Aavas Financiers Limited (AAVAS) Earnings Call Transcript & Summary

So we can now start the event. Good evening, everyone. A very warm welcome to you all. We are very glad to see you all here and appreciate you for taking your time out to join us today. Before we begin the session, a small request, please put your mobile phones on silent mode. Welcome to the Investor and Analyst Meet of Aavas Financiers Limited. We also extend a warm welcome to all those who are joining us virtually. Today, we have with us Mr. Nishant Sharma, Promoters Nominee Director, Kedaara Capital; Mr. Manas Tandon, Promoters Nominee Director, Partners Group; Mr. Sachinder Bhinder, Managing Director and CEO; Mr. Ghanshyam Rawat, President and Chief Financial Officer; Mr. Ashutosh Atre, President and Chief Risk Officer, along with the entire management team of Aavas. We will start with a formal address by the Promoter Directors, Nishant Sharma and Manas Tandon. Followed by an introduction from the MD and CEO. This will be followed by a presentation by the respective teams that will talk about liabilities, business, risk, underwriting, collections, culture, technology, analytics and share their views on how they are building Aavas. The presentation will be uploaded on the exchange after the meet. This will be followed by a Q&A session. I request you all to ask your questions towards the end of the presentation. If anyone wishes to ask a question, kindly raise your hand and we would provide you with the microphone. I now welcome on stage Mr. Nishant from Kedaara Capital and Mr. Manas from Partners Group, to begin the presentation. Over to you.

Good evening, everyone. Thank you for joining us here today. On behalf of the entire management team and all of us, really grateful for making time to be here. I think we were chatting about this outside with some of us fondly remembering the time when we signed the deal to invest in Aavas and acquire Aavas. Still remember the day, it was February 5, 2016, and then we closed a few months later on June 23, 2016. And we started this journey as partners, as promoters of Aavas for almost 7 years. It's been really fascinating to see how the business has prospered under the guidance of the Board and the leadership team really putting in all the effort we've grown. I remember still March 16, we closed with, I think, INR 1,637 crores of AUM and about INR 30-odd crores of PAT. And this year, we closed with about INR 14,000 crores of AUM and over INR 400 crores of PAT. So come a long way.

Thank you, Nishant. Given where corporate India is in its evolution, Nishant and I firmly believe that private equity, all of us in the industry have this unique opportunity and also an incredible obligation to our country to actually create institutions that outlive both of us certainly and any individual, and we take that responsibility incredibly seriously. When we became part of Aavas, as Nishant says, in June of 2016, we'd actually bagged four individuals at the time, we bagged Ghanshyam, Ashutosh, Sushil and Ram at the time, and we are incredibly grateful for their contributions. What's even more interesting is that four member team has now expanded to 12 members under the guidance of an incredibly involved and capable Board. And I would say that, that journey from 4 to 12, building out the Board, getting all of you as partners in that journey has just been a very, very gratifying experience for all of us.

I think like Manas said, in addition to having a highly experienced and committed management team, we are really fortunate to have a deeply engaged Board. And each of the Board members have been personally responsible for many of the management team members being part of the Aavas journey today. Soumya who chairs [indiscernible] as independent Board member. She was involved in convincing Rajaram who's our Head of Strategy and Head of Data Science to join us and you will hear about Rajaram's background shortly. But that's one example. Similarly, with Vivek and Mr. Kamath, they were instrumental in bringing Anshul on board given the past history. Sandeep, our Chairman, given his technology -- passion for technology and his background, obviously, was instrumental in convincing Jijy to come on board and lead our technology efforts. And obviously, most of you know, it's very hard to recruit from Kotak but we didn't want to take no for an answer, and we continued to persist with Sachinder and we finally got him on board about 3.5 years ago, having built a really large INR 40,000 crore book at Kotak. He joined us to lead sort of the entire MSME business for us. But the story don't end there. so I'll just...

Yes. No, absolutely. And look at the spirit of introducing our team here, when we were looking for our Chief Business Officer, at the time, we were working with [ Spencer Stuart ] and -- which is a very renowned recruiting firm and Spencer Stuart said, look, the best candidate in our short list is actually this guy Siddharth Srivastava but he's been with ICICI for 20 years. He's not going to leave ICICI to join Aavas. And Nishant and I basically said, look, let's just meet with Siddharth and leave it to us to convince him. And here he is. So you'll hear from him shortly. There are stories about everyone. Surendra, I remember the day in Nishant's office when we first met, right? And I don't know if Venkatesh is here. I didn't see him, but our Head of Internal Audit. Ripu who joined us a couple of years ago from ICICI and Indiabulls. And so there is a story about each and every person that you will meet today. And Nishant and my job, frankly, today is really just to introduce you to the team and to let you hear from them directly. Rahul's here. I want to tell a small story about Rahul. We have this incredible internal talent development program where our younger team members actually get to go. We take as a Board, as a firm, as a company, we take talent development very seriously. Rahul went to Ahmedabad to do this course. Came back, worked on this co-lending idea and now presented that idea to the Board. So you'll hear some of that over the next couple of years on some of the stuff that we are doing as a team with some of our younger team members inputs and so on and so forth. So it's been an incredible privilege all of you to play a role in bringing this all together and really look forward to the journey ahead and what you're going to kind of take our shareholders through over the next couple of hours or so.

I think some of the values like ownership, entrepreneur energy, you will see in the team as you interact with them, both on stage and off stage, we're hoping to make this an annual event. So all of you in the investment community get an opportunity to interact with the management team and have a more closer sort of relationship to be able to ask questions on industry and company. Obviously, all of us will be around this afternoon post the session to answer any specific questions you all may have about the future strategy and the vision of Aavas 3.0. And with that, thank you. Thanks for giving us the opportunity with your time and would like to invite our Managing Director and CEO, Sachinder to take us from here. Thank you.

Good evening, ladies and gentlemen, friends and colleagues. Thank you for taking your time out to join us and a warm welcome in this lovely evening. I'm Sachinder and as Nishant and Manas talked about, 35 years plus of experience, worked with institutions like HDFC Limited, ICICI and Kotak. My largest last [ employed ] with Kotak, 16 years, joined the Aavas family, and I've been with the Aavas family for last 3.5 years. With immense pleasure, I am happy to introduce our senior leadership team and they will run past the presentation. You'll have an interaction on stage as well as offstage during the Q&A session. And each of them be very specific, very unique individual [ billions ] which really culminates into a right kind of collective [ billions ] which is the essence of what Aavas is. Let me run you through the Aavas story. So Aavas was incubated in 2011 as the proof of concept of affordable housing finance under AU ownership with one CXO. In 2016, Aavas evolved under Kedaara and Partners Group as one of the institutions and went public in 2018. And the foundation was set and the model was perfected to really scale up under the ownership of private equity with the bench strength of CXOs at that period of time, it was around 4. In 2023, we embarked upon a journey of Aavas 3.0. And Aavas 3.0, it encompasses the deep institutionalization with a focus on scale with sustainable quality and leveraging digital, technology and analytics for quality growth and operating leverage. And this will happen with a deep management strength of 10-plus CXOs. Now the focus areas have continue and would be in the stacking order of governance, quality, profitability and growth. At governance, Aavas has always prided being governance first. And it is ably supported and backed by the Board, which consists of industry veterans and industry experts. So as Nishant and Manas highlighted about the contribution, which is there, and it's a very meaningful and very deep dive contribution of a very active Board, which helps us to really steer across the journey of institutionalization. I'm very grateful to the Board to have the deep dive interest in the management and the day-to-day operations, which really help us to scale up. So for example, Sandeep Tandon had a very big role to really select the tech stack and what we are doing at this period of time. And with industry experts of K. R. Kamath, Soumya Rajan, Vivek Vig and Kalpana Iyer, I think that helps us to really steer across in the right directions and really help the management to put the ship in the right direction. On asset quality, it's been a razor sharp focus to have -- to continue to be very, very strong on that metrics. And I think that we've built over a period of last 11 years. And this metric has been stress tested under very severe, several macro challenges over the last 11 years. And our endeavor is to continue to build on this razor sharp quality metrics, which has been the asset quality and which has been in the forefront of our firm. And I think as all of you would know and remember that we were the first one to go across and declare our 1 plus. And when we were declaring the 1 plus, I think it was the internal debate that whether we should continue or we will have to continue that but we took a call that once we have taken on quality, we will continue that. And I think we continue that rigorous focus on asset quality. Next is our profitability. And the profitability is neither, either or it is an and. And I think it makes sense to only do things which are profitable in nature and which really culminate with right kind of governance and right kind of quality. And that -- with that comes growth. And if you look at the stacking order, we have governance, quality, profitability and growth. In growth, we'd like to scale up sustainably with quality, again, with our focus on unserved, underserved, unbanked Tier 3 to Tier 5 towns, and the hard to underwrite informal segment, assessment bed segment, using technology as one of the biggest levers. And I think technology has a very important role really to play in this growth. As you know, whether it is a house or a building, it's very important to have a very sound foundation. Last 10, 11 years, gave a very strong foundation to the franchise to really to metamorphic into an institution. And this requires very strong pillars. And pillars are such that they have to be joined, so they can able to bear any of the shocks which might come across, whether it is act of God or manmade. So in this, the strong pillars are risk, financial capital, human capital and technology. And when we say risk, we are in the business of risk underwriting, risk-adjusted returns and spotting those opportunities on risk where we're able to understand risk and underwrite risk in a way which has right kind of input, protecting the balance sheet. And as Aavas, if you would notice, it has the strongest balance sheet with diversified liability base and a positive ALM. In the course of last 11 years journey, Aavas has never done anything which was short-term-ish, whether it was raising CPs for the short-term bump up in profit or doing anything which was creating those assets, which were liability constraints or liabilities which were asset constrained. So a very harmonious mix of asset liability as a balancing factor was really played out. And that is the strength on which we will build Aavas 3.0 as a lasting institution and which as Manas and Nishant and as you will hear from our team which has a footprint which goes beyond and outlives individuals. On technology. I think in the age where we are, we would have embarked on a journey of technology transformation and would like those transformation projects to be completed and really see the sustainable quality and operating leverage getting -- really delivered and which will really help the franchise and institution to make it big with quality even with sustainable scale. And for that, you have the vectors of growth. So as you know, there are sectoral multi-decadal tailwinds available in the industry. And when you talk about the macro, it's a very strong macro, which is available from the Tier 3 to Tier 5 towns, the kind of headroom which is available, which is the mortgage to GDP penetration is less than around 2, 2.5 percentage. And the middle class, which is aspirational in nature, which gives the right kind of input for us as far as the tailwinds are concerned. And we'd like to utilize with our ground level of granular experience in various markets. And this would be our core focus continues to be in the unserved, underserved, unbanked segments and wherein the core is self-construction individual home loan. So our understanding is on cash flow-based underwriting, the risk underwriting and our understanding of collateral. So we will build across the product suite, which is customer as a fulcrum and his needs, which is emanating from his home loan need, his personal need in the form of loan against property, his working capital needs, which is in the form of micro MSME and his needs, which are dependent on his life cycle. So we will leverage that across that. And we've put in input, and I have said, we'll talk about that in detail when it comes to the business and growth and distribution levers, which we are really accelerating on. On the geographic presence, as you know, that we are present across 346 branches, 13 states, 2,500 towns across length and breadth of India. We would like to have those geographies where we've already there, have invested, have learned, both from a granularity perspective, have seen the 1-plus, have seen the GNPA, really to get into the deep geographies with a name, there is spine, there is an opportunity with risk-adjusted returns, which matches the franchisee's P&L. So those geographies, we'll like to get in and go deeper. The second where we've already invested in, we'll accelerate those in a way where we have sufficient knowledge and sufficient data from our perspective. Now this could vary based on our own understanding, plus the regulatory framework, which is much more supportive. So we'll have integrated all of them to really push and accelerate on a way that it is modular, granular and sustainable with quality. As I again say quality is supreme and not leaving across anything on the table where we understand and the organization has an agility in execution. So we'll utilize that as one of the major levers to really propel where we feel it is right and the segment is good enough to really help. In the entire journey, we are the one which are really poised with the brick-and-mortar network. And as when we talk about technology, we have the best of the class of technology getting implemented. And when we say technology, we want to be a bank-like technology. And coming from a banking background, I think the trust which a bank gives as far as implementation of technology, use of risk architecture, controlling those parameters. I think it's about a supreme thing which will really help and integrating technology as a supplement, really helping across in sustainable quality, in the superior customer service and operating leverage. And this will really help right from the part where you source the customer, you underwrite the customer, you actually have the personas of customer on its predictability of his behavior and his customer service. So we've been in the phase of launching of SFDC for the loan origination system, for FlexQ for the loan management system and Oracle Fusion. So what we envision is an end-to-end journey. And on that really run the AIML models, which will help facilitate and complement the very fact of our strong expertise of understanding the informal segment, the un-assessed segment, across length and breadth of India. What would really this help us is what we really call is figital. And we talk about figging, we have the best of the technology, which is digital in nature, helps in digitalization and digitization and the part of brick-and-mortar. So you are the best of class covering across length and breadth of India. And you'll have Jijy Oommen and Rajaram talk about in that detail in their individual presentations. I don't want to take away the entire dream of their thing, and we will be really surprised and happy to see what a firm at this kind of stature is looking at and forward-looking things which are much, much integrated in NF platform, which helps us to scale sustainably and with quality. What all this will lead to? This will all lead to the value creation for all the stakeholders, which are customers, employees, lenders and shareholders. And on human capital, as Nishant and Manas talked about, we curated programs, which are tailor-made to the individual needs of India for upskilling, reskilling and really reorganizing the way people help to facilitate on real-life projects and implement them when it comes to the ground. I think as a franchise, we are building Aavas 3.0 as a lasting institution, which is backed on solid quality on bench strength, collective brilliance, marrying technology and the brick-and-mortar network really been figital in nature and make the best of the available opportunity, which is there with all your support. Thanks for patient hearing. I'll have Ghanshyam Rawat, our President and CFO, to take forward. Over to you, Ghanshyam.

Thank you, Sachinder. Thank you, Nishant Ji, Manas Ji. Good evening, everyone. I'm taking one of the important chapter, financial capital. You all know for housing finance company, financial capital is very important. And as Nishant Ji, Manas Ji, mentioned 2016, so I'm just recalling that first meeting when they asked us what's your plan on refinancing or lending or borrowing, how we'll do. So simple one statement we talked on the day. We need to build long-term, consistent most efficient raw material supply. Since this is a long-term business, we need a long-term financing for this purpose. So from that, we started our journey and year after year, we built our liability franchise. And today, with support of all of you, we're able to reach a very good liability franchise, long-term liability franchise. I will detail out something in the next 2, 3 slides. We have today very strong relationship, very deep relationship with all PSU banks, State Bank of India, Bank of Baroda, Punjab National Bank, Union Bank, Central Bank. I think we -- every year, we get a repetitive sanction from them. Some of the banks in last 10 years has given more than 10 sanctions basically. Every year, we get those sanctions from them. Similarly, we built on private sector banks also. HDFC Banks are with us since beginning year. Axis Bank, Kotak Bank, all three -- ICICI Bank. All 3, 4 large private sector banks are with us -- strong relationship with we have basically. One thing we've done very long but a very good one, 2014, '15, we started assignment and securitization basically. At that time, nobody was talking on around that basically. But we know -- this is a very important tool to refinancing your assets basically. 100% back to back your tender maturity. And it will -- good -- cost efficiently managing your capital also basically. We gradually built on assignment securitization. And today, almost 20% assets is funded by assignment and securitization. One thing we've done, I think, very differentiated in the last 2 years around that basically. Last year, as you all know, in our annual investor deck, we've done around INR 900 crore plus assignment during FY '23. INR 800 crore out of that is loan against property and MSME book. We generally believe that in the market, the HFC sale only housing book. But we created a lab or MSME book got sold in the last 2 years, continuously basis basically. That gives us two advantages in that entire process. As you know, we have a limitation. We have to 60% home loan on balance sheet size. Once we sell it, it gives a further space to build that book basically year after year. Second, book pricing is around 15.5%. We sold the book at 8.5%. The almost 7% spread, we are continuously basis are making where measure to the assets, risk has gone to them basically. So it's the best way to manage your entire capital cost efficiently. It improve your ROE year after year. Third, NHB now is refinancing, we since beginning, built up, year-after-year, relationship. Our asset is most suited to their refinancing mode. 20% is my assets, they're funded by the NHB financing. In last 10 years, roughly 8 years now, basically, 8 to 9 years, we participate each and every program. We took rural housing fund. We took affordable housing fund. We've taken urban low-income housing fund. We took urban housing fund. We took World Bank refinancing. Almost whatever promoting schemes comes by the RBI or NHB, we participate each and every schemes. So that's why we built up our year after year today, 20% balance sheet is funded by them basically. Bond market NCD, we now also have done very differentially basically what you see in other peer group. When liquidity was enough in last, let's say, a couple of years, most of the persons have gone to reach short-term money, gone to let NCD at 13 months, 16 months, 21 months. Those are very pricing. They're getting good one there basically. Some MLD structures, innovative structure gone to that, but we never gone to that. We moved -- in that time, we made difficult task. We made it hard work on that time, and we went to multi-let institutions. In last 5, 6 years, we raised 10 rounds of funding from multi-let institution. Two rounds from IFC, two rounds from CDC, one round from World Bank, one round from ADB. Almost 8x we raised long-term funding from them basically, which we know, this is the most difficult task when to go to them because they take almost 9 to 12 months to sanction one line basically. But they do a lot of good work. They visit my customers, they visit by branches, they visit my -- they talk almost -- every CXO they meet and discuss with them, what their plan, what they're doing. They meet this team. So that's why they're able to do complete due diligence in their process basically. They read by each and every policies, which are -- sometimes I feel I didn't read those policies, but they read each and every policy before they sanction the limit. So that was due diligence goes. So today, almost -- we have a good amount of line from them. We are going forward. We are working with a few more diversification. We are talking one of the Japanese big multi-let institutions. We're talking one more multi-let institutions to further have a deeper, our relationship in that aspect. I think you see right, next chart where we've shown the future, which we are talking next 3 to 5 years, how the liability will look like basically. Today, we have 45% bank loan. As we see, it will -- our rating will have another one more scale so that we think we will have more go-to-bond market. So that's 10% to 20% bond market will be increased. This will come to 35%. And one important aspect we are opening, we are seriously considering and exploring co-lending also now. We feel this is a very important tool which will help us back-to-back arrangement. It will help us to maintain our spread with us. And it is the best tool to increase your ROE going forward basically because book has gone, your margins are with you basically. So we are seriously considering co-lending now. So we are targeting in a 3- to 5-year vision, it will be around 10% at the entire piece. Rest, I think a data which you know we published incremental borrowing and the 31 lenders we have. So I'm just moving ahead. This is, I think -- as I mentioned earlier, this is a very important -- we built a strong liability, long-term liability. We today, have almost 11 years plus liability maturity, whereas my assets, behavioral maturity is 8 years basically, which help us across the liquidity cycle when it comes. We've seen in past liquidity tightness. We've seen in 2018 liquidity crisis. But in all this, this is -- it helped greatly to navigate successful in that time basically. We are the one of the, I think, best ALM managed, such a strong positive ALM we have basically. We manage interest rate perspective because interest rate decision -- another important decision on the table when we have the long term. So we manage very well that interest rate scenario also. When we raise fixed rate borrowing, we have created fixed rate assets also basically. It's 100% natural hedging is there in the system basically. So in all interest rate, whether rising scenario, whether falling scenario, we're able to maintain our spreads around that basically. Majority of spreads got maintained during that phase. We've seen in the last couple of years. I think second, I think we maintain as a good quality of cash, roughly INR 1,500 crore. We maintain roughly cash in hand at the moment. And roughly INR 2,500 crore, INR 3,000 crore remain as a sanctioned line from the bank's institution. We've got approved by the Board, executed, but yet to draw, so roughly INR 4,000 crore, INR 4,500 crore. Generally, we remain high liquid asset with us basically. This is almost enough for 3 to 4 quarters, basically. So that's, I think, strongness of our overall liability management, overall our cash management, overall our feed to the assets growing assets. This is our rating -- rating side if you see FY '13, we are BBB+. In last 10 years, we have seen 5x, our rating enhancement took place. Last rating enhancement took place in the first quarter of last year, basically. This, I think, helped us in our journey, and we are the short-term highest rating. As we mentioned earlier, we never raised any short-term money. We never raised any commercial paper. No doubt, always discussion happens sometime back also, whether can we increase 25 basis points spread, whether we can borrow commercial paper, whether we can borrow short-term money, so all these questions, we raised, whether we need 25 basis points or we need survival risk. Always prefer survival risk is more important than 25 basis point spread increase basically. Because that will -- survival risk protection will help us to navigate entire interest rate cycles, entire liquidity cycles basically. COVID time, cash flow goes down, but we paid all my liabilities in advance to the banks and institutions. Liability -- liquidity crisis in 2018, we paid all the liabilities on time, and we maintained our growth momentum as is where we have seen a lot of -- we found challenges in the market at that point of time. And moving ahead, I think this is another important slide, which is something I talked, but you see across the life of -- since 2016 to '23, 7 years, where we have seen a COVID, where we've seen a liquidity crisis, where we have seen interest rate rising, falling, both scenarios in that period. But across the life, we maintained our spread 5% plus. There was always discussion when Kedaara and Partners came INR 1,600 crore, 5% spread is manageable, but what will happen when double the balance sheet. When IPO came, it was again discussion INR 4,000 crore balance sheet size, it's easy to maintain 5% spread. But today, we have INR 14,100 crores. AUM spread is 5% maintained. That shows a long-term liability and ALM gap and product and quality, which Siddharth will talk in the next presentations how the product deepens to maintain this spread. This is, I think, another important slide, some data point, but very important. Total capital, how much capital we raised in last 10 years. We raised INR 1,400 crore the total capital raised in last 10 years. Last capital raise in IPO and IPO balance sheet size was INR 4,000 crore, [ wrote as ] INR 14,100 crores, 3.5x increase in the balance sheet size and last capital raise on that day. Total cumulative profit of the company, INR 1,860 crores. If you see last year, last year profit was INR 428 crore on the capital of invested capital. I'm talking INR 1,400 crores, it is almost 30% on invested capital the -- return on invested capital basically. Even if we talk, let's say, net worth, our opening net worth to closing net worth, it is increased by 16% in FY '22 also, in FY '23 also. So that shows the company now in the trajectory of 15% to 20% ROE business, steady state, consistent basis. Rest I think on AUM growth and the liabilities. What I mean to say is now company is self-sustained, self-funded company to meet its growth. In next 3 to 5 years terms, we are not planning any raising of capital. So you see how the leverage, how these metrics will move in the next 5 years. Now I invite to Siddharth for next business presentation. And before that, I think we have a small -- one of our own customer -- a small video. Please, they will play the small video. Thank you very much. [Presentation]

Good evening, everybody. I think Manas has already introduced me a lot. So I'll keep it short. My name is Siddharth Srivastava. I'm Chief Business Officer. I've been with Aavas for about a year or so. And being with the -- across MCG banking for last 23 years, and spent 19 years with ICICI Bank. And it's been -- Manas I can assure, it's a wonderful 1 year. So thanks to you. Let's -- so as interesting has been the story of Mukesh Gupta, we see the story of Indian housing transformation more interesting than what we have seen as Mukesh Gupta, and almost similar. Let us rewind ourselves 30, 40 years back. [Foreign Language] how things used to happen at that point of time? And what really transformed it? If you look at -- saving was the most important thing, which was the engine for housing development because people used to save for their entire life. And then they need to build a house at the time of retirement, they need to build a house or buy a house at that 30, 40 years back, and then transformation happened. Liberalization happened, private banks came and they changed the entire consumption of home loan cycle. We see similar cycle happening again but not at the prime level, which happened 30, 40 years back. We see that cycle repeating itself with the segment which is unserved, which is underserved, which is unbanked, a segment like Mukesh Gupta, we just showed you. And that segment is seeing that transformation and feeling that transformation. And what I think -- sorry, what I think, or what we think is that affordable housing companies are driving this transformation in the second, whatever changes, they are just happening now in this segment. So what it gives us as an industry? It gives us as an industry a huge runway, a huge runway to grow. What we see is that affordable housing as an industry is consistently grow -- is growing at a very decent pace. And the runway, which is visible for us is very consistent and very sustainable. Two, three things are driving this growth in a big way. Number one, our low mortgage to GDP ratio. As a country, we are about 10% to 11%. And we see that if you remove top 100 cities out of it, this will come out to be even less than 3% also. So the opportunity is huge. Other countries, if you look at, they are at a very high mortgage to GDP ratio. And I think we are on the cusp of that transformation in the next 20 to 25 years' time. Second, which is driving this industry is urbanization. We are seeing good amount of migration happening from villages to small towns, from small towns to Tier 2 cities, from Tier 2 cities to fringes of the metro cities. And that is where the entire change, entire transformation is happening, which is driving this industry and will be driving this industry for a very long period of time. We just saw Mukesh Gupta. What I see in Mukesh Gupta is an aspirational class, a class which wants to give one's independent room to his children, a class which wants to give one independent room to his parents. And this class, we are seeing which is growing very faster in Tier 2 to Tier 5 cities, where a person wants to make one more house, one more room, want to make one more floor. This thing -- this, we defined as an aspirational class, and we are seeing this aspirational class developing now also and developing in the future. And these three aspects, I think, is giving us a big runway in terms of affordable housing. And I think affordable housing can see a clear visibility of 10 to 15 years' time, sustainable and consistent growth. Now how is Aavas going to utilize this opportunity, which is in front of us? Two or three things we are doing, which I will just present it to you. Number one is that we are growing and spreading our footprint across the country. So we started with about -- in 2013, we started with four states with about 25 branches. Now we are spread across 13 states, and we have 346 branches. These branches -- so we could have gone one [ log ] everywhere in the country, and we have opened branches across the country, but we have a very different method, a different way we look at how we open up the branches, how we open up the market. We use a lot of data analytics, which I think Rajaram will also take us through during this presentation. We use lot of data and analytics that understand which are the markets which can give us a good 10, 15 years journey of consistent growth. And then we invest in those markets, and then we learn from those markets before we put up our pedal to accelerate on those markets. I'll give you one example. Suppose, 2 lakh population town will normally have a 50,000 households. We target 5% penetration, which comes to about 10 to 15 loans in a month. So that is the thought process we use when we open any branch. And give you an example, 10 to 15 loans in a month, average ticket size, INR 10 lakh, about INR 1.5 crores of business, we expect from that new branch which we opened. We normally charge 2% processing fees to around INR 3 lakh of income we will earn while doing -- opening that branch. So we devised our OpEx in such way that we restricted within the defined processing fees, which we take. And what we see is that within 12 to 15 months' time, most of our branches are able to recover our OpEx, which we set. 90% of our branches are ROE positive in 12 to 15 months' time. And in last 10 years, we have not closed any branch. All 356 branches we have opened are still there. Apart from that, we don't [ lean in there ] Suppose, if you look at our CAGR growth, the last number, if you look at, we have invested -- branch network has grown by 16%, and our disbursement CAGR is about 28%. So geographically, we'll expand. Every 3 to 5 years, we go to one new state. We open 30, 35 branches every year. Even during COVID period, we continued our strategy of opening new branches and we didn't stop even then. And we will continue the strategy of opening a new state every 3 to 5 years and opening 30 to 35 branches every year. It's a very important slide. Actually, it gives us a very good insight into what are our performance in terms of where we are, which is -- which are the markets which we opened about maybe 10 years back, 8 years back, how are these markets performing as of now? So we have a deeper geography strategy also. We want to penetrate deeper into the geography because what we started and where we started was that we only operate in markets where we see that there is a huge runway available for sustainable and consistent growth. So if you look at Rajasthan, it's a very important data I want to share with all of you. We started in 2012. We are showing disbursement growth of 27%, and 23% is our 5-year AUM CAGR. Even after 11 years of operations, we are growing above 20% CAGR growth. And this is across the markets which we have opened. Even after investing very few, we opened only three new branches last year in Rajasthan. This shows that we continue with our strategy of deeper penetration, mining the opportunities which is there in the market, whichever market we invest on, whichever market we go on, we use our skill, our understanding of the market not only to geographically expand, but also to deeper mine market. Apart from this new geography and deeper understanding, we also thought there is something new also happening in the market which government focus on housing for all and with MSME becoming a very important segment for the economy of the country. We saw that this is a good opportunity to invest now. So we opened newer products. We started looking at creating verticals where we can serve in a focused way, the properties which are coming up under Pradhan Mantri Awas Yojana and any different ULBs. We created a segment for MSME business. We started very frugally, and now we are doing more than 1,000 cases in a month. Apart from this, if you look at left side of this chart, this is where our future lies. This is the technology, which will be -- I think Sachinder also talked a lot on how we -- our Aavas 3.0 strategy on the technology front. This is just a start on how technology is impacting the entire growth cycle. Earlier, we only had a financial lead model where we used to do marketing ground activities and we used to generate leads. Technology and digital is helping us to generate leads unconventionally. Digital channel now contributes almost 10% of my business. We have implemented Salesforce across all 346 branches last month and it's under process of learning, but we are seeing a huge amount of efficiency we built up. We are doing all sourcing through app-based. All our vendors are on different apps and digitally giving their reports and giving their leads. Our disbursement, which is good -- maybe not that big on the volume, but number of counts -- our disbursement is the first disbursement. After subsequent disbursement, on self construction, money goes to a customer that we are completely digitized. Now customers need not come to my branch to avail part disbursement. He can sit at his home and using our applications, he can avail the part disbursement process. So this is just a start in our journey, and I'm sure with technology, with digital, with touch and feel credit, with understanding of the market and with the huge opportunity, which is available for all of us, I think we're well placed to become a leading player in the affordable housing segment. Thank you. And now, I invite Ashutosh, Ripu and Surendra to take us through underwriting, risk and collections part. Thank you.

Good evening. My name is Ashutosh Atre. I joined Aavas 9 years back as Head of Underwriting. And subsequently, became Chief Risk Officer. In last several years, I worked with organizations like Equitas, ICICI Bank, Cholamandalam, Apple Finance. In year 2011, when most of the affordable housing finances got the license, some 8 to 10 companies got the license, and everybody tried to -- first, everybody understood that there is a space available. There's a market available in this space. And everybody tried to do their own bid. We then thought that it is a risk business. And of course, we focused self-employed, nonprofessionals more. At that point in time, we said that we should create a risk-based franchise. Typically, when you have a segment which is a high perceived risk. So we tried creating a very, very robust risk framework. The risk framework has four verticals. One, underwriting, which takes care of understanding the business of the self-employed people typically; salaried -- understanding the cash flow of salaried client is easy, as we all know. So for self-employed people that too nonprofessionals with informal income, we emphasized on the cash flow assessment. And I remember when we used to explain it to the people that how we actually understand the business, understand the revenue streams and arrive on the profitability of these clients. So people used to admire. But the immediate question was, okay, this is very fine, beautiful. How will you scale it? So when I joined, it was INR 380 crores of AUM. And I used to explain them that we will have a modular growth. So today, we are at INR 14,100 crore AUM with same kind of underwriting and better quality. So now the underwriting team, when they do cash flow assessment, knowing very well that they need not draw too much of comfort from the value of the property because we are not in a realty business. On the other hand, there's a technical team, technical risk team with 170-plus civil engineers and vendors who assess the property on a technical ground and arrive on the realizable value. Now this team will always think that we are in a realty business. There is another team, legal team with 70 in-house lawyers and the vendors. They will check the property paper on the title clearance, on marketability and enforceability. The fourth vertical for risk takes care of operational and fraud risk. Around 100-member team has surprise visit to the borrower or property, as the case may be, and they submit their reports. And a decision is taken after considering the information from all these four verticals. We have another differentiator in Aavas. All these four verticals are mutually exclusive. That means no where in between there is a reporting relationship with the business team. All the verticals have got their own hierarchies and at the end, the reporting culminates at the CEO and MD level only. As I think we have been telling you that in the risk team, majority of our employees are seasoned one. And incidentally, the Head of Legal and Technical, both of them are with Aavas since inception. We have a Board-governed risk management committee, which takes care of various other risks. For example, concentration risk. So with regular tracking and measuring this risk with calibrated distribution, our AUM contribution of Rajasthan has come down from 90% to less than 38%. The committee also tracks other risks like ALM risk, interest rate risk, regulatory risk, reputation risk and cyber security. So this is a kind of risk framework, which we have created. I now request my friend and colleague, Ripudaman to dwell more on underwriting team and their work, which is one of the most important verticals of Aavas.

Thank you, Ashutosh, and very good evening. I'm Ripudaman. I'm the Chief Credit Officer at Aavas. And in exactly 1 week from now, I'll be completing 2 years with Aavas. So I'm a' '97 passout, 26 years of experience. Out of that, 24 years with mortgages only. I started with HDFC Limited, a couple of years there, close to a decade with ICC Bank and then a decade with Indiabulls. So we are present, as Siddharth also mentioned and so did Sachinder, the first slide of Sachinder said priority. So after governance, it was quality. So when we speak of quality, we are very granular. We are present in 13 states. We have 346 branches where we are present. And we are there to -- for the category of people who are underserved and unserved and they don't have the formal income documents. So how do we cater to the requirements of those customers? And how do we do? So in 346 branches, we have a strong 600-plus credit team. And the senior team, which is 80% of the senior team is home grown. And they have 5-plus years of experience with Aavas itself. Ashutosh touched it a bit. So the mantra for credit team is MMM. The first M stands for Miloge, Mangoge, Milega. So in case we meet the customer, you'll demand, you'll ask for the requirements because most of our customers, which they are unbankable and they don't have any formal income documents. So they'll have all those [ kaccha ] records. So in case you'll ask for those [ kaccha ] records, you'll spend some time, quality time. There would be cases where my credit manager would go twice, thrice or maybe 4x to understand the income as the business requirement is there. So a small restaurant or a biryani shop, probably my credit manager wants twice to see how much is the footfall in the afternoon and how much is the footfall in the evening. And probably will go twice, what is the footfall was on a weekend and what was on a week day, and then he will calculate. So the [ mool ] mantra because we have touch and feel would always remain there and our assessment would be done by the professionals, which they know they are capable and efficient enough to get the information from the customer. And on the basis of the information provided, they calculate what is the income, what is the cash flows, what is the cash outflow, how much is this savings? And how are the savings used? And how much is the loan they're eligible for. When I say leading by example, so 100% of SMB customers, which we get are visited by a credit manager. And this is walk the talk. So all my senior team members are supposed to meet at least 30 customers in a month. So this covers my two things: One, they are their ear and eyes to the ground. And of course, it's the on-the-job training of the new joinees because they know what are we looking in a certain proposal or certain person whose business is such. So we have 60 self-templated underwriting platform, where you can put all this information and you can come to know as to what is the income criteria. So in case you happen to walk by any of our 346 branches on Tuesday morning, please do enter because there's a morning training, which would go, which is a weekly process. Every week, on Tuesday morning, a training would happen for all the employees, be it sales, be it credit, be it risk, be it collection at the branch. So any branch you can get into at 10:00 a.m., you'll find that happening. So that is how we have made sure that when we went from one state to 2 to 3 to 4 and to 13 and to 346 branches, we have taken our DNA there. And all our senior managers have gone, expanded and gone to the new states, which we have opened. What is the way forward? So touch and feel, because of the profile which we underwrite and the geographies we cater to. We are in Tier 3, Tier 4, Tier 5 towns, always remain there. So it is figital, the word used by Sachinder and would be explained in detail by my colleague Jijy as well as Rajaram. And touch and feel would remain. We'll take care of -- we'll take help of technology to have more accurate decisioning and validation of the documents provided by the customer. So over a period of last 11 years, we have underwritten close to 8 lakh customers. We have a lot of database. Rajaram, Head of Analytics will explain that. On the basis of those 8 lakh database, we're able to run certain models, which would help us to do positive selection of customers. As I say, the proof of pudding is in eating. So on the right-hand side top, you see -- so we've been into affordable housing for the last 11 years. And this time frame is good enough to evaluate our processes, our concept, our people because they have stood the testimony of time. So in last 11 years, we have disbursed INR 22,000-odd crores, and our write-off is just INR 25 crores, which is 0.11%. So this is the real cost, which we have incurred after disbursing INR 22,000 crores. This is only INR 25 crores. So how is our current portfolio performing? In case you move left. So we -- in the last 2 years, we have disbursed 87,000 cases. That's the number of accounts which we have disbursed, close to INR 7,750 crores, out of which we have 1 plus DPD, which we count -- or which we started as organization, are only 571 accounts and INR 51 crores, which is just 0.66%. And in case, we speak of 90 plus, we have 135 cases out of 87,000 cases and INR 9.5 crores, which is 0.12%. Yes. So how -- so one is what we are doing and what is the behavior of the cases which were not eligible as per Aavas policy. So we did a study. We took up the cases which we were not able to sanction because they were not fitting in our policy from May '20 to December '21. And we saw their performance in 12 -- first 12 months, how they performed. So the cases which were not eligible for as per policy, their 1 plus was 5.1%, vis-à-vis, same duration, the case which we did 1 plus was only 0.97%. That was 5x behavior was bad vis-a-vis the underwriting which we did. So my colleague, Surendra will explain in detail. We have 1 plus of 3.3% as of 31st March '23 and 90-plus of 0.92%. So how do -- how are we faring in the new geographies, which we have entered? The four states, which we entered in last 4 years, our performance last 5 years, which is namely UP, Orissa, Chhattisgarh and Karnataka, our performance is even better. So our 1 plus DPD is 2.07% and our 90-plus DPD is 0.3%, vis-à-vis 3.3% and 0.92%, which we have over -- on our loan. So that's all from my side. Thank you so much. And I would request my colleague, Surendra to come in. Thank you.

Thank you Ripu. I'm Surendra Sihag. I joined from Bajaj Finance 6.5 years back. In Bajaj Finance, I was taking care of nonperforming loans at size of company AUM of [ INR 600 billion ]. And we have strong collection teams with strong backup of legal officers based on different, different geographies, almost 25 to 30 legal offices we have in collection teams. And as you know, there is two way to do collections. One is conventional way and second is with help of technology and analytics. We are on the path of using analytics and technology to get more efficiency and more efficiency. So we started journey from -- first we built a model that bounce prediction model. With help of this model, we are able to get advanced information of the bounce cases, almost 10 to 15 days before we get the information that around is going to bounce. For every account, we have different, different strategies, to -- how to minimize the bounce. [Foreign Language], high, medium risk or low risk [Foreign Language] With help of that, we are able to reduce our bouncing. As Sachinder said, asset quality after governance asset qualities are topmost priority of the company. You can see reflections there, our 1 plus is 3.3%, with -- and with control on our 1 plus, we are able to control our NPA with is below 1%. And with the use of technology and analytics, we are able to manage collections with same team size from last 3 years from 91 billion to 141 billion size, we are able to manage with same teams -- same size of teams. And we are fully compliant in and follow -- code of conducts -- there is no collection complaint pending against your company. And I am also law graduate, with MBA in Finance and we have strong relationship with customers. With the help of that, we have the priority of the customer to collect the payments. Thank you. Now I would like to invite Ashutosh, Ghanshyam and Anshul to speak on company DNA and cultures. Thank you.

Thank you. By the time Mr. Anshul, and Mr. Ghanshyam come, we have a very short video on Aavas team. Can we have the AV, please, quickly? [Presentation]

So gentlemen, all these years at Aavas, we are able to develop these DNAs and imbibe them. We will, in future, also continue the same kind of DNA alongside of this revamping of technology and analytics. The DNAs are: Drive for result, customer centricity, integrity, nurturing talent and sensitivity. We have also derived various competencies around each DNA for us to explain and identify. So the drive for result for us and Aavas is basically to contribute in input, to ensure feet on the street and to be there at the marketplace. One should have a solution-oriented approach and break the challenges. Customer centricity. Customer centricity, obviously, we are in a service business. So interest for the customer is of utmost importance for us. We need to be really fair and transparent with our customers. But a couple of things which are specific to the kind of segment we deal with. So it is very important for us many times to educate the customer for the kind of debt is getting created for him. And at the hour of need for a customer, we should be there. We should be able to give a rock solid support to him. We have quite a few incidences, but one incidence I just want to share with you, one of the customer who's into catering, or typical in Hindi, we call it Halwai. Because catering meaning he himself will also cook and do it. So one incident happened about 3 years or 4 years back, it was just INR 6 lakh of loan. And during making some food that hot oil splashed on his face and he lost his vision. So what happens in the beginning itself, we tell the customers that in the event of any problem, what generally you do? You generally try calling your friends and relatives and stop taking calls from your financiers or creditors, right? So we just ask them to just do it reverse, call us immediately as a friend or relative and tell us your problem. So in this incident what he did? He spoke to us and he explained that I do not have an intentional problem. I'll pay, but right now, I'm having this kind of a trouble. We not only helped him, we not only stopped asking for installment, but also try to help him by giving a sewing machine to his daughter and things like that. Eventually, we wrote off the loan. I am very, very happy to inform you, a few months back, that fellow came and paid back entire principal amount to us. So this is a kind of DNA on customer centricity, competency, this kind of competency we need to exhibit. Integrity, for Aavas, Integrity is into overall conduct, not only financial integrity. At Aavas results do not justify the means. Under any circumstance or performance pressure, we do not encourage dilution of process or policy. In terms of nurturing talent, you know that many of our employees are homegrown. So this is a very, very important DNA for us. Need to identify the right potential with unbiased approach, give them exposure and delegate, give them feedback and give opportunity to develop. Sensitivity is, again, a very, very important thing. We all know that no matter how educated or talented we are, the way we treat others tells it all. So always treat people with dignity and respect, also be available for people and understand and appreciate each other's roles and responsibilities as we encourage the difference of opinion in the organization. Another thing -- just one thing I would like to mention here, the kind of underwriting we were just talking about and lots of things which we are doing, it is a very, very practical and commonsensical approach with which we work and we insist people on application of mind. And we were generally insisting people for application of mind. But the results were completely overwhelming. In what sense? Those, because we hired a lot of freshers, typically chartered accountants. And when we used to tell them about apply your mind, it registered into their mind and it actually -- they imbibe it in their work accordingly. These people, some of them who went out and joined other financial organizations, believe me, they came back, not for the money, just that the restrictive policies and processes were not allowing them to apply their mind. It actually did wonders for us. People have came back to us. So this is one thing we noted that we should continue on all these DNAs and we shall continue like this. Now I call upon Mr. Anshul to actually throw some light that how this DNA has impacted on our HR policies and practices.

Thank you, Ashutosh, so passionately and lucidly taking us through the DNA. And explaining culture, believe me is the most difficult aspect. And having spent about a year with Aavas, I thought it would be prudent that our Chief Risk Officer takes on the culture and to be backed up by Ghanshyam Ji who've been the founding members and setting the foundation for Aavas. I'm Anshul, as the Chief People Officer for Aavas, I take the ownership for the human capital for the company. I have a diverse career background of about ranging for 35 years with the major part being with Indian Army. Thereafter moving on to the financial services with Arsel as a Head of HR there and as the CHRO with PNB Housing Finance. And now, for the last 1 year with Aavas Financiers. Ashutosh will show you and Ghanshyam Ji will show you, Manas and Nishant will show you that the core DNA and the culture values would be the guiding force for taking Aavas through your journey, and we would continue to bank on them. So they would stay rock solid with us. As a Chief People Officer, I would like to take you through a talent framework. So I'm not moving -- remaining steadfast on our core values, and then I would move on to the slide. So as the talent management framework, it is important to anchor the framework on certain basic principles, which are steadfast and deeply ingrained in our core value systems and the DNA of an organization. At Aavas, as a talent framework, we firmly believe in attracting and retaining the right talent. I'm using this word right talent because people generally say the best talent. So when I say right talent, what I mean is a right talent, a talent which comes to us and grows with us, is aligned to our DNA and our cultural value system. And that's what is the right talent and the best talent for Aavas. And that's been depicted, when take you through my slide that, that is the talent, which has taken the Aavas in last -- in our enviable journey in last 10 to 11 years. The second, we want to give the best of employee experience, bring in best practices, which are practical, which are doable within the business that we are in and position Aavas as an employer of choice which is quite evident that over the period of time, Aavas has been able to attract the best talent, which Manas and Nishant, you have certainly brought it out. So that's been again our core strength of our talent management framework. The third and the most important aspect, which we really believe, and we've been working on it very passionately is building talent. So buying or go for a buy option for a talent of building up a succession pipeline which is critical for an organization as a future-ready organization. So we believe in building our talent pool, which involves nurturing, investing in our talent across the grades. We also believe, as an Aavas that it's the middle management, which is the key for the next future journey of our Aavas growth story. And towards that, if you realize, and if you see on the slide that we have about 43% of our employees on the business vertical which have a vintage of more than 3 years and this is the middle management, which have actually grown from an RO level, and they are sitting now in a span, of 9 to 10 years, as the NSM levels. And they become the major force to attract new talent and to retain talent because this is the story that we give out to our employees, that you come to Aavas and we'll build a career for you. So it's not a job. It's a career that we are building to you. And in the affordable market space, obviously, this talent pool move because talent is mobile. But as Ashutosh said, that we create such an environment that this talent always comes back to us, and we really look forward to built up our alumni model. We have 70% employees with 3 years of vintage who have been seasoned employees, who understand the core DNA of Aavas, who understands the processes, who understand the way Aavas works, the way the Aavas foundation has been built. It's in their blood. And we have 78% in collections who have been with Aavas for last more than 3 years vintage. Now how it helps us? Firstly, we have a ready-made talent pipeline, which would go through and move on to take on succession planning and make Aavas future-ready. And secondly, as was brought out by Siddharth also in his slides, while we grow geographically, while we expand our footprint across the nation, it's this talent pool which goes and replicates. And it helps us in terms of transmitting and transfusion of our DNA and our value processes and makes that process of breakeven of our branches and establishing new branches with a similar kind of a look and feel and similar employee or a customer experience across our 345 branches. Now taking our talent pool and to unleash or unplug the talent potential of our people, at Aavas since we -- as I said, that we firmly believe in developing and investing in our talent, over the years of time, and it was brought out by Manas also, he got the cat out of the bag right at the beginning that Rahul has been one of the alumni sort of attended the course there. So what we have done is we have curated Aavas-specific programs at premier management institutes. Now the process for nomination of the employees is an aspirational one. It's just not that everyone gets nominated or you get it by the seniority. So it's an aspirational journey for you to reach there. While we do two things, once we curate the program. Other major aspect, which we do or a major outcome, which we look forward for our employees, it gives us an opportunity for this human capital, which we have nurtured over the period of time to look at leadership at a manageable competency and get a strategic perspective while attending with the best of the class of academy out there. While they are interacting -- and so these programs are not one of the mills in the sense you go for 5 days, like normal MDP programs are there and thereafter you come back and it's over. They last over 6 months to a year's duration. There are the multiple interaction points with the professors from these institutes. Our people during the course of the program, they are attending, they identify practical problems or I would say, practical opportunities or practical issues which are being faced by our company and obviously across the industry also. And very case specific, they would come down, they will identify and they would divide them into projects, identify as a project. And during what we are developing is giving them outlook to do a research-based project, wherein they do secondary research, tertiary research. When they come back, they would do a pilot at a small size of branches and thereafter go back, and that's all done under the mentorship of the professors there. They would go back to these institutions, have larger discussions, have presentations with the complete management team being there. And thereafter, they would come back and implement these lifetime projects to address the issues which our company is facing. So just to take you through one other projects. These are the projects which have been attritioned as Utkarsh, Chetan, Saksham, Plug-in, Parivartan. So I would just take you through the Saksham section wherein enhancing productivity of underperforming branches. So the approach was taken was that this team came back, they identified a set of say, about 20 branches, which has been consistently underperforming. They did a research, which was not only restricted to 1 aspect. They looked at multiple aspects from the talent perspective, from the business perspective, which markets we were doing well, and they are not doing well. They went down to in terms of identifying the pin ports of the location where -- we have done -- we were the market leaders and over the time how the competition has come in and taken over that market there. They would look at the marketing aspects as to what is the visibility of the branch, how are we positioned there? What is the customer feedback there? So it's a 360 daily complete research with which they did. They've worked on it for another 3 months to get these branches. And we were really surprised, and we were pleasantly surprised rather that of these 20 branches, about 13 branches they were able to turn them around, within the pilot period. And once we got back and we reinforced the learnings, now we have 2 projects which are under implementation and the guidance of the management team. So that's our talent framework, which I wanted to communicate in a very, very short time to you all. We would continue to develop our, nurture our talent across. Another aspect is you saw that video, it -- actually a while ago on our employee engagement. We firmly believe that an engaged employee is a productive and a contributing employee. We believe in intrinsic motivation of our employees. And we give an opportunity for our teams to meet. This is a small glimpse of our engagement activities. I would like to highlight a project, which is an extreme left Project Prerna. This is our focus on inclusivity and diversity. So we have a leadership program for our women employees wherein we are investing about 6 months, a project which we are doing for our -- building up our leadership pipelines across and to build upon our diversity focus there. With that, let me assure you that we are rightly poised in terms of our talent being there for Aavas 3.0 journey. I would now like to invite Ghanshyam ji to take you over the ESG journey. Thank you very much.

Now in last couple of years, [Foreign Language]. Every body start to talk on the ESG, but [Foreign Language] and we see in all presentation similar thread is that highest priority is governance, whether it's Ashu presentation, whether it's Siddharth presentation, whether it's a collection presentation, whether the Anshul's presentation, governance is a top priority in Aavas basically. And since beginning, we've given a top most priority to the governance since beginning. And more practical way, more practical way. I'll give you a few examples how we managing since beginning, like business for the customers. But ultimately, underwriters get signed a document. Underwriters sit with our customers, transparently disclose all terms and conditions, charges and EMI with them, basically not a business team. So we bring transparency since beginning when customer onboarding the company basically. The collection team, how do they collect? They have to collect the customer with following transparent and fair practice route with humility with the customers. If customer has a real problem, we become very human, we are on ground with the customers basically. Even finance team never had a -- finance team also every quarter, majority of vendors they talk and they discuss -- they talk to call to them, all your payment, due to Aavas has been paid on time. In the full year circle, almost every vendor they touch base, once or twice in their full year cycle basically. So that we adopted very practical approach to bring governance, built in the Aavas at each and every processes basically, which gives us as a long-term sustainable governance, good practices in the lending business. Last year, a couple of years back, we -- just 2 years back, we raised 1 Social Masala Bond, which is unique in India basically. We've got listed at a Gift City. CD was invested in that. That money was entirely for women empowerment basically. We keep on building on women empowerment. Today, we are very happy to share 1 data point here. Today, in Aavas, 36% plus women's are owning the -- co-owner or full property of the -- of a property, basically, which we have funded to them basically. That shows how much women empowerment we've worked in the last couple of years. [ CDs] shared the data with us because they drive that project. They mentioned in India, it's averaged between 10% to 15%. And now Aavas today has 36% plus where women's are owner of the property, either co-owner of the property basically. So we made, in every progress, everywhere some hard work done to reach those levels basically. I think then I think buzzword started, so we have also PWC help to make a policy framework for ESG and stack our work under SDG development, how -- all these -- where we are, so that all this we can disclose timely manner. And we had Churchgate Partner also, it's a London-based company, who independently review all our ESG works and disclose on our website independently. Where we are stuck on SDG, SASB and IFC, all that they track our work and accordingly they disclosure on our website. But the pure independent work by them basically. ESG rating, still, as you know, they do independent rating all the ESG works in the area on financial sector, we are having the strong rating or we are, let's say, #2 in NBFCs and HFCs. After HDFC, our rating is #2 on that easy framework basically. So that's I think -- that shows how we are seriously adopted these practices since beginning whether social, whether governance, whether environmental, high level of governance we have given to that... This is, I think, a very unique things last 2 years, we invested our time, our energy in this. Last year, we signed a document with the IFC, how we can do self-construction, single-unit houses as a green home in India. We made -- last 2 years, we've done a lot of progress in this thing. And we are very happy and tried to announce this thing, yesterday these results were got launched with the honest dignitary, Deputy Governor of Reserve Bank of India, Mr. Rajeshwar Rao and Chief Economic Advisor Dr. Nageswaran; Amitabh Chaudhry, MD, CEO of Axis Bank; Mr. Dave, CEO of HSBC; Mr. Ashwini Kumar, MD of SBI, all present, and these results were got launched yesterday in the Mumbai, which is available for everyone now, basically. We want -- when we designed this thing we thought of this should be available to everyone because this is not our own work. Everybody needs to be get benefited, all HFCs, NBFC banks to be get benefited. Now how we can build more and more house as a green home and single-unit houses. And I, yesterday, mentioned this thing in the entire -- this is not in India first. This is across the world. This is the first project has gone live basically, where green home for single-unit houses, nobody has worked so far in this project. But this data point is very important to see. Almost 100 houses, which we have funded in last couple of months, got certified by EDGE, London-based certifying agency, basically, who we're certifying those things basically. Around 11,000-plus customers has shown the interest in the last couple of months. They are interested to build their houses green, because the entire ecosystem need to build. We have the tutorial. We have the literature. We do a lot of roadshows also around it, around 8 to 9 roadshows we've done in different cities, where we invite architecture, contractor, [Foreign Language], home -- who want to build a home, then we give them the house, this house can we build a green home basically. On the energy saving, water saving material, what they use basically in that entire house, basically. There are set formula are there -- set on is there so that it can be -- with the minimum additional cost, with some changes in the design, they can build the green home basically. We have the entire thought, entire idea at that. So this is, I think, one of the unique project, and we hope this will be having both advantage as a green home also as well as a lot of demand from ESG funds. Once we build a house around there, we will have a good tie-up of ESG funds locally and international also. Funding line will be a very -- competitive price will be available to us. This is I think some important CSR work, which we keep on doing. We are 100% compliant with the CSR work, what we are entitled. We invest in the same year. We don't carry forward anything. Some of the project is very important. Gram Siddhi is a very important project, which is women empowerment, where we go in the rural semi-urban area, we set up a stitching school there, and we give them the training, then we give them a stitching machine also basically so that they can -- livelihood, they can earn. Certain women's are earning -- families earning INR 3,000 to INR 10,000 per month basically. Two years back, one of the women of Kaladera has gone -- her clothes are selected in Lakme Fashion Show, Bangalore. She was first time travel in the air -- so such -- I think it gives a lot of happiness when we see and they come and meet us basically. First time she came to Bangalore, her clothes are selected like showcase in like my fashions show. Project Vishwakarma is another very important project we do. Where we go in the rural semi-urban area construction site, we engage with the construction work. We give them a tool kit. We also give them a lot of literature, the financial literacy is open the bank account. And we provided them health card also basically, at the lowest priced health card also. And we provide a lot of what bank, government of India initiatives there, which can help them basically in their life. So we do a lot of work around that. Kheloday is another important thing. I think 3 and 4 -- Sharad is here, 4 students got selected in national level, which we are -- we promoted in the rural and semi-urban areas in that market basically. A lot of things we keep on doing here. Aavas [ R ] is important. Road safety is very important. I think now we all are excited about technology development, technology transformation. Now I invite Jijy to take through the -- what we are doing in the tech -- thank you, Jijy.

Very good evening, ladies and gentlemen. My name is Jijy Oommen. I manage technology and digital portfolio for Aavas, as the Chief Technology Officer. It's been more than 2 years since I have joined this great organization. Out of 25 years of my career journey, I've spent majority of the time in building, managing and transforming technology and digital ecosystems for financial services companies and fintech organizations. I have come from the technology capital of India, Bangalore to Jaipur on this mission of making Aavas 3.0 possible. And it's a great honor and pleasure to be here and meeting you all today. I hope you will definitely find my presentation interesting and useful. There are 3 things that I'm going to talk about: one, what has been the Aavas evolution in the last couple of years with respect to our technology and digital journey? And then the second thing that I want to talk about is what are the various tech initiatives that we are doing in Aavas? And then the third thing that I want to talk about is that what it means to the business? What kind of results is it delivering to the business, right? So we'll move forward. Just to reemphasize the goals and priorities mentioned by our MD and CEO, Sachinder. In IT, whenever we take any decision, we keep 3 things in our mind. Number one, is this decision enabling Aavas to be scalable. You've heard when Manas Nishant spoke from less than INR 2,000 crores of AUM in 2016, today, we are more than INR 14,000 crores of AUM in our overall asset book size, right? So it's a phenomenal growth, and we want the technology to enable growth and that too sustainably. And as my colleagues mentioned, that as a business, we deal with customer segments which are -- which needs definitely a touch-and-feel experience. So how do we enable our team to be more efficient, to be more effective? And technology has a great deal to play there. And then the third thing is, by doing all of that, are we enabling the right kind of customer experience? Housing finance business is a retention business. My colleague, Surendra spoke about it, that we have to maintain the relationship with the customer for at least 8 to 10 years. And how do we make that journey enriching for our customers right from sourcing to underwriting, to disbursals, to collections, retentions, the entire life cycle journey of the customer. Keeping these 3 things in mind, in the last couple of years, of course, Aavas has been an early adopter of technology in many ways, but over the last 2, 3 years, we have really put in a lot of emphasize in building up our digital capabilities. So starting from 2020 to 2021, we have brought in a lot of applications to make our field teams job easy, whether it is managing the business opportunities in leads for the sales team, assessment for the credit team, risk assessment and reporting for the risk team, technical evaluations and legal assessments for legal and technical teams, even our vendors as well. So today, every activity, business activity that is performed in the field, they are all happening through mobile applications. And on the other hand, as my colleague rightly said, our collection team is so much enabled with technology today that they have not required to increase manpower in the last 3 years, while the AUM has doubled. So the opportunity for us to innovate by enabling the teams with the right kind of technology and solution is really phenomenal. So last couple of years, on one side, we have enabled the team greatly. On the other hand, in 2021, we realized that post COVID, the segment that we deal with, they were not that tech savvy until some time back. But post COVID, the customers have become far more tech savvy. And with our technology solutions coming together, it really created a magic for us. In fact, I'll show you some interesting numbers as well. But we have launched our customer application, highly interactive chatbot. Our WhatsApp bot is also used by our customers for taking services and even making the business inquiries. Similarly, our collection touch points, all the digital touch points have been enabled for collections. And our social media presence is also helping us generate both leads as well as our customers. So overall, we have kind of in between 2020 -- 2020 and 2021, put in a lot of emphasize in building the digital capabilities. And then in 2022, all these frugal innovations that we have done, we felt that this has definitely a great story behind it, and we should definitely make it more scalable. And that's where we brought onboard Deloitte to help us chart a complete digital road map for us, looking at the next 10 years growth journey. So we have actually crafted a 3-year's road map plan, which we are in the process of execution and some of the projects that we have initiated from 2022 have gone live and some are in the process of implementations right now. And I'll talk more about it in a bit. So 2 big projects that we have initiated post this Deloitte engagement, the first one being GATI. And GATI as you all know, GATI Speed, the meaning of GATI Speed and the name was rightly chosen because we want our entire loan origination process to be far more, faster and efficient. And how that is possible. Now Salesforce is the world's leading digital platform -- cloud-based digital platform, scalability is not something that we can -- we need to worry about it. Also, we have tightly integrated this platform with multiple fintech API frameworks. You can see the names of the API partners in the lights of Perfios, Karza, SIGNZY because of the positive of space, we could not add all the logos, but almost 11 fintech partners have been integrated to this platform to make this journey enriching for our customers. And we have used, again, the world's leading platform MuleSoft to do the entire API orchestration. And I'm very glad to tell you that we have commenced this project from April 2022, and we have gone live on pan-India as on April 2023. And the -- in 8 weeks into production, the adoption is happening in a very, very phenomenal way, almost 20,000 loan applications have been logged in with the first-time right checks, all the first-time right checks in place in the system. 16,000 loan applications have been already decisioned and 6,000 loan applications have been already approved and 4,000 disbursals done. And we have clearly started. Of course, this is too early for us to share any numbers with you, but we clearly see a significant improvement in the turnaround time and experience of both our customers and our team between the log in to the sanction process and sanction to disbursals. Because of the kind of product and customer segment that we deal with, you don't get the documents right that easily, right? So it used to take a lot of time for our sales and credit team to go back and forth to collect information, collect documents, right? And that used to take a lot of time and delay in the disbursal process. So with this journey, with these API integrations, all the validations, verifications happening upfront, data enrichment is happening through the digital wave, with all these partner ecosystems, we are looking at a tremendous improvement in our efficiency. By improving the efficiency, we are going to pull 2 more levers: one, our operational leverage, and then the second is our customer experience, right? So we have already gone live with the system. It's under stabilization. The adoption is happening at a phenomenal speed, more and more features are also getting added as we speak. In a few weeks down the line, we are also looking at launching connectors of this system with all our apps and portals and chatbots and everything. So that customers can have a seamless journey of and take the benefit of this new system. And then second, project that we are working on is Unnati. And Unnati rightly -- as its name suggests, it's for growth, right? And why we have chosen this name is, this is a platform, which is going to help us scale. So we could have actually chosen some traditional LMS loan management system, but we have chosen the world-class loan management system, which is Oracle Flexcube and the world-class cloud-based ERP system, which is Oracle Fusion. And when you hear these big logos, you might be thinking that, hey, you guys have put in so much CapEx into the project, I would say no. All the contracts have been locked for 5 years. And what we have actually done is that it's all on cloud and pay-per-use model. So today, we are at x number of loan accounts, y number of users. And as we grow the numbers, our payouts will keep on getting increased. So that's how the structure -- structuring has been done. And what these 2 systems are going to do for us is today, we may be at close to 2 lakh loan accounts, active loan accounts. Tomorrow, if it goes to 20 lakhs loan accounts, technology is not going to pause any limitation to us. And all these systems have been designed to run from the leading cloud platforms, Salesforce, Amazon and Oracle Cloud. In fact, our data has also been moved to the Amazon cloud, which is also enabling our analytics team to run their processes far more efficiently, right? I'll move on to the next slide. Okay. So this is a little bit of a repetition, but I thought it's very important that we reemphasize on some of the results that we have achieved -- on the customer service because I would definitely like to emphasize more on the customer experience. Today, all our customers are able to reach out to us, avail our services, not just only from our branches, but also from our omnichannel-enabled customer care center that's on one side. On the other side, our chatbot Pooja, she is able to give -- guide the customers both new customers and existing customers with a service delivery or even the inquiry for the new loans. So -- and our customer app, now with the company of our nature, where are our major focus is on the -- on the rural and semi-urban customers and nonsalaried customer segment, having 60% plus customers using our app is a phenomenal number. Also, 90 -- more than 99% of the time, they are able to self-service without even calling us without even any manual intervention. So the kind of journeys that we are trying to deliver to our customers, we are very glad to see that there is a great deal of acceptance from our customers. That's on one side. Second, the partners with whom we work, the Mitras for lead generations, the apps provided to them directly, they are putting in the lead from wherever they are from their mobile phones. And those leads are seamlessly coming to a CRM system centrally, it gets called within 15 minutes. So whether a customer puts in an inquiry or a partner puts in an inquiry, it gets immediately tracked. It comes to the CRM and call goes from the contact center team. And today, I can very -- I'm very happy to share that we are maintaining -- our contact center team is able to maintain an SLA of 75% inquiries are being called within 15 minutes. So which is something we feel is definitely doing great in terms of the closures. And as our colleague, Siddharth said, today, more than 10% of our disbursals are happening from the lead generated through the digital channels. And on the other side, when it comes to collection, I would like to quote this figure 1 more time that 95% of our collections have moved to digital. What is essentially -- and if you correlate this with the statement that Mr. Sachinder -- Surendra said, that he had not been -- he was not required to add additional manpower despite the AUM has grown to double for collections. And he has been able to improve the portfolio quality. And as you know, the portfolio quality of Aavas is best in the market. So these are some of the things which are doing well for us. Of course, as I mentioned, 100% of the field activities are happening digitally. Even for collections, the field team who are going to the customer place for collection. Today, Mr. Surendra and team are able to wherever they are, they are able to real-time track where their collection team is, whether the collection executive is going to the customer or not. Because every single property location and customer location is geo-tagged. And Rajaram will also talk about how we are using this geotech data or even at the next level. So these are some of the numbers, which I feel was important to share. So with this note, I would like the team to play AV, which will explain to you a little more about our technology portfolio and give you all a little more real experience. [Presentation]

So thank you so much, ladies and gentlemen, for your keen listening. If you have any questions, I'll be around during the Q&A session or else we can chat over the dinner and drinks too. And I would like to call upon stage my colleague, Rajaram Balasubramaniam, who is the Head of Analytics and Strategy for us. Rajaram, over to you.

Thank you. Good evening, everybody. I'd like to thank Nishant for the introduction he made when he started talking. So my name is Rajaram Balasubramaniam. I have about 24 years of experience in banking by way of introduction. I started my career with Standard Chartered of India for 6 years, and I worked with Citi abroad for about 15 years. I was with them for 3 years in Dubai, 4.5 years in Cairo and Egypt and almost 7, 7.5 years in New York. So I have -- my experience has largely been in risk management, sales, business and P&L management. And like I said, it spans multiple countries, right? So today, it's my pleasure to be here to give you insight into something that's taken the financial world by storm over the last decade or so. And with the growth in technology and tools is continuing to do so. And you've seen the things. So yes, I'm talking about data and analytics. And when you talk about data and analytics and Aavas 3.0, it's a very integral pillar for us, and we are excited to have it there. And I'm equally as excited to give you a little peek into how we are approaching this within that. What you're seeing -- looking at behind me is a schematic of an analytics landscape that traces right across our customer experience. This has been expressed here in terms of very specific capabilities that we want to equip the business with. This goes right from sourcing, to underwriting, through risk and all the way to servicing, retention and collection. Let's talk about this for a couple of minutes, right? So all of you know, descriptive analytics, is kind of analytics where you look at a problem, you understand this nature and then you're able to express it in context. Today, if you take an example, SIP bounce analytics. What we've been able to do is we've been able to take demographic, product, bureau, transaction, behavior data and provide the business with not just bounce rates or trends, but also emerging risks that could be big in the future. And the credit team and collections team together have actually been able to address that problem proactively. So that's one use case that we can talk about here. And when you go into prescriptive analytics, this is similar to the first one I told you. But here, the emphasis is more on actionable insights, not just on data monitoring or data analytics, right? Let's look at a practical example that the business is using today. Take pricing analytics. One of my favorites. So what we do in pricing analytics is that we take our rack rate, we take what the rate we actually gave to the customer, we add a ton of variables, and we throw it into a machine learning model that does decision tree analysis. And out pops a bunch of correlations, which we can then break into logical business segments, logical groups where the business can then go and actually have targeted actions, whether you want to avoid something, whether you want to do more of something. It all depends on how you set up the target variable, right? The point I'm trying to make here is this gives us today so much power for us to harness. 25 years ago, doing a decision tree like this when I was with Citi, it would take us weeks to do it. But today, I have teams that just drag and drop the file, and I can do it in days or hours actually. So that's where we are today. Let's talk a little bit about the next one. When I talk about predictive analytics and I was telling how much power we have, are there any Spiderman fans in the room here today? Yes. So until Ben tells Peter Parker, "With great power comes, great responsibility," right? Everybody knows that line. Why I talk about that here is a story that I keep telling my team, my team has heard it more than once, right? When you come to predictive analytics, while today, you have tools that literally you can drag and drop and make ML models, you have to be very careful about what you're asking the model to do. And I keep giving this practical example to everybody I talk. Let's say you go into the supermarket and you want to get a carton of milk. You want to have the best coffee experience tomorrow morning. But your model is meant to give you the best pineapple, money can buy. The model will work. It will work spectacularly, but your coffee experience is not going to match your expectation. The reason I bring that up here is because I want to talk about 3 things that we're putting in place to make sure that all of this ties into the business. Number 1 is to get over these kind of problems, we need these skills. The skills need to be there in place. You can buy technology. But unless you are able to connect the business, the function, the technology and the analytics, you won't get your outcome. I'm very happy to tell you that over the past 1.5 years, we have built a decision sciences team in Bangalore and we've been able to attract very good talent with the help of my colleague here on the HR side. We've been able to attract very good talent there. The second pillar that we are building all of this on, we have worked with Deloitte, and we created a data strategy that is -- and we're going to implement a state-of-the-art cloud scalable architecture from end to end. Build a completely end-to-end automated data architecture system that is comparable to any large NBFC, any bank. So we are going back to our pillars. What Sachinder said, what Manas and Nishant, what Jijy said? We are -- we want to invest in technology. We want technology to be one of our pillars. And we want technology to grow with us, whether we have INR 14,000 crores or INR 140,000 crores or even 10x that. The last pillar, important to me, close to my heart is that we need to ensure that we are doing analytics at the level of maturity that we are today, because it's too little and people lose interest. Too much and they burn out, they lose interest. So how we are approaching that is to what I call, a recommend, sorry, a, assist, recommend autonomous strategy. What does that mean? You start out by saying analytics will assist a human operator. Once they build that maturity, analytics will then recommend to a human operator which they can choose. And then you come to the last stage, which is prevalent in much of the world outside is where analytics can take autonomous decisions with or without human intervention. It's a journey. So we are looking at it from those 3 pillars, right? So I hope I've been able to give you a little bit of how we are doing that. Now I come to a little bit of the exciting part where I want to show you what we have actually done. We're not waiting for all these technologies to come without waiting for the -- that will come, but we've been able to -- we have some use cases for you, some of them in deployment, some of them in development, right? I want to show you something. Let's talk about these 2 predictive use cases. So let's first talk about application score. The applications score as the name suggests, is a predictive score that tries to predict the performance of a pile even before it is booked. Now this is based on past data. It's a log with logistic regression model that we have developed for Aavas is the custom score. And what this does is able to differentiate performance across deciles up to 10x, which means that at the lowest risk end, it could be 2.6% and the highest was to be 26%. Question is, all right, what do I do with that information, right? Suddenly, the business is not making decisions based on an average of 11%, but they can take risk-based decisions at every segment. What can you do with that? On the acquisition side, you can do entry barriers, which is -- we can choose where your entry barriers, which is above your risk appetite, which is below your risk appetite, you can take different actions there. Second, you can combine that or replace that with pricing decisions which are risk-based. So suddenly, pricing is not just a rack rate, but pricing could be very intelligently driven with technology. You could price on a base rate, you could have deviation based pricing, risk-based pricing. You could do so many things with pricing. On the underwriting side, I -- this is something I want to talk about prioritization for about 30 seconds here. I mentioned to you that we are going in this assist, recommend and autonomous mode, right? That's what I mean by prioritization. So let's say, for example, for the underwriting team, if they have a lot of volume that day, or they have a case where they're on the proverbial fence, where they don't know what to do, that's where we start with the assist mode and tell them, here's the App score. The app score will tell you, is it a low risk, high risk or a medium risk customer, you decide what you want to do. So that's the assist part we want to do. The second one that we are trying to deploy is trying to use the app score for reject review. What we are trying to do there is we're trying to bring accounts back that were rejected recently so that we're not leaving any money on the table, that competition can take away. It's like a catch-all. So that's another thing that we can do with that, right? So that's on the app score front. The second one, I'm going to hand anecdote for you here. We started this out a year ago. So when I called everybody and I told them, I was trying to explain to them what I -- what we are trying to achieve here. When I say churn prediction, today, we start our retention efforts when somebody comes and asks us for a foreclosure letter. So a year ago, I said, look, that's good. But we need to be able to go and tell the business, who are the people who will come? How can we predict that? So my thought process from my experience, no one wakes up. No customer wakes up In the morning and today, I'm leaving Aavas, no. The human inertia is just too much. That doesn't happen. What happens is that they call you, they tell you a problem, they talk to other people, they contact you, their transaction behavior changes. And if their problem is not solved, then they leave. So over the last 8 months, we actually collected data for the last 3, 4 years to stitch all of this story together. And now we have a model that are the top deciles, it's more than 90% accurate to predict, who will come with a focus or request in the next 60 to 90 days. So then suddenly, we are going from a reactive retention management to a mix of reactive and proactive retention management. So that's some of the power that we have in the hands. Again, like I said, understanding the business, understanding what drives the customer. Those things are important when you do analytics. So that's on the predictive side. This 1 on top, I know it's Sachinder's favorite. He always lights up when we show this to him. He has given us a lot of input. He talks to us about this. I know Surendra is very excited about this 1 as well. And Jijy mentioned that, right? What we're trying to do here is the ask was, let's say, today, collection agents travel x number of kilometers based on their current allocation, what we asked our data scientists to do was to ask them, can you using clustering optimization, while keeping all of the constraints? Because if you see our collections was the first thing I did outside finance when I was 23. So collections is very close to my heart. So I do no collection. So you have a lot of constraints and collections. You have accounts to collector ratio, how many accounts can 1 collector handle, branch can not have enough capacity you also have still levels because you have flow, you have GCL. You have different collectives for you to handle. So you have a lot of constraints. So this is a mix of clustering and optimization with constraints. So we listed all of them down. And we told the model, can you come up with an allocation that can reduce effort. So in our development testing so far, we've been able to see that we can reduce 25% to 30%. This model is right now being deployed on the field. And we hope to see the results very soon, and we'll see how best to take it forward. But this is what we can do with technology when we implement technology that has real-time geo tagging, 100% geo tagging of properties, et cetera. The next 1 is what my friend Surendra mentioned, is on the bounce protection. This is a model that we have had for a long time. And here, again, on the collection side, I know I'm speaking a little bit on his behalf. But this is -- I have worked across the world. This is 1 of the strongest collection strategy and infrastructure thought process-wise, implementation-wise that I have seen. And I'll tell you why. We're approaching this in 3 parts. If you look here on the left-hand side chart, we are able to tell the business tactically what accounts are going to bounce next month. And we just don't tell them, we don't apply our strategy on everybody. What we're telling them is high risk, medium risk. And even those, you can actually apply a differential strategy. And somebody who gets past that gate, let's say, we have a collection team that maintains such a tight relationship with the customer that we are the first to get that money. And we have proven that with numbers. Now if you look at just like Maslow's Theory, the Pyramid, there is a pyramid that you can draw for asset products, bottom other asset products, credit cards. Next to that is personal loans. Above that is auto loans and above that is mortgages. The size of the loans of these types change. But if a customer is defaulting in mortgages, it very likely means they have default loan everything else before they take the mortgage. And even there, if you are able to get the priority, that shows that you're able to maintain the relationship with the customer. The third thing that we do, let's say, they get past that gate is that we have a very strong NPA legal team. So on the right side, to support that NPA legal team, what we are trying to do is while this is a tactical model for the next month, we are trying to see if we can predict if someone is going to go to 90 plus in the next 90 days. So what Surendra can do, has he can focus on today and tomorrow and also have a long-term view on a bunch of customers who will be 3x or 8x more likely to go to NPA. And you can have a longer-term view. You have 60 days to work on them, not just 30 days or 10 days. right? So these simple ways in which we hope to build this infrastructure. In conclusion, I want to say 1 thing. In my view, for the kind of scale that we want to achieve with our 3.0. There are 3 things we need: consistency, reliability and standardization. What we want to do with that chart we showed you here. And all of the things that we're doing is to help these elements and give business the right arsenal to use in the right spot to achieve that. I hope in the coming months, yes, you will see that we are able to do that. And that's all I had for now in the time that we had to present this. Once again, thank you for giving me the opportunity to take you through this. Have a wonderful day. Thank you.

Thank you, everyone, for this wonderful presentation, which was fairly detailed and exhaustive in nature. For everyone, please bear with us for a couple of minutes. As the stage is being set for the Q&A session, wherein the management, it has to be invited here so that they can take your questions right in front of you. So I now request the management to come over to the stage and take their seats, please. So while this is happening, once -- 1 more data point in addition to whatever has been presented, in addition to the people present here physically, there are about 65 plus more participants present virtually. So probably that gives an insight as to what we are in for today. We just wait for Mr. Sachinder to join us, that's the energy with which Aavas is moving. So before we begin, a small request. I would like to state, in fact, clarify one thing that this event is about showcasing Aavas 3.0, and that is fairly evident from the presentation. So what we would like to request is let us discuss more about this, the strategies and the future prospects and how this company is going to move ahead. So with this, I would like to open the dias and open everyone to join us for the Q&A. Can we have the microphones, please? Yes, sorry, sorry. So just 1 more addition. Started on the right note. Before you ask a question, kindly spell out your name and the organization that you belong to. Thank you and sorry.

Yes. Shweta here from Elara Capital. I have a couple of questions. So we presented on scalability and market size, which is understandable. But what I've been always wondering is because we bring in underserved customers in Bank in Ambit, then wouldn't our customer base be easily poachable after 2 to 3 years for any other PSU bank or NBFC/HFC? And hence, then the churning would increase. So what is the long-term scalability and sustainability with this kind of model? Because if I would be an NBFC, I would definitely like to open Aavas customers, say, 3, 4 years down the line after demonstration of good asset quality and buildup of trade history?

I think it's a part of the industry thing, but we at Aavas are very critical about this aspect of customer retention. So what we have done is that we have created an entire team under our customer service. And we are using technology and analytics such as Rajaram, I think, took us through during his presentation. No one, 1 fine morning standards, some sense say, I want to move out of Aavas, okay. We have a complete data trend line experiences available, which we are using through digital and analytics piece to identify those customers, those segments which may move out of Aavas and device strategy case wise how to out to stop and retain them within the organization. So if you look at our retention has actually helped us. We had about 6% -- 5.5%, about churning going out, and it is a decent churning, which has reduced with respect to last year. And we will continue our effort in terms of identifying people, identifying segments and then using analytics and technology. Beforehand, we have information, I can give solution to the customer and retain within Aavas. I hope it.

Yes, this was satisfactory. My second question is a little generate, but again, your outlook on growth because we are sitting on heavy capital adequacy lower leverage. I understand we cater to perceivably the most vulnerable segment of the society. But given that now we have backup of technology, data and analytics. So don't you think we can still go beyond 25% growth CAGR, so that there is full utilization of capital? And in that regard, just to follow up, when are we expecting ratings upgrade. So is it that we are waiting for ratings upgrade? And hence, maintaining that high CAR and slightly lower growth vis-a-vis the high capital adequacy?

Thanks, Shweta. You have 2 questions. I'll go for the first and second, I'll ask GSR answer to that. To your question of growth, I think you have to really look at the industry growth and Aavas growth. I think in the industry grow out, Aavas growth has been higher in those multiples. Now you really bifurcate the growth in 3 segments: the geographies, which we are in already, and that's got represented in Sid's presentation, the growth has been higher than 25 percentage. And that's really where we've understood the customer. We understood the geography, we understood the collateral, and that's 1 which is there. Second, where we're already there in 5-year term, their growth is lower than what the normal average growth is. And the third piece is the investment in the new states and our investment philosophy of really going across doing granular work understanding the customer segment, understanding the collateral, understanding the personas and having invested then only then accelerating. And as a result of these 3 parameters, which I talked about, which is already their geography, which we are present, the geographies which we want to accelerate. And the only 1 we want to invest. I think the moderated average growth comes to in the range of 20 to 25 percentage. And I think this is the growth, which actually helps us to give the financial metrics on 1+, on 30 DPD and stuff. I think balancing growth with profitability and with quality is a mantra. And as I said that the opportunity is there. The opportunity is very, very granular, very modular and we'll like to grow in a sustainable quality manner. And second question I'll have GSR answer.

As you know, rating is obviously independent agencies are there, ICRA and CARE who rate us basically. And last 10 years, we've seen 5x rating upgrades has happened basically. And it is separate independent agencies. But business is not linked to rating agencies, basically let me tell you. Business -- lending business is not only lending business but it's a basic quality business. How you maintain your quality, how you maintain your metrics is very important in the long-term business basically. So our focus in both the area, where we have invested and mature market, we grow better, where we are investing, we remain command quite and watch how we are able to establish fundamentally in that market, then we grow in that market basically. But high capital ratio is not on account of anything was there because in the home loan, this rate is just 33%. Otherwise, you see IPO we went last time the capital days on that time, our size was INR 4,000 crores. Today, we have INR 14,000 crores, 3.5x without raising any capital basically. As I mentioned, we are not going to raise any capital short to midterm time also basically. And retained capital I've shown on our presentation has now more than capital we have raised INR 1600 crores plus capital has been -- companies made a profit. So out of all these combinations, it looks calls very high, but we want to grow very consistent where we can maintain quality and long-term growth is very important for this business.

Right. Sir, 1 last question. You made a feating mentioned in your opening remarks on maintaining 5% spreads 15% to 20% ROEs. Can you give a ballpark rundown of your ROAs because your cost income has also been higher, maybe because you were building up the technology stack. So how do you see the entire ROE stack over the next 2 years?

I think this is a long-term business, and we generally don't give very short term, let's say, forward-looking anything. But if you see like we've seen -- we have invested in a branch. We have gone out of our comfort zone, and not only Rajasthan, MP, Gujarat, we have spread in 13 states. Last, we had gone in 2020 in Karnataka. UP is almost now 5-year-old. So seeing all these things. Now we see a 20% to 25% CAGR growth we see for next year is very much feasible, possible. We are confident on that, basically. Tech has been happened. Development is already investment is going on in that field. Branch side, we see in next 10 years, we don't see branch growth more than 10% every year. Top line will grow 20% to 25%, branches will grow 10%. Headcount will grow 10% to 12-odd percent basically. All these metrics will give us better ROE and better ROA metrics because not ordinary capital, it leverage will stack. Leverage is kicking in the -- every year leverage is kicking basically. So we are already like operating closing 16% plus ROE zone we're already there in the network basically. Certain branches, which are more than 3 year old in the system, basically, 85% to 90% branches giving 20% ROE that shows maturity of the branches, maturity of the business basically, it only start to kick in. But we need to grow, we need to invest in the growing, basically, those new markets, we have to keep wait and watch in the new market before they're giving the high double-digit ROE business in that area.

This is Namit from Indgrowth. I have a couple of questions. Firstly, compliments on putting together a very sort of experienced management team with as many as 10 CXOs of whom 9 are here. So my question is to Sachinder and Anshul. What is the plan around retention, some thought process around the retention of this high-power team. Some color around that. Second question is, in 1 of your slides, you had mentioned about some triangles and boundaries where on the upper end, you had mentioned INR 1 crore as a loan ticket size potentially. Some color around any thoughts on sort of expanding the maximum ticket size of the loans that you might pursue. And my final question is again around people. Not specific to the current experienced CXO team. But given the recent MDCO departure, are there any non-competes and non-poach sort of understandings in place?

I think from a segment perspective, when you talked about, I think we are looking at a INR 25 lakhs to INR 1 crore. Again, there, we have been very clear. This is a customer segment, which is unserved and underserved. We are not getting into a customer segment, which is directly in conjunction or in competition with any of the banking space. So I think we're very clear, and we will expand the segment, which are in the range where we understand and the customer being unserved and underserved in those categories. I think that's very clear from us. From a perspective of I think the kind of depth and the kind of job enrichment, which the current franchise and institution is able to offer I think that is drawn across the best of the talent or the right talent what Anshul talked about, to be there. I think it is the purpose, it's a passion in the job enrichment followed by the long-term incentive plan, the ESOP plans and all those, those are the parts which are there as on the monetary side. But I think at a CXO level, what you really, really look at is what is the drag. I think the drag is the purpose and the passion and why would you have somebody from a Kotak or an ICICI or an HDFC or City New York for that matter. New York to Jaipur is a long journey by flight. So you're talking about all those jetlags, but the guy doesn't seem to have any of them is very well settled, and we are taking advantage of that. I think over a period of time, that is 1 which is very important for the job enrichment. And as I said, that gets switched with a lot of other incentive plans which are monitory in nature. And on the second line, I'll have Anshul to answer that, that is about the strong middle management and the strong lines. And how do you do that? How do you plan talent? How do you retain talent? And how do you up skill that? Anshul can you dwell upon that?