Ladies and gentlemen, good day, and welcome to the Q1 FY 2022/2023 earnings conference call of PNB Housing Finance Limited. As a reminder, all participant lines will be in 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, Steve. Good evening and welcome everyone. We are here to discuss PNB Housing Finance Q1 FY 2022/2023 results. You must have seen our business and financial numbers in the presentation and the press release shared with the Indian stock exchanges and is 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 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. Good evening, everyone, and welcome to our Q1 FY 2023 results. On behalf of the company, I extend a very warm welcome to all of you. Let me start with the business update. As we communicated about our focus on the retail segment, we registered disbursement growth of 96% during the quarter as compared to the same quarter previous year. We disbursed INR 3,451 crore in Q1 FY 2023, with retail segment contributing 98% of the total disbursements. During the quarter, the company disbursed gross amount of INR 76.5 crore under the co-lending, which is in 20/80 ratio. We are also in discussion with other banks for co-lending arrangements. On loan assets, retail loans registered growth of 2% YOY and 1% sequentially to INR 50,294 crore as on 30 June 2022. The corporate loan asset declined by 35% YOY to INR 6,006 crores as on 30th June 2022 on account of sell down and accelerated prepayments. The loan assets for the company outstanding as on 30th June 2022 is INR 56,301 crores, and the asset under management is at INR 64,849 crores. On expansion of our footprint in the affordable housing segment, we have operationalized 10 new locations during the quarter, bringing the total number of locations to 34. As of 30th June 2022, our Unnati segment AUM was INR 3,047 crores. Coming to our asset quality, with our continuous efforts to reduce the GNPA, I am pleased to inform that our GNPA on in-day basis reduced by 23% during the quarter, primarily on account of corporate book. The corporate book gross NPA registered a decline of 37% in Q1 FY 2023 to INR 1,732 crores as compared to INR 2,738 crores as on March 31, 2022. The decline in the corporate GNPA is on account of resolutions through change of developer accounts, closure in two accounts, ARC sell-off in one account, and write-off in two accounts. Retail GNPA declined by 3% during the quarter to INR 1,907 crores as compared to INR 1,968 crores as on March 31, 2022. In percentage terms, the gross GNPA is at 6.35% as on June 30, 2022 as compared to 8.12% as on March 31, 2022. We continue to focus on improving our asset quality going forward. As of June 30, 2022, the net NPA was at 4.26%. With the increase in the repo rate in Q1 FY 2022, the company passed on the increase in rates to its customers. The impact of increased interest rate is yet to be fully reflected in the yield. In terms of liabilities, the impact of increase in repo rate is reflected in the cost of borrowing, as the overall cost of borrowing increased by 11 basis points. The company has reduced its liquidity in the books of around INR 3,800 crore on standalone basis as on 30 June 2022 as compared to INR 7,085 crore as on 30 June 2021. The profit after tax on a sequential basis increased by 39% to INR 235 crore in Q1 FY 2023. The ROA is at 1.47% in Q1 FY 2023 as compared to 1.24% for financial year 2022. With increased percentage of retail book, it is imperative to see the ROA of the retail book. Our retail book ROA over time has increased from 1.3% in FY 2020 to around 1.5% in Q1 FY 2023. The leverage has come down to 5.1 x as on 30th June 2022 from 6.33 x as on 30th June 2021. The company is comfortably capitalized with CRAR at 23.9% and Tier 1 at 21.4%. The residential sector is experiencing an increase in demand, particularly in Tier 2 and Tier 3 cities. As for ICRA, the portfolio of NBFCs & HFCs is expected to grow by 9%-11% on account of pent-up demand and increasing level of economic activity. To leverage on this opportunity, we will continue to focus on retail lending, expand our affordable housing loan offering, improve our portfolio credit quality, enhance efficiency through digital interventions. On the regulatory side, PNB has received its approval from RBI to infuse INR 500 crore in the rights issue of the company. Further, the company has received the final settlement order, whereby issues raised with respect to the potential issues have been settled under SEBI (Settlement Proceedings) Regulations, 2018. The Draft Letter of Offer is in the final stages and to be filed at an appropriate time. With this, I would like to open the floor for questions and answers. We have the entire management team sitting over here to answer to your question, and we welcome any question that you have, and we'll be more than happy to answer them. Thank you very much for coming and attending this meeting. Thank you. Thank you very much, sir. 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ravi Naredi from Naredi Investment Private Limited. Please go ahead. Thank you for giving me the opportunity. Sir, with due regards to all management team which you are sitting there, I want to ask when PNB Housing Finance Company will revive. Your gross NPA is 6.40% as on 30th June 2021, 4.05% NPA level on 30th June 2021, while it is 6.35% at 30th June 2022. Net NPA rises to 4.26% in 30th June 2022. When whole country's banks and housing finance companies improve their performance, but very sad to know PNB Housing is nowhere in the game. What is the main problem behind this scenario? It's a fact that the NPAs have gone up significantly, and that is historical reasons why it had gone up. It went up. Then subsequently in December, because of the November RBI circular, there was an impact on the company that about INR 800 crore of NPA had further up. But if you look at the two quarters that are important, in one day it is not possible for anyone, actually, any organization to bring down the NPA straight away. If you look at the two quarters between the March quarter and the September quarter, the June quarter, you will find that there is a significant reduction in the NPA that has been done. In the March quarter, we have reduced the retail NPAs of almost about INR 600-INR 700 crore. In this quarter, there has been a decline of the reduction of almost about 1,000-odd crores, which is about 23% of the NPA have come down in Q1 FY 2023. That is only Q4. It's just a matter of time. I can't bring it down straight away. Yes, there is massive effort that has been done both on the corporate side and on the retail side. The reduction has taken place both on the retail and the corporate side. There are a very large number of accounts which are under resolution. We have resolved about, I think about, 1,000 crores has resolved, and we have another 1,000 crores sitting over here, which we are attempting to resolve. I'm very sure that in the next one or two quarters, we should be in a position to resolve. That's on the corporate side. On the retail side, if you look at it, we are very, very keen on the matter, and we are very clear that we would like to bring down the NPA to less than 2% going forward. I think that's what it is. It's a journey that we are going to take, and the journey has already started from December 2021. Two quarters we have exhibited that we can reduce the NPAs, and we'll continue to exhibit the same kind of result in terms of reduction of NPAs. You see, one figure I would like to discuss with you. Our market cap is INR 6,000 crore. Our AUM is INR 56,000 crore. Nowhere in the history of finance market, we have seen so much low market cap of any finance company compared to AUM. What I want to know, how many more mandates in line in the company which need to come outside? Why the market is not giving any good value to the PNB Housing? That is my question to all management team you are sitting there. I think I missed one word that you said. What is lien? Budget. Budget. I think we have cleaned up everything. In fact, we were among the first HFCs which recognized the NPAs, where while the time was up to September 2020- 2022, we still went ahead and recognized the NPA, which was as per the Reserve Bank of India direction in December 2021 itself. I think there is nothing that is lying hidden either on the retail side or on the corporate side. We have gone ahead, and we have cleaned up everything. That is one part of it. In terms of the market capitalization, the market cap and everything, you would have seen that when the issue was announced, that the fresh issue was announced, the market cap, the share price went up from about INR 440, which was on the day that it was trading, almost about INR 900. There is a potential in the market. There is possibility of growth. It's just a question of because of some reason, and you know the reasons, because I'm sure that the kind of investment that you are doing in terms of actually looking at the balance sheet, looking at us, the approval from PNB had not come. I think that is one of the largest things that is there. Now that the PNB has an approval to invest INR 500 crore, it's just a matter of time that the DLOF is signed, DLOF was submitted and the capital goes. There are three important things that actually would help us in improving the share price and the market cap and everything. One of them is the capital requirement that was always actually at the back burner, but it has come forward. We will come out with a rights issue. The second was on the growth. In two quarters we have shown that there is a growth. In first quarter we actually showed a growth of almost... I would talk only about the retail because we have already two years back, we have very clearly said that we will not do corporate. We delivered a growth of almost about INR 700 crore on the retail in the first quarter. The last quarter of the financial year, which is January to March. We have again done a growth of about INR 550 crore. I think there is a very clear green shoots that are coming in, so that is the second part of it. First is the capital, second is the growth. The third is the NPA. If you really look at it in the last six months, we have reduced the NPA by about INR 700 crore. I think these are the way forward. I would observe and I would say that we are now moving in the right direction. We didn't want to say anything unless we actually demonstrated to you in the next two or three quarters that there is a growth. If you look at the disbursement, the disbursement has grown by 96% over the June quarter of 2021. The disbursements are going up, the ENR is going up, the NPAs have come down. I'm not saying it's a very rosy picture, but I think there is very clear direction that the company is on the path of recovery. Okay. All the best. Thank you very much. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The next question is from the line of Anand Mundra from Sure Wealth Management. Mundra, please go ahead. Hello. Yeah, yeah. I have one question. You mentioned that you have grown in retail quarter-on-quarter, but your disbursement has not grown in Q1 FY 2023 as compared to Q4 FY 2022. Am I missing something? I just want to be clear for that. First is actually that, the growth has come and you know that there is a growth, and it is very clearly reflected in the numbers, which you would have seen. In terms of the disbursement that you have seen, I think we did a very good, almost about INR 3,000-3,700 crore of disbursement in the, in Q4. Now, again, we have done almost about INR 3,400 crore of. This is the slower month. If you would have looked at the results of some of the HFCs, most of them have shown almost about 20%-40% decline in the numbers in comparison to Q4. Our decline is only 7%. This is usually a soft period. April, May, June is actually always a soft period in terms of the any HFC that you look at it, you will find that the numbers come down significantly as what it was in the March quarter. I think we had a minor blip in terms of the 7% decline, but we remain steadfast in terms of showing the growth. We are anticipating, we hope that our growth will be approximately in the high single digits. Any guidance for the growth of this year with respect to disbursement of the mix shift between the parties? Disbursement? I said about, say, single digit, higher single digit, growth, we are expecting this year. We already have grown by 1%. If you look at it as annualized basis, it's a 4% growth. While it's, the market is slow in April to June, we still had an annualized growth of about 4.3% or 4.4%. Going forward, things are only going to improve. Despite the fact, there is one more thing that happened in the first quarter, and that is actually the interest rate. There are two, you know, one is the interest rate. There is an increase of about 90 basis point interest rate, which actually dampened the market to some extent. The second is that the input costs have gone up significantly. These input costs in the construction activity have actually increased. The 20%-25% increase in the price of a property, which is also a little damping from what the, you know, the general public had seen, which was among the lowest interest rate, lowest prices and everything for the last year. That was a little damping or dampening. I am sure that people will come forward because still there is, if you look at the, mortgage, you know, mortgage market to the GDP, it is only at 10%. There is massive scope sitting over there in terms of the growth, and I am sure that people are realizing, and the growth will come in. We are, right now, after all the cleaning up that we have done, we are suitably placed to actually encash on that growth. You are giving a guidance of 15% EM growth for the financial year FY 2023 in retail? Correct. Okay. No, not 15%, high single digit, I mean, in mid teen. High single. The high single digit, which will say anything from 8%-9% here is what we are looking at. Okay. I mean, high single digit would be seven-nine, but actually at, I mean, that's the kind of growth that we are looking. We already have done 4.3-4.4 at a period which is normally very soft. In market, you guys are competing with. I'm assuming you are competing with likes of HFC, HDFC or ICICI Bank and other players. It's very difficult to compete with them. Their cost of funds are really low. Right now. What's the differentiation with? Please go ahead. Sorry. I'm sorry. What is the differentiation which we bring to the table for the customers? Otherwise, we will definitely would like to go with the larger banks which may offer better products or better pricing as compared to us. We are not focusing on that segment. A couple of things, Anurag. One is today, for the best customers who I say about 800+ CIBIL score, my interest rates and the competitor interest rates are almost at the same. 7.5%, 7.55% is what I also quote and they are also quoting. As far as the class of customers that we are looking at, the salaried and others who normally go over there, we still have interest rates which are pretty competitive. That is one thing that actually. I'm in the competition and that is why I'm growing. The second is that my actual ability to underwrite self-employed and NHL is far superior than any of the banks. Even if actually this quarter, if it has been a little slow, I will ensure that these capabilities that we have in terms of delivering, since nobody can deliver in about three and a half days, we actually have not only delivered, but we aspire to deliver it in three to three and a half days, four days to a self-employed person if he's applying for a loan. I think these make us very, very distinctive in terms of the way we deliver it. If the interest rates, if the interest rates are competitive, if my delivery is good, people will come to me. Otherwise, what was happening, because of the speed of my delivery, people were coming to me, but then after three months to six months, I was realizing that people were running off from me. The portfolio would shift, somebody would take over. Because you wanted loan today, I was able to give it. The bank was taking about a month to give it. So he takes a loan from me, but he comes back to me after three months and says, "I want actually to move on to some other bank." That we have completely arrested, not completely, we have significantly arrested. Almost it is 60% down from 70% to 40%-60%. We are arguing that the numbers. You can reduce that. We have significantly reduced the runoffs. I think these are two things because of the interest rates we are covering. The sharpness with which the sales is actually entering into the DSA relationships, the API relationships, the salaried. Our salaried is doing very well. We are actually increasing our salaried significantly, which actually deleverages us of the risk also. Sorry. Sir, how much is the balance transfer for this quarter? Sir, earlier it used to be 18% for the year. Balance from us to them? From us to others. 9%. 9%. I told you, during the COVID, the problem, the issue was that earlier everybody was quoting very high interest rates. The differential between me and the others used to be about 50 basis points, about the best of the banks. During the COVID, when the interest rates regime started coming down, the differential went up to almost about 1% or 100 basis points to 150 basis points. That was the reason why the numbers that you are giving have resulted in that. We took up because there are so many things happening on a portfolio, we wanted profitability, we wanted to ensure that the company remains steadfast. The moment we realized that it is time for us to go back to the market, we have actually lowered the interest rates, which are very competitive with the market. That is the reason why this has come down significantly. 9% is for what, CIBIL score? No. Annualized. Quarter. This quarter. This quarter annualized. This, I mean, nine is the annualized, which would mean how much? Approximately 2.25%. Yeah, yes. Particular quarter, okay. Sir, another thing, which is very important for the growth is the rights issue. What is the pricing for the rights issue there? Why is it kept in suspense for all these months and zero days? One is on March 9, the board has approved the capital raise of INR 2,500 crore through the rights issue, and that's the public knowledge. Now, what has subsequently happened, PNB has also received RBI's approval to participate in the rights issue, and they have done that. Approval is for INR 500 crore, which again has been announced, and they will hold the shareholding at 30% but above 26%. Below 30%, but above 26%. This is the second thing which is one of the most significant thing that has happened, that this time they were able to get approval. Last time they were not able to get approval. The third is that we have already appointed investment banker, legal counsels and everybody is on board and the Draft Letter of Offer is almost at the final stage. There are certain regulatory and other issues that are being sorted out. Once these are sorted out, we are actually, the company is planning to file the DLOF as soon as possible, and maybe it is within weeks also. So this is what we are going to do it. Then actually with respect to the preferential also, we have got it signed completely. As far as the SEBI is concerned, the settlement is final and as everything has been completely taken over. This is where we stand. I think, some of those issues can get sorted. I can't give you I can say to you, but unless those issues are sorted out, I will not be able to apply to the SEBI or to the draft letter of offer. We are working very vigorously on these issues. Hopefully, we should be in a position to file as quickly as possible on these. The biggest advantage is that the capital raise will bolster our capital position and enable the company to accelerate the growth. For the rating agencies and others, this is again one of the most significant things. With the leverage almost at 5.1%, which we have brought it down, and our capital adequacy at 23.9, I think this is one of the sweetest things that could happen for this company to actually go ahead and then book new, because this is a growth capital that we are looking at it. Sir, it would be really helpful if you can give some guidance on the pricing because it's really suspense from last six months. On what? Pricing. Pricing of issues. Pricing of rights issues. Timing actually, sir, I cannot actually say it to you because there are certain issues that I need to address it. The moment we address those issues, we will be in a position to do it. Even if I can apply tomorrow, but the point is that it's not going to get an approval unless everything is complete as per the draft rights issue. Sir, rights issue price will be approved by the board. SEBI will just confirm that. Actually, you can give us an indication what price board is thinking, giving an approval for rights issue. Sir, I will not be able to give you the price. It will let it go, and then we have investment bankers who are going to come sit with the CRC, sit with the board, who will come out with what exactly would be the price on the rights issue. Sir, the day. Last thing, sir. Once we file the DLOF, because it is not a fast track, it's under normal track. It generally SEBI takes some time to come back onto that. Once we get an approval from SEBI on the DLOF, we file the letter of offer. At that point of time is what the pricing gets decided by the board. The pricing is open in the sense that it will depend upon the market price at that point of time and how the stock is behaving in the market. Based on that, the pricing will be decided by the board and of course, with the recommendation of our investment bankers, that the pricing will be decided and announced to the market. Okay, understood. Sir, last question from my side. With respect to Unnati AUM, it has not grown in this quarter compared to last quarter. Unnati AUM has not grown in this quarter. Actually, I think as we had mentioned to you or we had actually explained that we not only have created a small vertical, but we have also now a head of the Unnati, which is a chief sales officer who's looking after the Unnati. She has joined about a month back over here, and we are revamping the whole product in terms of the. And she comes with almost about 10, 15 years, 26 years of experience in the mortgage industry and about 10 years to 15 years experience only on the affordable space. The team is being assembled, the policy changes are being done because affordable obviously requires a very different thing than what we were doing in terms of that. The Unnati portfolio is actually going to be completely different. That churning was taking place during this quarter, and we hope to go ahead and start booking the business as early as maybe September. No disbursement in Unnati portfolio in last quarter too? What was the portfolio? No, there was no disbursement in Unnati segment in last year, in last quarter? No, there was no, last quarter there was I think about 140 crores of disbursement. It's 140 crores? Because our policy is undergoing change. There is a new you know, completely new approval matrix that is that everything defined and how it is going to be rolled out, the ticket sizes and the on the eligibility norms. A lot of things are going ahead, and that is the reason why that slowed down to some extent. Sir, I understood that. Sorry, if there was INR 140 crores disbursement, but AUM should have grown by at least 50, 60 crores net of repayments. Why does it degrow in AUM by 50 crores? Actually what has happened is though we have done the fresh disbursement of 140, 142 crores, but our runoff on the Unnati, we have seen slight runoff on the Unnati. And hence, as I also mentioned that our MD has mentioned that we are going through the transformation in Unnati business. We are scaling it up. We are redesigning the entire model. Hence, the business that we are doing as usual was on a slowdown method and at the same time the attrition was a bit higher. Valli, how much was the runoff, sir? Runoff in the quarter one on Unnati portfolio was 25% on annualized basis. Yeah. Good evening. This is Valli Sekar. I'm heading the, you know, affordable housing piece here. Currently in the Unnati product, what we were concentrating was in the lines of priority sector lending, where our loan amount was in the range of up to INR 35 lakhs. But the actual affordable housing would be like the EWS, LIG-1 and LIG-2, which the government prescribes, which would be in an average, you know, loan rate of approximately INR 9-10 lakhs. Since we were doing these loans up to INR 35 lakhs, we were seeing significantly a lot of runoff in this loan portfolio. As far as affordable housing is concerned, the runoff is generally in the range of 4%-5% only. Completely we are revamping the entire product policy procedures, and we are completely coming in line with the actual affordable housing market. You will see a turnaround in the product and in the policy and procedures in maybe by the end of next quarter. From October, you will be seeing numbers growing in this as per the actual affordable housing policy in the market. Thanks. Very competitive products, competitive interest rates and the delivery and everything is going to be actually then you can compare that particular portfolio with the affordable or the, you know, the other competitors who are there in the market doing similar kind of business with a ticket size of anything between INR 8 lakhs to about INR 15 lakhs. What is the outstanding Unnati portfolio? Your voice is actually breaking. Sir, what is the gross yield? I just wanted to understand, sir, if there's a 25% runoff, what is the main reason for that? 4.6% actually. 6.25% maximum. 6.25% for three months. I'm just wondering, sir, portfolio has moved. It has moved to banks, or it has moved to some other NBFC or HFC. Where it moved? Banks. To the banks. Okay. Thanks. Thanks a lot, sir. Actually, what happened is some of the banks suddenly become very aggressive in terms of the priority sector, especially when they have a shortfall in the priority sector lending. They become very aggressive in terms of actually capturing that business. It is at that stage that portfolio starts moving here and there. Even when actually the co-lending side, when we go and talk, there are various ways in which the banks are looking at it. Some of them are looking at card sector, some of them ask for self-employed, some of them said, "I want NHB." It's a different mix of the portfolio that that particular bank would like to build to ensure that to actually give a guidance that this is the kind of portfolio I would like to accept under the co-lending platform. Whenever there is a shortfall in the priority sector lending, it is then actually we will see this kind of effort. What Valli is mentioning is that it is normally about 4%. There is a little uptick between 4% and 6%. The 2% is actually like additional delta on the Unnati platform. Okay. Thanks a lot, sir. Thank you. Thank you. The next question is from the line of Krishnendu Saha from Quantum AMC. Please go ahead. Yeah, most of my question has been answered. Thank you. Just on a Unnati listing, if I can ask, what has been the GNPA over there? What has been the change? GNPA. No, no. Just on the Unnati. See the predominantly the Unnati after this COVID impact, it is 200, 150 odd bps higher than the, you know, what in general we are taking now. It is in the range of delinquencies around 3% around. 3% is the number? Okay. Okay. One more thing that we are doing it is actually we are revamping the whole collection system of Unnati. We are setting up a complete infrastructure right from the ground only for collection of Unnati, because that is much more rigorous collection process and other things. We anticipate that not only the new portfolio that we are going to build will actually the collection will take place of that and the delinquencies kept low. With existing also we are very, very sure with this new Unnati vertical coming up, it will also look at the existing delinquency of the Unnati portfolio. One is the existing Unnati and then the new Unnati kind of portfolio that we are going to build. Both of them should see after maybe just as Valli mentioned, that you will start seeing some traction somewhere around October, November. The disbursement will start, but the traction that you will see will maybe from December onwards. You will find that there is a traction coming up in the business as well as in the collection machinery. Sure. Right. Thank you. Thank you, sir. Thank you. A reminder to the participants, anyone who wishes to ask a question, may press star and one at this time. The next question is from the line of Nikhil Walecha from Franklin Templeton. Please go ahead. Thanks for giving me the opportunity. Sir, you have shared GS3 as per Ind AS. Is it possible to share the GNPA under the IRACP? No, we don't maintain it in the IRACP. We maintain it under the Provisioning. I mean the ICAAP kind of. Actually, only the Provisioning we can give. The Ind AS actually also builds in the interest rate. Now we are monitoring it only for the Ind AS. There, it actually, the interest actually component is added to it. Okay. If you want, I can give you those numbers also. There would be a differential of over 100 to. How much would be the differential? INR 300 crore. INR 300 crores. Okay. In the ICAAP and the Ind AS, there would be a differential of almost about that amount. Understood. Secondly, I see that the stage three coverage had dropped slightly. I believe some of that would be due to write-off. Given that there is an aging of NPA, that coverage should increase. Why it has decreased? I think even the provisioning from the P&L side also, it has dropped. Ideally, I think, you should have increased the PCR, but what is the reason for the decrease in the stage three PCR? Because even otherwise, I mean, there's hardly anything to do reversal, is it? Yeah. See, this, what you're looking at as stage three numbers is you have rightly mentioned it is after the, you know, set up of these write-off with the provision numbers. We need to understand that there has been a upgradation of one account which has moved from stage three to stage one, right? One account has been sold to the ARC. Okay? That has been exited but we are maintaining the provision on the, you know, on the impairment against the investment side, that net number. In terms of the provisioning and the vintage prospects, everything is considered here. What we have actually written off is the vintage accounts only, you know, which are a large exposure, INR 244 crore to INR 20 crore and INR 425 crore exposure we have, which is in terms after this, you know, applying all the resolution strategies which we are having. Sir, the reduction is mainly because of those three, four accounts where one is we apply some from the APA sold to the ARC and two write-offs are there. They were fully provided accounts so that has been used. There has been some decline in the NPAs of even of you know INR 100 crore of retail. That is all the primary reason. Otherwise, it's not that we have actually deliberately reduced the NPAs and reduced the provisions. Okay. Sir, earlier you used to share GNPA of segment-wise construction finance slab. Can you share it now? Like how it is trending? We have only annually we were doing it. We have not done it quarterly. I think what we'll do is that Deepika will get in touch with you, the investor relations department, and they will actually share some numbers with you. Okay, thanks. If I look at the Sir. Yeah. The retail and corporate GNPA is shared in the presentation. You can have a look at slide number 16, which gives the NPA for retail as well as for corporate. Actually, now increasingly we are bringing the focus on the retail because we have already stopped doing the corporate. Obviously, in the corporate there is no new loan that is being sanctioned. No new loan is being sanctioned. The NPAs, the account becomes an NPA. Percentage terms, it will look very, you know, scary. The point is on the retail side it is very important that whether we are able to actually manage and bring down the NPAs on the retail side. I think that's where we have worked towards reducing it. Understood. Sir, if I look at the spreads, it's at 1.4%, which is I think all-time low and I think reason that you mentioned is quite, I can understand that there is a heightened competitive intensity. On the incremental basis also if I look at your the incremental cost, I think it's closer to 7.5% based on the recent NCDs. What are the incremental spreads that you are working at? The spread we are looking at is more around 1.5-1.6 x. How it will come about is that, you know, we have instituted increase in our lending rates by 35 basis points, which has been captured in the quarter. Another 50 basis points which will come in July to September. Whereas cost of borrowing will not go up to that extent simply because we are taking fixed rate liabilities as well. We will add to the spreads will slightly increase. One thing is that because between this quarter the cost of borrowings have actually gone up only by 11 basis points because of the mix of our borrowings that we have. In terms of the yield, because we are actually focused now only on the retail, it's going to be very different than what you would have looked at. Traditionally, if you start looking and comparing it with that, those yields were coming from assets which were again, you know, very high yielding interest rate, very high yielding. Now, it is only going to be the retail loans. With the retail loans, more and more focus on the retail loans. Obviously, we'll have to start living with the spreads which are on the retail side and when we talk about 1.55%-1.6%, it is basically the retail that will pump in those. Understood. Just a final question from my side is, as you know, you will do a fresh raise, then I think our Tier 1 will again increase and ROE will further reduce. Unless or until, you know, we increase our growth to say 25%-30% level, it would not improve substantially. Can you give some medium to long-term guidance, like how are we looking at, say, three-four years AUM growth, or how are we looking at ROE from a three-four year perspective? I don't know. We have submitted it to the regulators also, but. Mm. First of all, we still have a large book. It's not that we still have the third largest HFC and we have a large book. A small company with about INR 5,000-10,000 crores of AUM, it's very easy for them to say, "I'm growing that with, you know, 20%," and all that stuff. For us today it's a little challenging because at INR 50,000-60,000 crores to grow. When I say that we are going to be on high numbers, even if I say 5,000 Mm-hmm. We have the 9%-10%, it translates into INR 5,000-6,000 crore of growth straight away. That is what we are looking at. We are looking at high numbers. This year in high single-digit% and obviously going forward, these numbers will improve. I think we are in a sweet spot in terms of the, it's a cyclical industry, and we are in a sweet cycle where for the next four-five years, I will anticipate that the growing is going to be good on the mortgage industry. The growing is good. There is no reason for an HFC, especially when it has cleaned up its books and it is ready to go. It is demonstrating in the two quarters and it is actually growing. To actually go ahead and start. Especially another very significant thing is that the next two years you would also find that this Unnati, which is a new, portable kind of Unnati, that will start kicking in. Even if it doesn't give me a very high AUM, but it still gives huge amount of, you know, advantage in terms of the spreads, in terms of the margins and NI and NIMS and everything. That's what we are looking at it. Understood. Sir, just one more question. How is the co-lending partnership working? I think before you had some co-lending partners, so how's the traction over there? We have already reported. We have actually with one of them. We have agreements with two, one private sector and one public sector organization. The one private, we have already given them INR 78 crore. As I said, INR 61 crore and the remaining is with us, 60-20, 80-20. We have also given to the other partner a significant number of files. We are also in discussions with some other players with some other banks to actually provide that kind of a. We are expecting that it's still early times because there is straight through processing and the reason is not us. Some of these banks want absolutely, you know, a seamless integration with our system. Our systems are ready, my APIs are ready and I've shared my APIs. These banks and some of them are large banks. They are not ready with their APIs. Once those APIs are integrated fully, it's at that stage that the flow will take place and we anticipate that the numbers will start coming in. Right now we are pushing the files through SFTP and we are seeing that actually the DBs can be, you know, booked under them. I think with the numbers that we have given it to the other bank, we will see some traction in the co-lending. Understood. As of now it's very small but you expect it to pick up. Yes, sir. It all depends also. I mean, co-lending is good. We'll have to bring in, first of all my AUM, it affects my AUM. When I have transferred INR 61 crore, my AUM has come down by INR 61 crore. We have to actually pair it and see what is profitable for me, what is good for me, what is the customer requirement. If the customer is really, you know, very finicky about the interest rate, we will have to bring in a partner where the interest rates are slightly, you know, in median, between both the interest rates of that organization and our organization. It's a mixed bag of how you would like to handle the co-lending. However, the co-lending also provides a good opportunity for fee-based income, which is what we are also looking at it. Understood. Thanks a lot, sir. Thank you. The next question is from the line of Sanjeev Kumar Damani from SKD Consulting. Please go ahead. Good evening, sir. Am I audible? Yes. Yes, sir. Proceed. Sir, am I speaking to Hardayal sir? Yes, sir. Sir, I'm very impressed, the way you have all answered. I congratulate on that to you. Sir, my first question is that, I mean, can you quantify, you know, the total loan accounts that as on today you hold or as on 30th of June, total accounts that you hold of the loans given to- INR 2.52 lakhs. 2.5 lakh people. I mean, total, files are 2.5 lakh. Account, sir. 2.5. There are multiple accounts also. Multiple. 2.5 lakh accounts we hold, where we have given loans to entities. Right, sir? Okay. Can I know our employee size, sir, as on date? 1400. 1,400 are directly on our payroll. Do we have associates also working for us? Yeah, we have another, the sales side there will be approximately 2,000. 2,000. 2,000 only on the, you know, sales only because I think he's also in the sales side. 1,400 people working only for the sales. Only for the sales. They are not. Sales and under-sales and underwriting. I mean, are they all employees of the company or are they associates of the company? No, no. We have a subsidiary which provides businessman coverage. We have a separate subsidiary where people are recruited to work for this organization that way. Yes, sir. It saves us some cost that way, sir. Yes. So, so the- Yes, sir. I was observing, sir, that your retail portfolio is really going up and you are quite well spread into the middle of India and below down south also. Being a PNB Housing Finance, are you not present in north or Punjab National Bank also does the housing finance as well, sir, in north area. Sir, we are pretty strong now in North India. We are across India. We are at 70+ cities. We have almost 99 branches and we have also outreach offices. We are pretty strong in terms of the distribution network, geographically, city wise and everywhere if you look at it. On the north side, we definitely are strong but I would admit that as a PNB brand name and brand organization, we still have big opportunity to cash in on the PNB brand by actually making much bigger inroads into the market. Which is what we are planning and today if you look at it, in the last about two months we are seeing that there is a good traction that is coming in the north. Okay. Because I was seeing that. Traditionally we have been very strong on the west. Okay. Traditionally, very strong on the west, sir. Sir, now sir, you know, when we talk about our NPS drop and all that, I mean, do you feel, or do you face problem in collecting EMIs properly every month from even, you know, small individuals who have taken loans from you for housing or repairing or something like that. Are there failures? Is the sum total that you are showing as gross NPA largely from retail side or it is an old baggage that we are carrying of the corporate? No, sir, it is retail. Actually, most of the time now we are talking about the retail. Corporate is something we talk completely differently because for last two years we are doing only retail. There is no disbursement that is taking place other than few, maybe INR 50 crores, INR 100 crores of the old sanction. Now, in terms of the collection efficiency, we are almost at about 97% collection efficiency. We are able to collect, we are able to get money, we have feet on street, we have every all arrangements. We have digital tools to actually get the money. Everything is there. We provided it on our application, where a customer can come, check his EMI, see how much money he needs to pay. He can there itself repay us by the click of a button. There are multiple ways in which we have calling centers that are there. We actually very quickly through the advanced analytics, we you know the delinquency or actually you know the repayment, it's split over there. Something goes directly to the calling center, something goes to the field, depending on the metrics that we use. That is the way we actually try and save the money of the. The cost of collection has actually come down. If you look at it, there is a big difference in the way the collection is happening. Earlier, most of the NBFCs and HFCs were actually collecting. They would collect one or two installments, and then they would wait the next month again they would go. Now we are very clear that you need to remove complete irregularities. Because the very fact that from INR 800 crores that we had actually on the, you know, because of the Reserve Bank of India in March, we have just about INR 61 crores of accounts which are actually less than 90 days because of the Reserve Bank of India declaration here. We are able to collect the money now, and that is the reason why we are able to reduce our NPAs. Okay. That's one fine question. Sorry to interrupt, but for any follow-up question, may we request you to rejoin the queue, please. The next question is from the line of Aditya Doshi from Chanakya Capital. Please go ahead. Hello. Thanks for the opportunity. Mr. Doshi, if you can speak through the handset, please. Your audio is very low. I am on handset. Hello. Hello? Hello? Hello? You may please proceed. Yes. We can hear you. Sir, thanks for the opportunity. I just wanted to know that our corporate portfolio has almost 22% to 9%. Your audio is breaking up. Maybe request you to move to a better reception area, please. Hello. Now is it better? Hello. Hello. Still it's not clear. Now it is better? Yes. Sir, our composition of corporate loan book has almost reduced to 9% from 22%. Will PNB HF again relook at corporate building given that real estate market is picking up and project completion is not much of an issue in today's scenario and we can cross-sell that to retail. What's your strategy on that? In two-three. Sorry, sir. One second. Your audio is breaking up. Hello? Hello. Now, is it audible? Yes. Second is follow-up to the Unnati book. Since Unnati is a fairly new product, so why do we require it to again revamp it again? Second, have we outsourced collection of Unnati? Two things. The first question is we are actually on the corporate book, whether we are going to restart the business. We have been looking at it to restart the business. However, because of the very high NPAs that we were holding and the market also was not very supportive, that was one of the reasons why we had not ventured back into the corporate book. One of the reason was now we find that there is much more order and discipline that is there with the builders. And there are certain type of builders who were pretty good and they have deep pockets also. We are definitely reviewing it that what should be our sweet spot in terms of doing. We have done projects which are INR 1,000 crore also, but we are going to look at the sweet spot, what we want to do it. At some point of time, at the appropriate time, we will reenter the market. As an HFC, I think it is essential that we have actual presence across the mortgage industry. One of the primary reason why we had pulled back was also because of the capital constraints that we had. The risk weightages that we have to attach to a corporate loan is 100%. We did not have the capital at that time to go ahead and do it on the to continue to do it. That was one of the reasons. I think the moment the capital is there, I think we should be in a position to start, restart the business because capital is important. If the growth story comes on the retail, I would not like to actually be hamstrung that I do not have the capital to actually go ahead and to lend. That is one thing on the corporate book. The second is actually on your Unnati collections. The collection is more or less actually we have outsourced it. Yes, we also work with some of the agencies, collection agencies who are accredited, who are the required trained people on it. We also use them for collection purposes. It is not that it is used only for the Unnati, it is used across the organization also in certain ways. Okay. Is it fair to assume once the rights issue is through, we can go and if you can provide some timeline when we can enter this, maybe during this year or the next coming, upcoming quarters? I cannot give you the timeline because I need an approval from the board because board in July 2020, it had asked not to do this business, so I will have to go back to the board. I will go back to the board once the situation stabilizes. I have a fairly good capital adequacy which will support the business and the growth. Sudarshan Sen there was one question that what would be your growth trajectory in the next two years. I have to factor that in to ensure that the capital is adequate to take care of the growth that comes not only on the retail side, but also on the corporate side. Thanks. Okay, thanks. Got it. Thank you. Thank you. The next question is from the line of Krishnendu Saha from Quantum AMC. Please go ahead. Yeah. Just about the restructure book which is around 4% or 0.5% of the loan book. I'm just wondering how is that? What is the number? How is it? How are payments coming across? Can you shed some light on that, please? Yeah, sure. So, on the retail side, the restructuring book outstanding, principal outstanding is around INR 2,016 crores, 2,016. Out of that, around INR 300 crores has already moved to stage three as part of the, you know, 1,696 NPA non-performing. Almost 75% of the customers, either in the form of principal or interest outstanding, have started making the repayments. Okay. You expect 25% of the customers to move to stage three? Around 30%, yeah. 15%, sorry. 15%. INR 300 crore roughly. Okay. The restructure to which they've all started following up. You said that they were all starting. There's nothing left, no moratorium left for anybody, let's say. Hello? No. Yeah. Okay. I, as I said, around 75% of the customers have reverted back to the repayment scheme. Another 23% of our customers are still in moratorium. Okay. I still didn't understand. The book that we gave, you know, we gave a book of over INR 2,100-2,200 crores. 2,030 is actually the number over there. Almost about INR 1,500-1,600 have been started the repayment. Okay. The numbers that he has given of NPA also remaining would be, you know, one DPD onwards. Some of them would be one to thirty DPD or whatever it is. That is being monitored completely separately in terms of the restructured book. Restructured book and the moratorium book will be completely relooked at in the way we would like and there's a big focus in terms of ensuring that these people should, especially the ones who have started, they should continue to actually repay. The ones where the business is coming up, because we had a very large pool of self-employed within this. People where the business has restarted, there's no reason for them not to do it. Whether he's repaying it good with us, bad with others, good with us, bad with us, good with others, we are actually looking at the portfolio, backfitting it completely, and then seeing to it that actually we reach out and we say that you have to repay to us. If it requires a little tough stance to be taken, we are taking that stance. With the opening up of the legal machinery today, the SARFAESI and other things that it is one I spoke to you only on the doorstep and on the collection side or what we would do on cash collection otherwise. However, now we see that there is, you know, both the administrative machinery as well as the legal machinery, the courts, they are allowing us to actually issue and take the physical possession of the property. There are significant number of physical properties that we have taken. The option has opened. All these things are helping us in terms of actually putting the required pressure or to ask for the money. There is no reason why I have lent, I will not ask for my money. There is a security underlying over there. He needs to either repay it, sell it to me or whatever he wants to do with it, put it on the auction. We are using all these machinery to ensure that these are brought down progressively. Right. Just on this, capital raise, we are very well- Mr. Saha, sorry to interrupt, but your voice is once again breaking up. May we request you to move to- Can you? A better reception area, please? Can you hear me now? Yes. Hello. We can hear you, but your voice breaks. Oh, I see. Just a minute. Just on the capital raise, we already are at 21%-22% capital adequacy at Tier 1. What is the hurry that we have to raise the money? Couldn't we wait and clean up the book a little bit more, grow the book? We still have time. Why do we need the money so soon? That was my thought. I don't know if you could put in some thought on that part. Well, it is a money required for the growth. We are starting new verticals. We have stopped doing some businesses which required higher capital and that is the reason why you are seeing this. The moment you start, as I build a high yielding book, I mean, how do I do it? Because if the capital is a constraint to me, all this, everything is interlinked. I will start doing it, suddenly it will come down below 20% or 18% and you will again ask me, "What have you done? Why are you doing this? Right. We take a very, very conscious call in terms of how we want to actually enter the market. It cannot be start and stop. If I enter the market, I have to be there for some time. In the near future, we would like to get into high-yielding, developer or the corporate book. That's what we would want but Unnati is also high yielding. It's affordable, it's high yielding. The, what Valli spoke about between INR 8 lakh to about INR 15 lakh, it's a high yielding book which is about 11% to about 12.5, 13%, which is what the competition is offering also. In fact, competition is charging much more than what we are actually anticipating. Just on the Unnati book, what is the difference between the tenure of the old Unnati book and the new Unnati book? Now, we have not introduced it. We are going to introduce it. That is the reason that what Shivaji was trying to explain. That is, you will see some results from the third quarter. It is a different product, completely different product, different underwriting standards, procedures are different, collection strategy is different. It is going to be a very different way in which the business is handled, and it is not exactly like a prime business that is handled. Sure. Thank you. I'll get back. This company is very good, it knows how to do prime, but it also needs to actually do as a full suite housing finance company. This is also required to be done. Sure. Thank you very much. Thank you, sir. Thank you. As there are no further questions, I would now like to end the conference over to Ms. Deepika Gupta Padhi for closing comments. Over to you, ma'am. 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, as well as the audio of this call, will be uploaded on our website, which is www.pnbhousing.com. Thank you. Thank you very much. Thank you everyone for joining us. Thank you. Ladies and gentlemen, on behalf of PNB Housing Finance Limited, that concludes this conference. We thank you all for joining us and you may now disconnect your lines.