Ladies and gentlemen, good day, and welcome to Piramal Enterprises Limited Q3 FY 2024 results conference call. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this 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. Ravi Singh from Piramal Enterprises Limited. Thank you, and over to you, Mr. Singh. Thanks, Nirav, and hello, everyone. Welcome to our earnings conference call for Q3 FY24. Our results material has been uploaded on our website, and you may like to download and refer to them during our discussion. The discussion today may include some forward-looking statements based on management's expectations that are subject to uncertainty and changes, and 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, Executive Director, Piramal Group; Mr. Rupen Jhaveri, Group President, Piramal Enterprises; Mr. Jairam Sridharan, CEO of our retail lending business and MD, PCHFL; Mr. Yesh Nadkarni, CEO of wholesale lending business; and Ms. Upma Goel, CFO, Piramal Enterprises. With that, I would like to hand over the call to our chairman, and I would request him to share his initial thoughts. Thank you, and over to you, sir. Thank you, and welcome to our earnings conference call for Q3 of FY 2024. I will speak about the company's performance during the quarter. A significant development took place in December. The RBI issued a new circular on treatment of AIF investments by banks and NBFCs. Consistent with our disclosure, immediately following the circular, during the quarter, we made full provisions against that exposure. This action impacted both our reported profit and AUM. We are confident of full recovery of these investments, as reflected in the payment record of the affected schemes. You will notice in our investor disclosure that we have split our lending business into two parts. I would like to introduce this classification to you. A major part of our lending business now is the growth business. This comprises retail lending and our Wholesale 2.0 businesses. This segment is what we are investing into, and over time, you should expect this to be 100% of our lending business. As of December 2023, the growth businesses formed 72% of our AUM. This growth AUM have grown at a CAGR of 57% since the end of FY 2022 to almost INR 49,000 crore today. Within growth business, retail AUM grew by 64% year-on-year to be slightly above INR 43,000 crore. Our flagship mortgage business AUM now stands at more than INR 29,000 crore. These are growing at 27% year-on-year, cementing our leadership position in the affordable housing finance. Our granular Wholesale 2.0 AUM has grown from a standing start two years ago to about INR 5,500 crore, benefiting from our revamped business model, leveraging upon the industry tailwinds. The rest of the AUM is our legacy business, comprising of Wholesale 1.0 assets, security receipts, and the erstwhile AIF investments. This is the portfolio we have been writing down, and over time, you should expect this to be minimal in size. At the end of December quarter, the legacy portfolio was 28% of the AUM. The wholesale AUM are down by 37% year-over-year, excluding the impact of AIF book, and by 47% year-over-year, including the impact of the AIF book. In all, our Wholesale 1.0 book is now down 57% since end FY 2022, from INR 43,000 crore to less than INR 19,000 crore. Thus, the growth business now is in a driving seat with 72% AUM share and at critically large size of INR 49,000 crore and will dominate and drive AUM growth and earnings from here on. We have some pockets of value in the balance sheet, which we would unlock over time. We have today announced the sale of INR 1,440 crore from our stake in Shriram Investment Holdings. We expect closure in Q4 of this year, of FY 2024. The transaction is aligned with our focus on monetizing non-core assets. The carrying value of the stake was INR 569 crore. The gains from the transaction will further strengthen our balance sheet. You might recall that last year, we offered some guidance of the contours of our lending business in FY 2028. We had mentioned that in that time period, we intend to build an AUM of INR 120,000 crore-INR 130,000 crore, with a retail-wholesale mix of 70/30 and an ROA of 3%-3.3%. We are progressing strongly on these key metrics. Our growth, on growth and business mix, we are presently ahead, slightly ahead of our guided pace. On profitability and risk, we are on track with where we are hoping to be. Excluding the impact of AIF provision, in Q3 of FY 2024, our total AUM growth accelerated to 6% quarter-on-quarter and 9% year-on-year, leading to an AUM of more than INR 70,000 crore. Our business mix across retail and wholesale, our AUM now is 64% retail and 36% wholesale, versus 33% retail and 67% wholesale at the end of FY 2022. Moving on to profitability, in Q3 FY 2024, we improved our interest margins, fee income growth, and OpEx ratios to deliver core operating profit of INR 316 crore versus INR 237 crore in Q2, and INR 187 crore in Q1. An expansion in yield of AUM, due to improving AUM mix and broadly stable cost of funds, drove 28 basis points expansion on our net interest margin. Led by retail business, the fee income grew by 83% year-on-year, and fee to AUM improved to 0.9% versus 0.5% in the Q3 FY 2023. OpEx grew by 5% Q on Q, and 25% year-on-year, implying a slight moderation in OpEx to AUM to 3.8% in the third quarter versus 3.9% in the previous quarter. While increasing share of retail AUM has driven OpEx growth and improving operating leverage in retail itself should drive a moderation in overall OpEx ratio over the medium term. Our PPOP to AUM ratio has thus improved to 2% in Q3, versus 1.1% in Q1. We remain committed to further raising our operating profitability by driving operating leverage in the growth businesses and reducing the contribution of the legacy businesses. On asset quality, our overall gross and net NPA ratios were down by around 35 bps Q-on-Q, each to 2.4% and 1.1%. In retail, our 90+ DPD ratios were stable to down across all products. In wholesale, our Stage 2 + 3 book is down 54% year-on-year and carries 32% provision coverage. In Q3 of FY 2024, our credit cost stood at 1.6%, while still running lower than our long-run expected range of 1.7%-1.8%. Q3 credit costs were higher than the first H1 credit cost of around 1.2%. The H1 credit cost benefited from much higher recovery. Recoveries tend to be lumpy, which can create slight volatility in the short term in the metrics for us as we work on our resolution strategies. Our PAT, excluding exceptional items and one-off gains, thus stood at INR 119 crore, versus INR 113 crore in Q2 of FY 2024, and INR 30 crore in Q1 of FY 2024. We remain strongly capitalized, with a net worth of INR 26,000 crore and capital adequacy ratio of 24.3% on a consolidated basis, even after taking the full impact of the AIF circular. With these highlights, I will now hand over to Jairam Sridharan to discuss segment-specific highlights. Over to you, Jairam. Thank you, Chair. Sir, sorry, we lost your audio. Can you hear us? Yes. Can you hear us? Yes. Yes. All right. Okay, let's start with retail lending. So retail lending, our AUM scaled up by 54% year-over-year. This goes with a quarterly disbursement growth of 50% year-over-year. In the third quarter, our disbursement yields and the AUM yields were both stable at 14.2% and 13.2%, respectively. Our flagship business, the mortgage business, now stands at an AUM of roughly INR 30,000 crore, accounting for 72% of retail's AUM. The mortgage business, which comprises housing loans and LAP, is our core hook product in our branch-based business. When we start any new branch, we start with the mortgage business exclusively for some time before launching other products from the branch. Our housing loan disbursements grew 23% year-on-year, with an average ticket size of INR 19 lakh. In the third quarter, our disbursement yield in this business was 11.2%. LAP disbursements almost doubled year-on-year, and here our average ticket size is INR 23 lakh. Yields in LAP are about 150 basis points higher than housing loans. Mortgages witnessed significant reduction in its already low 90 DPD ratios during the quarter, signifying continued strong asset quality. Our other secured loans, which are primarily used car loans, continued to witness sharp growth with AUM up more than 3 times year-on-year to INR 1,700 crore. Our unsecured retail book has four products, and together they stood at about INR 10,000 crore of AUM. Over the last three quarters, through various measures to tighten credit underwriting, our disbursement volumes in this have been tightly controlled. Simultaneously, the risk metrics have remained benign. 90+ delinquency has been around 1.4%-1.6% in the last three quarters. We have also shared during this quarter, a special analysis on unsecured lending, given all the interest in that segment, about how our consumer unsecured business has done as opposed to our business unsecured loans. We have broken up the consumer unsecured loans, which are about INR 6,000 crore of the total INR 10,000 crore. We have split that up into loans above and below 50,000-rupee ticket size. We have also shown how that, how that portfolio breaks up between salaried personal loans business done from branches and digital loans. What you will find from those special analysis pages in our presentation is that loans that are below INR 50,000 in ticket size have in general been 2-3 times higher 90+ delinquency rates than that of loans above INR 50,000 ticket size. However, these loans are just about 10% of consumer unsecured, the risk is here as well, through a series of actions on our part, has come down quite sharply. You will see both the risk chart as well as the contribution chart in our presentation in the special analysis slides. We have launched and scaled up our branch-originated salary personal loans business, and, this has led to its share in disbursements increasing to 39% of unsecured consumer loans, versus 20% same time last year. We continue to make steady progress towards long-term operating profit metrics, which we have shared with you in the past. Yields and fee income have been stable at fairly healthy levels. OpEx ratios as well have been moderating from the highs seen in FY 2023. Our OpEx to assets ratio was down another 20 basis points during the course of this quarter. As we continue to expand our retail lending business, we are also investing in manpower, branches, technology and analytics of our retail lending business for continued strong future growth. We continue to add branches to our network, and during the quarter, we added 28 new disbursement active branches, aggregating to a total of 95 branches added over the course, over the last 12 months. With this, we today have a network of 470 conventional branches and 179 microfinance active branches. Speaking of microfinance, we have also this time specifically shown delinquency trends of the microfinance business, and of the unsecured business loans portfolio as well, for you to look at as part of our special analysis slides. Talking about our branch network for a minute, last year, at the same time, we had 93 branches, which were less than 1 year old. Those 93 branches are today all in the 1- to 2-year-old category. That kind of mix shift implies that you should expect to see, and we do see, more than 2 extra productivity, at this vintage compared to what these branches had in the 6- to 12-month vintage. This will remain the key driver of improvement in OpEx to assets for retail segment, as we move towards our target of 3.5%-4% OpEx to assets ratio, compared to where we are today, which is 5.6%, down from 5.8% last quarter. Our consumer franchise today stands at 3.9 million. We acquired another 3 lakh new customers during the quarter, and our active customers out of this 3.9 million base continues to form a strong base for us to do cross-sell activities in the future. That's the summary on the retail lending business. And to walk us through our wholesale business, Yesh, I'd invite you to take it on. Thanks, Jairam. In our Wholesale 2.0 AUM, we are focusing on building a granular and high-quality portfolio. Our 2.0 AUM grew 24% quarter-on-quarter to INR 5,562 crore across real estate and corporate mid-market loans. Our 2.0 loans are performing well and are in line with or ahead of underwriting, as reflected in prepayments in the portfolio, which stood at INR 980 crore in our new real estate book's inception, which illustrates the credit quality of the underlying borrowers. We disbursed INR 1,798 crore in quarter 3 of FY 2024, of which INR 1,005 crore was disbursed in the month of December 2023. The average ticket size is around INR 157 crore for real estate loans and INR 57 crore for corporate mid-market lending, highlighting the granular nature of the portfolio. We will further build this book in a calibrated manner while capitalizing on the market opportunity. In our legacy business, we have achieved an accelerated rundown of Wholesale 1.0 AUM, which is down 57% since March 2022, in line with our strategic focus. In the last three quarters, we generated gross liquidity of INR 7,001 crore. Wholesale 1.0 AUM, excluding non-yielding assets such as Stage Three assets, security receipts, land receivable assets, and DHFL book put together, stood at about INR 11,197 crore with an average yield of 11.6%. Our Stage Two and Three AUM reduced 54% year-on-year to INR 4,721 crore, with a provision coverage ratio of 32% combined. Wholesale NPAs have reduced by 6% since end Q1 of FY 2024, led by cash realizations of INR 909 crore. As the resolution process continues, we expect our NPA portfolio to reduce in near term by a combination of sales, enforcement, and collections at our carrying value. For the AIF schemes impacted by the RBI circular, as alluded to by Chairman, we are confident of full recovery from these, these investments. We have received INR 1,137 crore as interest and principal payment on these units so far. That ends the update on wholesale, and I'm going to hand over to my colleague, Upma, to cover financial performance. Thank you, Yesh. Now I'll talk about the financial performance. In Q3 FY 2024, our NIM expanded by 28 basis points quarter-on-quarter, supporting the NII growth of 11% quarter-on-quarter to INR 835 crore. Fee income was up 23% quarter-on-quarter to INR 155 crore, further boosted by one-off interest income on IT refunds of INR 64 crore. Our other income was up 53% quarter-on-quarter to INR 251 crore. Our OpEx was up 5% quarter-on-quarter to INR 697 crore. Thus, our pre-provisioning operating profit went up 55% quarter-on-quarter to INR 389 crore. If we excludes one of the incomes, which are dividend income and the interest income or IT refunds totaling to INR 73 crore, pre-provisioning operating profit was up 33% quarter-over-quarter to INR 316 crore. Credit cost was at 1.6%, versus 1.2% in H1 FY 2024, which is in line with our expected range for credit cost. We made provision of INR 3,540 crore pursuant to the RBI circular on investments in AIF. These pertain to two of our AIF schemes, where we have taken full provision and also reduced them from our reported AUM. Excluding the impact of AIF provisions, our Q3 FY 2024 PAT stood at INR 290 crore versus INR 48 crore in Q2 FY 2024. Excluding the benefit of one-off tax refunds and interest income on it, totaling to INR 184 crore, our profit after tax stood at INR 119 crore versus PAT of INR 113 crore on comparable basis in Q2 FY 2024. Now, let me talk about the liability management side. We continue to focus on diversifying our borrowing mix, including securitization. Our fixed to floating rate debt mix improved to 51/49, and we continue to see further improvement over coming quarters. Our cost of borrowing was largely stable at 8.7%. Our ALM is well matched with positive gaps across all buckets. To conclude, the performance of the company in Q3 and nine months of FY 2024 highlights the progress of the company, which is better than the medium-term guidance on AUM growth and mix. The trends on operating profitability and asset quality are also aligned with our strategic roadmap. We are confident on the company continuing in the growth mode and improving profitability to our stated goals. With this, I would like to open the floor for questions. Thank you. Thank you very much. We will 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 Avinash Singh from Emkay Global. Please go ahead. Yeah, hi. Good evening. A couple of questions. The first one on your AIF investment. So for the two investments, you have made provision of around INR 3,500 crore. So if you can just sort of provide some color around the life cycle of these AIFs and kind of tentatively when one can expect, you know, the recoveries to happen. That's one. And the second one would be if I look at slide 12, where you have sort of given in one of the charts, you know, profit after adjusting for one-offs. So if I see there, I mean, the jump from Q1 to Q2 has been material. Now, Q2 to Q3, like, INR 113 crores going to INR 119 crores, that is just like a 4-5% sequential increase, despite the fact that the PPOP level, the growth has been kind of a 33 odd%. So that is basically due to higher credit cost. And I recall you have been talking about slight normalization of credit cost in the retail that was going. So does that mean, I mean, if this is the sort of a trend, that the underlying profitability emergence is going to be much slower? Because, I mean, the like Q3, seeing a normalization of credit cost and then the, the PAT or, or the adjusted PAT is not growing in line with PPOP. So can you just provide some color? How do you see that, I mean, with the credit cost normalizing going further, how sort of, your, underlying PAT going to develop? Thanks. Thanks for your questions. This is Yesh. I will take your first question and let Jairam run with the second one. On AIF, just to give you a background on the AIF, these AIFs actually came into being back in 2020. So these have been in existence for three odd years now. When the AIFs were formed, the portfolio comprised loans about 35 odd, 35 odd loans, which were held by the AIF, in which we had the exposure. Today, out of 35 loans, 22 loans have exited, and what's left is 13 loans. Proceeds of these 22 exited loans have been used to bring down the size of the AIF. When they were formed, it was roughly in the range of INR 8,000 crore to today, which is INR 3,500 crore, which is the amount we have as a prudent measure in response to RBI regulation taken through the PNL. As far as the plan is concerned, it was always our intention to work on the underlying assets as part of 1.0 recovery or the strategic plan, and bring this portion of the balance sheet down systematically over the next few quarters. That plan hasn't changed at all. We continue to work with underlying loans and underlying partners. We continue to expect liquidity of the underlying assets to occur as we go from here. These loans are all performing. We get paid interest, and we get paid principal as they fall due, and we are quite confident that we, we will recover pretty much everything that we have taken a PN on this quarter as we go from here. So I'll just, I'll just take a pause here to make sure that you've understood various aspects of what I just said. And if you have any queries- If I may add one other point to that, Yesh, or a data point we have shared in the presentation. We have so far recovered INR 1,137 crore to our account, Piramal account, from these AIFs. This is on page 11 of our earnings presentation. You see the number, INR 1,137 crore of cash recoveries has happened to Piramal's account from these over the last few years. In this current financial year, in the last 3 quarters put together, we have recovered INR 700 crore. So that gives you a sense that this is not kind of a one-off, that suddenly you got some money, but we continue to recover. Over the last 3 quarters, we have recovered INR 700 crore. So that's the pace at which it's going. You can never be super certain about exactly the pace at which it will move forward. But let me just state the fact that over the last three quarters, we have cumulatively recovered INR 700 crore or received INR 700 crore. Recovery is the wrong word here. These are not stressed accounts. So we have received INR 700 crore of cash flow from these accounts in the last three quarters. We would also like to reiterate that the INR 3,500 crore of adjustment that we have taken to our, that we have taken through P&L into our net worth, is an accounting adjustment. This absolutely does not change the economic characteristic of the underlying asset. So the cash flow that we have been receiving in the past, there is no reason to believe that anything much is actually gonna change, in that regard, except that because we have now written down the entire AIF to zero, everything that comes in in the future, in one form or the other, comes through PNL directly. So that's the change that you will see, that you will continue to see some extraordinary positive inflows coming in from these AIF flows, which would otherwise have shown as normal, regular income. You will see them now as, as extraordinary items for the quarters to come. I hope that clarifies the part on the AIF side. I could, Let me do the credit card side or the PAT side thing as well, and then we will see whether you have any further follow-up. On your point on profitability, you're absolutely right. Our PPOP increased materially during the course of the quarter. However, our profit after taxes did not materially change. The delta, of course, is caused by credit costs, which went up by about INR 60 crore. The core credit costs went up by about INR 60 crore during the course of the quarter, from roughly INR 200 crore to INR 260 crore, give or take. So a 60 crore increase in credit costs happened. The gross credit cost is about the same, nothing much has changed here. What has happened is that there was, you know, there are recoveries that happen in our wholesale business, which tend to be bulky, so sometimes you get big, bulky recoveries and sometimes you don't. Last quarter, it just so happens that we had INR 140 crore of higher recoveries than we had in this quarter. That explains all of the difference and more of what you're seeing in credit costs. Basically, smaller recovery pools from Wholesale 1.2 is what explains all of this difference. INR 140 crore of extra came from there. That's the reason why you see the PAT not growing as well. But this recovery stuff is a bit bulky, especially in Wholesale 1, it's bulky. Sometimes it comes, and when it comes, it'll be a large number. So you, I don't think this changes anything with respect to our long-term profit trajectory. Our long-term profit trajectory continues to be strong, and you should continue to expect, strong improvement in the profit profile in the quarters to come. Yeah, thanks. A quick follow-up, just accounting perspective. I mean, whatever you know, income that will come from this INR 35 billion of that yeah, NPA declared AIF, or like, provided. So how will you account, I mean, whatever I mean, you are getting back the principal or the interest, how will we it get accounted? See, we don't know yet is the honest truth. Like, there will be some part of it which will show up as interest. There will be some part of it which will show up as extraordinary income. There'll be some part of it which will show up as other income. So we don't know. We need to work with our auditors. The one thing that is for certain is that all of it will come through P&L, because the hit has gone through P&L, so all of the inflow will also come through P&L. Yes, and so we will continue to make disclosures which make it very clear how much of the income that we make from next quarter onwards is coming from this AIF pool. We will try and keep it separate as much as possible so that you can see it clearly. We will try and make those disclosures. As that happens, the capital that has gotten consumed, we have consumed about 400 basis points of capital because of this AIF thing. That capital will also keep getting released as the recoveries come. We will try and be as clear about this as possible in our disclosures in the quarters from now. Okay. Thank you. Thank you. Next question is from the line of Piran Engineer from CLSA India. Please go ahead. Yeah, hi. Thanks for taking my question. Couple of things, and I think I probably might have missed it in the, in the initial comments. Our wholesale stage two has seen a jump Q1 Q. Have you all commented on that? Have I missed anything here? No, you didn't miss anything. Okay, can you then help clarify, please? We had one account which flipped into Stage Two, and that's what explains the increase in the Stage Two bucket. And corresponding with that, we have obviously taken more provisions. Okay. Any, any color on, like, the industry, et cetera? What is the, let's call it, timeline that you're looking at for an upgradation? Or is that, is this more a watchlist account that could slip into NPL next quarter? No, it's actually the mismatch in the cash inflow from the underlying asset which caused this. We have changed our ECL criteria, where once the account slips to stage two, we actually keep it there for six months at the very least, right? Before reverting it back to stage one. So we don't see an upgrade happening for the next couple of quarters at least, but we don't see this slipping into stage three though. Piran, it is a wholesale INR 1.2 real estate asset, so the industry is the same, the real estate, and it's a real estate account. Got it. Okay. Okay, thank you. Maybe, Jairam, just on, on unsecured loans, now you've got a book of INR 10,000 crore. Couple of things. One is, how should we think about economics, in the own channel versus the fintech channel? That's one. Because obviously you mentioned yield of 18%-19%, but through the fintech channel, I would assume, it's actually much lower. And secondly, our, sub-50,000 rupee digital lending book is also quite large, now at INR 4,000 crore. How do we think about, given the RBI, let's call it, actions or concerns over 50,000 rupees unsecured loans, how should we think about your strategy? Second, to answer your second question, our less than 50,000 rupee loan book ka AUM is only INR 600 crore. So, you know, please look at page 27 of our disclosures. If the total unsecured book of 10,000, split that into two parts. Consumer is 6,000, business is 4,000, mota moti. Within that 6,000 of consumer, about 600 is less than 50,000, and the rest, like 5,500 crore is greater than 50,000. So less than 50,000 consumers is only INR 600 crore of exposure. Needless to say, that's much higher delinquency. The delinquency, as again, you can see on page 27, the delinquency we have been able to bring down quite materially in the last two quarters through a series of actions that we have taken. However, it is still high. This part of the book is essentially sort of a flywheel kind of business. You're gonna originate a bunch of customers here, and only a small part of them are gonna flow through the funnel to become large ticket customers of yours in the future. So that's the way to kind of think about it. Now- Jairam, sorry, because- Please. On your slide 27, the digital loans average ticket size of INR 50,000, I know it's average, so some will be above, some below, and that's about 38% of your total unsecured AUM. ... Yeah, yeah. But more digital, but digital channel, there are two ways to look at it. One is by channel and one is by ticket size. The ticket size one covers the whole thing. It's digital, non-digital, everything put together, INR 620 crore is AUM, you know, which is less than INR 50,000 in ticket size. Okay. At disbursement, right? It's not that after rundown it comes below 50,000. No, no, no. At disbursement. It's all at disbursement. Okay. Okay. Now, your economics on a point. Fintech and non-fintech, yeah. Yes, yes. So the fintech business, broadly speaking, the fintech business is being done at roughly 14%, 14.5% IRR, right? But as you can see on, where is that fintech on a slide? Page 29. If you see page 29, the fintech business is largely protected through FLDG. This again, is a new disclosure that we have added this time, just to give people a better sense of how that digital business is going on. So we are currently about 90% of the fintech business is protected through FLDG, which essentially means I'm not taking any of the credit costs. I'm only taking credit costs on that 11%, which is up there. So essentially, I have a 14% IRR business with pretty much no OpEx and no credit cost. So currently, it tends to be very profitable. So that's kind of the way to think about the fintech business, that we are able to originate a lot of customers, and we are able to do that at reasonably good economics, without increasing your OpEx, without really increasing your credit costs, at all. So right now, the two partnerships, kind of, business done through partnerships is better economics. However, in the long run, you do want to have, your own channels originating a lot of these businesses, so you will continue to see us invest in own channels and, continue to bring that up. Got it. Okay, okay, this is useful. Thanks a lot, Jairam. Thanks, Piran. Thank you. Next question is from the line of Nischint Chawathe from Kotak. Please go ahead. Just one from my side. You know, you mentioned that AIF has a, has, you know, your exposure of INR 3,142 crore. I just wanted to know, what is the total size of the AIF, out here, including the other investors? So at inception, the total size across both the AIFs was about INR 8,000 crore, right? Of which the first one was INR 7,260 crore. What's left now on our balance sheet is INR 3,500 crore, and all of that actually attributes to our investment or our holdings. So there is no third party investor left in the AIF anymore. So all the assets, and the cash flows that the assets generate are, to our benefit going forward. In the tranche and the senior is paid off. That is correct. So I think whatever is now sort of, you know, in the AUM, it completely belongs to you. That is correct. You said that you received around INR 800 crore in the last 3 quarters from this? INR 700 crore. Yeah. INR 700 crore in the last three quarters. But in all, INR 1,130-odd crore, in addition... Well, sorry, of which the INR 700 crore is part. You know, to say that, look, this will sort of, you know, run down over the next, whatever, 10, 12 quarters or so? We plan to actually run it down more, sort of faster and quicker than that. I think we don't give specific guidance in terms of the velocity at which this will, but all I would say is that these assets have been in the portfolio for some time. They've been performing. Our partners as well as we have received cash coming from this portfolio, and our effort is going to be on receiving cash from the portfolio over the following quarters. And we'd like to reiterate that, you know, INR 700 crore cash flow last three quarters, you know, sort of anchor for you to think about going forward. Everything that comes in here is directly to PNL. Some color of the underlying assets, I mean, you know, how many of these projects would be already completed, under completion, near completion or, you know, anything else that you could share? So these are 13 different loans. All of the loans are residential real estate project finance loans, and they are at different stages of execution. None of these underlying loans are backed by undeveloped or early-stage land parcels. These projects have been in production for some time, at different stages, as I said, and therefore, cash generation has been happening here. That was my question. All the best. Thank you. Thank you. Next question is from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. So, particularly with respect to the Stage Two Assets, almost like 7,000 odd crores kind of increase. So if we look at it, in terms of the provisioning which we were carrying on this asset and how much that would have actually impacted the credit cost? Because earlier you mentioned it was largely because of the lower recoveries on account of which the sequential credit cost seems to be... But, was there any increase on account of the higher provisioning towards this particular asset? Yeah, the delta is INR 700 crore, not INR 7,000 crore. Sorry, INR 700 crore. Yeah. So a small part of it, it was due to this, but not a material one. Yeah. Yes, I mean, of the total provisions that, Kunal, the total provisions in the quarter, about INR 250 crore, right? If you see, stage two is, stage two origin is about INR 160-170 crore. And, and so, yeah, there is this INR 700 crore that has come in, has gotten provided for at the rate of roughly 30%. So motamoti 200 crore provision or write-off. Oh, okay, okay. So there was nothing which was there in the Stage 1 as such. Okay, when it was in the Stage 1, it was still provided at the regular run rate of 3% or so it was- Yeah, motamoti, yeah, motamoti 5%, because wholesale account, so motamoti 5%. 5%, and then incremental you would have done... Okay, okay. Yes. Yeah, yeah. So INR 200 crore coming particularly from this, and balance is coming from the write-off. Correct. Again, getting on to the write-off, so this is again getting into the lower ticket size, because we are seeing a sharp decline out there in terms of the 90+ delinquency out there. What we have shared in our presentation, particularly the less than INR 50,000, it's coming down from 4.4. Maybe that proportion is still quite low, in fact- Correct. Six hundred- But you're right. But, yeah. Write-offs, but it's not purely because of write-downs that the ratio is coming down. If you see, the denominator has been very flat. It's been roughly INR 500-600 crore denominator throughout for the last 5 quarters that less than INR 50,000 crore, INR 50,000. So the denominator is roughly flat. Yeah, it is just that these in these really small ticket cases, you either do a very quick settlement with the customer, take whatever money you can, and you go away. Or you take the write-off and actually close the account and move on. You can't actually stick with the accounts for long periods of time because it doesn't work. You're not never gonna recover any money. If you don't recover it very quickly, you're not gonna recover it at all. Sure. And lastly, in terms of the increase in the borrowing cost and, maybe, the bank borrowings, how much is the increase that we have witnessed? Because we are not seeing much of the increase in the cost of funds. It's hardly- Yeah. Gone up. So you're seeing cost of funds has gone up at a stock level by about 10 basis points. Marginal costs are indeed high. I have to say 870 is where we are at a stock level, but on a flow level, it's 9.25 to 9.50, is kind of where marginals are at. So marginals have gone up by 25 basis points, roughly 20 basis points, you know, ever since RBI's NBFC risk weightage thingy happened. So it is. Yeah, so it has, it has gone up a little bit since then. Okay, so 20, 30, and that will get reflected in terms of the overall borrowing cost as well? Let's see. Let's see. There is a, there's a lot that is gonna happen. Let's see what RBI themselves do in the coming few quarters and the few policy meetings that are lined up. If as we expect the second half of the calendar year sees RBI changing stance towards being a little bit more accommodative that will completely overwhelm all these small deltas and you should see cost of funds start to decline at that point. Sure, got it. Okay, yeah. Thanks. Thanks, Kumar. Thank you. Next question is from the line of Harshad Awalegaonkar from Bandhan Asset Management. Please go ahead. Hi, sir, thanks for the opportunity. Just wanted to understand on the stake sale that you have done from Shriram, any residual stake that we are left with in any of the Shriram entities? Yes, Harshad. All our ownership in the general insurance and life insurance businesses of Shriram remain intact after the sale. So those are not those are not assets that we have sold yet. So we will... You will continue to see the general and life insurance businesses on our book. They will, they will be held at a total cumulative book value of INR 1,709 crore. Okay. So the stake that you have sold, that was largely in the lending entity of Shriram? No, no, it is not in the lending entity, it's a hold co entity. My colleague Rupen can explain a little bit more. Just give me one moment. Yeah. It's an entity called Shriram Investment Holdings Limited. This entity held a bunch of their investments, including some stake via this entity into the main lending entity called Shriram Finance. They also held their brand and the associated cash flow of that group in this entity, and there are a bunch of other investments. So we just monetized this particular company. This company was spun out as part of the demerger that happened in December 2022, which led to the creation- Of course. SFL, LI, GI, and this company. Sure. That's it. So just, just one last quick thing. What is our stake in that, in the insurance entities now? As in the percentage? On a beneficial interest basis, about 13.3 on GI and 15, 14.9 on LI. Sure. Great. Thanks. Thanks a lot, sir. Thank you. The next question is from the line of [Pravin Wati from Pravin Wati and Associates]. Please go ahead. Hi, good evening. I have two questions for Jairam. First, what is our current position pertaining to the asset effectiveness? When can we see it to be accounted for in our books of accounts? When the DTA availability will get time-barred? And the second one, what is the status of unrealized bought a few years ago? When can we see it to be monetized? What was the second question? I couldn't hear your second question. Can you please repeat that? What is the status of the unrealized land bought a few years ago? When can we see it to be monetized? ... Got it. Okay. Hey, on the DTA, deferred tax assets, Q4, Q4 is the time that we will get to know. We are in active conversations with the, with the tax authorities. Everything will, will, pass the time bar during the course of this, during, in the next few weeks, actually. And, so in Q4, you know, you, we will, we will find out the final details. So you should expect to, expect to know that, and, and, and see that. On land, yes, you want to, you want to take that on? Yeah. So as we said earlier, land monetization is work in progress, and we don't have anything material to report at this moment, but we will keep you updated as we make progress. Can we see another risk-adjusted discounted cash flow for that asset that you have done earlier? We're looking all the options, but as I said, nothing material to update on this at this moment. Okay. Thank you. You will see, by the way, that this, this quarter, we have made a new disclosure, which very clearly, and clearly shows you all the various aspects of our, legacy business and, how that has actually changed. This is page seven, in our, investor presentation. Please take a look at that. That should give you a good sense of, how all the various legacy assets have moved. As you can see, the legacy AUM has fallen very sharply over the last, over the last one year, and we expect that level of monetization to continue in the quarters ahead. Okay. Thank you. Thank you. Next question is from Vinod Jain from WF Advisors. Please go ahead. Good evening. My question relates to loss on derecognition of financial instrument. What is the nature of this net loss on derecognition of financial instruments under amortized cost category? Vinod, sorry, we are losing your audio. There's slight disturbance from your line. Yeah, can you hear me now better? We can hear you, but there's a bit of disturbance from the line. Okay, I'll try one last time. My question relates to loss on derecognition of financial instrument. Vinod, sorry, but still your audio is breaking. Vinod, I think I got the essence of your question. Okay. So I think you were talking about about our SEBI disclosures, where we have loss on sale of financial instruments. All this is, by the way, capped. This is one part of the overall credit cost picture that we shared. When we say that the overall credit cost for the quarter is INR 250 crore, all this is captured as part of that. This sub-part is any losses that you take when you sell any one of the investment instruments that you might have. In our case, during the course of the quarter, there was some sale of security receipts that happened, which came with a little bit of a hit, which is incorporated here. However, I want to reiterate that all this is part of the INR 250 crore of credit cost that we, that we mentioned. So you don't need to go beyond the INR 250 crore. Everything that is there in the SEBI disclosures will all tie up to the INR 250 crore eventually. Okay, understood. How is this line item expected to behave in the coming quarters? See, we have guided on credit costs overall as being 1.7%-2%, at the overall level. This quarter, we had 1.6%, and last quarter, we had had one. Last two quarters, we have been in the 1.2%-1.3% kind of range. Let's see, if we have, you know, in the quarters that we have strong recoveries in our wholesale business, we are in that 1.25 kind of range, and when we have slightly less recoveries, we are in this 1.5 kind of range. You should expect us to be roughly in that range in the times ahead as well. Understood. Okay. That answers my question. Thank you. Next question is from the line of Arpan Agarwal, individual investor. Please go ahead. Hi, good evening. My question is on profitability on the interest-earning assets. So we can ignore the one-offs and the non-interest earning assets. And I'm already assuming that the long-term OpEx will be around 3%, and credit costs will be around 1.5%-2%. So my question is: do we expect profitability to increase in the long term, either due to borrowing costs going down or yields increasing? Yes, absolutely, Arpan. And you're pointing out all the right things. What do we need to see for us to build a 3%-3.25% ROA, like, which is what we have guided? You need to see, first and foremost, OpEx needs to come down from its current level, 3.8%, to a little bit more like 3%. Number two, you need to see yields go up, yields plus fees. I would put that together. Again, you're seeing that happen, but you need to see more of that take place, and hopefully, a little bit of moderation in the cost of borrowing. The three things, if they happen, and even if credit costs stay roughly where they are right now, you will see us get to 3 and 3, 3-3.25. So those are the three things that fundamentally need to change. The one thing that doesn't need to change is basically credit cost, which needs to be somewhere in this 1.5 kind of range. We have good line of sight on all three of those items. Okay. I have a follow-up question. So, is it possible to provide the average yield as a percentage of the interest-earning assets? Yield? There is one disclosure. Yes, one for wholesale one. Look at page number... Sorry? Sorry. Yeah. Page 36. Thirty-six. 36. Yeah, page 36. That will show you in our legacy business what the yields are for the performing part of the loans part of the legacy business. And everything else, of course, there is, you know, it doesn't contribute to yield. So, 11.6% is the yield that we are getting on the loans, and the rest of the book, about INR 7,500 crore, does not contribute to yield. But this is on the legacy book, right? So on 2.0 business, it's obviously different, close to 14% and we take- Yeah. as different. All right. Thank you. Thank you. Thank you. Next question is from the line of Agam, from Flute Aurora Enterprises. Please go ahead. Thank you for taking my question, sir. Just wanted to check if there's any update in terms of the upgradation of the long-term credit rating of the company? Nothing to report just yet. See, the credit rating agencies, just like all of you in the equity markets, are watching our numbers. They wanted more clarity on things like AIF and credit cost trajectory and our legacy business, et cetera, as well. So some of our disclosures this time are also aiming at providing more clarity to some of these constituents. And we continue to have those conversations, but nothing to report at this moment. Understood. Thank you. Thank you very much. Ladies and gentlemen, we'll take that as the last question. I will now hand the conference over to Mr. Ravi Singh for closing comments. Thank you everyone for joining this call today. If you have any further questions, please reach out to the investor relations team. Have a good day. Thank you. Thank you very much. On behalf of Piramal Enterprises Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.