Ladies and gentlemen, good day and welcome to IIFL Finance Limited Q4 FY 2026 Earnings Conference Call. I now hand the conference over to Mr. Kapish Jain, CFO, IIFL Finance Limited. Thank you, and over to you, sir. Ladies and gentlemen, thank you very much for joining our quarter four earnings call for fiscal year 2025, 2026. Joining on this call with me is our Managing Director, Mr. Nirmal Jain, our Joint Managing Director, Mr. R. Venkataraman. Along with them, we have Mr. Girish Kousgi, MD & CEO of IIFL Housing Finance, and Mr. Venkatesh, who's the MD and CEO of [IIFL] Samasta Finance. With this introduction, I hand over the call back to Nirmal to give you a update on the entire macro situation and the strategic elements on the company. Thank you, Kapish. Good evening, everyone, thank you for joining us this evening. Let me start with a brief perspective on the macro environment. As you all know, the Indian economy continues to demonstrate resilience with steady GDP growth, moderating inflation, and broadly supportive monetary stance. Importantly, credit demand, particularly from the retail and MSME segment, remains strong, these are the sectors which are structurally underpenetrated. In this backdrop, the NBFC sector is entering a more stable phase after a period of recalibration. The industry's focus is clearly shifting towards asset quality, capital efficiency and a sustainable growth, supported by tighter regulatory oversight and improved risk discipline. In this context, our strategy at IIFL has been deliberate and consistent. Over the past few quarters, we have repositioned ourselves in terms of the portfolio now, towards secured lending. We have exited or scaled down higher risk segments and strengthened our balance sheet. Today, we are anchored on three clear pillars or a three-pronged strategy: o ne, secured lending, dominated by gold loan and mortgages- m ortgages comprise home loan and loan against property. Two, capital efficient growth through our co-lending and off-book partnerships with banks. Three, AI-led operating model to drive productivity and risk control. We are beginning to see the outcomes of our strategy coming through clearly in our performance now. On technology front, our investment in AI are translating into tangible productivity gains, a cross lead generation, underwriting, collections and cross-sell, AI is improving conversion rates, reducing credit costs and enhancing operating efficiency. Regarding income tax, as you know, there was a search operation on the entire group. The assessment orders have been received for certain group entities. Therefore, I believe that for IIFL Finance also, the order is expected very shortly- I think within a few days or a week, we should get it. We have fully cooperated with the tax authorities, and we remain confident in our position, which I have stated earlier also, that the process should not result in any material adverse outcome for our operations or financial positions or business momentum. Now I come to business performance. Our loan AUM has crossed the INR 1 lakh crore milestone, and we ended at INR 108,000 crore of total loan assets. Gold loan continues to be the standout performer. The business has scaled strongly post normalization, with robust growth, stable yield and a very strong compliance and risk framework. This remains our primary growth engine. Microfinance is seeing a robust recovery with improving collection efficiency and stabilizing asset quality. We are growing this book cautiously with a sharper focus on quality and sustainability. In housing finance, we are consciously pivoted towards affordable home loan and mid-sized loan against property as additional product in that entity. In the last quarter, our AUM has remained flat and profitability remains subdued, partly due to higher than expected stress in our legacy Micro LAP- our portfolio. On the whole, we believe that the business is at an inflection point with new leadership, a sharper product mix aligned to our core strength and improved underwriting. We expect consistent improvement trajectory in our housing finance business as well. Overall, the quality of our loan book has improved materially. Provisioning remains strong. The balance sheet is well-positioned. As we look ahead, our outlook remains constructively positive. We expect continued momentum in our secured lending portfolio and further improvement in our asset quality, scaling up of co-lending as our core engine of growth and further gains from AI-led productivity initiatives. In summary, last few quarters have been about reset discipline and rebuilding momentum, and we are now entering a phase of sustainable capital efficient growth on a stronger foundation. With this, I hand over to Kapish, who will take you through a granular details of the our financial performance, and then we'll open for Q&A. Thank you very much, Nirmal. While our Investor Presentation and the Press Release is already on our website for you to refer, I'm going to read out some of the critical numbers for the quarter of quarter four of fiscal 2026. The consolidated profit after tax before controlled non-controlling interest stand at INR 223 crore, which is up by 24% on a quarter-on-quarter basis. We recorded pre-provision operating profit of INR 1,173 crore, which is up 80% YoY and 9% on a quarter-on-quarter basis. For the quarter, the consolidated loan AUM grew by 38% on a YoY basis and up 10% on a quarter-on-quarter basis to close at INR 1,08,180 crore, driven by gold, which closed at INR 52,581 crore, up by 150% on a YoY and 11% quarter-on-quarter basis with a healthy tonnage at 61 tons. If I need to further dissect the AUM, our core products loan AUM comprising home, gold, MSME and microfinance are up 45% on a YoY and 11% on a quarter-on-quarter basis to INR 1,04,198 crore, and this segment aggregates around 96% of our overall AUM. Healthy gross NPA number recently below to our stated number of around 2%. Our gross NPA stood at around 1.5% and net NPA of 0.7%, which is down 77 basis points and 32 basis points respectively if you compare to the same period last year. The company maintains a cautious stand on the MSME and MFI segment, while they have really recovered well and the collection machine continues to show a smart trajectory. With the implementation of ECL, our indirect provision coverage on NPA stands healthy at 93% with the largest share of secured assets that we have in the portfolio. The assigned loan book, which is coming through our partnership with the banks, has grown up smartly to INR 23,704 crore, up 85% on a YoY, 11% quarter-on-quarter basis. More importantly, interestingly, with the implementation of the new gold loaning regulations, the company is able to sail this process well with leading banks and our gold lending asset book stands around INR 14,384 crore, which is up 36% YoY, and more importantly, 9% quarter-on-quarter because the new regulation came on first of January. Our quarterly average cost of borrowing decreased 8 basis points YoY, and 25 basis points on a quarter-on-quarter basis to stand at 9.16%. If I talk about our liquidity, with the growth, we raised close to INR 28,165 crore with a mix of term loans, bonds, commercial papers, and INR 7,046 crore was raised through reassignments of loans. Our cash and cash equivalent, including committed credit lines from banks, stood healthy at around INR 6,638 crore and are adequate to meet not just our near-term liabilities, but also to fund our continuous growth momentum. We have a positive ALM, thereby improves covered FRAC- the expected outflows across all buckets with net gearing standing at around 3.8%. A healthy trajectory, with our annualized ROE for quarter four standing at around 18.59%, similar to what we have reported in the previous years, and more particularly prior to FY 2024. We are moving towards that, and the ROA stood at around 2.79% for quarter four. Our basic earnings per share for the quarter was 13.8%. Capital adequacy has stood well, with standing at around 17.8% for the NBFC, HFC at 42.1%, and Samasta Microfinance at 26.6%, each of which are well below the minimum threshold of 15%, reflecting our successful movement with the off-book model that we hold. With this, I open the floor for Q&A. Thank you very much. We will now begin the question and answer session. The first question is from the line of Yash from Dante Equities. Please go ahead. Yeah. Am I audible? Hello? Hello? Hello? Yes, hear you. Yeah, yeah. Go ahead. Am I audible? Yes. Yes, you are now. Please go ahead. Yeah. First I want to know what's happening with the special audit, the income tax special audit? The special audit got over long back within 60 days of given period. No- We are committed to it. The special audit report is submitted to tax authorities as an input for their assessment. By when will we kind of understand the impact of this report? Because there are some speculative reports talking about INR 300 crore-INR 400 crore. I think I can't respond to speculative reports. Because, you know, the entire group- a ssessment orders have started coming. Quite a few group companies assessment order has come. I believe that in a few days' time, our assessment order will also come. It's just matter of few days. Could you elaborate on the impact? This is a typical tax, norm, like this year. Sorry- The outturn would have been considered a normal case. I'm sorry, I couldn't hear you. Could you repeat please? I think our the tax assessment is expected. Okay. You know, the group company already started getting the assessment order, so the process is going at a full good speed. Our IIFL Finance also, we should be getting our assessment order in a few days' time. That will be like conclusion of the assessment process. Right. Will we be paying the assessment order or will we be kind of ask for a review or will we appeal for this? How does that work? Actually, it's, in the, it's appealed against- b ecause, if there's any assessment order asking us to pay more tax, we'll appeal. We'll go for appeal because as I said in my opening remarks, we believe that we don't have any tax liability arising out of any, you know, tax evasion or not paid tax. That's not the situation. Like in our group companies also, the demands are not on strong ground. If they have any demand, we will appeal against it. Right. My next question is regarding your gold finance business. Yeah. Under the assumption that the gold prices kind of stay where they are and consolidate here, what kind of AUM growth are we going to see for the coming year? I think if they remain here, we should see AUM growth of around 20%-25%. Right. Is there any anything happening with IIFL Home Finance demerger? We've been talking about this since two years, but it's always gotten, you know, to the next quarter or to the next year. I want to understand, are there any triggers here? Is there anything happening with regards to the demerger of IIFL Home Finance? Well, I think - I don't know for two years. I mean- we never said that we are. No, there's been rumors about separating this, but anyways. Look, I'll tell you what. In IIFL Home Finance, we have another private equity investor, ADIA. Obviously, they need exit, and there'll be a- t he most elegant way to get it listed separately and give exit to private equity investor is through a demerger. If more than 25% holding is public, it automatically gets listed. The way we had done in 2019, if you remember, our consolidated entity had Wealth, Finance, and Securities, now IIFL Capital. Right. It's a process. You know, I think this is something which we'll have to take a call at board level, and I don't want to speculate about it. At this point in time, as we said that, you know, IIFL Home Finance business has pivoted, reoriented its strategy. You know, once it stabilizes, we'll look at it. There's something- y ou know, I really it's a board's call, but it will happen sometime, but maybe I can't give a timeline for that. No, of course. I'm not expecting a timeline, but I just wanted to understand that is this something that you're looking to do? I'm not saying this year or next year. I'm just asking is this something you're looking to do? This is, yeah, definitely an option for us. Right. The standalone business and the home finance business separately, right? Samasta will stay as it is. No, even Samasta can get separated. There'll be, if the demerger, there'll be three entities. Okay. Okay. Just to clarify, if you demerge, you'll demerge into three entities, right? Yes, sir. Okay. I'll just come back in the queue. Thank you so much... Sure. ...for your time. Thank you. Yeah. Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Yeah. I'm audible, sir? Yes. Yeah. Thank you very much for this opportunity, sir. Just on the, on this demerge, is there any timeline? I mean- w hat should one look at? I mean, by when, this we can, we can execute or something like that? No, I mean, I don't think we can give any timeline because this is not something. The board has to decide. The boards of respective companies have to decide on that. This is something which actively we are looking- w ould that be a right assumption? No. See, no, there's nothing. You know, I'll tell you what. When we had done demerger of our consolidated entity earlier, there's nothing actively looking at it. You know, you take a decision and you start the process. Okay. Okay. Understood. Understood. Fair point. On this, the special tax audit, now, you mentioned the audit is all done and I think shortly you expect some orders or some assessment to come out. Would, is that right? That's right. Okay. I mean, any expectation we have? I mean, it went well and you did mention that we should not result in any material adverse outcome, right, for the company? If there is any demand assessment like in our other companies, 360 One or IIFL Facilities, you know, they have raised some demand, they'll be contested and we'll go against appeal because we believe that those demands are not tenable. Okay. If there's a demand, go against it. We'll go and appeal against it, yeah. When I say I don't expect any material adverse outcome because I know that we should not have any additional tax liability. But if for any reason they make a demand, we go to the appellate authority or CIT appellate authority, where whatever is the appropriate authority, and seek justice from them. You know, in any way, for a company of our size, there are a lot of tax matters which are under litigation, which, you know, as you know, that there's an insurance overriding commission and many other things which are also under litigation. That's a normal process. Okay, I got it. On the FY 2027 next year, now AUM growth of 20%-25% we are looking at. What sort of credit cost and ROA the range that we might be looking at? Credit cost, you know, this year, if you remember, we had given a guidance of 2.7% to 3%. Next year, our credit cost on the whole will be around 1.5%-1.7%. What sort of ROA we are looking at? Again, that will depend on growth. You know, that 2.4% ROA- I think it should end at 3%- 3.5%, but one can work out the numbers based on assumptions of growth or, you know, the way, and the credit cost. See, significant decline will happen with credit cost because we see 120 basis point- 130 basis point decline in credit cost. That goes to the bottom line. That is one, and that will straightaway improve the ROA also to that extent. Correct. When we say this ROA, that is on AUM, right? Including the- I mean, when we say the credit cost, that includes the assignment part as well, right? No, no. non-AUM? credit cost- Yeah. No, no. The assignment part losses don't come to us. Hello? Yeah, yeah. Fair point. What goes off-book, there only whatever remains in our book, maybe 10% or 20%. That is the thing that comes. Credit cost is based on the loan book and not the entire rate. credit cost is based on your book, I mean, your loan book on balance sheet, right? That's right. Okay. Okay, understood. Okay. That's very helpful, sir. I would like to wish you all a good night. Thank you, Deepak. That's it from my end. Thank you. Thank you. Thank you. Participants who wishes to ask a question, please press star and one. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Okay. Hi, Nirmal. Thanks for the opportunity. Just a quick question on the gold finance. The new regulations are in place from the 1st April in spite of the appeals from the banks and NBFCs. How are we addressing that? Are we going to categorize all our gold loans as consumption loans? Are we going to look at the underwriting part of the gold loans and do the other kind of gold loans? What is the new strategy here? What kind of gold loan growth are we looking at in 2027? The other NBFCs, there are new entrant NBFCs as well? My sense is that there will be a huge distribution footprint that a lot of these new NBFCs, including incumbents, would put out as there is, one doesn't need any regulatory approval to put out any new branches anymore. How are we going to address all of this in the gold finance piece? If you can elaborate on that, it would be really great. Second and third is basically, if you could clarify on the previous questions on Home Finance and IIFL Samasta demerger that you just spoke of, and also the previous clarification on the appeal for tax audit, if there is any adverse. Thanks. Okay. First is the new guidelines. Basically, fully complying with the new guidelines- loans above INR 2.5 lakh, they want, you know, the credit assessment to be done and the loans to be monitored. We have set up our system and detailed credit assessment is done for all the loans above INR 2.5 lakh. I think, you know, that in a way is good because companies like us who have, you know, good systems, processes and are trained people, then, you know, we can tap this market. That's the first question that you asked. I think, you know, that is fully in place. Our system process are working. Most of these loans are entirely there for MSME purposes. So typically these are small businesses who borrow, in our case, the predominant part of loans above INR 2.5 lakh. Two, Two, I think, you know, I already clarified about the demerger, that this is something which is decided by the board and shareholders. I can't speculate on it. I already said that in my opinion, this is a logical thing to do given that there's a strategic investor in our housing finance company. But when we'll do it, I don't think, you know, whenever it happens, we'll obviously communicate to you, communicate to exchanges, but there's no reason on this at this point in time. Third is about income tax. S o income tax authorities basically do the assessment and they will send the order which we are expecting in a few days time. I'm expecting in a few days time because entire group search operations happened together, everything happened together, and now the orders have started coming. We have seen that they've come for 360 ONE, IIFL Facilities, IIFL Management. All the companies are getting their orders. Whatever we, you know, hear and we understand that this entire process will get over the next few days time, maybe next few working days. Give a week or so maybe. You know, that's my personal opinion. Obviously, these are all, you know, there's no firm guidance on this. Should happen very soon. That's what I believe. Just one clarification, and if you can also give a guidance for the gold loan growth. The clarification is on the, you said that our gold loans are for MSMEs. We are going to classify these as income assessment. In that case, as per the new guidelines, we will have to assess the cash flows of the customers or are we going to classify them as consumption loans? No, you are right. We have to do a cash flow assessment and our branches are already doing that. Okay. We will classify them as income assessment, income generation loans... ...sustaining and moving towards this. What will be the guidance for 2027 for gold loan growth? Okay. Somebody asked this question earlier. The prices remain at level- similar level, what they are consolidated, you know, in the current level. We should see 20%-25% AUM growth. Is it 30%-35% or 20%-25%? 20, 20%-25%. Right. Thank you so much. The other thing that has happened is that RBI has freed the branch expansion. You know, as our business motto has always been to get into underserved segments where the banking penetration is relatively poor. You know, when you say banking penetration, many times you see the bank branches are there, but they are mostly focused on deposit, and they don't have infrastructure for loans and particularly gold loans. Many of these small customers, you know, their creditworthiness or their income documents are just such that, you know, they really can't borrow. You know, any other type of loan. We are setting up, maybe now we are free to set up more branches there and penetrate deeper. I, you know, I think that's the guidance that we give. Wonderful. Thank you so much. I'll come back if we can. Thanks. Thank you. The next question is from the line of Parag Jariwala from WhiteOak Capital. Please go ahead. Yeah. My first question is, you know, the subsidiaries or group companies which received the tax assessment order, were they also subject to the special audit or it is only for us considering maybe size or nature of the business? No. Yeah, they were not part of special audit. Special audit was only for Golden primarily. Okay. Nirmal-ji, do we have an access to that audit report or it is directly submitted to the tax authority? No, we had access to the report, but it's submitted to tax authorities. Okay. Special auditor discusses with us. Okay. Okay. Understood. Secondly, in terms of the off-book, you know, which is in the form of DA and co-lending, do we I mean, what's the intent of, you know, proportion we would, which we want to keep as an off-book AUM? Between the DA and co-lending, is the proportion going to change in the favor of other? Reason I'm asking is there is some changes in the co-lending mechanism by RBI. Any comments you want to offer there? RBI has formalized and, you know, set very detailed regulations and procedure for co-lending. In a way, that's good because there are certain things ambiguous that, you know, you always won't know how to deal with it. If everything is black and white and precise, then, you know, you know the way to follow these rules. The total off-book proportion, which is DA and co-lending put together- w hich is 34%-36% in that range, our endeavor will be to take it to 40%-45%. Within that, co-lending also has been growing relatively, and we think that co-lending should grow even further. Co-lending has become a very formalized and a very well laid out process. We would like to let the co-lending grow faster. If you see the slide, it also shows that the co-lending has been growing in our presentation if you see, the slide nine, which was 6%, you know, 15%, 14%, 13% or so, it's in that range now. We would like it to grow to 20% or so. Okay. Okay. Thank you so much. Thank you. Thank you. The next question is from the line of Chirag Singhal from First Water Fund. Please go ahead. Yeah. Regarding the special audit, what is the typical timeline till, you know, from the conclusion of the audit till you receive the final assessment order? No, there's no timeline that tax authorities have, because- n ormally, all the groups' tax, you know, they'll do it together, you know. That's what my understanding is. There's no timeline, I'm not aware of any timeline. Okay. And, one of the earlier participant mentioned a rumored tax liability. Are you expecting such high tax liability? We have been mentioning that, you know, nothing material should come out of this special audit. So I've said- What is the expectation? This is not final, but it is adverse outcome. The demand, whatever it is, will be contested. I have absolutely no idea of what is actual demand going to be. If you see most of the searches that have happened in other companies, typically they will raise some demand and then that gets basically appealed. In most cases, settled or removed. Okay. On the growth trajectory for the housing finance book, what are we expecting for the current financial year? Girish, is here. Maybe, you know, you want to talk about it? Yes. Okay. Growth trajectory he's asking. What we have done is, you know, we have re-categorized our strategy depending on the mortgage landscape. The focus going forward will be on affordable and emerging. We were doing affordable earlier also, and I think going forward, we will do more of affordable at a higher scale. In terms of growth, we are expecting a book growth of about 18%- 20% in FY 2027, and disbursement growth would be about 25.7%. 18%-20% growth in the advances. It's a low, 18%-20% in the loan book and 25% in disbursement. There can be some balance transfers and prepayments also, so that is what is, that is what the guidance for home loans is? AUM growth of 18%-20% and disbursement growth of 25%. Got it. Okay. That would be it from my end. Thank you. Thank you. Participants who wish to ask a question, please press star and one. The next question is from the line of Vansh Solanki from RSPN Ventures. Please go ahead. Mr. Solanki, please go ahead with the question. Your line is unmuted. Hello, am I audible? Yes, you are. Please go ahead. Yeah. As we discussed then, and also you told that the IIFL Home Finance and Samasta needs to be demerged, and it is a very logical thing here. I just want to understand your point of view- I know that it will be a board's decision, but in your point of view, what will be a better way to demerge a company? Like, while we have done the IIFL Wealth and IIFL Capital years ago and completely demerged without any cross-holding, will that be a better way or just we will IPO out the Home Finance and Samasta? We were saying that need to demerge, but I think, yeah, that will be a similar way what our earlier way we have done, you know, the demerger. That's the most clean way of doing demerger that the subsidiary shareholders get the shares in the similar economic interest, and then, you know, the parent, the listed company shareholders get shares of subsidiary in the same economic ratio and it gets delisted separately. Okay. Yeah. Okay. Thank you. That's all my side. Thank you. Thank you. Thank you. Ladies and gentlemen, to ask a question, please press star and one. Anyone who wishes to ask a question may press star and one now. Participants, to ask a question, you may please press star and one. Yeah, there are in the queue I can see the questions, so you can pick them up. Yes, sir. The next question is from the line of Navneet Bhaiya, an individual investor. Please go ahead. Hi, sir. Congrats for a good set of numbers. I have just one question. Your leverage level has increased meaningfully this year. Obviously, it's following the growth. What are you thinking about leverage, capital raise? I believe if you want to continue growing at +20%, you would need capital. Yes. There are, as I discussed, our strategy of growing core lending and off-book faster, will probably keep the leverage also under control and meet the capital requirement also. At appropriate time we can raise capital by the debt capital that we can even raise periodically. Equity whenever the, of course, the time is right, we'll do that. Without that, I think if we can grow our core lending of DA to targeted level of 40%- between 40% and 45%, we are safe in terms of our leverage as well as the capital. Sir, what is the leverage ratio that you would be comfortable with, in your books, in your consolidated books? Four and half times is okay. You know, I don't think up to four and a half times is any challenge. Typically, you can go up to 6.7 times, you know, based on the capital density. Actually, equity requirement is 10%. You can go 10 times also, but less than 5 up to 4.5 Is good. Okay. Understood. Thank you so much. Thank you. Thank you. The next question is from the line of Pranay Shah, an individual investor. Please go ahead. Hello. Sir, my main... Yes. ...my question is on the tonnage growth. We've seen around 1% growth on the QoQ basis on the gold tonnage. Like, what has led to this tonnage growth? And secondly, when we are expecting a 25% year-on-year growth, that will be purely on a tonnage basis, you are saying? Or, like, and how are we planning to achieve this, like the roadmap for it? See, our tonnage growth the previous quarter was better, stronger. What has happened is this that, customer requirement of loan basically is really not dependent on the price as such. Whenever the gold prices go up, then- this you will see with other gold companies also- you have probably seen some decline also there. Your customers keep only as much gold as required. The demand for credit is there, and sometimes tonnage will follow that. If they can meet their credit requirement without giving extra gold, they'll do that. When the gold has to be given, that will be done. It's not really linked to that. That is one. Two, we'll also be expanding our branch footprint a little. I mean, last year we did not, but now we may. This year we will. Not aggressively, but, you know, just to make sure that we keep the growth momentum up. Okay. Thank you. Thank you. The next question is from the line of Yash from Dante Equities. Please go ahead. Yeah. Just a continuation question on the net gearing ratio. We've seen that Samasta and Home Finance, both of them have actually operated on IIFL Home Finance especially has operated on quite low leverage, like 2.6%- 2.7% net gearing ratio. I just want to kind of understand when will the ROE and ROA pick up here? Because we've just reached single-digit ROE in IIFL Home Finance, right? You've done very well historically. You guided for 18%, 18%-20% growth, IIFL Home Finance. I still want to understand the ROE and the ROA movement here. Yeah. Good question. Actually we raised equity in Home Finance two, three years ago, and the book has not grown because, you know, some of the businesses, particularly microfinance and all that we discontinued. Therefore, you know, the leverage has also fallen, and that has also impacted our ROA, ROE. This year, as we said that as we grow our disbursements and our loan book and loan AUM, then these things will start falling in place. Which segment are we targeting to get this 18%-20% growth? Girish? We predominantly focus on affordable and emerging. As we had confirmed earlier, we have shut prime business because of margin. We currently have about 94 branches focusing on emerging and 221 branches focusing on affordable. We are also increasing our branch network on the affordable side. We plan to open about 100 branches this year in a phased manner. We have dedicated branches for affordable and emerging dedicated teams. We are also pivoting towards higher yield. We were doing affordable business earlier also, but we were doing at a lower yield. Now we are pivoting towards higher yield, which will be to start with about 12%+ this year. Going forward, we'll further up the yield in line with the market. This is what we are planning. As mentioned earlier, we plan to grow at about 18%-20% on AUM this year. On book also it is almost similar. On disbursement it will be about 25%-27%. Two things are happening. One is very clear strategy and focusing on affordable and emerging, where we have an opportunity of higher yield. Number two, upping the yield both in affordable as well as emerging. Just a question on your strategy to focus on affordable housing. Hasn't premium real estate outperformed affordable housing in the last four-five years, especially post-COVID? Also on the yield part, I think our yield is around 10.55%, right- i f I'm not mistaken, in IIFL Home Finance. Yeah. On the aggregate basis. Yeah. Yes, you are right. You are right. So are we... So by, let's say- Yes- ...by next year, where are we looking for the yields to move towards from 10.5% to where? Prime market has outperformed, luxury segment has outperformed the affordable in last two years. That's a fact, because interest rates were slightly aggressive. That is not our sweet spot because that is at a very low interest rate, 8%, 8.5%, 7.5%. It can start based on AAA, but still, it is at a much, much lower rate. On the contrary, affordable may not, I mean, has not probably grown very strongly in last two years, but there's an opportunity there. Girish, you want to add something? Yeah. If you look at the overall mortgage industry, the growth is about 13%-14% for last four-five years' time. If you look at affordable per se, the growth is about 18%-20%. Further lopsided is that the super luxury market has really grown, but that's a smaller 2% of the market, the Bombay and Gurgaon. That has grown very rapidly. Yes. That is an exception. Yeah. If you look at overall, you know, the growth in affordable is much, much higher than all the other segments. We see a lot of opportunity in affordable, given the backdrop of government focus on affordable with PMAY- 2, which specifically focuses on interest subsidy scheme, which was launched last year October. This time, this scheme would ensure that customer on book would be there for a longer time because there is incentive if customer stays with the company for five years. The customer attrition would come down, number one. Number two, this would largely improve the repayment behavior of the customer because one of the asks is that customers should be current and non-delinquent during the entire period of subsidy time, which is five years, because government would pay subsidy in five annual equal installments. All these things would ensure that affordable, as a segment would, grow at the same pace or maybe slightly higher vis-à-vis compared. Of course there are certain pockets in certain segments, you know, which is luxury and super luxury in certain markets, the growth could be higher. At a aggregate level, you know, there's lot of opportunity on the affordable side and to a greater extent on the emerging. Just putting on a point here. Why aren't we focusing on LAP loans? Through my personal experience, I can tell you that LAP loans have a higher yield than, you know, housing loans. Are we... Yeah. ...planning to focus on LAP loans going forward? Absolutely. I think we'll be focusing on LAP both on affordable as well as emerging. You know, we are completely out of prime as a segment, we would focus on LAP. Today if you look at the overall AUM, our LAP mix is about 18%. 80% is HL, 18% is LAP, the rest is construction finance. 18%, if you look at the mix, it is quite low, there's lot of opportunity. It comes at a higher yield both on affordable and emerging. Our focus is very clearly there on LAP as well. Yeah. You know, just to one quick thing. Yeah. Earlier it'll be Micro LAP is a INR 3 lakh-INR 4 lakh of loan to microfinance customer that we discontinued. Now, when we say affordable LAP is typically about INR 13 lakh, INR 14 lakh, INR 15 lakh of LAP similar to our, you know, what our home loan customers are. Which is adjusted may around 16%-17%, right? Right. No, see, there's one- Yes, that's a great business to be, I mean, that's a good business, and we are there in that business, yeah. No, like sir pointed out, we have an 18% exposure to LAP. If we want to focus on higher-yielding products, and, you know, get our yield higher from 10.55% because 10.55% is basically like a very low yield for a housing NBFC, right? There are a lot of obviously LAP as an opportunity is big and LAP in terms of ticket size also is pretty huge, at least in metro cities, right? The only thing I kind of wanted to point out is our leverage in the home finance business is quite low now, and I really hope that your AUM growth to LAP or affordable housing or premium prime loans or emerging loans kind of picks up this year and we again move back to the double-digit ROE. Do you think that is going to happen this year? Yeah, that will happen- t hat should happen. What you're saying is right, that this is affordable will grow faster. Girish has got a team and things in place, which is, you know, in last few months we were just trying to get that in order. Hopefully, what you are saying is the correct strategy to work on. We are working on that strategy. Let's see. Right. As far as IIFL Samasta is concerned, I just wanted to understand which segment are we going to focus from here onwards for this year- for this financial year? Venkatesh is here. Samasta is taking this decision. See, in terms of, we want to get back to our AUM where we let off in March 2024. That will be the key thing. We're cautiously growing and in terms of the card rates have been working well. Within these parameters, we are looking at how we can retain our existing customers and grow our book within the geographies we are already operating in. No, my question was regarding the segment, right? We've been growing in the MSME, I think. I wanted to understand if you're focusing on t he individual or group loans or, you know, what kind of unsecured loans are we going to focus on? No, no. If you look at it- see, we have, the qualifying assets need to meet a criteria of 60%. Our key growth driver would be the microfinance loans. Our Micro LAP would also grow. We will be growing overall on around 20% forward. I mean, within the things, Micro LAP is the only thing which we are other than the microfinance which we are focusing on actually. Right. Your average ticket size in these loans are going to stay here. I think it's around INR 68,000 per loan. Or is it going to move upwards? Where are we seeing this, kind of, you know, sustained average ticket size? Average ticket size in our microfinance is around, when we are lending, it's around INR 68,000, but in our Micro LAP, it's much higher. Is it around, is it upwards of INR 4 lakh-INR 5 lakh? It's around INR 4.8 lakh. Right. Okay. Thank you so much. Yeah. Sorry? Slide 33 has been taken in detail. Understood. Thank you. Thank you so much for taking all my questions. Thank you to the entire team. Thank you. Thank you. The next question is from the line of Gaurav Khandelwal from JP Morgan. Please go ahead. Yeah. Hi, good evening. Thanks for taking my questions. If I can just understand a bit more on the mortgage loans. Number one, why was the growth almost kind of muted at INR 32,000-INR 33,000 crore in FY 2026? How are we thinking about it going forward? The other part of my question is how are we looking at competition in this space? The competition is always tough, but do you see the competition accelerating? Especially from where I'm coming is- that some of the other companies- housing finance companies like Bajaj Housing, PNB Housing, they've been actively entering the the affordable and the lower ticket size near prime housing, which is in the INR 15 lakh, INR 20 lakh, INR 25 lakh zip code. Do you think that the competition incrementally tightens further and, how, what are you trying to do to mitigate that? Those are all my questions. Thank you. Let me take the second and third question first. One, talking about growth, as I had mentioned earlier, we plan to grow from this year onwards, and the guidance what we have given is about 18%-20% on AUM on the book and 25%-27% on disbursement. If you look at competition, what is to happen is that amongst all the four segments which is there in the mortgage business today, which is super prime, emerging and affordable. Largely, housing finance companies were focusing on affordable and emerging to a small extent of prime. We took a decision of not getting into prime because to start with, you know, we will have a challenge on margin and after a year, a year and a half, we would have, you know, customer attrition. Right. What has largely changed? If you look at any affordable company, once they reach a particular size, growing the book, you know, was a challenge. Going forward, this has eased out. You know, as I mentioned about the lock-in, which is there for five years on the interest subsidy, this is a large thing. I mean, this is on home loan and most of the loans, you know, depending on where we want to focus in terms of segment and geography, would fit into interest subsidy. This would ensure that, you know, we'll be able to retain customers on book for five years from now onwards, which was earlier about 12-18 months back. Once we onboard the customer in affordable segment after 12- 18 months, because of the pricing difference, customers would switch from a company focusing on affordable to company focusing on emerging because, you know, customer would have upgraded in terms of bureau score and customer would get a lower rate and therefore BT outs were higher. Going forward in affordable, BT out would come down given the backdrop of interest subsidy and all. Number two, if you look at competition is there. It was there even 10 years back. Last five, six years also there's competition. The only point is the market is huge. Affordable market is huge, right? Today, if you look at, there are not more than seven to eight big companies in affordable who are actively doing business. There are, you know, another 80-plus other companies, but they're, you know, very, very small. The book is very, very small. Opportunity is huge. The earlier the challenge was growing the book was not a challenge. Customer retention, book retention was a challenge. Now there is a solution for that thing. As long as we get a strategy right in terms of geography, segment and pricing, I think book retention won't be a problem. In terms of competition, huge opportunity and we don't see any challenge at all in terms of growing the book. Answering on the last point. If you look at last year, our disbursements and book growth was muted. I think earlier we had said that early user into micro and LAP, and that had a lot of overlap on the MFI customers. We all know that in, I think last two years- two years back, the issue, the challenge started in MFI industry. Of course, now it is almost recovered. Last two years, since some of the customers there was an overlap between the MFI business as well as our Micro LAP. We also faced a challenge. We had to rework on a strategy which we have done now. We have exited that business and we don't intend to be that business going forward. That is one big reason as to, you know, why, you know, the growth was muted. Now we have worked on our strategy and going forward you will see growth happening in IIFL Home in line with the industry. Got it. Thank you for that. That's very helpful. If I can just ask, for your short-term borrowing at the shorter end of the curve, how are the money market rates behaving today for you, versus, let's say, the fourth quarter average, if you could give us some sense? You know, when the war broke out, the last month, the rates had shot up and liquidity became very tight. It's normalizing now very soon. I think, you know, as we speak, rates are coming back. In between maybe month of March and April, a bit of aberration and maybe April first half at least. Things are getting back to where they were and what we see that the rates are trending down. Many times a function of liquidity rather than the benchmark rate. What we see is that, you know, the RBI's monetary policy has been pretty pragmatic in terms of managing liquidity. We see that things are getting better. Got it. Thank you. That's very helpful. Thank you so much. Thank you. Thank you. Thank you, Gaurav. Thank you. The next question is from the line of Murli Khandelwal from Murli Khandelwal Equity Research. Please go ahead. Hi, sir. Hi. Can you share the roadmap of improving standalone credit rating and how that translates into reduction of cost of funds? Sir, can you speak little louder? What would be the estimated impact- Sorry, sir? Your voice is little, muffled. What is that- c an you repeat please? Yeah. Can you share the roadmap for improving standalone credit rating and how that translates into reduction of cost of funds? Okay. Thank you. A roadmap for standalone credit rating, when we have been talking to credit rating agencies, one of the criteria they have are size and maybe INR 1 lakh crore is a good benchmark, that we have crossed. Two, you know, obviously they look at the profitability and the capital adequacy. The roadmap to improve that, i.e., you know, let's focus on profitability, focus on asset quality, which you see that our asset quality has improved significantly. GNPA bumped by 5%, way below our guidance of 2% and less. Our NPA around 0.7% odd, which again is pretty, you know, healthy. Now, I think the only one thing that we need to work on is our capital adequacy, which, you know, either we improve our co-lending, and off book significantly or we raise capital. Besides that, I think, we are on track on many other criteria as I spoke, that is the size of the business, asset quality and profitability. Okay, sir. What would be the estimated- Now, see, we are double A stable and we are two notches below the best. They can be AA A, they can be A A+ and A A. Obviously, you know, our first step will be A A+. You know, I believe that our cost of fund can go down easily by 100 basis point to 220 basis point- you know, once the rating improves. Okay. Sir, what would be the estimated impact of a one notch upgrade on borrowing cost and profitability? Very, very difficult because that depends on rating agencies that take a call based on the macro environment, sector view and everything. Obviously like anything like geopolitical, inflation, crude, weighs on their mind for the sector. You know, really this is not a question that I can answer correctly. Okay. Thank you very much. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to management for closing comments. Thank you very much, ladies and gentlemen, for joining this call late evening today. For any further queries, we are available and you can drop an email to our investor relations team and we'll be happy to answer. Thank you very much and look forward to meeting you again soon. Thank you so much. As Kapish said that, you know, anything else you can always reach out to us by Investor Relations. Also the data book which has got very detailed excel sheets about, you know, all the relevant data, you know, that can go into any detail that you require. Thank you so much. Good night. Have a good day. Thank you very much. Ladies and gentlemen, on behalf of IIFL Finance Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.