Ladies and gentlemen, good day, and welcome to the Muthoot Finance Q4 and FY 2023 earnings conference call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanket Chheda from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Yeah. Hi, and very good evening to all of you. We are here with us to discuss the Muthoot Q4 results. We have the entire management team with us, starting with George Alexander Muthoot who is the Managing Director. Then Alexander George Muthoot , George M. George, and George Jacob Muthoot, who are Whole-Time Directors. Then Eapen Alexander Muthoot and K.R. Bijimon, who is Executive Director, and Oommen Mammen, who is the CFO of the company. Without further ado, I will hand the call over to Mr. George Alexander Muthoot for their opening remarks, which will be followed by questions and answers. Over to you, sir.
Thank you. Good evening. This is George Alexander Muthoot, Managing Director. As advised, the Executive Directors of Muthoot Finance are also present here, along with the CFO and also the CEO, Mr. K.R. Bijimon. This quarter business has been good. We have the highest ever quarterly gold loan disbursement of INR 51,850 crores. That's the highest ever gold loan disbursement. We have an all-time high gold loan growth in any Q4 of INR 5,051 crores. That is the highest we have in any quarter four. We have an all-time high interest collection of any quarter of INR 2,677 crores. That's also a very good performance. There's an increase in the consolidated profit after tax, 8% QoQ at INR 1,009 crores.
Along with the subsidiaries, our total branches as on 31st March 2023 is 5,838, with an addition of 259 new branches opened during this year. Muthoot Finance is also certified as a Great Place to Work for the second year in a row by Great Place to Work Institute. Muthoot Finance has also been certified as India's most trusted financial service brand for the eighth year, seventh year in a row by TRA's Brand Trust Report 2022, 2023. In addition to Mr. Amitabh Bachchan, Muthoot Finance has also engaged Mrs. Madhuri Dixit as our brand ambassador in February 2023. The consolidated AUM stands at INR 71,497 crores, which is up by 10% quarter-on-quarter.
The standalone AUM of gold loan stands at INR 63,210 crores, which is also up 9% quarter-on-quarter. The standalone profit after tax stood at INR 903 crores from the quarter, for this quarter. We have also launched a few new products. One is the small business loans which we have started. It is the backbone of the Indian economy, accounting for 90% of all business in the country. We have launched small business loans to address the prevailing gap of credit access to MSME segment with an unsecured loan ticket size of up to INR 10 lakhs. We have just started it. We have commenced operations in metros, and we plan to expand it to tier 2 and tier 3 locations in phase 2.
We are doing it on an initial basis. We will see the progress, how it is turning out. Then go forward. We have also started a micro personal loan, a small personal loan, as part of our initiatives to leverage the existing customer base and to position ourselves as a one-stop financial service provider. We are now offering a pre-approved personal loan, we call it micro personal loan, to eligible customers. It is an EMI loan for 9 months to 12 months. The maximum loan, INR 1 lakh, and the entire loan journey is digital. The launch of this product has expanded our product range, increased our customers' engagement program, progress, and now cater to their diverse financial needs.
This is one thing which was missing in Muthoot Finance, that we have started the personal loan, micro personal loan, which is an EMI loan. The subsidiaries have also now on the growth has been revived in the subsidiaries. The Homefin disbursement
We also plan to expand the home finance network by opening 26 new branches across states in this year. The vehicle loan disbursement by Muthoot Money has also started well. Last month, we dispersed INR 20 crores. Belstar Microfinance has crossed INR 6,192 crores as loan AUM as of March, and the network crossed INR 1,000 crores, which is a historic landmark, and the revenue has also crossed INR 1,000 crores, a year-on-year growth of 42%. Collection efficiency continues to remain at 99% for regular accounts. The profit after tax of the company reported INR 130 crores, which is again a year-on-year growth of INR 189 crores.
Muthoot Finance has fulfilled its corporate social responsibility commitment with a spend of 101% during the financial year. We have spent a total of INR 96.69 crores in excess of our statutory budget. The company has allocated more than INR 100 crores for the next financial year, with an emphasis on areas of environment, health, and education to alleviate the poverty and uplift the financially deprived sections of the society. We have declared an interim dividend for the financial year 23 of 220%. That is INR 22 per equity share of INR 10, involving a payout of INR 883 crores. We have raised INR 250 crores through the 30th public issue of secured, redeemable NCD.
We have also launched a new marketing campaign, Kholiye Khushiyon Ki Tijori. This is the gist of the financial results of this year. I think now I will stop here and open the floor to questions and comments from the investors. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Yes. Thank you, and good evening, everyone. Sir, I have two questions, and first of all, congratulations to you and the team on definitely a very, very strong quarter in terms of your gold loan growth. Sir, I mean, my questions predominantly revolve around that. Just want to understand from last quarter to this quarter, what has really changed that has helped us deliver such strong growth in gold loans? Is it predominantly, I mean, higher prices, higher gold prices, or is it also to do with some lowering of aggression that you are seeing from maybe banks? That is the first question. Basically, what is it that has helped you kind of deliver such strong gold loan growth during the quarter?
Secondly, sir, if you could just explain why is there such a sharp jump in your employee expenses during the quarter versus the last quarter or for matter, the last quarter of the prior year?
That's it. Okay. Thank you. gold loan growth for this quarter has been robust. A few things helped. We have actually started a great campaign for involving all our branches and staff to do more and more gold loan business, and I think that is paying dividends. Our brand ambassadors and our gold loan initiatives also are seeing results, and that is what I also said last time. Secondly, the economic activity has also briefly has started picking up, and the demand for loans and gold loans have increased in this quarter. As you definitely said, the higher gold price has also helped, but not to the extent of the growth, but definitely it has helped.
Again, as I was saying last time also, I feel that gradually, the competition or the excitement of the banks, et cetera, in gold loans is slowly waning because as time progresses, the excitement of the banks et cetera to gold loan also will be and that is also a fact. That is one part of it. The gold price is another. Most important, we have been, the economic activities have picked up and we see gold demand and our branches have also started bringing in more and more business. The second part about the number, there's been a sharp increase in the number of employees. We have increased more than 1,000 employees during this quarter. That must be one of the reasons for that.
Overall, this, there is always a hike in the salary also. Increment salary also comes in every quarter, every year, probably this has come this year. We have not looked so much into this. There is no big aberration we have seen in that.
Got it. Just one last follow-up question here. Just wanted to understand that, given that you talked about these two things, higher gold price is helping economic activity picking up, which is leading to better gold loan demand and at the margin excitement of banks in gold loans really. Is it kind of giving you higher confidence of a better, or let me put it this way. Would you now start guiding for a higher gold loan growth versus what you've been guiding in the last few quarters? Sir, one more question on the sector.
We just wanted to understand, is it a common practice in gold lending that once the contracted tenure gets over, a customer can repay the interest and then that gold loan can be rolled over based on the current market prices of gold or gold prices? Is that a common practice in the gold lending industry? The other thing, a related question here is, have you had some conversations with the RBI around this practice?
Okay. Your question was whether we are seeing better growth in the coming months. Yes, that's what we feel. We had all the way over for several years we've been guiding a growth of 15%. Only last year, we were unable to do that 15%. We were able to do only about 7%. I'm sure this year we should be doing in excess of 15% this year growth. That's what we'll come back to the earlier 15%-plus growth this year. That is the first part of it. The second part you said, people coming after the term, the period.
On the gold loan side, 90% of the loans get closed before 12 months. It's only less than 10% which goes beyond the 12 months. Of that, a few of them may come for that. This, because this is so fungible and easy because there is no entry load, exit load, it is easier for the customer to go elsewhere and take the same loan et cetera. It is better practice for us to collect the interest and then renew the loan up that at that time point of time. There are far and few, very few people who do that. Most of them, before 12 months it is almost closed. Very few customers who go beyond because our period is not some companies have 3 months, 6 months, et cetera.
Our loan tenure is 12 months. Up to 12 months, 95% of the customers close their loan at that time.
Got it, sir. This is useful. Yeah. Maybe I'll come back with the question if time permits. Thank you so much and wish you and your team the very best for the next year.
Thank you. The next question is from the line of Rahul Shah from Shah Associates. Please go ahead.
Good evening, everyone, and good evening, Mr. George Alexander Muthoot. I'm a big fan of yours. My first question is, you said in the previous conf calls that and also in the TV interviews that Muthoot Finance is a very operational intensive business. Can you tell me what exactly do you mean by that? How exactly the fintech players and the banks, whether they are small banks or big banks, not able to replicate that model of yours, or to compete with that model of yours? How operationally intensive is it? And, yeah.
Thank you. Thank you. Yes, I didn't say about Muthoot Finance, I said about gold loan business. Gold loan business of Muthoot Finance is a operationally intensive business because first the gold has to physically come to the branch. It has to be physically weighed, checked, and also assessed. That is, there is no second, what should you say, alternative for that. Second, this has to be checked or the, of course, KYCs, et cetera, have to be collected. Then, rather or more than all the other usual photos and the KYCs, et cetera, we have to physically pack it, check it, and keep it in the strong room. We have to also, what should we say, look at the safety of the strong room and the gold ornaments.
We have to again, when the customer comes back to release it, we have to release it in good time. A loan is given maybe in 15 minutes, 10 minutes, 15 minutes, 20 minutes time. When it is released, when we give it back, we give it in three, four minutes time. There is also a lionware security system, safety security system, which we have in our branches to store and take care of the gold. We have, we have had earlier very many, attempts at break-in, robbery, dacoity, et cetera. All this attracts all these elements who try to steal these things or that is one part of it. We have to take care of that. Not only we, anybody who does that has to take care of that.
The second is again, the staff. The staff also has to be very careful with staff also because this is gold and cash, which is very attractive for maybe even for the staff also to do some sort of malpractice. That also has to be there. So we have a team of more than 1,000 physical inspectors or auditors who visit branches frequently, maybe once in a week, once in two weeks, depending on the size of the branch, once in a month, to check, randomly check, test check the gold packets there with numbers, with quality. So this is operationally very challenging because we have to return the gold to the customer. Actually, the customer has to have big trust in a gold loan company to hand over his INR 100 gold and take INR 60 or INR 70 loan from us.
He's actually depositing INR 100 and taking only INR 60. The trust is also very important. All this requires quite a lot of operations challenges, and that over the years we have been able to train our staff also for even the checking of the gold, the assessing of the gold. We don't employ outsiders. That's what I meant when I meant by all this operationally challenging. When somebody thinks of this, looks easy, but operationally this is intensive. That's what I meant.
Okay, sir. Next question is your AUM dependent on gold prices, totally or there are some other factors as well? How do you plan to utilize those factors to grow that? Secondly, where do you see your company in the next 5-10 years, both in terms of number of branches and also profitability, specifically for the gold loan segment?
I think I answered part of that in the first question. That is, there are quite a few things. Gold price is also a part of it because somebody can get more money on the existing gold. That is gold price is also one part of it, but that may be only a small part of it. The most important part is somebody should definitely need the money and we should be available in that place to do the loan. Somebody should need a loan amount and he should have the gold with him and he should have the mental framework to pledge his gold and take money, not something else. If all these things come together, then the business is there.
Your question about growth, that also I gave you a guidance that we have been growing 15% in the gold loan business over the years, except for last year, which is a difficult year for us for many, many reasons, which I've explained earlier. Now I think we are again back on the 15%- plus growth path, and I'm sure we should be able to do that not only one year, in more years to come also. 15% is something which we would always be targeting. Shortly we should be opening about 150-200 branches every year. That is something which we look at the need and necessity for branches in each area and then go about with that.
The profitability, yes, when the business also grows, we should see profit also going up proportionately at least.
Thank you. Mr. Shah, may we request that you return to the question queue for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The next question is from the line of Nidhesh Jain from Investec. Please go ahead.
Thanks for the opportunity. Firstly on the yields, what are the incremental yields that you have got in this quarter on the gold loan business? Is there an impact of penal interest circular, draft circular, that we foresee on our business? Second part of the question is on digital lending that you are starting. Can you talk about how are we filtering the customers who are eligible for this, these personal loans? How do we plan to scale the collection infrastructure for that? These are the two questions.
The yield for the quarter is 18.48%. No, in Q3 it was 18.22. I think, you know, we have been more or less able to stabilize the teaser loans, which were there in the past. I think going forward it should, you know, remain around these levels. As far as, you know, the penal charges circular, I think, you know, still it is in draft form. You know, let's, you know, hear on the, you know, the final circular. Whatever is the, you know, at the end of the day if we need to raise a particular amount of revenue, we have to raise it whether as charges or, you know, as interest. We'll take a call at that point of time.
Thank you. Mr. Nidhesh, does that answer your question?
Yes. There is also a follow-up question on digital lending. If you can share, how are we filtering the customers who are eligible for these loans, and also share the collection strategy, in case of bounce and overdue.
We actually, we don't do any digital lending. We lend only to the customers who come to our branch. Who are our existing customers, we give them a personal loan based on their scores, et cetera. We give an EMI loan. Collection strategy is the usual collection things only. Nothing different about it.
For faster processing, digital capabilities are used.
that's for-
Beyond the customer
Capability is for locating customers and probably giving them their exposures, that's all.
Okay, sure. Sure. Thank you, sir. Thank you.
Thank you. The next question is from the line of Nikhil Niyati from Equirus Securities. Please go ahead.
Good evening, sir. Am I audible?
Yeah. Please. Yes.
Congratulations on a good set of numbers. Sir, I have just one question regarding the new players that are coming into the market. They have high opex, but the low base absorb the opex. I just wanted to know your view, how do they gain businesses? Through channel checks, we have understood that they are reducing the interest rates to gain business. Have you come across any instances wherein have you lost the business about through these people, to these people? Thank you.
I don't know about the new NBFCs coming with the lower interest, et cetera. Probably banks come up and offer lower interest, et cetera. I don't know about the newer NBFCs coming and offering the competitive rate of interest. As you said, opex definitely is there. I don't know how they are accounting for these opex, whether they are accounting it on a pro rata basis or so, I'm not sure. Definitely there is opex, and I'm not aware of any new NBFCs which have come and probably given very low rates of loans, core loans. I'm not aware of such companies, sir.
Okay. The next question is, just a data keeping question. Can you give the AUM breakup, with regards to the ticket size between 0-INR 1 lakh, INR 1 lakh-INR 2 lakh and above INR 2 lakh?
Yeah. Just give us a minute. I think the average ticket size is about INR 7-plus.
Yeah.
The average ticket size is INR 70,000 .
Nikhil, no, this information right now, I don't have this information. We can provide you later.
Okay. Okay. That answers my questions. I'll join the follow-up, if I have any further questions. Thank you.
Thank you. The next question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead.
Yeah. Thanks for taking my question. You know, can you mention, you know, the quantum of auction done this quarter?
Auction. Nischint, auction is very low. I think it's around INR 27 crores.
Last quarter, third quarter.
Just give me a second. INR 2 crores-3 crores.
Sure. There has been a fair amount of pileup of NPAs. Do you expect, you know, large blocks of auction in the first or second quarter? It would be due right at some point of time now.
Yeah, yeah. See, these NPAs are because they have crossed the 12 months- plus- three months period. Many of these customers who are there in this have paid part interest, et cetera. They have also requested for some more time for us. We are in the money for all these loans, and we don't expect any interest drop in these accounts. We have around 7.5 tons of gold as far as these NPA sets are concerned.
There may not be any large block of auctions there.
No. No. No.
Sure. The other thing was, you know, on the cost front, would you say that, on the cost basis, you know, how much of it could be sort of, you know, one-off, and how much of it could be sustainable going forward?
I think this quarter is slightly, you know, higher because of, you know, because when you have a higher growth, we pay, you know, higher amount of incentives to the employees. That is one thing. You know, on the director's remuneration also, there is annual performance incentive which is booked. Otherwise, I think, you know, it should more or less remain, you know, somewhere around 3.5%, you know, at least for some more time.
Sure. Anything that you emphasize? Just last question is, anything that you emphasize in terms of increasing cost of funds?
You know, I think, the borrowing cost is, you know, going up. I think most of the banks and CLAs are around 8.5%. I think, you know, the cost of fund, borrowing should move in that direction unless, we start seeing reversal. I think in the last few, days or a more, week, we are seeing, some sort of a softening of the, you know, the rates. You know, till, that happens in a major way, I think, you know, it should move more, towards 8.5%, you know, in next few quarters.
Even if the interest cost goes up by 20, 30 basis points, we should be able to pass it on to our loan customers, because then if that is so, if the cost of funds is increasing for us, it will increase for everybody in the market. The borrowers also will understand. I don't think we have never found it. We've not had any difficulty in passing on such incremental co- borrowing cost to our customers.
Sure. Got it. I think you mentioned that the trajectory of business in the last one and a half months has also been strong.
Okay.
Yeah. Sorry. Thanks.
Thank you.
Participants to ask a question, you may press star and 1. The next question is from the line of Rajiv Mehta from Yes Securities. Please go ahead.
Yeah, sir. Thank you for giving me the opportunity. Sir, while you talk about competitive intensity from banks and the margin slightly waning, I mean, so far we have not seen any reflection of it in your customer matrix. When you look at the number of new customers acquired or even reactivation of old customers or even additional loan on additional collateral to existing customers, that metric has been moving pretty slowly. It's been very stable. How do we see these metrics, you know, kind of improving in the future? What can drive, you know, more customer acquisition, more customer, you know, activation? What efforts we will put for that?
We have been putting quite a few marketing initiatives. We are doing lot of outside market activities also. That is definitely bringing in customers. You should definitely understand this is a very short-term product. The average tenure of three to four to five months is very short. Customers come in, customers go, new customers come, existing customers come back again. It is not that we get lot of new customers to this. The new customers, additions are there. Definitely, we have added customers. New customers have been added this year. New loans have been added. That also happens. I think as an ongoing process, we'll be doing more and more initiatives to get more business, more customers, new customers also.
Existing customers can also bring in more of their loans because what we have seen is every customer has more than one loan, probably with us or with somebody else. Getting more of his own business or more of his existing gold loan business from other institutions also is very good. The existing customer can be giving us more and more business also.
Sir, do we internally track that, what percentage of customers which went to competition in the last couple of years, because of their heightened activity, are coming back to us?
See, these are small loans. We don't have, we don't know how to keep a track of somebody who has gone to another bank and who has come back because he may not tell us that he has gone to another bank because it is not a takeover exercise. He had a loan with us, he closed it and took the next loan from probably another bank. The third loan, instead of going to that bank after closing, he must have come to us. Very difficult to keep that track because it's not related to some property, et cetera. If there's a property-secured loan, this property was pledged to that bank and now it has come to us. This is fungible gold loan. I don't think it is...
It's only the impression we get from our field team in the branch that people, whether they have gone elsewhere, et cetera. It's the impression we get from us. No, every customer, even if he goes elsewhere, he comes, closes our loan and then goes to the next bank. We do not know where the customer is going.
Sir just lastly, any change in the product level interest rate in recent months, including April and May?
No, I think, we constantly do tweaking of the products region-wise, geography-wise, et cetera, to cater to different sectors and different demands. That is an ongoing process. Not any violent changes, though. Not any, as you would have seen, we are not thinking of any ultra low G-Sec rates, et cetera. Of course, we always offer a different rate. Maybe a 12% loan is always there, 14% is there, 18% is there, 19% loan is there. All these loans are there. What we need is from a consolidated or a blended yield is what we are looking at. What Mr. Oommen said earlier, we have about 18% yield. That is what is a blended yield.
Got it, sir. Thank you so much. Best of luck.
Thank you. Participants to ask a question, you may press star and 1 . The next question is from the line of Shweta Daptardar from Elara Capital. Please go ahead.
Thank you, sir, for the opportunity. I have couple of questions. The first one being, while the teaser loan portfolio is behind, and they have been migrated to higher interest rates, have they been migrated, say, from 7%-8% or to directly 18%-19%-plus?
That's your question. Okay. See, there's no migrations, et cetera, because when the teaser rates loan gets closed, when he comes for the new loan, they have to take that new loan at the new rates. New rates can be 12%, 18%, 15%, et cetera. It's not that somebody has been migrated from 6% to 18%. No, no. We would have stopped that scheme and customer has to redeem that loan. Probably when he comes for the next loan, he'll have to jump in at the new existing rates only.
Noted. Secondly, as far as growth is concerned, firstly commendable growth on the gold loan traction on the gold loan side. Just, you know, because you mentioned that it cannot be completely attributed to gold price rise. Of course, you gave other reasons. Historically, if I go back and see that Q4 is always a seasonally strong quarter, is there a seasonality? If so, what is that, what is that thing, you know, which is driving the seasonality every fourth quarter of the year? Then if the answer is yes, then how do you see quarter on quarter gold loan momentum for next two quarters?
Okay. What we said is on the fourth quarter, yes, we agree that it's a good quarter. This year's fourth quarter has been a historical high. That's what we said. The historical high of the fourth quarter. Compared to any other fourth quarter, this was the highest. That is the first part of it. Second is that we have given a guidance of about 15%- plus this full year. Probably we should be able to in the coming in the next year. Every quarter we should see better results. It's not that every quarter can be the highest quarter. We see that we get the 15% overall yearly growth.
Yes, sir. That was great. One last question I'm squeezing in. We have also seen tonnage improvement this particular quarter. You also mentioned that, you know, there are customers who open and close the accounts. There are renewals happening. Is this the reason? What is the reason for tonnage improvement at a time when competitive intensities have been still flaring up?
When the gold loan growth happens, tonnage also has to go up. It is not directly proportional to the growth because the gold price is also a factor. You have seen a gold loan growth in this quarter, definitely the tonnage also has to go up.
Okay. Okay. I'll come back. I'll take this offline. Thank you.
Thank you. The next question is from the line of Bunty Chawla from IDBI. Please go ahead.
Congrats, sir. Congrats on a good set of numbers. Thank you for giving me the opportunity. Firstly, Sorry, I have joined late. If you have already shared that number. Branch expansion for this year and the RBI approval for number of branches, what is that number?
We had an approval for 150 branches, this quarter we opened 67 branches. I think that 150 is complete, so on ongoing business we will be opening more branches.
For this FY 2024, what is the target of branch opening?
Maybe 150 branches we should be opening every year.
Okay. Okay, sir. Secondly, sir, what is the increase in the average ticket size on a sequential basis, QoQ basis?
Average ticket size?
Yes, sir. Yes.
I think now it is 70.
What was the growth on a QoQ basis?
What is the question? What is now the average ticket size last quarter? This quarter it is 70, you said. That's what you wanted to know, average ticket size.
Yes. Yes, sir. Yes, sir. Yes.
Give me one minute.
December it was INR 70,000. This, no, March it is INR 75,940.
Okay. INR 5,000. Sir, lastly, in previous question on the higher expenses you said. What should be the normal run rate we should carry for next two quarters or full year 2024, if you can highlight on that?
Yeah, yeah. We think we expect next year full year to grow by 15%, 1 5.
No, sir. On opex part, as the previous question you said. For example, if a director's remuneration was higher during this quarter. For full year financial year 2024, what should be the expected opex we should carry, we should consider?
That's what we are answering in the earlier question. We are expecting around 3.5%.
3,5%.
Yeah.
Okay. Thank you. Thank you very much, and best of luck.
Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Yeah. Thank you for allowing me a follow-up. Again, just one thing which has kind of bothered me a little bit. Just wanted to understand this or clarify this. I recall, I mean maybe a quarter or two quarters back, I mean, there were, I mean, articles in media where it was often talked that banks at the margin were giving out personal gold loans in the guise of agricultural gold loans which qualify for PSL. I mean, have you seen some change there or are those practices still continuing? I don't know. I somehow vaguely recall we even highlighted these practices to the regulator. Have you heard anything from the regulator or have these practices now stopped?
We have, as you said, we have highlighted it to the regulator. We hope or expect that they would have taken some action. Anyway, we have not got any confirmations from the regulator regarding this. We have only said, we don't expect them to get back to us directly on this also. We have raised our concern to the regulator. That's it.
Sir, are these practices still going on or have they stopped?
I think we have also probably we should say lost interest in that.
Got it. Thank you so much, sir. This is useful.
Thank you. The next question is from the line of Vaibhav Badjatya from Honesty and Integrity Investment. Please go ahead.
Yeah. Thanks for giving the opportunity. Sir, can you give me the total absolute amount of penal interest that is recognized for the full financial year, this basically financial year 2023 and financial year 2022? Absolute amount of penal interest.
Yeah.
Sorry. Can you repeat your question?
Total penal interest.
Absolute amount of penal interest for financial year 2023 and financial year 2022.
We don't record that, no interest. Everything, no, we recognize as an interest.
Yeah, I mean, for the loans that become overdue, you will be charging some...
Yeah, yeah.
additional charge, right? I just want that additional number. What is that in terms of absolute amount?
I don't have absolute numbers. To give an indication, you know. Normally, you know, our rates becomes 22% to 24% after 12 months. You know, there is a 2% additional penal interest which is charged on those overdue loans.
Okay. 2% additional. Okay. Okay. That's it from my side. Thank you.
Yeah. You need to link it to the fact that, you know, most of the loans gets, you know, closed before 12 months.
90%-95% of the loans get closed before 12 months.
Yeah, I understand that. That amount will be only for the overdue. I understand that, yeah. That's it from my side. Thank you.
Thank you. Reminder to the participants, anyone who wishes to ask a question may press star and 1. The next question is from the line of Subhranshu Mishra from PhillipCapital. Please go ahead.
Good evening, sir. Two questions. The first one is, what is the net customer attrition we have seen in the last two odd years because of the competitive intensity? First part. Second is the competition also from various other NBFCs and fintechs which are into small ticket personal loans as well as small ticket business loans? The third question is, what is the total INR payout to Mr. Amitabh Bachchan and Madhuri Dixit annually for brand promotion, sir?
First question was about. What was the first? Subhanshu, can you repeat your first question?
What is the net customer attrition in the last two odd years?
Customer acquisition. There is a, you know, slide in our presentation. If you look at that, you know, there is a customer addition of 3.33 lakh during this quarter. Overall, if you look at the total customers, number of customers have increased by, you know, increased from 52.33 lakh to 53.23 lakh. That is a net, you know, increase in the customer addition, and also the new customer addition numbers we have given. The point, you know, we need to see is that, you know, we have a large customer base, and every quarter we have been able to add around 3.5 lakh new customers. We have a large customer base.
Lot of them have availed the loan and lot of them, you know, are currently not availed, which we try to tap them on a regular basis. That's what we give always the information about, you know, fresh loans to inactive customers.
The customer base is those customers who are presently alone with us. This is a very short period loan. It gets churned every three months, four months. Okay. The second question was, sir?
Another question.
What was the second point, sir?
Are we facing competition from other NBFCs and FinTechs in small ticket business loans and small ticket personal loans?
I don't think people who take gold loan or definitely will also be taking some other loans also. It is not that because somebody is getting a small ticket loan, et cetera, he's substituting it for a gold loan or a gold loan is substituting for that. I don't think we have never faced such a situation, sir. About Amitabh Bachchan, et cetera, I think we pay some decent money to them, sir.
What is that as a part of the opex? That's what I'm trying to say.
Sure. I think we pay some decent money. I think that's better there.
Okay. Sure. Thanks.
Any other questions you want to ask?
Thank you. The next question is from the line of Pavan Kumar from RatnaTraya Capital. Please go ahead.
Sir, can you comment about whether the NIMs have stabilized? Should we assume that the current levels are at stabilized levels? Also for the any comment on the cost of funding going forward?
Yeah, I think, we have always been telling about spread of about 10%. I think we should, we will, we'll try to keep that spread at 10%, maybe plus or minus 5.5% is what we would like to keep. I think it should stabilize at that level, sir.
Okay. currently the spreads for this particular quarter are around 10.44%. We are saying that 10% should be normalized levels for the next quarter.
Around that 10% should be something which we should be able to do.
Okay. Fine. Fine, sir. that was the question from my end. Thank you.
Thank you. The next question is from the line of Manan Tijoriwala from ICICI Prudential AMC. Please go ahead.
Hi, sir, just two questions. One is, how much is the accrued interest? Second, what is the proportion of this personal loan book that we are making? What will be the average ticket size, and where do you see this proportion being in the near to medium term on the standalone book?
Interest accrued is INR 1,843 crores.
Right.
The personal loans are given to salaried customers. The average ticket size is about, now INR 4 lakhs. The book should be in the range of about INR 400 carores-INR 500 crores. Yeah.
Sorry, come again, please.
The personal loan book, as of March is around INR 544 crores.
Right. how much do we intend to grow it, sir, in the near term?
No, we started this business almost seven, eight years back. We have been very careful in terms of understanding this business. You know, in though we have been running this business for last eight years, we have done only so far INR 544 crores. Going forward also we'll do a calibrated growth. You know, we understand that this is an unsecured loan. There is a careful policy around the, you know, the personal loan business.
Understood. That's all from my side, sir. Thank you.
Thank you.
If there are no more questions, we can wind up the call.
That was the last question. I would now like to hand the conference over to the management for closing comments.
Thank you. Thank you, investors. You have always been a support to us. You have always given us confidence. You have always prodded us to do better and better. From our side, we will definitely ensure that we do the best and we take care of all our stakeholders, including the investors and all other stakeholders. Thank you. That's an assurance from Muthoot. Good day. Thank you. Good. Thank you. Thank you.
Thank you, Sanket. Thank you, DAM Capital for arranging the call for us.
Okay. Thank you, sir.
Thank you. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.