Ladies and gentlemen, good day, and welcome to Piramal Enterprises Limited third quarter and nine months FY 2023 results conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Hitesh Dhaddha, Chief Investor Relations from Piramal Enterprises Limited for the opening remarks. Thank you, over to you, sir. 9-month FY23 earnings conference call. Our results material have been uploaded on our website, and you may like to download and refer them during our discussion. The discussion today may include some forward-looking statements, and these must be viewed in conjunction with the risks that our businesses face. On the call today, we have with us our Chairman, Mr. Ajay Piramal, Mr. Anand Piramal, Director of Piramal Enterprises Limited and Piramal Group, Mr. Jairam Sridharan, MD, Piramal Capital & Housing Finance Limited, Mr. Rupen Jhaveri, Group President, Piramal Enterprises Limited, Mr. Yesh Nadkarni, CEO of our Wholesale Lending Business, and Ms. Upma Goel, CFO of our company. With that, I would like to hand it over to our Chairman, and I would request him to share his initial thoughts. Thanks. Over to you, sir. Thank you, welcome to our third quarter earnings conference call for the year FY23. We are at an inflection point currently, this quarter finally puts us on a solid foundation for future growth and steady profitability, with historical asset quality issues now fully accounted for. In performance of this quarter, as far as the AUM and the operating performance movement is concerned, I'd like to say that we continue to deliver on our strategic priority of achieving an AUM mix of two-thirds of retail and one-third wholesale. In this regard, our retail AUM grew 29% year-on-year to INR 27,896 crores. Our Wholesale 1.0 AUM reduced 20% year-on-year to INR 35,101 crores. This has resulted in continued improvement in our retail wholesale AUM mix. Retail AUM now accounts for 43% of the overall AUM as compared with 33% in the third quarter of FY22. We are very close in achieving our near-term target of having 50% retail composition of total AUM and are on track to achieve our stated target of having two-thirds retail composition of the total AUM in the medium to long term. As we continue to expand our retail lending business, we are also investing in manpower, branch infrastructure, technology, and analytics of our retail lending business for its future growth. The financial performance for this quarter, we have registered a net profit of INR 3,545 crores during the quarter, as compared with the net profit of INR 888 crores in the same quarter of last year. The key transactions leading to the gains were INR 3,328 crores on account of reversal of an income tax provision. Secondly, INR 1,106 crores on account of restructuring of Shriram Capital Group and bond buyback. Also, during the quarter, we created a one-time additional provisioning buffer of INR 1,073 crores on stage one and stage two assets of the Wholesale 1.0 AUM. With this provision, we have adequately provided towards Wholesale 1.0 AUM, and we are in the process of reducing our Wholesale 1.0 AUM in line with our strategy through a combination of various means such as accelerated repayments, settlements, et cetera. Our total provision stood at INR 6,485 crores versus INR 5,491 crores at the Q2 FY23. For the balance sheet, with our increasing net profit, even after creating this one-time additional provisioning buffer, our net worth has strengthened to INR 31,231 crores from INR 27,472 crores in the Q2 of FY23. At these equity levels, our net debt to equity stands at 1.3 times with a consolidated capital adequacy ratio of 31%. Our retail lending book continues to deliver strong growth, with retail AUM growing 29% year-on-year to INR 77,896 crores. In-house originated loan book at 53% of retail AUM is now larger than the acquired loan book. Disbursement grew by 593% on a year-on-year basis, and 29% on a quarter-on-quarter basis to INR 5,111 crores, with a healthy growth across both digital as well as digital products, resulting in an improvement in disbursement yield at 13.9% for the quarter. Our average disbursement ticket size stood at INR 11.6 lakhs for this quarter. We are firmly committed towards building a diversified and a granular retail portfolio. The performance has been driven by the following initiatives over the last few quarters. First, the addition of branches. Over the last 1 year, we have added 74 new disbursement active branches. With this today, we have a growing network of 375 conventional branches, namely 343 conventional branches in Q2 FY23, and 116 microfinance active branches versus 72 microfinance active branches in the previous quarter. We have established our presence across India, serving 450 districts across 25 states of the country. As stated earlier, our target is to serve 1,000 locations through 500-600 branches over the next 5 years, and we are constantly working to achieve it. Second is branch activation. Moving beyond launching new products, we are also working towards making our branches activated with multiple products. Nearly 67% of our branches are now selling products beyond just the home loan. Not only housing and secured MSME loans disbursement grew 387% in the last 12 months, but also the disbursement under the unsecured loan categories has seen a growth of 46% from the previous quarter and stand at INR 2,215 crores during the quarter. Third, product expansion. We have been consistent in launching new products and currently our product stack consists of 13 retail products catering to different customer segments. This quarter, we launched 2 new products, Budget Housing in the housing loan category and LAP Plus in the MSME loan category. As we focus on the Bharat market, we also launched our maiden brand campaign to build the brand Piramal Finance in our target segment. Fourth point is on digital embedded finance. We have 22 programs live across 20 partners who are Fintech, OEMs and aggregators under our digital embedded finance business. Digital embedded finance disbursements grew to INR 1,238 crores, contributing to 6% of our AUMs in retail. Our digital loan offerings empowered us to significantly expand our customer franchise to 2.6 million with an active customer base of over 1 million, providing us substantial cross-sell opportunities. We received cross-sell disbursements of INR 1,862 crores in the last 1 year. The fifth point is on technology and analytics. In line with our endeavor to focus on technology, we also launched a new innovation hub in Bengaluru to accelerate the development of next-generation lending solutions and analytics. In line with our stated strategy, we have been working towards bringing down our Wholesale 1.0 book. Resting on the same, our Wholesale 1.0 book AUM reduced 20% year-on-year to INR 35,101 crore. We continue to focus on resolution of Stage 2 and Stage 3 assets, which will further moderate the wholesale book size in the short term. A dedicated team is involved in monitoring and executing the resolution strategy for recoveries and monetization of assets. In addition, we will continue to remain vigilant across our portfolio and remain well provided for Stage 2 and Stage 3 assets. We are also focusing on building a high-quality Wholesale 2.0 book. While efforts were made towards completing the recognition cycle of the existing wholesale book, we are also investing to build a granular cash flow and asset backed real estate and mid-corporate lending business that will give loans to well-capitalized promoters across multiple sectors and geographies. We will build this book in a calibrated manner while capitalizing on this massive gap. We've already built a new Wholesale portfolio of INR 1,870 crores by adding INR 1,041 crores of loans during the quarter. Within the new real estate lending business, we have deals worth INR 697 crores outstanding as on December 22. Within the corporate mid-market lending business, we have already a book of INR 1,174 crores across diversified industries. I'll now speak on the liability management. Our ALM is well matched with positive gaps across all buckets. Due to our strong balance sheet and improving AUM mix, our average cost of borrowing improved to 8.4% for the quarter as against 9.1% in the same quarter of FY22, and 8.8% in Q2 FY23, despite a rising interest rate environment. With 77% of our liabilities being fixed in nature, we have remained well cushioned against major increases in interest rates. Our cash and cash equivalents is INR 6,032 crores at the end of this quarter. To conclude, the retail business is continuing to progress on its growth path, with the AUM mix at 43% of retail and 57% of wholesale now. In wholesale, we are focused on bringing our Wholesale 1.0 book and at the same time build a new granular real estate and mid-corporate lending business in a calibrated manner. With one-time additional provisioning buffer created during the quarter, we are now adequately provided towards Wholesale 1.0. Our healthy mix of liabilities is helping us to gradually bring down our cost of borrowing over the last few quarters despite an adverse rate environment. Our balance sheet remains strong with a capital adequacy ratio of 31%. We will continue to work towards creating long-term value for our shareholders. Thank you. Should we begin the question-and-answer session? Yes. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yes. Good evening, everyone, thank you for taking my questions. Just 3 questions. First is on the asset quality and the related provisioning, the write-offs. In last quarter we had moved around INR 5,900 crores of exposures from stage one to stage two and made associated provisions and write-offs. We had said that, I mean, the asset recognition cycle is largely complete. This quarter again, we have taken accelerated provisioning, while we might obviously choose to call it a prudential or a management overlay. Now our press release says that we are adequately provided on the Wholesale 1.0 book. Sir, in between your opening remarks, you had said that the historical asset quality issues have now been fully accounted for. My simple question is now can we draw the comfort that we have fully provided on the stressed wholesale exposures? Sir, that is my first question. The second question is again, on your investments in the Shriram Group. I think if I recall correctly, earlier you had articulated that you would want to exit the Shriram investments by March 23, which is this fiscal year. Wanted to understand that will we still adhere to this timeline or has there been some rethink on our strategy or timeline on when we want to exit our investments in Shriram Finance? Lastly, recently there was a media article, I think which talked about our exposure to Sahana Group or its promoter. wanted to understand what is our exposure in that account, in which of the three stages is this exposure classified now? After the sale of the flat and that transaction, have you now recovered your money? What is the haircut that you have to take on this account? Thank you, Abhijit, for all your questions. Very good questions. Let me start, and Yesh will chime in with a lot more of the details as well, as well as others in the room. Your first and most important question was around The provisions, the one-off provisions that we have made, one time provision buffer that we have created during the course of this quarter. Some color on that. You know, when we said last quarter that we were largely done with respect to the recognition cycle, that is absolutely correct. We stand by that statement, that we were done, you know, largely completed from an asset quality recognition perspective in that, in that cycle. This quarter, as you have seen, there have been a lot of one-off gains that have come in the balance sheet that have created an opportunity as well to create some additional buffers over and above whatever our models, et cetera, might have otherwise asked for and continue to ask for. We've created this sort of one time buffer. We want to be clear that we are done with respect to asset quality recognition. You saw that in the stage two and stage three numbers as well. If you see our stage two plus stage three numbers, they were INR 11,000 crore the last quarter, for in wholesale, that number has come down a little in this quarter to about, you know, INR 10,800 crore, 900 crore or thereabout. The total amount has come down. We've, we have made more provisions. We have written off stuff. There is nothing surprising that's going on from an asset quality perspective. We just chose the opportunity to create or get on the other side of the cycle and start creating some provision buffers for ourselves. So we want to reiterate that we are done with respect to the Wholesale 1.0 asset quality and provisioning issue. We will take the up, Mohan anything to add on? I think the only thing that I would add here is I think what you articulated is a good summary. The reality also is because we changed our stance towards the asset resolution last quarter, and sort of consistently executed our resolution strategy, we have seen a significant reduction in the wholesale book. We are on this journey where the wholesale book will continue to move in that direction. As you again rightly highlighted, we have seen a fair bit of reduction in stage two and stage three assets. Because of the additional buffer that we are taking in stage one and stage two assets as well as overall provisioning, our coverage ratio is going up quite significantly across these stages. That's the only thing which I would add. Okay. Our second question on Shriram. As you know, this company had a restructuring and bulk of the asset value is now in the form of listed shares. We continue holding those shares on our balance sheet. Some part of the gain attributable to the one-off is related to that and that you should expect going forward, whether it's mark to market gain or loss. Given it's a public stock, it's large value for us. Like we mentioned last time, we continue to monitor it and once we decide what the right course of action is, we shall let folks know. On your third point on or third question on news articles, again, we will not comment specifically on news articles, but what we can tell you is that we as part of the DHFL acquisition, inherited a bunch of wholesale loans. From the time of acquisition, which was September 21, we have been consciously trying to sell those, whether it's NPAs or PTCs or whatever the case may be and what you read is one such example. That's, that's our response to that. Okay. Thanks for the detailed answer. Just one follow-up question here. When we have done this fair value accounting for exposure in the Shriram Group, when we do the fair value, is that fair valuation done based on the current market price of Shriram Finance, let's say as on December 31st, which is the end of the quarter? Is that how fair valuation has been done during the quarter? That's correct. We will do that again in March 31st, as we sell all the shares and whatever the gain or loss will reflect in the fair value gain loss. That would be very easy to spot and we will be calling that out anyways every quarter. Thank you. There is Arpan, a part of it is also, unlisted. About, 75% of the total value is in listed stock, the balance is in unlisted. That is, that is valued at cost. That's right. Got it. Got it. In summary, at least on the Shriram Group, our stance is that we will kind of want to exit it by March, and then after the transaction, whatever fair value gains or losses are, we'll again recognize it in the March quarter. I don't want to put a time limit of March because, you know, it depends on where the markets are and we will at the appropriate time do what is necessary. Got it. Thank you so much. I will come back with the question. Thank you so much. Thank you. A reminder to participants to press star and one to ask a question. We have our next question from the line of Shreya Shivani from CLSA. Please go ahead. Hi, thank you for taking my questions. I have two questions. First is, can you tell us what is the interest reversal for this quarter? The other question is on our, given that, you know, our product mix is rapidly changing between retail and wholesale, what is the run rate credit cost assumption that you guys are building and any guidance around that? Thank you. For the first question on interest reversal during the quarter, we have reversed INR 58 crores during the quarter. As far as the run rate credit costs are concerned, see, the kind of business model that we are building, which we have spoken about in the past, two-thirds retail, one-third wholesale. Within retail, about one quarter of it being unsecured and the rest being secured. Within wholesale, a little bit of, you know, cash flow type mid-market lending and, you know, the bulk being real estate lending. That's kind of business that we are working towards. That business in the go-to state will likely have a, you know, credit cost in the 1%-2% range. And so we'll see, but it's a little ways away. Right now because we are, you know, so heavily provided, in the short term the credit cost metrics might look more suppressed because of the heavy level of provisioning that's there right now and the fact that the wholesale book is de-growing. In the short term you might see a very different number, but in the medium to long term, that's the range that we are building towards. 1%-2% in the medium term is for the whole book, right? Not. Yes. Not... Yeah. Okay. Okay. Got it. Thank you. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. We have our next question from the line of Santosh Kumar Keshri from Keshri Wealth. Please go ahead. Am I audible? Hi. Yeah. I'm an individual investor and manage funds for my family and myself. The thing is that we have been invested in your company for more than 2 years now, and since that time it's been all downhill. For example, the numbers that you are providing for, you feel model changing, and suddenly there's a new provision of INR 2,300 crores. To the earlier participant's question, you said that we had an opportunity because there will be income tax write back and there is valuation gain also from Piramal Pharma. That led you to create further provision. When you look at the financials, top line and above the line and below the line, like, that's provision for the gain on Piramal Pharma valuation, all this is below the line. Whereas the provision that you are making is above the line. Our gains are one time, the losses that you are recognizing is for all time on the F rates, and this is not actually giving a very good picture of the financial health of the company. What should we take as an indicator? Shall we exit fully from the company or it's like, it's all downhill and there will be further extra skeleton on the cupboard? Sorry, if my question is sounding negative, but the point is that the financials are not giving us any confidence. How do you see it, sir? Firstly, Santosh, thanks for the question. Thanks for being a patient shareholder over the last 2 years. It is our endeavor as a management team, and the promoters are on the call as well, Nihar. It is our collective joint endeavor to actually build a business which has built its strength for the long term. A business which will continue to be around decades from now and has the solidity and predictability of that we expect from financial services institution. Some of these transitions from an, you know, from asset quality problem do take multiple years in financial services. I'm sure if you have been invested in the in the Indian markets and in financial services in the past, you would have seen other situations as well. What we have attempted to do is be disciplined over this last 2-year period in trying to address each of these issues as openly and as honestly as possible. Use every opportunity to actually both clean up the books as well as make provisions that are necessary to strengthen and create a strong foundation for the future. That is the path that we are on. As chairman mentioned in his opening remarks, we believe we are at the at the point of inflection. This quarter marks the moment when from kind of making defensive provisions, we start moving a little bit more to the front foot and go on the offensive and start making some provisions like other banks have been able to do over the last 1.5, 2 years, and create a large buffers for themselves, which we are getting into that domain in this quarter. Our intent, Santosh, is to build this business for many decades to come. Hopefully we will continue to see you as a shareholder in this period as well. Hopefully we will be able to pay you for the pain and the trust that you put in this company. One other thing that I'd mention in this regard is that in this past 2-year period that you mentioned, if you just look at the network of the firm, the network of the firm has significantly increased. Market value we cannot control as a management team. Market does what it does. We are at our all-time high in terms of our network on the financial services business of INR 31,000+ crores right now. That results in a capital adequacy of upwards of 31%, some of the highest capital adequacy that you would see in any large NBFC in the country. We are doing the utmost to create an institution which is generational in nature. Hopefully we will see the benefits of that in the years to come. Fine. That's very good and nice words you have put to the whole thing. The second point is from Sulekha, that every quarter we say that there would not be fresh provision. This is like we have taken extra buffer. Somehow or the other, we find opportunities to create fresh provision, and that is somehow not convincing the investors, the financial community as a whole. What do we do to finally see an end to it? Whatever other provisions required on the worst case basis, maybe we can take all in one go in one year and be done with it. There are some things hidden in the cupboard. It may not be true, and it's a figure of way of speaking. There may be something hidden in the cupboard that a unsuspecting investor might feel and then may junk the stock or there is a large sell-off. It's not that the reaction of the financial community is negative, it's that the financials are not providing that confidence. My simple question is that why don't you take all hit in one quarter, at most two quarters, and be done with it? That's precisely what we've been doing in these last two quarters, Santosh. I think we are, as we mentioned before, we reached the point where we feel very confident about where we are right now. Do you agree with that, Yesh? I just think we all like the fact that we have been consistent in achieving the objectives that we've been laying out for ourselves, be it in terms of change of businesses between retail and wholesale, be it about focused way in which we are going about resolving the assets which is reflected in the shrinking of the wholesale book, but also providing, which we believe we are not adequately provided for. That's what the summary is. Okay. I note your point. Thank you. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. We have our next question from the line of Nischint Chawathe from Kotak. Please go ahead. Thanks for taking my question. I have two questions essentially. You know, we just discussed about this exposure for a real estate to a real estate project in Mumbai, you know, where you had probably some, you know, flash sales and recoveries. You said that this was something that you inherited from the DHFL portfolio. Just trying to understand the, you know, the book value of this exposure would probably be zero, right? You would probably, whatever you receive would be a gain. Thanks for the question. We, at the time of the DHFL acquisition, obviously we inherited this, as Yesh said. There was a certain value attached to all the assets, whether it's retail or wholesale. This is one of many assets that look all of that book. As I mentioned, for the last 1.5 years, systematically that's been coming down. At this point, we would not be able to go into specific account details, et cetera. This asset is actually not on our books. We have sold it some time ago. Okay, okay. Just on the home loan side, on the retail business, you know, how much, you know, interest rates would you have raised over the last, you know, 4-5 quarters? On the portfolio, about 50 basis points. In terms of new originations, about 30 basis points. On the home loan side is what you're saying? Yes. Yes. Perfect. Thank you very much. Thanks, Nischint. Thank you. A reminder to participants to press star and one to ask a question. We have a question from the line of Gopinath from PNR Investments. Please go ahead. Hello, sir. Good evening. My first question is regarding Shriram Finance investment that we have done, sir. Initially we, yes, there was a stress a couple of years back in our books, so we might have got the need to sell that investment and we were looking for an opportunity to get out of it. Now, given the balance sheet position and our strength and our, we have capital adequacy ratio of 31%, do we really need to look at exiting that company or we can retain it for a long time, is my question. Do we really need to sell it is the primary question. That is one. The second one is, as the previous investor who talked to you, the individual investor, my question is a bit related to that only, sir. Like last quarter, even though you have in the presentation said, largely provided, in the conference call you said it's not largely, actually we have provided completely. This time, coming up with another INR 1,000 crores is like really, it's a bit disappointing because when you clarified in the last quarter conference call, it gave a confidence that that is true and it's, it is a surprise having this INR 1,000 crore provision again. He just said, "I'm a 2-year investor." I'm a 12-year-old investor in this company. Sir, I trust this company completely, but this gave a bit of a bad taste kind of, I mean, we, I genuinely believed that last time was the complete provision when you clarified about that almost provided thing. Hope this kind of things may not repeat kind of. Is there any specific stress that we have found and provided are completely just because we got a INR 3,000 crores unexpected extra into books this time due to the tax reversal that we have simply provided INR 1,000 crores. Could you please give the confidence this time so that it will help? I think that's a fair question first. The response to that would be, we will evaluate any and all disposition or holding depending on the condition of the market. It is a liquid stock. Currently it's mark to market on our books. At this point, we obviously cannot disclose what we are gonna do. In due course, once we make up our mind, we shall do the needful. On your second question. Yeah. On the, on the provision, you know, I will reiterate what I mentioned in the previous to the previous caller as well. We stand by what we said in the previous quarter. We said in the previous quarter that we were largely done with respect to asset quality, recognition cycle, and we are, what we are doing in this quarter is getting on the front foot, getting a little bit more on the offensive, and essentially creating a war chest, creating a little bit of a defensive buffer. As you have seen a lot of banks and financial services institutions do over this last year and a half since COVID. People have created a lot of these things, whether you call them contingency buffers or by other names. People have created these buffers because profitability has been around and there's, you know, you want to, you know, create a little bit of bulletproofing for your portfolio for, you know, for the future. So far till last quarter, we have not been in a position to actually get there, but this quarter we are. You've seen us actually, you know, get into that mode a little bit and try and start creating some bulletproofing of the future. We continue to feel really good about the recognition cycle. I will reiterate that our stage two, stage three assets are today lower than what they were in the previous quarter. Most of the provisions that we have made, in fact all of the provisions that we have made is in stage 1 and 2, as you saw. Clearly, we are giving the indication that we are creating this summer, creating a buffer for the future perspective, not because there is any new information that has come about in this last 1 quarter, about the asset quality status of any of our accounts. We want to be quite unequivocal on that point. We continue to feel very comfortable about our staging of assets as well as the level of provisioning the assets held, you know, prior to this 1-time buffer creation. Of course, this 1-time buffer only strengthens that situation even further. That is very helpful, sir. Thank you. I just, this reconfirmation helps a lot. Coming to the first question, sir, about Shriram Group, my question was a bit different. I'm asking whether it looks like that business is doing good. Do we really still need to think of exiting or we can retain it? Why not, is my question. Why not retain that as a strategic investment as long as the business is doing good? There are various possibilities. We can do many things. That is also one of the possibilities. For you as a shareholder, you could directly own the Shriram share as well. Why would you want to hold it through us? That, you know, when, for us to continue, for one publicly listed company to hold large share in another publicly listed company is a bit weird and it adds a layer of intermediation in ownership, which is non-value adding for the ultimate beneficiary, shareholder. But that said, like, you know, we are, you know, we will, we will take a call on kind of strategically how we want to proceed with this, you know, over the coming months, and we'll let you know the moment there is something to disclose here. Okay. Thank you. Thank you. That's all from my side. I'll join the queue if needed. Thank you. We have our next question from the line of Bhavik Dave from Nippon Mutual Fund. Please go ahead. Yeah. Hi, good evening. I hope I'm audible. One question is regarding the Stage 3 asset that we have on the Wholesale side, that is around INR 2,700 crore, which is like INR 1,300 crore. There's a note that you mentioned that there's a non-RE exposure which is credit impact, obviously it's not yet like 90 or 90 equity. Just want to understand what kind of exposure it is like. What is the which sector is this? Also wanted to understand this INR 2,700 crore kind of Stage 3 that we have. What is the kind of resolution pipeline can we, can one think of? Like, because we usually provide a 72%, is there any visibility on resolutions on this front or any pipeline that we can think about from a next 12-month perspective? Yeah. To address your first question, there is one specific asset that had moved during the quarter, to Stage 3, which is a non-real estate, sector asset. Right. Which is being prepared and which has been provided for significantly to the extent of 75 odd percent. Which has caused the change in the numbers as you see between stage 2 and stage 3. That's what this is about. As far as resolution of that specific asset is concerned, we have been working on resolution for many months now and are in literally the final stages of documenting the settlement, which is again in line with the numbers that you see in front of you as a condition to proceed. For that specific asset. Absolutely. Other stage 3 assets are concerned, mostly they are in, again, it's sort of a mixed bucket between the reindustried and non-reindustried assets. We've been actually working on, appropriate, sort of resolution strategies for each of the assets commensurate with the underlying complexities involved in those assets. We've made significant progress in terms of resolving some of them, and for, some, the resolution will take, a few more quarters to come. As we, as we say, I think x the movement of that asset from stage 3 to stage 2 this quarter, I think the stage 3 assets have actually reduced marginally. That's, moving in the right direction. It would be great if you could just provide some color on like the resolution pipeline, because that number, the 3 times INR 700 odd crores that we have, if we can get a reasonable sense on how many accounts we have, like the top 10 exposures in the sense that how can that be resolved over a period of maybe 12 months, 15 months? Where we'll be able just to make or understand that so that there's some clarity on how that. The sound is coming muffled. Hello. Yeah, sorry. I was trying to understand that if you can give us some details, maybe this time around or next time on the top 10 accounts that we have and the resolution timelines that we can anticipate, that will be great and because that will give more clarity on the Stage 3 assets that we have because it's a large chunk. Second question is to Jairam sir. Sir, I just want to understand on the retail piece, we've been growing the digital unsecured piece reasonably at a reasonable pace, and just want to understand what exactly are we doing there in the sense who are the large two, three partners where we are taking the loads from the sense who are the originators, what kind of funding is this? Like, what ticket size is. Any color on that would help because that's growing at a reasonable pace. I just want to understand the unit economics in sense. What kind of ROAs do these businesses generate, right? They are like not AUM building, they are more disbursement linked. From that perspective, how does the profitability on this product, these unsecured products work for us on the retail front? Yeah. Thanks. Sorry. Okay, lots of questions there on embedded finance. Broadly, I'll start with the last thing you said, and that's the right way to think about it. This is not a business that's about AUM building. You know, this business will always be kind of single-digit percentages of AUM. It's unlikely that it gets larger than that. It is about acquiring a lot of customer relationships to whom you can in the future cross-sell or not. This is our largest customer acquisition engine. Hopefully over time, we'll keep converting this customer into a franchise by actually cross-selling them other products as well. We have made some disclosures on how our cross-sell engine is working, et cetera, and you will continue to see more of that. This business has today about 22 partners and 26 odd programs under which we do this. The name of partners, et cetera, is disclosed on our website. You should take a look at it. Our largest partners here, you know, would be fintech companies like Navi or EarlySalary or ZestMoney or Moneyview, and KreditBee. Many of these guys are all at roughly same level. Some of the biggest partnerships like Paytm, et cetera, are still relatively small for us and we are just scaling them up because we are still, those are still new partnerships and new relationships that will get scaled up. About half of this business, about 50% of this business is at a roughly INR 1 lakh ticket size and greater than 1 year duration. The rest of the business is short duration, small ticket business. Overall, the way the economics of this business work is that on a net-net basis, you know, we make an ROA of upwards of 4% on this on this business. It is a small AUM, part of the AUM pie, but it makes very strong very strong ROAs and also gives us massive customer base. That's the way to kind of think about this part of the business. Understood. Paytm and all are new partners, right? That's what I understand. Yes. Yes. We went live with Paytm and did our first disbursement in the third week of December. Sure. Understood. Understood. The other businesses that we are running in the sense housing and the secured side of the business, is the business being done by the same team which we acquired from DHFL or how is the manpower work around for this business, right? Because this is a set of business. Most of our manpower now is new. It's neither from kind of the legacy Piramal company nor from the legacy DHFL company. Most of the people are new and have been kind of hired post the merger. You know, you might recall that right after the merger, we were about 4,000 odd people in terms of our in terms of our total strength. Today we are close to 10,000 people. Practically, that entire staff has joined us in the last in the last year or so. These are people from the from the industry. We are at about 90% lateral and about 10% fresher right now. Most of the population that you see running the retail business are people who have come in laterally with very solid retail lending experience in various other institutions and are now part of this of this joint retail finance business. Understood. This is very cool, sir. Thank you. Thank you. We have our next question from the line of Bhaskar Basu from Jefferies. Please go ahead. Yeah, thanks for taking my question. I had a couple of questions. Firstly, on the asset quality, I mean, there have been some slippages from stage two to stage three, and we still have about 12% stage two. When you say you're done in terms of provisioning, have you kind of accounted for a move from the stage two to stage three and, or would you need to incur more provisions when these assets slip possibly to stage three? Some of these- We have adequately provided for these assets. As things stand today, we have seen that the stage two and stage three assets put together is roughly INR 10,000 crore, INR 11,000 crore, which was the number for last quarter. While the book has reduced, we actually have increased the provisions combined for these asset the stage categories to INR 4,600 crore from INR 4,400 crore, which makes us believe that we have actually adequately provided for the complexity of the underlying assets in this. Bhaskar, we have roughly 45% provided between stage 2 plus 3. For a 100% secured book, in real estate, we think that's that's a pretty good place to be in. Now, there might be kind of, you know, one-off timing issues in some quarter, something goes from 2 to 3, and in the next quarter we get some recoveries, et cetera. I mean, some timing issues might happen, but they'll be minor. In the larger scheme of things, stage 2 plus 3 asset pool with a 45%, you know, provision cover, you know, when it's when it's all sort of a 100% secured book, we believe that's that's that's fully provided for that book. Thanks. The second question was on the AIF front. Basically, I mean, AIF amount has been stable for quite some time, but this quarter we've seen a INR 2,000 crore increase. If you can just kind of help me understand that. Sorry, what? Could you just clarify the question? The AIF. The AIF, which is part of your wholesale book, which used to be about INR 5,100 crores roughly, in the prior quarters had gone up to about INR 7,200 crores. Just to clarify, this quarter the only increase would be in the form of one resolution that is done and that would lead to some security receipt increase. We can take this offline and be able to further clarify what exactly you mean. We'd be happy to provide more information. Okay. The AIF number, Bhaskar, has not changed materially last quarter to this quarter. Maybe we can just catch up offline on what number you're looking at. Maybe there's some confusion. Okay. I'll take it offline. The third question was, when you kind of look at running down this book, as kind of intent to, do you foresee any further haircuts as you try to monetize these assets or sell down or that's all accounted for now? No. In fact, that's precisely the point that we've been trying to make for the last couple of quarters, that the provisions that we are taking have actually enhanced our ability to go on the front foot and actually recover money using whatever new strategies appropriate for a given asset. Right? We don't actually expect any further provisions or losses to come beyond what we already have provided for for this category of asset, therefore what we have is adequate. Okay. My final question was on the Shriram investment. Basically, just wanted to understand the thought process once. If you decide to kind of liquidate that, what is the plan with the excess capital? Because you're already overcapitalized. What's the plan to do with the proceeds? At the right time, I think we will, like, we will share that. You would have seen over the last, one, two quarters, we do look opportunistically for the right kind of acquisitions that fit our broader financial services strategy. These will keep coming. We have a few things in mind. At the right time we'll be able to, share a lot more. Okay. Thanks. Thanks a lot. That's all from my side. Thank you. We have our next question from the line of Sandeep Jain from Baroda BNP Paribas Mutual Fund. Please go ahead. Hi. Thanks for taking my question. First, you know, on the PL side, if I look at that, sorry, I joined slightly late, so I don't know whether you have seen or not. Operating cost is slightly higher. You know, what are the, you know, kind of, range in terms of guidance in terms of operating expenses, if I look at that way for years to come? Second, on the book, just to, you know, continue with the Bhaskar question. If I look at the wholesale stage one, it is declining, right, from INR 39,000 odd crores to INR 25,000 odd crores. From here onwards, the decline in the book, what you are trying to say would be largely due to the repayment and not due to the further recognition or provision kind of thing. That is what the sense which we are getting. Yeah. Certainly the latter of what you're saying. Like, there is no provision related reduction. Like, of course, I mean, yes, it is right that the best way to resolve an asset is to actually sell it and, you know, we might get the right, the right opportunity to do that. Given that we are well provided, it, our ability to actually consummate some of those transactions is a lot higher. That might happen. Otherwise, no, there isn't any provision-led reduction in net advancement that you should expect, you know, in the times to come. That's not, that's not the way we are talking about when we're talking about reduction in the wholesale book. It is through resolution, not through additional provisioning. Now, your first question on OpEx, you might have seen that we made in our presentation a disclosure on OpEx to assets as a ratio. We have shown kind of that, this quarter we were at 3% annualized OpEx to assets. You know, historically, you might recall that when we were a wholesale-only company, we used to have an OpEx to assets of roughly 1.3%. Right now that number is at about 3%. As we continue to make investments in the retail business, as we continue to expand our branches and our staff et cetera, which should continue for another year or so, you know, you should expect to see OpEx to assets go up a little. In the medium term, our expectation when we become a book which is two-thirds retail, one-third wholesale, and we've started to see more of the scale efficiencies come in on the retail side of the business, you should expect OpEx to assets in the 2.5%-3% kind of range, with wholesale being at about 1.25% and retail being at roughly 3%. The related question, which you have said that the digital unsecured retail book and, you know, the retail book kind of thing, when you are saying that this business is giving you a 4% kind of ROE, what kind of OpEx to assets and what kind of credit costs you are assuming in that 4% kind of ROE? In the re-digital, embedded finance of OpEx, that numbers are very low, because most of the OpEx is actually being borne by the partners. Our OpEx is very limited to our internal staff et cetera. Apart from that there is several development acquisition costs that we share with the partner. We give the partner a revenue share in the form of, in the form of origination fee, or a scheme of the interest based on, based on the performance of the branch, et cetera. Really apart from that, there is no real operating expenses on our side in that business. In terms of credit cost? In terms of credit cost, obviously it's a higher risk business than normal. Again, there is because of the way the OpEx is structured, where there is a scheme on interest which is linked to the credit risk performance, our credit risk outlay is capped in almost all cases. Overall kind of, you know, we can, you know, we have budgeted in up to 4% of our credit costs in that business. The effective number that we are seeing is much below. It's actually we are seeing effective numbers in the 1% range. Okay. Again, last question on Wholesale 1.0. The declining of the book from here onwards, what kind of, you know, percentage decline we will see from here onwards? See, we have seen a 20% decline in last 1 year. Now the repayment or resolution, means any kind of timeline or any kind of, you know, kind of, stays that okay from here onwards it will not decline kind of thing and we will run this book kind of. How you will look at that Wholesale 1.0 book? Look, I think we've got a fairly good traction on resolving the assets across stages. Part of our book also runs off organically given the fact that we are still some more early loans. What we have achieved in the last 1 year is a reflection of that. We have shrunk by about 20%. I think going forward, we don't give any specific guidance, but something similar is what we will sort of aim for then. Fine. Thank you. Thank you. We have our next question from the line of Rakesh Parekh from Rockstone Capital LLP. Please go ahead. Rakesh Parekh? Yeah. Thanks for the opportunity. Just one question. For this quarter, we have provided for the contingency risk provision on the overall appetite. Just wanted to understand from overall portfolio point of view, what kind of provision we are as a contingency we will look to where we'll be comfortable as such? From that, so future onwards, we can accept that much additional provision could be possible as such? I don't think there's any specific number that we have in mind. I think what, you know, it's a little bit opportunistic. You do it when you can. We had an opportunity, we did it. I don't think we have a plan of continuing to do it, you know, in this manner. So I think, you know, at an overall provisioning level, if you see, on an INR 64,000 crore book, we have INR 6,400 crores of provision. So we have a ton of provision right now on our book. I don't think there is much interest on our part to create kind of much more in the form of any of these contingency provision business. I think we're good right now. Thanks. Second is, just wanted to understand about how the DHFL books for what we acquired is shaping up right now? Yeah. The DHFL book is shaping up, you know, quite well. We've, you know, we continue to get recoveries from old DHFL NPAs. We are also seeing the core performance of the non-NPA book of DHFL, you know, continue to hold up quite nicely. We are very happy with the performance. It is, it continues to be a little bit ahead of our estimations when we did. Excuse me, yeah, Rakesh Parekh. That it has been a highly transformative and positive acquisition for our company. Thank you. That's it from my side. Thank you. We have our next question from the line of Vineet Sharma from Sansera Funds. Please go ahead. Thank you for taking my question. Some of them were already raised earlier. Couple of comments. One, it would be helpful if you could give some guidance for FY24 for provisioning related credit costs. Second, given the steep discount that the stock trades compared to book value, given that you are very comfortably capitalized, would we consider a buyback? Thank you. On your first point, you know, guidance, et cetera, those are Q4 events we will see. As we get to Q4 results, we will take a look at our coming year and how we want to talk about some of the forward-looking statements on where we are. I think, as Chetan mentioned in his opening remarks that this quarter has been a little bit of an inflection point quarter for us, and hopefully that you will continue to see that spirit being reflected in the quarters to come and in the next year as well, where you should expect to see a lot more of the AU type business performance rather than a lot of one-off driven business performance. On your, on your second idea, we note your suggestion. Thank you for that. you know, we have, we, you know, we always welcome suggestions and ideas from shareholders on what might be good ways to actually utilize the capital that we have. Needless to say, you'll appreciate that any capital market action of that nature, we will. We can only talk about if and when there is something concrete for us to disclose to you. So, we take your suggestion on board. Thank you. Thank you. We have our next question from the line of Nimish Maheshwari from RSPN Ventures. Please go ahead. Hello. Thanks for the opportunity. I just want, it might be a repetitive question, but, what is the connection, or the DHFL connection with the Sahana Group? Will it, come in our book in Q4, or how much, if it is? We have already replied to that. We have mentioned that we have already sold this asset, and this was part of acquired assets from DHFL in September 2021 at a significantly markdown price. That asset is already off our books. Okay, thanks. That's it from my side. Thank you. We have our next question from the line of Vinod Jain from WS Advisors. Ladies and gentlemen, due to time constraints, that was the last question. I now hand over the call to Mr. Hitesh Dhaddha for closing comments. Over to you, sir. Thanks. Thanks everyone. Please feel free to reach out to I.R. for any further questions. Thank you. Thank you. On behalf of Piramal Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.