Q3 18/19

Jan 31, 2019

Ladies and gentlemen, good day and welcome to the IFL Holdings Limited Third Quarter Earnings Conference Call. 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. Please note that this conference is being recorded. I now hand the conference over to the management. Thank you, and over to you Good afternoon, everyone. On behalf of TMIathan, I thank all of you for joining us on this call. I am Sabodala Group CFO, a company by Naval Jan, our group chairman, R Venkataraman, Managing Director, Sumit Bali, CEO of ISN Finance, and current Mabed, Managing Director of IFS And Wealth Management. I'll now pass the mic to our chairman to comment on overview of the group's strategy and plan. Thank you, Prabhuza. So, our outlook and our primary you know, we can take a quick look at the economy and the sector and then come to our planning strategy. So in terms of economy many times, there are certain bookings happening. They get crowded by a consistent news, in terms of the year. And in fact, in the recent times, they're very frequent. And obviously, the uncertainty related to elections. But in this cloud, we, in this cloud, if you really look at the micro fundamentals, they're getting better. So in oil price, we are lower, but all the developer, are macro fiscal, account of fiscal capacity as well as current deficit. And in terms of inflation interest rate and as well as currency. And we are seeing that the headline numbers have been very positive. Also, domestic investors continue to invest, I mean, there has not been a situation of panic. You know, the mercury includes can vary a little bit, but, at least regardless of uncertainties and volatile environment around the domestic investors continue to believe in the capital markets are supported. Even from foreign investors' front of me, and we are seeing that China's growth has slowed down to the, lowest in last 30 years. And in terms of investment, ethnic, and India becomes the only large, emerging market economy that can absorb investments from foreign investors point of view, And even adding a few of them, I think regardless of what is outcome of Alexis, India will continue to attract cabinet from foreign investors as well as domestic investors. So in this background, I mean, next few months, maybe uncertainty because of but the overall outlook for the government remains steady positive in Thailand. So coming to, our businesses, Last part about challenging quarters was a defining quarter in terms of, maybe a, you know, trial by fire for tech for risk management policies, liquidity policies, and I think once it's up, settled, managed to be separated from buyers. But if I look at little, medium to long term, then all our businesses have very strong positive outlook. I do not think anything has happened, which is basically impact, structurally otherwise, growth prospects of all our businesses. So as we know that our business will now clearly, divided into 3 segments and we will become 3 different entities very soon. So we have after finance where our focus, for growth, as I have stated in my earlier calls, And last few quarters has been on affordable home loans, board loans and smart ticket business rules, and that also improves microfinance, which is for our work callers. Again, there's a focus on interest generating activities, or you can call them businesses. Liquidity, last quarter, as all of us know, has been challenging, but I think given, our credibility with investors are able to securitize assets, as well as, the recovery profile of our asset liability. We have had a comfortable, targeting, and in fact, I believe it will be We have used our TP is significantly down to 10%, 12% with matches the liquid assets that we keep at any point in time on our balance sheet. We also grew up to any significant challenges raising our long term resources or videos to long term, but and starting to grow our businesses as usual. I reported that, real estate sector has been challenged, and the we have seen that there is a spike in drop NPLs, our last ticket, real estate, or customer Approximately because now the recognition norm is 90 days. So even if there are small delays in order to assist to classify them as, nonperforming, And more importantly, in the last quarter, because of the chaos and panic, we have seen that many end users or the buyers of homes, for this project, you know, the deferred or the liability ceiling. But we very strongly believe that, curriculum is good in each and every case and, we should not stop any losses. So as things recover, I think most of these will be back on track and become normal because We haven't seen any damage in terms of quality of promoters, authority of, the furniture that we have funded. But the reality of reality sector is, that drop NCSL timely hairstyle. Our wealth business that Karam is with me, he'll talk more about it with ISOs 1, we have made it to sign you, move to your treasury model, and we are to lead the industry transformation. And the initial results of our clients has been very exciting to you all. Our Securus business, Again, it's a bit more cyclical and in the 2019, your activities, has it as low as and, maybe they continue like that unless, we see that the capital market sentiment changes, but for the time being, the secular business volatile and, has performed a significant setback. But our focus remains on, becoming more efficient in terms of cost and trying to move digitally and online as quickly and as much as possible and also as easily as possible. And just a very quick update on our reorganization that is on track as scheduled, to was that in December. And now we have a final hearing with NCIB sometime in middle of February. So next couple of weeks, And then from there, there are few procedural requirements, which may have seen in a couple of months. So we did a header back to Pravo. We will take it to line items and then help you. Thank you. Thank you, everyone. Our group net profit was rupee 220 crores in third quarter FY19, down 20% YY and 27% Q on Q. For the 9 months, net profit was 8.69 crores, up 18% YY and net profit after minority interest was looking 64 crores, up 18% YY. In the NPSC business, the loan idea grew 33% YY to the 36,400 aircraft. It was flat on Q on Q basis. Profit after tax completed as per India grew by 6% YY rupees 108 crores. It was down 33% to 1Q. Our Tier 1 car stands at 17.4% and total car at 20.7%. Primary drivers of our Indian growth are small ticket home loans, which grew by 49% Go load is due by 57 percent y y, multi gig, MSME loans is due by 56% y y, and microfinance loans is due by 205 percent y y. The last one coming off a small base. On the other hand, construction real estate finance, lapse and capital market loans will continue to have declining share in our portfolio. In home loans, our focus remains primarily on smart ticket loans to the salaried and self employed section. The fastest growing segment in home loan is the affordable whole segment of Suraj loans with average ticket size of 13 lakhs. Suraj loans accounted for 20 3 percent of our of our home loan disbursement in Third Quarter and 15% of clothing home loan area. Our product is specially designed to support the informal income segment in fulfilling the dream of owning a home. As of December 2018, we had over 7800 approved housing projects of nearly 1.5 fold. From 5500 approved projects a year back. 55 percent of home loans per day through these approved projects We expect that this approach will reduce our operating and trade costs going forward for our helping finance company. I also hope finance has been a significant player in the program will be our seasonal trade lease activity scheme, still made it has provided benefits towards 19,500 customers. And disposed facilities of more than 24.50 crores. The company is also expanding its footprint and currently has over 110 branches across 17 states. The customer base for our SSE has crossed 72,000 this quarter. Retail loans, including consumer loans and small business finance, costs to about 85% of our loan book. Another strong characteristic of our loan book is the large proportion of loans that are compliant with Reserve Bank of India's Priority sector lending long, about 53% of our home loans, 54% of labs, 83% of TV, 42% of SMB and nearly all of our LFI loans are CSL compliant. It agreed nearly 47% of our loans our PSL compliance. Our average cost of borrowing rose by 31 basis points Q on Q and 60 6 basis points YY to 9% in 3rd quarter. Increinitely, our borrowing costs rose by 75 to 100 basis points due to the tight security conditions in 3rd quarter. So the things are improving and funding costs have declined materially from 3rd quarter level. In a rising interest scenario, we are in a position to commence directly reprice our loans 46% of our loans on the floating rate basis. In the last 6 months, we have raised our home loan rate for 90 to 100 basis points labs, concession finance, commercial vehicle, gold and equity loans by 150 basis points, and capital market loans by 200 basis points. Our win was at 7.1 percent, expansion of 50 basis points Q on Q and 5 basis points YY. 89% of R and D comprise of loans that are secured and about 11% of loans are unsecured. We believe our area of risk is well balanced with some scope of the share of high yielding and unsecured assets to go up. We currently have 1862 branches primarily for our HFC gold and microfinance businesses. Consolidated gross NPA and then net NPA. We took line as per RBS credential, and provision as per expected trade loss matters were slightly in the end of the gross NCS stood at 3.7% and the net NPS at 1.5% of loans. The NPL ratios appear highly. For instance, the NPL ratios appear higher, partially because the loan book has declined 11% Q on Q due to portfolio sell down. Besides NCL did go up across funeral categories, including real estate finance, capital markets, TV, and S And P. Under expected trade loss provision, in India, provision coverage on page 3 assets stood at 60% and on standard assets at 180 one basis points. Return on assets for 9 months FY19 was at 3% and return on equity was at 16.4%. Some update on liquidity during third quarter, we were able to halve the share of commercial paper in total borrowing of IFS Finance from 24% in end September to 12% in end December. In value terms, outstanding cities came down from roughly 8353 crores to 3900 and 95 crore during the quarter. Our funding mix is well diversified, including 16% from NTV, 5% from sub debt, 39% of bank term loans and energy refinance, 28% of secure originations, or assignments, and 12% from commercial paper. Following the 10 years about their bonds raised from CBC earlier last year, we have initiated discussion with several other institutions to raise long term funding. We have received good response to our public issue of LTV, the subscription amount has crossed, 1100 crores, and we plan to close the issue tomorrow. We have a costing airline whereby inflows cover or exceed expected outflows across all our markets. On the asset side, our loan book has a relatively short maturity pattern with 45% of loans having maturity of less than 6 months and 39% of loans have in maturity of less than 12 months. We had liquid investments and sanctioned an undrawn rate line totally looking 3750 crores in end December. Little bit on digitization. We have continued our focus on digitization and starting every aspect of customer loan journey of the total 9.12 Lakh loans disbursed in first quarter, 99% were onboarded recently. We are focused on back end process digitization through multiple innovations as well as partnerships helping us achieve process efficiency. IFSA loan app had 169,000 downloads in 3rd quarter with 27,000 net new additions. ASSA loan app is extended to personal customers allowing customers to pay their EMIs and service their loans industry. On analytics, we have continued to deploy advanced analytics and machine learning exists for customer lifecycle management from usage of credit scores and trade decisioning to portfolio optimization to increasing customer loyalty and managing collection risk vis a vis combination of predictive scoring, and real time dynamic notification. Enel's operational efficiency is being targeted via workforce analytics, geo expansion and branch productivity analytics. We'll pack across all Windback and cross sell continue to be strong drivers of reduced customer onboarding costs, a multi product, multi channel cross sell framework that factors will result for propensity as well as behavioral risks associated with exposure. Continuing with holistic approach towards fraud and anomaly detection from pre dispersal to post dispersal stage, we have developed a fraud application scorecard. For the digital finance portfolio. The scorecard is capable of assessing risk for customers with the Bureau footprint as well as those who are new to credit. Now coming to commentary on Wealth Management. IFL Impact computed as for India, more than 59 crores, or have our assets under advice management and distribution have grown 11% Q on Q and twenty five percent YY to reach rupees 1,610,000,000. We added 40 bankers during the quarter, taking the total number of answers to 398 to further rise the growth momentum. We now have presence in 20 six locations and 9 geographies. Icloud offers a broad range of production services to participate as the largest share of the client wallet. This includes financial product distribution, advisory, brokerage, asset management, trade solutions, and estate planning. Net new money collected In first quarter of 590 was INR 2633 crores. AIF assets have grown 20 percent YY 250,025 crores, as well well financed, which offers loan against securities and margin funding to high network clientele, reduce its loan growth by 22% Q on Q to be 4748 crores, mainly due to conscious effort to build the business by recalling low yielding loans and exiting top non core assets. Turning to Capital Markets. Asset Capital Markets is largely comprised of retail broking, institutional broking and lithium banking businesses. Grew its YTV net profit by 5% YY. During the quarter, our average daily cash turnover was down 15% YY to be 11,000 to rupees 1183 crores, versus 3% Y YD growth in exchange cash turnover. Our average daily total turnover including F And O was up 10% YY to be 16,670 Our NSE market share in the cat segment was around 3.5% and in total, around 1.5%. We are continuously enhancing our offerings on digital and mobile platform for retail customers in our brookie business. Our mobile trading app, app, and market has had over 2,300,000 downloads, presently about 48% of our retail booking customers trade through the mobile app. We completed 12 large vessels in 2019 in the year to date and have a substantial pipeline of deals in various stages of execution. With that, we'll now open the floor for Q We will now begin the questions. Ladies and gentlemen, we will wait for a moment while the question We have the first question from the line of the Ganga from Anti Stockbroking. Please go ahead. Yeah. So, first, my question is on this, securitized book of, 9060 crores. So so how much of it is in the true sale or or the direct assignment format and how much of it would be in our book, which will be the securitized part? So, out of the 968 crores of total of book, 16 177 crores securitizations, and about 7,380 is a direct assignment. Okay. Okay. And that direct assignment, So this number for the this quarter would be how much? Yeah. If the if we just want the securitization plus direct assignment for the current quarter, It's about 5200 crores. Okay. Okay. Okay. And would your interest income have any, because I think under India, you have to account everything in the current quarter itself. So how much would that component be in the interest income line? It's about what is that drop. Oh, okay. Okay. Okay. Okay. Alright. Thanks for that. And then second question, you know, was on Nirmal's commentary that, that, you know, a large part of the ALM adjustments and, you know, every those things are done. So so for the in this, you know, I believe that maybe a quarter more and most of that should be over, So what would be the incremental lending rate and the incremental borrowing rate for, you know, the the MBFC as a whole once these adjustments are over? No, sir. I just want the overlap for itself. So right now, the mix that we have is fairly stable, and we can continue with the same which is cities at around 10% to 15% of our total borrowing. But now the interest rate, again, the divisional environment, which is if something are hidden under the crisis or there's a current, it's just like Miduah, but, most likely, Dickies have that interest rates are headed southwards. So we don't see any reason to further increase the interest rate or do anything at least at this point in time. Okay. Okay. Okay. Yeah. I I get it that, you know, borrowing cost is a variable, but on the yield side, you know, we have generally been at 14 to 15% kind of a blended yield. And and if I take into account all the yield hikes that we have taken, should should we still be able to be in that 15, 16% kind of a range in terms of yields? I understand borrowing cost. We'll probably I'll ask you next quarter when things are better. No, I think, so if you see a mentally, I'm here, and you will remain in that range, what you're saying. So 15%. So it's around 3.5%. So 4.5% is what you're going to use. Okay. Okay. Okay. Alright. Anywhere between 40 to 15 is the area that we look forward. Oh, okay. Okay. Okay. Alright. Thank you. The next question is from the line of Shiva Kumar from Unify Capital. Please go ahead. Yeah. Thank you for the opportunity. Sir, can you give some more granular sense on the stress in the construction real estate segment of your NBS C? So as in what gives you comfort that, most of this stress won't translate into a kind of a write off kind of situation? Yeah. So I think last quarter was an extraordinary quarter when you know the entire, you know, the lending opportunity for real estate can be essential. And that was even more aggravated by, even the home buyers are differing their purchases are This is an environment of very uncertain pure people's vision was. But, yeah, I think things are getting better and, I mean, it's a matter of time that we should see, the results back. We haven't seen any long term problem with the sector. It's just a question of liquidity crisis, which is a little temporarily in front end. Okay. And your comment on the operating which have been trending at, somewhat elevated levels over the last two quarters. Last quarter, it was, I'm talking about the NDSC space wherein, last quarter, it was about 2 79 courses this quarter. Again, we are seeing an elevated cost of around 2.98 crores. So what is leading to this higher cost? Structure? Yes. So we've been expanding our branch network fairly aggressively. So you see that our branch network has gone up to 1872. We continue to expand and add people in our homegrown microfinance businesses and, that is adding to the cost. And when you look at operating percentages and what has happened is the loan book on a cotton quarter business has been flat. And, so obviously, you know, this seems a little more innovative. But it's all in line with our strategy for growth. So as we have said, that will expand our intellectual branches which will basically, service our goal load, business loan and market finance, the segment of the business. So will this expansion continue, sir? Is there any number you're working towards? So, actually, numbers are difficult to to the number because, but but the pace may slow down a little bit in terms of the level of new branches that we'll add, but It's not possible to talk to a number to do. I mean, that the exams will continue forever. But as I said, that the pace is around linked within, by next quarter. Right. And with regards to your cost of funds, I see it's about 8.8% for the 9 months. Maybe you can give me the incremental cost of funds for the immediate preceding quarter. But your retail NCDs, you have priced them between 9.5 to 10 point 5 and a 2000 crore NCD should bump up your cost of funds, right, if you're able to, set your own. So our cost of money, the basic level, bits of long term soft term. And, there's a activity that we are raising. Therefore, 30 9 months, 5 years 10 years. But this incrementally, you know, this one, as the good mentioned that I have talked fund and all that in line with the LSP. But what are the incremental volumes we are doing, the density in the line with them? Yeah. So, see, like, no, your our average cost of borrowing has gone up by 31 basis points q on q. And, for the First quarter, it was at 9%. That's the average cost of borrowing for the HDFC. It has gone up by 30 basis points, Q on Q, fifty basis points, y y. That's the average. Incidentally, as I said, the cost has gone up by about 70 to 100 basis points. And there has been a demonstrate rise in our lending rate also. Right. And how was it in Q4? So if Q3 will mind you, sir. So how is it turning out this quarter? This quarter, the costs are actually incremental costs are already down by point compared to the peak borrowing rate that we saw in the month of October November. For example, CP would have borrowed at 10%, but incrementally now we are able to borrow at something like 8.68.6, we are able to borrow. So, that's just one indicator. Then, similarly, you know, now some loans are also easier to get and, the rates are also not much better. We have done earlier that assignment at the 9.59.6 influently now we are able to do at 9.15. Yes. The next question is with regards to the wealth business. We see a steep drop in the fee based income, instead of the fact that your A. M. Has grown by 11% q on q. So what led to this steep decline in fee fee based income? So the fee based income was declined primarily because of two reasons. One, obviously, there's a slowdown in activity for the last 3 months. Post the Eyleesi ASCO and in general because of volatility in the market environment. A lot of investors are sitting on the sidelines. To invest new money. So even though the new, flows are extremely good and strong, the, postponement of the investment activity is fairly high. So the clients are wanting to keep the money in liquid funds in pay for debt funds rather than investing it immediately to the market. So while the assets will continue, on a Q on Q basis, the decision to invest get kind of postponed a bit. The second is, obviously, even within that, the mix of investment has been predominantly on this fixed and compared as compared to the equity side. So if you see a mix of our gross global investments for the last quarter compared to a typical average quarter, where we see 50 to 55 percent of money going into non AAA debt. Last quarter, we have seen 72% to 73% of our investment going incrementally into AAA or Better Debt or AAA coverage there, and only 29, 28% of the floor going into non fixed income. Obviously, that has an impact on the, ease, because triple a debt as well as trying to recover in funds. We end up making a substantially lower fee income. So it's actually leads to a little bit of slowdown in activity itself. And second, the mix of the activity also has been, relatively muted towards the more risk free approach. That's that's the reason for the the class, the fee income. Correct. And what about the IFL-one strategy, how will it bring down the yields? Essentially, after one is more advisory mandate as opposed to, running a broker dealer distribution mandate. Now, while the advisory mandate itself is going to be getting a yield of let's say an average of half a percent, We've just launched it around about 2 months back. Response has been excellent. Had we speak, we were promoted already around about and a half to 7000 crores of, our assets into, Apple 1 or similar and an average retention of half a percent. Now what we need to keep in mind then what is very critical to understand when we are, looking at field is the following. Particularly in a broker dealer stop distribution model, you end up earning commissions on this transaction, not on the full portfolio. Typically, in a year, a client does not end up conducting more than 20 to 25% of his portfolio with us. As far as the advisory fee goes, that will be charged on the whole portfolio. So why earlier, we were able to get less than an average of percent quarter on 20, 25 percent of its portfolio. Earlier, we will be able to get 0.5% on its full portfolio. So there's really no impact on the yield and it is much more sustainable because I'm on a lot of active access also end up getting the advisory fee. However, it needs a process because it needs changes at the back end in terms of technology. We need to maintain multiple portfolios for the clients as opposed to maintaining one portfolio as clients gradually change They want part of the portfolio to continue in the broker dealer setup, part of the portfolio to move into Article 1. So it's a change which will not happen overnight. But we are confident that it will take place over the next 6 to 12 months with a much more hectic pace. And the impact on the retention actually might end up being slightly more positive, over the next 12 to 15 months as we make it as opposed to be negative. Because we end up getting your advisory fee on the school portfolio as opposed to getting a transaction fee on the part of the portfolio. Okay. So any numbers you're working with as to how much of the portfolio would you want to migrate to IFL 1? So, you know, we've just lost it 2 months back. So I don't want to really, you know, look that, prestigious that much into the future about, The response over last 45 days has been excellent. And, honestly, if you personally ask me, out of the incremental shares we are getting in terms of new assets coming to the firm, we are seeing nearly, half to two thirds coming the form of Apple 1. In terms of the older assets, I think we should be able to, move around about right, 25 to 30% over the period of next 15 months. So I think, you know, by the end of the current financial year, we will be hoping to be a done about at least, 10 to plus 1000 crores, under the Apple 1 Nana platform. And, potentially be 4 to 5 times that number by the end of the next financial year, with an average retention of 50 basis points. Okay. So I take it back to the 75 bit speed that we are seeing for the 9 months is more of an aberration, right, as soon as the market activity picks up, you would actually go to a slightly higher levels closer to FA 18? Yeah. On the distribution side, the fee is obviously a function a little bit of the lead of the investment, right, between equity and, fixed income. Last quarter is pretty much in terms of client activity and origin to his pretty much comparable last 2. I remember only the 1st second quarter of 2014. You've seen the risk arising from clients, being as low as what it was in the last quarter, last only in 2013. It may continue for another quarter given the types of elections around the corner. But it will come back sooner than later because, the flows are continuing and the money for the moment is lying in liquid parts, waiting for a better opportunity or for more clarity and therefore less volatility. Okay. If I can squeeze in the last question, what is the impact of the upfront commission regime in mutual funds? So upfront commission, there's been a mutual point for that long. We have moved to trail on mutual funds nearly a year and a half, 2 years back. So it's already kind of there in the there is a small minor impact of the PR change, which is going to be round about close to 7% of our mutual fund income. And, we will find income as a percentage of our overall revenues is around about 12.5%. So how about, 7 to 8% off 12.5%. Okay. So round about close to 1% of our revenues, 1 to 1 point 5% of revenues is impacted because of the change in, which is already getting reflected from the last quarter onwards. So we have a mutual fund credit from around about $130.40 crores a year, which will reduce the roundabout 10 crores to 15 crores. 225 plus. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead. Can you give say more details about this, you know, the relative possibilities, things can strike, how many how many lenders are in this case and, you know, what steps are we seeking to resolve that? So, well, I don't think that they're in here. You know, there's a, so it's not an efficacy for the crisis at this point. Like, I didn't can't give precise numbers of how many people in the state are not stressed. What happens is, that many times, some of the builders in the military stress in the sense that One part of the installment is delayed. And, basically, they come back on track very quickly, but provided the only benefit that bank can do to them in a dispute and then they will be able to start talking about them a lot. So, as I said that, the underlying curriculum is solid and good. And, my belief that our belief is that, this is a matter of this part of the next part is that most of these, builders of the project as well. Okay. An action has to be taken. We do that. In fact, it is restricted and simply that these cases are very clear and positive. Okay. Okay. Any specific geography where you're paying the stress building up or, you know, as the NPS has shot up and are these, loans to you know, the relative projects which are targeted towards, you know, uh-uh premium segment or, this has a number. So, primarily, you know, the most of all the entire stress is coming from the female segment, you know, but, primarily, or wrongly, the female depends that the main Bombay and, maybe a little bit of value, but I'll give you 2, the crazy, the call you guys. Okay. Okay. And, secondly, on the whole new book, you know, we have been seeing very sharp jumps and those traits and, you know, overall in the industry is seeing a lot of activity, and lot of competition. So can you, you know, elaborate more on how is the competitive intensity and, you know, our growth rate has been has been in very high. Reason for that. I mean, it's a big, you know, apart from, this affordable housing, the the itself is seeing a lot of competition. Any comments on competition dynamics for this sector? So I This is from the home loan side. I think we have a good base going for us in the approval segment. And, That is there. We're also seeing, competitive intensity has begun a bit. And our belief is that post this, crisis of liquidity in the Q3, we will see better times for some established pay agreement. If there was just too much of thought before it, But we do believe that the growth rates we have on that, are sustainable. We are similarly in line with the affordable home loans also looked at low ticket lag. So at least early days today, but that needs to be negotiated and good offering. And I think that's another product we data. So what are the, our mortgage piece? I think the whole integrated story of looking at small developers who are moving, who are building affordable homes, who work with them, have large number of APS, fund some of these good builders and also have a 1st class of refusal of getting home loan in timing. So we have an integrated play here and we are confident that, both rates will be good. And we do see some space being vacated by, some competitors and we hope to benefit from that. How much do you see for, So, see, we are also in a bit of a time where liquidity situation is what it is in front of us. You are Efforts, in the last quarter, I've shown you right, and it is entity issuance and some other borrowings coming through. I think we should be in a decent growth rate of about 20% to 30% for the quarter. And, next year, also, we should be able to sustain. Okay. You know, overall on the main side, basically, you know, we we are saying that we'll be able to maintain and start this level and the the the portion of retail is, a portfolio in our overall loan portfolio is increasing. So, like, what gives you confidence that, you know, our main may be maintained at this level? So if you see, 8 13 of our presentation, and if you see the growth rates on and SME. I think these are businesses which are growing at very healthy pace. All are higher than our current name. Home loan, as I said, it will be slightly below that, but we are we're seeing rate transmission happening on the entire book there, we should really see the book, which is there. And, so give us that 3 out of the 4 products are higher than the current NIM and are going higher than holidays, I think we should be able to maintain the. Okay. Okay. And overall, from a overall portfolio perspective, like, 2, 2, 3 years down the line. They can book as a percentage of overall portfolio. They do see that in going downhill. Pardon? Can you repeat the question? Yeah. What I'm saying is in in our overall loan book, what percent, like, over the next 2, 3 years, do, like, how much do we, and then, what is the mix of retail and wholesale book in our overall loan book portfolio, let's say, 2, 3 years down the line? So if you look at our book to date, it's 89% is, 85% is repaid. 11% is 1 secured. So going forward, I think, over the next couple of days, the attempt should be to keep move around service quality, on the cure side is 2020 on the retail side. That's the journey, we have progressed. Okay. Okay. And last question on the wealth management side, current, next, like, with the yields coming down to almost like 70 a 25 basis points this year. Do you see some improvement with IFL 1 coming in in FY 'twenty? I think it is, unlikely to go up beyond 75 basis points to math. I think the study is really two target would be in the region of 75 to 80 basis points to the plus minus 5 basis points variation. And if you see a very, very, you know, if you see a really good environment, you could see a 10, 15 basis points or a bad environment, 15 basis points, impression on the other side, but I will be very surprised, if the yield was, too high, beyond 75%. Okay. Okay. So 75 business will be the new base for us in terms of even, let's say, the market improves, but it it might have some improvement, but that might be depending on the market conditions. Okay. And any, you know, any, you know, any, you know, the market improves, equity market improves. So, that loan, the, this, even growth rates might improve with the improving 20 minutes? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] So you have growth, I think from where you still see the market right now, I think If I take out the, either the growth in assets or call in assets because of the mark to market movements, I think, domestically, we should be targeting 20 to 25,000 crores on a on a yearly basis. It will not be exactly symmetrical on a few on two basis, but, I think a domestic region broke around about 25,000 crores a year on net basis is is the number I think is definitely definitely achievable, even for the current, you know, for next step. Okay. Okay. Thank you. Thank you. Thank you. The next question is from Nishan Chavadeh from Kotak Securities. Please go ahead. Hi. Just on the, you know, assignment income, how much loans that you assigned this quarter? In addition, I gave you this number. It's 5200 crores of total all, you know, securitization, scope assignment that we did. I think all of this is about, 7, 807 or 50 crore hours we have done is securitization. Balance is all assignments. So, but on this almost INR 4200 crores. All that you booked as upfront income is INR 45 crores. So how should we really think about this? It is always a reversal also of the previous deal that we have done. This is the net amount. And the graph could be like how much? It's very, actually, if it's not, I don't have the draft number, but the net amount is this 45. Sure. Okay. Sure. On the wealth side, are there any concerns on the last book? I believe you have kind of, you know, along the book to a very significant extent this quarter. Should we see further unwinding in the in the quarter? So we when you're working on Monday, which is not core to our well planned. So we're not really, unknown amount in any significant way. Where we slowly are doing share where clients did not have a significantly large relationship with us on the wealth management book, the website is where he's announcing it. Okay. Otherwise, As a book, we, as you see, we are massively, unlevered. It's it's less than a 4th element of book. He practically has, on a net basis, 0 cities. So our ability to expand the book is, very high. However, we want to only and only, use the book as a conduit to facilitate our wealth business. As well as our investments on the as a sponsor to the alternative investment funding. Otherwise, on a standalone basis, we really don't want to expand that Sure. Just if you could give some insights in terms of the asset management side of the business. I believe you have given some disclosures on, it was a breakup of assets, etcetera. So maybe, you know, in terms of some plans, you know, how do we how we revenues playing out. Yes. Absolutely. I just that's one side that we're extremely excited about, within the, asset management business, obviously, there are 3 or 4, 5 mandates that we are on. So as of now, our largest focus has been on the alternative investment fund side of the business. There, we've seen the, a UN go nearly to roundabout It's 14 and a half, 14,600 off costs, grown nearly 30, 35% over the last year, which, is a significant number purely as a part of the size that we are from a large base last year where we worked with this, 7 and a half, 8000 crores in our free Azure plan. So that that's, that's something which study excited about. Within that, we are running 3 or 4 different kinds of strategies, which include, everything, right, from private equity to liquidating or private credit to real estate funds. There, we had a fairly successful record for the last 6 to 7 years. We, you know, recently closed the other state funded month and a half 2 months back. All of it is still lying in liquid. We've got participation from 4 by large institutions across the world. We recently also won a large, mandate. To, manage money for a large university in the US from a segregated managed account basis. So all that, if you have put together on the ultimate, asset management side, is moved to around about 24,000. We also recently got our usage life for our assets in your core entities in the financial capital. There is a complete an acquisition of a small fund with an asset base of $80,000,000. So these are the broad activities we are focusing immediately alternate asset management space. The CMS and the mutual fund business continue to be relatively small for us. We've, as of now, not looking to expand the mutual fund fees apart from a couple of flagships, basically, but a larger part of our initiative is an asset now in continue to be on the alternate assets as well as the segregated managed accounts. And that's why we believe we will be able to keep our net retention around the 65, 70 basis points, after, accounting for all the direct distribution costs. In terms of revenue, if you could give some sense, you know, this quarter, what was the revenue contribution or I mean, anything, any color that you could give on this? Yes. So we can, approximately, the revenue contribution for this quarter will be down a lot, I do have a number immediately that will be the reason of 45 hours for the quarter. Sure. Just moving on finally. This is a broadly 24,000 crores into 60, 65 basis points. Yeah. So round about 100 and 1450 crores annually. To run about 40 crores on a quarterly basis, the run rate we are running at right now. Okay, sure. Finally, just moving on to the broking business, you know, you reported a quarter on quarter decline in cash market volumes of something like around 10%, 11%. So just trying to kind of, you know, understand, how should one be thinking about it? Very interestingly, you know, Fipassa, which was kind of, kind of kind of a part of IFA sometime that has reported like a 19% volume growth, in the cash statement. So I was just wondering as to you know, how should one be thinking about it? Is the market moving more towards the 5% kind of a model or, you know, and how would this company then, you know, post separation layout? So I think there's a segment of the market that's moving to a discounted brokerage and you're seeing that how big the user has emerged as the larger players in IT security as well. But I am feeling that there is still So what will happen is that market will get divided in 2 parts. So there are still investors and, you know, of course, starting from wealth to mass affluent. Who basically looked for, individual and personalized antigen advice. And they realized a few basis point of cost results, the advice and also the service that they get. So on one hand, you see, that improvement in growth is coming from, so as I said, But as a whole story pays off fully, I think this comes Brooklyn 12 7 market shares, but then there will still be a market or a significant segment of the market that will, remain with the focus of this business. Europe, they should absolutely grab in the market, you know, which was, of the, you know, these are many, we are, like, kind of customers who prefer to do things in their own and their own to be paid, the full service brokerage. Sure. And, the IFL will remain focused on full service model. Yeah, absolutely. Thanks. Thanks a lot and all the best. Thank you. The next question is from Viral Shah from Credit Suisse. Please go ahead. Hi, good afternoon. Sunil Jalumalay from Credit Suisse. I have two questions. It to Curran. I just wanted to know that the presentation on Slide 22 is, kind of from what it used to be earlier. I just wanted some reconciliation. So the top left chart breakup of wealth management assets adding up to 100 basis, 100% is the breakdown of the previous slides, 1.6 lakh crore? Is that right? Or is there something excluded from that? No. It's going to be around 1.60000. Right. And, you know, where does the right hand side breakup of MCF in this? Okay. It's your AMC, but you categorize this. So the double company which is reported Yeah. Which is a laptop to arrive at the 1 at 16. Okay. Yeah. So there will be 14. So our total address will be 174. If I look at it in do this there. Yeah. So if I look at if I look at if I if I so the total assets will be 174 but off track 14,000 crores of our asset management assets have been distributed by the wealth management. So we knocked that off. Okay. So out of out of total of 25,000 crores, $14 crores distributed in house? That's right. That's right. So that's why it's knocked off and then the net number is 160. Okay. And my second question, Yeah. So, I mean, you mentioned about, you know, how we are seeing investors spark money in fixed income funds from, equity funds. But is there a risk to that as well? I mean, with not just market risk, but even credit risk becoming an important, factor for, you know Actually, so, okay, as a firm, we have, we have very, very low exposure to credit funds as a whole. I think our larger exposure has been really to, triple a funds as well as more SMEs. Our exposure to open ended trade funds is extremely extremely low, in percentage terms. But when I said last quarter, this category is low, I meant including credit funds. There's hardly any new into a credit fund. So what is in that sense? In that sense, it was classified into, 2 broad asset classes for the last quarter. The first asset classes AAA, and within only 6 or 7 names. Okay. And everything else, what are problem of all of it. Okay. When I say 72% of the trade law debt, I'm only meaning this word, 72% of the trade law in this part. Everything else, which has got a credit element to it, including debt, fixed in the remaining 28 percent. So the remaining 28 percent is not only equity. It could include equity. It could include credit funds is going to include a double a plus instrument. It will improve the private credit rate. So all of that sits in the remaining 28%. 72% of the money is going into either triple a six name or triple a power. Right. And how do you read the market, you know, does this going forward? Is it going to remain like this or worsen from here with recent events? You know, I from what I'm seeing from our client portfolios, you know, all the new money we bought and a lot of new clients we've done over the last 2 months, Even today, as I talked, more than 85 to 90% of the portfolio are sitting in, practically liquid waiting for a better time to, deploy or, at best, sitting in AAA and, sitting aside. So in that sense, the level of activity is, dropped. I personally don't see it changing massively before the election is at least. I think that, like, that kind of broader slowdown in activity might continue at least in the elections. And, you know, after that, obviously, it's a little off, you need to see some more clarity or definite conclusive view. Across the world in terms of, some volatility going on. Because otherwise, I I really don't see, the mindset in terms of investments changing rapidly within the next 30 to 60 years. Right. And lastly, the, did I get you right that your you said that the overall retention yield of 75 basis points, which is fund based plus non fund based that should remain in this range of 75. Yeah. Okay. I mean, I hope, there is obviously it's an estimate. It's going to be minus 5 or plus 78 because we are we are widely modeled to throw up its own, vagaries and challenges over the next one year. But given my, test marketing and the fact that we've moved 7000 crores in the last 2 months, last 45 days actually, I think it's this is the data points. I think it's a fair enough estimate to assume the 75 basis points will hold. Okay. Got it. Thank you. But what I what we have to appreciate in that seventy five basis points is the dependent on any kind of retrocession or conditions from the manufacturer is 0. It's actually reduction will be our, we we are the 1st month to launch direct client in automated investment pipeline for full and financial services. So effectively, in a sense, we are, kind of, killing our, I don't know, but even redirecting our clients to even for alternate products to come to the right plan. So the ability of growth, of that retention to stay becomes very, very high and practically non dependent on the manufacturer. Okay. Okay. Understood. Thank you very much. Thank you. Before we take the next question, we'd like to inform The next question is from Ashwin Val from HSBC. Hi. This is Ashwin Vasuraman from HSBC Asset Management. So my question is regarding asset quality. So, you referred to the real estate part, but even if I look at the other segments, you've seen, as at quality, did you rate quite sharply? Like, for instance, CV, your net NPA has gone up from 2.94.4. So, I mean, any color on that in terms of, the geography or, you know, or other segments that which is, cost structures because other players in that segment have not reported. And also on the real estate asset quality itself, I just wanted to check because You refer to the liquidity situation, you know, kind of being responsible, but wouldn't, a lot of that just have flown in the 0 to 90 bucket in the last quarter. And so, I mean, is that full effect sort of you have to play out, because some of that 0.19 will also now flow into the NPM market in the current quarter? On specifically on the commercial vehicle, it was a pretty challenging quarter. And, historically, we've seen last year also, the last quarter renewals the rest of the current quarter. This quarter, and a couple of things happened. I think area, which we had in stock for not this whole because typically they depend on some other smaller NDSs to find that the case, which due to the credit, tightness, was not forthcoming. So this, is already started looking good to the volume also were down, in the last 4 years. So that's what's the We are hoping that this quarter, the numbers in CV would come down. Yes. So this week, I already spoken a couple of times on that, but the last one was an extraordinary quarter in terms of liquidity and the state of history, but, you know, we are confident that we think we'll get on track and the, as we expected, we'll be able to GNB, the material state and all biopsy are released in the next two quarters, will come down to that level. Okay. And, just one question on the So, again, I mean, there's never actually another crisis and another set of new worries that is nobody in particular. But the longest circumstances, I think that today or I think that in last few weeks and I think they did better. So, and, you know, that was the whole thing. Just one additional question on the In terms of the availability of funds from, let's say, the banking channel, how has that been, like, how much of incremental lines would have got sanctioned, let's say, during the last quarter and, till, till now. And, also, you know, like, how do you see, that path that, and what's your unutilized bank lines currently? So that's the purpose of securitization. So What we are doing is that individual funds that I'd like to use for to buy assets from NPSC, but So we have, as I mentioned in the call, we have sanctioned a round gate line of close to 3000 crores. So we have actually got, this is a combination of, you know, financial for direct management as well as for download. So we have some various PhD banks as well as bad banks, pension lines of, of our security and need. For our home loans, for our commercial vehicle, SME, etcetera. So that's a pretty large pipeline, which will fill up the next quarter. Thank you. The next question is from the line of Megha Hariamani from Biasco Investment. Please go ahead. Yes. So my question is on the Q4. How does that look like? I mean, do we see any in the next quarter. And, second on the IFL well, how do we plan to expand or probably grow this vertical. I know you've been answering a lot of questions on this, but just, you know, in a nutshell, if you can see what are we focusing on and how do we see the income on the advisory side or on the other income fee income that we get. How do we see that expanding? Thank you. Pardon, expansion on the right management side, we essentially wanna be, a function of, 2 or 3 things. The first function of expansion is essentially going to happen through deeper communication and but I don't call the therapeutic facilities because it is beyond the toxic diseases. And, we're seeing a lot of traction in, the last 6 months. In these cities, for example, you're interested as corona, right, or, and the bar. You've seen massive traction build up. And then I think the last part of the, which is typically being either informal invested in ICTs or in fixed deposits or in real So finding its way into financial assets in these regions. 2nd, across irrespective of all the, peers that may have on the markets, the quantum of new money coming to the industry continues to be very, very strong. Even now on the unlisted strategic debt, at least a couple of transaction every 15 days where people who exited businesses are ending up with a large amount of capital in the secondary form. So that money continues to be, fairly large. And, we continue to have, close to about 70 to 75% incremental market share where we ensure that we are either the lead managers, lead members of, at least a large manager of the money for all these cases. Thirdly, I think, as I said, we're very excited on the ultimate asset management side. I think that's the business which for us in all the next 18 to 24 months, go through the 4th call from here. There, obviously, our investment is required in identifying the right people to manage their own strategies. So in that sense, the move coming in, over the last 6 months has enabled us to grow that business well. And, as as we build out that, we also recently closed the private equity funders and was housing close, couple of months back where we have got a great manager, precious managing, properly. 2nd cover is defined with the first one. We are a great experience, both in countries. Return on the exit. So those are, those are strategies which I think, will continue to to extend the work. In terms of advisory, as I said earlier, I think, overall, the end of the tunnel, the average fee, on a consistent basis will be higher. Then under the broker distribution model. But it will take its own 9 plus months to kind of clear it before it searches at that range of, the digital service activity response. Okay. And the first question was on Q4. How do we see the quarter, would it be under pressure as compared to the last year or March quarter? So things are really fluid, actually, and and they keep changing every day. And, like, last 2 days, they'll be able to call the sector, but On the whole, I think last quarter was extraordinary in terms of penetrating the market. So we think this quarter should be definitely better than the last quarter. I'll be back. I'll not get on the tag and what I think used to be the people part of that, but still, this will be a saving apology. Alright. Thank you so much and wish you all the best. Thank you. Next question is from Sahil Shah from Eagle White Asset Management. Please go ahead. Yeah. Thank you for the opportunity. Firstly, on the with RN side. This quarter, we have added about 40 r n. And last one year, we have added about, 72 but our implied cost is going down year on year. Can you put some light on that? So this year, this quarter, our position is 29 because of the integration of weather version. Yeah. But the whole year instead of 70 to 80 r and a decent, if you look at the number and then, you know, our costing, we are only going down. So Okay. So that's the last employer cost is going on because of the relative bonus provision variable. This is a function of the incremental profit was breakeven coming down. And sir, our tax is also following on in the website. It's about 15 to 18 this this quarter. How do we see the going forward? So I didn't address that mostly for a full call. The fact is a function eventually of the retention and margins on both the fund base is relevant in the sales side. So it is largely a drawdown from the fact that the reduction on assets is in the region of 60, 62 basis points as compared to 75, 20 basis points in the previous quarter. So how do we see that going forward? So as I said, in the level of activity largely directed to an extreme position, as extreme as the previous quarter with 70 75% in AAA and AAA bonds only then the the interest can remain okay, but it's something which is once, you know, removed last I saw it in the second quarter of 2013. It may continue upon another quarter or so, but as long as the next growth continues to be positive, the retention bounce back sooner than later. Okay. On our asset quality front, this quarter, there has been, you know, as the rental, I bought a 100 with 60 bps quarter on quarter. And the only that's come, you know, from real estate and the, you know, CV city financing. What the, you know, for the ex where do we see the going for order? Are we expecting, you know, the slippage, you know, the slippage likely to continue or what could be the, you know, our our call on that. So overall, I think, I mean, through the call, you said, real estate has been has seen a very challenging quarter, but underlying assets are good. And, it's just that some of these things also external dependency in terms of getting sorted out, whether granular retail businesses like CV, etcetera, and sensing bigger time ahead. We do see 4th quarter in the last few years. So that's how we look at it, for Q4. So could you quantify the number of the numbers used to include the entry this quarter? No. I mean, I think so we have lots of, the the number of developments that we're trying to address. So it's very difficult. Okay. Sir, lastly, on the credit cost, this quarter, we are using the last year, Q3 of actin. Our credit cost is very How do we see this? I'm I'm 24, 5, 19. No. Sorry. I was a credit card credit cost is high. Yeah. State cost is area maybe because of transition to India. But how do we see the q 4, 5, 19, and a 5 20? No. I think, if you look at our credit losses, there is a 1%? And as a person for the full, for the quarter. For the quarter, given the profile, So what happens is that if you really look at SME and, other product categories, the credit losses are higher, but they're written by high yield as well. So it might take a lot because as we as the last couple of quarters have been difficult, but there may be that longer term if you see our historical trend, there is a range of around 1% of maybe 80 basis point to one person. You can say that, 1% plus minus 30 basis point, that's the trend line that we should come back to. Thank you very much Due to diagnostic, we'll take that as the last question. I would now like to hand the conference back to the management team for closing comments. Thank you so much. Thanks a little bit for giving the call. And if you need any more information, please feel free to help us with that. Hi. Yes, sir. Lisa. Have a good day, Baba. Thank you. Thank you very much. On behalf of IIF And Holdings Limited, that concludes the conference. Thank you for joining us ladies and gentlemen. You may now disconnect your lines.