Ladies and gentlemen, good day, and welcome to the Q4 and FY 2021-2022 earnings conference call of PNB Housing Finance 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 zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Deepika Gupta Padhi. Thank you, and over to you, ma'am.
Thank you, Margaret. Good evening, and welcome, everyone. I'm sorry for the delay from our end. We are here to discuss PNB Housing Finance Q4 and Financial Year 2021-2022 results. You must have seen our business and financial numbers in the press release, and the presentation is also uploaded just now, shared with the Indian stock exchanges, and it's also available on our website, www.pnbhousing.com. With me, we have our entire management team across verticals sitting over here, led by Mr. Hardayal Prasad, Managing Director and CEO. We will begin this call with the performance update by the Managing Director and CEO, followed by an interactive Q&A session. Please note, this call may contain forward-looking statements which exemplify our judgment and future expectations concerning the development of our business.
These forward-looking statements involve risks and uncertainties that may cause actual developments and results to differ materially from our expectations. PNB Housing Finance undertakes no obligation to publicly revise any forward-looking statement to reflect future events or circumstances. A detailed disclaimer is on slide 40 of the investor presentation. With that, I will now hand over the call to Mr. Hardayal Prasad. Over to you, sir.
Thank you, Deepika. Thank you, Margaret. Good evening, everyone, and welcome to our Q4 and FY 2021-2022 results. On behalf of the company, I extend a very warm welcome to all of you. Let me start with the business update. As we informed during the last quarter, we intensified our focus on retail disbursements. In Q4 FY 2022, we have disbursed INR 3,698 crores, registering a growth of 31% on a quarter-on-quarter basis. For financial year 2022, we have disbursed INR 11,246 crores, registering a growth of 8% as compared to the previous financial year. Of the total disbursement done during the year, 97% was in the retail segment. On the back of the retail disbursement, we arrested decline in the loan assets during the quarter.
The loan assets stand at INR 56,889 crore as on 31st March 2022, as compared to INR 56,798 crore as on 31st December 2021. The retail loan assets increased by INR 693 crore to INR 49,730 crore, and corporate loan assets decreased by INR 602 crore to INR 7,159 crore. The corporate book has registered a decline of 39% during the year, primarily on account of sell-down accelerated payments of INR 2,664 crore during the financial year. As per our stated strategy, we have reduced our corporate assets to 11% of the assets under management. As on 31st March 2022, our AUM for the Unnati segment was INR 3,108 crore.
With our focus on this segment, we have increased our presence to 29 new locations operationalized during the H2 of the financial year. Talking about our asset quality, as a result of our continuous efforts to improve our asset quality, our retail GNPA registered a decline of 140 basis points quarter on quarter to 3.6% as on 31 March 2022. The corporate book GNP stood at INR 2,561 crores as on 31st March. The increase in corporate GNPA is on account of one large Gurgaon-based developer that moved from stage two to stage three. With this, the gross NPAs of the company stood at INR 4,332 crores as on, which is 7.61% of loan assets as on 31st March.
The net NPA as on 31st March stood at 4.49%. The retail collection efficiency for quarter four FY 2022 stood at 99.5% as compared to 98.5% in Q3 FY 2022 and maintained around 98% during the whole year. Talking about the liabilities, the company has registered downward trajectory in the cost of borrowing as on a quarterly basis. The incremental cost of borrowing for FY 2022 stood at 5.8%, registering a decline of 96 basis points as compared to FY 2021. The cost of borrowing declined by 61 basis points to 7.3% as on 31st March 2022. The company has maintained liquidity of around INR 5,400 crores as on 31st March 2022.
The net interest income during the quarter stood at INR 377 crore compared to INR 593 crore, registering a decline of 37%. During Q4 FY 2022, there is a net income reversal of INR 58 crore on derecognized loans due to unwinding impact of spread contraction and run-offs, whereas there was a net positive impact of INR 58 crore on derecognized loans due to fall in assignees and CLRs in the same quarter previous years. Further, in Q4 FY 2022, there is an in-year adjustment net interest income reversal of INR 70 crore. The profit after tax for Q4 FY 2022 increased by 33% to INR 170 crore versus INR 127 crore for Q4 FY 2021. The company is comfortably capitalized with CRAR at 23.4% and Tier I at 20.7%.
The leverage has come down to 5.4 x as on 31st March 2022, with reduced share of corporate book. On the back of improvement in PNBHFL's leverage and reduction in the share of corporate book, ICRA, on 12 April 2022, revised the non-convertible debenture rating outlook to stable from negative. On the strategic priorities laid by the company in January 2021, we are pleased to inform you that we have achieved sustainable business performance for few key parameters, which are maintaining adequate provisions, maintaining over 80% of our turnaround time, maintaining healthy mix of retail. The company will continue its focus on retail loans, including self-employed and affordable housing, enhance credit underwriting processes, improve collections, and upgrade its technology to improve and to grow and improve efficiencies.
The board of directors on ninth March 2022 approved capital raise of up to INR 2,500 crore through rights issue. With this, I would like to open the floor for questions and answers. We have the entire management team sitting over here, and we welcome any questions that you have, and we'll be more than happy to answer them. Thank you very much.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets when asking a question. Anyone who would like to ask a question, please press star and one at this time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Anyone who would like to ask a question, please press star and one at this time. The first question is from the line of Aditya Doshi from Chanakya Capital Services. Please go ahead.
Hello. Thanks for the opportunity. First of all, congratulations to the team on the ratings outlook update and the rights issue approval. My question was from the long-term perspective.
Sorry to interrupt you, Aditya. May I request you to come on the handset mode? I think you are on speaker. The audio is not
Yeah. I'm under the handset mode only.
Okay.
Hello.
Please come closer to the phone then. Thank you.
Hello. Hello. Is it audible now?
This is better. Please go ahead.
Hello. Thanks for the opportunity. First of all, congratulations on the ratings outlook update and the rights issue approval. My question was from the long-term industry perspective. With a large HFC merging into a bank and recent regulations have been amended in line with banks for NBFCs, how do you think a sustainable model can be made for NBFC HFC for the next in a long-term horizon? I understand we need a NBFC in a country like us as we do different segments. Second was a data keeping question. What is the BT out percentage? And third, the large corporate slippage in stage-three of the GUJAR account, how much provision has been made in the books up till now? Thank you.
Okay. Well, I'll talk to you a little about the growth strategy and the impact of the announcement that has been made between the measures. As a retail-focused housing finance company, we will leverage. We are very clear about it, that we leverage our expertise in self-employed and mass housing, where the company has its niche in terms of distribution network. In the market we are known to be extremely good in underwriting, not only in acquisition, but also in underwriting of the self-employed and other books. We are going to continue to look at it. There are massive opportunities coming in, and there is an upcycle in the housing industry that is very clearly visible. The underwriting capability services will play a major role in terms of the acquisition and underwriting.
Additionally, the company will focus on affordable segment, as we have mentioned it earlier, which is the Unnati segment. We have created a vertical. We are bringing and we have opened 29 branches in tier two and the. The retail disbursement is going to continue to be the major focus area. What we are going to do is that we have already brought down our corporate book to about 11%, which is something that we have very clearly said, that we'll take it down to 10%, and after that we will start looking at it.
Once a decision is taken at the right appropriate time on what exactly we are going to do at the corporate book, that is one which has an opportunity of giving us higher yield and it also has an opportunity of return linkages that come. We have already opened up massive amount of APFs, ties that we have and these builder ties play a very important role in terms of the linkages that we have. We have again reconnected with all the DMA, DSAs and everybody to ensure that there is significant amount of business that keeps on coming in and flowing in. One of the biggest things when I say that, going forward, should be an important milestone. We are actually in the process of upgrading our technology.
Our acquisition platform, our rule, our business rule engine. These are some of the things that will help us significantly in handling very large volumes. Once we start handling large volumes with the acquisition model and the automated underwriting model, it is at that stage that we should be in a position to break even very quickly and start handling large volumes, which the market today is ready. If you go and talk to the market, the market says there's massive opportunity. All of us are fully aware. Another important significant thing that we have done is that we have also tied up with three banks under co-lending. The last one has been with the largest bank, and they are very upbeat. We are also very upbeat.
Wherever we find that there is an interest rate arbitrage and we can sell a product, we are going to push that. As a growth strategy, the capital raise as it comes, we are going to ensure that these things are taken care of. I don't know on the other things. BT out for the year was 16.7% approximately. That's how it is. Earlier it was more than 18%. It has come down now to some extent, and it's already under control.
Okay, thanks. Regarding the large NPA account of GUJAR, which has taken to stage three, how much provision as of now we have on the books?
See, the company has overall level in the corporate book in stage three. We are maintaining the stage recovery ratio of around 46%. On those lines only, you know, we have been building it up provision for all the fresh accounts, all the fresh slippages what we have.
Okay. Thank you.
Thank you. Anyone who would like to ask a question, you may press star and one. The next question is from the line of Himmat Anand from an individual investor. Please go ahead.
Yes. Hello, everyone. I'm actually not really happy on looking at the financial numbers. I would like to know what your view is, why the company has not been able to bring any growth since its IPO and the share price has been suffering massively because of that. What would you like to say on the rising percentage of both NPA and net NPA, as well as something concrete about that, you know, the rights issue which got approval last month?
On the rights issue, what we can say is that the board has approved a capital raise of up to INR 2,500 crores, and we have started the process, and with the bankers and legal counsels all on board. The timelines would be, of course, contingent on the market conditions as well as the final approval from the board. PNB has already applied to the RBI. This is the communication which we have received last from them as well. This is where we are. I can just say that the work has already begun on the rights issue, and we are working on to that front with all the counsels and bankers on board.
Yeah. When Reliance Industries announced an rights issue, they were ready with the details for coming, details of ratio and everything in the next 10 days. It's been already a month that, you know, the company doesn't look like in a position to have the details.
Yeah. If you recall, when we had also announced after that, PNB had also shared its
Yeah.
Strategy to the stock exchanges, where they had clearly mentioned that they have the intention, but they need the approval from the regulator. This is where the status is. I mean, the example which you are taking, I mean, there are few regulatory approvals which are required, and because of this, we will not be in a position to give any further details to this thing. Yes, as I mentioned, the counsels, the bankers, everyone is on board. We are working with them on the requisite documentation and everything.
There are two things. One is that actually what the company. The company has done everything possible to ensure that the moment the approval is there, through the PNB from the regulator, we are ready to go. It's just that approval that is expected whenever it is, it is going to come from the regulator. We are there. Everybody remains committed towards raising the capital as quickly as possible.
Okay. Anything that you would like to tell the other shareholders as well regarding why the gross NPA is rising so much that it is becoming so threatening that, you know, in the coming years it can't be denied that the company might go into liquidation because of that?
I think we have to see the things in a better perspective. The statistics actually truly saying that there's a rise in NPA, but we need to understand you know the reasons behind the rise. I think we have already discussed this thing, and the company has taken a lot of initiatives. I would just like to put the things into right perspective. On the retail side, if you see the company's NPA numbers in absolute term, it has risen from the level of INR 600 crore to INR 1,200 crore in March 2020. Then there is due to the COVID impact, okay, it shoot up to a level of INR 1,600-odd crore.
With the RBI circular of November 12, where they clarified that, there was an addition of INR 829 crore. I'm talking about just retail. That take us to the level of somewhere around INR 2,431 crore of NPA. Today, after the tremendous efforts, once you get all the legal resolution channels available, at our disposal, which is SARFAESI, our retail NPA numbers are standing at INR 1,770 crore. The COVID impact was large. There's no denial that we could have been done better because our total dependence on the resolution goes through a legal SARFAESI channel. We learned during this period. We strengthened lot of early delinquency behavior resolutions. We strengthened our team.
We worked on the advanced analytics and today our position is that from the level of INR 2,431 crore of NPA, we're at INR 1,770-odd crore on the retail side. We are quite confident that going forward our NPA resolution with these efforts will continue and will perform better. Just a second. Now, I have talked about the absolute numbers. Now, if you look at the denominator side, the denominator continues to de-grow. I mean, after nine quarters the organization has achieved, in this quarter per se, a positive growth in the portfolio on the retail side. On the corporate side, yes, we have our own share of problems. We are resolving it. We have resolved in the last, you know, two years some big-ticket account. We have given already, information about this.
In many of the accounts, you know, resolution is going on. Unfortunately, we have got one large exposure slipping into NPA in this quarter. We are working on it. Hopefully we will have got a resolution very soon around those. Rest assured, in all those assets wherever we are working, we have got a, you know, good cash flows underlying, good security and resolution is also on the cards.
I don't want to say that the situation is so bad that it could go in liquidation. It's very clear. One is that there are two very, very good green shoots. One is the first time after a long time that the company actually has shown a positive growth. It's almost about INR 600-700 crore of growth that has come in the retail. The second is almost about INR 600-700 crore reduction in the NPAs of the retail, which is significant, let me tell you. After all the, you know, COVID related problems, the kind of book that we had, there was these issues, but however the company has started. Lastly, the total provision to total asset is 4.5%. Now this big account, you know, it's.
I mean, the situation would have looked so good if this large account which is, Gurgaon-based you know, developer. If this account would not have turned NPA it would have looked absolutely good that the. I'm not saying that it's absolutely amazing, but the journey towards that would have started very clearly. Now this is one of the largest builders of India, is at par with another second largest, third largest builder in India. Now there are some disputes that are going on and those disputes have reflected into this account which has gone into NPA. We are trying to resolve our debt. We have already taken possession, symbolic possession of the property. We are trying to resolve it as quickly as possible. It is multiple times than the value of that property, the value of the loan, outstanding of the loan.
We are very confident that the way we are working with these players, we should be in a position to actually start resolving a lot of accounts that we have already done, and we will continue to look at this way.
Yes. Okay. Don't you think that the absence of the valuation report last year when the QIP was done in favor of Carlyle and General Atlantic and which was bringing Aditya Puri on board, the company has suffered a massive setback that, you know, if Aditya Puri could have come on board, the shareholder value would have been tremendously unlocked and the company would have readily gone into a very positive perspective from the market's, you know, market's approach. Just a mere absence of valuation report caused all that Supreme Court legal, you know, legal drama and all that happened and that then appeal and everything because of that the company lost opportunity as well as growth. I would not, we'd not like to comment on it as the matter stands, I mean closed.
We have whatever was required to be done, we have done it, and at this stage, going back six, seven months and reopening something that has happened.
It's almost 11 months.
I would not like to comment on it. We'd like to move forward now and by announcing the rights issue we are moving forward.
Yeah, that's all. I would not like to ask anything else then.
Thank you, sir.
Thank you. Ladies and gentlemen, you may press star and one to ask a question at this time. The next question is from the line of Rikin Shah from Credit Suisse. Please go ahead.
Thank you for the opportunity. I just have one question. Wanted to understand and if you could help simplify what is driving this net interest income reversal on de-recognized loans due to unwinding of that spread contraction versus the gain in the previous year? For how many quarters do you expect this to continue? Is there any kind of indication you could provide when this could stabilize itself or mind?
See, when you look at the yield, the spread contraction is primarily on account of some particular reasons provided for two large accounts fully in this particular quarter. On account of that as the standards, whatever interest which we have recognized earlier in those accounts needs to be reversed back to the P&L. It is on account of that particular piece there is a contraction in the interest rate, the yield you were looking at as of now. If you adjust that particular one-time adjustment which has been made in the books of accounts on account of making provision against a large account, our yield would be up by 50 basis points.
For how long we have been having these reversals for a few quarters now. Any indication on when this could stabilize or we do expect these reversals to continue in the near term?
It depends. These are the accounting adjustments depending upon when a particular account is turning into bad and needs to be written off, so the income needs to be reversed back. We are on a growth trajectory and on a recovery phase. We don't think that in near future we would be like, we would be having subsequent reversals. These are the Ind AS related adjustment and a notional adjustment. But the overall yield on the pool is pretty much stable.
We can just to add to what Manish mentioned, there are three reasons because of which the interest income has come down. One is that there is a decline in the corporate loan book which is of a higher rate, it gives us higher yield. The second reason is the repricing of my retail book. To some extent that also impacts. Further reasons because of which the interest income has come down. One is a reversal of income because of securitization. We have seen a negative impact of INR 58 crore during this quarter, which is Q4 FY 2022. This was actually positive INR 58 crore in Q4 FY 2021. That's the kind of impact we have seen because of the securitization impact.
The fourth is based on Ind AS adjustment on the reversal of interest income on some of the corporate accounts, and the net of that is around INR 70 crore. Overall, because of these two factors of securitization and the reversal of interest income, we see an impact of around 50-60 basis points on our yield. Accordingly, the impact of course comes on to the spread and impact as well.
number, you can also give the annual number, the GNPA number.
On the annualized FY 2022 when we talk about the same thing, the primary impact is because of the securitization. There is a negative impact of INR 216 crores in FY 2022 because of the securitization. Whereas it was a positive impact of INR 178 crores in FY 2021.
Net impact.
The net impact actually is like approximately INR 400 crore which comes onto the year and hence the impact.
Maybe if I can just squeeze in one more question. Just wanted to understand what is your best interest rate on the retail side. Retail mortgages is what I'm looking at. What's your view on interest rate and trajectory from here in the sense that are you going to take any further cuts or this is bottom, pretty much bottom of where we are?
Yeah. On the overall AUM yield, we are currently at 8.80%. On the NIM front it is 8.74%. On the incremental side, we are doing business at 8.44%. That was what the incremental yield for the financial year 2022 was. We have seen that, last, you know, few quarters, we were not able to get the interest, our interest rate gap was too much and our book was also not growing. To ensure that we also have that positive growth on the NIM and the business growth, we tried to seek out the opportunities wherever that was possible due to the lower cost of borrowings, also some impact on the cost of borrowing.
Because of that, we had those opportunities and that's how we had been able to bring down some amount of rate of interest. The reason there were two reasons. One was, to ensure that we were able to retain our existing book, and second was also to have an incremental upside on the fresh, disbursements.
Okay, thank you.
Thank you. Anyone who would like to ask a question, you may press star and one. The next question is from the line of Miten Lathia from Fractal Capital Investments. Please go ahead.
Yeah, thanks for the opportunity. Just wanted to understand the Unnati outlook. We've sort of pretty much have similar AUM at the year end as last year. If you could sort of give some sense of what that book should be couple of years out or three years out, this is your plan.
Yeah. On Unnati, yes, the company's focus has remained and, in this particular quarter, we have been able to open 29 new branches across pan India. The focus will continue to remain there. We'll also open a few more branches in the next couple of quarters where the business opportunities would be there. As of now, we have already. We are doing approximately about, in the close to about INR 94 crore kind of a business in a month. This will grow as we open up new locations and new branches. For the Pan India, we have done INR 794 crore worth of disbursement in financial year 2022, and that will continue to grow from here on with the increased focus on the Unnati business.
If that is the level of disbursement, the rundown shouldn't be as steep, right? I mean, what are we missing here?
Miten , can you just repeat?
No, no. If you overlay the last year-end closing AUM on Unnati and the disbursement that you did, the rundown on the book seems pretty steep. I was just trying to understand what I'm missing.
While, Pankaj goes through the numbers, let me tell you. You know, what we are looking at Unnati is a completely new Unnati portfolio. It's going to be a new product with a completely new. With the 29 branches, the model is totally different. We are no longer going to now work on this product as we are, as we source business on the prime segment. The way we do business with same people going ahead and bringing in. Now, here we are looking at ticket sizes which are actually going as low as INR 5 lakh. This is a totally different model, so the growth you will not see in the long term. These are numbers that are going to get reflected. Secondly, based on the risk matrix, the interest rates will also vary.
There it's going to have a little more, maybe about 100 basis points more yield on the total loan. Those are some. I think that is more critical from our perspective, that once we start these 29 branches which we have opened from December, and they are functioning now. Once they start kicking in, you have to give about two to three months for these branches. Once they start kicking in, I think we would like to talk to you on the number of loans booked and the portfolio will come subsequently.
Sir, I was wondering if you had a target in mind to get to for that book?
Target? You have the target? I think we will share it. We will see. I think we don't. We will, we'll let you know.
Miten, as you are aware, we are in the midst of this rights issue and we are working on it. We are not talking about the numbers as of now. What is the targeted numbers per se. What Pankaj has mentioned that the focus is on Unnati. We have opened till now 29 locations in tier two and tier three cities, and we are looking forward to add more locations in the coming financial year, which will help us in increasing our disbursement in this particular segment and hence the AUM. As of now, the disbursements in Unnati is around 8% of our individual housing loan disbursements, and we are looking forward to increase these numbers.
Understood. Thank you. Thank you.
Thank you. The next question is from the line of Ankit Agarwal from Ark Capital. Please go ahead.
Thank you for the opportunity. Sir, I have a question on the corporate book level. Do we see this corporate book level stabilizing? When do we plan to start disbursing on this book?
Yeah, Ankit, as of now, you must have seen that, you know, we've, as a deliberate strategy, we've driven down this book, to a very, very comfortable level now, which is close to 11% of our AUM. You know, we somehow reached our target, which we had in mind, in terms of our reducing our corporate exposure because of the market scenario at that point in time. We are reevaluating the scenario now. I mean, we are relooking at this segment and we'll at the opportune time probably look at this disbursements again. That is something in the works right now, but definitely what we plan to achieve by reducing the book, that more or less we are there.
Okay, fine. That's about it from me. Thank you.
Thank you. The next question is from the line of Akhil Hazari from RoboCapital. Please go ahead.
Hello, good evening. Am I audible?
Yes, sir.
Yes, we can.
Yeah. Just regarding, you know, the statement about the green shoots being shown in the AUM growth right now. Going forward, you know, what would the growth look like? I think the management focus now on, you know, increasing growth or is it more focused on, you know, credit asset quality and, you know, reducing the NPA further?
See, from organization perspective, growth is also important and as well as the credit quality is also important, right? Now, in terms of the growth, as we told you that after the nine months, nine quarters of negative trajectory, and as Pankaj talked about various initiatives we have taken in terms of realigning our, you know, interest rate and, you know, sales and marketing strategy. That module of the disbursement is coming back. That will continue. As we have reduced the retail NPAs, you know, by a large quantity of almost INR 700 crore, that effort will always continue. In line with that, we have done realignments in the policy platform that has been done, the technology framework has been enhanced. From here on, both will go parallel.
I would also like to add here, we all know that the markets have really moved positively. There is an upside in the developer sentiments and lot of positivity has come in. We have also seen green shoots in our last four to five months disbursement. We have started increasing our monthly disbursement loan sanctions and disbursements. We have also put in lot of rigors. We have improved our productivities. We have reconnected with lot of good developers, and we have also reconnected with the DMAs, the corporate channel partners. We are coming back in a very strong manner, and we are increasing our efficiencies across all levels. Yes, we are very, very positive.
As far as forward outlook is concerned, exact numbers can't be given as we all know that we are in the midst of the rate issues. It will not be appropriate for us to share the exact numbers of what, yes. Yes, what we can just at this point in time, we can reassure that yes, we are looking forward to a positive year in our growth with lot of efforts, internal efficiencies that we have brought in and that would continue to be the endeavor of ours.
Okay, fine. Great. That's all from my end. Thank you.
Thank you. The next question is from the line of Bhuvanesh Kaur from Investment Capital. Please go ahead.
Yes. Hi, sir. Thank you for the opportunity. My question is on reversal of securitization income. So just want to understand what is driving this reversal of securitization income. I mean, which, where on which, what all parameters you are having different experience from the assumptions that you had made earlier, which is leading to the reversal of this securitization income. One. Secondly, how are you calibrating those assumptions so that such volatility where you recognize the income aggressively earlier and later you have to reverse, that doesn't happen again. And thirdly, is there any check, is there any third party verification or audit on those assumptions while recognizing this securitization? Yeah, these are my three questions.
Securitization income. See, as you are aware that we actually not doing any securitization. We are doing the assignment or transfer, assignment of loan. As per the standards, you need to upfront that particular income on the date on which you are recognizing that particular income on the date on which you are selling that particular pool. That needs to be unwound based on the assumptions which you have factored on the day one itself. Based on the runoff of that particular pool and the differential spread, you have to unwind it over the remaining life of that particular pool.
If you compare the March 2021 results with March 2022 results, in March 2021, what happened is that we have securitized a pool of INR 700-odd crores, whereby there is an incremental income which is coming to our P&L. Plus, in March 2021, there is a reduction in the MCLR. Normally, the rates on which we have sold the loans to the bankers are linked to MCLR. Because of the widening of the MCLR, and that is not under our control, there is an increase in the spread which we have earned on that particular pool, which resulted in the upfronting of an income. Last year, same time, we have recorded an income of somewhere close to INR 177 crores in our financial statement because of two factors.
One is we have sold the new pool. Secondly, there is an increase in the spread on account of change in the MCLRs. Now, in this financial year, what happened is there's no change in the MCLRs, and we have not sold any new additional pool. There will be a natural unwinding of the pool which will happen and there will be a reversal of our so-called unwinding of income on account of securitization. As far as the assumptions are concerned, the runoff of the pool is being utilized to arrive at the unwinding impact in the P&L. As far as vetting is concerned, the same has already been vetted by the internal and the statutory auditors, and the assumptions are looked after by them thoroughly.
Okay. Fine, sir. Thank you.
Thank you. The next question is from the line of Piyush Jain from BNP Paribas. Please go ahead.
Hello? Hello, am I audible?
Yes, sir. There's a bit of disturbance also from your line, so if you can mute yourself.
Sure. Hello, am I audible now?
Better. Please go ahead.
Yeah. Good evening, everyone. Just a quick question that since all the HFCs are growing in a phenomenal manner, and we all believe that the housing market is in a boom, but we are still yet to come out of the woods. Can you just tentatively tell us what timeline we are looking that we would be in the same growth phase where other HFCs are growing? Second, what, because since last eight, nine quarters, we are hearing the same story. We are trying to do this, we are trying to do that, but things are not happening the way we are as a shareholder we want. Can you just give when this, obviously brief us on that also? Because one HFC has already been divested, so that opens up a huge space for us.
We being a huge brand, we cannot even enter there. What is stopping us? I don't understand.
I think we have made it very clear. We have had a very positive growth this time. We have already done about INR 700 crore of growth in the retail segment. The growth journey has already started. All the problems that we had in terms of our NPAs, in terms of pricing, in terms of you know, a very deliberate decision of bringing down the book to certain extent, ensuring the profitability is there, ensuring that the productivity and efficiency remains over there. We have actually, so more or less, we have factored in, we have overcome it, and now the journey has started. The industry is expected to grow this year about 9%-11% and we expect to do the same thing.
We will try and do our best if possible. ICRA's report very clearly says that the industry will grow at about 9%-11%, and that's what we are targeting, that we will also be over there as a, in terms of the HFC. Now, when you start comparing with the previous numbers that this company has, one of the important thing was actually the corporate book that we were crowding there. Now that is a business that we are not doing it. We can very easily ramp up the numbers if somebody is doing the corporate book. Retail is one that we have started and we have shown a growth in this quarter.
Just a quick question in that. The other HFCs are actually eating up our market size. How do we plan to reach there, which we have already lost?
There are a couple of things I did mention to you. In terms of, you know, the reactivation that we did. We have moved out completely of the APF market, which is actually the builder buyer. We have reactivated everything, and there are almost 1,000 APFs that we have restarted, and we are sourcing business from there. The DMA channel was because we had decided that we will exit from large ticket loans. We have reactivated, and those are the ones who bring it. We have reactivated those channels, and we are going ahead and so on. We have reconnected with almost all builders. They were very clear, and we say it very, very frankly, that it is not. They have lot of confidence in PNB.
It's a question of you coming and bringing in the rates which are very, very attractive or which are not attractive, competitive. The more important thing is that what kind of service you provide, what kind of track you have and what kind of, you know, how quickly can you deliver the loan. Even if it is a little expensive, maybe 20, 25 basis points or 15, 24, 25, 40. But can you actually handle it? Do you have the ability to underwrite? I think we have the ability, and that is why in this quarter there is a significant amount of the certain things that have happened. Very clearly we are seeing a change in the mix of the business also and the way we are sourcing business. There's an all-time high number that we are actually looking at it as we move forward.
Sir, if I have to ask one thing that, even maybe after two quarters or three quarters, we would be in a much better picture. Is that what you're trying to say?
Well, no. Deepika very clearly says that no forward-looking statement and all that, but I told you that, we have started the journey.
Sir, nine months we already had this statement that we are coming out of the woods. That was always a forward-looking statement.
It has contributed to this.
You have been always giving the statement that yes, we are trying, and every time the results are getting worse and worse. Now, the whole point is that other HFC, other HFCs are growing and we are not growing. At least you can give us this statement that, yes, we are looking for the next two quarters, three quarters, we would be in a much better shape. At least this much assurance can be given to the shareholders, right?
Definitely. Definitely we will be in a better shape. There is no second thought about it.
Okay, sir. Thank you. Thanks so much.
Thank you. The next question is from the line of Sanket Chheda from B&K Securities. Please go ahead.
Hi, sir. So as of now, we spoke about the 40% from DSA. For this next year, how do we plan to move forward in our channel check to one of the largest DSA. We have set up a very ambitious target since the start of the year. We just wanted to know what is the thought process, I mean, as per 2023, how much do we plan to source through DSA or how much we will do it organically?
MD sir has also mentioned that, yes, we had improved our strategies on the sourcing mix. Our internal channel was always, you know, was doing well. We have improved our sourcing in our internal channel. We have improved the efficiencies there. What else, importantly, what we have done simultaneously is also in last four, five months, we have reconnected with lot many DMAs who had, you know, who had been disassociated with us due to our internal issues and last couple of years that we had faced. We are regaining their confidence. We are reigniting those relationships and we are, you know, getting our pie of business from there, increased pie of business.
Yes, since the market has gone away from us and those large bigger DSAs and important channel partners, they are now returning back. They are also reposing faith in the team. We have increased our business share, which was, I can share those numbers. We were doing close to about 30-35% kind of business now, which has already moved to 40%-41% kind of numbers. We have already reached that level. I can only at this point in time say that yes, with the increased rigor, with increased connectivity, with increased better relationship, better management, we would be, you know, increasing both our internal channel business as well as DMA business. That should reassure everyone that yes, we are on the right path and we are doing all the right things.
Just one more additional question. Of late has been hearing that all these DSAs, whatever loans they sold, they kind of have some tie-up with the ARCs also for the asset resolution, wherein you could have some sort of recourse. It may not be direct recourse, but do they provide this kind of services that DSAs have a partnership with some ARCs which help resolve the asset in case it is proved bad?
No, no, we don't have such kind of clauses and we don't work in that manner. Yeah.
We don't subscribe to this kind of the work culture.
Okay. My question was rather not for us. Does it do this kind of settings are prevailing or coming up, in the space as you would have witnessed others?
We are not aware of any such practices within the market. Since you asked, you are informing us, we are clearly saying we don't subscribe to any kind of this structure or a practice in the market.
Okay. Got it. That was only question.
Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Yes, thank you for taking the question. Deepika, just one question. I joined about 10 minutes-
Thank you, Mr. Tibrewal. Your audio is not very clear. Can you come closer to the phone, please?
Is it better now?
Yes. Thank you.
Yes. I joined about 10 minutes late, so I missed a part of your opening remarks. Deepika, possible for us to remind what color did we share on the corporate book? I mean, which accounts kind of moved it or slipped into NPA in this quarter and what was the quantum of exposure?
On the corporate side, only one large account, which is a Mumbai-based asset, a very prominent one, it had moved into NPA in Q4 and that is the only forward movement in terms of corporate account. Apart from that, if you look at 64% of the book still remains to be stage one.
What was the exposure to this Mumbai account?
It's INR 659 crores.
659?
Yeah.
Okay. Have we seen any resolutions in the last, let's say two quarters? This quarter, Q4 and Q3, have you seen any resolutions? Because I'm looking at slide number 18 where we are talking about corporate book remedial actions. I don't know, but where is this Radius account sitting there? I mean, where is it? The Radius account where you used to have exposure of about INR 250 crore.
It's there in the slide.
Abhijit, Radius is an account which we have written off last quarter.
Achha, okay. We've already written off Radius, is it?
Yeah.
Yeah.
Yeah. Technically written it off. We fully provided for it.
Okay. All right. We are still sort of trying to pursue resolution in Radius.
Radius, yes, just a technical write-off. We will continue to work to resolve the account and move forward, but from the balance sheet, we have actually written it off.
All right. I mean, these four accounts that I see on slide number 18, I mean, I'm guessing three of them are Supertech, Ornate and Vipul. Which is the fourth account here?
One is Arena, which is in the final stage of resolution. There is one Arena which is there, which we are very close to resolution. Apart from that, the account that we mentioned, which has moved into NPA in Q4, that is also mentioned there.
Just to add one more point. Since you joined late and missed out the opening comments and you know the commentary given by the managing director, this particular slippage is coming from one of the top end developer in the in India and another joint venture they are into joint venture with the second topmost developer in India. It was you know we will say it's unfortunate because of their some internal issues it has happened. The underlying asset and collateral and the security value is superb and it was never into delinquency. It just slipped into the delinquency in a lump sum.
Okay. It is then fair to say that given that this is the largest developer in India, JV with maybe the second largest developer, you expect a resolution in this soon, right?
It's basically an interstate dispute. We are working with the developers to solve the issue there. Otherwise, we are still going strong on the asset itself. We've taken the symbolic possession as well. We are putting all kinds of, you know, resolution strategies in place to resolve it as early as possible.
Got it. My last question is, I mean, while I understand you are working on the rights issue and which is why maybe we are shying away from giving any forward-looking guidance, but lately, I mean, our team, the management team, have you seen some churn or exits? What I'm trying to get to is, I mean, I recall, I mean, last quarter we informed about our CFO kind of deciding to move on. I mean, recently I gathered our business heads. Business head retail has moved on to another peer. I've heard of a few state heads I think moving on. I mean, what is your sense?
I mean, is it because of purely, I mean, personal reasons, better opportunities that we've seen a churn in our team or do you think that the team that we have now is kind of stable and we can look forward to, I mean, stabler times ahead?
Okay. We have no doubt a few senior leadership exits during the course of the year. We've also kind of added a few senior leaders within the team. We also have focused a lot on bringing in internal talent and growing them for leadership roles. That's one thing that we have done quite successfully this year. In fact, quite a number of people have been provided an opportunity to pick up senior roles. This is a process which will continue to happen over a period of time. I think we also haven't faced significant challenges in attracting talent over a period of time. We've done, in fact, significant amount of hiring this year in terms of filling positions right from junior level to senior level.
That has happened quite well for us. We haven't faced any challenges. I don't think there is also a significant business pressure that we have experienced on account of attrition. Just on the attrition front on overall, we are in line with industry. In fact, quarter-on-quarter comparison, we in fact have been able to sustain the same level of attrition and that has not kind of increased in Q4. Which means that we've been able to arrest that and it's been in line with what the industry is doing.
Great. Thank you so much. Wish you and the team the very best.
Thank you. As there are no further questions, I now hand the conference over to Ms. Deepika Gupta Padhi for closing comments.
Thank you everyone for joining us on the call. If you have any questions unanswered, please feel free to get in touch with investor relations. The transcript of this call will be uploaded on our website and the audio of the call will also be uploaded on our website. That is www.pnbhousing.com. Thank you.
Thank you very much.
Thank you. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.