Ladies and gentlemen, good day and welcome to Nippon Life India Asset Management Limited Q4 FY 2022 earnings conference call hosted by JM Financial. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sameer Bhise from JM Financial. Thank you, and over to you, sir. Thank you, Nirav. Good evening, everyone, and welcome to the 4Q FY 2022 earnings conference call of Nippon Life India Asset Management. From the management team of Nippon Life India Asset Management, we have Mr. Sundeep Sikka, Executive Director and CEO, Mr. Prateek Jain, Chief Financial Officer, Mr. Aashwin Dugal, who is the Co-Chief Business Officer, Mr. Saugata Chatterjee, Co-Chief Business Officer, Mr. Saha, the Chief Digital Officer, and Mr. Hiroshi Fujikake, who is the nominee director from Nippon Life Insurance. I would like to hand over the floor now to Mr. Sikka for his opening comments, post which we can open the floor for Q&A. Over to you, sir. Thank you. Thanks, Sameer. Good evening, and welcome to our FY 2022 earnings conference call. We have with us CFO Prateek Jain, Co-Chief Business Officers Saugata Chatterjee and Aashwin Dugal, Chief Digital Officer Arpanarghya Saha, Head of Elite Partner Group Nitin Gupta, and Hiroshi Fujikake-san, nominee of Nippon Life Insurance from Japan. Overall industry assets remained stable in Q4 driven by the rise in passive and equity segments offset by the decline in fixed income assets. The industry continued to see steady interest by retail and HNI investors. The industry's unique investor count grew by 10% to 34 million in Q4. The strong growth in investor base and overall assets indicate confidence by long-term investors in mutual funds. We expect the industry to maintain its growth momentum in future also. At Nippon India Mutual Fund, our priority is to be future ready and capture the long-term opportunity. As stated earlier, we are confident of regaining our market positioning as well as recreating and reinventing by continuously innovating and disrupting ourselves. Towards these goals, I'm happy to share with you the key performance highlights for this fiscal. NAM India recorded its highest-ever profit of INR 7.4 billion in FY 2022. Our overall mutual fund market share rose by 26 basis points to 7.38%. AUM increased by 24% to INR 2,873 billion. Along with the steady increase in AUM market share, Nippon India Mutual Fund added more than 7 million investors and has now the largest investor base in the industry. We increased our share of unique investor folios to 36% with a base of 12 million investors. The growth was driven by superior fund performance, comprehensive product portfolio, strong governance framework, robust presence in passive segment and granular distribution network. In line with our investor-first philosophy, we keep expanding our product suite to cater to the investors' varied and diverse needs. In FY 2022, we launched several innovative and industry-first products. Across seven NFOs, Nippon India Mutual Fund garnered assets over INR 40 billion from 275,000 investors. Other such unique offerings in the pipeline include S&P EV Index Fund, the Innovation Fund and the Artificial Intelligence Fund of Fund. In total, 11 schemes have been filed for regulatory approvals. These products will give investors more value creative avenues to diversify risk and generate sustainable returns. Here I would like to reiterate, even in future, we will focus on strong asset growth, but never at the expense of profitability. With a keen retail focus, we have one of the largest retail AUMs in the industry at INR 764 billion. The contribution of retail AUM to total AUM is among the highest in the industry at 28% compared to industry which is 23%. Excuse me. We are among the leaders in beyond thirty cities category. The category contributed an AUM of INR 478 billion. 17.2% of the total assets are sourced from these locations against an industry average of 16.6%. As on 31st March 2022, 70% of the individual assets have a vintage of more than 12 months. The analyzed systematic transaction book is at INR 88 billion. On a gross basis, systematic folios rose by 1.6 million in FY 2022. Our systematic AUM rose by 30% to INR 514 billion. 48% of asset AUM has contributed for over five years vis-à-vis 21% of the industry. Also in volatile markets, folio with lower ticket size have demonstrated a longer vintage and better stickiness. 12% of SIP folios have continued for more than five years against the industry average of 8%. Today, Nippon India Mutual Fund offers the industry's best suite of products in the classic category. With the strong growth in the industry's passive growth, our ETF ecosystem is already in place and far ahead of its peers in terms of investor base and mind share. In this segment, we manage an AUM of INR 558 billion, and have a market share of 14%. Excluding the EPF4 allocation that goes to two specific mutual funds, we would be the largest ETF player in the country. The Gold ETF is the biggest in this category with INR 66 billion in assets. Nippon India Mutual Fund share in industry ETF folios rose to 58%. In this fiscal, we added 6 million investors and accounted for nearly 70% of the total ETF folio additions in the industry for this quarter. Nippon India has 68% share of ETF volumes on NSE and BSE. Our ETF average daily volumes across key funds are higher than the rest of the industry. As a well-diversified asset management company, we have begun to grow our non-mutual fund segments over last three years. With the government mandates, we manage assets of INR 682 billion in non-mutual fund segments. The offshore business has assets of INR 114 billion under management and advisory. Leveraging Nippon Life's global network, we continue to ramp up our international presence. Multiple products which are in approval stage with the regulator are a step in that direction. In our AIF business, we manage category two and category AIFs across various asset classes. As of March 2022, Nippon India AIF had raised commitments of INR 45 billion across all funds. Online and digital assets have become a strong source of investor acquisition and communication. Keeping our millennial investors in center, we have developed a 360-degree integrated framework for acquiring, onboarding, engaging and re-engaging with such digital investors. Beneath this framework lies the science that has been created and improvised over time with digital powerhouses like Google, Meta, Adobe suite of products. It focuses towards creating a digital experience that is friendly, futuristic and frictionless for our partners and investors. In FY 2022, digital platforms contributed 58% of our total new purchase transactions. Over 3 million purchases were executed through digital assets, an increase of 63%. Nippon India Mutual Fund has a well-diversified and enabled distribution base. As on March 2022, we have over 84,300 distributors on panel with us. The MFD base rose to approximately 84,100, an addition of over 500 distributors during this quarter. We have ongoing tie-ups with 20 prominent digital partners. Direct channel contributed 56% of the mutual fund AUM. On the distributor assets, the share of MFDs was 59%. 81% of distributor assets are contributed by individual investors. Nippon India Mutual Fund has a wide presence in 270 locations across the country. We continue to review our existing branch operations and future expansion plans. In recent quarters, our marketing efforts are increasingly focused more on digital channels, which are more cost effective as against offline advertising. Now on the financial performance. For the year ended March 31, 2022, profit after tax was INR 7.4 billion, an increase of 9%. Operating profit increased by 46% to INR 7.6 billion. Operating profit as a ratio of average assets under management rose by 25 basis point from 25 basis point in FY 2021 to 28 basis point in FY 2022. Our aim is to create sustainable value through growth across asset classes, cost optimization initiatives resulting in expanding and favorable operating leverage. We continue to focus on increasing the diversity in our revenue streams. Towards this endeavor, I'm happy to state the revenue from non-mutual fund business rose by 19% in FY 2022 and contributed 11% of the consolidated core profit. We continue to grow organically through physical and online channels. Additionally, we remain open to evaluate investments in strategic opportunities that add value to the profitability or complement the existing businesses and ultimately are in the interest of the minority shareholders. Board has approved the final dividend of INR 7.5 per share. This is in addition to the interim dividend of INR 3.5. With this is the highest dividend paid by the company with a total of INR 11 during the financial year. As a signatory to UN PRI, the world's largest voluntary corporate sustainability initiative, NAM India aims to create and nurture a world-class, performance-driven and socially responsible ecosystem. Integration of ESG aspects into strategy, operations and risk management will help us navigate the dynamic markets and build long-term relationship with all stakeholders. We have introduced a formal ESG framework in FY 2022. We intend to develop responsible investment strategies to build a resilient portfolio that will not only provide superior return to our investors, but will also have a positive environmental and social impact. In line with the stewardship responsibility, we continue to monitor and engage with all our investee companies in the best interest of unit holders. In FY 2022, Nippon India Mutual Fund voted against more than 620 resolutions in our investee companies in the interest of our unit holders. To sum up, I would like to reiterate that at NAM India, investor centricity remains the key theme. We strive to deliver a complete product suite customized to the investor needs, superior fund performance, efficient client servicing based on a comprehensive digital ecosystem. We are confident to continue our trend of profitable growth in coming quarters. Before concluding, I would also like to welcome our two new board members from Nippon Life, Kimura-san and Yao-san. Kimura-san serves as a Managing Executive Officer, Head of Global Business at Nippon Life. He has an extensive experience in asset management operations on a global scale. Yao-san is the Regional CEO of Asia Pacific for Nippon Life. He's an industry veteran with over 25 years of experience in insurance sector. We are sure with the induction of such esteemed individuals, we will strengthen our board and we will continuously gain from the valuable guidance, specifically in the areas of planning, risk management, governance, and synergies with Nippon Life global operations. With these comments, we are happy to take any questions. Thank you very much. Thank you very much. We now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Viraj from SBI Funds Management Private Limited. Please go ahead. Yeah. Hi, thanks for the opportunity and congratulations for good set of numbers in such a challenging environment. I just have a couple of questions. First is, you know, if you look at our B30 share as a share of our own AUM and if we compare it to the industry trend, the gap between us and the industry, you know, seems to be shrinking, and that's a trend which is evolving. If I also look at the broader, you know, non-SIP pipeline which you shared in the presentation, most are in the active, so passive space. You know, you have ETF or index fund and not much in active equity space per se. Just trying to kind of understand, you know, how we are kind of looking at increasing our market share, especially in the active equity space where, you know, we've not much success in terms of, you know, gaining share per se for us. Just trying to understand the broader perspective there. A related question to that is, you know, if you look at a yield, you know, that seems to be further moderating. If I look at last 15 days of March also, we have seen a very sharp fall in the yield. Would pricing be a major lever to drive the AUM growth? Just trying to understand the yield, you know, the equation between or the interplay between, uh, pricing and market share in especially in passive equity. Thank you. Thanks, Viraj. I'll take some part of the question, and for balance I'll invite Prateek. Firstly, I think let me take your question on B30. I think we continue focusing on execution and the fact that we have added nearly 70 lakh new investors is a testimony towards that. I think while the gap that you talked is on the AUM, I think we clearly see, I think we continue building on retail and there may be a lag effect with these new investors coming and you'll see them topping up in times to come. Number two, your question on equity. Yes, I think we had last two years a little pressure on equity. I think as you would appreciate, as you can see, we've had certain, our equity performance has been improving and, normally equity performance whenever there's a one-year and three-year keeps improving, I think the flow starts increasing. Just to put things in perspective, if I was to divide this entire financial year in four quarters, the first quarter in equity we had, because the redemptions were high, I think we had a negative number. Every quarter after that, the number kept improving and, the net positive number for the quarter, Q4 was in excess of INR 2,000 crores. I think the positive trend is already visible, and I think from our perspective, we'll continuously keep focusing on execution. I think we believe, that, like in fixed income and overall the market share has gone up. In equity also the trend seems to be positive. The pulse that we get on ground tells us, I think you will see with a lag effect, in the next, three-four quarters, the equity market share also moving up. As far as how the new products are concerned, which are in, you mentioned about passive, I think we have always believed, I think, to be more investor centric and have been trying to complete our product suite. I think that the approach is not to see whether it's an active or a passive. I think continue to, keep evaluating products which can, which, you know, add value to the investors and they may happen to be active or passive. You know, I think we continue working on completing our product suite. As far as the realization is concerned, Prateek, if you could just, you know, throw a little light on that. Yeah. Viraj, the change in the last week of March is more to do with the compliance part of it. I think we mentioned it last year as well. What happens is that, look, we have to ensure that all the expenses pertaining to the scheme has to be accounted in the scheme and, you know, we cannot, you know, carry it to the last year. Therefore, what happens is there is in certain scheme where expenses are reduced or, you know, or where expenses have increased, you know, we need to just give these notices. Therefore you see there is some sanction, but then those are reversed back in the first week of April itself. Those are just to make sure that you know we are in full compliance with the regulation, that all expenses of the schemes are borne by the scheme, and therefore you see there is some dip in the management fees, not the net realization, just the management fees. That's one thing. If you look at the overall basis, if you see our revenue realization stands at about you know 49 basis points as against 52 basis points. Yes, of course, there has been pressure on the yields. Obviously, as I mentioned in my last call also, there are multiple reasons including the mix, the size of the funds you know and the rates which the competition is offering, et cetera. Because the lower the old AUM is getting replaced with the new AUM, so there has been slight pressure on the yields. But if you see on a back to AUM basis, you know, or rather on the operating income basis, you know, we have made about 20 basis points, 28 basis points of realization as against 25 basis points last year. You know, this clearly demonstrate that despite decline in the overall revenue to AUM yield, we have been able to improve our net yields and therefore our operating yields are better as compared to last year. Okay. It's just two follow-ups. One is on the T30 strategy. You know, sometime back we had put the physical expansion, the center expansion on hold, and our thinking was we will kind of wait and focus more on digital. Is there now, you know, a clarity in terms of what route we are taking, you know, in coming years, regarding the T30 expansion strategy? Anything further you can elaborate, in that sense and the kind of investments will be needed to support that? That is one. Second is, you know, why I talked about the yield part is because the competition intensity is still by and large the same. And there are players who kind of are willing to operate at a much more lower profit spread in a bid to gain share. Relatively, the performance has also been much better for them, if I look at one, three, five-year basis. Just trying to understand, you know, what will be our pricing strategy given that operating environment. Viraj, as I mentioned in my opening comments, I think our focus will be on profitable growth. I think we are very focused that we will not be doing any business at a loss. I think we will not be swayed by even if competition is going to be, you know, charging less or paying more. Thank you. Viraj, I'll request you to come back in the question queue. I request all the participants, please restrict to two questions per participant. If time permit, please come back in the question queue for a follow-up question. The next question is from the line of Mohit Surana from CLSA India. Please go ahead. Hi. Congratulations on the results. Mohit, your audio is not very clear. May I request you to speak through the handset? Hi. Better now? Slightly. Okay. Sir, congratulations on the result. First question is, in terms of dividend policy, this year almost you paid out 90% kind of a payout on dividends. What will be the policy, in terms of dividend payout, going forward? Secondly, in terms of revenues, they now look like they are flat quarter-on-quarter. Whereas if you see the markets as well as AUM, there's hardly any growth. I'm just, you know, I just wanted to know if there is any lumpy revenue that's included in this quarter. Yeah. For the second part, Mohit, you know, you see what happens, you know, last year also again this question has come. This quarter has actually two days less as compared to the previous quarter. The average AUM actually has fallen, you know, on the equity side because of the mark to market. Obviously, you know, where equity contributes a larger part of it, therefore you see there is a flat growth. Effectively, if you take the two-day more revenues, you know, you would have seen some improvement in the revenue as well. You know, that's one answer for it. I'll ask Sundeep to talk on the dividend policy please. Yeah. Mohit, as we have demonstrated in the past, I think as per a dividend policy, I think we have been rewarding the shareholders with high dividend. This year on a standalone basis it is 96%. Actually not 90%, 96% of the standalone profits have been given back as dividend. I think we'll continue similar policy of rewarding the shareholders with higher dividend. I think we at this point of time have adequate capital, net worth, I think to explore all M&A activities that we, which is a continuous part of our journey which we keep doing. I think as far as the profits are concerned, broadly 100% of the profits will be distributed as dividend going forward also. Okay. Thanks a lot. Thank you. The next question is from the line of Prayesh Jain from Motilal Oswal Financial Services. Please go ahead. Good evening, everyone. Congrats on a good set of numbers. Firstly, just extending the point on the yield discussion. You mentioned, Prateek, that you know we I think that legacy assets to newer assets transition that has created an impact. Firstly, whether you know what would be our mix today in terms of share of those legacy assets in the portfolio, which would be earning the you know the lower rate. And that would be helpful if you could give some color there. Secondly, do you think that the intensity of this transition would reduce going ahead, given that you know bulk of the activity will reduce going ahead, especially for the active equity schemes. That is one part. Secondly, on the other income bit, you know, we've seen a sequential increase in spite of the yields rising. Could you give some color there on the yield front? On the other income front, sorry. Yeah. In terms of, you know, aging, you know, I couldn't understand that what your question is, but, from the perspective, you know, what we do not disclose the exact composition of the aging. If you see last few years, you know, we have seen, you know, significant amount of outflows. All the assets which were, you know, now whatever we are remaining is the sticky assets. The recent assets what we've got in the last two years have been, the new assets. In terms of the, you know, overall, I would say that still, it would be, you know, in the range of closer to 50-50, but I do not see that, you know, the old assets to go out because most of them are now part of the SIP area, if you see. And hence, you know, that asset to continue. You're right that, you know, incrementally, whatever assets we gain, you know, that will be on a lower yielding. But again, as I mentioned that, you know, our focus remains that on a path to total revenue, if you see, you know, we are talking about 50% of profitability. We'll try to manage, you know, around that, you know. The path to revenue would be about, you know, we'll try to maintain at a base of 50%. Okay. So, uh, so, you know, on, on this- Whatever yield decline would be there, like, you know, the operating leverage will take care of it. That's the whole thought process, and that is how we'll be driving our pricing strategy as well, you know, to ensure that we have a sustainable growth. Okay. Got it. Most of the if you see, 70% of the assets are more than 12 months. Obviously, you know, there has, you know, this is like most of the assets what has come, you know, is already one year old now. Got that. Another question on the other income. Sorry. I'm sorry. Sequentially the other income increased in spite of the fact that the yields had hardened. You know, what was the reason for the increase in the other income? You know, frankly speaking, most of our predominantly one could be you know the asset increase and you know predominantly if you see most of our assets now is on the fixed income, our own fixed income mutual fund. We have brought down our equity exposures. In terms of you know in the fixed income also broadly most of our assets are in the one-three-year category. Okay. Still, you know, I didn't understand the reason for the increase in the other income sequentially, considering that the yields had hardened so much during the quarter. No. Correspondingly, it is about INR 34 crore versus INR 31 crore. I've done significant difference there. Okay. It was INR 3 crore. I think, predominantly it is the impact of mark-to-market, and that too has a last date. See, what is to see is that, you know, these numbers are, you know, this mark-to-market is on a last date. We have to see as of thirty-first December versus thirty-first March. I'm just slipping in one more question on the debt side. You've seen a lot of outflows for the industry in this year. How do you see the debt outflows going ahead? For the industry as well as for Nippon? I'll request Aashwin to take this one. Hi, Prayesh. I think, you know, this year with the, you know, what we envisaged, you know, overall that the yields will continue to harden, you know, with the Fed policy and central banks all over the world. Hence, you know, we would see, you know, most of the flows that should come into the shorter end of the curve. Consequently, we could see some outflow from long end category and more, you know, consolidation in the liquid and ultra short-term category. At overall levels, we don't see overall numbers going down on debt, but the construct of the flows could change. Mm-hmm. Because corporates and, you know, some other entities will continue to raise money. Hence, you could see, you know, monies coming in for more cash management purposes, and we could possibly see, you know, the long-term investments you know could possibly be postponed to end of this year or next financial year, depending on how the interest rate situation plays out. Okay. Got it. Thanks. That's helpful. Thank you very much. Participants, you may press star and one to ask a question. The next question is from the line of Viraj from Securities Investment Management. Please go ahead. Yeah, the question I had asked on the B30 strategy, in terms of physical versus digital and the investments, I think that got missed. I just wanted to update on that. Viraj, yeah, I think broadly at this point of time, we have because we are present at 270 locations, and broadly there will not be a lot more expansion, new branch expansion. Even if we do, it will be very minor. There you cannot, I think there will not be any major investment into that. But we'll continue investing in the digital space. We have already gone vernacular in that. I think that strategy, we are investing in digital continues. But physical branches after 270 branches, I think we feel that, I think at this point of time we are really great. Maybe few could be added, but it will not be any significant number. In what kind of investments we are making in the digital, just generally data perspective? I think we'll not be able to give a specific number on the investments in digital, but I think it's the only investment that we are doing for, I mean, at this point of time, I think we have done a substantial investment happening in the digital space. I think because I think we are investing both in the ecosystem, creating a lot of our proprietary stuff, trying to also, we have hired some data scientists to work on few things. A lot of things, I think. We'll not be able to give an exact number. But I think it's clearly this remains a very important focus area for us. What I was trying to get at is a lot of investment, capital led also, you know, maybe in that and. I don't think just from a capital point of view, at this point of view, I think it will not make a meaningful impact in the profitability in the years to come. Just one last suggestion. You know, some of the ESOP plans we have, they have an exercise price of somewhere around INR 370-INR 390. The current price is INR 330, and some of the days it's actually even more. Why don't we just explore? I mean, possibly we can look at buying shares from the market and, you know, meeting the ESOP obligation. Just a suggestion. You know, if something we can think on that. Ladies and gentlemen, please stay connected. The line for the management got disconnected. Participants, please stay connected while we reach out to management back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, you may go ahead. Yes. Hello. Yeah, Viraj. Yeah, Viraj, please go ahead. Yeah. Was my question, I mean, I'm not sure whether you. Viraj, I think we lost you after the ESOPs. After that we lost you. Basically, some of the ESOP plans, you know, they have exercise price of around INR 370-INR 390. You know, the current price is around INR 330, and then some of the days it's actually even more. Since we're kind of sitting on a sizable surplus cash, we can use some of that to kind of buy from the market and, you know, probably meet that ESOP obligation which we would have. Just a suggestion, you know, something we can explore in that sense. No, we've, Viraj, we have taken your suggestion. Our board will appropriately, you know, take this matter up in terms of, you know, because this is more to do with capital markets and shareholding. I think it is the prerogative of the board as well as the shareholders. We'll take your recommendations, and we'll put it across the board. Sure. The ESOP, is the bulk of it now done? I mean, should we expect that to kind of trend moderate going forward, or how should one look at it? Yeah. You know, obviously, largely, if you see, most of this has been accounted, you know, because the last was given in 2019, and I think that has been accounted. Obviously, you know, there will be, you know, more new ESOPs will be given, you know, in terms of, which will be vesting in the next 4 years. But this will not be as significant as what we have, you know, given originally. Okay. Thank you and good luck. Thank you. Thank you. The next question is from the line of Kunal Thanvi from Banyan Tree Advisors. Please go ahead. Yeah, thank you and congratulations on the good set of numbers. So I had, broadly, you know, two questions. One was on SIP market share. You know, it's when you did mention about that you started seeing inflows, but still our SIP market share continues to trend down. Any thoughts on that? And secondly, you know, while you did talk about the fact that the falling yield on the equity would be taken care by the operating levers that we now see in the business. Whereas, you know, if you look at then on an overall basis, the recent launches and the upcoming launches would be on the passive side of the business, right? If one were to look at the overall, you know, yields from 3-5 year perspective, how do one look at it like, because of course, the passives would have a lower realization, revenue realization. How the overall realization would look, you know, in next 3-5 years or more, you know, structural basis? Because at one side we will see equity is coming down, and then the second side we will see the share of passives going up, which again are lower yielding products. These are two questions that I have. I'll request Saugata Chatterjee take the first question, and after that Prateek will come back to the second question please. Saugata? Sure. Yeah. Hi, Kunal. Thanks. Yeah, with regard to SIPs, as you mentioned, you know, if you see the trend line this year, quarter-over-quarter our SIP market share both from the SIP accretion point of view, which is the actual SIP numbers coming in and the SIP input value, both have been seeing an increasing trend. You know, as we speak, we also are tracking the market share, how much of market share growth we are getting in that space. Going forward, I think, the way our trend line has been reflecting the last 2-3 quarters, it clearly shows that the market share growth now in SIP on the SIP side also will start happening because both are correlated. The equity, gross sales, net sales growth and the SIP market share, they're all correlated. Like Sundeep mentioned earlier, the trend line clearly shows that going forward, with increasing SIPs, you know, SIP flows coming in into our, into our funds, the retention improving, the net SIP market share also will start growing. The trend line is clearly positive in you know. Hence we are optimistic about the flows going forward. Got it. Sure. I hope I answered your question. Yeah, yeah. I got it. Sure. Yeah. In terms of the yield, you know, what you need to factor in, you know, from your business model perspective, obviously, due to this composition of ETFs or taxes rise in share, you know, obviously the overall yields will be under pressure. I think, you know, we do not see it that way. What we do is we segment that. We see active versus passive differently, and in active also equity, fixed income and other areas separately. Obviously what we need to do is we need to keep working on each of these segments and ensure that, you know, our yields remain, you know, or from the yield perspective, you know, we continue to grow, you know, on the absolute basis. If you see that in the last, you know, two-three years also, we have seen a compression of 2 basis points-3 basis points on the yields. I think broadly that is getting offset because of the growth. That I think will continue. From the passive perspective, I think what one has to see that this is a new set of AUM which is coming in and the recent growth is a classic example that, you know, assets have started growing much faster. I think the asset growth, you know, will take care of the absolute profitability. I'm not saying on the realization piece. Going forward, you'll continue to see asset growth is faster than the revenue growth. That will, you know, that is likely to happen. Okay. Thank you. One last question is on the situation in the market. Like, since, you know, we've seen some softness in the NFO on the active side and, you know, there were like, of course, two problems. One, the new issues were coming at a lower yield, but again, there was a lot of internal distribution commissions that were being paid out across the, because of the NFO season. With that softening, are we seeing any window in the Kunal, as I mentioned earlier in my opening comments, I think every company will have a different strategy. I think our focus remains on profitable growth, and we will not be acquiring business which is not profitable for us. Sure. Noted. All the very best, Sundeep. Thanks a lot. Thank you. The next question is from the line of Jignesh Shial from InCred Capital. Please go ahead. Yeah. Thanks a lot for the opportunity. Just wanted to reconfirm, did you say that, you know, in case if the yield, you know, softens further from here on, you'll be able to manage expenses and accordingly revenue to profit should be somewhere around 50%? Is that my understanding correct? Has that been the statement? You know, in terms of the operating revenue or net operating revenue to the revenue is about 50%. Yeah. That is what I have mentioned. You know, if assets keep growing and, you know, there is no incremental cost. Whatever we are earning, let's say even if we earn on an incremental asset, if I earn 25 basis points and there is no incremental cost then operating revenue goes up by that much. You know that. We have that much of flexibility at this point of time. You know, given that, asset growth will be more or less in line with the inflation and thereabout, while asset growth would continue in excess of 20%-25%. Even if you see the last decade, you know, the industry has grown in excess of 20% CAGR. Despite the volatility in terms of COVID or, you know, if you see the geopolitical situation, except for the one quarter, there was no decline in the industry AUM, you know, which speaks volume. The SIP input value, which declined a bit in the, you know, first two quarters, but again, it has come back. From an INR 8,600 crores of total SIP book, which was in January, now it is, close to about INR 12,300 odd crores. I think both these things shows that, you know, industry is on a secular trend. Given the fact that we are so under-penetrated Just about 18% of GDP. We have a long way to go. If the asset growth remain at this pace, you know, and our cost remains more or less, cost increment remain more or less, then I think we'll be able to manage these ratios. Understood. Basically, operating leverage is going to, you know, play a good role in that. Absolutely. Understood. Second, also, you know, from the debt and liquid point of view, is my understanding correct what you know, I guess management said that the corporates would come up with for managing money and all. Is my understanding correct that liquid will still see a flow over debt fund. At least in near term till the time we don't see clarity or you know or this interest rate rising regime gets settled out, we will see a momentum in liquid more compared to debt. Is that understanding correct? That is true. Yeah. To some extent you're right. You know, in the near term. Mm. We're still in the first quarter, first month of the first quarter of this FY. At the same time, I'd like to mention that a large part of, you know, the action that is anticipated by the central bank has already been built in. Okay. into the yields, you know, both in India and overseas. Mm. Okay? Going forward, whatever action that does happen, okay, you would see an immediate reaction. From here on, at least it'll be shorter, you know, for the next, let's say one quarter, one or two quarters, you will see some inflow. You'll see liquid plus ultra short-term funds. Yes. Thereafter, I think, as things start playing out, you know, the trends might change. Yeah, exactly. Yeah. Beyond the first two quarters. Absolutely. Before I ask, you know, a few more like a strategy question to Sundeep Sikka, I just want one number. What's the Gold ETF number? So Nippon Gold ETF AUM. Last time I think it was somewhere around INR 6,500 crores. Some 7,000. You know, something 6,700, 800, I don't remember. It is about. Exact number will be little above 7,000. Okay, understood. Now, Mr. Sikka, to you this more like a strategy kind of a question that I had. One, obviously, we have analyzed and yeah, I'm glad to see that, you know, couple of our schemes are really coming up pretty well. You know, that is somewhere, you know, we are also building in that we should see active equity should see a rise. Apart from this, anything specific you want to, you know, you want to mention specific on the marketing or on the sales side? How we are, you know, tackling it up, as far as active equity in AUM share, active equity AUM share is concerned. That is one, if you want to highlight something more on it. Number two, how do you see consolidation happening on the AUM industry in general? I mean, we are definitely, you know, getting into a segment where people, in spite of or despite having, you know, a lot of uncertainty over COVID, people kept on investing in AUM, I mean, mutual funds. That's a very, you know, a brighter kind of a note that we are having it for this year. How do you see, you know, overall period of next, you can say next three years kind of view if you have it that do you see more consolidation happening, large players dominating more, or branded guys are able to dominate more? Just, you know, couple of lines from your side would be really helpful. I think you've asked too many questions. I don't know how I'll be able to answer in this call. I think I'll try to just in the next two-three minutes try to give you some Sure. Sure. Thank you. Yeah. Jignesh, I think from our perspective, I think, broadly, I think we have always mentioned this industry is a very simple industry. The key to the success is execution. I think and for us, I think we are gonna continue executing. The most important part of the strategy is, what to do and not, and also what not to do. I think from our perspective, I think one thing we have decided is that I think for us retail remains a very, very important part because it is not very easy to execute, and we've been able to get that sweet spot right. Mm. The fact that during the year also 70 lakh new investors getting added, I think which is if you look at the data is equal to investor base of many mutual funds in India, which have been there for more than two decades. Mm. I think we also clearly believe an investor which comes once. I think he will only keep topping it up as the per capita income goes up in India. Other avenues to invest keep reducing. The money into capital markets through mutual funds will keep coming, increasing. Mm. To your other point, I think what has happened in the last two-three years during COVID, we saw a lot of investors coming to capital market and also to the mutual fund industry. Mm. For us, I think we see both complement each other. Anybody coming into the capital market, I think in one form or the other, I think, this money eventually will also come into mutual funds. Because during these two years work from home, after work from home is over, everyone has to go back to their day job. Mm-hmm. It has to also, the trading will go away and people will have to invest for long term. Mm. I think we clearly see. I think investors coming in once you've been exposed to capital markets. You'll come into mutual funds. Mm-hmm. Finally, I think when we look at our own data, I think we have seen there is a conversion, you know, there are cross-pollination of, you know, we see ETF investors also move into active and active move into ETF. Mm. From our perspective, we are very strong on both the sides. I think I'm very excited about the next three years. I think the, as for the strategy you ask, I think the strategy remains exactly the same to execute, I think, and execution is going to be the key. To your final question on consolidation, I think I clearly see, I think in India can have many more asset management companies. Mm. I think at this point of time also, the percentage, you know, if you were to see the unique investors, is less than 3%-4% of the population. I think it is going to be the winners are going to be the one who can execute in smaller cities and towns. That will hold the key. Absolutely. Yeah, really thankful. That's really helpful. Thank you. Thank you, and all the best for the day. Thanks a lot. Thank you, Jignesh. Thank you. Thank you. The next question is from the line of Ronak Chheda from Awriga Capital. Please go ahead. Hello. Yeah, Ronak. Sir, yeah. Just one question, sir. If I heard you correctly, did you say that the transition of the AUM to trail fee has been 50%? Is that what I picked up when you were answering to an earlier participant? No, no. I'm saying that, look, it is not transition, because, see, we have also. If you see our overall assets have grown. If you look at it, as of March, we were very close to about INR 62,000 crore. Today, we are about INR 1,15,000 crore. If you see, what I'm saying is that, look, from that perspective, there has been substantial market increase as well. If I capture that number and see that, look, there has been addition to the investments and of course there has been outflow happening also. Predominantly, I think at this point of time, the SIP-led AUM itself, you know, would be about 50-odd% of the total assets. Total equity assets. Got it. Just to get a sense qualitatively as well, of the total AUM, what percentage or what share would be based on trail fee and what would be that number? Not a specific one, just a ballpark. No. As you know, see today, you know, 100% of the assets on trail because, you know, upfront is not allowed at all. 100% of the assets is on the trail model now. Of stock AUM as well? Sorry. Stock AUM, yes. Yes, yes. Okay. Okay. Thank you. Those trails are as of what they were being driven at that point of time. The trail has not been increased. The past trail remains the one what we have been committed at that point of time. Yes. I'm asking more from the new trail fee, which in 2018 that transition happened. I'm saying in- No, no. Any assets acquired after 2018 is, you know, only trail. The assets which were acquired earlier to 2018, they continue to get the trail, whatever was committed in those years to them. Let's say if you- My question is- There was a commitment of zero trail, those are on zero trail now. My question is, of the two, of the AUM as on March thirty-first, what would be the percentage of AUM which was on that earlier trail? What would be the- No, we do not disclose, you know, that data. You know, no. I mean, qualitatively also that would be helpful. I understand that cannot be 100%, but any qualitatively, is it more than 50, less than 50? No, we do not comment on the, you know, that data. You know, we have taken your suggestion. We'll evaluate going forward if any additional disclosure is required, you know, to this effect. Okay. Thank you so much. Thank you. The next question is from the line of Siji Philip from Mirae Asset. Please go ahead. Good evening, sir. Congrats on a good set of numbers. Most of my questions have been answered. Just one question. The company's passive fund strategy has been playing out quite well. Any proportional limit in mind for the passive fund as a percentage of the overall AUM? I think from our perspective, we see it in isolation. I think these are different business lines. I think the investors will decide. I think we have not listed that what percentage can be passive and active. I think we clearly believe both active and passive are taking care of different needs of investors and have opportunity to grow multiple X from here. Okay. Thank you, sir. Thank you. Next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Hi, thanks for the opportunity again. Just a couple of questions on the cost front. If I look at your other expenses, that is like at the lowest level for past many quarters. Are there any one-offs or this kind of run rate can sustain? Secondly, on the fee and commission expenses, those are at a significantly higher level. Any one-offs there? Sorry. Fee and commission. Fee and commission expenses are at INR 16 crore versus your run rate for the rest of the year at around INR 12 crore per quarter. That's INR 16 crore in this quarter. Any one-offs there? On the other expenses line, there we are at a significantly lower level. This trend can, this run rate can continue? Yeah. This is just for some, on the PMS and AIF side, you know, there is, you know, as in when we pay some, you know, expenses related to the acquisition of assets, you know, those get accounted in here. Whereas for all the mutual fund expenses, you know, it is completely on trail model, so no expenses are accounted in, you know, this line item. Okay. Got that. Under other expenses, if I look, there's this, you know, we've been continuously seeing a sustained decline in this number, and there are INR 40 crore run rate for this quarter. So, is this run rate sustainable? No, no. Obviously, I've been mentioning it for the last two or three quarters now that. Mm-hmm. Going forward, you know, we'll try to, you know, reduce our, you know, expenses as much as possible. Given the headroom available now is very, very limited. Also, given the inflation around, I think, expenses from here are likely to, you know, increase, you know. What we'll do is we'll keep looking at opportunities in terms of automations, in terms of outsourcing. Wherever possible, we'll try to bring our cost of operations down. Any kind of further decrease or significant decrease from here, you know, is not envisaged at this moment. Okay. Got it. Thank you so much. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Ravin Kurwa from ICICI Securities. Please go ahead. Hi, sir. Thanks for the opportunity. Just wanted to confirm one thing, that the drop in yields in Q4 was purely because of managing the TER and the Q1 of next year, we are seeing better investment yields? Investment? No. Investment. Sorry. The revenue has declined because of the two days, because of the lesser, you know. Profit margin. The TER changes to comply with the statutory regulations, where all the expenses of the scheme has to be borne by the, you know, scheme itself. Therefore, what we do for the entire year, you know, we keep reviewing it, because, you know, whatever expense we are incurring. There will be cases where there will be some deficit. There will be cases where there will be increase. Cases where, you know, we have a buffer, we'll take up the additional management fees. Cases where we have a deficit, you know, we have to, you know, decline or reduce our management fees. Got it. In Q1 FY 2023, in the month of April, are we seeing some reversals on this number? That's right, yes. Actually, if you go and see it, like, in terms of our disclosure, you'll see that, you know, those are being restated back. Okay. If you see October also, you know, I think, someone has asked this question in the month of October itself, you know, that there has been some changes like that. You know, for certain schemes, and if you go and have a look at it, because all of those communications are there in the public domain. If you look at it, they were restated back. Got it. Thanks, sir. Yeah. Thank you very much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Akshay Jain for closing comments. Hello. Yeah. Thank you everyone for joining this call today. Thank you to the team Nippon Life India Asset Management for giving us this opportunity to host the call. Thank you and goodbye. Thank you everyone. Thanks for joining. Thank you very much. On behalf of JM Financial, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.