Ladies and gentlemen, good day and welcome to Aditya Birla Sun Life Asset Management Q3 and FY 20 25 earnings conference call, hosted by InCred Equities. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jignesh Shial from InCred Equities. Thank you, and over to you, sir. Yeah, thank you, Manu, and good evening, everyone. On behalf of InCred Equities, I welcome all to this Aditya Birla Sun Life AMC earnings conference call, 3Q for FY 2024 earnings conference call. We have, along with us, Mr. A. Balasubramanian, Managing Director and CEO, along with the senior management team of Aditya Birla Sun Life AMC. We are thankful to the management for allowing us this opportunity. I would now like to hand it over to Mr. A. Balasubramanian, Managing Director and CEO of Aditya Birla Sun Life AMC, for his opening remarks. Over to you, sir. Yes. Thanks, Jignesh. Good evening, everyone, and thank you for joining today's investors' call. I hope you all had the opportunity to see the earnings presentation, which has been put out in the exchange as well as our website. Let me begin with the economic outlook very quickly and give an update on the investors' as well. The current global macroeconomic landscape presents a mixed picture of challenges, and there's some bit of cautions to have come with optimism. Global growth is expected to remain stable, with the most forecast placing it around 3.2%. Central banks are now likely to maintain a cautious stance on monetary policies and continue their gradual normalization of interest rates after a period of tightening, and global markets have experienced increased volatility leading up to the new administration of the U.S. taking power. We expect this volatility to subside in Q1 FY 2025 once there is a greater clarity on the policies of the new administration. Against this backdrop, India is expected to maintain its position as one of the fastest-growing major economies, with a GDP growth of 2025 estimated at about 6.5%, and India's economic outlook remains positive, supported by strong fundamentals and favorable government policies. We might also participate in the recent volatility we've seen in the global market. Inflation is also showing signs of moderation, with the RBI actively managing it through effective monetary policy measures. We expect balanced recovery with a moderate uptake in both private investments and consumption. The Indian equity market is currently witnessing significant volatility driven by a mix of global and domestic factors, rising inflation, and potential trade-related issues and global market turbulence due to geopolitical tensions, and economic uncertainties are fueling price fluctuations. And despite global uncertainties and domestic challenges, Indian economic resilience and policy reforms and growing retail participation should continue to fuel investors' confidence in the market. Coming to the mutual fund industry, the industry has witnessed record-breaking growth in 2024, reaching an all-time AUM high of 68 lakh crores. As of December 2024, the mutual fund industry quarterly average AUM reached 68 lakh crores as compared to 49 lakh crores as of December 2023, growing by about 39% year-on-year. During Q3 FY 20 25, the mutual fund industry witnessed equity net sales around 167 crores through new fund offerings and also inflows in the existing funds. The total NFO collections in equity funds were around 19,400 crores, majorly coming from sectoral and thematic funds. The industry SIP continued to show good growth, with a 50% year-on-year growth around 26,500 crores in December 2024, with 5.26 crores unique customer base. The total number of mutual fund folios exceeded 22.8 crores, with a year-on-year increase of 37%. The individual average AUM grew by 39% year-on-year from INR 30.7 lakh crores to INR 42.5 lakh crores and contributed 16% of the total assets under management. This is also on the back of institutional AUM having remained somewhat flat for the last two years for a variety of reasons, including the withdrawal of tax, which we saw last year. These 30 cities, with an average AUM of INR 12.83 lakh crores, accounted for 19% of the total AUM. At Aditya Birla Sun Life AMC, our overall average assets under management, including alternate assets, stood at INR 4 lakh crores plus, reflecting 23% year-on-year growth. Our mutual fund average AUM reached INR 384,000 crores, growing by 23% again year-on-year. The quarterly equity average assets under management stood at INR 179,000 crores, growing by about 32% year-on-year. The uptick in equity investment performance, driven by improved perceptions and strong narratives, has helped us gain traction in equity net sales during the current quarter. Our SIP book grew by 38% year-on-year from INR 1,555 crores in the year December 2023 to INR 1,382 crores in December 2024. We also added close to about 670,000 new SIPs, with again an increase of by three times compared to the previous year around the same time. The total investors' folio crossed 1 crore, now it's about 1 crore 5 lakh is the investors' folio, with around 24 lakh new folios added during the nine-month period of FY 20 25, and during the quarter, we launched the ABSL Conglomerate Fund, which is a unique fund with a different concept, and garnered about INR 1,373 crores. We also conceptualized and launched the Nifty Ultra Short Duration Debt Index Fund, which also garnered close to about INR 714 crore during the current quarter. The retail sales team, which is dedicated to driving the higher engagement and establishing strong mindshare in the deeper markets through a series of impactful initiatives, we have been running programs like Koshish, which is nothing but empower and groom women MFDs, fostering inclusivity and leadership within the sectors, and providing an Asset Nurturing Program in order to gain higher engagement and higher mindshare and higher market share, and Fulcrum, which is to focus on equipping MFDs with the tools and strategies to build high-performing teams, driving sustainable business growth and improving overall productivity of the team as well as the distribution partners. Third is the Legacy Leap, which is designed to cultivate the next generation of MFDs by sharpening and enhancing their skills. Towards these initiatives, we believe will help us create a long-lasting impact across the retail channel improvement that we are trying to bring on the overall basis. On the alternate business front, to meet the growing needs of HNIs and family offices, we continue to strengthen our team and enhance our PMS and AIF offerings both in equity and fixed income. In fact, our PMS assets, including AIF equity, long-only equity, grew by 44% year-on-year from 2,671 crores to 3,853 crores. We are seeing momentum picking up as far as our PMS and AIF traction is concerned. On offshore business, we grew by about 28% from 9,894 crores to about 12,686 crores. In fact, during the current quarter, we have seen some inflows coming from offshore investors into India-dedicated funds that we have created both in Europe and EU platform as well as on the GIFT City to get money into the country. And in line with our vision to scale the passive business, we continue to offer a diverse product portfolio to our investors, delivering strong returns. As of December 2024, our total passive assets stood approximately about INR 31,600 crores, and our customer base has grown to over 10.69 lakh folios. Our diverse product offerings currently is about 52, and we plan to launch additional funds in the coming quarters to further expand our passive investment options. Moving on quickly to the financials, our quarterly revenue from operations was at INR 443 crores versus INR 342 crores in Q3 FY 20 24, up 30% year-on-year. Our quarterly operating profit also has shown a significant improvement during the current quarter to INR 262 crores from INR 184 crores in Q3 FY 20 24, up by 42%. In fact, our operating profit grew by 42%, which is higher than the overall revenue operations, about 30% growth. On the nine-month period, our revenue from operations was about INR 1,256 crores versus INR 988 crores for nine months FY 20 24, up by 27% year-on-year. For the same nine-month period, our operating profit was about INR 710 crores versus INR 528 crores, again for nine months FY 20 24, up by 35% year-on-year. With this, I'd like to conclude and open the floor for any questions that you may have. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Dipanjan Ghosh from Citigroup. Please go ahead. Hi, good evening, sir. First, maybe I'll just start off with a few data-keeping questions, and then I'll move on to my generic questions. So if you can quantify the employee number, SIP flow for the quarter, ESOP expense, and non-mutual fund revenues. Yeah, last of the last two years. Employee count as of December 24th is 1,627. The SIP flows for the quarter are around 4,000 crores. What was the other question? The non-MF revenue and the ESOP expense? The ESOP expense for the quarter is around 28 lakh, and the non-MF revenue is in the range of around 34-35 crores. Got it. Sir, just moving on to the question front, first starting off from this employee number only, it seems that sequentially there has been a significant uptick in your employee base from around mid-1,500s to 1,627. I just wanted to get some sense of, has the entire employee cost been absorbed in the base, or should one see it kind of overflowing into the next quarter? And also in this line, given the way the markets have been going into, let's say, the next year, if you were to remain choppy, do you expect the overall OpEx trajectory? How do you expect that to really shape up? The second question is on the mutual fund, or rather the overall yield part. If I understand correctly, there has been a significant sequential improvement in yields. So can you just explain that? And lastly, just qualitatively for January, how are you witnessing your net sales, redemptions, and maybe for the industry, if you can give some color out there? So as far as the employees concerned, of course, one, wherever we are building up our team, especially in the passive direct, as well as emerging markets where we are opening locations, and especially places like Mumbai, where we are further strengthening our team further with the distribution front-facing sales team. Largely, the increase is on account of them. There has not been any significant addition at the top level, at all at the operating level. That, I think, more or less this year, whatever we have taken as a budget, we thought before we start the year, next year, we'll complete the recruitment this year. So the next year, we don't need to increase the headcount on overall basis. That's broadly the principle in which we function. That's something I would say we've increased headcount on account of that. As far as the month of January's concerns, I think broadly, the trend remains the same. We have not seen any significant change in the trend that we have witnessed in the previous quarter. I think we are seeing a net sales improvement for us is coming in gradually in some of the schemes we already identified as a scheme to be pushed from a broader perspective, where we are seeing some kind of improvement, and the SIP focus continues to remain, so again, no major change, but however, the current volatility, we'll have to just watch out. There is one trend we'll have to just watch out. In general, what happens when the market turns volatile, the lump sum generally normally comes. They don't come as aggressive as it generally is supposed to be. Second, SIPs, while top-line SIPs continue to come, normally the cancellation rate from 50% to 55% average that goes to say 60% to 65%, again comes back. But right now, going by the January trend, it's very difficult to make many assessments of any significant deviation that we are witnessing currently. Sir, on the mutual fund yield part, what happened during the quarter? Yeah. So Dipanjan, on the mutual fund yield, the improvement which you are seeing is mainly on account of two, three reasons. One is on a few debt schemes, we have increased TER that has resulted in the increase in the yield. The other one is the mark-to-market. Because of the lower AUM, we are able to charge some higher TER, and thereby some yield has been improved. And the third reason is on account of marketing and distribution expenses has been realigned based on the current market conditions. So these are the two, three reasons because of which you can see the improvement in the yield. Sure. Sir, I couldn't understand the last part, what you mentioned in terms of marketing and distribution getting realigned. So is it like the increment yield on the incremental? Can you repeat the question? Sir, is it on the incremental flows where the commissions are getting realigned, or is it like your overall distribution expense that you are spending for the franchisee is getting reduced, or is it on the backbook that you have taken some kind of repricing? If you can just give some color. So based on the current situation, we have projected few marketing and distribution expenses for the year. Okay, so those expenses have been realigned, which has resulted in the increase in the fee. Sure. And then on the debt book, you have kind of repriced for a few schemes? Sorry, I missed that part. Sorry, the few debt schemes we have, we have increased the TER. That has, again, resulted in the yield revenue. Got it. Got it. Sure. Thank you, sir, and all the best. Yeah. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Prayesh Jain from Motilal Oswal Financial Services. Please go ahead. Hi, good afternoon, sir, and decent set of numbers. Just your thoughts on how aggressive or what kind of growth aspirations you have on the non-MF businesses. Probably if you could give us some three to five-year aspirations or targets for AUM size of PMS, AIF, or GIFT City, any of these things which can be significant contributors to your revenue and top line, to your AUM and top line, that would be a much, much help? Yeah. Thanks, Prayesh. As for the alternate business concerns, last two, three years, the investment that we are making, both in building PMS, AIF, and AIF fixed income credit, and Retirement Benefit Fund fixed income credit, and offshore. And lastly is the passive. This is the five different verticals we covered under the alternate. We are giving a reasonably good push as far as the PMS, AIF, and AIF credit fund concerns, given the fact that it can easily put into our family offices and HNIs across different parts of the country. Right now, this PMS and AIF put together, we have roughly about INR 4,000 crores kind of size. And definitely, the overall scheme of thinking that we put aside this year for the next five years' roadmap, we have been assuming the rate of growth in the alternate business has to be faster than the mutual fund. And given the fact that the customer segmentation here is different from mutual fund. And that we are seeing already both in terms of AUM growth as well as on the profitability contributions. Though I cannot give any specific number per se, but otherwise, we have put as a carry for individuals across the country from a sales team point of view, 20% of the carry goes towards building our PMS business. AIF credit fund, we already committed some seed capital from AMC business, and basically a few commitments already started coming in, some underwriting of instruments that are happening. And initially, our idea was to collect close to about INR 750,000 crore kind of size. I think upon building the first issue and then closure of the first issue, then we'll start building up the second launch. So that's something which we have put in place. Ideally speaking, in the PMS and the AIF, we could decide we would be gunning close to about INR 20,000 crores kind of size for a period of time. In the case of AIF credit fund, we would be gunning for close to about INR 5,000 crores kind of size for a period of next three years. In the case of Retirement Benefit Fund, where we have already given good experience, I think we managed roughly about INR 750 crores money that we are already managing it. Whatever effort we have put in in terms of reaching out to global investors, we are seeing some traction in that. There also, we'll be looking at the first bigger closures, the next one and a half years close to about INR 5,000 crores size, and then keep building it as we start making progress on the number which I'm just mentioning. Clearly, the idea is to build this phase in our overall basis. Offshore, in fact, I'm seeing some kind of traction. In fact, the last quarter, we saw some success coming from two of the Caribbean-based investors with whom we have a tie-up for the India-dedicated mandate. We saw some flows coming in, with whom we also have tied up from India to invest in overseas markets. We have seen some success, which also now starts giving me revenue through the GIFT City. We will see volume picking up in this space. And subject, of course, emerging market attraction for overseas investors' point of view continues to remain. As far as the passive concern, right now, we are roughly about INR 30,000 crore kind of size. Clearly, we are keeping an eye that how do we make the passive business verticals, which includes index, ETF, fixed income target maturity fund, to reach a size of about 1,000,000 crores size over a period of next three years. That's something we are putting as part of the business plan and work towards that. Got it. That's quite interesting, but one aspect which I wanted to understand also was, what are the kind of costs that we are incurring today on an unrated basis in the non-MF businesses? The reason why I'm asking that is, as these businesses scale up, the profitability improvement can be significant because if your teams are in place and no further hirings or no major hirings will be needed, then the revenue growth with AUM growth coming in and then following up with revenue growth, the profitability of the entire company can improve significantly, so just if you can give some color on what is the cost of non-MF businesses or at what level they are operating today. Yeah. One second. You have a breakup. So Prayesh, difficult to give you the cost because we will not disclose the cost as such for the particular business as such. But as we have already spoken, the alternate assets business used to contribute around 14%, 15% of our total revenue. So currently, it is in the range of around 7% to 8%. So our target is to take it further to around what we were there in the earlier period. But I just wanted to say, Prayesh, see, the cost has more or less remained the same. Whatever team we have added, we have already done that, except we'll only do the replacement of people who left. So it means incremental cost as far as people concerned. The main is investment function that we are already full. So that's unlikely. There is one cost which anyway I mentioned on the last call also I mentioned that we'll add somebody to head the overall alternate business to drive this as a separate vertical, which is a senior recruitment we'll do, who would take the entire responsibility of the building offshore business. That cost will get added. But beyond that, what we are trying to leverage is the distribution strength which has been created. That's something that comes in the form of a carry of people to add to the overall growth, which essentially means existing people in the sales will only add to the success of the alternate business, which will come as an add-on business rather than coming along with the incremental cost. Even this quarter, the last two quarters itself, we have seen the addition of revenue contribution coming from the alternate business improved by almost INR 16 or INR 17 crores. Additional revenue came because of the increase in assets in alternate business. Yeah. So is it fair to assume that these businesses are profitable today, or are they still breaking even or? Yes, yes, yes. These businesses are profitable today. In fact, offshore business also, everything is profitable today. The only question is scale. Got it. So the last question is on the mutual fund business here, where fund performance is one element where we are seeing some green shoots for you. The other element to grow the AUM is the distribution machinery, right? And at the time of IPO, we were talking about a lot of growth coming in from cross-sell to the group companies. Apart from that, any other drivers that you are putting in the business model to kind of really take up this momentum further, stronger? Because we are just at the cusp of fund performance improvement, and if the distribution machinery also kind of picks up more momentum, then you have a great runway ahead. Correct. No, with respect to the distribution, of course, we have an established distribution model as far as the retail concerns, which is basically divided into T30 and B30, and then beyond that, the emerging market. And then within that, we created a five-step vertical that we created. One is VRM model to activate growing IFAs in the country. We are seeing good success. We keep adding more people into the VRM model via the virtual RM model that we keep increasing the number of team members. As each time period departs, we also learn from the experience and then keep improving on contributing overall success. We are seeing some success. In fact, I must mention the conglomerate fund that we had. In fact, close to about 70-80 crores got added from the VRM channel itself in addition to the traditional distribution channel. So that's something we are seeing as a success. Second is the operation team. Beyond a point when it becomes a well-oiled engine, the operation team, which is a service-facing team, can also contribute to the overall success of the sales. We got a service to sales. We are stepping up the focus, and each year we keep increasing the target to ensure their contribution increases. While these are the established model that we have, emerging market is one where as a fund, we've had great success coming from creating our presence in smaller locations and improving our presence in those markets, therefore increasing our market share. That continues to remain one of our big areas. Currently, we have about 95 locations which operate, while 95 may remain 95, but some will go to the branch level. Some new branch locations will get added there. That's something that remains one of the big area of focus. Having built that, I think last one year, given the fact that we need to step up our engagement on distribution activities and also get a higher output, the team got together, identified about 25 locations in the country, which gives roughly about 80% of the overall sales volume for the industry, including ourselves. And what are the steps that we can take to ensure these 80% market gives me higher contribution by way of engaging just at the ground level? That's something we are doing. In fact, one of the initiatives that we are taking this year is we normally do an annual YAG event. This year, we are converting that into YAG event. We are continuing, but we are doing it only with the cream of people with whom our market share is less. Subject to our high engagement and getting convinced, as you rightly mentioned, about the perception and performance improvement coming also being noticed, therefore we can get incremental AUM from them. That's something which we are now doing it. Upon doing this, we'll probably do this across different parts of the country to ensure the distribution engagement increases quite significantly as we are currently putting in effort. Got it. This last bookkeeping, can we get the yields on each of the asset classes for this quarter? Sure. So Prayesh, the yield for this quarter on the equity side is in the range of around 70%-71%. Debt is 25%, liquid is 13%, and ETF is around 7%-8%. Got it. Thank you so much. All the best. Thank you. A reminder to all participants, if you wish to ask a question, you may press star and one on your touchstone telephone. The next question is from the line of Abhijit Sakhare from Kotak Securities. Please go ahead. Hey, hi. Good evening. Question on yields again. Sorry to interrupt, Mr. Abhijit, but can you please be a little louder? Yes. Just a question on yields again. If you could quantify what was the increase in debt TER that we've made in the previous quarter? I don't have that data, Abhijit, but I don't have that data to quantify the yield increase on account of debt side. But on a few of our debt schemes, we have increased the TER, which has resulted in the increase in the yield. Okay. And then. Overall. Overall, it's around 100 bp s. Yeah. Yeah. Going forward, are you anticipating any further tweaks to the overall TER numbers in the fourth quarter or going ahead, both on the equity and with respect to the debt funds? Equity will remain more or less the same. I don't think sometimes in our thoughts, remember, these numbers keep changing depending upon which bucket in which AUM moves, but otherwise, broadly, equity should remain the same. As far as fixed income concerns, one can expect marginal improvement on the yield given the fact that as interest rates get stabilized and then start coming down, we'll have to give some kind of room for growth in the duration assets wherein the expenses are generally higher than the liquid fund or liquid plus fund, so to the extent one can expect that segment to improve, and third is we're also pushing very aggressively our hybrid funds where like multi-asset allocation fund, balance advantage fund, equity savings fund. We are giving a push in terms of sales. And as we start seeing the overall improvement in terms of sales activities there, once again, the revenue contribution coming from that segment will also rise. Given the fact, again, the size is relatively low compared to the large industry size. Therefore, to the extent we could see the improvement in the contribution. Got it. No, no. Again, coming back to the growth front, now that we've seen some improvement in performance, especially in the shorter-term buckets, have you seen any improvement as far as the products getting included in overall recommendation list or any material change in how the products are perceived in the major channels? Yeah. See, at the level that keeps coming on and off, I think the major channels in the organized channel, except one or two, we have been part of the recommendation in most places. In fact, I must mention that our large-cap fund, Frontline Equity, and Flexi Cap funds, both of them are now coming as part of the recommendation list in the organized channels. We are seeing progress in the current quarter. Even our Balanced Advantage Fund, which has, again, been improving on the overall performance, we are seeing money getting recommended in the organized channel. Third is the Multi-Asset Allocation Fund, which, of course, for about one and a half years of track record, has done exceedingly well, also being included as part of the recommendation list by the organized channel piece. As for the online channel concerns, we did have a huge success in the last quarter. A few of our funds came as part of the recommendations, and those recommendations keep moving up and down depending upon the ranking we calculate from the overall basis. But a few of our funds are part of the core list, which is basically Frontline Equity, Flexi Cap, and Multi-Asset Allocation Fund and Balanced Advantage Fund. These are some of the funds that have been part of the recommendation list. We are seeing some kind of progress in this space. But of course, in order for this to get converted into a visibly higher AUM contribution coming from this segment, we need to continue to work towards it. The number keeps improving on a quarter-on-quarter basis. Got it. This is fine. Thank you. Thank you. Thank you. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead. Yeah. Hi, sir. Good evening. Sir, just wanted to confirm, firstly, on the debt side, could you clarify the overall yield on the debt side? Was it 23 bps? I got you. 25, 25 bp s. Sure, sir. And also, could you quantify the SIP AUM as of December end, sir? Yeah. It is INR 78,000 crores, Lalit. Got it. Sure, sir. So just on the SIP flows, so what we have been seeing is that for the industries, there has been an uptick in their monthly SIP flows, whereas for us, there has been a decline, and the discontinuation rates have also increased. So could you give us some reasons why? What would be the major reasons for the sales? I mean, broadly, on the SIP, the trend remains in terms of registration numbers, except we saw, especially the lump sum ticket SIPs. As you mentioned about normally during a market volatile period, lump sum is the one which generally gets stopped, and then they can come back, which I call it as high-ticket SIPs. We saw some reduction in that. Therefore, we saw overall numbers marginally lower than the previous quarter. Otherwise, the retail peer-to-peer SIP that we try to drive, both the area of adding new customers and the new registration coming from the larger channel partners, that focus remains. But otherwise, also from a cancellation point of view, generally, the ratio is about 50-50%, especially month of December, we saw this number going up to almost about 55 to 60. and at times, when that number suddenly improves, rather goes up, it does have an impact on the overall number. but otherwise, I would attribute this to the market volatility that we are currently witnessing, which normally I've seen historically happen for industry. Even for us, also the number can vary from fund house to fund house. but otherwise, I think once things settle down, we should see this number coming back to normalcy. Sure. Generally, we try to position as agnostic to the market, and that acceptance generally is high. Therefore, we go back to the basics and keep pushing it that SIP is something agnostic to the market and fluctuations and sentiment. That's something to keep harping on. It should only help in terms of maintaining it and improve. Right. So based on those questions that I got, so on the net sales, when we are saying that we are seeing some improvement in the net sales, so particularly in the channel, probably we are seeing more improvement or seeing some improvement in our market share, probably. I think it generally spread across all channels, Lalit. Mainly the IFA's contribution on incremental basis is improving. ND channel, which is the second largest channel for us, so their contribution is improving. So in fact, when we did that conglomerate fund, we did have participation into our fund coming from almost about 22,000 IFAs contributing to the conglomerate fund, which also helped us in activating a lot of the IFAs during this period. We're also seeing online channels selectively contributing on the SIPs. I think broadly, in the order of MFDs and NDs and direct and banking and then online channels. Gotcha. And so just last question, any products in pipeline on the active equity side? Of course, we already taken approval at the month of within launch of fund, which is the innovation fund. We have taken approval. We gave a preference to conglomerate fund over innovation fund. And as and when we feel is right, either in the current quarter or in the subsequent quarter next year, we will have this product launched. Otherwise, we have a series of product pipeline on the passive side, both on the passive equity ETF and index fund equity fund, as well as the target maturity fund on fixed income. Both we already have pipeline of product. We have one pipeline of product for GIFT City. Upon we closing the first fund, which we launched, a special opportunity fund to be created. Now we have created another fund to invest in global blue-chip. That's something we already launched, and we'll go aggressive in terms of promotion as we move forward in the current quarter. We also, of course, announced the fund launch from GIFT City to India. That also will be an official launch maybe in the next few months we will do. These are some of the product pipeline that we have as well. The offshore concern, domestic concern, there's only one product pipeline that we have kept as it stands today. Sure, sir. Thank you, sir. Thank you. We have our next question from the line of Mohit Mangal from Centrum Broking. Please go ahead. Yeah. Hi. Thanks for the opportunity. Am I audible? Yes, Mohit. Yeah. So first is in terms of SIP AUM. I think you said that it's around INR 78,000-odd crore. So if I look sequentially, I think there is a 7% decline. Is this number right? Yeah, yeah. Because of the equity mark-to-market, Mohit. Okay. Okay. Understood. This is a slow decline. Yeah, yeah. Understood. Understood. And secondly, basically in terms of the industry, so there's a lot of talks of this INR 250 SIP that is there. So Balasubramanian could just help us understand the dynamics of it and how do you intend to kind of use this situation to further improve your SIP thing? Yeah. So to repeat, of course, one of the fund houses to take lead in this phase as the regulator announced some time back. We have put things in place, but even otherwise as well, we do offer INR 100 SIP for people who can't afford more than that to the online platform. So we already have that in place. And once if it becomes an industry-wide push, of course, we would participate in that. But otherwise, in general, SIP is something my own belief is whether it is INR 250 or INR 100. I think SIP in general having gained acceptance and momentum and the ticket size, the average ticket size also keeps improving. I think our focus would be to use this product more to get new customer recognition rather than focusing on ticket size. I think we'll have both the strategy going both simultaneously. Or the INR 100, INR 200 for customer recognition, and then increase the average ticket size or contribution as they come on board. So that's the way I see it normally. But otherwise, I don't think this will have something unique for one to benefit big time given the fact that SIP itself now is becoming the widest accepted instrument in the country. All right. All right. Understood, sir. So lastly, in terms of, I mean, your peers are kind of rationalizing the distribution commission. And I think basically any thoughts that you would be doing the same or what are your strategy on that? Of course, we do have a scope, no doubt. But however, we need to do the right balance between growing the business on one side, other side grow the distribution channel on the other side, and ensure we also need to maintain our overall leadership in the industry. Therefore, we'll have to just see when to do and how to do and kind of thing. But otherwise, we do have scope, but not in the current juncture. We would rather focus on growing the book size and customer base and expand the business. Okay. Understood. Understood. Thanks, and wish you all the best. Yeah. Thank you. We have our next question from the line of Bhavin Pande from Athena Investments. Please go ahead. Hi. Good evening. Am I audible? Yes, Bhavin. You're audible, yeah. Yeah. Congratulations on good set of numbers. Sir, I just wanted to understand one thing on how do we look at managing fund performance in a down cycle, specifically thinking from a scenario of us just being on a cusp of turnaround and maybe gathering more flows. So how do we look at it? Yeah. The interesting, Bhavin, I think, is also the managing money business. I think these things, right, all of a sudden then this down cycle comes, and the only way we can manage the risk, which is what we keep harping all the time, the drawdown, especially in market volatility happens. So a number of stocks that pull you down should be the least, and a number of stocks that you have in the portfolio that gives you some bit of either the index performance or a little better than index performance, the component should be high. So that is the principle on which we normally work. Sometimes, most of the time you get it right. Sometimes you don't get it right. But this time, I must mention the last two, three weeks of volatility. Most of our funds could actually withstand the current market volatility and doing better than the market or the competition. So the only way we manage the risk. Second, of course, the sizing between large cap and mid cap and small cap. In fact, as a fund house, we have a reasonably good dominance in the large cap and mid cap space, less of small cap space. To the extent drawdown could also be less. I think that's the only way we keep a close track, which is the investment team keeping a very close track on that in terms of portfolio management operating style. Okay. That's helpful, sir. And sir, when we look at the behavior of an IFA partner, let's say maybe not seeing the discontinuation of SIP right away, but customer is reducing the size of SIP he or she is doing. So when it comes to pecking order doing things, that fund performance comes into account in terms of allocation? Yeah. Definitely, of course, we will do pay attention. I think there are two ways I look at it. One is, of course, improvement in performance. Second is the perception of improvement on performance. And third is the, irrespective of whatever it is, how well we are committed to engage with partners and continue to provide top-of-the-mind service. In my talk, I mentioned about three, four initiatives that we have taken, such as SHV and Legacy Leap kind of things. These all show our commitment to the distributors. And third, of course, is the customer engagement, direct customer engagement by way of guiding, giving insight, and giving our narrative on a continuous basis. It's not about getting the calls right or wrong. It's about being in the front foot and engage with the marketplace. All those things do matter. And of course, fund performance is only one part of it. If the fund performance is there, it becomes that much more easier for the front-end sales team actually to go and push that much aggressively. If the fund performance is actually there, but in the borderline case, then we must also replace that with high level of engagement at the ground level. So this is the combination in which we work. And as it stands today, I would definitely say performance improvement versus the peer group, not only is there improvement, it's also being recognized and noticed by people. Therefore, leading to gradual conversion of that into numbers. That's really helpful, sir, and wishing you all the best. Yeah. Thanks. Thank you. We have our next question from the line of Madhukar Ladha from Nuvama Wealth Management. Please go ahead. Good evening, sir. Congratulations for a good set of numbers, and thank you for taking my questions. First, sir, sequentially, our yield has increased, and that's particularly come from equity yields doing better, where you also mentioned that we have increased, we've changed some distributor payouts. Now, what I want to understand is, is this recurring or is this one-time in nature? Second, on the market share bit, our equity market share sort of continues to slide despite we have actually done two NFOs this quarter, and if I'm not wrong, we collected almost 1,410+ crores. So if I adjust for that, what is your sense on net inflow, market share, ex-NFO in continuing schemes? What is our market share, and are we sort of improving on a quarter-to-quarter basis? Or do you say, and in your opinion, is this decline in market share more because of performance needs to catch up or more because our market share and net inflow needs to catch up? So that is my second question. And third, on the current trends, SIP cancellations have picked up. Also, given this volatility, is the industry, I know the industry will probably witness higher SIP cancellations, but maybe you could talk a little bit about what are we seeing in our current trends in terms of SIP numbers holding up so far or cancellations actually picking up even more in this month so far? And how do you see investor behavior in this sort of situation over the next two, three months if, let's say, the markets were to sustain in this way? So yeah, those would be my broad three questions. Thanks. Madhukar, on the yield side, marketing and distribution expenses, which we have realigned based on the current market situation, it's in the phase where you may see some impact in the next quarter also, the yield will more or less remain in the same range. Yeah. That's the first process. Yeah. Correct. Okay. So this is not a one-off? Yeah. We are doing it in a phased manner, Madhukar. So the equity yield will probably sustain at about 71 bp s, as you mentioned earlier in the call. Madhukar, so what Prakash is saying, so these current yields may be there maybe for next quarter. These are one-off case for one or two quarters. Understood. Then you're likely to come back to the 67-68 basis. Yeah. Okay. Okay. And what is causing this? I mean, I didn't understand what causes this, actually. So like Prakash explained, this is the realignment of certain marketing and selling expenses, which is the regulatory guidelines. So Madhukar, we have made some provisions so that we have realigned. Yeah. So that we will not be incurring anymore because we're cutting back on that, is it? Yeah. Correct. Correct. Correct. Correct. Again, on your other two aspects, as far as the sales numbers concerned, of course, the market share, the way I see it, the overall market share, as far as the equity is concerned, it's on a quarter-on-quarter basis. The fall in market share is now getting better. That's one way I'm looking at it. And second is incremental net sales in some of the funds where we are only seeing outflows for a variety of reasons. Some of the traditional funds where we are seeing net sales improving, which includes the arbitrage fund as well as the large cap fund and a few other funds which are in the main category like Multi Asset Allocation Fund, including our thematic funds such as Balanced Advantage Fund, Index funds where we are seeing continuous flows. And these are each of these categories we take. I think there's some other category where we're getting inflows. Again, those categories, the net sales would be in the range of about 3%-4% kind of things. There are certain schemes, of course, Retirement Benefit Fund as a category we are seeing outflow, and that is largely on account of the category itself has not been getting any inflows. And on top of it, performance-based outflow that we have witnessed given the fact that we have large size. But there we are seeing outflows, but that's something getting reduced each month-on-month basis. Our idea is actually to identify, as I mentioned earlier, focus fund, whether we call it five funds. We have taken a focus fund on the diversified nature and three funds on the thematic we have identified. And on driving it across the country to improve our numbers, that's something we should see it being driven from a sales point of view. But from the cancellation of SIP and other things point of view, as it stands today, anyway, in the last two, three months, in general, the SIPs top-line number keeps rising. The cancellation number generally in the range of about 40%-50%. And this number may even go up a little bit, 60%-65%. And again, it's a function of market trend that we are seeing. But that's something should not necessarily bother anyone given the fact that on these numbers, they can make a comeback by way of growth numbers. And then new customers are coming in. We still have only about 5.5 crore unique customer base. We have about 70 million unique customer base. So, given the fact that the unique customer base can continue to rise, but these numbers should not ultimately lead to any different kind of output, except the ratio could change given the current market volatility if it sustains for, say, one or two quarters as we move forward. Understood. So just like a follow-up, sir, on a quarter-on-quarter basis, from quarter two to quarter three, I wanted to understand if we were to exclude the NFO flows, is our market share improving in net inflows? Yeah. On a scheme that are certain schemes is improving, yes. Madhukar, in the quarter three, we have received the improvement in the net sales ex-NFOs, which is the improvement in the market share. Yeah. Understood. Okay. That's positive. Thank you, sir. All the best. Thank you for the call. Yeah. Thank you. Ladies and gentlemen, due to time constraints, that would be the last question for today, and I now hand the conference over to the management for closing comments. Yes. And thank you, everyone, for joining. And with this, we conclude our Q3 FY 20 25 earnings call. And do feel free to reach out to our IR head, Prakash Bhogale, for any queries that you may have. Thank you. Thank you. On behalf of InCred Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.