Ladies and gentlemen, good day and welcome to the Bajaj Finance Limited Q3 FY 2022 earnings conference call. This call will be recorded and recording will be made public by the company pursuant to its regulatory obligations. Certain personal information such as your name and organization may be asked during the call. If you do not wish for it to be disclosed, please immediately discontinue this call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Anuj Singla from Bank of America Securities. Thank you, and over to you, Mr. Singla. Thank you, Faizan. Good evening, everyone. This is Anuj Singla from Bank of America Securities. Thank you very much for joining us for the Bajaj Finance earnings call, to discuss quarter three FY 2022 results. To discuss the results, I am pleased to welcome Mr. Rajeev Jain, Managing Director, Bajaj Finance Limited, Mr. Sandeep Jain, our Chief Financial Officer, and other senior members of the management team. Thank you very much for giving us the opportunity to host you, sir. Now I invite Mr. Rajeev Jain to take us through the key financial highlight for the quarter, after which we will open the floor for Q&A. With that, over to you, Rajeev, sir. Yeah. Thank you, Anuj. Thank you, Bank of America team. Very good evening to all of you. At the outset, I wish you all a very, very happy new year and hope this year is better than the previous two years, and we see end of pandemic and going into endemic. I'll be referring to the Q3 FY 2022 investor presentation that we have uploaded on the investor section of our website. Let's just quickly go through that. Let's go to panel 4. Overall, a very good quarter for the company, I would say. Across-the-board improvement in all metrics that I'll just take you through very quickly. The company is quite well prepared to navigate wave three, given strong management overlay provisions that we have created and significantly improved stage two and stage three assets of the company. Overall, I would say pretty good quarter. Business transformation phase one is delivered and execution of phase II has already been started. Very quickly, we'll go through numbers. My presentation is broken into two parts. I intend to take 20-odd minutes. 10 minutes on numbers, 10 minutes on business transformation, and then open the forum for questions to be responded to between me and Sandeep Jain. The balance sheet is INR 181,000 crore, year-on-year growth of 26%. Opex to NTI has started to come closer to our guidance frame of 30%-33%. Came in at 34.7%. PAT came in at INR 2,125. ROE on a quarterly basis came in at 5.3%. Net NPA came in at 0.78%. All numbers are in line with what it used to be pre-COVID. Some are better than pre-COVID. If pandemic becomes endemic, we are headed to hopefully a strong few years as you go ahead from here. Let's just go through the quarter. Panel five. Year-on-year, that's why I did not compare. Profits are up 85%. I did not compare them because they're not comparable. Highest ever AUM growth in a quarter. We've never clocked INR 14,700 crore. That was the core AUM growth that we clocked, taking our balance sheet to INR 1,81,000 crore. Overall AUM composition also remained very steady. Later in the presentation, we can have a look at it between 1% ±. Now, other than the auto finance business which is part of our REMI, its contribution has been going down. All other core asset compositions have remained very steady. So far in January, given that we are in wave three, I thought I'll just use this opportunity to provide some updated color. There is no impact of Omicron at this point in time on the business momentum. Things at this juncture in the first 17 days, 18 days of the month on business momentum remain steady. If there is no disruption or increased disruption as a result of wave three, hopefully full year AUM should be quite strong. We booked 7.44 million loans. Year-on-year, as I said, not comparable. Customer franchise, 55.36 million. As phase I of 3.9 has gone live or phase I of business transformation has gone live, we do want to and when we look at the new customer origination, we do believe that as a result of this, from 7 million-8 million guidance that we had given to the street for many years, we think that guidance gets up to 8 million-9 million. As the infrastructure becomes more and more robust and we continue to deliver more and more journeys, hopefully, that number can someday look at a 10 million kind of number. At this point in time, we believe that for the next six to nine months horizon, it should look more like 8 million-9 million per year run rate rather than 7 million-8 million run rate. Cross-sell franchise, 31.26 million. Year-on-year growth of 24%. Geographic footprint added 94 locations in the quarter. We are now at 3,423 locations and 128,000+ distribution points. Competitive intensity across products has increased rapidly. Post wave two, mispricing is more rampant. So far as a company, we've managed to protect our margin profile across businesses. That's one of the things that I'm not personally happy with because in retail businesses, it gets followed up by credit costs. It's quite quite intense competitive activity is what I would say. Interest income reversal going back closer to P&L for Q3 was INR 241 crores. We had guided it should come back to INR 180 crores-INR 200 crores by Q4. We're holding on to the guidance, that's really where it'll go to. It's very close. Last year same time it was INR 450 crores. This year same time it is INR 241 crores and by next quarter, if there's no wave three, then it should go back to INR 180 crores-INR 200 crores. Cost of funds came to 6.72%, providing a reasonable lift. We are originating as much longer assets as liability. We are continuing to make the liability profile longer, raise INR 2,700 crores in NCDs in three years and above, in fixed interest rate NCDs. Out of that, INR 2,100 came in ten-year monies. I think in the last two quarters, we raised INR 5,000 crores. Yes. In the last two quarters, we raised close to INR 5,000-odd crore in 10-year monies. In first 14 years, we didn't raise that kind of money altogether. Liquidity buffer came in at INR 14,400 crore, should normalize to INR 11,000 crore. Between choosing long-term borrowings and liquidity buffer, choice is quite clear. We'll choose long-term borrowings as a company. Panel six, very quickly over to some more detail. Deposit book INR 30,005, just a tad below INR 30,500 crore. 20% of total borrowing came in at 70/30 in terms of mix between retail and corporate. OpEx to NTI, 34.7%. We expect it to normalize between 33% and 34% by Q4. Continue to invest in teams and technology for business transformation. I'll cover that in just two, three more next two, three slides. We continue to invest as we focus on delivering the near-term quarterly profitability. Loan loss and provision took INR 1,051 crores. We've increased management overlay provisions in Q3 from INR 832 crores actually to INR 1,083 crores to protect ourselves or the balance sheet from probable losses that may arise out of wave three. Wave three clarity on impact will only emerge once January default rates, January collection efficiencies, February default rates and February collection efficiencies emerge. That's, I would say, 60 days away or 45 days away, just even from a stress testing standpoint. We thought it prudent to take a management view and have carried INR 250 crore additional provision in Q3 against third wave. Debt management efficiencies across products improved further. We are looking at them as ever best collection efficiencies or debt management efficiencies across business lines that we've seen in the last 14 years, 15 years. Bounce rate for July across products are in line with December. At least one metric out of four that determines fundamentally what losses could look like is at least out of the way, and we'll wait for other three to emerge before taking a view on what could arise out of wave three. Having said that, as I said, we want to continue to remain conservative given continued uncertainty of waves. We are in third wave. We might have a fourth wave. Over the last two years, I now worry about the month of June. The last two Junes have been terrible. You know, by June, if we are endemic, then I would say we are endemic. As a measure of prudence and given strong profitability, we've decided to carry sufficient overlays, and we are forecasting that on a full year basis instead of INR 4,300 crore-INR 4,500 crore of loan loss provisions, we'll carry INR 4,800 crore-INR 5,000 crore. Of this, if I may, we've already taken INR 4,000 crore- INR 100 crore. INR 4,100 crore in the three quarters. Depending on how it plays out, the fourth quarter we may take the balance. Mm-hmm. Gross NPA, net NPA improved sequentially and of course year-on-year significantly came in at 1.73% and 0.78%. They are very close to being back to pre-COVID levels. We are very close, and they are very close to where we've been historically for last five, seven years prior to COVID. Came in at 1.73% and 0.78%. The point is, the RBI had changed the NPA classification requirement for NBFCs. There was no impact of the same on gross NPA, net NPA for us as a company. Overall stage two went down actually by INR 600 crore as you can see from the numbers. Overall stage three went down by INR 1,000 crore. Between stage two and stage three, the numbers went down by INR 1,600-odd crores. Mm-hmm. Panel seven. I'm down to the last two panels quickly. Portfolio quality, rather than taking you through the nine panels which are appended in the slides later, I thought I'll cover it in executive summary. From a management assurance standpoint, seven portfolios are green. Two portfolios are yellow. Actually, the AF portfolio has moved from red to- Yellow. Yeah. It used to be 86% current business. It is close to 83% current business now. All goes well and despite the fact that portfolio has reduced by INR 4,000-odd crore in the last two years. It's a declining asset base on which there is improvement. I stamped management assurance of home loans as yellow because it came in at 99.1% versus 91.5% that it used to be historically at pre-COVID levels. Otherwise, I could easily argue even home loan is green. Eight out of nine are fundamentally green and AF being yellow. Now, consolidated post-tax profit grew 85%. As I said, year-on-year not comparable, but INR 212.5 crore is the highest ever profit that we have generated in any quarter. Capital adequacy, pretty strong, came in at 27%. Tier one itself is at 24.5%. As I said, in Q3, if you look at a long-term guidance metric that we've guided the street on, we've actually made all of them on a quarterly basis. If pandemic becomes endemic and given the state of portfolio that we are in and with the business transformation going live, I would say I'm quite excited about the next fiscal. Now, BHFL balance sheet, jumping to the subsidiaries, grew 39% to a tad below INR 50,000 crore, INR 49,203 crore. Capital adequacy was 19.5%. We would like to run that business at 7x kind of 7.5x kind of leverage. As a result, the BFL board today, BHFL delivered a profit of INR 185 crore, PAT of INR 185 crore, a growth of 87%. BFL board today, as a result of 7.5x to 8x kind of leverage, thought process that we have, has approved infusing INR 2,500 crore of capital in BHFL, as a rights issue, from BFL. BFSL acquired 65,000 new customers. Just to recall, we were acquiring 110,000 odd customers in BFSL in the previous quarter sequentially. We decided to focus on activation and quality rather than quantity. The activation rates now, which used to be 20%-23% in Q3 as a result, are now looking at 43%-44%. That's the direction that we want to take. We do want to grow BFSL. BFSL given it a PAT of INR 7 crore. The BFL board has also approved infusion of INR 400 crore of equity share capital as a rights issue in BFSL as well today. Overall, we've committed INR 2,900 crore of capital in today's board meeting into both the subsidiaries as a company move. That's really on the financials. As I said, overall good quarter for the company. That's probably being polite, but we're quite happy with the progress the company has made in coming out of wave two. What I do want to spend the next 10 minutes on is update on business transformation. I have four slides or five slides that I'll quickly cover. Two of them are busy. I don't intend to cover them, but I'll just take you through very quickly on that. Just before that, various conversations, various people have various views on what we're creating and so on and so forth. I thought I'd just simplify and clarify our stance on what we are doing this business transformation for. As a company, we have a very clear view that we are a consumer financial services business, diversified consumer financial services business. That's what we are. We believe that the purpose of any business transformation is a means to an end. It should, to the core business, result in stronger growth momentum or superior customer experience or better cross-sell, or lower risk and improve operating efficiencies. That's really the overall objective of any business transformation should be, and we are pursuing this whole agenda of business transformation singularly with our objective. I thought I'd just clarify my stand very clearly as management to make that point. Move. All business transformation, it's also clear, I'm sure you know, you're all learned people. We have become learned over the last 18 months. We are very clear it takes time, team and technology. We are increasingly super clear about that it needs all these three. It's been 15 months. We started to provide quarterly update to the street, and since we started the phase I of business transformation, I thought it would be an appropriate moment for me to share an update as to what's gone live and what's going to go live in phase two. Due to wave two, it got delayed by three months. It should have logically gone live in October. It went live in December. Phase one has now gone live with a staggered release methodology. Phase I had three sprints. Sprint one is now live for 100% of the customers. Sprint two and sprint three together are live for now 10% of the customers. It will go live for 100% of the customers between 24th and 30th of the month. We will sunset over a period of 15 days-30 days from there, depending on how many customers move from the older app infrastructure. Kurush is looking at me. The point that he's making is we'll have to go by if the customer does not want to upgrade, as a customer, we may not want to push a forced upgrade. That's a point well taken, Kurush, without you stating it. That would be our intention because we do believe new infrastructure brings significant leverage, larger infrastructure, and much better customer experience for customers. Next two slides, I'll demystify the entire new digital platform. The two slides from there on, I'll cover what we will do in phase two. I think that's the purpose of this conversation. Move. I'm not gonna go through this panel. There are two panels on what I would call 15 components. The way you should read it is that in this panel, the verticals read them as the first column, read them as components at a design level, and rest of them you read as features. Overall, the new digital platform has 15 components. Just go to the next slide. Has 55-odd components, features, sorry. Yeah, which is mentioned on this panel below. Overall 15 components and 55 features. Let's just go back for a moment. This is really all any of you as customer or if you came in as a prospect would experience. You would experience the entire payment stack that is here on top. You would experience 27,000 retailers through the no-cost EMI marketplace, which attracted 45 million visits in Q3 alone. It's already 250 million run rate asset. The insurance marketplace, which has gone live, has nine insurance companies and 800-odd products. Investments marketplace, the entire mutual fund infrastructure through BSE StAR sitting there. Health Rx, which is for a customer, our proprietary health infrastructure and BFSL app. These are proprietary app ecosystems. You would see lead journeys as what we call three-in-one financial services. You would experience earn and burn, earn for payment transactions, burn on convert to cash, bill payment and voucher. You would press a button and say, "Call me back," in any of the places, you would get a call anywhere between five minutes and 15 minutes, depending on which of the 3,400 cities you are, you pressed a button from. The productivity apps that are not visible to the customer, but that's really what integrates the integrated voice and marketing cloud infrastructure. You would see all these services, including calculators and profile updates and so on and so forth. You would see 31 apps across travel, entertainment, food, utility, shopping at this point in time. You would experience the feature search and content search as a customer, which we think is a hero frame because it's right on the homepage. You would be able to see, as I said, NPS, social share, wishlist and so on and so forth. Personalization, nudges, notifications. Data you will not see as a customer, but we would take consent from you. Depending on consent, it runs business rule engines. This platform is integrated with 400+ digital APIs to make things happen. The next two are not really relevant for you, but without a very scalable core platform, it won't work. I've mentioned in the past quarters three to four quarters ago that fundamentally restacking the core took the most amount of time other than focusing on a good UI UX. Restacking the core is an important dimension to being able to deliver at scale what we intend to deliver. It also meant investing in core infrastructure like high availability infrastructure and much deeper investment in disaster recovery, et cetera. What we've also done is, because this is a functional construct, 600 odd lateral and fresh hires we've got added to be able to deliver this over the last 15 odd months. This is really what you will see, as I said, between January 24th and January 26th as Google allows us to transition 100% of the customers and as we see stabilization of the platform. That's really all of you, either as prospective or new customer would experience. What we have focused on is what I would call phase one. It was focused on creating a strong, stable and a scalable foundation for us to build the overall business transformation for the next few years. What phase two will fundamentally do is to focus on from existing customers to go to new Bajaj customer journeys. Would introduce lot new features and functionalities. Would augment current feature set and nuanced journeys for our existing customers, taking them closer and closer to DRI. You know, at the end of the day, that's really what we'll transition from processes to journeys is really where we are, we are reorganizing our thought process and company over the last 15 months, 18 months. It's a journey and we'll continue to stay there going after journeys. What that would do is what you see as the yellows is really what will come in over a period of eight to nine months. On this panel, I'm not gonna spend time. On this panel yellow. Move. The next panel yellows. These are the new stacks and the features and components are not gonna change. But the features are gonna change. We'll transition from 15 stacks and 55-odd features, 52-odd features to 15 stacks and 72-odd features and components. The only difference versus what we did phase I and phase II is that consumers will not have to wait for eight months to experience the yellows that I talked to you about. Because as I said, we are focused on building a stable and scalable infrastructure. As that gets delivered, every three months we'll release sprints. Actually, we'll release every two months, but since we just started work on phase II, this time around, we will do it in three months. This will get delivered over four sprints between July and October, November, is really how we are looking at this frame to be. During this period, as I said, purpose of business transformation, this is a longer-term frame. We continue to remain committed to deliver our long-term guidance metrics as a company. This is being created with a five-year to seven-year view. Let me simplify the conversation. This will help the company not on quarterly outcomes. This will help the company get closer and closer to customer. As I said, deliver the objective of business transformation, which is to either reduce cost, improve velocity, improve growth momentum, reduce risk and improve customer experience. That's really. It's not new, as you will see some of the expression here, as I said in the AGM, that our agenda is omnipresence. Physically, we continue to mobilize that we are in 3,400 cities. Digital platform, phase one has gone live. 16.5 million customers currently sit on the old platform. 6 million now sit on the new platform. 500,000 new customers we acquired through EMI card in the third quarter alone. They are not just new customers. Of the 1.3 million safe, they gave 240,000 loans. We have a 30% conversion rate, which is a great number, I would say. In terms of activation, I already talked about 45 million EMI store visits. As phase one goes live, these panels will get filled more and more. This is really how it already has 28,000 SKUs and 24,000 merchants. The point-of-sale transformation, which allows good customers to apply for a PL right at the point of sale. We have INR 600 crores of personal loans in Q3 alone and 91,500 credit cards. Payments, we have just a tad below 5 million wallets now. We added 2.6 million wallets in Q3 alone. The P2M infrastructure, which you saw as yellow in phase II, will go live in February. We are not waiting for that to happen in phase II. We are waiting for regulatory approvals to move ahead further on BBPOU. The team onboarding, as I showed, we already hired for the payments business, 120 people, which will go to 400 people by June. That's really the quarter gone by. That's really the business transformation update. We are at it as management to chew gum while walking. That's the quarter. Happy to take questions. 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 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. Reminder to the participants, anyone who wishes to ask a question may press star and one. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The first question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Yeah, congratulations, Rajiv and the entire team. Firstly, with respect to this entire app, I just want to assess the adoption. How should we actually gauge the adoption? Maybe there are some metrics which you have highlighted in terms of people who were there on the consumer app and how many have been onboarded onto the new app, so maybe 16.5 and 6. In that, in terms of, maybe when you were making the remark, you said that many of them would not like to migrate, and there will be no force upon them. If you can highlight out of the total customer base, what is the final endeavor which we are looking at and by what time we would be seeing it? As and when the new features get introduced, how do we convey to the customers, okay, that this is getting launched, this is what has happened? Because I think insurance and something was not available, it is coming through. Now, whatever comes on from January 24th-January 26th, how do we keep on intimating to the customers and improve the adoption out there? Two things, Kunal, from a. There are two, three large engines that will drive adoption. You walk into the point of sale, your agreement is now on it. I mean, as on from first of February. Any new customer or existing customer comes on board, he has to go and do OTP and do an agreement there in the app. I mean, our entire ARU infrastructure is now driving this app because at the end of the day, if I am trying to do a activation and response units which do largest amount of communication with prospects and with existing customers, all of it is driving it towards the new digital platform. Adoption will be reasonably rapid. We are very confident and all channels in the company will go towards it. That's first part of the conversation because all journeys will get weaved in there, whether it's a personal loan or it's a point of sale. The mobile receipt, if you are a defaulting customer, you want to see the receipt, you will instantly see it there. Wherever you will touch us as a customer, the connect will be through the app as you move. Also the touch- All service touchpoints will be through the app. Service, collection, sales, all through the app. You know, that's one part of the conversation. Second part is as phase two goes live, we think we are already beginning to track a set of internal metrics. We'll start to publish them for either, let's say, fourth quarter next year onwards. We are already tracking a set of what we would call 21 metrics that determine a effective app ecosystem. Just as it gets matured, we'll start to share that as well. We are a transparent company, but it must reach a particular maturity before we feel comfortable starting to share. Wait for three more quarters. Okay. Sure. Overall, maybe in terms of the transitioning, so if I'm an existing customer, but there are no repeat transactions which are happening, but maybe through, say, collections or some other servicing which, whichever is happening, any which way I will keep on migrating to the new app and at least will connect with it. It's an important conversation, Kunal. You know, if you go to the functional architecture that we've actually published, number one. Number two, the conversation that we did with the community on taking on payments as a large frame. The first step that you will see, we are very clear that the engagement would happen through that. That's why you see on top, just if you go there, on top you see UPI, PPI, EMI card, BBPS. BBPS is now already clocking 250,000 transactions in a month. 400,000 transactions, Kurush is correcting me, in a month. We will start to see, and we're just getting our feet wet. Let me just make that point very clear. We've been focused on, as I said, building a strong, stable and scalable foundation. We have a large franchise, accelerating it, and we have a large profit pool. Accelerating it is not going to take too much effort. Thank you. Mr. Shah, may we request that you return to the question queue for follow-up questions. Thank you. The next question is from the line of Abhishek Murarka from HSBC. Please go ahead. Hi. Good evening, everyone. First of all, many congratulations for the quarter. Two questions. The first is, you know, on OpEx. Have you got a budget for, you know, what you will be offering as cash backs or incentives on the app? And, are you also seeing, you know, you've hired about 600 people, you will be hiring another 800 people as per your presentation. Are you seeing a lot of wage inflation there? And overall, how should we think about OpEx in terms of cost to income, given these two things in the backdrop? That's one. I'll come back to the second question. We'll guide in case there's a change. We do believe, as I said, we'll continue to chew gum while walking. We remain committed to deliver 33 odd% kind of OpEx to NTI ratios that we were at pre-COVID levels. Over time, Abhishek, as velocity grows, as you become more efficient, you know, the number will go down or could go down. I wouldn't say will go down, could go down. Mm-hmm. the 33% number or 32%, 33%, 34%, I'm not fixated on the number, I'm fixating on the trend line that we will continue. We remain committed to delivering profitability while investing in our future. Great. Basically what you're saying is despite all these efforts of investing in, you know, people and also through the app on cashback and all that, it's not going to skew the cost to income ratio from that level, 33%-35%, whatever it is, low 30s. Yes. When I said no. Okay. -it means- And the- Yeah. The other question I had is, basically on the provision guidance. Now, we've gone up to INR 48 billion-INR 50 billion, and you said you know, you're trying to be conservative. On the other side, you know, you've also said that the impact of wave three is not really as much as wave one, wave two. Why have we really increased this guidance? As I said, we remain in an uncertain zone. We don't want credit costs to drag P&L, to drag the overall momentum. Let me simplify the conversation. You know, we like to run a fully costed P&L as a company, and that's really what we've done for the last 14 years, 15 years. We want to remain conservative. As I said, this is management overlay. If it doesn't occur, which is for the first 17 days it's looking like, and by June, we don't have a fourth wave, this is available to be rolled back because. Let me in fact further complicate the conversation. The gross NPA, net NPA is back to pre-COVID levels. The Stage 2, Stage 3 assets adjusted for balance sheet are back to pre-COVID levels. We are very comfortable on all these four metrics. The uncertainty is what is causing us as management to take a conservative view. That's all. Thank you. Mr. Murarka, may we request that you return to the question queue for follow-up questions. Thank you. The next question is from the line of Shubhranshu Mishra from Systematix. Please go ahead. Hi, Rajeev. Congratulations on the set of numbers. So, two questions. First is slightly quantitative. If you can define what is the average age, income, CIBIL score of the new-to-Bajaj customer, how many of them are 700+? The second is if you can also list out the concentration of the distribution reach on Slide 47. We've given out the consumer durable, digital product store, lifestyle, retail stores. What are the top 1,000 stores or top 500 stores in each category catered to it either in terms of volumes or values to the AUM? A last question is quantitative. When do we plan to become a bank or apply to become a bank? First is the TG. Fundamentally, look, at a design level, we focus on who we want to do business with in the EMI card space. We target essentially those prospects that we intend to onboard as a customer. That's level one point that I must make. Level two, as a result, they have to be 700+ score or 720+ score, or they can be 0-1, so that we're clear about it. Normally, we see from a Trendline standpoint, as I said, we acquired 492,000 customers in Q3. That means 160,000 or so customers in EMI card platform every month. 85% of the customers are 720+ score, from a bureau standpoint, and between 12%-15% could be 0-1. Even those 0-1 are ones that we want to target. That's point number two. TG remains between 32%-45%. That's really the TG that comes through the board because the moment you want 85% of them to be bureau tested, naturally, in general, you're gonna find that TG. We find that that TG, above thirty TG, is about building a long-term business. That's third question. Fourth... Sorry. Contribution by top thousand sort of. Top 20 dealers would have 20% market share. You know, that's not changed. It's also not changed because we've kept going deep. If you say, if you take a top 20 city view, that number will be very different. But the moment you take a 3,424 cities view, the number has been at 20% now for a long, long time. Of course, the top 20 dealers also kept going down. The top 20 dealers, some of them have got down to 1,500 kind of city. That's also not 1,500. They have 2,000 stores, so could be down to, so number would be 20%. It's reasonably distributed both geographically and from a concentration of retailer contribution. Bank, there's no plan. We'll definitely update before we decide, I think. At this point in time, there's no such plan, and that's up for RBI came out with their guidelines. It's up for the shareholders to decide, and we as management will follow what shareholders decide. Sure. Thank you. Thank you. The next question is from the line of Prakhar Agarwal from Edelweiss. Please go ahead. Yeah, hi, sir. Just three sets of questions. First, in terms of home loans that you highlighted that is yellow, what are the exact pressure points that you are seeing to highlight that segment particularly as a yellow? Second, when you talk about- Sorry. Have we lost you, Prakhar? Prakhar, right? Prakash. Prakhar. Yeah, Prakhar. Sorry. Yeah. I was talking more from a home loan perspective. What makes you classify that as yellow? Which is first. Yeah. Yeah. Second, in terms of customer acquisition, you sort of said that from a normalized level, you probably may go to 8 million-10 million over a period of time. What exactly is the architecture that gives you increased levels in terms of higher customer acquisition rate? Lastly, in terms of when you make a point that competitive intensity in few of these operating segments has risen, where exactly have you seen this, which areas have exactly seen this rise? Do you see that profitability in few of these segments also getting curtailed because of higher competition? Because downside is what you said that has stagnated in January or probably is probably similar in December. Do you see pressure points in profitability in few of the segments wherein that is seeing higher competition? Look, it's visible all over. You're able to get an auto loan at 7.5%. You're able to get- Personal loan. Home loan at 6.6%. GSEC is at 6.6%. Anyway, GSEC is at 6.6%. Home loan is at 6.6%. That's competitive intensity for you. Personal loans are going at 10.5%-11% for best customers. To my mind, personally, the pricing does not adjust for risk, to my mind. I mean, now, and I could be wrong. We are clear that there is, based on our PPM frames, a red line to where we can go from a pricing standpoint. That's really the second response to the second point. It's all around us. Try and apply for a personal loan, you can get it at 11%. Salary personal loan. Professional doctors are getting money at 11%. It's not risk-adjusted in my mind. Home loan, if you see, I've put up the banner 58. Logically should be 99.25 kind of number, in my assessment, and that's why yellow. It's not a red in any given manner. It's just as you see the number to be here. To my mind, it should be 99.25 kind of number. As it gets there, we'll stamp it as green. It does not reflect a deteriorating credit situation given the nature of the business, but that's the management assurance assessment. Were these the two questions, Prakhar? Just last one was on customer acquisition, that you said that 8 million-10 million is what we're targeting. What is the underlying architecture, which you see that over a period of time you will be able to ramp that customer acquisition on a normalized level of 6 million-8 million? I think as the digital platform becomes more and more robust, as the journeys become more and more integrated, you will see that happen. I would only just add one more dimension since we're pushing this conversation, is that this is only an app conversation. There's eventually even whether you came on app or on web, the experience should be same. It should be same, not even similar. As both the platforms are optimized deliver identical journeys, I'm quite excited and do believe that the momentum will be strong. That's our assessment as management. Sure. Thanks a lot. Thank you. Thank you. The next question is from the line of Kuntal Shah from Oaklane Capital. Please go ahead. Good evening, Rajeev, and thanks for the explanation and the commentary thereon. Just one request that this presentation was just released five minutes before the call, and I think that most of us would not have- That's correct. Connect one time to it. Yeah. If the presentation were to refer to Kubernetes and Data Lake, I can assure you 99% of the people on this call wouldn't even understand it. That's okay. I don't have a view on that. We are supposed to provide update, Kuntal. Our board meeting was to finish at five. It went on a little longer. As you can see, we've just committed large capital. It needed explanation to the board, and to commit such large amounts of capital to the two subsidiaries. Thanks. That's the point. You can imagine our state. We've been at it since morning, and we're just at 7:00 o'clock also answering questions. Maybe call next time will help. Anyway, my two questions are: You mentioned there are gonna be almost 600+ APIs. APIs can enable even third party to offer solutions on your platform, provided you are not willing to or you don't want to. Are you planning to make it an open kind of a marketplace where they can also mutually benefit from your reach and your customer base, and you could do a revenue share with them? Uh- I saw marketplace of Bajaj two-wheeler. It means you have moved beyond Bajaj ecosystem. Is the- Yes. We'll be launching two-wheeler financing for non-captive customers by between June 1st or July 1st. In fact, we would have launched it if not for the marketplace. Let me make one important point that as we deliver phase two or any new large product, the whole approach to launching products, conceptualization to delivery, we would not do anything that is not available on day zero to customers on the digital platform. Technically, we could have gone live on February 1st with a two-wheeler financing business. We've held it back for five months because we want SKUs across mechanical and electric to be visible and available to customers to be able to compare and shop. That's one part. Two, as I said, on day zero, we would not launch without being on the digital platform. Your second question, Kuntal, was? APIs. APIs, as I said. Can these be delivered by third-party products to be done on the Bajaj platform? The in-app programs are mostly APIs at level one. Over time, as we see which piece is generating velocity, we will keep integrating tighter. You know, there's a lot of conversation that goes around saying people are building super app. Super apps are not created. They get created because that's what consumer asks in search and then you deepen journeys. At this point in time, you see 31 of them. They are all APIs, but they are level one APIs. They will get to level two, level three, and so on and so forth, wherever we see velocity. 31 APIs is going to 46 APIs or 47 APIs, whatever you said. 51 APIs. 50 APIs. Sorry. Those in-app programs are built as APIs, but let me caution, built as level one APIs. They'll get to level 2, level 3. Answering your second order question, no view on exposing it to other than in-app programs. Our main focus in phase two is to make our customers' journeys easier and easier and easier, because that's really what generates. We are a consumer diversified consumer financial services business, and that's really what generates the balance sheet and the profitability, and our entire focus is on that. I hope that answers the question. No, just wanted to know the pros and cons of opening it for third-party applications which you are not present on or are not willing to be present on, but customers. Never say never, Kuntal, but don't have a view at this point in time. I think that's the. If we think for travel and for shopping, our customers or for things like casual gaming, customers are interested, they're already there. Over time, we see on the search menu, customers are looking for another category. Based on data, we'll go out and build partnerships. Over time, we see in the existing in-app programs, clients are doing more activity, we will integrate tighter. That's how. That's our view. Okay, thanks. I hope Elon Musk or Salman Khan is gonna endorse Bajaj Coin, which you have laid out. I think those are going down that path. Thank you. Thank you. The next question is from the line of Nitin Jain from FairConnect. Please go ahead. Hello. Yes. Yes, Nitin. Yeah. Can you hear me? Yeah. So I just have one quick question. The speed at which the company is acquiring fixed deposits, like, despite offering better rates than, you know, private banks, that seems to have, you know, decelerated over the past few quarters. Like from where we were growing, you know, 8%-10% QOQ, we are down to low single digits. Yes. Any comment on that? That's all. Thank you. No, it's a very fair question, and it's a correct question. We've invested in 10 channels, 11 channels over the last four years, five years. We told the team the time has come for you to demonstrate that the distribution heft has as much role to play as pricing. That's really what we are testing for the last six months, eight months. We do see that, and we just increased pricing. We have internally pegged it as part of our ALCO processes to GSEC that we kept pricing very tight, but the business still generates between INR 950 crore-INR 1,000 crore of retail deposits with average deposit of INR 3.5 lakh a month. Let me use the word, we're just maturing the business to. That's on one part. The second dimension is that at the end of the day, retail liabilities is a cost center. There is a cost that we decide that we are willing to spend to diversify the balance sheet from the liability side. They have to make ends meet in that. These are the only two objectives, which is maturing the maturity of the distribution investments that we made and two, running it in a disciplined manner within a particular cost base. Okay. Just if I can add a follow-up. Is our cost of acquisition of deposits has it gone up recently, or how is it? No. It's not gone up. It's actually gone down. That's the pool that is available. Rajiv is referring to the overall cost of funds that it creates for the company. No, no. I was referring to cost of acquisition. Okay. The third point that Sandeep is making is a correct point as well. That at the end of the day, there are users of this money who also ask in ALCO, "What do I do with the money if it comes at this price?" Eventually, we have to find a rightful balance once the business reaches a particular point of maturity. That's really the point that Sandeep made is equally important. Between these three, that's how you see, and your observation is correct. Slowing down of the origination. Okay. Thank you. Thank you. The next question is from the line of Dhaval Gada from DSP Investment Managers. Please go ahead. Hi, Rajeev. Congrats on good numbers and the additional disclosures. I just had couple of questions. First was on new loan origination. The point is, in terms of sales velocity of existing customer base, if you see the current traction, it seems to be similar to second half of last year, but still substantially lower than pre-COVID run rate. The question is this number less relevant as the ticket size sort of increases, or it's important and that's something that we expect to normalize in FY 2023? You mean the one booked, right, Dhaval? You mean loan booked? The number of loans booked. Yeah, yeah. Yes, yes. The 7.4 million It's a correct observation. It's a correct point. That versus the 6 million, the 7.4 million looks good. But the point that you're making is correct. In December 2019 quarter, we had booked 7.8 million. 7.67 million. 7.67 million. 7.7 million to be precise. During that period, if you recall, post-pandemic, we came to a conclusion and we disclosed that to the street. There are two lines of businesses that washed away last three years of profitability. One was the retail EMI spends business, and that used to do 200,000 accounts a month. We capped that at 60,000 accounts. From a 600,000 accounts, we allowed them to do only, even in a seasonal, festive season quarter, like the previous one, we capped them at 200,000 accounts, 220,000 accounts. That's 400,000± accounts gone away. The second was that we used to do these wallet loans to our existing customers of INR 5,000-INR 10,000 for three months. So-called in the new jargon, which didn't exist then called BNPL. We used to do 70-odd thousand loans in a month. That was 200,000 loans in a quarter. We walked away from that last, now last to last April. That's how the 600,000 number logically gets reconciled to 7.4 million. 7.7 million, apple-to-apple is 8 million, is how you should read it. Observation is correct. Is it important? Answer is yes. In new loans booked remain an important metric because it demonstrates engagement, demonstrates velocity, so it remains important. We think as the economy comes back, as pandemic becomes endemic, given the franchise creation, given the de-distribution, given the new digital platforms that are getting created, we will see both happen. New customer acquisition and new loans booked. I'm waiting to see hopefully a normal summer. We've not seen a normal summer. Summer contributes to 40% of the business. We've not had a normal summer, which is April, May, June for last two years. I hope that answers the question. Got it. Just one sort of follow-up. Small point is, you know, in this period of December 2019 to now, I mean, we've seen about 33% accretion on cross-sell customer base, 33%, 34% accretion on EMI base as well, EMI card base. So, adjusted for the engagement ratios pre-COVID versus where we are, we should be next year, broadly, should it be similar even adjusting for the REMI loss and the wallet loan loss, it should be similar? Yes. We will see increased velocity. Now, it's a point of view. I can't say that, as I mentioned earlier to the response, that as this whole business transformation gets delivered, as customers become, we will should see increased velocity and increased engagement, and that should lead to higher volumes. Got it. The second question, Rajeev, I had was on the digital EMI card. If you look at the base now, I mean, it's almost like 5% of the EMI card base. If you look at the engagement metrics here, I mean, at least optically, they look better than you know, the existing EMI franchise. Just, I mean, I wanted to understand the economics part of it. I mean, should this card be you know, much better breakeven compared to you know, the normal origination? And also- They are profitable on day one. They're profitable on day one. Understood. Some initial thoughts on the engagement part. Out of this 492,000 customers, 300,000 customers pay a fee instantly and become and get an EMI card. 192,000 customers as and when they decide to take the product, come and at that point in time pay. That's how the breakup is. If you take it further, 492,000 customerson aggregate is profitable on day one, adjusted for as a P&L. Got it. Thanks. I'll come back. Thank you. Thank you. Ladies and gentlemen, we will take the last question from the line of Aditya from Citigroup. Please go ahead. Hi. Thank you. If you talk about two segments. One, you mentioned affordable housing in the last quarter. What's the profile of that business in terms of target yield, ticket size and geography? On IPO financing, which seems to be low, at least on quarter-end basis, is there a change in view on doing less of that? Or could this be just a period-end balance sheet phenomenon? Affordable housing has just gone live. BHFL has just started to, they created a team. We are testing it in two markets. We're building that business with a long-term view, very clearly. That's very early days. Aditya, very premature to make any comment on that. It'll probably be 18 months before we start to warm it up. Let me make a point. That's one part of the conversation. Two, IPO financing at quarter end, it had no outstanding, so that's one. Two, IPO financing is a phenomenon. As you all would be aware, would, based on the new guidelines of INR 1 crore requirement, would probably cease to exist from March 1st onwards. It seems as a market participant at this point in time. To retail customers who want it, we would of course offer it. Retail customer was never participating that aggressively. From a longer term standpoint, I could argue that it's a step in the right direction to retailize the market participation. Got it. Thank you. Just secondly, on the LCR norms, what is the expected impact? I mean, what portion or what amount of liquidity in this quarter have we kept in INR billion terms to comply with LCR norms? Sandeep. Yeah. Aditya, we are carrying a large amount of liquidity otherwise also. There is absolutely no impact that the company has from LCR perspective. The only change that was supposed to be done by us is that so far a large part of the investment was going in mutual funds. Versus mutual fund, now it goes into some of the trade bills and so on and so forth. That's the only change that has taken place. That also allows us to leverage, trade bills can be used for raising more debt as well. That's the thing that has changed. From an overall guidance perspective, we expect the liquidity buffer for us to go down to INR 10,000-INR 11,000 kind of range as we go along from here. That's on LCR. Even on LCR ramping up to 100%, there is no material impact. We are more than 100%, even now. As Sandeep says, the mix change is the reserves that. There is no financial impact other than that. Understood. Thank you. Anuj, shall we call it a day? Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Anuj Singla for closing comments. Thank you, Faizan. Rajeev sir, any last comments before we close the call? So far so good. Thank you all very much. It's late in the evening. Stay safe. This is the most transmissible variant. Please stay safe and wish us being safe. Thank you. Thank you all. Thank you. Thank you, sir. Thank you, Rajiv sir and Bajaj Finance for giving us the opportunity to host you. Thanks everyone for joining. This concludes the call for today. Over to you, Faizan. Thank you. Ladies and gentlemen, on behalf of Bank of America Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.