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

So good evening to everyone. On behalf of Team MAS, I'm Meet Chande. Welcome you all to the company's Investor and Analyst Meet at Mumbai, showcasing the Vision 2036 that is proven performance compounding with prudence. Standard disclaimer applies. So we have a full management and a core team of MAS present here, starting with Mr. Kamlesh Gandhi, who is the Chairman and Managing Director. Then Mrs. Darshana Pandya, who is the Executive Director and CEO, working with the company for more than 30 years. Then we have Mr. Dhvanil Gandhi, who is the Executive Director and part of Promoter Group. He has been working with the company for more than 11 years. Then we have Mr. Saumil Pandya, who is the President of Retail Assets and has been working with the company for more than 29 years. Then we have Mr. Vivek Vyas, who is the Chief Operating Officer of our Retail Asset Channel business, and he has been working with the company for more than 15 years. Then we have Mr. Nishant Jain, who is the Chief Risk Officer and he has been working with the company for more than 8 years. Then we have Mr. Ankit Jain, who is the Chief Financial Officer and has been working with the company for more than 15 years. Then we have Mr. Hitesh Ganatra, who is the Head of Human Resource Department and has been working with the company for more than 4 years. And at last, we have Mr. Rajen Shah, who is the Chief Technology Officer and has been working with the company for more than 22 years. Sorry, and we also have Mr. Darshil Thakkar, who is the Head of Credit and has been working with the company for more than 11 years. So first, we will have a -- sorry, I forgot to mention the name of Mr. Himanshu Kanakhara, who is the Executive Vice President of our Housing subsidiary, and he has been working with the company for more than 8 years. So first, we will have a presentation from each of them, and then we'll start the Q&A session post that. So this is the agenda, which I'll cover in a respective person's introduction. So our first speaker for the day is Mr. Kamlesh Gandhi. So Mr. Kamlesh Gandhi sir is the Founder, Chairman and Managing Director of MAS with over 3 decades of industry expertise, driving the consistent company performance. He is the first generation entrepreneur and has been -- has an experience of more than 30 years in retail finance services industry. He is the Chairman of Gujarat Finance Company Association, Director of FIDC, which is the SRO of NBFCs of India and Co-Chairman of Finance Task Force of Gujarat Chambers of Commerce and Industry. He is also managing trustee of Smt. Urmilaben Chimanlal Gandhi Foundation. The foundation currently contributes towards the financial needs in health care and the education. So sir's agenda for today is he is leading the Vision 2036, proven performance, compounding with prudence. So Kamlesh sir, I request you to please come on stage for your presentation. Thank you.

So good evening, everyone. And at the outset, I'm thankful to all of you for sparing your valuable time and coming to this meet in order to understand the company better. I'm trying to take you through 2 very distinct things that is, one is on the proven performance; and second, how we visualize ourselves in the coming decade. I think many of you with whom I have interacted personally, I have always shared that at MAS, decade is a medium-term view. While being a listed company, we do interact with you quarterly, but our main aim is having a long-term vision, which enables us to work very prudently. Now the very first slide, don't -- please don't take it that every company tells that we are different. The heading is key differentiators. And I'll take you through the characteristic of the company of what it has done over all these 30 years. And I'm very convinced and confident that you will also agree with this title that what we are different, it is a key differentiators. We are not just one more NBFC on the horizon, but we are the ones who have very relentlessly stood by all our commitments over all these 30 years. I personally believe that brand is nothing but commitment and delivery. And if you see us delivering over the last 30 years and more precisely post IPO where the numbers are in the public domain. I said before also, they were in the public domain with some listed instruments, but more interaction happened post the IPO. And when we did the QIP 1.5 years in 24 June, say, around 1.5 years back, whenever I interacted with the same set of investors, my first submission was don't go by what I'm telling, go by what we have done. And I could see many of them had the notes reserved way back in 2017, and we're very happy to note that we stood by each and every of the thing that we committed. And that is what I personally mean is the brand. So the first thing, what I'd like to present to all of you is what we have done over all these 30 years, which gives us the strength to visualize the decade further. The first and the foremost thing is consistency. And I would like to use the word courageous here that we were courageous to be patient. To be consistent over a period of 30 years and to relentlessly work towards your strategic intent is something which requires a lot of conviction and confidence in yourself. With so many distractions and noise outside, not getting distracted and sticking to your strategic intent is something that is very, very important. And let me tell you that we are not trying to claim that we are a super entrepreneur or something, we are doing something extraordinary. It happens to us because the way we started this company and the way we grew this company. I have discussed this with all of you many times, but for the [ unworst ], I started this company way back in 1988 as a partnership company with a INR 1 lakh of borrowed capital from our late co-founder, Mukesh bhai's friend. It was a marketing company, marketing consumer durables. We realized if we can offer finance along with it, it can sell more at times where finance was not heard of. And from 1988 to 1995, there are so many anecdotes to this, but in the interest of the time, I'll fast forward it that from 1988 to 1995 is where we earned our first INR 2 crores of capital, turned to corporate. And what was started as MAS, the full form of MAS is Marketing & Allied Services. That became MAS Financial Services Limited in 1995. And as you see in our presentation, we always start from that point. That is INR 1995 INR 2 crores, currently close to INR 15,000 crores. So all these 30 years, we have very relentlessly stuck to our strategic intent. Let me share with you that when we turned corporate, I and Mukesh bhai had very clear-cut objective that we want to keep this company as a promoter-driven professionally run company. We want this company to outlive us, not only link the numbers with how old are we or how other companies are doing. In our initial stage, so many investors or so many people will ask us that would you like to become Sundaram or would you like to become HDFC? And our answer was they are great companies to learn from, but we'd like to be MAS, because every company is uniquely placed just like every person is unique. And with this thought and with this strategic intent, we started in 1995, 30 years of relentless pursuing, pursuing the strategic intent very relentlessly gives us the confidence for our future vision. Friends, in lending business, creating assets is perceived to be simple. Top line can increase in no time. The way you land and the way you create your loan assets can increase very fast. Right under our nose, we have seen companies 2x or 3x our size within no time. Many of them succeeding, many of them had their own consequences. But over all this period, we have stuck to one dictum that is extending credit where it is due. This one line and to execute this single objective, it takes a lifetime. And if you ask me today, have we mastered it, the answer is no. We are learning. We are continuously at it that how we can extend credit where it is due because I personally believe that it is incumbent on the lender to give the right credit rather than on the borrower to borrow right. Because of the fact for the lenders, this is a process. For a borrower, it's an event. They can go wrong. Ideally, we should not. So this is what we have practiced over all these years that extending credit where it is due. And it kept us in good stead. It yielded dividends where it really mattered. And if you see the graph over all these years, the way we have maintained our asset quality, the operational cost and hence, the profitability. So this is what we have pursued over all these 30 years, and I see no reason to deviate from this going forward. This, ladies and gentlemen, is a big differentiator, growing mainly through internal accruals, while my colleague will take you through the numbers. Let me be very candid here that growing through internal accruals is in alignment with our strategic intent of keeping it promoter-driven and professionally managed. And at the same time, giving a very decent growth or a very handsome growth, I will tell it by all definition. I'll take you through the next slide, we'll translate it into numbers also. But around majority of our capital currently is through internal accruals. And that allows us a promoter holding of 67%, 66.61% to be precise. Now what does this promoter holding really should mean to the investors? Stepping in your shoes. I, from my 30 years of experience, very firmly believe and with so much of changes happening around, I don't know how many of you will agree that an enterprise is best run by the entrepreneurs. The difference is that when an investor puts his money in the company, he's running for his food. But when an entrepreneur puts everything in the company, he is running for his life. And we all know that who will be more focused, who will give the best. And hence, I believe that a meaningful promoter holding is the key for a very long-term sustainable success. Even during our Vision 2036, I'll stick my neck out and tell that as promoters, we'll be holding meaningfully above 51%. There will be capital raise when we talk, I'll discuss the number in the next slide. But there will be capital raise, it has to be, but without diluting the strategic intent. We are focused on profitability. We believe that profit is the index of the value add. And with a pinch of salt or rather bag full of salt, also the valuations -- I think I would try to put a question mark here. Also, the valuations. Just before coming here, I was talking to Dhvanil, showing one company at a INR 25,000 crore valuations, and I automatically asked what's the profit. He said that there is no profit, but they are getting this valuation and the price increase because they reduced their losses significantly. But we don't want to trade this part. We believe that profit is the index of the value add. And this is once again, friends, the result of the way we have run this company over all these years. We did not build this company in era when capital was freely available. We did not build this company in an era where burning capital or incurring losses was usual. We built this company in an era where we were judged, evaluated, assess whatever the word you want to use, purely on the profits made. And forget about how the investor will judge we being one of the largest investor in the company, forget about how the investors or the market will judge, let's say about from 2017, it's about our own conviction that if sufficient profits are not made, we are doing something which is not correct. We need to change our business model. We need to be more frugal. We need to have control on the leakages. So at MAS, whatever you will find, you will find 2 things. One is a long-term objective and number second is simplicity. Whether it is about adopting technology or whatever it is, we are doing what best is required for the organization in terms of technology without being so flashy on the expenditure we incur on technology. So we firmly believe that profit is the index of the value add. We do not upfront expenditures to the maximum extent possible. And that you must have seen over that reflected in our working over all these years that profitable right from day 1, even if you talk about housing finance company, the subsidiary, profitable right from day 1. But you have to be patient for that, and that is why I started from the slide courageous to be patient. Very important. I am here with my core team friends. The people who are the real heroes, the people who really run this organization. Whenever I meet you or Dhvanil meets you or my IR team meets you, we talk about the work being done by them. And as you could see from the slide, I'm sure that along with the names, you must also have seen a small number that depicts vintage. That's our strength. A core team with vintage brings about a lot of stability in articulation -- you're articulating your strategic intent right to the grassroot level. We're into retail financing, so currently, the team size is 5,000 plus, how to articulate your strategic intent right to the person at the ground level. And that is where a stable core team plays a very important role. So we have the culture of succeeding and failing together, learning together, facing the challenges together and being resilient all the time. When we talk about vision, usually, it is given for next 2 years, [Foreign Language], next 3 years, this will be it. While I talk about a decade, we will be concentrating at one link of a chain at a time. The reason is set, but the execution plans will be made where we concentrate on one link of a time that reason should not distract us, but it will be showing us the light every time that this is where we want to reach. I've shared with whom I have met that I spend a fair amount of time daily visualizing MAS a decade down the line, and that gives us a lot of confidence for our long-term actions. I'll just give you an example. I think my colleague might share that in her slide that during COVID, we were among the few companies who degrew our balance sheet even though being listed. Because we knew that we are not here for a quarter or 2 or a year or 2, we have a long way to go. So having a long-term vision is a key differentiator. And that gives us the strength, that gives us the wherewithal to act prudently. Friends, lending is not a business where you create a lot of excitement for 2 very simple reasons that you are present across the various sectors of the economy and various geographies of the economy. If it rains heavily in some state, we are worried. If some of the industry is not doing well, we are worried. We'll give a slide on the spread of the industry where we are present. And inherently, lending has its own risk. We are not in the business of avoiding risk. We're in the business of managing risk. And hence, how big is that risk as per your capabilities, aligned with our strategic intent of not burning capital and being profitable and how big is that risk will define the success. This is a very serious business. I don't tell that other businesses are not serious, but I don't know much about them. I've born, brought up and I've lived this business, and let me share with you, this is a very serious business. It's not about creating excitement. It is not about creating exponential growth and not also exponential profits. I would like to urge all of you to have the right set of expectations from the lenders. A few of them growing at a very fast rate without judgment of any of the companies, a few of them growing very fast or a few of them growing exponential profit over the years. Don't judge the entire or don't assess the entire industry by that yardstick. I meet so many young entrepreneurs at NBFCs. And I see many of them getting carried away that what will my investor think, what will the markets think. And that is a wrong way to run a lending business. It is up to you to what do you think. Just to put a perspective to these numbers for a sustainable lending business, depending upon the size, anywhere between 15% to 25% is a growth which should be not only assessed but respected. ROE is anywhere between 14% to 17% in housing finance company, a couple of percentage less should be respected because that are the sustainable numbers. You don't execute on day-to-day basis, but you play a very important role in setting the right expectations or the right set of working for all the NBFCs or the lending companies. That's very important. This is what according to me and my humble suggestion based on my 30 years of experience. So this is where we have differentiated ourselves. This is what we think we have done. We'll go on continuing doing these things. These are the differentiators which has been depicted in terms of what this company is built off in terms of its character. Numbers, I think we put up very regularly on our investor presentation, but this graph gives me a lot of confidence. This is up to '25. After a quarter, we'll be adding '26. Okay, on a lower base from INR 2 crores to we depict INR 12,000 crores. Now we'll depict it on a consolidated basis at INR 15,500 crores, translate into a CAGR of 35.12%. And what I was talking about internal accruals, 38.85% of CAGR on a lower base. I do agree this is the advantage what we are getting on a lower base. But in the coming decade also, we very firmly believe and we are confident to grow anywhere between 20% to 25% and with commensurating profitability, but with a very strong caveat prioritizing risk and profitability. When we talk about a decade vision, it's a reasonably long time. We need to adjust to the macros. But as I told you, I think we have a good presentation to be given by our CEO that how we face headwinds. And what happens when we face headwinds and what numbers can we achieve even during those most tough headwinds, including a black swan event like COVID. So this is that you see very regularly on our slides. And with your trust, support and blessings, we will go on saying it for many more years. And this was about the first part of proven performance. And let me share with you. We completed 30 years in May 2025. And on that day, we had our bar, that is big heavy audacious goal. As a team MAS, we decided that within next decade, we should reach an AUM of INR 1 lakh crore, once again, prioritizing risk management and profitability. The strategic intent will not get diluted. We all are here to evaluate the macros, a few quarters here or there, some number here or there really does not matter as long as we are on this track of our strategic intent. And this is a key differentiator that we are talking about a decade now. We know there will be challenges. We know everything will not happen the way we think, but we are determined. And we have proved that in the past over all these 30 years on a very smaller base. Let me share with you that smaller base has its own challenges. Smaller base has its own challenges. We work with MSME, the small borrowers, and let me tell you, we have one of the finest set of entrepreneurs. I was reading one article in the flight today where somebody was telling that Indian entrepreneurs are matching the U.S. entrepreneurs, and I was disappointed. The class of entrepreneurs what we have, especially in MSME segment, as I told you, they run for the life day in, day out. The constraints what they face, but still they are determined to grow and have grown and are propelling the Indian economy, I think we are second to none. So with that spirit and with each one of my team member also sharing their thoughts into how they will be instrumental in this growth of reaching this milestone, I will like to end here. And once again, thank you so much for listening to me so patiently. And I trust that we'll continue to get all your support and encouragement and respect that we deserve. Thank you. Thank you so much.

Thank you so much, Kamlesh sir, for your presentation. For us to do presentation seamlessly, I would request everyone to keep the mobile phone on silent mode and please not to talk in between of the presentation. So our next speaker for the day is Mrs. Darshana Pandya ma'am. She is the Executive Director and CEO of MAS Financial Services and has been associated with the company since 1996. She is responsible for leading the operations at MAS, and she is also the driving force behind the forging relationship between the company and its partners, which amount to more than 200 NBFCs. She has over 30 years of experience in the finance industry and holds a best-class degree in commerce from Gujarat University. And her agenda for today is journey of the company over the last 30 years. I would request ma'am to please come on stage for the presentation.

Good evening, everyone. Very difficult to match Kamlesh sir's energy and passion, rather it is impossible, but I will try to give my best. So as Meet shared that I'll take you through the journey of last 30 years. So we joined corporate in 1995 from a partnership firm visualizing the great opportunity to serve underserved segment of the society. And so now it is a journey of 30 years, which happens to be my vintage of the company, my vintage with the company also. So I'm very happy to share with everyone that I'm part of this journey, too. Now if we do some number crunching to understand this journey, we have reached an AUM of INR 14,600 crore on a consolidated basis, which is spread across 283 branches on consolidated basis. In MFSL, it is 208 and the rest is in the housing company in 13 states. And through this 280 branches, we have covered more than 1,500 locations. So we have reached up to 15,000 locations. And beyond that, beyond the 13 states, we are present through our more than 200 NBFC partners, which is our 15 years old business model now. And as we can see that started with 1 product and now we have 6 multiple product offering for the customer. Under our MSME program, we have micro enterprise loan and SME loans. Under our wheels product, we have 2-wheeler and commercial vehicle loans. And under consumption side, there is salaried personal loan and housing loan through our housing finance company. Here, it is very important to have a good intermediary to create a very good quality portfolio. It is not necessary that we can do -- we are doing everything or we should do everything. We should have the people who is having deep demographic knowledge who can help us to create a quality portfolio. So we are partnering with more than 200 NBFCs and for other products, 2-wheeler, we have 135, good set of intermediaries. For commercial vehicle, 579 intermediaries are there. And for housing loan, 161 partners are there. Now while Kamlesh sir took us through the journey of last 30 years, I would like to throw some light on the last decade, which we all know that it was very challenging for all of us. So there were multiple headwinds during these last 10 years, and we could successfully navigate it through all these headwinds because we -- our focus was on fundamentals. We stick to our strategic belief of discovering the numbers rather than chasing the numbers. If I enumerate this headwind for you, for your reference, in '16, '17, demonetization happened, then '17, '18, GST implementation was there, which affected small traders and manufacturers and all. In '18, '19, there was an NBFC crisis, followed by liquidity crisis. Then '19, '20, 2021, we all know that it was very difficult for all of us on health ground also because it was affected by COVID-19. And practically, everything was on standstill mode. In '23, '24, it was a severe regulatory overhang, and it had cascading effect also. So in '24, '25, and still, we are facing some challenges as far as overleveraging of small borrowers are concerned. So despite of all these headwinds, what we could achieve? So our CAGR in terms of AUM is 20%. And in terms of PAT, it is 23%. And I think you would give us the allowance of this 2 years of COVID. And if we discount it, 25% CAGR we can consider for our AUM. And as far as PAT is concerned, it can be 29%. So this is how we could navigate it very successfully this -- during these last 10 years. And this gives us the confidence that what we are targeting to reach up to INR 1 lakh crore, we can definitely do that. Now this is also one more major -- one of the major strengths of the company. As sir shared in his opening remarks, that we have built up our capital majority through internal accruals. So just to give you the reference of number, if we consider this INR 2,865 crores as INR 2,900 crores of capital, 66% growth is through internal accrual only. So we raised capital 4x during this period. The first raise was in 2008. So we raised $10 million in 2008 from FMO. Then it was followed by EUR 10 million from DEG in 2012. And in 2017, we got listed and INR 135 crores was pre-IPO and around INR 233 crores was IPO. In total, we raised INR 368 crores in IPO. And in 2024, through QIP, we raised another INR 500 crores. And here, I would like to mention that we are thankful to all our investors for showing tremendous faith in us because our IPO got subscribed 128x and QIP also subscribed more than 6x. So this is the story of an internal accrual, non-dilutive growth. Next is about the rating of our company. We have been rated AA- by CARE. So this is the rating as per the rating agency. If you ask us, we are no less than the AAA rating because what we believe that what AAA-rated company does that they always fulfill their commitment, fulfill their commitment under all the situations, and that is what we have done throughout this period. So -- and we are very hopeful that within next -- by the time we reach INR 1 lakh crores, we will get -- we will reach our target of rating also, that is AAA. So now this is about the product expansion. As we know that we started with one product that was consumer durable in 1995. Then we went on adding the products in our bucket. So today, we are offering more than 6 products because there are subproducts under the SME loan and commercial vehicle loan as well. So if we look at the numbers, micro enterprise loan, the portfolio is more than INR 5,500 crore. And the quality is also very benign for all the products. So GNPA stands at 2.87%, NNPA is 1.64% per our MEL product. SME loan, we have more than INR 4,900 crores of the portfolio, whereas GNPA is 1.49% and NNPA is 1.15%. Two-wheeler loan, the growth -- the portfolio is INR 1,022 crore and GNPA is 3.35% and NNPA is 2.34%. Commercial vehicle loan is INR 1,055 crores, whereas GNPA is 4.14%, NNPA is 3.22%. Salaried personal loan is INR 1,185 crores. GNPA is 3.45% and NNPA is 2.61%. Housing loan is INR 859 crores, whereby GNPA is 0.97% and NNPA is 0.67%. So around 72% is coming from our MSME loan. Two-wheeler is contributing on consolidated basis. Two-wheels portfolio is contributing around 14% and SPL is around 8% and housing loan is contributing 6%. This shows the power of distribution of the company. So we can see the numbers. Well, I would like to share with you that we started with 1 branch in 1995. And we started not with the nearby branches. We could have started with Gandhinagar, we could have started with Anand or maybe Mehsana, which is closer by our head office. We started the first branch -- our first branch was in Bhavnagar. And why we started there is the reason was we found a very good set of people over there to start the new branch. So that is right from day 1, that was the focus to have the people with good character. And we have always given priority to good character, people of having good character than people having talent. Talent is equally important. We value a lot, but good character is more important than that. And the outcome of this decision to -- even today, the Bhavnagar branch is having the best quality of the portfolio. So this was how we started. So if we look at the presence in Western part of the country, Gujarat is having 63 branches. So in Western part, Gujarat, MP, Maharashtra and Chhattisgarh, there are 137 branches. In North, Rajasthan is having 47 and other states are having 8 branches. And in South, we are having around 16 to 17 branches. So we still have a lot of opportunity to expand our branch network in southern part of the country and Northern India. So we are into the process of the same. This year, we were waiting to -- first to have the better results from the existing branches. And then every year, we are planning to open 20 to 25 new branches to expand our branch network. So what I will be focusing on going forward, so our focus will be on the endeavors to bring about a compassionate growth. We are not only growing passionately, but with empathy also. So our focus will be on the compassionate growth, which will be catalyst for undoubtedly higher productivity, resilience and loyalty among all the stakeholders. Secondly, our focus will be talent and culture building. So as I am involved across the verticals, my focus will be on creating a performance-driven yet value-based culture within the organization and develop next level of leadership across all the departments. Kamlesh sir and Mukesh sir, they have groomed a team of around 20, 25 people. Now it is our responsibility to groom the next line equally. And third is leading the execution of set long-term vision. So that is to align capital, talent and strategy towards delivering the company's long-term growth road map. So this is how we are planning to take the organization towards our goal within the next 10 years to reach up to INR 1 lakh crore AUM. And everybody will be guided and motivated to move towards that direction. Thank you so much.

Thank you, ma'am, for your presentation. Our next speaker for today is Mr. Dhvanil Gandhi. Mr. Dhvanil Gandhi is the Executive Director and part of Promoter family, and he has been associated with the company for more than 10 years. He is leading the SME vertical of the company and played an instrumental role in developing it through branches across India. He plays an active role in driving the IT initiatives and strengthening the investor relations through regular engagement with the investor community. He also is heading the insurance vertical of the company. And under his leadership, MASFIN Insurance has received insurance broking license from IRDAI in last year. He holds a post-graduate degree from ISP Hyderabad and bachelor's degree in Business and Administration from Ahmedabad University. And his agenda for today is journey going forward with SME vertical being the leading growth driver. Sir, I request you to please come on stage for your presentation.

Good evening all. Good to see some familiar faces and some new ones, and thank you all for making the time to attend this event where we can talk in more detail about the company's long-term vision rather than the usual discussion that we have regarding the past quarter's performance and what we are going to do next quarter. So it's -- so this event was planned with the understanding that we want to share more about how we scale the business, how we manage risks through various cycles and why we are confident that we can build a much larger institution with the same discipline that we have built the current one. As all of you have seen during the previous slides as well and the previous speakers' communication as well that we have been -- that we have grown by being very predictable, I would say. And we take comfort in saying no more than saying yes. And I think that has become a competitive advantage for us in this lending business. And as mentioned by our Chairman as well, that the right place to start the journey ahead is how we talked about the Vision 2036. So I just quickly want to talk about what philosophy we have adopted over the years. And those pillars have been the reason for the robust performance that we have delivered over the last 3 decades. So number one is the determination to follow a long-term vision and build an institution not only for a decade, but for generations. And it shows up in how we have navigated multiple cycles and how we have built very long-term trust with our customers, partners and all the other stakeholders. The second point is consistency. I think consistency is one of the hardest thing in the lending business in the limited experience that I have been associated with it because markets are always luring you to change your standards. When debt and capital is easily available, it is luring you to grow faster. When the competition is high, it is luring you to maybe loosen the credit filters or reduce the pricing. But in our experience, institutions don't get into trouble because they don't know what the risk associated are with their decisions, but they forget to stick to the fundamentals and the basics. And I think that is something that we have done very well over the last 3 years -- or 3 decades, and that is something that we want to continue going forward as well. Third is discipline, discipline in how we allocate capital, how we focus on the critical return ratios and how we decide what we will not do even if it looks attractive in the short term. So we believe that our real strength comes from focus and discipline and from doing what we know, what we understand and bettering it year-on-year as we go forward. So I talked about what the philosophy. Now the challenges, I want to spend some time on that as well. So as we all are aware that technology is changing the financial services landscape very, very fast and very aggressively. And we believe that we are rightly placed to manage these challenges going forward as well. Technology is changing how we underwrite, how we distribute, how we conduct our operations. And we feel that we have chosen the path to lead selectively in areas which add value to the organization and not only for the sake of the headlines. So technology is a challenge, could be a potential challenge going forward if we are not agile in managing it. Second is regulatory and compliance. RBI is trying to get NBFCs and banks on similar kind of regulatory threshold. And I think for companies like us who have managed compliance so well over the last 3 decades, it's a strategic edge and a competitive advantage wherein if we continue doing or if we continue to manage compliance the way we have, we feel that companies like us can be well rewarded. And that's the kind of culture that we have built over the last 3 decades. Third, and I think the most important one is how we balance legacy and transformation. Three decades of vintage or 3 decades is a very long period. There are a lot of hard-coded stuff, which gets into the organization when it's been operating since a very long period of 3 decades, I would say, sorry, for 3 years -- 3 decades. Somebody representing the next in line in terms of the Promoter Group and somebody along with the colleagues to take the organization forward, I personally see this legacy as a strength. And I think we have to leverage on it in the right way. And if we are agile and adaptive, it can act as a real strength. So we will hold tightly to our values that we have built over the last 3 decades, like discipline, trust, long-term focus. But as the times change, we have to be open to execute differently as well. And that is something which is -- execution challenge is something which is a big challenge. And I think with the right set of people who can execute as per the newer times, but also uphold the values of our 3 decades is something that can act as a real advantage. Need for speed, efficiency and personalization, the customer behavior is changing, technology is changing that, so I feel that faster decision, frictionless service, those are some challenges that we have to keep on addressing. And the most important that this is still -- we still feel that this is a human capital business. For companies like us operating since a very long time, availability of debt and capital is not a challenge, but availability of the right talent, availability of upskilling this human talent from time to time is something which is very critical. And if we don't focus on this, that can derail the vision, but we are working, and you will see that forward as well that we are working hard to keep the talent, upskilling and the capabilities going forward. So enablers, market size, as we all are aware, not a challenge. We are lucky to be in India where financial services is still underpenetrated, underserved, whatever words you want to use for the market are less. So I think market size is definitely not a challenge for us in our vision for 2036 and further. Vintage and trust capital that we have built over a long period of time. I think this is a very critical one because we have seen economic cycles, regulatory shifts and how the customer has also evolved. So we have built a very high reputation amongst the peers and the stakeholders in the industry that we operate in. And trust capital, along with human and financial capital, I feel can be a real enabler for us to take the organization forward in the right direction. And it's -- and our brand of commitment and delivery is one of the reasons why our stakeholders trust us and why we get the respect that we get in the industry that we are operating in. And third is consistency in vision and culture. So I think as the Chairman said that promoter-driven but professionally run, that gets a lot of consistency in terms of the vision, and that really helps the organization look at the long-term vision and execute that accordingly. And the culture of responsibility, all of us, all 5,000 of us have to own it, have to take the proprietary interest and then take the organization forward. So these are the enablers for our vision for 2036. I'll talk about the SME piece now. Some broad macro data picked up from the SIDBI, CRISIL report last year. So again, market size, not a challenge at all. What number I've put out here is INR 30 lakh crore is the addressable gap and majority of it coming from the medium, micro and small enterprises. So this has been considered with certain assumptions of a 3:1 debt-equity currently out of the INR 34 lakh crore formal credit supply in the system right now, 80% is through banks, 20% is through -- 60% is through banks, 20% is through NBFCs and the rest is through different other entities. So the market size is not a challenge, and it is huge enough for us to take things forward. So MSME is the flavor of the day. Every bank, NBFC, small, big that you might be meeting or talking about, they are talking about MSME, MSME funding, SME funding. So here, I've just put out how NBFCs, not only MAS, but how NBFCs differentiate themselves from banks. So large private banks and public banks are well placed to cater to borrowers with these 3 characteristics basically, where the requirement of working capital lines is in the form of a cash credit or an overdraft facility, strong financial track record and strong bureau histories available and wherein good collaterals or transaction-backed lending can be done. Where NBFCs are well placed is on cash flow-based assessment and taking the calls on the business continuity of the enterprises. Exception handling, this is an important part wherein the size gives us the advantage to be agile, to be nimble footed to handle cases wherein we have to talk to the customer, understand the profile and then take a decision and not only follow a very A to Z laid-down procedure. It has its own risk, but if you inculcate that in your credit and risk mechanism, then this can act as an advantage. Sector, we are in a position to -- because we are more closer to the ground, we are able to observe the sectors more thoroughly and then cater to them as per the requirements. And dependency on data is not only on audited financials and bank statements for us, but we can look at more ground level in-person data, alternative data, which is available more freely now and also take vintage-based calls. So this is how NBFCs, midsized NBFCs like MAS are well placed to cater to the MSME ecosystem. So there is a value chain, large banks, large private PSU banks, large NBFCs, midsized NBFCs, small NBFCs and fintechs. So that's the whole value chain and every player in the value chain has their own market cut out for them. And if they execute correctly over there, I think the numbers are very much achievable. So we have overall 208 branches in MFSL as we had discussed. And 3 years ago, we took a slight different approach wherein we opened up 27 specialized locations, 27 top cities of the country. And the idea is now to go into the -- beyond the 30, the B30, what they call it. And the next idea is to take this forward from 27 to say, around 50 over a period of time and focus on different cities other than these, which are the larger ones. But 60% -- 50%, 60% of the credit flow, customer flow is from these 27, 30 larger locations, which are present across the country. So this is what we did around 3 years ago, and it has been paying off well because these are slightly different set of borrowers than our other retail products, and they have to be catered to in a different way with a different set of team, and that is something that we have built through these 27-specialized SME branches over a period of time. This is a product suite, right, from INR 10 lakhs to INR 5 crores, wherein we have divided in collateralized backed, supply chain, business loan, embedded finance. I'll talk about each of these in a little bit of detail. This is the yield metrics that is there right from 12% to 19%. Ticket size, as I said, right from INR 10 lakhs to INR 5 crores. These are the average ticket size in our each of the products. Tenure right from 12 months to 18 months, and the type of security that we generally take when we underwrite customers in some of these underlying product lines. So in the past, we have talked about that on the outset, it looks like SME loan. But inside SME loan, there are multiple sub-products to cater to various set of different borrowers based on the requirement, end use of fund that they have and also the kind of risk pricing that we should do right from, say, as low as 12% to as high as 19%. So number one is the collateralized backed, where we fund up to INR 5 crores. This is backed by banking, GST data, financials data, only informal data that we see when we visit the customer. There are, again, various subproducts inside this. It was not practical to put all of them down here. So we have clubbed it under collateralized back, which is mortgage of removable property, long-term use, long-term gestation, some investment, building up of infrastructure for manufacturing units and stuff like that is where such -- this product is best suited for. Supply chain need -- as an NBFC, we can only give term loan. We can't give limit-based facilities. There are some products in the market like Dropline OD and all, but we are catering to that particular requirement that customer wants to use INR 10 lakh for 30 days, repay it, keep that as a limit, supply chain as a product, purchase invoice discounting, sales invoice discounting. There are, again, multiple products in this category as well, and it is secured through cash flow control through escrows. It's a 12-month limit, yearly renewal, average ticket size being around INR 40 lakhs. Third is business loan backed by hypothecation of current assets like stock and all of those other receivables, 16% to 19%, short term in nature, 36 average being around 18 to 24 months, average ticket size being INR 27 lakhs. The newest one of the lot that we have started to cater to under the MSME program is embedded finance. Net to the company, the yield is around 14% to 15%, ticket size up to INR 5 lakhs, average ticket size up to INR 1.3 lakhs, 24 months tenure and again, NACH and escrow mechanism. So here, what we do is that we work with the payment companies in the industry where they have the merchant base, they have the captive data of the transactions that happen on a daily basis, and this is an EDI product, Equated Daily Installment. All of our products are on the EMI base, and this is the EDI base. So this is a new pilot that we have started around 6 to 8 months ago. We partnered up with one payment -- big payment company, in the top 2 currently in the country. And what basically this product does is provide them working capital through the fintech channel at the click of a button. There are preset business rule engines which are then activated, bureau check, all of those checks are done and then the loan is disbursed to them within a matter of 30 minutes to 2 hours. So this is something which is well suited for small merchants, general store, grocery store, mom-and-pop store owners that we see in and around our locality. And I think catering to different set of borrowers with the right kind of product designing is going to be an important element going forward. A person who has the headache of paying only INR 200 daily versus paying, say, INR 3,000, INR 14,000 at a month, this kind of a product is well suited for very small trader profiles. And that is something that if we have looked at a lot of data, this product is there in the industry since last 4 to 5 years now, we have looked at various data cuts in terms of par performance and all of those things. And finally, we took the jump wherein we were getting enough confidence that this is something that can start as a small portion. And if succeeds, then we can scale it up gradually. So this is the product suite under the SME loan segment that we currently operate. Some data on industry. I think these are the top 12 industries, top 12 contributing 70%, 8% of the business for us as of now. This is on portfolio outstanding. So top 3 is steel and metal, second is electronic, third is FMCG and agro and textiles have formed the top 5. So you can have a look at these numbers. Again, well diversified. we don't have any concentration risk over here. Some of these industries go through cycles from time to time, but that is where our credit and risk is pretty agile and monitoring it on a monthly basis to see how we can change the weightage if required or loosen or tighten the credit screens if required from time to time. And these are some other major industries which are outside of the top 12. So 12 plus 20, almost 32 different industries that we are catering to. This is the distribution channel, 218 branch-led channel, which is branches, obviously, 208 branches, ecosystem. So again, SME business, roughly around 70% of the business is driven through referrals, DSAs and those guys, large ones, large aggregators Supply chain is driven by anchors, which are there, which whom we onboard and we give them a limit and then they give us sub parties under those. So ecosystem and digital media is something that we do from time to time. We have our own in-house call center to cater to and to our existing customer, and this is a broad distribution channel that we have currently. So 65% to 70% is driven through the ecosystem channel and the rest is driven by our branch-led and direct digital channel. These are the internal stakeholders. This will apply to all our products, not only SME. So I'll broadly cover it, sales for business origination. We have separate teams for all of these credit for underwriting, sales doesn't have any approval power. Sales doesn't do any underwriting. There is a separate underwriting team product-wise at the branch for each of the product. Portfolio management is for collections. There's a separate team product-wise at the branches for each of the products. Sales operations to support sales activities, credit operations to support the credit team and obviously, technology team, again, specialized to the product to assist in developing of various technologies and taking it forward on the tech front. So these are the stakeholders to -- for all the products to keep the product up and running. SME in the Vision 2036, INR 1 lakh crore is going to contribute anywhere between 25% to 30%. So from INR 5,000 crores to, say, roughly around INR 25,000 crores of AUM is the journey over the next 10 years. And I would say the key contribution for that will be obviously the market size, gradual expansion in the ticket size of the loans. This is something that we are very consciously doing, wherein we are working as the balance sheet size grows, risk appetite increases. We are trying to cater to borrowers wherein the ticket size is slightly higher to manage operations and keep the cost efficiency better. Expanding into newer geographies, North and South, huge opportunity. There are incumbent players, but there is enough space for all of us to coexist. And obviously, technology going forward. So fintech in SME till now is yet to succeed at the level at which it has succeeded in products like personal loan and all because to underwrite an Indian entrepreneur and Indian SME still requires a digital model, a touch and touch-based model. But going forward, things are changing. we would not say that the brick-and-mortar would go out of fashion in the next 10 years, but brick-and-mortar wisdom plus leveraging our technology is something that will play a critical role going forward. So this is the vision for the SME product going forward. This is the vision for as an organization overall, the the challenges, the enablers that we are going to have on the journey. Thank you so much. .

Thank you, Dhvanil sir for your presentation. Our next speaker for today is Mr. Saumil Pandya sir. So he is the President and Head of Retail Asset at MA and responsible for managing the micro enterprise, 2-wheeler, commercial vehicle and satellite personal loan of the product of the company. He played an instrumental role in expanding the retail presence of the company across states, and he has been associated with the company since 1996 and has more than 30 years of experience in the financial services industry. And his agenda for today is real estate business, wherein this business to lead the growth. Saumil sir, may I request you to please come on stage for the presentation.

Good evening, everyone. Thank you, Dhvanil bhai. Thank you, Meet. Before starting my presentation, we all know we are living in 2 countries. One is fully developed, that is all India and second way is underdeveloped or yet to develop, that is Bharat. And with whom -- I'm representing Bharat with my product. So I would like to speak in Hindi. [Foreign Language] Micro enterprise loan, 2-wheeler loans, used commercial vehicle loans and salaried personal loans. [Foreign Language]

Thank you, Saumil sir, for your presentation. Our next speaker for today is Mr. Vivek Vyas. Mr. Vivek Vyas is the Chief Operating Officer of our Retail asset channel business with over 15 years of experience in the financial services industry. He is involved in the NBFC relationship management and business operations supporting the growth and stability of the portfolio. He holds the Bachelor's Degree in Commerce and an MBA from Gujarat University. And his agenda for today's retail asset channel business, 15 years of robust performance. Sir, may I request you to please come on stage for the presentation.

Good evening, everyone. Thank you, Meet, for introducing. Before jumping into the quarter, I would like to discuss with you that why we are calling it as a retail asset channel. So we are not only funding to the companies, but we are onboarding good companies, having strong ground presence, operational excellence. And so we are funding to the -- not only funding to the companies, but we're onboarding good partners, having strong ground presence, operational excellence and thorough understanding of the demographies. Apart from this, we have also onboarded multiple checkpoints in our system, and we are also evaluating customer end-to-end journey. So we believe that portfolio created with these expertise is as good as retail portfolio and having granular control on this portfolio. This is the reason we are calling it as a retail asset channel portfolio because mainly we have generated this portfolio through our NBFC channel partners. We are working with the NBFCs across India for more than 15 years. Till date, we had partnered with more than 200 NBFCs across India, and we have disbursed more than INR 30,000-odd crores. The strategic intent behind this model is to cater the financial needs of underserved segments and creating the opportunities created while promoting financial inclusion, job creation and supporting MSMEs. We are treating our NBFC partners as our extended distribution of not just the borrowers. Through our branch-led model, we are having presence in 13-odd states. But with the help of our extended distribution, we are having presence across India, except Jemukashhmir and Northeastern states. These NBFC partners largely having benefit of their local reach, customer proximity, faster field execution and stronger ground level market intelligence. On the other side, MAS, we have 30 years of experience. We had experienced multiple headwinds. We're having different product understandings. We are backed by strong credit ratings and support from good investors. So from the inception, we believe in complementing with each other rather than competing with each other. So if we combine the expertise of these NBFCs and experience of MAS, we have created value from this partnership model. Like both of us have achieved operational excellence, ensured credit where it is due, we both of us have served the underserved segment, strengthened the customer access and scale the lending operations with the controlled asset quality. So next question you all may have is how we are onboarding these NBFCs. As I mentioned, we are into this business for more than 15 years. And over a period of time, we have developed a niche for the onboarding such NBFCs. It starts with the strong promoter due diligence. We firmly believe that entities driven by strong promoters will definitely turn to do well in the long run. In the promoter due diligence, we are checking their -- we are doing their reference check. We are doing their background verification and their track record assessment. We are also checking are the investors in the particular company and whether the investor or promoters, whether they are capable enough to infuse more funds in the market or not. So this ensures continuity, integrity and alignment with the long-term interest of the company. Next is the proven track record. We are also checking whether the promoter or KMPs of the company, they are having proven track record or not either in the company or with the company and or maybe they are having overall market experience. We are also checking whether they are capable enough to frame good practices, strong processes and policies as well. We are also checking whether we are capable enough to take the company to the next level or not. Next is the product alignment. As sir and I mentioned that over a period of time, we have developed expertise in micro enterprise loans, 2-wheeler, SRTO loans, SME, SPL, housing and LAP products. So we are onboarding only those companies which are dealing in these products so that we can add more value to them beyond financing like we can be helpful to them in customer onboarding, we can be helpful to them in framing the process or policies, and we can be helpful to them to strengthen the recovery processes and many other ways. We believe that governance and compliance is also one of the important onboarding parameter. Companies has to adhere internal policies and applicable RBI guidelines such as practice code, digital lending guidelines, KYCML guidelines. Companies having robust governance structure, regulatory discipline and transparency should be onboarded. And this transparency, we believe that this transparency should extend from entity level to the customer level in terms of clear loan documents, transfer pricing, proper disclosures and ethical collection practices. We are also checking fundamentals of the company. On the finance side, we are checking companies debt equity ratio, their capital adequacy ratio, profitability, their revenue trend, et cetera. On the operations side, we are also checking robustness of the processes, their turnaround time, operational capabilities as well. So this way, we are onboarding not only financially strong companies, but operationally sound companies as well. We are also checking whether these companies are having diversified lender base or not. This will be helpful to check the continuity of the funds for the particular NBFCs. We are also evaluating whether these companies have borrowed at the reasonable pricing to maintain their profitability. We are also checking whether any aggressive borrowing is there or not in terms -- for a shorter tenure of time and as compared to their own lending products. We are also checking whether any covenant breaches are there or not. So these are the main points we have covered for the onboarding. So this onboarding framework has been tested across multiple times. As I mentioned, till date, we have disclosed more than INR 30,000 crores. And till date, the actual loss through this vertical is less than 50 basis points. So this shows how strong our onboarding parameters are. So once we have onboarded the companies on the basis of certain data parameters or principles, so all these things will not remain same over a period of time. All these things may change because of market dynamics, interest rate volatility, entering into the new product or in new geographies. All these things may affect the company gradually, but not immediately. Our continuing monitoring framework allows us to track these changes through multiple data exchanges, the MIS verification, governance oversight, et cetera. All these things will be helpful to take the corrective decision in terms of pausing of disbursement, tightening the control, changing in the lenders' covenant as well. Apart from all these things, we are having strong monitoring team, which continuously visits the company's head office and branches. They are mainly covering underlying asset verification, data and system validation. They're also checking the process and policies, geographical portfolio, collection assessment and file and document verification. We'll take one by one. In the underlying asset verification, they are checking the underlying hypothecated assets on a monthly basis. They are verifying DPDs of the hypothecated customers. If these DPDs are higher than the certain parameters, then this company has to replace these customers with the regular customers. And if such replacements are on a higher side, then we'll ask for the company level data and verify the same with the product and geographical performance to arrive at the conclusion. Team is also generating live data at the time of visit, and we are validating the same with the data provided at the time of price assessment, which shows the -- you can see data accuracy of the particular company. Before initiating the field audit, team is discussing with the various departmental heads regarding their process and policies. And team is also evaluating the same, whether these policies and parameters has been implemented at the field level or not. They are also verifying if any deviations are there, then such deviation has been taken as per approved metrics or not. We are also tracking the geographical exposure details. This will be helpful to detect the geographical risk, and it will be easier for us to take the control at the difficult times. Next is the collection assessment. So during this visit, team is also verifying the disbursements with the bank shipment and utilities provided by the company. They are also checking monthly demand versus collection and the collected amount has been deposited in the bank segment or not. We're also visiting the regular customers on sample basis. And for the stressed accounts, they are visiting them to assess the recovery efforts and understand the ground selling of those particular customers. Next is the document verification. Team is also verifying the complete set of loan documents, which includes their loan agreement, their KYCs. Specific to vehicle finance cases, they are checking insurance copies, invoice copies and required RTO papers are there or not. And for the secured cases, they are also checking or verifying property papers, too. Next is how we are different from others. So as I mentioned earlier, we are into the business for more than 15 years, and we have developed a niche for the NBFC lending space, so which differentiate us from the conventional lenders. Mainly conventional lenders rely on the balance sheet strength, collateral, they are having very limited appetite for the smaller or emerging NBFCs. They are largely rely on to the data provided by the NBFCs and having limited oversight into the origination, collection and other systems. They are having transaction-based approach. Largely, they are disbursing in a, you can say, in a single larger amount to a particular NBFCs. This may lead to a negative carry or liquidity mismanagement for them. On the other side, we positioned ourselves as a friend, philosopher and guide to our NBFC partners, and we are having totally different approach as compared to the conventional lenders. For the assessment, we are going beyond financials and evaluating company's business model, their customer segment, governance, portfolio behavior as well. Our approach is risk aligned. It's not that much aggressive, but we are supporting smaller and emerging NBFCs, which demonstrates good portfolio performance, control and origination. We are having domain expertise. So we also deep dive for the company's operational assessment. We are covering or evaluating their processes and even the -- we are also evaluating their field level performance. Our approach is providing continuity of the funds as we are -- our approach is tranche-based and not the transaction based. This will be helpful for the NBFCs to plan their liquidity accordingly and helpful to maintain the profitability. Our approach will always be granular, partnership driven, continuous monitoring and having the full control to the end borrowers. Next is the way forward for the RAC segment. So RAC segment will continue to grow in future in a calibrated manner while maintaining diversification and alignment to the long-term vision of the company. We believe that NBFCs will play an important role in the credit distribution and providing timely and adequate liquidity support to them will be a good growth opportunity for us as well. In long run, RAC will continue to participate in the company's overall AUM in alignment with the strategic intent of the company. With the increase in company's AUM and scale, our appetite to add value to the NBFC partners will also increase in line with the risk-approved framework. So this balanced expansion approach, both in direct and indirect business vertical will further strengthen company's diversification, granularization and resilience across multiple cycles. Thank you, everyone.

Thank you, Vivek sir, for your presentation. Our next speaker for today is Mr. Himanshu Kanakhara. So Mr. Himanshu is the Executive Vice President of our housing subsidiary, and he has been working with the company since 2018. And he has over 25 years of experience in leading and executing various sales and distribution roles. Prior to working with our subsidiary, he has worked with HDFC Bank for more than 13 years, where he was responsible for developing and growing securitization with the NBFCs, cross-selling of banking products and construction equipment products. He has also worked in product sales of passenger car and commercial vehicles of brands like Tata Motors and Mercedes-Benz. He also based a master's degree from Gujarat University Ahmedabad. And his agenda for today is housing subsidiary, a venue unlocker for the parent. Sir, may I request you to please come on stage for the presentation.

Good evening to one and all. We'll be happy to take you through an overview on our housing finance vertical. We are targeting our affordable housing finance segment through our subsidiary that is MAS Rural Housing and Mortgage Finance Limited, or MRHMFL. MRHMFL was established in the year 2008, and it is headquartered in Ahmedabad, Gujarat. Talking about the product range, we provide loans for purchase of new houses, resale houses, construction on owned plots by the customers, home improvement loans and also commercial property loans, that is small shops for industrial states. We also extend loans to developers, the affordable developers as construction finance for completion of the projects. Talking about the area of operation, we operate in rural and semi-urban areas of Gujarat, Maharashtra, MP and Rajasthan. We have a network of 101 branches and have sourcing arrangement with 161 intermediaries. Typically, these are DSAs and referrals. We have clocked an AUM of INR 8,592 million, that is on December '25, and we have registered a strong growth of 22.49% year-on-year. Talking about our target customers, primarily, these are salaried and self- individuals, typically who work in a small or a micro or a medium enterprises. They are into, say, on production line or in services or in supervisor role. And others are self-employed individuals, typically who run a micro enterprise unit like a kirana store or doing job work for a manufacturing unit. And we extend construction loans for completion of affordable finance projects, but the share is very limited here. This is just to complete the construction, boost up the projects and get some APFL and get some share out of it. Our average ticket size is below INR 10 lakh. And if you see our tenure for housing loans, it is up to 300 months. And in case of non-housing, there is shop loans, it is 144 months. Now this is our journey on AUM. This is our quarter-on-quarter performance for last 68 quarters. Now if we see the numbers, the absolute numbers look small, but look at the consistency of growth with 39% CAGR. It's a hallmark of consistency. This is our specialty over years that we take time to reach a critical mass. But because of consistency, we can bring about very formidable numbers. It is very important to gauge the success from where we started, that is 0 to close to INR 900 crores as of now. If we grow around 30% plus, we'll be doubling our AUM every 2, 2.5 years. So that will be a formidable side. And within a decade, it will be in excess of, say, INR 10,000 crores, coinsisting with the vision of the company for 2036. This is a very clear indication of our capabilities to compound. And the robust growth in CAGR is visible in our PAT also. We have grown our PAT at the CAGR of 52%. Now this is on our distribution network. We operate through 101 branches and majority, we are focused out of Gujarat, followed by Maharashtra, Madhya Pradesh and Rajasthan. Now out of the 101 branches, we have support of 26 parent branches, the parent company's branches, MFSL branches. And typically, I mean, this is a developing vertical. So we keep it asset light. Once we reach the economies of scale, we have our dedicated branches in place. Again, out of these 101 branches, we have a special focus on rural areas, typically village branches catering to the farmers who are into agri and milk segment. So we have 34 dedicated village branches in Gujarat, and we plan to add 10 more in Gujarat. Currently, we are -- if you talk about Gujarat, we are more focused on the North Gujarat part, that is Himatnagar Belt and all. And now we want to add Savrastra, that is the western part and southern part that is Surat and surroundings. On the sourcing part, I mean, we source our business through direct sales team, builder tie-ups that is APFs, third-party channels that is connectors. We have our outreach programs. I mean, typically, we do the umbrella marketing. Our team goes out. We try to reach the customer on his way to office or home. We conduct activities at crossroads of industrial areas or rental areas where we have more footfalls. There, we give the product information, where we talk to the customer and broad-based, we try to judge the eligibility. We just update him with the requirements and try to generate a lead with these outreach marketing programs. Similarly, we do loan mailers at developers place. We have APFs, we do the tie-ups with the developers, and we keep loan mailers. We are also present on social media, that is Facebook. We have our static post and reads on product information and probing the customer to come up and to generate a lead and check his eligibility with us. Now this is our product variance in case of housing, it is home purchase loan, home construction loan, home extension loan. And in case of developers, as we said, it is construction finance to developers for completion of the projects. Now typically, these are not very rated developers. They need money to complete their projects. The product cycle is such that the developers, they put in their money and then there comes a stage wherein they are stuck up at times. The next inflow is from the customers as margin money or from the part payment from the bank who is from where the customer is a loan. So there is a gap at that time. So we have our credit screen in place. And accordingly, if the builder qualifies, we give a project loan with 2x cover as collateral. We take the land as collateral. So that is on the construction loan. And next is commercial property loan. These are typically shops, new and old and industrial shapes, again, for retail customers. Now talking about the tenure in the housing range, it is up to 300 months for all the housing loan products, that is home purchase, home construction and home extension. In case of construction finance to developers, it is 36 months. And for commercial property, that is shops, it is 144 months or 12 years. Talking about the target customers, these are individuals who are salaried, self-employed, moreover, nonprofessionals and farmers. Now if we -- just to illustrate, if we take an example of Mumbai, our customers would be somebody who want to buy a home at Nala Sopara or Niaga or Boisar Palghar or towards Kalyan, it is Vangani, Shelu and all that. So he'll be typically employed at a micro, small, medium enterprise, and he wants to avail a house of his own. And majority of the customers are first-time buyers. Similarly for the developer finance for affordable developers. And talking about the ticket size in home purchase is INR 8 lakh to INR 10 lakh. In construction, it is 5 lakhs to 7 lakhs. Typically these are in the Tier 2 locations, Tier 3 locations. And home extension, renovation it is INR 3 lakhs to INR 5 lakhs. Typically, these are rural customers who want home improvement loans, who want to improve their sanitation facility or tiles or add up a room or add up a floor. And similarly, for the construction loans for developer is INR 2 crores to INR 3 crores and commercial property or shop loans, it is INR 6 lakhs to INR 8 lakhs. Now this is way forward. We are aiming to grow our AUM by 30%, 35% over medium to long term. And these are the enablers, strong industry growth. Just recently, there was a review at NHB. And if I just quote Chris numbers, currently, 35% of the people in India are living in urban. And that is expected to grow further to 40% by 2030 and 50% by 2050. So from 30 crores, further, it would be -- we are expecting the population also to grow to 160 crores by 2050. So from 50 crores to 80 crores, 30 crores more people are likely to live in the cities. So this is a great enabler for growth. Again, we'll expand our branch network. We will take the help of our parent company. We'll keep asset-light branches, and we'll expand our branch networks to other neighboring state. Gujarat is there, but MP, Rajasthan and Maharashtra will be adding up branches. We have our digitalization in place. We have a loan origination system and loan management system in place. We'll continue to improve and focus on that. That will give us a better track, a better operating expenses, improve our operating expenses, and that will add on to our revenues. We are targeting sustained profitability, targeting ROE in the range of 2%, 2.5% and ROE in the range of 15% in medium term. Further, unlocking the value of parent company, we are planning a potential IPO by next 5 years. And this vertical housing, vertical should contribute 15% of the consolidated AUM in medium to long term. Thank you.

Thank you, Himanshu sir, for your presentation. Our next speaker for today is Mr. Nishant Jain, who is the Chief Risk Officer at the company. He is a qualified chartered accountant with over 15 years of experience in credit and risk management in financial industry. He is responsible for managing the overall risk depending on the product and policies and risk framework of the company. He has been associated with the company since 2018, and his agenda for today is robust risk management and credit underwriting. May I request sir to please come on stage for presentation.

Good evening, everyone. So I try to be as fast as possible I can be. So to take you forward how we do risk management at MAS because one of the critical thing in current volatile scenario. So we try to ensure that we enhance our risk guardrails on a continuous basis to achieve the vision of the company. So for that, what we have done is we have strong credit policies and processes for each and every product. So as already told -- as already mentioned earlier that we have multiple products. And in those multiple products, also there are subsegments. So we define the strong policies and process, which helps us in maintaining our portfolio quality. We are not in the business of eliminating risk. We are in the business of managing it. So we have a defined risk tolerance limit at each and every level, which helps us in monitoring all the things on a regular and continuous basis. We keep on doing data and scenario analysis to understand where we are going wrong and what correct actions need to be taken up. We have a strong monitoring and reporting team, which continuously escalates all different kind of data, all different kind of reports and MAS for the management and other stakeholders so that they can take corrective steps whenever it's required. And basis that monitoring reports, there are early warning signals, which is sent or triggered to the team that where they are doing wrong and what is need to be changed. Along with this, we also do a different kind of stress and behavioral analysis, which helps us in predicting future broad level changes and give us a fair bit of idea that certain things may go wrong in future and accordingly, we can change the policies. So broadly, from a risk oversight and discipline perspective, these are the critical historical performance of the company that from a liquidity and ALM standpoint of view, the company's liquidity is positive, and we don't have any negative mismatch in any of the buckets even in a very stressed -- severe stress scenario, if we apply different -- we give our shocks to our collections going forward or we give shocks on various behavioral patterns also. Despite all this, our liquidity is going to remain positive. So that is our liquidity discipline for you. From a capital management point of view, as on December, we have a very strong capital position. We continuously keep on monitoring the capital requirement of the company based on our consumption requirement, based on various shocks even. So based on internal assessment also, our capital position is strong enough. And we have a sufficient capital buffer available with us even if we apply various severe stock scenarios also, which helps us in keeping a cushion for an adverse scenarios also. From an asset quality point of view, our GNPA and NPAs are constantly monitored, and it's well within the defined tolerance limit. We have an early mechanism, which is constantly giving triggers. So we constantly keep on working on it. And basis that wherever is required, we make all the changes in the policies and process on a continuous basis. From a financial discipline standpoint of view, we have a sustained profitability, and we keep on tracking our ROAs. So we have defined the ROAs limit. And basis that, we are monitoring our financial performance. We have a strong risk-based pricing mechanism internally, which helps us in getting a desired ROAs for our product. And along with this, we're constantly monitoring other financial metrics, which helps us in creating a financial discipline in the organization. From a credit risk management perspective, I'd just like to highlight that we have a very structured lending approach in the company. We have a strong LOS system and overall LOS journey. Along with this, we have a strong underwriting team where we have a strong people at place who understand the product, who understand the field nuances, who understand how the products need to be done and what kind of assessment practices need to be adopted. Along with this, we have a risk pricing mechanism for various and different kind of risk, the product needs to be priced accordingly so that we have -- we got a desired ROA. So we understand which product will lead to what kind of losses and basis that risk pricing is defined. Along with this, we have a strong portfolio monitoring and recovery and collections team, which helps us in managing the NPAs well within the defined limits. I take you to the next slide, how we do a credit assessment at MAS. So we have a product-based policies for each and every product. We have a mechanism for assessing borrower for each and every product. Along with this, we also verify the repayments of the borrower. We have a defined resource for each and every product basis that we keep on monitoring the performance. Along with this, we have a negative and cautious list. We categorize the customer based on the risk level of the borrower. And along with this, we ensure that our portfolio is well diversified. So we have multiple products, multiple geographies we are dealing with, and we are doing business in multiple industries. So we are not concentrated in any particular segment. So that helps us even in any kind of a macro event, our portfolio got impacted to that particular geography or industry. Other portfolio remain immune from the risk. And basis, our overall performance, I'd like to highlight that the company constantly keep on calibrating the policies and processes, which ensures that the performance of the product remains robust. I'd also like to highlight you that this is the overall journey from a login to disbursement. More or less, product to product, it may change slightly or a bit of it. But majority of the process or parts remain same. The pipes move from sales, then it moves to credit credit to ops and ops post ops it got disbursed and post disbursement, the collections and recovery process takes place. So from a monitoring standpoint of view, for each and every other different risk, we keep on monitoring it on various counts. But from a credit risk standpoint of view, these are the critical parameters which we monitor apart from the other things. One is gross and NPAs. Along with this, we have defined in systems, the early warning triggers, which helps us in identifying the early indicators. Along with this, we also monitor the collection efficiencies. We have a system of modeling where it helps us in predicting certain cohorts or buckets which are not doing good. And basis that we make certain changes on our policies front. We have a strong data analytics team, which helps us in analyzing the performance on various counts and parameters. We also analyze the peers' performance, how they are doing it in comparison to what our performance currently is. And basis that if we need to learn from them, we can do the certain adjustment accordingly. Along with this, we also monitor the ROAs. So if the product is not making profit for you, it's not making sense to do that business. So we constantly monitor that the product is generating sufficient ROAs or not. And basis all these parameters, we make necessary changes in the policy wherever is required. So this is one of the critical slide. This demonstrates the company's performance and the risk management over the period of time. So as you can see, the performance remains robust over the period of time. Our GNPA stands at 2.56% as on December 2025 and with an NNPA of 1.72%. So along with this, MAS is constantly and actively derisking its portfolio across geographies, product and distribution channel. So that also helps us in maintaining the risk level. So what's way forward for the risk management team. So we are constantly reviewing and improving our processes. We want to ensure that our product and policies remains aligned with the mission of the company. So strategic alignment is very critical. Along with this, we are working on our technology part and leveraging on the same so as to ensure that we have an operational efficiencies at overall organization level, and there is strong controls and enablers are there. So manual errors chances got reduced by having high level of technology implementation. Along with this, the company is also focused on emerging and nontraditional risk likes of climate risk, which has a huge consequences. So we are monitoring those also. Along with this, we are monitoring the macro parameters, which can have impact. So you have seen over the last decades, there are multiple headwinds, which has impacted the performance of NBFC. So as a company, we are constantly monitoring those parameters which can have an impact on the organization. And according to those headwinds, we are making necessary changes in our overall processes. And along with this, we are constantly working on strengthening the risk culture of the company. We are defining each and every member's roles in risk awareness and risk management at MAS. And according to those, we are guiding the team that they will remain accountable to the performance and vision of the company. So we are strengthening those processes. Thanks for your time. Over to you, Meet.

Thank you, Nishant sir, for your presentation. Our next speaker is Mr. Ankit Jain. He is the CFO of the company since November 2019, and he has several years of experience in the financial services industry. His areas of responsibilities include Liabilities Management, Investor Relations and Treasury Functions. He holds business degrees in commerce from Pune University, and he is an MBA from ICFAI University. And his agenda for today is strong liability management. May I request sir to please come on stage for the presentation.

Thank you. Good evening to all. This is on the pillars of capital and liability management. The company's financial strategy is anchored on these 4 core pillars. First is adequately capitalized, that is capital management, whereby the company should be adequately capitalized in terms of growth target and risk covering, asset and liability management where the liability should commensurate the asset maturity pattern. Resource management, whereby the resource will be well diversified and most importantly, maintaining competitive cost of borrowing and generating healthy ROE. This framework enables the company to support sustainable growth while maintaining the risk discipline. This is further on the capital management, where, as you all know, we are well capitalized at 22.84% as on December with Tier 1 capital of 21.48%. In June ' 24, we raised fresh capital through QIP of INR 500 crores. This QIP raise was after 7 years of our IPO, whereby we tripled our AUM. And this proves our business model, which is self-propelling. By self-propelling, we means capital requirement of our business is generated majorly through internal accrual, thereby limiting our reliance on frequent external equity infusion. The strategy of the company in terms of capital is to keep capital adequacy at around 20%, debt equity at around 4.5x, target ROA to be in the range of 2.75% to 3% and thereby resulting ROE at around 15% to 17%. In terms of -- right now, the capital level, we are well placed to achieve our immediate target of INR 20,000 crores, whereby 20% to 25% of the AUM will be off book through direct assignment and co-lending transaction, enabling capital efficiency and risk diversification. Also, we have a great room to raise Tier 2 capital as and when it is required. This is on the liability management, whereby liability is raised -- whereby asset liability maturity pattern is always matched, and we have a diversified resource mix. Our borrowing profile is well supported by strong credit rating, which is AA- from CARE and AA stable from Acuite. As we desire or as we strategize to have 20% to 25% of AUM as off book, our asset pattern support it. We have 80% of the portfolio is MSME loans, including the CV loans as per -- and these loans qualify as a practice sector lending and retail loan for the purchaser. This is on the instrument-wise breakup and lenders-wise breakup of our sources of fund. Our sources of fund is well diversified with both instrument-wise and lender-wise, reducing concentration risk and enhancing funding stability. This is on the diversified lenders. The company has a broad and diversified lender base with no undue dependence on a limited number of lenders. If you see all the top lenders of the country, we have a borrowing relationship and a very immaculate track record. This is a depiction of our ALM maturity pattern, where you see we have a great cushion in terms of surplus fund and in none of the cumulative bucket, there is a negative mismatch. Even we closely monitor individual buckets, whereby up to 1 year, there should be no negative mismatch. In terms of liquidity management, company keeps 3 months of liability and the operating expense estimated as liquidity on hand, and we include liquidity on hand is cash and cash equivalents, liquid investments and immediately drawable limits. Company also track unencumbered assets, which provide flexibility to raise secured funding as and when required and also to execute DA transactions. This is in terms of way forward, whereby we will remain adequately capitalized at about 20%, in line with our strategic intent to reduce the required liability -- to ensure the required liability raised adequately and timely, further diversification of sources of funds with focus to reduce dependency on Indian banks and single type of instrument, target to maintain around 20%, 25% off book through direct assignment even on a larger scale to maintain robust ALM which commensurate with the dynamic of the tenure of asset and to minimize the impact of carrying cost while maintaining adequate liquidity on hand. We have a strong belief that this approach is expected to support scalable growth, balance resilience and stakeholder confidence over the medium to long term. Thank you.

So in the interest of time, we are taking IT presentation and the credit presentation before the HR presentation now so that we can show you the live demonstration of what technologies we are using. So next speaker is Mr. Rajen Shah, who is the CTO of the company and has been working with the company more than 30 years. He holds the Bachelor's degree in Science from Gujarat University, and he is an MCA from IGNOU. He brings in strong technical expertise and strategic leadership to drive these scalable and secure IT solutions with MAS. He plays a key role in aligning technology initiatives and business objectives. He actively fosters a culture of innovation and digital transformation across the organization. He is responsible for managing IT infrastructure, EDP operations, project execution and end-to-end software development. His agenda for today is leveraging technology across the spectrum powered by in-house tech. So I request you to please come on stage. Okay. So we'll jump to live demonstration first. Sorry for this inconvenience. I would request Darshil, who is the Credit Head to show the live demonstration of our technology. So Darshil Thakkar is the qualified Chartered Accountant, Company Secretary and Certified Management Accountant. He is the Head of Credit for the retail asset channel and SME lending at MAS. And he has been working with the company since more than 11 years. And he will take you through the live demonstration of our SME and 2-wheeler LOS what we have developed through BRE-enabled LOS. And he will also take you through the CAM and the AI-driven discussions which we have. Over to you, Darshil.

So thank you. Good evening, everyone. I'll be presenting our digital LOS that transforms lending into a real-time data-driven algorithmic decision platform rather than being just a process tool. The platform uses data triangulation, arithmetic, decisioning, dynamic rule engines and real-time orchestration to deliver faster approval with lower risk. So can we have a login. So this is our login screen of the LOS. The logins can be done through any channel. For ease, we will be doing a demo through an employee login. So the employee will log in into the LOS. So this is the login screen. We will quickly take up one of the sample cases. This is a live case, which is live in the system. So the person who is logging the sales team will input a few key details and rest of the details are auto captured through predefined logging. So here, only the customer name and the constitution type needs to enter. Once he inputs the PAN card through the back end, we will directly fetch the GST details and all the complementing details will be auto captured. So next, the customer or the sales team needs to enter the basic borrowing details, borrower details, which will be -- you can say and like whether he's a proprietor or what is his designation. Then through an Aadhaar-based OCR, the front and the backside of the Aadhaar is uploaded into the system. And all the details which are there in the Aadhaar are auto filled. You don't need to enter anything. Then the GST details are auto captured. Over here, a consent link is sent to the customer to fetch the GST details. Similarly, if account aggregator feature is available and the customer consents to it, the banks -- the consent is done over here. Otherwise, the bank statements are uploaded. And once rest of the details are filled in and an e-mail and a WhatsApp message is sent to the customer. And once he provides his acceptance on processing the file, the system starts its actual process. So I will quickly run you through what are the basic background checks, which the system does. The system, first of all, fetches the GST details from only a PAN. And this -- and the details are captured from the GST website itself. Next, based on the PAN, we will also come to know about the name matches, whether the Aadhaar seeding is there or not. Every detail is being auto captured through the APIs. We'll also review that UM certificate. This is also an API-based integration that is there. So we'll come to know whether there is any identity risk or not or identity fraud, which is there or not. Now starts the data triangulation and algorithmic decisioning. So the bank statements, which we initially uploaded, it's very easier if you can get it into an Excel. But we have gone one step ahead and used various algorithmic decisions and we can come to know about what are the various transactions which are being done. And so can we just go directly into the detailed analysis portion. So the bank statements which are being uploaded over here. So just by a mere click, we will come to know within fraction of seconds, what are the various transactions which are done across the 12 months, what are the interfirm transactions, what are the sister concern transactions. We will even come to know what are the loan receipts, loan repayments, EMI bouncing if any, and everything just at your fingertips. So this reduces the credit decisioning and the debt involved to a greater extent. Now we will see how this data triangulates with the GST details. So once the customer gives a consent, within a fraction of seconds, say, 5 to 10 seconds, we'll get the GST details. So from the GST details, we will not only come to know what are the monthly purchases or the sales, the GST filing frequency. We will also come to know what are the various circular transactions and who are -- from whom they have done the transactions, like who are the suppliers, who are the customers, what are the aggregate transactions done on a 12-, 24- or 18-month basis. And as you can see, we will also come to know what are the banking transactions which are being mapped against that particular supplier or the customer. So this is the power of data triangulation, as you can see. Now we have gone one step ahead with, you can say, borrowing analysis. So we all know that CIBIL report -- most of us in the field of credits see each and every day. But we have used the algorithmic decisioning and dynamic rule in order to create a direct borrowing profile. So from the CIBIL, we directly capture what are the live loans, what are the outstanding and what is the sanctioned amount, sanction date and so on. And these details are then data -- through data triangulation with the bank statements we can come to know in which month the EMIs are being paid at what date they are being paid. Not only this, now say if in the bank statements, there are some EMIs, but we are unable to track the same in the CIBIL report then also it gets highlighted in a separate field. So this reduces the task of a credit officer to a greater extent. Now based on all the data, the credit officer or the credit analysts will have certain questions. So we do a system-driven PD. The link is sent directly through the system itself to the customer mobile. And the customer using the link will open the video PD software, and we will see what happens through a live demonstration of a case. So in this particular case, a couple of days back, we had done a PD. So we'll play a video of the same for a couple of minutes. [Presentation]

So as you can see, it was a 20-minute conversation with the prospective customer. Now through AI, you can see a summarized transcript of it. The system will not only capture the longitude and the latitude to verify the place, but it will also provide us with the synopsis of whatever discussion has been happened. As you can see, the discussion through AI has been highlighted through various pointers like whether the conversation was about a family member, about the business, what all details were provided by the customer and so on. And one more thing, like you heard, it was -- the conversation was in Gujarati. The system auto translated into English. So the conversion can be in any language, Tamil, Telugu, Marathi, anything. We can easily come to know what was the conversion and also we can track the authenticity of every detail. So now we will directly jump on to the eligibility. So using all these data, the system will perform the checks and through various rule engines, the eligibility is being displayed over here. So over here, the credit officer only needs to check whether all the data are in sync with the PD details and so on. If he's satisfied, he will proceed to the next step and proceed directly with the recommendation and so on. So this is the score metrics. So using the various rules and policy parameters, the data is auto populated and a risk score is assigned to it. So this helps us with the risk-based pricing also. Now based on various data source, if the policy parameters are breached or if it requires any higher authority approvals and so on, then it gets auto triggered and the case moves into that particular authority's trade. And over here also, there are various restrictions which are kept that the permissible amount, you won't be able to enter higher than what the system reflects or as per the authority or the deviation metrics. And once the case is approved into the system and the LOI is sent directly through the system itself to the customer and based on the acceptance of the LOI, the disbursement and the other operational process moves on directly through the system itself. And if the customer agrees for an e-agreement, the e-agreements are also done through the LOS itself. So this was more about an SME customer. Now we will quickly talk about now a customer who has asked loan for a 2-wheeler product. This product is much more faster and much more digital, which not only uses the SME framework, which I just showed, but it has an end-to-end digitization as well. So we will take an example of one of the case over here. So again, the basic details are captured by the employee. And like in the SME using the PAN and the Aadhaar, all the corresponding details are auto captured. So over here also within fractions of minutes, you can say the loan application will be ready for evaluation. So the basic customer details are captured. Then the sub-dealer details, occupation, bank details like in SME, everything is also done over here as well. So here, the employee will just input the manufacturer details, model and the category will be auto captured through the rule engines. So over here also, there are various API markings in the consumer bureau, if we can show. So rather than a traditional PDF over here through various algorithm engines and rule engines, we have done -- we have got this details. Now the details are mapped in the bureau and the details which are input into the LOS, they are auto matched based on the rules which are predefined. So over here, the PAN and everything is also reported in the same way as to us. So we can see that it's a proper match. So again, the loan information and everything, like you don't need to go through the PDF versions. Even if there are any derogs or any negative thing which is there in the CIBIL, it will be auto highlighted over here. So this makes decision-making much more easier and faster. So all the recent inquiries and everything are mapped over here. So over here, there is one added feature that we have incorporated, which is a face match verification. So when the Aadhaar is uploaded, we also take a live picture of the customer. And then there is a verification which is being displayed over here. There is a 99.96% matching of the face. So we can know that -- know the person whose KYC details are submitted is indeed the borrower. So the identity risk is reduced and eliminated in this step. So over here, this is an end-to-end digitalized system wherein if the major policy criterias are matched, then the system will auto generate the policy details and so on. And based on the acceptance, it will move directly into the disbursement. So say, in this particular case, there are no deviations. So it will directly move into the operations team for the disbursement. The delivery order for this particular case will be auto generated and sent for payment purposes. So I'm happy to share that everything has been developed in-house using our intensive experience and knowledge on the product and the sectors. So the products that we talked about were something where we can rely more on the bank statements and the GST returns and other things which are available at our disposal. Now I will talk to you about the MEI product, which requires much more human intervention and human intelligence. So if you can show them one CAM. So one more feature of this is that whatever you saw in the LOS can be easily downloaded into a PDF format as well. So this is one of the CAM report. So all the basic information form details and everything is captured. The KYCs and everything are verified as shown in the earlier SME product. So over here, the main thing is how you calculate the eligibility. This is the segment wherein majority of the records and transactions happen off the books. So from the bank statements or there are -- you won't be able to judge what is the actual income. So over here, there is a PD which is being done at the customer premise, which is a very exhaustive one. So if you can show them the business records, which were verified business. So the credit officer or the analyst will visit, he will collect whatever the kutcha records, bills and everything are available. And there will also be random checks of the records, which will be done. So say if he gets a record of supplier, then he will also do verification of that supplier and ask whether he is a genuine customer of him or not, what are the transactions which are being done on a monthly or a yearly levels and so on. There will be site visits of the residence premise as well. So as you can see, this involves more of a human judgment, and we power it with the machine logic. So I have covered majority of the products over here, which we expect to be the driving force in the -- in achieving of our targets. So as you can see, every loan application is powered by multi-source data validated through APIs, scored by algorithms and governed by policy rules, while human judgment steps in only where it adds value. Thank you.

Thank you, Darshil, for that detailed presentation. So in the interest of time, we'll start with the Q&A just by one conclusion slide, which I would like to highlight. So we conclude today's presentation by reaffirming that team MAS remains dedicated to realizing the vision of reaching a milestone of INR 1 lakh crore AUM in the next decade, leveraging a track record of proven performance over the past 3 decades and pursuing compounding prudence in the years ahead, following the [indiscernible] of excellence through endeavors, which we now reckon as purpose-led progress driven.

So we'll now start with the question-and-answer session. [Operator Instructions]

This is Amit Tulsiram from Westport Research. First of all, thanks a lot for very detailed presentation. I can see a lot of hard work has gone. So my question is on micro enterprise loan. If we look at the period FY '22 to FY '22 and FY '24 to FY '26, rest of the industry who is into micro loans, which is less than INR 1 lakh, had a very high credit cost, almost double digits for this 2 years. So what that we have done differently that our credit cost from the gross NPA and the other numbers, it looks like we never crossed the single digit there. So that's the one question. And simultaneously, if you can clarify during this year, how much -- what part of the micro loans was generated directly to the branches? That's it.

So from a micro loan customer perspective, you're talking about more of a microfinance customers are 2 notch above those customers. And along with this, we have a credit process where we assess the income, we meet the customer. That is what we have shown you overall the process point of view, and we are doing this business from a very long period of time. So we understand the nuances and the field level understanding. We visit the customer, meet them. We see to it that what operations they are having. And basis that only the credit judgments are done. So that is why the major reason is that our portfolio performance remain benign in this product segment. And what's the next question, sorry...

What part of the micro enterprise loan is generated directly through our branches during this period?

So it's majority of the sourcing is -- and some part is through NBFC, but majority is through direct sourcing.

Anyone want to ask a question can raise their hands.

I was just going through your numbers. One thing I noticed was like your expenses, especially the employee expenses and the other expenses part of it has grown much faster than the AUM growth. In fact, it is almost like 35%, 40%. So I wanted to understand, I understand the hard work that has gone into the tech platform, everything. But going forward, do we expect this -- the expense growth to come down and we get some operating leverage out of whatever investments we have made? Or how do we look about the expense portion going forward?

So the increase in the overall OpEx, including the employee, which is a part of the OpEx cost as well has been due to the strategic shift that we have done over the last 4 to 5 years from our partnership-led distribution model to a direct-led distribution model. So that has led to the cost that we have incurred. We were roughly in and around '21, '22, 2021, '22, we were roughly at around 100 branches. We have doubled that over a period of last 3 years. And we have changed the sourcing mix from roughly around 50% partnership based to around 35% partnership based and 65% from our direct distribution from our 210 branches. So this has led to the overall increase in OpEx. But again, as we have communicated in the past, the number that has to be seen along with OpEx has to be the ROA number, wherein that has not changed. And we have been constantly hovering around 2.75% to 2.85% kind of an ROA -- that is just because the yields have also increased, OpEx has also increased, but the profitability also has been kept intact. Going forward, the focus for the last 6 months, 9 months, we have not increased any branches. The focus has been to get these branches to higher efficiencies. Going forward also, we'll not be going very aggressive in branch opening. We'll look at getting these branches to the right efficiency and then expanding further. But in the retail lending industry, cost to income in this range is something which is normal. And our focus will be to obviously work on OpEx and other levers also to increase the ROA from time to time.

So just a follow-up on that question. On your OpEx part, what percentage of your OpEx is based on tech expenses? That's one. And another is a broader question on the tech part. You gave a very broad presentation about the tech and all very detailed. I wanted to understand what has been the development in terms of PAT and efficiency over the last 3, 5 years? And what is the medium and the long-term goal that we look at our tech?

So for us, tech, unfortunately, because of time, we couldn't concentrate on that tech presentation. But around 5 to 6, 7 years ago, we were at a crossroad at around INR 4,000 crores to INR 5,000 crores of AUM. We had to choose between two -- either one of the model, which is SaaS or built and operate. We had to choose between one of the model, and we chose the built-and-operate model where we invested in the team, the IT team. So now we have a team of more than 100 developers and business analysts and the journey has been wonderful where the technology has withstood the litmus test of scalability as well. So we have scaled up from almost a INR 5,000 crores kind of an AUM when we really started the LOS development and all of those programs. Earlier also, we had technology, but it was not at this level, but last 4 to 5 years have been transformational for us in terms of technology development in-house. So for us, the tech cost majorly is the employee cost. So it is a part of the overall employee cost. I will ask my colleague to just get back on the exact number. But for us, hardware and the employee cost forms the tech expense rather than the SaaS or the fee or the fees that we pay to maybe third-party service providers. Annual cost for tech is in and around INR 12 crores to INR 15 crores approximately. And with the availability in terms of what further OpEx we can incur, we'll be investing further in this as well. And all of this is developed in-house. So that is something that has kudos to the team because we have a lot of lateral hiring from time to time. And the kind of feedback that we have received not only from our in-house team, but from the people who have joined from other organizations has been very positive. Going forward, the focus will be getting the TAT even lower. So currently, average TAT for all our products, at least for the retail piece, which is 2-wheeler and all of those products is a single day, sometimes disbursements within 3 to 4 hours. SME, MEL takes 1 to 3 days. And we feel that now we are -- we have the base set. We are working further on reducing the efforts of our team in terms of data entry wherever we can, sales team, efforts of our credit underwriting team in terms of data crunching to the maximum extent it has been eliminated. So we don't want them to use Excel for listing down the credit, debit entries and all of those things. We are way past that. We want their focus more on identifying, talking to the customer, identifying any gaps potential if there are any and helping us improve the overall policy and the product. So we feel that along with AI, we showcased one glimpse of the AI adoption, which is real-time PD, real-time translation, transcript and the transcript, which is ready in our desired format. We are working on Agentic AI for CRM department for collections, where we don't have to deploy additional manpower, number one. Number two, we are working on chatbot workflows, again, for CRM and customer service, where customer queries and all of those things can be handled by the machine itself. We don't need to deploy people over there. So these are on the CRM side in terms of new initiatives for reducing TAT and increasing customer satisfaction and service and reducing the TAT and getting more data analytics into the system to help the credit underwriting team. That's the way forward.

I have questions on the NBFC relationships. One is, what would be the current average size of the AUM of our NBFC relations? And over the last 15 years, how many of -- what would be the time period or legacy of these relationships extended? Like how many would have dropped off? How many would have sustained with us? That is first part. And second is, when we say our goal of achieving INR 1 lakh crore kind of AUM, how would the NBFC piece fit in because they also would have aspirations to become much larger and maybe move out of our umbrella fold or become an independent entity. So how would you manage these relationships as we become large?

Yes. So, currently, where we add value is the smaller NBFCs, whereby their ticket size ranging from -- right from AUM of INR 50 crores to, let's say, INR 1,000 crores. So that is where the majority of the portfolio sits. And secondly, yes, you have marked correctly that once they grow beyond the size, then they are not with us. But what we do is we are continuously adding new NBFC partners if they are -- their products are in alignment with our products and other parameters are also okay. But to address this, right now, we have -- what we are focusing upon is that we are focusing more on our direct retail business model. So going forward, what right now, it is -- the NBFC portfolio is contributing around 34%, 35% going forward within the next 3 to 5 years, it can be 25% to 30% as well.

And I just want to add to that even when they grow, what happens is if you look at our lenders list, there are 44 lenders, right? And there are like 6, 7 NBFCs in that. So even if these guys get bigger, the nature of business is such that you will have to constantly be aligned and keep some exposure with entities -- various entities apart from private PSU banks as well. So we will get opportunity to work with them. We can also work at final rates. We can also work at competitive rates. So for them in their overall liability mix, if we are 3% and if we are charging maybe 200 bps higher than their cheapest cost of borrowing, I don't think that, that will make any marked impact on the profitability. But the relationship that we will have with them of continuous funding is something that they will value much more than the 200, 300 bps that we charge higher than maybe their cheapest source of funding.

We talked about the risk monitoring framework and also on the product side, the IT side, what we have added, how much of it gets replicated to the NBFC partners over a period of time. So like the value addition which we are creating in our business, are we compulsorily making the NBFC partners also copy it or they can have a different risk management and monitoring framework from our risk monitoring framework?

So from a system point of view, we are not forcing them to use our platform, but it's always been a requirement that they should have strong processes and policies and the system at their level. So as my colleague also shared, when we do the field visit, we see what kind of an MIS they are generating, what kind of a portfolio quality they are having and what kind of a process are they're having. So if they are not having a robust systems or MIS is in place, the comfort with the company is is not to what our internal process says. So we'll kind of reject those companies. So it's must to have a good MISs and systems at the company level. That is what one of the monitoring and an assessment requirement at while selecting the companies.

And these are developing. That is where the frame philosopher guide rule comes in. These are all developing companies where our risk and relationship team is engaging very closely with them to help them develop risk models frameworks to the level that we are ourselves operating at. That is where our input as a partner and not only as a lender comes in. That's the value add.

I have 2 questions. The first is for the micro enterprise loans, what percentage of borrowers would be approximately first-time borrowers? And for the borrowers who are not first-time borrowers, who are you winning the business from? And the second question is if you could throw a little more -- this is mostly to Mr. Kamlesh Gandhi. If you could throw a little more light on succession planning. And besides Mr. Dhvanil Gandhi, if there are any more promoter group personnel in the management?

So [indiscernible] will be taken by my colleague. On the succession planning, we have Dhvanil in the business. And the rest, my daughter is not in the business. So Dhvanil and considering only Dhvanil is a part of the promoter group, I think I'll not be doing justice to the people who are working with me since more than 25 years. So they are also the part of the succession planning in running the company, maybe not only the ownership. So the focus is around Dhvanil, and he'll be actively participating going ahead.

From NTC standpoint of view, the ratio ranges from 5% to 7% where those are new to credit kind of a customer. These days, more of or less these kind of borrowers are taking some kind of loans from other NBFCs or banks. So broadly, we are seeing that the ratio of NTC is gradually reducing day by day. So at present, it ranges between 5% to 7% for our MSME kind of borrowers.

Who are you winning the business from...

So the market is reasonably quite big. There are multiple players who are operating in the same space. So we are also having our own processes. We already explained to you that we have a field team in place who source the customer, do the different kind of activities at field level to generate and source this business. So that is how the process.

And to add to that, generally, say us onboarding our borrower is not us winning a borrower is not somebody else losing a borrower in this scenario because what happens is that different companies have different policies, as you would have seen in the MSME case, there are multiple borrowers -- there are multiple lenders who sit on the balance sheet even of a small borrower. So it's not that if customer borrows from us, we have fulfilled his 100% requirement or if he borrows from somebody else, they have fulfilled his 100% requirement. Generally, what we have seen is, as Nishant said, one 2-wheeler, one consumer durable loan, 2 or 3 working capital loans is something that we are regularly seeing now in the MEL and the SME space, borrowers' balance sheet. Sourcing is direct, yes. If I understood that correctly. And we have 1,000 people in MEL for -- at the FOS level.

Request you kindly identify youself before asking the questions.

This is Pratik Chheda from Guardian Capital Partners. So your salaried personal loan segment has now sort of becoming much -- more and more meaningful, almost around 10% of your book. Your GNPAs in that -- how has the GNPAs behaved in that segment, first of all? And second, the question is that your provision coverage ratio is around 25% in that segment specifically. So just wanted to understand how have the LGDs moved in your experience, how have they moved? And do you plan to increase your provision coverage in this segment going forward?

So from an LGD perspective, so one thing is that this -- there is a large portion, which is sourced through fintechs. So there we have a cover of DLG, which helps us in keeping LGDs lower. Yes, there is a more or less a default ranging between 3% to 4% as we have seen in the -- at the industry level. And that is get covered by the DLG is provided by these fintech companies. So that is why the LGDs are slightly lower in comparison to other products here in this segment.

So the PCR is adequate as of now?

So as of now, it's -- the PCR or the LGDs are calculated based on our historical data, based on our modeling. So that is giving the result of 25% as on date. As we keep on getting more data and based on that, if there is any change, it keeps on reflecting in our modeling. So it's not a human intervention which builds the LGDs or the PCR. It's a robust system or a model which has been adopted by the company and basis that the PCR or the LGDs are calculated and factored in.

I had a question on your capital consumption. So just wanted to get a better understanding for MAS to grow at 20%, 25%, ROEs of 15%, what kind of capital consumption is required every year? And if you look at the history of MAS, we have been very conservative in raising capital coming to the markets. So going forward as well, how do you see that...

So the way we have worked out, I think during this journey of next decade, we might have to raise capital 2 or 3 times to be at around 20% capital adequacy or maybe between 18% to 20%. Currently, we are already at around close to 23%. We derisk around 20% to 25%. So the immediate capital raise can be between INR 20,000 crores to INR 22,000 crores. And then there will be one more or another capital raise before we reach a milestone. So there can be 2 to 3 capital raise in between.

And one more question I had on your customer journey for MEL and an SME customer. So generally, how long does that customer stay with MAS before he moves to a bank or a bigger NBFC? So what kind of retention do we see from that kind of a customer?

So MEL stickiness is much higher. So I think we will have customers who are enjoying maybe a fifth or a sixth or a seventh cycle with us now, and they have been continuous borrowers. So across the board, we see a repeat ratio of anywhere between 15% to 30%. We have strong guardrails on when we can entertain again after giving a loan, maybe 12 months, 18 months, we have to see that repayment track record. After that, we will entertain again for a top-up loan or a fresh loan. But MEL is pretty sticky. SME, higher ticket size loans, generally, what we see is anywhere between 24 to 36 months. Maybe after that, there is a possibility of a BT out. But over there also, that percentage for us is under control currently. And over there also, we have a repeat ratio of anywhere between 17%, 18%. So pretty sticky customer this thing because the tenures are shorter, loan runs down, the requirement keeps on going up because they are growing their own revenues at anywhere between 15% to 50%, depending on the size of the organization. So they also require money consistently, continuously. So maybe we are the ones financing or maybe somebody else. But for us, we have seen pretty sticky book in MEL. SME slightly lesser than MEL because of the higher ticket size and great competitiveness from other lenders.

Just one question. So we say that we want to maintain ROEs of 2.75% to 3%. But just to get a better perspective from a product level ROE. So which kind of a product gives us more than company level and what kind of product gives us lower than a company level ROE?

So SME is a product which currently would be slightly lesser than the overall company level ROA. 2-wheeler and -- so SME, MEL would be slightly in that -- between 2.65% to 2.85% range and the others would be slightly higher between 2.85% to 3%. That is 2-wheeler, commercial vehicle, PL. These are the 3 products which are slightly higher. So average out to around 2.85%.

Anyone want to ask question can raise hands.

This is Anil Tulsiram from [indiscernible] again. I have 2 questions. First, on MEL. I think a few quarters back, it was mentioned that eventually we will move to INR 3 lakh ticket size and the growth of the MEL will be lesser than the overall company growth. So can you elaborate more on this part? And the second is, what is the strategy on the co-lending partnership with the banks? Do you think it will -- it can play a good role in reaching us in INR 1 lakh crores? Do we see -- because SMEs are finer ticket size. So there can it help us? So these are the 2 questions.

So in terms of co-lending, right now, we prefer more DA in terms of off-book transaction because DA is already which you created the portfolio and bank is also accustomed to do more DA compared to co-lending. Going forward, we see that co-lending will also pick up. Also, there has been a change in co-lending guidelines, which has come to live very recently. So all the banks are taking stress guards in terms of co-lending. And even for NBFC, we have to take a first guard in terms of how to arrive on a rate of interest, how to set a fee structure. So this is a work in progress, but we see that a combination of DA and co-lending going forward to achieve a 20%, 25% on a large scale.

NEL, we are continuously increasing the ticket size. So earlier, our cap was at around INR 3 lakhs, then INR 5 lakhs, now it's at INR 10 lakhs. So there are conscious efforts. It's a transformation. It's a phased transformation. It can't be done overnight. But if you look at our average ticket size also that the ones that we do directly, it is going up from say INR 70,000, INR 80,000 to INR 1.2 lakhs, INR 1.3 lakhs. So as the balance sheet size grows, we want to go higher on the higher curve in terms of ticket size and security maybe on all of those things. So over a period of next 2 to 3 years, you can anticipate that this average ticket size could be closer to around INR 4 lakhs, INR 5 lakhs on the MEL side from the current INR 90,000 or INR 1 lakhs, INR 1.2 lakhs that we have seen. No. It will be a combination again. We will keep on -- because that's our -- that's our value add that only based -- lending based on security would be easy lending. So we don't want to do that. We want to do a good mix of secured lending as well as cash flow-based assessment lending. So maybe the risk appetite increases, maybe what is INR 3 lakhs till unsecured, we can increase it to maybe INR 5 lakhs, INR 7 lakhs also. But it will be a combination, maybe 60-40 kind of a ratio where 60% could be unsecured, 40% could be secured. Over a period of time, I think this will settle at around 50-50 kind of a number. And also, we get sovereign guarantee covers. So CGTMSE and CGFMU are 2 sovereign guarantee covers that we take for all the eligible portfolios. So that also -- and we have taken -- so we have tasted that now wherein we have paid the premiums, we have received the reimbursements as well. And if the government keeps those schemes running, these could be secured under that as well.

Yes. This is Anuj from [indiscernible] Investments. What is the breakup between the 3 channels in SME and economics of all these 3 channels, please?

In SME, you mean the DSA, DST. Yes. So as I had mentioned in my remarks around 60% to 65% is DSA-driven business, referrals DSA-driven business, around is around -- rest is direct digital and all of those and branch walk-in and all is very miniscule, sub-5%, I would say. So that's not sizable. Majority is DSA, DST, repeat customers.

Yes. And just the economics of that?

So more or less, what happens is that whatever reimbursement that we have to do to our channel partners is part of the yield. So more or less, the economics on both the sides will work out to be the same. When we do direct origination, the cost of the direct team, the gestation period is slightly higher over there. Their efficiencies are not at the same level versus a relationship manager who manages DSA partnerships. The cost is more or less equivalent to whatever we incur in terms of DSA payouts. Almost 70%, 80% of that we have to pay to the in-house employee as maybe commission or as a part of the overall OpEx. So the cost dynamics are not that drastically different. We look at -- rather than the cost dynamics, we look at it from a different angle is that in the SME market, if we can retain the customer, originate the customer directly, then over a longer period of time, the CAC can come down. If we keep on servicing that customer maybe for 2, 3, 4 cycles, the acquisition cost can then meaningfully come down. But that is a process, I would say. The SME market, especially the ticket size we are operating in is deeply proliferated by DSAs. Customers also rely on these guys as quasi CFOs. So direct channel is a long-term planned channel, which ideally we want to take that percentage higher, but that's a process.

And maybe you partly answered the next question. Is there a number where you want to take the direct channel to in the next year?

Yes, the aspirational number would be at least 50%, 50% to 60% should be direct. Rest could be maybe partnership DSA driven. But difficult to put a time line exactly when, but over the midterm, maybe 2 to 3 years, the idea would be to be close to that number.

Okay. So there are no further questions. I think we can conclude this today's session. I would request Kamlesh sir to give the closing remarks, and then we would request all of you to join us for the networking dinner outside.

So thank you, everyone, for sparing your time. It was a little lengthy than what we had expected, but we tried to be as elaborate as possible. And I will reiterate that we remain committed to our objective what we have laid out for ourselves for the coming decade, improving, discovering, rediscovering, learning, relearning every day, strengthening the team and what all is required, and that is what we have demonstrated over all these years. Thank you for your time. Thank you for your support, and I expect that in future also. And very keen to see you again in between two, but on achieving this target, maybe with more presence and with a declaration that we have achieved it. So we look forward to it, and thank you so much.

Please join us for dinner and the team is here if you want to interact one-to-one with anybody. We all are here. Thank you.