PNB Housing Finance Limited (PNBHOUSING) Earnings Call Transcript & Summary

Dear shareholders, good afternoon, and a warm welcome to you all to the 33rd Annual General Meeting of PNB Housing Finance Limited through videoconferencing or other audiovisual facility. [Operator Instructions] I now hand over the proceedings to Mr. Sanjay Jain, Company Secretary of PNB Housing Finance Limited. Over to you, sir.

Thank you. Welcome to all the shareholders, members of the Board, dear members, Chairman, Board of Directors and other stakeholders and dignitaries present in the meeting. I, Sanjay Jain, Company Secretary of your company, welcome you all to the 33rd Annual General Meeting of the company, convened through audio conferencing and other audio/video means in accordance with the circulars issued by Ministry of Corporate Affairs and SEBI. We have the Board members, including independent directors, chairperson of audit committee, nomination and remuneration committee, stakeholder relationship committee and statutory auditors and secretarial auditors present in the meeting. Before I begin, I would introduce Board members present at the meeting. Mr. CH.S.S. Mallikarjuna Rao, Chairman of the company. He is attending the AGM from New Delhi. Thank you, sir. Mr. Hardayal Prasad, Managing Director and Chief Executive Officer of the company. He is attending the AGM from New Delhi. Kindly, greet, sir. Mr. Sunil Kaul, Non-Executive Nominee Director. He is attending the AGM from Singapore. Mr. Kapil Modi, Non-Executive Nominee Director. He is attending the AGM from Mumbai. Mr. Rajneesh Karnatak, Non-Executive Nominee Director. He is attending the AGM from New Delhi. Mr. Neeraj Madan Vyas, Non-Executive Director and Chairman of Credit Committee of Board. He is attending the AGM from Indore. Mr. Nilesh S Vikamsey, Independent Director and Chairman of Audit Committee. He is attending the AGM from Pune. Mr. Chandrasekaran Ramakrishnan, Independent Director and Chairman of Nomination and Remuneration Committee and IT Strategy Committee. He is attending the AGM from Chennai. Mr. Sudarshan Sen, Independent Director. He is attending the AGM from Mumbai. Mr. Ashwani Kumar Gupta, Independent Director and Chairman of Stakeholder Relationship Committee. He is attending the AGM from Delhi. Dr. Tejendra Mohan Bhasin, Independent Director and Chairman of Corporate Social Responsibility Committee and Risk Management Committee. He is attending the AGM from New Delhi. Ms. Gita Nayyar, Independent Director. She is attending the AGM from New York. Thank you. This is to confirm that the requisite quorum as required under the law is present at the meeting through video conferencing. Participation of members through video conferencing is reckoned for the purpose of quorum as per the circulars issued by MCA and SEBI and Section 103 of Companies Act 2013. Therefore, I declare the meeting as validly convened. Members who have preregistered themselves as speaker will be allowed to speak when their names are announced and requested to speak. The audio and video mode will be open for them accordingly. Members may ask their queries through -- during the meeting through communication box appearing on their screen. Answers to the queries will be given suitably in the last. The recorded video of the proceedings of the meeting will be available on the website of the company and NSDL. The transcript of the AGM will be uploaded on the website of the company. General instructions. The company has sent the annual report and the notice of 33rd AGM to all the shareholders on their registered e-mail addresses available with the company, RTA and depositories and to all other persons who are entitled for the same. The same is also available on the website of the company and stock exchanges where the securities of the company are listed. Members may note that the facility for joining this meeting through video conference or other audio/video means is made available for the members on a first-come first-serve basis. The company has received requests from a few members to register them as speakers at the meeting. Accordingly, members who have preregistered themselves as a speaker will be allowed to speak on the announcement of the floor for questions-and-answers. Also, the members who have missed the opportunity to drop their requests at the registered e-mail address, as given in the notice earlier of getting themselves registered, now may ask their queries during the meeting through communication box appearing on their screen. Answers to the queries will be given suitably. I also draw the attention of the members to the fact that the requisite registers and all other documents as referred in the notice are available for inspection electronically. During the AGM, members seeking to inspect such documents can also send their request to [email protected]. May I now request Mr. Ch.S.S. Mallikarjuna Rao, Chairman of the company, to take the proceedings further.

Yes. Good afternoon, and thank you, Mr. Sanjay. Dear members, I welcome you all to the 33rd Annual General Meeting of PNB Housing Finance Limited. It is a pleasure to connect with you all, although we are meeting virtually. On behalf of the company's Board of Directors, I would like to thank you for taking time out to join us today. Dear shareholders, it gives me immense pleasure to address you as the Chairman of your company and present this 33rd annual report and consolidated financial statements of PNB Housing Finance Limited for the financial year ended March 2021. The COVID-19-led pandemic which unfolded during the last quarter of financial year '19/'20 had unprecedented impact on human life as well as economies across the globe. The complete lockdown witness during the first quarter had a deep impact on the economy and lead to steep fall in domestic output. Where series of measures taken following the unlocked phase helped the economy recover in the second half of the year. However, the pace of recovery was impacted again by the second wave which resulted in localized restrictions in movement and in economic activities. The health care and the frontline workers have been the pillars of support during these challenging times, and we are forever grateful to them for their unconditional services. At PNB Housing, we supported the government's initiatives to help individuals and businesses by implementing measures like moratorium, partial credit guarantee scheme 2.0, emergency credit line guarantee scheme and also participating in specialty finance facility, targeted long-term repo operations, deferment of interest on working capital facilities, among others. The RBI took decisive steps to ease the monetary policy to help the economy recover from this unprecedented shock. There have been subsequent cuts in repo rates to support liquidity. The RBI pushed more than INR 2.7 lakh crore through open market operation purchases between February 6 and December 4, 2020. Targeted long-term repo operations for 3 years' tenure of a total amount of INR 1.13 lakh crore for investment in corporate brands, commercial paper and nonconvertible LCDs, in addition to injection of INR 1.25 lakh crore through long-term repo operations were conducted between February and March 2020. Growing opportunities for the housing finance companies, while the housing demand was deeply impacted during the first half of 2021. The situation improved in the second half owing to the pent-up demand, falling interest rates and the extension of credit subvention scheme for the affordable housing segment. Post-pandemic, there has been an incremental need for owning home rather than renting out. The cumulative growth in on-book portfolio of HFCs for 9 months in the financial year 2021 that is up to December '20 versus March '20 stood at 2%. However, the second half of the year witnessed recovery in demand, leading to a gradual increase in disbursements nearing the pre-COVID levels. The total housing credit increased from INR 21.1 lakh crore as on 31st March 2020 to INR 22.1 lakh crore as of 31st December 2020. The disbursement started picking up from Q2 of financial year 2021 onwards and overall on-book housing loan portfolio of NBFCs, HFCs and banks is estimated to have reached INR 22.1 trillion as on December 31, 2020, supported by portfolio buyout. Banks continue to outpace the disbursement growth. The overall HFC credit in India is estimated at INR 11.3 lakh crore as on 31st of December 2020, with exposures across home loans, loan against property, construction finance and lease rental discounting. Driven by robust demand and liquidity support for its bankers, depositors, debenture holders and national housing bank, the portfolio growth in the affordable segment remained higher at 8% in 9 months during the financial year 2021. Finance growth of 18% in financial year 2020. With unwavering demand, the segment is expected to continue growing at a faster pace than the overall industry. The second wave has slowed down the recovery for the overall economy, including the real estate sector. However, with the accelerated vaccination program to inculcate the -- inoculate the population in driving the hope for a faster turnaround with major global rating agencies and exports anticipating a double-digit growth for the economy, evolving with a dynamic environment. While we have remained cautious during the year under review in terms of new business, we utilized this time to sort out a new strategic road map, which helps bolster our position in the industry in the coming years. We have accelerated our digital journey and embarked on contactless customer onboarding and disbursal, one of the first in our sector to do so. We have sharpened our focus around the affordable housing segment and created a dedicated product and infrastructure to help strengthen our presence. We are leveraging the power of digital and analytical tools to strengthen our processes, including recovery and risk management and to create a much stronger institution going forward. We will continue to serve our customers and help fulfilling the dreams and aspirations of owning a house for millions of Indians, remaining stedfast. Even with the contraction in the economy in the same fiscal year, your company has focused on retail business, portfolio quality, recorded a decent income, which translated into 44% year-on-year growth in profit after tax. This became possible due to the efforts of all the stakeholders and efforts of employees of the company who have worked throughout the year in COVID cyclone. Distribution strategy, technology, customer centricity and corporate social responsibility are your company's key strengths. The company has pivoted its distribution strategy around an array of products that helps to drive sustainable growth in business. The hallmark of our product booking is innovation, affordability and flexibility. With the changing paradigm in the housing sector, our strength lies in our efficiency to underwit all categories of customers and nurture strong relationships with our business partners and stakeholders. With our retail focus and especially in affording housing segment, we remain stedfast in supporting PM's mission of housing for all. The current scenario highlights the urgent need to accelerate sustainable business environment and PNB Housing Finance is committed and prepared to lead the change and build a healthy and progressive housing finance company. I take this opportunity to thank our fellow board members for their infringing support, the leadership team and a strong team of employees for their effort to steer through the challenges and create a stronger PNB Housing Finance for tomorrow. I also wish to thank The Reserve Bank of India, the National Housing Finance Bank, the Securities and Exchange Board of India and the stock exchanges for their continued support. I'm also thankful to the shareholders for their overwhelming support during thick and thin. I expect that we are building a stronger PNB Housing Finance, which will add significant value in the coming years. Thank you very much. Now I would like to request the Managing Director and CEO to apprise the shareholders regarding the performance of our company.

Thank you, sir. Thank you for the message. Dear shareholders, hope all of you are healthy and safe. The last few months have witnessed a devastating second wave of pandemic affecting India and many other countries in ways that are more severe than the first. The human cost of last few months is incalculable and across societies, there has been a deep impact. That said, things are improving rapidly with timely restrictions and widespread vaccination leading to a gradual return to normalcy. We all hope that this happens sooner than later. On behalf of all of us at PNB Housing Finance, I would also like to pay my tribute to all health care professionals and frontline workers for their relentless and selfless efforts at this time in service of the nation. Naturally, such a worldwide crisis has seminal economic impact as well with almost all economies going into decline and recovery slated to be gradual one. The pandemic and the subsequent lockdowns also posed a new set of challenges for the entire housing finance industry, which was already struggling with liquidity constraints post the NBFC crisis of 2019. Despite these unprecedented challenges, our people demonstrated exemplary grit and determination and countered the adversity with courage. Collectively, we ensured that the crisis brought out the best we had to offer, and we're able to protect our businesses during these testing times. We adapted well and responded with a calibrated strategy. Our multipronged approach began with activating the business continuity plan. We ensured health and well being of our employees and took steps to our continuity and coordination even in a work-from-home scenario. As new businesses remained muted during the first quarter, the teams were mobilized to engage continuously with customers, resolve their queries and address any needs and concerns. We aligned our collections and operational strategy, keeping in view the evolving cash flow situation of our customers through a regular follow-up and interaction. As a result, the retail loans under moratorium accounted for only 29% of our book loan book. We significantly improved our focus on collection and increased our tele and field collection efforts without inconveniencing customers. Owing to the uncertainty and economic slowdown, disbursement in the first quarter was severely affected, resulting in degrowth of 43.9% compared to FY '20. However, the housing sector received a fresh lease of life through timely interventions from the government and regulatory bodies through steps that benefited both developers and homebuyers. The rationalization of home loan rates for retail customers and builders created an upswing in the last 2 quarters of the year. This was further aided by a reduction of stamp duty, registration costs, capital gains, steps to lead, et cetera, by the government, leading to a sharp increase in disbursement in the second half of the year. The increased digitization at all levels will also be a core differentiator going forward. Our sustained investment in this area board fruit as we increased digital sourcing to 22% versus 9% a year ago. We also initiated steps to automate underwriting for straight-through processes. In these trying times, we launched various initiatives to keep our costs under control and reduced costs -- borrowing costs in line with general interest rates. Our net interest income stood at INR 2,323 crore for the year as against INR 2,308 crores in FY '20. Operating profit stood at INR 2,069 crore against INR 2,062 crore in FY '20. The profit after tax grew by 44% to INR 930 crore as against INR 646 crore in FY '20 due to cost control, efficiency and productivity improvement measures initiated by the company. Our asset quality as stressed or was stressed with a gross NPA of approximately 4.4% on the loan book and approximately 3.9% on AUM. As a prudent measure, our total provisions as a percentage of total assets increased from 2.6% a year ago to 4.1% at the end of financial year '21. Our liquidity is supported by a prudent mix of long-term and short-term borrowings, and we plan to keep adequate liquidity -- liquid investments and unutilized lines to meet the gaps. Cash and cash equivalents were INR 6,969 crores as on March 31, 2021. Our leverage profile has improved with a gearing of 6.7x as on March 31, 2021, compared to 8.6x a year ago. Higher internal accruals and relatively lower risk rates for smaller ticket loans formed apart of our portfolio rebalancing strategy, which led to increase in our capital adequacy ratio. Our CRAR is comfortably over regulatory limits at 18.73% with a Tier 1 adequacy of 15.5% as on March 31, 2021, as compared to 17.98% and 15.18%, respectively, a year ago. We have realigned our strategy in favor of retail businesses as we have built significant expertise around self-employed and salaried customer segments, while reducing our exposure in the corporate segment. Smaller ticket loans today account for 96% of our disbursements. Our Unnati loans are proving to be a niche, powered by a differentiated distribution network, underwriting capabilities and customer service. Our focus is on 3 major areas that comprise strengthening the core, digital drive and accelerated growth. This agenda consists of 7 focus areas around management, capital, risk management, cost optimization, digital drive, retail-focused lending and affordable housing segment growth that will help grow businesses, strengthen risk management, increase profits and create value for all stakeholders. This, along with our focused approach towards affordable customer segments, will be our agenda over the medium term and help the organization become stronger. The company is fast evolving as a technology-led company in the housing segment. Digitization and innovation are 2 attributes that are transforming us from being just a lender to a digital solution provider for customers. With the introduction of new-age technologies such as artificial intelligence, machine learning, robotic process automation across the value chain, we are achieving improved process control and efficiency. We have leveraged technology by launching our digital acquisition platform, Ace, our flagship mobile app for contactless application and onboarding. Our customer centricity is a core differentiator and is central to the diverse home and nonhome loan products portfolio that we offer to our customers. Our value-based approach and high governance standards enable us to put customer interest before our own. We continue to sharpen this focus through proactive upskilling initiatives for our workforce. We are leveraging advanced analytics and new-age technologies to accelerate an organization-wide digital transformation with the intent of improving our customer service and value proposition. Apart from our digital onboarding platform, technology has redefined the way our CRM works and has improved that during the year. We provide our customers with an omnichannel and seamless experience through branches, customer care centers, mobile application, social media, et cetera. Our efforts are augmented using advanced analytic tools and predictive analytics to forecast customer needs for better customer service. Care for the community is an integral part of our ethos and culture. During the year, our CSR activity stores contribute INR 22.7 crores to improve the lives of 2.5 lakh-plus beneficiaries. These contribution extended from skilling programs and for their children through investment in health care and access to formal education. As part of our efforts to facilitate inclusive growth, we work tirelessly with construction workers, an important stakeholder in our ecosystem whose well-being and growth we are committed to. Besides, we also have programs that cover water conservation, research and innovation for betterment of lives. I'm delighted that our CSR arm to Health Foundation has commenced a long-term infrastructure project for water conservation in water-stressed areas of Rajasthan, which is the first of many similar initiatives. During the pandemic, we contributed our efforts to contain the spread of the virus. It included installation of medical equipment such as CT in a box at a major hospital, which helped prevent the spread of viral infection within the hospital, protecting patients and staff. We also extended assistance to leading medical institution and support -- to support their research and development in the areas of reusable PPE material. Notwithstanding the headwinds caused by the pandemic, I feel, the challenges faced by residential real estate in 2020 have, in fact, become the catalyst in providing stimuli to the industry for sustained growth. The importance of owning a home got underscored from a consumer standpoint and with spur demand. At the same time, The Reserve Bank of India is leading the way to recovery by holding policy rates at historically low levels to initiate a cycle of consumption-led growth. The government's impetus on affordable housing and the emergency credit line guarantee scheme will continue to spur demand for home loans. The extension of the co-lending model by the RBI will further help expand leverage capacities of the HFCs and create better operating metrics for the sector. We have embarked upon a transformational journey called Project Ignite with a global concerting firm to reposition business, strengthen underwriting and collections and optimize cost. The measures undertaken will increase our digital footprints, drive efficiencies, enhance productivity and augment growth to improve ROA and ROE. In the new normal characterized by rapid behavioral changes, we expect significant traction for our business and business model. Over the years, we have continuously evolved to meet the changing profile and needs of our customers, including millennials who are looking to buy homes early in life and win even empowering customers with better options and choices. We are confident that with our strategic realignment and an experienced team, we are poised for a growth phase in the years to come. On behalf of our employees, the entire management team and the Board, I thank you for your continued and unwavering support. I'm confident that we are positioned to create significant values for all stakeholders in times to come. Thank you very much, and I request Sanjay Jain, Company's Secretary, to further -- to take -- to proceed with our agenda. Thank you.

Thank you, sir. Thank you, sir. Auditor's report since there were no qualifications, observations or adverse comments on financial statement and matters which have any material bearing on the functioning of the company, may I, with your permission, take the auditor's report on financial statements for FY 2021 as read? Thank you. Agenda of the meeting. As the notice has already circulated to all the members, may I, with your permission, take the notice convening the meeting as read? Now I would like to take up the resolutions as set forth in the Notice of 33rd Annual General Meeting dated -- notice dated August 4, 2021. There are 5 ordinary businesses listed as agenda item #1 to 5 and 3 special businesses listed as agenda Item #6 to 8. Agenda #1. For ordinary resolution for adoption of audited stand-alone and consolidated financial statements of the company for the financial year ended March 31, 2021, together with reports of the directors and auditors there to. Agenda #2. For ordinary resolution, the appointment of director in place of Mr. Ch.S.S. Mallikarjuna Rao, DIN 07667641, who retires by rotation and being eligible, offers himself for reappointment. Agenda #3. For ordinary resolution, the appointment of director in place of Mr. Sunil Kaul, DIN 05102910, who retires by rotation and being eligible, offers himself for reappointment. Agenda #4. For ordinary resolution appointment of Mrs. T. R. Chadha & Co, LLP, Chartered Accountants as a Joint Statutory Auditors of the Company for a period of 3 years. Agenda #5. For ordinary resolution appointment of Mrs. Singhi & Co., Chartered Accountants as Joint Statutory Auditors of the company for a period of 3 years. Agenda Item #6. For special resolution to authorize the Board of Directors to borrow funds by issue of bonds to stock nonconvertible debentures or the face value aggregating up to INR 35,000 crores. Agenda Item #7. For ordinary resolution for approval of material-related party transactions with Punjab National Bank being a related party. Agenda Item #8. For ordinary resolution for the payment of commission to independent directors and nonexecutive non-nominee directors of the company. [Voting]

Before we proceed, I would like to inform the members that in compliance with the provisions of the Company's Act 2013 and SEBI listing obligation and disclosure requirements, Regulation 2015, the company has provided the facility to cast the votes electronically on all resolutions set forth in the notice. Members who have not cast their works electronically and who are participating in this meeting will have an opportunity to cast their votes during the meeting through the e-voting system provided by NSDL. Members can click on board tab on the video conference screen to avail this feature. E-voting is active. Members may please note that there will be no voting by show of hands. The company has appointed Dr. S. Chandrasekaran, filling in Mr. Rupesh Agarwal, filling in Mr. Shashikant Tiwar, Partners of Mrs. Chandrasekaran Associates, Company Secretaries, New Delhi, as scrutinizer for scrutinizing the electronic voting process in a fair and transparent manner. The combined results of remote e-voting and e-voting at the AGM will be declared after the report of scrutinizer receipt. The results declared, along with the scrutinizer's report shall be placed on company's website, www.pnbhousing.com and on the website of NSDL, www.evoting.nsdl.com, and communicated to BSE Limited and National Stock Exchange of India Limited. Thank you.

[Operator Instructions] Over to you, sir.

To avoid repetition, the Board will respond to the questions at the end once you have asked your question. You can mute and continue to watch the proceedings. I would like to welcome the members registered themselves as speakers.

[Operator Instructions] We take our first shareholder, Santosh Kumar Saraf.

[Foreign Language]

[Foreign Language]

Our next shareholder is Yashpal Chopra.

Am I'm unmuted? Am I'm unmuted?

Yes, sir, we can hear you...

[Foreign Language]

Honorable Chairman sir. Sir, I'm Yashpal Chopra calling from Delhi, client ID 82570454. Sir, I feel it's my moral duty, ethical duty, just to complement and congratulate the management, our Chairman, our MD and the financial wizards, Board of Directors, our CFO and the Company Secretary for getting as a grand performance of the company for a period of only 6 to 7 months. The performance was so much or call it, excellent even if I compare it with the previous year because there was all round growth in turnover, PBT, PAT, ROC, EPS, everywhere there was a grand performance. Numbers were quite good, versatile. But sir, at the same time, in spite of all those good numbers, investors have been deprived of this dividend. That is a point which is pinching to us. So anyhow, that will be a financial strategy and you people are the wizards of finance department, so you must be knowing it better. Sir, the second point on which I want to congratulate the management is that the controversy caused by our SEBI on the issue where our management was making all the efforts for the liquidity and SEBI was there to put the hurdles over there. And in that game, in that battle of -- let's say, is or either we have won at this tribunal level and even we have got the clearance from the CCI, so that is a matter of pride for us. And I know I don't -- I'm hopeful that even our -- even at the Supreme Court we are going to win because here the entire interest is that of the investors, where the interest is whether the liquidity for the organization. So that is the main objective. So that is why I'm very much hopeful that we are going to win. Actually, I wanted to raise the query as to what is the present status of that Supreme Court dispute? But I know being myself, I'm an advocate, dealing with these corporate affairs, I know the matter is sub judice and I cannot expect anyone to give a reply on that. So that is why, that query is not judged. So sir, I will just tell you, sir, that I'm very, very much hopeful that the coming times means the current performance of this year is certainly, definitely far better because of 2 things. The first is that there has been all round increase in the real estate business. Mean, there was -- that share market data, which is there -- the strength of the company says that real estate business is picking up like anything. And that means that indirectly or directly our companies will be gaining after that. And the second thing is that the fear of that pandemic, fear of that corona that is waning out because now we have learned how to live along with the corona because now we have to follow those protocols of protection, safety. And because of that thing, we will -- our economy will just be on the raise. The time of stoppage and the time of hault that is gone and so our coming time will be definitely, definitely better. And the third point is where the liquidity point. We are very much sure that before the end of this financial year, our company will come up with their products or recollection of liquidity and all that through the presidential issue or QIPs or through the settlement of this controversy. So before I wind up, I must thank the corporate governance under Mr. Sanjay Jain and his team, Madam Bhatia and Mr. Vaibhav. So they all need to be -- and they all deserve kudos because they are maintaining a very, very nice relation with the shareholders. They are the bridge of solid relationship between the management and the shareholder. So that is a matter of pride. And before I wind up, I pray God to bestow positivity on you all from the top to the last men in the organization, so that if they are safe, if they are positive, our company definitely will be positive, and our company will give the positive results and that was being -- directly or indirectly that will grow for the investors, grow for the company. Best of luck. Thank you.

Our next shareholder is Chetan Chadha.

Can you hear me, sir?

Yes, sir, we can.

Yes, we can hear you.

Sir, I'm really happy to see you. Sir, [Foreign Language]

Thank you very much.

Our next shareholder is Aspi Bhesania.

Chairman sir, Directors and shareholders, Aspi from Bombay. Sir, I welcome Mr. Hardayal Prasad as MD and CEO. I hope under him, the company will scale new high. Sir, I also welcome Mr. Neeraj Vyas, Mr. Sudarshan Sen and Mr. Kapil Modi, who are appointed as Directors during the year. Sir, is any one -- any new Director from the so-called new promoters? Sir, I congratulate the management to maintain this year-on-year. Sir, deposits as on end March were INR 17,129 crore, whereas disbursements were only INR 10,445 crore. So what have you done with the balance? You should reduce deposit rates, so deposits will reduce or else stop accepting deposits. The loan deposits are -- loans are 1/3 of FY '19. So when do you expect to scale that new highs of FY '19? Sir, gross NPAs of 4.44%. How do you see NPAs going forward, considering Q1 provision is only INR 160 crore, whereas quarter-on-quarter, it was INR 350 crores? Sir, our focus is on retail, but now NPAs have started increasing in retail due to pandemic and loss of jobs. Till economy does not grow, our NPAs will continue to grow. Sir, rather than fighting with SEBI and wasting time, I would recommend that you cancel the previous deal and go for a rights issue. When PNB, our parent, can renounce the rights issue in favor of anybody. Even we will tend to participate because earlier, we were just forgotten. Sir, thank you and all the best.

Thank you.

Our next shareholder is Rakesh Kumar.

So am I audible, sir?

Yes, you are audible.

Sir [Foreign Language] sir?

[Foreign Language]

Chairman sir, Board of Directors and co-shareholders and secretary department [Foreign Language]

Thank you.

Thank you.

Our next shareholder is Gagan Kumar.

Mr. Chairman, Board of Directors and fellow shareholders, myself, Gagan Kumar. My DPID is 30020611044542. I'm joining this meeting from Delhi. [Foreign Language]

Thank you. Thank you very much.

Our next shareholder is Pradeep Sood.

[Foreign Language]

Thank you.

Our next shareholder is Raju Verma.

[Foreign Language]

Thank you very much.

Our next shareholder is Sarvjeet Singh.

Hello, can you hear my voice sir?

Yes, yes, we can hear you. Please continue.

Chairman sir, my name is Sarvjeet Singh, and I'm a shareholder of your company. And my DP -- my client ID is 02090517. Chairman sir, first of all, good afternoon to you, all the Board of Directors, all the employees of PNB Housing Limited and my co-fellow shareholders. [Foreign Language]

Thank you. Thank you very much.

Our next shareholder is on an audio call, Bhupendra Singh.

[Foreign Language]

Thank you. Thank you.

Our next shareholder is Vimal Jain.

Hello, am I audible?

Yes, you're audible, Mr. Jain. You can go ahead.

Okay. Sir, I want to tell that I have full faith in the management, and I also equally congratulate the management for a good teamwork to bring down the total expenditure as compared to previous year. And I expect that this expenditure will further come down in the coming years. I have a small query that the Board has not recommended any dividend for FY '21. So in this regard, I would also like to state that with the improved scenario and with the improved expectations in the future regarding home loans, how is that company planning to reward the shareholders? So can we expect an interim dividend in FY '22 or something like that? Lastly, I would like to thank the secretary department and all the staff for making this good arrangement for the excellent e-meeting as well as for giving me the opportunity to put up my query. And I hope that the next time then -- when we'll meet, we'll have much better and good market value of our share price.

Thank you.

Our next shareholder is Manjit Singh.

Hello, am I audible, sir?

Yes, you are audible.

[Foreign Language]

Thank you.

Our next shareholder is Ajay Kumar Jain.

[Foreign Language]

Thank you.

Our next shareholder is Santosh Bhutani.

[Foreign Language] Firstly, I would like to thanks the Company Secretary, Sanjay Jainji and [ Chandniji, Vaibhavji and ] [Technical Difficulty] well in time and I appreciate the efforts of the team who has [Technical Difficulty] strategy on the challenges and how you are addressing this issue due to the impact of the pandemic situation of second wave? And also if we have a third wave, how are we ready ourself for any similar situation [Technical Difficulty] scheme was launched last year to settle pending disputes [indiscernible] that the scheme has been a good success. Your comments on it [indiscernible] if any. Sir, [Technical Difficulty] any significant bad debts [Technical Difficulty] period. Sir, under your leadership and your continuous efforts and customer centric approach and your strong and effective steps towards creating higher benchmark and wealth creation for shareholders, I must say all this is [Technical Difficulty] because we feel that the management has much more potential than what it has delivered here. Sir, we feel that the new management is very confident in its approach and achieved a target [Technical Difficulty] systematic in its working and stronger in its commitment and [Technical Difficulty] under your leadership. [Foreign Language]

Thank you. Thank you.

That was the last shareholder in queue. Over to you, sir.

Thank you, sir. With this we conclude the question session from all the shareholders. I now request the Chairman and MD and CEO of PNB Housing to address the queries raised by the members. Thank you, sir. Chairman, sir?

No, these are all questions from the shareholders. I would now request the MD, Mr. Hardayal Prasad to reply those questions.

Sir, I think in response to Mr. Santosh Kumar Saraf who addressed some issues and asked questions on the average cost of our borrowings and other things. The cost of borrowings for FY '21 actually stood at 7.9%, and it actually declined by 34 basis points on Y-o-Y basis. Similarly, the cost, we expect the cost of borrowing to reduce going forward. And if you really look at it in this quarter of June, the cost of -- incremental cost of borrowing came down to 5.74%. This is the first time that the company was able to reduce its cost of borrowings below 7% -- below 6%, though it is for short term, but the company remains steadfast in its approach. It's been negotiating with all the borrowers in terms of all banks and others to reduce the interest rates as much as possible, though the interest rates have come down significantly and our spreads, we have been able to negotiate also. However, we continue to be very, very upbeat in terms of reducing our cost, and we expect that we will continue to negotiate with everybody. In fact, one of the ancillary borrowings that we did, and actually, I think it was in June that we did. We were able to get interest at a rate which was very, very low, and we continue to remain engaged with everybody. In terms of the vaccination, there was another question on the vaccination of employees. So almost about 95% of our employees are vaccinated at least once. And this number is actually as on -- about 10 days old, but the company has engaged with one of the leading hospital chains for inoculating all our employees. And we expect that by 31st August, all employees will be inoculated. And we are now working on the second inoculation, which is very, very important from our perspective. So that when they interact, when they go out, not only are they safe, but they also ensure that the customers that they interact with, they are also safe. There was another query on the rainwater harvesting and what we are doing. The company has only 1 property, which is in a multistory building. So there, the water harvesting, the rainwater harvesting and all other things are managed by the facilities team of that building. Otherwise, all our properties are on a rent basis [Technical Difficulty] property owners, whether they have. And as many of you would be aware, presently, I think when the approvals are given for construction of properties, rainwater harvesting is one of the most important things that is always insisted. And therefore, we assume that these things are taken care by the property owners. I think this is very important, and I also mentioned to you in my address, that the company is working in Rajasthan for rainwater harvesting. We remain very, very, I mean, conscious of the fact that it is important that we maintain the ecologic balance, and we take care of the environment. And with the same principle, in our offices, we have -- in most of our offices, we have removed the plastic bottles that used to be consumed. And we provide standard bottles, the water is provided, and we see to it that the hygiene is maintained. So the plastic and other wastes are minimized to whatever extent possible. There was another question on the women empowerment and on the women's percentage. It has gone down to some extent this year. However, the company has a policy or maintaining almost about 17%. And going forward, we are increasing those numbers. We are slightly ahead at 17.98%, but it has more to do with the COVID and other impacts where we have seen a large number of women employees leaving and taking care of other things. However, as a policy, we remain very, very committed towards the diversity angle, and we will see to it that the numbers go up. In fact, one of the directors in the company, Ms. Gita Nayyar, who's sitting here, since she has joined, she has always been asking on these things that the company must do something about it. So the company is conscious about these things. On the dividend payout, there was a question that why the company did not pay the dividend. The reason is that we were in the midst of raising capital. And on the one hand, capital was a constraint and there was this -- there could have been some more time that would have been required. The Board decided that we need to conserve capital. And that is one of the reasons that the dividend was not declared. However, in terms of the second query that was there for the interim dividend, I think that's a call that the Board will take keeping in view what is actually the capital position, what is the profitability. And at the appropriate juncture, that decision will be taken by the board, whether these things can be done. In terms of our yield on advances is another question that was there on the yield of advances. The company has a yield on advance of 10.4%. The interest rates have been falling. However, we have been able to protect to some extent, despite the fact that there have been some amount of regulatory policy changes that have been brought in when we offer interest rates and we offer interest rates, which is lower to retain the customer. Those are some of the changes that have been done. Despite that, the company has been able to keep the yield on advances at 10.4 percentages. These are some of the questions that came from Mr. Santosh Saraf. If I have missed out on something, I will -- if I'm not able to cover it in then the next questions, I will -- it can be pointed out or what we'll do is that we will send responses. I think Mr. Yashpal Chopra mentioned about nonpayment of dividend, which I have already covered and why we were now -- we did not pay. In terms of SEBI, case on preferential present status that was asked for. Many of you would be aware that post multiple hearings, SAT had pronounced a judgment on the 9th of August. The SAT judgment was a split verdict with a presiding officer favoring -- coming out in our favor, while the other justice had dismissed the appeal. In view of the conflict, the presiding judge had also mentioned that he will -- the registry will put the order for appropriate action. So that was one which is still awaited. Meanwhile, the company has been interacting very, very closely with the promoters, other shareholders in terms of the future course of action. And meanwhile, on 31st, SEBI has gone and filed an appeal with the Supreme Court. We are looking at it. The Board is meeting to review it. And hopefully, we will have a very clear picture on what exactly needs to be done. There was also a question on the liquidity of the company. The company remains extremely liquid. We are very comfortably placed with our liquidity. There is enough liquidity in pipeline of borrowing to address any commitment over the 3 months at the minimum level. It's been about 1.5 years that the company has maintained a slightly higher liquidity because of the COVID and other problems that were there. And during FY '21, the company has incrementally borrowed INR 29,000 crores, primarily through various long-term instruments, which is bank term loans, deposits, NHB refinance and other things. We have maintained a liquidity of almost about INR 6,005 crores of cash and liquid investments as on 31st March 2021, along with undrawn and sanctioned lines of over INR 3,000 crores, which we have and which we can use any time. This was a query from Mr. Yashpal Chopra. Mr. Chetan Chadha had mentioned about the preferential announcement of it. I did mention to you that this is -- it is still subjudiced. The Board is going to take up this matter. And we will come out with a very clear cut view in terms of how we are going to come out, what is -- how we're going to address some of the queries that have been raised, the split verdict and what is the way forward for the company. It remains a fact that the company needs capital, and the capital is required in whichever way it is possible. So that is -- that was one query from Mr. Chetan. And then we had a query on the deposit, the INR 17,000 crores of deposits and disbursements of INR 10,000 crores. Actually, the disbursements and deposits have nothing to do other than the fact -- that the incremental deposits go towards the disbursements. So the incremental deposits were there. There was a 6% growth in the deposits last year. But only that incremental deposit goes towards that. Otherwise, the overall deposit that remains as part of the overall liquidity and the borrowings -- the commitment, and the company already has a very large pool of assets, which are funded through various means. So that is one thing that is there. So there's a little understanding. There's a little -- I would like to bring that clarification in it. In terms of the NPAs, the company has seen a little inflated NPAs. The reason was that the company had built strong skills in the self-employed sector. The self-employed sector was one which was badly affected in COVID. And that's one of the reasons that the customers or the borrowers in that sector had definitely -- we had some issues on the NPA. So the increase in the GNPA is primarily on account of COVID-19. It's a recognized fact that it is COVID-19. However, we had a little higher numbers more because of the profile of our customers. If you -- many of you have mentioned that you have been a shareholder since the IPO, you would know that for -- the same portfolio was behaving extremely favorably and normally till about 2019 and even for some extent into 2020. And it's only after -- and it had withstood all kinds of vagaries of changes, whether it was GST, whether it was demonetization, whether it was ILFS crisis, NBFC crisis, but the COVID has impacted the company significantly. I think that is there. What the company did to respond to it that adequate ECL provisions were created, both in retail and corporate book, to absorb any unexpected shock from unforeseeable future and corresponding risk trajectory. INR 778 crores provision was created in FY '21 in addition to write-off of around INR 83 crores, primarily towards our vintage book of 3 years in retail. So I think we -- what we have done is that our ECL provisions are quite adequate, and they will take care of the vagaries. Even if -- and we have factored in that in case the delta variant strikes India once again, last few days, we have seen very high numbers in Kerala. And if that also happens, we have taken into account that we are little conservative in terms of the way the provisions are built. So hopefully, going forward, and the kind of data analytics that we have brought in into our collection machinery, we are seeing the return of normalcy, both in the collection efficiency, the telecalling efficiency. Only in the last month, we have increased it by 3% on the telecalling just to see to it that it doesn't go. I think those are some of the things that the company is doing to ensure that the numbers remain strong. Mr. Rajesh Kumar (sic) [ Rakesh Kumar ] had actually raised a question on the higher deposit rates or lower interest rates for shareholders. I think that's a suggestion that keeps on coming in many of the shareholder meetings. And that's one thing that -- which we think about it and see if that can be brought in. We definitely have higher interest rates for the senior citizens. As a practice, most of the financial institutions have special interest rates on the deposit for senior citizens. So that's one thing that we do. Once in a while, during campaign, we definitely look at coming out with some attractive offers, whether it is a processing fee or some interest rate, and these are usually done during the period of festivals and others. The company remains committed towards coming out with attractive offers whenever it is possible, keeping in view the profitability. At the end of the day, many of you have recognized that the profit increased by almost 44%. So we will ensure that we do not sacrifice those things. At the end of the day, the bottom line is important. The top line is equally important for the growth story and other things to continue. Mr. Gagan Kumar from Delhi, he mentioned about Unnati, foreclosure and other things, loans approval and processing charges. Actually, processing charges are something that we -- I mentioned to you that it's only on offers once in a while. Processing charges are important because by the time a loan is sanctioned, it is significant amount of expenditure that is done on the acquisition side, underwriting side, the disbursement and other things. There are the expenses involved. And the companies now doesn't make a lot of profit out of it. It's just ensuring that the expenditures are met. In terms of the foreclosure and other things, the Reserve Bank of India has already come out in February for not charging on the foreclosures. So there are no foreclosure charges right now in certain categories and certain categories, which are allowable by the Supreme -- by the Reserve Bank of India, we'll go ahead and do it. Mr. Pradeep Sood and Mr. Ajay Khurana from Delhi, they mentioned about the good results and other things, also about the company secretarial team. I would like to thank you for that. We will continue to work hard for you. We will see to it that value is created not only for shareholders, but all stakeholders. And it is important that the company remains strategically positioned despite all challenges, so that we create value out of it, which will benefit. And you already have seen from about INR 157 share price, it had shot up to almost about INR 400, INR 500 till March, April, and then it has gone up to almost INR 900 crores. I think that's one thing that we have [indiscernible] I think Mr. Pradeep mentioned and also Mr. Sarvjeet mentioned about the returns and other things. So I'd like to thank Mr. Sarvjeet also on this issue. So Vimal Jain, I think you said that there's full faith in the management. Thank you very much. The management continues to work hard. The governance structure is strong of the company. It continues to actually take guidance from the Board of Directors, who continue to guide the company in terms of the strategy and other things. On the operational part, the company remains strong with people with large experiences, and they continue to handle the functions in one of the best possible ways. You also asked about the dividend, but we have covered about the dividend part. And the second question was on how the company is planning for -- to reward the shareholders. I think I've mentioned to you at some stage if it is -- if we feel that there is a -- if the performance is good, we will take guidance from the Board -- we seek approval from the Board for an interim dividend and other things. Mr. Manjit mentioned about increasing the revenues and other things. Actually, we have a little depleting book, and that's one of the reasons because of the depleting, our cost of funds are a little higher than banks which have a CASA, which is current account and savings bank, where the interest rates are very low and they are able to actually quote very, very low interest rates. So the attrition of the book remains a challenge for the company. Despite that, the company not only did disbursements of INR 10,000 crores last year. But this year, it plans to increase it by almost about 40% to 50%. So once the disbursements are increased, once this attrition of the book reduces, we are very sure that the revenues and other interest and others will continue to -- will improve. And we remain -- the budget, the environment and overall conditions that are there, we hope that they become favorable, and we are able to make higher disbursement. There's one more thing I would like to point out, and that is that the company has, and I mentioned it in my opening remarks that we have decided that we are going to be a retail-focused company, with a lot of emphasis on the affordable housing. I think that remains a very good sweet spot. We already have a presence of almost about INR 3,000 crores in that area. And we are building new business models to enter those areas, which are going to give higher yields. And that -- those are some of the steps that we are going to take. In terms of bringing in productivity improvement, those are, again, some of the things that will help the company to increase it to either protect the cost or increase revenues. In respect of tie-up with developers and other things, we have tie-ups with developers, we finance costs, we have limits over there up to 15% after which we go to it. We will continue to look at good opportunities where the record is good. The delivery of the housing is on time. Those are some of the things that the company keeps on looking at it. And we will continue to look at that. There was one more question on tie-up with banks and other things. I think we have already entered into a co-lending model with one of the leading banks, the private sector banks in India. We are working with many other banks, both public and private sector, to enter into some more co-lending model. I think co-lending also will give us not only better interest rate for the customers, but it will also help in terms of improvement of other income and the revenues will improve. I think those are some of the important things that we are doing. Last year, we had -- this last financial year, we had also given some support to 1 paralympic -- there was a girl from, I think, Northeast or I think Uttarakhand. That is where we had also given some support to them. We remain committed. We do not have a very clear CSR in terms of the support to the poor because as a housing finance company, we have always concentrated on working with builders, improving skill sets, creating economic assets and all those things. But I think this is a good suggestion, and we will discuss it with the CSR committee to see if we can come out with a CSR initiative of supporting prospective Olympic, Paralympic World Championship sportsmen who can be actually supported by the company as part of the CSR. Mr. Ajay Kumar Jain, I think thanks for the wishes. We appreciate that. We recognize that you all have stood by the company. We would like that you stand by the company. We definitely are going through a COVID time, the whole economy is suffering [Audio Gap] We will see to it that we come out as a much stronger company with a change in the retail strategy, with a change in the overall book that we are looking at it and the model change. I did mention to you that we have a consultancy with an international consultancy company, which is working on it towards the underwriting piece, towards the sourcing, acquisition piece on the cost side and the collection. And these are some measures, which will help us significantly. Mr. Santosh Bhutani was -- he mentioned about strategy on challenges of COVID. I think what we have done is that, first of all, the biggest challenge was to protect our employees because [ who start their day with our ] customers. So first of all, we had started this work from home. We protected our customers significantly in terms of ensuring that they do not have COVID, but when they go out to meet, they do not actually transmit it. I think that's one. And the second one was on the inoculation also that we did, this was on the employee front, which is very, very critical. In terms of our strategy for growth and other things, the company has the skill sets, which is very, very good and strong on the underwriting piece on the salaried and self-employed. I think what we are looking at is that self-employed is one where there is a possibility of improvement on the yield and other things. So the company is working on changing a little bit of mix of the business that it does. We have already exited -- one of the biggest challenge was on the NPA from the corporate side. The company has already decided to move away from the corporate funding. So we have become retail-focused. And with this change in the strategy, in terms of affordable, where the yield is higher, I think we have gone to respond to it very, very strongly. We have created a -- we're creating, not exactly created, but we are bringing up a vertical for affordable housing. Those are some of the things that come straight away from the challenge from the government of India, which says that they want housing for all. The Prime Minister says housing for all. And I think that challenge we are reaching it. So those are some of the -- NPA remains a cause of concern for us. And we are looking at it very, very closely. We have brought in many changes in the collection. Some of them have yielded results. Some of them are work in progress. And we will see to it that this NPA increase is immediately pulled back. I think that's one of the most important challenge that remains in the company to ensure that we bring in capital, we ensure that the growth remains, we ensure that the profitability is strong, cost control measures are there, and overall productivity and efficiency parameters improve. I think these are some of the things that the company has been doing. So I think -- hopefully, I have responded to most of the questions. If there is anything...

No, if anything is there, they can send the e-mail.

Yes, sir, you can respond to it.

Yes, please continue.

Sir, I think we have -- all the questions we have responded.

Now I would like to take the opportunity to thank all of you, who have supported us doing this virtual meeting and participated in the best possible manner. I hereby declare that the meeting is closed. And you are aware that the voting processes will still remain for another 30 minutes, then later on it will be closed. Thank you very much.

Thank you, sir.

Thank you.