momentum across all segments in Q4. Contributing to a 10% quarter-on-quarter and 46% year-on-year growth in our AUM, taking it to INR 80,556 crores. Our retail and SME segment AUM grew 57% year-on-year, and our active customer base grew to 5.7 million compared to 3.6 million last year. In Q4, we disbursed INR 15,598 crores, which is the highest for a quarter so far. Our disbursement for the full year was double of that what we did in FY 2022. 72% of it is towards retail and SME customer segments.
Business loans comprise nearly 43% of our disbursement mix and was the highest contributor across product segments, followed by personal and consumer loans at 31%. 58% of our personal loans was sourced digitally. With this momentum and focus on granular product segments, we ended this year with a retail and SME segment AUM mix of 67%. We were able to deliver a 60-basis points year-on-year improvement in our NIM, taking it to 6.84 for the year. We also significantly augmented our frontline capacity by doubling our branch footprint this year. We added 164 new branches in FY2023, taking our branch footprint to 323 branches. Again, in line with our target for March 2023.
Despite this expansion in frontline capacity, we managed to maintain Q4 cost-income ratio at a similar level as last year. This I attribute to our continued investment in technology to digitize processes to grow sustainably. We closed FY23 with a profit before tax of INR 2,090 crore for the full year, delivering a 41% growth year-on-year. In fact, profit before tax for quarter was at an all-time high of INR 604 crore, growing 51% year-on-year and 12% quarter-on-quarter. The ROE for the quarter was 16.55% compared to 12.4% in Q4 last year. 4% expansion in a year, which is clearly noteworthy.
I had mentioned in my last quarter earnings call the next leg of growth will be driven by our enhanced frontline distribution capacity and investment in digital and direct sourcing channels, which we will continue to invest in FY 2024 as well. In business loans vertical, we launched the differentiated Udyog Plus, our unique and differentiated unified platform for MSME customers to enable digital journey for credit as well as value-added services for MSMEs to transact seamlessly. The asset quality has shown a consistent improvement over last year, with our Stage Two and Stage Three coming down from 8.98% in Q4 last year to 5.84% in Q4 of FY 2023. Gross Stage Three has reduced to 3.12% compared to 3.58% in Q4 last year.
We maintained our Stage Three PCR at a healthy rate of 46.2%, up from 43% last quarter. Credit cost for the quarter was 1.49%, which was 25 basis points lower than previous quarter, which you may recall I had mentioned in my last call was elevated owing to the implementation of new ECL policy. To conclude and reiterate the quarter four performance, not only did we have a strong quarter in terms of the AUM growth, but also in terms of progressively driving increase in retail and SME portfolio mix. As a result, our quarter four NIM expanded to 6.88% over last year. With a efficient control on costs despite investment in building sales, we delivered a quarter four PAT growth of 51% and return on equity of 16.55%.
With this, I will now hand over to Pankaj Gadgil for our housing finance business.
Thank you, Rakesh, and good evening, everyone. I will now cover the performance of ABHFL. We have experienced continued momentum in disbursements and book growth with a robust financial performance and focus on portfolio quality, which has resulted in consistent improvement across all return metrics. Let me talk you through some of the key highlights. Disbursements of INR 5,300 crores in FY23, which is our highest ever, which is an increase of 42% YOY. Loans book as of March 23 is INR 13,808 crores, an increase of 14% YOY. NIM is 5.08%, an increase of 100 basis points YOY. Our PBT for FY23 is INR 309 crores, which is an increase of 22% YOY.
Portfolio health has improved consistently. Stage Two plus Stage Three has reduced by 271 basis points QoQ and 377 basis points YOY. Stage Three loans have reduced to 3.23% in March 2023 from 3.66% in December 2022. You can see that we have demonstrated consistent improvements across various key performance indicators for the third consecutive quarter. Encompassing aspects of good growth, asset quality, and poor profitability. We witnessed accelerated growth in disbursements across all product segments. The customer base now is about 54,500 and has grown by 22% YOY. We continue to focus on granularity with a ticket size of 25-30 lakhs. ABFSL now has a stronger presence with 128 branches located across 20 states and a well-diversified portfolio.
We continue to invest in talent, technology, and analytics to increase capacity and enhance productivity. The cost-to-income ratio for FY23 is 40%, reflecting accelerated investments in technology and front end. Now coming to portfolio quality. The moratorium on all the COVID-related cases were ended in December 2022. All the numbers which you are seeing on Slide 32 of the investor presentation are including the performance of rejected cases, and 100% of the cases are now being presented for collections. Like I mentioned earlier, our gross Stage Three has reduced from 3.66% in December 2022 to 3.23% in March 2023. We are maintaining our Stage Three PCR of 43% and additionally carrying a management overlay of INR 56 crores. With a robust debt service framework and pre-delinquency management, the collection efficiency is consistent at 99%.
Most importantly, with a focus on quality of origination, 96% of our disbursements in Q4 FY23 are with 700+ CIBIL or new to credit. You can see the detailed breakup of the same on Slide 31 of the investor presentation. Moving on to financial performance and liquidity management. In terms of ALM, ABFSL is operating in compliance with the regulations set by NHB and Board. We have maintained positive ALM, ensuring that the company is well prepared to meet its liquidity requirements, which can be further referenced on Slide 33 of the investor presentation. We are rated consistently Triple A for the last six years by ICRA India Ratings. As you can see on Slide 34 of the investor presentation, we've been able to maintain a healthy spread at 3.79%.
With continued focus on diversified long-term borrowings, the contribution of NHB to total borrowing outstanding has increased from 14% in March 2022 to 18% in March 2023. Now coming to the financial highlights. The PPOP is highest ever at INR 381 crores in FY 2023, with a growth of 15%. The PAT for FY 2023 is INR 241 crores, an increase of 22%. The ROA for FY 2023 is 1.94%, and ROE is at 13.16%. You can refer the detailed financial on Slide 38 of the investor presentation. Lastly, on Slide 35, our organizational roadmap is anchored around growth, service excellence, digital reinvention, and distribution network, and let me cover that briefly. Firstly, we expect to accelerate growth in both the prime and affordable segments through geographically focused micro-market penetration strategy and fully leveraging the ABG ecosystem.
Secondly, like Vishaka earlier mentioned, we are accelerating our digital reinvention efforts across the entire customer journey, and we have launched a seamless loan origination system in April 2023, which enables higher face time of our teams with customers. Lastly, we are very actively focusing on enhancing our analytics capabilities across areas of data engineering, data science, and digital tech. In summary, we are committed to sustain our profitability and maintain a quality portfolio while simultaneously investing in long-term growth. With this, I now hand over the call to Bala, MD & CEO of our asset management company.
Thank you, Pankaj, good evening to everyone. As I presented the AMC on call, the total average asset under management, including alternate assets for Q4 FY 2023 stood at INR 286,000 crores. For the quarter ending March 2023, our mutual fund AUM was at INR 270,000 crores, remained more or less flat-ish as compared to Q3 of FY 2023 AUM. Our equity mutual fund asset under management was at INR 169 crores for the quarter ending March 2023, with equity mix to that 42%. Throughout the year, we launched several initiatives aimed at increasing the size of our SAP book size. Our effort has resulted in our SAP book crossing INR 1,000 crores for March ending 2023.
As part of our strategy to build the customers, competition, we added close to INR 7 lakh new portfolios, which has resulted in our overall fully account increasing and going above INR 80 lakh as of March 2023. On the passive front, our product offering grew by 3 times to INR 29,000 crore as of March 2023. Our existing passive book as a result of this has grown from 7 products to 41 products, and overall number of fully added this now close to INR 4.93 lakh. On the alternate asset building, especially on the PMS and AIF front, we have raised the commitment of INR 7,000 crore to our India equity trustees fund, which is connected to the AIF fund by leveraging our multi-channel distribution footprint and established over a period of time.
With respect to the offshore operations, we have received in-principal approval from Gift City, launching India year's engagement on its own, domestic and Gift City. Additionally, we are also currently in the process of launching two more global fund under the Gift City umbrella. On the real estate front, though we have been fine building the incremental asset, but current focus has been creating right experience in our credit opportunities fund by way of making investments that investment is currently in progress. With respect to the financial numbers on a full year, for the full year March 2023, the revenue from operation was about INR 1,227 crores compared to INR 1,200 crores for the FY 2022.
Operating profit before tax was at INR 67 crores as compared INR 7.3 crores FY22. FY20 profit before tax was at INR 794 crores versus INR 399 crores on the same period last year. I'm also happy to announce that as part of our shareholders' approval, we declared INR 5.25 per share as a final dividend. That takes it to INR 10.25 per share. With this, I'll hand it over to Kamlesh Rao, MD & CEO of Aditya Birla Sun Life Insurance.
Thank you, Bala, and good evening to all of you. The consistent growth journey of ABSLI in both the individual and group life insurance business continued in the financial year ended 2023. We outperformed both the overall industry as well as the private industry. Individual life insurance grew by 37% compared to the private industry growth of 24%. This growth was achieved through increased productivity and capacity investments made last year. Our success in launching new products was key to our growth. We launched an industry-first immediate income guarantee product under the Nishchay Plan, which sold 5,000 policies in just 17 days. The success of our new products, combined with our PAR's contribution of 25%, were the hallmarks of our business in financial year 2023.
The individual business had a very healthy product mix, with traditional business accounting for 81% and the unit business now at an all-time low of 17%. This has resulted in strong gross margins for the firm. The fact that 25% of our business came from upselling to existing customers helped productivity growth in both our proprietary as well as our partnership channels. In the group life insurance segment, the private industry saw a growth of 17% last year, while ABSLI registered a growth rate of 30%. We continue to focus on the credit life business, which is growing at more than 100% over the last year's base. Our total premium of INR 15,070 crores has registered a growth rate of 24% over last year. With a two-year CAGR of 24%, demonstrating the consistency of our business growth.
This growth came from new business growth as well as renewal premiums growing at 14%. Like Vishakha mentioned, our digital connections now account for 77% of our renewal premium, and this growth is seen across all persistency buckets from the 13th month to the 61st month, with the 13th month persistency now at 87% and the 61st at 54%. We continue to maintain an upward bias in our forward guidance for these persistency numbers. Our AUM under management now stands at close to INR 70,051 crores with a YOY growth of 15%. A 2-year CAGR here of 17% is a demonstration of the consistency of our growth. 24% of this AUM is in equity and the balance 72% in debt.
Our investment performance has been better than the respective benchmarks across all three categories of equity, debt or even balance funds, either from a one-year or a five-year perspective. Our digital adoption across various areas is demonstrated in Slide 54. 99% of our new business customers are onboarded digitally. 83% of all our services are now available digitally, covering 60% of our customer transactions. Our customer self-service ratio now stands at 88%. We continue to manage the net margin solely well, as seen in Slide 55. Last year, we managed a net PMP of 15, and for last year, financial 2023, we closed the year at a 23% net PMP margin.
We have shown a growth of 800 basis points in our net margin compared to last year. The absolute value of net PMP moved from INR 369 crores to INR 800 crores in financial year 2023. ROE has grown to 22.6% in financial year 2023 from 15.4% levels of financial year 2022. We will continue to focus on quality of our book to make it better across the 13th to the 61st month persistency from current levels and also focus on diversified mix of both the proprietary and partnership channels within our business. We believe that the new EoM guidelines introduced by the regulator will have a positive impact on the life insurance industry in the long run.
These guidelines will ensure directionally that life insurance companies will improve cost efficiency in their business operations. Eventually these efficiencies will get passed on to customers in the form of better benefits and products as per the spirit of the new guidelines. With this, I will now hand over to Mayank, CMD CEO of our health insurance.
Thank you, Kamlesh. I'm very happy now to give the performance of our health insurance business. We had a very successful year with an industry-leading growth of 57% YOY in FY 23, making us not only the fastest growing health insurer in the country, but in fact the fastest growing insurer across all lines of GI industry. We are well ahead of industry growth at 21% and SAHI growth at 26%. The growth was powered by our retail franchise expanding at an impressive 33% YOY. In FY 23, we acquired 3 million net new customers, bringing our total customers to 21 million, 11% YOY growth. As a result of this growth, our market share in SAHI company stands at 10.4%, an increase of 210 basis points over last year.
Our corporate business experienced an outstanding growth of 104% in FY23, driven by our strong emphasis on cross-selling and upselling and the introduction of a new category of corporate OPD offerings, which have collectively accounted for 41% of our business in the last year. Our corporate business is modeled on right risk selection designed to capture market opportunity targeting new-age companies and has delivered a positive combined ratio. We believe that we have set up one of the most profitable corporate businesses in the industry. In terms of overall profitability in FY23, we observed an escalated level of retail claims that is consistent with the industry trends. The claims are largely driven by factors such as non-COVID linked illnesses and providers inflationary pressures. To mitigate the impact of these claims, we have implemented various interventions, including underwriting, sourcing and provider management strategies.
Additionally, we have increased the price of our flagship products already. We have further strengthened our FWA, which is Fraud Waste and Abuse model, and we are also collaborating with the industry, in fact, to help identify and prevent any potential fraudulent activities using the data provided by IIB. In spite of the above, our combined ratio has actually come down to 110% in FY23, a reduction from 127% the previous year. The full year loss stood at INR 220 crores, well below the loss of INR 311 crores in the same period last year. As we progress, achieving a larger scale will enable us to generate greater operating efficiencies. We believe our superior performance is made possible by the robust foundation we've established through our unique Health First model over the past six years.
The power of the proposition lies in its ability to leverage the fundamental principles of prioritizing the health of consumers, which has resonated strongly with our stakeholders, as was reflected by the success of our brand campaign, Kya Peechhe Chhodaa Hai, which was the story of our actual consumers sharing their experience with the masses. In order to build upon our differentiated model, we are continuously introducing new offerings to the market. Our recently launched product, Activ Fit, which was an industry first comprehensive plan for young consumers, is in line with the strategy of innovative and segmented product offerings. This included an industry first feature of in the product, a face scan based good health declaration, and which has been received very well by the market so far.
Our industry leading claim settlement ratio of 96% is a reflection of our commitment to prioritizing key moments of truth for our consumers. On the digital front, our digitally enabled distribution mix is the most diversified distribution in the industry, with Proprietary channel contributing to 27% of our retail business as of now. We now have 85,000+ advisors across 200+ branches. As I mentioned earlier in the previous communication, we leveraged our ABC branch strategy to nearly double our branch network at a low-cost last year and are also synergizing with other views in areas like corporate advisors. In addition, we now work with 17+ banks, including the recently added 2 new private sector banks. Sorry, public sector banks, Punjab National Bank and UCO Bank.
On the digital front, our business, including strategic alliance partners, grew 71% year-over-year, becoming a sizable 15% of our total retail mix. We continue to invest extensively in our technology and digital capabilities to superior customer experience and more importantly, scale hyper-personalized engagement for our Health First model. We are already in phase two of our tech and digital investments to further lead in this space to leverage the emerging new opportunities fueled by the changes in regulations over the past one year. In addition, we are continuously enhancing our data and analytics models to make our entire customer lifecycle management more efficient and personalized. This includes personalized product offerings, revenue smarter, targeted health and wellness interventions, and personalized service approach to enhance overall customer experience.
Furthermore, our predictive analytics model helps us to detect fraudulent claims and machine learning algorithms helps analyze customer data to predict future claims and ensure accurate pricing and coverage. Moving forward, we aim to organically expand our franchise while maintaining best in class unit economics. We would like to open up chosen white spaces to increase revenue pools and also improve profit pools. Thank you. I will now pass it back to Vishakha for our closing remarks.
Thank you, Mayank. This concludes our comments on the Q4 FY 2023 performance. Now we will be very happy to take your relevant questions.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the questions 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 Bhuva from ICICI Securities. Please go ahead.
Hi, congrats on a good set of numbers. Just two questions from my side. One is on this fresh capital raising. If you can help us through the capital allocation of this likely fundraise.
As you know that, you know, it is expected that the Indian economy will grow at a very healthy pace. I think, in the last year one has seen a very robust credit growth in the system at around, you know, over 15%. You know, all the other parameters and the drivers of the growth in the economy has really worked in the last 12 to 15 months. One expects that momentum to continue. We believe that the capital that we plan to raise to include to make investment with the primary objective of supporting the growth in our lending and insurance businesses and also to strengthen our digital offerings. You know, that is what it is basically for the growth in the franchise across the platform.
Okay. Any split you would like to highlight? Let's say, how much of this would be towards lending business and how much of it would be towards digital and insurance?
That will be very difficult to, you know, articulate. As I said, you know, if one were to look at the growth that we have seen across our businesses, it has been very robust. Therefore, we believe that taking into consideration, the growth that one expects in the Indian economy, we will definitely, require capital, for the growth and therefore, you know, we will ensure, that the capital is available for all our businesses, to have the robust growth.
Got it, ma'am. Ma'am, my next question is on the NBFC side. You know, as to as on March 23, our book mix is roughly 70% secured, 30% unsecured. When we look at the FY 2023 implemented business then it is more skewed towards the unsecured piece. Maybe in a medium-term perspective, what could be the ideal mix in terms of secured, unsecured for us?
Akash, would you like to take this?
Yes. The, we will continue to really see and look at the opportunity in terms of the different customer segments. Clearly personal and consumer space we are looking at opportunity and also on the MSMEs business. As Vishakha had mentioned, we have launched Udyog Plus. I think we'll continue to focus on these segments. Depending on what the customer needs are and the product segmentation is, we continue to build a balance of both secured and unsecured, and we'll continue more.
broadly it should remain at 70/30 mix or unsecured should outpace the secured mix?
As I said, I think, it will depend, in the customer segments, what are the opportunities, and we will continue to really leverage on that opportunity both on the consumer side and on the MSME side.
Okay. Okay.
A lot of MSME business is secured in nature.
Got it. Got it, sir. very helpful, sir. Thank you.
Thank you. The next question is from the line of Avinash Singh from Emkay Global. Please go ahead.
Good evening. Good set of numbers. Couple of questions. The first one is again broader on your strategy. You have articulated, I mean, a nice U.S. strategy. So far one concern that remains with the overall ABC businesses, that in majority of the cases the businesses are still kind of a B to B to C or B to D to C. Where it is your bridge to the customer, from your entity to the customer are kind of a very, very powerful third party with the entities. That is where a question comes around the, you know, your sustainability of customer franchisee or growth.
I mean, whether I look at the lending business where you are sort of, partnering with a lot of, you know, FinTechs, DFIs, and eventually reaching out to customers or in insurance, it's like a bank and all. I mean, of course, you have the plan for B2C in place. How do you see this, I mean, sort of evolving when your business has a sort of a direct connect with the customers because that is a bit differentiated than many of your peers? Again, some bit of more color around how it is going to change over, say one, two years, how you approach or reach to customers, at the time of sort of, reducing the intermediation. That's one.
Second, is on the lending fees, on the, in this side, that a lot of this growth at this point, I mean, is coming, you know, in this personal unsecured, of course, the previous question you tried to address this. Do you have sort of a, you know, a sort of a segment in mind which you would like to add? Because some of the segment where you operate, probably the competition would be sort of increasing and also kind of growth would be already kind of peaking out if I can say. Is there sort of a product segment or, you have in mind that we sort of augment you would like to augment to enable your future growth? These are my two questions. Thank you.
Okay. Let me take the first one, because it is across the platform. First of all, you know, if you look at it, even the partners, yes, we do work with the partners, particularly the digital partners in our NBFC business. We do work in our insurance businesses, you know, the agents as well as, you know, the bank insurance partners. We look at these partnerships as more as a channel to reach at our customers. When we reach our customers, it is most of the time, our people are involved. The customers get to experience our product directly and our service directly and therefore, you know, we have a direct contact with the customer.
The data of the customer and the customer ownership in most of the channels is with the Aditya Birla Capital, therefore we can leverage these customer data as well as the customer, you know, the contacts for our, you know, for our other products as well. In few channels of course there would be a cost implication, because we may have to, you know, pay some amount to the channel that we would have used initially. I would say that in all the channels we have a direct, you know, contact with the customer and the customer gets to experience our products and services directly. As you rightly said, yes, we are working in each of our businesses to also create now, in many businesses we already have that.
Also, we are creating now a specifically dedicated digital channel, which we call it as One ABC. You know, we incorporated what we call it as Aditya Birla Capital Digital, which is going to be an omni-channel platform which will have, which we will leverage our existing branches. We will have a VRL, we have a web platform. We will also have our app. As I said in my opening remarks, we have already launched VRL, and it has gone live in the month of March. We had said in our last conference call that we will be launching our web as well as the app in the very near future this year. With that, of course, we will look at acquiring...
We will of course look at servicing our existing customers, of ABC as well as ABG Group. We will also, look at acquiring the customers digitally through this channel. I hope I have answered that question. The second question, I'm gonna request Rakesh.
On the first one, if I can just add.
Yeah.
I just want to clarify that it's not all business. I'll talk about the lending business. If you look at 62% of our business is direct. Yes, we depend on the partners, but that is only on the consumer side of the business and some bit of personal loans of the business. Beyond that, the SME business which we do, it's a relationship and direct acquisition model which we have and obviously on the corporate side also is a direct acquisition. Also on the partners, the entire ownership, though the sourcing is done by the partners but the entire ownership of the customer is with us. The entire contract is with the customer. The repayment happens from the customer's account. We make disbursement in customer's account. Clearly the ownership is with us.
The entire data, the performance of that customer is with us. Clearly, I think, yes, we do depend on some part of our business and some segment to acquire through the third party. I think the ownership of the customer, and as I said, 62% of the customers which we acquire are, or the business which we have is through direct.
Second question.
The second question was on NBFC in terms of the new product segments and all. Clearly, we have discussed this. We believe there is a big opportunity in the consumer, the personal space and the MSME space. That is the reason why we have built this platform, B2B platform, which is Udyog Plus. Clearly, we want to capture the large-scale micro-SMEs who are looking for a small ticket loan. As we build a credit history of these customers, we will be able to really do business with them in a long term. I think that's a clear new segment, a new acquisition engine which we have built, and we believe there's a big opportunity and we need to really do justice to this before we really start looking at newer product segments.
Thank you.
Thank you. Rakesh, if you can just follow up on-
Sorry, I would request you to please come back in the queue. The next question is from the line of Abhijit Tibrewal from Motilal Oswal Financial Services. Please go ahead.
Yeah, thank you for taking the question. Am I audible?
Yes, you are.
Yeah. Thank you. I mean, again, my questions are on the lending business. Just want to understand with regards to the NBFC, definitely, very strong momentum that we are seeing across product segments. The last question you were kind of trying to explain about the digital partners that you work with predominantly in the consumer and the personal loan side of things. What I wanted to understand here is while the going is very strong now, just wanted to understand how are we looking at things going forward? What I'm trying to understand more specifically is somewhere are you, I mean, anxious about the kind of growth that is coming in particularly in the unsecured side of things?
Not just personal and consumer loans, but also, the unsecured business loans. Why I ask this is, when we engage with a lot of your channel partners or let's say DSAs, what they clearly highlight is, while the engagement is very, very good, at the same time, we are also very aggressive in terms of kind of decisioning. While it's a good thing that we appreciate, I mean, how are you looking at things? If you can answer this and then maybe, I'll ask my second question.
Sure. If you look at 70% of our NBFC book is secure. Our unsecured portfolio comprises of personal loans to salaried professionals with a focus on emerging income segments and checkout financing. If you look at that total book of INR 15,000 crores out of INR 80,000 crores of business. About 87% of our personal and consumer loan portfolio is to customers with a credit bureau score of more than 700. We are clearly and we have built an underwriting model. The scorecards are inbuilt over a period of time, with our learning, and it's a completely agile in terms of the scorecard which we use, the credit bureau score and our own performance. The asset quality, as you mentioned, in our NBFC business through the cycle has been quite stable and it continues to remain healthy.
Also, if you look at the gross Stage Two and Three, that has declined by 315 basis points year-on-year and 114 basis points sequentially to 5.84. Clearly, we are focused on all these customers which we onboard are acquired through the scorecards which we have built over a period of time. We track the performance not only monthly basis, in certain on a weekly basis, we review the performance in terms of which cohorts are performing and how are they really coming on our benchmark. We are completely on it. We will continue to be on it.
Thank you for that. Just a follow-up question. If you look at your group loan, that ROA, in the NBFC business, can you help us understand what are those levers going to be going forward, which will maybe help you achieve a further expansion in ROA from here? Just one last question for Vishakha. This Aditya Birla Capital Digital that we have incubated now, and wherein you also talked about having that app interface. Again, two sub-questions here. One is, I mean, what are our plans going forward? Is this subsidiary going to house the so-called, let's say, super app of Aditya Birla Capital? Going forward, in addition to loan offerings, what are the other things that you maybe plan to provide on this app? Thank you so much.
Yes, you know, the app will be housed in Aditya Birla Capital Digital. In addition to, of course, you know, our endeavor there would be to have a completely customer centric approach. We will try to be, you know, position our Aditya Birla Capital Digital as a one-shop solution for all the financial needs of our customer across his life cycle. Therefore, in addition to the products that we have are manufactured by us across our lending, insurance and investment, what we call it as PIFA, there are value-added services that we will also, you know, give it to our customers in the short to medium term.
Got it. If you can address that question on the ROA in the NBFC business.
As we have been mentioning and we have been driving the granularity of business in terms of, you know, focus on the personal and consumer and the MSME. I think that will change. That product mix will drive improvement in margins, and that should drive the overall ROA.
In addition to that, to the answer that Vishakha gave, on the first question on the services and the, and the products that you spoke. This is Pankaj here. I think we've also, you know, shared, that, you know, in our direct to customer interface, payments is something that, you know, we have spoken of and we did, you know, this collaboration with NPCI, which was, you know, also announced to develop, you know, digital solutions on payments. That also is going to be a very important hook, you know, in that, you know, trying to offer our entire bouquet of solutions. We always say PIFA, so it's protect, invest, finance, advise, and also we are adding the pays, which is, you know, payments. That's what, you know, we are heading to.
Yeah. Thank you so much. Congratulations to the team on a very, very good quarter.
Thank you.
Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead.
Hi, Vishakha, and the entire team. Firstly, with respect to in terms of leveraging the Group ecosystem and the kind of business momentum which we are seeing, how is the proportion of incremental lending to the Group customer base? What do we see it as a proportion of the incremental lending over a period, over the medium term?
We have not put out that number as yet. Just to, you know, talk about the various customer segments. You know, what we see is there is huge potential to leverage the entire group ecosystem. You know, whether you look at on the individual side, we have a large number of employees within the group. We also, as Rajesh said, have recently launched our MSME platform, which is Udyog Plus, which will work with the entire ecosystem of the ABG. You know, we have large industrial companies within our group which have their own dealers, vendors, also their own partners, who are linked to them.
We will work with each one of them, to ensure that we, you know, provide finance that really meet the needs of these customers, which are the small and medium enterprises. We also as a group, have made foray into the consumption and therefore, really providing, you know, various of the solutions, including the payment solution that Pankaj spoke about. We would be able to now, make those available to the retail franchise that we are building at a group level. We look at synergies across, you know, the businesses that we have in the group, including our own employees, at a group level.
Okay. There wouldn't be any specific targets which would have been internally aligned to?
Internally, of course, Kunal, we have taken very ambitious targets and, you know, but as I said, we have not yet articulated.
Sure.
-it in terms of the number. Yes, each of our businesses have taken a very ambitious target internally, which we will work through.
Sure. In terms of the digital lending, what would be that as a proportion of the overall disbursements?
Rakesh?
Of overall disbursements, Kunal, we have given this. If you look at on the personal and consumer segment, out of that, how much will be digital?
This INR 4,700 crores, what out of that, how much could be digital within this?
90 odd % out of this will be digital.
Okay. 90 odd % out of this.
19. 19.
19%.
Yeah.
Okay. Okay. Okay. Got that. What would be the tenor of unsecured business loans?
These are, Kunal, 15-18 months on the consumer side, and on B2B side, 18-24 months.
No, the only reason to ask the question was when you look at it in terms of the repayment, it's hardly 2% in this particular quarter, and even on a full year, it's hardly 20 odd percent. When we look at it in terms of the unsecured business, disbursements are 1,300, well, whereas there is almost like INR 1,200 crores kind of increase in AUM as well. Hardly like 150 basis points kind of a rundown and even on a full year basis, it seems to be hardly INR 1,100 odd crores kind of a rundown. Because tenor should be 1 to 2 years, was not getting that test to why.
That's exactly it. There are different... In this, the short term, the checkout financing is even lesser than that. I gave you the average of 15 to 18 months. If the checkout financing is there, it will be 6 to 9 months. Clearly that's where... Yes, it's a churn business. You are right there.
In fact it has to be higher. Here there is hardly 2% prepayment, run rate for a quarter, which seems to be quite low.
I, let me just.
I don't know.
I don't know what, which numbers you're looking at.
We'll take this-
We will take it offline now on this.
Yeah.
I will ex-
Yeah.
We will explain it to you.
Sure. Just last thing in terms of the capital distribution, did you highlight in between the lending and the non-lending? If we have to look at it, INR 3,000 odd crores, how will it get distributed between lending and the non-lending businesses?
Kunal, as I said that the capital, you know, we see a robust growth in the, you know, the segments that we are present today. And we see that growth opportunities across our segments. So depending upon, you know, the growth opportunities, we will allocate the capital to our respective businesses. But out of all the businesses, of course, the AMC doesn't require capital. Both the lending businesses and, you know, the insurance business is what requires capital.
Would it be fair that largely it would be towards lending business because insurance still we have 173% solvency.
I think looking at the, you know, the opportunities in the market, I think it would be fair to assume that.
Okay. Okay. Thank you. Thanks and all the best to you.
Thank you. The next question is from the line of Lalitabh Srivastava from Anvil Wealth Management. Please go ahead.
Hello.
Yes.
Yeah. Am I audible?
Yes, you are.
Yeah. Thank you, ma'am, congratulations to the whole team for great performance this quarter. Most of the questions have been answered. Just wanted to have a sense on, you know, the business growth outlook. We are leveraging our own network as well as, you know, partner channels and digital means as well. If you can, you know, just help us understand, you know, what will be the repeat business run rate on the unsecured and the retail business, where we see desirable customer credit behavior. What is the repeat business run rate there? That's my first question.
Secondly, you know, on the asset quality side, you know, across the industry, we are seeing very encouraging trends and especially, also we have, you know, seen, on both Stage Two and Stage Three, very encouraging performance. If you can, you know, give some sense as to, you know, first of all, more color on the additional checks, the credit filters that you are employing, in addition to the bureau score-based credit assessment. If you take pre-COVID-19, credit filters as a threshold, where do you think we are as of now and, going forward, what will be our strategy on that? These are the two questions.
One, third question I would like to add is, you know, what will be the sustainable credit cost outlook that you see for FY 24 and beyond? Yeah. Thanks.
Your first question on repeat customers, it's 40% plus is our repeat customers in our unsecured business. Clearly the strategy is that we onboard customers on a smaller ticket size, shorter tenor, and based on the performance of these customers, then we give them a slightly higher ticket size and a slightly longer tenor. That's 40% plus will be our repeat customers. What was the second question?
In terms of the how are we doing underwriting and apart from that?
Credit filters and I think Pankaj can add for home loans. I covered this in my earlier presentation, I think in the script as well, that 87% of our customers which we onboard on the consumer and personal side, they have credit bureau score of more than 700. We track their performance in terms of on a monthly basis in certain cases, on a weekly basis. We see which are the cohorts which are doing well, which is not doing well and completely on top of this. Clearly we have built the credit engines. We have the entire alternate data we use in credit decisioning. Clearly a lot of work has happened there.
Wherever we see anything which is, which is not in line with our thresholds which we have defined, we clearly stop and are controlling it.
I think to add to Rakesh Singh, Pankaj Gadgil, I think, same goes for housing as well. We have covered this in our slides as well. For us also, 88% of our sourcing is to, you know, customers who have bureau score more than 700. Very interestingly, customers who are new to credit also, who are, you know, really, you know, at the top of the funnel there as well, the contribution of 8%. All included, 96% of our sourcing today is 700 and NPC plus. To your question on prequel, I think overall, you know, the credit culture in all the country bureaus, you know, which has, you know, come up from 218 today that has matured. People have become very conscious, you know, regarding their own credit, you know, history.
As Rakesh mentioned, I think there's a very consistent focus, you know, A, in making sure the quality of origination is up to scale at that, you know, we're talking about the bureau. I think on portfolio management, on the early warning signals, I also spoke about the pre-delinquency management, which is, you know, using advanced analytics to predict, you know, which are the customers who are likely to, you know, not honor their checks and then working proactively, I think also makes a lot of difference. I think, that's, you know, consistently been our focus, you know, in both the lending businesses.
Yeah. Some sense on, you know, what will be the sustainable credit cost you would keep for FY 24, if you can share?
I again mentioned this that, our, through the cycle our, credit performance has been very, very stable. It's, Stage Two and Stage Three has come down by almost 315 basis points. In terms of year-on-year and 114 basis points quarter-on-quarter. I think we are completely focused on it, and we believe that license to grow comes from the quality of the portfolio and we will continue to really very vigilant on our portfolio quality.
Yeah. Thank you. Thanks a lot.
Thank you. The next question is from the line of Gaurav Sharma from HSBC Securities. Please go ahead.
Yeah. Hello. Am I audible?
Yes. Yes, you are.
Thank you for the opportunity. Couple of data point questions. If I can see that portion of banks for earnings is 52% in both the lending business. Can you just provide a project base of how much this is linked to repo and CLR and some other benchmarks that is one for both the lending business. Second question is like when you are going for incremental borrowing, what are the benchmarks you are choosing or focusing on these two questions?
Thanks for the question. I think, as you rightly said, the terminals that we, you know, take from banks are always eternally benchmark. Of course we endeavor is at all points of time to make sure that transparency is maintained and we are optimizing costs at the same time, you know, we are not compromising on any ALM and that's largely the focus there. Of course, there'll be a combination of, you know, some banks who lend you at HCLR plus there'll be some banks who will be lending you on T-Bills. I think that is a continuous process, you know, from our end. You know, as I had spoken, you know, earlier in my talk, this is about the housing business.
The focus there means also leveraging NHB because you know, we are in the affordable segment and we also spoke about the four line four seven contribution that is coming in product from the affordable and also in the CA business. Leveraging NHB, you know, for refinance becomes very critical. We've spoken about our mix, which has gone up, you know, from 14% in last year to an NHB to 18%. There's been a significant movement there. This is a continuous process, you know, at our end, you know, to look at ALM on the other side and also reduce costs because that's the name of the game essentially for our lending business. That's, you know, where we are.
Gaurav, do you have any further questions?
On question number one, okay, can you please share the exact rates of current rate?
We have not, you know, explicitly disclosed, you know, the breakups. It's always going to be, you know, some banks will be on MCLR, some may be on T-Bills. Repo rates normally on, based on what will be, you know, indicated typically, you know, when banks are lending to us, it will be these two only. That's it.
Thank you. The next question is from the line of Chintan Shah from ICICI Securities. Please go ahead.
Yeah.
Yes.
Hello? Yeah. Hello. Congratulations on good set of numbers. Thank you for the opportunity. I had one question on the housing finance segment. Currently, like we are generating around 2% ROA. Like this is well above our guidance of FY 2023. Any of FY 2024, any revised guidance which you are looking at since if you look now, housing, affordable housing is roughly 42% of the AUM, given that the affordable housing players which are listed, they are generating a ROE of more than 3% debt. Are we aiming at near to that mark?
I think, you know, the way we've been saying that, you know, we would want to always, you know, sustain the performance. You know, it is not only across the growth, it is also focused, you know, on the margins. The focus is, you know, anyway is going to, you know, make sure that the, you know, triangulation of growth portfolio quality and also sound and diverse risk management, that triangulation always, you know, works for us. The contribution of, you know, affordable, like you rightly said, you know, is, you know, now, for over the plus years is today at 49%. As we have, you know, always spoken, I think the opportunities in both the prime and affordable, you know, have to be leveraged appropriately. Leveraging may be ecosystem as well.
I think the focus is going to be along all the three tenets, which is portfolio management, robust management and growth. I think, even our endeavor is going to be to sustain, you know, the numbers from the ROE that you mentioned, and, you know, look at opportunities as and when they come up.
Sure. Sure. One more thing on the Stage Two portfolio and affordable housing. Currently we have seen a quite sharp decline from 4.5 to 4. This is largely on account of recoveries or less legacies or in the bottom is the reason.
Very good question. I think, you know, the customers who had, you know, served their debt, you know, COVID is a change. We observe these customers, a large proportion of them, you know, are, you know, repaying very, very heavily. With natural, you know, movement, they have moved into Stage One. Of course, you know, we could have our, you know, efforts intensified the entire collection and also the legal framework, which also helped us, you know, at all points of time to reduce the Stage Two and Stage Three effectively. You would have seen that now the Stage Two and Stage Three stand at 4.99%, you know, in the portfolio.
Okay. Just one last thing on the just OpEx, overall OpEx thing. Given that we are pouring more into the digital space and making various initiatives on the digital platform, how do we expect the OpEx to go up? Means OpEx to hold in FY 2024. Means OpEx growth would be at around current levels or will that see a slight bump up?
I think.
That is for housing as well as lending both.
I think matrices wise, you know, we would, you know, not pay any focus on the matrices individually. I think the key focus is, like I said, man-managing maturing growth. You know, cost acceleration, on its own doesn't mean that much. I think the functionality of ROA is extremely important. Of course, the risk management is very important. At the same time, like I said, there is an acceleration in investment in technology and digital analytics that we are doing to, you know, ensure that the appropriate growth and ROA and of course, only personal and part of this will be, you know, is maintained.
Thank you.
Amber.
Yes. Please proceed.
On the NBFC side also, if you see the cost income ratio is quite efficient. In spite of, adding 164 branches last year, we have maintained the efficiency. We will continue to, I think, operate in these levels.
Thank you. The next question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead.
Thanks for taking my question. Just on the, you know, the finance business. You know, can you split the average ticket size, you know, of consumer and personal loans? I think that's around INR 28,000 between consumer and personal loans.
Consumer loans is around INR 20,000, and personal loans, blended personal loans is around INR 3 lakh.
Sure. On the secured side, the ticket size is declining, you know, despite the fact that LAP is going up. What could be the reason for this?
No. Clearly we are focused on, you know, building granular business and across all our segments, is what we are trying to drive, and we will continue to drive that.
What will be the ticket size in LAP?
In, secured business, you're saying?
Yeah, that's right.
secured business is, INR 1.8 crores is our average ticket size.
You know, in LAP, the LAP segment of secured business.
Yeah. If you look at this is our average and I think this will be across the segment, but majority say it should be in the similar line.
Sure. That is. Just one clarification, the bureau scores, you know, that you put out, you know, the pie chart. This is based on number of customers or is it based on the value of your book?
Number of customers.
yeah, just moving on to health. I'm trying to understand-
It's just value. Value. It's on value. Sorry, just a correction that, is on value.
That includes the corporate book also, is it?
No, we have mentioned this on the top that it's personal and consumer loans.
Got it. Just moving on to health. You know, if you could kind of, you know, help us understand how does the UAM guideline affect the health business and any color on path to profitability?
I think as Amish also mentioned earlier, you know, the situation will be very similar for both life and health. I think it's a very positive step for both, you know, general insurance industry. You know, we have to watch out in terms of the, you know, pace at which it gets implemented. Because I think ultimately the objective is to see how some of the benefits of this is passed on to create better offerings by the industry. It's a more consumer kind of, I would say, more friendly for the consumers. I think it will take some time for the whole framework to get executed by the industry. In the medium to long term is when we start seeing the full impact of this.
We are comfortably placed on this?
Yeah, yeah. We are very... There are enough mechanism in the guidelines for all category of companies, including us, to be able to meet.
Perfect. Quickly moving on to the life side. You know, on Slide 40, you show the product mix, channel wise. Is this for the, for the individual business or overall business?
The product mix is for individual business only. 81% that you say, which is traditional and 17% on the unit side is largely the composition, is the composition only of the individual business.
Sure. You know, the unwinding rates for you at 9.6% in the UV box is probably, you know, more on the higher side. You know, if you could explain maybe there is a specific reason for why it will be higher than peers. Is it something that you are running a larger duration, longer duration, you know, book?
Typically, it's a function of, within the traditional whatever your composition. If you have, size of the, guarantee commitment that you have to the customer versus the spread you are making on that portfolio if it is slightly better, then the unwinding rate in the non-consecutives tends to be, better in a particular year. That is why you'll see across the listed companies, it's in the range of about 7.5%, 8%, we'll be at about 9%. The incremental comes down upon the product mix and, also a function of the committed guarantee in your guarantee book to the customer versus the spread that you can make on the same book for it.
One last point, how much is non-fund in the traditional mix for last year and this year, for this year, sorry?
Actually, we, you know, monitor the product mix as per the opportunity in the marketplace. At 1 point of time for our margins, we actually had excess of about 10% on protection. In the increasing interest rate scenario that we saw last year, we thought the opportunity was more in the non-fund segment. In the traditional business, about 35%-80% of the business will be in the non-fund segment. We keep doing every year depending on the interest rate cycle, we move the product mix accordingly. Maybe at this point of time, we have, maybe a need to look at the protection business more aggressively. Last year, we did capitalize on the opportunity in the non-fund segment.
Perfect. Thank you very much for patiently answering all my questions. Thank you.
Thank you. Due to time constraint, we take the last question from the line of Deepak Shinde from HDFC Securities. Please go ahead.
Hello. Hi. My first question is for NBFC. The, the mix of retail plus SME is already ahead of our guidance, now at 67% and growing at only at a rapid pace. Is there any internal feeling of, we are looking at where the retail plus SME will not grow at 70% or 75% or we'll look at, what kind of opportunities we have for growth in this segment? Similarly for personal and consumer loans.
The opportunity and maximize the opportunity in terms of the risk-calibrated manner and these segments, we will have to review it, looking at the opportunity.
Right. Second, on the asset quality, in a housing business, 3.3% GNPs. What is the source of these delinquencies? More of customer segments or spread across prime, affordable and CM book?
We have a very high default, so we have a very small, you know, CM book.
Right.
Only 1.3%. It is very well distributed. You know, as, you know, we have mentioned, it is coming down very rapidly. We have already seen from December to March, it has come down rapidly. Very importantly, now is only 0.9%.
Right.
You heard us about the quality of origination earlier as well. We are very focused on the quality of onboarding. 96% of our onboarding is happening in tier one scores of 500 plus and also when you develop.
These would be largely prime plus affordable home loans or less, these GNPs.
Yeah, I think very, very, very small percentage. It will be very close to zero.
Right. All right. Just coming back to the NBFC growth. Our personal consumer book has been growing at a very rapid pace. Would we continue to seek opportunities or there's a time where we would like to, you know, take some pause and evaluate how this entire portfolio is being? What are the, you know, for FY 2024 in terms of growth on the NBFC side?
Deepak, your voice was not very clear. If you can just repeat that question?
Am I audible now?
Yeah, but yeah, go ahead.
Yeah. On the NBFC side, our personal consumer book has been growing at a very rapid pace. Is there any target in mind where we would like to, you know, take a pause and look at how that entire portfolio performance is behaving before, you know, pursuing it further? Let us see. Any guidance you would like to give for FY 2024 for that book?
We will continue to focus on building a granular portfolio, so clearly on the personal and MSME side. We will continue to build that business deeper.
Okay. If the opportunities arise, we will continue to grow at such high pace of growth on the personal consumer side.
Depending on the opportunities and which we have.
Thank you. I would now like to hand the conference over to Ms. Vishakha Mulye, CEO, Aditya Birla Capital Limited, for closing comments.
Sure. Thank you. I would like to thank all of you who joined us today evening and look forward to keeping touch and more interactions in the future. Thank you.
Thank you. On behalf of Aditya Birla Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your line.