Q1 21/22

Aug 5, 2021

Ladies and gentlemen, good day and welcome to the India Built Housing Finance Limited Q1 FY 2022 Earnings Conference Call hosted by Investec Capital Services. As a reminder, all participant lines will be in the listen only mode, And there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. From the management, we have Mr. Gavan Banga, Vice Chairman, MD and CEO Mr. Ashwini Hooda, Deputy Managing Director Mr. Sachin Chaudhry, Chief Operating Officer Mr. Mukesh Garg, Chief Financial Officer Mr. Ashwin Malik, Head Treasury Mr. Ramnath Shenoy, Head, IR and Analytics Mr. Rakesh Gandhi, Head, Market Mr. Hemal Zaveri, Head Banking. I now hand the conference over to Mr. Ravind Banga. Thank you and over to you, Mr. Bonga. Thank you. A very good day to all of you and welcome to the earnings call of the Q1 of fiscal 2021 2022. I hope all of you and your families are doing well and are safe. Kindly bear in mind that most of us are taking this call from our homes. Therefore, we request that you restrict yourselves to high level questions. Granular numbers beyond the ones detailed in the earnings update or on this call can be taken directly from the Investor Relations team by e mailing them. Since our last call post our quarter 4 fiscal 2021 results in May, The COVID-nineteen pandemic situation in the country has fairly normalized. The country as a whole has seen continuous fall in the number of new cases reported and restrictions on movements have been lifted to a large extent in most of the states. Scientists and doctors continue to warn us of an impending third wave, but given the At IVH, over 80% of our employees have taken at least the first dose of the vaccine and all our branches are now operating following strict hygiene checks, sanitization, social distancing norms and local guidelines. With the economy opening up again in June coupled with vaccination gathering pace, Economic activity has rebounded. Our disbursals too have picked up pace from June onwards. Our collection efforts suffered in April May, dropping to a low of 96%, owing to the lockdowns and consequent restrictions on the movement. It has recovered steadily from June onwards and is now back to 98 plus percent levels. Residential real estate demand, which picked up last year, has continued to gather pace. Property registrations are at an all time high in most of the cities. Housing sales in the first half of calendar twenty twenty one recorded a 67% year on year increase in the top 8 Indian property markets, with strong sales being recorded across price segments after over a decade, especially in the premium segment. Real estate developers too have regained confidence with residential project launches in the first half of calendar twenty twenty one recording a robust 71% Y o Y increase. Real estate cycles in India are typically at least 6 to 8 years long, And it is after almost 9 years that we are seeing this uptick. We strongly believe that we are now at the cusp of a long up cycle and the next 6 to 8 years will be extremely good for the residential real estate sector in the country and Indebul's housing will continue to take benefit of this tailwind. I will now quickly cover the headline numbers for the quarter. I request all of you to refer to the earnings update that has been sent across. Please refer to Slide 3. As at end of June 2021, our loan book stood at INR 65,438 crores. Our AUM stood at INR 79,213 crores. Our regulatory capital adequacy at the consolidated level stands comfortably at 30.9 percent of which Tier 1 capital is 24.3%. Our net debt to equity has moderated to 3.1 times. Our net interest income for the quarter stood at INR 765 crores. Our employee expenses for the quarter were INR 115 crores compared with INR 16 crores in quarter 4 fiscal 2021 and INR 88 crores in quarter 1 fiscal 2021. Last quarter, which is quarter 4 fiscal 2020 One, we had a write back of superannuation, retire and ESOP expenses of over INR 60 crores, which resulted in a low net employee expense. If we are to compare just the salary and the incentive expenses within this, Excluding the ESOP and the retire expenses, the comparable number was INR 98 crores for quarter 1 fiscal 2022 versus INR 80 crores on quarter 4 fiscal 2021 and INR 78 crores in quarter 1 fiscal 2021. This increase quarter on quarter of about INR 18 crores is on account of the following. Roughly INR 3 crores is on account of new recruitment. The remainder INR 15 crores is on account of the annual long term performance linked bonus, which we have paid to our employees. This long term performance linked bonus is aimed at helping us retain employees, help us quickly ramp up disbursals this year and will also in some ways help us compensate for 2 very nominal increments that we've given over the last couple of years. This bonus has a clawback provision built into it based on performance and continuation of employment. Thus, most of the increase is related to increase are sustaining our capacity of disbursals and will certainly be offset by higher fee income with a lag of around 6 months. So this increase should result in a compensating INR 18 crores or so of increase in fee income on a quarterly basis within about 6 months. Overall, our path for the quarter came in at INR 282 crores, a 3.2% Y o Y increase as compared to INR273 crores of PAT in the same quarter last year. The company's profitability has now stabilized and is showing a trend of growth over corresponding period last year. For the first time since the ILNFS crisis broke out in September 2018. Going ahead, One has confidence that our profits will also be supported by a declining cost of funds. Our incremental borrowing costs have reduced and the stock of borrowings is also trending lower, thanks to a change in the outlook of our credit rating. This reduced cost of funds on book to 8.3% has enabled us to maintain our spreads at a comfortable 2.6%. Moving on to Slide 4. Here we have detailed our performance on various important financial metrics. The management continues to work on 3 important pillars, capital adequacy, liquidity and asset quality to fortify the company's balance sheet. I will cover updates and progress on each of these three pillars in the next few minutes. We are one of the best capitalized Housing Finance Companies within our peer set with a capital adequacy of 30.9%, of its Tier 1 is 24.3% and one of the least geared with a net gearing of 3.1 times. On the back of strong performance parameters, CRISIL had revised the company's rating outlook to AA with stable outlook in March this year. As we speak, the company is engaged with the other rating agencies to also review our credit rating outlook and one is very, very confident of the outcome. The next meaningful target on the rating front is to get an upgrade to AA plus An upgrade to AA plus will immediately reduce cost of funds, both stock and flow of funds by as much as 50 to 70 basis points. AA plus will also enable diversification of long term pools of capital becoming available again to the company given that provident funds and insurance companies prefer to invest in AA plus or higher rated paper. Subsequent to the AGM, where we have taken Several enabling resolutions from our shareholders. The management is now in implementation mode and would be taking all strategic and operational steps to try and ensure an upgrade to AA Plus in the current financial year itself. Our asset quality has remained stable despite a period of acute Macroeconomic stress brought about by COVID and result in clock downs. Till date, we've had to restructure loans of only INR 84 crores equivalent to 0.1% of our AUM, even under the restructuring framework 2.0. But under the Restructuring Framework 2.0, the Reserve Bank has given time for the smaller borrowers till September 2021. We are thus engaged with all of our Small borrowers evaluating their requests. At this point in time, I would like Under the government guaranteed ECLGS program, where the government guarantees the loan that we give out, We have sanctioned loans of INR 4.89 crores and we expect this to rise to a total of INR 800 crores under the government guaranteed scheme. Overall, our portfolio performance has been much better as compared to the industry. That is besides the fact that we run a secured book, The retail loan book is now well seasoned with an average vintage of the book of about 4 years, given the Deep consolidations that the management choose tools for the company. This high vintage of 4 years implies very low current loan to values and hence increased resilience to the economic consequences of the pandemic. However, taking heed of the warnings of an imminent 3rd wave And fully appreciating that the economic impact of the second wave will play out over the coming months, The management of the company has decided to take an extremely conservative and prudent approach towards provisioning in order to strengthen the balance sheet. To effectively tackle any and all potential future contingencies, we have showed up our provisions on balance sheet to INR 36100, which is almost 4x the regulatory requirement 4 times the regulatory requirement and equivalent to a healthy 5.5% of our loan book. It is also 159% of our gross NTA. This higher provision cushion places our portfolio in a strong position to negotiate any potential macroeconomic uncertainty due to the second or the expected third wave of the COVID-nineteen pandemic. On the more optimistic side, since growth has resumed On the disbursal front, we believe that this 5.5% coverage of loan book, we have created a very comfortable foundation of provisions, which will allow the company to replicate the steady compounding that we had witnessed across all financial parameters for a 10 year period between 2019. We are starting with that exercise now and this 5.5% provision cover of our loan book should be a good base for management to be able to focus on compounding all financial parameters on a very steady basis. Atec CAGR close to 15%. Our net NPAs are down to INR 1227 crores from INR 1517 crores in quarter 1 fiscal 2021. As further detailed on Slide 6, our gross NPAs as at end of June 21 are at 2.86%. The NPA percentages seem optically higher on account of the large reduction in our loan assets. Had the company not chosen to de grow its book in the past 1 year, the gross NPAs of 2.86% would have actually been at 2.45%. To conclude the asset quality point, We believe our strong provisioning pool, seasoned retail portfolio and strong demonstrated recovery capabilities will ensure that asset quality will remain stable in the future as well. The guided range for asset quality is plusminus50 to 60 basis points from where we are. On Slide 5, we have given an update on the elements, which are at the core of laying the strong foundation of our retail asset light model. We have been on a path of consolidating our wholesale loan book for the past two and a half years. Strong sales traction in residential real estate and hence collection in escrow accounts of Projects which are hypothecated to us of our wholesale borrowers has put the company firmly on track to reduce its wholesale book by 33% by March 22. Over the course of the last two financial years, The company has entered into several structured transactions to enhance The pace of reduction of the wholesale book and also to generate liquidity such that it can continue to disburse for last mile financing of projects, which are mortgaged to us. While we have invested over INR 10,000 crores or nearly $1,500,000,000 over the course of the last 2 to 3 years, we have achieved A unique opportunity today where most of our projects, which are mortgaged to us, have either Get gotten to a stage where they're already at occupancy certificate, have received the occupancy certificate or would receive the same over the course of the next few months. While there is tremendous sales pickup in the residential real estate market. The consumer tendency is to purchase homes which are nearly complete and not early stage homes. The projects which are mortgaged to us are thus uniquely placed to enhance the sales momentum going forward, And we believe in fiscal 2022, therefore, the primary reliance to run down the wholesale book would actually be on self liquidation, where incremental sales and collections from sales which have already happened would facilitate this process. We do not foresee significant number of structured transactions being required in fiscal 2022 to reduce the wholesale book by 33% by March 2022, which is the goal that we have set. On the retail side, we've continued to expand our branch network in Tier 3 and 4 locations. Over the last few months, we have opened 10 technology enabled smart branches. We are well on track to add 50 such branches in Tier 3 and 4 towns within the financial year. We've also made immense progress in establishing our co lending partnerships over the past few months. We believe now, Given the multiple partnerships we have, we have the widest product offering in our history where we can afford to offer home loans at rates as low as 7%, 7.2% to MSME loans as high as 14% with each and every loan being eligible for either securitization or co lending. On the co lending side, we have started sourcing loans actively for each of our partnerships. The real time technology integration is also progressing and with most of our partners should get completed by the period September to December of this year. So we have all the partnerships in place. We have a very wide Product offering, the widest in our history. The sourcing has started in the market. And as we look to scale up, The tech integration is also progressing well. We expect to do meaningful disbursals under these arrangements from the current quarter, which is quarter 2 fiscal 2022 itself. And as I have stated in my previous call, From quarter 2 fiscal 2022 onwards, when we declare our results, we will also be updating stakeholders on the specific co lending numbers that we've achieved in the quarter. Moving on to our 3rd pillar, The pillar of liquidity and ALM Management. We had liquidity buffer of INR 11,419 crores. The large part of that was almost INR 10,000 crores was in unencumbered bank balances and bank deposits and the balance in government securities, liquid bonds, mutual funds and commercial paper. As part of our ALM management, We had updated that 66% of the bond repayments of INR 6,576 crores coming due in September. You've already completed buyback or an effective buildup of treasury stock, does nullifying any additional outgo of cash from here. We've also complied with the Debt redemption fund requirement of creating 15% of total maturity of bond. Thus, Now the additional liquidity requirement is minuscule, which will not move the needle in our liquidity buffer. So we moved on from this one lumpy repayment that we had to continue to leverage our liquidity buffer to build further credibility. We believe our strong buyback, stock repurchase program of INR 6,000 crores has gone down well with our lenders. In order to continue to move on that momentum and given the fact that we have a repayment of We have done something very unique where we have created voluntarily a reserve fund for repayment of these dollar bonds. The company will periodically transfer a sum totaling to 75% of the total maturity proceeds of these bonds in 3 tranches of 25 percent each to a debt repayment trust managed by our lenders repayment trust of IDBI Trustee. IDBI Trustee will utilize these funds towards the scheduled redemption of these bonds. We've already transferred the 1st tranche on 4th August and the second and the third will be transferred on 4th November 4th February. These bonds are fully hedged, Thus, the INR liability of INR 2,730 crores will be made in May 22, of which INR 2,047 crores will come from the reserve fund, and we will transfer the balance of INR 6.82 crores in May. The IDBI trustee has already notified Citicorp International, which is the dollar bond trustee. And we believe Citicorp would have in turn informed all the bondholders via the Euroclear and Clearstream system. Besides the INR 6,000 crores of bond repurchase and buyback, We had also done a similar prepayment or creation of a reserve for INR 315 crores of Masala bonds, which had come due in February 2021 by transferring to our lenders repayment trust in November 2020. We will continue to follow this proactive approach towards our ALM management and continue to leverage our strong capital position and comfortable level of liquidity. I'm sure this will also provide Our ALM is published on Slide 7, and we have also provided quarter wise detailed ALM on Slides 22 to 26. If you can now please refer to Slides 1213. As we've laid out in our fiscal 2021 annual report, From this year onwards, environmental and social consciousness will be key considerations in every aspect of our operations. We are engaged with leading ESG rating institutions to further formalize, benchmark and measure our ESG approach. Doing so, we are confident that the targets that we have laid out for this year as well as over the next 10 years will be met and we will continue to improve our operations such that we adhere to ESG best practices. These targets have been detailed on Slide 13. Despite the 1st 2 months in the quarter being a washout due to the 2nd wave, We have made considerable progress in terms of disbursals in June, which has further gained momentum in July. We have now stepped on the gas pedals to increase our retail disbursals through our new asset light business model, Our co lending partnerships, which are in place, we are increasing our manpower and opening new tech enabled branches. The macro on the residential real estate demand is also very strong barring any significant Adverse economic consequence that an impending third wave of COVID may have on the economy. We are very optimistic and confident about our future growth. The management team continues to focus on for defining the balance sheet and making sure our principles around asset quality, liquidity and capital, We continue to get stronger on. The retail asset light business model is maturing well, And we are fairly sure that by March 2022, we would be disbursing through this asset light model at a monthly rate of INR 2,000 crores. On this note, the IBH management is now open for questions. Thank you. Thank you very much. We will now begin the question and answer session. The first question is from the line of Abhijam Maher from Deutsche CIB Center. Please go ahead. Yes. Hi. First of all, contracts on the results, I had two quick questions. One was primarily pertaining to a reversal of provisions which were made under an NPH guidelines of INR8.25 crores. Could you Just elaborate a bit on that. And the other question was the increase in total provisions. So I believe that the increase has been around INR 1200 crores over the last quarter. Could you let me know where the impact of this would be seen from, say, the income statement perspective because I think the total impairment on the income statement is around close to like INR 2 INR 200 crores rather. Yes, sure. So there is an enabling provision of the National Housing Bank, which we have taken use of to create a base. It is merely additional provision that we have created. We have not utilized any of that provision in order to have a strong base. As a consequence of this, the total provision buffer has moved up To 5.5%. The INR 8.25 crores plus INR 200 odd crores, there would also be some deferred tax advantage that the company will get that would add up to another INR 200 crores. That is how we would have had a total increase of around INR 1200 crores in our provision pool. We have not utilized any of that. We have just taken advantage of the enabling provision under the National Housing Bank guidelines, which are now the Reserve Bank of India guidelines. Got it. Got it. Thanks. Thanks The next question is from the line of Craig Gilead from NWI Management. Please go ahead. Good afternoon. Thank you so much for the presentation and congratulations on the great results. A couple of questions. One is, if you could provide a little bit more color on the credit quality as we We're hopeful to sail out of the 2nd wave, and you seem to have a pretty good amount of confidence that If there is a 3rd wave, it won't be quite as bad. So just a little more texture on your thoughts there. Number 2, You mentioned very good progress with credit agencies and your goals there. You mentioned unlocking Insurance companies as potential investors, would the mutual funds also be sort of linked to Further credit rating improvements or are there other factors? And then you mentioned great results as well, progress On the co lending agreements, anything specifically related to HDFC? So thank you very much for the three questions. Yes. Thanks for always supporting us and I'll take these questions 1 by 1. As far as credit quality is concerned, as we mentioned, April May were difficult months for collections, both Keeping in mind the safety of our own employees as well as adherence to the local guidelines, we could not really move out and The payment instruments which were not getting honored by our borrowers, we could not do any sort of field collections on them. We also continue to be hampered and that hampering continues till date by the fact that several courts in India have barred lenders from taking possession of homes where We have completed the process of taking possession, which is a 6 to 9 month process, but we are technically barred as of right now from taking possession. On the wholesale side, the entire IBC process is also going extremely slow with new cases not really getting admitted. So these are some of the limitations as far as asset quality is concerned. The good news is despite these limitations, we've been able to Keep the asset quality in check. There has been an insignificant movement in our gross or net NPAs. Slowly now, various courts are lifting these restrictions as the country emerges from the 2nd wave impact of COVID. And optimistically speaking, What we have already classified as NPA or done a technical write off on, we should see a hastened speed of recovery over the course of the next 2 to 3 quarters. As more and more states open up and remove these restrictions, as well as physical courts start setting. For example, the Mumbai High Court is now sitting on physically sitting on multiple days of the week and is thus taking new matters. Once various NCLT branches also start sitting there would be good momentum on recoveries. As far as the 3rd wave is concerned, we continue to be Optimistic yet cautious, which is why we have invested in the provision buffer. And as I said in my comments, The optimism makes me believe that we have through these provisions laid a very, very good base for a very steady compounding over the next 8 to 10 years as we did in the last decade. As a worst case, we believe this is a very big provision buffer. And therefore, with this provision buffer, there should be Minimum volatility in the company's earning profile and additional buffer is coming from the fact that A large number of loans by value as well as number, which where we are in a position to liquidate the asset on an immediate basis, we should be enabled to do that over the coming few weeks to months. Given all of this, we believe that we should be able to have a asset quality range, which is plusminus 50 basis points to 60 basis points of where we are. The engagement moving on to your next question, the engagement with the credit Rating agencies is indeed very positive. Most credit rating agencies, the domestic credit rating agencies have a deep understanding of the non bank business and have been supportive of the organization. That said, They can't the nature of credit ratings globally is that they tend to be procyclical. Moving on to your question, and these two points are related about new pools of capital and new pools like mutual Will they be provident fund and insurance companies or mutual funds? Mutual funds themselves and the underlying capital that they have on the debt side tends to be extremely procyclical. And if we get into a down cycle, then A large quantum of bonds described by mutual funds tends to make the company suffer more on the down cycle, which is what we suffered from over the course of the last 2, two and a half years, especially the 1st 2 years after the ILSS crisis. We've learned our lesson. As we speak, we have only about $50,000,000 of bonds which are subscribed by mutual funds and as a long term strategy learning from some of our other peers, which are of a similar size, but which are companies which have been around for 3 to 4 decades. The bond issuance will be either done in the form of public issues or would be preferred to be done to provident funds and insurance companies. The quantums will certainly be much smaller than mutual funds can potentially do, But we have to keep longer term stability in mind. With all the good intentions that fund managers have, If they are facing redemptions, they have no option, and we wish to keep ourselves away from that trap. So The engagement with the credit rating agencies and the positive results that one is confident of should enable 2 things for us: reduce our cost of funds by anywhere between 50 to 70 basis points on flow On the bank borrowing side, which is roughly about 35% to 40% of our borrowings, it should reduce that stock by 50 basis points to 70 basis points and it should diversify and the diversification would be focused more towards insurance companies, providence funds, retail investors and high net worth individuals and not really be focused towards mutual funds. On your third question on co lending and the progress with HDFC, Obviously, HDFC is one of the most strategically important relationships for the company. The good news there is The initial planning, the initial integration around loan agreements, standard operating procedures, credit policies, etcetera, is all behind us. And as of last week, we have actively started sourcing cases in the market. There will be a slow build up. HDFC is gold standard for the fact that they are very, very conservative. So as we Push loans through to them. They will take a conservative view and there would be a slow build up. Similarly, with our other Partnerships also, we are now in the market and fairly well progressed on the technology integration side, which is almost like a prerequisite for this whole model to scale up. 1 is quite confident that with all of our co lending partners between the months of September to December, we would be on a real time technology interface. And that would really be the base for a long term sustainable scale up in numbers. In the meantime, we will continue to do business with the processes and the tech enablement that we have already achieved, and we will start reporting these numbers to you from this quarter onwards. Thank you. I hope I answered your question. You did. Thank you very much. Appreciate it. Thank you. Stay well. Thank you. The next question is from the line of Prashant Shreedhar from SBM Mutual Funds. Please go ahead. Hi, Hi, thanks. I have two questions, one on asset quality and the co lending agreement. So on asset quality, if we look at the FY21 annual report, the stage 2 plus 3 is almost 35%, It seems quite high for an HSE. So maybe we could throw some more color on how this would be today segment wise and whether We have sort of moved to stage 2 because of higher provisions. That would be helpful. And on co lending, so what percentage of the P and L do you expect Would come from the co lending fees or if you could guide towards that? That's a good question. Thank you. Yes. On the asset quality, Since the company is an NBFC and NBFCs follow NDIS, So our ability to be able to create provisions are largely constrained by the ECL model. And given the low loss given default, the ECL model will enable on an ongoing basis Only very, very minimal sort of provisions. This is a reasonably significant constraint. Unlike in GAAPs where you can create very large management overlays, You can have countercyclical provisions, etcetera. All of that is not really technically allowed under the ECL model. Therefore, we have to do in order to be as a management intent, in order to trap greater provisions, Especially in a phase of the kind of volatility and vulnerability that one is seeing, one has to ensure that Technically, also we are correct. If you look at the Stage 2 movement between fiscal 2020 to 2021, In absolute value, it is insignificant. And we had to keep those assets in stage 2 In order to ensure that we don't let go of any of the provisions, this is a time for enhancing provisions, Not releasing provisions. Thus, we have done 3 things. 1, we have created a larger pool of Stage 2 assets. Within that, we have not really looked at doing any sort of restructuring. And the third thing that we are doing is wherever we are seeing stress, we are taking larger provisions either by technically writing them off or by enhancing the Stage 3 provision coverage, which has also now gone up to almost 45%. Between these three, I feel We have a very, very comfortable position and thus irrespective of the near term volatility which If a wave 3 may bring out, I've been able to articulate a guidance of plusminus50 to 60 basis points on the gross NBS side. As far as core lending is concerned, it is early days. The volumes are picking up. We expect as a first milestone, 30% of our disbursals We will be under the co lending model by March of 2022. Once we've achieved that 30% of disbursals under core lending. We will be able to give you more accurate guidance as to from fiscal 2023 onwards what would be the percentage contribution to our net interest income. At this point in time, we would like to focus On making sure that we ramp up these numbers, let us see which partnership scales up faster and better and which product between Either home loans or secured MSME loans scales up. 2,000,000. So the earning gap between our home loan spread and our MSME spread is almost 2.5 times. So we'll need the next 6 to 7 months for all of this to mature. Sure. Thank you so much. That pretty much answers all of my questions. Just one addition, how would this Stage 2 and 3 look across The home loans lack and other segment? Yes, Pimasek, there would be a greater concentration on the Wholesale assets in Stage 2. So it would be something like a 50%, 30%, 20% sort of a contribution between Wholesale assets, lab assets and home loan assets. Sure. Thank you so much. Best of luck. Thank you. Thank you. The next question is from the line of Unjun Chen from HPS Investment Partners. Please go ahead. Hello, hi. Thank you for the call for taking my question. Good quarter. Congratulations on that. Just want to get quick update in terms of the loans. You mentioned about the 66% of the debt due By December, I have completed the buybacks or cash reserves. I just want to go back to the Q4 when you update with a little bit more details. Think it was about INR 2,236 crores remaining, that was due by September, an ECB loan of INR 200,000,000 in October 21st as well as the U. S. Dollar $2.50 Just want to get a little bit more color. Has there been more progress in terms of buying back Of the INR 2,236 crores remaining and on the other Loans as well. I know that you already have provided 25% of reserves for the U. S. Dollar bonds, but how also Any update on the ECB loan, which is due in October 21? That's my first question. Yes. So thanks for your kind words. To answer this, what we are trying to do is Do a proactive ALM management and go behind buckets, which seem to be apparently bloated. The September bucket was apparently bloated because of the large public issue of bonds that we had done 3 to 5 years ago. And for that, we had gone behind by creating a treasury stock via the buyback program. Since The time that we did the large buyback in April, now the bonds which are being made available to us are at a significant premium. Therefore, it makes no economic sense for the company to be investing in its own bonds at a significant premium. The only other input that I would like to give to you is that aside of the 66% of the bonds that we've already bought back as treasury stock. We have additionally adhered to the local guideline, which requires us to keep 15% of the maturity value of bonds in a Lienmark FD towards a debt redemption fund. So we are in compliance of that as well. 66% plus this leaves a very, very minuscule number, which we will need to fund out of our liquidity buffer come September. So that sum of money is really small. The ECB repayment is again just $200,000,000 It is not a large sum of money. The next big bunching that we had was in May 22 of $350,000,000 towards which we have also taken this proactive step, which we have reported to you yesterday of creating a reserve of 25% and continuing to contribute to that reserve at the rate of 25% every quarter over the course of the next 3 quarters, such that come May, we would again have a very minuscule additional sum of money that we have to take out of our liquidity buffer. As a policy, we will have to be constrained by the various regulatory guidelines applicable to our local bonds as well as our overseas issuances, be it dollar bonds or dollar loans. Mostly the dollar bonds and dollar loans can't be prepaid or bought back. Thus, we have devised this new reserve structure that we have created. If there are any further bunching up of liabilities, We will continue to use all the tools which are available to us within the constraints of the regulatory guidelines. As we speak and as I look at the ALM over the next 24 months, I see no further bunching up happening. Thank you. That's very good color. My second question is on your loan dispersal. I didn't see any numbers in your presentations. Could you share with us at least for the Q1, how was the loan dispersal Trends in April, May June and into July. And how is that trend? April May were obviously extremely disturbed months. It was In June that disbursals picked up. So we had we disbursed close to about INR 2,300 crores, roughly about $300,000,000 of loans in the quarter 1. Most of that happened towards the month of June. From June to July, we've seen a very steady pickup and we've seen an increase of almost 40%. July to August August onwards, it would be a more normalization of the pickup. And this number would tend to reach about 6,000, which is close to about Almost 2.5 times of where it was in the previous quarter by the Q4 of this year. So from INR 2,300 odd crores, we will get to about INR 6,000 crores by the Q4 of the fiscal. Q4 of the fiscal. Got it. Thank you. And do you have any update in terms for your equity sales that you mentioned before the intention to sell 20% to 25 Yes. So we have taken an enabling provision from our shareholders to issue either via a QIAP or via an FCCB structure or a similar such structure of up to $275,000,000 For any preferential structure, we need to go back to shareholders and seek a specific approval. As we speak, not only us, but I think several participants Both in the HFC and BFC space as well as in the fund management space are eagerly awaiting the outcome of the PNB Housing LIC Housing mandate given by SEBI. I believe the PNB housing matter is in the securities appellate tribunal. Once that Outcome is clear, then I believe the preferential market would realign itself to whatever is the reality of that order. In the meantime, we have this enabling resolution. So for now, we will wait out for to see how things are progressing. If it's going to be taking time and no eminent resolution is coming, we will move on to plan B. Otherwise, we will stay with plan A, which is a preferred option. So at this point in time, I do not have anything specific To report on this, as and when we have, we'll obviously immediately get back to the market via an exchange release. Understood. Thank you. That's all from me. I'll be back in the queue. Thank you very much. Thank you. Thank you. The next question is from the line of Mahendra Kanakia from MG Capital. Please go ahead. Good afternoon to everyone and thank you for the opportunity. The company is trying to reduce its cost of borrowing. So in this regard, I have a question that what are the reasons that Company is not borrowing from the NHB. Like for example, Revco, they are borrowing from the NHB at a very low cost. And second thing is that why the company is not borrowing to the public deposit? So these are my questions. Yes. Every company, sir, has A borrowing program, which is defined by the existing lenders of the company. In the case of Indebels Housing, we have historically followed a paripassu charge to all of our lenders. And therefore, given the nuances of borrowing From NHB, there is a provision for a specific charge and all of that. It becomes a fairly Big restriction for the company relative to just going back to our existing lenders and borrowing from them. If we borrow long term monies, which is 7 odd years from our long term debt providers, which is Our banks, it tends to come at more or less the same cost that we would get from the National Housing Bank. And therefore, to avoid this operational difficulty, which is a fairly significant difficulty and one of the reasons why Covered bonds also have not been able to get any success in India from NBFCs. We are suffering from that sort of a limitation. As far as the public issue is concerned, We have been one of the largest players in the public issue market in the past. Given the fact that our rating had a negative outlook, We believe that it would have been difficult to give the necessary confidence to the public to have an attractive Public issue success. Now that the rating has a stable outlook, 1 is certainly exploring this route. And at the right time, when the reception is expected to be good. Now with RBI today, for example, clearing up the air and stating that they would continue with an accommodative stance. We believe that interest rates should continue to remain stable, and we will try and utilize this opportunity to come up with a public issue Shortly. The credit rating outlook was crucial and we will now that we've achieved that public issue is the next step. Okay. Now my question was regard to the public, Not the NCD, the deposit from the public. Sir, since 1987, any company which is incorporated after The year 1987, the Reserve Bank of India has not granted it the license, any company, The license of being able to accept public deposits, I think about 5 or 6 years ago, Reserve Bank of India further tightened the guidelines to say if there is a merger between a deposit taking company and a non deposit taking company, the deposit taking license will fall off. So we can't go and now get a deposit taking License because this particular company was incorporated only in 2005. The We can't also acquire a deposit taking company because that license will fall off and that window is That's not open to us. Okay. Got it. Okay then. Okay. Thank you. Thank you. Thank you. Participants to ask your question, please press star. We'll just take one more question And then we'll end this call. Any further questions can be directed to the Investor Relations team over e mail, and we'll answer them 1 on 1, If there is a last question. Thank you. The next question is from the line of Pranav Hinduja from Baird Enterprises. Please go ahead. Hi. Thanks a lot, sir. Thanks a lot for the Opportunity. Sir, you mentioned that total restructuring is around INR 80 crores. Am I right in that, total restructured book? Yes, Sannath. It is around at this point in time, it is about INR 80 crores. And what is the pipeline? You don't see that We don't see a significant increase. We are engaged. We are we have to report on a biweekly basis to the regulator as to What kind of restructuring is happening? Since it is targeted to the smaller borrower, the Regulator and the Government of India are very clear that they want a solution to flow through the system. So we have to proactively engage. But as we speak, Given the fact that restructuring will leave a permanent mark on the credit history of the borrower, most borrowers are Hesitant to go for restructuring and thus I don't expect any large tick up in this number. But Yes. This call by the end of this quarter, we will have a fair idea of what's going to happen since the provision lapses on 30th September. Right, right. Can you just give me some color on the wholesale book? So you mentioned in the call that Many of them have received or in the process of receiving OC and also you are in a position to sell some of these Exposure, sir. And I think last quarter you guided that INR 4,000 crores around will be sold. So can you just give me color in terms of much percent of the projects are complete? How much percent of projects are have received OC? What is the percent of sales that has that they have achieved? Any color would be really helpful. So 50% to 60% of the projects where they are would either be at OC stage or would be getting OC within the financial year, which is in the next 7 months. So they are at that stage. In order to take advantage of the provision that came out by the Maharashtra government, Where if a project is which makes sense where rather than taking advantage of the deferred Payment of premium, which is also allowed. You pay the premium upfront and get a discount on the premium. We believe our projects would have been perhaps the largest beneficiaries of that, and we would have spent around INR 500 crores in Paying premium upfront because we see a large number of these projects getting completed over the course of the next 1 year. So most or majority of the book is at that stage. Another about 20%, 25% would be about a year to year and a half away from OC and the balance will be 3 to 4 years, which is early stage projects. Perfect. And how many how much percent of these have been sold like On an average, where a project is close to achieving OC, That number would be about 70%. And for an early stage project, it will be close to about 30%. Perfect. And all these are in Tier 1 cities? These are all either in the National Capital Region or in Mumbai, Pune, Bangalore, Hyderabad and a very, very, very small number in Chennai. Thanks a lot for patiently answering all of my questions, sir. Thank you. Thank you. Thank you. Thank you, everyone. And if there are any further questions, then we'll be happy to take them 1 on 1 over email. You also have our telephone number, so you can call us and We are happy to take the call. I have to jump into another call. Thank you so much and we look forward to speaking with you next quarter. Bye. Thank you. On behalf of Investor Capital Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.