Ladies and gentlemen, good day, and welcome to Ujjivan Small Finance Bank Q4 FY 2024 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nikunj Shah from IIFL Securities Limited. Thank you, and over to you, sir. Thank you, Muskan. Good morning, everyone, and welcome to Ujjivan Small Finance Bank's Q4 earnings call. I'm delighted to welcome the entire management team of Ujjivan Small Finance Bank, who will discuss the earnings and the business performance, followed by our interactive Q&A. The management team is represented by Mr. Ittira Davis, MD and CEO, Ms. Carol Furtado, Executive Director, Ashish Goel, Chief Credit Officer, Mr. Ramesh Murthy, Chief Financial Officer, Martin P.S., Chief Operating Officer, Vibhas Chandra, Head Micro Banking, and Sanjeev Barnwal, Company Secretary and Head of Regulatory Framework. With this, let me pass on the call to Mr. Ittira Davis. Over to you, sir. Thank you, Nitin, and good morning and welcome to our Q4 earnings call. I'm pleased to announce that Q4 has been another strong quarter for the bank, closing the financial year on a strong note. The bank has raised the bar to improve benchmarks, which is evident through its healthy growth and strong profitability. There were several developments post the book closure. As you know, we have received RBI approval for the appointment of Mr. Sanjeev Nautiyal as the Managing Director and CEO of our bank, with effect from July first, 2024. He will join us on June first as President in the interim. He's a seasoned banker with over three decades of extensive experience in retail, SME, financial inclusion, operations, HR, international banking, and treasury. Previously, Mr. Sanjeev Nautiyal held the position of Deputy Managing Director in State Bank of India, handling financial inclusion and micro markets. Also, he was earlier Managing Director and CEO of SBI Life Insurance. I will be stepping down from MD and CEO position with effect from June 30, 2024, but will continue to be associated with the bank as an advisor. With the approval of the RBI, Carol Furtado has taken over additional responsibility as full-time director. She's now an Executive Director of the bank with effect from May 1, 2024. We have successfully completed the merger process between the bank and the holding company. The shares will be credited to the shareholders of UFSL, and trading is expected to start this week. Here, I would like to highlight that the merger has benefited all our shareholders. The book value per share has increased by INR 2.6, resulting in a book value per share of INR 29.06 as of March 31, 2024. Additionally, owing to the strong profitability of the bank for financial year 2024, the board has recommended a final equity dividend of INR 1.5 per equity share. This will be subject to shareholders' approval in the ensuing AGM. Speaking about business, we continue to expand our presence geographically. We have added 123 branches during the financial year, taking the total branch count to 752, spread over 26 states. We aim to add around 50 more branches during financial year 2024-25. During Q4, our loan disbursements stood at INR 6,681 crore, growing 11% over the last quarter. This resulted in full year disbursements reaching INR 23,389 crore, with a registered increase of 17% year-on-year. Our gross loan book grew by 24% year-on-year and 10% QoQ. Customer acquisition remains strong, and we have acquired around 2.7 lakh new microfinance customers in the last quarter, taking the total count of newly acquired customers to 10.5 lakh for financial year 2024. This is around 12% higher than what we acquired in the previous year. This increasing acquisition reflects the untapped potential of the customer segment. We have graduated about 1.4 lakh customers from group loan to individual loans in financial year 2023. The individual loan growth will continue to outpace group loan growth. More than 80% of the current IL customer base are from our existing GL customers, who continue to have good record and thus were graduated to the individual loans. We see strong demand and believe this trend should continue in financial year 25 as well. The growth in affordable housing, including micro mortgages, continue to be strong. We dispersed INR 730 crore for fourth quarter and two thousand two hundred and eighty-four crores for the full year, witnessing a growth of 45% on a year-on-year basis, and our book is now a INR 5,000 crore book on the affordable housing. We had piloted a new LOS for the affordable housing vertical in Q4 2024, which was successfully launched across the country in April this year. This will help us improve efficiency, reducing manual interventions, enabling digital onboarding of customers, improve productivity, and streamline the approval process. We have added pre-qualified top-up loans to the product suite for our existing customers, and a number of our existing customers are already eligible for this loan. Similarly, our micro mortgages book has grown well. We see this momentum to continue in the next year as well. With regard to the MSME business, the transition is nearly complete. We disbursed INR 128 crore in the fourth quarter, which is a significant improvement from just INR 24 crore in the first quarter. Our new Pan-India MSME book largely comprises of LAP products. The LOS for the same is planned to be launched in the first quarter. This will lead to significant improvement in critical metrics such as productivity, turnaround time, et cetera, helping us scale the product much faster. Financial year 2025 will also witness countrywide launch of fund-based and non-fund-based working capital offerings. To further augment the product offerings, we are closely working with 4 fintech partners, of which two are already onboarded in the fourth quarter, and as supply chain finance business from fintech partners gains traction, it will add to the growth of the MSME vertical, as this is a high-yielding book. Our FIG business continues to contribute to our secured base, with quarterly disbursements of INR 546 crore in the fourth quarter. We continue to invest in our emerging businesses, such as gold loans and vehicle finance business. Gold loan will now be offered from 250 branches by the end of financial year 2025, up from 60 currently operating branches, and vehicle finance will deepen its presence in the existing eight states to more traction to grow their business. We will continue to invest in technology and human resources to make products readily to be scaled up. In line with our long-term objectives, we continue to grow our secured book, which increased to 30.2% as of March 2024, up from 28.3% in the previous quarter. Q4 has been a strong quarter on the liabilities part as well. Total deposits have grown strongly to INR 31,462 crore, registering a 23% year-on-year growth and a 6% quarter-on-quarter growth, reaping benefits from our increasing branch presence, enhanced service levels and improved business productivity. Additionally, our focus towards retail deposits has helped us garner INR 778 crore of CASA this quarter, registering a double-digit growth of 10% sequentially. Our total CASA book now stands at INR 8,335 crore. Our CASA ratio improved to 26.5% against 25.5 in the last quarter. The benefits of brand campaigns and introduction of value-added products during the year has also fueled this growth. Our retail term deposit growth continues to outpace bulk term deposits growing by 7% and 36% for the quarter and the year respectively. We have recently increased our term deposit rates by 25 basis points for the 15-month deposit bucket to offer a more competitive rate to our customers. We believe the key to expand our customer base and reaching a diverse set of customers lies in embracing mix of physical and digital journey. Two digital liability products, namely fixed deposits and savings accounts, were introduced during the second half of the financial year, mobilizing INR 75 crore of deposits. During the first quarter of this financial year, we will be introducing digital initiatives such as smart statements, video banking and WhatsApp banking. Furthermore, we aim to offer end-to-end digital services experiences for our customers in select areas. In financial year 2025, we will continue to invest in targeted brand campaigns. The focus towards building retail and granular deposit base and leverage our digital channels will continue. Additionally, our MSME business will also contribute towards building current accounts as the asset product suite is designed towards meeting our customers' requirement. We will also offer escrow accounts to our current account customers. Our Hello Ujjivan application is gaining acceptance among our customers, with total downloads reaching around 7.8 lakhs. The loan acknowledgement from our repeat and top-up group loans has also started to pick up. A total of 1.28 lakh loans were acknowledged this quarter, which forms 33% of total repeat and top-up group loans. We are also exploring offering insurance products via Hello Ujjivan, currently offering 1 insurance product, but we hope to add a few more in the future. Now, a look at the financials and margins. This quarter, we were able to benefit from our past efforts, resulting in expanded margins. The expansion was a result of three factors: improved cost of funds, optimal system liquidity, and continued benefit from asset book repricing. The resulting NIMs for the quarter was 9.4% against 8.8% in Q3, and 9.1% for the full year 2024, and this is in line with our previous guidance. While the asset book repricing will continue to benefit us, the cost of funds will stay elevated as a result of our recent hike in the 15-month deposit bucket. The cost of funds for the quarter was 7.2%, against 7.5% in the last quarter. There is also a one-time benefit of 17 basis points in cost of funds due to interest reversal on the term deposit post the reverse merger. Currently, around 75% of the book is in the highest bracket, while around 15% of the book sourced between September 2022 and February 2023, and 10% of the book sourced pre-September 2022 is yet to be fully repriced. The cost-to-income ratio for Q4 2024 remained at 56%, slightly elevated as investment in infra and technology continue. Going forward, we believe it will remain at similar levels as investments continue to form a strong base for the bank. Pre-provision operating profit remains strong at INR 519 crore, growing by 26% year-on-year. Coming to asset quality, the collections continue to be strong, around 99% levels. The credit cost continues to move towards normalized levels. Credit cost for the quarter is INR 79 crore, versus INR 63 crore in the previous quarter. Our asset quality remains robust, with GNPA at 2.1% and NNPA at 0.3%. Slippages for the fourth quarter were at INR 175 crore, against INR 140 crore in the third quarter. For FY 2024, slippages are at INR 480 crore, with upgrade and recoveries of INR 224 crore. Bad debt recovery remains strong at INR 141 crore in financial year 2024. We have written off INR 65 crore during the quarter. We had guided for a credit cost of sub 100 basis points for the last financial year, and the bank remained well within the guidance. During the second half of financial year 2024, we have seen credit costs normalizing. This includes an external factor of loan waiver campaigns in some specific pockets of Northern India. Further, as the book vintage increases, and with credit cost normalization continuing, we expect credit costs to be in the range of 1.4%-1.5% for financial year 2025. During FY 2024, bad debt recovery was INR 141 crore on the back of strong collections, a strong collection team and intensified legal activities. We will want to continue these initiatives during the current year as well and expect to recover around INR 100 crore. PAT for the quarter was INR 330 crore, resulting in a full year profit after tax of INR 1,281 crore, growing by 17% year-on-year. This has resulted in a healthy return on assets and return on equity of 3.3% and 24.8% for the fourth quarter. For the full year, return on assets is a remarkable 3.5% and a very good 26.1% for ROE for the financial year 2024. RBI has recently outlined the eligibility criteria for qualifying to apply for the universal bank license. We are pleased to confirm that the eligibility criteria will come out as planned, basis the board guidance. Now, a guidance for the current financial year. We estimate our gross loan book to be growing between 20%-25% for financial year 2025, while deposits will grow in line with our asset growth, and our CD ratios will maintain those of the financial year 2024 levels. Later in the year, a firmer number will be given on the, you know, exact growth, whether we are on the higher end or the lower end of the 20%-25% growth. Financial year 2024/2025 will be a year of sustained business performance and profitability. We expect NIMs to stay around the 9% and the ROE at around 22%. These are early indications, as I said, with firmer guidance to follow at the half year mark. Thank you. Over to you. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchtone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we wait for the moment while the question queue assembles. The first question is from the line of Rajesh Mehta from Yes Securities. Please go ahead. Yeah. Hi, good morning, and congrats on good quarter. My first question is on the asset quality. Why the slippage in run rate was slightly higher in the quarter? It could be because of Punjab. ... but the upgrades and recoveries quantum was quite lower in Q4. Any specific reason why upgrades and recoveries were lower? And second associated question is, we are continuously seeing reduction in on-roll and off-roll collection team in micro-banking. Can it have any future bearing on collection efficiency, maybe OD collections or maybe recoveries and upgrades? I'll answer the first question, which is, our slippages. So if you have noticed, our slippages have consistently been, you know, in the range of 0.5%. There was a minor reduction, I would not say a reduction in the, in the fourth quarter, and there is no specific reason for that. You know, it has been more or less flat. As far as the team size is concerned, we had actually increased the team size in Q3, and we brought it back to the normal level in Q4. So you would see a Q over Q reduction, but the team has been based on our, assessment of the overall book to be recovered. So we see that this number will continue. So this, you know, the collection team's strength is expected to continue during this, financial year. Okay. So you are implying that this, credit card guidance of 1.4-1.5, kind of captures a very usual steady state, slippages as well as upgrades and recoveries from credit going forward, right? In fact, you know, even last year said that we will be seeing normalization of the credit costs, and we saw that the credit costs were normalizing quarter on quarter, and we expect that this will be a steady state going forward. Okay. And, just on the average ticket size across products, when I look at affordable housing, excluding mLAP, when I look at MSME, excluding Fintech channel, there has been, some increase in, ticket sizes when I look at Y and Y comparison. So anything specific which is driving here, that's number one. And, second is, this, this cost of deposit, which fell this quarter, and you said there was a one-time benefit of interest reversal. So excluding this, how would have cost of, cost of fund moved in this quarter? Okay, I'll take the ticket sizes first. You know, the average ticket size in group loans has gone up marginally. New customers' contribution reduced from 43%-39%, and we saw an increase in the repeat loans from 32%-39%. The increase in ticket sizes in group loans, in individual loans, ticket sizes have increased across as we are graduating group loans to individual loans at a higher ticket size. This increase was about 3%, so it's not a very significant increase in the ticket size of individual loans. No, no. My question was on the ticket size of affordable housing ex of mLAP and MSME ex of Fintech, which we show in the presentation. So they have gone up. The affordable housing, the ticket sizes, you know, even last year was around INR 12.6, and we have seen a INR 14. So that's a marginal increase, you know, the INR 14 lakhs is what we are normally underwriting these days. The range remains, however, between INR 12-15 lakhs. Okay. Most of our business is coming back, you know, back, that business segment of INR 12-15 lakhs. Now, it could be slightly on the 14 lakh range or the 13 lakh range, but that's not a significant movement. The band remains the same. The customer segment remains the same. On MSME, yes, we have seen a slightly higher ticket size. We launched the, LAP product in Q1, and that has stabilized over the, over the last four quarters. In the last quarter, we saw significant traction, and we want to be in that range of INR 40-50 lakhs. So that's the segment in which we are, we have started to see the scale-up happening. Yes, thank you. We continue to operate in the range of INR 40 lakh-INR 50 lakh. Sorry, I just missed it. We see that we will continue to, we continue to operate in the INR 40-50 lakhs average size for LAP loans. Okay. Yes. Thank you, and bye-bye. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, please limit the question to two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question is from the line of Nidish Jain from Investec. Please go ahead. Thanks for the opportunity. First, on MSME loan, can you explain, can you give some details on the Fintech partnership that we have? What is the book size that we have from that partnership? What are the added needs, et cetera, and what is the customer group profile that we are targeting in the MSME Fintech vertical? MSME Fintech, we recently started this portfolio, and we have already tied up with two partners, and there are two in the pipeline. And the book size is very small. ... we are also hoping to grow this through the FinTechs and also on our individual capacity. Okay, sure. In the MSME vertical, what is our origination strategy? How are we originating these loans? So this is a combination. We are doing the semi-formal LAP. We started this portfolio, restarted the portfolio sometime in May of last year. And, our strategy is to get customers from the semi-formal, semi-urban areas and grow the portfolio there. Okay. Okay. How should we think about the cost of funds going forward? This quarter, there is one-off. So adjusted for one-off, probably the cost of fund is 7.4%. How should we project cost of funds in FY 2025? Actually, cost of funds, we'll see a marginal update, because we have recently announced a rate hike. TD rates have increased by about 25 basis points in March 2024. However, when compared to, compared QoQ, we have seen a substantial reduction in cost of funds. We have already said that around 17 basis point reduction is due to interest rate reversal on the holding company deposits, and, while the balance 8.8 basis points is due to improved CASA and retail deposits. So, our view is until the repo rate starts coming down, we assume the cost of funds to remain elevated. We don't wish to predict as, several external factors come into force, on the cost of funds here. But from a modeling perspective, we should start with 7.4% as our starting number, and there should be marginal increase in cost of fund from that number in FY 2025. Is that right? Well, more closer to around 7.3- Okay. because of tighter treasury management. Hmm. Sure. Okay, that's it from my side. Thank you. Thank you. The next question is from the line of Pritesh from DAM Capital. Please go ahead. Hi, good morning. Just two questions. One is on this FIG lending, which we have seen a very strong growth. So if you can give some color, what comfort we are having there? Was it just, liquidity deployment? Is it short term, long term? If you can give some color on that. So the FIG lending is doing well for us. We have grown, you know, substantially there. Our portfolio size is around 730-1,730 crores INR. We will be taking this up a little further to, you know, to balance our secured assets book. And the customer segment would be the NBFCs that we are targeting and the A-rated companies and AA plus rated companies. Sure. If you can just mention what kind of a yield we will be getting, there, and is it short term or is it like a sustainable? As you said, you will increase it, but the lending which has happened is short term in nature or a decent tenure. So, on the FIG portfolio, we have, you know, exposure coming in from, NBFCs lending to MSMEs, vehicle finance, education sector and gold loans. So these are the four. The tenors on all these four segments are different from each other. MSMEs are a slightly higher tenor and gold loans are much on the lower side. The yields again are, you know, risk calibrated because, you know, 95% of our portfolio remains in A and above. So therefore, the yields are slightly on the lower side, but it is risk-based pricing. And we, you know, we've not diluted the portfolio. It continues to be in the range of 93%-95% A and above. Got it. Second question was on other OPEX growth. We've seen this, it is, a high growth this quarter. Any one-off there, and, will we see such run rate? Because suddenly this quarter has been seen as sharp, sharp out, uptick. Yeah, I think, you know, the other operating expenses, there's been HR costs, which have been slightly higher because we have made some adjustments, and also the premises cost, because we opened quite a few branches in this part of the year. So, it is something that is there, and, you know, the OPEX costs for the branches will continue primarily by way of rents, and the salaries will remove. It will continue also because that's part of the process. We have also had some IT expenses, which are project related. Some of the IT expenses will continue as we upgrade, because as you know, the regulator is now very, very, keen to make sure that the technology is in line with what you're offering and the customers benefit from that and not lose out. So we are ensuring that our technology is state-of-the-art and will come up to the regulator's expectations. So yes, you know, going forward, these are things which I think all banks, the whole industry has to take note of, and then I think it is something that is very important, so we will be investing in that. ... Got it. Lastly, we mentioned about liquidity usage this quarter. How much going ahead we tend to use more, I mean, the LCR. So what will be the base case scenario? We'll keep or we'll not breach that number. Oh, breaching LCR is not a question. We cannot afford to breach it, so- We have about 130% something right now, and will it be at the similar levels, or will it go a little bit further down, or we'll increase the LCR? So what is the stance on that? Our average is to maintain it around 140, 150. That's. So 134 is good, 140 is good. You know, that's the level. Not too much liquidity, but at the same time, something which is reasonable and good and safe. Got it. Thank you so much. All the best. Thank you. The next question is from the line of Ashlesh Sonje from Kotak Securities. Please go ahead. Hi, team. Good morning and congratulations. Two questions from my side. One is just a data keeping one. Can you share what is the outstanding, technically written off book as on March twenty-fourth, and also on March twenty-three, if you have the number handy? Sorry, to? If you have the technically written-off book available as on March 2024 and March 2023? In March 2024, it was in the range of about INR 1,100 crore. That's the total book, written-off book. But this consists of what we have done in the last two years, plus what we had done during COVID time. Understood. Would you have the number available for March 2023 as well? I'll just come back to you. Okay, sure. And secondly, the secured book is now at roughly 30% of the overall advances. How do you expect this to trend over FY 25 and 26? Um, sorry. So the guidance given for the two years is around 60/40. Sixty would be in the unsecured, and forty, secured. We would be meeting that guidance in the next two years. We've already reached 0.2, and we are seeing an increasing trend there. We've also introduced more secured as particular by gold, vehicle finance, MSME, and wide doing well for us. Understood. If I can just squeeze in one last question. How are you accounting for the income from the off-balance sheet book, the IBPC and securitized loans? On securitized, we will take it into income. IBPC helps us in containing our cost of funds. Okay, but the interest spread from the off-balance sheet book, would that be booked upfront or will there be a, a- It's on a cash basis. We don't recognize. Okay, but you book the interest spread? Or, or the entire interest income and interest expense separately? We're paying for this, you know, IBPC is a source of funds for us. Okay, perfect. I'll take this one offline. Thank you. Thank you. The next question is from the line of Renish from ICICI Securities. Please go ahead. Yeah, hi, sir. Just two question from my side. One on the individual loan side. You know, so we've been growing this piece at pretty accelerated pace from last five, six quarters. So can you just throw some light on, let's say, the PAR portfolio or maybe some sort of asset quality indicators in this book? For individual loans, you know, these are customers who have mostly graduated from group loans. We do about 10%-12% of open market acquisition on the, on the individual loan side. Most of these customers have a two to three year track with the bank. So the asset quality for individual loans is better than the group loan asset quality, and that has also given us the confidence of growing this at a rate of 40%. Okay. In terms of PAR, it will be lower than the group loan PAR. Our average remains to be in the range of 1.3-1.4. What are the yields we charge under this one? Yield? You know, it is again, risk-based pricing that we do. The yields would be somewhere in the range of, the group loan yields. Okay. Marginally higher, but would have been in the same band. Got it. Got it. And my next question is on the NIM guidance, which we have given, of 9%. Now, given we intend to grow our secured book at a faster clip, over the next two years. So how do you see this NIM behaving over the next, let's say, six to seven quarters? I mean, naturally, your yields under secured book will be lower. So how one should look at the NIMs as it's been going on? Yeah, as the secured book increases, NIMs will come under a little pressure. ... but, you know, recently we have got an upgrade on the asset, on the rating from the rating agencies. So we will be using that to, you know, manage our costs, and also, using treasury to, you know, manage the fund, process. So hopefully it will not be much lower, but, it depends on how fast the secured asset book is building up. So we'll keep, we'll keep the market advised as to if we see any changes coming up. But for now, for now, go with the guidance of 10%. Okay, okay. And lastly, on the deposit growth run rate, so in Q3, we did mention about deposit growth rate will not track the loan growth. But when we look at the CD ratio, which is still at 94-96%, does it-- doesn't it calls for a accelerated deposit growth than loan growth in near term? Yeah, in the fourth quarter, our deposit growth was quite, quite good, and we see that continuing into the first quarter. So yes, I mean, our intention is to make sure that our CASA ratio, et cetera, moves up. Our target internally is towards the magic number of 30. But yeah, you know, in terms of the CD ratio actually based on the, I think it is 87%. Of course, if you adjust it for the IBPC, then it's slightly higher. But for all practical purposes, IBPCs are used to manage CD ratios. So I think you should look at the 87 rather than the 94, because that's how the regulator looks at it. Okay. Okay. Thank you, sir. Thank you. Thank you. The next question is from the line of Kriti Dwarkar from Laburnum Capital. Please go ahead. Hi, good morning. I just wondered your overall view on the MFI cycle. Are there any early warning signals you're seeing in any geography? And even the loan waivers that you spoke about, was it contained in particular geographies or Northern India, or you saw it spreading out, more than what you had initially thought? Can you kindly repeat the question? The voice was not very clear. Hi, can you hear me? Yes. Much better. Yeah, I wanted to know your view on the five cycles. Sorry to interrupt. Can you speak little louder, or you can use handset, please? Hello. Better? Yes. Better. Yeah. Yeah, I wanted to know your view on the MFI cycle, if you're seeing any early warning signals in any geographies, and even the loan waivers that you spoke about in Northern India, was it contained in particular geographies, or did you see it spread more than what you had initially expected? Yeah. Okay. In some pockets, we have seen, especially in Punjab, Haryana, as you mentioned, that the portfolio to, you know, some extent it's impacted due to Karja Mukti Abhiyan in the second half of financial year 2024. We expect this to subside by Q2 onwards. Our portfolio, you know, overall is performing well, as we are mostly into urban and semi-urban, but, seems to be a temporary, you know, thing. Apart from these loan waivers, you don't see any signs of any early warning signals in other geographies or for some other reason? So apart from there, we, our portfolio in Kerala has, you know, little underperformed, and it is at industry level as well, and to an extent, in Tamil Nadu as well. We have slowly, we have little slowed down also our NCA strategy here to contain our repeat loans and repeat customers. It is something which again, I would say that it is, kind of, temporary in nature, but we need to take cautious steps to ensure that our portfolio is safe. Can you, sort of, pinpoint a reason for, Kerala and Tamil Nadu underperforming, an industry level reason maybe? There is no specific pockets. It's Kerala that is, you know, we have a limited number of branches, limited presence in Kerala, and at industry level also, we see a little stress and kind of, little overborrowing, and as a cautious step, we have little slowdown in Kerala. But, as far as a specific pocket where concerns are raising out, that there is no specific pocket. Got it. Got it. My next question is, on other income. You've done really well on the other income. There's been sort of a catch up with more focus on cross-sell, treasury has done well. Going forward, do we expect this line item to continue outperforming in the next year, or do we now think it will go in line with the disbursement for NII? The other income will mostly be in line with our business growth, and we see insurance as an area where we could do well, including, you know, the P&C and maybe a few more third-party products would come into the picture. This is a line item that would continue doing well for us. I think there was, in terms of the full year, there was a one-time effect in the insurance income. That will not be there in the current year. That's about, thirty crores. Got it. Got it. Can I just ask one more question? If you expect any operating leverage to play out in the next financial year, because I think you have upped the, sorry, what is the number you had given for the number of branches that you want to open in FY 25? And then related question on operating leverage, if it's going to play out this year. Number of branches next year is, FY 2025 is 50 additional branches. 50. Got it. And overall- Yeah, what was the- -at the company level, do we expect in FY 25? Uh- What is- What is your definition of operating leverage? Sorry. If cost to income will fall below 55%. Yeah. Yeah, cost to income may tick up a little bit. As I said, you know, we have got additional costs which we have put in place because of the manpower requirements and the competition in the market, and the market is a bit heated, so that will have some impact. And also, the premises costs, which will be slightly elevated compared to the previous year. However, you can be rest assured that, you know, we are currently among the best in terms of cost income in the small finance bank industry, and we hope to remain in that position or near the one or two in terms of the best, in terms of that ratio. Sorry. Thank you so much. Thank you. The next question is from the line of Shailesh Kanani from Centrum Broking Limited. Please go ahead. Good morning, everyone, and thanks for the opportunity. So, all my questions are already answered. Only one question. So on the recovery front, from written-off accounts, we had guided during the start of the year that the number would be lower than last year, but this year we have done well. So, any guidance from that front? How will the recovery from the written-off accounts be? Last year said that we will probably try to achieve about INR 120 crores, 110-120 crores. But during the year, we found that we had a very favorable environment in terms of like we had planned during the year. So on the micro banking side, we had Lok Adalat. There was a very supportive environment there. And most of the recoveries that we have got from the written-off pool has been from either micro banking or from the affordable housing segment. So it is because of the, you know, increased action on Lok Adalat and, you know, sale of repossessed assets on the housing side, that we were able to get a slightly higher number than what we had initially thought. This year, again, we are saying we, this year we are about, anything between 100-110 crore. You know, the year which we had written off during COVID is now quite aged, so we expect much lower, much lower, recovery from there. But from the written-off pool, which is immediately in the last two years, we'll probably get much higher, recovery. So, something in the range of, 100-110 crore is something, is what we target this year. Okay, thanks a lot. That's useful. Sir, just last question on my side. Since our individual lending book has grown very smartly this year, and some of our peers have taken CGFMU to cover. So is the management contemplating anything on that side, and any views you can share with us? We have, you know, we've had meetings, to understand the entire CGFMU group, you know, product, the entire offering. We, we are continuing the discussion with them, but we don't see that happening in at least the first six months. If at all, we decide to take the CGFMU to cover, it will be in the second half, but nothing decided as of now. Okay, sir. Thanks a lot, and best of luck. Thank you. The next question is from the line of Rakesh Kumar, from B&K Securities. Please go ahead. Yeah. Thank you, sir. So the question was related to the refinance that we are availing. Number has, you know, slightly come down. So if you can, you know, elaborate on that, what is the plan that we have on the refinance availment? Yes, sir. Yeah. The refinance that we are taking, you know, from the various agencies, we are in discussion with the National Housing Bank and a few others. So we expect, during this year, there'll be an increase, but, you know, our loan book is also growing. So if you look at it as a proportion of the loan book, you might think that it might be coming down, but absolute numbers will be increasing. And wherever it is advantageous for us and wherever it makes sense, we will be looking at the refinance. But, you know, the refinance doesn't come cheap, it's quite expensive. So, you know, we have to manage the cost as well. But it's a good source to have as a backup. Yeah, so just to get a different, yeah, like, you know, a differentiated view, that what is the, like, you know, the cost of borrowing that we have, excluding refinance and, for the refinance itself, if you can provide us the figure, the borrowing cost for-... about these things. We'll take that offline and, you know, my colleagues will get back to you. Sure, sir. Just a related question, sir. Other than FIG lending, you know, we have almost all the loans against which, you know, we can get a, you know, refinance. So, is there any, you know, any issue that we are not, you know, we are not going ahead on this front, or, if you can tell us because we are-- I'm not able to understand that why we are not going ahead with this, refinance thing so much. So if I add your IBPC, I don't know, like, because the number is clubbed, IBPC and securitization numbers is clubbed. So if I take the IBPC number and your refinance number as a percentage to, you know, your your assets, basically your loans, against which you can take this refinance, that number looks quite low as compared to other banks or the PSBs. So just to understand that, that's slightly better, sir. Yeah. IBPC, we have around INR 2,500 crore. So INR 2,360 crore, to be precise. And from other sources, it's not very much, but as I said, it's the costs which we have to consider. You see, the thing is that we are very heavy, highly capitalized. So the thing is that with a 24% CRAR and all that, we don't really need this refinancing as a source, because net, net, it's a bit expensive. As I said, we have to look at the cost of funds. We cannot just do refinancing for refinancing sake. It has to make sense, and also when there is an asset liability mismatch, yes, some of these refinancings are useful and we will do so. As we grow our MSME book and our housing loan book, yes, we will revert. We will be looking at these refinancing to take care of the maturity mismatch. So yes, going forward, you'll see more utilization of those sources. But for now, you know, with our present level, we are quite, well funded. Just another point here, sir. Just, sorry to extend this further. So it can also help you in the LDR number, basically, like, you know, so the more refinance that you take, it will help you at that front also, I think. Which number, sorry? So the higher refinance number can also help at the LDR level, right? LDR calculation. So actual LDR, which I think regulator will consider, as compared to what you report, you know, in general. So higher LDR, it will, you know, get... Like, to that extent, your LDR will also look lower. Okay. No, we'll, we take your point. We'll, you know, have an internal discussion with the treasury and others and see whether it really will help us. But yeah, no, good, good point. Thank you. Thank you, sir. Thanks a lot, sir. Thank you. The next question is from the line of Mahesh Kabra from the SK Group. Please go ahead. Yes, please, Mr. Mahesh, go with the question. Hello? Uh, hello. Yes, please go with the question. Yeah, good morning, sir. Question is about the dividend. We are distributing almost this quarter's profit as dividend, and with the growth that we are projecting, soon we would need, probably more capital to raise, you know? My question was about dividend. What is the idea there? No, our profitability has been good, you know. In fact, if you see the level of profitability, the CRAR has been able to keep up with the profitability levels and keep, take care of the asset growth. Now, recently, the RBI has asked for additional capital to be put aside against some of the consumer lending, which is why there's been a slight adjustment in the CRAR. But, we have enough profit generation, you know, to take care of the growth in the balance sheet, and we don't anticipate, based on our current growth expectations, to be coming to the market for any additional capital in the near term. Regulatory requirement is 15%. Internally, we have kept a guideline at the board level of 20%. We are at 24%, so I think, you know, there is adequate cover there. And during the 2024, 2025, we don't need any additional capital, which is required for building the balance. Yeah, I get that probably we won't need capital even in 2025, 2026, but 25% growth in loan book and approximately 15% growth in net worth with 20% ROE and dividend distribution, probably 2.5-3 years down the line, we will again have to raise capital, right? Am I right here? Three years down the road, yes. Three, you know, that is on our target. So from time to time, we'll have to raise capital. So are you suggesting that we don't declare any dividend? I mean, being a banking company, growing at 25%, I thought, preserving capital would be better. But I'm... You are expert, I'm not. I'm just asking, understanding your thought process in it. No, but, you know, the industry is giving a reasonable level of dividends. We have to also, our profitability is good. We are not giving, you know, exorbitant dividends. We are giving something reasonable. Maybe on the higher end, you know, people do it between 12 and 15. We are on the 15%. But, you know, that is an annual feature, which the board has to decide from on an annual basis. So this year it's the highest profits, so 15% was decided. ... Yeah, yeah. Thank you, sir. Thank you, and, congrats on the good set of numbers. Thank you. Thank you. Thank you. The next question is from the line of Yash Dalal from Systematix Group. Please go ahead. Yeah, good morning, sir, and thank you for giving me this opportunity. I had two questions. So, since we have recently added two fintech partners for MSMEs and two in pipeline, so assuming that both of them are added, how do you expect the MSME group to grow? And second would be that, any expected date by which we can expect the shares to be credited, if you could guide on that. So MSME, through the fintechs, through our revised strategy, we will be growing as expected. And you know, the last year, we did a lot of strategy, you know, relook at it, also on our customer segments and all that. And we've opened up a lot of product lines. We should be able to see a good growth happening in this financial year. And you know, this would also be a good enhancement to the growth of our current account book. So all in all, we are seeing a good uptake in the MSME book this financial year. Regarding the commencement of trading? Pardon? Regarding the commencement of the trading. Okay. The share trading, just one moment. Go ahead. On the commencement of the trading, we are in receipt of the in-principle listing approval from the exchanges. Last Friday, we received it. As we speak, we are initiating our corporate action documents with CDSL and NSDL. We are very positive by tomorrow, you will get the shares credited into your account, and the trading approval will be received in a day. So possibly by Thursday or Friday. We are very positive that the shares will be available for trading. Okay, sir. Thank you a lot, and congratulations all the way. Thank you. The last question is from the line of Sandeep Pangal from Pisces Capital. Please go ahead. Hi, can you hear me? Yes. Yes, yes, we can hear you. Okay, good. So I think first, great result, and thank you, Mr. Davis, for leading this bank through very turbulent times. But a couple of things now that the merger is done, if you look at page 37 of your presentation, the post-merger shareholding has a lot of retail investors. I'd just like to understand what the strategy of the bank and the management with respect to sort of making this more institutional over time. I know there will be roadshows, et cetera, but some flavor on where to be, that's it. No, some of the, you know, shareholders of the holding company are institutional shareholders. We have people like IFC, et cetera, who are there. And those will continue to hold the shares in the bank. But having said that, yes, you're right, we would like to increase the number of institutional shareholders. We have talked to a few people, and we hope that, you know, some of those discussions will fructify. Right now, we have about 33% who are institutional shareholders, and we'd like to see that go up to a better number. But yes, that is the objective of the management, to make sure that we get long-term institutional investors to take a reasonable share of the shareholding. Okay, great. Thank you so much. Thank you. Thank you. As that was the last question, I now hand the conference over to the management for closing comments. Over to you, sir. Thank you, Muskan from Chorus, for your support on this call, and also more importantly, Nitin Shah, who has been from IIFL, who has been supporting us, as this is my final, you know, session with you guys in the last eight quarters. Thank you for all your interesting questions and also being part of the journey, and wish you all the best.