Ladies and gentlemen, good day and welcome to IIFL Finance Limited's Q4 FY25 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 zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to the management team of IIFL Finance Limited. Thank you, and over to you. Hi. Thank you very much. This is Kapish Jain. Here, I am the CFO at IIFL Finance. I welcome everybody on this call today and for spending your time with us. On this call today, I have Mr. Nirmal Jain, our Managing Director. Mr. Venkata Ramana, our Deputy Managing Director and Co-founder. Mr. Venkatesh, who's the CEO for IIFL Samastha, and Mr. Monu Ratra, who's the CEO for IIFL Housing Finance. I now hand over this call to Mr. Nirmal Jain to give a perspective on the overall micro sector and economy, and also on companies' going-forward strategy. Thank you, Kapish. Good afternoon, everyone. Thank you for joining us today. Let me begin with a brief overview of the macro environment. India continues to be among the fastest-growing major economies globally, driven by resilient domestic consumption, a robust financial ecosystem, and deepening credit penetration, especially amongst MSMEs and retail borrowers. The NBFC sector remains a critical pillar in this growth story. Although the regulatory environment has become progressively more stringent, pushing all of us to raise the bar on compliance, governance, and risk management. That said, the past few days have brought heightened geopolitical tensions with Pakistan, following serious cross-border hostilities. While the situation is evolving, and we hope for a swift de-escalation, the immediate impact on the broader financial markets and domestic economy is difficult to assess. Against this backdrop, I am pleased to say that IIFL Finance has demonstrated remarkable resilience and agility. After navigating the regulatory embargo on gold loans in the first half of the year that has gone by, Q4 has marked a decisive turnaround for us. Our consolidated profit after tax was INR 251 crores, which is quarter-over-quarter up 208%. And our AUM in aggregate rose by 10% sequentially to INR 78,341 crores. We expect to see acceleration in profit and asset base in FY26 as well, towards the normal trend line that is our pre-RBI embargo levels. Gold loans saw a significant 40% sequential growth, reaffirming our customer loyalty and franchise, while MSME loans, which is our strategic focus for the future, continued their steady rise, up 18% year-on-year. Home loans also maintained healthy momentum, reinforcing our leadership in the affordable housing finance segment. I'm also very happy to report that asset quality has improved further, with our GNPA declining to 2.2% from 2.4% in the previous quarter. Our capital efficiency, as we computed for the consolidated, is robust, 29% at the group level, well above regulatory norms. However, we are conscious of the individual company-wide capital adequacy levels, especially for the parent entity, where we expect direct assignments and co-lending to pick up during the course of the year. Most bank partners have held back, awaiting RBI's final guidelines on co-lending, which we expect in this quarter. Our liquidity buffer of over INR 5,200 crores ensures that we are well prepared to meet our growth requirements as well. On the funding side, we mobilized close to INR 8,500 crores during the quarter, which included the MT and the medium-term note dollar bond issue of INR 325 million, which was topped up by another INR 100 million, so INR 425 million in aggregate, and a successful domestic NCD placement of about INR 1,500 crores during the quarter. Beyond the numbers, we have made significant strides in fortifying our compliance framework in line with RBI's scale-based regulations for upper-layer NBFCs. This includes tighter board-level oversight, automated compliance systems, proactive monitoring and reporting, and this reaffirms our commitment to governance and transparency. We are equally focused on leveraging technology for growth and efficiency. Our digital strategy is driving faster loan disbursal, superior customer experience, and smarter risk management. With 4,900 branches now digitally integrated, our physical model will allow us to scale sustainably, and we plan aggressive investment in digital as well as AI technology in the current era to maintain our edge in the sector. Looking ahead, we expect to build on the momentum of Q4 and drive profitable growth across key segments. We believe that our strong balance sheet, our disciplined execution, and clear strategic focus will enable us to deliver sustainable value for all the stakeholders in FY 26 and beyond. With this, I hand over to our CFO for a detailed financial update. Kapish. Thank you very much, Nirmal. Ladies and gentlemen, for the quarter four of fiscal FY25, as mentioned by Nirmal, the consolidated profit after tax before controlling interest was INR 251 crores. It was down 42% YoY for reasons already mentioned, and it is up 0.8% on a quarter-quarter basis, led by the growth that we have in our loan book as well, and at AUM level as well. We recorded a pre-provision operating profit of INR 651 crores, which is down 35% YoY. However, it is up by 22% on a quarter-on-quarter basis. Going for the quarter consolidated loan AUM, while it degrew by 1% on a YoY basis, it was up by 10% on a QoQ basis at INR 78,341 crores. If I further dissect the AUM and talk about our core products, which are Home, Gold, MSME, and Micro, on a YoY basis, it was flat at around 1% growth and turned 10% growth on a Q1-Q basis, which is INR 76,654 as of 31st of March 2025. The mix stands healthy, with home taking a Lion's share of 40%, Gold running back to its last share of around 27%, and Microfinance has degrowth in line with the way the sector has performed over the last one year. Our gross NPA has improved to around 2.2%, and net NPA at around 1%, which is down by 10 basis points and 15 basis points respectively if I compare with the same period last year. Our ECL provision is driven by in-dairies, and our provision coverage ratio on our NPA stands at around 100%. Being quarter four and with the increase in the momentum of our business, and as our assigned portfolio becomes more mature, we see some momentum coming in in our assignment and co-lending asset book growth as well, which is marginally shown growth in this quarter. The degrowth was more because the book was running down due to the embargo in the previous quarters. The assigned loan book stands at around INR 12,789 crores, up 3% QoQ and down 22% YoY. The co-lending book has gone up by around 15% QoQ and down 10% YoY basis at INR 10,606 crores. A brief on our liquidity. Our cash and cash equivalent committed trade lines from banks and institutions stand at around INR 5,216 crores, adequate not just to meet our near-term liabilities, but also to support our growth momentum. We also find good traction in our conversation for new lines of credit from various institutions, including banks. As always, we hold a positive ALM, whereby inflows cover and exceed the outflows across all our buckets, and net gearing standing healthy at around 3.4x. Our annualized ROE for the current quarter stands at around 7%, while ROI stood at 1.6%. The basic earning per share for the quarter was INR 4.9 per share. As of 31st of March, we hold a healthy capital adequacy of around 18.5% in the NBFC, housing finance at 47.2%, and microfinance at 32.4%, well above the threshold of 15% regulatory defined. With this, I come to the end of my presentation, and I'll hand over and open the floor for Q&As. Thank you very much. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are encouraged to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Sukriti Jiwarajka from Laburnum Capital. Please go ahead. Hi. Can you hear me? Yes. Please go ahead. Okay. My question is on this MSME unsecured book that you're doing in the standalone entity. Now, I'm sorry if you've covered this before in previous conquests. Now, I'm seeing the book has grown at 3X over the last two years, 21% yield, 8 lakh ticket size. I'm just not able to understand this category of loans. These are MFI yields almost. What sort of MSME is taking these loans and why? Yeah. These are the MUDRA loans for which government is also pushing banks to meet their target. There is insurance coverage on this kind of loans also. Our insurance coverage is effective from last quarter. Now, coming back, I mean, maybe coming sharply to your question, which is that what is the profile of these customers? These are typically small shopkeepers, ancillary units who would borrow at these levels. Normally, the higher working capital banks will be willing to consider application, but normally, these small customers get ignored. They are typically shopkeepers, traders, freight operators, small service providers like professionals also. These are the kind of customers. Are these working capital loans? What is the tenure? Tenure typically is between 12-24 months. Mostly, yes, you are right. These are working capital loans. I mean, some of them can take it for expansion also, for CapEx also. Okay. And just a couple of follow-ups on this, right? Are you doing this from your own balance sheet or because you said banks have a requirement? Is this a sell-down for PSL? As you rightly said, this is a relatively new portfolio and has accelerated in the last couple of years a lot. Banks have a lot of good appetite for this. We've been talking to various banks. They've been integrating our flow as well as basically, we are negotiating with several banks. Maybe this year, probably we'll see that there's a significant co-lending and DA in the year. Today, that INR 2,500 crores is on your balance sheet. Sorry. Sorry, what did you say? Today, this MSME unsecured is on your balance sheet, right? MSME unsecured is largely on our balance sheet. Got it. How big you're saying you want to grow overall MSME at 25%, 30%? Honestly, this book is looking very risky to me. I just want to know if I'm not understanding this properly because it's a little long for working capital, the tenure. Is this something that you want to grow at 30% as part of your MSME? How big can you take this? The growth is in the secured part of portfolio, which we had guided last year also. Our secured portfolio has been much smaller, and that is where we intend to grow faster. The unsecured growth will be primarily more driven by bank partnership. If you really see, then in terms of target, we'll probably bring down our unsecured portfolio and focus more on secured. Any early warning signals in this portfolio? Because I think you've slightly taken a reduced growth in the last two quarters. Hello. Sorry. Hello. Can you please repeat? Sorry. Any early warning signals in this portfolio that you're seeing? Because I've seen that you've sort of flattened growth in this book in the last two quarters. Any early signs, early warning signals that you're seeing? What has happened is, as I said, that unsecured is what we are slowing down. If you would have seen that our unsecured portfolio is basically going down or is not growing, and maybe will grow at a slower pace. Secured infrastructure is the team that we are putting in place for the last few months. For secured portfolio, typically, it is a LAP product for which you have a different set of people. Then you build your network for title verification, technical, as well as sort of valuations, all those things. We were also doing some of these, are also sold by the microfinance company, that also has slowed down in last year significantly. We will see a big or maybe a significant ramp-up in the secured portfolio in the next few quarters. Got it. Right. My last question on this is the insurance. Primarily, MSME will grow more by LAP or lower-end property product. Every ticket size will also go up a bit over the next year. Yeah. Got it. Got it. The insurance coverage, is it similar to how that CGFMU coverage works for MFI for this? Yeah. There are two schemes which government has, but broadly similar. In one scheme. You get it after two years. Hello? Sorry. About 3%. Basically, but it's a significant coverage which government now provides for MSME. Okay. Thank you. That's it. Thank you. We'll take a next question from the line of Niharika Karnani from Cap Grow Capital. Please go ahead. Yeah. Hello. Yes. I'm audible? Yes. Very much. Yeah, my question is also on the MSME sector. We have highlighted that we'll be growing our MSME book by 25%-30%, and ROE from the current overall 3.4%- 16%. Just wanted to have an idea as to focus would be around what parameter? Will it be on growth or credit quality? What would be your focus? Credit quality is focus, If you see the gold loan growth, because we are getting our lost business. Last quarter, technically, we have grown by 40% quarter over quarter. It is mostly we are trying to recoup and regaining the lost customers. Gold loan will be a significant contributor to our profitability as well as growth, where we expect that we will probably get back our earlier level and also exceed that and getting back on the trendline growth. MSME is a new segment, which again, we leverage our gold loan branches. We have been working on this segment for quite some time. Our distribution capacity is significantly higher. Last year, because of the gold loan and after that MFI and then certain other things, we were held back. On a low base, given our distribution capability, you see the growth appears higher. It is something which is within our capacity. One more question here on the MSME part. What kind of ROE is expected here, given we'll be growing this book? ROE is we are given our guidance on an overall basis, and that also assumes that our co-lending and DA will continue at a level which historically has been there prior to ban, which can accelerate, which can decelerate. That is one. It is primarily many of our overheads and costs are also combined because we use the same infrastructure. We use our HO and technology and many other functions are combined. Just to do an allocation, we have not done the allocation to figure out ROE separately. Understood. Most of the cost, most of the infrastructure is together. So we look at it holistically. Got it. One last question here. Again, in the MSME sector, what will be our focus there, whether we'll focus on the cost part or will we try to reach out to as many possible customers there? No. First one was we will focus on which part? Cost. So it's kind of cost versus reach in case of MSME? No. In case of MSME, we'll leverage our infrastructure and also the DSA channel for LAP. Cost, we are conscious of. Our advantage is that we already have infrastructure of branches across the country, which we can leverage. We do not have any plans to aggressively increase our cost base at this point in time. Got it. Got it. Understood. Thank you. Thank you. We'll take our next question from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Yeah. Hello, sir. Thank you very much for this opportunity. Am I audible? Yes. Please go ahead. Okay. Okay. Great. Great. Just wanted to understand how are we looking at ROE for this year, FY26? Closer to 3%. Closer to 3%. I mean, what will, because you are still guiding for a credit cost of 2.5%-2.7%, right? Is that right? Yeah. I mean, at that level of credit cost, how are we maintaining still ROE of 3%? I mean, what will drive that? Because on your normal level of credit cost, it's little on the higher level. No. Last year, credit costs were 3.1%. Our NIM will also improve because we see that the interest rate cost seems to have peaked down. In a liquidity-tight situation, we've paid a higher price. Also, in the mix, when the gold loan is a significant driver, we'll see the NIM improvement. Sorry? Yeah. Please continue. Please continue. Yeah. I think there's a NIM improvement, the volume growth, and continued co-lending and partnership with the banks. These are the three drivers. Will cost to income also improve? Cost to income will also improve with the volume. Okay, we also have planned to make certain aggressive investment in AI and technology, benefits of which will accrue over a period of time. Yes, cost to income will improve definitely compared to last year. If you can bring it to FY 24 level, I think that's a good target. Understood. Understood. That's very clear. That's very helpful, sir. I mean, that would be it from my side. Thank you so much. Thank you. We'll take our next question from the line of Anusha Raheja from Dalal and Rocha. Please go ahead. Yeah. Congratulations. I am good, head of numbers. Yeah. I want to understand on the strategy, what will be on the gold loan side post-MRO? I think you have recouped the previous levels closer to around it used to be INR 24,000 odd, and you are closer to around INR 21,000 odd crores now. How do we see the loan book growth over the next two years' time? Also on the branch expansion side and the changes that you have done at the NBFC level so that we are complying with the RBI norms, if you can highlight some of the important ones. Also, in the last quarter, you had said that you are being accommodative in terms of pricing the gold loans in order to attract the customers. How is the scenario right now? At the margin level, how do we see the margins panning out for the gold loans? Yeah. Gold loan growth will be fairly strong this year as well as next year. The underlying assumption is that the Gold prices will remain firm. A significant part of Gold loan industry growth is also driven by a significant increase in the gold prices, which obviously increases your loanability against the same quarter. That is one. Our margins will be inching up. We'll get back to our normal margins quarter after quarter this year as well as next year. We are competitive, and the market is very competitive. There is no question about it. You have to really make sure that operationally you are efficient and use technology to save costs to make sure that you make up for the competitive pressure on the margins. I believe that gold loan this year and next year will do well because for two reasons. One is gold prices are firm. Two, unsecured lending has become a little difficult and more expensive. Many times if the gold loan NBFCs are lending at 18%, 19%, 20%, and you have a very aggressive set of unsecured lenders, sometimes fintechs, sometimes new NBFCs, then customers always get distracted. I think that will also be one of the factors. Third is obviously the economic growth and the credit under penetration. All these factors will drive growth. If the growth is there, then the margins are maintained. Okay. And so in terms of branch expansion? Branch expansion at this point in time, we want to strengthen our existing branches and get them to productivity level, which is comparable with the best in class. That is still some time away. Branch expansion still requires RBI's approval. What we probably need to evaluate is how quickly we regain our lost business and start growth path from there. We are open to branch expansion, if not in the first half, then second half of next year. Maybe it will not happen in the next six months, but if things go as planned, then we will start expanding from, say, later part of this financial year or next year. Okay. And how much is the LTV now in the gold loans incrementally? Maximum is 75. And average will be about 69. 68, 69. At the origination? At the origination, it's around between 70 and 75. Okay. On the asset quality side, you said that I just want to understand how the asset quality behavior is panning out across the segment in the MFI, home loans, and on the gold loan side as well. A related question is the credit cost estimate is 2.5-2.7, right? Previously, it used to be close to around 200 basis points. Is it that you are using pain in MFI to continue in this entire fiscal? I just want to understand the broad rationale for a higher credit cost estimate. Okay. There's some bit of pain in MFI that may linger on. An unsecured MSME portfolio also can have, I mean, because it's a high-yielding portfolio. It can always have slightly higher credit losses also. These two factors are there primarily for the estimation of credit losses this year. Do we expect normalization probably in FY27 on the credit cost side? Yes. Or is it too far? On our portfolio, as our MSME portfolio mix will also change in this year, we'll see that next year probably credit costs will get back to our earlier levels. Okay. And just lastly on the off-book assets. We have seen a good growth on the co-lending side. Can you just help us understand? It used to be closer to 40% of the total AUM. How do we expect the co-lending and assignments to happen in the financial year 2026? I think that will definitely have a good impact on the P&L. I think we are right now at 30%. Our end of it will be to go back to 40%. In FY26, you said? That's right. By the end of FY 26, I can say. Within that, the share of co-lending will be higher? Yeah. Now, RBI has come up with a new draft guidelines for co-lending for which they invited for comments till, I think, 12th May, which is Monday. Let's see the final set of guidelines, and then we'll know how co-lending will evolve. Model one is that is not workable as per the new RBI guidelines. You are on that model, right? See, okay, it's a little more complicated than. The thing is that for Gold, you know what happened for home loan mortgages? There's no problem because you have time. Gold loans are small loan products with instant. I'm sure that all gold loan companies will have submitted their feedback to RBI and also the industry association. Let's see the final guideline, and then we'll figure out what will be the DA versus co-lending target for this year. Okay. Thanks. Got it. Thanks. Thank you. We'll take our next question from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yeah. Good afternoon, sir. Thank you for taking my question. First thing is, again, on this FY 26 guidance that you have put out in the presentation, I just wanted to understand when we are guiding for interest spreads of 6.9%-7% versus 6.7% in FY 25, I mean, what are the underlying drivers for that? Basically, what I'm trying to understand is earlier during the call, we spoke about being more secured. We were also given a guidance that MFI is not going to grow very highly this year. You guided for 5%-10% growth. Is it coming from a changing product mix, or is it some benefit of cost of borrowings that you are baking in for a higher guidance on interest rates? That's the first question. That's a good question. Last year, because of the Gold loan ban, the relative share of gold loan has been significantly lower in the average assets as compared to the year before. We ended at 24%, but if you take the year average, then it was even lower because all the growth has come in the last six months. The first six months was a declining trend, and we had come down to almost INR 10,000, which is about maybe 12%-14% of this thing. The mix of FY 25 is a little skewed with much lesser share of Gold loan than normal. If you fix that, then also you see a slight improvement or reasonable improvement in the margins. That is one. Secondly, also, we see that the interest rates have peaked down. In last quarter and last after the Gold loan ban was lifted, we have paid much higher interest cost because the liquidity requirement was faster as we are recouping our business than what we could really get from our usual traditional sources. Also, till recently, now RBI has improved liquidity in the system very significantly. Till a couple of months back, liquidity was tight. NBFC money, cost of funds had gone up. These factors played last year. Also, when we did the dollar bond issue, which was a significantly higher cost-friendly hedge. If you adjust for that, then you see this improvement. Got it, sir. Thank you. The second question that I had was for Manu, sir, more particularly on the housing finance business. If you could just share two things. One is, what is the one plus DPD that we are seeing today in the housing business? Sir, I mean, last year arguably was a very tight year, particularly for unsecured. Of late, we've been seeing some tightness in collections in the affordable housing side as well. While we do a very wide spectrum of products, in the fourth quarter, we've reported a minor asset quality deterioration, which again, by any width of imagination, is not bad. I mean, what is your view? I mean, are we seeing early signs of some spillover from unsecured into the affordable housing segment now, or is it just some similarity, some weakness in government spending, which is leading into lower earnings in the hands of customers, and which is why some tightness in collections that we are seeing today? Yeah. Hi. So I'll answer them. I'll go one by one. Yes, there has been unsecured has gone through its cycle of the pain. We did see that in the secured small ticket secured loans, the micro-LAP loan, we did see some spill coming out there, which was there. That's why you see relatively our growth in the secured MSME has been pretty flattish. We were cognizant of that, and I think we proactively looked at it to be more watchful of that portfolio's concern. I'm sure as things even out, we should start doing that business again in a slightly different moderate style, increasing the average ticket size and maybe lean yield expectations to soften. Barring that, as far as the overall asset quality is concerned, I think it's holding on well, except this micro-LAP segment, which we saw in the home finance business. I think the cue, if I see this, our performance of our ex-secured micro-LAP business, actually our asset quality has improved from the previous year as well. I think the pain is behind us, and now we can expect a pretty consistent growth from here on. We have become a sizable AUM of nearly INR 40,000 crores now. Got it, sir. Thank you for that. The last question, rather two last questions that I had was one, again, for Nirmal sir. I just wanted to understand, I mean, who's heading our Gold loan business now? In Gold loans, again, these draft guidelines that came out on Gold loans, I just wanted to understand how are we positioned with regards to the LTV, more importantly, the LTV guideline, draft guideline that came out that the 75% LTV has to be maintained throughout the tenure of the loan. A, what is our readiness? If at all, there is any impact that you see here? Lastly, for Venkatesh sir, I'm just trying to understand, I mean, last quarter, Q3, we had to take in very high credit costs in the microfinance business. This quarter, again, I mean, while the credit costs have come down, how should we look at the credit cost trajectory from here on? How are we looking at credit costs for the full year 2026 in the microfinance business? Thank you so much. Avira is heading the gold loan business. What was the other question? LTV? Yes. Actually, gold prices are up significantly. Instead of 75, say you bring it down to 70 or whatever, then more or less we will be covered throughout. At that, we will recalibrate the loanable value if these guidelines become effective. To my mind, you assume that, okay, gold prices are not INR 100,000, but say 90,000 or 95,000, which they were just a few days back. Of course, the business at that level was also healthy. I think the gold prices are firmly strong, so that probably will allow the industry to mitigate this change in the LTV computation process. Got it. Yeah. With regard to the microfinance credit cost for the FY2026, I mean, Abhijit, you are informed that the guardrails one was implemented in July 1, and the guardrails two came in on April 1. I mean, if you look at the present book, it has been performing well. Hopefully, most of the things will be done and dusted by this quarter. We are looking on an average credit cost of around 5% for the FY26. Got it. Lastly, this Tamil Nadu bill that came out, TN bill, are you seeing any early impact, just like we saw maybe in Karnataka earlier when that ordinance came out? While I appreciate it is not applicable to registered and regulated entities, but anything that you're seeing, some disruptions in Tamil Nadu because of this bill that was passed recently in Tamil Nadu? Yeah. With With regard to Karnataka to Tamil Nadu, there was a huge buildup in the media with respect to this. Post that, the bill was introduced in the assembly and happened. Abruptly, the bill was hitting in Tamil Nadu, which even many of us were not even aware of. While vis-à-vis Karnataka, we had a lot of preliminary discussions with the various government departments and all those things. Nothing has played out so far in the Tamil Nadu case vis-à-vis what we saw in Karnataka. Tamil Nadu remained status quo. Got it. So it's fair to say that Tamil Nadu collections are still holding up well. Nothing outright alarming that we are seeing in Tamil Nadu just yet. Yeah, that's right. They're still holding up well. Great. Thank you so much. I wish the team at IIFL the very best. Thank you. Thank you. We'll take our next question from the line of Harshit Gadkar from Robo Capital. Please go ahead. My question is already answered. Thank you. Thank you. We'll take our next question from the line of Abhishek M from HSBC. Please go ahead. Yeah. Hi. Good afternoon, everyone. Nirmal, one question on this Gold loan. Now, last couple of quarters, we've ramped it up back to INR 21,000-INR 22,000 crore. On a quarter-on-quarter basis, are we likely to see this kind of a ramp up now, or are we back to a level where we are comfortable and we can grow more at an equal pace or even pace rather than just trying to recover lost ground? Yes. Actually, the market seems good, and we'll have a growth momentum continuing even if we have after recovered our lost ground. I think the momentum seems good in this year. Okay. And then following up from that, if you look at your tier one and then parent entity, it has come down very sharply last couple of quarters because you've ramped up the portfolio, and you saw this reverse effect last year when the portfolio ramped down, your tier one went up. If you continue this kind of growth momentum, then 13.8 can fall pretty sharply. At what level do you say that now it's urgent to raise capital or infuse capital at the parent level? Abhishek, I think we'll focus on one is that the portfolio sell down, which is DA as well as co-lending, which because of these RBI guidelines, most of the banks have put on hold. Other than that, we should also look at subordinate bond. For tier one also, we are open less. At appropriate time, we can look at it for sure. That is something which the board and shareholders have to make an assessment, and we will do that every quarter to see where we stand. Right. Because with this kind of growth and maybe even 1.5% depletion, you're back to 12.5, 12.4 kind of level where you were earlier before the ban. That is also. That's why I said in my opening remarks that we are conscious of that. We had to work on it. If you look at our historical trend and our current off-balance sheet asset, they are significantly lower. The earlier question that I answered first is that if we get back to that level, then we should be safe. Fair enough. Okay. Now, this question arises if you are not able to sell down the assets or get the co-lending partners for the growth. I believe that we should be able to do that, and that is what our first priority is. Okay. In Gold now, we've started off with slightly lower yields than earlier, basically again to recover the ground. Now do we see that normalizing? Now, incrementally, do we do business at higher yields just from a profitability perspective now that we are back to INR 21,000-INR 22,000 crores? Yield has started improving. If you see this quarter, it is up by 20 basis points on the portfolio level. There are competitive pressures which we cannot ignore. It might improve at a slow pace, but still, it has some more room to improve. At the ground level, have you increased yields? That's the question. Or will you increase yields, or will you keep it where it is and just run? We have. As of now, we do not have any product or any scheme less than 1.2% per month, which typically most of the gold loan companies will have 99% or 83% or so, which is equivalent of 9%, 10%, or 12%. As of now, we are not doing new loans of less than around 15% or so. We can look at the reduction on a tactical or a strategic basis, but the boarding yield itself is higher at this point in time. Okay. The other question is on Microfinance in 4Q. Is there any kind of write-back? Because when I see the provision number, it's actually quite low QoQ. I don't know. Maybe I missed something. Yeah. No, what you said is right. There are a couple of things. One is that we had a sell down to ARC, in which there are some gains or a write back. Two is we also reduced our stage three coverage from, I think, 83%- 70% and trying to bring it more realistic. These are things that have helped. How much would have been the write-back due to the ARC sale? I think INR 50 -INR 60 crores. 50, 60. Okay. Yeah. I don't have the full figure. If I see your. It should be in that range. Yeah. Okay. Okay. And even if I on your stage three. Q3, at 87.9%, we have brought it down to 70.5%. Yeah. Correct. So around 18. So that would be around INR 60 crores if you were back at 87, 88, and another INR 60 crores here, so INR 120 crores. You would still be lower than your 3Q provisions. Whereas most of the MFIs, if I see the 4Q provision, it's pretty much similar to 3Q. It's because of better experience, better recovery. Can you throw some light on that? Yeah. I mean, if you look at how it spanned out in post-October, how the collection things have improved, that's what the management overlay we had. Actually, that rollback is based on that, and that's the reason you can see the change in the provisions, what we have done. Okay. So how much? There has been INR 125 crores. Overlay, which was. Which has been released. Yes. Okay. Okay. So around INR 125 crores, that's what you said, right? Just to get the number. Yeah. That's it. Okay. Understood. It's around 50. Yeah. You're right. Yeah. Yeah. Exactly. Now it is pretty much similar to last quarter, which, yeah, that's fair. Okay. In 1Q, do you expect 1Q, 2Q, how do you expect this credit cost to trend in MFI? The credit cost, if you look at it, I mean, actually, if you look at it, as I explained earlier, whatever the lending post the guardrails, things have improved. The asset quality has improved. We are almost seeing we are at the fag end of it. If you look at our zero bucket collection percentage, also it's increased, and we are seeing the forward flow has decreased considerably. We are going to see an improvement in, I mean, quarter two will be much better. Quarter one, we may have slight thing in quarter two from onwards, we'll have a better trajectory. Okay. Venkatesh, one more question. Sorry, just squeezing it in. In Karnataka, 4Q saw a very quick recovery, right, especially in March. How have April and so far May been? Have collection efficiencies fallen below levels which you would expect normally, or they have just fallen in line with seasonality, or they are stable? How has that moved? No, there's not much of anything fallen. Maintaining, and in some states, we are seeing improvements. Karnataka has held on to whatever we had in the month of March. Okay. April is similar to March. Yeah. Yeah. How much would that be, the number? We are on. Which would have been how much? Both, we would have hit around 96% in collection efficiencies in Karnataka. Understood. Right. Thank you. Thank you so much, everyone. Thank you, Nirmal. Thank you. We'll take our next question from the line of Hitiandra Pradhan from Maximal Capital. Please go ahead. Hiteendra, can you please unmute your line and go ahead with your question, please? Yeah. So with respect to Microfinance, we just wanted to understand your. Can you put your handset mode, please, Hitiandra? Your voice is not very clear. Yeah. Yeah. For the microfinance business, can you give us your SMA one and two numbers for quarter three and quarter four, and also your gross and net slippages for quarter three and quarter four? There was slight banking, Hitiandra. Okay. Okay. I'll have a look. Also, in terms of your overall Opex, do you have any guidance of how this should trend in the first half and the second half as we sort of grow our goal? Our what? CapEx. The Opex. The C/I ratios in the first half and second half, are they going to be meaningfully different given that you also mentioned some investments that you are planning in the next side? They will not be materially different because we'll have some other cost savings also, and these expenditures will spread out. Okay. For the new proposed gold loan regulations, in case we have a sort of a falling gold prices scenario, do you see that as a big sort of an impact on your gold loan business? If the gold loan prices fall significantly, I think there'll be an impact on the industry as a whole. Okay. Okay. Okay, sir. That's all from my side. Thank you. We'll take our next question from the line of Mohit Jain from Tara Capital. Please go ahead. Hello. Can you hear me? Yes. Please go ahead. Yeah. I wanted to just have a clarification in terms of the microfinance management overlay that we are carrying of INR 125 crores. We have exhausted the entire overlay, and going into next year, we are not having any overlay left, sir? No. I mean, if you look at the thing, we have a thing of around 70 odd percent right now. Given the historical thing, we are still much ahead; we have around 7% overlay over the other thing. Okay. So because my understanding was that ECL is based on the recent data, and if I am reducing the rate last year, the losses on the ECL rate would have been much higher. It is very surprising to see because if it is an overlay, we could use it, but it is very surprising to see the model showing a lower loss rate for this year. We had taken conservatively up significantly last year. Okay. They were increased, so now they are brought back to normal levels. Okay. This is done for both stage two and Stage three because in Stage two also, we are seeing a lower rate as compared to previous quarter? Yeah. There's a slight lower rate for Stage two also. Okay. Okay, sir. And just one thing on the home loan part, you said the increases in the NPA in stage three is because of the micro LAP. How much of our home loan portfolio in the home loan portfolio, how much proportion is the micro LAP out there? What is the share? Yeah. Mohit, out of this total book which we have, it is about INR 2,400 crore. It is about INR 2,400. 2,400. 2,400. Yeah. Okay. Okay. Thank you, sir. Thanks a lot. Thank you. Thank you. We'll take our next question from the line of Ashwin Balasubramanian from Franklin Templeton Mutual Fund. Please go ahead. Ashwin? Am I audible? No. Please use your handset mode. Is it better now? No. It is very feeble. Hello? Hello, Ashwin? Yeah. Is it better now? I'll probably go ahead with my question in a little bit. Yeah. Go ahead. Go ahead. Yeah. Yeah. I just wanted to check in terms of the standalone balance sheet, your borrowing mix is much more towards market borrowing as compared to bank borrowing. I wanted to just understand last three months, what would have been the sort of sanctions that you have got from banks in after March quarter, and as well as beyond March, would you have sort of increased the bank borrowing since then? Assume your voice is not audible, but if I understand, then you're saying that the borrowing mix has changed. Yes. We are trying to reduce our dependence on the term loans, which are primarily from banks. Going forward, we'll try to make it more and more balanced. Right. In terms of the liquidity on the balance sheet, would you be sort of increasing that, especially on the standalone book, considering that the mix is also moved more towards market borrowing? Yes. In standalone, probably we'll increase our liquidity a little more from current levels. Okay. Thank you. Just to understand, with regard to my first question again, with regard to my first question, would we be in this quarter, would we have got any lines from banks since March, for example? I can't hear you. Would we have got any bank lines since March? Yeah. Okay. Of course, we've got new bank lines, and I think we've given some data on the press release also. So there's a continuous process. April is generally a slack month. Normally, people wait for the full year results, which is today. But there are quite a few things in pipeline. The bank liquidity has improved, and there's a really positive response from the bank to all our loan applications. Okay. Okay. Thank you. Thank you. Thank you. We'll take our next question from the line of Gokul Raj from Bavaria Industries Group. Please go ahead. Hello. Yes. Go ahead. Please go ahead. I'm sorry. The participant's line is disconnected. Ladies and gentlemen, to ask a question, please press star and one on your phone. As there are no further questions, I now hand over the call to the management team for closing comments. Over to you, sir. Thank you very much for all the participants and the active participation during the call. For any further questions, please reach out to our investor relations team, and we will be happy to address all your further queries in case anything is remaining. Thank you very much. Thank you. Thank you so much. Thank you. Thank you. On behalf of IIFL Finance Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.