Q4 20/21

Jun 14, 2021

I now hand the conference over to Mrs. Ramya Rajapopalan, Senior EVP, Corporate Development. Thank you, and over to you, ma'am. Thank you very much, Margaret. Good afternoon, everyone, and a very warm welcome to our results call. We hope you and your families have been safe and well. Today, I have with us on the call Mr. Rasheen Shah, Chairman and CEO of the Edelweiss Group Mr. Himanshu Kaji, Executive Director and Group COO and Mr. Deepak Mittal, MD and CEO, ECL Finance. We hope you have had a chance to review the investor presentation as well as the addendum on ACL Finance Limited that we have filed with the exchanges last Friday. During the discussion, we will be making references to it. Please do take a moment to review the safe harbor statements in our presentations. We will be making some statements today that may be forward looking in nature and hence may involve certain risks and uncertainties. With that, I will now hand over to Mr. Ramesh Shah to begin the proceedings of the call. Thank you. And over to you, Ramesh. Thank you, Ramya, and good afternoon and a warm welcome to all of you. As earlier, Ramya said, I hope you all, your families are all safe and keeping healthy For us, ensuring health and safety of our employees And their families has been the most important thing and customers and taking care of them has been a priority Not only the last year, but especially the last few months. The last few months have been a tough time for all of us with the second wave hitting us Just when we were confidently emerging from the first one. And I think we again as a country were at a crossroad. I think the 2nd wave felt a lot more personal. I'm sure everybody on this call will feel that. I think wave 1 was not as personal as wave 2 was. And each one of us experienced somebody who had fallen sick or some loss that we experienced from through colleagues, friends, extended family. But at the same time, I think what has been heartening is to see the collective efforts by a lot of individual citizens, ordinary people, The social structure of this country came together, and I'm sure that each and every one of you on the call I have some personal stories to share of some great effort made by people around, offering infrastructure, offering help, oxygen concentrators, Medical supplies, beds, donations, by rallying quickly, I think we all showed that we do care for each other. I think even for us, The kind of effort our employees, our friends, everybody made has been one of the highlights for this quarter. I think the word for this quarter and for this year for us has been the resilience, the resilience that we've been able to show. And since this is our Q4 call, but also annual call, I basically want to talk about 3 things. And of course, after that, we'll be happy to answer Any questions along with my colleagues? I'm sure you have had a chance to go through the results and the investor presentation. So I will not bore you by repeating the numbers in terms of profits and book value and top line revenue and fee income, All that is there in the presentation. The three things I want to discuss today are: 1st, Our overall performance for FY 'twenty one, both on the numbers front, but also on our Execution of our strategy and the game plan that we had articulated at the start of the year. The second thing I want to talk about is how we have calibrated our businesses and positioned them for growth. As you know, we are a diversified financial services with many businesses in financial services, all at different stages of growth. And one of the highlight of this year has been that we've been able to position all our businesses to exploit the growth that is there ahead of them. And third, lastly, outlook for 2022, both for India Financial Services and for EDELWEISS also. So friends on first, FY 2021 has been an important year for us. Of course, all years are important, But this is also the year we completed 25 years. So it feels like we are still very young, but we completed 25 years this year. And as we now start the next innings for the next 25 years, at the end of FY 2021, Very happy to see that we are entering 2022 with a strong fortress balance sheet. Our equity base has become stronger. Obviously, liquidity has got easier. And most importantly, the businesses we have built, operating platforms we have built And the talent we have is very, very heartening. So as I said earlier, this year for us has been The key word has been resilience. As you know, in the last 2 years, we have pivoted from One company with multiple divisions with a lot of shared services, a lot of co owned activities. Originally part of our diversified approach, we built a lot of businesses. But now we now have Made all the businesses independent. So from an integrated diversified financial services company, we are now a diversified financial Services with independent businesses underneath them. A lot of our businesses are now ready for their own independent growth, And we believe that the foundation has been laid. They are now truly have their own balance sheet, their own governance structures, their own boards, a lot of them have their own Investors and partners and this now we feel in a way the children have grown up to become independent Adults and create value for all stakeholders. The first one of this in FY 2021, an important That was the Edelweiss Wealth Management spin off by selling the majority stake to PAG, we have now set in motion The spin off process, the stage 2 on this is demerger from the holding company and then the listing of the Edelweiss Wealth Management and the distribution of shares as we have highlighted. We have a Slide 14 on that. And we are very proud of this business and we will all be very proud individual owners of this business post demerger and The listing of this business, but this is the first step we have taken to unlocking value. Our approach has been to build And then unlock value and I'll speak about that a little bit more. But besides Edelweiss Wealth Management, this has been a year, a good year on many other accounts. First, there has been a lot of queries and questions about ECL Finance and the wholesale book. As you would have seen, we have given an addendum showcasing the fundamentals of ECL Finance. I think the last 2 years have been difficult for ECL Finance, mainly because of the wholesale credit book and the headwinds on liquidity and the Challenges that were faced, however, in spite of these headwinds, we have executed as per our plan. And in this year, we have executed the plan of 1st, introducing the wholesale book. We have aligned the team. The wholesale team is still there, but now they are more And asset management team, and we are using them to build private funds in our asset management business, what we call the private credit alternative Management business. So the team's experience is used, but instead of doing this business in NBFC, which has a lot of NPA as well as ALM issues that cropped up in the last 2 years, we have now ensured that there are other ways of exploiting this opportunity. On ECL Finance, we have ensured the book has come down. As you would have seen, the book is down a lot in the last 2 years and we We'll halve this book again in the next 2 years. What we've also done is put a robust process Overseen by our Board of refreshing the cash flows for every loan, every wholesale loan on a quarterly basis And then ensure that our numbers are adjusted for the NPV of that. So in a way, calling it constantly mark to market the book. We've been doing it for last three quarters and this has been one of the approaches we have followed because I think on retail a broad parameter based Approach works but on wholesale, which is a very idiosyncratic and every loan is very individual. It is very, very important That each and every loan is revisited every quarter to estimate the future cash flows of that. And in our ECL Finance presentation, we have given some color to that. So we'll have the book in the next 2 years. We are also confident now That with this process we have adopted, the book is appropriately marked. We had to take some impairment as you would have seen we have taken, But now we have marked the book and we will continue to do that as per the cash flows. But now we have done the stress testing, we have done all the estimates and you can Appreciate that the last 2 years have been as much of a stress test for a wholesale credit book as it has been Anywhere else with COVID, with post ILFS liquidity crunch, a problem of last mile funding. And I've got my colleague Deepak, who's been leading this effort. He and his team have done fabulous work in ensuring that ECL Finance was always steady. It always had enough liquidity, the wholesale book was under control and we have got that. And our idea is ECL Finance still has a lot of Capital and liquidity and we want to use that as we build our MSME business in that which has always been in ECL Finance but a much smaller part of the business. However, and I'm sure if there are any questions on ECL Finance, we'll handle that. Our Asset Management and Insurance business have had The best year ever in FY 2021. Both our asset management business, the mutual fund and alternative. The mutual fund AUM has grown by 89% this year and the alternatives, the private credit funds that we run, They have grown their AUM by 38% this year on a Y o Y basis. Our life insurance and general insurance business Saw a premium growth of 25% for life insurance and 49% for general insurance. You can see that in Slide 3638, respectively. And even for Wealth Management and ARC Business, this was a good year in spite of the pandemic. If you see our customer assets in wealth management had had a very robust growth. So we started the year by being extremely cautious on liquidity And maintain more than ample liquidity in our business. So liquidity pressures have eased off, we want to remain careful until COVID is behind us. And of course, for this year, our biggest priority was the well-being of our people. We have 8,500 people. We have ensured that when a lot of them got infected, we took care of them. We have also Vaccinated more than 5,000 of our employees and their family members. And our primary commitment, I think remains to make sure our employees are well. I think business will always do well if your employees are well. So that's the first part. I think 2021, in essence, good year, the diversified model has come of age, The word resilience has been underscored and all our businesses have shown good execution in This year and especially the Asset Management and Insurance business have posted the best growth years in this year. On item number 2, where I wanted to speak about how the businesses are poised for growth. One of the first things we have done is we have simplified our organization structure. As we said, we had some complexity, the common entities were used by multiple businesses, all of that. In the last couple of years, we have integrated businesses to entities. We have actually completely ring fenced and made the businesses independent. They now control their balance sheets, they control their capital structure, they have their own governance structures. We all serve on the boards of those. A lot of this business is 100% owned by us as you would have seen on Slide 7. So they are Erilwaz businesses, but by ensuring that they are fairly ring fenced And independent, we have created a structure which allows them to grow and compete in their more aligned with the needs of their individual sector rather than 1 enterprise because we have wholesale businesses, retail businesses, Credit businesses, insurance businesses, we have allowed all our businesses to be truly independent and aligned to their industry structures. So they have the best of Edelweiss, but now they have a lot of independence in terms of how they go about executing their strategies. Our approach has been that we want to grow business invest and grow businesses. Our experience has been it takes about 10 to 15 years For a business to grow and become mature, to grow organically, inorganically, as for example, we have done in a wealth management business, This business in 20 years has now been valued at INR 4,400 crores. We would not have even Invested in fact more than a couple of INR 100 crores in that business. But after creating value, after growing value, our Our commitment is to unlock the value for our shareholders, but unlocking comes after creating value. So first, create value, build value And then unlock it. And unlocking it can come in various forms. We can IPO the business, we can distribute the shares, we can demerge the businesses. But our idea is that as the business becomes independent and starts creating value, how do we get our shareholders to Participate directly in that value creation. As you know, more than 40% of our equity is held by insiders, The founders and the management team and all. So we want to make sure that we take care of all the shareholders in unlocking this value as we go along. So now all our businesses have the right structure, right resources as you would have seen, all our businesses are very well capitalized. Our housing finance company has a lot of capital adequacy. Our ARC, insurance business, the solvency ratios are high. So all our businesses are fairly well capitalized. The total number of customers in Edelweiss in 2018 Was about 500,000. We now have 2,500,000 customers. So totally, in the last 2 years, we have added 2,000,000 Customers across our businesses, in our life insurance business, in our general insurance business, in our mutual fund business, in our retail credit business, The truly realization of our strategy is also underway. And our biggest growth vector for last 2 years, of course, we have managed liquidity And manage the balance sheet and impairments and all of that we have taken. We have restructured our business, we have done all of that. But the most important Achievement for the last 2 years are the 2,000,000 customers that we have added. And in this year, we expect to add maybe another 1,500,000 customers across all our retail businesses. Also in this year, our asset light credit model For housing finance and SME has now commenced. We invested a lot in technology. We have partnered with banks. And the initial signs for this Tech led asset light credit, retail credit model is very encouraging. We are truly excited by this. Maybe this was the logical outcome Of the last 2 years that we all saw and both this retail credit businesses have adequate capital, Adequate liquidity, a lot of distribution, they have a lot of branches all over India to be able to scale up this strategy. So the next 2 years, this is going to be an important thing to watch and I hope that we execute as per our aspirations on this. Even in our ARC business, we've been buying more retail loans and this is another growth area for our ARC, which also has a lot of equity and liquidity. So I think the realization of our strategy, the businesses are poised for that. And that was an important, I think restructuring exercise that we have undertaken. On point number 3, which is outlook for FY 2022, FY 2022 is going to be a key bridge here from the last 25 years to the next 25 years. I think we have laid the foundation for that. And as I said, we want to add about 1,500,000 retail customers And continue to invest and grow in our asset management and insurance businesses. Both those businesses are on the cusp of explosive growth. They are not young businesses. Our life insurance business is almost 8 years old. Our general insurance business is in its 4th year. Both our asset management businesses are about 10 years old. But now as I said, the real growth for a lot of business comes between 10 to 20 years. And I think at this time, we want to continue to invest in that. We do expect this year because the Q1 has been slow Because of COVID-two and we are still conservative holding liquidity, profits will continue to be muted. So we want to Make sure our expectations from businesses for profit growth this year are still muted, but continue to invest in the businesses. This year, we'll also carry we continue to carry excess liquidity and a lot of you have asked questions on that. When the crisis started post ILFS in 2019 2020, we borrowed a lot of money at a group level. And that is why there is a drag in terms of BMU and corporate earnings because we borrowed some expensive liquidity that we are holding. A lot of this was at a high cost. But in view of the environment at that time, we borrowed a lot of this money for 2 years 3 years. A lot of these loans will get paid back by 2022 and 2023. So the drag of excess liquidity Continues, but it was something we had to do because we are not a large corporate house with any fallback. So at that time, our Board decided that let's Hold a couple of INR 1,000 crores of excess liquidity even if that is expensive. So we bought this We borrowed this, what we call, fairly expensive flexible liquidity at the top, which has allowed us to go about our business and make sure That in spite of the NBFC headwinds, all our businesses had adequate room to grow and one not hindered by that. I think this year our retail credit business growth will still be slower because we are still laying the foundation of this asset light retail credit model in partnership with banks. There will be teething problems, but we think we need to build a platform before eventual growth. And last, the benefits of releasing liquidity and capital in the wholesale book, this is a question a lot of people have asked us. I think from FY 'twenty three To FY 'twenty six, we will see a lot of liquidity and capital from the wholesale book coming back. As you know, we still have INR 3,000 crores of equity, which is embedded in the wholesale book. And as we do the workout and reduce the wholesale book, a lot of this equity and liquidity will come back to us, Which we can use to either for the shareholders benefit or to invest into businesses. So given COVID-two wave underway, Which was underway, maybe a 3rd wave will also happen. We all have to be prepared for that. And the general cautiousness that I think will continue in the first half, This will not be a year for us to rapidly scale up, but to continue to invest because this is not a great year For a business scale up, but a great year to keep on investing in the business. On the environment overall for This year, we do think that, as I said, wave 2 was not as impactful on economy and damaging to the economy as wave 1. But from a personal impact point of view, wave 2 has affected a lot more people. I think it will take time for people to find the Confidence and the key turning point for that will be the universal vaccination. Going by recent trends and what the government has announced, We think we should get that done by October to December 21. So it's still 3 to 6 months of cautious Outlook for all of us, of course, the stock market will do well because there's a lot of liquidity. There is long term optimism. And I think if I also see the point after universal vaccination, I think India looks like on a cusp of a new growth era For the next few years, but for the next 5 or 6 months, there will be many waves and constant balancing, rebalancing between lockdown To protect health and opening up to resume economic activity and we should be comfortable with that. We all remain committed to our Asset light retail credit model grow our asset management businesses and keep investing in our insurance businesses. So I've tried to give you the overall strategy, the overall execution update, because I'm assuming you have gone through the numbers, But I also found it very useful that it's very helpful to address specific questions on business and financial statements As more an interactive process. So I do look forward to your questions, your queries, either specific or overall as we go forward. But Once again, thanks to all of you for being on this call. And over to you, we will now await your questions and feedback. Thank you. Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking a question. Please press star and 1 at this time. The first question is from the line of Jeetu Panjabi from EM Capital Advisors. Please go ahead. Hi, Rakesh. I just wanted To understand a couple of aspects, one, this whole demerger process, Can you give us a sense on the timeline and what do you think the outcomes are going to look like in terms of is it a 12 month horizon What is it longer and they are beyond the regulatory process and 2, the influence and the role that the EagleWise team would have In the new company, the PHE company as well and how is that going to evolve over time? And the second question was The thoughts on the asset management both on the reconstruction side and the other the regular asset management side, How do you think this is going to play out? Is there any thinking of going out of stake by Nordisk stake to some International Asset Manager. And how do we see that whole business playing out over the next few years? Yes. Hi, Jeetu. Thanks for this. I think the first one on Edelweiss Wealth Management demerger, I think it was Three stage process for us. The first stage was getting the PAG deal done and What I call the start of the spin off process that has been done. We are now going to NCLT for a demerger because in order to get The listing done, we can easily distribute the shares to the shareholders, but then it becomes dividend and in form of shares and all. But our idea is to go through the demerger process. So we are now filing for NCLP demerger. So the wealth management Business will be demerged from Edelweiss as a listed company. And as part of the demerger, it will then get listed also. Usually listing takes About 4 to 5 months after the demerger is over and the demerger should take about 8, 10 months depending on NCLT process and all. So I think now the two steps are demerger and then the listing of the business. We expect to get this done in the next 12 to 15 months, maybe give a couple of months here and there. It is also a good time because that allows the PAG partnership To get embedded well, there is a lot of initiatives in that business going on. We are all actively involved because you should remember that The otherwise shareholders will still have more than 40% holding in this company when the demerger happens. And all of us, all the shareholders who are there will be individual Shareholders of that business. But we do think the time has come for that business to scale up on its own. And after it is listed, It will have currency for M and A, for acquisitions, it will have currency to be able to reward their employees and wealth managers. And it's been I think it's been a great business that we have built inside Data Wise, but this is the Template we want to follow is make sure that we invest time, effort in building a business And then spin it off in an appropriate way, which allows the shareholders of Edelweiss to also participate in that. So that's the timeline on that. We are very excited about this business. This business has done very well in the last two quarters. The first two quarters obviously were slow of FY 2021. And with the PAG partnership, we are very, very excited on the growth prospects of this as you can understand. And maybe in one of the future calls, we'll invite them also to be as in this call, we have got ECL Finance. We'll get the revised wealth management team also To come and give an update to the analyst on that. On the Asset Management business, I think we are now at the cusp of really Our growth and this year has been witnessed to that. As I said, our mutual fund business AUM grew by more than 80%. Our alternative asset management AUM grew by 36%. We are now the largest alternative asset manager in India. We have more than $4,000,000,000 of assets under management. And as you know, G2, the asset management business effectively has Three large buckets now. I think one is the passive, other is the active and the third is the alternative. A large part has been in active bucket over the years, but we see a lot of growth in passive. So you would have seen in our mutual fund business, We have been investing a lot in passive strategies. We think that is an idea whose time has come, especially passive debt Opportunities like Bharat Bond and all, because with all the changes that have happened in the NBFC and the bond market in the last few years, we think Debt EPS and passive debt is an idea whose time has come for a lot of Indian investors. And on the other side, Alternatives, which are illiquid, but give you a much higher yield. And we have a lot of international investors. We have close to INR 30,000 crores of AUM on that. But good news on that is we are now seeing a lot of Indian investors, insurance companies and others who are Hi, let worth investors. We are also looking for 12% to 18% yield strategies on a 5, 10 year basis. We have an infrastructure fund Where we raised almost INR 4,000 crores only with Indian HNI Investors. So we Want to make sure that both this, we have a barbell approach and alternatives on one side. Alternatives have a fee of about Within 1.5% to 2% and a carry which is another 1% to 2% you get. So alternative is high yield, high fees, illiquid for Usually the money is illiquid for 5 to 8 years for most investors. Passive debt is another strategy in the mutual fund. So I think our approach has been that we are seeing all over the world a lot of money is moving away from active. Inactive, your fees are about 100 to 250 basis points. In passive, your fees are about 8, 10 basis points. In alternatives, they are about between 250 to 300 basis points. So a lot of investors are saying, okay, we will move from active, some to passive and some to alternatives to get the high yield. And I think we are very well positioned on both of that. And even on ARC, we have now in the last 4 years been building a retail credit business. In fact, this year, A lot of the portfolios we acquired in ARC are on the retail side, which is home loans and SME loans and all because the growth of retail credit With banks and NPSs, obviously also make sure that there will be some NPS and there will be a need for those portfolios to be managed by an ARC. So I think that is also a big opportunity. We have almost 180 people team in that business and we want to capitalize on that. Thank you. The next question is from the line of Vivek Ramakrishnan from DSP Mutual Funds. Please go ahead. Good afternoon, Ramesh and good morning. Hi, Ramesh. Congratulations on comparing 25 years to you and your team. My question is around the wholesale book only. I just wanted to know, I mean, the ECL Finance presentation is extremely useful. Could you let us know in terms of near completion date, because you're expecting a lot of inflows from projects, near completion status of Various projects, since are they like some which are going to be delivered very shortly, which will release a lot of cash flows for you? So that was my question. Thanks. So I think we have Deepak here who can also answer that. But broadly, our portfolio is about a third of the portfolio is OC and almost OC kind of projects, which is what we call completion where they are already in sales mode And OC is almost there or OC is already received? I think another 45 Person is in the middle stage, which is about a year to 2 years away from OC and about the balance will be, I think 3 to 4 years. So we do I think that these are 3 stages of the portfolio. Deepak, you have anything to add? Yes. So Rajesh, Our projects broadly speaking, we are 30, 40, 30. 30 is what is closer to either in the last stages ROC complete Inventing, 40% is what should get completed in the next 24 months and the remaining 30% has like about after 2 years. Vivek, just one more point. I think there are there is still a structured finance portfolio, which is also there, which Most of it will come for repayment within the next 12 to 18 months, so those cash flows will also be part of the wholesale cash flows. As well as in some of the cases, especially in the last 6 months, we are seeing developers who are ready to completely take over especially the mid sized projects. We are seeing good traction on there where developers are ready to take over either some of the projects on hold or some land parcels, which also Brings cash flow even though the project at EC and finance level, because as you would realize, a lot of liquidity is available today to good quality developers at a Fairly reasonable, right? So we are also happy to participate in some of the So I think Vijay, in this, the important part for us is obviously the cash flow coming back. But as liquidity has eased off, we have shown in ECL Finance what are the annual cash flows expected from this portfolio. As liquidity has eased up more than just getting back the money, we want to make sure that we don't have any more impairment. In fact, We get more than what we have provided for and idea is to start getting flow backs and all that. So we are monitoring it, optimizing it as much as we can To just ensure that over the next I think the portfolio will become half in the next 2 years and in the 4 years almost all of it will come back. But we think now the cash flow estimates that we are doing on a quarterly basis, we are making sure that Our carrying cost is much is either equal to or higher than what is the our NPV is higher than the carrying cost. So we Constantly have committed to our Board and others that we will do a quarterly estimate of the refresh of the cash flow, do an NPV of that And just to ensure that we are always marked well because we want to make sure that we do get back The money, but we also don't incur any more losses on that. Perfect, Rashish. Thank you very much and thank you to Deepak and good luck. Thank you. The next question is from the line of Anitha from HSBC Asset Management. Please go ahead. Hi. Thanks for the opportunity. I just wanted to understand one thing on the wholesale book. In Quarter 3, you had given about 8,500 to be the outstanding corporate credit, and now you're showing 11,400 as the wholesale book. So what will be the split between the corporate book and the other wholesale credit? And just wanted to understand that. And Yes. I think after the last quarter, we got some queries. See, 8,500 is a loan book. That's a credit book. But we are also holding the SRs. When we sold the portfolio, we got some security receipt. So what we have done in this time is added both of them. For clarity purposes, so 8.5% is the loan book and the balance are the security receipts, Which are related to the earlier loan book which have been sold. But from economic point of view, they are both the wholesale credit exposure. That's why we have, I think replace the credit book to wholesale book. Wholesale book is equal to credit book plus SR book on the wholesale loans. Okay. Okay. Thank you. That's helpful. And secondly, just wanted to understand in your liquidity and cash flow plan, Quarter 3 versus now, you're expecting like more contractual inflows in April to September quarter is what I see from your presentation. So I mean, what is giving you the visibility or what are the positive drivers that you're expecting that you will get more cash inflow versus what you presented in 1 quarter back? Just trying to understand that. As Deepak said, a lot of this, there are new developers coming. We have done almost INR1500 crores of recoveries in the last 6 months and as liquidity environment as well as real estate environment has also improved, a lot of the projects we had Were viable, economically viable project but were stuck because of last mile funding. Now we're seeing the new developers, a lot of the new agreements have been signed. There is a clear cash flow plan. There is M and A happening. So even we had an exposure to a power plant, Which has been taken over by a new buyer and the cash flows are getting expedited as part of that. So I think there has been a general improvement on that. And Hence, I think our estimate as I said, we refresh our estimates every quarter. And then obviously, what we give out here, we also maintain Stressed test on that and we maintain our liquidity as per the stress test needs, not as per the normal need. So I think even if There is any slowdown on that. We have a lot of excess liquidity. In fact, now liquidity has stopped being a problem because there has been ample liquidity, But we want to be just careful because I think after wave 2 experience and although it didn't impact the liquidity environment as much, We don't know what will happen. So until COVID-two is over, we are until COVID is over, we want to make sure that we are more We only be careful and look at stress situations on cash flow. But we do think the wholesale book Cash flows will be better than what we are all expecting. We are giving the activity on the ground that we are seeing. Okay. Just one more last question, if I may. On the core origination model, can you give some color as to what kind of traction you're seeing? And what is the general sense? And how do you see the growth And what is the general sense and how do you see the growth here? Yes, I think, Detok, if you want to also? Yes. So as all of us are aware, I think the India securitization market has been a very large market in India. Historically, we have securitized portfolios to a lot of banks, both on mortgages and on SME side. What changed in this was the old co origination and now what it calls the co lending model. I think the previous guidelines which had come out Had some teasing issues because both from a customer end as well as from the 2 institution participating, there were a lot of operational issues which needed to be tackled up Right. Because these loans were being booked at the same time in both the entities. So it was almost like a tripartite agreement between the customer and the toll lending institution. The new CLN guidelines which came out, does away with some of the dealing issues or Most of the teething issues and makes it easier for non banks to originate and send it to BaaS. After that, we have seen a flurry of activity Between banks and you would have also seen some disclosure in the public domain. We ourselves have had a sign up on the Retail businesses on the retail business side with 1 public sector bank, I think we should in this quarter do one more sign up on the mortgages space. We personally believe that this is going to mark a very strategic shift In the direction of lending business as a partnership between banks and NBFCs. And we are ready for it. We were one of the early movers in this Even under the old model, we had started disposing. But I think with this new guideline, I think operationally things will become much, much easier. Partly because of COVID wave 2, it has not taken out because the disbursement activity given the personal safety issues They come now, but I do expect quarter 2 of this year to start marking the start of this business and It will gain strength every quarter. We do expect this will become a very large business for NBFC Bank partnership and it will make a strategic shift. I think the key thing will be then NBFCs will become much, much more focused on Particular asset classes which we are very, very good at originating, whether it is cost of origination, managing underwriting cost, connections, We ourselves have taken a lot of steps in the last 2 years to not only digitize but also digitalize the process, build Alternative credit scoring models and I think a lot of them will come to fall. Once the liability side would be supported by banks and NBFC would largely be responsible for the quality of the pools we originate. It also does risk mitigation for the PAX is 20% would be on the and BFC book. We do see this will become a fairly large part of the marketplace. Thank you. Thank you very much. That's helpful. Thank you. In fact, Anit, I would just add that we are seeing the cost of this Actually, it's a lot cheaper, though it is off your balance sheet than borrowing money on your balance sheet and doing on lending. So I think Asset Light is actually going to be cheaper for NBFCs than borrowing their own balance sheet with equity needs and all of that. So I think as Deepak said, We are very excited by this. We have to see how it evolves, but RBI and the bank seem to be very, very supportive of this. Great. Thank you very much and all the best. Thank you. The next question is from the line of Praveen Agarwal from TD Investments. Please go ahead. Hi, Rashid. Good evening. I just wanted to ask that there was a news item regarding a minority shareholder grievance in the ARC business. Can you throw some light on it? What happened to that? Yes. I think it has actually been an event, An episode that has been going on for 4 years. We have a minority shareholder in that business because if you remember when we started ARC business, We were only allowed to own 49%. So the remaining 51% was given to a lot of individual investors and shareholders at that time. Then over the years, as you know, the DPQ came in, we were also allowed to increase our stake and now we can go up to 100%. So we've been Very keen to buy out any investor at a reasonable price. Now as you know, in ARC, there is no exit. It's unlikely that we will ever see IPO or the listing of the ARC business in the near future. As a result of that, obviously, individual shareholders would like to exit that business. And when they want to exit the business, they obviously want the price. And a lot of this has been going on for about 4 years ago is when these investors started making allegations. We got an opinion from Justice Shri Krishna to do a complete inspection of all our Activities and paperwork and all the deals we have done, we have strong governance. We should remember that 20% of the equity of ARC is owned by CDPQ, which is a large global firm. Another 5% is owned by 1 Swedish pension fund. So there is a strong governance oversight Honor, ARC. But this individual who is an ex ASZ Has decided to make allegations. We have gone through, we have appointed lawyers, the Board of ARC He has done an independent inspection of everything, and we remain very confident that everything we have done is as per the guidelines As per the rules which are there, like one of the allegation is that CDPQ when they invested, they invested INR 500 crores For 20% of the company, if you remember about 5 years ago, when SEDPICI invested, they invested INR 500 crores for 20% of the company, Which is a valuation of INR 2,500 crores. At that time, the book value of the company was around INR 400 odd crores. So it was a nice 5 times price to book value that we got as a pre money for this business. And his allegation is that, that 500 is not enough. Pretty big, you should have invested INR 800 crores, though I mean that INR 500 was much higher than any formula price, any semaphroat price, anything. So when you have this kind of allegation, it can create a newspaper sensationalism, which is there, but there is no underlying real merit in that sense. So, we are very happy for anybody. I must say the ARC is inspected by RBI every year. The same individual had made complaint To RBI also 2 years ago, RBI had also asked for information. So the drama goes on. The idea is what appears to us is to create nuisance So that a minority shareholder can be bought out. And we have seen enough cases in India of minority shareholders in unlisted private companies Now creating this kind of allegations and all, so that they can get bought out. Our idea is we are happy to always Provide exit to investors if there is a possibility because even if we can't buy, we can get some other investors. ARC is a good business. Of course, as In the last 2 years, as the book growth has come down, as we have not acquired as many new assets, the earnings have come down. But even today, the ARC business has INR 2,200 crores of equity. So there is a lot of equity in that business. There is a lot of potential in that business And we want to exploit that, but we own 60% of that business. SediPQ owns 20%, Another 5% is with Swedish pension fund that is 85% and the remaining 15% is with 2 or 3 individual shareholders, out of which This is one of the shareholders. No other shareholder has ever complained. Just as an aside, this particular shareholder, his Sunil Law, is on the Board of the company for the last 8 years, Sunny has been party to all the decisions. He has never objected to Board. There are Board minutes and all where he has Approved the CDPQ investment and he's approved all the other loans we have taken everything else. So this is more an effort to create A nuisance and you know how it is, people feel I can make allegations and can do harm to you, but we should always remember that allegations are allegations And underlying facts are underlying facts, and we stand by the facts. Thank you. The next question is from the line of Aditya Jain from Citigroup. Please go ahead. Thank you. On the wealth management transaction, if you could just explain the impact on the P and L, which are line items that has flown through. I can see a INR 1400 crores gain on derecognition. Is there any impact in any other line item also in investment gain or somewhere else? And secondly, where has that been used in impairment? How would you say that it has been allocated? And then lastly, related to it, has some of it been used to repay the hold for debt? And what is the outstanding hold for debt now? So yes, I think overall, I think we can give you the exact number of Holdco debt. As you know, we have never borrowed too much At the Holdco level, so the Holdco debt should now be, by my estimate, maybe about 1,000 odd crores, 1500 crores. Himanshu can give you the number on that. On this Edelweiss Wealth Management transaction, it's been a complex transaction, which is still undergoing. There is a demerger, as I said, Underway and all that. So the way to look at this quarter and in the annual report, there'll be a lot of details. It's a lot more complex than to just explain. I think the simpler way to explain is what is the net extraordinary gain for this quarter because we have a lot of other markups And markdowns also that we have taken because as I said, we have an ad hoc book and all of that also. So as a result of that, I think the net extraordinary gain for this quarter has been INR 500 odd crores. That has been all wealth management plus impairment. We've also taken this opportunity to take some Sharing costs, which will all ensue because of the demerger, there'll be a lot of restructuring costs that will also happen. Along with that, we also The long term incentive plan for our key employees, we have done our deferred bonus pool out of this capital gains that we got Because as you know, last year was a difficult year, so we could not really pay bonuses and all last year. So this year, we took the opportunity of Captifying some of that, creating long term incentive plans for employee out of the capital gains that was getting that in this transaction. So I think the way to look at it is the next the net P and L impact, extraordinary gain that you can remove It's about INR 500 crores after a whole series of pluses and minuses that have gone through. A lot of that if you want offline, Somebody can take you that and a lot of that will be in the annual report as we go along. Any other question, Mr. Jain? Sorry, I was on mute. Thank you. Just a clarification on the EPL plus ERFL. The credit cost is negative. So what has driven this reversal of provision? You want to answer that Deepak? Yes. So if you look at our total numbers for the year, every quarter there could be a little bit as Rakesh talked about it, every quarter we The cash flows and we update the cash flows for every wholesale asset. So every quarter there is normally a swing of INR 50 crores For every quarter and that normally results in either an impairment or a credit provisioning or a release of the sale. So given the wholesale nature of the book, I think every quarter you could expect a INR 50 crores, either a positive or a negative number on the As we refresh the model, so those come on a quarterly basis. But I think overall, as I said, our book now we are fairly confident is Fairly conservatively marked, so we do not expect any significant impairments Coming forward on this book, I think from next year onwards, we do expect that some of the impairments may start getting released from whatever early traction we are seeing on resolution. From next year onward, we should actually start seeing positive slippages on this book rather than negative slippages. Q4 was also one such quarter where we did have I would also add, Aditya, that this is all because of IndeS. And India's on retail works very similar to India gap because then you do everything at a portfolio level, but India's on wholesale books We'll always be very idiosyncratic and because everything will be mark to market now unlike earlier where you had an NPA and then you continue to provide. Until the NPA remained and NPA, you just kept on providing. Now you might mark down a loan 1 quarter, Then there is an improvement and you might mark it up a little bit or it might release some impairment that is already provided. So, India's on wholesale book will have this kind of variations as Deepak was explaining. As I said, the idea is to keep this as a portfolio, Which is mark to market every quarter and the marks can go up and down a little bit. We'll always remain conservative in the mark that we have, But you can expect, I think the book is now fairly well marked. I think we are very conservatively marked as far as we can estimate And that gives us confidence, but small variations is what we should expect, but all those will balance out in the next 2 years or so. Got it. Thank you. Thank you. The next question is from the line of Prashant Sreedhar from SEI Mutual Fund. Please go ahead. Yes, thanks. Just a further doubt on the wealth management business, do we expect a name change And will the Board composition change? So the Board composition has already changed. We are all on the Board. There are I mean, I and Venkat and Ditya from Edelweiss on the board, Nitin Jain, who is the MD is on the board. There are people from PAG already on the board. So there is a new board. We are involved. The name changes. We have committed the name for the next 3 years and As part of the deal itself, so it will be it is currently still run as an Edelweiss business with all the internal linkages and the synergies and everything else. So the Board has changed because the PAG nominees are also on the Board. And we have a very clear game plan Agenda which has been agreed between PAG and us, it's actually working very well because PAG brings in a lot of Expertise in scaling up businesses and bringing the extra governance focus and all. And they have put some very high quality people on the board. So it's been a good addition. As you know, in our insurance business, we run a JV, in 81 insurance broking business, we have a JV with Arthur Gallagher. So we are used to running that. So we are very comfortable with this. Sure, sure. Now that's very helpful. Just on the lending book, so you're just putting all of it together, ECL plus retail plus housing. How much would be the restructuring plus the DCCO extension, ECLGS disbursements, etcetera? You want to answer that Deepak? Yes. So I think when the last refresh we had done on the wholesale book, I think the number was closer to 5% and for the retail book it was closer to 3% to 4% between EC and PS and Restructuring. Okay. Sure, sure. And what would be the stage 2? So I'm assuming some part of this restructuring could have been Classified under stage 2 for higher provisioning. Structuring would be either stage 2 or in some cases also stage 3. ECLDS, as you all know, it's a government guarantee, so there is no staging impact from that. Sure. But the restructuring is either 2 or 3. That is helpful. Thank you so much. Thank you. The next question is from the line of Vishal Teckrawal from RealValue Securities. Please go ahead. Thanks for the little update on ECL Finance. I just wanted to ask, We have taken a lot of impairments and write actually last year, though balance sheet and equity base is still strong. What if the law is worst over? And what should we expect in future, if you can throw light on it? Thank you. Yes, I think on ECL Finance, As I said, I think wholesale businesses always have this kind of a little volatility. I must also tell you, Vishal Finance, we've been doing this business for 12, 13 years. So we did make profits in the early years. Last 2 years, we have taken impairment in that. But I do think now we have marked the book to what is the appropriate value of the underlying cash flows, plus The underlying environment has improved. Last year, there were a lot of problems of getting lost by funding and projects were getting stuck And even the sales were much lower in real estate. I think a lot of that has improved. So I think the real estate cycle is definitely on an uptick. A lot of good developers want to step into good projects which are economically viable, but which are stuck. So we are seeing good sign on that also. So I think we have taken the whatever markdowns had to be taken. We have restructured whatever loans had to be Sure. We have a very active workout group and we are doing active workout, all the special accounts have a strong focus. And we are either bringing new developer, we organize last mile funding, we change a lot of parameters of the project To make sure that the project gets completed and our loans are repaid and when the loans are repaid, our equity also becomes free because we have almost INR 3,000 crores of equity. So though it's a INR 11,000 crores book, there is INR 3,000 equity out of the INR 11,000 crores. The other thing you would have seen in the ECL Finance presentation, We are more about close to INR 6,000 crores of long term borrowing. So given that we have a lot of equity and long term borrowing, which Now use for this book, even the liquidity challenge on this book has been behind us because earlier we were fighting both, we were fighting the impairment battle And we were fighting the liquidity battle and they both started facing on each other almost like a vicious circle. I think both of that has come to an end. So I think the worst is over, but yes, I think we still need to do the workout and release the capital. So over the next 4 years, as we get back the money, The borrowing against that book will get repaid, but we will also release our equity. And for us, that is very exciting because INR 3,000 crores of equity, which is embedded in the wholesale book is what we also want to come back to us and we can use it for other growth areas also. So we are fairly confident that ACL Finance is now on a good trajectory. Also, this equity will have and ECL Finance is a good MSME business, which has been overshadowed by the wholesale book. But even this, I think MSME book has a lot of scalability as Deepak explained. So I think ECL Finance as a platform is a strong platform. We started this company in 2,005. Over 15 years, it's gone through its ups and downs. But I think over the years, ECL Finance still has A lot of equity, a lot of liquidity and a lot of potential in the MSME asset light retail credit model that we would espouse in the next Few years will be testimony of that. Thank you. I think I just wanted to add, I was just reminded by somebody Then, Jeetu had asked a question on the asset management and whether we will look at partnerships and all. I forgot to answer that. As you know, both our asset management businesses, alternatives as well as mutual fund, are 100% owned by Edelweiss. Our general insurance business is also 100% owned by Edelweiss. And now that we have adequate capital and liquidity and all, we are not actively looking at partners to put capital. Earlier, In earlier years, when we did ARC and life insurance, one of our ask from our partners was to bring in capital also. Now I think given that we are releasing capital from our wholesale credit book and we have adequate capital and liquidity available, We will not be looking for any partnership for capital reasons. But of course, if there is a strategic partner who Either offers a great value or we think that business will have a much better future with a partner. We'll always be happy To realign our capital and all. And we have had some we have some great partnerships in our insurance broking business, in our life insurance In our ERC business, in our credit business, so we're always open to partners. We are always open to recalibrate our portfolio and Holdings Structured, as long as it is good for the business and unlocks value for us. Any other question, Mr. Vikraman? Thank you. The next Question is from the line of Rajeev Patak from GP Holdings. Please go ahead. Hi, Ramesh and team. Hope all well with all of you. A couple of things. It's a good thing that you brought down the group level borrowings by approximately like INR 3700 crores a quarter. But on the other side, you've also increased the liquidity that you're carrying. So is it that You're carrying this excess just to fortify yourself against the possible wave to impact and then you'll start paring down that liquidity again And you bring down your gross borrowings? Yes. Actually partly that, partly we have taken When the crisis started, we borrowed some long term money at the Holdco level to make sure that as parent, we had enough liquidity to provide All our underlying businesses, fortunately, including ACL Finance, nobody needed the money, nobody had that crisis where they had to depend on the parent for the money. Because we are not a corporate house where we have a corporate parent, we at that time when the crisis started in 20 eighteen-nineteen I borrowed some 2 year, 3 year, 4 year money, slightly, as I said, expensive money, but it was an insurance that we bought. A lot of that we are carrying because we have lock in periods on that. A lot of these loans will start getting repaid From 'twenty two onwards, so 'twenty two, a lot of these were for 2 years 3 years 4 years. So between 'twenty two and 'twenty three, A lot of these expensive loans will get repaid and that will also reduce our drag, our cost and also allow us to optimize liquidity a lot more. And secondly, as you said, we are just COVID is not over. And until COVID is over, our Board has guided us To be more careful on liquidity, even if it means a little bit more liquidity drag for a couple of quarters. If you have taken it for last 8 quarters, I think The 2 quarters is not going to kill us, but it will only make us stronger. Okay. And Rakesh, on the if you can just recon From the Holdco level debt and the other point is you didn't mention a timeline of around 12 to 15 months For the wealth management process to get over and to final listing, is that the right timeline from now? Yes. I'll get Himanshu to answer both of that. Himanshu, do you want to Hello? We can hear you now, sir. Yes. Thank you. So I think the Holdco debt as on March 31st, External debt is around 8.50 odd crores. Okay. I'm sorry, what was the second question? My line was Yes. And the timeline for the listing of the wealth is 12 months to 15 months from now. Is that the right thing that we heard in the previously in the call? Yes, I think that is what it is. Okay. Okay. Okay. Thanks a lot. Thank you. The next question is from the line of Praneeth Vanwar from ICICI Bank. Please go ahead. Hello. Good evening, Rakesh. So congratulating on your Silo Jubilee. Thank you. Yes. So my question is regarding on ARPU transaction. So your housing finance ARM has done around INR 75 crore of transactions in the FY 2021 year. So, first question is what are the nature of those assets? And second is, EFSL has assumed both risk as well as reverse for the transaction. So, I guess the focus is now on independence of each entity. What was your view about that? Like, what was the thought process behind that? I think I'll let Deepak answer the first one. On the second one, the thought process is we are still the owner of those businesses And we want to make sure that all our credit businesses have the support of the parent. And as I said Even earlier, even to provide liquidity support and we have a very strong balance sheet at the whole core level, Betelwise Financial Services strong Balance sheet. So we have to give comfort to all the banks and everybody. We have given a backstop on that Because ultimately, this is our business, ECL Finance is an area wise entity. And as I said, all our businesses are independent at our operational level, but it doesn't mean That the parent support is not there. And that is what we have adequately provided, whether it's on liquidity or on this. On the first one on the housing finance sale to ARC Deepak, do you have any clarity? Yes. So as we have been building our Retail business is one of the other things which we have been experimenting with is some kind of a champion challenger model even on the correction side. And especially given the lockdown where there were some amount of administrative hassles around correction, especially on the mortgages side, We found that by experimenting through our own ERP, we were getting in some pockets, we were getting very good. And as Ramesh also spoke about it that our ARC is also building a fairly strong retail platform. We are not only looking at our own ERC, but we were looking at other ERCs also and finally we closed the deal With our Yashil, the idea is that over a period of time, we want to get the best outcomes out of our retail portfolios, including The NPA or Stage 3 portfolios and while we do a large part of collection on our own and recovery on our own within the retail businesses, But from a benchmarking point of view, we do want to see some of the other ERPs can do as good or a better job. That also keeps us honest in terms of our own recovery capability that allows us to benchmark. Yes, fair enough. Thanks. Thank you. The next question is from the line of Mr. Samadhi from Kotak Securities. Please go ahead. Yes, hi. Thanks for taking my question. Just two questions essentially. One was on the asset management Both for mutual fund and alternatives, could you kind of share some scale after which these businesses start making meaningful profits? I'm sure there is operating leverage benefit that you'll start getting beyond the point. Yes. If you see on the mutual fund side, we are still investing in growing the AUM and all. And I think our Mutual fund assets are now INR55,000 crores. I think it's only profitable that the business made about INR 4, INR5 crores of profit after tax, Which is still I mean, because we're investing a lot of money in building products and platforms and all that. I think the mutual fund should start Being significantly profitable and when I say significant profitability is INR 50 crores to INR 100 crores post 24, 25 onwards Yes, our current plan, we continue to invest in that. On the alternative side, as you know, Nishant, we run a lot of the Credit funds. And in credit funds, unlike private equity funds, you earn fees only on deployment. So out of the INR 30,000 crores of AUM, About 13,000, almost 40% of our money is not yet deployed. So we have a lot of undeployed money. So as we deploy that the profitability will go up. And the second in this is there is a lot of carry that you get on the funds when you exit. A lot of our AUM has been built from 'seventeen, 'eighteen onwards. So if you see out of this 30,000 crore, close to 23,000 crore, 24,000 crore AUM is only of the last 3 years' Vintage. A lot of this will also the carry on this will start coming out after 'twenty four onwards. So I would say 'twenty four onwards It's where the Asset Management business will be at the stage at which the Wealth Management business is now. The Asset Management business is about 2 to 3 years behind the asset behind the Wealth Management business in terms of its profitability scale up. So I think 24, 25 onwards is where we our current total AUM is 30,000 in alternative and 55 mutual fund. I think the mutual fund's significant profitability will be once we cross 80,000 to 100,000. And in alternatives, at 30,000 also you can be reasonably profitable if your win test of the funds has to get older. So I think a lot of our money It's only last 3 years and once it becomes about 6 to 7 years is when the alternative assets really give you the profits and the returns of that. Thank you. Just on the wealth side, if you could give some breakup of I mean, I think you had Net revenues of approximately INR 1050 crores. If you could share some break up of this in terms of how much of it is Kind of capital market advisory linked or if how much of it comes from broking and how much of it comes from normal client fees, could share some makeup of that that could be Sure. I can give you broad color. I don't have the exact numbers. As I said, we'll be happy to connect you with the wealth management Our team and show that about 18% to 20% of this is your interest margin business, which Margin funding and IPO funding and all that. And I think we've been for the last 5, 6 months, averaging about INR 100 crores of top line per month. And that 100 crores top line, the way it works is 100 crores top line, about 65% costincome ratio is the way this business It's broadly stabilized and I say treat this as approximate numbers and the exact numbers we'll be happy to get the management team Out of INR 100 crores of average top line, as I say, about INR 18 or INR 20 comes from the interest Margin Business. I mean, we see Wealth Management as what we call an ABCD business. A is for advisory. I think our advisory fees are about also about 18%, 20%. B is the broking business. Broking is about T5 ish, 40%, 45% comes out of broking business. C is the capital part, which is what I said the interest Credit and D is the distribution part where you sell funds and you sell insurance and other parts. So I would say Broadly, you should assume it's 40, 2020, but exact numbers they will be able to give you because it also changes from quarter to quarter. But this is broadly how it is. Our long term target is that broking should be about 30% of the business, advisory should be another 30 And both distribution and capital should be to 2020. Sure. And if I look at the transaction that you have done, you're looking at So, I mean, can you say that the investors have got a very good deal? Yes, that is always the case, but I think we struck this deal in the middle of COVID wave. So if you remember, we had announced a deal in August last year. And obviously, the business improved a lot more. The first half was slow. So the annual profit at that time we were expecting was about 200 crores, 100 crores, 100 crores, 100 crores, 100 crores was the trended at that time. And so I think it was at about We had estimated about 2020 to multiple for the business at that time. Obviously, the business did very well. We had an option To try and see whether we can optimize and all that, but we our Board decided we should stand by the commitment we have made. So we signed the deal in August last year. It took us about 5, 6 months to get all the approvals and all because we had to get all the international approvals and everything. I think our idea was not to be greedy, but to just make sure that the business has a strong footing because PH has also invested INR 400 crores into the business over and above this. So there is INR 400 crores of additional capital in the business. And obviously, from August To December, the world changed a lot. But given that this was not just a transaction to Realized value, but it was to unlock value, go through the demerger process, distribute the shares to our shareholders. It has a much larger strategic importance to us than maybe improvement in valuation by 20% or so, which Is what you would have argued for, but it's okay. I think in your history, you'll always do transactions, which will Either look good for investors or for you and everything evens out in the long run. Sure. Great. Thank you very much. Thanks. All the best. Thank you. The next question is from the line of Dinesh Khanna from AKC Investments. Please go ahead. Hi, Ashish. Good evening. I had a couple of questions on the wealth management business. I think you have answered that, but from an investor point of view, I just want to understand that the demerger process, you explained that it's So, why NCLT and the listing happens. So, as a shareholder, what are the time when when people can expect shares of wealth management being paid to them? That was the first part. Secondly, I think the similar question is the kind of numbers this business is showing, I think 2 Your total profit, 30% growth. Do you think by the time this listing of this business happens, this business can command a valuation of let's say 9 to 10,000 crores in itself, Just wanted to hear your sense on the sense. See, I'm always careful about making any forward looking statement on valuation and all. I think A lot of people on this call, including you understand valuation in market a lot more than we do. Of course, there are comparable to other wealth management outfits out there. I think Fortunately, this business has now comparable. There is IFL, there is ISAC, all of them are there, Angel Broking, all are slightly different model to each other. But I think as I said, 1st half, we were cruising along at about INR 100 crores for the first half, but in the second half, it's been more like INR 140 crores and all. So if I take the second half plus, there is additional INR 400 crores of equity that has been infused on this, which is also on money and all. I think there should be good growth in this. And our idea is that as and when it gets listed, it should be comparable to the peers who are out there. So the idea is to have a strong business even if it gets listed at a particular price, it's the post listing that is very important. But we do expect that this business, I think the wealth management businesses as a whole will always trade at between 20 to EVP going forward, that's a kind of it's more like an FMCG business. And I think this business is the time has come In India, for this business is to be standalone and scale up. I think, Altria, they were still very subscale. I remember about 5 years ago, this business is to Make a profit of only about 80, say, 70 crores for us. But now I think the business has got investments, it's grown, it's become very robust Standalone, he's got multiple business lines underneath that. So I do expect that wealth management business should trade at 25, 30 We hope that ours will be best in class in that. But our current approach is that for the next A year or so, we solidified the business and keep on growing it. Now it's got INR 400 crores of additional equity. The retained earnings of last is also there because they've got more than INR250 crore of retained earnings also. So the capital base, by the time we list this company, the equity base of this Entity should be closer to 2,000 odd crore, 2,000, 2,200. And And according to me, a good business is when they make about 20%, 25% ROE on this kind of advisory and kind of business. So I think that is what I would call it a good business. Understood. And is there a time line in terms of I think most NCLT only people can expect Right now when NCLT process for demerger, after the demerger We'll get the shares and post demerger is the listing process, which is because demerger gives you listing, but usually we have seen in the past The listing takes anywhere between a month to 3 months after the demerger. Understood. Thank you. Thank you. Ladies and gentlemen, due to time constraints, that was the last Question for today. I now hand the conference over to Mrs. Ramya Rajagopalan for closing comments. Thank you, Margaret. On behalf of the Edubais Group, I'd like to thank all of you for giving us your time and for asking us insightful questions. Because of lack of time, we'll have to close this particular session now. I would request all of you who have additional questions or who Did not get a chance to ask questions in the queue to get in touch with our Investor Relations team and we'd be very happy to help you out With any additional information needs that you may have. Once again, thank you for your time and stay safe and well until our next. Thank you very much. Thank you, Ramesh, Himanshu and Deepak for your time. Thank you. On behalf of EagleWise Financial Services, that concludes this conference. Thank you for joining us and you may now disconnect your lines.