Ladies and gentlemen, good day and welcome to DCB Bank Limited Q2 and FY 2027 earning conference call. Today we have with us Mr. Praveen Kutty, Managing Director and Chief Executive Officer, Mr. Sridhar Seshadri, Whole Time Director, and Mr. Ajit Kumar Singh, Chief Investor Relations Officer. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand the conference over to Mr. Praveen Kutty from DCB Bank Limited. Thank you, and over to you, sir. Thank you and good evening, everybody. Welcome to the Q2 results call. The bank continues its growth momentum, with advances growing by 21% YoY and deposits growing by 19%. In keeping with the guidance, both advances and deposits have doubled over September 2022 over the last four years. Our net interest income grew by 17% YoY. Over the last one year, the yield in advances dropped by 38 basis points, while during the same period we reduced the cost of funds by 34 basis points. If you look at the last quarter, our yield on advances dropped by 2 basis points while cost of funds dropped by 8 basis points. If you look at revenue, it grew by 21% YoY, core fee income continuing to be strong. The focus we have on our productivity and on technology adoption is helping us in keeping our cost to average assets under control. It continues to be below 2.5%, to be precise, at 2.47%. Our cost to income is at 59.64% at an 18-quarter low. During the last two years, we have grown our employee strength by 1%, our balance sheet by 34%, and our revenue by 33%. The fact that the revenue grew by 21% and cost grew by 18% YoY meant that operating profit grew by 26% YoY. The portfolio quality continues to improve with our credit cost at 0.28%. Our GNPA is at 2.29%, and NNPA is at 0.73%, both of which are at a 23-quarter low. Our PCR is at 81.38%, a 7.23% improvement over the last year, and PCR excluding technical write-off is at 68.75%, a 9.6% improvement over the last year. As a consequence of all this, our net profit has risen by 29% over the year to INR 236 crore, which is the highest ever in a quarter. This is the fifth consecutive quarter where the bank is clocking its highest ever quarterly net profit. As a result, our ROA is at 1.03% for the quarter and 1% for the half-year. Also, the ROE is 14.6% for the quarter and 14.12% for the half year. I just want to take you back one year into our Q2 2025, when we gave guidance of an 18%-20% growth, of cost to average assets being less than 2.5%, of GNPA also being less than 2.5%, net NPA being less than 1%, and lastly, on ROE of 13.5% for this year, 2026/2027. One year later, in each of these four quarters, each of these numbers speak the story of consistency and predictability. Finally, I'd like to share with you the trend line of ROE for the last four quarters. It is 12.73%, 13.53%, 13.61%, and now 14.6%. Thank you for listening in, and operator, could you please open the lines for any questions from the audience? Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to 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'll wait for a moment while the question queue assembles. First question comes from the line of Akshat Agrawal with Nirmal Bang Institutional Equities. Please go ahead. Good evening, sirs. Thanks for the opportunity, and congrats on a good set of numbers. The first question is on cost. While the cost-to-income ratio and cost to average assets are tracking guidance, the OpEx growth QoQ and YoY looks a bit elevated. Is it mostly on the staff addition, branches, and a bit on technology? Is that contributing to increase, or is there some one-off there? Are we on track to reach 13,000 employees by year-end and adding 20 branches overall during this year? Thanks. On the operating cost, the increase has been with people. We are now at 12,002 people, which is higher than what we started off the year with. So it's a people cost that's coming in. Otherwise, it's a normal cybersecurity tech cost. There is nothing exceptional on the OpEx side. We should expect similar kind of trend lines to continue on the OpEx cost and also on the cost to average assets. So I don't see us doing any change in that. As to your question whether we'll be 13,000 people by the end of the year, we want to be, but I don't think we'll be. So we'll be higher than 12,000, which we are currently, but I don't think we'll reach 13,000 by the end of the year. Probably we'll be around 12,800, 12,900. That's what we're seeing currently. Right, sir. Thanks for that. On the NIMs, what was the reason for the decline QoQ? Cost of funds seems to be declining. Advances declined by 2 basis points. If you can elaborate on the key drivers of the compression and outlook for the NIM in coming quarters. Ideally, with the rate hikes, we should see expansion going forward. Is that correct, or is there some other component that could affect the margins? If you look at Q4 and Q1, our advances growth was in the region of 18.5%-18.7%, whereas deposit growth was between 20% and 21%. We are stockpiling liquidity post the February 26 Israel-Iran war, and it is a conscious strategy to have enough liquidity with us. Then what happened is in August, there was a window to garner NRI deposits, which comes at a much lower cost than our normal-term deposits. We got $194 million through the FCNR window. This really increased our liquidity significantly, and that has a liquidity cost attached to it. Why you don't see a similar growth on deposit in Q2 is because usually most of the maturities come towards the last week of every quarter. We really lent aggressively and on maturity of the high-cost bulk deposits, we gave up those deposits, which is why deposit growth is at 18.6%. But we have to carry the excess liquidity for practically the whole 87 days of this quarter. That's a cost which you have to pay, and that's the reason why there's been a reduction in the NIM in Q2. Going forward, you already seen the lead indicator where the deposit growth is less. We're starting Q3 with less surplus liquidity. Obviously, in November, we will be passing on the increase in repo rate to a significant chunk of our asset customers who are on floating rate. That will have an impact on NIM. We are confident of holding our credit cost to well below the guidance level, which will also have a positive impact on NIM. On a go-forward basis, we would see the NIM improving in Q3 and in Q4 as well, assuming there will be no further rate hikes going forward. Right, sir. If you could provide some quantitative guidance, like 5-7 basis points or something like that, can we expect going forward per quarter? Is there continued component from home loans to LAP shift as well, which was incrementally 70% to 30% last quarter? We are at 70/30, slightly 71/29. We are comfortable with that, and we will be continuing with that. That is on this incremental. Over a period of time, the stock also changes its color, so you get the benefit of it over a period of time. The real story is not this. The real story is about the cost to deposit. The way the cost to deposit is coming down, it is not because of CASA. It is because of the conscious strategy of not being the highest rate provider, and we managed to make 3,000 people in branch banking aware of it and still grow 18.6%, still keep the top 20 less than 7%. That is really helping in this run. Some bit also has helped in our long-tenor term deposit repricing, which is coming in. It is a combination of this. It is more a cost to deposit improvement that is helping the NIM in the longer term, not necessarily the yield growth. Of course, a repo rate increase will have an immediate impact on the widening of the NIM. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your question to two questions per participant. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of Suraj Das with Sundaram Mutual Fund. Please go ahead. Hello, am I audible? Hi, Suraj. Feebly, but we can hear you. Okay. I will speak louder. I have more than actually two questions. First of all, I think congrats on the board approval on your tenure, sir. Secondly, I think on the good quarter, after long, I think you have given 1% ROA, 1%+ ROA on a quarterly basis. Before coming to ROA, sir, on the gold loan, I think growth has been strong, but I do not know, the slides where you give your disbursement and the loan, it looks like that the loan increase is more than the disbursements. Is this because of the co-lending fees that you do not give disbursement? Yeah. Let us go one by one. You can ask me multiple questions, but in a serial order. On gold loan it is a combination. We kind of kept co-lending flat and increased our DA because it provides you better compliance and gives you better pricing. About 30% of our entire gold loan book is organic and 70% is inorganic, which is basically a mix of co-lending and DA. Currently, gold as a percentage of the total asset is 23%. The bank is comfortable taking it up all the way to 25%. I do not think we will ever go beyond 25% for this particular category. But currently we are at 23% and there is no anomaly between disbursement and growth because the disbursement that you see is for organic gold loan only and not for inorganic. It neither has co-lending, which is actually flat, nor does it have DA, which is growing. Understood. Sir, overall yield would also be, let us say, better on a quarter-on-quarter basis because of maybe mix shift between co-lending to DA? We are talking about basis points, right? So it is better. Okay. Sure. in that sense. But in overall, it really wouldn't matter. It's not like as massively different as business loan and home loan, like LAP and home loan. It's not that different. It is marginal. But look, we are in a marginal business. We don't let anything lie. We are constantly on the lookout for improving yield and reduction of cost of deposit. Right. Sure. And sir, related question to that, your gold slippages is also increasing for last two quarters. While I understand that LGD would be hardly anything, that I fully agree, but is this because of your DA and co-lending? Is the slippages coming from DA and co-lending or organic book? Because also the context for asking this question is this quarter few people on the NBFC side, they are highlighting that there is some stress in the gold book, especially for the shorter tenure product. So I don't know what is your DA composition to your co-lending in terms of, let us say, bullet loans or maybe EMI shorter tenure. So that is the context for asking this question. No, it's a relevant question to ask. If you look at non-gold, our slippage ratio is 1.55%. It is 1.52% last quarter, now it has gone up to 1.55%. That is 3 basis points increase. Are we worried about it? Honestly, not. Your early bounce, your early month on board vintage performance, that is one doesn't lose sleep over it. On gold loan, what you said is right. Some of the co-lending or DA partners, you find that the mindset is to collect before NPA happens rather than at a one DPD level. So we're dealing with multiple co-lending partners and DA partners. So the rigor of one DPD doesn't apply to many partners. To some it does, but by and large, it really doesn't apply, which is the reason why this is happening. From a gold loan, is there a worry perspective? I want you to look at our investor presentation, page number 22. One year back, our NPA was INR 27 crore. One year later, it is INR 26 crore, and in the last five quarters, the highest our NPA has ever been to is INR 29 crore, and our book has been growing. We're talking about a INR 14,000 crore book with INR 26 crore NPA. Just look at the perspective. Thank you. Our next question comes from the line of Varun with Bandhan Life Insurance. Please go ahead. Sorry. Thanks for the opportunity and congrats for the good set of numbers. First is, basically, I observed a sequential increase of 450 employees, while the branch network has expanded by just about three branches. Could you help us understand the areas or functions that is driving this in headcount increase? Yeah. We are putting more people in existing branches, both for assets and liabilities. The belief is that we can really sweat more from existing branches without having to increase our footprint significantly. That is being borne out. The space is already there. It is a sunk cost. It is already invested. The network is already there. You do not have to reinvest in it. But we still are a people-dependent business. We still are digital. Our customers expect some sort of assistance to happen. What we do is, where our portfolio is getting bigger, both in assets and liabilities, we put more people in those branches. That is why it is not a location game. The big eight cities contribute to practically everything of deposits. It is still driven by not top eight branches, but all branches in top 8 to 10 cities contribute a lion's share of deposits and advances. We continue to invest in those areas where our returns are much better. I still think that we can extract more juice from the existing branches. Does it mean that we will not do incremental branches? Probably maybe about 20 branches in a year. One does not see more of that happening, and one does not see the need for more of that to happen. Even the 20 branches, we would like to put it in locations where we already have our branches. Understood. With respect to the cross-sell or the bancassurance business, we have said that volumes will cover up for the loss that could come in form of drop in commissions. Just wanted to understand how well prepared are we to capture the volume growth opportunity. Also, can you talk about some of the factors that are helping us drive higher bancassurance business at the moment? Yeah. On cross-sell, I wish I could tell you some good news. We are putting in a lot of effort, we are putting in a lot of work. We are not seeing too much of result happening, but are we going to give up? Absolutely not. This is a slow-burning fuse. The graph remains very close to the X-axis for a long period of time, and then suddenly harmonically will increase. We know that. We are going to be patient about this, like many other things in retail. There is a lot of effort on both from people skilling, from technology, from business intelligence, et cetera. There is really no great input to tell you right now. That doesn't mean that it will not happen in the future. There is effort happening. There is work happening. Maybe we will see the results over the next 12 to 18 months. Okay. Just last question from my side. Do we look to source mortgage business through balance transfers from NBFCs, given that our ability to probably offer more competitive rates to the same customers? Is that integral part of our mortgage growth strategy? Any update on capital raise? Yeah. Thanks. Okay. That's quite okay. Fine. On NBFCs, yeah. It's a target segment for us. Balance transfer from NBFCs is very much a central activity for our mortgage business. Not from a reduction of rate perspective. We want to give them a higher rate overdraft facility so that our yields are higher, but the customer has a flexibility of paying a lower interest cost despite a higher rate of interest. We want to give OD facilities to these customers and take on board. We want them to transact with us, they want to engage with us, converse with us, and which will provide us an opportunity to cross-sell and that is working reasonably well. Customers understand the concept of interest paid versus interest rate. But are we looking at dilution of yield? Unless it's a very high arbitrage opportunity, we would like to keep the interest rates in. Understood. And update on capital raise I am sorry to interrupt you, sir, but you can please rejoin the queue. Yeah. Quick one on capital raise. You should be hearing some good news before the next investor call. Thank you. Next question come from the line of Nitin Aggarwal with Motilal Oswal Financial Services. Please go ahead. Yeah. Hi. Good evening, everyone. Am I audible? Yeah, very audible indeed. Great. Praveen, couple of questions. One is around the cost of fund. Like this quarter, we have seen a good decline. Our deposits have also shown some traction. But the margins have declined. Can you share the lending yield and the margin ex of FCNR deposits? How much were the two numbers this quarter? See, that will require a bit of calculation. What I know is that about $194 million has come in with swap deals with banks in Middle East and in Africa. The first time ever the bank has done that. With our rating, people were willing to access our FCNRs. On the overall, what I would like to tell you is that the reduction of cost is a sixth continuous quarter trend line. You are seeing that happening. Like I said in the opening, when asset yield dropped by 38 basis points, we managed to drop the cost of deposit by 34. Yeah. That is a longer term, like one full year trend line movement. Last quarter, I will take it with a pinch of salt, Nitin, because there are some NRI customers have foreclosed their previous deposits to take advantage of the FCNR. We got more than what we deserve in terms of prepayment penalty, et cetera, and lesser interest rate. It is giving us more credit than we deserve. Even otherwise, it would have been on the downward trend. Right. Because the yield declined very marginally low, but the asset mix is getting better. Fair to say that ex of FCNR the yield should have also moved up? Are you talking about the future? No, this quarter. The lending yield this quarter. Lending yields is a drop by 2 basis points. 2 basis point. Yeah. So ex of FCNR now, would this have gone up because next quarter with the same trend and cost of funds and with yields moving up supported by the rate hikes. Yeah The expansion would be fairly decent. Absolutely. Right. Well done. Second on the PCR, we have been making quite a stride on the PCR. We have covered up almost 10 percentage point over last one year. Any numbers we are looking at and any color around the ECL transitioning impact and the steady state impact on credit cost? Look, we are a secured lender. We don't lend unless the collateral is much more than our exposure. Secondly, you've seen the recent trend lines happening across metrics. Except for SMA 1 and 2, I see that every other parameter is pointing to a positive direction as far as ECL is concerned. Having said that, we have appointed a big four. Our team is working very closely with them on ensuring that we get our assumptions right, we get our ECL model right. So work is underway on that. I'll be confident by March we should be able to go up and running. But right now what I can tell you is that all lead indicators and the profile of the bank seem to indicate that we are in a good frame as far as credit quality is concerned, and that should reflect in the ECL also. Right. Note that. Lastly, on the ROA and ROE guidance, we have already reached what we indicated for FY 2028 also. Will you like to revisit those guidances? Yes. As a bank, we have no intention of sitting on our laurels. No way. 1% is also only a milestone. That's not a destination. We are hungry, we are ambitious, we are determined. No two ways about it. This is just one more milestone in our journey. The reason why I don't want to put up another guidance is because there is a very high possibility that before the next investor meeting happens, we would have either a firm offer or we would have incremental capital coming in, which would change the ROE guidance going forward. But otherwise, look at the trend line. 13.5 is what we committed. It will definitely be higher than 13.5, and possibly with the capital coming in also, we'll be better than 13.5. That's what I can tell you right now. Assume the capital comes in on January 1, we still will be on a diluted base will be better than 13.5. Thank you. Next question come from the line of Jai Prakash Mundhra with ICICI Securities. Please go ahead. Hi. Good evening, sir, and thanks for the opportunity. Okay. Congratulations on your board renewal. Sir, most of the questions have been answered, but I just wanted to check again on ECL. You would have done the dry run. While everything looks okay in terms of LGD in the last few years actually of decent performance on LGD and et cetera, but the slippages are slightly higher. Including gold, everything. Yeah. Does that mean that you may have to provide more on a standard basis, standard assets because your SMA may be slightly higher, then LGD may not change, but could that mean that you have to provide slightly higher on standard assets basis? We are sitting on close to INR 218 crore of provisions. Floating provisions, which we started making in somewhere around 2015. Never touched it, despite whatever headwinds we had, including pandemic. In an ECL kind of environment, that will really help the cause. Secondly, look at PCR. At 81%, and it is a secured book. Forget about 81%. Look at the 9.5% increase over the year. Right. Forget that also. Look at our cushion available. Look at our provision as a percentage of our operating profit or the other way around. We have a 5.93 times cover of operating profit on our provisions. There is so much cushion available, and our credit cost is 0.28%. Just triangulate these three numbers. Credit cost of 0.28, provision coverage of 81%, a 10% increase in provision coverage, not 10, maybe 9.5% over the last one year. INR 218 crore of floating provision. It is there. What I can tell you and the rest of the audience on ECL is once the model kicks in, what we are very much focused on is to reduce the SMA 1 and 2 which will help us gain benefit over the period of ECL before the next calibration of ECL modeling. Is it going to be difficult? Look, if we can get 97% of upgrade and recovery from fresh slippage, and we can bring down the NPAs. Our NPA grew by INR 7 crore in the last quarter without any technical write-off. If we can bring down NPA, why can't we bring down the SMA 1 and 2? It is an execution challenge, but I think the people are capable of doing that. That is the next big gain in credit cost. After the ECL is implemented, it will come from reduction of SMA 1 and 2. Right. Okay. Secondly, sir, on overall ROA. So we have around 20-25 basis points ROA contribution from banca fee. That is going to be materially impacted. Other banks are saying 56% decline in the fee. That is possible, assuming the draft guidelines come through. That would mean 10-12 basis points of an ROA hit. Do you have any within fee line item or any other line item that can actually offset that kind of a hit? It would be really helpful if you can provide some colors there. So see, the answers to the future actually remain in the past. If you were to look back, let's look back two years. We had INR 120+ crore hit on MFI. Okay? Nothing came. NPA equals loss, right? We took that in our stride, and then we had INR 100+ crore one-time benefit we got from treasury, which disappeared this year. Are you seeing any impact of that? INR 100+ crore in H1 of 2025 has disappeared in H1 of 2026. Will it impact? Will bancassurance impact us? Certainly, it will. But will we be passive observers waiting to take the punch and curl up and die? Obviously not. So there'll be multiple areas where we will put together, which I. Let's wait for the draft guidelines to come in. Maybe the draft guidelines is the final guidelines. You look at us one quarter after the implementation of the bancassurance norms and see what the results are looking like, and then you will see the resilience of the bank. Right. That is very clear. Last question, sir, on gold loan. There are a lot of bureau reports suggesting that last part of the disbursement is going to people who have already been delinquent at other banks or other lender or in other products. So when we disburse gold loan, either organically or through partners or DA, if CIBIL score being a standard, is that a prerequisite or because it is gold loan the product itself is secured? So what is the current practice and maybe could that change the growth trajectory? Our philosophy is absolutely clear. Gold loan is usually loans taken by people who really desperately need the money. Somebody could be in a hospital, they would need it for farming requirement. There are people who may not have access to formal source of credit, and some of them could be delinquent customers. We are okay with that. We take them on board fully knowing well that their CIBIL score in some cases may not be good enough. Why you do CIBIL is to establish the fact that the customer is of a particular profile that he or she may not be giving us fraud gold. The profile of the customer is important to that extent. So it's from that perspective that you'll be looking at the CIBIL. A low CIBIL score is not a bar for a gold loan customer and will continue not being a bar for a customer. For us, we see that as a mechanism to rebuild credit and to get back into the formal world. That's true for us, and it's true for the inorganic partners that we do business with. What is the big risk in this regard? The big risk in this regard is the fall in the gold prices. Currently, 999 gold goes at some INR 14,560, and it's fairly stable at that count. If there is a deterioration of credit for those customers, they probably, I can draw in on one analogy. I'll take you back to Q1 of 2025 when there had been a massive microfinance problem. We had gold loan customers who had microfinance exposure elsewhere. From CIBIL check we could figure it out. Despite the MFI going completely bust, gold loan did not have an impact. So the gold loan was with us, MFI loans were with somebody else. We found out that those customers' behavior was very different. I'm telling you this from the perspective that we didn't get the money entirely out of auction. Auction was less than 10%. No customer is going to give up the collateral which he or she has, which is worth much more than the loan that he or she currently has. That's how we see the behavior. Thank you. When the collateral value comes down, then we will have a problem. Still, we have a buffer, but that is the real risk, not the income-earning capability of the gold loan customer. Thank you so much, sir. Reminder to all the participants, please limit your question to two questions only per participant. Our next question comes from the line of Aditya with Securities Investment Management. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, first question was on agri book. We have a good proportion of agri book. Considering the drought situation prevalent in the country, how are you looking at the disbursement growth in this book and also on the asset quality for our existing book? If you look at the tractor book, it is about 4%. If you look at a KCC book, it is about 4%. We have a 1% individual MFI loans that we provide. What we have seen is that the tractor and the KCC book and MFI book also is behaving pretty well. It has given us cover in terms of PSL and subcategories of PSL. That is a very important engine of ours, which is running pretty well. We are on the lookout for El Niño-related pain coming from this particular segment. So far, we haven't seen it. Our book continues to behave very well. The bounce rates are low. It is really benevolent in terms of fresh vintage bouncers and fresh vintage delinquencies, also from a NPA and recoveries perspective as well. We are on the lookout from an impact of climate risk on this particular segment. But we really haven't seen anything which should keep either us or the industry worried on this count. Understood, sir. Got it. Secondly, on NIMs. Currently we are at 3.3 against a guided range of 3.5-3.6. I know we will get the benefit of a repo rate but that would be on a temporary basis because that would normalize once deposits start repricing. But on a structural basis, if you just help us understand what would drive NIMs from the current levels to our guided range. Keep the current cost under control, drive the cost of deposit down, and work on product mix to improve the yield. Do not go into riskier segment within the product to chase yield to create a problem later on. We want to play conservative by staying in a safe zone but moving the product mix a bit. We will work on cost of deposit. The way to look at cost of deposit is, and you rightly said this, when repo rate increases, eventually the cost of deposit will increase. No one is disputing that, it will happen. But what you have to look at is the divergence between the yield on assets and the cost of deposit, and how does that play over the next three, four quarters going in. We want to keep that wide and we want to keep the provision impact low, as low as what we currently have. Hello. Thank you. Our next question comes from the line of M.B. Mahesh with Kotak Securities. Please go ahead. Hi. Hi, sir. Just a qualitative comment from your side. In terms of the strong growth one has seen in segments like LAP for you as well as for the industry as such. Just trying to understand how are the underlying trends on BT and are you seeing dilution of underwriting standards coming through or is it still holding up? What's your sense of read back? The reason I'm asking this question is that if you go back in the last decade between 2012, 2013 and all the way up to 2016, we did see this instance of very high growth in that period, and we saw how it played out later on. Are we seeing a similar trend coming through again or do you still think it's too early? Okay. Right now, if you look at any early trends and across products, I'm not seeing that there is any cause for concern. But in an inflationary economy, rates going up, it is but natural that there is a sting in the tail. The house view is that it's important to go up the ladder in terms of ticket size. Marginal it may seem, but even a slight increase in ticket size is going to give a better impact in the future. It is the extension of the K-shaped recovery coming through. That's how we see across product segments. The slightly better segment, even if it means a slight compromise on the yield is good enough in a scenario where rates are going up. That's how we see it. But is there any indication of that? No. Is the demand good? Absolutely. Is the early trends encouraging? Totally benevolent. When you say demand is good, is it because the cash flows of the borrowers are better or the income is going up? Or are they simply leveraging much more than before? What's your sense of the book that is building right now? While we say secured, et cetera, we are a cash flow-based business. Nothing else matters. This whole collateral is just a thing in the mind. Honestly, everything is unsecured. It is about the cash flow. And what we see from an assessment of cash flow is that there is a requirement. People still believe that productive use of the money will cover for the interest rate and give him or her a tidy sum. Some of the LAP that we do, like I was telling another person who asked a question earlier, is interest arbitrage or a movement to a better product. Roughly speaking, about one third are coming to you for interest arbitrage. One third is coming in for a better product. Not one third. Maybe one sixth is coming for a better product, which is term loan to OD. But a significant chunk still is coming for higher exposure. They need more money. It is not for arbitrage at all. They believe that, not only they, our underwriting team also believes that that money will give customers better returns after paying our interest rate. All right. Last question. When you say bounce rates have not gone up, and when you do look at the bounce rates that are coming right now, however benign it is, it is not like these borrowers are showing signs of being stretched out. No. The bounce rates are the same as what it was in January. We haven't seen any change. In our mortgage book, it is slightly better than what the beginning of the year bounce rates were. And our rejection rates are also similar. That's a more important thing. Are we rejecting more customers than we used to reject in the beginning of the year? No. It's about the same quantity. Demand is higher, rejection rates are similar, and early trends are looking decent. Thank you. Our next question comes from the line of Kushagra Goel with Investec. Please go ahead. Hi, sir. Thank you for taking my question. Most of my questions are answered, but just a few data keeping question. Could you please give us your loan mix on EBLR, MCLR, and fixed rate? We don't publish that. But you can take an educated guess on how much it is. You'll get to know from the next NIM, which we publish three months later. You can back calculate how it is. Or the ratios have remained same three years back also when the repo rate cut happened. Frankly, it's exactly the similar way. We have a hybrid book, we have a fixed rate loan book, and we have a floating rate book. And even the fixed rate loan book, remember this, 23% of our book is gold loan, which is fixed rate. But they reprice practically every month because they're all short tenured. One follow-up on the mortgage piece. I know you have not specifically called this out, but could you tell us how right now your mortgage book, how is it split between fixed and floating? I know your hybrid keeps on shifting, but if you could give some indication or a number around it. We don't publish that. Specifically product-wise, we don't publish, neither do we publish for the entire bank. We have hybrids, fixed, and floating. But directionally, that's increasing, the floating part? No. Like I said, when the repo rate cuts happened, we had the ratio of these three. On a larger book now, the ratio remains remarkably the same. Maybe a one percentage point, one percentage movement either way. Sure. The big change over the last three years has been that the gold loan book has increased significantly. The fixed rate book has increased, but that's really fixed only in name because these are typically six to eight-month duration gold loans. It keeps on getting repriced, as you can imagine. Sure. Got it. Otherwise, the ratios remain exactly the way it is. Sure. Great. That is all from my side. Thank you. Not at all. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. All right. If there are no further questions, thank you very much. We have a question. Our next question comes from the line of Jai Prakash Mundhra with ICICI Securities. Please go ahead. Hi, sir. Thanks for the opportunity again. Sorry, sir, just we have a decent exposure in Maharashtra, and we have a good growing AIB book. It would be really helpful, sir, if you can share your thoughts, any repercussions, early signs, or what is the bank doing to mitigate the drought-related impact in the AIB book? That is my only question. Thank you. I would say it is not material enough that it has even come to my attention. Okay. I don't think it is. See, one good thing about the bank is that we don't have a single state where asset exposure is more than 20%. I'm talking about asset exposure. So if you look at agri exposure, it can be pretty marginal in that sense. But like I said in the beginning, we haven't seen any statewide beginning of an endemic problem or a pandemic problem. We haven't seen that yet. Even in agri, our collections remains robust and bounce ratios are standing up to the beginning of the year numbers. Sure. Sir, mortgage growth, we should think that it shall. So far it is still a little bit muted only. It should accelerate, right? Towards the overall loan growth basis by over the next two quarters. Is that a fair assessment? It is a fair assessment for two reasons. One is that we will not allow our gold loan book to be more than 25%. We are very clear that we will grow overall by, like we keep on saying, 18%-20%. So if both these are constants, then what will change is the contribution from mortgages. Got it. Thank you and all the very best, sir. Thank you. Thank you very much. Thank you. Next question comes from the line of Parth Gutka with 360 ONE Capital. Please go ahead. Yeah. Hi, sir. Thanks a lot for the call. Not at all. Just one question. Sure. One question. We have on a Q2 basis, the corporate loan growth is a bit on a higher side. Just trying to understand, wasn't there enough opportunities on the retail side where the yields would have been better and we could have done better on margins? See, if we look at our corporate exposure, a lion's share of it is from NBFCs. The kind of rate that we're able to command is very good with very low sting in the tail. The ROE that we get from that book is pretty good, and I wouldn't be surprised if we raise it up to 10% of the overall asset book. Currently, it's about 8% or slightly less than 8%. But in this particular segment, we have the expertise. Just look at this. We do co-lending, we do DA. We understand this particular segment, we interact with particular companies and therefore we also have the ability to access NBFCs and we're very comfortable with that particular segment. The yields are decent and historical NPAs are very low and that's reflecting even now. From an ROE perspective, it's a good book to have. Like I said, gold should be 25%. I think corporate, we should be at around 10%. We should be seeing an increase happening. May not be in Q3, but in an ideal state, it should go up to 10%. It's a good book to grow. Sure, sir. Thanks a lot, sir. Thank you. Thank you. Our next question comes from the line of Prem Patel, an individual investor. Please go ahead. Hello, sir. Hello. I have been an investor from last three years. I hold around INR 20 lakh share and I am very much happy with the performance you have delivered. Just one question. Do you have a bank account with us? No, I don't have. You should have a bank account, sir. No, I don't. You should have experience of having a DCB Bank account. I will send somebody to your place and on a firsthand basis see how banking with DCB Bank is like. So apart from being an investor, we want you to be a customer as well. Yes, 100%. Sir, I had just one question. At what price to book valuation are we thinking of diluting the equity? Good question. Look, we are very near closure on the capital. This has got three components. I am sorry I am not able to give a straight answer. But from a timing perspective, before the next investor call, we will have a firm commitment on the capital. Maybe the capital also will come in by that time. The quantum and the rate is getting closed. If that is closed, the firm offer will also come in. It is a question of a few more weeks or maybe maximum a month before we will be able to close it out. Look, the bank has not raised capital from 2017 onwards. Yeah. It is waiting for a right time. The right time is not based on time, it is based on valuation. That is the reason we haven't raised it so far. We are conscious about at what rate would we dilute incrementally. The bank's capital position is strong. Our capital adequacy ratio in September 30th is better than our capital adequacy ratio in March after having grown. It is not as if we are desperate for capital. We are holding out. We are ensuring that the capital which we require, and which we definitely do require, comes at a price which is fair to everybody, existing shareholders as well as to the new incumbent or new entrant or entrants who would come in over the next few months. I had just one concern that I am pretty sure that just now our share price is very much undervalued. So today just we closed at our book value around 203 or something like that. So below the book value, we will raise the capital or not? Below the book value, we will not raise capital. Okay. That much I can tell you. At what price to book will we raise capital? That is under negotiation, but below book value we will not raise capital. Okay. That is it from my side. Thank you. Thank you. Thank you very much. Thank you. As there are no further question from the participant, I now hand the conference over to Mr. Kutty for closing remarks. Thank you and over to you, sir. Thank you very much. Look forward to the meeting three months later. Bye-bye. Thank you, sir. Ladies and gentlemen, on behalf of DCB Bank Limited, that concludes today's call. Thank you for joining us and you may now disconnect your lines.