Cholamandalam Financial Holdings Limited (CHOLAHLDNG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm Bharti, moderator for the conference call. Welcome to Q1 FY '22 Earnings Call of Cholamandalam Financial Holdings hosted by Axis Capital Limited. [Operator Instructions] Please note this conference is recorded. I would now like to hand the floor to Mr. Praveen Agarwal of Axis Capital Limited. Thank you, and over to you, sir.

Thank you, Bharti. Good morning, everyone. Today, we have with us M. Sridharan Rangarajan, Director of Chola Financial Holdings; Mr. Ganesh, N., Manager and CFO of Cholamandalam Financial Holdings; Mr. Suryanarayanan, V., MD of Chola MS General Insurance; and Mr. Venugopalan, S., CFO of Chola MS General Insurance. I would request Mr. Sridharan to give his initial remarks on the results, post which we'll open the floor for Q&A. Over to you, sir.

Thank you. So good morning to all of you. I thank you for all participating in our earnings call. I hope all of you are keeping good health and safe and your near and dear are also safe and healthy. To start with, let me touch upon a few key things. Then we have our colleague, Mr. Suryanarayanan, MD of Chola MS General Insurance; Venugopalan, CFO of Chola MS General Insurance; and Ganesh, our CFO, is also on the call. I hope you had a chance to go through the presentation shared with you. And I'm sure you would have gone through the detailed presentation of Chola Finance as well. As you all know, the company, NBFC subsidiary, Chola Finance and Services, joint venture Chola MS Risk continue to report under IndAS as per the regulatory requirement. The insurance subsidiary [indiscernible] General Insurance has prepared the financial results on as per IGAAP and would adopt IndAS as per IRDA guidance. However, IndAS financial results were provided to the holding company for the purpose of consolidation. Now I come to the stand-alone financial performance of Chola [indiscernible]. It consists of income by way of dividend, interest and royalty. For the quarter ended June '21, there's no dividend receipt. However, the interest expenses on borrowing continues to accrue, and hence, there's a loss before tax of INR 0.93 crores. Interest expense compared to the last quarter has substantially reduced because of the replacement of the term loan to the [indiscernible]. The consolidated results of the company consists of the results of Cholamandalam Investment and Finance Company and Chola MS General Insurance Company as subsidiaries and Chola MS Risk Services as joint venture. At a consolidated level, the revenue from operations for the quarter ended June '21 increased by 11% to INR 3,591 crores as compared to the corresponding quarter of the previous year, while the profit after tax reduced by 39% to INR 357 crores, primarily due to the impact of second wave of COVID-19 on the operations of the subsidiary companies as well as few IRDA-related communications. Cholamandalam Investment and Finance Company Limited was adversely impacted by the second wave of COVID-19 pandemic leading to shift our focus from business to well-being of the affected persons, both borrowers and staff. This resulted in a setback in the performance in Q1 disbursements and collections front. Disbursements were up by 1% as compared to Q1 of FY '21, as purchases of vehicles were predominantly deferred. Collections also suffered resulting in increase in Stage 3 assets from 3.96% to 6.79%. CIFCL held management overlay provision of INR 750 crores as on December 20 and created additional overlay provision in March '21 to the tune of INR 350 crores to support possible uncertainties that could arise due to COVID second wave, taking the total to INR 1,100 crores. Of this, the management overlay of INR 400 crores was reversed during the quarter ended June '21. Post this reversal of INR 400 crores, CIFCL still maintains an overlay of INR 700 crores in Stage 2 and Stage 3 to manage any future contingencies. PAT after the quarter -- sorry, PAT for the quarter ended June 30, 2021, is INR 327 crores compared to INR 431 crores in the corresponding quarter of the previous year, registering a decline of 24% [indiscernible] provisions. Assets under management grew by 7% to INR 75,763 crores as on June 30, 2021, as compared to INR 70,826 crores as of June 30, 2020. CIFCL's asset quality as at the end of June 2021, represented by gross Stage 3 assets, stood at 6.79% with a provision coverage of 35.51% as against 3.34% as at June 30, 2020, with a provision coverage of 41.62%. The total provisions currently carried against the overall book is about 4.37% as against the normal overall provision level of 1.75%. The increase in Stage 3 assets in Q1 FY '22 is temporary, and we expect the loan losses to get normal levels in subsequent quarters, as it happened in Q3 and Q4 of FY '21, where the customers started paying up once the lockdown was lifted and normalcy returned. The capital adequacy ratio at the end of Q1 was at 19.08% as against the regulatory requirement of 15%. Now coming to Chola MS General Insurance. The company's performance was adversely impacted by the second wave of COVID-19, resulting in low volume from financial channels due to low CV sales. It also affected the bundle attachment sale of health and PA. The company was still able to grow its GWP by 13% to INR 997 crores in Q1 FY '22 on account of increased contribution from other channels and non-motor products. Please note that the growth of 13% is as per IndAS. Growth as per IGAAP is about 4.7%. Fire products grew by 9.1%, motor by 4.6% and health de-grew by 4.5% as in the last year the same quarter, the volumes were higher due to COVID products sales. Motor and fire growth were higher than the industry growth. However, COVID claims to the tune of INR 197 crores impacted the profitability. IRDA has advised the company to absorb the acquisition cost of long-term policies and also absorb the carried for balance asset April 1, 2021, in FY '22. This accelerated amortization of deferred acquisition costs to the tune of INR 81 crores also resulted in reduction of profit before tax by 82% to INR 38 crores. There's no increase in provision for stressed investment during this quarter. The company is of the view the existing provision is adequate to cover potential losses. IRDA has, by its circular, advised insurers to reduce the tax remittance on the contested liabilities for solvency computation. Insurers in the jurisdiction of Chennai Income Tax Commissionerate also have contested the taxation relating to the disallowance of IBNR provisioning and reinsurance remittances. The matters are commonly contested and before ITAT or Madras High Court. IRDA has also represented at the appellate forums in favor of the insurers. Insurers have represented to IRDA both individually and collectively through the general GI Council. This reduction has the effect of reduced solvency by about 0.19x, which has brought the solvency to 1.76, that is 1.76 is after a reduction of 0.19. Cholamandalam MS Risk Service, which is a small but niche company, reported a profit after tax of INR 0.4 crores against the loss of INR 3.59 crores in the corresponding quarter of the last year. So with these comments, I would like to open up for question and answers. So kindly form up the queue, and then we'll be more than happy to clarify your questions. Thank you.

[Operator Instructions] First question comes from Ravi Mehta from Deep Financials.

Just if you can clarify on the health piece of the business. So we did see a good amount of COVID claims coming in. So what kind of provisioning or reserves are we making? And how you foresee the coming quarter impact?

Yes, Suri?

On these COVID-related claims, we had about 37,000 claims coming in during the quarter 1. And these were largely for us coming out of the benefit products -- the group benefit products that we had sold last year between May and August. This count of 37,000 was higher than the count of claims that we suffered last year, which was about 32,000 plus. So this is a 1-year product. And as I had mentioned even in an earlier call, most of these policies are having their natural risk end date by August. And after policies sold, almost 80% have ended by July. So to that extent, we do not foresee much of further impact on Chola MS in the months to come. So to that extent, our reserving, yes, for to the -- for the IBNR. On these things, these are benefit products. There are -- there is no element of IBNER, meaning the value of the claim cannot go up subsequently. So it is only an event, which is getting reported later. We are carrying a reasonable IBNR reserves to manage this for any further claims that could come.

Okay. Can you quantify? Or is it possible?

Yes. In the Q1 '21-'22, the claims that have been incurred under [indiscernible] including the IBNR is INR 196 crores, which includes both COVID-specific product as well as the non-COVID-specific product.

Okay. Also, one question I had on solvency. So I've been seeing for the last 3 years, we end up reinsuring the motor [ ODPs ]. I think, mostly to manage the solvency. And we've been gradually inching to, I think, 1.76 you mentioned in the opening remarks. So will this trend continue? Or at some point, do you think this is behind and then we can grow without doing this reinsurance of OD?

Yes. A good question. As you have rightly pointed out, the solvency has been going up steadily in the backdrop of higher profits accruing to the company with our investment-related provisioning behind us. So the profitability overall profits is going to help in improving solvency. And if you had noticed, so we -- over the next few years, we may consider a reduction in the reinsurance of the motor OD part. So we don't -- and -- see, the other point is also, we want to maintain a healthy margin on solvency. So as Sridhar mentioned, the IRDA stipulation has brought it about 1.76. Otherwise, we were at about 1.97 there. And we want to push margin, which in normal course itself should get strengthened at which point the Board will consider toning down the reinsurance on the motor OD.

So just a related question. So actually, probably once we get to a healthy ROE, I think this problem will get corrected, right?

See, it was corrected [indiscernible]. Last year end, also, it was a very healthy number. The challenge is coming largely because of the extraordinary situation of almost INR 197 crores, INR 200 crores of COVID claims, plus the change in IRDA's advice in terms of considering the contingencies part of the calculation of the solvency. So -- but these are -- we have a very strong case. It's an industry-related case. It's not unique to Chola MS alone. So I think we will get back.

Yes. So one small observation. What I saw is that even last year, I think, we had, overall, some investment provisions close to INR 100 crores. And if I adjust that, if thinking that is behind, I think we are almost there hitting 20% ROEs. So if we embark on this journey, then probably I think this should be solved. Is that a right way to look at it?

Absolutely. You're right.

Okay. Then probably this reinsuring of OD book should not be there much?

It will be there for the risk management purpose to that extent, yes.

Okay. Okay. Sure. But not this 40% what we do. I mean, I think it should be much lower compared to like what we were doing a few years back.

Yes.

[Operator Instructions] Next question comes from Prateek Poddar from ICICI Prudential AMC (sic) [ Nippon India Mutual Fund ].

I mean, thanks for holding this call. I think I had asked this in the last con call and you have said that you would start holding con calls, so thanks very much for that. So two questions to start with. One is just in your health portfolio, if you can talk about how much of your composition would be from indemnity and how much would be defined benefit base as of quarter 1 FY '22 end broad mix?

Yes. Thanks, Prateek. See, our health business from the agency grew by 57%, and our business from the public sector banks, all of which are indemnity products, grew by about 44% in Q1. But we had a de-growth of 18% from the bundled health and personal accident business, which largely comes in from the financial channels. To summarize, actually, the proportion of the retail to be bundled was 44:56 during quarter 1. And our intent, as I had mentioned even earlier, is to first reach the 50:50 mark, which I think should be possible.

Okay. And just, sir, given that our retail book, still as we see today, slightly lower versus our -- versus industry, let me put it that way, from an overall GWP mix perspective. For us, the impact of COVID claims, even let's say, there's a wave -- hypothetically, there's a wave 3, 4, 5 would be very limited, right. Is that a fair understanding?

Yes, your understanding is right. Now that the COVID-specific products are behind us, the impact out of a possible third wave would be, in my opinion, fairly minimal.

Okay. Great. And sir, if you can also help me understand, you had called out about these deferred acquisition expenses, which were recognized. What is the nature of this? And is this a one-off? Or this is something, which is recurring? I didn't understand this.

Yes. Let me explain the background. Chola MS sells a fair bit of long-term policies, long-term policies where the tenure of the policy is beyond 1 year. These essentially come in, in the bundled, credit linked personal accident and some health policies, which anyway do not extend beyond the period of 5 years. That is the IRDA norms. In the case of dwellings, until March '21, these -- the dwelling loans of housing finance companies went even up to 15, 20 years. Our average tenure of a policy that we issued is about 12.5 years. Of course, from April 1, with the introduction of standard products, the [indiscernible] of 10 years only. So we were absorbing the sourcing cost over the policy period with the approval of IRDA, and this is the practice followed by the company since FY '15-'16. So now actually, IRDA has advised the company to absorb this cost on incurrence, meaning as we write the policy even though they are for a period of 10 years or up to 5 years in the case of PA or health, we are to absorb this on incurrence and also absorb the opening position in the current year. While the Board has still requested IRDA for absorption over 2 years because the benefit of these products are essentially going to come in over the next few years. So the effect of this absorption would mean that we are actually absorbing cost of the future, which we would have done so in the normal course as we continue this policy, which means that the cost of the next 3, 4 years is getting taken in now and a smaller portion of dwellings where we would have taken it over a period of, say, the next 10 years is going to come in right away.

And sir, the number which you called out, I think it was around INR 60-odd crores, if I'm not wrong. That is the opening position, which has been absorbed?

Venu?

Yes. The opening prepaid element was INR 325 crores. 1/ 4 of that, we have absorbed in the Q1. That's what Mr. Sridharan also said in the opening remarks.

Got it. Got it. This is really helpful. And lastly, just to get to normalized level of profitability this quarter because, for us, life industry, we are very -- I mean our COVID claims were because of the COVID-specific policy, which we sold like this IRDA, again, saying that opening absorption has to be done. If I were to add those 2 numbers, that is the way I should think about the normalized level of profitability, right? Is that a correct understanding?

Yes.

Prateek, on the cost side, it is okay. But you should also consider the fact that the lockdown also brought in some benefits out of other lines. The motor OD, even to an extent in the normal planned hospitalization in health and the motor third-party. Of course, the company has stayed conservative. When it comes to the motor third-party related benefits of lockdown, these will get recognized over a period of the year.

And I want to add, this is also helpful in a sense because the future cost is absorbed upfront. So which means the future profitability could be better because these costs are now taken onetime hit here.

Yes, yes. That is why I was asking for the normalized level. And sir, just on the...

Normalized level -- see, normalized level, I don't know, maybe I'm just -- could be in the range of INR 600 crores to INR 650 crores of profit before tax.

Got it. Yes, yes. And your action plan on this INR 325 crores, 1/4 has been absorbed in this quarter. Do you plan to absorb everything this financial year?

That is what is the current direction. As Suri said that, we have appealed to IRDA to consider over 2 years.

Okay. And what does this do to our solvency, sir? Let's say, if you were to absorb this incremental of around INR 270 crores to INR 260-odd crores in this financial year, does it -- do you think that this could further impact your solvency or solvency might remain where it is? I know it's a dynamic position, but...

We did consider this. And I think we believe it could be 1.7 to 1.8 at the end of the year, even if they have to observe for the full year, considering all the pluses and minus that we could look at it.

Okay. And I just wanted to ask you your thoughts. Just last 3, 4 years, we have had so many external events from crop to DHFL going out to investment in the provision book and then this COVID-specific policy, which we sold. Are we over it, like now there won't be -- and this one-off again comes up where IRDA again tells you to absorb the INR 325 crores in a year. I'm just trying to understand, is this the last? And from here on, there should be no hiccup, right, in terms of any one-off events. So we should see the normalized level of profitability, which inherently are doing, but optically, we cannot see because of these one-offs.

True, true. I think your observation is bang on. I think to the extent what we know of all challenges that we faced in the last kind of 3 years from investment to some of these specific challenges and long-term policies. Of course, the COVID is common to all. So all these elements with normalcy getting restored, we are behind all of this.

[Operator Instructions] Next, we have a follow-up question from Mr. Prateek Poddar from ICICI Prudential AMC (sic) [ Nippon India Mutual Fund ].

One small correction, I'm from Nippon India Mutual Fund. Just a couple of things. One is if you can also help us understand, I mean you are doing this, but just on the diversification strategy within motor and also of your overall GWP where you wanted to get the share of LTP. Just some color over there and how are we proceeding over there?

So on the motor part, it is also there in the presentation, but let me take you through. As at the end of quarter 1, we have taken the share of 2-wheelers to about 20%, cars is at about 29% and tractors and construction equipments are at about 9%. So which means that the share of commercial vehicles has come down to 42% at the end of quarter 1. While with pickup in commercial vehicles, the balance may slightly change towards fees. But then we are clearly looking at a surge in both cars and two-wheelers. In two-wheelers, in fact, our market share in new two-wheelers for the quarter was over 9%. And now that the numbers for July is also, again, we crossed the 10% mark. Two-wheelers, our point-to-point growth quarter-to-quarter is at about 70%. So that's the trust, which is there. The car portfolio has also grown by about 34% in this quarter over the corresponding quarter. So clearly, the direction is in balancing and moving the portfolio to a more diversified nature. In the quarter, we have also entered the OEM panels of Hero, which, as we all know, is the largest two-wheeler manufacturer. So we have also got panel of Nissan Renault where we are likely to replace Bharti AXA following their merger into ICICI Lombard. This is the position with respect to motor. The part about health is that, yes, naturally, this is a large area for growth, and we would tend to think where our total volumes from health would be in the range of about 14% to 15% by the end of the year because motor will continue to be a strong engine of growth. Please also understand that we are growing strongly in the commercial and the SME segments. While the rate of growth will be larger, the proportion in terms of the overall pie for health for this year, we would expect it to land at around 14% to 15%.

Got it. Got it. Just on combined ratios there, sir, I mean, there is no disclosure with regards to loss ratio segment-wise. Maybe if you can help me with that, how much would be health, motor OD, motor TP? That would be helpful.

Yes. We have provided this in the presentation part. If you look at it in comparison to the industry also, last year, March '21 is concerned. So this also includes level of the COVID losses, which is clearly about the health segment, particularly, okay? So if you look at the COR point of view, we are at March '21 position. In fact, in Q1, I will say that it is 150% [indiscernible] and 110% [indiscernible] service. That is the overall COR, which we have now. But in terms of loss ratios, I will explain you that we are best in the industry from the point of view of the motor OD, we are still market leaders on that. But for the COVID losses, we are again leaders in the health segment, benefited by the attachment products base. Then we are leaders in the PA, clearly, both on top line as well as on the loss ration front. So that is on the individual part. But from the point of view of the motor TP, as we -- this all depends on the level of reserving adequacy levels across the industry, and we are comparable to many other players. We have changed our mix in the motor TP clearly, and which we are seeing as a part of a benefit on the frequency. Still we are -- in the last year, if you look at it around 80% loss ratio, it is much higher than the comparable players in that because we are keeping reserves at the conservative level. This is what Suri also said about that. Health is impacted by the COVID claims in the last year. Fire, we are again comparing to FY '21 March, we are best in the industry at 33%. Overall, loss ratio was 72.4%. It has got both plus and minus here. One is about the health where the COVID claims is there. COVID claims impact is around 5% level on the overall COR level. So if you look at the COR basis, 109 in the last year. This includes 5% level of the COVID claims. So otherwise, it would have been 104. Our ambition for the next year will be around 103, 104 like that. We are slowly moving into 100% in another 2 years or 3 years.

This 103 basis what, sir? Is it based on IRDA guidelines or any?

So we are talking about internally on the NEP method. IRDA guidelines, it will have a benefit on the NWP growth basis. So we are only talking about NEP basis now.

Okay. NEP basis. And if I were to see -- you've talked about 120% COR. And if I were to assume the 2 one-offs, which you have, which is the COVID as well as with the [ adequate ] acquisition, your COR -- true COR this quarter would be roughly 97%. Is that a fair understanding, sir?

Yes. If you eliminate both from the point of view of COVID losses, if you reduce it in Q1, you are talking about, yes. If you eliminate both COVID as well as on the element of an acquisition cost we have absorbed in the...

But Prateek, you also have to consider that there were some benefit of lower claims. It will pay back in the ensuing quarter. So yes. So with that also is a one-off benefit that came in.

Got it. And broadly, sir, just from a COR perspective, given that the growth which we are envisaging and the mix diversification, how should I think about combined ratios in the next 2, 3 years? Will it drift downwards or still -- it would remain stable?

See, this -- it depends on a few factors, such as what kind of motor third-party pricing improvement the industry is able to get from the government over the ensuing years. Let's recognize the fact that medical inflation is there, and therefore, any injury that arising out of a motor accident means a higher payout. Likewise, the minimum wage has been increased by more states, keeping pace with the inflation and these are bound to increase the compensation provided for motor accident victims. So while this is the cost push side, therefore, the industry badly needs a price correction, which I think happened for the last 2 years. The last one that we got was in June 2019. So it is unlikely that there will be any further increase in the current year. So April '22 is what we are looking at, and that is absolutely essential to balance off any cost push. So that is factor one. Factor two, obviously, in motor is the level of premium price discounts that is visible in the market, which has been going up. While there are some respites coming in because of lockdown, but then they will again resurface and go up. This is an industry -- again an industry issue also arising out of competition, which is there. But then that's the way different players choose to play. This is also going to have an effect. Factor three is, the health pricing itself. All players have lost heavily over the last 1 year, not just on one account of COVID products, but also on the normal products. So this pricing correction is something which all insurers have taken up to the regulator for the correction and not stick to be mandatory once in a 3-year revision. So this is also critical in the way the COR shapes up for the industry.

Understood. So basis these three if they were to fall in line, and I'm assuming the level of premium -- I mean price discounts on the motor side or something, which is industry-specific. But the other two, there is a reasonable probability of going through, assuming how should I then think about cost? Would it held down -- I mean go downwards or you expect it to remain stable?

Yes. And there is a fourth one, Prateek, which is the Motor Vehicle Amendment Act itself. It was passed way back but has not been given effect to until now. So that can also bring in and partly offset the price and inflation-related impact on the motor TP. So I think 2, 3 items are with the regulator and one is amongst us insurers, which is the mindless premium discounting. So I think some sense would prevail. And even as the investors like you press for an acceptable COR, I think good sense will prevail on all of us.

Next question comes from Sanketh Godha from Spark Capital Advisors.

Sir, you gave product-wise claims for this year, but if you can provide the same for first quarter, it would be great, sir? if you can give -- break down the motor OD, TP, health, PA and fire loss ratios for the quarter would be great? That's my first question. And second question was just to understand that in the PPT, you mentioned INR 146 crores COVID impact and non-COVID-specific INR 197 crores. So I just wanted to understand the difference. Is it largely because of the IBNR what you have provided with respect to COVID, the difference is between these two numbers? I have a couple of more. After you answer, I will ask.

Yes. Sanketh, hopefully, this public disclosure, as I said, that it will be published shortly, which will cover the segmental loss ratios, which you can see it from the site itself, number one. With regard to the INR 146 crores and what I mentioned INR 196 crores is, COVID-specific product claims are INR 146 crores during the quarter and another INR 50 crores in terms of the non-COVID product, which is in the form of indemnity products like [indiscernible]. So this is the difference between INR 146 crores and INR 196 crores.

Okay, sir. I mean, INR 197 crores would have IBNR provision...

Yes, yes.

Sorry?

It includes IBNR.

How much is that number, sir? Just to analyze that if there is any impact is going to come, how much can we absorb or [indiscernible] coming from?

I think, see, this is an overall, Sanketh. You will understand that the complete disclosure may not be completely possible, but this is a total picture what Venu had said.

One assurance is, this is a short tail and our exposure is also coming down, we have sufficient level of IBNR provided in the books towards the COVID claims.

Got it, sir. Sir, you said that the COVID policies until June covered the 80% of the policies what you have sold. So 20% are left over until August month. So given we are in the 1st week of August, if you can give the experience of July and August with respect to COVID brings with this policies, is there any significant shift coming from those policies? Or do you believe last quarter is absorbing the Q1 itself?

Sanketh, it's been trickling down very clearly. We are not seeing the counts that we saw in the month of May and June. And what we are seeing even in the month of July is not out of any fresh infections but largely out of delayed intimations arising from the lag in intimations. So I mentioned earlier in the call that 80% of exposures are getting over by August. And actually, July had about 65% exposures going down by the end of July. So where we are coming from is that the policy itself is not live for any new intimations to come in. So that is where we see the positivity there. And we are fairly certain that we should not have a similar kind of shock in Q2.

Got it. Got it, sir. Sir, can you give me the number on advanced premium what you have collected because the two-wheeler component has become very healthy right now, around 20-odd percentage. So I just wanted to understand what is the kind of advanced premium number to our total investment book or if you can give the absolute figure, it will be great, sir?

In the quarter, we collected about INR 110 crores of advanced premium, largely from the motor. And as at the quarter end, what we are carrying is about INR 944 crores.

Okay, sir. Great, great. Sir, one more thing on just on distribution. I mean I was finding it difficult to reconcile the numbers because you have given a distribution mix in two different ways in the presentation. So in one slide, you spoke about banks contributing 19%, corporate agents contributing 6.8% and captive corporate agents contributing 32.3%. And in another presentation -- another thing, you have given a different set of numbers. Sir, basically, trying to difficult to reconcile both. If you can give a clarification there, it will be helpful, sir.

See, corporate agent captive, it also carries an asterisk, which explains that it is largely out of our Chola Insurance Express outlets, Cholamandalam Finance and the retail stores of Coromandel Fertilizers. The corporate agents represent the other NBFC corporate agents. And banks, what we have said, all the public sector banks, though they are also corporate agents, for the purpose of classification, we have shown it as banks. All the banks are corporate agents as well. So in a different set, maybe in an IRDA presentation, they would all get clubbed as corporate agents only. But for better clarity, we have shown this separately here.

Sir, if you look at the Page #32, you said captive channel that is Chola, Coromandel and CIE put together is 32.3 percentage. But in the previous slide, we have mentioned that it's CA captive, which also speaks about Chola Finance, Coromandel and CIE put together as 18.2% -- sorry, sorry, my bad. Both of are right, sir. Sorry, my mistake. But sir, can you just tell me what is IndusInd Bank right now of the total bank of 19 percentage, sir?

Sanketh, may I suggest we will explain to you separately to understand because we are not able to get your point properly, but we can clarify to you.

Okay. Sir, I'll take it off-line, sir. But if you can just mention IndusInd Bank contribution, that would be helpful, sir.

Yes. IndusInd Bank contribution is...

For the quarter, it was sort of now -- sort of about 11% to 12% now. See, it is where the impact as now of the second wave has impacted. So for IndusInd Bank, it's now at about 11% to 12%.

Next question comes from Devansh Nigotia from Securities Investment Management.

Sir, just going ahead, if you can host the call after public disclosure, it will be really helpful because then we'll have all the data and we can ask more accurate questions. So my first question is regarding, I mean, the deferred acquisition because the call that has been there in this quarter. Just a reclarification, so does that mean the current balance is INR 270 crores and based on IRDA guidelines, this will be booked in the 2 years, this year and next year?

See, the direction as of now is to absorb it in the current year. The Board has represented to IRDA to permit an absorption over 2 financial years. So as it stands, it is for 1 year.

And within health and fire insurance, I mean, if you can just help us with the mix of the attachment products which are sold through home loans. And if you can also elaborate on our current relationship with your top housing finance banks or the companies. And are we looking to increase the tie-ups further or not? And in case of public sector branches, I mean, that is trending downward from 42,000 to 37,000 to 32,000. Sir, what exactly is happening in our relationship with these banks and NBFC? Because these are a good source for these profitable health and fire products.

Yes. So let me take that portion first. See, all the banks, consequent to the merger, they are also pruning down the count of branches. They are merging branches. So that is the driver. Union Bank has done it. Indian Bank has done it. Bank of Baroda has done it. And Punjab National Bank has done it. All these 4 branches after the mergers have cut down on their distribution, which is their strategy. And therefore, the number of outlets is reflecting that. This, of course, has no bearing on the business front because the business is still there. It just got combined into one outlet. That is all. Coming to the second question on the housing finance part that you raised, presently, we have channels such as Mahindra Rural Housing; Aptus, which is coming up with the IPO, we are the insurers. Then we do have business coming in from all the public sector bank tie-ups on all their dwelling businesses. And we are in discussion with a few more partners for increasing the business on the dwellings portfolio.

Okay. And in case of -- if we have to understand, I mean, the strength of our relationship with these PSU banks or other private banks or NBFCs, let's say, in case of -- if you can just give a direction on the kind of wallet share, we have with them, if there are any kind of exclusive relationship with any of them? So some direction there would really help.

See, all these -- for example, the largest relationship is with the Bank of Baroda, where on the non-life side, we share space with TATA AIG and with a PSU. Our market share in BOB is about 58. So in Union Bank, we share space with Bajaj and a PSU. So there, our -- we are trailing Bajaj, but we are the #2, and the difference between us and Bajaj is about 4% to 5% in terms of market share. In PNB, of course, PNB, consequent to the merger, presently, they have 4 players. And then this will get converged to 2, 3 by April 1, '22. But suffice to say that there, again, we are doing well. And there, again, the difference between us and Bajaj, amongst the 3 private sector players, we are #2, trailing Bajaj by about 3% to 4%.