Good day, ladies and gentlemen, and a very warm welcome to the Ujjivan Financial Services Limited Q2 FY 2020 earnings conference call hosted by IIFL Securities 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 Mr. Abhishek Murarka from IIFL Securities Limited. Thank you, and over to you, Abhishek. Thanks, Ali. Good evening, everyone, and thanks for logging into the call. To take us through the Q2 FY 2020 results from Ujjivan, we have the entire top management of the company. From Ujjivan Financial Services, the holding company, we have its MD and CEO, Mr. Ittira Davis. From Ujjivan Small Finance Bank, we have Mr. Samit Ghosh, Managing Director and CEO, Mr. Nitin Chugh, President, Mr. Sanjay Kao, Chief Business Officer, Mrs. Upma Goel, Chief Financial Officer, Mr. Rajat Singh, Business Head, Micro Banking and Rural Banking, Mr. Murli Manohar, National Manager, Financial Planning and Analysis, Mrs. Sneh Thakur, Head of Credit and Collections, Micro Banking, and Mr. Deepak Khetan, Head of IR. I thank the entire team on behalf of IIFL for allowing us to host the call. The management will now start with some opening comments, and then we can open the floor for Q&A. Thanks a lot, and over to you, sir. Thank you very much. Good evening, and welcome to our Q2 for the full year 2020 earnings call. We are pleased to report a strong all-round business performance which continues from the previous two quarters. Our asset and liability businesses have both shown excellent growth. We have maintained focus on cost and profitability. In this quarter, we achieved a PAT of INR 93 crores versus INR 44 crores in the previous year, in the same quarter, both from strong business growth and also from the tax benefits which we received in this quarter. Disbursements were at INR 3,606 crores, up 51% year-on-year and 22% quarter-on-quarter, which led the gross advance to grow by 55% year-on-year to INR 12,864 crores. Diversification of our asset business continues with the non-micro banking business, primarily Financial Institutions Group, affordable housing and MSME businesses continue to scale up and now stands at 21% of our gross advances. Retail deposit, which constitutes 42% of total deposits, grew by 237% over Q2 previous year to INR 4,248 crores. Our CASA book stands at INR 1,202 crores, up 45% over the Q1 of FY 2020. Now, CASA book accounts for 12% of our total deposits. We lowered our cost of funds to 8.4%, from 8.5% in the previous quarter. Our customer base has moved up to INR 49.4 lakhs from INR 47 lakhs in June 2019. Micro banking business with disbursements growing at 18% over Q1 2020 stands at a gross advance of INR 10,191 crores, up 38% versus Q2 2019. We have successfully launched Sampoorna or family banking in majority of our branches, providing savings and health insurance products to the families of our micro banking customers. Savings account balances are also steadily started building up. A number of business re-engineering initiatives and process control practices are also being undertaken to scale up cashless repayment and transformation of the center meetings from sourcing loans to sourcing deposits from our micro banking customers. Repeat loans through phone banking will be piloted in November 2020 of that year. Agri group loans to mixed group customers was launched in fourth quarter in 2019, now contributes 21% of the rural banking portfolio. Deepening of the footprint in URCs and activities focused towards agri skill development has led the rural banking portfolio to grow to INR 395 crore. MSE business, which currently stands at the gross advance of INR 835 crore, was up 137% versus Q2 full year 2019 versus 22% versus Q1 full year 2020. The business has completely shifted towards secured lending, which accounts for 84% of the book as of September this year. As of- Uh, ladies and gentlemen, the line for the management seems to have disconnected. Please hold while we reconnect them. Ladies and gentlemen, we have the line for the management reconnected. Uh, sir, you may please proceed. Yeah. I'll continue on the MSME business. This has enabled us to increase our ticket sizes and move up in the MSME target market segments, while the yield has declined marginally. The business is moving towards building relationships with secured higher ticket sized loans and multiple products and services like overdraft for working capital, current accounts with corporate internet banking, et cetera. This has enabled us to open over 10,000 current accounts and build up this average cash balance, CASA balance, in the current accounts of INR 44 crore. Affordable housing stands at gross advances of INR 1,212 crore, clocking a growth of 127% over Q2 2019. Scaling up operations and targeting projects in tier three, tier four cities with products catering to economic weaker segments and low income group of the society, have consistently aided to its growth. FIG lending continues to gain traction, achieving a sizable portfolio of INR 521 crore. Continued disbursement to NBFCs in closely identified sectors has assisted in a 45% growth over the previous quarter. Our deposit business has seen stellar growth this quarter and continues to improve its performance, backed by expansion of banking outlets and focusing on joint offering of products and services by our businesses such as branch banking, MSME, task, et cetera. Focusing on building on low cost deposits, we have piloted digital deposits and savings accounts in the month of August and have acquired close to 1,000 customers as of date. We successfully launched privileged savings account during Q2, targeting high relationship value customers. In the quarter ended September 2019, we have onboarded close to 69,000 new-to-bank retail customers, which helps us to ramp up our retail deposit base. Our focus is acquiring new customers, immediately onboarding them on various digital platforms to ensure they are active transactors and building up a stable CASA. Our credit book continues to be of the highest quality, with a stable GNPA of 0.9% and NNPA of 0.3%. Despite multiple states grappling with floods, our PAR greater than zero has declined to 1.6%, compared to 1.8% in June 2019. We continue to remain focused on managing our cost, and cost to income ratio of 67% in the H1, and 69% for the Q2. During the quarter, we converted 46 branches and opened 32 new banking outlets, including 21 URCs. As on 30th September 2019, we have 552 banking outlets and four asset centers. Remaining asset centers are expected to convert it in the running quarter. Ujjivan remains focused on addressing financial needs of the aspiring middle class, which is the fastest growing segment of our economy. Business fundamentals remain strong as the micro banking portfolio is largely unaffected by economic cycles, and we look forward to robust growth. We are happy to announce that we have successfully completed the preliminary work for the up and coming IPO, and we are in advanced stages of listing the bank via IPO route. We are very confident of achieving the successful closure of the IPO within stipulated timelines. I am, I would like to welcome today in this meeting, Nitin Chugh. He joined Ujjivan as President and Designated MD on August 17th, 2019. His induction and overlap with me is in progress, and he will be taking over from me on December 1, 2019. I'd like to stop here and hand over to Ittira to take you through the financial performance of the quarter and listing update. Thank you very much. Thank you, Samit, and good evening. Today, this call is a milestone call for Ujjivan for several reasons. The first, of course, Samit has introduced Nitin Chugh, and that's a very important announcement and the changeover which will happen from 1st of December. This also happens to be Samit's last call as MD and CEO, and I think that's very important because he has seen the company through from the starting to this stage. Interestingly, in a few weeks, we will have the second company in the Ujjivan camp, which is going to be listed, that is the bank. Going forward from the next call, which is in January, we will have a slightly different format in the call because you'll have the bank which is listed, as well as the holding company, which is listed. This is just by way of information and about the milestones that we have. Now, the most important thing of today's call is, I was looking back and trying to see how things have moved in the last six quarters. As you know, 2017/2018 was a time we battled with the demonetization and everything else that came with it. We took care of that, and now we have seen six good quarters for the Ujjivan. In the Q1 of 2018/2019, we saw INR 45 crores. Moved to the Q2 of INR 44 crores, and again a Q3 of INR 45 crores. We moved, after having set that base, moved to the next level. Q4 of 2018/2019 saw INR 64 crores. Now in the first two quarters of this financial year, we have entered the 90s. INR 94 crore in the Q1 of this year and INR 93 crore in the Q2. I think, you know, all these track records speak for themselves. I think the base has been set. The bank is in a good position, and we are in the business of doing banking and taking it forward. For the shareholders of Ujjivan Financial Services, I just want to inform them that for the retail investors, we have a reservation of the IPO from the bank for about INR 120 crore, and this reservation will be made available to the existing shareholders who are eligible from Ujjivan Financial Services at a special price, and that price will be at a discount of up to 10%, and that will be decided finally before the launch of the issue. Please keep that in mind, and if you're advising any of the shareholders, I think this is something that you can pass on to them. Having said that, you know, because we are in the IPO process, there is a limitation on what we can give you by way of forward-looking numbers. Please restrict your questions, keeping that limitation in mind. Without taking much more time, I'd like to hand you over to the moderator for your question and answers. Please, you know, try to keep your questions to a maximum of two because we'd like to give time to as many people as possible. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to limit their questions to two per participant. Time permitting, you may come back in the queue for a follow-up. The first question is from the line of Nishant Shah from Macquarie. Please go ahead. Yeah. Hi. Hi, team. This is Nishant. A couple of questions. Firstly, on the IPO, what is the planned fresh capital issuance within the IPO, or is it entirely OFS? It will be a fresh capital. Entirely fresh capital? Yeah. We are raising through this IPO, we are looking at raising the entire fresh capital at this point of time. Fair enough. A little more strategically, is there any thought about probably allocating a higher number of shares to existing investors so that, like, so that when the merger has to happen, say two years down the line, there is a little more consensus or visibility on consensus? Is that something of a thought that we've given to? Yeah. I mean, in terms of existing investors, we have a pre-IPO tranche which is closing shortly. Existing investors are welcome to participate in that tranche. If you need any further information, you can contact us separately with the investor team. Also there is, you know, 75% of the IPO itself has to be done with institutional clients. There is opportunity in that as well. As I said, 10% of the amount is reserved for existing investors of the holding company. Retail investors. Existing retail investors. I think, there's a lot of opportunity for the existing investors to participate. Fair enough. Second, little bit of an ambitious question from Nitin. Nitin, it's early days for you in the bank, but could you just highlight probably what kind of things are you looking at for the bank? Is it gonna be something new? Is it just the same things done better? Anything that you can say at this time? Nishant, quite honestly, we are trying to do quite a few things. Focus obviously is going to be on the liabilities franchise. I think we are putting in a fair amount of plans to strengthen and grow that. Like you've heard from Mr. Ghosh also, we are very interested in a stable granular b uild up. That's obviously going to be high priority for us. At the same time, as we are diversifying and now that we've added 78 new branches in the last quarter, there is going to be a lot more focus on generating business from these branches, the new ones, as the older ones also, you know, continue to contribute. The third one would be to also bring in a lot more use of digital technologies. We have identified quite a few places all across the organization. I think you will hear more from us. Unfortunately, we cannot get into too much of details because of the limitation, but yeah, quite a few things are being worked on. Fair, fair enough. Yep, that's it from me. Thank you so much, sir. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Yeah. Thank you very much, sir, for the opportunity. My question is regarding IPO only. Now, assuming after this dilution, maybe 15%, 20% dilution, the holding company will be holding about 80%, 85%, right? Or there's more dilution? Or have you given the number of dilution? Yeah, the dilution is about 10%. Yeah, your numbers are correct. Yeah, go ahead. Okay. About 10% dilution. Now, that is about the three-year cap that RBI has put in. Now coming to five years, that requirement that we have to also. Any plans on that? What we are planning to do on that front? Yeah, there are different plans, but obviously it's a little bit early to discuss it. Yeah, we will be. Our objective is to mainly meet the targets set by RBI. One of the things is that we will be discussing further with RBI as to how this can be achieved. Mm-hmm. If a reverse merger is possible, then that will help. Otherwise, we have backup plans also in trying to achieve the dilution from the level we are to 40%. To 40%. That is a huge dilution that we're talking about, right? Yes. Yes. Even a merger is one of the option that you might be considering or discussing with RBI to kind of Yeah, as soon as we finish the listing, we will be starting the dialogue with RBI for that matter, for the reverse merger and see if it is possible. Okay. Understood. Sure. That's it from us. Thank you very much. Thank you. The next question is from the line of Gautam Jain from GCJ Financial Advisors. Please go ahead. Yeah. Sir, if I understand, you are raising about INR 1,200 crore in the IPO, right? Yes. Yes. You're saying the maximum dilution will be 10%? No, INR 300 crore of that is for pre-IPO. The balance is reserved 10% for the existing shareholders, and then INR 780 crore is for the institutional and the normal IPO. Overall amount to be raised is INR 1,200 crore? Yes. That's what has been filed with SEBI as well on the DRHP. For existing shareholders who are owning more than INR 2 lakh worth of shares would not get any discount. Is that correct? For that, we will advise you separately because definition of retail investor is individual and HUF. Even high net worth who come into that may also be then restricted from applying for shares in a separate category. We will, before we launch the IPO, we will let you know exactly how this is defined and take it forward. Lastly, can I get the break-up of other income in case it's possible? See for H1, our break-up of the other income is processing fees, INR 82 crores, PSLC income, INR 46 crores, income from bad debts write-off, INR 16 crores, income from third-party insurance products, INR 9 crores, miscellaneous income of INR 22 crores, totaling to INR 175 crores. Thank you, ma'am. Thank you so much, sir. Thank you. The next question is from the line of Jehan Bhadha from Nirmal Bang. Please go ahead. Yeah. Sir, you just said that, you know, about 10% of dilution would be done for raising this INR 1,200 crores. That implies that the total company valuation is around INR 12,000 crores. Is this assumption right? Well, I mean, each one can make their own assumptions, but, you know, obviously the valuation is based on certain assumptions. I think that is something we will finally put, the price will finally be determined based on market conditions. Right. This 10% is not fixated, right? I mean, the dilution could be more also and- Yeah. We said it was INR 100 crore. It can be anywhere between 10%-13%. Right. Thanks. Second question, if I look at the presentation, there is a big difference between profits of consolidated financials and profits of SFB because one is on Ind AS, consolidated is on Ind AS, and SFB is based on IGAAP. Why such a big difference? You know, as you are aware, in the holding company, we have already adopted Ind AS. In the bank, we follow the IGAAP. The major reason for difference between the Ind AS and the IGAAP are there are three line items. One is on account of processing fees. Second one is on account of expected credit loss, and the third one is on account of the ESOP charge that comes from holding company to the bank. Okay. These are the three major reasons for the difference between Ind AS and the IGAAP. Right. Once the SFB lists, will we immediately switch to Ind AS? As of now, we will continue to be guided by the RBI regulations, and even after listing, we will be guided by the RBI directions. Right. There are no indications as we speak by when Ind AS will be applicable for the bank. Once it is released, a notification will be released from the RBI. Banks will follow the Ind AS. Sure, sure. Thank you. That's all. Thank you. The next question is from the line of Manan Patel from Equirus Portfolio Management. Please go ahead. Sir, thank you for the opportunity and congratulations for good numbers. My first question is regarding the MSE part of the business. It seems that it has been growing in line with the ticket size. If you look at 100% growth in AUM, the ticket size has also grown by 100%. Like, can you explain what is the nature of the business and why are we not able to grow the customer base as such? Okay. On MSE, we are focused on the secured side of the business. We've stopped doing any unsecured business. On the secured business, if you look at the total ticket size, ticket size has grown to INR 13 lakh, which used to be INR 7.4 lakh earlier to last year. We've seen a growth in ticket size primarily. Since we are focusing on secured business, the growth on number of customers has obviously not been as much as we were doing earlier when we had the unsecured business, too. That's the primary reason how growth has happened on Going forward, now that it is completely secured, do we see customer base growth as well? We will continue. As we've grown in the secured business, as we've learned in the secured business, we will be growing products to ensure that we grow both the customer numbers as well. Okay. I just wanted to add. My second question is, sir, Mr. Sachin Bansal is on our board, as I understand, on the bank's board of directors. Right. Now, he has also invested in another microfinance company and he's a CEO there. Do we see any conflict of interest there? I don't think we see that much. MFI is relatively small, and we had discussed this before. I mean, he had discussed this investment with us before he joined us. We really don't see that much of a conflict right now. It's a relatively small MFI, so. Still we are in the same line of business. True. I mean, right now we don't see that much of a conflict. We'll see as we go along. Okay. Understood. Thank you, sir. That's it from my end. I just wanted to add, you know, we have changed our strategy on the MSE business. We were putting on a lot of small ticket unsecured customers earlier, and we've sort of moved up the ladder of the target market where we are now lending up to INR 2 crore. What you will see is larger ticket size loans and overall, you know, multiple relationship with customers, you know, loans, overdrafts, current account, corporate internet banking, et cetera. The business will be more relationship-oriented rather than just individual loan-oriented. You will, it may not, you know, I mean, we may have seen many customers coming in earlier, largely because they were small ticket unsecured. We are not adding them anymore, and it will be sort of larger ticket size, but the business volume will grow. It will be. Understood, sir. No, that's very helpful. Thank you. Thank you. The next question is from the line of Manish Ostwal from Nirmal Bang. Please go ahead. Yes, sir. Thank you for the opportunity. Question on the slippage during the quarter, which has increased from INR 26 crore to INR 41 crore. Which are the geography contributed, because some of the parts they were floods, which are the segment, geography contributed this slippage in the microfinance space, sir? Yeah. Addressing this question, there are two parts to it. On the microfinance side, we've seen some slippages coming from Odisha, and it's largely on account of Cyclone Fani. The other area from where we are seeing slippages is the MSE unsecured book, which is running down. Otherwise, the book continues to grow steadily with an excellent portfolio quality. Okay. Secondly, just to confirm, you shared on the IPO dilution, maximum 13% dilution at the SFB, small SFB level, right? Sorry, could you rephrase that question? What exactly are you trying to get at? Sir, we are raising equity capital through IPO in Ujjivan SFB. My question is, the maximum equity dilution at the SFB level will be 13% and post the IPO, the Ujjivan holding will hold 87%. On the lowest side, based on the pricing. I understand the pricing will depend on the market, demand and supply scenario, but that is a rough idea. You know, we are raising INR 1,200 crore of total fresh capital from the market with INR 300 crore. Up to INR 300 crore we have reserved it for pre-IPO and 10% of the total issue size is being reserved for the retail shareholders of the holding. Our pricing process is going on. We will not be in a position to comment exactly on the dilution, what would be the dilution. We will be confirming the final dilution once we will be completing our pre-IPO and we will be moving towards the IPO price. Dilution finally depends on the pricing. Pricing is still not being worked out. Before the next earnings call with the company will be listed, that's right? Yeah. That's what we've been intending to do. Yeah. Thank you very much. Thank you. The next question is from the line of Amit Nanavati from Nomura Securities. Please go ahead. Yeah, hi. Just two questions on the business side. We've been seeing very strong growth, both disbursement, loan growth on the new segments that we've started just one to two years back. When I look at asset quality trends segment-wise, housing, MSE both has seen an inch up there. How comfortable are we to kind of push the pedal now in terms of growth, especially when the environment is kind of getting more difficult to grow in? Firstly, I just wanted to add that, these businesses are not one or two years old. They are three to four years old. We have piloted each of these businesses, affordable housing and MSE for over three years. We've learnt whatever we have to learn from those lessons, and obviously you heard that cut down our unsecured business in MSE. Similarly, we've made a lot of adjustments to both these businesses. What we are now in both these businesses we are in a position to scale up. That's broadly what I don't know. Sanjay, you want to add anything? You know, when we are scaling up, we are looking at the entire business from a solution perspective. Like, Mr. Ghosh stated earlier in the case of MSE, every business that we look at or every customer we look at, we look at it from a total solution perspective. Growth is not just an aspect of asset, but it's an asset and deposit and a total customer growth. From that perspective, we are very confident as to the customers that we are going to. Of course, you know, we've learnt, like Mr. Ghosh said, over the last three years which segments, which products to go with and that will stand us in good stead, we believe. The reason I ask is, again, MSE unsecured, you are quite comfortable. two, three quarters back we realized MSE secured is a better way to do it. Again, when you look at segment-wise asset quality, if I look at and I kind of do a one-year lag, the inch up would be even sharper. Especially given the current environment, would it be fair to or would it be more prudent to have a pause, look at how the early cohorts are moving and then kind of push the pedal on growth there? That was the only question I had. Yeah. You know, that's something we do consistently and if you look at our lagged portfolio and look at the way we've been growing. There are two things we've done. One is we've decided on which segments we will be growing in from our learnings from the past. And secondly, the lagged portfolio has declined, is declining as we go along. To that extent, we will see a better performance of our portfolio as we move forward. Just to add to that, we've also looked at the lagged delinquency numbers. Like I stated earlier as well, those numbers are primarily emanating from the unsecured MSE business as far as MSE is concerned. The MSE portfolio quality continues to be robust and we are not seeing any stress in that book. As far as housing is concerned, that book also continues to be very good and there have been some delayed repayments but looking at the numbers we have, repayments are coming in with a slight lag. Okay. One more question, just more on the technical side. On the IPO listing, right? Or the reverse merger rather. Do you have any comfort or any discussion that you have with RBI whether the 40% promoter holding and a reverse merger can coincide each other and you don't have to reach 40% before discussing reverse merger? Secondly, on the dilution which you're talking about 10%-13%. Generally in an IPO you have a 20% price band versus what you file at. What kind of flexibility do you have here? Say if your pricing is getting better or worse than what you expected, you file that. Can you cut down the price by 30%-40% or increase the price by 30%-40% or it's a 20% band that you have to live with? I'll just take the first part. That is, you know, we had discussions earlier with RBI regarding reverse merger. That they are extremely positive about that at the end of five years, they're open to reverse merger. You know, subject to their regulatory comfort with us, and given that we have a sort of impeccable track record, that should not be a very difficult proposition. The other issue on the 40% dilution before fifth year, this is something we will take up with them after we complete the IPO. Yeah. Whether we can do it together or whether we have to complete it before it or we don't, you know. Those are the things, I think, from our discussions with them, basically they said first list, comply with the first condition and then, you know, come back to us and we'll discuss. That's where it is. Sure. As regards the price band, I think, Upma will tell you a little bit about it. As I said, we are in the process of today our DRHP has been filed with SEBI, and we have got the final responses also from the SEBI. We are in the process of responding to that. Post that we will be filing our RHP. Then the process of price band discovery that will be taken up. Depending on the market conditions, we will come back to you for the price band at an appropriate time. Will you still be allowed to change the price band beyond 20% or you'll still be restricted to the IPO and OFS within 20%, which generally applies to? No, there is no price band for 20%. I think what you are referring to, we have been looking at INR 1,200 crores of capital raise. From that, we have the flexibility of going 20% higher from INR 1,200 crores or 20% lower. Price band. Once fixed, we will not be making any changes in that price band. Okay. Got it. Thank you. Thank you. The next question is from the line of Dekan Tharia from Antique Stock Broking. Please go ahead. Yeah. Hi. My question is around. I could make out that, you know, there's in terms of overheating or large and, you know, this. Sorry to interrupt you. You're not audible. Your voice is breaking. Okay. Sorry. I'll just repeat my question. It's basically on the microfinance business. You know, what do we see for, you know, the next one or two years? Like, will it be a 30%-40% kind of a growth business for us and 1% credit cost or those numbers have changed, because of, you know, the three years of good run that this sector has seen and, you know, the competition by some very large aggressive players. Getting 30%-35% growth in microfinance business is something which we have committed and that seems doable, especially in microfinance business where we are moving some of our client to individual loan business, where we do better underwriting and we give them higher ticket size loan based on their track record with Sugam and their bureau record. I mean, as long as we have that strategy of moving customer from group loan to individual loan, we are able to deliver sustainable results. In terms of credit cost also, we don't see significant jump there. In terms of the credit cost, given the limitation we have in terms of the forward-looking statements, I would re-request you to look at the Q4 guidance given in the last financial year. That holds good. Okay, fine. That's it from my side. Thank you. Thank you. The next question is from the line of Pranav Mehta from ValueQuest. Please go ahead. Yeah. Good evening and congratulations on a good set of numbers. My question is on this, FIG book, which it has seen a significant build-up in the last few quarters. You know, if you could just explain what is the, like, average ticket size and tenure of loans that we are giving out here? These loans are largely to micro NBFC-MFIs, and it's mainly to NBFCs, which we are very familiar with, which don't have any kind of ALM mismatch. We've known them very well through the course of the year. In terms of governance and management, they have a very good track record. We are very selective about it. The average tenure is more around two years, two to maximum three years. The ticket size is what? INR 25? Maximum 10-25. 10 to 25. Average is INR 17 crores. Average is INR 17 crore. Right. Thank you. So second, just to follow up on a question somebody asked earlier that, you know, the difference between our Ind AS and IGAAP profit is, you know, like, quite significant. Like, you explained the three points, you know, for which the difference is there. You know, if you can quantify, you know, the, with numbers, what exactly is the difference because of processing fee, ECL, et cetera, that would be helpful. Quantification is available in the presentation. I mean, I'll just again put across. If we go by the book, basically our IGAAP numbers are INR 187 crores. That's the profit number. Ind AS are INR 144 crore. Major three items when I look at the profit numbers, one is the expected credit loss modeling. The impact is INR 8 crore, 7.7 crore precisely. Processing fees impact is INR 31 crore and fair valuation of ESOP of holding company shares is INR 6.6 crore. These are the major three impacts which has impacted the Ind AS profits. These numbers are for H1 or for Q2? These numbers are for H1. Okay. Okay. Thank you. Thank you. The next question is from the line of Aseem Pant from HSBC. Please go ahead. Hi, sir. Thank you for taking my question. Just a couple of Aseem, you're not audible. Hello. Is this better? Yes, thank you. Yeah. Hi. So just a couple of questions. One is, one small data point. For how many of your microfinance borrowers are you the only lender, and how has that trended, let's say, in the last two years? Customers who are unique to Ujjivan stands at 30%, and it's been constant at 30% over the last few quarters. Okay. Secondly, sir, in terms of your, the new applications that you get for microfinance, what are the rejection rates? I mean, is the number changing or is the number fairly stable? How is that doing? The rejection rate for Q2 is at 18%, and it's been in the range of 18%-20% in the last two to three quarters. Okay. These, the rejection rate is for the new applications, means the new to Ujjivan customers, right? Not for your existing- No, it includes both fresh and repeat loans. If we look at a breakup of fresh and repeat, new to Ujjivan customers have a rejection rate of around 22%. On the repeat loans, we have around 14%. Okay, sir. Fine. Thank you. I wish you all the best. Thank you. The next question is from the line of Amit Mantri from 2Point2 Capital. Please go ahead. Hello. Just wanted to understand this tax benefit that we have got in this quarter. Can you quantify that as well as? Sorry, we lost you. Yeah. Your question is over? Sorry, we lost you. Hello? So it seems his line dropped. We just move to the next question from the line of Lalit Deo from Equirus Securities. Thanks for the opportunity. Rohan here. Sir, just want to understand, have you given any thought on the universal banking license after five years? If so, any timelines on that? We definitely plan to apply for the universal bank license, but that would take place only after. I mean, we want to finish listing by before February. After that, our you know milestone is reverse merger if we can resolve the 40% issue before that. That will happen only after completion of five years, and it may take up to one year the entire legal process, et cetera. Only after we complete that, in 2023, I presume, we would apply for a universal bank license. Sure. Sir, secondly, like, when we are moving customers or giving customers, individual loans and moving them from group to individual, so what kind of income growth have these households seen in the last two to three years, typically? Any assessment on that? One small clarification. We provide group loan customers unsecured individual loan, not MSE loan. MSE loan is largely given to a different segment of customer. When we transition a group loan customer to individual loan customer, we generally focus on the creamy layer, customers who have relatively higher income than the group loan. Exact number will be difficult to quantify at this moment. Sure, sir. Lastly, like, overall, like, whatever comment we are hearing from ground and even some of the FMCG companies have indicated that the consumption demand remains weak even in rural and also a certain parts of urban. So how is the income volatility in the customer base that we are having in the micro-lending space? Any feedback that you're receiving from the ground level? Look, we have also kept a very close ear to the ground to understand what's going on. So far in the last two, three months, we have not seen any significant impact. We are very careful in areas where we are hearing such kind of issues. So far, nothing. I mean, it's not showing up in any of our leading indicator. Sure. Sir, lastly, the incremental CASA of INR 351 crore during the quarter, if you could give some color on the granularity of the same? It comes from a mix of both micro-banking and open market customers. Within that, we've got various segments that we work with. You know, there is an open market standalone SA customers that we come through. There is also a whole lot of cross-sell that we do for CA with our MSE base. There is an entire salaried section that we have where we get CASA from. There is, of course, the whole micro-banking space through which we get a bunch of customers. It's a, you know, our strategy is to go through different identified segments that we have. Address them through a total solution, part of which is by generating more CASA. Sure, sir. We do have a breakdown. I mean, we'll have to give the breakdown. We can share the breakdown, exact breakdown with you later. Sure. Thanks a lot. Thank you. We will take the last three questions. The next question will be from the line of Dhwanil Desai from Turtle Capital. Please go ahead. Hi, sir. Only one question. When you move the microfinance customer from group loan to the individual side, in group loan you have a social collateral in place. When you move to the individual loan, do you take any kind of collaterals or it's more of an unsecured lending that you do? No. It's based on cash flow assessment and customer's track record with us as well as their bureau records. It's an unsecured lending in that sense, right? Yes. Yeah, yeah. This is unsecured lending. Okay. This is a part of microfinance, microbanking business. MSE lending is a completely different business which we are focusing on secure. Understood. Yeah. Thanks. That's it from my side. Thank you. The next question is from the line of Aseem Pant from HSBC. Please go ahead. Hi, sir. Just a follow question. The individual micro loans are given to only your mature client, microfinance customers or is it to, you know, other lenders, group loan customers as well? It's given to group loan customers and, I mean, in most of the cases we make their spouse the co-borrower and 90% of our individual loan goes to our group loan customers only. In 10% cases we are also doing open market. Okay. From the reference and the referral from our customers. Sure. Just a follow-up. How much of your SA would be from your micro borrowers right now? Or what would be the average micro, you know, savings balance? From the micro borrowers, they contribute 46% of our total SA book. Okay. Great. Thank you, sir. Thank you. Thank you. The next question is from the line of Krishnadut, an individual investor. Please go ahead. Yes, sir. I am comparing your three-year performance between September 2016 and September 2019. Our AUM has more or less doubled. Yes. Yes. It seems the participant has lost connection. We'll just move to the next question from Ashish Pandey, an individual investor. That would be the last one. Oh, hi. My question has been answered. Thank you. Thank you. The next question is from the line of, Nishant from Macquarie. Please go ahead. Yeah. Just to follow up on one of our previous questions. I think you mentioned that 46% of your SA accounts are from micro borrowers. Yes. Hello? Hello? Yes. Out of the INR 1,200 crores of CASA that you have, 46% or that is roughly around INR 550 crores is from micro borrowers, your microfinance customers. Sorry. 46% is of the savings book. Could you just try and break up the CASA book in its entirety? Like INR 1,200, what would be the split of it between CA and SA and the thereafter between micro and retail? The CASA book is INR 1,200 crores. INR 200 crores is CA, INR 1,000 crores is SA. Mm-hmm. 46% of the SA book is from microbanking. The balance 54% is from the rest. It's not 38%. CA from the microfinance book is very small. Okay. Even if I assume it's zero, that still means that 38% of your CASA, like so INR 460 crores roughly is from your micro borrowers. That's correct. Right. Out of this you've also mentioned in your PPT that this 1,200 number includes your institutional CASA as well. What would that institutional CASA amount be? That is very tiny. Institutional CASA is about INR 16-18 crores. Oh, okay. Fair enough. Yeah. That clears it up. Fair enough. Thank you. That was it. Thank you. That was the last question. I now hand the conference over to the management for their closing comments. Well, we'd like to thank IIFL for supporting us through this call and for the previous calls as well, and all of you for participating in this quick Q&A. If there are any other questions that you have, you're most welcome to contact us separately at the investor relations number or by email. We look forward to seeing you in future meetings and calls. Thank you very much. Thank you. Ladies and gentlemen, on behalf of IIFL Securities Limited, that concludes this conference call for today. Thank you for joining us, and you may now disconnect your lines.