Ladies and gentlemen, good day and welcome to Q3 and Nine Months FY 2022 Earnings Conference Call of PNB Housing Finance Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Deepika Gupta Padhi. Thank you, and over to you, ma'am. Thank you, Neeraj. Good evening and welcome everyone. We are here to discuss PNB Housing Finance Q3 and 9-month FY 2021-22 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. With me, we have our entire management team across verticals sitting over here, led by Mr. Hardayal Prasad, Managing Director and CEO. 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 our judgment and future expectations concerning the development of our business. These forward-looking statements involve risks and uncertainties that may cause actual developments and results to differ materially from our expectations. PNB Housing Finance undertakes no obligation to publicly revise any forward-looking statement to reflect future events or circumstances. A detailed disclaimer is on slide 36 of the investor presentation. With that, I will now hand over the call to Mr. Hardayal Prasad. Over to you, sir. Thank you, Deepika. Good evening, everyone, and welcome to our Q3 and Nine Months FY 2022 Results. On behalf of the company, I extend a very warm welcome to all of you. Before I share business and financial update, let me give you an update on the transformation project that is Project IGNITE that the company embarked upon in last financial year. Phase II of the project that is design and implementation started and is within timelines. The key structural initiatives identified are focus on high-yielding affordable housing Unnati business in Tier 2 and Tier 3 geographies. We have already opened 13 Unnati locations during the quarter, and 25 new locations will be operationalized by March 2022. Improve collections and recovery by leveraging digitization and building advanced analytics. We have undertaken multiple interventions to reduce forward flows in the collection. Enhance productivity and right-size infrastructure through various initiatives have also been undertaken. Let me now share business and financial update. The company disbursed INR 7,548 crores in nine-month FY 2022, as compared to INR 6,342 crores in nine-month FY 2021, registering a growth of 19% YOY. The loan disbursed during the quarter are INR 2,828 crores with 97% towards retail segment. The loan asset is at INR 36,798 crores as on 31 December 2021, as compared to INR 64,584 crore as on 31 December 2020, and INR 59,283 crore as on 30 September 2021. The retail loans are at INR 49,036 crores, which is similar to loans as on thirtieth September 2021. The corporate loans are at INR 7,761 crores, registering a decline of 22% quarter-on-quarter. As per our stated intention, this includes the sell-down accelerated payments of INR 1,080 crores in corporate books in Q3 FY 2022. Since March 2019, the corporate book has de-grown by 57% in absolute terms and is currently at 12% of AUM of the company. This is exactly as per the announcement that we have been continuously making since 2019 when it was decided that we are not going to do new corporate loans. Our affordable segment, which is Unnati, is at INR 3,089 crores of AUM as on 31 December 2021. We have opened 13 Unnati locations to increase our presence, enhance business in this segment. The gross NPA of the company stood at INR 4,340 crore. This includes gross NPAs of INR 829 crore, which is less than 90 DPD, but included on account of asset classification norms as per RBI notification dated 12 November 2021. Gross NPA excluding asset classification norms as per RBI notification is INR 3,511 crore as on 31 December, which is at similar levels compared to 30 September 2021. Actually, it is the same number. The net NPA as on 31 December 2021 stood at 4.87%. The adjusted net NPA without considering INR 829 crore, which is less than 90 DPD, would have been 3.6%. The total provision to total assets is at 4.4%. The retail GNPA stood at INR 2,431 crore, including INR 829 crore added on account of asset classification norms as per RBI notification. The corporate book GNPA stood at INR 1,908 crore as on 31 December 2021 on a depleting book, which further reduced by 22% quarter-on-quarter in December 2021. The retail collection efficiency for Q3 FY 2022 stood at 98.5% as compared to 98.3% in Q2 FY 2022. On the liabilities, the incremental cost of borrowing stood at 5.75% for the quarter. The average cost of borrowing declined by 62 basis points to 7.36% as on 31st December 2021 as compared to 7.98% same time last year. The company has maintained liquidity of over INR 5,000 crore as on 31st December 2021. The company is comfortably capitalized with CRAR at 21.6% and Tier 1 at 18.9%. The leverage has come down to 5.57 x as on 31st December 2021, with reduced share of corporate book. With this, I would like to open the floor for questions- and- answers. We have the entire management team, the CFO, the CRO, the head of the business, the head of underwriting, the HR team, the IT team, the transformational team, all heads are sitting over there and we welcome any questions that you have, and we'll be more than happy to answer them. 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 pound 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 Rikin Shah from Credit Suisse. Please go ahead. Good evening, sir, and thank you for the opportunity. I have four questions. First one was on the disbursements. While we have been flagging that the corporate book would be running down over a period of time, but even in this quarter, the retail disbursements also fell 4% QOQ. While we are seeing strong growth by some of the peers, what explains the sequential contraction in the retail disbursements? That's question number one. Second one was on asset quality. The INR 829 crore impact from the RBI circular, was it largely only due to the upgradation norms, or was there also some impact from the daily stamping of the loans? And, if yes, then what would be the breakup between the two? Third one is on the margins. You highlighted that there was a net income reversal of INR 79 crore. As explained in the last quarter, it was partly due to the BT outs. Just wanted to get a sense of what the balance transfer out was this quarter and how is our interest rate differential vis-à-vis the competitors. Do you see the BT outs kind of slowing down going forward? Lastly, there was just some notification that Kapish would have resigned. Just wanted a clarification on that as well. Thanks. That's all from me. You wanna talk about the disbursement? Yeah. Good evening. Just introduce yourself, sir. Yeah. On the disbursement front, the fresh retail dispersal for Q3 was INR 7,217 crore, which has registered a growth of 18% year-on-year. Having said that, we are also operating in a very largely rate-sensitive markets. Due to the lower rates offered by the PSUs and some of the larger players, we did have an impact in our business, but still we have managed to have a growth of 18% so far. Considering the whatever steps that we have taken, we expect the growth in the Q4 in FY 2022 and the disbursement to be in line with Q4 of FY 2021, and that's how we'll register the growth for the financial year this year as well. In terms of the disbursements, the home loan remains absolutely flat. I mean, we will start growing now because of the interest rate differential and other issues that were there. However, on the non-home loan, the interest rates have come down significantly by most of the players. As an HFC, obviously, with whatever issues we have, these are some things that we are working on. On the NHL, we had also, along with the corporate book, exited the high value NHL, which was very significant and which was one of the businesses that the company used to do continuously. Now, all those things have impacted to some extent the overall disbursement. The company is relooking at how it would like to reposition. One is on the affordable. The affordable will not give you a major amount of the kind of growth that you have seen in this company. However, we are open to look at all options so that we continue to have the focus on the Unnati business that is stated proposition of our company, and also see that the existing book that we have, how do we actually continue to grow it. In terms of the asset quality and upgradation, I think the CRO will take you through. On INR 829 crore, this is impact of a November 12 circular, and it is the downgrade. Most of the accounts were in Stage 2 only, which has been, you know, transferred to Stage 3. It's a retail portfolio only. Any impact from the daily tagging on this? See, daily tagging is, it's a impact of both. November 12 circular talks about daily tagging and the upgradation which was one. From December 12, the daily tagging has started. The daily stamping will take place on the account based on that these numbers have come. We have just given you the breakup of the numbers where this INR 829 crore stands. I think that's more important. Of this, INR 829 crore, INR 40 crore is Stage 1 and the rest is in Stage 2. But we have marked it as NPA. Staging on DPD basis. Okay, sure. There's another question on the margin and the balance transfer. Let me actually respond about Kapish. I think Kapish has been with the company for almost four years, and he has made an immense contribution in terms of the way the company has shaped and the value addition, a massive value addition that he has done in terms of bringing down the cost of operations, in bringing a new, a completely new way in which the finance department would look at, work upon it. Whether it is cost, whether it is revenues, whether it is securitization, there's a huge amount of effort that has been put in. As anybody would like to look at the career, he has decided to move on and look for good opportunities. The company also was offering him very good opportunity. Based on his personal preferences and choices, he has decided to move on. The company has decided, and it has gone ahead with the replacement to be hired as quickly as possible. Kapish is sitting here also. Working on the balance transfer I think. On the other part of the question was about the BT out. Yes, we had about 18% of the BT out that we have witnessed so far. That is largely rupee which has impacted the margins as well. Okay. Just as a clarification on the asset classification, I do see that the provision coverage has also come down because of this technical change. In terms of the outlook going ahead, is this the kind of provision coverage that you would feel comfortable running with or you would look to kind of shore it up again over a period of time? Secondly, the net NPA is also around 4.8%, if I recall correctly. While the RBI requirement is 6%, but is there any soft requirement to bring it down below 4%? You can actually respond on the provision coverage. Okay. In terms of the provision coverage, if you look at the number of Stage 3 coverage, it looks to be 43% in September, and now it is around 36% in December. It is because of the technical write-off. The company today, you know, overall coverage ratio, if I look at segment-wise and other component-wise, there is no significant change. The company will always continue to maintain an adequate provision policy. There is no relaxation in that as a rule or as a policy also. In terms of net NPAs, net NPA basically, you know, it's an INR 829 crore impact which is coming there. We are maintaining all the provisions as per the behavioral model of India, you know, okay? The provisions are very much sufficient. In terms of 4% and this thing that we don't want to. Hi, Kapish here. You know, 4.8% is a number that we are seeing. It was 3.2% in September. It is 4.8% because we are considering that as a in the NPA bucket. They are not 90+. Therefore, the numbers have always been there. You should not compare 3.2%- 4.8%. If I just corrected what MD mentioned in the earnings statement as well, that this 3.2% has moved to 3.6%, which means that there has actually been no change in the net NPA number. It is more because the book has depleted. The net NPA percentage has gone up on a lower denominator. Therefore, the net NPA actually 3.6%. Yes, it is 4.8% because of the new norm that is coming. We will be working to see how we can get our processes aligned to the new normal, which is there on the daily marking fees and get this INR 829 at a lower threshold so that that number overall looks lesser. Obviously speaking, you should consider that 3.6% on a comparative basis. Let me actually say that when we are comparing these numbers, it's not apples and apples that we are comparing it. I can go back and actually say that in September, March 2021, what was the number based on the Reserve Bank of India definition. We are not comparing. That was a totally different definition that was there. For sure. My question really was not to make the sequential comparison, but how does RBI look at net NPA and whether there is any soft requirement to bring the net NPA below 4% because that has been the case with some other NBFCs. Not, no comparison here really. Sir, the PCA regulation talks about 6%, right? The PCA regulations are currently not applicable to HFCs. They are more for NBFCs because it is clearly mentioned in those regulations that it is not for HFCs. There is no soft regulation if you're talking about any lower number than 6%. We would like to honestly keep it at around 4% and lesser than that. Okay. This helps. Thank you very much. All our efforts will be made to actually pull back as much as possible. I just cannot give you the number straight away. Efforts are made in the last about 20 days because this is a completely new norm that we are looking at it, the new way and the stamping that is taking place. The NBFCs and HFCs were not prepared for it. I can tell you that within, if I look at yesterday's number, which is a dynamic number now because of the daily stamping that is taking place, the number is improving and we will make all of the efforts to see to it that we pull back as much as possible, on month-to-month basis. By the quarter end, you'll see some little bit amount of improvement over there. I cannot actually give you the number right away, but yes, there is internally we have a number that is there, and we'd like to work on that number. Okay. Thank you very much. Thank you very much. The next question is from the line of Aditya Doshi from Chanakya Capital. Please go ahead. Hello? Hello? Hello? Yeah. Hello. Hi. Hello. Can you hear me? Hi, Aditya. We can hear you. Yeah. Thanks for the opportunity. I have two questions. First, if you can please provide some qualitative color on the corporate NPA and the resolutions. Second, Unnati is currently around 5% of our total book, and it's also our focus area and a high-yield product. So what composition do we aspire to grow over the next long term or 10 years and the timeframe, if you can give a guidance? Third question is, since in this quarter we just got the news of Kapish leaving the organization. In the past, like for 1 year we have been seeing some large churning in middle and top levels. So if is there some particular reason for this? That's it. Thank you. In terms of the corporate resolution, let's Saurabh. Can you just. Firstly, yeah, on the corporate resolution, see, we have a pool of INR 1,900 crore of NPA, though we've sequentially on a quarter-over-quarter basis it's remained the same. It's just that, you know, it looks bloated because of the lower basically run off of the book. We are working on, you know, solving the issues. If you look at, we've resolved a few accounts. I mean, in fact, there was a resolution which was there in the last quarter which was solved in the NCLT. Similarly, you know, we are working on a few higher value resolutions also, which will start looking up from, you know, next quarter or one quarter more. We have resolutions lined up for each of these assets. The only thing is that they will Some of these assets even though they'll get resolved, they continue to stay in the NPA bucket because, you know, the resolution and the money takes time to come in. We definitely have resolutions for each of them. One very significant thing I'd like to talk about. There were some accounts in March we had said that they are SICR. Other than one account, we have been able to pull them back. I think that's very significant. They're large account, large exposures that were there. We have been able to pull back. Well, yes, there will be some stresses because that portfolio has been completely segregated and we are working on it. One is that three accounts have been pulled back. Second is one account has actually definitely slipped into NPA. We're working with them in terms of the resolution, how we can bring in another party to do it or sell the assets, in whichever way that is possible. On the Unnati front, I think, Pankaj will cover that in terms of growth and everything. Unnati has remained the focus for us and it will continue to grow. As of now, we are at 9% of the total IHL business. Having said that, we have also taken some initiatives by introducing 13 new outreaches, which we have already started in last 1.5 month or two months. Business has already started from these 13 new locations. At the same time, we have also identified 50 branches across the geographies where we are present, where we have increased Unnati team specific sourcing channel from where the sourcing will increase. This has also been done recently, and it will help us to increase our reach and sourcing our Unnati business in Q4 of FY 2022. We expect that the monthly disbursement numbers to cross INR 100 crore from immediate basis and maybe our overall percentage of Unnati share will grow from 9% to maybe 12%-13%, 14%. That's what we are looking at. In terms of the top level changes, you know that from 2019 there were some decisions that were being taken by the company in terms of the way the business will be done, whether it was corporate book, whether it was actually high to high ticket loans and all those things. Based on that and some of the changes that have happened because of the COVID, and COVID is actually the last straw. If you look at it right from demonetization, the GST, the RERA and the IL&FS crisis, there will be one after another, the NBFCs, HFCs have been going through it. As part of that, yes, people did decide to move on. The Risk Manager, MD, his tenure was completed. The ED risk also decided to move on because he wanted to start something on his own. The HR head had actually applied much before all this happened because he wanted to go back to the government. He came from the government, and then from the army, and then he decided to move back to the government. That was one of the reasons. It was not that he was. That was a personal choice. Then actually now Kapish has decided, I think he's put in 4 years. Organic and inorganic growth are essential. The company actually relies on the internal talent also, and the company pushes for the internal talent to take over. I would say that yes, it is, one would look at it that there are some changes that are happening, but I would personally feel that it's, it will be very good for the company. Overall, the company is going to grow. The company has the strength, the company has delivered, and it's just a matter of time when there are a couple of fixes that the company will do it. There will be growth that is coming up. We have also seen that there is a lot of interest that the investor community has in us, and we are around to the INR 4,000 crore deal. That was very clear direction that came from the investment committee, investor community. I feel that in case there are certain things that are very essential for the company, if that takes place. There are two, three things which will very quickly take place. One is the growth trajectory that we are looking at it. The second is actually on the provisions and other aspects that one can look at it. The third is the creation of verticals that we are looking at it. All these things put together will actually help the company in coming back and, you know, delivering on the numbers. Yes, there are challenging times for the company. There is no second thought about it. I'm sure that, with the steps that we are taking, even if actually it's a baby step, but these steps are going to create sort of, you know, vibrancy into the organization. Okay. Thank you. Any other question that you had, I think you wanted corporate resolution on the top-level changes. No, sir, just if I can add one more thing on the capital raise, if you can update anything like that would be very helpful. Thank you. We're still actually working on it. We have not announced anything. We have not come out with anything. We're still working on the capital raise. I think all of you are aware, everybody is aware that the capital is required by the company. The company is working on it. Hopefully, once we have taken some call, we will come back to you, and we'll make the necessary announcement and also inform each one of you. Okay, sir. Thank you. Thank you. Thank you very much. Participant, you may press star and one to ask the question. The next question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Yeah. Again, on growth, earlier we had guided for quite an aggressive disbursement target for the full year compared to that of what we had reported in FY 2021. Looking at the run rate which is there for the first nine months, obviously it seems quite a way. Now in terms of the strategy, would it be in terms as we are seeing, rate sensitive, competition intensity, would the call be to lower the rates and grow, and that could ideally lead to the margin compression? Should we expect it? One is that, Kunal, on the rate side, and if you look at about the last 1.5 years, you'll find that there are 6x or 7 x we have actually recalibrated the rates. These are times where for NBFCs and HFCs, they're very difficult times because the cost of borrowing for them is slightly on the higher side. The banks, because they do not have any options to lend to industry or a corporate, they have brought down the interest rates to one of the lowest that India has ever seen. Now that is definitely a big cause of concern. To respond to it, one is that we have also lowered down. We are further looking at it. We are calibrating every day. Now, as I told you earlier in my presentation that, on the home loan side, we have at least arrested, you know, the massive decline that we were seeing it. We have arrested it. Now we'll have to maybe one other quarter we'll start showing the growth on the home loan. Now the question comes on the NHL side. Now HL-NHL also these interest rates used to be about 10%-11% if you look at some few years back. They came back to 9%. Now some of the banks are quoting almost a similar rate as their home loan rates. Now that again is a cause of concern for us. We are looking at it, how we can bring in because they also involve 100% risk weightages. The moment I have 100% risk weightages, I also would have to consume capital and my ability to do the retail loan goes down. Retail means the home loan goes down because there it is about 33% to about 50% and that actually without a capital, I may have some issue. In terms of the growth that you are looking at it, we had targeted some growth. We expect to do more than what we had done last year. The reason for some of the reason could be I would not ascribe all the reasons, but one of the reasons could be that we are factoring in the capital that would come in. I would not say fully, but there was little expectation that it will come and hit us by December. If it would come over there, then there was a possibility of, you know, the growth trajectory. Having said that, whatever has happened, we are relooking at all our options in terms of the growth that we would like to. Any organization and especially our size, we continue to be a large organization, would like to look at the growth opportunities every time. We are looking at it, we will work on it, and we will see that the rate-sensitive environment is also taken care of in terms of the growth opportunities that exist on the realty and the mortgage industry. Sure. Secondly, in terms of the nature of INR 829 crore, so this is largely the retail. Should I assume that this is largely coming in from retail or there are corporate also which are getting classified in the RBI notification? It is, Kunal, one is only retail. Only retail. There's no impact on the corporate. Zero impact actually. This is all retail. Out of that it was given that INR 790 crores of say 29 is actually in Stage 2 and INR 40 crores is in Stage 1. Yes, sir, go ahead. No, no. The only question was when we look at it, if it is primarily retail, okay, when we look at the composition that you give in terms of 66% of the book in Stage 1, earlier we used to have almost 75% odd. There seems to be some slippage out there. No doubt we would have sold down. It seems like the sell- down which is happening, that is happening in a better rated book. What we are sitting with now, okay, that seems to be the stressed book either in Stage 2 and Stage 3 because it's not there in RBI notification also. Still I don't see the coverage going up. Like Stage 2, in fact, we have reduced the coverage, okay. Particularly Stage 3, it's highlighted that it's because of write off. Even on Stage 1 we had not seen any kind of an increase. Not able to get through maybe why there is no increase in the provisioning. See, in the corporate book, in the Stage 1, there is an exit, a large exit which we have seen of more than 1,500-1,600 odd crore. There's a two write-off which we have done in the Stage 3, of around INR 422 crore. Now, my Stage 3 coverage for corporate book is more than 50%. For Stage 3 coverage is more than 50%, and there is, you know, some backward movement for Stage 2 to Stage 1, which we have resolved with a zero overdue. Fully recovered money, right? On the Stage 3, there is a one slippage from Stage 2 to Stage 3, which is a large ticket, and on that we are carrying a provision of more than 45%. For Stage 3 or a Stage 2, we are having it adequately covered for our corporate portfolio. With the depletion in book, these numbers percentages looking a little bloated. Now, just answering the overall question on the provisioning piece, my Stage 3 coverage for retail portfolio, after considering INR 829 crore as NPA Stage 2, it is around 25%. It used to be around 26, 27, but since this portfolio has moved from Stage 2 to Stage 3, the coverage is 25%. If I include the technical written off two accounts of INR 422 odd crore in the portfolio back, I would be having a provision coverage ratio of 4.90%. We have not reduced any provision coverage. It is going consistently by the models and we are adequately provided for. No, Stage 3, I understand. I was just talking about Stage 1 and Stage 2. Would it have been better if we have increased the coverage out there on Stage 1 and Stage 2 as well? Because obviously Stage 2 there is a chunk of some delays as per RBI. There is some slippage or maybe the accretion in the corporate of almost like INR 200 to INR 300 crores happening in Stage 2 as well. No, see, it all works by the model. I mean, if we have already moved INR 829 crore of retail portfolio, which had an incidence of NPA, and the model was, you know, behaviorally marking it on a higher side, then, I mean, when there is more slippages coming or, you know, the behavior of the residual Stage 2 accounts getting, you know, deteriorated, then automatically the numbers will go up. But as of now, we don't see any further stress or, you know, any kind of further severity on those portfolios. There is no impairment reserves created, no? Over and above the stage NPAs for IRACP. As for India, there's no impairment reserve. It's all to be the part of the, your, you know, ECL provisioning only. No, no. Something which was required under IRACP, additional provisioning that was not routed through impairment reserves. No. Our provision under Ind AS is, you know, 2.5 x more than probably what we are under the IRACP. Thank you. Thank you. Thank you, Kunal. Thank you. The next question is from the line of Shahraj Singh from Laburnum Capital. Please go ahead. Hi, sir. Thank you for taking the question. My question is on the Unnati side. Can you give us some light on the sourcing and underwriting processes being followed here for these Unnati loans? Hello? For Unnati loans, as we have categorized the loans under INR 35 lakhs segment for both salaried and self-employed. The underwriting remains for salaried again, it has few rigor points in terms of, you know, the salary credits and bank accounts, et cetera, and largely the same as in the other than Unnati segment. The self-employed, of course, is a segment wherein, you know, they are less organized in terms of filing regular ITRs and having the regular bank credits, et cetera. There is a mechanism to ascertain the cash flows and cash flow-based assessment is done for these self-employed profiles. Plus the field visits are done. The full-time employee visits the customer's business, customer's property to be purchased, and the assessment is done accordingly. Is it the same thing as the sourcing team which is doing this or different teams? Yeah, the team is separate who has, you know, the skill sets of appraising Unnati customers. The scheme, the team on both the sourcing side and the underwriting segment remains separate to appraise this kind of a loan profiles. Sir, I mean, our main focus area is supposed to be the Unnati loans, but it is too small for the entire book to grow, right? I mean, what other areas are we focusing upon to grow the entire book? See, this is one of the focus areas. How we call it a main focus area is because as we increase the percentage or 9% disbursement to 12 to 13, 14 kind of a percentage. The other focus area, the prime home loans, which we do for salaried and non-housing loans, remain in the focus and as what has already been addressed in the MD's initial address, that non-housing is a segment which clearly we see some, you know, focus to be further to be focused upon, and we will augment more business in that space as well. It's not only Unnati per se for the organization. Oh, okay. Unnati has just remain one of the areas that we'll focus. Having said that, as we have mentioned earlier also, that we are looking forward to growing Unnati piece only from 9% to maybe 13%-15% of the overall IHL. Our primary business or prime HL and non-HL will continue to have rigors on that and will continue to augment, and we'll see the opportunities of growing the prime business on, with prime HL and non-HL in focus to have a right product mix. That's where our strategies will be put in and, going forward. There are 2 or 3 things that we have initiated. One is that we had also withdrawn from the builder financing. Builder means on the retail side, the builder agreements that used to have the APF module, Approved Project Finance that we had with the builders, that we have reactivated it. That has started giving us results. The second is that once we had exited in 2019 from the NHL side, I mean, from the large ticket, especially the more than INR 2 crore. Our connect with the DMAs and DSAs has actually come down. That's one thing that we have restarted. We started building the connect once again because we have found our sweet spots of where we can actually deliver even on the NHL side. Now, those are some of the things that once we have cleaned up a lot of stuff that was there, we have decided that we will go ahead and actually build it. There has been a traction in this month, in December, and going forward there will be. However, the numbers that don't reflect this, the reason is because of two things. One of them is actually the interest rates that are there, and the second is also the runoff that keeps on there. Even if I get a customer, suddenly he's actually going ahead and shopping for another lower interest rate continuously. With private banks and the public sector banks offering very, very low home loan rate, the portfolio also runs away, in about three months, six months time. I think there are challenges, but we are finding our own. We have already found our sweet spots. It is not that we have not booked. We still book some significant business, and we will continue to look at these opportunities so that the growth comes up very quickly. I think what we have done in December especially has been very, very good in terms of the sourcing. There's a very, very good sourcing numbers. It's almost about 50% increase that we have seen over November, October, November. This is something that if we're trying to replicate. The sourcing increases. The business mix changes, the connect actually improves. The productivity improves. We are working on the productivity improvement. These are some of the steps that will help us in augmenting the business growth that are there. Let me again reiterate, Unnati will remain a focus. Affordable is a focus. Housing for all is a government mandate. We are part of it, and we will ensure that our systems and procedures and the overall push that we have on the Unnati will be there always. Okay. Sorry. Essentially, yeah. I'll request to come back in the question queue for the follow-up. Sure. All good. Thank you. I request to all the participants, please restrict to two questions per participant. If time permit, please come back in the question queue for the follow-up question. The next question is from Renish Bhuva from Systematix Group. Please go ahead. Hi, sir. Thank you for the opportunity and it's a fairly detailed presentation. I wanted to understand on slide 13 where we give out the AUM mix and we give out salaried, self-employed. What percentage of our salaried customers come from the Cat A companies? If you can split the salaried into you know PSC employees, government employee, government non-PSC employees, private sector employees, and within private sector, how many come from Cat A, Cat B, Cat C kind of company? What's the average income and average FOIR for these salaried customers? And similarly, if you can split it for self-employed as well, what's the average FOIR and what's the average income for them? That's the first one. The second is what kind of budget have we estimated for the litigation or the resolutions of pending corporate loans? That's the second question, sir. That's it. Thank you. On the retail, as you asked, the salaried, largely 60% is our Cat A profile which comprises of, you know, government employees plus other, well-established company. The Category B and C constitutes the balance around 40%, and that too again, Category B has a larger share in that. The FOIR what you asked for salaried is around 50% FOIR is on a salaried segment and close to 66%-67% is the FOIR on self-employed. Sir, can you reply for corporate litigation? What is the question? What exactly are you looking for? How much are we budgeting for the corporate litigations? Yes. In our budgeting exercises, what kind of expense have we budgeted for the litigations or pending litigations for all the corporate loans? See, we can give you those numbers offline. See, whatever we are budgeting in terms of litigation as of now, what we're doing is we book those in the specific accounts, and we've been recovering each and every penny from those specific accounts when they are exiting. When we do any kind of litigations, whether it's SARFAESI or, you know, Section 138 or whatever we have to do in terms of our litigation costs, as of now, very few costs, you know, we are bearing ourselves, and we are recovering each of them from the customer itself. No, sir, I have full faith that you're recovering it. That's not the question, sir. My question is fairly simple. In your budgeting exercises, what are you budgeting for the litigation costs? It's fairly simple, sir. I have full faith in you that you'll get the money back, but what is the budget, budgeted estimate? I don't understand your question. Budgeting estimate on the legal. Yes. Can you actually exemplify the question also? For all the litigations that are pending, sir, what is the litigation estimate that we may have, sir? What can go out? What can go out means, you're talking about. Litigation costs, sir. Yes, sir. Litigation costs basically. Litigation cost? Yes, sir. Any kind of legal costs, sir. I think that's a very specific number we can offline here. Sure, sir. It's not actually if you are looking at the cost to the account. I don't think it is significant in terms of the litigation cost that goes in because, you know, what do you do? You can actually issue SARFAESI notices. You issue loan recall notices. If it is an NCLT, you will go and actually invoke. Either you will go sit with the committee of creditors. You are actually going to invoke the personal guarantees. So all this actually doesn't. Actually, it's not a significant cost that goes on the litigation part. If that is, I don't know whether I've been able to answer your question, but if you are looking at the cost to the account, I don't think that there is any budgeting also that is done for that or it is what is the cost. I can actually offline, I can handle it with you, and we can work on it and tell you that what exactly could be the litigation cost. We'll give you that number. Sure. It's not a very significant number, let me tell you. With respect to NCLT costs, wherever we have NCLT, those are part of CIRP costs, which is, as per law, first meted out by the resolution applicant, comes back very, very quickly first when the resolution happens. As of now, we just had one NCLT case for us, so there we'll recover that money. Oh. We'll give you that number offline. It's not a very significant one. Sure, sir. Thank you. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yes, sir. Thanks for taking the question. Good evening to everyone. Sir, I understand, I mean, last two years, I mean, have been really difficult and I have complete empathy for you and your team. Sir, I mean, and maybe I'm kind of repeating, I mean, the question again, what some of the earlier participants have asked. Sir, I mean, finding it difficult to understand what is, I mean, our core positioning right now. 'Cause at some point in time, maybe we thought that we kind of want to change our target customer segment. We really want to be growing in the home equity segment, and we shared sometime back that out of the total IHL, I, this individual housing book, I mean, we're kind of looking to grow home equity to about 13%-15%. S ir, what I'm trying to understand is, understandably the banks have been very aggressive. When we look at this entire housing finance companies landscape, there are customers who are ready to take loans at the entire spectrum. You have customers taking loans at 6.5% right up till 14%, 15%, 16%. You have housing finance companies doing that. Sir, then to get defensive and say that PSUs have been aggressive. I understand the aggression is much, much higher in the last, let's say, 18 months. HTat's always been there. I f we were to just defend ourselves by saying that we are kind of waiting for this inflation to come down, then I don't know, sir, what is kind of lacking here because our cost of borrowings are maybe not going to come down materially from here. W hat is it that we are doing? And when you, sir, guide that after, let's say that we'll start growing now, by when do you kind of expect your disbursements to start outpacing the runoff that you see in the book? That's my question one. Sir, two more housekeeping questions. The one is on this INR 889, INR 829 crores that you've classified under Stage 3, but what you're suggesting is because of RBI guidelines and is under Stage 1 and Stage 2 respectively. Just wanted to understand, sir, I mean, what is the time horizon that we have taken? Is it this exercise that you've done of classifying these accounts under Stage 3, is it a prospective exercise or a retrospective exercise? Have you classified accounts since first April onwards that have touched NPA or these are accounts which could have touched NPA at even two, three years back, but are less than 90 DPD now, so you have now classified it under Stage 3, which is GNPA. Sir, lastly, a lot of the housing financials now have started talking about that the book, whatever we had restructured are now, coming up for repayments. In other words, the repayments are starting now. What has your collection efficiency experience been in that 4-4.5% of the book that you have restructured? Okay. To answer your second question, you know, whether this has been implemented retrospectively or prospectively. After the twelfth November circular, we have implemented it prospectively. From the twelfth November, any account which was an NPA not covering the overdues fully, that continues to be NPA. Any account which was standard on twelfth November becoming NPA but still not fully recovered, that is also being treated as NPA. We have not implemented it, you know, before twelfth November kind of thing. On the restructuring. Sir, if I understood you right, you said you have done it only prospectively from twelfth November onwards. Absolutely. Thank you. Absolutely. Because the circular was very clear. It is no impact on the 12th November, whatever the position is as on that date. Now, on the restructuring book, I will give you some numbers also. So in this, we have executed restructuring on INR 85 crore incremental assets. So it is INR 2,146 crore retail restructuring book which we have done. Around 40% of all customers have started repaying us and we see a good traction, but there are some risks also coming up. So around 10%-11% of that book is moving towards Stage 3 in delinquency actually. One is actually, I don't know why, this doubt is coming to your mind in terms of the Reserve Bank of India. The instructions are very, very clear how it came, and we have actually implemented it exactly as what it is written over there. One is that there should not be any doubt that whether it has been done this way, 31st, 12th, 31st December. It has been done as per the instruction. They said that 12th December please start doing it. We have started doing it, and we have categorized it. There was a question, there was discussions and NBFCs will show it, maybe as NPA. Reserve Bank of India has said you have to show it as NPA. You could have shown it in Stage 2, Stage 1, depending on what it is. We decided that we are gonna keep it because Reserve Bank of India says this is an NPA. Now in terms of the business positioning and other things, there were some decisions that were taken in 2019, that we will not do certain type of business. Obviously, once you have stopped doing the business, there are linkages and relationships which are there with the builders and others. It does take some time for the company to actually come back and start doing it. We are very clear on two things. We will remain in the prime business that we do. We will not do some large tickets that we have, that we were doing earlier. We will build our portfolio on the affordable housing. You look at any of these. It doesn't come up in one day. It takes some time to build it. We are building it. Our focus remains. There is no doubt, ambiguity on, in terms of what we will do. We will do prime business. We will do affordable housing business. This is what the company will do it. Sure, sir. I mean, please don't get me wrong, sir. I mean, I kind of strongly believe that PNB Housing as such is a great franchise and just a matter of time before you get your mojo back, sir. Wish you the very best, sir, to you and your team. Thank you so much. Thank you. The next question is from the line of Sameer Bhise from JM Financial Services. Please go ahead. Yeah, hi. Thanks for the opportunity. Have you shared the yield on the Unnati book as of now? How much is the Unnati book? Huh? The yield. 11. It's You already said. The incremental ROI for Unnati for the third quarter FY 2022 is 11.26%. Okay. Secondly, just one question on this whole INR 8,829 crore. Is it fair to assume that large part of it was due to the daily stamping or was it otherwise? I mean, the upgrade related issue, I mean. Overdues were not fully covered. It's both. Okay. It's fairly. It's both, sir. Okay. Thank you. All the best. Thank you. The next question is from the line of Gautami Desai from Chanakya Capital. Please go ahead. Yeah. Thank you, sir. I think a similar question, but I'll put it in a different way. When you say that certain decisions were taken in 2019 by the company, I guess company also has. I mean, company is shareholder, right? I mean, I can talk about myself and several others that I know of, the secondary market investors. You know, we did not even at that point of time have as big a problem on the corporate book of, you know, problem on the company investing in the corporate book as much as probably the private equity investor had, right? That is point number one. In 2019, there was some overreaction on the corporate book, you know, that the business will happen and that is going to happen and this actually did not happen. The portfolio turned out to be much better than what was expected at that point of time. In fact, I feel the quality of the portfolio was not much different than say, you know, one of the most reputed housing companies. Only difference was that housing company kept growing whereas we did not. The NPA percentage ballooned. Had we continued to grow, you know, this would have been a part of the business. Are there any kind of learnings when you keep saying that, you know, we have competition, we have interest rates problems and all that, so that is a part of your business model. The business model doesn't support, you know, that kind of a growth and that kind of interest rates, but I'm sure, you know, there are some learnings and visiting and revisiting of what we thought two years back. Somebody like Pankaj Jain, who has been so proficient on the western side on the corporate loan book side, now he is sitting at the helm. Is the company not thinking of, you know, revisiting what they had decided in 2019. I mean, it's presumptuous to say that the company is not thinking. The company continuously recalibrates and the company thinks about what it is. I think in the last about half an hour we have said that we have been recalibrating and we are thinking. When I said on the DMA and DSA, I very clearly said that we are revisiting that and we are re-looking at that business model. In terms of what we were doing on the NHL side, we are re-looking at what we are going to do. We are building back the whole stuff that is required to that. In terms of the corporate, I mean, there are multiple things. You know what RERA had done. So whether the projects were there or not. The company actually segregated the two portfolios very clearly and said that this is under the remedial management group. The remedial management accounts were accounts which were stressed. With more financial disciplines being exerted, it becomes essential that actually we also see that the accounts are maintained properly on time. There is a financial discipline in terms of the repayment, in terms of project completion, in terms of whatever it is. I think those are some of the things that at that stage or even subsequently when the reviews have been taking place, that is, that this portfolio has been kept separated. Now, in terms of if you ask me that what are the security coverages, what are other things, well, I have about 1.96 coverage that is there for the remedial management groups also. I have 2.5 coverage for the other portfolio. As far as the coverage is concerned, I have adequate. The coverage doesn't help you in actually taking forward things. There are a lot of other imponderables that continue to remain on the book. Some of them will remain, some of them you are working on it, and some of them you will actually come out of it. I think, Saurabh, if you can actually talk a little bit about the corporate book that she's asking. You see, what happened was in 2019, there were a number of factors which affected the micro market. It was not just only housing that decided to recede out of this business, for the time being, I would say. A lot of other NBFCs and HFCs also receded because, you know, there were micro market changes which were happening. There were issues on the ground in terms of, you know, prolonged slump in the real estate market. That is why it was very essential at that point in time to concentrate on the existing portfolio, on the existing projects which we have undertaken, to make sure that they see the light of the day and we make a few legal recoveries out of that. We are good at building that part of the book, but we'll build it at the right time. That is most important. We have to get back to this business only when we should, we see the green shoots of recovery in the business, when we know what is our new target segment after the whatever issues have happened in the market. A lot of, you know, developers which were even good developers in certain micro markets faced issues. Now that, you know, the developers have started to deleverage themselves, sales are improving, we are re-looking at it. But it's at that point in time until now, it was a very conscious decision to make sure that, you know, we are completing our existing assets. We are not taking unnecessary risks, because obviously, you know, a lot of peers of ours did get affected because of this. We made sure that, you know, our capital is not getting blocked, neither our projects are majorly getting stuck. We monitor them with. Just to add, Gautami, as you mentioned about the corporate book, I mean, at that point of time, there were some decisions taken, but now we are at 12% of AUM on the corporate book. We are re-looking at few things which MD also talked about. I think we'll keep on updating on that front as well. As of now, we are looking at all these various avenues where we were performing and how we can go about it in the coming time. The very fact that Pankaj did so well on the West is the reason that we elevated him, and we said that, okay, he is going to head the business front. I'm sure that there is a lot of energy that he's going to bring into the system. The experience that he has both on the retail and the corporate side, that is going to help the organization move forward fast. At some stage, we will take that call in terms of whether corporate is to be done or not to be done. It's something that we actually want to do now. I really hope so. I really hope so, sir, that the organization, you know, takes advantage of Pankaj Jain's expertise and the way the environment has changed, you know, in favor of real estate. I think that, you know, it's a very good opportunity for the company to restore its glory. Thank you so much. Thank you, ma'am. Thank you for reposing confidence in the sales head. Yeah. Thank you. Thank you, sir. Thank you. The next question is from the line of Aditya Jain from Citigroup. Please go ahead. Hi, thank you. Just a quick question on the BT outs. I think you mentioned 18% in the beginning of the call. So could you tell what was the level of this, just to put context around it, what was this in the last quarter? What was, say, a normal pre-COVID sort of level? Hi. Actually, the BT out percentages have remained similar more or less, you know, percentage here or there. Having said that, we are also taking a lot of efforts on the retention part, and we have built a core task force also behind that. Going forward, we'll ensure that the BT out will see the reduction and our attrition will also. We have demonstrated on attrition front as well. Our overall attrition on the IHL have really reduced and we have arrested that. What remains is the non-HL part where we are working very, very hard and we have a task force which have already been set up across all branches, all regions and every other locations wherever we are, and we are focusing on that. Pre-COVID, just as a reference point. It has always remained between 15%-18%. All right. Okay. Understood. All right. Thank you. Thank you. The next question is from the line of Vivek Shah from HDFC Bank Limited. Please go ahead. Vivek Shah, may I request you to unmute your line from your side and go through your question, please. Due to no response, we move on to the next participant. The next question is from the line of Ajay Chaudhary, Individual Investor. Please go ahead. Hi, I'm a retail investor, and actually, I would like to know what is going to be your biggest focus in the next 12 months. The next question is, given that the bank is profitable, do you have any plans to start paying dividend in near future? Sir, growth is the biggest focus that, you know, we are looking forward to our growth in the AUM. We have seen last 8, 9 quarters the growth. We have already worked on that. The arrest has already happened on the retail side to larger extent. On corporate side also, whatever our plan that was there, we have met that plan. Going forward from last month onwards, we have seen the growth happening, growth coming in, and the quarter four will see the arrest completely happening and growth will start coming in from this particular quarter. That's the largest focus on that. Secondly, also on improving the asset quality. These are the two important focus area which will continue to be there for the organization. My second question was, do you have any plans to start paying dividend? Dividend is not a very efficient way to reward shareholders because dividend in some case, dividend distribution tax and at the end of the day, the shareholder also has to pay tax because it's not like a tax-efficient way for you as well. If a shareholder is being paid dividend, he still has to pay tax. Those laws have also changed. Rather than having a dividend leakage and a tax leakage at both ends, for a firm like ours, where we would need to grow and we would need capital to be preserved to support our growth, we would like to use the capital in a more efficient manner, at least for the next foreseeable time. As we grow further and have more capital buffer being built in to internal accruals, we might look into paying a dividend in future years. Today it doesn't really make too much sense both for the company and for the shareholder to look for dividend. I kind of don't agree with you. Even though we have to pay taxes, you know, it's better to have income. That's. Let's keep that aside. What I hear from you is that you need a lot of cash to grow, right? Yeah. We need capital to grow. We, the firm has been looking to raise capital. We have now corrected our gearing further and got it down to around 5.6. Therefore now we see that there's an opportunity for us to push our planning for our growth. For that we need capital. As we grow and as we get more business coming in, you'll still see, I think you will see the value coming in into the share price, which will more than compensate for any dividend that one would expect for. That's our endeavor. Okay. Thank you. Thank you very much. Ladies and gentlemen, that was the last question for today. 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 and the audio of this call will be uploaded on our website, which is pnbhousing.com. Thank you. Thank you very much. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.