Q1 21/22

Aug 4, 2021

Ladies and gentlemen, good day, and welcome to the PNB Housing Finance Limited Q1 Financial Year 20 1, 2022 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance Please note that this conference is being recorded. I now hand the conference over to Ms. Deepika Gupta Paddy. Thank you, and over to you, ma'am. Thank you, Madhuri. Good evening, and welcome, everyone. We are here to discuss TMB Housing Finance Q1 financial year 'twenty one 'twenty two results. You must have seen our business and financial numbers in the presentation and the press release shared within Indian Stock Exchanges and also available on our website, that is ww.tmbhousing.com. With me, we have our management team represented by Mr. Hadar Prasad, Management Analyst and CEO Mr. Kapil Jain, Chief Financial Officer Mr. Nipanth Desai, Chief Centralized Operations and Technology Officer Mr. Sandeep Ram, Company Secretary and Head of Compliance Mr. Rajvind Suri, Business Head, Retail Mr. Jattu Lanan, Credit Head, Retail Mr. Neeraj Mansanda, Chief Risk Officer and Mr. Saurabh Suri, Head of Energy Management Group. We will begin this call with the performance update by the Managing Director and CEO followed by an interactive Q and A session. Please note, this call may contain forward looking statements with Examsita's 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 statements to reflect future events or circumstances. A detailed disclaimer is on Slide 34 of the investor presentation. With that, I will now hand over the call to Mr. Hadjal Tushar. Over to you, sir. Thank you, Deepika, and thank you, Madhav, for introducing us. And good evening, everyone, and welcome to our Q1 FY 'twenty two results. On behalf of TNB HSL, I extend a very warm welcome to all of you And trust you all and your families are healthy and cope amid the COVID pandemic, especially the 2nd wave that we have just gone through and the 3rd wave, which may hit us. As I talked about our businesses and financial performance, for the quarter, I would like to advise that in line with company's philosophy of interest first, During the quarter, we started a vaccination drive that resulted in 81% of our employees currently vaccinated at each with at least one dose. This was essential as our staff interacts with the public at large and also the public the borrowers and the depositors visit our branches. And it was essential not only to protect our team but also protect the customers to visit our Danske and your home day meet. The company has rolled out this agenda in January 22, as all of you would be aware, and I shared related monetary with last quarter to help achieve strategic objectives of being a profitable and a retail focused housing finance company, which is what the company aspires to become as a very, very strong retail focused company. The company also embarked upon its transformation in 20 last quarter and had named it as Project Ignite. There is a long term project with over 12 months, and diagnostic phase of the project is complete. We are entering the 2nd phase in which the implementation and other things will staff. During this stage, we conducted in-depth discussions, analysis and benchmarking to assess the current state and identify areas of opportunities across our verticals. We have identified a number of initiatives across functions, business, underwriting collections costs, etcetera, that could increase our digital footprint across grow business with efficient underwriting and collection modules, optimize our cost to create value for all our stakeholders. As part of our difficult journey, we are introducing RPAs in our standard processes to reduce human dependencies, automate our credit decisions for salary customers to start and collection systems with rule based engines and advance analysis. It's an ambitious project, and it is far reaching in terms of the way we are going to look at the business and the way we will deliver in terms of the business footprint that the company would like to have. Japan India COVID-two lockdown created extreme restrictions during the quarter which impacted business in collections. The company disburse received INR1759 crores during the quarter with 94% of the disbursements in retail segment in line with our corporate agenda. This is very critical from our perspective to make the company as a retail focused company. Our focus on the Affordable segment continues with Omni Business. This segment contributed 9% of the individual housing loan divestment and is currently at INR 2,986 crores of LUN. The company has created a selected vertical for this segment and has identified 13 locations in Tier 2 and We are still busy to be operationalized during the year. The first six centers go live by September, and these centers are over and above Our regular above 95 branches from there also, we do business at different levels. The collection efficiency during the quarter stood at 95.4 percent more because of the lockdown and major problems that India have encountered. The collection efficiency was the lowest in the month of May when the entire country was under lockdown. The efficiency improved in June and further in July. The collection efficiencies for July 21 improved substantially to 98%. The company has taken various initiatives during the quarter, which include cross functional allocation of cases and use of external vendors to improve customer interaction, addition of digital payment platforms to provide ease to the customers for making payments and updating of collections. I think this is one of the most significant things the way the company has been able to bounce back in terms of improving its collection efficiency, especially after not only the lockdown of almost 45 days, but also Lot of intervention that the courts have taken during this period. During this quarter, the restructuring scheme by RBI was extended up to 30 September 21. As on 30 June 2021, INR1733 crores, which is about 2.9% of our loan assets, has been restructured under the RBI resolution framework for COVID-nineteen related stress, this is OPR 1 and 2. There is no restructuring done during the quarter. Under the ECL year for MSME customers, The company disbursed INR 315 crores at the 30th June 2021. As highlighted by us in the last quarter. On the co lending opportunity, we are tied up with Yes Bank and are in discussions with other banks for expanding our reach on the pro lending space. This, we feel, will help us in generating fee income and cross sell income, along with expanding our customer base in minimal capital consumption. The module will also help us in onboarding prime customers at market competitive pricing for better retention. This is especially significant for HSE whose borrowing costs are very high and it becomes relatively Challenging for them to match lending costs of banks who offer a strong profit rate these days because of their cost of and very, very low cost of borrowing. The company has accelerated digital transformation across substantially. During the quarter, the integration of Aetna's online sourcing platform and NLOA went live, resulting in smooth file flow in the system. This is a significant step, and the allowance to our received platform increased from 31% in Q4 FY 'twenty one to 46% Q1. We now have some branches which are 100% sourcing their applications through the digital platform. I think going forward, for this company, This is something that the company will continue to follow continue to approach, and I'm sure that the industry footprint improves significantly. The company is also a part of the MSP's automatic data flow system project, which is currently under pilot phase, is also implemented. The GMP of the company stood at 6% as of 30th June 2021 on a loan asset basis. The net net pay as on 30th June stood at 3.6%. In a disciplined loan book, which decreased by 19% in the last 2 years, The GMP looks further elevated compared to a growing book. The company, as a prudent measure, has made adequate provisions and our total provision to total assets is at 4.47%. The retail GNPA stood at 3.8% as on 30th June 2021 as compared to 2.5% as on 31st March 2021. Increase in the retail book, Shigaraj NPA, is primarily unmetting from the self employed moratorium book, which we have communicated during the Q4 results. And amongst all of your teams, we have the highest self employed footprint. The team is closely monitoring the moratorium book to have faster and quicker resolutions. The corporate GMPA stood at 15.94% as on 30 June 2021 as compared to 12.7%. Increase in the corporate book GMP is the movement from Stage 2 and SIPR accounts only, which we have also discussed in our last presentation that we had. On the corporate accounts, the remedial management group that the company has created as we get good results and is relentlessly working towards accelerated resolution of corporate accounts. The resolution in 3 of our corporate accounts got impacted due to the COVID-nineteen second wave, and we expect few more resolutions within the calendar year. The 3 accounts, namely the protected radius and arena mentioned in the resolution holds aggregating ECL provision of around 70%. On an overall basis as a prudent measure, the company carries 15.6 provision on the loan assets in the corporate book, with coverage ratio of 55% in state 3 accounts. As per our stated position, We continue to reduce our corporate book. During the quarter, the company has sold and received accelerated repayment of INR479 crores. This is the beauty of continuous engagement that the company is having with all corporate borrowers, especially because of our very clear laid down strategy of ensuring where we will reduce our corporate book and improve or increase our retail lending. The corporate book has been down by 39% in absolute terms in June 21 from the March 2019 level. Talking about the liabilities, the company is seeing a downward trajectory in the cost of borrowings quarter on quarter. The company during the financial year has worked aggressively on prepaying and renegotiating its high cost borrowings. The The company during the quarter received INR 490 crores of MSP funding and the incremental cost of borrowings for Q1 FY 'twenty two stood at 5.74%. This is the first time that we have actually reached below sub-six percent. It has registered a decline of 52 basis points from Q4. The company has maintained liquidity of approximately INR 7,000 and 85 crores as on 30 June. I think the continuous engagement of the company and the Treasury Department, the CFO Department with all the lenders has resulted into this kind of a reduction that we have experienced in our cost of borrowings. On the capital raise, as communicated, from time to time, the matter is present as present subject before the Honorable first, and the company is awaiting the final orders. However, we continue to operate in a business as usual manner and working on strengthening our position with gearing, which has further declined to 6.4 times and with lower share of corporate, the CRAR has actually improved to 21.4% compared to 15% required by the regulators. I think these are some of the things that I wanted to cross, but as we go forward, the presentation has already been uploaded on our website. And therefore, I would like to throw the floor open for your questions and answers. I have with me the whole stock management team sitting over here, and I would encourage you To ask questions and the respective function head would be in a position to respond to you, It's definitely to help you and suit and actually help you in alleviating the questions that you all have. Thank you very much. And once again, Thanks for joining us. As I see right now, there are almost about 165 parts, and which is very, very encouraging For us, the interest continues to be extremely high in the company. Thank you very much. Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking The first question is from the line of Amit Ketan from Laburnum Capital. Please go ahead. Yes. Thank you very much for the opportunity. Two questions over here. First of all, on the senior management team, Should we assume the team is by and large in place and that this will be the team that will drive the new strategy forward? Or should we be expecting significant further hiring at the senior and possibly even the middle management level? So it would be good to get Mr. Harvayal's perspective on how much is done and how much is left to do in terms of the overhaul of the team over here. The second question really has to do with processes and In any sort of lending activity, it's only in a stressful situation that you actually understand how well the processes are working and what your cross cycle returns are. If we look at our core sort of borrower base, right, which is In both salaried and self employed, we gravitate to slightly higher risk than the absolute prime borrowers of the banks would K-two, not massively higher, but slightly higher. If we look at the yields we're getting from these guys at the actual credit costs that we're getting in the operating costs to take extra service, sir. Are we confident that we can get to a 15% or 17% ROE from this base? Or is that kind of unrealistic to expect where you look at yield given the competition normalized credit costs across the cycle and realistic operating costs, It will be hard for us to cross 12%, 13%. So those are the two questions. It will be great to get your perspective on both of them. Amit, in terms of the management team, the top team, more or less, the team is actually intact. We have had 2 exits from the company. The director had left in March actually in April. And subsequently, the CFO, the HR head, he also left because he had got an opportunity to work in different environment, and we decided that we needed to move. We are in the process of hiring a new city, and we will actually onboard them as quickly as possible, probably in the next few months. Otherwise, if you look at the sales underwriting, the collection, The CFO, the CIO, the corporate team, all of this is the team which is going to drive the business. And there's going to be pretty good stability in terms of the way the business is going to be done. Obviously, we will continue to look for opportunities to augment wherever we find So there are either gaps or it's because of the environment, because of the conditions we need to actually strengthen it. For example, that we launched and I mentioned to you on the project Ignite, the project that we started, we wanted it could have been run internally also, But we decided that project planning, project planning and everything is a completely different ballgame. And therefore, we brought one of an experienced transformational leader who has proven ability to deliver in terms of project implementations and other things. So that's one thing that we will continuously look at it. Whenever we find opportunities and we find that we have the right I think I did mention I failed to mention the CRO part also. We have a CRO who was appointed last Clearly continues to remain with us and there are internal audits we did last year. This is a strong thing this is going to run-in my opinion. In terms of the second question was in terms of your lending processes. I think There is no problem in terms of our processes. We have done a fairly good job. We have tweaked our processes whenever there was a requirement. We have changed our standard operating procedure whenever there was a requirement, and it is not that we have done it recently. Whenever the company has realized that there were issues that were dropping up on the portfolio side, it has responded and it has tweaked its business model. Whether it's both on the sales side, the kind of business that we sold, whenever we find that there are opportunities, new markets, we will enter over there. Wherever we find that there are stresses building up, we definitely will look at that, whether it is a systemic problem or it is otherwise. In the morning, you look at the underwriting, the tightening of the underwriting processes, The collection mechanism, there's massive amount of IT incidentals that are being done. The new rule based engine, automated engine, Our team has been brought in. Another one of the most important and significant things that we have done is that we are actually building up a strong and a very powerful advanced analytics team. And it's a bizarre team. Not only there will be people working under every vertical, but we will also be strengthening the arm of the CRO. So the PRO will look at the credit risk part and the analytics part across the organization to push information back over there. One more thing that is important is that the IT now remains a very, very strong bedrock of the growth engines. Digital IT. And IT is not going to just provide an infrastructure. IT is going to support the business that it is being run. So in terms of repetitive processes and in terms of any other things, IT has got a strong power to reengineering everything. I think all these things that you look at is should enable the company to actually do significant amount of savings in terms of the way we do business, We calibrate the strategies wherever it is, bring down the cost, improve the income wherever we find opportunities, And that is the only way we can actually add value to the share to all our stakeholders. And right now, We are in a midst where we have done the diagnostic process. The complete diagnostic has been completed, and we are moving to a stage where we are implementation stage. All these questions that we talked about in terms of our business mixes, in terms of the way we deliver, In terms of the ROA, ROE, all these are part of the diagnostic and the results are with us. Now we are looking at setting up the vision statement and then what exactly are going to be the deliverable in the next 3 months, 6 months 9 months' time. I think the results that are there are organic in nature the way we are looking at it. But the moment we put in place this implementation phase, You will find that the results will start delivering at a much faster pace. And obviously, right from the business growth to the revenue streams, which is interest and other income, to the profitability and the ROE, ROA will actually perform The complete cycle of all of the way we look at the business. Anything that you'd like to add? Sawan, your question was on the ROE that you would like to look for and you started on a number of 15%. You know, MB, Mahindra mentioned when we were speaking earlier on that we are operating in a DAU manner, but the environment in itself is not a conducive environment. We had lockdown Last quarter, we had not done the same quarter last year as well. So this is creating some challenges on the road. To around 18% now sorry, for 20% as of June of 20% to around 18% now. As we reduce our share of corporate book, We would be in better position to enhance our gearing. And with enhanced gearing, I'll be able to then have a better ability to get Capital is extended. The opportunity for us to get to that 50% ROE is definitely there In a steady state normalized environment where the credit cards do not really come in too hard, is something that we will look for. And I was just Over the next couple of years, we achieved that number because the 50 office is sometimes a building. We have got to a gaining of around 6.4. So as we move higher with the larger retail book, that's what we will get under our assets to reach. We are looking into other opportunities to advance our revenue in the form of pre income, in the form of co lending opportunities as well. We'll give the addition on our fees without expecting on our capital Just to take you a little bit back, including financial year 'nineteen, the company had an ROE which was beyond 15%. I think the company has demonstrated it previously. It is a cycle in which it all started as a company It has some issues in terms of its corporate book and then the structures have come up. But we can tell you that a lot of commitment and law of authority The way the company is actually shaping up, there is a strong possibility that going forward into the year, we should be able to reach that level. As the deal gets approved, Mr. Puri coming and joining the Board. I would like what you've been a CEO before, he has been a CEO before. What kind of guidance would you expect from him? Which areas do you think he's likely to add the most value? And from what you've said, I assume you don't expect to shake up the senior team very much. So it's still going to be very much the senior team. Have you had discussions around a potential change in strategy and how we're going to leverage this individual who clearly brings a lot of experience and a strong track record to the table. Amit, the matter is that Judith would like to wait for the fact results to come in, and then we will have to then I would like we would go to the board and sit down together because to review what exactly is the fact verdict. And I would like to comment only after that. These are conjecture. These are forward And I would not like to comment anything on either any individual or anything that the company will do. The company has a plan. We've been doing on it, and that's the way it will continue to do. Obviously, with the guidance of the Board, we continue to actually operate. That's the way we are going to do it. Thank you. Thank you. Thank you. The next question is from the line of Amit Dhanathra from HDFC Mutual Fund. Please go ahead. Yes. Just a couple of questions from my end. One is this, your cost of funds has come down over last 1 year. Have you passed on any lower interest rates to your customers because on reported basis or even on calculated basis, your yield on advance continues to remain where it was 1 year ago. Whereas for many of your peers, it has come down very Please. So can you highlight what the FF has been? Has there been any reduction in the lending rate for you on your back book also? And what is the current interest rates on the bad book on retail? Yes, hello. Sefo will cover it in detail. But let me tell you, In terms of the lending rate and in terms of categorizing the lending rate, the company will continuously under look forward. The company looks at asset And we are going to quote the rate that we are going to borrow as whatever costs are required to be added to it on the borrowing cost, the cost of borrowing, And then the lending rate has arrived at. The company continues to look at those things. In the last about 1 year, not 1 year, about 6, 7 months, The company has brought down the interest rates on 4 occasions. And these have been pretty well received because if you look at and the business was completely normal, And we got the 90 days in the Q4 of FY 'twenty one, which is January to March. The company did significant amount of business. And therefore, there is significantly fixed scope for doing business. We continue to do good business at the cost at which we are offering the lending rate. In terms of the rate, we did look at it. The Alco sits, Telco decides on the rates, and we see what is the best that we could do. This is Gantan Lim on the call. On the cost of borrowings also, the company has in terms of the cost of borrowing, if you look at it, I have cost of funds and other things, I'll leave it In terms of the cost of borrowing, we have renegotiated everything. Every bank And as the lender, we have gone and we have spoken to them and we have told them that there is a significant whether if it is 100 basis point reduction in their repo and other things, There is a reduction of about 70, 80,000 in the MCLRs of various bank as you look at it. We have suddenly got assets engaged. It is not just actually bringing down the interest rate from the NCLR. That's because the NCLR has come down. So it is renegotiating the spread over the NCLR. I think that is why the interest that we had engaged with every bank, unfortunately for us. But everybody realized that, yes, there is a big opportunity to reduce the interest rate. And keeping in view the way the company operates under the umbrella of PNB name, So we have been able to negotiate, and that's one of the reasons why we have been able to do it. I think it can also cover on the spreads and then other things on the cost of funds, etcetera. So, Amit, there are 2 parts of this. So one is on the new acquisition. Yes, on the new acquisition, we have reduced our As what Andy mentioned, 4 times we've done this. And as and when we get benefit on across the borrowing, on the incremental long term money that I'm borrowing, So that's something we have done. So our real estate strategy has come down from what it was in last year, same time to what it is today. On the O and M and A, we have We have a whole business resizing policy with heads up that is working with our customers, some key factors on their sales profile to pass on them And on the new and recent, we have reduced our rates when I'm assigning customers what it was last year and what it is now. On our overall book, with regard to the old book, This is regarding actually incremental long term borrowings. I think we look at it differently. I mean, when I mentioned to you the incremental Costs are borrowing. They've come down to 5.74. But when we look at the lending rates and the stability of the front and the long term product that we have. We always look at the incremental long term borrowing rate that what is the best we are doing it. And that would always be the standard Vancouver, I mean, for the short term rate that we would sometimes not the best way to look at it. So I think those are very, very important things from the point of view, from profitability point of view, The return advances as well as the spreads, other things we are able to control, net net interest margin is maintained. Okay. These are some of the things that we are continuously looking at it. Can I ask my second question now? Yes. My second question is that, ma'am, what we have seen in last 1 year is that The mix that you have and the return ratios and then when all you are delivering is based on a book which has gone down. Now I'm assuming that you will get growth capital soon and once you get that and you start growing, I just wanted to know that The future growth when it starts happening, will the mix be similar in terms of your LAP as well as housing loan and also the mix between salaried and self employed. And in the future, Composition of AUM, will it look similar to what it is currently or that is going to change meaningfully going ahead? Actually, the portfolio has been balanced. If you look at it, With the down selling and the faster repayment of the corporate book, the book as such is actually showing a complete So the rebalancing that's happening yesterday. When we said in January that we are going to rebalance the whole portfolio by becoming a retail focused organization, Well, we really mean that. And that's the way we have wanted to do it. So in terms of actually anything that we have wanted to do for our building and new book and other things, We will continue to actually focus on that book. The corporate can give you a higher rate, but we are looking at a very stable book, extremely stable book. And these are the books which will enable us to take care of the environmental Yes, it's on the bumps that keep on coming in. And that's the way we are going to actually respond to the whole way. Amit, before I forget, one more element why my yields are still where they are, maybe a clear brand. Although my yields issue on the lower end is also because I repriced Thank you. The next question is from the line of Shubhanshu Mishra from Systematic. Please go ahead. Hi, sir. Thank you for the opportunity. Two questions. One is that, given the fact that you're increasing our digital forays, What life status or status of the credit is this going to affect and what have been the budgeting exercises done for the OpEx Please, if you can guide for that, that's point number 1. So, the map, I see a large portion of the book More than Sanddilag. So how many customers do we have outstanding for that particular book. And given the fact that we are talking about analyzing the book, what kind of A proportion we can look at maybe in 2 or 3 years' time, what would be retail, what would be lap and what would be non Retail, non retail. If you can, please repeat your question so that I can do Sure. So what kind of OpEx decline are you looking at with the digital sourcing increase? And Which on parts of the life stages of credit is basically going to affect? Is it only sourcing or There are various other live stages that we've also planned out because we have also spoke about Amulet. So, what are the one is, what live stages of credit Is digital foray going to affect? 2nd, what is the OpEx decline one can look at, given the context Looking for the housing, please. First of all, the digital footprint will be implemented across the life cycle of the loan, And it is not only restricted only to the underwriting process or a collection process. It is end to end. As you see, our current initiatives that we have just taken on digital sourcing and digital applying for digital application for the customer to apply for the loans, it is changing momentum. However, it is too early for any initiative to come out with a targeted office reduction upfront because this increase into productivity also results into some kind of an off build offshore staff required to purchase a similar amount of lumber. So those calculations will fluctuate only probably when the Yes. Subranche, on the digital side, right from the acquisition, which is I spoke about, 46% is the acquisition. Right. And then what we are saying is I have mentioned to you about the rule engines. I mentioned to you about the business rule engines, which are important. The standard is going to meet we will go through the complete automated processes, the completing new rules being written, Automating the whole processes, duplicates being removed, redundancy being removed, RPA is taking over the repetitive work. Similarly, as it move forward, it moves towards the disbursement lag, and then it finally goes to the collection lag and paper is filed, API, CTOP, Lot of work, this is a very expensive one, which is very expensive. So the acquisition cost comes down very, very critical for us. Acquisition from us, sometimes it becomes self services. Then actually the underwriting cost comes down significantly. The collection is already we are working on it. At the moment, we integrate it fully With our Tiger app, let me call for the collection, all these things are significant in terms of bringing down the cost to income. We are looking at that in case we are or I would not say in case. When we go ahead and fully implement it, The solution is complete. So similarly, the whole cycle is actually integrated, but the rule engine is going to come only after September, October. Once we have done it, since the volume game that we are looking at, we should be in a position to improve the volume. And therefore, instead of saying that how much cost I will be able to reduce, and I think the good measure would be to understand that we should have a very, very controlled, calibrated cost to income basis. The income can go up with the business volumes that we will generate, And of course, KPN will not grow up in the same proportion as the other things will actually grow. I mean, those are some of the very, very important things In terms of the digital reports that the company is having, we'd like to record a strong digital company. On the last and other things, would you like to respond? Yes. So loan against property, if you see that up to 75 lakh segment, there is an increase in portfolio and like you mentioned. Beyond that, You see a decrease because incrementally and this has not reached last 4, 5 quarters, incrementally, The focus has been to up to funding or the lag cases around 30, 40 and even 75, not more than 75 lakhs. When we see this, our average LTV is less than 50% when we speak. And then on the left, we find that the sales and predominantly sales and portfolio In an average age of 40 plus years, these are 2nd or 3rd generation business profiles. So I hope I answered anything. And the plan number On NSS, please, where we are talking about the ticket size, At this time, we have considerably reduced more than 75 lakhs. If you talk about, say, 75 lakhs earlier, some 1 or 2 years back, we were somewhere around 14%, 15%. Now we have come down to 14% in there. It's about INR 2 to INR 5 crores, we have come down from 20% to 9%. And similarly, INR 5 crores, we have come down from 16% to 3%. So that's where we are moving to a granular ticket side in terms of NHL business. And we are very, as Sachin mentioned, we are very, very careful In sourcing these kind of business results, almost every month, we get these advisories from underwriting team to pick up those cases which are which have a good signal record and all those things. In figures also, we are very careful picking up Good difficulties also. So that's where we are currently. The number of customers outstanding with mobile 75 lakhs of exposure in the lab book, so that was my question. I understand the granularity part of it. If you can, please give me this number. Raju, as of now, we would not have those numbers handy. We will come back on that. During the course, if we are able to get that, we will just give it to you. Otherwise, we can go to the next step. Right, sir. Sure. Thank you. Thank you. Thank you. The next question is from the line of Nudhush Jain from Investec. Please go ahead. Thanks for the opportunity, sir. Sir, just one question on our credit rating update and any interaction with the credit So since our performance has been very good, we have set up gearing. Our books It seems to be very well provided. I think we are carrying the highest provisions as percentage of the loan book coming from the HFC. So what's the credit rating agencies are waiting for to upgrade our credit rating? So, Nitesh, actually, we did had one conversation down with the rating agencies in the last quarter. One thing is that capital is not sorry, capital is not coming as a real We want to go to some component on the gearing side, and we are now looking to add the assets of the business as well to build a base for ratings. So they could see that our gearing has come down. They could also see that we have reduced the mix between retail and corporate. So those are the converting factors. So the similar transaction has been through the other aspects of the business to enable us to build that case on a 2 step process. The concept would be to see our outlook change from current status to our to our table or a positive state and then to have a next level conversation on the rating improvement as well. COVID day 2 does bring in some stock to that process because they would now like to wait and want to see how things are stabilizing for players in the market Just dialing for the conversation on the dating improvement. Sure. But the current gearing from their perspective, so I want to understand that On a sustainable basis, is the current gearing a sustainable number from a trade rating the comfort of they want much lower gearing from these levels? Yes. So they are using words like the current gearing is because we believe the current gearing is bad. So they are not giving us Nikindra, Ritu was coming in as well. There is a disconnect between the gearing that they are looking at it and the gearing that NSE looks at. We have told NSP also to reconcile with them. That's why we are looking at differently. But anyway, they obviously are looking at an everybody because of the lot of capital We are looking at lower gearing. There is no second thought about it. However, 6 Point 3 that we have achieved is a good gearing in terms of the reward and risk and the reward and other things. Yes. Because we have replied to further bring down our gearing, that means that our ROEs will always be suppressed. So that is a bit of a concern. 2nd, sir, is in terms of yields, if you can share what are the yield on our current book on the retail portfolio and on the housing portfolio. We don't take sale, housing and non housing. So Okay. Okay. And you said the book yields also that would be The book yield for retail segment, Nitesh, is 9.87%. Within that sorry, 9.58%. Within that, individual housing loan book yield is 9.19%. Thanks, Giti Gharan. That's it for my time. Thank you. Thank you. The next question is from the line of Ankar G from Sree Consultancy. Please go ahead. Once this project is implemented, what kind of growth are you looking at? We have classified the last conference call also where we mentioned that we will be targeting around 50% to 60% of growth. I mean, I'm sure on disbursements. And we will be carrying on with that, and that's where we are endeavored to reach. And we are focusing on that number currently. This is a follow-up on the discussion that we made last year so that you can understand. Yes, so in the last year, We are pretty sure, Vinam, with this we are sure that we will be able to achieve these numbers because if you see in the last year quarter of Q4. We were able to get around INR 4,000 crores disbursement in the quarter. And there in the March, the month of March, we were able to do almost INR 500 crores business. So if you see going forward, we have got all data done, and I think we will be able to I think 10,000 was what you did, I think, from there. Onkar, we did 10,000 approximately 10,000 crores of this business. Yes, last year, 10,000, I'm not aware. I think that is what the I was up in Q4. So when we said 40% to 50%, we are looking we would look at this kind of growth. And it also comes from the on the assumption that there will not be lockdowns and other things. That is one part. And that is one we are baking in into our we are going to bake it into our the MOU that or the budgeting that we are going to do. However, your question is beyond that, and I will let you know. What you are saying is that when I want to be done with this project in May With my consultant, what is the kind of growth I would be looking at it? Now this is something that will also flow in. Some of it will flow in, in this INR 15,000 crores that he's talking about. Some of it will flow in because of the changes in the processes into the parent lease, into the system that we are going to introduce and some of the business is going to come because of those changes in the 1 year that we are going to have. However, The changes are going to be significant once we have stabilized the whole operation. And that is it's a 1 year process. So I would assume that after about 9 months and about 6 months from now, we should see some good traction coming in into the home. And Rajan just mentioned that we are looking at that kind of disbursement improvement because I think, in my opinion, we can very easily take it up over there, assuming that the COVID-three disaster, the day 3 is not there. There are no more down the floors in here, and we are in a position to have business as we play. Yes. Because this project, Ignite, is just not about, as Andy mentioned, it's just not about generating numbers. It's about having complete overhaul of the systems, overall of the processes, having the Giving additional footprint across the organization. And I mean there are many things which are taken care by this project Ignite. And yes, and obviously, we are pouring into big time into now into affordable housing. So that's also a part of Project Ignite, and we are taking the very seriously, and this all this thing will add brand new deals. Why? Because we are hearing you at all. I mean, what was the question? I was saying that just from the first question which I asked, I was saying that Whatever you have said, it means that from the next financial year, the project should start giving its results, right? Yes, absolutely. Okay. The second question is on the capital adequacy. Since you already have a 21% And with the new capital coming in, what I mean, what will be your target areas for the growth? So obviously, we updated statements that our internal would be to go into the retail segment. There is a statement LNB, that is the result that we need to maintain home housing at all. So yes, so nothing changes with regard to our new opportunity in terms of product centers. It would be retail driven, it would be individual housing and the lab mix. The mix here could be in the range of around 70% to 30 That's the kind of mix which we've always maintained. And in the housing portfolio, we have the product Gundati, which is our business area as well, Making sure that we have the set interest available with regard to connection recovery as we build the asset base. So the Yes. So this, whatever you have just said, this is irrespective of the Carlyle deal you are talking about, right? We are talking about business days, but that is one part, and we don't know. The matter is subject to this. I would like to ask Yes, whether that goes through or it doesn't. Anything on the capital or anything, we'd like to wait for it. And we will be ready with this once we have some kind of clarity that comes from the thread, and we will go back to the board, discuss it extensively and come out with our strategy in terms of whatever the direction that we would like to make here. And as part of our business, it's a large organization. Organization with about 70,000, 75,000 crores of business. It has its own way of doing it, and it has its strategies in place to grow. It knows what exactly it wants to do. It is just a question of whatever new things that you have, we would like to tweak your strategy for optimal results. I mean, that's one thing that we would like to look at it, given the circumstances that we operate in. Thank you. Thank you. The next question is from the line of Sumit Jain from Sumit Associates. Please go ahead. Yes. I have one question. Hello? Yes, sir. Yes. So, you have mentioned that you have raised an agreement of maybe 490 crores in quickly, right? Yes. And your cost of incremental cost of funds in Q3 is 5.7% something, right? Yes. So total borrowing How much total borrowing we have done in Q3 Q1? So, sir, for a misstatement, amount is 1490, not 490. We did INR 14.90 crores for management in quarter 1, and the total volume that we did in quarter 1, It's your money, but then I would also like to assume that So we should be able to get it refinanced as well. So we should be able to get it refinanced and further extended once this money Thank you. The next question is from the line of Gajeet Sarsil Rasool from ICICI Bank. Please go ahead. Yes. I just have a quick question here. So I am trying to understand the rationale behind making it a retail centric portfolio by January because as far as I can think, increasing the exposure towards Retail segment will definitely increase the risk of the portfolio as well. So until the economy is performing perfectly, in the Just times, I think the loan to value ratio will decrease significantly because the probability of a decline in the value of Grade A properties, which are in the case of corporate borrowers, is very low when compared to individual housing. So I just want to understand the rationale behind making it a retail focused portfolio by January. Let me see, Badri, I mean, if you Understand this, total breakup of how things are panning out and how things have been for us in the past also. So the corporate portfolio was not doing that great for us, and we categorically, we started moving towards shifted our focus towards retail business. And the main purpose is that we were not getting too much into a bulk business in a corporate way. We want to split. We don't want to have a concentrated risk in our book. So the main purpose is to have a well spread out book, The risk is obviously been set out in that way. And you understand that the risk rate associated with that book, the risk rate associated with the book cost, So cost rate is pretty high in terms of the estimate. Yes, 100% is the risk rate associated with the book. And if you talk about risk rate as it is in the range of 50%. So there also we are able to deploy our money in a much more efficient manner where we will be able to get much more returns. So if you see all those aspects putting together, the risk, the capital, the return and everything, I think this makes a much more sensible preparation for us to be in a retail book. Sorry to interrupt you, sir. We cannot hear you clearly. Can you please come close to the mic? And that's the most important aspect. We are quick enough to realize that there are systematic issues And we were quick enough to react to it, bring down that part of the book very quickly. I mean, somebody who's holding on to this book in the COVID time, this is And we will see I don't know what the situation is. As of now, I will be leaving the actual capital strategy. Kashi, one thing is just on the consumption of the capital and obviously corporate ask for natural capital and capital intensive Business also. That's one part of it. But please remember that whenever we are talking about the retail, Yes, Simon, this is talking about creation of verticals, affordable housing. And I think the government of India is also very clear in terms of the Portable Housing and they are for motor lift. Secondly, if you talk to any of the builders, you realize that everybody is concentrating on building Affordable Housing side. So there is massive opportunity that is going to come up in India on the affordable housing side as well as loans which are less than INR 2 crores also. I think it gives you a very, very a large portfolio, which will become stable as we grow, A minimum mark of that portfolio is going to be very, very stable portfolio, and it is not the degrees of the economic cycle. It's not a sizable business that is today, it's only 1 500 crore accounts. It can actually create some little bit of turmoil in the company, Those kind of things. I think the sale will give you very, very good stability. And the moment you enter in perfect and you start doing good amount of affordable, The overall fees on advances and proves. I think that is very, very critical from our perspective, and that's what we are looking at it. And how do we manage it and how do we ensure that these NIMs and others are actually improving continuously? That's one of the thoughts on which we are moving, and we are going to build on it. Thank you, sir. That clears the rationale, Rob. Thank you. Thank you. We'll take one last question, which is from the line of Deepak Lalwani from Unifi Capital. Please go ahead. Yes. I think you may have discussed it earlier, Binky, but if you don't mind repeating. So you've done a disbursement of around INR 10,000 crore last year. So what is the target you're looking for this year and maybe the following year? I think you just got a little bit too, I think you can repeat that. So Deepak, I think it's I'm just repeating it. I've done it again previously also. So we are just targeting almost 40% to 50% growth over 10,000. So it is almost so that's the number that we are targeting currently. For this year. And maybe next year, do you have any target or? No. Next year, we'll see. We'll get back to you on that. Okay. Fine. That was all. Okay. That was all. Thank you. Thank you. Ladies and gentlemen, due to time constraints, that was the last session. I now hand the conference over to Ms. Vipita Gupta Pajin for closing comments. Thank you, everyone, for joining us on the call. The transcript of this call will be uploaded on our website. Thank you. 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.