Ladies and gentlemen, good day and welcome to IRFC Q1 FY 2025-2026 earnings conference call hosted by DAM Capital Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Parth Jariwala. Thank you, and over to you, Mr. Jariwala. Thank you. Good morning, everyone. Welcome to the Q1 FY 2026 earnings call of Indian Railway Finance Corporation Limited. From the management, we have with us Sri Manoj Kumar Dubey, Chairman, Managing Director, and CEO, Sri Ranjit Sahai, Director of Finance and CFO, and other senior management with us. I'll now hand over the call to Sri Manoj Kumar Dubey for his opening remarks, post which we can open the floor for questions and answers. Over to you, sir. Thank you, Parth, and very good morning to everybody. Delhi today has got a very good rainy morning. It's very pleasant, and incidentally, it's Maha Shivratri also, so it's a very auspicious time. We are also happy to supplement it with good numbers that we came out yesterday evening. As you know, all the key parameters have shown good positivity, few in a decent manner and few in a steep manner. In fact, the top line has grown in a decent manner, and the bottom line has grown in a steep manner. We'll discuss that in detail when we do the Q&A session. So I'm joined here with my Director of Finance and CFO, my Head of Business Development, and other key senior executives. As you've seen from all the numbers that we have published, we are walking the talk of what we started two quarters back in Q3 of last FY. As you are aware, for the last two FYs before the beginning of this FY, disbursement to Indian Railways or, in fact, to any of the entities were nil for this company. So that was a little lull period so far as disbursement was concerned. And we embarked upon our new journey that we call IRFC 2.0, where we started looking for diversification within the whole of the railway ecosystem, not limiting ourselves only to single client in the Railways. Well, that was a new move in the history of the last 40 years of this company, but I'm very happy to share that the team IRFC, a strong and small team, I can say they rose to the occasion. As you see today, in the last six months or so, we are sitting over a healthy order book of more than INR 25,000. Disbursement has started. Q1 has shown decent disbursement of nearly INR 3,000, but we'll discuss in Q&A how we have got the plan in place that, as per our guidance that we gave in the beginning of the FY, our disbursement will see a kind of acceleration in Q2, and we'll be doing more than what is required to be done in H1. We continue to secure the lowest cost of capital among peers, and true to our ethos, we are sharing this benefit directly to our customers. As you know, our overhead cost is also minimal in the whole ecosystem, so this competitive edge strengthens our balance sheet coupled with zero NPA and stable cash flows. This literally sets us apart in the ecosystem. We are just not giving a very attractive pricing, but we are fostering a true partnership for a longer period. So this company, unlike other NBFCs, will be seeing minimal or very less prepayment. That is something, a kind of ethos that we are going to put in our system. If we are going to make some partnerships in terms of lending and borrowing with any of the partners, it has to be a long-term win-win scenario. This is going to give us the edge, the kind of query that we are getting from all over, all the CPSE, state government, metro railways. We are really excited to have those kinds of queries. In fact, the team is working overtime with the kind of inflow of the customers, which is, for any company, something which is very, very rosy. People are happy to work extra for garnering more of the business. At the same time, with cuts of repo rate, there is a pressure on the kind of margins that the whole ecosystem is garnering nowadays. We are comfortable for the fact that our overheads are lowest in the ecosystem, so it hasn't affected us much. But yes, we are not only competing with NBFCs per se. We are competing with every efficient bank of the country, and that gives us a very interesting proposition that how IRFC positions itself, not only competing with the NBFCs but also with the banks for arranging cheapest kind of resources in terms of the funding to anything coming in the whole-of-government approach. And when I say the whole-of-government approach, the private entity fits in the manner that if any private entity is entering into any kind of joint venture or any kind of PPA or any kind of concession agreement with the government, for us, they become a government entity. So the pie is big, the team is set, and we are looking forward to quarters coming every time when we walk our talk. And the motto of the company is that every quarter should be better than the last in terms of top line, bottom line, and all the financial parameters. So now we are open to question-and-answer sessions. Thank you. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Raghu with Creaegis Capital. Please go ahead. Hi, good morning. Thanks for the opportunity. Please excuse me if I'm missing out on something. My question is regarding how is our cost of capital at 5% because the government bond yield itself is 6.3%, 6.2% right now. How are we able to achieve this 5% of cost of capital? No, who said 5%? I think there is some confusion regarding it. From where do you want the 5% numbers? Yeah, because the total borrowing is around INR 414,000. Per quarter, we are paying an interest outgo of around INR 5,000 crore. So it makes INR 20,000 crore per year, right? So. It's not about 5%. It is because of our business model. We fund two types of assets. One is the project asset, another is the owning asset. So the major portion of the project asset, around INR 2 lakh crore, is still to be. We have to execute the agreement for these assets. And whatever interest cost we incur for these assets, it will be added to the loan amount, and it will get capitalized. So accordingly, it is not getting reflected in my P&L. That is why you are getting such a low number. Otherwise, my cost is around 7%. Oh, cost of capital is around 7%. Okay. It is overly around 7%. As you know, that was the accounting system that we have with the railways where the projects are having a moratorium of five years. Okay? Okay. Till the time the agreement is not signed and the moratorium period is going on, then it is all accruing interest, and later on, it is transferred into the capital when the agreement is signed. This is what my BD head was telling you. So far as cost of capital is concerned, yes, it is hovering around 7%, but it's still cheaper than what others are getting in the market. Okay. And just one more question I have is, we have the presently, there is no corporate tax for us for our company. So generally, what is your view? What is your view of how long can this continue? Is there any indication or something which you have saying it can come sometime in the future? So I can only assure you that next five to six years, we did not talk about it, and that's a longer period. So let's talk about it somewhere in 2030. I hope I answered your question. Yeah, yeah. It's answered. Thank you so much. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Mohit Jain with Tara Capital Partners. Please go ahead. Hello. Can you hear me? Hello. Yeah. Hello. Hello. Yes, yes. You are audible. Yeah. So just to be sanctioned disbursement, we have a sanction, and I think our annual target is to disburse around INR 30,000 crores. You have hinted so far; we have disbursed INR 2,500 crores. So sir, we. No, you are not audible clearly. Hello. Can you hear me now, sir? Yeah, but it is getting dimmed in between, so be near to the voice. Yeah. I am okay. So I'm moving to a better place now. Can you hear me, sir? Yes, yes. Yes. Please go ahead. Yeah. So I'm saying, sir, we had a guidance of we said initially that we have a INR 60,000 crores disbursement sanction target for the current year, and we plan to disburse around INR 30,000 crores in the current year. And I guess you hinted that so far we have disbursed INR 2,500 crores of loan. So how should we look at this number going forward for the entire year? That's a good question that had come to your mind looking at the numbers. The factual position today, I'm sitting over nearly INR 25,000 crores sanctioned projects, right? And a few more big tickets are in pipeline. Now, out of the INR 25,000 crores sanctioned projects, you rightly mentioned that in Q1, we disbursed around INR 3,000 crores, which is pretty low in terms of the total target of INR 30,000 crores. But the key here is that out of the INR 25,000 crores that we have sanctioned, many projects are of refinancing nature. Earlier, we were funding only to Indian Railways, not to even the SPVs of the Indian Railways in the ecosystem. They had very high-cost loans on the banks. So all are coming to our kitty now. So all these loans are sanctioned, and they are in the process of disbursement. And as you know, in case of refinancing, the whole amount is disbursed in one go. So the answer to your question is this: that by Q2, we expect that we'll be doing 50%, half a mark of what we have given the guidance for the whole year. Maybe we can exceed it also, even if we don't. But even if we don't, we are quite pretty sure that by Q2, with these kinds of refinancing disbursements, things will be evened out. And we are pretty on track of what we have given the guidance in terms of disbursement as well as in terms of the sanction of the loans. To the annual sanction, is going to be that the guidance is going to be around INR 60,000 crores? Correct. Correct. Okay. And sir, I guess the moratorium of many of the projects has been over now. So what is the rundown of the annual rundown that we expect from the existing loan book? Is it something like INR 10,000 per year? Absolutely. You are right. For next three to four years. Basically, should we expect a? 30,000 crores of cash disbursement. No, you said again, your voice went out. Please, Mr. Parth, ahead of the rundown. Hello. Yeah. I'm saying we should look forward. Yeah. I'm saying we should look forward to loan growth now because the disbursements are going to now exceed the rundown of the old book. So you are doing my job. So you are making it clear for everybody. So you are bang on. You are bang on. So this quarter, we just broke even at INR 4.5 lakh crore, just nearly INR 400 crores down the last quarter of my AUM. So you are pretty on the point that going forward, every quarter, we'll be seeing a decent improvement in my asset under management also. In fact, in the morning TV show, we were discussing that maybe the next FY, we see it growing past INR 5 lakh crore again, which used to be our AUM two years back. Okay. Mr. Chairman, are you done with your question? Since there is no reply from the line of Mr. Chairman, we'll move to the next. That is Mr. Jeet from Pinpoint. Please go ahead. Hi sir, am I audible? Yes, yes. You are quite audible. Could you talk about your new disbursement yields versus your current book yields, please? What would be the difference, and what explains the margin improvement in this quarter? So you see, the NIM that we have come out for this quarter is 1.51, which is quite above what we showed last quarter that was nearly 1.31. So as I mentioned in the last call, also if you go through it, what we said that the new businesses that are coming is not coming from IR, where there was a fixed 40 basis points or 35 basis points contract. So here we are either competing or discussing across the table. In fact, most of the assets were competing only, the good quality asset where RFP is coming out. Wherever we have got L1, we are still finding that because of our low overhead cost, which is giving us a lot of legroom. My margins are two to three X of what I used to get from Indian Railways. So that will surely come into NIM. Now, overall, because the total INR 4.6 lakh crore is coming for the railways at 40 basis points and 35 basis points, if you ask for overall improvement, it won't be very steep right in the beginning. But for the additional asset that we are entering into our system, the NIM will be more than 2%. So to summarize the thing, going forward, you'll find that every quarter, IRFC's NIM is getting better, and the yield on the PAT is also getting better, which is more or less these days. Like this particular quarter, you saw from Q1 to Q1 PAT jumping in terms of double digits. It is precisely nearly 11% of the jump. So this story will keep unfolding going forward quarter after quarter. Okay. Understood. So NIM should structurally improve from here. And on AUM, you're saying INR 5 lakh crore by the end of this financial year itself, right? Next FY. I didn't say I'm correct, yourself. I said that somewhere in next FY, that is 2026, 2027, we may see our net AUM going past INR 5 lakh also the way we are looking at the kind of flood of the business that we are getting as queries. Of course, we are going to cherry picking. We are a net, I mean, zero NPA company, and that is our main focus. Out of all the queries, even for the government side that we are getting, we are going to cherry picking. But still, the pipeline is coming so big in terms of big ticket sizes that we feel that we are sitting in a very exciting time and good proposition. Sure. Sure. So that's clear. And just in terms of these new businesses, right, including the loans and sanctions to NTPC, so this is a completely new field for you, right, which involves the power sector, which I presume would not have a lot of linkage to your existing business of railways. You may be aware that NTPC is one of the biggest suppliers of power to Indian Railways. So there is a clear linkage. But how much do you intend to grow in the power sector? You see, the railways' requirement today is eight to nine gigawatts. And 90% of that is coming from the other than railway sources. So all these power suppliers who are now shifting to renewable, and Indian Railways also wishes to get net zero by 2030. It's a very challenging task. So we are moving towards that. So all renewable projects who are going to supply and get into a power purchase agreement with Indian Railways through their zonal units, they are our clients. They're a client. There is a joint venture of railways called REMCL. We have already entered into MOU with them. They are facilitating the power purchase agreement of this renewable supplying companies to the units of Indian Railways. The moment they enter into PPA, they become our prospective clients. Of course, because we are here to cater to them at a very attractive and a cheaper rate, we expect that anything in the renewable coming to the Indian Railways, which is going to be eight gigawatts in the next five to six years, all are seemingly our business itself. Okay. Understood. Understood. That's clear. And what would be the reason that you do not have to pay any corporate tax? So let us hear from my BD head. It is because of the leasing business model we are following. We have an unabsorbed depreciation for the assets that we lease to the railway. From FY 1990 onwards, we have opted 115 BAA. Because of that adoption, we are not liable to pay any tax under MAT. We have a lot of unabsorbed depreciation that will be going forward also for a foreseeable future of five to seven years that will be sufficient to absorb whatever income we have, whatever taxes on that income we have. In the next five to seven years, we do not expect any tax liability on the company. I hope that clarifies it for you. Yes. Yes. That's clear. Thank you so much. Just one last thing. So these loans that you're refinancing, would these largely be from banks, or would this be from other NBFCs? And what is the rate differential that you're offering on these, please? So we will not be naming anyone, but of course, once we have positioned ourselves cheaper than all the NBFCs and the banks, of course, the business will be coming from both of them. Not only these guys, there are some bilateral foreign loans also which we are going to replace because they are also with the devaluation of rupee and dollars going high has become very costly to our siblings in the railway ecosystem. So all these businesses are coming on the plate. So what was the second question you asked? Yeah. That's it. Just wanted to know, is this from banks or NBFCs? But yeah, I think you answered it. Everyone. Yeah, what is the rate differential that you're offering? Rate differential is minimum 100 basis points. At times, it is 150 basis points also. So we are bringing a lot of comfort and relief to the entities who are working in the railway ecosystem. And that is what this company is meant for. But the beauty is that after subsidizing them by 150 basis points, the other competitor rates were so high that we are still making good money and far more than what we used to make from Indian Railways. So that is what is giving us a very win-win and attractive solution. Understood. Understood. And, sir, last question, if I may? So you asked the question here. So there are others also in line. Okay. Sure. I'll get back into this one. Go ahead. Go ahead. Go ahead. The last question. On the 100 basis points worth of repo cut that we've seen, are you passing it on to your borrowers at the moment on the back book? Absolutely. Absolutely. Absolutely. You know, the ethos of this company is whatever we are saving in terms of the cheaper borrowing that we are getting in the market. In fact, a few weeks back, we raised one 5-year, 10-year bond at 6.45% or 6.5%. So these are the rates we are getting in the bond. So whatever cheaper raw material of the financing we are getting, we are obviously passing it to our borrowers, and if you don't pass them, we can't compete. We are not in the business of high-risk, high-margin assets. We are in the business of zero-risk, attractive assets, and incidentally, we found that they were also being funded at a very high cost. I mean, government is not supposed to get funding at 9.5% and 10%. In my view, that is not the correct kind of because government is also doing business. And anybody who is doing business has the right to get the fund at the cheapest rate. What we are actually doing is we are making more margin than what we used to get from the railways. Still, we are becoming lower in the government system. And that is giving us a very good impetus, acceleration. It's a win-win scenario. People in all CPSE PSUs, government PSUs, state government, they are coming to us because now they know that IRFC is funding to every government entity who are having good rating. And that is why we are feeling that going every quarter ahead will be having good business on the hand. We have to do cherry picking, and we have to ensure that we remain zero NPA going in the future also. Sure. That's very clear. Thank you so much. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Raghu with Creaegis Capital. Please go ahead. Yeah. Just to follow up on the previous question somebody was asking, your borrowing cost is 7%. What is the spread on, suppose you're funding a metro project? What is the spread on that particular loan which you'll give? Is it 2% or is it 2.5%? What is the spread? So you see, the metro as a project for us is something unique because we are a government-owned company in a major, like, and metro is a necessity for the nation. It is not a business. As you know, none of the metros, including Delhi Metro, are profitable in terms of totality. Somebody is making a cash profit, maybe Hyderabad Metro, Delhi Metro. But you think of Delhi without metro. I mean, it is impossible to cater to the logistic requirement of this huge population. So what is the answer? The answer is metro is going to be there. And it is the responsibility of the government per se to ensure that metro in India is flourishing. Today, we have got more than 50 metros either working or sanctioned, all in a phased manner. Having said that, all these metros require funding, and they require the cheapest kind of funding. The earliest experiment for these metro railways where the bilateral funding comes from Japan or World Bank or ADB or many other things. In the last 20 years, government has realized that these loans are not so straight and cheaper loans. They have got many riders on it. There is currency fluctuation. There is SOFR and TONA rates. There are other tighter things that you buy things from that company only, then you avail the loans. So these kinds of things are tying the hands of the state government and the central government. So what we are planning is because we have been funding cheaper through the Indian Railways, maybe a model where we can tell metro railways that you have a cost plus model, and you have this 40 basis points margin from that. We can agree to that also. To summarize the answer to your question is we are geared up to bring as cheaper as possible the funding to the metro railways of this country with the guarantee from state and central government where my loan is guaranteed. But the margins, yes, we are agreed and ready to fund them as cheap as possible in the system because we want to set a benchmark that if government wants to invest money and if they want to have extra budgetary resources, IRFC is a conduit who will bring in money not only from the domestic market but from the ECB market at the cheapest rate, and all benefits will be passed on. And we will be having the minimum kind of markup on that. And that market is not anything to guess. We already have a benchmark with railways, which is 40 basis points. This is the gamut we are trying to plan, and this FY will be coming out with a very clear solution for all the prospective metro railway funding in the country. I hope I've clarified. Yeah. But because the reason I'm asking is the cost of capital for, suppose don't get me wrong because I'm quoting your competitor, for REC is something around 7.05 or 7.1. Okay? So they generally lend to anything with a spread of 2.5%. So that is the reason why I'm asking. So generally, for any infrastructure project, what will be your spread? Because you're expecting a NIM of more than 2, right? So that means your spread. You are asking the question and giving me answers also. So I'm expecting a NIM of 2 and what is their NIM? Their NIM is 3.5. Their NIM is 3.5. Spread is 2.5. Yes, so my spread will be obviously at least 100 basis points lower than them. Why? The answer is also very clear. It's not secret. What is their overhead cost? If you've done your mathematics, then you must be knowing. Okay. What is their overhead cost? REC, PFC, and HUDCO? I think it is something around 0.4%-0.6%. No. It is 0.8%, 0.9%, and 2.5%. Okay. Respectively, REC, PFC, and HUDCO. Mine is 0.1%. Yeah. But now, because we are expanding into these new areas and all, don't you foresee our overhead also to a bit expand a bit? We have foreseen. We have got a very concrete plan. My upside will be from 0.1%-0.15% itself. It won't cross 0.2%. So that's the plan. Right. So we are in the business of B2B. The cutting edge is that we are not going to put any overhead burden on our system. We are committed to deliver in a manner which is cost-effective. And we have a plan in place. In the B2B model, we do not foresee that our workforce will grow to as big as RPF. You know the numbers, and you know our numbers. So that is our advantage, and we want to maintain it. To clarify it, we don't foresee our overhead cost going even 0.2% in the next two to three years. Okay. So clear advantage of 70 basis points will lie with us so far as we are, I mean, compared to our peers. Okay. Can I ask you one more thing? Are you interested in now lending to even Discoms and things like that? If suppose some Discoms approaches you? No. No. No. Absolutely not. This is not at all in our discussion right now. Let it be very clear. Discoms, there are specialists there. PFC, REC, it is their domain area. They are competitive in that. Yes, Gencos, only those Gencos who are supplying to Indian Railways. Let's also be very clear about it. Okay. So for a normal conventional power project or something, you are not going to fund them? You talk about Gencos. So you talk about Discoms. Discoms, we are not going to fund right now. That is not in our portfolio, and we are not looking at that. You talk about Gencos, yes, Gencos, we are going to fund if they are having a linkage with the Indian Railways. Even the mining, coal mining, if they are having a linkage with the Indian Railways, we are going to fund them. Okay. One last thing. Anything related to infrastructure? Other infrastructure projects and all? Even that stays off the table right now. We find that infrastructure. So if the railway. Apart from railways, maybe road or something? Let's be very clear. Right now, our mandate and our limitation is that we are funding anything which is having backward and forward linkages with the railways. So yes, like if you say a port is coming having a railway linkage, yes, we are going to fund it. Our fertilizer factory is coming having a linkage with the railway line. And every production of fertilizer is going to be hauled by railways. Yes, there is a linkage. So these kinds of infrastructure projects which are having a direct linkage with the railways, there are many. But something in standalone happening, yes, we are not going to have a look at that. There are other sibling NBFCs as you know them, and they are there to cater them. If a port just has a railway line and a port costs maybe INR 50,000 crores, IRFC is ready to lend them money if there is a railway linkage. Whatever part of it, yes, we'll have a look for sure. Okay. No, that's great. I just want to find out the scale of the opportunity. That's all. Please don't get me wrong. You are rightly asking, and everybody is rightly asking this question for the fact that we never dealt with these things. It's good that you are asking these questions, and these things must get the spread also that we are funding all the infrastructure projects having a backward and forward linkage through the railways. Of course, a rider is there. We are very particular about the quality of the assets. As you know, we are perhaps the only zero NPA company. We wish to remain that. That tag for my investors, we remain to keep that tag. We are very, very critical about looking at the quality of the assets. Yes, if they fulfill our benchmarks, if they are ticking all the boxes that we need to, then anything who are having a linkage with the railways, we are going to have a look for funding. That's great. That's really great. Thank you so much. Thank you. Thank you. Next question comes from the line of Daman Kumar, an individual investor. Please go ahead. Hello. Good morning. My first question is with respect to the projected sanction of INR 60,000 crores. So how much of that would be approximately on the leasing model and how much will be on the term loan model kind of a thing? Because right now, most of our assets are under leasing model. So just want to understand in the future. My BD head will take up this question. Mainly, it will be on the term loan model. Basically, we are also funding on the leasing model to some of the entities. But the quantum would be around INR 2,000 crores, INR 2,500 crores. But mainly, it will be on term loan basis to various entities, those who have a linkage with the railways and those who are operating in the infrastructure. Okay, and in case there was a news article about funding of NTPC rolling stock wagons, so those will be on leasing model or those will be also on term? Those will be on the leasing basis, and we have some other inquiries from other entities also. But the total quantum would not exceed more than INR 2,500 crores. With NTPC, we have executed an agreement of around INR 700 crores, and some deals are under discussion, and they will be finalized in due course. But the total quantum would be around INR 2,500 crores. Okay. Got it. Thank you. And my another question is with respect to the leasing model. So I understand the IRFC follows the primary lease period of 15 years and secondary of another 15 years. But most of the money is recovered from the Indian Railways within 15 years. So initially, I think in the beginning, there was no problem. But right now, because of too much investments on infra relating to railways, it is putting a strain on Indian Railways' finances staying within 15 years because most of the operations of Indian Railways are kind of on break-even situation. They don't have extra money to pay. By any chance, is there any discussion or is there any thought process going behind the new project assets for which lease agreement will be signed to extend that primary lease period from, say, 15 years to 25 years so that it doesn't put a strain on the finances of Indian Railways? So you are giving a very good advice and solution to Indian Railways, which is for them to take a look. Right now, what model you mentioned is in place. But what you proposed, I can only say that it is something for the Indian Railways to look at it. If a proposal comes from their side of any kind of this, yes, company, it doesn't harm us in any way, increasing the tenure if they wish to. But right now, there is nothing such on platform. Okay. And is there a way you can possibly for IRFC management to put in place this proposal to Indian Railways, or most of the proposals come from their side only? That is something between the PFC and the government. It is not the domain where we should talk about. So there is a system in place, and as in when either side needs to talk about something in writing, they talk. But this is not meant to be discussed with the investors. Right. Okay. Got it, and one last question is with respect to the new financing, which will be mostly on term loan models, so will the interest rate be fixed for long term, or will it be a floating kind of a situation which will keep on changing based on underlying rate? Whatever we have sanctioned, it is on the floating basis. As of now, in the ecosystem, nobody wants a fixed rate kind of a scenario, and we have to operate as per the market condition, and if someone wants on a fixed rate basis, we are open to it, and we can discuss and we can structure the deal as per the requirement of the prospective borrower. Okay. The floating rate underlying is weighted average cost of IRFC internal funding or external benchmark? Is it internal benchmark or external benchmark? We are using various benchmarks. We are using AAA benchmarks. We are using Repo, Federal Funds. It is based on how the prospective borrower wants the deal. My lending rate would be decided based on the credential of the project, based on the tenure of the project, what is the risk appetite of the borrower, and what would be the interest rate scenario going forward. Based on these parameters, we decide what benchmark we should use and how to structure the deal. Okay. Got it. That's all from my side. Thank you very much. Thank you. Next question comes from the line of Ritika Behera with Bandhan AMC. Please go ahead. So sorry, my questions would be a little repetitive, but if you could just reiterate your guidance on sanction and also on disbursement and AUM for this year and next year, if you've given for next year as well? You want for next year also? So if you've shared in the call, then yes, because I missed some of the calls. That is quite wishful. I'm happy that you are covering us and you are having the interest. So I can only say the guidance that next year also your interest will be intact as we are on the rising path. So whatever we have given the guidance for this year, that will surely remain a benchmark for next year also. No, that's very helpful, sir. So if you could just share the guidance again which you've given already for this year. I actually missed the numbers. Okay. This year, yes. This year, we gave the guidance in last quarter itself. When we began with this FY, we have targeted around INR 30,000 crores for disbursement and around INR 60,000 crores for sanction of the assets. As I see in your presentation, you've given that total sanction already till date is 23, so you are expecting that another further some 40,000 to come during the year. That's the right way? Yes. Yes. Yes. Yes. I mean, it is a ballpark figure. So it is never like you stop at 60,000, you don't go more than that. So it is a kind of ballpark. When we started in the FY, as you know, this was the first time for this company. We never ventured outside Indian Railways. So with the kind of inquiries and enthusiasm that we found to our customers looking at our products which are very cost-effective and time-effective also, so we thought that this is the kind of good numbers that we should come out. And to give a flavor again, with the last two conferences, I always give this comparison. 30,000 crores that we wish to disburse, it should be akin to nearly INR 75,000 crores-90,000 crores of loan that we would have done to the Indian Railways for the fact that only 35 bids were coming from there. So here, the margin is more. So INR 30,000 crores, if we are able to disburse, it will be akin to something of the highest that we used to do for Indian Railways in terms of the margin. So that is what we are targeting this year. And as you mentioned numbers yourself, I think INR 23,000 we have already done, and we are right in the first part of the Q2. So I think we are well on the target. And we believe that by the end of the FY, we should meet it very comfortably. Sure. So sir, if I could just extend this. So obviously, these being large projects, obviously, the disbursement takes time. And as I see that you've done 3,200 disbursements this year, this quarter, sorry, of the sanctioned of 23. So just two questions here. How much of the 60,000? So you roughly feel that 50% of the sanctions would be disbursed this year, and that's how the 30,000 crore number. Any color that you can give on the balance 27,000 yet to be disbursed? What is like? You have given. I think you joined late, so I have to repeat again and. No, sir. That's okay, sir. I'll maybe visit in the recording. So the kind of projects that you have sanctioned, quite a few of them are refinancing. Okay? So as you know, refinancing is done in one go. So all these refinancing projects are already sanctioned, and they are already lined up for Q2 out of the INR 23,000 crores. So we expect that more than INR 10,000 crores will be disbursed in Q2. So making it even for H1. So by the time we end up Q2, we believe that nearly 50%, maybe 40%, maybe even 50%, maybe a little more than that disbursement should take place. So we will not be very hard-pressed going in H2. This is the crux of the answer that you wanted to know. So all these numbers which were on, you see, on the sanctioning of the project side, we are quite ahead in one quarter. On the disbursement side, we are lagging behind. By the end of Q2, you'll find that even in both, we'll be having nearly 50% of the disbursement done, and of course, nearly 50% or more of the loan sanctioned. This is how the things are panning out. I hope I clarified, and it is good to hear from you. Yes. So certainly. And lastly, you said that INR 5 lakh crores for FY 2026 is the number you gave, maybe. Somewhere. I said no. FY 2027. Somewhere around that. FY 2026, we are already on. I said that next FY, that is FY 2027. I can't predict. I hope I could have predicted. But I believe that the way we are governing the business, I believe that one of my young officers from my BD team gave me a presentation showing some ROI pictures. I'm not telling you the numbers. But yes, out of the ROI pictures, I believe that the way we are going ahead, sometime in FY 2027, we should cross 5 lakh mark of asset under management for this company. Great. Thank you so much. Thank you. Actually, I got. Thank you. Next question comes from the line of Vikas Kasturi with Focus Capital. Please go ahead. Yeah. Good morning, sir. Good morning. Sir, during this call, you mentioned two or three times about ensuring zero NPA. And you also mentioned about that the company needs to tick a few boxes. So if you could just provide some color on this, sir, how do you ensure, especially when you're lending to a private entity and you have a 30- or 40-year track record of having zero NPAs, and now you are venturing into lending to outside Indian Railways? So what are some of these boxes that you look for to ensure that you have zero NPAs even going forward? And I have a related question to this, sir. If NPAs do arise, because that's the normal thing that happens whenever you do lending, would that affect your AAA rating? Fine that you raised this question. First, to answer your question, right now, let it be very clear, we have not funded anything private, nor are we looking right now to fund anything private. This is the first remark. Second remark, our mandate has extended to whole-of-government approach. The definition of whole-of-government approach in India is, of course, any entity of central government, CPSE, where majority of share is held by Government of India, and of course, the state government. These are our prime customers now. Within the government system, we believe that there is negligible chance of any of the government entity getting bust and getting NPAs. This is the first flavor. This is the first box that we need to tick. Amongst the government assets also, we are doing our due diligence because today the government assets are also getting rated. So today, the rating agencies of the country are very robust, and more than one rating agency is there who are rating all the assets, and they are quite convincing also. So within the government also, we are looking for A-rated assets. So this is another box we are ticking. The third thing is, if we are going to fund assets like Metro Railways and all, where the farebox model is not seemingly sufficient to take care of the loan responsibilities, we will have a clear-cut comfort from state government and the central government who are the promoters. Without that, we won't go ahead. So these are the boxes we are ticking, which we're talking about of ticking and ring-fencing ourselves to ensure that going forward, we do not get into any kind of NPA whatsoever. Now, the third thing, how the private players will come into the picture. Yes, private players can also come into the picture if they are entering into a joint venture or a kind of long-term PPA agreement or any kind of concession agreement with the government. For example, I'll give you a flavor of Railways. Railways has got a joint venture model where they create an SPV. In that SPV, minimum 26% of equity comes from one of the CPSEs of the Railways, and 74% theoretically can come from a private entity also. However, they are all state governments and other CPSEs. Now, this entity is not a CPSE entity. It's an SPV. But the modality is such that the land is owned by Indian Railways, and concession agreement goes for 25-35 years. At the end of the concession agreement, the whole project, which is tangible, will come back to the Railways. Now, think of a scenario that something happens in between, say, 10 years, 15 years. Now, this property is on the land of Indian Railways, so everything will come to Indian Railways. So I still have the comfort that I'm dealing with my promoter itself, and it's a tangible asset. So that risk is heavily minimized. So we are looking in these terms only. As far as the CPSE is concerned. We are funding to NTPC. You know they are AAA-rated assets. We are funding to renewables, where the ratings are always AAA or AAA stable. So the answer to the question is, within the government parlance also, we are doing our cherry picking. Why we are doing cherry picking? We are doing cherry picking because we are not into the high-risk, high-margin business. We are not looking for 2.5% and 3% or 300 basis points margin. We know that our margins will be at the max touching 120- 150 basis points, and that also is a very wishful thinking if I'm getting 150 basis points in this kind of scenario if the asset quality is extremely good. Because we were working in a field where we were getting 40 basis points, 80 basis points, or 100 basis points with purity of the business that it is zero NPA kind of asset, it is extremely gratifying and satisfying to us and to my investors also, so I hope I've given you the clarity on how we wish to be zero NPA in coming future also by funding to entities in the government having a whole-of-government approach other than IR. Okay. Got it, sir. And related question, sir. In one of the first conference calls that IRFC had, the then MD had said that there is a backstop arrangement with railways that in case any day IRFC is unable to service its debt, it would be done by the Indian Railways. So now that you are lending to all these other entities, would that arrangement still continue? I mean, for the railway funding that we have done to IR, yes, that arrangement, whatever you mentioned there, whatever I'm funding other than IR, we are doing on the strength of our balance sheet. We have got a very robust network with us. So we know how to do the business on these lines. And that is why we are not going berserk in attracting business. If you do that, maybe I'll be able to gather more than a lakh crore in one quarter, the kind of queries we are getting. But as you know, we are going very safely and in a very steady manner. As I clarified to you that we are not looking right now for anything private, even having a very good rating, because my platter is full with what queries I'm getting from the government. That is our mainstay, and we wish to remain to that mainstay for the next two, three years. Later on, we'll see how things are panning out. Got it, sir. Thank you, sir, and wish you all the best. Thank you. Thank you. Thank you. Next question comes from the line of Pranav Gupta with Aionios Alpha Investment Management. Please go ahead. Hello. Yeah. Good morning, sir, and thanks for the opportunity. Most of my questions have been answered. Just a couple of clarifications. When we look at the new entities that we're lending to that are either forward or backward linked with the railways, and obviously, we have the comfort of the multiple comforts that you mentioned earlier, but is there any specific guarantee that is being provided by these entities or by the state governments, or is it just based on an understanding that eventually, obviously, the projects will go to the railways and the railways will sort of service the debts? Basically, it depends upon what type of asset I am funding and to whom I am funding and what is the tenure and what is the structure of that deal. In some of the cases where we have a concern regarding the future cash flows, we generally ask for ring-fencing of those risks. But wherever we feel that the external rating is quite good and they have a robust financial model in place and their cash flows are quite predictable, in those scenarios, we may exempt. We don't ask for the government guarantee. Hope I've clarified. Understood. Just a follow-up on that. So if you think of, say, a metro project that we are funding, in those cases where cash flows might vary versus that are done at the initial part of the project, in those cases, I would assume that you would have a ring-fencing on the cash flows of that project eventually when it gets commissioned. I think for metro, we discussed at length, and I clarified very clearly that metro is not a model where farebox model will be enough to cater to the disbursement, I mean, servicing the loans. So of course, when we are going to fund the metro, in the past also, whatever bilateral loan to metro has come, it has come through DEA, Department of Economic Affairs, and there is clear guarantee from state and central government. So if at all we are going to fund anything, which we are already in the process of discussion, we are going to follow the same model. In case of metro railways, 100% guarantee has to come from the promoters who are central government and the state government in the similar manner as they are guaranteeing it to the bilaterals and multilaterals. Once that is done. Understood, sir. We are safe and we are happy to fund. Yes, that's right, and what I'm very clearly telling everyone that with the metro railway, I'm not here to make very huge margins. That is not done, so metro railway is something in the nation's service, and with my robust balance sheet, with my low overhead cost, if I'm making 30 paise out of that, it's very good, and we are very happy doing that. Because we have got some other mix in the bag where we are earning more also. Understood, sir. That's very clear. Very clear. So the second clarification was again on the other bit of book where the spreads are slightly higher than what we do in the railway or metro sort of financing. Is it fair to assume that those loans also come with, say, probably a 70, 80, 100 basis points spread at best? Repeat the question again. So obviously, in the cases of projects that are sort of guaranteed by the government, where we are happy to make a much lower spread, for the other parts of the book where the spread is slightly higher, is it fair to assume that the spreads sort of cap out at 90-100 basis points? Right. Right. Right. You are right. Wherever we have a deal, like CMD has surprised you, in case of a metro, where all the risks got ring-fenced and we have a cost-plus kind of a model. So we are happy to have a 40 basis points kind of a margin. Wherever we have all the risk on my book, I need to have a more margin to cover those risks. And in that scenario, I would be charging a margin more as we are getting in the past. But we, as of now, are main focus on the quality of the assets. Our main thrust that we should fund the quality assets. And my margin to cover all those risks would be in the range of 80- 100 basis points, as CMD has briefed you. No, absolutely, sir. And so the last question for all the external borrowings, are the risks on Forex fully hedged or is it partially hedged? So that's a business model that we have multiple models going by the tenure of the loans. So we have hedging model also. At times, it's a longer tenure than we try to wait for a few years to get better yield. So that's a model which is being followed in this company. And as you know, the borrowing side of this company is very strong that we have been doing for a number of years for Indian Railways. So we are good at it. So it's a mix. To answer to your question, it's a mix. So the borrowing side is absolutely strong and totally get that. If you could give out any number as to how much of those borrowings will be hedged and how much will be unhedged, that would be. Those numbers, we won't like to share with you right now. But yes, as and when ballpark, I can tell you that anything which is within five years, we tend to hedge it. Sorry, just to clarify, the shorter tenures are hedged and the longer tenures are not hedged. Any tenure which has come up within five years' time, we tend to hedge it. Understood. Understood, sir. Great. That's all from my side, and thank you for answering all the questions, sir. Parth now will be taking last question. This time, you have stressed it, and I'm happy that a lot of queries are coming, but still that one or two we should follow. The last question should come. Thank you. The last question comes from the line of Tanuj with DSP. Please go ahead. Hi, sir. Just on these sanctions, the INR 230 billion sanctions this year, sir, what are the yields you expect in these businesses like the ones with NTPC? Yeah, if you could share that. It would be in the range of 70 basis points to 150 basis points what we are charging from various customers, but we can't tell you customer-wise, but this would be the band. Sorry, 70 basis points spread, you mean? Like 7% cost of fund and spread about. It is based on the quality of the asset, tenure of the loan, their credit rating. On case-to-case basis, we decide the spread, and our spread would be in the range of 70-150 basis points on case-to-case basis. But customer-wise, we can't share this. Understood. Understood. Sir, and your employee count, how has that changed? Will that increase materially over time because you're getting into newer segments sort of, so? We are expanding. In terms of percentage, we have grown 50%. When the base was so small that at 50%, it had only nearly 20. We are getting excellent talents from government as well as from other CPSEs right now. And again, there is cherry picking in talents also. So as people are attracted to this company for business, so talents are also getting attracted to this company. So as CMD, I'm very happy that I'm able to garner the best of the talents available in government as well as in CPSE parlance. We are now around 60, and we look forward to be 100 or 110 in the next five years' time. And having said that, we still want to be the best of the talents in small numbers using the other facilities around right from the consultancy, advisory, AI, whatever you call it. And since we are into B2B business, unnecessarily, we don't want to add the manpower numbers. So we are going to shift to a good office, a very technically sound office very soon by the end of this FY. So we want to invest more in the machines and the analytics than unnecessarily manpower. So to answer to your question, the manpower will grow, but grow in a very concerted manner. At the end of the day, we will ensure that my overhead cost is not getting higher than 0.15% in two, three years. That's the answer. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of the question and answer session. I would now like to hand the conference over to the management for closing comments. Thank you, DAM Capital. So two quarters back, I started with you. We could hardly take the questions for 30 minutes. So I'm happy that queries are more. This is my third quarter, and we could do it one hour, and still few people are there to ask questions. That speaks volumes about the interest that we have generated in IRFC. DAM Capital is a partner in the journey. I am thankful to you that you are doing it on our behalf. We ensure to our investors, in fact, retail investors are in a big number that this management, under the guidance of Ministry of Railways and Ministry of Finance, are totally committed to deliver what is required for the investors. We are on the growing trajectory. We are not very rash. We are driving very carefully. We have got our accelerator and brake in place. We'll tick all the boxes. We'll drive very carefully, but the speed will always go and go on and on in terms of our top line and bottom line. Our country is having a very exciting time. Honorable Prime Minister says 2047 as the target for Viksit Bharat. This is the real Amrit Kaal for the country. The next 20 years are the time when everything will grow, and in the growth spectrum, IRFC is all geared to play a very important role, and of course, since we are in business, we want to grow in a very positive manner, catering to the need of the nation, being in nation's service, and also growing our finance in a better manner, so I wish that all my shareholders stay with us and be partners into this growth and the nation's service also. Thank you. Thank you. On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.