Good morning, everyone. Welcome to the earnings conference call of Cholamandalam Investment and Finance Company Limited. To discuss the 2Q FY 2022 performance of Chola and share industry and business updates, we have with us today Mr. Vellayan Subbiah, Chairman and Non-Executive Director, Mr. Ravindra Kundu, Executive Director, Shaji Varghese, President, Housing Finance. Ladies and gentlemen, good day and welcome to Cholamandalam Investment and Finance Company Limited's Q3 FY 2022 earnings conference call hosted by Kotak Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Nischint Chawathe from Kotak Securities Limited. Thank you, and over to you, sir. Good morning, everyone. Welcome to the earnings conference call of Cholamandalam Investment and Finance Company Limited. To discuss the Q3 FY 2022 performance of Chola and share industry and business updates, we have with us today Mr. Vellayan Subbiah, Chairman and Non-Executive Director, Mr. Ravindra Kundu, Executive Director, Mr. Shaji Varghese, President, Housing Finance, Mr. Suresh Kumar S, Senior Vice President and Business Head LAP and SME and Mr. Arul Selvan, President and CFO. I would now like to hand over the call to Vellayan for his opening comments. Thank you, Nischint Chawathe. Good morning, everybody, and welcome to the earnings call for the third quarter. Just some key financial results and highlights. Disbursements for the quarter were at INR 10,430 crores, which is up 32%. YTD they are at INR 22,772 crores, which is up 27%. The total AUM is at INR 79,161 crores, which is up 4% year-on-year. The NIM is up at INR 1,484 crores for the quarter, which is up 9% year-on-year and INR 4,240 crores for year-to-date 2021, which is up 18% year-on-year. The profit after tax is at INR 524 crore for the quarter, which is up 28% year-on-year and INR 1,457 crore for year-to-date, which is up 15%. Some quick highlights. Post the second wave of COVID, we've actually seen that economic activity has steadily been improving, especially in contact-intensive service industries which were hard hit by the pandemic. Pent-up demand and the monsoon have further aided to a swift revival of the economy in Q3. We've seen uptrend in basic economic indicators, tax collections, power, vehicle registrations, highway tolls and e-way bills. That all gives us a sense that this is gonna be more broad-based in terms of the recovery. This in turn has led to a sharp recovery in both our disbursements and collections during Q3. The positive momentum seen in Q2 further accelerated during Q3 in terms, basically on account of healthy demand during the festive season and, boosted auto sales, and improved customer sentiment overall, right? That led to a healthier demand for mortgage loans as well. In the last quarter, we also announced a new business division and digital partnerships. The three new business divisions are targeted at the consumer and SME ecosystem. One is consumer and small enterprise loans, and this division will offer personal and professional loans, and micro and small enterprise loans through traditional direct-to-customer and digital partnership channels. To that end, we've entered into three strategic partnerships with leading fintech companies BankBazaar, CreditVidya and Paytail to scale up this business vertical. Second is the Secured Business and Personal Loans. This division will offer loans to self-employed non-professionals through traditional channels for their day-to-day operations and capital investments. The third is the SME Loans, which will offer term loans, working capital finance, equipment finance, and supply chain finance to SME customers through, again, both traditional and digital channels. We also made an equity investment in Payswiff, where we have entered into a strategic arrangement to acquire up to about 72% of the equity capital of Payswiff Technologies Private Limited for a sum not exceeding INR 450 crores. Payswiff will consequently become a subsidiary of the company. Payswiff is engaged in the business of enabling online payment gateway services for e-commerce and provides e-commerce solutions. Payswiff is an omni-channel payment transaction solution provider that lets business owners accept payments from their customers in store, at home deliveries, online and on the go using their product offerings. The relationship is expected to add value to the existing Chola ecosystem by providing a platform to build new age SME offerings at scale, access to the SME network across the country and an opportunity to be one of the preferred SME financiers. Next, I wanna talk a little bit about the changes to RBI regulation on asset classification and provisioning under IRAC, which basically, as per their circular dated November 12, 2021, this is probably the most significant change from RBI in this last quarter. Basis this, the following are the key changes brought into scope and into immediate effect. NPA evaluation will be on a day-to-day basis based on daily DPD runs after the end of the day process in the system. Agreements which cross 90- days DPD should continue to be classified as NPA until all dues towards principal and interest are completed. While these changes are regarding evaluation of NPA as per income recognition and asset classification and provisioning, IRAC as defined by RBI and has no bearing directly on the ECL model, we have made suitable changes in presenting the stage-wise asset categorization to bring in more transparency in our reporting to enable all stakeholders to relate to figures both under the IRAC model and the Ind AS ECL model. Accordingly, we have sub-categorized the stages as follows. We now have Stage 1, Stage 1A, Stage 1B, and Stage 2, Stage 2A and 2B. Stage 1 total is the summation of those three, Stage 1, Stage 1A and Stage 1B. Stage 2 is 2A and 2B combined. We have Stage 3 and Stage 3 legal. I'll just talk a bit about what some of each of these sub-classifications are. Stage 1 represents assets which have never touched NPA and currently is within 0-30- days, and hence not an NPA as per RBI norms. Stage 1A represents assets which had been an NPA in the past but are normalized and currently in the 0-30-day bucket, so hence no more an NPA as per RBI norms. Stage 1B represents assets which have been an NPA in the past but are yet to be fully normalized, though it is moved to Stage 1 currently, and hence this will be an NPA as per current RBI norms. Similarly with Stage 2, 2A and 2B. 2 will be assets that have never touched NPA and have always been in 0-90-day, which so therefore they will not be an NPA per RBI norms, current RBI norms. 2A will be assets which had been an NPA in the past but have now normalized, those but are now in the 31-90-day bucket, and hence they're no more an NPA as per RBI norms. Stage two B will be assets that have been NPA in the past and yet to be fully normalized, though it's moved to stage two currently, and hence these will be treated as an NPA as per current RBI norms. Stage three will represent assets which continue to be an NPA as on the closing dates, and these are obviously an NPA under RBI norms. I think most of you should receive the press release by now, but we've got detailed figures as to what the totals are in each of those stages, and that will give you a much better and more transparent view as to what the overall implications for NPAs are. During the quarter, the company also made additional provisions of INR 136 crores towards management overlay, taking the total management overlay to INR 836 crores. I've been through the overall performance highlights. In aggregate disbursements in Q3 were at INR 10,430 crores, which is a growth of 32%. You know, I'll just go through the individual businesses. Vehicle Finance disbursements were at INR 7,647 crores as against INR 6,084 in Q3 FY 2021, which is a growth of 26%. Year-to-date, December 20, 2021, they were at INR 16,654 crores as against INR 14,096 crores in the previous year, which is a growth of 18% year-on-year. LAP was disbursed INR 1,763 crores in Q3 as against INR 1,265 crores in the same quarter last year, which is a growth of 39%. Disbursements year-to-date were at INR 3,884 crores, which is a growth of 59%. Home loans disbursed INR 437 crores in Q3 as against INR 434 crores, and disbursements year-to-date were INR 1,129 crores, which is a growth of 12%. The total AUM is at INR 79,161 crores versus INR 75,813 crores. The PAT year-to-date is at INR 1,457 crores, and for the quarter is at INR 524 crores. PBT ROA was at 3.8% and for year-to-date, for the quarter and year-to-date is at 3.6%, and that's against 3.1% and 3.4%. ROE is at 19.3% against 17.6%. The company continues to hold a strong liquidity position with INR 6,317 crore as cash at the end of December. That's including INR 1,500 crore invested in G-Sec, and it's a total liquidity position of INR 10,671 crore, including undrawn lines. ALM is comfortable. We have no cumulative mismatches. The company also, the board of directors has approved the payment of an interim dividend of 65%, which is INR 1.30 per share. Asset quality, as I talked about earlier, Stage 3 assets were at 5.8%, with a provision coverage of 38.8%, as against 6.16% at the end of September 2021, with a provision coverage of 36.45. The total provision currently carried against the overall book is 4% against the normal overall provisions levels of 1.75%, which we carried pre-COVID. As per the RBI norms for the November 12 circular, our GNPA will be at 8.53%, and our NNPA will be at 5.76%. We carry INR 746 crore higher provisions under Ind AS versus IRAC. The capital adequacy is at 19.8% as against regulatory requirement of 15%, and our Tier 1 capital was at 16.8%. Let me stop with that, and then we'd be happy to turn it over to you for Q&A. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Viral Shah from Credit Suisse. Please go ahead. Thank you for the opportunity. I have four questions. The first one is on the new business vertical launched recently. Would you please elaborate a bit more in detail about the typical customer profile yield, tenure and medium-term growth aspiration for each of these new business divisions that we have launched recently? Second, the strong disbursements that we saw also finally pick up in the growth in vehicle disbursements. Given the demand outlook from here, do you expect this strong momentum to continue over the medium term as well? Third is on the asset quality norms. Regarding the RBI circular, wanted to check whether it was applied retrospectively or prospectively from twelfth November onwards. Going ahead, how should one think about the credit costs? Would it require further management overlays every quarter? The last one is some housekeeping questions. I wanted the total outstanding restructured loan book split between Stage 1 and 2, total ECLGS disbursements made until now and the collection efficiencies for last three months. Thank you. That's all from my end. Okay. My RAM is not that high. Arul, have you got all the questions? Can I reply that new business, sir? Respond to that. Yeah. Ravi, why don't you start with the new business release? Yeah. We can talk. Disbursement on Vehicle Finance, and then, Arul Selvan, you can talk about the IRAC question November twelfth and retrospectively. Got it. The last question also then, Arul, you can respond. We lost Arul Selvan, yeah? Sorry, sir. I was on mute. Yes, yes. Okay, yeah. First, Ravi, why don't you answer on the new business end of this thing? Sure, sir. Sure. Good morning all of you. Vikrant, good morning. As chairman mentioned some time back that we want to basically address this ecosystem of consumer and the SME. I'll try to basically explain the business line, what we launched in line with that, you know, last quarter coming to the public. SME ecosystem, we are now starting from top to bottom of the pyramid, which is a small grocery shop, general kirana restaurant, and that is a secured business loan. Will be based on the, you know, informal collateral. And that can be given to a small stationery shop, it can be given to medical shops or electrical appliances services, all the stuff. And it will be given only in the tier two, tier three town. The ticket size will be around, say, INR 1-5 lakh rupees. Small ticket size, small loan. Small people who are starting their business, they have a residence stability, they have a business stability. That kind of business and this is going to be a good ROA. Starting point of SME. The second point is going to be the professional and non-professional business loans, which is going to be given to a small self-employed customer who are running little bigger than the customer who are going to be served by the secured business loan category. Third category is SME, which is a medium enterprises, where we will be giving a term loan. Under the secured business line, the loan will be a plain term loan type. EMI will be collected month on month, and it can be through the collectors. In the case of business loan, there are three types of business loan as of now in the market. One is the term loan, then there is a flexi loan, and within the flexi loan, we have a simple flexi, hybrid flexi, drop line flexi. Those are all the loans, and then subsequently we will start the credit line also. Whatever basically being offered in the business loan category in the market by the various competitors, various players, all of them will be done by us. This will be done in three channels. B2C, directly personal, and second will be traditional channel, which is DSA franchise channel, and third will be DST channel, where it will be generated and be served by the team member. This is the SME, which is starting from bottom of the pyramid to the, you know, middle of the pyramid and slightly upper segment of the, not the large ones, but it is the medium one. The fact is we basically cover entire SME spectrum. In the case of consumer, we are starting both professional loan and salary loan. The salary loan will be small in terms of the percentage of the overall book, but professional which is going to be, you know, catering to the doctors, engineers and chartered accountant and those professional will be more. Around 70%-80% will be of that of the mix of the will be coming from there. Now, coming to the SME. SME we will be giving, you know, 3 types of loan, and which is going to be a term loan, working capital, equipment loan, it is industrial equipment, and supply chain finance, both forward integration and backward integration of the anchor sitting on the vendor and giving the channel funding and discounting of bill of the vendors. These are the products which we are as of now thought about it, but the market is dynamic, and we are trying to find. We will give you that. Whatever is going to be suitable for us, we will be doing it. As Chairman said that it is important for leveraging the 1,100 branches going forward, whatever new locations are going to come. It will be easy for us to expand across the country very fast and use the traditional channel. Then move to partnership channel where the three partners have already been onboarded. Another three partners we are discussing with them and mostly we are getting all digital lending being done in the market. Then those partners will be working with us and both of us will be working in three types of tiers. One is in loan, you know, being collected by them or loan originated by them, collected by us. We've got end-to-end collection and underwrite done, and they will be doing origination. This is what is the new business. As per disbursement of Vehicle Finance is concerned, we have seen that we've been doing very well. This is because Tier 2, Tier 3 towns, small commercial vehicle, light commercial vehicle, heavy commercial vehicle and cars and MUV, have started doing well. The highest growth has come from used vehicle business which is continued to grow. We are expecting that the growth momentum we gain in quarter three, it is going to be continued now because we have seen that the impact of Tier 3 is slowing down now. A little impact seen in the month of January. It is slowing down now and we will start getting benefit from February. Hope I addressed the entire your business growth question, Viral Shah. Sir, just on this, if you could also share any ballpark or typical yield profile for the new business verticals that we have launched, and what would be our medium term growth aspiration for this? Yeah. Yield we will not be able to disclose, but the ROA will be higher than the current ROA. That is one. Yield we don't be able to disclose of the existing business as such. The ROA, if you like, the ROA which we are going to target from the new business lines will significantly higher than what current levels are. Secondly is that with immediately from the Q4 itself, I am expecting that like, you know, we have done 10,000 through this program. It will start adding from the new three business lines can be around 600-700. 7%-8% increase will can come from the Q4 itself. Then subsequently as we expand it across the country, then the disbursement can be anything. Okay, fine. That's helpful, sir. Yeah. Sorry, this is Arul Selvan here. Can you hear me? Yes, sir. This is on the question with IRAC. We started using the daily DPD from November first because, you know, we had that data from November first and we have set up system, you know, capabilities from November first. The ECL came to November first because they could do it from the first of November. Credit provisions, as of now, we don't see anything further going up, and as a matter of fact, there should be reversions. We have to look out for how the COVID three pans out, shutdown pans out, et cetera, that we will have to see. Your other question on the restructuring, currently the total book is around INR 4,600 crores on the restructuring. Almost INR 4,000 crores of that is INR 4,200-INR 4,300 crores in Stage 2 itself, which is where we have grouped the whole of this restructured book. Around INR 300 crores has moved to Stage 3 because some of them having some delinquencies starting to come in. On the ECLGS, during the current year we've done around INR 35 crores of disbursements. The opening book is around INR 2,000 crores, so that's the status on ECLGS. Sir, when you say the restructured loan book, INR 300 crore, has moved into Stage 3, there is nothing. Sir, because people are restricted to two questions, it gives opportunity to others. Yeah, because. Sure. We are constrained on time. We only have one hour today, so, you know. Sure. Just a clarification one. On the restructure, nothing is in the Stage 1 book, right? Stage 1 is grouped as Stage 2 because though it is Stage 1, we have grouped all of the 3,000 in Stage 1 only. They are not having delinquencies of even 30+. As a because they are restructured, we have considered them as a slightly higher risk and providing them with higher levels of PD and LGD. That is why they are grouped under Stage 2, even though RBI does not mandate us to group them there. Got it. Thank you. That's all. Yeah. Thank you. Before we take the next question, a reminder to the participants. Please limit your question to two per participants only. You may rejoin the question queue if you have a follow-up. The next question is from the line of Dhaval Gada from DSP Mutual Fund. Please go ahead. Yeah. Hi, thanks for the opportunity. I had two questions. First was on the new verticals that we were on. You know, the question is, we made certain investments. We've, you know, opened these three new verticals. Is there any, you know, gap that is still to be bridged either via organic or inorganic, you know, strategy? Overall, you know, I think Ravi mentioned about, you know, 7%-8% of disbursement coming from these verticals. In the next couple of years, would it be like, you know, like, 20% or more in terms of disbursement? Would that be the sort of momentum that we look for? I mean, some color beyond, you know, one year, if you could provide. The cost associated with these. Is it already loaded? How much more can we expect from this? Yes. That, that's the question. Thanks. Ravi, will you take it? Yeah. First question is what we are talking about to fill up the gap. As of now, we have already invested in the Payswiff and ecosystem of Payswiff will provide us the in access to MSMEs wherein, you know, we can actually go to database of 3.3 lakh customers they have. So we can actually talk to them what are their needs, and we can actually serve them from the lending point of view. Market is dynamic. As of now, we have not thought about it. You know, the investment in Paytail and Payswiff are giving opportunity to kind of, you know, expand our business from this level to the, you know, definitely. But it's just based on any opportunities, and we'll think about it. It comes with the disbursement. As I mentioned, within, say, 6 months time, the run rate per quarter can be more than INR 1,000 crore from these businesses. As of now, we are doing, say, INR 10,000 crore from the three business line which we have been doing for some time. This thousand crores within next two years' time can actually go up to more than INR 5,000 crore also. It depends on how fast we expand it. Opportunity is still larger because we are beginning to, as you have seen that in the past also, we do not jump into growing very fast. It looks like these three businesses are, you know, in terms of execution and in terms of increasing, the volumes are faster because we have a, you know, opportunity coming from the partnership, opportunity coming from the traditional channel and opportunity coming from the B2C channel. All three are not available in CSEL or Vehicle Finance or LAB or Home Loan. So definitely the growth will be faster, but I don't want to give you any mix as of now. Let us actually wait. Quarter-on-quarter we'll see. Like, you know, I'm expecting that these three businesses can start growing INR 1,000 crore per quarter within three to six months' time, and then we will discuss. Opportunities are humongous, and it is going to be very fast as compared to the previous businesses. On cost, any color? Cost is part and parcel of the business as in, as of now, whatever we have, you know, technologically, whatever investment have been done, you know, or already incorporated. Most of the cost in the technology side is basically, you know, getting the technology companies for the, you know, for using their system, LOS LMS and test model. It is not CapEx but OpEx. Therefore, the cost from the technology point is not one. This is the people cost, so we have already, you know, incorporated in the existing business plan itself. It will be in line with the business. As we grow business and the businesses will see that, you know, branches. The one important thing is that we need not worry about the infrastructure cost for expanding the business. It is just to recruit people and recruit in the branches which are there in the rural segment. In a way, it will actually leverage on our existing branch network, and it will improve the utilization of the branches. From there, we don't have any problem. The people cost only going to be one cost. Second is the OpEx of the usual loan origination system or loan management system or the loan collection system of the technology partner which we are going to use it. It will be in line with the business. It will not be a very heavy cost. Got it. Thanks a lot. Thank you. Bye. Thank you. The next question is from the line of Harsha from L&T Mutual Fund. Please go ahead. Thank you. I just have two questions. Firstly, on that stage-wise ECL summary slide of yours. Between 1A and 1B, you have written that 1A normalized and 1B is yet to be normalized. Can you just help me understand what do you mean or what do you define, how do you define normalized? This is Arul Selvan here. Normalized is where what we mean is that it becomes zero. That is all dues have been repaid. As per the RBI norm, you have to collect everything due from them with regard to the EMI and principal before you can reclassify them as a non-NPA or as a standard asset. I'm trying to follow the same thing in the ECL model or under the same days also by classifying them based on the under ECL model, you have to classify based on number of days. Stage 1 is less than 30- days, and Stage 2 is 30-90- days, and Stage 3 is 90+. Which have touched 90 but under mode two move back to Stage 1 and become completely normalized, that gets classified as Stage 1A. Stage 1B is those which have gone to 90 but have moved back, but have still not yet come to completely zero. That is, they've not yet completely extinguished all their overdues. They are classified as Stage 1B. 1B under the new norm is an NPA. 1A is not an NPA. Just a follow-up on that. If let's say the account was 90- days+, then you have recovered some dues, and it has moved back to Stage 1. If as per RBI, you have recovered each and every penny from that account, how it still continues to remain under Stage 1 or 2? It should be a fully normalized account, right? Assuming you have recovered every penny. No. Between the time it became an NPA and now, there are further EMIs falling due. All that also got to get recovered. Okay. One A is basically that has moved back from 90- days to Stage 1 but has also cleared all its dues. Whereas in 1B, it has also moved back from 90 days to Stage 1, but it has not cleared all the dues. Yes. Yes. What we are doing is 1A is still perceived as slightly more riskier because he has touched NPA and come back. 1B is those who have touched NPA and come back, but not yet cleared as per RBI. Sorry, can you repeat please, sir? One A is those who have touched NPA and come back, so they are perceived as slightly more riskier than the pure one who have never gone to NPA at all. Oh, yes. Agreed. Okay. That is the distinction we are trying to bring, and that is why you see the provision percentage also slightly higher for each of these categories. Understood. Second question I have is, sir, we have seen in a generalized economic trend right now, we have seen cost of funds more or less stabilized. Whereas for Chola, the cost of funds has also declined very sharply this quarter. Just two sections this question. Number 1 is how much of your cost of funds you can leverage further under yields and eventual NIM to existing business, to drive NIMs from here? Secondly, in these new businesses, verticals that you will grow over the next few years, how those NIMs of those businesses will be as compared to the existing businesses? See, what we do is we don't play with the price to boost our disbursement or otherwise. It is more done on the from an underwriting principle to see that we, you know, we lend to people who could, you know, pay back in time. It's the price is secondary. I'm not saying it is unimportant, but it is secondary. The price will not be the determining factor. The NIM is, you know, cost of funds reduction need not necessarily always be passed on. Sometimes it is passed on, sometimes it is held back. We are in a situation where we are right now holding back. At some point when we see, you know, more, we may pass it off to other yield banking, but that will be more market determined. The second question on the new businesses, it is evolving w e need to see, but I am sure that the NIM levels are very high, but there you will also have on the flip side more OpEx and slightly higher credit costs. Overall, ROA will be better than our traditional businesses, but it will have differential NIMs and differential OpEx and the credit costs. Understood, sir. That was perfect, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Prashanth Sridhar from SBI Mutual Fund. Before that, I would like to remind all participants again to please limit your question to one per participant only. Over to you, sir. Hi. Sorry. Am I audible? Yes. Now you are audible, sir. Thanks for taking my question, sir. Sir, you were just talking about some type of flexi loans on the business side. The general confusion we have is when the customer does not have to pay a principal every month, how do you figure out the repayment trends and credit costs and how does that differ from a normal term loan to the same SME? Or is there a difference? Yeah, just that one question. No, in the flexi loan, there are two types of flexi loan. Okay. One is a simple flexi loan wherein, you know, you can actually give the opportunity to customer to pay only interest and at the end the customer can pay the bullet. We are talking about the OD drop line flexi, wherein, you know, every month the OD limit will keep coming down. To that extent, customer has to repay that principal. The interest also will be served and in fact in the market there is a hybrid flexi loan is also there, wherein for two years, suppose there is a total tenure of five years, two years it is simple. That means only customer will serve the interest and then after that, drop line will start. We are focusing more on the drop line flexi loan and simple flexi loan we are not at all integrating as of now. That is the reason what you mentioned about it. Hybrid flexi loan, we have not launched so far. Sure. Sir, just one follow-up. You would have done some study on the credit costs for these flexi loans, right? Drop line or hybrid, whatever. Is that different from normal credit costs to the SME sector? What should we sort of expect when we compare it with that? No, there are different players and the mix of the drop line versus term loans are varying because term loan the ROA is lower. The drop line flexi is basically like, you know, from the Vehicle Finance point of view it is new and used. Okay? In the used what we have, you know, higher NCL and higher, it is a high risk, high reward type. It depends on how best you do the collection. There are players like, some who are doing very good collection and therefore, they have a higher NCL, but they are able to manage it within the, you know, threshold, and they're able to deliver higher ROA. In the case of the drop line flexi as compared to the term loan will be higher. You know, slightly the yield will be high and the NCL will be high. At the end, the ROA will be high. Got it. Sure, sir. Thank you so much. That's it from my side. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal Financial Services Ltd. Please go ahead. Yes. Thank you so much for taking my questions. Sir, I mean, I have, I understand we've been asked to restrict ourselves to two questions, but apologies. I have three questions, one each for Vellayan, Ravindra Kundu, and Arul Selvan, sir. Sir, Vellayan, sir, I mean, firstly, I mean, I think, I mean, if I heard you right, that we're looking to partner with 10 fintechs. Just wanted to understand that there are so many other NBFCs who would have entered into such co-origination and co-lending partnerships with fintechs. Are these partnerships exclusive in nature? Just if I might ask, I mean, we already have done a JV with DBS in the past where experience was not good. I mean, what will be the right to win in these newer ecosystems and product segments? Have you already done hirings for these newer segments? Who will be leading this newer ecosystems and products? Sir, lastly, what measures have you taken to ensure that this time around there are no lapses, I mean, like we had about a decade back when we entered consumer loans? Yeah. Okay. You're right that these. First off, I think we should understand the nature of, you know, what happened with DBS and what is happening now is very different, right? In that case, DBS came in and played a very significant role in the management of the company day-to-day, right? Here in the case of these partnerships, it's very much kind of Chola culture, and honestly, I think kind of one of the big reasons why the relationship with DBS failed is because we had two different cultures under the same roof, right? Kind of the classic NBFC culture, which is what Chola came from and is very different from kind of, you know, what I would call a DBS, which is much more a bank-led culture, right? When they were approaching it then, you've got to recognize that there was no data available on Indian consumers, right? There was no CIBIL, or CIBIL was at a very, very early stages. Pretty much all of the data we used to submit to CIBIL, we'd actually not get any information from any of the credit rating agencies. India was a very different point then. I think that's the first thing. The second is, like I said, the role of DBS as a partner was different, where they were involved in the management. Like, here, the role is totally different because it's Chola managing with our culture, with our way of approaching things, with our underwriting capabilities, where we're basically using partners like this who can help on origination, right? If we talk about the BankBazaar and Paytail, for example, there, right now we're pretty much the primary partner. BankBazaar is kind of partnered with somebody else on the card side, but in terms of this product that we're going after, we're the only partner initially. Also the format of, you know, the structure is different from kind of the classic kind of FLDG format. It is actually structured as a like a co-sharing relationship, right? It still sits in our balance sheet, but basically it's a very different structure from an FLDG structure. Your question on kind of why are we taking this up? I mean, there are two questions, I think kind of, you know, why is this approach different from DBS? Hopefully, I've answered that. Second is why do we need to partner with these FinTechs? I mean, honestly, the way I look at it right now is, we see it as kind of a as a different mode of acquisition, right? I mean, basically, I think gone are the times where only one mode of acquisition will work. Whilst we have the core business and the core underwriting skills, you know, hosted under a key person, for that person, there's a traditional mode of origination that he or she is managing. In addition, we're also trying these digital modes. Like Ravi said, we're gonna be cautious and only scale the modes that we believe are scalable. That's always been Chola's approach, and that will continue to be Chola's approach now. Your question in terms of how, why will we not fail like we failed last time? Or fail? Oh, I don't know. I think I'm paraphrasing it. Maybe kind of it was asked in a different way. Obviously, you know, I think it's the approach, right? I mean, basically right now, even on these loans, we're predominantly still looking at it. Our whole mindset at Chola is first is collections, second underwriting, third origination, right? We still are looking at, A, will we be able to collect on these loans? How will we be able to collect if there's non-performance? And then looking at underwriting standards, where we now have a lot more access to data on these customers than we did before. The last time we did consumer loans, we had very little data, therefore it was a very different approach at that point in time. I don't know if that answers your question on that. Yes, sir. That does. Sir, lastly, I mean, have you already done the hiring for these newer segments and who'll be leading these segments? Yeah. We've done the hiring. Sorry. I think. Okay. Ravi, maybe you just answer this, and then we can move on to next. In terms of, I think the question is who's leading the segments? I mean, Arul, Ravi, have we shared kind of who's leading-. Yes, sir. Which in the past? No, we have not shared. All three businesses are being now headed by the people who have been with Chola for many years. After that, the people who have been working in this industry, and they have been hired from the market, and the hiring is going on as of now. The business heads for all three businesses have been working in Chola for many years, more than 15- years. I think that should give you comfort. Okay. that each of the business heads have been in the company for over 15- years. Sure, sir. Sir, if sir. Sir, if you allow me, can I squeeze in one last question here? I think it'll be better if you come back. Sure, sir. Thank you so much, sir, and wish you the very best. The next question is from the line of Abhinav Sharma from HDFC Life Insurance. Please go ahead. Hello. Hi, sir. I have couple of questions. One, can you throw some light on the Excuse me, sir. I'm so sorry to interrupt, but your audio is not clearly audible. Hello? Yeah. Go ahead. Am I audible now? Yes. sir, I have a couple of questions. First, can you throw some light on the collection trends in January? How do you see this UB bucket moving forward? Do you think it is going to normalize in subsequent quarters or this is the natural outcome of our business model? The second one is that our net NPA equals to that 6% threshold target. What's our focus on net NPA? Do you think collection alone can drive it to, let's say, provision solution? Yeah. This is Ravi here. I'll just talk about the portfolio of 8%-10% has a 70% of the overall portfolio, which matter most actually in December. In October and November, it was 116%. In January also, we closed 123% against the billing. In terms of collection efficiency of the non-delinquent book in the month of October and November, it was, you know, more than 98%, 98.5. In the month of December, it reached to 99%, so roll forward was 1.07%. In the month of January, again 99%, but the roll forward was 1.13%. Collections have improved and it is significantly better than the past, and it has reached to the level where we used to do it in the past. Now coming to the NPA, like, you know, at Chola's level, we are at 5.85 in terms of NPAs, and as for the RBI is 8.53. In this quarter, I think we will try to reduce it by 2% over and above RBI, whatever we are at. If you take the net NPA, so net NPA from 5.75 can go down to, you know, 4% level, within, say, six-month time. I'm just trying to keep three more months extra. We are moving in the direction. Already improvement has started, seen in the month of January as compared to December. It's just a matter of six month time, because this is the new RBI now, wherein the ever 90 customer who were basically touching 90 and being there in the Stage 2 for longer period and which has gone up during last six months post wave one. That will be taken care because we will go to the customer to educate them and try to basically collect money from them because it is kind of, you know, their credit score is getting impacted and their loan, if they want to take a loan that will also get impacted. By that we can actually convince customer who are in the bottom, low-hanging fruit like those who are in Stage 1 and then Stage 2 customer. Thank you, sir. Thank you. The next question is from the line of Mahrukh Adajania from Edelweiss. Please go ahead. Yeah, hi. This question was asked, the previous person also asked this question. The other transport financials want to move to 4% NPA, net NPA. Is there any such plan for you? Arul Selvan, you can. Yeah. So the need by some of the other players who have to move to 2% is because of the dividend policy announced by RBI, where if they had crossed the 6% NPA in the past, in the current year unless they become 6% they cannot, you know, declare dividend. That is why the threshold of 4% is being, you know, targeted by them. Not that we don't want to go down to the 4% level, but in our case since we have never touched the 6% NPA in our, you know, in the last three years, we are not constrained by that regulation to declare dividend even if we are above 4% as long as we are below 6%. We are below 6% and we will certainly be driving it to bring it down to 4%. That constraint of having to necessarily touch it is not a mandatory or a regulatory requirement as we see it. Got it. What is your outlook on margins, given that bond yields are firming up? Your bank borrowings, the reset on bank borrowings is what? One year, six months? It all is different for different borrowings. We have borrowings which have got three-month reset, six-month reset, one-year reset. We have borrowings linked to various benchmarked, you know, indices like your repo or, you know, treasury bill, et cetera. Some of them we have also hedged against, you know, these by having a fixed to floating to fixed sort of an arrangement. It's not like, you know, we can't if we don't have one single mode. It's a mix and we do it and we manage it depending on what we see as the outlook for the coming period. Thank you. The next question is on the line of Piran Engineer from CLSA. Please go ahead. Yeah, hi. Some of my questions have been answered. Just on the previous question itself, just wanted to understand that, you know, during COVID we got bank sanctions at pretty low rates by linking to external benchmarks. Now that the priority sector thing has gone, how do we see this repricing upwards next year? Just the other clarification to Ravindra Kundu saying about INR 600 crore - INR 700 crore of quarterly disbursement from the new business. The runoff of this business will also be pretty high, right? Is that a fair assumption? That's it from my end. Okay, I'll take the first question, Arul here. We will see repricing when we have a MCLR repricing happening in case of bank loans. In some of the cases what we have done is we have moved away from MCLR into benchmarked lending even for bank loans. Today, banks are offering benchmarked, you know, indices, very fairly low rates, even for non-PSL assets. Earlier, they were only restricting it to PSL assets. Now today they are offering because banks are also in a need to grow their book. We are capitalizing on that. We have repriced a lot of our loans during Q3, which is why you see a further improvement in cost of funds in Q3. We see that continuing for some more time. Yes, at some point the trend will change and at that, point in time we have to take necessary actions to protect our NIM, and we will be doing so. Thank you. The next question is from the line of Subramanian Iyer from Morgan Stanley. Please go ahead. Thanks for the opportunity. My question has already been answered. Wish you all the best. Thank you. Thank you. The next question is from the line of Aditya Jain from Citigroup. Please go ahead. Thank you. If you would talk about a little bit about the fintech partnership. You know, if CreditVidya, say for example, has multiple NBFC partners. How does the allocation that happens to Chola work, and where does your underwriting model feature into the process? How automated is it? If you could give some color along those lines. The allocation is based on the underwriting norm decided and the commercial discussed. Therefore that is one. Underwriting is fairly automated. Nothing has to be done manually. We need to cross-check and see that if in case there is a problem, we can you know recalibrate time to time, which we have opportunity to do it every month. In terms of their other partners, they are preferring us because we have a huge network, and in case of the fallback, we can support them in collection. The branch network, collection efficiency and collection strength of the companies are preferred more than anything. Definitely there is a bit of underwriting norm and commercial charges are also important. Commercial is the starting point, but the ending point is how we can support them in order to basically serve their customers in a larger way. They see that Chola is one of the largest player in the market in some network, and having a very robust collection mechanism which can support them. Got it. Thank you. Thank you. The next question is from the line of Harshvardhan Agrawal from IDFC AMC. Please go ahead. Hi, sir. Thanks for the opportunity. Just two very quick questions. One is, of the restructured book number that you gave, does it have any overlap with the Stage 2 book? Shyam, do you have that data? I got to check that out. I am not... There will be some, maybe, yeah. It will be very minuscule because it would not have had time to move to Indian comeback, so that would not be the case, at least now. Oh, okay. Sure. One last thing is like during the start of the year we typically guided that we intend to take our Stage 2+ Stage 3 back to 10% by the end of this fiscal. Do we still expect that Stage 2+ Stage 3 to come down to 10% in the next quarter? To some extent, because the restructured book will continue to be in Stage 2, irrespective of whether they are in zero bucket or otherwise. Stage 2 will look inflated because, you know, unlike the earlier restructuring norms, where they allowed us to reverse back from, you know, NPA status which was assigned to the restructured book after one year. In the case of the new norm, they have asked us to hold it as restructured and carry an additional provision for a period until 50% of the loan is repaid. Until then, we can't reverse this back into Stage 1. As we have opted to keep it in Stage 2 because of the higher provision, et cetera. Till that time, we will continue to keep it in Stage 2, and as and when they reach the 50% threshold, then we will move them to Stage 1. It may take a little longer time, but that does not mean that the book is bad. That's what I'm trying to convey. Thank you. It has come to 10.37% now already. Yeah. Thank you, sir. The next question is from the line of Shweta Daptardar from Elara Capital. Please go ahead. Thank you, sir, for the opportunity. My question is pertaining to home equity GNPA. They have been sticky for some time now, whereas things are actually picking up on the growth traction front. Also, how is it panning out in terms of sub-segment resolution? Could you, sir, throw some light there? Suresh? Maybe both are Stage 2 and Stage 3 coming down consistently. Suresh, we can't hear you properly. Oh. Sir, can you hear me now? Yeah, that's better. Yeah. Our Stage 2 and Stage 3 from quarter-over-quarter with both Stage 2 and Stage 3 coming down. We see a lot of traction happening on the DRT side now because the DRTs as well as the court started issuing orders. We still see you know some of the orders now coming from the DRT, but we expect that things will ease out now with most of the lockdowns have been released now. We see it should be only improving from this point onwards. Hello. Hello. Yeah, we can hear that. Yeah. Thank you. Thank you. Ladies and gentlemen, the next question is from the line of Nischint Chawathe from Kotak Securities. Over to you, sir. Yeah. Hi. Just maybe probably this just got you know slipped off. You know there was one question that you know in the new businesses while the disbursements would be high your rundown probably also remains high right? Because some of these will be short-tenure loans. Maybe if you could just comment on that. Yeah. Yeah, sure. The mix of the small tenure and longer tenure is as similar to Vehicle Finance as of now. In fact, small tenure is very less. The rundown will be also similar to Vehicle Finance. It will not be aggressive. Sure. Perfect. That was the last question. Thank you everybody for joining us today. Thank you very much, you know, to the management for giving us an opportunity over the call. Thank you. Thank you. Thank Thank you, Nischint Chawathe. Thank you. Thank you. Thank you all.