Ladies and gentlemen, good day. Welcome to the PNB Housing Finance Limited Q1 FY 2021/2022 earnings 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 zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Deepika Gupta Padhi. Thank you. Over to you, ma'am. Thank you, Margaret. Good evening, and welcome everyone. We are here to discuss PNB Housing Finance Q1 FY 2021-2022 results. You must have seen our business and financial numbers in the presentation and the press release shared with the Indian stock exchanges and also available on our website. That is www.pnbhousing.com. With me, we have our management team represented by Mr. Hardayal Prasad, Managing Director and CEO, Mr. Kapish Jain, Chief Financial Officer, Mr. Nitant Desai, Chief Centralized Operation and Technology Officer, Mr. Sanjay Jain, Company Secretary and Head of Compliance, Mr. Rajan Suri, Business Head, Retail, Mr. Jatul Anand, Credit Head Retail, Mr. Neeraj Manchanda, Chief Risk Officer, and Mr. Saurabh Suri, Head Remedial Management Group. We will begin this call with the performance update by the Managing Director and CEO, followed by an interactive Q&A session. Please note, this call may contain forward-looking statements which exemplify adjustment and future expectations concerning the development of our business. These forward-looking statements involve risks and uncertainties that may cause actual developments and impacts to differ materially from our expectations. PNB Housing Finance undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances. A detailed disclaimer is on slide 34 of the investor presentation. With that, I will now hand over the call to Mr. Hardayal Prasad. Over to you, sir. Thank you, Deepika, and thank you, Margaret, for introducing us. Good evening, everyone, and welcome to our Q1 FY 2022 results. On behalf of PNB HF L, I extend a very warm welcome to all of you and trust you all and your families are healthy amid the COVID pandemic, especially the second wave that we have just gone through and the third wave which may hit us. As I talk about our businesses and financial performance for the quarter, I would like to apprise that in line with company's philosophy of people first, during the quarter, we started our vaccination drive, which resulted in 81% of our employees currently vaccinated with at least one dose. This was essential as our staff interacts with the public at large, also the public, the borrowers and the depositors visit our branches, it was essential not only to protect our team but also protect the customers who visit our branches or whom we meet. The company had rolled out this agenda in January 2022, as all of you would be aware. Had shared related initiatives last quarter to help achieve strategic objectives of being a profitable and a retail-focused housing finance company, which is what the company aspires to become as a very strong retail-focused company. The company also embarked upon its transformation journey last quarter and had named it as Project IGNITE. This is a long-term project with over 12 months, diagnostic phase of the project is complete. We are entering the second phase in which the implementation and other things will start. During this phase, we conducted in-depth discussions, analysis, and benchmarking to assess the current state and identify areas of opportunity across our verticals. We have identified a number of initiatives across function, business, underwriting collections, cost, et cetera, that would increase our digital footprint across. Grow business with efficient underwriting and collection modules. Optimize our cost to create value for all our stakeholders. As part of our digital journey, we are introducing RPAs in our standard processes to reduce human dependencies, automate our credit decisioning for salaried customers to start with, and collection systems with rule-based engines and advanced analytics. It's an ambitious project, and it is far-reaching in terms of the way we are going to look at the business and the way we will deliver in terms of our digital footprint that the company would like to have. For pan India, COVID-19 wave two lockdown created extreme restrictions during the quarter, which impacted business and collections. The company dispersed INR 1,759 crores during the quarter, with 94% of the disbursements in retail segment in line with our corporate agenda. This is very critical from our perspective to make the company as a retail-focused company. Our focus in the affordable segment continues with Unnati business. This segment contributed 9% of the individual housing loan disbursement and is currently at INR 2,986 crores of AUM. The company has created a separate vertical for this segment and has identified 13 locations in Tier 2 and Tier 3 cities to be operationalized during the year. The first six centers go live by September. These centers are over and above our regular above 95 branches from where also we do business at different levels. The collection efficiency during the quarter stood at 95.4%, more because of the lockdown and major problems that India had encountered. The collection efficiency was the lowest in the month of May, when the entire country was under lockdown. The efficiency improved in June and further in July. The collection efficiency for July 2021 improved substantially to 98%. The company has taken various initiatives during the quarter, which include cross-functional allocation of cases and use of external vendors to increase customer interaction, addition of digital payment platforms to provide ease to the customers for making payments, and updation of collection app. I think this is one of the most significant things, the way the company has been able to bounce back in terms of improving its collection efficiency, especially after not only the lockdown of almost 45 days, but also a lot of interventions that the courts have taken during this period. During this quarter, the restructuring scheme by RBI was extended up to September 30th, 2021. As on June 30th, 2021, INR 1,733 crore, which is about 2.9% of our loan assets, have been restructured under the RBI regulation framework for COVID-19 related stress, that is OTR 1.0 and 2.0. There is no restructuring done during the quarter. Under the ECLGS for MSME customers, the company disbursed INR 315 crore up to June 30th, 2021. As highlighted by us in the last quarter, on the co-lending opportunity, we have tied up with Yes Bank and are under discussion with other banks for expanding our reach on the co-lending space. This, we feel, will help us in generating fee income and cross-sell income, along with expanding our customer base in minimal capital consumption. The model will also help us in onboarding prime customers at market-competitive pricing for better retention. This is especially significant for HFC, whose borrowing costs are very high, and it becomes little challenging for them to match the lending costs of banks who offer at from bottom rates these days because of their CASA and very low cost of borrowing. The company has accelerated digital transformation across its value chain. During the quarter, the integration of ACE, our online sourcing platform, and LOS went live, resulting in smooth file flow in the system. This is a significant step and the login through our digital platform increased from 31% in Q4 FY 2021 to 46% Q1. We now have some branches which are 100% sourcing their applications through the digital platform. I think going forward, for this company, this is something that the company will continue to push, and I'm sure that the digital footprint improve significantly. The company has also, as part of the MSME's automated data core system project, which is currently under pilot phase, is also implemented. The GNPA of the company stood at 6% as on June 30th, 2021 on the loan asset basis. The net GNPA as on 30th June stood at 3.6%. In a decreasing loan book, which degrew by 19% in the last two years, the GNPA looks further elevated compared to a growing book. The company, as a prudent measure, has made adequate provisions, and our total provisions to total asset is at 4.47%. The retail GNPA stood at 3.8% as on June 30th, 2021, as compared to 2.5% as on March 31st, 2021. Increase in the retail book, the gross NPA, is primarily emanating from the self-employed moratorium book, which we had communicated during the Q4 results. Amongst all HFCs, we have the highest self-employed footprint. The team is closely monitoring the moratorium book to have faster and quicker resolution. The corporate GNPA stood at 15.94% as on 30th June 2021 as compared to 12.7%. Increase in the corporate book GNPA is a movement from Stage 2 and SIPR accounts only, which we had also discussed it in our last presentation that we had. On the corporate accounts, the remedial management group that the company has created has yielded good results and is relentlessly working towards accelerated resolution of corporate accounts. The resolution and fee of our corporate accounts got impacted due to the COVID-19 second wave, and we expect few more resolutions within the calendar year. The three accounts, namely Supertech, Radius, and Arena, mentioned in the resolution hold aggregating ECL provision of around 70%. On an overall basis, as a prudent measure, the company carries 15.6% provision on the loan assets in the corporate book, with coverage ratio of 55% in stage three accounts. As per our stated position, we continue to reduce our corporate book. During the quarter, the company have sold and received accelerated repayments of INR 479 crores. This is because of the continuous engagement that the company is having with all corporate borrowers, especially because of our very clear laid down strategy of ensuring that we will reduce our corporate book and improve or increase our retail lending. The corporate book has degrown by 39% in absolute terms in June 2021 from the March 2019 levels. Talking about the liabilities, the company is seeing a downward trajectory in the cost of borrowing quarter on quarter. The company during the financial year has worked aggressively on prepaying and renegotiating its high cost borrowings. The company during the quarter received INR 490 crore as MSP funding and the incremental cost of borrowings for Q1 FY 2022 stood at 5.74%. This is the first time that we have actually reached below sub 6%. This has registered a decline of 52 basis points from Q4. The company has maintained liquidity of approximately INR 7,000 crore, INR 7,085 crore as on 30th June. I think the continuous engagement of the company and the treasury department, the CFO department with all the lenders has resulted into this kind of a reduction that we have experienced in our cost of borrowings. On the statutory rate as communicated from time to time, the matter is present as subject before the honorable SAT and the company is awaiting the final orders. However, we continue to operate in a business as usual manner and working on strengthening our position with gearing, which has further declined to 6.4x and with lower share of corporate, the CRAR has actually improved to 21.4% compared to 15% required by the regulators. I think these are some of the things that I wanted to talk, but as we go forward, the presentation has already been uploaded on our website and therefore, I would like to throw the floor open for your questions and answers. I have with me the whole top management team sitting over here and I would encourage you to ask questions and the respective function head would be in a position to respond to you. It definitely would help you and actually help you in alleviating the questions that you all have. Thank you very much and once again, thanks for joining us. As I see right now, there are almost about 165 participants which is very encouraging for us that the interest continues to be extremely high in the company. Thank you very much. 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 the 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. Anyone who would like to ask a question, please press star and one at this time. Ladies and gentlemen, we will wait for a moment while the questions being assembled. The first question is from the line of Amit Khetan from Laburnum Capital. Please go ahead. Yes, thank you very much for the opportunity. Two questions over here. First of all, on the senior management team, should we assume the team is by and large in place and that this will be the team that will drive the new strategy forward or should we be expecting significant further hiring at the senior and possibly even the middle management level? Be good to get Mr. Hardayal's perspective on how much is done and how much is left to do in terms of the overhaul of the team over here. The second question really has to do with processes and in any sort of lending activity, it's only in a stressful situation that you actually understand how well the processes are working and what your cross cycle returns are. If we look at our core sort of borrower base, right, which is in both salaried and self-employed, we gravitate to slightly higher risk than the absolute prime borrowers that the banks would cater to, not massively higher, but slightly higher. If we look at the yields we're getting from these guys at the actual credit costs that we're getting and the operating costs it takes to service them, are we confident that we can get to a 15% or 17% ROE from this base or is that kind of unrealistic to expect when you look at yields given the competition, normalized credit costs across the cycle and realistic operating costs, it'll be hard for us to cross 12%, 13%. Those are the two questions. Would be great to get your perspective on both of them. Amit, in terms of the management team, the top team, more or less the team is actually intact. We have had two exits from the company. The executive director had left actually in April, and subsequently, the CPO, the HR head, he also left because he got an opportunity to work in the central government, and he decided that he needed to move. We are in the process of hiring a new CPO. We will actually onboard them as quickly as possible, probably in the next few months. Otherwise, if you look at the sales, the underwriting, the collection, the CFO, the CIO, the corporate team, this is the team which is going to drive the business. Absolutely. There's going to be pretty good stability in terms of the way the business is going to be run. Obviously, we will continue to look for opportunities to augment wherever we find that there are either gaps, or because of the environment, because of the conditions we need to actually strengthen it. For example, when we launched, and I mentioned to you on the Project IGNITE, the project that we started, it could have been run internally also, but we decided that project running and everything is a completely different ball game. Therefore, we brought an experienced transformational leader who had proven ability to deliver in terms of project implementations and other things. That's one thing that we will continuously look at it whenever we find the opportunity, and we find that we have the right kind of people sitting over there, we will bring them. I think I failed to mention the CRO part also. We have a CRO who was appointed last year. He continues to remain with us, and there is an internal audit. We did it last year. This is a strong team which is going to run, in my opinion. In terms of the second question was in terms of the lending processes. I think there is no problem in terms of our processes. We have done a fairly good job. We have tweaked our processes whenever there was a requirement. We have changed our standard operating procedure whenever there was a requirement, and it is not that we have done it recently. Whenever the company has realized that there were issues that were cropping up on the portfolio side, it has responded and has tweaked its business model. Whether it was on the sales side, the kind of business that we sold, whenever we find that there are opportunities, new markets, we will enter over there. Wherever we find that there are stresses building up, we definitely will look at that, whether it is a systemic problem or it is otherwise. Similarly, we look at the underwriting, with the tightening of the underwriting processes, the collection mechanism. There's massive amount of IT interventions that are being done. The new rule-based engine, automated engine, RPA is being brought in. Another one of the most important and significant thing that we have done is that we are actually building up a strong and a very powerful advanced analytics team. With that team, not only there will be people working under every vertical, but we will also be strengthening the arm of the CRO. The CRO will look at the credit risk part and the analytics part across the organization to push information back over there. There's one more thing that is important is that the IT now remains a very strong bedrock of the growth engine. Digital IT. IT is not going to just provide an infrastructure. IT is going to support the business that is being done. In terms of repetitive processes and in terms of any other thing, IT is going to come forward to re-engineering everything. I think all these things, if you look at it, should enable the company to actually do significant amount of savings in terms of the way we do business, recalibrate the strategies wherever it is, bring down the cost, improve the incomes wherever we find opportunities. That is the only way we can actually add value to the share, to all our stakeholders. Right now, we are in a midst where we have done the diagnostic process. The complete diagnostic has been completed, and we are moving to a stage where we are in the implementation stage. All these questions that we talk about in terms of our business mixes, in terms of the way we deliver, in terms of the ROA, ROE, all this is part of the diagnostic and the results are with us. Now we are looking at setting up the vision statement and then what exactly are going to be the deliverables in the next three months, six months, and nine-month time. I think the results that are there are organic in nature the way we are looking at it. The moment we put in place this implementation phase, you will find that the results will start delivering at a much faster pace. Obviously, right from the business growth to the revenue stream, which is interest and other income, to the profitability and the ROE, ROA will actually perform the complete cycle of the way we look at the business. Anything that you would like to add? Amit, your question was on the ROE that you would like to look for in terms of on a number of 15%. MD mentioned when he was speaking earlier on that we are operating in a B2B manner, but the environment in itself is not a conducive environment. We had lockdowns last quarter, we had lockdowns in the quarter after as well. This is creating some challenges on the road. Our endeavor is, as you have noted, we reduced our loan book share on the corporate side from 31% as of March of 2020 to around 18% now. Sorry, from 31% as of June of 2020 to around 18% now. As we reduce our share of corporate book, we will be in better position to enhance our gearing With enhanced gearing, I'll be able to then have a better ability to get capital expanded. The opportunity for us to get to that 15% ROE is definitely there. In a steady state, normalized environment where the very COVID-19 do not really come and hit you hard, it's something that we look for. Our objective from a medium-term perspective is to be able to come to that ROE of 15% with a gearing. With a larger share of retail and maybe a single-digit corporate share, we come to a gearing around seven, eight, and with around 1.6-1.8, like what we mentioned earlier, we should be able to get to that 15% ROE. I'm not saying that this is something that we can achieve this year. This is something which we would plan for ourselves over the next couple of years to achieve that number because the business also takes some time to build in. We have got to a gearing of around 6.4. As we move higher with a larger retail book, that's what we're going to endeavor ourselves to reach. We are looking into other opportunities to enhance our avenues in the form of fee income, in the form of co-lending opportunities as well, which gives the accretion on our fees without stepping on our capital and other avenues which we enable that's possible. Just to take you a little back into financial year 2019, the company had an ROE which was beyond 15%. I think if the company has demonstrated it previously, it is a cycle in which it all started that the company had some issues in terms of its corporate book and then the stresses that come up. What we can tell you with a lot of commitment and a lot of authority that the way the company is actually shaping up, there is a strong possibility that going forward into a year, we should be able to reach that level. If the deal gets approved, Mr. Puri coming and joining the board. You've been a CEO before, he has been a CEO before. What kind of guidance would you expect from him? Which areas do you think he's likely to add the most value? From what you've said, I assume you don't expect to shake up the senior team very much. It's still going to be very much this senior team. Have you had discussions around a potential change in strategy and how are we going to leverage this individual who clearly brings a lot of experience and a strong track record to the table? Amit, the matter is sub judice. We'd like to wait for the SAT results to come in and then I would like we would go to the board and sit down together to review what exactly is the SAT verdict and I would like to comment only after that. These are conjectures, these are forward-looking and I would not like to comment anything on either any individual or anything that the company would do. The company has a plan. It's been doing on it and that's the way we continue to do. Obviously, with the guidance of the board, we continue to actually operate and that's the way we are going to do it. Thank you. Thank you. The next question is from the line of Amit Ganatra from HDFC Mutual Funds. Please go ahead. Yeah. Just a couple of questions from my end. One is this, your cost of funds has come down over last one year. Have you passed on any lower interest rates to your customers? Because on reported basis or even on calculated basis, your yield on advances continues to remain where it was one year ago. Whereas for many of your peers, it has come down very sharply. Can you highlight, has there been any reduction in the lending rate for you on your back book also? What is the current interest rates on the back book on retail? CFO wi ll cover it in detail. Let me tell you, in terms of the lending rate and in terms of calibrating the lending rate, the company is continuously going to look forward. The company looks at it and we are going to quote the rates that we are going to borrow, add whatever costs are required to be added to it on the borrowing cost, the cost of borrowing, and then the lending rate is arrived at. The company continues to look at those things. In the last about one year, not one year, about six, seven months, the company has brought down the interest rates on four occasions. These have been pretty well received because if you look at when the business was completely normal and you got the 90 days in the fourth quarter of FY 2021, which is January to March, the company did significant amount of business. Therefore there is significant big scope for doing good business. We continue to do good business at the cost at which we are offering the lending rate. In terms of the rates, we look at it. The ALCO sits, ALCO decides on the rates and we see what is the best that we could do. This is on the cost. The cost of borrowing also the company has, in terms of the cost of borrowing, if you look at it, and cost of funds and other things, I'll leave it to the CFO to cover it. In terms of the cost of borrowing, we have renegotiated everything. Every bank and every lender we have gone and we have spoken to them and we have told them that there is a significant, whether if it is 100 basis point reduction in the repo and other things, if there is a reduction of about 70, 80 in the MCLRs of various banks that we look at it. We have continuously brought our assets in this. It is not just actually bringing down the interest rate from the MCLR just because the MCLR has come down, but it is renegotiating the spreads over the MCLR. I think that is one of the reasons that we have engaged with every bank and fortunately for us, that everybody realized that yes, there is a big opportunity to reduce the interest rates and then keeping in view the way the company operates under the umbrella of PNB name We have been able to negotiate and that's one of the reasons why we have been able to do it. I think it can also cover on the spreads and NIMs and other things from the cost of funds, et cetera. Amit, there are two parts of this. One is on the new acquisition. Yes, on the new acquisition, we have reduced our rates. Like what MD mentioned, four times we have done this and every time we get benefit on our cost of borrowing on the incremental long-term money that I'm borrowing, we try to see how we can be more cooperative on the offerings with regard to pricing to our customers and also maintaining a reasonable spread on the new acquisitions. That's something we have done. Our new acquisition pricing has come down from what it was in last year this time to what it is today. On the old book as well, we have a board-driven repricing policy which helps us in working with our customers, considering factors on their trade profile to pass on them on repricing benefit which they can take in under a defined policy which is approved by our board and in line with what the regulators prescribe. Taking that into consideration, we do offer repricing opportunity to our existing customers from a retention perspective. On the new acquisitions, we have reduced our rates when I'm acquiring customer to what it was last year to what it is now. On overall book with regard to old book, we have not done any real alignment across the board on the pricing. Can I ask my second question now? There is something very important that the CFO mentioned and this is regarding actually incremental long-term borrowing. That I think we look at it very differently. I mean, I mentioned to you the incremental cost of borrowing has come down to 5.74. When we look at the lending rates and the stability of the long-term product that we have, we always look at the incremental long-term borrowing rate than what is it that we are doing it and that would always be different than incremental to the short-term rate that we would sometimes. That's not the best way to look at it. I think those are very important things from the profitability point of view that the even advances as well as the spread other things we are able to control, net interest margin is maintained. I think these are some of the things that we are continuously looking at it. Can I ask my second question now? Yeah, please. My second question is that, now what we have seen in last one year is that the mix that you have and the return ratios and NIM and all you are delivering is based on a book which has gone down. I'm assuming that you will get growth capital soon and once you get that and you start growing, I just wanted to know that the future growth when it starts happening, will the mix be similar in terms of your LAP as well as housing loan and also the mix between salaried and self-employed? In the future composition of AUM, will it look similar to what it is currently or that is going to change meaningfully going ahead? Actually, the portfolio has been rebalanced. If you look at it, with the down-selling and the faster repayment of the corporate book, the book as such is actually showing a completely different. The rebalancing will continuously take place. When we said in January that we are going to rebalance the whole portfolio by becoming a retail-focused organization, then we really mean that and that's the way we are going to do it. In terms of actually anything that we are going to do for building a new book and other things, we will continue to actually focus on that book. The corporates can give me a higher rate, but we are looking at a very stable book, extremely stable book. These are the books which will enable us to actually take care of the economic bumps that keep on coming in and that's the way we are going to actually respond to the whole business. Amit, before I forget, one more element why my yields are staying where they are maybe a clear trend, although my new business is at a lower yield is also because I repriced my corporate assets in maybe Q1 of last year and we across the board increased our rates by around 1%-1.25% for my corporate assets. Benefit of that kept on coming into my book and therefore while I was reducing the retail assets, the incremental new volume that I got from the corporate kept that benefit at a similar level with very little difference reduction and that's it. Understood. Thank you. Thank you. The next question is from the line of Shubhranshu Mishra from Systematix. Please go ahead. Hi, sir. Thank you for the opportunity. Two questions. One is that given the fact that we are increasing our digital foray, what life cycle or stages of the credits is this going to affect and what are going to be budgeting exercises done for the OPEX decrease, if you can guide for that? That's point number one. Coming towards the LAP, I see a large portion of the book being more than semi-lap. How many customers do we have outstanding for that particular book? Given the fact that we are talking about granularizing the book, what kind of proportion we can look at maybe in two to three years' time? What could be retail, what could be LAP and what could be non-retail, if you can do that? On digital footprint, can you please repeat your question so that I can give pointed response? Sure, sir. What kind of OPEX decline are you looking at with the digital sourcing increase and which all parts of the life stages of credit is digital going to affect? Is it only sourcing or there are various other life stages that you've also planned out? We also spoke about Amit. One is which life stages of credit is digital foray going to affect? Second, what is the OPEX decline one can look at giving the fact that digital foray is increasing? See, first of all, the digital footprint will be implemented across the life cycle of the loan, and it is not only restricted only to the underwriting process or a collection process. It is end to end. As you see our direct initiative that we have just taken on digital sourcing and digital application for the customer to apply for the loans, it is gaining momentum. However, it is too early for any initiative to come out with a targeted OPEX reduction upfront because this increase into productivity also results into some kind of an augment of the staff required to process a similar amount of lump sum. Those calculations will fructify only probably when the digital initiative reaches to its peak or it reaches to its stabilized state. Yes, Shubhranshu, on the digital side, right from the acquisition, which is I spoke about 46% acquisition. What we are saying is, I mentioned to you about the rule engine. I mentioned to you about the business rule engine, which are important. The target is going to go through the complete automated processes. The completely new rules being written, automating the whole processes, duplicacy is being removed, redundancy being removed, RCAs taking over the repetitive work. Similarly, as it moves forward, it moves towards the disbursement leg it finally goes to the collection leg and papers, files, et cetera, lot of work which is repetitive and which is very expensive. The acquisition cost comes down. Very critical for us. The acquisition comes down, sometimes it becomes self-service. Actually the underwriting cost comes down significantly. The collection is already we are working on it. At the moment we integrate it fully with our TIGERS app that we call for the collection. All these things are significant in terms of bringing down the cost to income. We are looking at that. I would not say in case. When we go ahead and fully implement it, the acquisition is complete. Similarly, the whole cycle is actually integrated, but the rule engine is going to come only after September, October. Once we have done it's a volume game that we are looking at. We should be now in a position to improve the volume, and therefore instead of saying that how much cost I will be able to reduce. I think a good measure would be to understand that we should have a very controlled, calibrated cost to income measure. The income can go up with the business volumes that we will generate, and the cost will not go up in the same proportion as the other things will actually grow. I think those are some of the very important things in terms of the digital push that the company is having. We'd like to be called a strong digital company. On the LAP and other things, would you like to respond? Yes. Our loan against property, if you see that up to INR 75 lakh segment, there is an increase in portfolio and which you mentioned. Beyond that, you see a decrease because incrementally, and this is not recent, last four or five quarters incrementally, the focus has been to up to funding on the LAP cases around INR 30 lakh, INR 40 lakh and INR 75 lakh, not more than INR 75 lakh. We see this, our average LTV is less than 50% when we speak. On the LAP, we find that it predominantly stays in that portfolio with an average age of 40+ years. These are second or third generation business profiles. I hope I answered anything. On NHLPs where we are talking about the ticket size. Our ticket size we have considerably reduced more than INR 75 lakhs. If you talk about, say, INR 75 lakhs earlier, from one or two years back, we were at somewhere around 14%, 15%. We have come down to 14% in there. If you talk about INR 2 crores-INR 5 crores, we have come down from 20% to 9%. Similarly, for INR 5 crores, we have come down from 15% to 3%. That's where we are in moving to a granular ticket size in terms of NHL business. As Jatul mentioned, we are very careful in sourcing this kind of business because almost every month we get these advisories from underwriting team, to pick up those cases which have a good CIBIL record and all those things. In CIBIL also, we are very careful, picking up good CIBIL cases also. That's where we are currently. The number of customers outstanding with more than INR 75 lakhs of exposure in the LAP books. That was my question. I understand the granularity part of it. If you can just give me the number. Shubhranshu, as of now, we would not have those numbers handy. We will come back on that. During the course, if we are able to get that, we'll just give it to you. Otherwise, we can go to the next question. Thank you. The next question is from the line of Nidhesh Jain from Investec. Please go ahead. Thanks for the opportunity, sir. Sir, just one question on credit rating update and any interaction with the credit rating agencies. Since our performance has been reasonably good, we have cut our gearing. Our books seems to be very well provided. I think we are carrying the highest provisions as percentage of loan book among all the HFCs. What the credit rating agencies are waiting for to upgrade our credit rating? Nidhesh, actually, we did have one conversation round with the rating agencies in the last quarter. One thing is that capital is not coming in as a real demand because they are drawing some comfort on the gearing side and they are now looking into other aspects of the business as well to build that case for rating. They could see that our gearing has come down. They could also see that we have reduced the mix between retail and corporate, so those are the comforting factors. There's several conversation has been to other aspects of the business, to enable us to build that case on a two-step process. The first step would be to see our outlook change from current status to almost a stable or a positive state, and then to have a next level conversation on the rating improvement as well. COVID-19 wave two does bring in some stop to that process because they would now like to wait and want to see how things are stabilizing for players in the market to start any further conversation on the rating improvement. Sure. The current gearing from their perspective, so I want to understand that on a sustainable basis, is the current gearing a sustainable number from a credit rating standpoint or they want much lower gearing from these levels? Yeah. They are using words like the current gearing is reasonable and the current gearing is fair. They're not giving a very strong thumbs up kind of a statement because of the environment, but they are not raising any more concerns on the gearing because the corporate book has also come down and the gearing otherwise will also improve with internal accruals coming in as well. I think there is a disconnect between the gearing that they are looking at it and the gearing that NHB looks at. We have told NHB also to reconcile with them that why they are looking at differently. Anyway, they obviously are looking at, and everybody because of the lot of capital that has been infused in many of the HFCs. They are looking at lower gearing. There is no second thought about it. However, 6.3x that we have achieved is a good gearing in terms of the reward and risk and the reward and other things. Yeah. Because if we are required to further bring down our gearing, that will mean that our yields will always be suppressed. That is a bit of a concern. Second, sir, in terms of yields, if you can share what are the yield on our current book on the retail portfolio and on the housing portfolio? Yield on book. Yield on retail housing and non-housing. Yield on retail book for which quarter it is 8.7%. For Q3, 8.7%. On housing portfolio? Housing number. For housing, 8.01%. 8.01%. Nidhesh, he's talking about new acquisition. Yeah. That's what he's asking. These are the incremental yields? Yes. Okay. Can you share the book yields also that could be useful? Book yield for retail segment, Nidhesh, is 9.58%. Within that individual housing loan book yield is 9.19%-10%. Thanks, Deepika. That's it from my side. Thank you. Thank you. The next question is from the line of Omkar G from Shree Consultants. Please go ahead. Once this project is implemented, what kind of growth are you looking at? We have ratified last conference call also where we mentioned that we will be targeting around 50%-60% of growth. I mean, I'm sure on disbursement, we will be carrying on with that and that's where our endeavor is to reach. We are focusing on that number currently. Just give a flavor of the disbursement that we made last year so that they can understand. Yeah. In the last year, we are sure that we will be able to achieve these numbers because if you see in the last year quarter of Q4, we were able to get around INR 4,000 crore of disbursement in that quarter. In the month of March, we were able to do almost INR 1,500 crore business. If you see going forward, we have got all geared up and I think 10,000 was what we did from there. Omkar, we did approximately INR 10,000 crores of disbursement. I think that is Q4. When Q4. When he says 40%-50%, we would look at this kind of growth. It also comes from on the assumption that there will not be lockdowns and other things. That is one part, and that is one we are going to bake it into our MOU that, or the budgeting that we are going to do. However, your question is beyond that, and I will let you know. What you are saying is that when I want to be done with this Project IGNITE with my consultant, what is the kind of growth I would be looking at it? This is something that will also flow in. Some of it will flow in this INR 14,000, INR 15,000 crore that he's talking about. Some of it will flow in because of the changes in the processes into the territories, into the system that we are going to introduce, and some of the business is going to come because of those changes in the one year that we are going to have. The changes are going to be significant once we have stabilized the whole operation, and that is it's a one-year project. I would assume that after about nine months and about six months from now, we should see some good traction coming in into the whole. Rajan just mentioned that we are looking at that kind of disbursement improvement, which is, I think in my opinion, we can very easily take it up over there, assuming that the COVID third wave is not there are no more lockdowns across India, and we are in a position to have businesses as usual. Because this Project IGNITE is, as MD mentioned, just not about generating numbers. It's about having a complete overhaul of the systems, overhaul of the processes, having the digital footprint across the organization. There are many things which are going to be taken care of by this Project IGNITE. Obviously we are pouring big time now into affordable housing. That's also a part of Project IGNITE and we are taking it up very seriously and all this thing will add value there. It would be stabilizing, right? Because we are here at all. What was the question? I was saying that just from the first question, which I asked, I was saying that whatever you have said, it means that from the next financial year, the project should start giving its results, right? Yes, absolutely. Okay. The second question is on the capital adequacy. Since you already have a 21%, and with the new capital coming in, what would be your target areas for the growth? With regard to target areas for growth, obviously we have made that statement that our endeavor would be to grow into the retail segment. There is a stated MD directive as well that we need to maintain home housing at around, individual housing around 50% and overall housing around 60%. That's the broader framework for us with regard to our business mix. Yes. Nothing really changes with regard to our new opportunity in terms of product segment. It would be retail driven, it would be individual housing and the LAP mix. The mix here could be in the range of around 70%-75% of individuals and 25%-30% of LAPs. That's the kind of mix which we always maintain. In the housing portfolio, we have the product Unnati, which is our interest area as well, which we would build up in a calibrated manner. We mentioned that we are talking about moving into 30 new locations as well. That will give us an additional uplift on our overall AUM as well. It's not as if we would drive that in a reckless manner and build that portfolio. It will be a very good gradual progression, making sure that we have that infrastructure available with regard to collection recovery as we did earlier days. The focus would not change anywhere. It would be retail, it would be individual home loan LAPs driven from the Unnati as well. Other aspects of the business which will come into play, giving further revenue for us would definitely aspects like co-lending. As MD mentioned in his statement as well, that co-lending gives me an opportunity to get that additional ROA uplift because I don't invest my capital. I get upfront income in the form of other fees and revenue as well, and I'm able to target customers whom I otherwise may not have been able to if they are really very prime technical customers. With this set kind of customer, I do make a decent spread as well as I do co-lending. That's an additional aspect of business that we want to work on. Yeah. This, whatever you have just said, this is irrespective of the Carlyle deal you are talking about, right? We are talking about business as usual. That is one part, and we don't know. The matter is tentative. I would like to. Yeah. Whether that goes through or it doesn't. Anything on the capital or anything, we'd like to wait for it. We will be ready with it once we have some kind of a clarity that comes from the side. We will go back to the board, discuss it extensively, and come out with a strategy in terms of whatever the direction that we would like to make here. As part of a business, it's a large organization. It's a organization with about INR 70,000 crore-INR 75,000 crore of business. It has its own way of doing it, and it has the strategies in place to grow. It knows what exactly it wants to do. It is just a question of with whatever new things that you have, you would like to tweak your strategy for optimum results. I think that's one thing that we would like to look at it given the circumstances that we operate in. Okay. Thank you. Thank you. The next question is from the line of Sumit Jain from Sumit Associates. Please go ahead. Yeah. You have mentioned that you have raised an NHB amount of maybe INR 490 crore in Q3, right Your incremental cost of funds for the Q3 is 5.7% funding, right? Yes. How much total borrowing you have done in Q3 from Q1? It was a misstatement. The amount is INR 1,490, not INR 490. We raised INR 1,490 crores for management in Quarter One. The total borrowing that we did in Quarter One. Okay. out of INR 5,500 crores, we have raised INR 1,400 crores something from NHB refinance, right? Yeah, INR 1,490 crores. NHB refinance is basically short-term liability or long-term? It's a one-year money. Okay. It's a short-term. It's a one-year money. I would also like to assume that NHB has been supportive of us, every year we will able to draw new batches. We should be able to get it refinanced as well. Okay. We should be able to get it refinanced and further extended once this money comes to maturity. Done. Very done. Thanks a lot. Thank you. The next question is from the line of Qazi Saifur Rasool from ICICI Bank. Please go ahead. Yeah. I just have a quick question here. I am trying to understand the rationale behind making it a retail-centric portfolio by January, because as far as I can think increasing the exposure towards the retail segment will definitely increase the risk of the portfolio as well. Until the economy is performing perfectly in the distressed times, I think the loan-to-value ratio will decrease significantly, because the probability of a decline in the value of grade A properties, which are in the case of corporate borrowers, is very low when compared to individual housing loans. I just want to understand the rationale behind making it a retail-focused portfolio by January. See, Qazi, if you understand this total breakup of how things are panning out and how things have been for us in the past also. The corporate portfolio was not doing that great for us, and categorically, we shifted our focus towards retail business. The main purpose is that we were not getting too much into a bulk size business in a corporate way. We want to spread. We don't want to have a concentrated risk in our book. The main purpose is to have a well spread out book, and the risk is obviously well spread out in that way. You understand that the risk weight associated with that book. The risk weight associated with the book of corporate is pretty high in terms of the 100% is the risk weight associated with the book. If you talk about risk weight associated with the retail book, it is in the range of 50%. There also we are able to deploy our money in a much more efficient manner where we will be able to get much more return. If you see all those aspects putting together the risk, the capital, the return, everything, I think this makes a much more sensible proposition for us to be in a retail book. Adding to what Rajan said, real estate is always a cyclical business. Sorry to interrupt you, sir. We cannot hear you clearly. Can you please come closer to the mic? Just adding to what Rajan said. Real estate is quite a cyclical business and it has its own nuances. Management here very well understands when the risks are accumulating in certain kind of a portfolio. We are very proactive to understand that when to start and when to stop. That's the most important aspect. We were quick enough to realize that there are systematic issues, and we were quick enough to react to it, bring down that part of the book very quickly. I mean, somebody who's holding on to this book in the COVID times, this is one of the most impacted part of the books, I mean, especially evaluations and everything. We were very quick enough to shed off this part of the portfolio and save on our capital. Again, it's a cyclical business. As of now, our thought is that as and when the economy stabilizes, the situation stabilizes, we would want to diversify our risk, be more on the retail side, and we will see as and when the situation improves. As of now, we feel this is the optimistic strategy. Look, Qazi, one thing is just on the consumption of the capital and obviously corporate asks for massive capital and sub-capital in terms of business also. That's one part of it. Please remember that whenever we are talking about the retail, we are simultaneously talking about creation of verticals, affordable housing. I think the Government of India is also very clear in terms of the affordable housing, and they are promoting it. Secondly, if you talk to any of the builders you realize that everybody is concentrating on building affordable housing stocks. There is massive opportunity that is going to come up in India on the affordable housing side, as well as loans which are less than INR 2 crore also. I think it gives you a large portfolio which will become stable as we grow A minimum mass of that portfolio is going to be very stable portfolio, and it is not vagaries of the economic cycle. It is not a cyclical business that today suddenly, 1 INR 500 crore account, it can actually create some little bit of turmoil in the company, those kinds of things. I think retail will give you very good stability. The moment you enter and perfect and you start doing good amounts of affordable, the overall yield on advances improves. I think that is very critical from our perspective, and that's what we are looking at it, that how do we manage it, and how do we ensure that these NIMs and others are actually improving continuously. I think that's one of the ethos on which we are moving, and we are going to build on it. Thank you, sir. That clears the rationale as well. Thank you. Thank you. We'll take one last question, which is from the line of Deepak Lalwani from Unifi Capital. Please go ahead. Yeah. Sir, I think you may have discussed it earlier briefly, but if you don't mind repeating. Sir, you've done disbursements of around INR 10,000 crore last year. What is the target you're looking for this year and maybe the following year? Deepak, I think I'm just repeating it. I've done it again previously also. We are just targeting almost 40%-50% growth over 10,000. That's the number that we are targeting currently. For this year. Maybe next year, do you have any target or this is in- No, next year we'll see. We'll get back to you on that. Okay. Thanks. That was all. Okay. That was all. Thank you. Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference over to Ms. Deepika Gupta Padhi for closing comments. Thank you everyone for joining us on the call. If you have any questions unanswered, please feel free to get in touch with Investor Relations. The transcript of this call will be uploaded on our website. Thank you. Thank you for joining us. Thank you. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.