MAS Financial Services Limited (MASFIN) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to MAS Financial Services Limited Q4 FY 2022/'23 Earnings Conference Call, hosted by JM Financial Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sameer Bhise from JM Financial. Thank you, and over to you, sir.

Thank you, Nirav. Good evening, everyone, and welcome to the 4Q '23 earnings conference call of MAS Financial Services. First of all, I would like to thank the management of the company, Mr. Kamlesh Gandhi for giving us the opportunity to host this call. From the management side today, we have Mr. Kamlesh Gandhi, Chairman and Managing Director; Mrs. Darshana Pandya, Director and CEO; Mr. Ankit Jain, the Chief Financial Officer; and the entire senior management team of the company. We will first begin with opening comments from Mr. Gandhi regarding the business environment, and then we proceed to the Q&A session. Over to you, sir. Thank you.

Thank you so much, and good evening, everybody. I'm happy to be connected again for sharing the Q4 performance of the company. As shared with all of you writing to us at note and our presentation on the website. The performance of the company was very robust as in line with our 2 decades of performance, what we have demonstrated over all these 25 years of working. And this was the first full uninterrupted year of working post-COVID. And taking that into account, the performance of the company in terms of AUM and PET and in terms of growth stands at 29.55% in AUM and 27.5% in profit for -- if you look at the performance for the whole year. And if you think the quality of the assets has been pristine at net Stage 3 at less -- at around 1.52%. One more achievement or one more milestone what we have crossed this year is crossing consolidated profit about INR 200 crores. The consolidated profit is approximately INR 206 crores of the company, which is where I consider is an important milestone. And we are just striking distance away from a very another important milestone, which we are very confident of achieving it this year is of reaching and crossing INR 10,000 crores in AUM. I recollect the first INR 1,000 crores was done in '12, '13. And if you take the year -- 1 year out of COVID. So in a decade, we have grown this book 10x. So if you were INR 1,000 crores in '12, '13, and we are confident of crossing INR 10,000 crores in '23, '24, which translates into almost a 25% CAGR over a long period of 10 years. And I think all of you will agree that this was a very, very eventful decade, starting if we take into account the various crisis in the financial sector and the last one but not the least, the health crisis which is devastating and not only India but the whole world. So I'm very happy to share that despite of all these cycles, the company could demonstrate a 25% CAGR and a 10x growth. And we have very strong enablers for the sale even going forward, in terms of high capital adequacy, in terms of the new expertise, in terms of prioritizing in the quality, profitability over just growth, giving us not the growth, but the development. And once again, INR 10,000 crores will be a milestone, which I think will once again trade away the way INR 1,000 crores traded away in memory. And as articulated in all of our communications, but every time we reach a milestone [indiscernible] So this is -- this was the achievement on the company as a whole while my colleague, Darshana and Ankit will take you in detail. But just on the strategic front on -- if I come on the distribution side, the value creation of the asset. We continue to focus on the MSME segment, which constitutes more than 80% of our business. We have -- we have the potentiality to serve more than 9,000 centers across the country. And our focus will remain on MSME segment to our direct distribution and through our very robust and distribution channel also. The distribution model to NBFC also witnessed a very strong performance 11.5 years, almost 12 years old model now with a cumulative disbursement of more than INR 20,000 crores and loss given default of less than a percentage, has demonstrated a very high-quality intermediation. So we will continue to strengthen our distribution from the asset creation on both this -- on both the distribution network. Having said that, our direct distribution network is fast increasing in terms of percentage and contribution. This year, it is contributing 63%, and we'll continue to contribute more going forward. We all know that technology plays a very important role and it's MAS, we are aware and working very hard on that through our internal team of more than around 35, 40 people are working hard to see to that how we abreast the technology that increases efficiency right from loan origination to disbursement, banking to transaction. And I think that will add to the [indiscernible] going forward. I would like to inform all of you which was, I think, shared on our website also. But I'm very happy to inform that we have formed the Management Advisory Committee an Advisory Committee to the Board, consisting of 3 eminent people starting from Dr. Rajiv Kumar, who was the ex-VC or Vice Chairman and a very renowned economist, recently being conferred upon one of the highest award by the government of Japan for his contribution towards infrastructure during his tenure as a VC or Vice Chairman. I think his insights will provide a lot of detail to the company for its next growth of INR 10,000 crores and beyond. The second eminent person is TTS Srinivasraghavan, the ex-MD of Sundaram Finance in our NBFC sector he is known as the father of the MAS industry, having demonstrated a very quality pristine growth over many years and a stalwart of the industry. And Mr. Paliwal, the ex-ED and the current CEO of Small Finance Banks Association. So I think I'm very thankful to all the 3 eminent personalities for having very readily agree to join the Advisory Board, and I'm confident that they will contribute very positively as this scale new heights and enter new horizon of INR 10,000 crores and beyond. So this is -- on the HR side, we continue to remain a strong team of 2,500 people, and I'm very proud to share that there is a minimum attrition at the top and the medium level as I've already shared that we have a very strong team -- core team of more than 35 to 40 people who are doing the -- reception. So we have [indiscernible] collectively. We have learnt collectively. And that does put the company in a very good state. Along with our focus on lateral recruitment also going forward. So that was on the HR side. So from me, just to reiterate that it was a very robust and a strong quarter. We see a very strong enablers for us to continue our growth anywhere between 20% to 25% going forward and crossing an important milestone of INR 10,000 crores this year with keeping fundamentals intact. If you were to look at our capital adequacy is more than 25% as Tier 1 capital. And it is very important to mention here that post our IPO, there is almost 5 years from close to INR 3,000 crores will be almost INR 10,000 crores this year, mainly through internal accruals. And I understand all of you will agree that in the lending business where capital is the base and going through internal accruals, that too with strong capital adequacy -- of the robustness of the operations and the asset creation. I'm happy to share that we have witnessed a dividend of 18.5%, the final dividend. That is the dividend for the whole year to 36.5%, which amounts to 10% of the payout of the current year, in line with our strategies, which is [indiscernible] since last few years. So with this, I would like to hand over to Darshana to take you through the numbers in detail while the numbers are with you, but just to refresh, we'll take you through the numbers in detail, which are important for all of us to understand. Darshana, please take...

Yes, sir. Thank you so much. Good afternoon, everyone. I'm happy to share the numbers for Q4 '23 and the financial year '22, '23. And as mentioned back on this, it was post-COVID, this was the full year, which was without any abnormal situation. So we could grew our book by 29.55%. And if you look at the configuration of the portfolio, micro-enterprise loan is now at INR 3,874 crores as compared to INR 3,249 crores, which is 19.23% growth in book. SME loan has grown by 31.29% from INR 2,274 crores to INR 3,000 crores. 2-wheeler loans has grown by 46.88%, which is now INR 554 crores as compared to INR 377 crores last year. Commercial vehicle loan has grown by 7.90% from INR 345 crores to INR 372 crores. As such, we have grown our retail book in our commercial vehicle loan portfolio, but there are a few instances of pre-closure in our NBFC book enhanced the percentage of 7.90% growth. For SPL loans, it's a new segment for this year. So we don't have any comparative figures. If -- the book size is now INR 305 crores. If we look at the total income on a quarterly basis, it has grown by 47.13% from INR 183 crores to INR 270 crores. Profit before tax has grown by 17.37% from INR 60 crores to INR 70 crores. Profit after tax on quarterly basis has grown by 23.44% from INR 45 crores to INR 55 crores. And if you look at the annual numbers, total income has grown by 44.44% from INR 657 crores to INR 949 crores. PBT has increased by 25.27% from INR 211 crores to INR 264 crores. And profit after tax has grown by 27.55% from INR 157 crores to INR 200 crores. I'm happy to share that we could maintain the quality of the portfolio. So now our gross Stage 3 asset is 2.15%. Our net Stage 3 asset is 1.52% as compared to 2.23% gross Stage 3 and 1.60% net Stage 3 as on December '22. And we received 4.31% of our total on the book asset management overlay. Now coming to our housing performance, housing portfolio performance. There also, our book has grown by 31.57% from INR 314 crores to INR 413 crores. Total income has grown by 34.33% from INR 9 crore to INR 12.40 crore. Profit before tax has grown -- has come down by 9.28% from INR 1.87 crores to INR 1.70 crores. That is mainly because of increase in other operating expenditure because we have expanded our branch network and accordingly, the number of employees have also increased. Profit after tax has come down by 8.62% to INR 1.50 crores to INR 1.37 crores. And if you look at the annual numbers, total income has grown by 20.64% from INR 36 crores to INR 43 crores. PBT has increased by 30% from INR 6 crores to INR 8 crores. And PAT has increased by 29.66% from INR 4.89 crores to INR 6.34 crores. So this was regarding the performance of both the companies. Now I request Ankit to take you through the liability management.

So before Ankit joins the desk, just I missed out on apprising all of you on housing finance. As I've always shared with you that housing finance is going to be one of the strong value accretion for the company going forward. And that also we have registered a 30% growth. And this year, we also anticipate a 30% to 35% growth. We see this company growing to INR 1,000 crores in the next year or 2 years and generating value for the company going forward. So we are happy to share that we -- we are confident about the growth in our housing finance company also. That remains well capitalized. The quality of the asset I shared remained at around 0.6% of net Stage 3 assets. And any growth capital can be contributed whenever required. So with all the strong enablers of large market size, news expertise being developed and gaining the traction in terms of business line, we assure that the housing finance will register a robust growth this year. With this, I'd like to hand over to Ankit Jain to apprise you on the liability side of...

Yes. Thank you, sir and ma'am. Hello to all. To upgrade on the liability management. So this quarter, we were able to maintain an average liquidity buffer of around INR 650 crores to INR 700 crores. And along with that, unutilized capital facility of around INR 375 crores. In addition, the company has sanctioned on hand through various instrument of more than INR 250 crores. In the last quarter, completed around INR 555 crores [indiscernible] business with various banks. And we further have around INR 1,000 crores sanction on hand, which we will be utilizing during the next 2 quarters. The last quarter completed around INR 24 crores co-lending transactions. The company has tied up with 3 banks, and we are in discussions with few other banks for meaningful and sustainable co-lending tie-ups. We aim to maintain around 20% to 25% of AUM as top book through direct assignment and co-lending transactions. We have cash credit facility of around INR 1,700 crores, out of which we -- the utilization generally remains around 65% to 70%, and that portion is always kept as a liquidity buffer. We successfully rolled over around INR 1,450 crores of short-term working capital loans, which are sublimit of the cash sale limits. With this INR 755 crores term loan during the quarter. This term loan is generally for a tenure of 3 to 5 years, which helps us to further strengthen the asset-liability maturity pattern. Our structural liquidity remains strong whereby there is no negative impact on equity and the cash flow in all the community buckets were remained positive. On the capital equity side, we have remained strong at 25.25%, with Tier 1 capital of 20.79% and debt-equity of around 4x this year. In the March quarter, we raised around INR 100 crores of debt which qualifies a Tier 2 capital and help us to further strengthen the base of capital structure. The cost and borrowings for the quarter was around 9.26% and for the whole year, it was around 9.02%. This is majorly because of our effort towards -- on the position of cost while raised fund from various instrument and through various [indiscernible] as well as because of the lag effect of MCLR based borrowing. We see that this cost of borrowing to settle around 9.5% in the coming quarters. So this is on the capital liability management, and we are open for the Q&A round. Thank you.

[Operator Instructions] The first question is from the line of Rahul Jain from Credence Wealth.

Hello? Am I audible?

Yes.

Sure. So 3 questions. One, with the cost of funds having gone up, and also competition going up on the MSME side, which is one of the areas where our focus has been and which has been doing great for us. So how do we see the scenario ahead both in terms of growth? And also with terms of, okay, whether we will continue to grow aggressively in this particular segment, how do we look at this segment? That is question number one. Second is -- shall I ask all the questions or shall I go one by one?

You can carry you on. You can ask all the questions.

Okay. Second is with regards to the NIMs, again, with the cost of now it's almost about 4 quarters for the fund, costs have gone up. And we have been able to pass on certain part of it, but how do we see the scenario going ahead in terms of maintaining our NIMs? Lastly, the salaried personal loan segment, we have done exceptionally well in last 1 year, practically from -- I think we today have almost INR 300 crore AUM in that particular segment. So 2 things, do we still feel that the kind of aggressive growth which we have done in this segment will continue with that on this base of INR 300 crores? And since this is our first experience with this segment, how do we see the asset quality for this particular asset class?

So starting from the first question on -- I recollect 2 questions on rate cost of funds and NIMs. So if you see last year, as Ankit shared, that because of our immaculate track record with various lenders, we are in a position to negotiate to talk with them on the premium which have an MCLR. And hence, we are in a position to maintain NIMs during the most volatile period of close to 7%. As we go forward, right from the last year, we had endeavored to start repricing our assets accordingly. And now with the rate cycles being the high [indiscernible]. But nevertheless, being MCLR there will be some rate hikes being passed on to us. As Ankit told that from the marginal cost of 9.25%, we might see a 9.5% this quarter. But still with the repricing and with a better negotiation with the lenders, we are confident of maintaining NIMs anywhere between 6.75% to 7% as maintained over the years during this year also. On the MSME growth, please let me share with you 2 basic things here that this is a very, very huge market to be served, one. So the competitive landscape does not put that stress on the rate. It is not about you're getting the market size. If I talk about this is my market share in MSME, it will be difficult for me to give any number in an integer. It is a fraction and so less that can't be calculated. So the size of the market is so huge. And secondly, it is not rate considered to that extent at 0.5% or 1.5% will play a very important role in getting the assets the way we want. This has been our experience over all this year, and wherever we have seen the cycles of higher rate, higher inflation or various other [indiscernible] we have been in position to understand the segment and navigate through that. So that was on your MSME piece on the growth and the rate and the NIMs. On the salaried personal loans, this a INR 300 crores as a total of INR 9,000 crores, close to INR 8,100 crores of AUM is around 4% of our total AUM. And we would, as I say, remarked by you will grow cautiously. Any new products which will pick up, we don't grow very aggressively. But at the same time, we need some critical mass to assess the product performance. And we think that this was a critical mass we need to build up to get the product performance. And we'll be building up on this, depending upon our experience we have from time to time on the asset quality and the learnings and unlearnings that we have to undertake. But having said that, as a strategy, salaried personal loans will not be more than 5% to 7% of our total AUM for next few years, which is what I admitted right now unless it starts exiting excellent risk-adjusted returns. So this is my response to all the 3 questions you asked.

Just a clarification or just anything to the overall MSME, SME and 2-wheelers, given the high rate of interest rates today, you are comfortable at today's rates to lend and grow at around 25%? Because generally, our principles or we have always maintained that we will grow, but we will always grow profitably. So given the high rate of interest, you will maintain that growth rate of around 25% in spite of maybe sometimes getting concerned about the asset quality?

See, our rate hike is -- what are we talking about? We are talking about a rate hike of around 0.25% or 0.3% to be passed down to the borrowers. I think that is not going to affect the quality. And secondly, this is -- let me tell you that we have passed through various cycles where the rates are much more higher usually for the same segment. But still, we have managed the good asset quality within those rate brackets also. So this marginal rate hike, I don't recon can have any impact on the asset quality. At the same time, see, in lending rate whatever rate you lend, you have to be cautious and you need to understand what -- you have to be very circumspect on the credit underwriting. So today I said with one of the channels that while you would like to determine growth, but at the same time, we don't mind discovering the growth at the ground level. So I always give a raise bond growth target between 20% to 25%. You might overshoot it is in fact a good opportunity as we did this year to register 29% growth.

Next question is from the line of Jaiprakash Toshniwal from LIC Mutual Fund.

Sir, can you just more elaborate on the Corporate Advisory Committee in terms of what is the term of the committee? How many times it will meet up in the year and what is the scope?

So the term of the committee is, it will be renewed every year. And the scope is more on strategic in nature, understanding the company's strategic impact and advising us on -- we have to look at our all the execution parameters, advising us on what best can be done to align our execution in lines of strategic intent at the company administrators. And secondly, they will be very helpful in understanding in giving their reasons that what exactly are we supposed to do as we grow in scale. And that will -- and advising on any [indiscernible] thought which is referred to them in terms of increasing the efficiencies or in terms of any recovery phase during our execution. So we have taken the committee members from the various phases from the varied sources. That is one an economist and another person who has run the NBFC at a scale for a very long time and the one from the regulatory aspect. So when guiding us from the regulatory aspect will be useful by one of the committee member who happens to be the executive -- ex-Executive Director of RBI. So this is -- it will be 4x in a year. We will meet every quarter, post our results at the mutual convenience of the Board members and the committee members, but not limited to 4x. It can increase on demand whenever it is required.

Okay. Interesting. The second question on the personal loan segment. You mentioned that you have reached through a critical mass at this point of time. Is it -- so is it -- does it mean that we'll have -- you have some more data on the customer or how the product has performed, anything which you want to highlight on this product per se?

See, it's really early to know the trends because this was the first year of the critical mass. And as the time progresses, we'll be in a position to understand that. And hence, that is what I was referring to that we'll be watching the portfolio this year very closely. But as of now, the portfolio has been satisfactory, while there are -- we learn every month on what has to be amended in terms of our credit screens from the early bounces and all what we see. But currently, it's difficult to talk about the trend of the portfolio. But we are very circumspect [indiscernible] and we would like to be like that for -- we like to be there for as long as we have sufficient experience and data to scale up to a certain time. So currently, the portfolio quality is good and it is quite satisfactory. But going ahead, we'll have to see that have it the year over a period of time.

Okay. And sir, just last question on -- we're planning to have our own feet on the street and on branches to cater to the MSME segment? So can you just elaborate more where are we on that journey? And how much -- what is the target for the FY '24 for that on -- that journey perspective?

So I'll break this into 2. So we are rather slightly shifting our focus to the SME piece, whereas micro-enterprise loans we have been doing it since many years, and this is being distributed through our NBFC partners also. But on the SME piece, we intend to have specialized branches in the country where thereby we will be having close to 50 branches in total, where they will be distributing only SME loans. And there [indiscernible] employed there, and will be close to around 350 to 400 guys working there in various capacities in the origination, credit and collections. That will be the total addition to this segment. And the ticket size will range anywhere between around close to INR 22 lakhs, INR 25 lakhs per process. And secondly, in this part of the business, we are happy to share that because of the technological advancement, the credit assessment has relatively become more accurate. And at the same time that the turnaround time has also reduced. If I give an example, we are in a position and we finance to the SME where we have access to direct GST data and their banking data and the credit we get from time to time. So it helps us to gauge their cash flows, their income, their credit history. And so far, our experience has been very good on early delinquencies as far as this segment is concerned. While we'll continue to do the annual surveys we have been doing so far.

[Operator Instructions] Next question is from the line of Ankit Gupta from Bamboo Capital Partners.

Congratulations for a good set of numbers for the entire year. So sir, I wanted to ask about the measures that we are taking to improve our cost of borrowing. With our size growing and our direct presence also increasing, how do you think we can get a lower rate of borrowing? And I think that will also come from upgrading ratings as well. So your views on reducing the cost of borrowing and measures you are taking to do that?

So reducing cost of borrowing is a very continuous exercise. So it is -- we always try it and try to get the liability of the cheapest available rates while keeping -- high on that amount we need to raise. So given our track record, let me tell you that we are rated A+ by AA minus by ACUITE. I can't predict for litigations. But fundamentally, we are -- we are almost there for our rating upgrade. But we just need to wait and watch the credit bureaus perspective. So we continuously try to see to that how we reduce the fund through a variety of resources and keeping the powder dry for at least 2x or 3x the amount we need. So what happens in liability, your capabilities to reject an offer is very important for getting the right rate. And how far are you placed in terms of the timing. Let me share with you that we are always 2 to 3 quarters ahead in terms of sanctions. As Ankit told you already have more than INR 1,200 crores of sanctions in various forms, which is more than sufficient for our Q1 and by Q1, we'll be having another sanction will be okay for us after Q3. So being ahead of the curve in terms of requirements and having more sanctions on hand, having diversified source of funds in terms of say, for example, we have cash credit limit carved out to demand term loans. We have term loans. We have term loans on PSUs, private banks, development and financial institutes, then we have capital market borrowings also up till now it was through MLD now it will be through NCDs. And we have assignments and the [ PT book ] can also be drawn. So the various sources of funds being ahead of the curve, keeping the powder dry for more amount and then choosing and taking the right offers is the key. So it is all about execution.

Sure. But just if you look at it, our bank borrowings largely term loan and cash credit, which consumed around 68% of our total borrowing. And last year also, if you look at it, as of March 31, 2022, the amount was around -- the proportion was around 68%. And so -- like do you think when we grow to, let's say, INR 15,000 crores, INR 20,000 crores kind of over the next 3 to 5 years. The proportion of bank borrowing will come down. And hopefully, by the time we will be upgraded to AA category are the proportions of NCDs and -- our ability to access the bond market will also increase? And like what are our plans for that?

Definitely. See once again it's a question of price. At a particular site, diversification beyond a particular extent is not possible. So for example, I want a term loan and whereas State Bank of India telling me that, okay. I'm very happy that you are working, you will have to get a pension from INR 500 crores. There, I cannot go and tell that no I want a diversification and I'm not going to use this resource. So to the maximum extent possible practically, we have diversified. And as we grow automatically, we'll get the room to diversify because what happens is that while we need money, even bankers have a target to lend to good companies and good parties. So if you see, during the quarter end, my financing is hard pressurized for taking the disbursement of the various sanctions on hand. And it is difficult to convince all of them for it to delay to the next quarter or to some of them, we might have to dismiss them by not taking it. So diversification will definitely happen, which will happen with size and as you rightly remarked, this increase in rating all sorts of diversified resources will be explored. And that will help to reduce the cost curves.

Really asking, let's say, if you have to access the bond market now for a 3- to 5-year kind of NCD [indiscernible] NCD and compare that with a 3- to 5-year term loan, like what kind of cost advantage do we get when we access the bond market -- when we are accessing the bond market currently?

I think my understanding is that the bond market will be at least 0.5% to 0.7% higher as compared to the term loans we raised because of the various costs involved in raising those.

Sure. Sure. And I think that difference will actually become negative or bond market might become cheaper for you when you -- growing size and hopefully get a rating upgrade to double AA category?

Yes, yes, yes.

Okay. Sir, my second question was on the branches. If you look at our branches that we have opened in last year, so the major branch expansion has come to -- has come through our existing states where we had a larger presence of Gujarat, Rajasthan, Maharashtra and Madhya Pradesh. And some of the newer places like Karnataka, Tamil Nadu, Delhi and Chhattisgarh just entered. So those haven't seen much of expansion. So what kind of opportunity size is a label in our existing areas, like 3, 4 states where we have larger presence? And what are plans for geographical expansions in the new states that we have entered? And any plans to enter further new states in FY '24 to '25?

See, it is all about the intention of the company to grow in a particular center where we have stated afresh. So all the new branches will start gaining in disbursements over a period of time once we have the experience, the right team, the right understanding, demographic understanding, which only comes through working. So with all our new branches being opened at various states, we'll start gaining in traction this year. And we would like to be ahead by around 2 to 3 quarters in terms of our requirement of assets when you open new branches. So that is where I told you -- shared with all of you in the opening remarks that we contemplate to have more than around 175 branches this year, up from 150 branches. That is to say with our requirement not only for this year but up to Q1 or Q2 for the next year, as I see right now. Then later on during the year, as the year progresses, it can increase or decrease depending upon the asset what we can create. But at the same time, let me tell you that we are keen to expand our distribution, which can be done any time. But the distribution will be done in such a manner whereby the quality of the assets and the risk adjusted returns are maintained. So keeping all these things we'll be expediting to newer geographies, newer branches, which is always available to us.

[Operator Instructions] The next question is from the line of Hardik Doshi from White Whale Partners.

My first question was on the housing finance side, the gross NPAs for the stage 3 assets have been inching up over the last 4 quarters or so. Anything on the asset quality side that we should be aware of? Or how is the delinquency rate over the last few quarters?

See, it has to be a raised on. And as we grow, if I had it you on certain book size to keep delinquencies up to a certain level if possible. But as we grow, it will be raised on, but within acceptable levels. If I share with you the acceptable levels in affordable housing is anything less than 2%. But we are currently at around 0.60%. And as we grow, I think it will marginally increase. But it will be sync with our planning in the strategic intent on the price structure that is [indiscernible] what you call it. And currently, there's -- in the current portfolio, there is nothing which we should worry about. Because if you see the performance in terms of the next 3 assets, it's pretty robust as compared to the industry standard. So a range bond is -- we can expect a range bond the next 3 assets, which should be less than a 1% up to the INR 500 crores, INR 1,000 crores, and it can do between 1% to 2% as we grow above that.

Got it. Okay. And in terms of the loan books, you said it's up to INR 5 million in residential and INR 10 million in commercial. So the profile of these customers, do they overlap a lot with our SME lenders? I mean, I'm just trying to understand how much of cross-selling opportunities there? Or is this a very independent base?

See, currently, it's a very independent base because while we might get an opportunity, the problem will be on the eligibility because as a lender, how I would like to go beyond an exposure on a particular party is very important. So in our class of the borrowers, the loans usually are sequential in nature that you complete 1 loan and then takes another loan or has completed a major portion of the first loan and then goes for the second loan. So the cross-sell is always available to us. But once they complete one side of a loan or they complete one side of the loan substantially. So it has to be looked from that aspect. And if I share with you currently, our cross-sell percentage is not that great. And that is only because of the limitations on the credit faces on extending more loans or fresh loans to them.

Okay. Understood. And while we gave loans of up to INR 50 lakh, what is our average ticket size? And what is the mix between residential and commercial? And who are our main competitors out here? I'm guessing this we are doing mainly in Gujarat right now?

On housing, average ticket size is INR 700,000 currently. And you are right that we doing in Gujarat. The next is Maharashtra. And we also started exploring Madhya Pradesh and Rajasthan. So the ticket price will be around INR 700,000.

And our housing portfolio is around 82%.