Hi. Thank you everyone for joining us at the Direct Investors Call of IIFL Finance. They have recently come out with financial results and they have also been in the news. Therefore, we felt it would be only appropriate to engage with the international investors who have joined in, and sort of run them through recent developments and recent financial results. To run you through the specifics of the company performance, we have Mr. Nirmal Jain, who most of you would have met. He is the Founder as well as Managing Director, Founder of the IIFL Group, as well as Managing Director of IIFL Finance. We also have Mr. Vikas Jain, who is the CFO of IIFL Finance. With this, maybe I will just hand it over to Nirmal to give an overview of the—
Thank you, Chetan. Good morning, and thank you all of you for joining us. Our financial results are already there in public domain, and on the numbers, I have CFO Vikas, who may talk a little bit more about it, but I would like to begin with the broader environment and then in this environment, how we are managing our business. What are the priorities that we are getting or we are focusing on to get into the next phase of growth. The macro picture remains mixed while India's growth outlook is resilient, but financial market and customer behavior continue to respond to global uncertainties, as we know. The interest rate, liquidity, asset prices, all of them are seeing significant volatility.
In this environment, we are very conscious and aware that our business requires a disciplined growth, staying close to customers, maintaining strong underwriting and liquidity standards, and ensuring that our risk control keeps pace with the growth and as well as fully cognizant of the environment. So we have made a meaningful progress towards building a secured book with high asset quality, and I think that is all the more relevant when the environment turns more volatile. Also we, as a group, have meaningful but not unwanted diversification. Primarily, all our loan assets comprised of gold loan mortgages, which can be home loan or loan against property, and there is a very small part of unsecured microfinance portfolio. As well as there is a small business of loan against shares and our construction book, which has been running off, but there is still 1 or 2 percentage on the book.
In our business, we remain focused on quality of the portfolio and resilience of the franchise. Gold loan continues to be an important area of growth and a very strong engine for our profitability as well as growth. But in this environment, we want to make sure our gold loan growth is supported by customer demand as well as expanding branch network. In fact, in the financial system in India, we see that the unsecured lending or the personal loan as well as unsecured lending is not involved. Also microfinance, they have contracted in last two, three years, and that is also helping many customers to sort of fall back upon the gold loan, to run their businesses, primarily the small businesses and the working capital requirement thereof. So we are taking a very cautious approach because the risk inherent in the business.
We monitor gold prices on a very regular basis, our loan-to-value levels on a daily basis. We maintain prudent margin of safety, and we are keeping a very close watch on our portfolio performance, collection, and operational control. Our approach is to identify inherent risks early and respond to these emerging risks in a timely manner while continuing to serve our customers and their requirements in a responsible manner. Across the group, we are investing in technology, process discipline, and customer experience. We believe that the technology and AI can help our teams, our people to serve our customers more effectively, improve productivity, reduce costs, and strengthen controls. Our aim is to use these capabilities to support our people, improve decision-making, and while maintaining a clear focus on the customer and the quality of the assets. We are committed to further strengthen our capital adequacy and liquidity.
The equity raise currently underway is an important part of our capital plan. It is intended to strengthen the balance sheet and support the company's strategic priorities. We are progressing it with due care and in accordance with the applicable process, regulations, and the guidance of the board. We will keep all our investors informed as and when any material development arises in this case. The resilience and diversification, the secure nature of our business, the disciplined asset growth, and careful management of liquidity, capital and risk, and the quality of our governance and control are the strength that stand us out or that basically distinguishes us from our peers. We recognize that investors' trust is built through transparency and as well as the quality of our growth.
We shall continue to engage openly with all our investors, equity as well as debt, and shall keep you informed in case there is any material development, which can impact our business, our financial position. As we look ahead, our priorities are clearly to grow with discipline, protect asset quality, strengthen customer trust, and improve operating efficiency. We thank you for your trust and confidence in us, and we look forward to discuss and keep our engagement with you on a continuous basis. Now, I think maybe Vikas can give you some rundown on the financial performance of the quarter in a very brief way, and then we can take questions and answers. Thank you.
Thank you, Nirmal. Before discussing the financial performance, I would like to highlight actually two achievements during the quarters. The first one is that we have completed our India's first blockchain-based tokenized bond issuance by a non-PSU NBFC under our SEBI Regulatory Sandbox thing. The second update which we have from the quarter is the Fitch Ratings has upgraded IIFL Finance long-term issuer default rating from B+ to BB- with a stable outlook. Now we will go through the consolidated financial performance. Consolidated loan AUM has now rose to INR 124,000 crores, 8% quarter-on-quarter basis, and 38% on a year-on-year basis. Our core business stands similar, gold, home, MSME, and microfinance, which almost account for 97% of our total AUM, and which has grown around 43% on a YoY basis. The portfolio remained predominantly secured. Nirmal just mentioned we are transitioning more secured portfolio.
90% of this AUM, gold loan is around 53% and home loan is around 27%. Gold loan remained the main driver, which has 13% sequentially rising to INR 65,729 crore, whereas MSME loan grew 11% to INR 11,948 crore. Our consolidated NII has rose to 13% on a quarter-on-quarter basis to INR 1,480 crore. Total income grew by 6% to INR 2,340 crore. Loan loss provision has been declined by 5% sequentially to INR 281 crore. PAT post non-controlling interest rose by 13% on a quarter-on-quarter basis to INR 805 crore. H1 PAT, profit after tax, is around INR 1,518 crore. Our operating efficiency continued to improve with Opex to AUM, which is a key metric which we keep monitoring internally for us, is now at 3.3% on Opex to AUM basis, down from the 4% at a peak levels.
For our first half-year 2027, annualized return on asset is 3.1% and annualized ROE is 23.1%. Consolidated portfolio yield is stable on a quarter-on-quarter basis with 16.5%, and cost of borrowing is also around stable to 9.08%. Asset quality remained broadly stable. Consolidated gross NPA declined by 7 basis points on a quarter-on-quarter basis to 1.48%, and net NPA is 0.87%. Our overall provision coverage ratio to the Stage 3 book, which we generally track, is 91%. The combined 1 to 90 DPD portfolio stands at 9.1%, while 90 + is around 1.5%. Liquidity remains strengthened during the quarter. We have touched our highest liquidity for our consolidated side, INR 13,805 crore, which is like cash and undrawn credit lines. Consolidated capital adequacy is 23.5%, and net gearing is broadly stable at 4.1x versus 4x previous quarter.
Coming to a standalone IIFL Finance performance, IIFL Finance standalone AUM has rose by 11% on a quarter-on-quarter basis to INR 70,382 crore, which is 96% as a secured book. NII increased by 21% sequentially, total income grew by 8%, loan loss provision declined by 11%, and PAT increased to 17% on a quarter-on-quarter basis to INR 548 crore. Standalone yield has improved by 12 basis points to 18.6%, and spread increased by 11 basis points to 9.2%. Opex to AUM has been stable at 3.1%. Standalone gross NPA is 1.3%, up 3 basis points. Capital adequacy, Nirmal just mentioned, we are working on that, and 17%. Net gearing is 4.7x. Gold loans now account for almost 93% of the standalone AUM. On a very small glimpse on the IIFL Home Finance, AUM rose by 4% to INR 43,070 crore.
Disbursement has started growing by 10% to INR 3,498 crore. PAT is broadly stable at INR 188 crore, and gross NPA has improved by 8 basis points to 1.38%. IIFL Samasta Finance, AUM is stable at INR 10,816 crore, while disbursement has slightly declined by 11% sequentially, and gross NPA has improved by 46 basis points to 2.84%. Net NPA improved by 14 basis points to 0.86%. PAT has rose 13% sequentially, INR 69 crore, supported by lower credit. In my closing remarks, if I say, we have delivered a strong AUM operating profitability along with progressive efficiency and asset quality. With this, I invite for Q&A session to all, Nirmal and we will be happy to answer.
Can I just request the investors who want to ask questions, if they can raise their hands and accordingly, post that, we can allow them to ask the questions. Hi, Beatrice, please go ahead.
Hi. As a question, can you give more color about what is happening with the Fairfax stake? Would they be reducing their stake in the company? Is there any new strategic investor coming in? Thank you.
Sorry.
Fairfax.
Yeah, Fairfax.
Fairfax and strategic investor. What is happening on the Fairfax stake and any strategic investor coming in?
Sorry. Fairfax has 13.5% stake in the company, and as you would have read in the papers that they acquired IDBI Bank, which is large acquisition for them. This bank is valued at almost $10 billion or $9 billion-$10 billion. Fairfax will look at exiting the IIFL Finance, either partly or fully, but timeline is not known to us. The strategic investor or a private equity or long investor, the financing investors, we are working on that. As I said in opening remarks, the valuation and discussions are on. As and when anything materializes or anything happens which require disclosure, we will definitely make it. We are trying to work on it in a manner that we try and close it in this quarter. I think that's the update from our side. They are two independent transactions.
Fairfax can exit. They may happen together, but they need not happen together. Beatrice, does that address your question?
Yes. Thank you.
Thanks. Thank you.
Thanks. Jason Warren, you go ahead.
Jason? Jason Warren, mute right now.
Can you hear me now?
Yes, we can, Jason.
Yeah.
Okay. No, sorry, just I did not catch it properly. You are saying that if there were to be any new investors who try to close any potential transaction this quarter, the third quarter, the third fiscal quarter. Is that correct?
For equity raise, we are talking to potential investors. We have not yet concluded any transactions, so we are working, and our endeavor is to close the transaction in this quarter.
Okay. That is the quarter ending December, right?
Yeah, that is right.
Okay. My question would be on your capital. Can you guide us in terms of your standalone capital? I know you have this equity raise. Can you guide what is comfortable standalone capital for yourselves, and what is the regulatory minimum on the standalone IIFL Finance level?
Currently, we are at 17%. The comfortable is 20% or more. About 20%.
Okay. Over 20%.
About 20%, I am saying. More than 20%.
Okay. Is there a timeline as to when you will get to this, especially after the equity raise?
Our effort is to do it as soon as possible, and as I said that we expect that we should try and conclude it in this quarter, which is by December 31st, 2026.
The equity raise will be new equity, and it will bring your standalone to more than 20%. Is that the correct understanding, please?
That's right.
Okay. I just have another question, on your ratings. Any updates on the S&P rating? Have you recently engaged with the rating agency? If so, what are some of the things that they're looking out for, such that they will follow through with the positive outlook? I think you have had very good ratings trajectory from the other two. S&P, we are all still waiting on them as well. Any more color here would be appreciated.
S&P has started their engagement with us, their process may take a few weeks, but we're engaging with them. They started collecting data information, and run the process internally for our review.
Okay. Any timeline did they share?
I think they haven't said, but might be, again, December, I think they look towards another couple of months, maybe.
Okay. All right. Thank you.
Four to six weeks, I think, I would guess.
Okay. That's very helpful. Thank you. That's all for now.
Thank you. Thank you, Jason.
Thanks, Jason. Justina, why don't you go ahead with your question?
Thank you. Thanks, management. I have a follow-up question on the capital raise. The first question is the current planned capital raise to replace Fairfax stake eventually? That's the first question. The second question is, if we look at a Fairfax stake, that's at 20%, is the management open for a new equity investor that is coming in to take up a stake that is higher than that kind of level? Or what's the thinking behind potentially what kind of stake the new investor that is coming in will be taking up?
What was the first question, sorry?
Sir, total stake from the new investor, including Fairfax potentially.
No. I think open to the combination of equity raise. So a new investor can take part stake from Fairfax and a primary money in the company, or a new investor can be taking stake in the company, with all the existing shareholders. But our primary objective is to get the capital in the company, and that may happen along with Fairfax stake or independently. But both options are open.
Okay. How about the second question in terms of whether the management is open to have the new investor taking up a stake that is higher than 20%?
He wants to participate in the additional stake.
Venkat will take, yeah. The promoters, me and Venkat, we are also looking at taking some stake to make sure that our dilution is minimized.
Okay. That—
We can subscribe to the warrant pro rata or as much as our own financial position will allow us. Our intent is to take certain stake along with it through warrants and reduce our dilution to the minimum possible.
Okay. I think the objective will still be to keep the new investor stake at roughly 20%. Is that the correct understanding?
Yeah, 20%. Anywhere from 10% - 20%.
Okay. Thank you.
Okay. Let me hand it over to Michael then. Michael, please go ahead with your question.
Hi, can you hear me?
Yes, we can, Michael.
Okay, great. Thanks management for your time. I think just operationally, I have been looking at some of your decks online. Just want to get some color on your business mix. Roughly in the past two years, we have seen your home loan portion drop from roughly 38% and drop roughly more to 10 percentage points to 27%. Just want to know, is this just because of the yield on your gold loan side is a lot more attractive and you are bringing it down? Is there a certain floor where you would see your home loan drop to?
Gold loan, the entire industry, or entire financial system in India, banks and NBFCs both have seen that the gold loan has increased very significantly, primarily because gold prices have been much higher compared to what they were, say, two years or three years ago, which improves the borrowing capacity of the people who have gold as a collateral. Also, these loans are secure, so there is a policy tacit support to those loans. Thirdly, unsecured borrowing has become frequent in India. Our long-term endeavor is to keep mortgages and gold loan similar, maybe 50/50, or close to proportions to be balanced. But in the short to medium term, depending on gold prices, this balance can get a little bit skewed. But as I said, that we want to have a very balanced book of mortgages and gold, in medium to long term.
Right. Okay. With the fluctuation in gold prices, are you seeing anything, maybe collateral damage?
Gold prices have corrected in the very recent past, but I think we have adequate cover.
Okay.
We monitor and we try to be a little more conservative while lending to keep some cushion, in the LTV that is maximum versus what we give.
All right. Thanks.
Okay, Alex, over to you. Why don't you go ahead with your question?
Hi. Hello. Am I audible?
Yes. Go ahead.
Yes.
Hi. Nice to speak to you again. Just maybe want to get some color from you on the gold loan asset quality. One is that, obviously your early delinquency, it is increasing a little bit. I understand that it is still within the historic norm and also because your book has seasoned a bit. That is kind of within expectation, but I just want curious if you have any color in terms of forward-looking guidance over the next few quarters. The second thing is that more specifically, I think you are also probably aware, recently one NBFC, the management, said that for the whole industry, like maybe 15%-20% or so, the disbursement in the past year of gold loans have been lent to customers where they also have another debt that is over 90 days overdue. I am just wondering if you have any comments on that.
For IIFL, do you have visibility into your customers' other debt obligation, the delinquency situation and any similar statistics you can share with us on this front?
Yeah. Thank you, Alex, for asking this. As far as gold loan is concerned, the asset quality, the asset quality, as you know the norms are that for 90 days if interest, principal or any installment you have not paid, then it becomes non-performing assets. When it is dues from zero to 30 or 30 to 60. We classify them as SMA 1, SMA 2, SMA 3. Most of the gold loan customers are small businesses and they take it for working capital. Most of the lender payments are paid in 90 days. What we are seeing is that there is a slight deterioration, which is the delay in the installment payment is expected. When the gold prices go down and customers have to do a mark to market, they are not able to do it, or they are not able to borrow more on their loan.
Our experience of last 18 years is that the loss given default is almost negligible because the collateral has a value which is significantly higher than the loan, and customer also understands that. So they may take. Sometimes they don't go out of their way to make sure that the amount is repaid. Or they may take the leeway to delay the payment a little bit, but ultimately they pay. And very few customers, maybe 1% or less, who default, they basically, the auction of their gold recovers their loan amount more or less fully. The observations of the NBFC or other NBFC leaders, they are not completely mistaken, but of course, they are based on the small portfolio that they have.
The fact of the matter is that customer is. Supposing if a customer has a choice of taking personal loan at a good rate of interest, he may take personal unsecured loan, and he may not come to gold loans. So the gold loan customers are small customers, they are vulnerable customers, they are the bottom of the pyramid. But they are small businesses, so they are not. At least in our case, most of the loans are for business and not for consumption. And at the same time, customer is very emotional and values the personal jewelry. And therefore, they make sure that the default doesn't happen ultimately. But these customers may have the contingent NPAs, it might go little higher. Most of the gold loan companies you'll see that the NPA reported may be around 2%-3%, but the ultimate losses are minimal.
So that's the character of this business.
Yeah, so—
If I may add to the question where they had observed that 15%-20% of the customers were already NPA before getting onboarded. I just wanted to add a note on our own credit underwriting policy for gold loan. We do not onboard any customers that currently have a live NPA with any other lenders. We do a bureau check for all our borrowers, and if they have any 90 + loan anywhere in the industry, we do not lend to such customers.
Okay. I understand. For all your customers that you do have access to such information, right?
That's right. Yes.
Okay. That's very reassuring. Just wondering, because I'm not entirely sure about where that statistics come from. If that is a sort of industry phenomena, is it a case that that kind of a underwriting standard or problem is mainly concentrated in unorganized gold lender rather than a licensed NBFCs like IIFL or other similar names? Is that a correct understanding?
Many times after taking gold loan also they can get into delinquency elsewhere. The percentages are not alarming, but with the economic and with the business activity, the small variations can happen. There could be unorganized lenders or small lenders also, and every NBFC can have different policies of credit underwriting.
Okay. I see. Thank you. Much appreciated.
Ryan, why don't you go ahead with your question, please?
Yep. Am I audible?
Yes, Ryan.
Yes.
Okay. Yeah. Thank you, management, for hosting this call. I think I have a couple of questions. The first one is regarding a new investor coming aboard to replace Fairfax. Any preference for the type of investor, sponsor, sovereign wealth funds, and how would they affect your financial policy if they come in?
How would it affect the Basically what type of investor is likely will be your preference to bring in, and would it affect the financial policy going forward?
No. We will bring in long-term investors who have high-quality backing investors who bring the Maybe they can help us with the best practices, governance and whatever global representation that they have. It is not going to affect our financial policies because investors who come in will look at our financial position policy and then take a call whether they want to invest or not.
Will the new investor be provided any board seats or anything? If so, how many?
Any board seat, if yes, how many?
Yeah, board seat is possible. It depends on the type of investor. If there are the investors who are like a long fund, normally they do not ask for board seat. If you have private equity investors, private equity or sovereign fund, then they ask for board seat. We are open for investor board seat. We always had on our board nominees of investors in last 20 years. We have benefited from them because they help us in governance and best practices. We have a nominee of Fairfax on our board. Earlier, when Carlyle was invested, we had their nominee. Right now, even LIC, Life Insurance Corporation, their investor, their nominee was on the board, who just retired.
I see.
And so on.
I see.
ADIA, who is our housing finance equity investor, Abu Dhabi Investment Authority, their nominee is also on the board. So proprietary investor nominee will be on the board, and they will come.
I see. I just want to check if my understanding is correct. Earlier you mentioned that the target is a 10%-20% equity sale to the new investor. Would then be, because Fairfax have about 13.5% stake. Are you saying that the new investor will be anchoring your equity raise that you want to close this quarter?
Yes.
Did you understand the new investor will also be anchoring the equity that is targeted to be raised this quarter. Is it clear?
Yeah, it will be the new equity.
Sorry, can you repeat the question, please?
Yeah. Earlier you mentioned there is this 10%-20% sale of your company's shares, which Fairfax currently have about 13.5%. Will the new investor be anchoring your equity raise that you want to close by this quarter, the next upcoming quarter?
Yeah. A new investor will anchor the round. That is how it will be completed in this. This is a little fluid because we haven't yet. There are multiple combinations. There can be not one investor, there can be multiple investors. The mode in which we can do this transaction is a preferential allotment to one or two investors or a QIP, which is qualified institutional placement, where there can be multiple investors. We haven't decided on that. It can be one of the two, most likely.
Understand. Is there a preference from the management to have multiple marquee investors coming in, or just have one investor that have a big stake?
It depends on the type of investor, who the investor is. If it is a really high-quality marquee investor, really globally reputed, then one investor is good. If there are some good long investors, but a group of them, it depends on which investor we have to sort of close the transactions with.
Understand. When it comes to your business wise, given that what's happening in the rate markets onshore, are you seeing any funding pressure?
Funding pressure.
Not really. As Vikas mentioned, there are liquidity on all-time high end quarter end.
I saw a couple of onshore NCDs that require refinancing in the next 6-12 months. Do you think that your new funding rates will be higher?
The funding cost is not going down. It might inch up a little bit because of the geopolitical and liquidity situation. We don't see any risk in terms of liquidity, but the cost might be moving up. There's upward pressure on the interest in line with the global interest trends. Cost may go up a bit.
Would that compress on NIM?
No, it won't be. It can be passed on. It won't make any much impact on our margins appropriately.
I see. Understood. My final one is regarding your gold loans.
It's only for the incremental loan because we have a large portfolio of loan. Incrementally, the borrowing changes only by a small percentage every quarter.
I see. Thank you for that. My last question is on your gold loans. In terms of underwriting standards, are you still underwriting based purely on the asset? Are you considering any underwriting based on the cash flow of your borrower?
Yeah, we do. We have introduced new income-generating loans where we do the cash flow analysis of the customer, and then customer can borrow more against the same collateral.
How much of your gold loan portfolio right now is this new type of income-generating type of client?
That product has been launched in this quarter. I think we'll see the numbers, but it may not be very large right now, but it's growing. Historically also, there would have been income-generating loans for SMEs, but we would not have done their assessment in that manner. The assessment process started in just last three, four months.
Okay. Thank you so much.
Thank you.
Thank you.
Jason, I believe you have another question.
Yes. Thank you for having my second round of question. Just a bit of clarification. I think on the Fairfax stake, can you maybe explain if there is regulatory compulsion to sell a higher stake? Because I know RBI has very strict rules on having more than one ownership or having ownership of more than one financial license. Maybe that one first. Do they need to sell?
I do not know how exactly the regulatory guidelines work, but maybe whatever we read is that you cannot have more than 10% stake in two regulated or RBI-regulated entities. But many times, RBI may nudge them to make sure that they just focus on one regulated entity. Earlier, if you see the RBI narrative or the discourse has been that supposing you have two regulated entities, which is controlled by one investor or one shareholder, then they should not do overlapping activity. In the sense that if you have, say, one NBFC and one bank, more than state many times control matters. Control is like your board seat, your influence on the promoters or the management. If you can do, say, gold loan from one entity, then you should not do gold loan from the other regulated entity.
I think that is broadly the way in which regulations work, but I am not an expert on this. Fairfax will decide on their own as an investor. We really cannot comment on what their timeline and what their plans are. But whatever indications we have from the market, from them is that, if at appropriate time they may look to exit. Because they also increased their stake in IIFL Capital. We have another group entity which is by the same promoters. There, they are going up to 51% from their current 30%. In that context, we believe that they may like to consolidate their equity holdings.
Okay, understand. Second one, maybe just help me understand as well. I was trying to look at your IIFL Finance structure. Do you have any links under this IIFL Finance to IIFL Capital? I know the promoters are similar, but any links between the two entities or they are separate?
Yeah. But in this case, the companies don't have any links.
Sorry. Can you say that again?
No, the two companies don't have any cross shareholding amongst themselves.
Okay. Yep, that's clear. Maybe then on your gold loans, can you share in terms of your origination LTV, what's the LTV and how do you determine the gold price? On a blended basis in your gold loan portfolio, what is that LTV as well?
There are different types of loans. LTV can be 75%, but can go up to 85% also for income-generating loan. The gold price are decided based on last 30 days average or spot price, whichever is lower, on a daily basis. There are certain official exchange websites. We take gold prices from there. Then based on the assessment of the gold quality, the percentage is applied. If the gold containing jewel is 90%, then you take 90% as the effective weight, or you basically scale it down to 90%, apply 75% or 85%, depending on the type of the loan and assessment of the borrower, and then sanction the loan amount.
Okay. Is it correct to say that on average, the origination LTV is 75%-80%, depending on the type of loan? At origination.
Yeah.
Okay. Can you share in terms of your portfolio right now in terms of blended LTV?
Blended LTV is 70%, yeah.
Yeah, the average LTV is 70%.
Okay. Still on this topic, can I ask, just based on your operational experience, whenever there is a decline in gold prices, maybe sustained, there will also be increase in delinquencies on the gold loans. Is that a normal occurrence?
Our gold loan delinquency NPA increased from 60 basis points to 90 basis points in the last quarter versus the quarter before.
Which is very marginal. This may vary a little bit more, but I don't think we are much concerned about this, because as I said, the loss given default is still minimal and within our target ranges.
Okay. Understand. Can you share in terms of your credit costs, do you expect credit costs to go higher or lower this fiscal year? Any guidance?
I would say our credit costs will remain within the guidance that we have given, 1.5%-1.7%. The delinquencies, even if they go up a little bit on the NPA side, our credit costs will not go up because as I explained, the loss on the given default is very minimal in this.
Okay. Last one from me. Just in terms of funding plans, if you have any, can you guide in terms of offshore issuance, the rest of the next year? Any thoughts on funding offshore?
Offshore funding, we are not doing it right now because the cost is elevated compared to the local funding, including the hedging. But whenever yields come down, that is the time we can look at the market. When the yields will come down is your guess would be as good as mine. At least in near future, we do not have any plans to tap offshore market.
Okay.
Thank you.
Thank you.
Thank you so much.
Justina, I believe you have another question, so please go ahead.
Yeah. Just a follow-up question on your gold lending business. I think more recently, some of your peers have started lending out. I am getting a feedback.
Sorry, gold lending somehow.
Some of your peers have started—
We could not hear you clearly.
—some of your peers have started lending out gold loans and do underwriting on that basis. I'm just thinking whether IIFL is doing something that is similar or will your gold lending still be collateral based?
Gold lending.
Gold lending.
Are we doing any assessment-based lending?
No, no. We are, in our income-generating loan, we do assessment-based lending also. We started this income-generating loans, where borrower can go up to 85%, but that is based on the cash flow assessment of the customer. That will become a significant part of the gold loan portfolio, where small businesses where we do the cash flow assessment of the customer.
Okay. Do you do this for all your gold disbursement or on a selective basis?
No, this is the customer. He gets a lower LTV.
Okay.
This after the launch. Okay. Done. Thank you so much. Thank you. Are we closing the box?
Hi. Sorry, can I check, is there any more questions?
If any of you have any more questions, you can always reach out to our Investor Relations directly or to bankers, whatever is convenient. Thank you, and we'll be in touch.
Thank you so much.