Ladies and gentlemen, good day and welcome to Can Fin Homes Limited Q3 FY 2022 Earnings Conference Call hosted by Investec Capital Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nidhesh Jain from Investec Capital Services. Thank you, and over to you, sir. Thank you, Sayan. Good afternoon, everyone. Welcome to the Q3 FY 2022 Earnings Conference Call of Can Fin Homes Limited. To discuss the financial performance of Can Fin and to address your queries, we have with us today Mr. Girish Kousgi, MD and CEO of Can Fin Homes, Mr. Amitabh Chatterjee, Deputy Managing Director, Mr. Prashanth Joishy, CFO, and Ms. Shamila, Business Head. I would now like to hand over the call to Mr. Kousgi for his opening comments. Over to you, sir. Good afternoon to all the investors. We had a good quarter, backed up by last quarter, which was pretty decent. Outlook is very, very positive. We've been making good trend since last year third quarter onwards. Quarter 4 of last year was pretty good. Quarter 1 of this year was impacted due to COVID second wave. The market is quite robust. Only in this we lost about 45 days in first quarter of this year, and therefore going to have big impact on business, which all of you are aware. Quarter 2 we came back very strongly, and quarter 3 also we've done very well in most of the parameters. In terms of market, I think this market is going to be robust for next few years. Real estate as a space has really improved in the last decade. This is going to remain the same for another 4-5 years, in our sense. We are able to get business from across all the geographies barring one or two, all the segments, whether it is builder or non-builder. This is across all the types of cities, whether it is metro, whether it is big cities, mid-size cities, or small cities. In terms of profile, there has been increased demand from salaried. SE and PE demand was quite low. After COVID, I think it really went down drastically. Now slowly confidence is coming back. We're also seeing that the share of self-employed non-professional incrementally is going up. It is still not back to 30 because ideally at a portfolio level we were at 70-30, and after COVID I think this changed drastically, and now it is slowly coming back. The last quarter, salaried was 74% and SE and PE was 26%. This 26% is much lower than the earlier quarters. We were able to log all-time high book growth. We showed about 19.5% book growth. In fact, we had a lot of challenge last year as all of you are, you know, aware because we had a lot of pressure on NIM. So that has now, you know, come down drastically since last 4 quarters. Last year's quarter 1, quarter 2, and quarter 3, and to a certain extent quarter 4 of last year, we had a lot of pressure on BT. Now it has come down. Just to give you a sense, for the BT amount for quarter 3 was about INR 78 crore. The same number last year those quarter was 3x higher. It has now come back to normalized position, or rather it is better than pre-COVID time, I guess. In terms of disbursement, we have grown by 1.2% year-over-year. It may not be the right comparison because obviously last year because of COVID, you know, impaired disbursement. Same thing is true with the entire industry. Still, if you look at the book, the book has grown because you know, whether we do disbursement or not, I think book would by and large, you know, be same, but for the run-offs. On book we have grown at 19.5%, and we have done all-time high disbursement in quarter 3. Prior to quarter 3, all-time high was quarter 2. Prior to quarter 2, all-time high was quarter 4 of last year. In last four quarters, three quarters have been all-time high disbursement in the history ever. Which means with every quarter we are trying to improve our disbursement. If you look at the sequential growth, it is not marginal. It is quite substantial growth what we have done. For example, if you look at this quarter, this quarter we have disbursed INR 2,472 crores, which is a good sequential growth of 12%. If you look at last quarter, it was INR 2,208 crores. Prior to that was quarter 1, so because of COVID there was an impact, so we disbursed INR 823. If you look at quarter prior to that, which was quarter 4 of last year, it was INR 2,001 crores. In last four quarters, last three quarters disbursement is all-time high. Same thing is true with even sanction also. Quarter 4 of last year was INR 2,201 crores. Quarter 1 was low because of COVID. It was INR 829 crores. Quarter 2 was INR 2,288 crores. Quarter 3, October-March, INR 2,762 crore. Last year we did change the pricing strategy because there was a lot of pressure on book, and the book was decreasing. BT out was significantly higher. There is no opportunity outside because of lockdown and COVID. Before we had to drop the rates, we did that in last year. That had an impact on margins. In this year, from April till now, we have increased rates twice and our yield has improved from 7.9% in quarter 2 to 8.05% in quarter 3. Now you will see increasing trend. For coming quarter, yield will be higher than 8.05%. If you look at the cost of funds, I think it is pretty constant. It's pretty stable. Quarter 3 was 5.56% and quarter 2 was 5.57%. If you look at quarter 1 is 5.6%. It's pretty consistent and here or there I think one or two basis points difference, otherwise it's maintained. Incremental cost of funds for quarter 3 was 4.98% and it previously was 5.56%. If you look at rate improved from 2.42% which was in quarter 2 to 2.49% in quarter 3 and quarter 1 was 2.4%. If you look at NIM was 3.53% last quarter, and this quarter is 3.74% and quarter 1 was 3.31%. In last three quarters, largely if I have to talk about, margins are improving, disbursements are improving with every passing quarter, approvals are improving, book is growing. Now, there is a challenge of revenue and PAT. Now the issue is that in last year same time our yields were higher. We dropped price and that had an impact, you know, for next 3-4 quarters because of the lag effect. Now this year we have increased rates so now margins are improving, our book is growing, disbursements are growing, you know, and this quarter, if I have to look at let's say nine months for example, I think PAT is flat and revenue there is a decline. Now that is purely because of the lag effect of rate change. Now next quarter we expect that if you look at whole of this year, visually compared to whole of last year, there will be growth in our PAT and revenue would be flat. Now starting quarter 1 of next year then we will see, we'll be back to normal state. You know, the impact of rate drop and impact of rate hike, I think both would have got adjusted to. From quarter 1 onwards you will see the benefit of increase in rates working this year. I think that is where we stand in terms of you know revenue and PAT. In terms of margins as I mentioned, I think last three quarters it is increasing in both on spread and NIM. NIM for this quarter was 3.74% but also has an effect of investments you know because of NCR requirements. If I discount that our NIM will be 3.65% against NIM of 3.53% which was in quarter 2. Even in this quarter we have to make investments due to NCR and therefore this 3.65%, you know, we will definitely improve on 3.65% but of course that point, that 9 basis points is because of the NCR investment because our return on investment is much higher than the cost and therefore this 9 basis points got added to that. This we will see in quarter 4 also but not significantly after quarter 4. Therefore I am saying we should read probably NIM as 3.65% against 3.74% because this 9 basis points increase may not be recurring in nature. In terms of asset quality, we were able to improve NPA from 0.78% - 0.71%. This quarter we were able to collect from the NPA pool, write back certain amount and also, we ensured that recent RBI circular, you know, which was announced on November twelfth, that didn't have much of impact because we preponed all our collections and we were able to manage, you know, collection efficiency and our collection efficiency has improved. Now actually it is back to or maybe now it is better than pre-COVID levels. I would open the floor for discussion. 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 say 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 at this time. The first question is from the line of Shreepal Doshi from Equirus. Please go ahead. Hello, sir. Thank you for giving me the opportunity and congrats on the good set of numbers. The first question was with respect to credit cost, what caused the sudden increase in the standard asset provision that you have done during the quarter? Basically when we increase our disbursements my provision would go up because I have to provide on the incremental growth in the book. If you look at quarter 3, we grew incremental book by over INR 1,000 crore and therefore, you know, my provisioning to collection will go up. Would that not be the part of the ECL that we do? I mean, ECL provisioning that we sort of calculate. No, because we look at both ECL and IRAC but we are holding INR 240 crores because as per the IRAC we hold higher. We are holding INR 240 crores and as per ECL it's about INR 157 crores. We are holding INR 240 crores. Which is higher than the required as per the ECL model. We are holding properly higher than what is required. We are holding INR 240.14 crores against INR 156 crores. As per ECL model, provisioning required is INR 156 crores. As per IRAC it is INR 240 crores. Got it. How are we seeing the collection efficiency trend? Yes, sir. You also asked about credit cost. Credit cost is 0.4%. There's no change in credit cost. 0.4% standard you said you are saying, right? Right. This is overall. For standard it is 0.45% due to the slab change. This is why PAT is low is only because of, you know, provisioning under SA about INR 11 crore and INR 5 crore for NPA bucket limit. Got it. So sir how are we seeing the collection efficiency trends in the restructured pool? Have you seen any slippage from there? No, actually restructured pool, you know, out of the sets where it is not due, twenty crores we have closed, which means customers have paid back. So the pause has come down by INR 20 crore from the restructured pool. You know, very few accounts were due and there is. We have 100% collection. Actually it will be very hard, it's too early to comment on restructured pool, because till quarter 3 we had very few accounts, you know, where EMIs were due because whether interest or EMIs were due. In such accounts we have collected 100%. Outside this pool, you know, where restructuring option is availed but customers have come forward and closed the loan only. It is not. Closure of loan only is about INR 20 crore. Got it. The third question was with respect to the strong disbursements that we've seen. What is the infrastructure that we are planning to add in terms of the branches and employees going ahead? Because if you look at since March 2019 we've broadly added 12-13 branches. While I understand that we've been rationalizing branches in terms of relocating and closing some of inefficient branches, but incrementally what is the thought for this? Basically last year we took a call that, you know, we would open 6 branches because of COVID and other reasons. Otherwise on a yearly basis, on a steady state we would open about 12-13 branches. In going forward you will see, you know, branch expansion. Having said that, you know, we were able to grow our book, you know, without increasing too many branches from about INR 19,000 crores to about INR 25,000 crores. Right. So incrementally we will need to add branches to continue. Yeah. Got it. Thank you, sir. I'll come in the queue for more questions. Thank you. Thank you. Good luck for the next quarter. Thank you. Thank you. The next question is from the line of Madhu Kadajanya, Individual Analyst. Please go ahead. Good afternoon, sir, and congratulations. Thank you. Sir, I have a couple of questions. Firstly, the impact of the LCR has been positive for you, is what you said. How did that happen? Basically, you know, my cost of fund is 5.5% and we have to invest in government bonds which fetches 7%. There I have a positive carry. The other question again is on RBI norm. You did clarify that you did not have impact because you preponed collections and your collection efficiency is improving. But in terms of your upgrade from NPA to standard, were you doing it after receiving all EMIs or how did that happen earlier? And will there be any follow-on impact from that in your next quarter's asset quality? From November 12 onwards, any upgradation was based on entire arrears collection as per the new RBI guideline. Now all active accounts went through this collection process for two months after the RBI circular, which is for the month of November, and second is month of December. Two months we have seen all live accounts, you know, has gone through this process and we are able to manage because we preponed, you know, collection and therefore the impact on this to NPL was negligible. For example, earlier let's say in a quarter like, let's say quarter 3, you know we had timed in 31st of December to collect. Right? Now, October had 31 days, then November had 30 days, and therefore December 29th only was the cut off. December 29th was the 90th day for all NCM to collection for us to collect so that it doesn't flow to NPA. We lost 2 days because of this new deadline. We pre-pulled and we collected all by 29th of December so that nothing flows to NPA. I think largely our strategy was in terms of arresting the flow and to a certain extent wherever we could, you know, we could upgrade the account, you know, we collected full arrears and upgrade the account. Got it, sir. Sir, just in terms of rates, say if your lending benchmark lending rate were to change today, when will your outstanding or your old loans reprice? After how much lag, beginning of next quarter or how does that work? Because if rates rise, we just want to assess the impact on your margins. You see the entire book will get repriced in one year. In one year? Yeah. Suppose let's say tomorrow there is change in repo and the rate goes up, and if I want to increase it, I can pass on that in about 15 days' time. In the natural course, the entire portfolio will get repriced in one year. Got it. How much of your loans are repo linked? All the loans. All the loans, no? Got it, sir. Thank you. Thank you. Thank you. The next question is from the line of Utsav Gogirwar from ICICI Prudential Life Insurance. Please go ahead. Thanks for the opportunity, sir, and congratulations on a good set of numbers. My first question is with respect to the strategy and competitive dynamics. If we look at our website, the starting rack rate on individual housing is roughly around 8.25%. The gap between, say, Can Fin rack rate and, you know, the lowest lender is roughly around 175-180 basis points. This is a similar gap. One year back it was around 40 basis points, you know. I just want to understand what has changed in last one year in terms of strategy or the way we are doing the business because of which we are able to charge higher. At the same time, the disbursements are also doing, you know, all time disbursement we are doing. I just want to understand on the strategy front. Also, if you can also talk about competitive dynamics, in the current environment, that will be also helpful. Sure. Basically, what has changed? Nothing has changed. I think we are almost back to pre-COVID times. I think barring the Omicron, that is, COVID third wave, I think we are back to pre-COVID times in terms of demand and market dynamics. Now, we had changed our pricing strategy because there was COVID first wave which impacted the entire economy and there was national lockdown and therefore, you know, business opportunity was not available outside and therefore there was lot of pressure on the balance transfer, right? Now, so then for book retention it was absolutely necessary, you know, for us to be competitive on the yield and therefore we had to drop the rates to retain customers. When markets opened up, when markets improved, we increased rates and which is why we were able to grow our disbursements, grow our book and still retain existing customers. I think one big change is that now economic activity is back. We are almost back to pre-COVID levels in terms of demand and economic activity. That's the only change. Because for many years we've been operating at least 1.50%-5% band on bank rates, bank home loan rates. I think that is something, you know, that we have managed over three decades. Now we are back to those times again. Sure. Then my second question is with respect to the cost of funds. Now, if you look at our total borrowing mix, around 15% is CP. You know that although it has come down as compared to say last one or two quarters, but in a rising interest rate environment, how do you see the cost of funds movement, especially next year? What are the levers that are available with us to you know control the cost of funds? Basically we've seen that in next couple of quarters rates will start inching up. We expect rates to increase by about 100-125 basis points in next 4-6 quarters. That is something that, you know, we have budgeted and we can easily manage that because we have operated when the rates were high and when the rates dropped. Now again the rates are going to start inching up, so I think that wouldn't be a problem at all. Our strategy broadly would remain the same. We are actually agnostic in terms of source of funds as long as, again, the costs, you know, increase. Our strategy would remain the same and we would easily be able to manage increase in rates between 100-150 basis points. Sure, sir. Understood. That's it from my side. Thank you. Thank you. The next question is from the line of Nitin Jain from Fairview Capital. Please go ahead. Sorry, I didn't follow. Nitin Jain, your line is in talk mode. Please go ahead with your question. Mr. Jain, your line is in talk mode. Please go ahead with your question. If there is no response, I have to mute the line. The next question is from the line of Devansh Nigotia from SIMPL. Please go ahead. Yes, sir. Thanks for the opportunity and congratulations on good results, sir. Last quarter we mentioned that we are going to start initiating legal action and SARFAESI for the NPA pool. What exactly is the progress there? Because there is a possibility of some reversals that reduce all that. If you could just throw some light there. In quarter 3 we were able to, you know, crack close to 17 accounts from NPA pool. The legal action is on now, all the SARFAESI initiation, SARFAESI action, all that is on across, you know, all the states. We are able to crack about 17 of that. That is why you see that 0.7%, it has come down to 0.71%. We were able to crack about 17 of those going forward this 100 in the NPA. If I adjust the INR 16 crore credit cost in this quarter, that is after the 50% reversal in this NPA pool of INR 17 crores, right? Exactly. If that's the right understanding. Because you mentioned that 50% is already provided in this pool, so then how will this interplay? It could be 50%, it could be 100%. It's from various buckets. Yeah, regarding the INR 16 crores what we provided, INR 11 crores pertains to standard assets. Only INR 5.5 crores pertains to the NPA bucket movement. The NPA pool that has been sold will also be reversed, right? T hat will be reversed, absolutely. The total overall, if you calculate on this one, overall provisioning required is INR 7 crore. Overall provisioning withdrawn is INR 1.7 crore. Net impact is INR 5.3 crore. You mentioned the collection efficiency of 100% in the restructured books. This was for the pool that was due for three months or six months periods? As you highlighted in our earlier remarks. Restructured pool started from October onwards, so it is too early to analyze the collection position in the restructured pools. Because the accounts, you know, very few accounts have fallen due now. There we have collected 100%. I think beyond this, from the, you know, pool where, you know, neither interest nor EMI is due, so the progress comes down to 24% already. Thank you a lot, sir. This is clear now. Bye. Let me give you a number. 20% of customers where EMI has not fallen due, they have, they are actually, they started paying. 700 customers out of 4,400 customers, they started paying. Restructured books should reduce going forward. It should reduce because in these 700 accounts where they are paying, neither interest nor EMI is due. Okay. Thank you. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Sir, thanks for taking the question. First, couple of housekeeping questions. If you could just share what was the quantum of borrowings as at the end of December 2021? Borrowings stood at INR 22,550 crore. INR 22,550 crores. Yes. Sir, what was your incremental yield during the quarter? Incremental yield is 8.02%. 8.02% incremental and despite that, we're talking about 8.05% portfolio yield. Yeah, 8.05% is yield on portfolio and incremental is 8.02%. 8.02% on housing loans. On housing loans. Okay. HDFC's MCR investment is out. See that 8.02% is on the housing loans. That is the advance change. If you consider the MCR investment return what we have earned, it comes to around six basis more than that one. It comes around 8.07%. Yield of 8.02% is purely on the housing loans. Incremental yield we record housing loans only keeping the MCR because just started now, we kept out of the purview for the purpose of incremental yield calculation. Fair to say that, I mean, instead of a drag on your margins because of this new LCR requirement, you're actually seeing your NIMs and so-called your yields going up because of the implementation of this LCR requirement from December onwards? See, I tell you, I think, we cannot comment on how this is going to behave in future because today premium is higher. After a few quarters, you never know, NIM could be lower. I think only thing is we have to comply with LCR norms and we are complying. At this point in time, there is a structural change. Sure, sir. The question that I had is, I mean, I see that in your presentation you have, I think, restated your borrowing mix that you gave during the last quarter. I mean, what have you done? If you now raise CPs from bank, do you now classify it under banks or do you now classify it under CPs? Borrowings from the CP remains CP only. Now bank borrowings have become more cheaper than the CP because we have to take into consideration both cost as well as yield and factors into mind. That is why there is a 3% shift to the bank borrowings and CTs have come down by 2% from quarter-on-quarter sequential basis. Maybe the last question from my end, before I come back into question queue, were there any one-offs in your operating expenses during the quarter either because of let's say CLTR expenses or technology spends? Or would it be fair to say that your operating expenses during the quarter are a direct reflection of your higher disbursements? Or have you kind of up-fronted some of the expenses that you typically book during the fourth quarter of the fiscal year? No, there is nothing one-off expenses like that. It is an ongoing. Whereas the AS 15 provisioning, the company has to provide in respect of all staff expenses. So that has been coming into effect, which is slightly one quarter more than what it was in the corresponding quarter last sequential quarter. Where there is a slight uptick as such in the expenses side. Okay. Sir, if I could squeeze in just one last question here, rather two parts to this question. One is, I mean, why have you had to increase the provision cover on the NPA pool? Is it because these are, I would say legacy, and because these are legacy NPA loans and because you're not able to resolve them and because of the aging, you've increased the provision cover on your NPA loans from 40%-45%? Lastly, what impact has this Omicron variant third wave had on your disbursements during the month of January? One is that, the provisioning for NPA is basically bucket movement because now after November 12, you know, we have to collect the entire arrears to upgrade the asset. Right? Now this INR 5 crore is only for NPA bucket movement. Right? Now, and the balance as clarified by Joishy is for standard assets. Now, Omicron had an impact even though severity was low. You know, obviously, the efficiency of our employees was quite less usually compared to other months because of Omicron. In terms of business impact, we have not seen much. I would say the impact could be hardly some 4% or 5% in the month of January, which we feel we can easily cover up in next two months. That's it. Congratulations on a good quarter, and wish you the very best. Thank you so much. Thank you. Thank you. The next question is from the line of Harshvardhan Agrawal from IDFC AMC. Please go ahead. Harsh, thanks for the opportunity. One thing I wanted to understand, you said that the incremental yields are at 8.02%. What I check on your website, the lowest rate mentioned is 8.25%. Just wanted to understand why this divergence in the yields? No, see that, wherever the rate of interest when we do the rate of interest increase, it is having a lag effect of one year. The reset will take place over a period of next one year. The 8.25% rate what we implemented in the Q3 is for the prospective lending and the existing book will get reset in the next one year. The full impact will come in the next one year. Sir, you said the incremental yields are at 8.02%. It means the fresh loans that you're giving is at 8.02%. Yes, correct. The incremental yield is 8.02% because it also depends on the mix of products, you know, that we have generated. We also have offers, you know. We have a rack rate, and we also have an offer. You must have seen, you know, home loan rates are 6.5%, you know. Maybe 6.4%. We also have an offer. Rates not as low as 6.5%, but we also have an offer, you know, where the rates are lower than rack rate. That is subject to, you know, certain conditions like zero CIBIL Score up to so and so and stuff like that. But the average yield, incremental yield is 8.02%. I think, if you look at quarter 3, the yield is 8.02%. Okay, sure. Sir, one last thing I wanted to understand was on the repricing of your books. Just for my understanding, let's just say if I were to take a loan in January 2021, which was at 7.25% rate, so come January 2022, is it that my loan would be repriced at 8.25% automatically? No, it won't. If you have taken under the offer, then it will get back to the rack rate. If you have taken at the rack rate, then your rate will not change. Sir, sorry sir. This thing will be lost then. Suppose if you have availed the loan at the rack rate, y our rate will not change. If you avail a loan at a discounted rate, it'll go back to the rack rate. Your rate will change only when I change rates for all, when there is change in the interest rate scenario. Because what I understand was earlier we were calling that automatically when we change rates, after one year, the back book automatically gets repriced onto that rate. We have discontinued that working. Is that so? It depends on the risk rating. Depending on the performance of the account, the rates will get changed. If you have taken at rack rate, the rate remains same. If let's say nothing changes, then your rack rate remains. Okay. Sure. Got it. Thanks. Thank you. The next question is from the line of Ankush Agrawal from Surge Capital. Please go ahead. Yeah. Hi, sir. Thank you for taking our question. So again, maybe speaking a little bit on this reset of loans. Our entire book is variable interest rate book, right? With resets annually. For example, if I take a loan in January 2022, it will get reset in January 2023. That is the right understanding, right? In case there is some increased interest rate environment going on, if you want, you can still reprice in the middle, in between this one year period. You have that discretion. Yeah, yeah. We can reprice anytime depending on the market condition. Yeah. Market condition. Right. Market condition. Right. Sir, similarly on our borrowing side, how much of our borrowings are like repo linked to repo and are variable? 100%. Because I think barring few loans, I think all the loans are variable. It's directly and indirectly linked to repo. Right. I think bank borrowings, NBFC borrowings, those are the majority. I think CP would be fixed, right? Yeah, correct. Right. Got it. More or less, in case the interest rates started rising quite fast, we can reprice our book instantly if we want to. Yes, we can. Right. Thank you. Secondly, what kind of leverage are we looking at, like, on the higher end? I mean, you saw that, last year it was coming down. Right. Now because of this rate change, you know, there has been slight change in the PAC numbers and therefore there is slight. We also have plan to raise capital. We are looking to raise capital at 8 x, is that what you're saying? Two things. One is we are comfortable up to 8x. We are up to 8x and we also plan to raise capital. These are two different Right. You won't look to go above 8x, that is what you're saying? Because I think till 2019, 2018, I think we were above 9x. Yeah. Of course. Okay. Why this change in stance, sir? Sorry, come again. Why this change in stance when earlier we used to go up to 9x and 8x, 10 x leverage, and now we are seeing that you won't go above 8x. Why this change? Earlier it was 9x. E 9x. E arlier it was more, but I think now we have internally looked at and, you know, we want to be around 8x. I mean, that's what we feel we are comfortable with. Okay. Right. As per the regulator, I think there's enough scope. I think, you know, to be competitive in the market, even in terms of borrowing, I think all the banks would expect us to be quite low on the leverage. Therefore, you know, we want to keep it within reach. Right. Got it. Sir, another thing on this, the cost-to-income ratio. I mean, it has increased quite a lot this year. I think it's now for this quarter it will be around like 19%, right? I think just before COVID and all the year it was around 15%, 16%. What's the reason for this? I think one is provisioning. No, I think our cost to income ratio that we gave in the presentation is excluding provisions, right? No, there is an AS 15 provision. We are referring to the provisioning as per Accounting Standard 14 what we have to provide for. Okay. That includes extra cost around INR 5 crore, I think, come for this quarter, which is slightly higher compared to the previous quarter. Some more expenses have been slightly increased because volume of business has increased. Because of that, it has increased by 1.6% compared to the previous quarter. Right. In the medium to long term, where do you think this number would settle, sir? It is somewhere around 16%-17%. is the average range that is going to hover around over the next. All right. Just one last feedback. Like in our quarterly presentation, can you include like some of the basic metric like book value and our absolute borrowings are not there in our quarterly presentation. If you can add that will be very helpful going back. Book value and, sorry? Borrowing. Some of the basic metrics like what is the total debt, what is the book value. Those kind of basic stuff is also missing, right? Thanks for the suggestion. We'll incorporate book value, borrowing. Particularly in annual reports we try to incorporate those things so that. Thank you. That was very helpful. Yeah, sure. Thank you. The next question is from the line of Aswin Kumar from HSBC AMC. Please go ahead. I want to on the LCR book you mentioned that you had a positive impact. Just wanted to understand what will be the nature of the investments which you will have for LCR? And also what will be the quantum in terms of the investment book that you need to hold for LCR? Our quantum is INR 600 crores and the nature is G-Sec. Now yield what we are getting is about 7%. About 6.737%, 6.1037%. I think that is where we have some impact, possible impact on the yield. This will be longer tenor G-Sec, isn't it? No, 10 years. This INR 600 crore is additional for LCR or it's the total investments on your balance sheet? It will come in the investments in the balance sheet because this is started from this financial year only for us. It's total amount, not incremental. Okay. Got it. Also, I mean, I just noticed in the presentation it's been pretty large segment, although the base is small, you've seen a good growth this quarter. I mean, is that incrementally more focused on that segment or what is the strategy there and what will be the customer segment there for you? I think customer segment is same, our policy is same, underwriting clients are same. Only thing is our LAP book was very small in the entire portfolio. It was only about 5%. We thought, you know, we'll double the book in next 3 years. The 5 will become 10 in next 3 years. We will maintain 90 home and 10 LAP. Because generally within the same non-home loan, we have top-up loans. If you exclude that, we have only 5%. We thought we should grow that book. We have an opportunity without compromising on the risk profile of the company. That's our plan. That is in next 3 years. You will see LAP book growing at a much faster pace than home loans. Right. Just one more question. In earlier quarters, I mean, your RAC rate was also a bit lower, and you had changed your strategy in terms of, you know, wanting to sort of be competitive with banks. Currently, given that your RAC rate is much higher and your utility yields also 8%. Is there any change in strategy or customer segment in terms of the segment you are catering to versus the which banks are catering to? Because, you know, even though banks are offering, let's say 6.5%, 6.7%, kind of rate on those loans. Earlier if you see the difference between banks and us, it was about INR 150 and for certain products, INR 200. Now the difference is not that much. Now we would be probably 100+ higher than banks. To that extent, certain markets have opened up for us, you know, where we see an opportunity of growing the book at 5%. Having said that, you know, I think the starting point for us is to maintain the margins. We will, you know, I think I mentioned this earlier also, 3% and 2.4% is what, you know, we would definitely pursue. I know today our minimum is 3.74% and the spread is 2.4%. Obviously it will improve, but I think what we protect is 2.4% and 3%. Okay. Thank you. Thank you. The next question is from the line of Anuj Jain from ValueQuest Capital. Please go ahead. Hi, sir. Thanks for the opportunity. I have few queries regarding loan book. First is, what is our highest exposure to any single real estate project? Real estate project. See now, the total book only is less than INR 1 crore. No, no. I mean to say via home loans, via individual home loans. What is? Individual loans, my maximum exposure would be on an independent property about INR 3 crore. INR 3 crore. Right. What is our highest exposure to any single developer? Actually the developer is less than INR 1 crore. Sorry. Let me rephrase my question. My query is through individual home loans, what is our exposure to any single developer or any single project? Let's say, for example, in any particular Tier 2 city, there is, like five different projects of a single developer and we are financing those through home loans. Do we have any cap on the exposure to any single project like that? Understood. If you look at the portfolio, 75% is non-builder and 25% is builder. This 25%, you know, we fund for, you know, apartments in a project which is nearing completion. We don't fund at, you know, maybe pre stage or maybe, you know, at a 50% or 60% level. We fund only when the project is nearing completion. To that extent, our completion risk is quite low. Let's say there is a builder and, we have funded, his 5 projects, and if 3 projects are complete, I don't carry any risk there because the properties are registered and the building is complete, project is complete, so I don't see any risk there. That will be out of my exposure, you know, bucket. At any given point in time, at the enterprise level, out of the 25% of incremental sourcing or maybe if I can take last 1.5 year sourcing, because the kinds of projects what we fund would typically, you know, get completed in about 12-18 months because we focus on small builders, small projects, not high rise, you know, or maybe captive kind of developers. My risk would be always in the range of 7%-8% in month of completion. Understood. Sir, can you also provide a state-wise exposure of our loan book? State-wise exposure. We can share the details with you. For example, earlier Karnataka used to contribute about 3%. Now we are well diversified. South, you know, contributes to about 67%-68% of our business. If you want any particular state, we can share that with you. Within this South region just tell us like top five states and their contribution. Sorry, didn't get you. I didn't get your question. Within South region, what is the distribution among different states? Karnataka, Tamil Nadu, Maharashtra. On an incremental basis, Telangana does about INR 150 crore. Entire Karnataka would deliver about INR 210 crore to INR 215 crore. TN would be quite lower, would be about INR 110 to INR 115 crore. This is the split in terms of that. Understood. Okay. Thank you. Thanks a lot. Telangana would be INR 70 crores. Sure. Sure. Okay. Thank you. Sorry. AP is INR 70 and Telangana will be INR 150. Together, roughly, other subjects would be about INR 150 + INR 70 = INR 220. INR 220. Okay. Thank you, sir. Thank you. The next question is from the line of Gaurav Kochar from Mirae Asset. Please go ahead. Hi. Good afternoon, sir. Just to understand the margin dynamics and the impact of NCR. In the numerator, in the net interest income, while the interest income would flow, the interest income on the NCR bit, but in the denominator, would you include investments? Yeah. We do invest, we do include investments because it has started only from December onwards. That's why the denominator is smaller, but over a period of time it will be getting passed on average basis, it will be getting added just like housing loans. Okay. This 9 basis points you are attributing to is because of lower base of denominator. Hence, then on the numerator there is a full impact of interest income on NCR and the denominator is slightly small because of low base. Is that the reason why it is 9 basis point only? Yeah. That's why we are telling that, yield excluding the investment yield, it is 3.65 and with the NCR investment income it is 3.75. The difference is 9 basis points only on account of that one. Going ahead, you expect this margin actually to that 3.65% structurally? Should that improve in the next say one year or so, that core margin excluding the impact of NCR? Yeah, 3.6%. I think we should take it as 3.65%, because you know, NCR yield may not be recurring in nature. It will recur, but the quantum will be very less. Therefore 3.65% is the reference point with previous quarter of 3.53%, plus the 3.65% has scope to improve. Okay. Just the second question was on the incremental yields. You mentioned 8.02% on the home loan portfolio. Sir, if our incremental RAC rate is 8.25%, which is the minimum, and incremental yield is 8.02%. Are we giving a discount? I think in one of the questions earlier also you alluded to, but wasn't quite sure. Just wanted your comments on the incremental book that you're disbursing, is there a discount given there also, and hence the weighted average yield is 8.02%? For a limited period, yes, we do give discount. Okay. Okay. Sure. Incrementally, I mean, given this was a festive season, maybe that's why. But going ahead maybe in Q4 or beyond, the marginal yield should be higher than 8.25%. Should we assume that? I would put it this way. My yield last quarter was 7.99%. This quarter is 8.05%. I think the 8.05% will improve quarter-on-quarter. Okay. Specific to home loan, that yield has some legs to move up maybe, towards that 8.25% blended basis. Home loan, non-home loan, I think both will improve and gt he yield will. Also whatever rate reduction we have done that, you know, portfolio changes would happen, you know, in some time because there's always a lag effect. Yield will improve. Sure. Sir, given the leverage is less than, maybe, the threshold that you have just spoken about, and given the ROEs are high and ROT is also in mid- to high teens, why do you want to raise capital? Just wanted your thoughts, one. Secondly, on the leverage bit, do you see any? Because right now also, we are getting borrowings at very competitive rates. Do you expect post capital raise the cost of funds or the rating, so to speak, you know, improve going further? We will not raise source of capital, but we feel we have to raise bit of capital so that, you know, our cost also would come down and even the leverage would drop. We want to raise some capital, not, you know, large amount. We had a limit in the pool of up to INR 1,000 crore, so we might take part of that amount, you know, in next couple of quarters. Okay. Understood. Thank you, sir. All the best. Thank you. Thank you. The next question is from the line of Ritika from Ocean Dial. Please go ahead. Thanks for the opportunity. Firstly, just one, if you have touched upon the self-employed segment, which obviously you know used to be a higher share. How are we seeing the trends on an incremental basis and anything that we are looking to you know as a strategy to maybe again you know gradually increase this pie? That's the first question. Sure. I think it used to be 30% incrementally earlier. Then after COVID started, it came down to about 12% and then increased to 15, 18. Now it's come back to 26%. I think in another quarter or two it will be back to 30%. We don't want to, you know, force fit to increase, you know, sourcing from self-employed and change the mix because, you know, we had challenges of COVID in last two years. We want HNT as a segment to come back naturally. Now it's almost back. From 30 it went down to 12, then we saw 15, 18, now it's 26. I think another quarter or two it may be back to 30%. Sir, any changes that we would have made to our underwriting to again, you know, get back to these numbers and, you know, or do you think that generally the business impact had, you know, over the time reduced and that's how, you know, we were comfortable again going back here? Or had we, you know, done something, We have not made any changes, not only for HNT yield for salary. We have not made any changes because of COVID. We only changed some processes. We only tightened the process because of COVID and after first wave in the month of January, we restored all the procedures back. After that we have not made any changes to the process also. We don't feel that there is a need or necessity, and that is why we are pretty comfortable whether the CMP share goes down or goes up. Sure. The second question is that, just firstly, just confirming, did we share that INR 210 crore to INR 215 crore is the incremental, you know, share of, maybe of the INR 2,000+ crore disbursement that we do, INR 210 crore to INR 215 crore came from Karnataka. Did I get that correct? No, no. Incremental. For example, if we have done INR 2,472 crore in quarter 3, so every month what we get from Karnataka is around that number. It's not booked, it's only incrementally. No, no. Understood. This is a monthly number which you've shared. Exactly. Yeah. Monthly number. Understood. Yeah, because that's why I was saying it. If the share came down very sharply, I just wanted to check on. Great. That, those are my two questions. Thank you and all the best. Thank you. Thank you. The next question is from the line of Mayank Gulgulia from SUD Life. Please go ahead. Yeah, hi, sir. We have shared like entire loan book can be repriced with a period of one year. If we want, we can change it within also. Like, let's say if like right now, you said 8%, so it's like 4% repo + 4% trade spread, and that we can change any point of time and within a 4% repo rate that will change as and when RBI change the policy. Is it that way lending is, sir? Whatever incremental sourcing I do, and if I give any offer, that offer will go back to rack rate after 1 year. That's number one. Number two, every year we do review all the accounts, and we have a risk categorization S1, S2, S3. Depending on the category, there is a, you know, rate which gets loaded to the account. These two things we do. Apart from these two, if at all there is any change in the interest rate scenario, whether rate goes up or goes down, we pass on that either benefit or that increase to the customer. Our lending book is linked to our rack rates, not the RBI repo rate. Everything is linked to repo directly or indirectly. Because we borrow from, you know, banks and, all those loans are linked either to T-bill or to repo or the internal treasury benchmark. Indirectly or directly everything is linked to market. Okay. Like, typically when someone borrows from a bank, it's like, repo rate plus, some spread. Like to our customer, how do you communicate like in terms of yield, like in our typical agreement, how is it? We communicate to a customer saying that this is the rate, this is the margin, that's all. Okay. All good. Thank you. Thank you. you. The next question is from the line of Chandrashekar Sridhar from Fidelity International. Please go ahead. Hi. Do you have any thoughts of reducing the CP book any further? If so, is there a timeline which you could suggest? Second is, you know, I'm just going through your asset liability statement, it seems, which you published in the annual report. In the two-month issue, you seem to be running a negative ALM all the way up to five years. Any thoughts on how do you correct this? No. CP, as what we are telling, CP is raised only as a cost leverage and not a source of fund. It is backed up by the undrawn bank limits as well. This is a cost leverage concept only. Since the backed up documented bank limits are there is also a drawdown schedule as well as the due date within which we should avail. Accordingly, the funding has been planned in such a way that over the year the cost of the fund remains lower. At the same time, within the due date, the bank funds are being availed. When all these things are given, the ALM is always kept in mind so that whatever the risk factor is there at a particular point of time it will cover up, so that utilization of the bank borrowing, cost of the fund as well as ALM is matched and kept in line with. Sorry. I think they're actually not matching what your ALM statement seems to be suggesting. Because it seems like from beyond 2 almost 5 years, there's a mismatch. No. There's no mismatch, is there, because the housing loan collection is for a period of 15-20 years whereas the bank borrowing is 7-10 years. There is a gap which is there, I think, but there is also a tolerance limit will be there. It is one-to-one match will never come in the housing finance business. There is a tolerance limit also will be there within which we can function. Whatever we are talking about is keeping that tolerance limit also in the mind and accordingly we are working on this. Thank you. Thank you. The next question is from the line of Pratik Singhania from Sage One Investment Managers. Please go ahead. Sir, my question is pertaining to a scenario, say suppose economy again, sir, comes completely back on track after COVID. Say if banks which are getting much more competitive in retail, they tend to like give some leeway or reduce some credit risk process in terms of evaluating the credit rating. In that case, if we have to simultaneously review our credit rating and say if we want to like give some benefit or some leeway to the borrowers, then in that case, like how our book or growth would pan out if we want to do that? See, we have managed normal competition from banks for many years. Right. What happened during COVID was abnormal competition. Because it is abnormal competition, we had to drop rates. If it was normal competition, I think this is a steady state for us and we would really manage the differentiation and let the competition on. Right? Because COVID was probably once in a century kind of event, and therefore we have to make this change. In spite of making this change, you know, we've seen that in last 6-8 quarters, we have done pretty well even in the context of COVID, both in terms of book retention or disbursements or NPA management. Right? If it is normal competition, there is no issue because the differentiation is always going to be there. If it is abnormal, let's say like COVID, then obviously we also need to change the strategy to, you know, see how best we can, manage things. Are you seeing this competitive intensity reducing from banks like as and when we are opening? Drastically it has come down. That's why I told. Last year, quarter 1, quarter 2, quarter 3, huge competition. Right? Quarter 4 we saw that competition was there, but it started coming down. Now, from quarter 1e till now it is normal business for us and normal competition because from April we increased rates. In spite of increasing rates, you know, in last four quarters, three quarters have been all-time ever highest disbursements in the history. Again, like banks will be focusing back to more of corporate, and What actually happened was now economic activity is improving and obviously, you know, SME in the segment has improved. Corporate credit has kicked off, and therefore, dependency on mortgage for growing bank book also has come down drastically. Now there is normal competition. We don't see too much of competition now from banks the way we saw last year. Okay. All right. Thank you, sir. That answers my question. Thank you. Yeah. Thank you. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yes, sir. Thank you for allowing me a follow-up question. Two housekeeping questions and then one final question. If you could just help us with the stage two loans number and what is the provision that you are carrying on stage two loans? Okay. You want the provisioning as of stage two loans is as per the Ind AS as well as IRAC norms? Both you do. Yes, sir. First thing is what is the proportion of stage two loans right now and what are the provisions that you are carrying on those stage two loans? Stage two loans as of now is INR 437 crores. That is as per the two what we classify as stage two out of the total book of INR 25,091 crores. Provisioning of stage two as per the IRAC norms, whatever we have to maintain is to the extent of around INR 69 crores, whereas as per the Ind AS model it comes to INR 45 crores. Sure, sir. During your opening remarks, you also talked about the BT out numbers that you saw during the quarter. If you could just repeat that for us. BT in quarter 3 was about INR 78 crores, which means about INR 26 crores every month. This number used to be 3x higher last year quarter 3. Sir, sorry. Quarter 2, how much was it? No, no. Last year, quarter 3, this number was some INR 278 crore. Okay. Okay. This year it's INR 78 crore. Got it, sir. The last question that I have. Thank you so much for this. The last question that I had is, I mean, there seems to be some confusion around the repricing of loans. If I understand you correctly during the call, if someone had taken a home loan from you, at 7%, which was Q4 of last fiscal year, let's say January or February last year. This year, given that your rack rate is now 8.25%, that 7% loan that someone took, last year in January or February, it will get repriced to 8.25%. Is it? Yes, yes. What you said is right. It gets repriced. I mean, whatever is the current rate it gets repriced at that. Sir, do you have levers to kind of make sure because, I mean, if someone sees a 125 basis points kind of an increase in home loan rates when clearly the home loan rates of banks have not increased as much, will there be any retention policies in place which could kind of lead to a similar pressure on your earnings in the coming quarters? Sir, lastly, I mean, given the kind of disbursement that you've seen during this year, what is it that you're targeting in terms of a disbursement growth in FY 2023? Let me explain to you again on the interest rate thing. See, for example, let's say today my rate is 8.25%. That's a rack rate, okay? I have an offer where I offer 7.5%. Now, the 7.5% is for one year. After one year the 7.5% becomes 8.25%. Number two, whenever I give loan every year, so we have S1, S2, S3. S1 being the best, S3 being the worst, right? Relatively. Based on the change of risk rating, my rate also would change. Number three, whenever there is change in the interest rate scenario, it could be, you know, rate could be, could increase or decrease, that I will be. If we take a call, we will be able to pass on that, benefit or that increase in cost to our customers. These three are the, you know, aspects what comes under interest rate changes. Now, your second question was? The second question was, I mean, what is the disbursement growth that we have in mind in FY 2023? Yeah, yeah. We will be able to grow 18%-20% both on disbursement and book. I'm sorry, sir. Can you repeat yourself once again? 18%-20%. Disbursement growth? Yeah. All right, sir. Thank you so much for your patient answering. Thank you. Thank you. Thank you. The next question is from the line of Nishant Chawla from Kotak Securities. Please go ahead. Yeah. Hi. Yeah. Hi. Yeah. Hi. Am I audible? Yeah. Sorry, sir. Please carry on, sir. Sure. This is just a clarification. I know you touched upon this in the call, but, what is the reason for increase in the NPL coverage during the quarter? NPL coverage has been because of the aging factor as such. There is a stage movement in the NPA. Because of stage movement, the bank gets a provision. Within the NPA bucket, something moving from six months to one w ithin NPA bucket. Because when the account becomes NPA, you will cover 15%. Yeah. Got it. Yeah. Sure. Just one thing on the investments that you are making, you know, for NCD and government securities, what will be the duration of those bonds? 10 years. Then in that sense, I mean, assuming a scenario of rising interest rates, you'll probably have to take some NPL hit as well, right? We have that option, yes. Okay. Just one last question. What are your approval rates or rejection rates, which are very important? Approval rates we have, blended we have about 88%. Approval rate is 80%. Okay. Is that sort of changed over time? Yeah. During COVID time, you know, it came down to about 84, 85, and then again now it hovers at 80-90%. Sure. Did you anywhere in the call mention that the demand for salaried loans is higher than non-salaried at this point of time? Yes. Yes. I did mention that. Demand for salaried is quite high compared to SALP. However, SALP has improved over last few quarters. From 40% increment it has gone down to 12% and then 16, 18. Now it is back to 26%. Is that because of tightening of screens from your side for SALP customers or, because the demand was lower? We haven't done any change with respect to policy or credit underwriting or the process. It is only market dynamics. Sure. Great. Thank you very much. Thank you. Thank you. The next question is from the line of Karan Agarwal from Tusk Investment. Please go ahead. Karan Agarwal, your line is in talk mode. Please go ahead with your question. Hello. Am I audible? Yes, sir. Thank you for taking my question, sir. I have two questions. One is on the competitor side, competition intensity, and the other is on the technology initiatives which Can Fin is undertaking. Coming to the first question, the average annual income of the customer segment which Can Fin targets- I think, Mr. Agrawal, the audio is breaking from your line, so please check. Yeah. Good morning. Hello, am I audible now? Yeah, please go ahead. The current annual income of our target customer is INR 6 lakh. Is that correct? It's about INR 38,000 to INR 40,000 per month. As I could recall in the previous quarter or a quarter before that, you were targeting customers who have an annual income of close to who have a monthly income of close to INR 1 to INR 1.5 lakh. Is that correct? No. Our average income of a customer is about INR 38,000 to INR 40,000 per month. I also mentioned that we also focus on high-value salaried, but that's an exception. Okay. Thank you, sir. Got it. The second question is on the technology initiatives which Can Fin Homes is taking. For example, I checked on my Google Play Store that we don't even have an app for a customer, right? On the other hand, there are players who focus on small-ticket affordable housing companies. There they have an app, and most to 70% of the customers interact through the NBFC through the app itself. What are we doing in terms of the technology and the digital initiatives? See, I think there are two aspects to this. You know, I have seen the entire digital journey for various products in last 5-7 years, right? Now, as a company, we focus on automation. When we say automation, you know, we work on Perfios, then Dedupe, then we will have FinnOne. We'll be working on automation, but not really on the digital journey per se because there are certain risks associated with digital journey. I don't want to get into details in this call, but because this is not a small ticket personal loan or a personal loan, you know, where the ticket size is lower so that we can have a digital journey. Here there are so many manual checks, like legal and technical. Having said that, I think mortgage as a product, you know, needs lot of automation, and we are working on that. At the same time we are also working on, you know, changing the entire IT infrastructure within. As part of that, you know, we will have online sourcing, tax sourcing, online collection, integrated with various APIs and stuff like that. Okay, sir. The account aggregator framework that the government has come out, we are working to integrate that into our business as well, right? Please come again. What was that? Sir, the account aggregator framework is the government, which the RBI has come up with. Can Fin is working to incorporate that into our business as well, right? For underwriting. No, I don't think that is under study. That is still under study. As of now we have in-house. Everything is in-house. Okay, sir. Got it. We don't plan to outsource unless there's a regulation on this. Okay. Thank you. Thank you. The next question is from the line of Pooja Ahuja from Monarch Networth Capital. Please go ahead. Hi, sir. Thank you for the opportunity. Firstly, I wanted to understand, on the credit cost, you know, on a sustainable basis for the next 2-3 years, how much credit cost can we expect? I don't think so there'll be too much of change in the credit cost because we believe that, you know, we'll be able to maintain NPA less than 1%. Today it is 0.71%, so we don't expect too much of credit cost. We also have planned to work on the NPA pool and the restructured pool, so we will not see too much of a difference in credit cost. Versus let's say the pre-COVID level. Is that what we're estimating? Pre-COVID level. Yeah, I think we're in that level. Okay. Sure. Secondly, you know, the two levers that the real estate sector as a whole was seeing in terms of, you know, stable home prices and low interest rates, how do you see the impact of these two levers sort of increasing seen in incremental term, that can probably impact demand, if at all? I think we are already reaping the benefits of these two changes. Okay? Right. Affordability is very high and real estate prices have actually eased off and the demand is also robust. This will definitely help the industry and also us as a company, at least the next 4-5 years. The only thing which might change is that probably increase in interest rates. I think I mentioned that we'll be able to absorb that up to 1, compared to 150 units. Okay. Sure. Just one housekeeping question. What was the BTO number in the last quarter? Let's say pre-COVID? Quarter 2 was INR 70 crore. Maybe let's say in Q3 FY 2020. I am expecting maximum INR 30 crores per month. Okay. Sure, sir. That's it from my end. Thank you. Sure. Thank you. The next question is from the line of Saurabh Mitra from Centrum Broking. Please go ahead. Yeah. Thank you for taking the question, sir. Am I audible? Yeah. First, just to follow on the disbursements. You know, in terms of Q4, given the backdrop of the third wave, you know, how should we look at disbursements for quarter 4 also including January? I think typically quarter 4 we should show improvement over quarter 3e, assuming that Omicron will not activate. It could be higher than the GBP 2000 that are recovered at mid-quarter this quarter? I f the Omicron eases from now, I think quarter 4 should see much higher improvement compared to quarter 3. Sure. Just an extension of the previous question in terms of borrowing mix. In the year-to-come mix, next quarter or two quarters, how should we look at the borrowing mix? Will Will it be at similar levels that we saw in Q3? See, I think there won't be much change in the borrowing mix. It all depends because nothing, I think borrowing mix will not change, you know, quarter to quarter. It takes about 3-4 quarters for, you know, meaningful change in the composition. You know, bank would still be close to, you know, 50% of the total, I think borrowings. We can see a bit of increase in NCD because every incremental portion requires 25% of NCD, you know. So NCD you can see, slightly inching up, and I think, rest, will still remain the same. Not much of change. Sir, could you quantify the borrowing numbers for the quarter, please? Sorry, come again. Borrowing numbers for the quarter. For the quarter. Incremental borrowing for the quarter. You're talking about Q3? Yeah. Q3 closing figures for borrowings. Closing of the borrowing is INR 23,550. Borrowing book is INR 23,550. Okay. Sure. Thanks. Just one last question, sir. A clarification on the provisioning bit. Conceptually speaking, the provision on the restructured and except restructured standard provision would be under the same head, right? Madam, your voice is breaking. Sorry, could you please repeat the question? Yeah. Just a minute, sir. What I was asking is it better now, the voice? Yeah. Now it's better. Yeah. What I was asking is in terms of, you know, the provision on the restructured and the provision on standard asset ex of restructuring, that would be under the same head, right? That'll be under same head. Yes. Okay. Could you quantify the restructured book in the current quarter, please? Last time I think you had quantified a number of Total resolution, Resolution 2 are INR 650 crore. Resolution 1 was INR 77 crore. Both put together today the outstanding is INR 71 crore, and INR 20 crore of the book has been repaid. INR 711 - INR 20 is the number that we have to look at, right? INR 690 is the book outstanding as of 31st of December. Okay. Got that, sir. That is it from my end. Thank you so much. Thank you. The next question is from the line of Rahul from First Principle. Please go ahead. Yeah, thanks for the opportunity. Sir, just wanted to reconfirm again. You said that you made 40 basis point of provision on standard assets. Is that correct? 0.45%. 0.45%. Okay. When I look at the provision number for this quarter and divide it by the increase in loan book, I get a slightly higher percentage. Can you just explain that? No, no. This INR 10.97 crore, which is standard asset, so this is restructuring it from bit and the balance is for increase in incremental book. Okay. On a going forward basis, we should expect 45 basis points. For example, next quarter on, you won't have anything on restructuring. It will be only, you know, standard asset provisioning on a book increase and NPA. Okay. Got it. Thanks. Thank you. The next question is from the line of Dinesh from Mirabilis Investment Trust. Please go ahead. Yeah, hi. In last quarter, you talked about raising some INR 750 odd crores of NCDs, and I think we have raised some INR 275 crores in November. Wanted to know the rate of the same and when do we expect the remainder to be raised with the timeframe? INR 275 crores raised at around 6.10% for 39 months. Okay. The remaining we have to raise in this quarter, we are already tied up with couple of investors. It is only the rates. They are all waiting for the CP result to be out to finalize the thing. Probably in next two months we are going to raise the balance INR 275. Okay. The rate, can you repeat, like the INR 275? 6.10%, INR 309 lakh is what we raised last, that is INR 275 crore. Okay. This was because, like the INR 750 was because we were going to mature certain NCDs. Is that correct, right? No, it is not matching up 1:1 ratio. No NCDs are mature during this quarter. No. I mean, I think there was some maturity in the quarter 2 or quarter 1, so. Yeah. Quarter 1 it was there. Quarter 1 there was a maturity of NCD. This what we raised is to the purpose of, incremental borrowing. You can raise 25% from NCD as per the SEBI guidelines. This is one step towards that actually. What was the amount which got matured in quarter 1 and the rate? You are talking about what is the matured. Matured one is somewhere around INR 260 crore roughly what is matured. The rate, because it has been raised around three years back, was somewhere around 7 point. Okay. Got it. With this, like you said, the remainder INR 475 is expected in the next two quarters, next two months, sorry. Can we expect the CP to go down? I mean, I understand the CP is for the undrawn and not for sourcing. Since you said the long-term rate is lower than the CP, do we expect the CP percentage to go down, since we plan to raise the remaining INR 425 in the next two months? No. See, I'll tell you, because the CP is used for cost leverage. It is not for funding purpose. If we see an opportunity where we can try and lower cost, we might use CP as a channel. All I could say is that the CP will be raised only against only if we have undrawn term loan limit or undrawn working capital limit. Okay. Got it. My second question is with respect to the COVID buffer. If I recall the number correctly, it is some INR 33 crore, right? Like what is our stance on the reversal of the same or utilization since like the NPAs are controlled and even the stage two is quite controlled. From this quarter on, we are on standalone basis. Whatever the COVID excess provisioning were, we utilized that. Okay. Got it. Thanks. Yeah. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Girish Kousgi for closing comments. Thank you so much. I think market is quite good. As I mentioned that I think we are on the growth path. Disbursement, there is an increasing trend, book is increasing, margins are improving quarter-over-quarter. Even NPA is under control. Not just NPA, the entire SMA and the asset quality per se is pretty good. The collection efficiency is back to pre-COVID levels. Hopefully we should be able to show up this performance in the coming quarter. As I mentioned, in the coming quarter, we can see for the whole year there'll be some kind of increase in the PAC, but very much to be flat. I think starting from first quarter of next year, I think we'll be, you know, pre-COVID levels. The only change being aggressive on growth in terms of disbursement and book. Thank you very much. Thank you. Ladies and gentlemen, on behalf of Investec Capital Services, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.