Ladies and gentlemen, good afternoon, welcome to HDFC Limited Q3 FY 23 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note, this conference is being recorded. We have with us HDFC's Vice Chairman and CEO, Mr. Keki M. Mistry. Managing Director, Ms. Renu Sud Karnad. Executive Director, Mr. V.S. Rangan. Member of Executive Management and Chief Investor Relations Officer, Mr. Conrad D'Souza, and Additional Senior General Manager, Anjali Tarapore. I would now like to hand the conference over to Mr. K.K.M. Mistry. Thank you, over to you, sir. Thank you very much. Good afternoon, everyone. At the outset, I would like to welcome all of you to HDFC's earnings call for the third quarter of the current financial year. The board of directors at its meeting held earlier today approved the financial results for the nine months ending December 31, 2022, which were subject to a limited review. Let me start with outlining a few developments in the economy over the last three months, which have had a bearing on the corporation. The Monetary Policy Committee at its meeting held in December 2022 increased the policy repo rate by 35 basis points, mainly on account of the need to keep inflation expectations anchored. This was in addition to the 50 basis points increase in the repo rate in October 2022. There has been a further uptick in interest rates, consequent to which we have increased deposit rates as well as rates on loan products. We had mentioned in our previous earnings call too, the interest rate actions have a short-term impact on net interest incomes. We have seen rate action by RBI and have correspondingly passed on the rate increases to our customers, there is always a transmission lag between the increase in interest costs on our liabilities and the repricing of our assets. I will explain this in detail later. In July 2022, the RBI had increased the limit of external commercial borrowings under the automatic route from $750 million to $1.5 billion per financial year. We have fully utilized this limit in the current year. In August 2022, we raised $1.1 billion as a social loan under this window. Further, December 2022, HFC dispersed a loan of $400 million, which will be utilized primarily for the green affordable housing portfolio. The borrowings are fully hedged for currency and interest rate risk, and the all-in cost on the borrowing is comparable with our domestic cost of funds for a matching tenure. The momentum in the economy was strong right through the nine months of the current year. This is reflected in a pickup in individual loan disbursements and an 18% growth in the individual loan book on an AUM basis. During the quarter, the loan book crossed INR 6 lakh crores and AUM crossed INR 7 lakh crores. Over the next few minutes, I will give you a summary of the key highlights of the performance for the 9 months and the quarter ending December 31, 2022. Let me start by summarizing the progress of our business through the quarter. Our individual loan approvals for the 9 months ending December 31st, 2022, were higher by 21% compared to the corresponding period in the previous year. For the same period, individual loan disbursements grew by 23% over the corresponding period. I may mention here that due to the holiday season in October, November, the monthly disbursements were marginally lower than the previous month, but December saw a return to the normal trajectory. Housing disbursements constituted 93% of individual loan disbursements in the current year. Growth in home loans was seen in all segments of the market. 94% of new loan applications were received through digital channels. During the third quarter, we sold individual loans aggregating to INR 8,892 crores. The individual loans sold during the last 12 months amounted to INR 35,937 crores. The total loans sold during the 9 months ending December 2022 amounted to INR 27,570 crores. These loans were all assigned to HDFC Bank pursuant to the mortgage sharing agreement with the bank. Individual loan book growth on an AUM basis was 18%. If the loans amounting to INR 35,937 crores had not been sold during the preceding 12 months, then the growth in the individual loan book would have been 26%. On a balance sheet basis, our individual loan book increased to INR 4,79,316 crores. In addition to this, the individual loans sold by the corporation and outstanding as on December 31, 2022, amounted to INR 97,700 crores. HDFC continues to service these loans. Individual loans outstanding on an AUM basis amounted to INR 5,77,016 crores, a growth of 18% over the previous year. As of December 31, 2022, our non-individual loan book on an AUM basis was INR 1,24,469 crores. As mentioned in our earlier calls, construction finance loans, unlike lease rental discounting loans, have a longer disbursement period as they are disbursed based on progressive construction and after the developer has brought in his share of equity. Further, over the last few quarters, we have seen some scheduled repayments of earlier facilities and resolution of some stressed assets. We have also matured to run down exposures in the loan book which are non-compliant with accounts applicable to commercial banks in lieu of the impending merger. The total assets under management as of December 31, 2022 amounted to INR 7,01,485 crores as compared to INR 6,18,917 crores in the previous year, a growth of 13%. If no loans had been sold during the preceding 12 months, then the growth in the total loan book would have been 18%. Prepayments on retail loans on an annualized basis amounted to 10.7% of the opening loan book. As you'll be aware over the years, historically, our prepayments have ranged between 10% and 12%. The average size of individual loans for the period ending December 31, 2022 stood at INR 35.7 lakhs as compared to INR 33.1 lakhs in financial year 2022. The contribution in value terms from customers with a annual family income of INR 18 lakhs or more has increased during the year to 52% from 44% during the corresponding period in the previous year. Our trust on affordable housing loans has continued. During months ending December 31, 2022, 23 of home loans approved in terms of number of customers and 10% in value terms were to customers from the economically weaker section and the lower income group. The average home loan to customers in the EWS segment amounted to INR 10.8 lakhs, and to customers in the LIG segment amounted to INR 19.5 lakhs. We break up the loan book outstanding on December 31, 2022 on an AUM basis into different categories, individual loans constituted 82% of the total loan book as compared to 79% in the previous year. Construction finance constituted 8% of the total loan book. Lease rental discounting loans constituted 6% of the total loan book while corporate loans constituted 4%. We were to look at the incremental loan book growth, for the nine months ending December 31, 2022, the entire growth is from individual loans. 98% of the loans were sourced through distribution channels. However, this is largely through HDFC Sales, a 100% subsidiary of HDFC Limited, as well as through HDFC Bank. HDFC Sales accounted for 51% of the loans sourced, while HDFC Bank at 30%. Third-party DSAs accounted for 17%. Thus, 83% of HDFC's individual business was sourced directly or through our associates. Emergency Credit Line Guarantee Scheme was extended to mitigate the economic distress caused by the COVID pandemic. Under ECLGS 1.0, 2.0, and 3.0, the corporation has disbursed an aggregate amount of INR 1,876 crores. Amounts disbursed under this facility are guaranteed by the central government. The Reserve Bank of India permitted a one-time restructuring of loans under its resolution for COVID-19 related stress. As of December 31, 2022, the outstanding loans under OTR one and OTR two together amount to INR 4,085 crores, which is equivalent to 0.7% of the loan book as compared to a peak of 1.4% in September last year. 98% of the OTR loans are in the individual loan category. RBI had on November 12, 2021, issued guidelines on harmonizing NPAs across the financial system. Subsequently, RBI has deferred the effective date of the applicability of these guidelines and the NPA reporting under the revised guidelines was deferred to the quarter ending December 2022, which is this quarter. HDFC, however, has continued to report NPAs in accordance with the revised RBI circular of November 12, 2021. There has been a significant improvement in asset quality over the last 18 months. December 2021 was the first quarter when we were required to report NPAs under the new norms brought in by RBI. Since then, we have reengineered our recovery mechanism and processes, and I'm happy to report that as of December 31, 2022, the gross non-performing individual loans calculated under the new law stood at 0.86%, down from 1.44% in December last year. Similarly, gross non-performing non-individual loans stood at 3.89%, down from 5.04% in December last year. As per the new regulatory norms, the gross non-performing loans as of December 31, 2022, stood at INR 8,880 crore. This is equivalent to 1.49% of the loan portfolio, which is down from 2.32% in December last year. Calculated under the earlier norms, the gross non-performing loans as of December 2022 would be 1.38%, comprising 0.79% for individual loans and the same 3.89% for non-individual loans. The improvement in credit quality is also reflected in the credit costs which I will cover later. As at December 31, 2022, the corporation carried a provision of INR 13,274 crore. Under Ind AS accounting, both asset classification and provisioning have moved from the expected credit loss model for providing for future credit losses. Based on the model, the total exposure at default, which is principal plus interest, of INR 6,01,765 crores is broken up as follows. Stage one loans constitute 94.5% of the total loans. Stage two is 3.7% and Stage three is 1.6%. We have seen a very sharp 3.7 percentage point reduction in the aggregate of Stage two and Stage three assets from the peak of 9.2% in between last year to 5.5% of the exposure at default over the last six quarters. In fact, in the current financial year itself, we have seen 120 basis points reduction in the aggregate of stage two and stage three assets from 6.7% in March 2022 to 5.5% in December 2022. During the quarter, we have charged the profit and loss account with a sum of INR 370 crores towards provisioning. The aggregate charge to the profit and loss account for the nine months is INR 1,357 crores. The ECL to EAD coverage ratio for stage two assets is now 25% and for stage three is 56%. The provisions carried as a percentage of the EAD amount to 2.21%. As a result of the improvement in asset quality over the last 6 quarters, annualized credit cost for quarter 3 was 22 basis points, down from 33 basis points and 29 basis points during quarter 1 and quarter 2 of the current year respectively. Credit cost for the 9-month period now stand at 28 basis points on an annualized basis. We have stated in our earlier earnings calls that as asset quality-related issues get resolved, we should over a period of time be able to normalize the credit costs to pre-COVID levels on a sustainable basis. This, in turn, will have a very positive impact on the return on equity. Let me now come to investments. We continue to hold all our investments in HDFC Bank, HDFC Life, HDFC Asset Management, and all other subsidiary and associate companies at the original cost of acquisition, which is the price we had paid whilst making those investments. These investments are not accounted for on a fair value basis. If we were to mark to market the listed investments as at December 31, 2022, the unrealized gain, that is the unrecognized gain, which is the difference between the market price on December 31, 2022, and the carrying cost, would be INR 2,55,883 crores. This unrecognized gain is not part of our net worth, nor has it been considered in our capital adequacy calculations. Our capital adequacy ratio on December 31, 2022, stood at 23.7%, of which Tier I capital is 23.2% and Tier II capital is 0.5%. The capital adequacy is well above the regulatory requirement. At this stage, it is important to talk of return on equity. Under the Ind AS accounting norms, net worth includes certain items which do not form part of Tier I capital under the prudential regulations. These include Ind AS transition reserve, deferred tax liability on special reserve, fair value gains on investments through OCI, investments in subsidiaries and associates in excess of 10% of net own funds. Securitization gains recognized upfront in accordance with the Ind AS requirements. These items aggregate to INR 22,193 crore. Hence, Tier I capital is INR 1,07,046 crores as against the reported net worth in December 2022 of INR 1,29,239 crores. A more appropriate way of calculating the return on equity will therefore be on regulatory Tier I capital as against the conventional method of computing the return on equity on net worth. Annualized return on equity based on Tier I capital for the 9 months ending December 31, 2022, stood at 15.4%. During the quarter, 600 warrants were converted into 600 shares of the corporation at a price of INR 2,165 per share. The last date for conversion of warrants is August 10, 2023. As at December 31, 2022, the Corporation's total borrowings amounted to INR 5,43,664 crores. Term loans, including the external commercial borrowings of $1.5 billion equivalent drawn in the current year, which I referred to earlier, and refinanced from the National Housing Bank, accounted for 24% of the borrowings. Market borrowings, that is NCDs and commercial paper, accounted for 43% of the borrowings. Deposits as at the quarter end amounted to INR 1,61,521 crores and constitute 30% of the borrowings. It is important to mention here that while the deposit level has remained steady, retail deposits now constitute as much as 70% of total deposits, as compared to 62% in March 2022. We continue to encourage retail deposits, and retail deposits have grown 14% during the current year. During the earlier part of the year, we had raised wholesale deposit spending, withdrawal of the ECB of $1.5 billion. These deposits have been repaid on maturity. Wholesale deposits are generally shorter term in nature and are not as attractive as they used to be on account of the liquidity coverage ratio requirements. I will now move to the statement of profit and loss account. The year has seen a volatile interest rate environment, as I mentioned earlier, and therefore, some of the numbers of the current year are not strictly comparable with the previous year. There are certain factors which have affected the profits of the current year. These are: First, is impact on net interest income due to the transmission lag between increase in funding costs and increase in lending rates. Secondly, due to volatility in equity markets, we had a loss on fair value of investments through the profit and loss account as compared to a gain in the previous year. Thirdly, the expense ratios are higher as we incur expenses up front on staffing, IT and branching to meet the increase in demand for housing loans. There was also an increase in legal expenses due to an increase in business as well as resolution of some stress assets. Needless to add, whilst these expenses are being incurred up front, the benefit of these expenses will accrue over the incoming periods. Let me first of all speak of the issues which have had an impact on the net interest income. In the 9 months of the FY 2023, we have had rate actions which have had an immediate impact on borrowing costs, which in turn have not been simultaneous with the transmission of rates on the asset side. RBI increased the repo rate 5 times since May 2022, in all aggregating to 225 basis points. The last increase of 35 basis points was on December 7, 2022. In the run-up to the expectation of the rate hike, market rates and swap rates increased, and this had an impact on our borrowing costs. We have increased our lending rates in response to this hike by a similar 35 basis points, with effect from December 20, 2022. The benefit of this hike will be received over the next quarter, whilst the costs remain unchanged, assuming there is no further change in interest rates. That's why we've had an immediate impact on borrowing costs. The lending portfolio tends to reprice over a period of one quarter. This transmission lag has had a slight short-term impact on the NII growth for this period. This should be regularized over the coming periods. Lastly, the proportion of the retail loan book has increased to 82% over the last few quarters. While return on equity on both the retail and the non-individual business is almost similar, the spread on non-individual loans are higher because of the fact that these non-individual loans carry a higher capital allocation requirement and also have higher credit costs. Net interest income purely on the basis of interest, without taking cognizance of the profit and sale of loans during the quarter ended December 31, 2022, amounted to INR 4,840 crores compared to INR 4,284 crores in the corresponding quarter of the previous year, a growth of 13%. For the 9 months ended December 31, 2022, the net interest income amounted to INR 13,926 crores compared to INR 12,519 crores in the corresponding period of the previous year. If we adjust for the one-time impact of the transmission lag in passing on the rate hikes to the customers, as well as the impact of the swap benefits in the previous year, the NII growth for this period would have been 17%. On the positive side, it is important to note that credit costs are lower on a sequential basis as a result of improved credit quality. We have always targeted a net interest margin of between 3.3% and 3.5%. I'm happy to inform you that after a couple of quarters of reported net interest margin at 3.4%, the net interest margin for the quarter and the 9 months ending December 31, 2022, both stood at 3.5%. This is an improvement over the last 2 quarters and reflects on our ability to manage the transmission lag risk. The spread on loans over the cost of borrowings for the 9 months ended December 31, 2022 was 2.29%. The spread on the individual loan book was 1.91% and on the non-individual book was 3.69%. Income earned from deployment of surplus funds in cash management schemes of mutual funds and government securities was much lower at INR 172 crores as compared to INR 329 crores in the corresponding period of the previous year. This was due to average level invested this year in liquid funds at INR 4,507 crores as compared to INR 13,549 crores in the corresponding period in the previous year. With the introduction of the liquidity coverage ratio in December 2021, the corporation's liquidity is largely held in government securities. The government securities and liquid fund holdings as of December 31, 2022 is around INR 56,000 crores. The average level of liquidity held during the quarter was INR 51,000 crores. There was no profit on sale of investments during this quarter. However, there was a profit of INR 184 crores on sale of investments during the nine-month period, compared to INR 263 crores in the same period last year. Dividends received during the quarter was INR 482 crores compared to INR 195 crores in the corresponding quarter of the previous year. During the nine months of this year, we earned INR 2,528 crores by way of dividend income, as compared to INR 1,400 crores in the corresponding period of the previous year. Dividend during the year was received predominantly from our group companies. Largely owing to volatility in equity markets during the quarter ended December 31, 2022. For investments classified as fair value through profit and loss account, there is a debit to the profit and loss account of INR 62 crores as against a net gain of INR 124 crores in the corresponding quarter of the previous year. For the nine months for investments classified as fair value through profit and loss account, the net gain on fair value changes stood at INR 89 crores, which is significantly lower when compared to INR 672 crores in the corresponding period of the previous year. Under Indian Accounting Standards, the stock options granted to employees are measured at the fair value of the options on the date of grant. This fair value is accounted for as employee compensation cost over the vesting period of the options. Accordingly, employee benefit expenses for the nine months include an amount of INR 176 crores compared to INR 329 crores during the same period in the previous year. For the period ended December 31, 2022, the cost income ratio stood at 9.5%. The cost income ratio is relatively higher during the period on account of the increased retail business over the last year, as well as the increase in the branch network. The benefits of these cost increases will be derived over the next quarter. Increased technology and legal costs also contributed to the increase in the cost income ratio. We expect the cost income ratio to remain in single digits for the year. For the nine months ended December 31, 2022, the standalone profit before tax was INR 14,616 crores compared to INR 12,624 crores in the previous year, giving a growth of 16%. Tax provision during the nine months ended December stood at INR 2,802 crores compared to INR 2,582 crores in the previous year. The standalone profit after tax for the nine months stood at INR 11,814 crores compared to INR 10,042 crores in the previous year, a growth of 15%. For the quarter ended December 31, 2022, the standalone profit before tax was INR 4,612 crores compared to INR 4,048 crores in the third quarter of the previous year, a growth of 14%. Tax provision for the third quarter amounted to INR 921 crores compared to INR 787 crores in the third quarter of the previous year. The standalone profit after tax for the third quarter stood at INR 3,691 crores compared to INR 3,261 crores in the third quarter of the previous year, resulting in a growth of 13%. Pre-tax return on average assets was 3.0%. Post-tax return on average assets was 2.4%. The basic and diluted EPS on a face value of INR 2 per share was INR 64.9 and INR 64.5 respectively. The consolidated profit before tax for the 9 months stood at INR 22,826 crores as compared to INR 20,195 crores in the corresponding period last year. After providing INR 3,131 crores for tax, the consolidated profit after tax for the period stood at INR 19,695 crores as compared to INR 17,150 crores, a growth of 15%. The profit attributable to the corporation was INR 18,537 crores as compared to INR 16,136 crores in the previous year, a growth of 15%. As at December 31, 2022, the corporation had 3,925 employees. Total assets per employee stood at INR 171 crores. Annualized net profit per employee was INR 4 crores compared to INR 3.8 crores during the same period in the previous year. Let me spend a couple of minutes to give you an update on the merger. As you are aware, on April 4, 2022, the board of directors of HDFC Limited and HDFC Bank Limited approved a composite scheme of amalgamation of HDFC with HDFC Bank, subject to requisite approvals from various regulators, statutory authorities, shareholders and creditors. Under the scheme, upon the scheme becoming effective, the subsidiaries associates of the corporation would become subsidiaries associates of HDFC Bank. HDFC Bank will then be 100% owned by public shareholders and existing shareholders of HDFC will own 41% of HDFC Bank. Pursuant to the no objection for the merger from various authorities, the Competition Commission of India had approved the proposed amalgamation. The National Company Law Tribunal, that's NCLT, Mumbai branch, had passed an order in the matter of the amalgamation pursuant to which a meeting of the shareholders of the corporation was convened in this quarter on November 25th, 2022. The resolution approving the scheme of amalgamation was passed by 99.9% of the shareholders voting in favor. The final hearing of NCLT is scheduled to be held tomorrow, which is February 3rd, 2023. Clarification from RBI on the various requested dispensations, grandfathering of assets and liabilities, and shareholder limits in our subsidiaries is still awaited. HDFC's distribution network spans 724 outlets, which include 213 offices of HDFC's wholly owned distribution company, HDFC Sales Private Limited. HDFC covers additional locations through its outreach programs. We continue to engage with all our stakeholders on ESG. Our ESG reports are on our website, including a recent report, which is an introductory framework on climate-related financial disclosures. For further information on ESG-related queries, you may engage with our investor relations team, Anjalee and Conrad D'Souza. The corporation's corporate social responsibility activities focus primarily on healthcare, education, persons with disabilities, and environmental and sustainability. CSR activities are conducted either directly or through the H T Parekh Foundation. The CSR spend during the nine months was INR 161 crores. In conclusion, let me also say that we've been happy to receive a few awards in this quarter. We won the award for the best performing housing finance company for CLSS under the Pradhan Mantri Awas Yojana by the Ministry of Housing and Urban Affairs. At the 19th Inclusive Finance India Awards, the corporation was awarded the jury special award for contribution to financial inclusion. At the Business Transformation Leaders Awards by Mint and TechCircle, the corporation was declared the winner for Project DASH, which is digitally agile seamless home loans, marking its digital transformation journey. The above are some of the highlights of the results for the period ended December 31, 2022. We may now proceed to question and answers. I would request you to kindly introduce yourself and be brief with the questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to limit their questions up to two per participant. If time permits, you may join the queue for any follow-up. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Suresh Ganapathy from Macquarie Group. Please go ahead. Hi, Keki., I have two questions, both on your loan growth and deposit growth. first on deposit growth, you know, the share of retail deposits, as you said, has gone up from 60% to 70% year till date, which means that you have, if I were to calculate it backwards, the net accretion has been INR 13,000 crores of retail deposits over the 9-month period. I heard, of course, you guys have launched a Sapphire Deposits in the previous quarter. Can you let me know how much mobilization you have did through that deposit? On a QOQ basis, what would have been the retail deposit accretion? This INR 13,000 crores is a 9-month number, I also want to know the QOQ number. All right. From the Sapphire alone, I think it was around INR 10,000 crores. That is what we mobilized from the launch of Sapphire to the, you know, the period actually. Okay. Ranjan, the total mobilization itself is so 13,000 crores in retail on a 9-month basis. If I take 70% of the current deposit base and I take 62% of March 2022 number, the absolute difference comes out to be only 13,000 crores, and you are saying 10,000 alone you have got from Sapphire. Some of the numbers are not tallying. Suresh, It may not tally because there would be some repayments which could have worked the number out. It's not right to look at it from that perspective. To answer your question as to how much of what was the net accretion to retail deposits in the third quarter, it's about INR 5,750 crores. Okay. In the quarter. In the quarter. In the quarter. In the quarter. 3Q over 2Q, net accretion is INR 5,750, and the nine-month number is INR 13,000 crores. Okay, fine. That's based on my calculation. Now, you know, my point here is this. Can the 70% go to 80? I mean, because of the fact that you might have to do more corporate deposits rundown. Is that the outlook going forward? Because on an absolute, if I were to look at on a total deposit base, the QOQ decline has been -1% and YOY has only been 4%, right? Can this continue in the coming quarters also because of the LCR requirements and, you know? Yeah. Yeah. Suresh, it's not that there is no availability of corporate deposits. There is a very large availability of corporate deposits, which typically we have kept running down. The only reason we kept running it down because of the LCR requirement. If you have a short-term deposit, there is a very large LCR requirement that comes in. Incrementally, we could look at probably maintaining a similar kind of a ratio by the end of the financial year. Yeah. At the same time, you know, if there are corporate deposits, see, unfortunately, there are these corporate deposits, a lot of them they come with a withdrawal option actually. Withdrawal option doesn't work too much, you know, favorably on our LCR risk. Mm-hmm. Mm-hmm. That's why it keeps going a little bit thin. Wherever we could get money on the basis of non-withdrawal ability or a limited withdrawal ability, sort of clauses. There we are open to actually we are actually accepting the deposits. True withdrawal ability for a very short time doesn't really make sense actually. The reason is that whilst the company will not withdraw money, I mean, this is a historical experience over the last 30-35 years. In actual practice from an LCR perspective, put it in the first bucket, just because it is a withdrawable deposit, which then defeats the. You know, it becomes very expensive from an LCR requirement. That's the reason why we are discouraging it. We will try to persuade more of the companies to give us deposits if we need, if at all we need, where they don't have this withdrawable option. In reality, this withdrawable option is rarely, actually rarely if ever exercised. Okay. The corresponding question is on the loan side of the balance sheet. Again, there we have seen a rundown of the corporate book ahead of preparing yourself ahead of the merger because of certain non-compliant loans. Again, the number is minus 6% YOY and 5% QOQ or whatever, either way it was. The point here is, again, how much can you see this going down? I mean, is there a quantification that you can give that this is the proportion of loans which cannot be taken on HDFC Bank balance sheet, and consequently, that is a rundown that we are expected to see? Suresh, for most of the loans that we have, we have gone to RBI and we sought RBI approval that these loans were permitted under the NHB guidelines. RBI guidelines which apply to banks are different and therefore you grandfather the grandfather these loans. As I mentioned to you, we still haven't heard from RBI. Hopefully in the coming quarter, we should hear from RBI. If RBI grandfathers the requirement, then we don't have to run these down. For example, there are certain loans which came up for maturity. On maturity, we took the money back, we took the loan back. The reason we took the loan back and did not give a fresh loan, even though that company may have wanted it, is simply because, you know, those loans may not have fitted into the RBI, into the banking structure under the RBI. Difficult to give a percentage, but my sense is, as I said, as I think we mentioned in the call also, there is a reasonably good pipeline of construction finance loans that is there with us. As I've been explaining time and again, in a construction finance loan, whilst the loan may be given, you know, up front, the disbursement for that loan is linked to the progress of construction. We disperse the loan as the project gets constructed. Typically a real estate can run for three, four, five, six years. Typically what would happen is loans which would have got approved in 2018, 2019, 2020 would be the loans which would be getting dispersed now. The period of 2018, 2019, 2020 was a period when there was a slowdown in the real estate sector, which you are aware of, which we tried them again. The pickup in the real estate market really started in, I think, the latter part of 2020 and more so in 2021. There is therefore a very good pipeline of these loans coming in, but disbursement for these loans may not happen in the third and the fourth quarter of the financial year. Maybe some of this, a lot of this may get dispersed over the next year. Okay. Can I squeeze in one more question? Sure. Yeah, sure. You know, the retail AUM growth has shown a marginal downtick, you know, from 20% last couple of quarters, come down to 18%. I'm not trying to mistake you, but is there some impact of rising rates, sorry, because they have gone up 200 basis points from the bottom, slowly getting felt here for this QOQ decline? I'm sorry, slower growth? Yeah. Suresh, I would attribute it to two factors. Primarily because you can add rate if you want as a third factor. Mm-hmm. The 2 main factors is that if you look at the first half of last year, I'm talking of April 2021 to September 2021. The first quarter in particular, April and June, was significantly impacted because of the second wave of COVID. Mm-hmm. Because of that, disbursements in that period were relatively low. Okay. Therefore, we had relatively lower loan growth. Now we are comparing our growth in the third quarter with growth in the third quarter of last year, by which time complete normalcy had returned. Mm-hmm. Mm-hmm. This would, to my mind, be the primary reason why you would see that nuances. The decline is 20% to 18.3% or 18.4%. Yeah. The other is also that we had Diwali and Dussehra in the months of October. Mentioned earlier, we saw relatively lesser disbursements in October and November than what we had seen in September. Okay. Having said that, December was a normal month, so things picked up from November. I'm sorry, from December. Okay, this is very clear. Thank you so much. Yeah. Thank you. We have our next question from the line of Mahrukh Adajania from Nomura. Please go ahead. Yeah, hi. My first question was that what is the size of infrastructure bonds that could qualify, I mean, the size of bonds that could qualify as infrastructure bonds? The size of the bonds that are qualified infrastructure bonds, the seven-year bonds would now be to the tune of INR 118,031 crores. Okay. Sorry. 1 18 31. Okay. Eighteen zero. This number when we spoke, I think a few months ago, used to be a little under INR 1 lakh. Right. We've added more of these long-term bonds. Correct. My other question on numbers is that what would be the size of the SLR book now, total SLR? INR 56,000 crore is the SLR. Got it. Okay. My broader question is, of course, your loan growth has been good. There were some small base effect in October, November, which has corrected in December, but there are a few large banks that have seen some slowdown in home loan growth. What do you think is the outlook for mortgage growth from here on? Mahrukh, I would never want to do this quarter, one quarter, one month high, one month low. There are seasonal factors which have an impact. The reality of the matter is that if they have gone up, sentiments do get impacted to some extent, but the inherent demand for housing is very strong. What we find is that when interest rates go up, then typically for the first 8 to 10 days we see a dip in the number of new applications that we receive. By the time the 8 or 10 days are over, the number of applications reverts back to what they used to be before the. This is a temporary phenomenon, but because we've had such frequent increase in interest rates in this quarter, it could have some temporary impact in terms of it. I think once interest rates stabilize and then 90% plus of any interest rate hike that could have happened has already happened, we should start seeing a steady and a rising growth. Got it. Just one last question, K.K. in terms of these loans which you have requested RBI to grandfather and hopefully they should be, in terms of what's eligible for banks and what's eligible for non-banks, could you quantify? Would there be any rough quantum that you could share? I won't be able to give you a rough quantum, but there are things which are very, very small and fairly irrelevant, things. Like for example, there could be cases of pledge of. Loan against shares. Loan against shares, for example, could be one category. Mahrukh, I think what has gone to RBI is in terms of, you know, the loan against shares and all which are clearly not permitted in the bank beyond a certain limit. Those numbers are not more than INR 5,000-6,000 crore as I have told you in the past. Depending upon how everything comes in, either they will, you know, they will get grandfathered and they will get run down over a period of time. Okay. We are still talking about that book only, right? Yes, we are talking. That is the book which is the risky because the rest of the book is actually, sort of, I mean, all the construction finance and all that, they are all the permitted, between bank context. Got it. Okay. There could be certain differences between the regulations that the housing finance regulation permitted certain kinds of loans and the banking regulation does not. As I said, we've asked RBI for grandfathering and happily hopeful that they will. Normally in a merger, grandfathering is usually always done. The point is that when these loans mature, we do not give a fresh loan or a new loan simply because if it doesn't qualify under RBI, we don't want to add more to the loans which do not, you know, which do not fall into the banking regulations. Got it. Okay. Thank you. Thanks a lot. Thank you. We have our next question from the line of Rahul Picha from Motilal Oswal Financial Services. Please go ahead. Yeah. Hi. This is Akshat here from Motilal Oswal. I had two questions. One, I wanted to, you know, get a hang on the restructured book and I wanted to understand what percentage of our restructured book is, you know, now started its repayment and what would be our collection efficiency on that 0.7% of the book. Second, I wanted to know the disbursement figure for the quarter. All right. The OTR book that we had, I mentioned that in my initial comments. Our total OTR book now stands at about INR 4,000 crores, which is roughly 0.7% of the loan book. A lot of these repayments would have started. We never changed the repayment. The repayment terms were never changed. Almost the entire book is repaying and our collection efficiency would be similar to that of the overall book? I mean, more or less the same. It's such a small amount, INR 4,000 crores on a book of INR 6 lakh crores. It really doesn't move the needle one way or the other. It might be marginally lower, but not significantly. There's nothing which has become, sort of very apparent. Okay. Okay. To answer your second question, disbursements is a little over INR 40,000 crores for the quarter. Okay, thank you. That's all. Individual. These are retail side also. Retail. Retail. Correct. Thank you. We have our next question from the line of Nishant Shah from Millennium Capital Management. Please go ahead. Hey. Hi. thanks for this. just one data cleaning question. What is the proportion of the book that is eligible for priority sector lending today? What is the pace that this book is growing by? On our outstanding basis, I think the last number which we worked out was coming around close to INR 120,000 crores. The priority sector book in our books. Okay. Net of the books sold actually. It doesn't include the books which have- This is loans given by HDFC which would qualify as priority sector in a banking structure. Understood. Is this book growing faster than the rest of the book? I mean, it's growing in more or less the same line as the rest of the book. Okay. All right. Sure. Just one I want to confirm if I got the number right. infrastructure bonds that you mentioned was INR 118,000 crores. Yeah. INR 118,000 crores. All right. These are bonds which have an original maturity of 7 year and above. Understood. Perfect. Thanks. That's it from me. Thank you. We'll take the last question from the line of Suresh Ganapathy from Kesari Wealth. Please go ahead. Hi. Thank you for giving me a chance. Am I audible? Yes, yes. Very much. Yeah. Yeah. Mr. Keki Mistry, just one question. After the NCLT hearing tomorrow, are we expecting other than RBI, are we waiting for some other approval, some other big regulator approval, or it will all be done after that? No. There will be other processes, and I'll request my colleague Ram to talk about it. Basically the way it works, I'll give you an example. We have an asset management company. Now, through the asset management company we've raised money through, you know, thousands of lakhs of customers. Now, under the SEBI rules, we have to write a note to each one of these unit holders and give them the option if they wish to withdraw their money because the promoter of HDFC Asset Management will now be HDFC Bank and not HDFC Limited. In reality, no one is going to, you know, withdraw their money because of that, because HDFC Bank and HDFC Limited are equally strong, but it is still a process which has to be gone through. There are processes like this which are required by different regulators, but, these processes, it's more a formality rather than anything which it will be an impediment to the merger or something which will create a stoppage to the merger. Okay, got it. Other than this, there's nothing big like in terms of, one is NCLT, second is RBI. That's right. Yeah. NCLT, RBI. RBI has to approve, approval, plus they have to give us a response to the forbearance that we have sought, plus we have to write to all the stakeholders in SEBI. Yeah. IRDA. IRDA. IRDA will be one because there is a change of promoter there. That will also be obviously once the RBI gives it, IRDA will also follow. I must also say that all these regulators had given an in-principle approval or a no objection approval a few months ago. Therefore in that sense there is no real reason why anyone would delay things too much other than the certain processes which need to be followed. Yeah, definitely. Yeah. In-principle approval is there. Yes, I noted it. Thank you so much, Mr. Keki Mistry and the team. Thank you very much. Thank you. Thank you. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir. No, thank you very much. I can only say that the outlook for housing continues to be extremely strong. My sense is that the interest rates have now more or less peaked. You might see a 0.25% rise in rates going forward. I don't see too much more than that Therefore, I would say that the coming quarter and the quarter after that should continue to have a good market should start seeing a strong growth in the loan books. As far as non-individual loans are concerned, the construction finance loans are concerned, as I told you, there's a reasonably decent pipeline, but the disbursement of these loans will be linked to the construction and therefore may not happen in the immediate quarter. Thank you. On behalf of- Thank you so much. ...HDFC Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines. Thanks. Thank you. Thank you.