Can Fin Homes Limited (511196) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Can Fin Homes Limited Q3 FY '22 Earnings Conference Call, hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nidhesh Jain from Investec Capital Services. Thank you, and over to you, sir.

Thank you, Seyan. Good afternoon, everyone. Welcome to the Q3 FY '22 Earnings Conference Call of Can Fin Homes Limited. To discuss the financial performance of Can Fin and to address your queries, we have with us today Mr. Girish Kousgi, the MD and CEO of Can Fin Homes; Mr. Amitabh Chatterjee, Deputy Managing Director; Mr. Prashanth Joishy, CFO; and Ms. Shamila, Business Head. I would now like to hand over the call to Mr. Kousgi for his opening comments. Over to you, sir.

Good afternoon to all the investors. We had a good quarter backed by last third quarter which was pretty decent. Outlook is very, very positive. We have seen a good trend since last year third quarter onwards. And quarter 4 of last year was pretty good. Quarter 1 of this year was impacted due to [ COVID's ] second wave. Market is quite robust. The only thing is we lost about 45 days this first quarter of this year, and therefore, it did impact business, which all of you are aware. And quarter 2, we came very, very strongly. And quarter 3 also, we [ also done ] very well in most of the parameters. Now -- so in terms of market, I think this market is going to be robust for the next few years. Real estate, other space has really improved in that regard, and this [ tend to ] stay for another 4 to 5 years in our sense. And we are able to get business from across all the geographies, barring 1 or 2, all the segments, whether it is builder or non-builder. And this is across all the type of cities, whether it is metro, whether it is big cities, midsized cities or small cities. In terms of profiling, there has been increased demand from salaried. The CMP demand was quite low. After COVID, I think it really went down drastically. Now we're fully confident it is coming back. And we're also seeing that the share of self-employed nonprofessional is incrementally -- is going up. But it is still not back to 30 because ideally, at a portfolio level, we were at 70-40. And after COVID, I think this changed too drastically. And now it's really coming back. So last quarter, salaried was 74%, and the [indiscernible] was 26%. So this 26% was much lower in the earlier quarters. We were able to log all-time high book growth. We showed about 19.5% for growth. In fact, we had a lot of challenge last year, as all of you are aware, because we had a lot of pressure on BT. So that has now come down drastically since last 4 quarters. So last year's quarter 1, quarter 2 and quarter 3. And to a certain extent in quarter 4 of last year, we had a lot of pressure on BT, now it has come down. Just to give you a sense, for BT, around quarter 3, it was about INR 78 crores, the same number. Last year it was 3x higher. So it has now come back to normalized position. Our average is better than pre-COVID. In terms of disbursement, we have grown by 123% Y-o-Y. It may not be the right comparison because, obviously, last year because of COVID, we couldn't do those well, same thing with the entire industry. But still, if you look at the book, book has grown because whether we do disbursement or not, I think we could, by and large, would be same but further runoffs. So on book, we have grown at 19.5%, and we have been all time-high disbursement in quarter 3. And prior to quarter 3, all-time high was quarter 2. And prior to quarter 2, all-time high was quarter 4 as well. So last 4 quarters, 3 quarters have been all-time high disbursement in the history ever. So which means every quarter, we are trying to improve our disbursements. And if you look at the sequence in growth, it is not marginal. It is quite substantial growth, what we have done. For example, if you look at this quarter. This quarter, we have disbursed INR 2,472 crores, which is a good sequential growth of 12%. And if you look at last quarter, it was INR 2,208 crores. And prior to that was quarter 1. So because of COVID, there was an impact, so we disbursed INR 893 crores. And if you look at quarter prior to that, which was quarter 4 of last year, it was INR 2,001 crores. So in last 4 quarters, last 3 quarters, disbursement is all-time high. And same thing is true with [indiscernible] also. Quarter 4 of last year was INR 2,201 crores, and quarter 1 was low because of COVID, we got INR 829 crores. Quarter 2 was INR 2,288 crores, and quarter 3 approvals are INR 2,762 crores. So last year, we did change the pricing strategy because there was a lot of pressure on book, and the book was a bit easy. BT also was significantly higher, and there was no opportunity outside because of lockdown and COVID. And therefore, we had to drop the rates. We did that in last year. That had an impact on margins. And this year, from April to March, we have increased rates twice, and our yield has improved from 7.99% in quarter 2 to 8.05% in quarter 3, and I would say increasing trends. So the coming quarters, yield will be higher than 8.05%. And if you look at the cost of funds, I think it's pretty stable. Quarter 3 was 5.56% and quarter 2 was 5.57%, and if you look at quarter 1, it was 5.66%. It's pretty consistent. And here or there, I think [indiscernible] has been maintained. Incremental cost of funds for quarter 3 was 4.98%, and exclude fully was 5.56%. So if you look at spread. Spread improved from 2.42%, which was in quarter 2, to 2.49% in quarter 3, and quarter 1 was 2.4%. So if you look at NIM. NIM was 3.53% last quarter, and this quarter is 3.74% and quarter 1 was 3.31%. So in last 3 quarters, largely have to talk about, margins have improved, disbursements have improved, with every passing quarter. Approvals have improved, focused growth. Now there is a challenge of revenue and PAT. Now the issue is that in last year, same time, our lease was higher. We dropped price. And that's higher than, in fact, for next 3 to 4 quarters because of the lag. Now this year, we have increased rates. So now margins are improving, our book is growing, disbursements are growing. And this quarter, if you have a look at, let's say, [ 9% ], for example, I think that is flat, and revenue, there is a degrowth. Now that is purely because of the lag effect of rate change. Now next quarter, we expect that if you look at whole of this year vis-a-vis compared to whole of last year, there'll be growth in PAT and revenue would be flat. Now starting quarter 1 of next year, then this will be back to normal state. The impact of rate drop, the impact of rate hike, I think both would have got adjusted to. And from quarter 1 onwards, you will see the benefit drop/increase in rates what did this year. I think that is where we stand in terms of revenue and PAT. In terms of margins, as I mentioned, I think last 3 quarters, there is increasing trend both on spread and NIM. NIM for this quarter was 3.74% but also has an effect of investments because of LCR requirements. If I discount that, our NIM will be 3.65% against NIM of 3.53%, which was in quarter 2. And even in this quarter, we have to make investments due to LCR, and therefore, this 3.65% -- we will definitely improve on 3.65%. But of course, the point -- that 9 bps is because of the [indiscernible] investment because our return on investment is much higher than the cost, and therefore, these 9 bps got added to that. So this we will see in quarter 4 also but not significantly after quarter 4. And therefore, I'm saying we should read probably NIM at 3.65% against 3.74% because this 9 bps increase may not be recurring in nature. In terms of asset quality, we were able to improve NPA from 0.78% to 0.71%. This quarter, we were able to collect from the NPA pool and write back certain amount. And also, we ensured that recent RBI circular, which was announced on November 12, that didn't have much of impact because we triple down on collections and we were able to manage collection efficiently. And our collection efficiencies have improved. Now actually, it is back to, what -- or maybe now it is better than [ INR 3 crores ]. I would open the floor for discussion.

[Operator Instructions] The first question is from the line of Shreepal Doshi from Equirus.

Congrats on the good set of numbers. Sir, the first question was with respect to credit cost. What caused the sudden increase in the standard asset provisioning that we've done during the quarter?

So basically, when we increase our disbursements, my provision would grow because I have to provide under incremental growth in the book. So if you look at quarter 3, we grew incremental book by INR 1,500 crores. And therefore, my provision to direct will grow.

Sir, would that not be the part of the ECL that we do? I mean, initial provisioning that we sort of calculate?

No, because we look at both ECL and direct, but we are holding INR 240 crores as per the IRAC. We hold higher. We're holding INR 240 crores. And as per ECL, ECL is about INR 157 crores. So we are holding INR 240 crores.

Okay. So which is higher than the required as per the ECL model?

Okay. We are holding far higher than what is required. We're holding INR 240.14 crores against INR 156 crores. As per the ECL model, provisioning required is INR 156 crores. As per IRAC, it is INR 240 crores.

Got it. And so how are we seeing the collection efficiency trend...

Yes. You also asked about credit cost, so credit cost is 0.4. It's the same [indiscernible].

For standard is what you are saying, right?

Overall. Just the overall. For standard, it is 0.45. This is a flat change. So this is why PAT is low is only because of provisioning under SA, about INR 11 crores, and INR 5 crores for NPA bucket movement.

Got it. So sir, how are we seeing the collection efficiency trends in the restructured pool? Have you seen any slippage from there?

No. Actually, restructured pool, out of the set where it is not due, INR 20 crores we have closed with customers who have paid back. So the PAT has come down by INR 20 crores from the restructured pool. And very few accounts are due, and there, we have 100% collection. Actually, to be very honest, it's too early to comment on the restructured pool because until quarter 3, we had very few accounts [indiscernible] were due -- the interest were due. And in such accounts, we have collected 100%. But outside this pool, where we [indiscernible] option is available, but customers have come forward and closed the loan only. It is not -- closure of the loan only is about INR 20 crores.

Okay. Got it. Got it. Sir, the third question was with respect to the strong disbursement that we've seen. So what is the infrastructure that we are planning to add in terms of the branches and employees going ahead? Because if you look at -- since March '19, we broadly added 12, 13 branches. And while I understand that you've been rationalizing branches in terms of relocating and closing sort of inefficient branches, but incrementally, what is the thought process?

So basically, last year, we took a call that we will open 6 branches because of COVID and other reasons. And otherwise, on a yearly basis, on a steady state, we would open about 12 to 16 branches. So going forward, you will see branch expansion. Having said that, we were able to grow our book without increasing too many branches from about INR 19,000 crores to about INR 25,000 crores.

Right, right. So incrementally, we will need to add branches to sort of continue -- yes. Got it. Got it.

The next question is from the line of [ Maruk Adajanya ], individual analyst.

Congratulations. Sir, I had a couple of questions. Firstly, the impact of the LCR has been positive for you as what you said. How did that happen?

So basically, my cost of funds is 5.5%. And we had to invest in government bonds, which is 7%. So they have a positive carry.

Got it. Okay, sir. Sir, and the other question again is on RBI norm. You did clarify that it did not have an impact because you [ repooled ] collections and your collection efficiency is improving. But in terms of your upgrade from NPL 2 standard, were you doing it after receiving all EMs? Or how did that happen earlier? And will there be any follow-on impact from that in your next quarter's asset quality?

From November 12 onwards, any upgradation was based on the entire arrear collection. As for the new RBI, there's none. Okay. Now all active accounts went through this collection process for 2 months after the RBI circular, which is for the month of November and second is month of December. The 2 months we have seen, all live accounts have gone through this process, and we are able to manage because we reformed collections, and therefore, the impact on this 2 NPA was negligible. For example, earlier, let's say, in a quarter like, let's say, quarter 3, we had time in 31st of December to collect, right? Now October at 31 days, the number at 30 days, and this was December 29, 21 as a cutoff. December 29 was the 90th date for all collection to collect, so it doesn't flow to NPA. So we lost 2 days because of this new guideline. So we preponed and we collected all by 29th of December, so that nothing closing. So I think most largely our strategy was in terms of arresting the flow, and to a certain extent, where we could write or not, where we could upgrade the account, we collected full arrear and upgraded the account.

Got it, sir. Sir, and just in terms of rate, so see, if your lending benchmark, lending rate was to change today, when will your outstanding or your old loans reprice? After how much lag? Beginning of next quarter? Or how does that work? Because if rates rise, we just want to assess the impact on your margin.

See, the entire book will get repriced in 1 year.

In 1 year?

Yes. Supposed tomorrow, there is change in repo and the rate goes up, and if I want to increase it, I can talk on that in about 15 days' time. In the natural course, it takes the entire portfolio and then repricing.

Got it. But how much of your loans are repolling?

All the loans.

All the loans. Okay. Got it, sir. Okay, sir.

The next question is from the line of [indiscernible] from ICICI Prudential Life Insurance.

Congratulations on a good set of numbers. My first question is with respect to the strategy and competitive dynamics. So if we look at our website, the starting rack rate on individual housing is roughly around 8.25%. And the gap between, say, Can Fin rack rate and the lowest lender is roughly around 175 to 180 basis points. This is a similar gap. 1 year back, it was around 40 basis points. So I just want to understand what has changed in last 1 year in terms of strategy or the way we are doing the business because of which we are able to charge higher? At the same time, the disbursements are also doing -- all-time disbursement we are doing. So I just wanted to understand on the strategy first. Also, if you can also talk about competitive dynamics in the current environment, that will be also helpful.

Sure. So basically, what has changed, nothing has changed. I think we're almost back to pre-COVID time, barring Omicron, that is COVID third wave. I think they are back to pre-COVID times in terms of demand and market dynamics. Now we have changed the pricing strategy because there was COVID first wave, which impacted the entire economy and there was national lockdown. And therefore, no business opportunity was not available outside. And therefore, there was a lot of pressure on the balance transfer, right? Now -- so then for book retention, it was absolutely necessary for us to be competitive on the yield. And therefore, we have to drop the rates to retain customers. When market opened up, when markets improved, we increased rates and -- which we're able to grow our disbursement, grow our book and still retain our existing customers. I think one big change is that now economic activity is back. We are almost back to pre-COVID level in terms of demand and economic activity. That's the only change. Because for many, many years, we've been operating at, at least 1 to 3 higher than bank rates, bank loan rates. So I think that is something that we have managed over 3 decades. Well, now we are back to those times.

Okay, sure. And sir, my second question is with respect to the cost of funds. Now if you look at our total borrowing mix, around 15% SGP. And that, although it has come down compared to, say, last 1 or 2 quarters, but in a rising interest rate environment, how do you see the cost of funds movement, especially next year? And what are the levers are available with us to control the cost of funds?

So basically, we've seen that in next couple of quarters, we should start reaching up. But we expect rates to go -- increase by about 100 to 125 bps in next 4 to 6 quarters. That is something that we have budgeted and we can easily manage that because we have operated when the rates were high and then the rates dropped. So now again, the rates started reaching up. So I think that won't be a problem at all. Our strategy broadly would remain the same. So we are actually agnostic in terms of source of funds as long as [ within ] the cost increase. So our strategy would remain the same, and we would really be able to manage increase in rates between 100 to 150 bps.

The next question is from the line of Nitin Jain from Fairway Capital. The next question is from the line of Devansh Nigotia from SIMPL.

Congratulations on good disbursement. Sir, last quarter, we mentioned that we were going to start initiating legal action and pursue for the [ NG ]. So sir, what exactly is the progress there because there is a possibility of some reversals in the credit for that? So if you could just throw some light there.

So in quarter 3, we were able to crack close to INR 17 crores from NPA pool. So that legal action is on now. So all the [indiscernible], all that is on across all the states. So we are able to crack about INR 17-odd crores. That is why you see that 0.78% has come down to 0.71%. So we were able to crack ourselves [indiscernible]. Going forward, this number will increase.

Sir, but then if I address the INR 16 crore credit cost in the quarter, that will -- that is after the 50% reversal in this NPA of INR 17 crores, right? If that's the right understanding. Because you mentioned that 50% is already provided in this pool, so then how will this interplay?

It could be 50%, it could be 100%, so it's from various buckets.

Yes. Regarding the INR 16 crores, what we provided, INR 11 crores pertains to standard assets and only INR 5.5 crores pertains to the NPA bucket movement.

But the NPA pool that has been sold will also be reversed, right?

Yes, that will be reversed.

Yes. The total overall -- if you calculate on this, the overall provision is, in fact, INR 7 crores. Overall provision return is 1.7%. So net impact is 5.3%.

Okay, sir. And you mentioned the collection efficiency of 100% in the restructured. So this was for the pool that was due for 3 months or 6 months period? You highlighted in your earlier...

Restructured pool started from October onwards. So it is too early to analyze the collection provision in the restructured pools.

See, because the accounts -- the very few accounts have fallen due now. And there, we have collected 100%. I think beyond this, from the pool, there's another interest [indiscernible] were due, so the cost has come down from [indiscernible] already. And just to give you a number, 20% of customers where [ EMA ] has not fallen due, they have -- they are actually -- so they are paying. So the 700 customers out of 4,400 customers, they started paying.

So restructured book should reduce going forward?

It should reduce because in these 700 accounts, they are either paying major interest or [ EMA ] due.

The next question is from the line of Abhijit Tibrewal from Motilal Oswal.

Sir, first couple of data keeping questions. If you could just share what was the quantum of borrowing as at the end of December '21.

Borrowings stood at INR 22,550 crores.

INR 22,550 crores.

Yes.

And sir, what were the incremental yields during the quarter?

Incremental yield is 8.02%.

Sir, 8.02% incremental, and despite that, we're talking about 8.05% portfolio yield?

Yes, 8.05% is yield on portfolio and incremental is 8.02%.

On housing loans.

On housing loans.

See, that 8.02% is on the housing loans. That's advances. If you consider the LCR investment return what we [indiscernible], it comes to around 6 bps, more than that. It comes around 8.07%. Yield of 8.02% is strictly on the housing loans. Incrementally, we refer to housing loans only keeping the LCR, which has just started now. We kept out of our purview for the purpose of increment yield calculation.

Okay. Sir, then fair to say that, I mean, instead of a drag on your margins because of this new LCR requirement, you're actually seeing your NIMs and so-called yields going up because of the implementation of this LCR requirement from December onwards?

See, I'll tell you, I think we cannot comment on how this is going to behave in the future because, today, the yield is higher. So after few quarters, you never know, it could be lower, right? I think the only thing is we have to comply with LCM [indiscernible]. At this point in time, that is a cost [indiscernible].

Sure, sir. Sir, the other question that I had is, I mean, I see that in your presentation, you have, I think, restated your borrowing mix that you gave during the last quarter. So I mean, what have you done? If you nowadays see fees from bank, do you now classify it under banks? Or do you now classify it under CPs?

The borrowing from the CP remains CP-only. Now bank borrowings have become more cheaper than the CP because we have to take into consideration both costs as well as yield and factor into mind. So that is why there is a 3% shift to the bank borrowings, and CPs have come down by 2% from quarter-on-quarter sequential basis.

Okay. Okay. Sir, and maybe the last question from my end before I come back into the question queue, were there any one-offs in your operating expenses during the quarter, either because of the CSR expenses or technology expense? Or would it be fair to say that your operating expenses during the quarter are a direct reflection of your higher disbursements? Or have you kind of upfronted some of the expenses that you typically book during the fourth quarter of the fiscal year?

No, there is nothing one-off expenditures, like the rate is an ongoing right off the year, so [indiscernible] the company has to provide in respect of all staff expenses. So that has been coming to the effect, which is slightly [indiscernible] more than the corresponding quarter last sequential quarter. As well there's a slight up in the [indiscernible], in the expenses side.

Okay. Sir, if I could squeeze in just one last question here -- rather 2 parts to this question. One is, I mean, why have you had to increase the provision cover on the NPA pool? Is it because these are, I would say, legacy and because these are legacy NPA loans and because you're not able to resolve them and because of the aging, you've increased the provision cover on your NPL loans from 40% to 45%? And sir, lastly, what impact has this Omicron third wave had on your disbursements during the month of January?

Yes. So one is that the provisioning for NPA is basically bucket movement because November 12, we had to collect the entire arrears to upgrade the asset rate. So now this INR 5-odd crores is only for NPA bucket movement, right? Now -- and the balance as clarified by Joishy is [indiscernible]. Now Omicron had an impact. Even though severity was low, obviously, the efficiency of our employees was quite less vis-a-vis compared to other months because of Omicron. In terms of business impact, we have not seen much. Okay. So I would say the impact could be high, some 4% or 5% in the month of January, if we feel we can easily cover up in next 2 months.

Congratulations on a good quarter and wish you the very best.

The next question is from the line of [ Kashden Agarwal ] from IDFC AMC.

Sir, one thing I wanted to understand of, you said that the incremental yields are at 8.02%. But when I checked on the book side, the lowest rate mentioned is 8.25%. So I just wanted to understand why the divergence in the yield.

No, see, that -- because whenever the rate of interest -- when we do the rate of interest increase, it is having a lag effect of 1 year. The reset will take place over a period of next 1 year. So the 8.25% is what we implemented in the Q3 is for the prospect to lending and the existing book will get reset in the next 1 year. So that's not -- the full impact is coming the next 1 year.

Sir, but you said the incremental yields are at 8.02%. It means the fresh loans that you're giving is that 8.02%.

Yes, correct. So the incremental rate is 8.02% because it also depends on the mix of products that we have generated. And we also had offers. So we have a rack rate and we also have an offer. You must have seen home loan rates at 6.5%, others is 4%. So we also have an offer, which is not as low as 6.5%. But we also have an offer in the rates that are lower than rack rate. That is subject to certain conditions like 0 score or so and so on and stuff like that. But the average incremental yield is 8.02%. So I think if you look at quarter 3, the yield is 8.02%.

Okay. Sure. And sir, one last one I wanted to understand was on the repricing of the book. So just for my understanding, let's just say, if I want to take a loan in January '21, which was at 7.25% rate, so come January '22, is it that my loan would be reset at 8.25% automatically?

No, it won't. If you have taken under the offer, then it will get back to the rack rate. If you take it at the rack rate, then it can not change.

But sir, [indiscernible].

Suppose if you have availed the loan at the rack rate, then your rate will not change. If you already loaned at a discounted rate, then it will go back to the rack rate. Your rate will change only when I change rates for all, when there is change in the interest rate scenario.

Right. Sir, because what I understand was earlier, we were following that automatically when we change rates, after 1 year, the bank will automatically reset also that rate. So we have discontinued that working with [indiscernible].

It depends on the risk rating. Okay. Depending on the performance of the account, the rate will be changed. But if you've taken it at rack rate, the rate -- let's say, nothing changes, then your rack rate remains.

The next question is from the line of Ankush Agrawal from Surge Capital.

So sir, nitpicking a little bit on this reset of loans. So our entire book is variable interest rate book rate with resets annually. So for example, if I take a loan currently in the month of January '21, the reset for my loan will happen in January -- sorry, if I took a loan on January '22, it will reset in January '23. That is the right understanding, right?

Yes.

Yes. And in case there is some increased interest rate environment going on, if you want, you can still reprice in the middle in between this 1-year period? You have that discretion?

Yes, yes. We can reprice anytime depending on the market.

Market condition. Right. So sir, similarly on our borrowing side, how much of our borrowings are like record -- linked to that [indiscernible]?

100%. Because I think barring few loans, I think all the loans are variable. It's directly, indirectly linked to repo.

Right. So I think bank borrowings, NHB borrowings, those are the majority. I think CP would be fixed, right?

Yes, right.

Right. Got it. So more or less, in case the interest rates started rising quite fast, we can reprice our book instantly if we want to?

Yes, you can.

Right, right. And sir, secondly, what kind of leverage are we looking at, like on the higher end?

I mean, if you saw that last year, it was coming down. And now first of this rate change, there has been slight change in the PAT numbers and the [indiscernible] and we also have plans to raise capital.

So we're looking to raise capital at 8x, is what you're saying?

No, no, no. One is we are comfortable at the rates. [indiscernible] And we also plan to raise capital. So these are 2 different...

All right. Right. So you won't look to go above it, that's what you're saying? Because I think in 2019, '18, I think we were above 9%.

Yes. That's right.

Okay. So why this change in stance, sir?

Sorry. Come again?

Why is this change in stance. Earlier we used to go up to 9 and 8, 10x leverage, and now we're somewhat we won't go above 8. So why this?

Yes. No, earlier, it was more. But I think now we have internally, we have room both and we want to be around 8%. I mean that's what we feel we are comfortable with.

As per the regulator, I think there's enough scope, but I think to be competitive in the market, even in terms of borrowing, I think all the banks would expect us to be quite low on the leverage. And therefore, we want to keep it around 8-ish.

Correct. Got it. Got it. And sir, another thing on the cost-to-income ratio. I mean it has increased quite a lot this year. I think it's now, for this quarter, we have clocked like 19%, right? I think just before COVID and all the years, it's around 15%, 16%. So what's the reason for this?

So I think one is provisioning.

No, I think our cost-to-income ratio that you gave in the presentation is excluding provisioning, sir?

No, that is the AS-15 provision. We are referring to the provisioning as far as [indiscernible] around [ INR 5 crores ] net income for this quarter, which is slightly higher compared to the previous quarter. And [ for some extent ] have been slightly increased because the volume of business has increased. Because of that, [ we are at 1.6% ] compared to the previous quarter.

Okay. So in the medium to long term, where do you think this number would settle, sir?

Somewhere around 16%, 17% is the average range [indiscernible].

16% to 17%.

Yes.

Right. Okay. Sir, just one last feedback. In your quarterly presentation, if you can improve [indiscernible], for example, like some of the basic material book value or absolute borrowings are not there in our quarterly presentation. So if you can add that, that will be very helpful going there.

What could we add, sorry?

Borrowings. Some of the basic material, what is the total debt, what is the book value, those kind of basic stats is also missing.

Okay. Right. Thanks for the suggestion. We'll incorporate it. Book value, borrowing, [indiscernible] in annual report. [indiscernible]. So that's...

The next question is from the line of Aswin Balasubramanian from HSBC AMC.

Sir, on the LPR that you mentioned that you had a positive effect. I just wanted to understand what will be the nature of the investments which you will have for this year? And also what will be the quantum in terms of the investment book that you need to hold for LCR?

Our quantum is INR 600 crores and the [indiscernible] is G6. Means what we're getting is about 7 -- about [ 6.737 -- 6 point and 37 ]. So I think that is where we have some positive impact on the NIM.

Sir, so these will be longer [ tenure G6 ], is it or [indiscernible].

Yes. 10 years.

Okay. Okay. And the INR 600 crores is the additional for LCR or it's the total investments on your balance sheet?

This will come in the investments in the balance sheet, because [indiscernible] for this financial year, [indiscernible]. It's a total amount, not incremental.

Okay, okay. Got it. And also, I mean, I just noticed in the presentation in terms of LAP segment, although it is small, has seen good growth this quarter. So I mean, is that incrementally more focus on that segment? Or what is the strategy there? And what would be the customer segment there for you?

So I think consumer segment is the same. Our policy is same, underwriting is same. The only thing is our LAP book was very small and the entire portfolio was only about 5%. So we thought we'll double the book in the next 3 years. So the 5 will become 10 in next 3 years. So we would maintain 90 home and 10 LAP. Because generally, within the same non-home loan, we have a top-up loan. So if I exclude the LAP [indiscernible]. So we thought we should grow that book. We have an opportunity without compromising on the risk profile of the company. So that's our plan. That is in the next 3 years. So you will see LAP book growing at a much faster pace than home loan.

Right. And just one more question. In earlier quarters, I mean, your RAC rate was also a bit lower and you had changed your strategy in terms of wanting to sort of be competitive with banks. So currently, given that your RAC rates is much higher and your incremental yields are at 8%, so is that, again, like a change in strategy of customer segment in terms of the segment which you are catering to versus the -- which banks are catering to? Because even those banks are offering, let's say, 6%, 6.5%, 6.7% kind of rates on home loans?

Earlier, if you see the difference between banks and that's about 150, and under certain products, 200 bps -- 150, 200 bps. So now the difference is not that much. So we would be probably 100 bps higher than banks. So to that extent, certain markets have opened up for us where we see an opportunity of growing the book as well. Having said that, I think the starting point for us is to maintain the margin. So we will -- I think I mentioned this earlier also, 3 and 2.4 is what we normally would definitely foresee. i Know today, our NIM is 3.74 and the spread is 2.4. And obviously, it will improve. But I think what we'll protect is this 2.4 and 3.

The next question is from the line of Anuj Jain from ValueQuest Capital.

I have a few queries regarding loan book. So first is, what is the highest exposure to any single real estate project?

Real estate project, see, now the total book on lease is INR 700 crores.

No, no, no. I mean to say via home loans -- via individual home loans. What is the...

The maximum exposure would be -- on an independent property, would be about INR 3 crores.

INR 3 crores.

Correct.

And any -- and what is our highest exposure to any single developer?

A [ single ] developer is less than [ INR 1 crores. ]

Sorry, let me rephrase my question. My query is through individual home loans, what is our exposure to any single developer or any single project? Let's say, for example, in any particular Tier 2 city, there is like 5 different projects of a single developer, and we are financing those through home loans. So do we have any cap on the exposure to any single project like that?

Understood. Understood. See, if you look at the portfolio, 75% is non-builder and 25% is builder. And this 25%, we fund for apartments in a project which is nearing completion. We don't fund that maybe clean slate or maybe at a 50% or 60% level. We fund only when the project is nearing completion. And to that extent, our completion risk is quite low. And let's say there is a builder and we have funded 5 projects. And if 3 projects are complete -- if 3 projects are complete, I don't carry any risk there because the properties are registered and the building is complete, project is complete. So I don't see risk there. So that would be out of my exposure bucket. So at any given point in time, at the enterprise level, out of the 25% of incremental footing or maybe if I can take last 1.5 years sourcing because the kinds of project, what we fund would typically get completed in about 12 to 18 months because we focus on small builders, small projects, not high-rise [indiscernible] kind of developer So my risk would be always in the range of 7% to 8% number completion.

Understood. Understood. And sir, can you also provide a state-wise exposure of our loan book?

State-wise exposure, we can share the details to you. So for example, earlier Karnataka used to contribute about 30%. So now we are well-diversified. But [ South ] contributes to about 67%, 68% of business. If you want any particular state, we can share that with you.

So within this South, if you can just tell us like top 5 states and their contribution?

Can you repeat the question?

Within South region, what is the distribution among different states, Karnataka, Telangana, Maharashtra?

So on an incremental basis, Telangana does about INR 150 crores. So entire Karnataka would deliver about INR 210 crores, INR 215 crores. PM will be quite lower, would be about INR 110 crores, INR 115 crores. So this is a split income. And Telangana would be INR 70 crores. Sorry, AP is INR 70 crores and Telangana will be INR 150 crores. So together, [indiscernible]. Andhra Pradesh [indiscernible] INR 70 crores.

The next question is from the line of Gaurav Kochar from Mirae Asset.

Sir, just to understand the margin dynamics and the impact of LCR. So in the numerate, in the net interest income, while the interest income would flow, the interest income on the LCR bid. In the denominator, would you include investments?

Yes, we do invest -- we do include investment because it has started only from December onwards except the denominator is smaller. But over a period of time, it will be getting passed on average basis if we're getting added, just like how we launched.

Okay. Okay. So that 9 basis points you're attributing to is because of lower base of denominator, hence then, on the numerator, there is a full impact of interest income on LCR and the denominator is slightly small because of low rates. Is that the reason why there's a basis point [ difference ]?

Yes, that's why we are telling that yield -- excluding the investment yield, the NIM is pooling at 3.65%. And with the LCR investment income, it's 3.74%. So those are...

Okay. Sure. So going ahead, you expect this margin actually to -- the 3.65%, structurally, should that improve in the next, say, 1 year or so, that core margin, excluding the impact of LCR?

Yes, 3.6% -- I think we should take it at 3.65% because the LCR yield may not be recurring in nature. It will matter, but [indiscernible]. And therefore, 3.65% is the reference point with previous quarter of 3.53%. Yes, the 3.65% has to go through.

Okay. Okay. And just the second question was on the incremental yield. You mentioned 8.02 on the home loan portfolio. Sir, if our incremental rate is 8.2, which is the minimum, and incremental yield is 8.02%, so are we giving a discount? I think a lot of the questions earlier also, you alluded to. But I wasn't quite sure. So just wanted your comments on the incremental book that you're disbursing, is there a discount given there also? And hence, the weighted average yield is 8.0?

[indiscernible] do this one.

Okay. Okay. Sure. So incrementally, I mean, given this was a festive season, maybe that's why. But going ahead, maybe in 4Q or beyond, the marginal yield should be higher than 8.2xShould we assume that?

I would put it this way. So my yield last quarter was 7.99. This quarter is 8.05. I think the 8.05 will improve quarter-on-quarter.

Okay. Okay. So specific to home loan, that yield has some legs to move up, maybe towards that 8.25 blended basis. 8.65 is...

Yes. Home loan, non-home loan, I think both will improve, and yield will -- and also whatever rate provision we have done, that portfolio changes would happen in some time because there's always a lag effect. [indiscernible]

Sure, sure. And sir, given the leverage is less than the -- maybe the threshold that you've just spoken about and given the ROEs are high and growth is also in mid- to high-teens, why do you want to raise capital? Just wanted your thoughts, one. And secondly, on the leverage bit, do you see any -- because right now also, we are getting borrowings at very competitive rates. So do you expect post capital raise the cost of funds or the rating, so to speak, to improve?

We will not raise [ both ] of capital. But we feel we got to raise a bit of capital so that our costs also would come down and even the leverage would drop. So we want to raise some capital, not a large amount. We had an approval of INR 2,000 crores. So we might take part of that amount in the next couple of quarters.

The next question is from the line of [indiscernible] from Ocean Dial.

So firstly, just one, if you have touched upon the self-employed segment, which obviously used to be a higher share, how are we seeing the trends on an incremental basis? And anything that we are looking to as a strategy to maybe again gradually increase this pie? That's the first question.

Sure. I think it used to be 30% incrementally earlier. Then after COVID, certainly, it came down to about 12%, and then increased to 15%, 18%. Now it's come back to 26%. So I think in another quarter or 2, it would be back to 30%. We don't want to force it to increase sourcing from self-employed and change the mix because we had challenges of COVID in last 2 years. So we want CMP as a segment to come back naturally. And now, it's almost back. So from 30%, it went down to 12%. Then we saw 15%, 18%. Now it's 26%. So I think another quarter or 2, it might be back to 30%.

And sir, any changes that we would have made to our underwriting to again get back to these numbers? And -- or do you think that generally the ground -- or the business impact had, over the time, reduced, and that's how we were comfortable again going back here? Or had we done something...

We have not made any changes, not only for CMP and for salaries. We have not made any changes because of COVID. We only changed some processes. We only tightened the process because of COVID. And after the second -- after first wave, in the month of January, we restored all the processes back. And after that, we have not made any changes to the process also. So we don't feel that there is a need or necessity. And that is why we are pretty comfortable whether the C&P share goes down or goes up.

Sure, sir. And the second question is that just firstly, just confirming. Did we share that INR 210 crores to INR 215 crores received incremental share of -- or maybe of that INR 2,000-plus crores disbursement that we do, INR 210 crores to INR 215 crores came from Karnataka? Did I get that correct?

No, no, no. incremental. For example, if we have done INR 2,472 crores in quarter 3. So every month, what we get from Karnataka is around that number. It's not booked. It's only incrementally.

No, no, understood. So this is a monthly number which you shared?

Exactly. Yes, a monthly number.

Understood, yes. Because that's why I was saying -- if the share came down very sharply, so I just want to check that.

The next question is from the line of [ Mayank Gulgulia ] from SUD Life.

Sir, can you share like entire loan book? Then will it be repriced with a period of 1 year. So -- and if you want, we can change it also. So let's say, the product right now, you said 8%. It's like 4% repo plus 4 percentage there. And this guide, you can change any point of time and the [indiscernible] 4%, will actually change [indiscernible] the policy? Is it that the way your lending is, sir?

We -- whatever incremental growth will I do and if I give any offer, but also we'll go back to that rate after 1 year. That's number one. Number two, every year, we do review all the accounts and we have a risk categorization, risk 1, risk 2, risk 3. And depending on the category, there is a rate that gets loaded to the account. So these 2 things, we do. Apart from these 2, [indiscernible] change in the interest rate scenario, whether the rate goes up or goes down, there is either benefit or this increase to the customer.

Sir, our lending book is linked to our RAC rates, not the annual rates?

Everything is [indiscernible]. Because we borrow from banks, and all those loans are linked either to e-bill or to repo, whether internal, external. So indirectly or directly, everything is linked to market.

Okay. Sir, typically, when someone loans from a bank, it's like reference [indiscernible]. So like to our customer, how do we collect these in terms of yield? Like in a typical [indiscernible]...

We communicate to our customer saying that this is the rate, this is the margin. That's all.

The next question is from the line of [indiscernible] from Fidelity International.

Do you have any thoughts of reducing the CP book any further? And if so, is there a timeline which you could suggest? And second is, I'm just going through your asset liability statement. It seems -- which published the annual report. Beyond 2 months, you seem to be running a negative ALM all the way up to 5 years. Any thoughts on how do you correct it?

No, CP as well we are getting CP is raised only as a cost leverage and not a source of funds. It is backed up by the [ income ] bank, et cetera. So obviously cost concept only. And since the backdrop documented banking are there, there is also a borrowing schedule as well as the due date within which we should adhere. Accordingly, the funding has been planned in such a way that towards the year, the cost of the funds remains lower. At the same time, we will raise the banks from [indiscernible]. So when all these things have been done, the ALM is always kept in mind so that whatever the mix at, there's a [indiscernible], it will cover up so that utilization of the bank borrowing, cost of the funds as well as ALM is matched and continued with.

Sir, I think they're actually not matching what your ALM sales statement seems to be suggesting. Because it seems like from beyond 2 months up to almost 5 years, it seems that there's a mismatch.

Well, there is a mismatch in there because the housing loan collection is for a build of 15 to 20 years whereas the bank borrowing, it's 7 to 10 years. While the gap will be directed, but there is also a [indiscernible] limit that will be there. It is 1 to 1 match. It will never come in the [indiscernible]. Then the target limit also will reside within which we can function. So whatever we are talking about is keeping the common limit also in the mind and accordingly, we are the such numbers.

The next question is from the line of Pratik Singhania from SageOne Investment Management.

Sir, my question is pertaining to a scenario, say, suppose the economy again comes completely back on track after COVID. And say, if banks which are getting much more competitive in retail, they tend to like gain some lever, redeem some [indiscernible] in terms of evaluating the credit rating. So in that case, if we have to simultaneously review our credit rating and, say, if we want to like give some benefit or some lever to these borrowers, then in that case, like how our book or growth would pan out if we want to do that?

See, we have managed the normal competition from banks for many, many years, right? What happened during COVID was abnormal competition. So because of abnormal competition, we had to drop rates. If it was normal competition, I think this is a steady state for us and we would very easily manage the differential and let the competition on, right? So I don't think so that situation would -- because COVID is probably once-in-a-century kind of event. And therefore, we have to make this change. And in spite of making this change, you've seen that in last 6 to 8 quarters, you can see really, given the context of COVID, both in terms of book reduction or disbursement or NPA management, right? So if it's normal competition, there is no issue because the differentials are always going to be there. If it is abnormal, let's say, like COVID, then obviously we need to change our strategy to see how best we can manage.

So sir, are you seeing this competitive intensity reducing from banks? Like as and when we are over this?

Drastically. Drastically it has come down. Last year, quarter 1, quarter 2, quarter 3, huge competition, right? And quarter 4, we saw that competition was there, but it started coming down. Now from quarter 1 until now, it is normal business for us and normal competition. Because in April, we increased rates. And in spite of increasing rates, in the last 4 quarters, 3 quarters have been all-time ever highest disbursement in our history.

Okay. So again, like banks would be focusing again back to more of corporate...

What actually happened was until now, the economic activity is improving. And obviously, SME as a segment has improved. Corporate credit has kicked off. And therefore, dependency on mortgage for growing bank book also has come down drastically. And therefore, now there is normal competition. So we don't see too much of competition now from banks the way we saw last year.

The next question is from the line of Abhijit Tibrewal from Motilal Oswal.

Sir, 2 data keeping questions and then 1 final question. If you could just help us with the Stage 2 loans number and what is the provision that you're carrying on stage 2 loans?

Okay.

You want the provisioning Stage 2 loans as well as for the NDS as well as direct loans?

Possibly. Yes, sir. Sir, first thing is what is the proportion of Stage 2 loans right now? And what are the provisions that we are carrying on those Stage 2 loans?

Stage 2 loans as of now is INR 427 crores. That is dependent to what we classify as 2 stage. Also the total book of INR 25,091 crores. So provisioning of Stage 2 outside the [ announcement ], whatever we are [ promoting ] is around INR 69 crores. Whereas for the ECL model, it comes to INR 45 crores.

Sure, sir. And sir, during your opening remarks, you also talked about the BT numbers that you saw during the quarter. If you could just repeat that for us?

Okay. BT in quarter 3 was about INR 78 crores, which means about INR 26 crores every month. This number used to be 3x higher last year in quarter 3.

Sir, sorry. Quarter 2, how much was it?

No, no. Last year, quarter 3, this number was INR [ 278 ] crores [indiscernible] INR 78 crores.

Okay. Got it, sir. And sir, the last question that the last question that I had is, I mean, there seems to be some confusion around the repricing of loans. So if I understand you correctly during the call, so if someone had taken a home loan from you at 7%, which was Q4 of last fiscal year, let's say, January or February last year. This year, given that your RAC rate is now 8.25%, so that 7% loan that someone took last year in this January or February, it will get repriced to 8.2%. Is it?

Yes, yes. What you said is right. It is repriced annually. Whatever the current rate, it gets repriced on that.

And sir, do you have levers to kind of make sure? Because, I mean, if someone sees a 125 basis points kind of an increase in home loan rates when clearly the home loan rates of banks have not increased as much, will there be any retention policies in place which could kind of lead to similar pressure on your needs in the coming quarter? And sir, lastly, is -- I mean, given the kind of disbursements that we've seen during this year, what is it that you're targeting in terms of disbursement growth in FY '23?

Let me explain to you again on the interest rate case. Because, let's say, today, my rate is 8.25%. That's the RAC rate, okay? I have an offer of 7.5%. Now the 7.5% is for 1 year. So after 1 year, the 7.5% becomes 8.25%. Okay. Number two, whenever I did loan every year, so we have S1, S2, S3; S1 being the best, S3 being the worst, right, relatively. Now based on the change of risk rating, my rate also would change. Number three, whenever there is change in the interest rate scenario, it could be -- it could increase or decrease. But I would be, if we take a call, we will be able to pass on that for them all that increase in cost to our customers. So these 3 are the aspects of what comes under interest rate changes. Now your second question was?

The second question was, I mean, what is the disbursement growth that we have in mind in FY '23?

Yes, yes. So we will be able to grow at 18%, 20%, both on disbursement and book.

I'm sorry, sir, can you repeat yourself once again?

18%, 20%.

Disbursement growth?

Yes.

The next question is from the line of Nischint Chawathe from Kotak Securities.

Am I audible?

Yes, audible. Please carry on, sir.

Sir, just a clarification. I know you touched upon this on the call, but what is the reason for the increase in the NPL coverage during the quarter?

Yes. NPL because of the aging factor as well, there is a sales movement in the NPL. Because of sales movement, we bind it provisionally.

Within the NPL bucket, something moving from 6 months to...

[indiscernible] because when the account becomes NPL, you will provide 15%.

Yes, yes. Got it. Got it.

Yes, 150, and then eventually 100, yes.

Sure. And just one thing on the investments that you are making for LCR and government securities, what would be the duration of those bonds?

10 years.

10 years.

10 years. And then in that sense, I mean, assuming a scenario of rising interest rates, you will probably have to take some NPL [indiscernible] as well?

We have that option.

We have that option, yes.

Okay. And just one last question. What are your approval rates or rejection rates, whichever you put it?

So approval rates, we have blended. We have about 88%. Approval rate is 88%.

Okay. And is that sort of changed over time?

Yes. During COVID time, it came down to about 84%, 80%. And then again, now it is back to 88% to 90%.

Sure. And did you anywhere in the call mention that the demand for salaried loans is higher than nonsalaried at this point of time?

Yes. I did mention that. Demand for salaried is quite high compared to SMAP. But however, we said we included our last few quarters. From 30% incrementally, it has gone down to 12%, and then 15%, 18%. Now it is back to 26%.

But is that because of tightening of screens from your side for your CMP customers? Or is that because the demand was lower?

We haven't done any change with respect to policy or credit underwriting or the process. It is only market dynamics.

The next question is from the line of [ Karan Agrawal ] from Quest Investment.

So I have 2 questions. One is on the competitive side [indiscernible], and the other one is on new technology [indiscernible]. So coming to the first question, the average annual income of the customer [indiscernible]...

Mr. Agrawal, your audio is breaking from your line. So please check.

Am I audible now?

Yes, please go ahead.

Yes. So the current income of the -- current annual income of our target customer is still flat. Is that correct?

It's about INR 30,000 to INR 40,000 per month.

Yes. And as I could recall in the previous quarter or a quarter before that, we were targeting customers who has an either income of -- whoever monthly income is close to 1 lakh, 1.5 lakh. Is that correct?

No. Our average income of our customers is about INR 20,000 to INR 30,000 per month. I also mentioned that we also focus on the high-value salaries, but that's an exception.

Okay. Got it. And the second question is on the technology initiatives, which Can Fin Homes is taking. For example, I checked on my Google store -- Google App Store, that we don't have an app for a customer, right? On the other hand, there are players who focus on small ticket affordable housing companies. They have an app, and close to 70% of the customers inquire that to the NBFC through the app itself. So what are we doing in terms of the technology on a digital initiative?

See, there are 2 aspects to this. I have seen the intent, which still [indiscernible] for various products in the last 5 to 7 years, right? Now as a company, we focus on automation, the necessary automation. We work on per CR, then the quote investment. So we'll be working on automation, but not really on the digital delivery, per se because there are certain risks of activity [indiscernible]. I don't want to get into details in this call, but because this is not a small ticket personal loan or a personal loan where the ticket size is lower so that we can have a digital leasing. Here, there are so many manual [indiscernible] legal and technical. Having said that, I think mortgage as a product would need a lot of automation, and we are working on that. And at the same time, we are also working on changing the entire IT infrastructure within. So as part of that, we will have online apps. We're seeing online collection, integrated various APIs and stuff like that.

Okay, sir. And the account aggregator framework that as the government has come out, we are working to integrate that into our business as well, right?

It's coming in, what is that?

Sir, the account aggregator framework of the government, which the RBI has come up with Can Fin is working to incorporate that into our business as well, right, for underwriting?

No, I don't think...

It's under study.

That is still under study. As of now, we have in-house. Everything is in house. And we don't plan to outsource. That's our resolution on this.

The next question is from the line of Pooja Ahuja from Monarch Networth Capital.

Sir, firstly, sir, I wanted to understand on the credit cost on a sustainable basis for the next 2, 3 years, how much credit cost can we expect?

I don't think there will be too many change -- too much of a change in the credit cost because we believe that we'll be able to maintain NPL less than 1%. And today, it is 0.71. So we don't expect too much of credit cost. And we also have a plan to work on the ABL tool and the respective tool . So you will not see too much of a difference on credit cost.

Versus, let's say, the pre-COVID level? Is that what we're estimating?

Yes. It can be in that level.

Okay. Sure. And secondly, the 2 levers that the real estate sector of where were seeing in terms of stable home prices and low interest rates, how do you see the impact of these 2 levers sort of increasing, seeing an incremental trend that can probably impact demand, if at all?

So I think we are already reaping the benefits of these 2 changes. Okay. Accessibility is very high and real estate prices have actually yield off, and the demand is quite robust. So this will definitely help the industry and also as the company at least the next 4 to 5 years. The only thing which might change in there's probably increase in interest rates. I think I mentioned that we'll be able to absorb that up to 1.25 to 1.50 yields.

Okay. Sure, sir. And just one data keeping question. Sir, what was the BT number in the last quarter and, let's say, pre-COVID?

Quarter 2 was...

INR 70 crores.

Okay. And maybe, let's say, in Q3 FY '20?

See, I am expecting maximum INR 30 crores per month.

The next question is from the line of Gaurav Jani from Centrum Broking.

Am I audible?

Yes, you are,

Sir, firstly, just to pile on the disbursements. So in terms of Q4, given the backdrop of the third wave, how should we look at disbursements for quarter 4 also including January?

I think typically, quarter 4 should show improvement over quarter 3, assuming that Omicron will not aggravate.

Okay. So -- but it could be higher than the downtime when the corona dropped this quarter?

Yes. If Omicron recedes from now, I think quarter 4 should see much higher disbursement compared to quarter 3.

Sure. Sir, just an extension of the previous question in terms of borrowing mix. So in the near term, I mean, next quarter or 2 quarters, how should we look at the borrowing, extraordinary or at similar levels that we saw on Q3?

See, I think there won't be much change in the borrowing mix. It all depends because nothing -- I think more or less will not change quarter-to-quarter. It takes about 3 to 4 quarters for a meaningful change in the computation. Banks would still be close to 50% of the total borrowings. And we can see a bit of increase in [ MC ] because every incremental [indiscernible] requires 25% of [ MC ]. So [ MC ], you can see slightly increase up. And I think the rest will still remain the same, not much of change.

Sir, could you quantify the volume number for the quarter, please?

Sorry. Come again?

Borrowing number for the quarter. Incremental borrowing for the quarter, was that Q3?

Yes, Q3 closing figures for borrowings.

Quarter 3 borrowings was INR 23,550, the book. Borrowing book is INR 23,550.

Okay, sure. Just one last question, sir, a clarification on the provisioning. So actually, are we seeing the provision on the restructure and [indiscernible], right?

I don't get -- your line was breaking. Sorry, if you could please repeat the question?

Yes. [indiscernible]. So what I was asking was -- is it better now, the voice?

Yes.

Yes.

What I was asking is in terms of the provision on the restructured and the provision on standard assets ex of restructuring, that would be under the same rate, right?

That will be the same rates, yes.

Okay, okay. And could you quantify the restructured book in the current quarter, please? Last time, I think you had quantified a number of...

Total in resolution was -- relation 2 was INR 650 crores; resolution 1 was INR 77 crores. Both put together today, the outstanding is INR 711 crores, and INR 20 crores of the book has been repaid.

So INR 711 crores minus INR 20 crores is the number that we have to look at, right?

Yes, INR 690 crores is the book outstanding as of 31st of December.

The next question is from the line of [ Rahul from Meldia ].

I just wanted to reconfirm again. You said that you made 40 basis points of provision on standard assets. Is that correct?

0.45.

0.45. Okay. But when I look at the provision number for this quarter and divide it by the increase in loan book, I get a slightly higher percentage. So can you just explain that?

No. This 11% for INR 97 crores, which is standard assets. So this is restructuring in some bit, and the balance is for increase in incremental book.

Okay, okay. Sir, on a going forward basis, we should expect 45 basis...

No. For the next quarter, you won't have anything on restructuring. It will be only a standard asset provisioning on a book increase and NPA.

The next question is from the line of [ Rubis ] from Mirabilis Investments.

Sir, in last quarter, you talked about raising some INR 750-odd crores of entities. And I think we have raised some INR 275 crores in November. So wanted to know the rate of the same. And when do we expect the remainder to be raised in the time frame?

INR 275 crores is around 6.10% for 9 months. And remaining, we have to raise in this quarter. We are already tying up with a couple of investors, which is only the rates. They were all waiting for the future reserve to out to finalize the bid. Probably in next 2 months, we're going to raise the balance.

Okay. And the rate, can you repeat? Like [ 277]?

6.10%, that is 9 months, is what we raised last. That is INR 275 crores.

Okay, okay. And so this was because like -- the INR 750 crores, because we were going to measure certain NPA. Is that correct, right? So I wanted to...

No. It's not matching of 1-to-1 asset. No incidents were matured during this quarter.

No. I mean, I think there was some maturity in the quarter 2 or quarter 1. So...

Yes, quarter 1 is all there. Quarter 1, there is a maturity of NCDs, which is what we raised is through the [indiscernible] of incremental borrowings, 75% from NCD. As per the specific guidelines, this is one step towards that aspect.

Okay. So what was the amount which got matured in quarter 1 and the rate...

Mature, you're talking about what is the mature? Mature is around INR 250 crores, INR 260 crores asset, what is matured. And the rate -- because it has been raised around 3 years back, the rate was somewhere around 7-plus.

Okay, okay. Got it. And with this, like you said, the remainder [ 475 ] is expected in the next 2 quarters, next 2 months, sorry. So can we expect the CP to go down? I mean, I understand the CP is further undrawn and not part of sourcing. But since you said the long-term rate is lower than the CP, so do we expect the CP percentage to go down since we planned to raise the remaining [ 475 ] in the next 2 months?

No. See, I'll tell you because the CP is used for cost leverage. It is not for funding purposes. So if you see an opportunity where we can trend down cost, we might use CP as a channel. So all I could say is that the CP will be raised only against -- only as a backup, only if we have undrawn term loan limits or undrawn [indiscernible] limits.

Okay. Got it. And my second question is with respect to the COVID buffer. So if I recall that number correctly, it is INR 133 crores, right? So like what is our stance on the reversal of the same or utilization since like the NPAs are controlled and even the Stage 2 is quite controlled also?

From this quarter or not, we are on a stand-alone basis. Whatever the COVID exposure, we will utilize that.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Girish Kousgi for closing comments.

Thank you so much. I think the market is quite good. And as I mentioned, that I think we are on the growth path. Disbursement, there is an increasing trend. Book is increasing. Margins are improving quarter-on-quarter. And even NPAs are under control, not just MP, the entire SMA and the asset quality is pretty good. The collection efficiency is back to pre-COVID levels. And hopefully, we should be able to shore up this performance in the coming quarter. As I mentioned, in the coming quarters, where we can see for the whole year, there will be some kind of increase in the PAT. That revenue would still be flat. I think starting from the first quarter of next year, I think we'll be not pre-COVID levels, the only change being aggressive loan growth in terms of disbursement and book. Thank you very much.

Thank you. Ladies and gentlemen, on behalf of Investec Capital Services, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.