CSL Finance Limited (530067) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. Good day, and welcome to CSL Financial Limited earnings conference call hosted by Antique Stock Broking. We have with us today the management of CSL Finance represented by Mr. Rohit Gupta, any Director, Mr. Chandan Kumar; Mr. Anoop Saxena and Mr. Gaurav. [Operator Instructions] I hand over the conference call to Ms. [ Vivi].

Thank you for taking out time for joining the call. The situation since last 4 to 5 months has disrupted all business operations including NBFC, while the -- especially the smaller NBFCs has faced a lot of constraints in the tough time. In that backdrop, CSL Finance has reported quite good numbers. So without spending much time myself, I will now hand over to Rohit Sir, who can take us through the business performance and the challenges faced in the current situation and the steps the company is taking. So over to you, sir.

Thanks, [ Vivi ]. The management of CSL Finance welcomes you to our year-end investor call. I have with my colleagues, Chandan Kumar, who is our credit at Wholesale at Anoop Saxena who is our Zonal Head for the North. And thank you all for taking all the time for attending this call. We hope you and your loved ones are safe and healthy in this stressful period of COVID-19. Financial year 2020 [Audio Gap] for our industry. The tight liquidity and general slowdown has created strength in many segments of the economy with the SME sector, where we operate, bearing the brunt of the slowdown. As the year closed, the Indian economy was buffeted by the COVID-19 related lockdowns, NBFCs, which were struggling to -- large NBFCs in the sector have seen negative results. There's a general lack of trust in the market and only the largest heavily rated [ funds ] were able to deliver for the market. On the liability side, a couple of loans that were sanctioned to us were not disbursed, partially due to IRR concerns. And so this, in turn, impacted our ability to grow our balance sheet within that period. Since then, taking into account the general slowdown, we have acted prudently and decided to fund the growth of SME loan book from wholesale loan book. Coming to our financials. Our income grew by 2.1% from INR 59.69 crores to INR 60.95 crores in financial year 2020. This was the first year when we have adopted IND AS so it is -- has declined by 10.61% from INR 25.05 crores to INR 42.48 crores in financial year 2020. The main reason for the decline in profitability was due to COVID reasoning in the last coming quarter, which is INR 4.61 crore. As a prudent measure, which we have adopted. I want to point out that this is not just reasoning and is not linked to any specific loan accounts. We did this provisioning to provide for the challenges by taking normal risk. Our network increased to INR 232 crores as of March 31, 2020 with our current book value being INR 387. Second half of the year has been better for our company operationally as our disbursement grew by 43.97% from INR 121 crores in first half, INR 251 crores in the second half. Our collection grew by 35% from INR 112 crores to -- in the first half to INR 151 crores in the second half. Our AUM have a decline marginally by 1.63% from INR 323 crores to INR 318 crores as on March 31, 2020. Our wholesale lending AUM stands at to INR 245 crores as of March 31, 2020. It consists of 3 segments, mainly Wholesale Large, Wholesale Small and Wholesale LAP. We are shifting our focus towards Wholesale Small where risk is lesser with the loan tenor also being a smaller duration. Our Wholesale Small portion has gone up by 21.25% from INR 80 crores to INR 97 crores as on March 31, 2020. Our segment is doing -- our SME segment is doing well. For the year ending 2020, our AUM has grown by 30% to INR 72.75 crores. Our SME portfolio consists of both secured and support of which more than 90% loans are secured. We do unsecured loans only to K plus 12 schools where we have capped the ticket size to size that. Now coming to the effect of COVID-19, I think the main thing everybody wants to hear and which has impacted the whole economy. COVID-19 has had a huge impact on the Indian economy in general and financial sector in particular. The COVID induced lockdowns and subsequent loan moratoriums announced by RBI had a cascading effect on the balance sheet of NBFC. In our case, our operations were closed from March 31 May 31 due to national lockdown, which was subsequently extended in few states. But during that period, we were working from home and a few of the branches, which were able to work has opened in middle of the May. RBI announced moratorium up to August 31, which has impacted our liquidity in short term. During moratorium 1, that is March to May, over 57% of our customers requested for moratorium. Our team has worked very hard and -- on educating the customer with a clear focus on collections. During moratorium too, we have been able to bring it down to 24%. In our wholesale portfolio, most of the accounts were retailed earlier before a loan maturity due to the revised cash flows from their escrow funds. Now due to the moratorium, the repayment period may get extended, but we still expect most of the loans to be repaid on time. In our wholesale loan book we have over 57 loan accounts, and we have interacted with every single borrower over last quarter to understand the situation on the ground and have taken proactive measures were required. Furthermore, as soon as the lockdown was lifted, we visited the customers to get better understanding of sustainability of projects and future cash flows. While 67% of the wholesale customers offered from moratorium until May 2020, but due to cash flowing in the escrow accounts where we have a mandatory capitalization, we received repayments of INR 33.89 crores during the first 3 months, that is April to June, against the total outstanding of INR 245 crores as a whole wholesale AUM as on March 31, 2020. We have always been very prudent in our [ provisions ] and maintained LTV around 45%. So we do not foresee any challenge to the wholesale loans. There is a lot of skepticism in the market. And that's why we have given a detailed presentation on the wholesale accounts in our year-end presentation, which we have uploaded on the website and to the BSE also. Furthermore, most of our funded projects are either complete or nearing completion. So we don't see any execution risk and expect sizable committed receivables from existing sold inventory. Now coming to Retail. In a retail segment, we have AUM of INR 72.75 crores as on March 31, 2020. We have reviewed more than 1,200 customers during the lockdown, and we have met more than 800 customers physically. In the SME segment during moratorium 1, 45% of the customer choose go from moratorium, which has been reduced to 22% beginning July. One area where there is a challenge is the school vertical, where cash flows have gone -- where the cash flows of these schools have gone technically to 0. In the school vertical, we have a total 251 customers with a total AUM of INR 25.6 crore as on March 31, 2020. There, over 42% of the borrowers have chosen moratorium as on June 30, 2020. Before COVID-19, the school loan vertical was performing really well, and we expect good recoveries once the government restriction on school opening are lifted. Since the COVID-19 has impacted MSME business all across the country, we expect continues to increase so as a prudent decision, we have made a nonspecific provision of INR 6.9 crore since fiscal year 2020 out of which INR 4.61 crore is related to COVID-19 only. So as of March 31, 2020, we have a gross NPA of INR 2.18 crore, which is 0.69% of our portfolio against, which we have made reset provisioning of INR 6.98 crores. For liquidity management, we are at a very comfortable position. We have maintained cash and cash equivalent of INR 43.74 crores as on March 31, and we had cash and cash equivalents of INR 31.25 crores as of June 30. We have not availed any moratorium from our lenders and have repaid INR 43.14 crores of our loans in quarter 1 2021. In fact, we have also made a prepayment of INR 3.5 crores of a little high cost loan in June quarter. Our borrowing has reduced from INR 142 crore as on 31 March to INR 95 crores as on 31st March -- June 30, 2020 -- so ended March 31, 2020. Our CRR stands at [ INR 70 crores ] as at March 31 '20, which will be [ 100 ]. So -- and during this month, we have also got, in principal, approval from for private placing of [ NCDs ] about INR 30 crores from our lead banker, SBI. And we are also in discussions with 2 more PSU banks, and we are very hopeful of getting some funds from those 2 PSU banks also. Though the business has been stable, it has been challenging lately, but we are focused on maintaining the high-quality of our balance sheet. Right now, the focus is on serving the tough times, surviving during this tough times, when we are consolidating our operations once things return back to normal, we'll start growing our business again. We are confident that on our [ reverse ] balance sheet and prudent business practices -- we hope that we will be [ appropriate ] in the coming years. Thanks. And I open for everybody for your questions.

[Operator Instructions] We have a question. I will unmute. Please go ahead.

[ Ankit Gupta ] here from p Bamboo Capital ]. So Rohit, if you can -- based on your current understanding of our various business segments. If you can give your estimations on how things currently are looking that when the things will be back to normal in all our business segments, you can you just throw your thoughts on this? So your estimate on when things will be back to normal, but not if normal, let's say, the moratorium reduces to, let's say, 10%, 5%, 10% of the overall bond.

So the business in the last 1 or 2 months have been near to normal, but I would not say that as you can seek a moratorium, which was 57% has come down to 22%. And if we remove those 2 loans, it is down to 10%, and most of the branches are working for the last 2 months, and now people have realized that they have to work in this new normal, the people are coming out. But -- and we were also a little cautious on the disbursement. So the focus was more on the collection and improving our internal processes. So the business as for the retail, I would say, will take another 3 to 4 months to have a full clarity because how the customers behave after moratorium. And when this on and off lock down system goes away because we still -- the states are still announcing weekly or fortnightly lockdowns. So -- and how this the whole pandemic plays out, still India, the numbers are going up. So it's still too early to say. But yes, but the way the things have picked up, now the customers have realized earlier because the segment we were into retail, they thought moratorium is like just the government has given them a relief that they would be paying during in period. They have realized that this will only increase and [ mature ]. And we have educated them a lot. So customers have started paying. So to say that it will become to the normal secure of pre-COVID period, it's too early to say at this time. And as compared to our wholesale segment where the concerns are much larger in the industry and larger companies are facing a little more problems as compared to that if you see our portfolio in that segment. We have been very prudent that we are on this focus with C4 parameters will be common, that we were into affordable segment. We were into areas where end consumer demand was there. And mostly, we were into last mile funding where sizable receivables was there from the existing sales and the projects were named completion. So the collection has come down partly due to banks who are not functioning, few of the PSUs were merging. The [ Dewa ] merger was going on. So the housing loan disbursement has slowed down during the last 3 months and not sticking up, they are doing their double check for the existing disbursement. They are asking for salary slips again, doing diligence check on the builders again. So the disbursements are a little lot of slow and [ threshing ] have been affected. But to our part of the plus point is that most of the projects were either sold or size or there was huge receivables. So our loan exposure will be taken care of by existing receivables. And if we see the fresh sales will be slow. And because now the people are only moving out not only going for essentials and housing, this will come into the immediate priority. So it will take time. And -- but our accounts or our behaving good. The collection in first 3 months not surprisingly to our surprise was very good. And so we don't see that there will be any challenge on any of the accounts. Yes, the collection can be little -- realization can be a little longer. If you see our pattern in the last year, our collection and disbursements was roughly around INR 245 crores. So even if we had a typically 3 year tenure the loan used to repay within 18 months to 24 months. That period will take longer now. So -- but still our accounts, we still feel will be regular. So on the retail side, apart from school loans, we are not facing major challenge. School loans is one area where schools start functioning. So with 50% of accounts which are in moratorium, they will become revenue, more or less when the school starts operating again.

Sure. As on date, how much of your wholesale book is in the moratorium?

Initially, I will -- we have a Chandan, from the Wholesale side. He will give you more clarity.

[ Ankit ], if you go by the numbers, that around 67% of our wholesale customer has opted for the moratorium. But on that note, [Audio Gap] on logically, we have some cash flow in first tier accounts. So logically, that account cannot be covered into the moratorium asset. The moratorium on that is applied only to provide the person on the repayment part. We all understand that during this portion of lockdown the construction as well as the sales activity has almost 0, was almost 0 for the developer part. So they require a [ cushion ] for the repayment so that they can bring down the construction as well as the sales activity to the normal or to the normal activities, right? So despite this, there are some collections on the account. The customer has requested for the moratorium to get the cushion for that time frame, that has been offsetted due to the lockdown.

Ankit ], I just like to -- because we have a capitalization on the escrow accounts. Our receivables are coming in this year. So we were mandatorily doing 30% to 80% capitalization depending upon the project. So those capitalizations will be treated as an advance towards further payments. So in spite of those account to moratorium, we have received reasonable repayments. So only moratorium you can say we have extended the repayment period by 3 months. So little cushion has been built on the repayment structure.

Sure. Sure. So for the amount that has been deducted from the escrow account, that you will continue to -- that has already been debited and it won't be refunded to the customer.

Right, right. Because most of the accounts, which we have funded, this idea that the complete of nearing completion, neither do they require so much money for their completion right to face too many labor problems because it is only the fit-out stage. The project is almost complete when the customer goes for possession, some fit-out work is pending, which don't require too much money, not even in our small builder loans. It is a segment which required, it's a small 200, 300 square yard plot those apartments are coming on it. So typically, 10 to 30 people are there. And the construction cost is not a big sector. So they can buy even giving 10% to 20% higher wages, they are able to get the people. Now things are also turning for better. People are migrating back because of the lack of transport because educate -- trains and are not still running nor migrant labor wants to come back. So we have 2, 3 duties in our wholesale loans. First, the pending construction is very small. Second, there is a huge committed receivable. When we say committed receivables, those people who have paid 30% to 70% pending, they will get a long bit of time on the delivery. So see, we are into affordable segment. We have 2 class when it is totally affordable, which is less than INR 20 lakhs, which are -- most of our projects are 90% sold from day 1. And others are up to 50% for the mix. Because of all those sectors, so our collection can be a little delayed, but this moratorium where we are giving the cushion of 3 to 6 months will take care of that but we don't see that any of our accounts going in bad unless until things go extremely bad during the next 6 to 9 months.

Sure. Sure, sir. And 1 last question on after a long time, we talked about getting NCD from SBI and some other PSU banks also sanction has grown. If you can talk a bit about how is the funding towards NBSCs, including our company, so over the past few months, how has been that scenario? And if you can also highlight some of the key terms of this INR 30 crore NCD that we are facing with SBA, what are the interest rates on that, coupon rates and tenure and other key terms of them?

Okay, the primary reason it was that because of because [ CRISIL ] the liquidity was tight and the rates being offered to us being a BBB rating company, was in the range of 12.5% to 14%. And those are moving from wholesale to retail. Our collections from wholesale were very, very strong. So we always think that we should have reasonable margin, this margin, and we are very cautious of our costs. So even if you see our cost of my debt is less than 10% and what we have agreed upon on this INR 30 crore NCD, the rate being closed at 10.25%, which I think the statement would not have given to any BBB rated coming there. According to what they have told us, they have been giving between 11% and 12% because they say AA+ has been given AA and AA - has been given at 9.5% to 10.5%. So and for us, a more detail, our internal collections were strong, and we were cautious of the cost. That has been a primary reason. Otherwise, the last year, if we want to raise money in the range of 12% to 14%, we could have easily raised it. So that was not a [ reason ]. But we have a strong -- if we're just raising our AUM. And if you are not -- so we want a profitable growth, so -- because one by one, even for happening from ILF has given to DHFL then Yes Bank. So multiple factors were coming at every 3 months. So and because those companies, what is happening in the NBFC, those companies who are having ALM mismatches, they are a little more aggressive in borrowing and the lender say the other people are boring, why don't you are taking at those rates. So it was becoming little difficult for us to explain that they are facing some different kind of challenge with that. So that has been one reason that we were -- otherwise, we could have raised in last year also. We had few in terms sanctions, but to a rate of -- the IRR was the only primary concern.

Sure. Yes. You have also acted this in earlier calls as well that you are not comfortable with higher interest rates. Yes. And what will be the tenure of interest NPD?

The tenure for this is 3 years.

Okay. Okay. And the other 2 PSU banks that we are in talks with for taking loans, what will be -- our cost of borrowing from them?

Maybe 1.25% a little bit. We are also so the I think at 1.25%, 2.5% may be higher.

10.5%, 10.75%.

But we are seeing that we get the previous one.

Sure. Sir on the funding or on getting more loans or limits from bank, how has been the scenario in the past 1 to 2 months? Are you seeing some PSU banks becoming losing their purchases and funding NBFCs?

Because of the government pushed them to do under TLTRO I, II and the PCT interest gains, and PSU banks have taken the lead and especially the PNB and the State Bank. So they are disbursing. And to see if those other banks are also with less liquidity. So it is for them also to find a good borrower, it's difficult. So because of some government pressure and because of excess liquidity with them. So they are giving funds to NBFCs and even smaller NBFCs with the BBB and BB+ are also getting funds from them.

[Operator Instructions] Please ask your question.

[ Basta Phun ] here from [ Uran Tali Partner ]. Congratulations for steady performance and given the circumstances, and I think you have already answered quite a bit of the questions -- my questions. So could you, Rohit, speak a little bit about the RBI moratorium. So since the moratorium is now the 31st of August, so are you going to charge interest on accrual basis? And do you think that the customers will pay all the accrued interest or you would need to do some kind of discounting there?

No, no. We'll be charging interest on accrual basis, and I don't think so because...

Hello?

Yes, you are audible, sir.

Yes, yes. So the interest will be charged on the accrual basis. As every customer now has been explained that the interest will be charged every month, and you will have to pay that. And even our Wholesale segment customers, they are very -- you can say, they understand this thing and even the retail one has been explained very clearly by our team. So they understand that, and we don't see that there will be anywhere we'll be giving any kind of discounting -- discounts or any kind of waiver to the -- any of the customers. That situation will not happen. I think unless until the account where which goes to NPA and is kind of a kind of a settlement here.

Okay. And Rohit, for our NPS, we have made a provision of INR 6.9 crore including INR 4.6 crore for COVID as a precautionary terms. But what is your own assessment for the NPAs? I mean, as you said, you have already spoken to most of the clients and reviewed each and every account. So what is your feeling of the book in terms of NPA?

I think most of the investor maybe having more of, I think, set on the wholesale side, we are very, very confident. First, our wholesale book, our quality of assets that we are having and the LTVs are very, very strong, a small borrower book in the wholesale segment is mostly in South Delhi and Gurgaon, which are very marquee properties. So taking any kind of haircut, we don't see that thing happening. Because of moratorium being given some 3 -- 1 to 6 months. And during that period where we had collections also, it helped help them to give them 3 to 6 month cushion. I think more or less it takes care of, if anything there in terms of slowness in terms of sales and collection. Yes, if things go from here, otherwise goes more worse. we see more lockdown, pandemic going worse from here and people becoming more fearful. So then, yes, we can face some challenges. So -- but I can only say that as compared to our peers, but we are very, very small. There should be no comparison of us with the larger ones. But our wholesale portfolio should be performing exceedingly good as compared to our industry peers, which we are very, very confident of. And the retail side, I will also ask Anoop who is looking over on the retail, but will give his own opinion. The only challenge we are facing is on the school, which the total AUM is around INR 25 crores, out of which 50% is a moratorium, which has been very regular prior to COVID. But I think the collection to make them regular, the school has to be open, need to be on. And I don't know when it will open, whether it will open next 1 or 2 months or in next year that I'm not certain about. And will give you a little more healthy at on the SME side, what is happening on the ground level.

So -- so from the SME side, I don't think any challenge will be there. Whether I am audible?

Yes. Yes.

Okay. So I look to see any challenge will be there for a longer time. As Rohit mentioned, actually said in the case of schools. It is in case of the school cash flow exactly went up to 0 because in most of the cases, schools are not getting open. But metro cities, in metro cities, the online classes are happening, the fees are getting collected. But there we are but where we have funded for the schools are non-metro cities or tier 1, tier 2, tier 3 cities but rural school there. Specifically of online classes are not here technically no fees is getting collected, those on are coming for online classes only. So that kind of improvement is there. So technically no fees are getting collected.. In terms of retail micro SME, things are coming back to normal. Shops are getting open coming to the market or purchasing change. So that thing is coming for the normal.

Then moreover micro SME was on the semi-rural side, which are impacted through March. Most are dairy loans, [ canal ] loans, so these kind of customers got customers. So they have not been impacted too much. So the major challenge is only in the school side, where our portfolio is around INR 24 crore, 50% is regular, 50% which is INR 12 crore is in the moratorium. And I think the kind of reason which we have created will take care of it. And this requires a small billing we may provide in next coming quarters. But I -- as of now, we think that this reason, we have -- the position that we have created will take care of if anything happen. And that too will only schools are not even allowed to open. If schools are allowed to open or -- we what I have mentioned the accounts will become regular in 2, 3 months after they're opening because they will be able to collect the backlog of fees also. They will not allow the students to next class, if they don't pay the backlog fees.

Okay. Okay. And Rohit, given the uncertainty over the -- which is prevailing in the economy, so how do you think about the business for FY '21? So can we improve the performance or in terms of operations, what is our plan in terms of branches or disbursement? Anything that you can share at the moment?

We have taken 2 measures where we have consolidated 1 or 2 branches. We have consolidated 2 branches. We have a little bit haircut was taken by everybody from May 1 after onwards, April 1, myself taking 50%, the senior people taking 50%, 55% so we have converted that into a variable kind of a bonus that if we are able to achieve these kind of targets, it will give them a lump sum. So cost of operational, look at say, strategizing that has been done. And on the business side, we were conservative of these 2 to 3 months. Retail, we will be starting next month. We just wanted that we do completely physically, and we are able to -- were able to contact each and every of our customer. So with the physical -- a bit the view of each every customer during this 3 months, our team worked very tirelessly. So we wanted to improve our internal systems and policies we have acquired. So still we want that how we want -- we will not be too aggressive as you want to see how this post moratorium period plays out, which is very, very important. Because right now, the hard collection, I would say, the trajectory mostly from the private sector. From the PSUs, they are not making that kind of effort. So movement, the moratorium period goes. So the pressure will come to the customer from all loan accounts. So we want to see that period and want to see how this pandemic plays out. So as explained in my initial introductory remarks. For us, 2021 will be a period of consolidation and period of survival. We will not be very aggressive. We have done disbursement where and the wholesale also well to cases where we thought they are very good. So we don't see that we feel our AUM will go down as of it what it is, but definitely, 10% to 15% of AUM growth we see this year as of now. But we'll be both cautious and our strategy is that survivability is most important, and we want to maintain our quality of book on the balance sheet side. So that is more the focus area than the growth part. Great.

Next question, I've unmuted the line.

It's -- this is Sanyal Desai from Tata Capital. So first of all, very high regards to you and your team to the way you guys have structured your wholesale book and the way you have managed it there. It is really commendable. The 3 questions that I have is, so we are planning to raise money from NPD, and we are also in talk with a couple of banks as you mentioned. So and -- but I mean, looking at our balance sheet, we have enough liquidity, our recoveries are well, we are very confident of not having very large positions. So I mean apart from strong growth, what are -- I mean, what is, sir, even why we are raising this earnings, can you elaborate on that? That would be very helpful.

Pardon me, your name Anil?

Sanyal Desai.

Thanks, Sanyal. So nearly that very right that we have good liquidity. Our collections have been solid. So we have paid one [indiscernible] for us to have over everything we have gotten the sector back. So we have been rationalizing the cost -- our cost of borrowing is now sub 10% as of now. So even if we maintain certain little access liquidity, where we get the opportunity and being small and being focused, sometimes we are able to find opportunities even when times are not good. So we are very conservative. For us the quality of the book, foremost, then the growth, which has been our philosophy for last 2 years, post ILFs also. So if we get that, so we will only disbursing when we see that we're able to do it. Chandan will say a little more. And so when we're getting funds at our cost in the last 2 years, we were a little reductant to borrow at 12% to 14%. So we'll be building a little cushion. We can see that things go things are not good in pandemic that is not going to go worse from here. And where we find opportunities, we'll be using that the reserves which will play. So that is the strategy behind that. And Chandan, would like to add a little.

Another thing is that, as Rohit has initially mentioned that cost of borrowing is important for us. So the last year was there that we did offer to us, but we were not able to raise the debt at the lowest cost. So we were not raising the debt. Now this is an opportunity to get the cancels and we are getting a good IRR, good rates or got ROI. At least is expected by an expected by acceptable to us. So we expect most opening of lockdown, there would be a ample opportunity in the market. So we would be utilizing that fund in that scenario. And we are being a little proactive in getting these cancels done, cost opportunity to open then definitely would like to deploy in the -- in our category.

Okay. So basically, we are positioning for growth as and when the opportunity comes from. That's the way to look at it, right?

Yes. But depending upon the scenario and program, definitely for us. Quality of book is good. So that always has been and will always remains.

Okay. And second thing, Rohit, I wanted to understand that we have done exceptionally well on the wholesale side of it, and that is the book that we have been turning down. And I think in the last few calls, you had mentioned that there is general aversion to this segment, including our lenders on our exposure to this. But any kind of rethink that you have on that because the market is wide open, a lot of people are exiting, and we are very well positioned. So would you not want to take advantage of that, given that we have a good experience and good risk management and understanding of that area well?

Sanyal, you are very right. Of now most of the people are exiting from this and everybody wants to enter into retail. So I don't think in the lending you can totally exist from the corporate side just today. So yes, definitely give us an opportunity. So the only thing is that we have to be very clear on the parameters we have been working earlier. We will keep on working. As and when we find opportunity, and as the players are getting from here from segment, we'll get opportunities. So that is one thing giving ourselves cushion to move there and moreover, even if on the real big also this project and rightly priced at the right fit and is complete, this will help. I would like to add one thing. This is in right now. Home loans are at multi digit lows and stands at [ 7% ] which has never been there. The posted prices have been for last 7, 8 years and still you're able to get 10% to 15% lesser in now past 1 to 2 months. So -- and with this, all other investment avenues like gold or the top market performing and the segment where your cost of home loans have gone down 200 to 250 bps. And where real estate there down by 10% to 15%. I think is something which is not going to repeat that people will not -- it is that in this period one to move out for constant stationary purchase. So if things go a little better. If the product is right, most of all, you will find buyers.

Right. Right. So I mean how do we think about our overall loan book composition, say 2, 3 years out in terms of wholesale and retail? And if you can also talk a bit about retail, what would be the focus area, I think our focus has been on micro SME side. Will it remain like that? And -- or will we expand our horizon on that?

Initially our is that we want to be -- build our domain knowledge by remaining into limited segments and the segment which the larger companies or from the competition from the larger companies or from the Fintech space will not be there. So in case of our micro SME, these are those people who don't have -- don't find GST returns, don't have bank statements. So they can't be penetrated through Fintech mode. And the larger NBFCs are not excited by going through 3 to 5, 7 years, 7 lakh kind of a loan. So we want to build our domain knowledge by -- into this segment and would like to remain in these 2, 3 segments, which we are in, the only segment which has taken for a little bit hit is school loans, which have been very good in the past. And as the schools will open, education will not will not finish and everything will not go online. Still, I think children also want to go to school and parents would like to send their kids to the -- children to schools. So when the schools start opening the sector will start looking at debt sector also. But next 3 to 6 months, schools, we will not be doing it. And the rest of that focusing, and that will be our core strength. And so apart from that, we may add some salaried component, especially from of my sectors, so which is of a little around parallel with the micro SME. So our core thought is that we don't want to venture out into the segments which are larger players are there. So because we don't have a cost-competitive strength to fight with those player and to make our mark into those segments.

[Operator Instructions] I'm unmuting the next question.

Yes. So a few of my questions have been answered, but I've got a couple of more. So you mentioned about things being back on track with the developer loans, especially in the unlocked space. So can you to some color on that? Like how are the projects panning out?

Ma'am, this is [ Bora ] can you just announce your name and your organization?

Yes. I'm [ Rashmi Mehta ] from Antique Stockbroking.

Yes. Thanks, [ Rashmi ]. So I will not say that things are near-normal in the this developer stage, which is only the developers which we have chosen largely because higher into affordable less than INR 20 lakhs, where sales have already happened on the date of launch or last mile funding because of those reasons, the questions are coming up. In terms of flash sales, they are not, I would say, very great is they are still very muted because people -- for them, it is not -- they are not moving out for these kind of things right now. So the only hope we are all that because the projects are already sold, and there's a lot of committed receivables. We are going to get our receivables from that. And going ahead with the home loan rate coming down below 7% and the segment which we are in less than INR 40 lakhs and mostly less than INR 20 lakh category. And certainly in suburbs of the metro or in metro cities. So you will always find buyer for that, provided we have got -- the customer sees that the project will be delivered in time. And with the even if you see what has happened, most of the projects which are suffering, they were pre IND AS so I would say, period, they are on legacy projects, where the right kind of full funding was not there, neither the lenders were able to monitor that the developers have diversified the money from that project want to project to for purchase of land or any other reasons. So now if you -- going forward, any of the funding which have happened in the last 1, 1.5 years, that has been done very conservatively, and those loans are not -- are performing reasonably good. So going forward, these legacy projects will get completed or will be in litigation. So a few players will be left. And with their domain knowledge and real estate is one thing, the way we may be good in our part of area, but we may not have knowledge in other parts of the country. So that kind of region-specific domain knowledge is very, very important with sometimes the larger player because it is always being run by a very small team. So that small team having a pan India, micro knowledge and able to manage that. So sometimes become very difficult. So that has been a little [ USP ] because we are located in a particular our presence -- most of the clients have present in a particular region because we think that our domain strength is much more here. And we are able to monitor. Monitoring is very, very important. And the team has to be a very focused team and that 2, 3 things which any company has. I don't think so, the segment is very bad. Yes, a few of the things that have happened this segment during last 2.5 years, RERA coming, GST playing out, demonetization, economy going slowdown. Builders have, I would say, the money for their own personal purposes or for other purchasing land banks, all these things going out and with the rate of home loan rates coming down, I think when the things will consolidate, this industry will have a good future, maybe after 1 or 2 years. This is the last thing I would say, we are think the bad players will get rated out of the bad project. And in 1 or 2 years, we will have a good time when everything will be more regulated. And the right kind of equity will be coming from the developer and the monitoring will be closed. Because still, housing is one, the demand is still there. People want housing of their own. So -- and with the interest rates these low rates, it will definitely going to bounce up if Indian economy has to grow, which is only a time. So and we will not leave this segment because the strength which we have built, we would like to remain into this segment.

Okay. That explains it. So I've got one more question pertaining to the LAP growth. So have we noticed any trends or any data or insight that you can share with regard to the customer behavior since March? Like how is the book performing? If you can throw some color on that?

Let me -- hi, Chandan here. let me say we have a small book of LAP That is the loan against property. You were talking about LAP book or developer book?

LAP book.

LAP book. And we have very -- only 6 cliental are there into this book. Actually, this is not a preferred segment, which we are always focused to lend. And all of these customers are edging out -- all of these customers -- and the book has not been impacted at all during last -- these 3 months. We say that the customers have taken moratorium in the segment; 2, 3 customers have taken moratorium. But the customer and financial network wise were so robust that we don't charge for the LAP position. Considering the size of the book or the number of the customer is so small. So commenting on the data trend is not the right thing that we would tell on the LAP part itself or the overall portfolio. But the book is very small, and we are very confident on the LAP part that there will be no issues on the repayment or the repayment part of the customers.

Okay. So can we expect like the book to grow going forward?

LAP book, actually, we are not that much focused for growing our LAP book, and it is not an area of our tale. But it is just an opportunity-based lending. And for the -- and available to the S&I customers who are known to us or we have whom we have lended and a kind of a need-base or opportunity that lending to the S&I customers.

Okay. Okay. That explains it. And sir, I've got 1 last question on the liquidity front. So at our current levels of liquidity, how long do you think we can sustain like upwards sort in a period, if you can give a ballpark?