L&T Finance Limited (LTF) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the L&T Finance Holdings Q3 FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. We have with us today Mr. Dinanath Dubhashi, Managing Director and CEO; and other members of the senior management team. Before we proceed, as a standard disclaimer, some of the statements made on today's call may be forward-looking in nature, and a note to that effect is provided in the Q3 results presentation sent out to all of you earlier. I would now like to invite Mr. Dinanath Dubhashi to share his thoughts on the company's performance and the strategy of the company going forward. Thank you, and over to you, sir.

Thank you. A very good morning and a warm welcome to all of you, and you -- all of you who have joined this call this morning. Greetings for the New Year to all of you and I hope, sincerely hope that this year will be vastly different from the year gone by. As professionals, we continue to learn from the difficult times and definitely look forward to the opportunities that the future holds. The week gone by, and especially the weekend, hopefully marks the beginning of the end of the COVID disease for the nation. The progress of the country, as it dealt with the uncertainty of the pandemic, ranged from the strictest of lockdowns in the first quarter of this financial year to the concerted efforts made towards delivering the vaccine to its citizens in the last quarter. Of all the stakeholders who deserve our gratitude, the biggest gratitude goes out to the frontline workers who have showed resolute in this adversity. Indeed, the health care workers were supported by continuous improvement in the health care infrastructure as the nation navigated its way through the pandemic. Taking parallels to our business, our frontline staff across businesses have faced, and are still facing, severe difficulties and have been improving business metrics, even when the situation around them look grim to begin with. The resolve of these individuals has been supported by improvement in the macro economy, mostly in the rural agri belt and also by data analytics and the digital capabilities that we have continuously strengthened. So I drew this parallel because the frontline staff really putting their life at risk and then the infrastructure, the central infrastructure, aiding them through various means like data analytics. And then finally, some destiny, some higher force come to -- coming to the aid by the recovery that we have seen in the agri structure -- agri sector. Together, these have resulted in incrementally better quarter-on-quarter profits for us. In my last communication with you, I had delved upon 2 major lessons arising out of the pandemic. As an organization -- first is, as an organization, we have worked on staying prepared by investing in our strengths, doing the right things, irrespective of how the environment is and doing the basics right. And most importantly, doing this well before the pandemic. Of course, we didn't know that the pandemic is coming. But doing the fundamentals right and staying prepared have genuinely helped us tremendously. I had also mentioned that we have chosen our sectors of concentration well and with the rural economy leading the recovery and with the visibility of green shoots, we are being helped by our strengthening position to get out of any problems that were there during the lockdown. So clearly, 2 things: preparation before and then choosing our sectors well, rural to a large extent, infrastructure and now some green shoots even in real estate, which is, of course, that's good, that we are aided by maybe, as I said, divine factors. But we also -- the strengths we have shown in all these sectors are coming to our aid. I take pleasure in presenting to you the quarter 3 performance of the company for the financial year FY '21. One of the imperatives, as we ended Q2, was to have high focus on collection efforts. In most businesses, the collection efficiencies have moved up to pre-COVID levels, signaling the return of normalcy, just the beginning of normalcy. The disbursements across business segments have been higher on Q-to-Q level. To just give you a flavor, LTFS had its highest quarterly disbursement since quarter 1 of FY '20 in quarter 3 of FY '21, which were up 51% on quarter-to-quarter level. The significant uptick in disbursement has been seen despite increased prudence in credit norms during the lockdown, and we are continuing with them; sustained benefits of cost-reduction efforts initiated in Q1; and a favorable cost of borrowings have helped us in improving the company's overall profitability. The headline PAT for Q3 FY '20 is INR 291 crores, which is a 10% Q-on-Q growth. In Q3, we fine-tuned our approach based on market dynamics, while building additional momentum on both sides of our balance sheet. On the asset side, in terms of disbursements, collection, fee income; and on the liability side in terms of reducing the cost of borrowings and incremental liquidity that we held on our books since the pandemic started. So very simple, it is the question of not only better liquidity but more reliable and predictable liquidity. The balance sheet strength has been supported with we carrying continued additional provision of INR 1,739 crores, which have remained on similar levels as previous quarters. Let me now share a few details about all this. First, assets, in which let us talk about the rural segment first. Today, everybody is talking about it because every time when the economy comes under pressure, rural is the one sector which shows the glimpse of hope and saves the country. The rural economy today is far more resilient owing to structural changes, which have driven long-term growth. Initiatives like Direct Benefit Transfer, PM Kisan Yojana, PM Awas Yojana, Ayushman Bharat, increase in MSP crop procurement and improved rural infrastructure have ensured better cash flow in rural India. Since the unlocking, the sector is paving the way of recovery and continues to do so. On the disbursement side, the pickup in disbursements on month-on-month basis has been quite rapid. If you see the disbursement growth, Q-on-Q, we were 49% above the last quarter. So I would like to also talk about some seasonal factors, along with the structural factors that I talked about. The rabi sowing in this country is 3% higher Y-o-Y. And as of 8th of January, with live storage in 128 water reservoirs is about 120% of storage of the average of last 10 years. The current reservoir levels indicate a good rabi crop in addition to the increase in rabi sowing. And that expectation leads to our expectation of positive rural sentiment to continue in the remainder of FY '21 and a little ahead. So that's the case I'm making. Structural changes in the rural. You know of many other seasonal changes like 3 years good monsoon, et cetera. But good MSP and crop procurement prices for kharif, 3% above last year sowing area for rabi and reservoir levels which are 120% above last 10-year average gives a good expectation of a good rabi crop and continuation of positive rural sentiment. The domestic sales of Farm Equipment across the industry has been estimated to grow by around 18% to 20% in FY '21. The two-wheeler sales have also shown a positive Y-o-Y growth. In fact, what should be highlighted is that even within two-wheelers, the revival of motorcycles was faster than scooters showing a strong rural demand. Over the period of the last few quarters, I have guided you on how we have been focusing more on increasing our counter share with selected dealers to OEM partners instead of taking a broad-based efforts towards increasing market share. The quarter gone by has led to the validation of this strategy, whereby we maintained our market share, which was a result of the strategy of counter share in Farm and Two-Wheeler segments. To add to that perspective, LTFS was the #1 Farm Equipment financier during H1 FY '21 amongst the top 5 two-wheeler financiers and among the top 3 micro loan players during the same period. We have retained a cautious outlook on our micro loan disbursements, which is though up by 53% on quarter-to-quarter basis, we are yet to catch up with last year's level. In collection, we have enhanced our on-field efforts to supplement our analytics-backed call center to ensure collection efficiencies quickly move towards pre-COVID level. Robust farm cash flows riding on robust kharif harvesting season, all-time high wheat procurement and higher rabi acreage have supported collections favorably. Just to give some numbers. In Farm, we have achieved our highest ever monthly collection efficiency at 91.8% in December 2020. The two-wheeler collection efficiency pegged at 98% in December '20 has recovered close to the pre-COVID level. In Micro Loans, our collection efficiency for December '20 was 98.3% and definitely, we are still behind the pre-COVID level of around 99.5% but recovered rapidly. Effective tracking of payment behaviors of customers and intensive on-ground collection efforts are pushing us towards the pre-COVID levels. Number two, if we talk about the infrastructure sector. Among our business sector, rural was not the only silver lining in the previous quarter, the infra business showed a strong disbursement momentum, majorly amongst renewables and road segments, where LTFH is one of the leading players. Our disbursement for the quarter guided very well by our risk guidance was more than INR 4,600 crores, about 1.6x growth on quarter-to-quarter basis. The continued focus of governmental infrastructure has ensured that the sector has delivered steady performance. The overall energy consumption turned positive in Q3 FY '21 with renewables, both wind and solar, driving the sectorial growth. In terms of cash flows, operational projects are being paid on time. Most of the DISCOMs have also remitted payments and have been instructed to maintain a must-run status for renewable energy. The liquidity in the sector has been well supported by package for DISCOMs announced under the AatmaNirbhar Bharat, where a total of INR 118,000 crore has been sanctioned to DISCOMs and INR 31,000 crores has been disbursed, which is increasing the liquidity in hands of the DISCOMs and helps also reasonably on-time payments to the gencos. For roads, annuity projects are receiving timely payments for NHAI, and toll collection for the portfolio financed by us have surpassed pre-COVID levels. The toll collections during Q3 for our road portfolio reached a level of 108% on Y-o-Y basis. Also as a part of our prudent practices, we maintain a strong sell-down desk, which allows us to generate more fee income while proportionately reducing the need for allocating higher capital. Our sell-down volumes for the quarter was INR 889 crores, which was 62% up from last year. Though, from last quarter, where we saw some record volumes, it was low. Third, housing and real estate. Our pickup in disbursements have been slowest in this segment. We continue to be selective in our real estate disbursements with focus on completion of existing projects. In fact, we have not underwritten any new project. Our focus on Cat A developers in our portfolio, resumed construction activities. Government measures and attractive schemes by developers has helped our funded project sales rebound faster than the industry. The sales in our portfolio during July to November of this financial year have been 102% of last financial year. This is an important number. This is -- I'm talking about only our portfolio. July to November number has been 102% sales of last financial year, same year. The corresponding figure for the industry is 82%. The buyer preference continued to be towards projects by reputed developers and with visible construction progress. The uptick in housing demand has also been driven by interventions like lower interest rate, lower stamp duties, rationalization of risk weights for home loans. Whilst these have pumped up the demand for retail housing segment, the negative impact of COVID-19 on MSMEs is likely to increase the risk aversion towards the LAP and the SENP segment, resulting in players being more conscious to lend to these segments. Our retail segment has shown a month-on-month improvement in both disbursements and collection volumes, where focus has been towards sourcing our salaried segments and on direct sourcing. Disbursements to salaried segments have now reached 93% of Q3 FY '20 levels and constituted 94% of Q3 FY '21 total home loan disbursements. So out of the total home loan disbursement for Q3 FY '21, 94% were to the salaried segment. LAP disbursements have been primarily towards the government-backed ECLGS scheme. Our retail -- in retail segment, incremental collection efforts are being undertaken to ensure that our portfolio quality remains enhanced. Our real estate -- for real estate, we are working with developers to ensure timely project completion, which will ultimately result in higher escrow collections. This should be seen along with the fact that there has been a marked improvement in escrow collections in Q3 FY '21, which stood at 120% of the same quarter last year. The YTD 9-month FY '21 collections are already at 78% of the corresponding prior FY levels. So whilst Q3 is 120% of last Q3, even considering the first 9 months, out of which you will accept that the first 6 months were largely very bad, it has been 78% of corresponding prior FY 9 months. Increase in escrow collections, when seen alongside sales in our real estate portfolio, may be indicative of buyer-preference projects by reputed developers with visible construction progress. With the inherent strengths we have, we remain committed to the housing segment. Now coming to the liability side. Proceeding towards the liability side, AAA-rated LTFS saw an easing liquidity as well as reduction of cost of funds. As of December '20, we maintained the liquidity of INR 16,442 crores in our book, out of which INR 7,957 crores was in the form of liquid assets. Obviously, we are all in line with the -- or even better than the RBI LCR norms, et cetera. In light of the moratorium and the stretched market liquidity conditions prevailing during Q1, we have taken a conscious call to derisk ourselves and keep additional liquidity in our book as always. But in Q1, it was much more. From July onwards, the average numbers have been strategically moderated. The negative carry on account of this was INR 24 crores in Q3 FY '21 as against INR 64 crores in Q2 FY '21 and INR 84 crores in Q1 FY '21. So this is one of the main reasons why our cost of funds has reduced so much naturally because we have -- and this also is analytics backed, we have managed it well. The focus in Q3 FY '21 was to take advantage of the reduction in market interest rates and lock in long-term funds at good costs. The incremental borrowing in long-term funds during the period was INR 4,248 crores. This includes drawing the second tranche of USD 50 million from Asian Infrastructure Investment Bank and priority sector loans of INR 1,100 crores. Now this, along with prudent use of CPs, we have been able to lock in also 2 -- 3- to 5-year funds at a very good cost. In addition to long-term funds, LTFH utilized the ability of the balance sheet to support a small incremental proportion of CPs during the quarter. The resultant liability mix during the quarter has shown a sharp reduction of 50 basis points quarter-on-quarter, which now stands at 7.82%. The strength of our balance sheet -- on the asset quality side, the strength of our balance sheet can be assessed by its asset quality. Our GS3 has improved Y-o-Y basis from 5.94% to 5.12% from -- on Y-o-Y basis. NS3 has also improved on similar lines from 2.67% in Q3 FY '20 to 1.92% in Q3 FY '21. This has been undertaken while improving the PCR from last year from 57% to 64%, which is in line with our prudent provisioning measures, which we continue to maintain as a part of the long-term strategy. As envisaged during the end of Q2, and I have spoken about it, NS3 has sequentially increased by 25 basis points on a quarterly basis. It can be attributed to the facts that some accounts under moratorium till end of August would have been 90-plus only by Q3 FY '20. The collection efficiencies across the Micro Loans, and Q2, that effect couldn't have been seen, so in Q3, but you will agree that it is fairly limited. The collection efficiencies across Micro Loans industry even though they have shown a fast bounce back, lots of people are asking, why haven't we used more of our stage 1, stage 2 provisions, and here is the answer to that for GS3 because one of the feedback coming was why haven't you used lots of stage 1, stage 2 provisions in Q3. Very clearly, as you see from our provision -- our presentation, we have used a little but not much. We have not created any new additional stage 1, stage 2 provisions, but used only to a small extent. The answer is why, and that I'm about to answer now. The collection efficiencies across the Micro Loans industry, even though they have shown a very fast bounce back, were still in the range of 85% to 90% levels during November '20. The efficiencies for LTFH are far better than the market, reaching levels of 98.3% during December '20. While the overall collection efficiencies have improved on quarter-on-quarter basis, the repayment behavior at the bottom of the pyramid continues to be erratic, and I would like to highlight this like I've highlighted before. Micro Loans is a cadence business. And though the collection efficiencies have significantly improved, we need to remember and prepare ourselves for the following. The fact that 98.3% is not 99.5% or 99% plus that we always had, which we maintained in pre-COVID levels. To give you a perspective, approximately 1% dip in our portfolio is INR 120 crores of debtors, just a perspective. That doesn't mean that quarterly NPAs will go up by INR 120 crores by 3 because we collect some also. But it means INR 120 crores of increase in the flow to debtors when the collection efficiency is less by just 1%. And that number needs to be remembered. Well, 98.3% looks extremely high and extremely good. The erratic nature and lower predictability of repayment frequency we have observed in the field. Now I will again explain it, like last time. Normally in Micro Loans, if a person pays in a month, that person pays next month also. And if the collection efficiency is improving, that means some more people are paying. This year, since the moratorium or even during the moratorium and even after the moratorium is over, the behavior we have seen is people who pay in a month, a few out of that, few, small percentage, 3%, 4%, 5%, don't pay the next month, while many more pay. So the collection efficiency goes up. But every month, there are a significant number of people, between 3% to 5%, which paid last month but don't pay this month, and which is very different, very new in the micro finance industry. The third factor is upcoming elections and the increase in political intrusion in the business, most recently in Assam, and onetime restructuring offered by -- offered to the micro loan customer by many other micro loan players which will further spoil repayment behavior. Just to emphasize, we have offered 0, 0.0% OTR to Micro Loans customers, and I will talk more about it. While we continue to remain steadfast in our focus towards collection, we cannot remain insulated to these developments. This is one of the reasons why we are maintaining high provisions on stage 1, stage 2 assets. And we will continue to remain for some time till the situation becomes clearer. We will see whether it happens in Q4 or Q1. But yes, we are moving in that direction certainly. The resolution framework offered by RBI on onetime restructuring for COVID-19-related stress was another test of our asset quality. I'm saying something very important. While market players have gone forward and done a fairly high amount of OTFs, we have undertaken no OTF, 0, in our entire rural portfolio, all -- any business in rural portfolio and even the real estate portfolio. The maximum potential restructuring in our portfolio which were invoked till December 31, so now we know the maximum amount, not all of this has been restructured already, but we know the maximum which can be restructured is INR 1,438 crores, corresponding to 1.4% of our book. Of this, assets worth INR 230 crores have been restructured in Q3 FY '21 and the balance may be restructured in Q4 of FY '21 or Q1 of FY '21. Just to give you the breakup, very clearly, rural OTR 0; real estate OTR, 0; HL plus LAP, we have done about INR 340 crores; infra, there are 3 projects with about INR 440 crores; and corporate exposures, about 3 projects with INR 650 crores. As you will expect, overall, about INR 1,400 crores, which is absolutely just about 1.4% of the total book. And this is only invoked. As I said, only INR 213 crores has been restructured, and the 10% provision has been taken as corresponding. In my last communication, I had also mentioned that we're selectively using DCCO extensions for our real estate portfolio. With clarities emerging post-COVID, we have undertaken DCCO extension only for 3 projects out of 105 projects of -- in our portfolio, corresponding to an asset size of INR 1,162 crores. This is in line with my earlier approach, earlier guidance that DCCO shift will not constitute more than single-digit percentage of our portfolio. Okay. So it is well within that guidance. The validation of our balance sheet has been displayed through a AAA rating by all our 4 rating agencies, which have been reaffirmed: CRISIL, ICRA, CARE and India Ratings as a part of their annual surveillance exercise during the financial year. Coming to the financial performance. Last time we interacted post the Q2 results, I had mentioned about the trend month-on-month, quarter-on-quarter, in some cases, year-to-year improvements across businesses. The trend, as I last spoke, has continued in this quarter as well. Talking about disbursements. The pickup in disbursements on quarter-on-quarter basis may have been positively impacted by festive uptick. We agree to that. The disbursements in Q3 FY '21 were higher by 51% on Q-on-Q basis and 13% Y-o-Y and were the highest since Q1 FY '20. The volumes crossed pre-COVID levels owing to strong pickup in rural and infra. Amongst the rural segment, farm business had an uptick of 43% on Q-on-Q basis; two-wheeler showed an uptick of 50% on Q-on-Q basis; and both these businesses, 13% and 10%, respectively, on Y-o-Y basis. The growth story also extended to our Micro Loans disbursement, where the disbursement shown an uptick of 53% Q-on-Q basis. The Q-on-Q uptick has not translated to Y-o-Y owing to our focus on existing customers and also increase in credit rejections. Why existing customers is largely, we believe that even data on new customers because of moratorium till August, our engines need much more data to go into new customers. We are looking into it. Our infra disbursements are highlighted by an impetus towards sell-down and prepayments to create lending opportunities within the capital allocated. We further underscored the point by disbursing INR 4,641 crores, which is up 60% quarter-on-quarter basis and 124% Y-o-Y. The disbursements were characteristic by sell-down volumes of about close to INR 5,000 crores in Q2 and Q3 totaled together, which is 3x the cumulative sell-down in the preceding 3 quarters. Real estate disbursements remained approximately at the same level as Q2, but of course, sharply down from Q3 FY '20 owing to our focus on completion of existing projects. As far as book growth is concerned, book remained mostly flat during the quarter despite higher disbursements due to a good problem, I mean due to increase in collection volumes. Within the pie, our focused book increased 3% on Y-o-Y basis and 2% on quarter-on-quarter, whereas there is a sharp reduction of 34% in the defocused book Y-o-Y. Farm book has grown sharply by 18% on Y-o-Y, owing to continued positive growth and was ably supported by 9% increase in two-wheeler book, where all both these businesses, we have maintained our market share in festive season and implied analytics to increase counter share. The book increase have been moderate in our infra business 4% Y-o-Y and home loans 3% Y-o-Y. Our focus on salaried segments can be highlighted that within the HL portfolio, our salaried book has grown by 15%, albeit these are very small numbers. Our collection due in disbursement outlook and resulted in an 8% Y-o-Y reductions in the Micro Loans book. LAP book also reduced 9% Y-o-Y. And more importantly, our focus on completion of existing projects and more new underwriting have resulted a 2% Y-o-Y reduction in real estate. As these have been conscious call, we would like to suggest that the book has moved in the desired direction. The AUM in our investment management business increased by close to INR 8,000 crores quarter-on-quarter basis, chiefly contributed by increase in AUM in fixed income class by about INR 3,700 crores or 20% quarter-on-quarter. As far as cost of funds is concerned, the current market situation was ideal for working towards our objective of reduction of cost of funds. The weighted average cost of funds have improved significantly to 7.82% versus 8.54% last year and 8.32% last quarter. The average liquid assets on the balance sheet on a quarter-on-quarter basis have also led to a reduction in cost on account of the same. We also used the current liquidity regime to judiciously lock-in for medium- to long-term funds at lower cost. We believe that is the prudent and cautious approach at this point of time. We don't know when interest rates will start rising, but we believe that they're certainly close to bottoming out, and it is prudent to lock-in to medium- to long-term funds. During the quarter, we have undertaken incremental long-term borrowings of INR 4,248 crores, of which INR 1,100 crores have been PSL loans raised at lower rates. NIMs plus fees for the quarter was 7.39%, a big increase of -- from 6.49% of last year. The fee and other income for the quarter increased by INR 38 crores, owing to strong revival in rural and infra disbursement and enhanced cross-selling of products. The fee in rural was highest since FY '17. The improvement in NIMs and fees is also because of the reduction in cost of borrowings, some prepayments in high-cost borrowings, which our treasury team undertaking and renegotiation of interest rates. The lower cost of borrowings has helped the NIMs plus fees being higher in the current quarter, and this will depend on market situation going forward. As far as operating cost is concerned, with the return to normalcy, our operating costs remained in line with those of last year. This represents an increase of about INR 37 crores on Q-on-Q basis, primarily led by collection costs, and it is directly proportional to business activity and has risen in this quarter as business activity, including collections, went up. Even though collection efficiencies have come to pre-COVID levels, in some cases above pre-COVID levels, the check bounces have not yet come to pre-COVID level. They have improved but not yet come, which increases the cost of collections. And this is something we are paying maximum attention to, but that is leading to small increase in cost of collection, but it's all for the good. It is increasing collection efficiency, keeping credit cost in control. I would like to highlight, of course, that the increase in operating expenses proportionately is lower than the increase in NIMs and fees, so which shows that the expenses are value adding. As far as credit cost is concerned, we are confident of our book quality and remain confident of collection abilities. However, we must prudently prepare ourselves for the irregular repayment behavior in certain cases arising out of challenges thrown by the pandemic. While we continue to maintain PCR at 64%, our additional provisions remained at similar levels for stage 1 and stage 2 at INR 1,739 crores as in the previous quarter. Of this, INR 1,100 crores as macro prudential; INR 483 crores correspond to COVID-19 provisions, which are mandated by RBI in March and in June; and the balance of INR 157 crores correspond to enhanced provisions that we have taken on stage 1, stage 2. The total credit cost of the quarter was INR 1,024 crores, of which INR 144 crores is attributable to markdown of a specific HFC asset in the defocused book. As you would all know and guess, that this is coming to closer to resolution now hopefully. And hence, we have taken our best estimate -- conservative estimate of the provisions and INR 144 crores additional have been provided there. We believe that with that we are close to the -- or we are at the resolution value. Barring that, the credit cost remained on comparable levels of Q2 FY '21. The credit cost of focused and defocused business on an annualized basis is 2.21% YTD FY '21, which remains on similar level at 2.24% for entire FY '20. Just to conclude, in my introductory remarks, I mentioned that a professional looks forward to what opportunities the future holds for each one of us. And as I say, that there have been spots of recovery in almost all sectors that we are involved in, rural infra, housing, to some extent, even in asset management. Based on our experience, the developments in the market in last few months, and with incremental development across months, I can only say that as far as LTFH is concerned, we are close to normalcy. We are taking advantage of the recovery in rural and infra sectors, and we would be most -- making the most of our market strength and market presence. More importantly, with additional provision we have built in additional -- built additional resilience to our balance sheet. As the provision stand today, I could say that we are largely past any concerns arising out of the moratorium and are firmly looking ahead for business as usual. To make maximum out of the pre-COVID scenario, we have identified the need for raising additional capital. The Board at their meeting dated November 9, 2020, approved a rights issue of fully paid-up equity shares of the company for an amount not exceeding INR 3,000 crores to the eligible equity shareholders of the company as on the record date. A meeting of the Board is proposed to be held later today to discuss terms of the rights issue. I would request you not to ask questions about the terms, timings of the rights issue. You will know by today evening. Any case given the rights issue and you would have guessed that I'm actually reading out of a script, given the rights issue, the restrictions imposed by the regulations, there are very limited comments that I will be able to make on a forward-looking basis. You all are market experts, you will understand that. And request you to kindly appreciate that and understand this while I respond to your questions. I will try to do justice, but there are lawyers who have a gun to my head, please understand that. Thank you for the patient listening. I now open the floor for questions.

[Operator Instructions] The first question is from the line of Rikin Shah from Crédit Suisse.

I had a couple of questions. The first one, it was on -- around the write-offs. It does seem that the write-offs in this quarter was meaningfully higher. So if you could elaborate a bit more on the businesses where the write-offs were done and how do they compare directionally versus our usual run rate of the write-offs? Second one was on the collection efficiency for Micro Loans, where the 98.3% number, is that comparable with the 90% number that was mentioned in the 2Q because it does seem that the definition of collection efficiency has changed? If it is changed, what could be the comparable number? And the third and the last question will be on the infra book pipeline. How does the pipeline look like given the strong disbursement that we have seen in the last 2 quarters? What should the expectations be in the coming quarters?

Okay. I will take one by one, okay. The write-offs, so number one, okay, in my retail book, normally -- I will tell you the normal policy. Retail book we write-off something which goes in very, very high DPD, each one of them. So the most important thing about our write-off is normally speaking, normally, almost in 100% of the cases, we write-off loans which are only 100% provided, okay? And hence, you will see that the PCR is always a good indicator. That if you do a lot of write-off, the PCR will come down drastically, naturally, because 100% assets go out. So that's the first indicator. Second is, because I don't want to put business-wise numbers there, then I will have to include in my letter of offer and all those things, we are too close to the rights issue. I will give some indications. Generally, for retail, we really wait for a very high DPD for it to write-off, where we genuinely believe that chances of collection there are low. And even if there's some collections happen, we will take it as income. So that's it. This time, it is a little higher not because of retail because one asset, if you remember, in -- I think it was in the first quarter, we had provided 100%, it's a large corporate asset of a large conglomerate, we have returned that off. So that's -- that was the large number. Okay. So it is one asset, big asset, returned that off, and hence, it doesn't show any trend. That's what I wanted to tell you, okay? So that is your first question. Collection efficiency. Collection efficiency definition will naturally be different when a quarter has moratorium and the quarter doesn't have moratorium. When a quarter in which there is no moratorium, you come back to -- because in moratorium, there is no billing, right, of the moratorium? So normally, on-time collection efficiency definition is very simple. That in the denominator is 0 DPD billing, in the numerator is 0 DPD collection. That is the simple definition. During moratorium, those definitions had to be tweaked for moratorium. We have come back to normal definitions. The number we are giving this time should not be compared with the numbers we gave last time. It should be compared with the number we gave last year. So these are the -- so that is why I came out and said that 98.3% is actually not 99.5% and above, which was there last year. So that's the number to be compared with. The big question is how to report write-off -- I mean how to report collection efficiency during moratorium. Now that we are in a non-moratorium period, the definitions have to come back to normal, right? So very simple. And there is no comparison, I was taking the same definition, I can't do that because 2 months this quarter we are not under moratorium. I have to get back to normal definition. I hope that answers your question. So if you compared it with Q3 last year, it is exactly the same definition. And we are about 1.5% short of last year. I don't remember the exact number for last year, but it should be around that, yes? And anyway, you then check it precisely calculations with Anuj, yes? Infra book pipeline, very simple answer, I won't be able to answer at all. We are seeing as I indicated, and I tried to indicate, see, every -- all these businesses, you have to look at the strengths and the strengths -- I can highlight the strengths and I can highlight what we have done in Q2, Q3, et cetera. It is up to you to see what will be the expectations for Q3, Q4. Such short-term projections, like pipeline, et cetera, my lawyers will kill me.

The next question is from the line of Jignesh Shial from Emkay Global.

Sir, definitely a good set of numbers. I have a couple of questions. I understand, I have -- the first question was on the infra book itself. I understand that you can't give more granularity about the book. But earlier, we have stated that our overall Y-o-Y growth in the infra book yearly would be roughly around 15%, and the rest we will be selling down and all. Are we changing that strategy? Or we are still intact with the same strategy?

For sure. Strategic question I can answer because this is very long term. There is no change in strategy. As you would know, 5 years back, when the new management took over, the book was very infra heavy. We have continuously increased the proportion of rural, and that strategy continues. Infra strategy will be sell-down disbursements. We will have strength in business, strength in disbursements, generate fees and sell-down as much as possible, right? You will remember that Q2, the sell-down was excellent and hence, Q3, we have been able to do good disbursements naturally. Having said that, quarter-on-quarter -- see, also, you have to manage things quarter-on-quarter, right? So very simply, I will just speak my mind here is rural, as much as the disbursements have grown, we have a sweet problem in rural that at this point of time, even now, the collections are higher than disbursements. Very small number now, INR 100 crores, INR 200 crores, but collections are still higher than disbursements. And hence, at this point of time, instead of wasting capital, you can allow infra business to grow for a couple of quarters, right? Rather than managing the tight management quarterly, you can maybe allow them a little bit of elbow room, right? And that's what we are doing. You can call it more as a tactic while strategy remains the same. Does that answer your question?

Yes. But in that book, our focus will still be on the same segments like roads and renewables and all? Or are we changing at this time, sir?

Road refinance, yes, within new construction from HAMs, good HAM projects, renewables and transmission.

Okay. Understood. Yes. Understood. Now -- secondly, now since we're discussing rural, last time around also we discussed some -- or I had a similar question and you explained, there has been definitely improvement on the NIM plus fees, whereby you indicated that sort of cross-sell has also been happening on the rural side. You mentioned about the -- some insurance scheme and all that you have been selling. Can you -- what -- can you elaborate a little bit further? Are we seeing an improvement on the cross-sell, specifically in the rural portfolio side? And if some glimpse over the products that we are selling and all, if you can just elaborate on that?

Yes. Largely, it remains same. Our cross-sell largely, largely is on services. There is some loans that we cross-sell by doing data analytics in our consumer loans category. We look at our two-wheeler customer base, our -- some other customer bases, et cetera, and look at it and cross-sell, but that is very limited. Mostly, it is cross-sell of insurance products, whether it is health, whether it is hospital cash, whether it is credit protection, all these products we sell. Most of our cross-sell is at the beginning of the loan, at the initial time of the loan, so that it would remain same. And hence, you will see rural fees will largely be in line with rural disbursements. So to answer your question, there is no -- nothing drastically different we have done in Q3 than we have done in Q1 and Q2, or at least Q2. Q1, we hardly did anything anyway.

Okay. Understood. Thirdly, we are seeing in the last couple of months, the data -- macro letter indicates that the demand for housing had seen a sharp surge, specifically October, November and December, especially the macros is quite visible out here. What's the outlook that you are seeing, one, on the housing finance side itself, and that is the retail funding side? As well as are you seeing an improvement happening on the developer finance segment side as well? Though we have been consolidating since quite some time, a couple of quarters and all or even longer period, but what's the outlook on the housing as well as on the developer finance side from your side?

So I will not call it outlook. I will call the trend which we have seen in the past, okay, because the outlook word is allergy at this point of time. It takes 1 month at least. So I will talk about past and you are intelligent enough. You will -- you project the way you want, okay? So let me take. So first of all, any change in housing, obviously, will have the effect on the developer funding side naturally, because housing is the basic thing. So lots of things have happened. Interest rates at lower ever prices. Home -- house prices have actually fallen for the first time, right? Various schemes by developers. In big markets like Mumbai, the stamp duty reduction, right? So what this has led to -- and these are numbers. By the way, about the industry numbers that we have put in our presentation, this time we are super confident because of the -- it had to be put in the letter of offer, there are all numbers made and certified by CRISIL. So we are okay, generally. With this, the sales, especially people -- and I will not say specific numbers. See, housing as a real estate, as an investment tool, as an investment class was prevalent 2 years back. It went totally out. And even now, I don’t -- we don't see it coming back so soon, as an investment tool. But demand, original demand, staying demand has definitely picked up in the last quarter, I would say, and maybe a little before that. And this generally has had positive impact on the industry as such, and especially our portfolio, which indicates -- I mean we have before this also given some cuts of our portfolio and our portfolio, and there are numbers we have put in our presentation, talking about sales increase of our portfolio. And today, also I spoke about them. The escrow collections increase of our portfolio. These are all numbers showing very positive impact on good projects, good developers, certain type of products. And that, moving on to our portfolio, we are quite happy. It shows that we have chosen well.

Okay. Understood. But do you think that developer financiers in general, not specific for your book I'm saying, is likely to see a better tenor real estate, in general, in India? Do you feel this is out of woods now? Or you still feel there will be a couple of quarters of pain might come up and then probably we can see a little bit because last time, I guess, we discussed that by 2023 or 2022, '23, the current inventory seems to be getting exhausted about. So do you think that trend would be even seeing a further improvement and all?

Again, I don't want to comment that. But one thing is -- two things I will say, that do I think it is completely out of woods? Definitely not. Reason is still large format products, 4 bedrooms, 5 bedrooms, luxury housing has not picked up, okay? So -- and developers where there have no capacity to -- very small developers, C, D, E category developers, who have single projects, et cetera, they are down and out. So there is a lot of consolidation, et cetera, happening in the industry. That will take some time. So this -- because of these 2 segments, definitely not out of the woods. And even though there has been a pickup in Q3, and the pickup in Q3 has surprised even me, so I don't think in Q2 I would have given you a guidance of Q3 so fast pickup in home -- at least small dwelling sale. That has happened. But it is just 1 quarter, and we are all very experienced to me in old days, you in young age are already experienced to -- too experienced to call out of the woods in 1 quarter.

Understood. And just 1 data-keeping point. You said, DCCO restructuring. Can you give me the number again and the projects in real estate?

Three projects, INR 1,162 crores, 7% of our book, yes? I had guided last time that it will be in single digits.

Understood. And your total OTR restructure is INR 1,438, which excludes rural and real estate completely, correct?

Completely, absolutely.

The next question is from the line of Umang Shah from HSBC Securities.

Sir, I have a couple of questions. One was from -- again, from a strategy standpoint, that, let's say, again, from a medium-term perspective, how should one read the macro prudential provisioning policy of the company? So we already have about 1.9% additional provisions that we are already carrying. Is there any particular threshold that the management has in mind, which one should see as a threshold and probably up to that extent the company can absorb provisions and beyond that, once again, you start making provisions. Just wanted to understand the thought process, how should one look at this?

Okay. Generally speaking, very generally speaking, why are macro prudential provisions made is there are certain businesses which by nature are cyclic, right? Let us talk micro finance. I wouldn't speak specific numbers because then my auditors will have to start auditing those numbers. But very simple, micro finance is a problem of some kind every 4 to 5 years, right? So companies have choice, whether to show very high ROEs from that profit for 4 years and then a very low ROE in the fifth year, right? I mean fourth, fifth year or something. Don't take it exactly fourth, fifth year, around that time. We have taken a choice since we started making macro prudential. I mean we had not foreseen COVID coming and that made us provide much more actually than that. That we will keep taking macro prudential provisions and slowly building up for the time when a problem happen. Problem of these proportions and hence, huge micro prudential provisions in Q1 and Q2. Naturally, that is not something which is a normal occurrence. Even though I will not be able to talk about future, I can only say that any normal occurrences like storm, floods, earthquakes, elections won't cause the problem that last 6 months caused, right? So the kind of stage 1, stage 2 that we did in the last 2 quarters has been extraordinary. You can judge the direction from the fact that in Q1 and Q2 where we made huge provisions here, stage 1, stage 2, whether it is macro -- some of it were compulsory, the COVID-19 provisions which the RBI said, right? Then there were -- on top of it, there were macro prudential. And on top of it, we made some overlay provisions, okay? You will see that in Q2 -- Q3, we have not made anything extra. Not INR 1, we have created more on that. All our provisions in Q3 have gone towards stage 3. So now you can judge the direction, okay? When we will reverse, et cetera? I can only say it will depend on normalcies coming back and the speed of normalcy coming back. I mean, I have an idea but I can't give it right now on the call.

No, no. I can understand. I think this is also good enough. And just a related question on restructured loans, about INR 14 billion-odd, which you mentioned, of which the resolution has been implemented on just about INR 2 billion. On the balance book also, we have taken provisions as per the company ECL policy, right? So fair to assume that as and when the implementation will happen, there would be a provision release from these loans or we will kind of proactively keep on carrying higher provisions?

I wouldn't say if there's the provision release or not. I can confirm that balance we have taken provisions according the company's ECL policy. But that 10% -- from ECL to 10%, we have moved only the INR 231 crores. Got it? And rest, we will move as and when the restructuring happens.

Okay. Understood. Sir, another question was on...

And by the way on corporate -- let me just give one more clarification. A good part of the corporate and infra loans that we have restructured, a good part is where we are a small member of the consortium. So there have been no choice restructuring. Below 25%, you have to be led by the consortium.

And as you already mentioned in your opening remarks, this INR 14 billion is the outside number. So I mean, this number will not go up. If at all, the implementation doesn't take place, it will only reduce.

It cannot go up because last day of invocation was 31t December.

Fair point. Sir, another question was related to liability repricing. Now again, I can understand you can't really give an outlook, but just from a liability book perspective, is it fair to assume that a large part of the borrowings which were bank borrowings and other borrowings, which were supposed to get repriced would already have gotten repriced by now? And to that extent, the -- and let's say, if rates kind of stabilize from here on, the repricing benefits coming into the quarters might be minimal or how should one look at it? And also, if you could just give a flavor that our CP borrowings have once again crossed double-digit number after a very long time. Would we have some sort of a capping on the CP borrowing? Just some color on that.

Okay. So I will talk again of the past, yes. So one, I can confirm that's a large part of the benefit, and that's why the benefit also is split into saving of liquidity drag or negative drag because of the excess liquidity and the cost of borrowings as well. Both these things, as you say, the excess liquidity, now the cost -- quarterly cost is only INR 24 crores, right? It has come down from October to December also, but INR 24 crores, as well as reduction in interest rates. Both these things, I would say that -- I will not talk about the future, I will put the English very carefully. A large part of the benefit would have flowed in Q3, right? A big change, a big step change would have happened in Q3, okay? Does that satisfy you? Yes.

Yes.

And also, we have specifically mentioned the amount of long-term money we raised. A lot of negotiations as well as prepayments have happened to high-cost borrowings. Renegotiations have happened. New raise has happened. And most importantly, taken -- I mean, we must be a very, very large PSL borrower in the system today. And we have used our PSL like lending to a very, very good extent to raise really cheap PSL funds. I mean, just to put it in context, I believe that for a long, long time, we were not below 8% ever, right? So a big benefit has accrued already.

Okay. Fair point. And sir, on commercial paper?

Yes. Yes. So CP, as I said, our cash flows allow us much more than this. But as you said, crossed double digit, meaning it is 11%. So [Foreign Language] we can say -- you sounded like a reporter actually, I'm sorry. So from 9% to 11%, yes, of course, we crossed double digit. But no, largely, there won't be -- we have not put a cap as such. But largely -- as I said, I mean, what we have done very prudently is actually locked into long-term -- longer-term funds cheap at this point of time. We believe that we are closer to the bottoming out of interest rate cycle.

Okay. Perfect. That's great. And just last 2 data points which I wanted to confirm. If you could share the sanctions and the disbursements number under the ECLGS scheme?

I have not given -- very frankly, disbursement [Foreign Language] hardly anything there. It is in some small double-digit. [Foreign Language] But nothing to talk about. I mean we have been outstanding failure in this. [Foreign Language].

Okay. No problem. And just to reconfirm, the NPAs which have been reported do not include the impact of Supreme Court standstill, right? So the Gross Stage 3 for us is...

So we don't report NPA. We just report GS3, which has nothing to do with Supreme Court. So everything which is GS3 is there.

The next question is from the line of Kunal Shah from ICICI Securities.

So a few questions. Firstly, in terms of the restructuring, if you can just give the texture of the restructuring in terms of mild, moderate, severe. No doubt, it's 1.4-odd-percent. But what could be the nature of this kind of a restructuring on the corporate side and even on the infra?

I don't know. I don't know what you called mild or [Foreign Language]...

[Foreign Language] this entire thing, [ Kamat Committee ] also they highlighted, okay, this is how it's going to pan out, okay? So that's the reason maybe just wanted to understand as to how severe could this be and what is the kind of a stress in these accounts which have got restructured?

No. So as I told you, retail, yes, retail is just about INR 300 crores, which is housing and LAP. I don't think there is any abnormal stress. As I had last time told, SME, there is a problem, slowest market to take over. And I have said that whatever restructure we will have in SME, and it's a small amount, INR 344 crores. So I don't know whether to call it mild, severe, et cetera. At this point, we have done the restructuring the way we think, that -- hope that the business comes back. Of the others, I would say, a fairly large...

Just in this, between home loan and LAP as well, maybe the home loan would be relatively smaller size within this and would it be fair to assume that INR 3,600 crores, INR 3,700 crores of LAP, largely, the number would be from that pool?

We believe that within INR 340 crores, that number itself is so small that what to talk about trends and all in that. I don't think that is very meaningful at this point of time. And please understand Kunal, I mean, anything we put we will have to then -- I say, we will have to put it in the letter of offer, and it is complicated from here. Any breakup more than...

No, I'm just trying to understand, is it like 5%, 10% of the net pool or no? That was the broader understanding which I was trying to gauge...

After the rights issue -- this is not going anywhere in 1 month. After the rights issue, you can always discuss and get whatever clarifications you want.

Sure. Okay.

Please understand. That's why I said in the beginning that I will be very restricted in what I...

Yes, yes. No worries, yes.

There is another thing that corporate ones, as I said, quite a few of the corporate ones are led by the consortium leaders. So we are just joining it.

Okay. And we said like we have met the provisioning as per our ECL except for that pool of INR 230 crores which is already restructured?

Correct. Correct.

So there, we would have met 10%?

There, it will be 10%. Yes, that is correct. INR 231 crores -- INR 213 crores quarter. Sorry, I don't remember the numbers, something like that.

Yes. Yes. That's okay. Yes. Yes. Okay. And secondly, again, coming back to rural. So last time on MFI, it was almost 9%. And maybe out of the current provisioning, what we look at in terms of the focused business, maybe significant proportion would again be attributed to the rural side. So maybe that's further inching up. You highlighted a few things in terms of the behavior being slightly erratic for these MFI customers and collection efficiency also quite strong. So what -- maybe what is the proportion of this erratic customer that is maybe concerning us? Because maybe if I have to include another 2%, 3% of further creation of the specific buffer, then it seems like almost 11%, 12% -- 11-odd-percent of the MFI is being provided for, okay with, say, almost like 98% kind of a collection efficiency. So is it like the behavior is erratic to the extent of almost like 10%, 15% of the pool or how is it?

So number one -- 2 things I would like to clarify. Number one, we have not made any stage 1, stage 2 provision this quarter. So I don't know why you saw it inching up. It has definitely not inched up at all in stage 1, stage 2 because we have made 0 additional stage 1, stage 2 provision in Q3, yes? In fact, a small number we have used, okay? So that is the first comment. Second, the erratic behavior comment I made was about the whole industry and the trend in the industry. It's not about our portfolio at all. And definitely, it is not 10%, 11%, et cetera. Those people not paying in a [ puzzle. ] It's a much smaller number. I don't want to talk about a specific number, but it is much smaller number. The spirit behind this -- you understand, the spirit behind this is if you have created a provision, wait till you become very sure that a trend is setting up before you start reversing a substantial portion of them, right? The very fact that we have not created anything additional should be an indicator to you that how we are looking at the progress of the performance. That last 2 quarters -- last 3 quarters, we created heavy provisions in stage 1, stage 2, stage 3. This year -- this quarter, we have come to not providing anything new. So that's the trend that you should look at.

No, the only thing I was looking at the pure -- maybe outside of stage 1, stage 2, if I have to look at total provisioning, okay, including the specific stage 3 as well...

But that is the third quarter. That is no thinking. That's the ECL model.

That's the only the ECL one.

So ECL model, we have -- we strengthened, we keep strengthening. That's okay. That's not a problem.

The next question is from the line of Prashanth Sridhar from SBI Mutual Fund.

Most of my doubts have been answered. Just 2 things, if you could give us some split or idea about the disbursements on the infrastructure side, whether they are to existing or new projects?

Can you contact Anuj? He will give as many details as we can because I don't have a readymade answer. I'm not prepared for that.

No problem. No problem. And the other one was just a sort of bookkeeping clarity. The disbursement amounts that you guys give, those are gross disbursement or are they net of something?

Gross, but net of what? No, no, they are gross disbursements.

Okay. The reason I ask is because you've given the collection figure for the quarterly amount, right? So closing minus collection plus opening would give disbursements...

No, collections also will be gross, including interest. Collections actually will be gross of interest. That is why it will not add up.

The next question is from the line of Nidhesh Jain from Investec Capital.

Sir, on Micro Loans, if you can share some more data in terms of nonpaying customer fee or 1 DPD that still can give us more clarity how we are faring versus industry, how we -- because other companies will likely start disclosing nonpaying customers fees of last 6, 7 months or 1 DPD that we have currently versus last year? Because the 0 DPD collection will be very -- I will say, it will not be comparable because probably we will have reasonably large size 1 DPD from today. So maybe say 3 months of last year, may not be comparable?

One minute. Okay. I don't know how to answer this question. I can only say that naturally, the stage 1, stage 2 provisions that we do are on stage 1, stage 2, right? So stage 1, stage 2 is anything which is not 0 DPD, so -- stage 2, yes. So I don't know. I mean we don't want to give this number. It is not in public space. It's -- I can only claim that I think it is, yes, substantially better than the industry. I think that's the only thing I can say.

We take the last question from the line of Karthik Chellappa from Buena Vista Fund.

Just 2 to 3 questions, sir. Firstly, on the point on the collection efficiency for micro which reached about 98.3%. There is an interesting comment in the presentation which says through rollout of contests and incentive structures. So what are the nature of these incentives and contests that you had run, which helped you to reach a 98% plus collection efficiency? And related to that, does the Assam Bill -- or Assam Bill like regulation change the way you look at a specific state for doing business or the way to conduct business?

Okay. Yes. Okay. So the first one I can answer because it doesn't affect any this thing. So first of all, just to confirm, there is no confusion. All incentives, contests, et cetera, are for our people. It is not for customers, okay? So that is the first. It is basically to generate excitement. So first, retail is about generating excitement. [Foreign Language], okay? There is a large pool. We have 22,000 people, out of which what 16,000, 17,000 are in Micro Loans, [Foreign Language] -- field force, around [Foreign Language]. And you have to keep them excited because the direct connection with management will be through so many levels. I can only say that I am using -- my phone is iPhone 10 and there are several people in my rural field which are now got iPhone 12 from the company. Does that answer your question? It was a lighter vein, but it's true. Both is true. I'm using the iPhone 10 and there are people who have got iPhone 12. Sorry?

Okay. It at least gives the degree of incentives that you're offering.

It's not like -- okay, okay, I'm now getting it. It's not in terms of as a percentage of collection or not those sorts of things which will lead to issues in the field, okay? It's fun. It's like I will tell you one of the -- we have something called Wall Of Fame. That every month, we declare that you cross these thresholds, you will be declared as winners of Wall Of Fame. And no less person than the chief executive of that particular business hold this virtual conference right now, and those people are made to look like absolute heroes on a monthly basis. And then we have 1 Star, 2 Star, like people who have been Hall Of Fame -- Wall of Fame rather, 2 continuous months, 3 continuous months, 4 continuous months. It is basically creating excitement. Let us not forget that when we sit here on the table and crunch numbers, there are people there going through toil, going through severe disappointments on a daily basis, okay? Just take the Micro Loans team. Debtors and even not collecting from 1.7% of people on a monthly basis is an experience that they've never had. And at some point of time, not collecting from 30%, 40% during the COVID thing, it's a very different Micro Loans business or any other business than what all these young people have seen. See what will be their age [Foreign Language] almost, right? So they have to be kept excited. So it was largely that. Where it comes and ends at us is the additional cost which we have to bear and as management -- which is very small, and management has to see that the benefit of that is way higher than the cost incurred. Does that answer?

Got it. Yes, somewhat, sir. Any comment that you can offer on the Assam Bill like situation or what you can say?

Yes. So Assam Bill like situation, I can say, should be avoided. We had not thought that it should become anything like that. But I can only say we are very well prepared. We saw this, and this is the good part about analytics. Analytics can sense that something is going wrong though we don't know what is going wrong. Of course, COVID, et cetera, analytics failed badly. But otherwise, what something -- some rumblings on the field analytics can feel, right? And our Assam portfolio today is almost 50% of what it was 2 years back, right? In fact, the entire Assam portfolio is about INR 400 crores, yes, out of which 0 DPD is close to 50% of that at this point of time. And anything which is above 0 DPD, we are largely provided and ready. So that is the whole idea that will issues like Assam or any other issues happen, this industry is supposed to be like that, and that is why you make super normal profits when it doesn't happen in this industry. It is an extremely profitable business. But the important part is, does the company be ready in terms of trying to predict something wrong happening and most importantly, making provisions on it when it happens, right? We today have examples of -- when Andhra happened 8 -- 10 years back, we had a shock. I mean those numbers were very small compared to today, but that was a shock. But after that, Orissa happened. After that, 1 or 2 things here and there have happened. And you haven't even noticed it. We haven't even noticed it in our P&L because we have been ready very early because of the analytical abilities we have and the provisioning we have done, and Assam is no different.

Great. Sir, and my last question is, if we were to look at the disbursements both in Farm Equipment and Two-Wheelers, which have been very strong Q-on-Q, the associated commentary is we have maintained market share in both these segments, whereas the commentary in the second quarter was we had become #1 in Farm Equipment and we were among the top 3 in August and September. Does this mean that in the third quarter, the rest of the industry, whether it is NBFCs or banks were also equally strong in their disbursement growth for these segments which is why we have not been able to gain share despite...

No, no, no. It doesn't mean anything like that. It only means that because of the rights issue, the denominator, which is industry data, has to be out and has to be certified by an independent agency, only then I can declare market shares for Q3. So up to Q2, it is certified by the independent agency working for us. Both -- so now Q3, while we know very well the numerator, we have a very good idea of the denominator, we can't put it in public domain when the right issue is on. That's all it means. The industry data is not out. It's as simple as that.

Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Mr. Dinanath Dubhashi for closing comments. Over to you, sir.

Yes, my only closing comment will be a big thank you for being with us over this whole problem, 9 months -- last 9 months through whole difficulties, supporting the company, having faith in us. Crystal ball gazing is a very difficult game. We -- I always said that over the last 9 months, we have managed to predict some things before this, made provisions in our P&L. We may have been wrong a few times. I have no issue saying that because crystal ball gazing is always a difficult game. But one thing that this company has done and will continue to do is all the time doing the right things first and then doing things right. So we try and see what can be a situation, a worst case situation and try and be ready for that. We also believe that all capabilities that we have built, like analytics, digital, our strength in market has stood us in great strength during these 9 months because of which in almost -- not only in pack but various parameters which lead to the final number, we have shown a positive trend over the last 3 quarters, right? I thank you all for your support and your good wishes and only pray that, that will continue. Like any other corporate citizen coming out of this, we will need a lot of your support and good wishes. So very humbly praying for the same from you and from the Almighty. Thank you.

On behalf of L&T Finance Holdings, that concludes this conference. Thank you all for joining. You may now disconnect your lines.