Bajaj Finserv Ltd. (BAJAJFINSV) Earnings Call Transcript & Summary

Good morning. We welcome, everyone, to Bajaj Finserv Investor Day, hosted by Kotak Institutional Equities. My name is Nischint Chawathe, and I lead KI Research for diversified financials and insurance. Before we start the event, just a few announcements. We start every session by the hour. Each session will be for around 55 minutes, 45 minutes for the presentation and 10 minutes for Q&A. You'll see a tent card on your table. If you have any questions for the management, please scan the QR code on the tent card and type in your questions, I will be reading it out. Needless to mention, we request you to keep your phones on the silent mode. It gives me immense pleasure to introduce our first speaker, Mr. Sanjiv Bajaj, Chair Managing Director of Bajaj Finserv Limited, the holding company of Financial Services businesses of the Bajaj Group. Under his leadership, Bajaj Finserv has emerged as India's leading diversified financial services companies with solutions in lending, life insurance, general insurance and investments. With the consumer-first digital approach and a culture of innovation, he has played a crucial role in reshaping digital financial services in India. Welcome, Sanjiv.

Good morning, and welcome to Bajaj Finserv's first Annual Investor Day, where we've got all our companies here together. And thank you to the Kotak team for arranging this. The intent of the time that we spend here in the first half of the day with you today is to provide you with a picture where hopefully, you will get a sense of why we think that the whole is bigger than the sum of the parts. So most of you cover one or more of our listed stocks, some of you also spend time with our insurance companies. But this is the first time where we're trying to put everything together to present to you the larger picture. And I must thank you all for taking the special effort to be here at this time in the morning. I know it's not easy for Mumbaikars, especially given distances that you need to travel, so very much appreciate that. I also see some friends who've traveled from outside of India, I'm sure not just to be here exclusively, but great to see you all as well. So welcome. At Finserv, we have a very simple focus, and that is to be the financial life cycle partner to every Indian. This is what we put down in 2005, '06 when we were trying to put a blueprint together for building financial services in India. You know how we are structured with our financial services companies, all getting consolidated under Bajaj Finserv. But when we look at ourselves, this is what -- this is how we see ourselves. We have a set of companies that offer products across the financial life cycle of the average Indian, whether the consumer, the MSME, small business, whether it's an asset acquisition, protection as people start saving some amount of money getting into health, getting into income protection, wealth management and finally, retirement. So a set of products that go right across each one's financial journeys. And on the left, what you see under Finserv is set of manufacturing companies. We have Bajaj Finance, some mortgage business, our insurance companies, the newest entrants entering from 18 months ago, our AMC. And on the right, you see some of the newer platforms that we have been building in the last 6 or 7 years, the digital brokerage, the health aggregator as well as the marketplace because we believe that financial services in India is increasingly getting digital, it is leveraging data. And those companies that can manage the right balance between people and digital, between growth and risk, between innovation and responsibility are the ones that have a greater chance in reaching out to customers in what is otherwise a very commoditized industry. And this is our attempt. If you look at our journey so far, the creation of these companies, while prior to 2007, of course, Bajaj Auto Finance existed, we had started our insurance companies, but it's really the team getting together from '07 and in the last 17 years, building out each of these businesses. And another lens to look at this, and I'm not sure how clearly you can read that, is to see the products and services that each of our companies have built across insurance, across lending, mortgages, our payments, our mutual fund business now where systematically year-on-year, we have added a set of capabilities, whether products and solutions, digital capabilities, those on the risk side. This is, of course, not a full picture. It's just more to present an idea as to how systematically we build our businesses across the group. We've also had business lines where the construction equipment finance, infrastructure finance, that did not meet our target performance drivers and that we shut down. And while we do a lot of experimentation, we drive a lot of innovation, our teams are also very careful to see that we don't entertain hobbies. So if a business in a few years' time, does not hit the targets for risk and profitability and growth, we will very seriously review that business, and as I give you some examples, even shut them down. And over this period of time, and you know this as investors much better. If you had put a lakh of rupees in 2008 into Bajaj Finserv, that is worth over 32x today versus 4, 4.5x for the Sensex. So that's the kind of value that we have added as Bajaj Finserv. Of course, a lot more as Bajaj Finance. We have listed, as you know, a Housing Finance company as well just earlier this year. And there will be others that will come in time. We believe none of this is possible without the kind of growth opportunity that we have seen in India over the last 1.5 decades, and we expect to continue seeing over the next decade and more. We are not only the fastest-growing large economy in the world consistently for the last 4 years, but the translation of this growth is tremendous. When you look at it from a point of view of how disposable incomes are rising. And you can see over here itself when disposable incomes have doubled in the last 10 years. It opens up multiple avenues for financial savings, financial growth. And that's why when you look at the typical breakup of savings pattern, sure, we have seen some reduction in gross household savings. Eventually, as people get richer and get on to the consumption bandwagon. Some of that is expected to happen. But interestingly, we are seeing an equally strong growth in physical assets as in financial assets. And once again, this makes sense, right? Typically, for the middle class, you want your house, you want your home, you're investing in a few other assets. The first set of physical assets need to get created. And that's where a number of our businesses from the secured lending business, our mortgage business, our insurance businesses get to play a significant role in enabling those journeys for our customers. And at the same time, we believe that whether it is financial borrowings that has gone up. Now there is always a dark side of some of it, are you over leveraging individuals. But we believe, in general, this done responsibly is providing that currency that every individual needs to enable their lives. And for many of them, especially when you go outside or when you go below a particular income level or outside of the big cities, it is taking them away from the local money lender and driving them into the more formal part of the financial system, giving them all the safeguards that then the regulator and the industry provides. Once again, if you dig deeper and you look at financial assets, interestingly, you can see over here how within this period of even if you see 10 years between 2013 and now, 1/3 less in the more -- in the safest saving product with deposits. And this is expected to go down to half by 2030 from 2013. And other products are gaining ground. What this is more emphasizing is both the requirement and the need of individuals to use financial solutions for their own lives, but also as people are getting more well to do because when we talk of $2,700 per capita, we know that's only on average. Within that, as so many economists have said, you have multiple Ind AS. And when you look at these numbers, very clearly you can see individuals saying that we are willing to take some additional risk for their additional return that we need on the financial savings side as we move forward. Once again, when you see the evolution of the demographic pyramid, you can see how the pyramid is expected to rise, again, even in a short period between FY '23 and '27, and just a caveat, as you see, a lot of these numbers that I'm comparing are not for the same period. It's because we are using published outside data so that these numbers are all real and accurate, and that's why we couldn't necessarily find everything for the same period. It's not only to pick up the right data to pass a message. So the demographic pyramid clearly is rising. And we, across our companies end up playing a role in each of these segments. So you can see at the bottom, this is the lower income segment. This is where we are focusing on low-cost solutions, vernacular language, assisted models, which require these people to participate moving them into the formal financial system. The middle is where the large middle class lies using self-use platforms, DIY platforms, loyalty programs to enable people to access our products and services more. As they move up, you're going into some amount of savings, goal planning. And finally, more and more customized, personalized products and experiences when you move up to the HNI. Our aim is to through the support, those in the lower income, bring them into the formal financial system, as I said, enable the middle income and leverage the higher income with a bunch of products and solutions across these companies. And in the same way that we believe there is tremendous potential with individual customers we feel for MSME customers as well. More and more formalization of the MSME sector, whether through the introduction of GST, the various credit support programs that the government gave starting with COVID and those that still continue, which encourage MSMEs to enroll in these programs, enroll in the formalized part of the sector, but take benefit from that. And in a number of initiatives driven by the government on the digital infrastructure, whether GST data sharing, whether OCN platform, which shares the working capital flows, enable people like us to leverage data and analytics to provide the right products at the right price to these customers. And we believe this is a segment that is growing strong. It's 30% of GDP, expected to grow more. We know how in countries like Germany, this sector plays a very important role in the growth of that country. And we also believe that this will be a critical contributor to the Indian economy. And hence, with our products and services across insurance, across lending, across payments, we expect to increase our exposure in this segment in the coming years. We build our businesses focusing on 4 key blocks. Efficient capital utilization, being a life cycle partner, I've already talked about that, customer obsession and our culture and people, which we believe is what makes a difference. When you look at now efficient capital utilization, a lot of people have not understood how efficient a capital utilizer we have been across our company. So when you look at our big companies, look at our insurance companies, the general insurance company, when you look at GWP to the invested capital, it is between 45 and now 70x, significantly higher than our top 5 peers. When you look at our Life company, the blue line is us. We've adjusted the orange line by removing SBI Life because they get exclusive access through the bank, so their commission structure is very different. You can again see the utilization of capital consistently over the years. And if you pull this back 10 years, 15 years, you will see the same. The total capital in these 2 insurance companies that Bajaj and Allianz have put together since inception, 23 years ago is less than INR 2,000 crores. It's about 1,500 crores, INR 1,600 crores. Today, the General Insurance company itself makes significantly more after as Tapan keeps telling me, you're taking too much dividend. So even after that. And this is the discipline that we drive. Again, when you look at Bajaj Finance and you see whether it's our ROEs, you see our capital utilization versus industry, you will see that capital discipline. When our businesses are -- or each of our companies are setting up new business ideas, getting into new markets, the Finserv team and they work together to look at what are the phases, when we're investing, there will be such phases. But are we then getting the bang for our buck or not? And of course, we have smaller businesses where we are still in an investment cycle with each business in a defined time frame has to end up being a not only a net generator on capital, but one within certain hurdle rates that we prescribed. We've talked about being a life cycle partner to small to the consumer and to businesses, and we started this initially on the consumer lending side with consumer durable professional loans as well as on the insurance side. Of course, we added mortgages. This is not -- this is not a time wheel. It's just got a set of all our different products and services. And then life insurance products, asset management products. As we are building these products and when you look at these across various platforms that our companies operate on, digital as well as physical, you will see a mixture of products and services that we offer. So that from a customer point of view, they get to experience if not end-to-end at least most of our products and solutions across our platforms. Moving on to payments and then more engagement products, whether it's on travel, dining, recreation, entertainment, daily services and rewards and recognition programs, which again bind customers to come and do more with us. Over the last 17 years, we have built a full set of products and services across lending, insurance and asset management. And we continue to leverage this using various digital tools either those provided by the government or those that we are building, including on AI payments so that we can leverage, as I mentioned earlier, the best of the physical world and the digital world in the solutions and the service that we end up providing to aim to be that life cycle partner. And this can only happen when we are able to take a holistic view across all our business and services and ensure that the products, the quality of those products, the transparency of those products, the intuitiveness by which customers understand that, the way our apps work, the way our platforms work, this is homogeneous across the businesses. The look and feel, the experience, how we handle customer complaints and grievances is something that we end up monitoring across each of these companies. The same for the MSME business. And once again, I'm stressing this with consumer and MSME is where the largest part of our focus is. Of course, we do some amount of corporate lending, corporate insurance as well. But our burgers or our pizza equivalent would be consumer and MSME. Again, a set of products from lending, from insurance, broking that goes across for our MSME customers as well. And with this, in the last year, some of our milestones, the IP of Housing Finance that you're all aware of, within health, and we'll talk about that a little bit more, our acquisition of Vidal Healthcare, which was our first full acquisition as a financial services group. Bajaj Finance continues to be India's largest and most profitable NBFC. BAGIC continues to be India's most profitable and one of the largest general insurers. BALIC last 5 years, fastest-growing Life company in the country, recently crossed an AUM of INR 100,000 crores. And the AMC, of course, is still very young. It's only 18 months old. But again, one of the fastest-growing AMCs, we've just crossed AUM, I assume I can talk about that over INR 18,000 crores in the first 18 months with a set of products and a team that, touchwood, so far at least is doing good. So that's really the year gone by. Coming to customer obsession, we are very clear that in a commoditized industry unless we innovate for our customers, we'll get dragged down to the discounting side of the market, and that's no fun to be in. There will always be larger players than us. There will always be those that will be competing in a particular line of business or otherwise. Our reach is pan India across all our companies and to innovate, to anticipate what the customers' needs are, we significantly rely on data with customer consent on our analytics, we leverage the digital infrastructure and digital facilities that this government has created over the last 10 years, whether on Aadhaar, on UPI, Bima Sugam. And then leverage capabilities, whether it's on account aggregator, on GenAI in what we do. And just a glimpse of that is, for example, using account aggregator, we've managed to add 3.5 million first time to credit customers in the first half of this year. Our Farmitra app has been supporting with information claims settlement for over 6 million farmers, our Ghar Ghar Bajaj or Har Ghar Bajaj campaign is extending our penetration in rural India in our general insurance, also our life insurance business and further in Bajaj Finance. You can see with GenAI, over 300 projects, on one of those projects, we have a GenAI voice-enabled tool, which you can't believe is not a human that is talking and selling on average 10,000 loans a month for the last year, nearly for the last year with very good performance metrics. Of course, we have a set of human eyes that is watching, trying to reduce hallucination. But our projects are not just in pilot stage. Number of them are working. We also believe that GenAI by bringing in natural language into programming will enable a larger number of Indians to get trained for these services. As a country, we have to make sure we create the job opportunities for them because now the training is getting even simpler. Again, the Bajaj Finserv app over -- nearly 65 million app installs, Bajaj Pay, which is our UPI payment platform, almost 35 million IDs. Product innovations, whether a diabetes product plan. Why should an existing customer who have diabetes not get life insurance. So within a range, I think going up to 8.5% or so, if I remember, for HbA1c, we will cover you to do a test, we will cover you. So we are clear that while there will always be some complaints that I didn't get my insurance claim, our job as an insurance company, whether life or non-life is to be fair, to be fast when the customer needs us. We do -- we check for the fraud. We have huge systems. The check for fraud because unfortunately organized fraud is a reality in our country. But if the fraud checks are clear, when it comes to claim, we have one of the best claim grievance settlements in the industry. Surety bonds, again, one of the -- we are one of the first in that market. We actually help create the product in the market. And I'll talk a little bit about health as well towards the end. Now we believe none of this is possible without having our teams doing that. It's not just the guys in this room. It's at least another 2,000 people that drive each of our businesses. And our purpose is very simple. We want to continuously build a place where innovation, agility and ownership thrives so that we can create responsible leaders who will build long-term businesses to delight our customers. Each and every word over here is key, and there's no HR consultant that has created it. This was created about 8, 9 years ago by a set of people from our own companies because this is what we believe drives our differentiation. At the heart of this is how can we get each person to feel like a founder. So when he or she gets to work in the morning, they have that spring in their step because they actually believe they can make a difference and not with their shoulders drooping down come for just another boring day at work. And in this, the 4 mindsets that we work on creating are the growth mindset, being responsible, customer obsession and being a talent builder. And what this means for the growth mindset is to build a mindset for continuous transformation. Each of our companies run over a couple of hundred projects a year that come from the annual strategy meets. And youngsters get involved in these projects, very often they lead the projects with our older leaders only mentoring and guiding them so that we can be on a journey of change, we can keep working for building the future while we keep performing for today's results. As far as customer obsession is concerned, as I mentioned earlier, it's really about responsible innovation because otherwise, we will get dragged to the commodity end of the market. As a talent builder, and we've been a set of growth businesses, we developed, we delegate. We encourage youngsters to come into roles early on, and we have more than enough for the older folks as well. And finally, we believe being responsible, life is about black and white. We have no room for gray in that area, always do the right thing. If we can continue to build this culture across our organizations, this is where we will build that founder ethos, and this what will help us with consistent outperformance. And there is a very significant amount of time and effort that each company and Finserv working with each company pays in this area. And that's why I thought it was for you to get a little bit of that qualitative flavor as well. And hence, it's Finserv, we help working with our companies, they are the experts, but we help them in building strategy, ensuring good governance, collaborating and best practice sharing. There are a number of teams that we have created across companies for best practice sharing. Our One Finserv leadership initiative and next -- later this week, we are -- the top 200 of us are going to be in Bangalore listening to outside speakers, analyzing case studies that we have written on our own successes and failures for the top 200 leaders to come together and collaborate because many of them are now working in a different company in the group from where they joined. And this is the cadre that we are creating on the run of leaders not only in senior management, which is where we have started, but over the next 5, 10 years in middle management across -- middle management as well that will work across our companies to create much larger career opportunities for them. And for us, a well-rounded set of leaders who have worked at least in 2 or 3, if not more of our companies as well as driving common customer experience. And by common, I don't mean hard common rules being forced down in everyone. But more the softer side of it, so that how do customers feel that they are getting a fair treatment, they're getting speedy redressal. It's easy for them to understand our products and solutions. We realize that it can be quite a complicated business. When you read a life insurance policy or a general insurance policy, it's not the easiest thing to do. But how can that first summary page convey the message very succinctly. We get involved in these kind of things. And of course, on the CSR side as well. And that's where I'll move to next. Beyond business, Bajaj as a group launched earlier this year our social initiative under the title of Bajaj Beyond, how can we go beyond business? How do we go beyond profit, beyond growth to helping the larger society. So that's clearly a responsibility of ours well. And we have committed over the next 5 years to spend INR 5,000 crores across our companies and our family charities to enable 20 million youth. And we will do that by focusing on the youth of today and that is through skilling. Skill serve is an initiative that the Bajaj Finserv companies have built themselves internally over the last 7 years. We run a 100-hour certification program in over 400 colleges, 22 states around the country. We are certified by the government to offer credits in the final year for this course. So it's not an additional course. And this is enabling a large number of BAs, BCOMs, boys and girls from Tier 3, Tier 4 locations to get ready for financial services jobs. So it's a 100-hour program, 80 hours of technical training on banking, on insurance, on investments, 10 hours on spoken English because that's very important in an office environment and 10 hours on attitudinal training because we find that there are dropouts in the first 100 days because they are just not used to working in an institutional office setup even in Tier 3, Tier 4 locations. We also understand that it's a big need for the industry. And that's why in our recruitment drives, we find all the large banks, NBFCs there because they want to hire this quality people. We also work with a number of other NGOs to expand the skill training because we can't do everything ourselves. In addition to the youth of today, our focus is on the youth of tomorrow as well. And this is in the areas of primary health, primary education and shelter. We work with a number of organizations that rescue children from railway platforms, from places they've left their homes and come and they're suddenly lost and helping them either get back or if they don't want to get back, then helping them get their lives together. Same in the case of health and education because we believe that these youth of tomorrow are -- need the support today, while we are working with the youth of today as well. So that's just a little bit of a glimpse on the CSR side. Very quickly, a couple of minutes on our emerging businesses. A lot of people wonder what is Bajaj Finserv Health. Well, very simply, our aim through this health tech venture is integrate the fragmented health care system. So many of you all in your younger days and your younger colleagues who change jobs every 5 years, move from one city to another. You lose your health records, you don't know who the next doctor is. You have an emergency, your kid, or you have a toothache, you want to talk to a doctor, how do you get connected to a doctor. You want access to an appointment with a top doctor in the hospital, how you're able to do that. You want a hassle-free experience if you're going in for significant ailment into an hospital. How do we do that? So we have aggregated in the last 6, 7 -- or last 5 years, actually, the entire network, we have over 120,000 doctors, over 5,000 hospitals. We would prefer you not taking photos, dental, diagnostic, pharmacies, we brought in the entire payer stack from corporates to insurers, government, hospitals, that's where the Vidal acquisition came in, and I'll explain about that. And all this is creating a set of digital products and services that are available. So you can get on to our Finserv Health app and if you have an immediate problem, you can online find the nearest doctor of that specialty and have a conversation with them. You can schedule if you want a video consultation later or book an appointment, I think we have over 150,000 appointments getting booked every month, and that number is increasing. 60% is physical, but 40% is teleconsultation. We are processing over 300,000 insurance claims a month with our large corporates and for their own employees. And the idea is from OPD, where we have a very innovative product, which otherwise, without the use of data and analytics and fraud capabilities, insurance companies didn't want to get into OPD because it's very easy to -- most people to get a prescription from a doctor to get a few thousand rupees charged under their OPD policy. So how do you take care of fraud? But on the other hand, there is a very big need as well for OPD insurance. So from OPD insurance, partnering with Digital Health mission, we are the only non, I think, government entity that has partnered with them in building out the entire National Health mission platform. The acquisition of Vidal allowed us to get to hospital services, IPD services because you either need to be an insurance company to offer that as a license or a TPA. And this opens up right from OPD to IPD that's inpatient and then wellness as well. So you can book appointments for mental health, for yoga, your gym and a variety of others, for cosmetic procedures, all this on one platform and a team that is converting health care from a transactional business to hopefully a relationship one over a period of time. And so that's what health does. The other new venture of ours, the other platform is Direct. And this is very simply the Amazon of financial services. It on a common platform brings multiple partners to offer the simpler solutions in financial services to individuals. And we believe that as we are building out our businesses and as the sector is building out its capabilities, it is equally important for us to invest and build digital platforms as it is to build the physical side of distribution because an increasing number of customers are going to the digital platform. And before a Google or an Amazon or a Flipkart builds the financial services platform, 6 years ago we started building ours. We've got over 90 brands now from banks to mutual funds to card companies, AMCs, various products which are easy to sell and service on the net. As you can see, and this is both web and app enabled, over 200 million yearly traffic. We have close to 40 million app installs, 1.7 million credit applications. We are now processing 1 billion loans a year run rate. We are doing close to INR 800 crores of loans actual end-to-end processing disbursal online. And just in the last quarter, we had 40 million unique visitors doing close to 850,000 transactions. And we think there's, again, a long way to go. A large number of partners that you can see, of course, started off with the Bajaj Finserv companies. But the aim is to be a lot more. And that's really what we are at Bajaj Finserv. You guys know these numbers better than us, but total income at a consolidated level has grown 21%, 5-year CAGR profit at 20% and our 10-year numbers also are quite healthy. Each of our companies has finished their rolling long-range plans. These are just a quick look at the themes for the -- some of the top companies and I'm sure leaders will speak a little bit about key aspects of this today. Finally, our aspiration over the last -- over the next 5 years, and this is really the one number, which is future focused is to grow at 20%, 22%, whether top line, bottom line and more importantly, build a customer franchise from just under 100 million to 200 million Indians in the next 5 years. And we believe we can only do this by efficiently utilizing capital, by providing a whole range of financial products and solutions across the customer life cycle, focusing on innovation for better customer service. And finally, only when we continuously invest in our people and culture, will we be able to deliver this. And that's my presentation. So thank you once again. Open for any questions, comments. Sorry you want to.

As we begin the Q&A session, let me also welcome Sreeni Sreenivasan on the stage. So these are some of the questions that have come through the QR window. What is the business model of Bajaj Health? And how do you see the opportunity?

So that I've already presented. Is there a follow-up question beyond that?

Any numbers you can put out?

Well, so I showed -- well, what I can do is I can ask Devang, who is the CEO. Devang, a few top of the line numbers come in. What are you doing monthly in terms of claims, in terms of customers?

I think in given consolidated numbers of Bajaj Finserv, whatever number I say is going to be not very material from investors' standpoint.

Number of customers.

That's the right question. What we track is how many health transaction do we process in a month on our platform. Along with Vidal, currently, we are doing 10 million health transactions a year. Our aim is to grow this by 30% Y-o-Y in a way that we will make it a viable business model in next 3 years. So these are the 3 success parameters, grow health transaction on our platform 30% Y-o-Y. That's a reasonable growth because we are not an upstart. When I started in Bajaj Finserv Health, only OPD, we were growing 100% year-on-year. But with Vidal acquisition, which is second largest TPA. If we grow these transactions 30% Y-o-Y, and in the next 3 years, make the operation financially viable, we would think that we are moving towards success. The market is huge. The need gap is huge. So we will just remain on this trajectory and then we will solve for our objectives. Hope I have answered.

What is road map ahead for Bajaj Direct considering growing competition in the space?

So once again, as I explained, you've seen we have over 90 partners. I talk about the number of transactions we are doing. I don't know how many players are actually processing end-to-end and disbursing INR 800 crores of loans a month. So our ability to do that on the lending side is firmly established. We will continue building on the other side on investments, on insurance as well. We do small ticket insurance, but we have to still crack it profitably for the other insurance lines. Incidentally, the marketplace is something which by next year will breakeven on a fully loaded cost basis. We also, through the capabilities that we have built, have set up a separate division, which is Bajaj Technology Services. And the capabilities on the digital side that our teams run is high-end digital stuff. For example, it's in the areas including Salesforce, Adobe, Advanced Analytics. And these are services now in the last 2 years that we've started offering to other companies as well, initially in the same domain. We set up an office in the Middle East to offer that. We should have our first client on board next quarter. That business is still in an investment mode. But the marketplace will break even next year, and we will continue building it from there. We think the market is large enough, but there are not too many players that have the ability and the domain knowledge, both on financial services and on technology and data where this team leverages those capabilities across what we learn from the group because it also builds for a number of our group companies the technology solutions. I think this is our main differentiator when you compare us with others. And you will see quarter-on-quarter, both where it comes to health, where it comes to this business. Our digital brokerage already makes a good amount of money. But these 2 companies, we don't spend money burning capital on customer acquisition. So that's why the growth is not 200%, 300% year-on-year purely by buying customers, but it is more organically through the experiences we create. And that's why the businesses are breaking even and will be profitable as Devang said his in the next 3 years as well compared to so many others where you're seeing valuation, but you're still not seeing value.

Sure. So I think on that note, are we looking at any transactions out here?

So they're asking or you're asking?

I'm asking.

You want business for yourself. We have nurtured both of these platforms because we believe until we breakeven and show a path to profit and show a viable business model, we should bear the risk and fund it ourselves. But we are equally clear that both these platforms are really industry-level platforms. And that's why at the right time, we will open it up to outside strategic investment.

Sure. What is the group's view on becoming a bank, given the size of BFL? Will it help other companies in the group?

You see, if you have to become a bank, I will need all you wealth guys over here to tell me what to do, to break down my shareholding from 56% to 26%, and that 30% today on roughly INR 4.5 lakh crore and that money in the future, I don't need to do anything after that at least. But more seriously, no, we don't see any reason to be a bank. We will not even qualify right now because of RBI's guidelines, but we see no reason. We are today regulated and supervised as a bank being the largest NBFC in the country. The scale-based regulations has formally created recognition for NBFCs as another category. And as RBI is putting their arms around greater control and supervision of these medium and large NBFCs, they are also providing facilities, which they would otherwise not. So we think over the next 5 years, very clearly, you will see large NBFCs being treated like banks without being given the bank license. And keeping in mind, we already have a deposit license. We think that puts us in a very sweet differentiated spot as an NBFC without having to worry about becoming a bank and all the other associated consequences of that. I do believe that having your skin in the game in a regulatory environment, where the regulator clearly can exert control, put people on the board, change board, having more equity, more control is better than less if we have to build long-term institutions. And one of my worries for this country is as the government has done a lot in building the infrastructure and the foundational block for growth, our domestic financial services system in capacity and capability is not keeping pace. The banks find it -- private sector banks find it easy to skim off the low-hanging fruit from the public sector banks, chip off market share every few years, you don't have to worry about the rest of India. I think it's about time between government, regulators and the industry. We have to think that long term as well. And it's a huge opportunity as well.

And I think finally, elephant in the room, any update on the discussions with Allianz?

I'm also waiting for that update. And as we announced earlier, they've expressed their interest to exit us and they're exploring to get into India in a position of control, which they know they will not get with us. So we can understand that. If Bajaj Auto is to go and set up a unit in Indonesia, it will want its own control. But it also means they have to give up 2 very valuable and large franchises, and that's why it's taken them some time to get arms around that. From our point of view, they've been good partners. We wish them the best if this thing goes through, as I said, it's still under discussion. When we have something firm, we'll take it to the board and actually announce it. But we have great teams led by 2 great leaders over here. We've been running the business for the last 15 years after Allianz to their credit, helped us set it up in the initial years. And that's the way they work in a decentralized manner globally as well beyond the few key European countries. So dependence is close to negligible. Business is being run by us. So there's no disruption other than some short-term name brand change and stuff like that. If it happens.

Perfect. Thank you very much, Sanjiv. Thank you, Sreeni. This concludes the session. We'll now have a small 5-minute coffee break and assemble at around 10.

Thank you.

Thank you. Please settle down. In our second session today, we have Mr. Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance. Tapan, a stalwart of insurance industry has over 30 years of experience. He is one of the founding members of Bajaj Allianz General Insurance and has been with the company for more than 22 years. As its MD and CEO for more than 12 years, Tapan has built the organization to where it is today with more than 14 crore customers and a wide distribution network spanning of more than -- spanning across more than 1,000 locations in India. We start this session with a presentation by Tapan followed by Q&A. As in the previous section, do scan the QR code for any questions that you may have for Tapan. Over to you, Tapan.

A very good morning to everyone here, and thank you for the coffee break early morning. That's very helpful. As I begin the presentation, and as mentioned by him earlier, 23 years back when I was joining Bajaj Allianz as one of the founding employees of the company. My friends told me, don't join a private insurance company. Insurance companies are supposed to be institution of trust and people will not trust private companies, at a young age, you'll be out of job. And I did think that, that's a very important interesting statement. But today, 23 years later, as I stand before you to present the company and where we are reached to become the largest insurance company in India, organically grown, not a single acquisition, either on distribution or of any company, some of my peers did so to where we have reached. It's an interesting journey, and I love every bit of it. Just a summation of the 23 years of putting together, today, as we stand, we have serviced 15 crore customers, which technically means they're talking about 1 in 4 households in India has been served by us as insurance company. If you look at our profit after tax, PAT, if I take a decade's profit of the industry, our market share, we were 69% of the industry's profit on that basis. If you look at our net worth is INR 12,000 crores. And that's more interesting if you look at the capital put in, and we did see Sanjiv present that, it's just about INR 270-odd crores. And last capital infusion was in the year 2008. So we have not taken any capital from the shareholders from 2008 until today, which is close to over 15 years, 0 capital. And with no capital being taken from shareholders, if you look at solvency ratio is at 312%. We are one of the highest solvent companies in the Indian insurance market, GI insurance market. Solvency requirement by regulator is 150, which means if you're 150, your solvent, below that, you are insolvent. And we are at 312, which is the highest. And why I mentioned this is that is when we have taken 0 capital from shareholders from 2008 till date, which means that for the time going forward also, we don't see any capital requirement from shareholders in terms of running our businesses at whatever speed you want to run it. The other interesting data that we have is on the combined ratio basis. Combined ratio is very important in the general insurance business. It actually means that if you have taken INR 100 of premium, the outgo to that, the outgo in insurance business would be claims, commission and expenses. If the outgo is more than 100, then your combined ratio is over 100. It's below 100, it is good in terms that you make underwriting profit. Now the industry is close to 100, at 119, 116. Bajaj Allianz General Insurance Company has been close to 100 and below 100, which means if the industry loses on underwriting about INR 17 to INR 18, Bajaj Allianz makes underwriting profit also or somewhere close to 100, which means that the Bajaj Allianz General Insurance Company is about 18%, full percentage points better industry in terms of profitability. And not only about being in terms of profitability, but also acquires market share. And if we look at the number of customers or policies that we sold last year was INR 3.82 crores. And that is when the largest insurance company in terms of top line, they sold about INR 2.62 crores. So we acquired customers at a much massive pace compared to any of our competitors, which would be there. Now that was the story as we move forward to here in terms of what it was. Now it is a very interesting business that we're in. Until 2006, 07, I think the first slide, the tariff was there. Tariff again, the pricing for most of the major lines of businesses was fixed. That was called the tariff regime, which meant that if you took a fire policy, the price was fixed. If you took a motor policy, the price was fixed. That was tariff regime. And then free pricing happen for the industry. And today, if you look at -- if you're buying an automobile policies, the price compared to the tariff area would actually be 50%, 60% lesser in the own damage part. And if you look at a fire policy, again, we were 60%, 70% less than what it was in the tariff area. So imagine an industry which goes through a price correction of 60%, 70%. And before 2006, '07, it is not -- the industry who had a combined ratio, which was much below 100, still had a combined ratio above 100. And with 60%, 70% price correction, still the industry had been -- that was a major change happen in the industry. Then the next phase was, again, the creation motor to TP push, government wanted to protect the motor third party, which is mandatory by law to be insured with and they create a pool for that, which again did not work out very well. And then obviously, the consolidation happened and the realignment happened. At all times, Bajaj Allianz General Insurance company was able to overcome that particular challenge of that phase and emerged much stronger and more powerful than it was before that phase. And it adopted to and created many investments in terms of innovation and looking forward new lines of businesses, new products and how do you beat the market in terms of better analytics, better understanding of business there. Now a result of this, and that's why we thought we'd put a 5-year picture together. If you look at growth, and I mentioned it was the profitability part that we have been at least 17% to 18%, full percent points better than the industry. If you look at the growth also, we have been growing over the industry. If the industry grew at 10% in the past 5 years, we grew at 13.2%. The industry combined ratio, which I just spoke about 117.5, Bajaj Allianz General Insurance Company was 99.6. So when you see a company which is doing about 17%, 18% better than the industry and still growing and capturing market share, and there's a lot of companies desire to have this, keeping the cost among one of the lowest in the industry. If you look at our cost also, industry had a cost expense of 31.4%, we're at 27.7%. And if you look at industry lost INR 132,057 crores in this 5 years' time. And I also put the top 5 private players, not only for the industry, we put the best 5 private players in comparison to where we stand also and they lost about INR 15,365 crores. If you look at the cumulative PAT, the industry lost with the investment income also INR 222 crores and Bajaj Allianz has INR 6,566 crores and the top 5 private players had INR 15,000 crores of PAT, which has been there. And if we look at the return on equity, now when we look at return on equity here, it shows 16.8%, but technically, it is because when I mentioned to you, we have a solvency of 312%, which means we have a lot of excess capital with us out here. If you remove that, and I showed that in the previous slide, the ROE would actually be at 25% consistently for all this time. When we put a 200% solvency requirement, which most of my peers will be having that and lower than that, our ROE is over 25% plus, which would be there. Now at a 25% ROE if you look at and if we look at the industry's ROE is to be about 0.1% and you look at top players also, the return on equity of 15%. So ROE with the top players in comparison by putting the solvency at par is about 10% better even than the best players in the Indian market, which would be there. And we saw this slide on Sanjiv's presentation in terms of GWP to capital for 5 years. We had 54x the GWP to capital, while the industry is at 5x and the top player in the industry is only at 6x. So you can see that the efficient use of capital that the company has been doing over the time and as we build this up to where it stands today. Now if you see the building blocks, I think it's a very simple strategy of business that you may look at. Key focus on the basics in terms of if you look at -- that's why when you look at the expense ratio it again was among the least. If you look at distribution, insurance is still a distribution-led game. If you want to be big in the insurance business, you have to have a very powerful distribution network. And Bajaj Allianz insurance company has one of the best distribution network in the country. We will speak about it as we move on to it. And then it's risk selections. If you try and see this business, it is not only about automobile health, a lot of us when you look at our general insurance business, we think they ensure some automobile, some health. But you'll be surprised to know that everything other than natural death is covered by general insurance company, which means right from satellites to factories to automobile to health to accidental deaths to crop to cattle to pets, you name it, to cyber, it's diversified intense amount of business that you do in terms of the products that you cover. And at that same time, the selection of risk of such diversity and complexation of business is where the skill set lies. How do you pick up the risk that you feel would be good compared to the whole lot that you have? And you pick that up aggressively so that you grow faster than market, that is some skill set that you build over time and you build it well. And that is where the profit focus comes in. If you look at our customer value, be obsessed with the customer. Because again, in this business, the moment of truth happens pretty frequently. In automobile, you will have a frequency of accident, which would be close to about 20-odd percent, which means that 1 in 5 cars would meet with an accident. In health, it would be 1 in 10 people would be actually getting hospitalized. You have a huge amount of claims and claims means that the person is under stress, something has gone definitely wrong with that person. At that moment of truth, how do you deliver determines how do you build a reputation. This business, when you look into, should look into for 100 years, you don't build an insurance company for a couple of years. When you entered this business, you should have a horizon, which is over 100 of years, you build trust, you build and you take time to ensure that you deliver services to your customer and which they remember you in times to come. Now in terms of the pillars of the growth that we mentioned about, as I mentioned earlier, one was, obviously, we talked about the distribution network. And we have a slide on that coming forward, but just offhand we have the largest bancassurance distribution and sometimes I have challenged people to figure out it's maybe, in my view, the largest bank distribution in the world in terms of number of bancassurance partnership that we have currently here. We have, in terms of agents and POS put together, about 100,000, which is about 1 lakh agents and POS, which is there. If you look at OEMs, we would have the motor dealers are working with over 10,000 motor dealers. And nearly every OEM that would be in the Indian market, we would be working with them. If you look at brokers, we'd be comfortably working with over 800 brokers. So it's a formidable distribution network, which means that we can acquire customers from any part of the country, any segment of customers that we want, we're using any of our channels to reach to that for any products that we have. I think that is the distribution that we've built. If you look at the product portfolio close to 450 products plus add-ons we'd be having in terms of I mentioned to you, every -- the coverage that we have to provide, it will be in every segment. So every line of business, every segment of product that you could think of, Bajaj Allianz insurance company would be in that and would be one of the major players in that particular product or line of business, which should be there. On risk management and risk selection, is very important for general insurance business. I think the analytics skills, the distribution skills and the risk management skills put together in terms of how do you understand the risk, how do you see the evolution of risk. And I tell this to a lot of people. When I started working 32 years back, the biggest risk for me was on the 1st of the month when I got my salary because we don't have these UPIs then, you would actually go to the bank, take out cash and carry it home. And pickpocketing was a huge risk. Today when I talk to anybody how many of you think pickpocketing is a huge risk, it is not. But mobile phishing is a big risk. You see it in every day, malware is a big risk. How many of you'd actually be covered for phishing on your mobile. Bajaj Allianz General Insurance Company took out the first product in terms of cyber risk at individual level. Not only that, stocking is a big risk. Risks change over time. As a company, we have been among the first to be able to come out with the products. In fact, pet insurance, again, we were the first to come out with pet insurance. Because now if you look at people have pets and they really take care of the pets a lot. The risks and the need of the consumer changes over time, as a company we have to keep evolving on that basis. And the obsession for customers, as I mentioned, and we shall see with the data points, how our obsession for customers actually reflects in the data points that we have. And tech, obviously, I think a lot of people they think of companies, and today, as a 23-old company, already people talk as a legacy company, when I think for the horizon of the company that we work in, we're still a very young company. Tech, sometimes people feel is something relevant to startups. But the interesting point is that on the tech also, nearly all the innovations in the Indian market has been done by Bajaj Allianz insurance company. And we have been cutting edge into that. We'll take more of these topics as we progress further in our discussions. So I mentioned this in terms of our distribution strength, the largest distribution network. I gave you these numbers out here, we just put together into more this thing. And if you look at financial inclusions, we cover over 4 crore farmers. We also have 7 crores life covered in terms of the group health, of government health also, right, from the Gujarat government. We also did J&K government and Chhattisgarh government earlier. And direct also, right, for institutions and corporates, some of the biggest risk in India, which is INR 70,000 crores as sum insured is covered by us. In fact, our reinsurance capacity in Indian market is amongst the biggest or the biggest, if I may say so, in terms of what we can write. And that's why any risk in India irrespective of its size has been written by us, and some of it has been written at 100% basis without any coinsurance because of our strength in terms of our reinsurance capacity and the way we build it. So the numbers I spoke to you while I was talking about them, this is for you to have a look into it. And the ecosystem part is again very critical. Right now, the insurance company, the issue is under the Insurance Act, 1938, we can't sell anything else other than insurance. So ecosystem dependency is a lot on partners and friends. And that's why when we have Devang leading EVH is very helpful for us or Allianz Partners doing service internal roadside assistance is very helpful for us because as a company, we can't set up ecosystem. And if you have read the newspaper, in the parliament, the bill of value-added service that you see is something that we have been championing for that it should be allowed for insurance companies all to do creation of ecosystem for a betterment of customers coming together. And hopefully, it should be through in the parliament, and you will see a massive change in terms of how customer gets serviced by insurance companies coming together for that. And also, we were among the first to start distribution network in the e-commerce space and in fact, right from the early start-ups and building a huge customer presence there also. Products, I did mention about some of them, pet, but 2 or 3 of our products here, which is my personal favorite, and I want to talk about it. And I mentioned about how the changing needs of consumers and the risk is evolving. How many of us think that when we were much younger and especially me, when I was much younger, the families in India were joint families and people were not traveling much very far from where their original home was, from hometown was from. We'd prefer to be close to home, which meant there was a security system for elderly in the family. The grandparents were being taken care in terms of either they had the children or grandchildren close to them. In today's time, while we talk about India's growth story, while we talk of and the studies which say that 25% of global workforce shall be Indians, we are so proud of Indians doing so well, we're so proud of Indians leading so many companies across the globe, do we realize that somewhere down the families have become nuclear, and now elderly in India are staying alone? And the biggest worry from a perspective of a person who is doing well and moving out is his or her parents staying alone in some city. How do you address this worry of a consumer is what we thought about. And if not, why should we not -- at that time, Apple came out with this watch, which had that fall detection and we spoke to one of our -- because we -- as I said, we cannot do or sell any product other than insurance. We spoke to an entrepreneur friend to get us that fall detection device. We spoke to Allianz partner to set up an ambulance network across the top cities in India. We got a policy linked to it. We have tie up with close to 7,000 hospitals. We spoke to hospitals to give green channel to people who have the emergency. Then now if somebody has a fall -- the people who have this policy, a customer, a call goes to a call center, we call the person up. If they don't pick up the phone, we send the ambulance, get them picked up, get them to the hospital even before the person or his family -- immediate family comes to know where the golden hour is very important in saving a person. And that's the Respect care product we created. So just to give you an insight of how we create product, how do we see the change in society happening, how do we create -- in spite of not being able to create an ecosystem in our own system, how do you partner with powerful companies around us to be able to provide solution to our customers. How do we solve what is, I think that is the basic bedrock of our product development. On the pet, which I spoke about, I think if I see a lot of youngsters now in the age of 30 to 40 are having pets now. I think they are pet parents, and there's a need. And we saw a huge shift happening in terms of how youngsters look at pet today. And there's not a single company offering a stand-alone pet insurance, and then we came out. We studied the best markets in the globe where we put together research from our side to come with pet. Surety is another classic example. Finance Minister announced surety in her budget speech. But no insurance company in India came out with a surety product simply because of the insolvency at -- the insurance company not having the right to recover as per that as the preferential and I think it lasted over a year's time, and I remember Mr. Gadkari also speaking about it that the companies did not come with surety bond and Bajaj Allianz insurance company then came out of with the first surety bond product in the Indian market. In fact, Mr. Gadkari himself launched the product into the market. So if you again look at the V-Pay in motor, a lot of us have a motor claim and sometimes we get frustrated that this is covered, that's not covered. We came out with a product in which we say everything is covered, including consumables for you, and that was V-Pay. So most products in the market, let's say, or services in the market in general insurance space, the innovation or creation of the product has been done by Bajaj Insurance company. And the thought process, and that's why I've talked a bit about thought process of how we look at products, how do we innovate and how do we put it together from a consumer perspective is obsessed with the worries and the road blocks and the difficulty that a customer faces in terms of the life cycle that he's going through. So many on that, I can spend the whole day speaking about it because this is my passion in terms of putting products which we feel is for the changing times and needs and surety itself, this product itself, the way the market is growing. And we heard when Sanjiv mentioned that the banking is not able to support the infrastructure growth in terms of how it's moving. These products are the ones which actually take care when the BG requirements is not able to cope up with that, which means that a huge requirement coming forward in the Indian market, which may in my view, go up to INR 20,000 crores in times to come, just 1 product, which should be there. Now the other thing that we are very focused about is that we are not in terms of risk to focus on just one line of business or one product which would be there. So that if that product or line of business goes for a toss then the company goes for a toss. So if we look at over years, it's a very balanced mix, it's a very balanced portfolio which we have created. In the business of insurance, balancing portfolios and geographies and the line of win is very critical, simply because some line of business, some portfolio and some geography will go through a disaster. So if you are too heavy, dependent on one, that is a huge risk for a company perspective. And since we are so diversified, be it in product lines of businesses, be it in geographies or be in terms of the way we're spread that ensure that if something goes wrong somewhere, we still have a huge book, which is good and going strong on that basis. Now as I mentioned earlier, in terms of our risk management, be it pricing and underwriting, we pride ourselves in pricing right for the risk, which would be there. In terms of reinsurance, as I mentioned to you, we have the largest reinsurance capacity in the Indian market, which actually means that we can write any risk in Indian market irrespective of its sum insured, and it is bigger than any company in the market. Insolvency you mentioned, we showed you that we have the highest solvency in Indian market, which means that if I look for the next 4 or 5 years, irrespective of how we grow, irrespective of how much claims we have, we would not be calling for capital, which is there. And 2008 onwards, we have not called for any capital requirement in building this company to what it is. And if we look at our asset quality, it is among the best in terms of our investment, which happens. We have a CIO here, he is very particular about not investing into any asset quality which would be rated lower than what it is. Now this is a slide I was mentioning, I'll give you data points to demonstrate because a lot of us talk about customer obsession. But how do you evaluate customer obsession? Like everybody, every company would be talking about customer obsession, and how do you put that number together. So if you go to the regulators site website, the IRDAI website, these numbers are taking from regulatory website, it's not a number that we have created on our own. And if you see Bajaj general insurance company, it is in spite of having one of the largest customers in the Indian market, and we mentioned we serviced 15 crore customers. Last year, we issued 3.82 crores of policies for customers. We have the lease grievance ratio, and this is not for 1 quarter or last quarter results. From the time IRDAI, our regulator, has started displaying grievance ratio on their website, you go to their website, you'll be seeing that every quarter we have had among the least customer grievance every quarter from the time the regulator displayed customer grievance ratio in terms of putting it together, which means over a decade, I think they have been just displaying it now for close to 12 years, every quarter we have that. So when the health insurance also came in, they also display for health insurance. We benchmarked ourselves on the health insurance part also. And there also if you look at we'd be having the lowest grievance ratio in terms of the health insurance perspective. And when you have this number, it gives the confidence that when you speak about customer obsession, we're obsessed with customers and we're servicing it. And I also mentioned to you in terms of the moment of truth because we are servicing people when things go wrong. We are not servicing people when they're rich, when it's luxurious. And when things go wrong and had a huge stress it's our duty to service them well. And that is why when you look at these numbers, it comes into that pace. And there's NPS, obviously, we get done from an external body in consultation with Allianz in terms of globally. And here also when you look at it, motor and health, again, the 2 major lines of businesses, we have had the highest scores over -- from the time we've been doing it every year on that basis. So put together when you look at these 2 numbers in conjunction, then we feel confident that our obsession on customer is also yielding results. Tech, as I mentioned, I think a lot of times people associate tech with starters. But if we go through -- there's not a single in tech space, either we would have innovated or is something in the market which we are not doing, it would be there. And that's why I thought we put some slides on tech also to put that point forward. So when we build our cloud, we're the first -- among the first in the world in the general insurance space to take our core to cloud and do a transformation there. And we have a hybrid cloud formation. In terms of digital distribution, I think we were among the first -- the first in India to do digital distribution in terms of putting e-commerce people together and the platform doing so. In terms of innovation, I spoke about it, be it on tech. In fact, in 2013, '14, today, we see a lot of people talking of clicking pictures and settling claims on the spot. But 2013, '14, when we did it, we were among the -- and if I may not be wrong, we were the first in the world to do so where you could click pictures on the spot of a motor vehicle accident, upload it and get your claims settled immediately, which now most companies talk about today, around 10 years fast forward, which should be there. So I think on the space in terms of innovation, in terms of using tech as a tool to transform businesses, we have been on the cutting edge of putting it together. And I mentioned about this, that we were the first large insurance to transition our core system to the cloud. If you see today now, we can take out any products in 2 weeks' time. We issued 3.8 crore policies, as I mentioned to you last time, our cost per policy is among the lowest in the industry, which should be there. Not only that, we have, as I said, anything that you can think about in insurance space, be it voice bot, AI-driven or you have a bot-driven, which is AI, which has over 1 lakh active users currently, or app, which should be there in terms of we already have 50 lakh policy issued there. And in terms of the portal, which should be there, we used to call it -- and we used the word care at all places because we strongly believe that we symbolized care and need from a customer perspective, which should be there. This is our app, which we call Caringly Yours, that's our tagline also, till now we have over 50 lakh downloads, about 60 products on top of it. And the ecosystem, which I mentioned to you, be it health or motor, if you are stuck up somewhere, even if you have a tire burst, you can actually get somebody to come and change your tire, if you have a requirement of a doctor or an OPD consultation or you want to figure out the closest hospital to you or in terms of travel ecosystem, travel is also very interesting. I don't know how many of you really think about it. When traveling international and a lot of times the requirement for you to have a travel policy and you take that and there are some countries where we don't have a requirement to take a travel policy where we do not take it. One of my friend said, why should I take a travel policy, I said, okay, let's say, if you go to XYZ country and something goes wrong with you, whom do you call? In the insurance ecosystem it says that it's your friend and times if goes something goes wrong and if you have a policy, it doesn't cost you much, just call up and you have somebody to help you out, now even if it's a passport theft or a lack of cash and you require some emergency cash or hospitalization, it puts it together. And all that is in our app. So you actually can, when you walk into an airport, scan your boarding pass and you can get a policy issued. And if there's a flight delay happening because we have put in blockchain, we can actually tell you that your flight has got delayed and a claim has got triggered, do you want the claim? It's as simple as that, even before you ask for the claim. So I think in terms of putting all that together in terms of innovation, in terms of cutting edge, we'll be doing that. And this is what let's talk about. But this, to me, was very interesting. When we're doing this app for farmers, I was personally not very sure. So I was checking with my team, okay, we're doing an app for farmer. I'm not sure how much of it will get used? And what can we do on that? Are we just building a property which will not have any significant use? But I am very happy with the team that they proved me wrong. This had more usage and download than urban app, which was there, and the team put together a huge ecosystem of not only the claims being processed through this, uploaded, but right from giving farmers information on crop sowing to the best market to sell their produce to how the weather would be, and the usage of this app to me also was very, very interesting. We already have 10 lakh downloads, 21 states, 9 languages, and it's been awarded. It's an award-winning app right from the -- any institution in terms of tech, wherever we see it always keeps on winning awards which is there. But this to me personally was a huge surprise in terms of the usage and download and in terms of what it's delivering when we created that. Again, this was among the first that we did in the Indian market. API vault also we built. And as we said, we are partnering a lot with players, which are on the e-commerce space and players which are digitally savvy, and we are able to now under a week onboard any partner, 300 partners, we have digitally integrated and onboarded using our API vault, which should be there in putting that together. So bot, now we all talk of the voice bot, AI driven. We already have 6 crore messages getting exchanged, 9 lakh (sic) [ 9.9 lakh ] message -- unique users and 1 lakh monthly average users happening out of bot in terms of be it policy issuance, servicing in terms of claims being raised. And most of it would be obviously with the watch, but directly done through these bots. So it's our obsession to see what's happening in the global space. So we don't miss something which is not in our radar, something which is happening. So we scan about 2,500 start-ups. We have done POC. We have about 200 plus 45% plus solutions implemented. So we actively collaborate because if I go back, let's say, 23 years back when you're building this company, at that time, my thought was that the competitive advantage would be, if you can do it and others are not able to do it, so it should be more inward focus in terms of your solutioning innovations. But if you ask me today, if you're not collaborating, if you're not having very smart people around you putting together solutioning and putting it together, then we'll miss a huge opportunity. I think for me also as the leader has been a huge mind shift happening. We focus a lot on collaboration today. And if you look at when you took the cloud strategy also, we ensure that we would take on a cloud where we would have enough ecosystem of startups also being encouraged there. So we can collaborate in terms of the space that we're in also and make it much faster to the market in terms of innovation should be there. So I think a huge shift in the way we look at our businesses now is hugely collaborative and putting things together. Motor on the spot, I mentioned to you, we were -- we started the first in the world. Today, every company is doing it. Earlier we didn't have AI to that level, we had machine learning to some extent. But now I think with AI put together, health also, claim by direct click, is also more or less a straight through process we have created for health claim also. But these 2 are the most servicing led product lines, which would be there. As I mentioned to you, in motor, 1 in 5 motor would have an accident, in health, 1 in 10 person who would get admitted. And now with OPD coming in, that frequency also still goes up much further. So it's a heavy focus in terms of using AI and putting it together. We also in -- and this Insurance Samjho, again, I would like to speak about it. A lot of people spoke about insurance being very complicated, difficult to understand and putting it together. So when we saw generative AI coming into fore and one of the key features of generative AI was it was sum of documents and it could take out solutioning. So I got the team together and said, why don't we put up on our portal any insurance policy of any company, any in the world, people could upload it to this generative AI which we called Insurance Samjho and people ask questions, we could simplify insurance without going through the gambit of putting it together. Initially when we did that, there was some hallucination which was there, the team worked on it. Now it's pretty good in terms of you can upload a policy -- any policy of any company, it sums up beautifully and gives you answers in a very simplified manner of what the coverages are, what exclusions are. And that again, when I see and I look around in the market till we had done it, nobody had done it before us. We also internally ask us, and then we have a GPT Workbench. My belief is innovation should be at the end, every user should be able to think differently from a business perspective put it together. So we put a work play for GPT Workbench so that every user in the company is able to take it through. Now we're trying to give it to distribution partners. So innovation cannot be centralized to some department or some particular unit, which only talks about it. It should be at the route level and that's where the GPT Workbench comes into play. So obviously, all that put together in terms of numbers was story is one thing and numbers collaborated and put that together now we have digital issuance which is 96.5%, the digital agent onboarding is 100%. If I look at digital payments is 95.4% and the digital care, as we call it, through AI-enabled bot is 76% of what we do. So you see the massive number. And when you talk about numbers, obviously, for our company, we talk of our crores of consumers and putting that together. So percentage wise add that to numbers, it's a huge number that we're talking about when you put this together. And in terms of productivity, expenses of management, as some of you will be aware, the regulator has come out with expenses of management, there's a limit now in terms of claims, and commission -- sorry, expense and commission put together, it's called the EOM, which is there. And if you see again from an EOM perspective, you have to be at 30% and below from the regulatory perspective. Bajaj Allianz is safely below 30%, while I think close to half the industry is over 30%, they have to bring down their expenses and commission. But as a company, we have enough headroom there. And from the industry also, if you look at it, we are much below the industry average in terms of our expenses of management, which again shows that the company has a huge capability in terms of taking business further. There are no restriction or drawing it back. And the combined ratio I already spoke about, we are, at any point of time 17%, 18% better than industry in terms of how do you put it together. Now if we come to the road map and goal for this year, and Sanjiv showed in his presentation, we talk about antifragile. Why we took this antifragile as the word? Because as I mentioned to you, our industry has always been under constant stress. You have an industry which works at about 117% combined, which means that for every INR 100, they lose on underwriting INR 17. And you saw the result on the return on equity at such a low result or in terms of the losses it had in spite of the investment returns, they still had INR 202 crores loss in the industry. In this industry, which is constantly under a price regime war in terms of combined ratios are high, you for 23 years, have been delivering to the result which is beating the industry. And for the next 100, 200 years, how do you make yourself that with every kiosk, you get stronger, with every change of regulation, you become stronger. And with every change in the way market behavior changes, you get stronger. I think that is something which has been in our DNA, and that is something which we want to hard code into the company in terms of going forward that we are anti-fragile. With every shock, with every change in the market, you actually get strong as a company and you're more strong and you transform the entire business landscape. That is our long-range strategy plan built around this thought process of how do you build that together is a point which is there. Obviously, the Indian growth story is huge. India's economy is growing at the pace we heard about, one of the fastest growing Indian market -- in the world market. And if you look at, it's already fifth-largest economy, going to become the third largest economy. While if you look at the insurance market, the P&C business or general insurance business, it's the 14th largest in the world, but P&C business catches up with economy because it's linked to economy. If you have infrastructure happening, you have insurance happening. If you have factories getting created, insurance happening. If you have a large middle class growing up, buying cars, you have insurance happening. You have health insurance happening. Insurance business is linked to the economy. It has a lag. So if the economy is the fifth largest, insurance is 14th largest, it is going to catch up with that. Economy becomes third largest, insurance becomes third largest. In fact, I tell my people, when I say that one day, Bajaj Allianz will be the biggest insurance company in the world, why do you get so surprised. It's simply because if the economy is the third largest, the insurance catches up to become third largest, and you're a leading player Indian market. If you don't do anything stupid itself means that you shall get propelled to become the largest company in the world. It is as simple as that, just don't stupid stuff, keep your head cool, keep on doing business well, be anti-fragile and build on that basis. I think that is where the opportunity comes when you talk about insurance and look at it how it gets built on. And if you see the low penetration or the rural resurgence and the changes happening, that's why from this business perspective, it's a business which will keep on multiplying, getting stronger in times to come as it moves forward. And if you look at on the strategy going forward, as I mentioned, every line of business, every nook and corner of the country, every distribution I can think of put together, looking at talent, building up the best technology, putting more products which changes with the way the consumer risk and putting that together, when you put all this story together, that would keep us going strong with a strong balance sheet, which we have. Strategic goals, what we have been doing for 23 years, we continue doing that. Growth higher than the industry, maintain a balanced, diversified portfolio, ROE over 25% with the excess capital off on our basis, which is there. Industry-best combined ratio and maintain the highest NPS and the lowest grievance ratio, be customer obsessed, transform, innovate and be among the best the market has seen. Caringly Yours. Thank you very much.

Thank you. I'll read out some of the questions that have come up. What is your growth outlook for the industry?

Okay. So if you look at in the next one year, the industry growth would be looking a bit less because of a regulatory change in terms of how you account for the long-term policies. And that's why you saw that this month, if you look at industry growth, it's come down low because earlier the long-term policies, you could actually book the premium upfront. And obviously, it would get stacked up, but now the regulator says it has to be booked yearly wise. So there would -- should be a seemingly drop in the growth which you look at, but that's a yearly base effect, which will get corrected. But the industry as I mentioned to you, if it is going to catch up to the economy, it will always be and if I look at the CAGR over the past 23 years, it has been about 13% to 14%. So it will be a double-digit growth industry for the next 20, 30 years is my belief, looking at how the economy and where we stand currently. But yes, this first this year that we see after the long-term accounting change by regulator, you will see a fall in terms of the growth of the industry, and that will simply be because now the business has to be booked one by end. But obviously, that is always the forward-looking -- the business will get booked in the future.

Got it. Your superior core ROE is because of profitability-led growth. As we gain market share, will this narrow down?

We're already the third largest in terms of market share. So when we talk of gain market share, we're not a small player. Third largest, including the government companies. So when you are a small player, then the problem comes in that if you're growing, this fear would come in that as you grow more, you enter new lines of businesses, are you aware about it or you are not at the top of the game as you -- but if you're already among the largest players in terms of topline in the market, you're already gaining market share over the market and you're maintaining this. And that's why if you look at the past records, and I showed you that slide when I put that 5-year average, the industry is growing at 10%, we are growing at 13%, and we also now having about 70% industry's profit as a market share over the past 10 years, we put together. So when you're already a large player, this risk is not so. You already have learned the art of gaining market share and making profits and which should be there among that place. So yes, for a smaller player, when they gain market share, the risk is there, do they understand the new line of business they enter or do they understand the new distribution they enter. But from our perspective, based on track record, I don't think that will be big risk. Having said that, we are very cautious about it. And every time we keep -- I think it's an evolution because what has given you success in the past would not give you success in the future. So every day, if you ask me, when I get up, the first thing I think is has the risk changed, has the market changed, has the customer changed? And that's why I still travel a lot, I think, close to over 200 days in a year to be in touch with the ground to see how things are changing, how things are moving and pickup from what's happening there. So it's a constant phase, but looking at our track record and where we are positioned in the market, I don't see as a big risk.

So before the next question, may I request Ramandeep, the Chief Financial Officer to be...

Yes. I'd like to call Raman and Ankur also, Raman is my current CFO, moving on to the group -- as the group CFO, Ankur is my CFO designate, taking on from Raman. I think by time the year ends, is taking on. So it would be good to have them both, yes.

What are the top reasons as to your combined ratio is most superior in the industry and can competition copy it?

I would love to. I always said, as a company, as a management, we love competition. We love chaos in the market. We love upheaval in the market because that is where strong companies become stronger. If they catch up, we have to get better. I would pray and wish that they catch up to where we are. It will push us to get better in the market. But I think it's not a very difficult strategy. Anybody can catch up. All it requires is a huge focus in terms of selection of risk. All it requires is a huge focus in terms of cost effectiveness. All it requires is a huge focus on building a good distribution network where you can segment the customer you want to segment and pick up the customer you want to pick up. Not a difficult thing, but we'd love our competitor to catch up, it will push us to get better.

This is one, actually more on the industry. How do you look at some of the specialized insurance companies, some of the newer companies that are coming up, focusing on niches of health or motor or whatever?

I think specialized insurance companies are only 3 -- in 3 segments right now. I don't think that there's anybody specialized in motor as yet. We had SAHI, which is a standard health insurance company, which has a license for SAHI, we have some good companies there. We have Agriculture Insurance Corporation, which AIC, a government company, public sector, is only focused on agriculture. And we have ECGC, which is only focused on export and credit, which is there. Now the P&C insurer, I do all 3 lines of businesses. I also do crop, I also do health and I also do the credit insurance which will be there by ECGC. But if I look at the specialized insurances in the health space, they were able to accelerate growth of retail health at a much faster pace, which was there. In the crop business, I think AIC initially had a monopolistic stand in terms of what it does, but now with so many people in the crop insurance, that has more or less evened out. In the credit also, ECGC still has some more monopolistic hold on it. But I think, again, with a lot of people into the credit business entering that's going on. Health also, I think the advantage of P&C business has is because it can do most line of businesses and in the cost structure and to the combined ratio structure, it is not dependent on that. It has to grow health faster than the market to be able to sustain a combined ratio. See, the problem with health is, in the first 2 to 3 years, your loss ratio for a health policy is lower. As it matures, it gets higher. So if you are a stand-alone health company, if you're not growing faster in the market, than there's a problem because you're not acquiring customers with low loss ratio, which over time, develops into a higher loss ratio, then there's an issue for that. But if you're a general insurance business into all lines of businesses, it's easy for you to be able to from the same customer, get value by selling different products and putting that together. So I think general insurance company definitely has an advantage into this business under the market, which a standalone health company is because focused on one line of business. And I mentioned to you in a business of insurance, you have to be diversified in products, in the reach in terms of where the customers can be in terms of distribution and network. If you're not very diversified, one incident can hit you. When COVID happened, the health got hit INR 35,000 crores the industry paid. I think again, the industry -- a lot of industries when had COVID they went to the government asking for subsidy relief. The P&C business did not. They paid INR 35,000 crores of loss in COVID only and a lot of countries did not pay COVID losses. And on top of that, they did not get the government asking for subsidy and INR 35,000 crores, let me remind you, was 6x the industry's profit for a year's time. And you know the health industry at that time got hit very, very badly. So when you're in a single line of business, there's a risk that you carry.

In the presentation, there was a lot of emphasis placed on Allianz when it comes to products that are mentioned. Going forward, and he's assuming without Allianz, how do we see ourselves in innovation?

That's a very interesting question. When I mentioned about Allianz -- so do you want to ask something? Should I answer this first? When I mentioned about Allianz, I mentioned about Allianz services, like I mentioned about EVH, our health services. Services means Allianz does not offer their services only to us. It also offers to our competitive peers. It's a service industry, it's not Allianz. Allianz has many wings to it. So obviously, service part of which does continue going -- it is a different wing. It's not about -- it is based out of Gurgaon, like our health EVH is based in Pune, it's servicing. So while Devang also would give to more partners, which would be my peer or competitive, it's service units. Service units don't get affected. If they get affected, there are 3, 4 more such players, which are offering those same services in the market, which would be there. So it's not something that as a company we get stuck because of that. If you look at our reinsurance also, it is very diversified, right from Berkshire to Allianz to Munich Re to Swiss Re, there's no concentration of any risk which we foresee moves out. And reinsurance also, let's say Allianz would give to any good player in the Indian market. It's not only that it will be with only with Bajaj Allianz, which would be there. So when I speak about Allianz, I speak from a perspective of reinsurance services. A bit in terms of product innovation, putting that together, I think the management -- the Indian management does it. It does not depend on any company outside India. We use services of different companies. Allianz comes to your mind because of Bajaj Allianz, but we also use services of many other partner. I mentioned about start-up ecosystem, and we used to have 45 players supporting us, there's many players. Hopefully, that has no impact at all in terms of our business because simply it's a service provider, it will be more of a loss for the service provider to move out of us than our loss to get a new service provider to place. I think this is a reverse problem statement there not on our side.

Perfect. Those were the questions. Thank you very. Okay, sorry. Yes.

While on the core profitability single JV, we talk about ROEs above 25%, why don't we flush out excess capital so that our true profitability is revealed better? Because our core ROE itself is diminished over a period of time, both the reported ROE as well as core ROEs. Over the last 8 years, if we see has progressively declined. Our combined ratio, obviously, superior to the rest of the industry, but it is no longer superior to our own standards. Our own standards 7, 8 years back and what it is today is material decline. I mean if you add up 8 years -- last 8 years of our underwriting profit, they are practically 0. In last 5 years, it is small negative but a negative. And therefore, in some sense, I think the industry perversity is becoming our own issue as well because our own profitability is in check. Our capital efficiency itself is diminished.

So when you look at this question, as I mentioned, our ROE at 200% solvency is close to 28%, 29%, so even today. So if you have a company which is giving a 28%, 29% ROE, with a 200% solvency requirement, bringdown solvency at about 150 requirement, it'll touch 30% ROE which should be there. Now when you look at excess capital, which is there, there are 2 reasons for it. First is we give dividend. And for the last time we gave dividend, which is about what, correct me if wrong, 200% the capital -- total capital put in the company. More than that. We gave more than 200% dividend of capital put in by shareholders in the company, last year itself we gave that dividend. We're already giving very good dividends to shareholders. But when you have a general insurance business, it's a business of risk. Risk means that when you write large -- like I told you I wrote a client with INR 70,000 crores sum insured. The way loss happens, it can go INR 20,000 crores, INR 30,000 crores of sum insured. Those clients look at your balance sheet. Solvency is a criteria in which big corporates look at how strong is your balance sheet. If big losses happen, can they afford to pay the claim very gracefully. Our business is a business of risk. When you write large risks, then again, you have to have high solvency to will do so. So for our business, a high solvency is an asset, which will be there. Having said that, in terms of our ROE, when you -- if we took a 150% solvency which is IRDAI requirement, our current ROE would be how much, Raman?

More than 30%.

More than 30%. So how can we say that it is diminishing. A company which gives you a 30% ROE return even today at 150% solvency is in any business would be phenomenal. But having said that, high solvency helps us get good tenders. It shows a very strong balance sheet. And having said that, we give a dividend to our shareholders which is about 250% plus to the capital put in by shareholders.

But Tapan, we can't mix up the two. If you think that excess capital is required to signify our strength and our solidity and it helps us in winning the business, then really it is an essential component of capital. Then we can't really call it as an excess capital. It's part of the business. And therefore, what is the return earned on the total capital is the real return? If you say that it is really excess, then we should flush it out. And then I think the true core strength of the business would reveal itself. Plus the point I'm making is, while our numbers continue to be superior to the industry, our numbers are inferior to what our own numbers were at a point of time, and has shown a decline consistent.

Yes. No, I think it is -- if you look at -- we always have been 18% to 20% better than industry, which we still are. The industry...

16%.

16%, it will be close to that. I think by the year-end, we'll see that. So the point is that as the industry moves up and down, that will be there. And as I mentioned to you, being among the large players, we have to invest in terms of new businesses, putting that together. And that will be a constant effort which will keep on happening on that basis, which should be there. So I think the numbers if you look at and graph it, chartered over, let's say, a 23-year period, you'll see that it will hover between this point, which I mentioned 16% to 18%, 20%, sometimes better, sometimes lower, depending on how the market behaves and how it moves up. But not that it commonly goes off from the perspective which should be there. On the excess capital, it's a question why you put that together is because most of our peers would be having, let's say, close to 160% in terms of the balance, some would be close to 200%. So in fact, the public sector is actually below 150% itself, there are 3 of them which are below 150% completely there. When you look at the ROA, it gives you an unfair comparison. So when we put that base limit, then the ROE comparison actually gets in a better place. That's why we put that together in terms of how do you do that. Thank you. Your questions are always very interesting. It's always a pleasure to know. Nice to meet you.

Just one last thing.

Yes, please.

On the core underwriting profits, our strengths always has been that business must make money on its own and the profit which we make out of investment income is really incidental and, of course, a very important component of the profitability, but it is incidental. And the core business itself has to make profits, which has consistently been our stance. It's reflected in our underwriting, it's reflected in our capital efficiency. But over last few years, one is consistently seeing that the profitability of the underwriting per se is becoming kind of close to 0, and therefore, really speaking, it is the investment income, which is the source of the profitability. So industry perversity or competition, in a way, is catching up with our own attitude as well?

So I think now I get from where your question is coming. Last couple of years we've had cat losses. I think we have to remove the cat losses to see that. What cat losses actually means is our flood losses. And if you look at in the last couple of years, you had more frequency of flood losses compared to the earlier times. And that is where I think, what -- I think your question is coming from there, that obviously pushes it up. If I remove the cat losses, Raman, our combined ratio would be, I think...

This year -- I think in most of the years, it will be sub 100.

Sub 100, yes. So finally, the cat losses are the ones which is appearing, which is there, which actually means that now you have more floods happening in the market, which should be there in terms of putting it together. And that's why you see this aberration, and that's why I think your question comes from that perspective.

I think -- I'll just add to it. I think the ambiquity really comes from the way we do the accounting in the Indian context. See, over the years, where the growth is becoming more aggressive, the commission payout is on the higher side, you are not allowed to amortize the acquisition cost. So that's why in the Indian context, you see that a large chunk of the money is made on the investment income, not on the underwriting profit. Secondly, if you look at, again, the international context, the long-term liabilities, the way they operate for a P&C company in India vis-a-vis the rest of the world, it's very, very different because here, our motor TP liabilities run over 5 to 7 years whereas you don't see that in the international context. So that essentially is nothing but your operating profit. But the way we account for it, it gets booked as investment income. So looking at just the underwriting profit is not the right measure. And all of this will get corrected once IFRS comes into play, which is 2 years away. Now if you see the context of our own numbers, today, we report like you rightly said 100% combined ratio or a little lower than that. Now if I were to do the same measure on IFRS basis, my combined ratio will be far lesser than what we report today. So that's how you should look at it because it's all about the ambiguity which comes from the accounting. And the other thing is, obviously, you look at the standalone ROE.

Thank you. Thank you, gentlemen. We've completely run out of time. Thank you very much.

Thank you. Thank you for your patient listening.

Thank you very much.

We'll just start the next session in a moment because we already run out of time. For our third session, we have Mr. Tarun Chugh, Managing Director of Bajaj Allianz Life Insurance. As in previous sessions, this will be a presentation followed by Q&A. Please scan the QR code for any questions that you may have. Tarun has an extensive 3-decade long experience in the industry and has been a transformational leader behind sustained growth at Bajaj Allianz Life Insurance, one of the fastest-growing private life insurance companies in India. The company has a 26,000 strong team, 560 branches and India's only agency channel that is 100% digital with a network of almost 1.6 lakh agents. Welcome, Tarun.

Okay. So what I'm going to talk about really is the story of Bajaj Allianz, the last 7 to 8 years, how we have spent on developing a foundation on which we will now be talking about the growth trajectory further as well and what's our plans. So just a little introduction on the sector first. And largely, these graphs show you where the sector is. Largely, we've been on the ballpark of 3%. I think when the sector opened up, we were at about 2%, 2.4% as in penetration. Now after all this effort, 23 companies getting added, we're still at the ballpark of about 3% penetration. So it did take the sector to open up to maintain our position on the treadmill. It required 23 companies to be added on. And the hope, of course, is the graph on the right side, which talks about the density, the insurance density still remains the lowest among the comparable economies. But the hope is the bars that you see of other countries, which really talk about how GDP per capita does influence and tends to grow this. And we are seeing a higher ticket size, higher growth in sum assured and interest towards higher density. So this will keep growing. And as India -- you saw Sanjiv's graph on the bar chart on the way the segmentation of the Indian population is and as wealth is getting delivered and built, you will see this growing further. I think the interesting part is the one on the left, the lower left, you've seen the way the sector is transformed, being this is all on weighted premium, which is all of us, which is what all of us see. From 34% in 2006, now the private sector has doubled its market share at the same time, maintaining overall growth of the sector. LIC has become 3x its size, but the private sector has grown more than 10x. Within the private sector, there's a very important, I won't say [ minute share ] but a significant point that you'll see. The top 10 companies contribute to about 90% of the private sector. The top 10 private sector companies contribute to 90% of the entire sector itself. So that is kind of consolidating. The top 6 are closer to the 80% mark. So you can see that customers are coming to larger distributions and larger brands as time is progressing. We move to the next slide. A lot of this growth, of course, has to be enabled by the regulatory environment. And that's been quite forthcoming in the last few years. Of course, there's been some disruption at the same time. But largely, the ease of doing business where the EOM got sorted out, the Bima Trinity, and now the move towards global standards, and this will pair ourselves up with the rest of the industry outside of India, when the RBC and the Ind AS starts getting implemented and that process is on already. The last point on the bottom, though, is something that has been the talk of the last 3 to 6 months. The introduction, particularly of surrender values, special surrender values in life insurance. This is going to impact in the short term, but we expect this to have a far better impact on stabilizing the industry and the commissions we pay, improving the customer proposition as the commissions are now pared down at more level than just being front-loaded. I think the sector has been quite responsible in the last 2 months in discussing this with our advisers, with our distributor partners like banks and that's only just showing up more positive signs. As the commission gets more level, we are able to pass on a lot more benefits to the customer. We get better in terms of persistency and quality, and that is going to be showing up in the future. In the short term, though, you should expect a little bit of recalibration in terms of product mixes of people getting adjusted to new products and distributors a little feeling in disarray that commissions have come down and why have they so because it is not that everybody makes a lot of money. So this is a little bit that you see on the left. On the right, what you see is another bit of disruption that's happening on the credit uptake, particularly in the lower segments of the market, the microfinance side, particularly. And that is impacting the credit life product, which has been a mainstay for VNB for the sector. And that is impacting the credit life product, which has been a mainstay for VNB for the sector. So I think this is something I needed to call out to you. You will see a little bit of uneven behavior this quarter and next quarter, but I think overall, this is a very positive recalibration of the sector. In terms of our own transformation journey, there is a lot many slides I have, but I think this is the first one that we are proud of talking about. The last 7 years largely have been spent on building the heft of the business, getting it to a size where it becomes more meaningful. And if you see the growth rates, industry on the right -- top right side, you can see grown by 11%, LIC 5%, private sector by 14%. And we've been, by far, the fastest-growing company over the last 7 years. Our market share, you'll see the blue and the orange. The blue talks about the growth in the market share in the private sector. We are now nudging closer to 10% of the private sector. And in the overall sector from under 2%, now we should be hitting 6% very soon. So I think we're getting closer to being a meaningful player after this transformation has come through. You can just get all the cursor down, yes. So market share, I talked about. The things that go around it, of course, are significant. So the distribution mix, 7 years back, we were largely a proprietary channel, agency and a little bit of private -- our own proprietary sales force. That has become a lot more, I would say, diversified. And the theme you'll see entirely through this presentation is the way we've diversified our concentration, diversified our risk, diversified our muscle and capability, whether it's location, whether it's reinsurance, whether it's the products we offer, whether it's the kind of distribution partnerships we have. And I think on this bit, we differentiate ourselves from our peer set, where we are possibly the only company in the top 5 which doesn't have one partner contributing to any significant number. There is one, but now it's around the ballpark of 20%, while the same for my peer set would be in the 40% to the 50%. ULIP mix has significantly changed, and I'll -- there is a lot more flavor to this, which I will add in the subsequent slides. Persistency has -- is now again in the ballpark of 84% for 13 months and 61st month is going up. It's a bucket which tends to come over over a period of time and it's getting better. Our VNB 7 years back was not there. We were negative. And now we've been moving positively. Our NBM is although one point to look at, but our focus really is on VNB. Going forward, it is going to be a big change in terms of focus more on the bottom line, while the top line will, of course, grow faster than the industry. Just a few buildups for the top line. You can just play all the -- yes. So if you just look at all the graphs, the weighted retail premium, 30% CAGR. Renewal premium is something that talks about the health of the book, INR 11,500 crores at a steady 20%. And this is -- this tends to get better as time goes because all the basics get settled in. And GWP, which is a submission of both these numbers, is at a healthy INR 23,000 crores. So the heft is now coming back. The one that people don't talk about really, and I think is possibly the most important parameter is the new customers added and number of policies usually is a good surrogate to take out of that. So in terms of number of policies, new policies added, this last 6 months, we've been the third largest private sector company. And that, to me, is a big indicator of health because the way we have data on the customer, I must say life insurance is particularly one sector in which the customer while filling a form gives about 120 to 130 data sets, data points. And not only do you -- can you get into customer needs, but you can get into household needs. That capability can surely help in upselling. Our upsell engine already contributes to about 33% of our business. We expect that to grow as the NOPs start going up. Interestingly, you'll see two things. You'll see the bar chart and you see the line chart. The line chart, 7.5 lakh customers this year. We expect this to almost hit double figures by the end of '25, fresh new customers added. Fresh new policies added. Interestingly, the bar chart, 2017, we were actually net negative in terms of customers. Now this is turn turtle, and you see the positive of 2.7 lakh net customers added positively. And you'll see -- this is the most health-based parameter to talk about, which usually doesn't get talked in the sector. So this you'll see us talk about more as we are accruing more positive in this parameter particularly, yes. This is on the bottom line numbers. Finally, touched INR 1,000 crores last year. In terms of VNB, you'll see this accelerate far better than the top line because that's where the focus is. NBM margins important from negative to 15%, still not in the ballpark of the peer set, but we are nudging ourselves forward quite systematically. And you'll see Sanjiv talked about the LRS, and that's where the focus really is for the next 4 to 5 years. AUM ended the year last year at about INR 110,000 crores, currently stand at about INR 1,25,000 crores. So about top 5 in the private sector already. Yes. Just a broad summary of these numbers. The top ones you've seen, the bottom ones talk about the -- our comparison to the private listed companies. While the private listed space has grown by 21% CAGR in the last 5 years, we've grown by 47%. So that is something that talks about the way we focus on growth. And the VNB share, this is something we intend to play a bigger part of, still can get better and will be getting better, as you see, a 2.8% to now 7.4% of the private listed space. So this is just talking about the girth of the company. So all this time has been spent on trying to develop, I'd say, reach, our physical girth, our social capital, are we really doing the right things. The grievance ratio is one of the least. Our claim ratios remains one of the best, top 3. The number of lives covered has only just been getting healthier and steady. Financial capital, more and more focus coming in here, and you'll see embedded value solvency. Of course, we are the best in the sector. VNB is something we will be talking about more and more. In terms of what usually differentiates the Bajaj Group from anybody else really is our digital heft. And this is something that is the customer-centric contextual innovation is something we focus on more and more. And as Tapan talked about earlier that life insurance and insurance is not an easy thing to remember and understand. And that is where a lot of our focus is on trying to use digital assets there. This is the LRS that we've particularly taken on for the next 4 to 5 years. With the regulatory change that has happened in the last 2 months, reboot the entire business model, recalibrate our operating profits, operating model. And hence, we've taken a few months of October, November really to be able to spell it out, list it out and be able to grow, and you'll see how this pairs out in the future. Largely, it has been a focus of the private life insurance sector to sell saving products, and we've been party to that. From a 4% mix on risk, we expect on the retail side to move this to double figures, 10% in about 4 to 5 years, while 10% might look like a small percentage, what you have to understand is that the premium per ticket on risk is about 1/3 of the premium on the average for saving products. And hence, 30% of our customers are going to be risk customers, which is a big shift from the past. Now over the past 7 years, we've basically looked at these 4 building blocks of foundation and this is what we continue to build on. I'll just first take a little bit of how we've developed our distribution capability. So 2017, we were largely, like I said, 90% was 2 channels, largely agency. This has, if you fast forward to 2024, developed into the second largest nonbanking bancassurance institutional business company now. In agency, we're the third largest private agency, of course, not LIC, but SBI, ICICI and us. And BALIC Direct is a proprietary channel, which upsells to customers. Given our capability on data and tech, we're now the second largest after ICICI. So you're seeing us popping up in each of these building blocks. Just a little bit more flavor on the institutional business first. Larger banks, I mean, we didn't have -- we didn't have any before 2019, but now we've got this heft developing. A lot of investment has gone in these banks because how we differentiate ourselves from other peers is that not just adding value to ourselves, but really adding value to our partners, where we've earlier in our domain here have been tested whether we could really increase the pie for the banks, and that's what we've been doing. Starting with difficult models that we got like white spaces, selling retail on asset products, getting on and seeing a phone banking can work, looking at outbranch and not just in branch. A lot of these -- this heft is now developed and we are getting recognized for the way we are adding value to our partners. And hence, it's been a steady stream. We have a lot of regional banks. Like if I just talk case in point on Tamil Nadu, all the household brands today have us as a partner, whether you take TMB, LVB through DBS, KVB, which one have I left out, CUB, Equitas, all of that. So what we're doing is we're looking at our presence all over the country and going state by state and developing our distribution. In SFBs, we remain a significant player and lately added AU Finance as well. If I look at the way this business is going to now throw up efficiencies because the entire discussion now is -- for us is on bottom line growth. A lot of the investment has gone in, in the past and bancassurance hasn't necessarily been the most positive NBV number, but now we can see that coming in because investment has gone in. The verticals that we set up are already stabilizing and now the output and productivity with the right product mix is growing up. So if you just look at this, FY '21, if you look at the darker part, the mature partnerships were just were half of the -- this is partnerships who were at least there for 24 months, was half of the top line. This now is significantly -- a significant number, which means that the mature partnerships are now throwing up numbers, while the ones we have to invest new in is the light blue bar, and that is what is now going to help in top line growth, but really, it's the mature investments that have gone in, and this should help us in the bottom line growth, particularly, yes. Okay. Similarly, in agency, we've taken a different path towards agency given the kind of capability I have in senior management on distribution. Most people rely on the typical agency or have one model for agency. In Bajaj Group, usually, our focus has been on build and break and grow. So we've been able to break up our agency based on market opportunity and customer segments, customer need segments largely. So we've not just have the core agency but also product-based agencies, whether it's retirement, whether it's the hiring is very different in that or it's HNI agency for ULIP and term. And we've set up possibly the first one to set up an internship-based model for agents where we are able to take care of the initial round of salaries as they are learning the business more and more. And this model particularly is being used in the Tier 2 and Tier 3, where it's very difficult to find talent for agency. Going forward, our new verticals, which currently contribute about 20%, so already are INR 614 crores last year, expected to be 35% for overall agency. And this is going to grow faster than our core business, of course. We are adding about -- we have close to about 550-odd branches at this point in time. This is going to be growing by about 40 branches I'm committing to as of now. Being a forward-looking statement, that's a number I'm standing out on. But currently, this year, it's about 60 branches that we are already adding. And digital agency has been our core, and this is an investment we've made before time as you've seen the new regulation come in, where agents could be allowed to do a lot many things than just sell for us life insurance and getting them used to digital assets, getting them used to making the right kind of pitches, getting them used to customer segmentation, getting them used to know the customer on a 360 basis. This is what is something we enable to assist them get more and more efficient. This will help us in the next wally of regulatory change. BALIC Direct is something which is flourished really based on our data analytics capability. And it's really an upsell channel, which upsells to our existing life retail and group customers. And it's a significant base. And while we did struggle in the starting, but I think it's been quite a good break and grow, and this is something that is going to grow further and possibly going to be the fastest-growing engine, should hit about INR 1,000 crores this year, and we expect this to grow more and more, either by setting up new verticals and of course, just a straight-line growth by copying the model that we've got in the larger cities to grow in the smaller and the Tier 2 and Tier 3 cities as well. Quickly on the credit life business, we were largely a microfinance focused business, and this is changing and the asset mix that we have now added is a lot wider. Something we learned through our years that it's better to have a wider network than a smaller. And as you see, there are a lot of specialist producers as well, yes. And this is kind of explaining that. If you look at the yellow that I'm indicating there, so we learned it in the '23, '24 space already, already '24, this is the concentration risk that we had. So we had three large players that we were banking on. We are waiting for the AUM to get sorted out. And now that it's been sorted out, this is going to become a lot more -- a lot bigger growth engine, but not depending on 3 or 4, but broadening our credit life portfolio. And that's what is coming in. Largely, this is based on our risk modeling capability. So anything that we write here, we do not write anything if it is profitable. And that is the core of this engine. The pricing strategy becomes critical. We have a significant capability set here because we've been in this business -- invested in this business a long time. We burned our fingers in the past, but learned from that. And here on, the one thing that we've learned from BAGIC is the way we built our reinsurance network. So we are going forward and getting new reinsurers to India, where we are getting specific credit lines made for them and then getting to mirror that capability, pass it on to the customer. We, until about 3, 4 years back, used to deal with about 3 to 4 insurers. Now this is in the teens already. And this capability is, I can see, something that we'll take forward further. On the product side, this has been, again, not a very talked off thing, but maybe first time I'm talking here. There has been a lot of innovation that BALIC has been bringing quietly to the sector. We don't feel -- we don't always want to talk about brahmastra all the time. But yes, these have been some of our big ones. Flexibility on income and wealth on a par platform, never happened anywhere in the world, but started in India by us. Now we're seeing other people follow it. So it's a slider. It's a slider product where you can actually pick and choose how much income and wealth you would want, and you can actually tailor-make a product on a par platform, which is not easy. And it's because of the technology capability at the back end. GPG, which is guaranteed pension goal, was the first deferred pension, guaranteed deferred pension introduced in India. And a lot -- many people have now followed us and it usually helps if you start early and everybody else is following. POS Goal Suraksha is a simple point-of-sale product, which as distribution, lesser known distribution, people who don't have much capability can sell a simple product, which gets issued pretty fast. And this in the POS space is a market leader and has been the market leader for the last 3 years. Goal Assure, we were the first ones to start returning mortality charges to the customer whoever remained long enough, hence, getting us closer to explaining the product to customers who didn't understand mortality charges. And that has been something that everybody else has followed. Diabetes terms, Sanjiv also mentioned it, something that we've been learning on. This is one of the innovations which has succeeded in part and is now getting spread more from an HbA1c Sub-8, we intend to move this as we go. And as you see that diabetics are very pensive when they get on to even talking about term insurance. And this is something we are going to work on more and more. Good thing is that this has been one innovation from where we've learned our entire back end and how to get medical. We're possibly the only company in the insurance sector across GI, HI and Life, where we actually have the TPA APIs connected to us, where we are able to take -- make sense of their written documents as data. And that data is going to help us good when we go forward and we can analyze this data a lot better in health, that is going to make a big difference. If I look at the product mix transitioning, of course, same story from a 70% ULIP. Now it's a ballpark where we intend to be in the future. And this balanced product mix is something you will see as we go ahead as well. On the protection side, as you saw the LRS call out that I did, so it's a significant change. Already part of it is visible. Not very big numbers, but yes, I mean, it's been doubling almost for some time. Just to talk about the fact that FY '17, we didn't have any term plan. So all of that is PASA. And going forward, you will see 10% of our retail mix coming from term. In terms of APE, in terms of customer base, it's going to be as high as near 1/3, which is a significant shift in the sector. If I add annuities to it, now this is going to be beyond annuities and term are the two risk products that life insurance companies do sell. The rest are savings. And the risk of living less and the risk of living longer. And these are the 2 risks, particularly will contribute upwards of 1/3 of our customers going forward. Yes, it's a good segue to risk itself. I think one thing that we're particularly now getting the heft to focus on is on our EV. And going forward, this is something we can now start focusing on more and more. Our ROEV, if I look at -- if you look at the cursor towards the solvency of 150% is at a ballpark of 18%. The sector is around 20%. We expect this to move to 20% very quickly because we have that excess capital and that question for BAGIC and BALIC remains the same, the ROEV shall look a little lower, but that excess capital is something in the Bajaj Group, we felt comfortable to keep. Of course, Sanjiv is, of course, taking some dividends now as well, been taking for some time. But that is -- we are happy to give and at the same time, get our solvency, keep it in check and get our ROEV in the ballpark of the rest of the sector. We are into the risk business and we bucket our risks and monitor the risks that we look at. And a lot of these risks are very difficult to monitor. I mean, how do you monitor death? How do you monitor living longer? So a lot of stochastic modeling happens in this. A lot of work happens on lead indicators and very important for predictability. Hence, each of these are looked at the back end by our team of actuaries and the finance side, which is -- and with data analytics, we are getting stronger and stronger in being able to predict this. Cyber risk is a risk that is getting more and more called out. And of course, that is something which we can only do through our systems side getting stronger and which is what we've been focusing on. This is an output of the risk. What this talks about, as you know, is that life insurance is all about an assumptive P&L. NBNs, VNBs are based on assumptions. So the intent is that the variance to the assumptions need to be ideally in the positive, which was largely always been. But if I look at FY '17 to '19, maybe we were too conservative and hence, the positive variance that has been there. We have to be in the ballpark, and that is what is of under 2%. And this is a critical bit that BALIC is particularly keen on. The fact that we do not bring any uncertainties to our shareholders is our commitment for good. And there's a lot of work that happens, which is very difficult to verbalize in a group like this. But there is involvement from the group, from BFS Group and also from our back-end team. While the rest of the foundations I've talked about, just move back, this is something possibly which is at the core. And maybe in an investor deck, possibly gets talked about the least. But this is possibly the most important bit which decides on how the company is going to -- any company is going to fare. Whether it's a customer centricity at the core, whether it's there or not, analytics is, like I say, a calling card of the Bajaj Finserv Group, and that's visible in BALIC as well. And of course, as Sanjiv alluded in his deck about the focus on people, I think that investment in people and technology remains our calling card as well. While customer centricity, there are various ways to look at it. The output this is benchmarked with the rest of the sector through the regulator is, of course, persistency cohorts. We are now there in the ballpark of everybody else in the -- among the best-rated companies. Our 61st month is getting a lot better and better and will keep improving. Notwithstanding this, what you have to understand is a customer and this is something that I think one doesn't get an opportunity to talk about on investor calls really. It's not that the customer is losing if he or she is not persisting. If you look at our ULIP plans, well, most customers possibly won't even want to be there until 5 years because the regulation allows it like that. And the way the return on that the person is getting, typically even 2 years, 3 years is very profitable. So while this is an indication, anybody maintaining a ULIP 62nd month, 61st month beyond, 70% will be near impossible because customers have already made their money. And they would tend to reuse it. In a way, helps the liquidity part for them in the future. The grievances side, we are -- we remain in the best cohort persistently. And this is something that we focus with a hawk's eye, and we are proud of just getting this number down for us. When I talk about tech and process, we have today 100% of our policies are written on a micro services-driven digital platform called Digi. We have a Digi platform, which is for bancassurance different for proprietary and agency channel because it's built on micro services. And this allows us to make a customer journey possible, a new customer journey possible within a day. We're also the only company in the sector who stuck its neck out and saying that we are going to be implementing a micro services-based policy admin system. Most tech platforms in the sector, which are the core platforms are based on technologies, which are really relevant, COBOL where you don't get skills. And it's a [indiscernible], which is built around all these COBOL platforms. Now we are working with Infosys to develop the PaaS already, the rollouts of products on micro services, we have about 213 micro services offered on this is getting rolled out as we speak. In the next about 18 months, we should have all our channels selling retail plans on this platform. Analytics is something that I've kind of alluded to all through. Today, 40% of our non-term policies for preapproved customers gets issued under 1 minute. I don't think a life insurance policy gets issued under 1 minute for anybody outside of this company. And this is something we took from BFL's learnings. My thing was if Rajeev is willing to give a loan in 3 seconds, he's going to give his own money in 3 seconds. I can surely take money from you in under a minute. So that has worked well for us. With any bank partner, when we work, we first do a data room exercise to understand mirror images of customers that are with them and we are able to use this to build our data rooms for them and hence, being able to provide preapproved sum assured for their customers as well. This has been a calling card and it's been -- a lot of our banks have used this to expand their business. Beyond this, a lot of focus on our data scientists. We have about 70 data scientists with us, are focused on underwriting and easing the process on underwriting and presales for all our customers and distribution partners. This is something that you will hear us talking more and more in the future. On innovation, on Gen AI, we've got a lot of effort made on two spaces. First on Gen AI and then on AI, I'll come on NLP, I'll speak about. And you can maybe visit our booth outside on smart pitch. As you know, it's very difficult not only for a customer to interpret what is said in the life insurance pitch, but even for the distributor, it isn't so easy as to what to be pitching and which is why a little bit of that slip between the tongue and the lip happens here. And this is where Gen AI smart pitch comes in handy. So before our distributor can go to a customer, all he or she has to do and maybe you should try this out for yourself on our booth outside, where you can -- we can actually tailor-make -- we can -- a pitch for the customer and the kind of product he or she should be pitched. So our distributor knows that if I have to come to, let's say, Pankaj, I just met, Pankaj Sood, then the way I have to sell to Pankaj is this is a profile, this is the things that he's likely to buy. This is the past details I know about this customer. This is what I know from gleaning out from the government infrastructure. And this is possibly what I can pitch to the individual. And this is -- this pitch has been practiced by 2,000 of our best distributors who have been -- who actually transcripted their pitches. This could be as simple as opening a call to closing a call basics of sales. This is as useful for query handling, for even, like I said, getting into details around product comparisons, which we'll be bringing in, in the next 3 to 6 months. The one below is something that particularly I'm proud about. Sanjiv talked about NLP a lot. And this has been our calling card. We have possibly the only AI brain in the sector, I can maybe even call out in the world, which is 97% correct on all utterances that it hears in a sector which is very difficult. And this is driven on WhatsApp. And what I'm proud about is maybe I'll show you in the next slide, is that this engine actually won the world -- the global award on the digital insurer platform and it was the Insurer Innovation Award for last year. It's the first time that India won this. And by the way, we happen to beat -- there was a talk about Allianz and we have been Allianz Germany. They were the winners in Europe, and we are the winners in APAC. Maybe APAC is more challenging than Europe is, and we did win this globally. And this was on this WhatsApp engine. So today, whether it's our employee who wants any answers -- on its own on provident fund statements or on incentives, on anything that he or she would want answered on its gold sheets on leave, et cetera, et cetera, can be done through the WhatsApp engine. Similarly, this is for the adviser. Adviser can see where he or she stands. It is there for the customer, where there are 56 services for the customer where he or she can see the fund value, can see the NAV, can see the movement, can send in a request for any change that he wants or she wants. And at the same time, we also pitch in a new product. This has been the past, but we've been building on this quite well. The other thing that I'm proud about is that this organization has been now building this block of talent. And we've been third year in the row, one of the best employers so that now we are categorized in a separate league altogether, Best Employer of India, the top 15 companies usually. So this club has been consistent for us. And what -- so I was talking to the people who've been giving us this award as to why we are getting this award because sometimes these awards are awards, you can get them for any reason. And this is when we learned about 3 years back when we first won it when the individual did say that, look, when we interviewed your customers, your distributors, your employees and particularly employees, we figured out that you were -- they were saying that you listened to them. Sometimes strategy is built the other way around, where we were listening to them, and that became part of our strategy. So we term ourselves as a listening to act company. So there is -- any employee can reach out to me for any issues he or she has. The customer can reach out to me for any issue he or she has. And we get a lot of our innovation bites through listening to our employees. The last -- the next 5 years, our commitment to sustainable profitability remains. Yes, you can bring the version 2, please. Yes. So as is where is we are 8.6% among private players. While I can't predict what the -- each of the players is going to do, but we are going to be growing BALIC at at least 2x of the rest of the sector, rest of the insurance sector. Our retail protection business, as I've already talked about, will be 10% of our RWRP, which is an aspiration that we are striking to be, which means about 1/3 approximately of our customers are going to be through protection. Product mix from the current mix, we are going to be in this ballpark. So ULIP between 32% to 38% is where we expect. So I'm saying approximately 35%. And we will always be a well spread out business, not banking on one product category. Today, markets are doing well. Everybody is enjoying the ULIP bandwagon, but this can change very quickly. So we intend to remain on a balanced mix. EV, I talked about being in the range of 18% to 20%, nudging closer to 20%. And the different thing from here on forward is going to be our focus more on growing the bottom line than just growing the top line. So we expect our VNB to grow far faster than our RWRP, and that is what is our commitment. And hence, this is what I'm saying, sustainable and profitable growth is what BALIC stands for the next 4 years. Thank you. You need a mic for Bharat. Sorry, just take the mic Bharat, everybody can hear you.

ROEV target about...

So we're saying in the range of 18% to 20%, this is adjusted for capital. So more nearer 20%.

From 15% to 18%.

Yes, yes. Not from 15% from the current 18% to 20%. So I know you had this question you asked Tapan as well. We do have extra capital. While we'll be consuming bulk of the extra reserves based on term products, as you know, term reserving is a lot higher. So while we today have about 130% of capital versus requirement. At 150%, it will be closer to 20% of ROEV. I am just explaining that to you.

I'm just reading out the questions from the QR window. There has been phenomenal growth for the last 5 years of what are the growth levers for the future.

I kind of mentioned already in my slide, Yes. I think Vipin, if you can just comment maybe here. Everybody is pointing to you so might get you here. Our growth levers are largely going to be on the bottom line, more -- and top line, of course, I have committed it will be double that of the sector, and we've been able to maintain that easily. A lot of that will come into being from the investments you've already made in the past on the bancassurance side, for sure, adding a few more, but largely the stock of banks that we have already are yet to showcase their growth really, and that's what we're helping them build. Agency, I talked about break and growth. So you'll see our new verticals of agency delivering higher growth than our core agency and proprietary sales as a distribution sales remain the fastest-growing channel. So I think that is where you see a lot of growth. But focus on BALIC for more bottom line growth.

Pricing intensity of savings products versus bank products. How do you plan to deal with this given CASA pressure that banks have?

See, this is not new. The CASA pressure on the banking sector is not new. We've seen it occur time and again. And usually, at the quarter end, it is at the peak when our numbers are also aiming to hit high. I think the way to look at it is that Insurance part of the entire household saving used to be about 9% until 2020 and then have bumped up to 11% and has been constant despite all these pressures. We expect this to remain in that ballpark because people are getting used to buying risk products. Products are getting a little easier to buy and that directionally shall remain. Specifically to BALIC we don't follow any one product strategy. The ballpark have a product mix that we follow. If CASA pressures continue, then you will find more pressure coming on non-power products, but then we have a significant presence of PAR and ULIPs and risk. So largely, it is a diversified product mix that is going to be BALIC's response to any CASA increase.

IRD is restricting Banca share to 50%. I guess there was a news article on this. What are your views?

Make it happen more and more. Sanjiv just told you that he's not setting up a bank. So I'm more happier with this. So see, I'm not a big proponent of saying putting a number of 50 or 40 or 60 or whatever. But I'm more for giving more choice to customers because sometimes when you have your own company and we've seen it in the group. I mean, BFL never really worked with only one. They worked with various companies. And everybody has to fight for their share, and that's what has worked for the group. And I would recommend that more and more banks will take this up, and I'm seeing that happening. So a lot of banks have now got 5 to 7 insurers. And that will only just help customers because there's now software available where like for any of these branch banking or branch out walking customers, you can actually -- or customer acquisitions by out-of-branch sales forces can happen through simple automated platforms where when you see a customer, you can actually give them the top 3 plans that is available to you through your impaneled life insurance companies. So that ease of business is now available. So I guess when the regulator is nudging this towards 50%, I think that's what they're implying. But hardcoded 50% is not a good thing. I think it should be more diversified is the way I'll answer that.

Sorry. So as I understand, I think what the article was saying is that the regulator is saying that from an insurance company's point of view, banks should not be more than 50%.

That we're not anyways. We are not there. And by the way, I don't think that is correct.

That's what the new article probably said.

Some person talk to some person and the rest of the market interpreted that the way I want it to. And I don't with any of the articles that have been coming, I think there is more to it than this.

I think that's what the...

Yes. So we are -- we've always had a diversified business. Our agency used to be the biggest. It shall remain critical. So banks will never be more than 50%. And like a statement that I made that we'll never be dependent on one bank. So our largest bank is only 20% of our business as last quarter. And that is the commitment we've made to the Board that, in fact, that will get pared down more and more so that we are not depending on one because if somebody catches cold or sneezes, then we have a problem.

The next one is on group credit. I know you touched a little bit on this, but we've seen slowdown in group credit. How do you see this picking up?

So like I said, it is not going to pick up for the next 3 to 6 months. It is going to -- we are in a tough place there. And I think for the right reasons, RBI has brought in the controls that they have. And this will be an issue for the next 3 to 6 months. POS sales as in point of sale for loan, sometimes it's getting delinked with the POS for insurance. That is going to impact the sector. Banks are getting asked why their attachment rates are high. So this is going to be an issue. How we've done this is by diversifying. You already heard the fact that we are not dependent on any one. We used to have three of our partners contribute as high as 50%. Now they're under 33% and that is how we are doing.

There is a more generic question more on the regulatory landscape. How does the regulator achieve its objective of increasing penetration at the same time, more regulations for companies on whatever expense EOMs or whatever.

For surrenders maybe. Yes. So I don't think -- maybe whoever has got this question can come and talk to either Tapan or me. We could both equally answer that for you. It's the other way around. The number of circulars that have come down has been significant. The EOM has made it a lot more easier to be flexible to different kind of distributors. And that was a big issue for us because at a line item basis, there was checks that were inspections that were happening and declarations we had to make on what we were paying people. I think that was a significant change that has brought more flexibility so you can help people who are developing their insurance capability a little more than the ballpark. You can pay lesser to somebody who's already matured and hence, get to the life cycle of agents and the way the sector is going to evolve. I think it's pretty good. Whoever has got this possibly needs to talk to us because of just the opposite that's happening.

We can probably take it along with lunch. Just one last, and I think this is on composite license, and I guess it's got implication for BAGIC and BALIC both, if Sreeni you want to.

I think the insurance build draft that is out allows the regulator to have multiple classes of business across different segments. As of now, it is not very clear exactly what that means. Globally, I think most large insurance companies work as holding companies with multiple life, GI, some of them have health. In U.S., health insurance is separate. You find in some markets, life and health are together. In India, life, health, GI are all separate. I think -- and in the case of life insurance, it's long term, there are guarantees, there are investment-linked products. So we'll have to wait and see what the regulations are going to be in terms of ring-fencing policyholder funds or participating funds and things like that. At a broad principal level, we are -- we will look at it as it comes with the regulations. And if it makes sense, we will do it. There's clearly on the -- at a very primitive level, one thinks that there is going to be a lot of advantage in cost saving, obviously, in terms of branches, in terms of some part of the functions and back office, there could be some savings. But in the long run, the risks are completely different. The distribution itself is different. And therefore, one has to see what value will come before we take a decision. But it all depends on what the final regulations are going to be.

Sure. Thank you. Thanks, Srini. Okay. Thanks, Tarun. Thanks, Vipin for this session. We will immediately start with the next one.

In our final session, we have with us Mr. Rajeev Jain and Anup Saha of Bajaj Finance. As in the previous sessions, we will have a presentation followed by Q&A. If you have any questions, please do scan the QR code. Rajeev Jain needs no introduction, but Rajeev is Managing Director of Bajaj Finance, one of India's leading and most diversified financial services companies with AUM of INR 3.7 lakh crores and pan-India presence of over 4,200 locations. Under his leadership, Bajaj Finance has transformed from a captive auto finance company to a technology-driven agile financial services by [indiscernible]. Anup Saha serves as Deputy Managing Director of Bajaj Finance. With more than 2 decades of experience in financial services, he oversees company strategy, growth and transformation. Anup joined Bajaj Finance in 2017 from ICICI Bank, where he held senior leadership roles across credit cards, mortgages, auto loans and debt management. Anup's visionary approach has played a crucial role in Bajaj Finance dominant position in Indian financial ecosystem. Over to you, Rajeev.

Good afternoon. Welcome you all once again. I'll present for 45 minutes and take Q&A for the last 15. Sorry. This is a 17-year road map. I don't want -- performance history, I don't want you to look at it numbers are all over. The fonts are too small. The principal message is -- I'm sorry, I'm sorry, I'm sorry. Just give us a moment. Perfect. Okay. This is a 17-year journey from FY '08 to FY '24. It's been a great run, I would say, so far, 17 years of journey. Last 17 years, our product lines grew from 4 to 26. Our loan disbursals grew from 1 million to 36 million annually. Our customer franchise grew from 1 million to 83 million. It's well on course to cross 100 million this year. AUM grew from INR 2,500 crores to INR 3.3 lakh crores and profits grew from INR 30-odd crores annually to INR 19,000 crores plus in FY '24. During this period, our market share at an overall financial system level from a credit standpoint grew from 722 from 10 -- from 10 basis points to 200 basis points and profit ranking moved from 722 among listed companies in India to 21 in India. Our people capital during this period moved from 1,700 people that we had in 2007 to 53,000 people. We became from one company to three companies and from one listed companies to two listed companies. I mean that's really been our 17-year journey for us so far. This is the only panel that principally I'm talking about the past. I thought we'll talk about what future holds for us. Past, you guys all know, I've done 17 into 4 that's as many quarters of quarterly tests, and I'm in my 18th year as of running the firm. So most of the presentation over the next 40-odd minutes is focused on what future holds for us rather than the past. In FY '22 AGM, as our AUM crossed INR 2 lakh crore and a lot of people, investors ask, other than HDFC, nobody has crossed INR 2 lakh crores, where would you go from here? We presented our ambition of principally doubling AUM from INR 2 lakh to INR 4 lakh crores by FY '25. I'm happy to share, and you know this, we are well on course to cross INR 4 lakh crore by end of this year and with similar return ratios. It's very common in our industry to expand AUM, but to continue to deliver similar strokes, same stroke, better ratios is a harder thing to go by. We are well on course to deliver this year INR 40 million-plus loans. We'll cross 100 million franchise, hopefully, 101 million and INR 4 lakh crores with a pretty healthy return on assets and return on equity. I do want to take this opportunity. I think there are lots of people who have been -- are phenomenal supporters through this process. We've seen good times and bad times, but a lot of you have stayed with us, and I want to take this opportunity for your trust and for your support. Question, of course, is where do we go from here? I think 2 became 4, Will 4 become 8 or no is the principal question that you have. Even we have as management, I had another paper ma'am along with it. Sorry. Okay. Its okay. Question is where do we go from here? I think that's the principal question. We started to present to the street our long-range planning framework 2 years ago. Annually, we said we would give you some snippets of it. And we use long-range planning as a process to define our medium-term aspirations. That's really -- so it's not a plan for you. It's a plan for us. We started to share that with the street 2 years ago because you said 2, will it go to 4. Now same question can apply, will 4 go to 8. And that's really what I'm here to show that we are very clear that 4 will go to 8, but let's see how. First of all, I do want to make a point that our long-range planning process is a 14-year-old process. It's a 5-year rolling strategy plan with a 12 to 24 months execution road map and a bottoms-up financial plan. It gets teed to the last dollar, [indiscernible]. We use macro data use. We analyze macro trends. We look at industry outlook. We benchmark a successful company every year as part of this process so that we can continue to be a learning company on an ongoing basis. We just concluded. It normally happens between 5th and 10th of December. This year, we did it on 2nd to 7th. It's a 5-day, 7 to 7 process. And what I'm going to do is to share some snippets of that to give you a texture of this. This will be, of course, put up on our investor website for you to refer to as well. So versus in the past, where we would do this at the end of third quarter results, along with third quarter results, this time, we are using the Investor Day to principally share that. Our long-range planning framework has 6 sections. In general, if I had 3 hours, it's a 3.5-hour presentation, I've tried to truncate this into a 45 minutes frame. We look through macro trends very deeply. We look at the financial sector that we are part of, the key industries, the products that we finance, what is the forecast for them. We choose a benchmarking company every year. We look at megatrends. We sharpen our basic construct as a firm on an ongoing basis every year. And then we get to strategy. So strategy is an aggregation of the first 5 points that you see, which leads to eventual strategy creation for us, which is what we really share with you. We don't share the first 5 -- first 4 with you -- first 3 with you, megatrends in an abstract manner, we share with you, basic construct we share and strategy we share. Given paucity of time, I'll principally cover megatrends that we see, basic construct, some updation that we have done and strategy section to give you a texture on our long-range plans. Yes, this is what I want. Thank you -- as we said, strategy is as good as it -- as far as it gets you, execution gets you farther. We published this also to the Street saying what did we say last year in terms of megatrends and strategy and how have we gone about it. We -- if we share a plan that we must share along with it an update on it. So before I talk about the future, let me just spend 2 panels on what did we say to you as part of our long-range plan that we would do as part of strategy and megatrends. So just 2 panels quickly. This is the 35 strategies. If you were to reconcile, you would find in our last year's long-range plan. The good news on this panel is there were -- in products, there were 9 strategies we talked about on horizontals, we looked at 15 strategies. In platforms, we looked at 7 strategies and geography 2 and subsidiaries, there were 2 strategies. The good news on this panel is most of them are green. I don't have time to take you through, but I think overall, it will be there for you to review as part of the presentation when as it gets uploaded. Overall, if I summarize this panel, of the 35 strategies that we outlined in LRS last year that we published to the Street, 28 are green and 7 are work in progress. If you break them up on products, 4 out of 9 strategies are live and 5 are work in progress. On horizontals, 14 out of 15 strategies are live, and one is work in progress. On platforms, which is digital platforms principally, 6 out of the 7 strategies are live and is in work in progress. On geography and subsidiaries, all strategies are live and are progressing well. If we quickly provide a snapshot view on performance last year on megatrends, these are the megatrends that we principally published. These are 2 years of megatrends. So this includes -- we started to publish megatrends in '22-'23 and '23-'24. So overall, 25 megatrends as you can see here in total. Good progress on 18 megatrends and 7 are work in progress. Two megatrends, I do want to highlight, most importantly, among the megatrends that you saw that we made significant progress on as a company, are account aggregator and GenAI. We will cross ending this year 30 million AA consent as we finish the year, which has dramatically improved our customer insights for us as a firm. On GenAI, we are right now implementing 29 GenAI use cases across 25 work streams as a firm, which in the next year alone should deliver INR 150-odd crores of cost saves. But more important dimension of -- or the bigger outcome of GenAI early adoption has been that it has helped us build a much clearer road map for us for the future and which is really what I'll cover as I give you some snippets of our strategy. So that's the year gone by on megatrends and on strategy that we published. Let's talk really the future now. What do we see the future to be? I'll principally start with megatrends first. Three megatrends clearly. But just before I go to megatrends, I just do want to reinforce the definition, which we published to the Street that they are principally powerful transformative forces that could change the economy, business and society. They are structural shifts and that are longer term in nature and generally have, in general, irreversible consequences for businesses. That's really -- so we spend a lot of time for us as a firm, what we identify as megatrends, whether it applies or not. So a significant amount of number of workshops happen in the firm before we identify a megatrend to be a megatrend. Mind you, it's still a judgmental process at the end of it related to our business as to whether its application will or will not be a megatrend. The more important point when we started to identify megatrends was we didn't want to miss a megatrend. And as I've said in the past to people, that missing a megatrend is worse than identifying what a the trend, but we may identify as megatrend. It's better to be in that corner rather than missing a megatrend. So it is -- I'll give you example, QR. '16, '17, the technology teams in the company really pushed for QR. We missed it, okay? There is a huge price in the process that we will -- we are sub 0.4% market share in the payments business. So don't miss a megatrend is the thought process. That's why we started to look at megatrends very closely. And we believe that it can change the status quo of a business in the medium to long term. So we are very -- we research it deeply. We use the management bandwidth to define and identify megatrends annually. These are the 3 megatrends that we have identified for the year. So taking the total, I think, to 25, I think it's the next panel in terms of products, and we break megatrends into 3 blocks -- rather 5 blocks. India Stack, Sanjiv talked about it in the morning as to how India Stack has really helped us. That's where you can see account aggregators sitting there. I think it will transform lending structurally. It will transform financial services. I mean we have 17%, 18% market share of monthly account aggregator pools in India at this point in time. So that's really how India Stack is helping us transform our business on an ongoing basis. Platforms, products, technology and others. What we have identified in the current year are 3 megatrends, one in product, which is green finance, and I'll give you some texture on it. In technology, multi-cloud orchestration and Zero Trust. I think these are the 3 megatrends for the year. It is also very clear to us that when we started to track megatrends that we will see -- when we started, we knew we'll have more megatrends. As time passes by, we'll have lesser and lesser. So the idea is not to have more megatrends. Idea is to have a clear view on megatrends and how its implementation and use case and the opportunity for us as a firm. So 3 megatrends, green finance, multi-cloud and Zero Trust, taking total, yes, we are 25, taking -- with these 3 taking the total to 28. Also, we think that what we identified as a megatrend, which is GenAI is actually a mega megatrend. I mean it is another age as all of you must be reading on it, that the AI age is not even a megatrend, it's a mega megatrend as far as we are concerned, and I'll share as to what we are up to on this mega megatrend. But quickly, let's spend 1 minute in terms of what our LRS plan for these 3 megatrends is. On green finance, if you look at the -- our point of view when we forecast, we think India's green initiative targets, net zero emission by 2070. That's a government stated agenda, 45% emission reduction by 2045. And various sources say it's a INR 35 lakh crore opportunity by 2030. What we are doing is starting small. We're starting with financing of solar and EV, we already do. We do this year, 7% of the total 2-wheelers that we would finance in the non-captive business would be EVs. So that we already do, if you're going to do 4.5 lakh 2-wheelers and scooters this year in non-captive, 8%, 9% -- would be 7%, 8%, 9% would be EVs. We're starting solar in a big way. We're targeting close to INR 2,000 crores of -- between INR 1,200 crores of solar and INR 800 crores, INR 900 crores of EV financing in the next year. Zero Trust, I think Cybersec is clearly, as we go more and more digital, one of the threats lurking in the ecosystem is Cybersec. If you take Cybersec and most amount of time on Cybersec is spent on outside in. I think the inside out is as important as outside in. Inside risk, insiders creating risk for you is as important as outsiders risk. A lot of money is spent on cybersec external defenses, as much bigger is internal defenses. So Zero Trust is a framework that has been created by -- in the Valley ecosystem or in the security world that operates on principle of trust but always verify. That's in a very simplistic sense, the Zero Trust frame is. We are investing very deep in Zero Trust infrastructure. It's a deep technology infrastructure that it calls for, significantly reduces operational risk for us as a firm, and we're investing in critical technologies and security policies over the next 12 to 18 months. We want to be a comprehensive Zero Trust company by, I would say, FY '27, latest in 2 years. FY '26, we would have made significant progress. But by FY '27, I would say we would like to be a 100% Zero Trust infrastructure. Last is multi-cloud, 90% of our -- principally means you're working on 2 cloud infrastructures. We already work on 2 cloud infrastructures. We work with Salesforce, which is a cloud, SaaS cloud, and we work on Azure. We are the largest customers of Azure in India. But we're talking how -- so one, for definition, deploy a multi-cloud orchestration strategy to make applications cloud agnostic. The cloud seems very easy, but at a fundamental level, Amazon is as different from Azure as it can be. So they are very, very different. They may both be clouds. So investing in them means replicating infrastructure. But given the fact that 90% of our compute is now on cloud, we think from a prudent standpoint, we need to transition from a single cloud infrastructure to a multi-cloud infrastructure, and that's really where we'll go to. And in Phase 1, it will be a 2- to 3-year journey at a design level, even at our pace, but implement Phase 1 covering 40 out of 94 critical applications that we see as a firm over the next 18 months. So that's really the 3 megatrends identified. You can spend some time if you get on the progress that we've made on the 25 other megatrends that we continue to make progress on, barring the 7 which are work in progress. I'm getting closer to strategy, but just quickly on basic construct. Our basic construct as a firm, irrespective of who runs it is -- the objective is to codify and institutionalize the way we think and the way we act. That is why we created basic construct. It's anchored around ambition, what do we want to be, what is the strategy, how will we deliver it? What is the approach? That's a second order dimension of strategy, what is our philosophy in running businesses or building businesses, market share, profit share, customer share and technology and AI first. These are 8 basic constructs we have created as a firm, which guide our decision-making on an ongoing basis. Quickly, what you see is updated. Is there a pointer you have? Or does this work as a pointer as well? As you see, this is updated here. The updation is in blue. Until last year, we said we want to be a dominant payments player. Having invested last 3 years, we have come to a conclusion that it's important to be a viable payments player rather than -- it's not possible to be dominant, given that PhonePe has a 73%, 74% market share and so on and so forth. Between GooglePay and PhonePe, the market share is 90% plus. It's a huge inertia product. So the asset, if you -- any of you use BajajPay, the asset looks very similar, same feature-wise to a PhonePe, but inertia is just extremely high. So -- and we today are investing $30 million, $40 million a year in building out the payments business. So the thought process is to be a viable -- the intention would -- that's what you see updated would be to be a viable payments player in India. I think that's one change in construct. Second is, so far, we used to say we want to dominate with 100 million customers. What we are principally saying at a construct level is we want to dominate with 200 million customers. Market share, there's no change, 3% to 4% of total credit in India, 4% to 5% of retail credit in India. And this will change, this has changed again, actually, it should have been in blue of 1%. It was 3% of payment GMV. We're saying it will be 1% of payment GMV. Strategy, there is an update, which is that we used to say that we want to be an omnipresent financial services company, dominant across physical, which is branches, app, web, social rewards, we've added AI as a platform in the current year. On approach, there is no change. So I'll move on it. It's acquire and cross-sell. On philosophy, there is no change. Build businesses with a 10-year view and to continue to deliver a 21% to 23% ROE on a sustainable basis. Market share, there's no change. We continue to aspire to be amongst the top 5 players in India in each line of business that we operate in. On profit share, there is no change. We want to be amongst the 20 most profitable companies in India and amongst 5 to 6 most profitable financial services company in India. Last year, our rank was 21. So we are getting closer to the 20 that we want to be. This is across sector. This is not financial services. This is across sectors and amongst 5 to 6 in financial services. Seven is customer share. There's no change, have highest level of customer satisfaction and products per customer. We now, for the last 2 years, published our products per customer. We have 6 products per customer on a 24-month lag basis as we publish to the Street on an ongoing basis. On technology and AI first, it used to be technology and data first. We are transitioning from technology and AI data first to technology and AI first. We're principally saying that over the next 24 months, we want to be a firm which is use technology and AI first as an organization culture to solve all problems. We think -- we used to say, use technology and data to solve as an organization culture to solve all problems. We think the dramatic transformation is on what AI is going to do, and I'll share some of the -- as to where we are headed on adoption of AI rapidly in the firm. Be an earlier adopter, I think clearly, we want to be -- and I'll share with you as to how we've been early adopters of technology and how we want to continue to remain an early adopter of AI as well. And it is not for happiness or it's not for satisfaction or it's not for -- as a sales point, but it should help result in sustained growth, and we've seen the benefits of it, lower cost, improved productivity, superior customer experience and robust controllership. So that's the construct. I would just say to you that it remains an extremely important governing frame. It helps you question us, challenge us, ask rightful questions and allows us to provide a point of view to ensure that are we dithering away or differing away as a public company for the construct that we have principally organized. And we believe inside out as a firm that it helps us strengthen our moat as a company. Okay. Time for strategy. What does strategy LRS '25-'29 say? Principally, I'm happy to introduce what we've created a new term. One, we think we are headed into a BFL 3.0. That's one part. And we want to be a Fin AI company. That's really what we are forecasting us to be or we envision us to be. But before I talk about 3.0, let me just show you one panel as to what has been 1 and 2 all about for us as a company. If you see this panel, it's a little busy panel, but let me take one moment. We think '8 to '16 for us as a firm was actually 1.0. AUM during this period grew from INR 2,500-odd crores to INR 44,000 crores. So in a way, we took 8 years to get from INR 2.5 crores to INR 44 crores. During this period, we were early adopters of cloud. We started to use Salesforce Cloud. Before cloud, people started to talk cloud in 2013. We were early adopters of cloud. We were early adopters of data analytics and decision systems. We were in Phase 2, we went from INR 44,000 crores to INR 3,30,000 crores. We'll cross this year, hopefully some -- we will definitely cross INR 400,000 crores. Let's see -- that's for Nischint to forecast as to where will we go to. But we'll definitely cross INR 4 lakh crore. We were early adopters of digitalization. It was not end-to-end digital. It was in the processes, we were digitalizing processes to reduce friction for consumer and reduce cost for us. In the last 3 years, as COVID happened, we came to a conclusion that we needed to go fully digital. So if you ask me, we were early adopters here, we are early adopters here, we are early adopters here. We are not an early adopter here. Going fully digital was not an early option. It was, I would say, if I'm being harsh on us, I would say we were a follower there or if I'm being polite, I would say we were on time, okay? That's really -- we don't want to be doing this. We want to be always as a firm doing this. And that's where the urgency on us deploying AI. What did it do? It led to, of course, balance sheet continue to grow. We went from 4 products to 26 products. Number one, cost of doing business kept going down. If you take the first half, we are already at 33.2%. 34% OpEx to NIM is down to 33.2%. And as we'll share as we take this forward. So products grew, balance sheet grew, operating expenses to NIM continue to move down. Principally delivered through technology. That's the last point I want to land to you. During this period, we became a fully diversified nonbank. Other than education loan, we now meet all needs of our customer. From 3 products, we went to 26 products. In a way, we took 17 years, Sanjiv made that point in the morning that we are responsible as capital allocators. We invest businesses at a particular point in time. We sweat that, then invest, generate capital, then invest. That's a virtuous cycle that we are on, and we remain committed to ensure that we are allocating capital in an efficient manner. Being a technology-first company, we were early adopters, as I explained to you, OpEx to NIM, as I explained to you. In hindsight, if I think about it at a design level, we were always doing Fin & Tech. Inadvertently, at times, if I -- as we were creating our long-range plan, I finally concluded along with Anup that we were always a fintech, okay? Using finance and technology -- financial technology and financial services, if that's what the meaning of fintech is, we were inadvertently we were a fintech. All this led to what, as I said, expand scale, rapidly grow revenues, bring down OpEx, reduce credit costs and compound on a profitable basis for us as a firm. Sorry, last point that I missed, going back is this. While we were a follower in the frame, I think while we picked the -- we picked this late. But given how agile the firm is, I think we are now among the top 5 apps on Google Play Store. We'll end this year probably with 70 million net installs. The other 4 apps are principally payment apps. So clearly, the company mobilized significantly and used the last 3 years to become a fully digital infrastructure, and we continue to invest deeply in that space. So it's been fascinating. I mean, if I think about it, 17 years, 1.0 and 2.0 have been really fascinating. I think we've all become much better professionals. We've become -- it's been a fun journey, I would say. We've been in some good times. We've had through some difficult times like demon was a difficult time in hindsight. COVID was a difficult time, rather very difficult time. But I would say, overall, if I look at the excitement between 1.0, it was a different level of excitement, 2.0 is a different level of excitement. I think BFL 3.0 will probably be more exciting than even 1.0 and 2.0 because I think AI will change the way -- it will change everything. I mean, at a design level. Let me just -- I thought I'll distill for you what do we mean by BFL 3.0, a FinAI company. We spent a lot of time trying to think through what would BFL 3.0 FinAI company mean. So I'll distill this. We'll first talk 3.0. We'll then talk FinAI, and then we'll talk FinAI, BFL 3.0 FinAI company. So 3 pieces of definition, very quickly, not more than 2 sentences, but it's more than that, then it's probably -- I've come to a conclusion making presentation, it's gibberish. BFL 3.0 will be amongst the most sustainable as we see it and profitable companies in India and a preeminent choice for its 200 million customer franchise for all their financial services needs. Other than education loan, as I said, we are meeting all needs of the consumer. We anyway distribute insurance products. We distribute mutual fund products. We have a broking company. BFL 3.0 aims to be the lowest cost operating model in financial services by accelerating business transformation and leveraging digital and technology. So that's really what BFL 3.0 we see to be. Let's go to FinAI. BFL of the future that we envision will be FinAI company with AI-enabled technology architecture. I think that's the key word there that it's not in parts. It will be an AI-enabled technology architecture, which integrates across all its processes to significantly improve customer engagement, that's top of the funnel, grow revenue, that's the second level of the funnel, reduce OpEx, reduce credit cost, enhance productivity and strengthen controllership. I think that's really how we see a FinAI company to be. The first sentence is the input variable and the second sentence -- second part of the sentence is the output variable. In summary, if you take the keywords of 3.0 and of the FinAI company, you'll principally see that BFL 3.0 FinAI company will be a preeminent choice, which meets all financial services needs of its 200 million customer franchise. It's AI-enabled technology architecture that integrates AI across all its processes to deliver significant operating leverage and create a virtuous growth cycle for us as a firm. So that's really what we see BFL 3.0 to be. But definition is fine. What do we foresee it to do? So let's go there. Okay. This is the strategic framework for us as a company. Some people may even argue in this room should you talk through strategy in this level of detail. I think we are in business where execution takes precedence over strategy. Anything -- all that I'm talking to you is no secret. Somebody has to just do it and do it for -- as we tell people, those who know us, do it 70 hours a week, 12 months of the year or 52 weeks of the year, and you can be a FinAI company. There's no problem. You will just do 70-hour work week on an ongoing basis, let anybody copy this, but 70-hour work week is harder to copy than a PPT is. So let's go there. This is -- let me break this into Fin and AI because they connect at the -- they are joint at the hip. But in terms of Fin, let me just spend 2 minutes, and I have only 2, 3 more panels. So in terms of acquiring customers, which is top of the funnel. If I roll 100 million customers going to -- in 4 years going to 200, the numbers don't add up, okay? On a run rate basis, this year, we'll add 16 million, 17 million customers. That means we'll add only 65 million, 68 million customers over the next 4 years. Then how do we get to 200. We think strategic partnerships, organic acquisition, which I talked about and Bajaj Prime, which is a product, if you download the app, you should -- I would say, I would encourage you to buy. It gives you INR 15,000 worth of value for INR 699. Strategic partnerships at a marginal cost infrastructure with -- will be something on which you will hear over the next, I would say, a quarter or 2 about. Making our 200 million or next 100 million is the first part of our strategic frame as part of the Fin strategy. Sanjiv talked about. In fact, I have not seen Sanjiv's presentation. Sanjiv put so much of emphasis on MSME. Clearly, MSME, we see as the next big frontier of growth. He had seen ours. I've not seen his. So I think we clearly see MSME as -- see, when people think of BFL, they think about us as consumer durable financial. You push them a little, they say, you're a personal loan company. Very few people know that in business loans, we are the largest originator, okay? We have 17 years of experience doing MSME business loans. In the last 3 years, we launched on back of it. The industry is INR 33 lakh crores. But, we have 30% market share in that of a business, which is a much smaller part, which is business loan. We want to play in the INR 33 lakh crore infrastructure rather than in a small pond of BL. But BL is a huge acquire and cross-sell model, okay? You give INR 11 lakhs to a small business. He needs LAP, he needs industrial equipment. He needs affordable home loans or he need home loans and so on and so forth. So MSME, we see as a next big growth engine for us as a firm as we move from here. Build market leadership in 3 businesses. PL, we serve the entire spectrum of INR 50,000 to INR 50 lakhs in personal loans. We would be one of the -- probably the only company which serves INR 50,000 to INR 50 lakhs across 17 different lines of businesses in the firm itself we run as INR 50,000 to INR 50 lakhs. Build market leadership we have a 9% market share in personal loans. Build market leadership in gold loan. Build market leadership over time in MFI and in 2-wheeler. We are already the largest 2-wheeler lender, mind you. But as the captive, Bajaj Auto has gone away, we are replacing that business with an open architecture business, which is much larger in scope. Bajaj Auto is a group company. They have a 20% market share of the industry. It opened for us an 80% market. So the road map for the 2-wheeler business will be much, much larger than the historical captive business we had. Optimize, viable payments business, Auto loans, we are running -- run the business with very low credit cost because there's very little money to be made. Including a 50-50 used car and new car business model, it still makes just about makes 13%, 14% ROE. New products, green financing, I talked to you about. This is one of the businesses that we are quite excited about. 10% of -- I don't know how many of you know, 10% of cars sold in India are to corporates, okay? That's 10% of the sales in India are to corporates. We offer -- when we reached out to corporates, they said [Foreign Language]. When we reached out to them, they said, [Foreign Language]. So we are building a multiproduct corporate leasing infrastructure, which will serve multiple products to the customer, customer being corporate. It may be a tripartite, which is with employee or it may be to the firm. So we are quite excited about this line. And I think given the strength of the brand, given the full breadth of product, this could be a very, very large business over the next 5-odd years. In risk management, given that India lending has become retail lending, 75% of the total credit in India is now retail. It led to a certain unintended outcomes in terms of -- in some of the lines where the supply side increased dramatically. Personal loan being case in point, INR 8 lakh crore market pre-COVID and to INR 18 lakh crore, which meant that the past models alone would not work, go back to apart from doing all the science and data analytics that we do, go back to some level of back to basics. And that's really what we are up to as a firm from a long-range planning standpoint because you can model everything you can't model prudence. You can model many things in risk modeling. You can't model prudence. If you model prudence, then I need to speak to Bharat Bhai, engage with him and understand that's -- even then I may not be able to fully model prudence, but at least it improves my probability of improving prudence. Lastly, operational risk. As we get larger and larger, more and more complex, operational risk is an important area for us to ensure we eliminate blind spots of operational risk. So these are the 12 Fin strategies that you see. You see, however, what we are excited about is the 20 -- if you ask me in these strategies, I am very excited about this. I think strategic partnerships that's something that you'll hear. We are very excited about MSME as the next big growth engine. We are very excited about corporate leasing. We are very excited, I would say, among the 12, this, this, this are -- I'm very excited about two-wheeler as a frame. I think these are 4 out of 12 that I would say you would see significant progress in over the next 12, 24 months. Let's talk AI. AI principally, we started our life in AI. '22, GPT came through. '23, we started to put a lot of effort into it and came to a conclusion that let's first test whether it does work for an enterprise. And we said the easier place to start on an enterprise is to start with taking cost out, which is really what OpenAI services was intended to do. So we first started with cost takeout. And as I said in the beginning, INR 150 crores of cost takeout is really what we'll deliver on a run rate basis for next year. Exit rate will be -- this year alone will be INR 40 crores of sales and run rate basis will be INR 150 crores. What AI has to solve for is revenue. If AI did not solve for revenue, $200 billion of investments that the big tech has made will be of no value because big tech's customers are principally enterprises. I think -- so you will see AI for revenue, AI to reduce cost, AI for design, AI for risk, AI for credit, AI for productivity and AI for controllership. That's really how an organization is principally organized. When I said AI-enabled technology architecture across processes, that's really what I meant. There's nothing that is left that will not touch AI as far as we are concerned over the next 12 to 24 months for us as a firm. Now what does that mean? It means, and I'll show you after this -- this is the last panel. After that, I'm going to take you through short conversations. We sent 560 million SMSs in a month. Even, I'm shocked by the number, but that is what it is. All that is passive. All that is passive conversation today. I can send it to Bharat bhai, Bharat bhai can't do it. It will say Bharat bhai, you are preapproved for INR 2 lakhs and call this number. It will all go into conversational AI. Bharat bhai will get an SMS, which will have an embedded AI link, he'll press that, and he'll start to engage, okay? He'll start to engage. It will say, "I don't want to INR 2 lakhs, I want INR 3 lakhs. What is the interest rate?" Imagine the power that will unleash on those 560 million SMSs. We foresee a 3x plus conversion rate, which means 560 million will go to 180 million or it's 1/3. I think that's the kind of -- in Phase 1, it will be conversational. In Phase 2, it will be multimodel. It will start to talk through images, text and videos in the same link that is being sent. Phase 2 being next year, January, March, Phase 1 being June, July. AI for cross-sell. Only 20% of the customers buy insurance today. Anybody who buys an expensive phone should buy extended warranty, but only 20% buy. Phone falls, getting out, he is spending significant money, only 20% buy. But the -- we still engage with them. You can't -- it's low ticket, high velocity. Without technology, you can't sell a INR 2,000 extended warranty to a client or he won't -- he can't buy. Makes it possible, because it tells Bharat bhai you must buy. It's good for you. If your phone fell this way, your phone is 30% gone in terms of value. So we foresee 3x conversion rate from a revenue standpoint. We foresee 3x conversion rate from a cross-sell standpoint. Some of the -- I was doing meetings in the morning with 2 teams, they were asking me what will happen to your cross-sell rate. This is what will happen. There will be things that will go away, but there will be things that will come in that will dramatically alter the way AI will change the revenue dimension. AI to reduce cost, 1.5x field productivity has to go up. Actual productivity has to go up by 2x, that's the way we foresee. I mean we think OpEx to NIM will go down sharply over the next 4 years. I mean, in terms of PSF productivity, reducing contact center, and I'll give you some examples. We are already doing INR 150 crores to INR 200 crores of monthly business, which is dialed by, and I'll give you next to this is a video, which is through a virtual assistant, you can't make out. You cannot make out, you'll hear this. Ops and service Copilot, technology, we're already doing 20% of the code is being written for digital assets, which are -- which is a common code. So that's happening. AI for design, if all of you are using -- you will see a Rufus equivalent for BajajFinserv app by July, August. I mean, if any of you use Amazon, if you're seeing Rufus. It's already starting to do a conversational AI with you. It will dramatically change as I was saying. Today, you say I want popcorn. Tomorrow, you will say intent. I am feeling hungry at 4:00 p.m., right? It's 4:00 p.m. He knows when you're using that. It will say, would you like to eat popcorn. So it will transition from specific to an intent-based conversation, intent base, you can imagine what it can do to revenue. AI for risk, unstructured to structured data. Today, we write PD notes. He says, Bharat bhai says, I'm an investor, I'm worth whatever, they are all lost. All that is lost in that PD note. Tomorrow, and we do 5 lakh PD -- we write 5 lakh PD nodes every month, okay? All -- I can say, extract these 12 variables and put -- convert them into unstructured to structured that's going to happen by June this year. I mean -- was it possible earlier? Yes. Every time you want to do it, it's 6 to 8 months. And you guys track me quarterly. So imagine, I mean -- and every time you want to make a change to that, that's again another 8 months gone. Augmented risk intelligence, responsible and explainable AI. B2B is a business where we foresee that augmented risk intelligence using unstructured and structured data could dramatically alter our velocity. AI for credit, underwriting copilot. Today, what does that boy write in PD notes? Centrally, we can see, but I can't put a concurrent underwriting infrastructure to read those 5-lakh PD notes. Tomorrow, it will be possible at a summary level to that boy or girl who's making that, who's written that note and available to us on a real-time basis. AI for productivity, engagement, training, dramatic transforming. AI for controllership. Today, we do sampling-based audits. BI with sampling. Tomorrow, you don't need BI. You won't need sampling. It will be 100% audit infrastructure that AI will help you deliver. So that's -- sorry, Sorry. So these are the 20 AI strategies across revenue through controllership. What we are up to is a detailed -- it's telling me time is up, just give me 2, 3 minutes. A detailed implementation plan has been created as part of our 60-day planning process of LRS and across all businesses and functions by the firm for us to become a FinAI company is what I would say to you. And we are extremely excited about the AI era and the business transformation opportunity that -- and the learning opportunity for us is professionals that it principally delivers. Now let's listen to -- let's -- I have 1 minute, 3 video stroke calls that let's listen to. The first one is conversational voice AI. So assume a virtual assistant is calling Bharat bhai for sales. This is real. It's happening today. Do you want to play one more. [Presentation]

Available in 6 languages. This is a real call. This is a real call and mind you, let me give you some nuance on it. 12 months ago, the ambient -- there's a background noise, right? He's on a road. 12 months ago, it was not possible. Now it's possible. The ambient noise, the background noise 12 months later, it's being productized. We projectized it, okay? We worked with Microsoft closely and solved it. It's in a product form available now, okay? Going live in the next -- as Azure launches, it's 01 mini. I think this will -- I have 6,000 call center agents across service and sales. Cost of deploying AI is 1/3. That's a simple math for you to do. I mean this is -- and we foresee the pace of change is so strong that you have no option but to adopt. Otherwise, somebody else will adopt. Now let's listen to the -- let's watch the second video. This is in production. As I said, we're doing INR 150 crores to INR 200 crores. We are forecasting 6,000 number will go down to 3,000 by FY '26 and go further down from there on. You want to play the second video? Okay. I have to. Let's look at a conversational text AI. As I was saying, Bharat bhai sitting at home and he gets an SMS message, what happens? I have to click? One more. [Presentation]

Will be possible in the next 6-odd months time. I mean, this is what I was explaining that today, it's all content, static, great. This is how we looked at Amazon and built this as -- look at the degree of engagement that the customer would be able to have or all of us as consumers will be able to have as AI gets deployed across the street. I think there's one last one, which is how to improve productivity. This is a real instance. Clearly, like Gemini, I'll take one moment to press another button. On the right-hand side, you'll start to see prompts across our internal ecosystems, okay, which is -- see today, a 5-day old boy in the company versus a 5-year-old boy, there's a marked difference. AI Copilot will start to reduce that difference significantly. I think that's really the big change that will principally happen. Let's just see the example. [Presentation]

So I've given you 3 -- the only 3 or there's one more. You will see -- okay, the last one because it's important for me to share with you as to how things will change. I have to press. This is vision AI. I think in financial services, which is all about documents, which is all -- while documents are digitized, but they are documents. I mean, you'll see you can take a title deed and extract. This is the example. This is a real title deed, you can -- prompts are able to read through the handwritten [indiscernible] with 97%, 98% accuracy. [Presentation]

So we didn't complete it. That's okay. So that's really -- now you guys are all about numbers [Foreign Language]. So that's why we published to the Street. If we deliver 2 to 4, if we deliver 4 to 10, what will happen? This is how will we look in 2029 or FY '29. Customer franchise should range anywhere between INR 190 million to INR 210 million. Last year, it said it would be INR 130 million to INR 140 million. Cross-sell franchise will move from INR 80 million to INR 90 million to a year later to INR 115 million to INR 125 million. So the way you to see this panel is what have we done in the 6 months? This is what we said in LRS '28, and this is what we are saying to you in LRS '29. So these are the 12 metrics that we published to you. I realized you are interested in only one thing. So return on equity, which is 19.5% in the first half of the year. LRS '28, we said 20% to 22% continues to anchor there at 20%, 22%. You can ask me that why would it not improve given Vision AI to text AI to so on and so forth. Maybe it would. We published to you every year. As we make progress on it, we will share with you. We are here every 4 quarters presenting to you as to what we are up to and how we'll continue to make improvements in delivering every year. That's my end of presentation. I realize I've taken a long time. I look forward to your continued support. We are an operating business. We go through good times and bad times. We look forward to your tremendous support through good and bad times. Thank you. Thank you so much. I don't know if there is time for questions. So there is...

There are a lot of prompts saying that don't take Q&As, but I think I'll just take 1 or 2. And I think the most -- probably you can just give some brief pointed answers to this. May I request Anup and Sandeep also to come on the dias. So you recently ended the partnership with RBL and DBS, what is the impact?

Since you called Sandeep and Anup let them answer. So let's Sandeep answer, because it's a CFO point, so let CFO answer.

I think very clearly, while we have enjoyed a very good partnership with RBL for the last 7, 8 years. Given the regulatory environment changes and so on and so forth over a period of time, the number has also come down. The contribution in terms of profitability of that business was just about 1.2%, 1.3%. So it's a significant impact. Plus the way we have the partnerships stitched with RBL. Even post termination, we'll still have TTL revenue right on the business. That will ensure that while something will be protected for us, the growth is something that will end up compromising by not doing incremental card, but does provide us longevity of revenue pool coming from the co-brand business that we have done with them.

Just make a metadata point that the industry has grown from INR 54 million to INR 102 million in a 4-year horizon. Cards per customer has gone from 1.6 to 2 cards per customer. Industry is going through a cycle. The new regulatory infrastructure between -- since 2022 October, the new guidelines that came in, principally said we could only be a distributor. I don't want to -- it's very hard to generate, create customer franchise. I don't want to distribute. We want to be having skin in the game. That is the principal objective. I think we created one of the finest partnerships in this country, making RBL the fifth largest card issuer. We value the partnership. But like all good things come to an end. It's one of the good things that come to an end. But the partnership stays. That's a point Sandeep made. The financial nature of the partnership continues to stay. And maybe 3 years from now, we may build again. Last point I want to make, we've not exited with RBL. We have exited the credit card business. We have exited the credit card distribution business, which means both with RBL and with DBS, given, as I said, the earlier point that I made, we deemed it prudent to transition.

Rural B2C is still in yellow. When does it become green and has urban B2C showing -- started showing some signs of slowdown?

Yes. See, about 2 years back, we used to grow rural B2C at 36% AUM. And then we took a series of actions and the business grew for last 1 year at about 5%. We have started rebuilding the business. We see this will grow at 12% to 14% from here. Some of the issues are more internal to us because we grew very fast. We also did not -- we did not adequately invest in our debt management capability, which we have done. Like this year alone, first half, we have added 3,000 people in DMS. By end of the year, at a company level, we'll have 5,000 people. So that's one part of the point. But from here on, at a vintage level, we do see improvement because the best way to look at risk is vintage, and we do see the early vintages are improving.

And urban B2C?

Urban B2C, yes, there is pressure because if there is more supplies being a largest player with 7% market share, which, as Rajiv said, has moved to about 9% now. We do see some pressure there. As Rajiv says that pre-COVID, there used to be a metric. We are still -- we had COVID years where it was really bad and then we had great years, right, 2 years. During the period, obviously, we went through a process of giving more loans to lesser customers. What we changed beginning of this year is we changed our approach there, brought down because our B2B business was growing quite strongly. So our consumer franchise continued to grow very robustly. So what we have done since beginning of this year is increase the base, bring down the ticket size by INR 30,000, INR 40,000. So from a value at risk level also, we have taken action. So I'm saying from a portfolio wise, we have taken actions. And the strength is because the franchise remains very, very strong. So we can continue to grow. But at quarter-on-quarter, there is some pressure, which we believe will take about a quarter more to stabilize. I think first quarter of next year definitely are of it.

Sure. And any guidance on secured, unsecured mix? This was the last question.

Any guidance on?

Secured, unsecured mix.

Yes. So I think portfolio mix is an important guardrail metric that we maintain within the company. We try and ensure that the portfolio mix should not change significantly because that has bearing in terms of growth, profitability, credit cost and so on and so forth. As we forecast the number for LRS, we don't foresee more than 200 basis point shift in the overall portfolio metrics.

Portfolio mix, as we outlined, 8 categories as a company. Even if you take the last 5 years, plus/minus movement is 100, 150 basis points on a stack of 100. So 1.5% would be the movement in and out. And it's 2 parts -- so we foresee it's largely to remain stable. So I think there may be periods of -- secured is growing faster than unsecured and so on and so forth, but plus/minus 1%, 1.5% here and there. That's all.

Perfect. Thank you, Rajiv. Thank you Anup. Thank you Sandeep.

Thank you so much. Thank you for patient hearing. Sorry to delay your lunch.

On behalf of Kotak Institutional Equities, I thank you all for joining us today. We sincerely thank Sanjiv, Srini, Tapan, Tarun, Rajiv and Anup to best of faith in Kotak Institutional Equities and provide us an opportunity to host this event. Thank you very much. I would also like to thank the support from BFS, Urvashi, Nisha, Shruti, Nashi and Samyukta. Thank you very much, and please do join us for lunch.

I'll take this moment to thank Kotak on behalf of, Sanjiv, thanked in the morning, but thank you so much. Thank you. Thank you once again. Thank you.