Repco Home Finance Limited (REPCOHOME) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Repco Home Finance Limited Q4 FY '22 Earnings Conference Call hosted by Yes Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Mehta from Yes Securities. Thank you, and over to you, Mr. Mehta.

Yes. Thank you, Faizan. Hi. Good afternoon, everyone. Thank you for joining in this call and thank you to Repco's management for giving us this opportunity to hold the Q4 FY '22 earnings call. So from the management side, we have got K. Swaminathan, MD and CEO; and other senior management team members. So now without further ado, I would request Mr. Swaminathan to give his opening remarks, post which we can take questions. So over to you, Swaminathan, sir.

Good evening, everybody. I'm Swaminathan, MD and CEO of Repco Home Finance. Thank you, Rajiv. Thank you, moderator. I have with me my entire management team, my Group Wholetime Director and CFO; and as well as the entire general managers team, along with Mr. Bala, our Head of Retail [indiscernible]. Welcome to the earnings conference call for the 3 months and the year ended March 31, 2022. This is my first time meeting you all in my new role as CEO and Managing Director of Repo Home. On behalf of the company, I extend a warm welcome to all of you, and thank you for joining us in the call today. First of all, I'm thank you -- thankful to that the quarter that has gone by was first in the last 5 or 6 quarters that don't have any issues related to COVID. We hope that things are moving forward. So positive things. The Board has approved the FY '22 financials on Monday and has also approved a dividend payment of INR 2.50 per equity, that is 25% for every share of INR 10. I should tell you that the business activity has indeed picked up in Q4 with sequentially both the loan sanctions and disbursements have recorded handsome growth. Loan sanctions increased 31% in the concluded quarter of March 2022 to about INR 652 crores from about INR 490 crores in Q3. Same way, disbursements have also increased 35% Q-on-Q to about INR 601 crores as compared to about INR 444 crores in Q3. The issue is that loan books have not moved mainly because of huge repayments and prepayments. The annualized repayment ratio, including regular repayment stood at 21% in Q4. We lost INR 466 crores worth of loans to prepayments alone during the quarter. The prepayment was just INR 248 crores in Q4 of 2020-'21. The repayment ratio for the entire financial year also remained elevated at 17.6% as against 13.1% in FY '21. On the profitability front, we have reported strong loan spreads and margins at 3.9% and 5%, significantly above our weighted levels of 3% and 4.3%, respectively. And I expect the spreads and margins to remain higher than our guided band even in FY '23. The profit before provision line, that is before provision and before taxes, has risen by about 5% year-on-year to about INR 493 crores in FY '22 as against INR 470 crores in the previous year. This is despite the reduction in the loan book. Hence, profitability has not declined. On the contrary, there is a marginal increase. The GNPA has declined 2 basis points to 6.97% sequentially. However, the NPA has fallen by 13 basis points and now stands at 4.86%. GNPA provision coverage registered a 2% sequential improvement, 32%. And the overall ECL provisions has increased 0.5% sequentially to 4% of the loan book. That said, I would be focusing on reducing NPA gradually. We earned an ROA of 1.6% and ROE of 9.6%. Though it may have fallen from the previous year, this mainly is because of the provisions made. The credit cost, that is ECL provisions, were at INR 233 crores in FY '22 as against a mere INR 81 crores in FY '21. The balance between our exposure to self-employed and salary segment stood at 51.2% and 48.8%, respectively. Similarly, the share of nonhousing loan, that is LAP, is about 19.1% of the loan book. The total capital adequacy ratio is very comfortable at 33.6%, of which Tier 1 alone is 33%. Our branch network is around 155 branches and 24 satellite centers. We would be resuming our network expansion in FY '23, maybe April of the second quarter. We have a strong liquidity to remain comfortable. We carry around INR 600 crores of cash and cash equivalents as of end of March '22. In addition, we have around INR 1,900 crores of unutilized lines of credit from banks. So our liquidity coverage ratio is comfortable at 238% versus the regulatory requirement of 50%. We plan to start -- because there is a negative carry because of deposits and loans, so we plan to start making investments at least in a smaller way in better yielding government securities. For the future, I expect the company to come back to the growth path in FY '23 with a loan growth book of around 10%. In addition, I hope that the NPAs also will gradually come down from the second half of FY '23. The NPA ratio may come down around 60 to 120 points from the present level. I will summarize the key financials. The pre-provision operating ratio has increased 5% to about INR 493 crores. The higher credit costs has alone led to a PAT decline of about 33% to about INR 192 crores. The loan book is at INR 11,759 crores. The ROA and the ROE are at 1.6% and 9.6%, respectively. Core profitability has remained strong. NPA stood at 6.97% with a coverage ratio of 32%. Sequentially, there has been a growth in NIM. There has been a growth in profit before tax and the provision. I think this all as of now. I'll be very, very happy to answer all your questions. Thank you.

[Operator Instructions] The first question is from the line of [ Akash Jain ] from [ Moneycurves ].

My question is just to understand what is happening on the GNPA. If I look at the results of all the companies, all the companies in financial services, including all the housing finance companies that have come out with results, all have shown a significant decline in GNPA numbers. And probably we are the only financial services company or HFC who has not done the same. So it's quite surprising as an investor that while everyone has shown a marked decline in provisions and nonperforming assets, we have been stuck with the same levels as last quarter. So can you please help us understand what really is happening and why are we not able to bring that ratio down?

See, it's mainly because of Q3. Q3 numbers, I think, you may be knowing. It's mainly because of the November 21 circular of Reserve Bank of India. The circular did not have any differentiation as far as identification of a NPA account, okay? So any account which became 90 days into overdue was NPA even prior to the circular. Only the issue was -- see, we were upgrading an account if the overdue as of the end of the particular month -- or particular quarter was less than 90 days. That particular thing has now been renewed. As a result, our GNPA numbers has risen in Q3. But as far as Q4 is concerned, I would like to inform there is nothing significantly that has changed. See, our additions -- or the slippages in Q4 has remained the same or, in fact, it is better than even Q3 and the Q1. Just to give you the numbers, in Q1 we slipped around INR 95 crores; Q3, other than RBI circular -- because of RBI circular, INR 277 crores was our slippages. Even without that, our slippage was around INR 113 crores. Whereas in Q4, we were able to contain the slippages to around INR 90 crores. Similarly, in Q4, we have been able to recover around INR 96 crores. As a result, the GNPA number has remained constant or slightly come down. I do not know about the other companies. And we decided not to move that -- whatever the RBI thing that we have already implemented, we decided to continue. We did not move back to the pre-RBI provision. Even though RBI permitted us to do that, we did not do that. So I think there's no need to create an…

So there has been a created a lot of provision…

An alarm as far as NPA is concerned. Yes, NPA is at the peak as of now, but gradually it will decline from the second quarter onwards.

So I understand this problem on -- of the RBI regulation and the fact that we have to -- according to the new norms, our number will look elevated. I am more worried about the provision that we are creating every quarter, right? Last quarter, because of the increased RBI norms, I think we had to make an extra provision because of the new norms. But this quarter, again, we have made a very significant provision and write-off. So I just want to -- GNPA number by itself is not a worry, but provisions every quarter is a big worry, right?

See, we have not done any write-off. Let me very clear, we have not done any write-off in this quarter. As far as provisions are concerned, I think it is better -- it will be -- strengthen the company's balance sheet if we make increasing provision -- incremental provision for the same stock. I'm not adding provision for a new NPA. I'm adding provision for my existing stock. I think over a period, this will only strengthen my balance sheet. See, as of now, we have 32% coverage my Stage 3. Over a period, we want to increase it, not significantly, but at least gradually over a period so that by end of 2023 we reach at least 50%. My idea is we need to grow, we need to increase our profit, as well as simultaneously, we have to increase our provisions so that we are comfortable on both sides.

See, I have been an investor in this company for almost 7, 8 years now, okay? So if we look at our own history of credit losses over the last 10, 15 years, we have had very low credit losses. So I'm really surprised that we want to take the provision coverage rate to 50% given that in a housing finance company and given our own track record of collections, we have hardly had any credit losses. So what is the reason that we are aggressively provisioning and trying to get the coverage ratio to 50% when our history has been fairly benign in terms of final write-offs and credit losses? Is there something much worse this time in the book than we have had over the last 20 years of our history?

Sir, let us -- let me make it very clear. We are not doing any aggressive provisioning. See, whatever provisions that are required as per the rule, that is the same thing we are doing, except some INR [ 415 ] crores. That's all. So there is no aggressive provisioning as of now. But I just want to give you an information that we are supposed to move to the IRAC provision also over a period. What is the date? I think over a period -- our provisions as per Ind AS should be more or less equal to the IRAC provisions of RBI. As of now, we are quite comfortable. But going forward, I do not want to create a shock: in one quarter we make huge provisions. So it is better that we make a gradual increase in provision so that even on a later date when we are -- our -- if at all we are meeting IRAC requirements, we will be quite comfortable. Today, my provisions under Ind AS is around INR 100 crores more than what would have in IRAC provisions. But going forward, these assets which have been classified in the third quarter will move to the DI, D2 category as per IRAC norm. Those days maybe -- there may be a requirement of higher provisions as per RBI norms. During those periods, I do not want to be found wanting. So I think prudentially, it is better that I increase my provision gradually along with my increase in profit so that I am not found wanting on a later [ date ], say, 4 sense or 5 quarter sense. I think you will appreciate my plan.

So if the slippages remain the way they have been over the last 3, 4 quarters and we all assume that we will not be hit by more COVID issues, how long do you see such elevated provisions and impact on profitability of the company? For how long do you -- should investors expect profitability would remain low because of increased provisions?

Sir, I understand you are concerned. Let me make it very clear: profitability will not become low because of provisions. My idea, I guess, let us increase profitability as well as this. See, the idea is we need to increase -- we need to increase our growth. Not a stagnant way of -- business numbers so that the profitability remains stagnant and we increase our provisions. That is not my idea. My idea is we should increase our profits by better businesses so that the profits are also more, the provisions also gradually and sequentially improve so that the profits also remain elevated. Definitely, there will not be any accelerated provisions at the cost of profits.

The next question is from the line of Aviral Jain from Siguler Guff & Company.

Sir, welcome aboard, first of all. I wanted to have -- ask you about 3, 4 issues. One is, if you could just outline your 3- to 5-year strategic plan for the company, if you have something that you're presenting to the Board or have something in mind given that you are in the system for almost 2 months now in terms of loan book growth, the segments-- hello?

Sorry to [indiscernible]. It seems voice is not clear. Can you be a bit more audible?

Yes. Am I audible now?

Yes. Yes.

Yes. My request was if you can outline your 3- to 5-year business plan of what you would want to achieve -- now that you've come on board -- into the next 2 months in terms of loan book growth rate, any segments that you are missing out on? And how would you accelerate, you said, growth and profitability? So would you look at more LAP or increase geographically? One more thing that you mentioned was the repayment rates have been very high because competition is very active. And this is something that I posed to the previous management as well that there are a number of HFCs which do a higher yield. And there could be very right borrowers, very creditworthy borrowers for us to choose from for us as in somebody is taking your good profile borrowers, you can also take somebody else's good profile borrowers who are at much higher yield. So more strategic questions, and then I have a couple of questions there on current finances.

See the plan is -- see, we have presented to our Board in April what is our growth plan for the current year. We want to grow. I do not want to make tall promises. We want to grow around 10% to 11%. We want our loan book to be around INR 13,000 crores by end of 2023, March '23. We want to grow 10% to 11% to around INR 13,000 crores. This is the broad outline as far as the thing is concerned. The NPA we want to contain and we want to bring down at least by INR 100 crores to INR 150 crores. We have a challenge of restructure loans that is coming up in the second quarter. So taking that into account, we have made a moderate NPA reduction of around INR 100 crores as far as NPAs are concerned. And along with the growth, we also want to create a proper atmosphere, proper systems and controls so that we move gradually and we move systematically so that there are no issues down the line. These are all the broad areas which have been presented to the Board also. And I understand your concerns. Yes, we have 1 or 2 issues striking the company that is only related to asset quality only because of this RBI circular. We are addressing it. And only by cost and interactions -- we have a big team and we want to increase the team also so that we want to have some 40, 50 people exclusively for collection so that not only NPAs, the likely NPAs are also brought down. That is a broad thing. Another thing -- we have to educate our borrowers See, these borrowers have been rather -- or over the years, they have been asked to pay only the limited sum of the EMI. So the whole -- new borrower used to pay only the EMI, one EMI or something, perhaps his over dues are 2 or 3 installments. So slowly and gradually, we are educating the borrowers so that he starts paying more. This is one thing. And as I said, we also have an exclusive collection line. So this one to address the asset quality. The other concern, as you rightly pointed out, is regarding the takeover. So whatever growth we are making -- see, I should say that even in the current quarter, we have made substantial sanctions as well as disbursements. In fact, 45 days, we have made enough disbursements that could be the entire quarter of the last 2 years. Whatever was done in the whole quarter, we have been already in 45 days. But this takeover is remaining a concern because of which our book is not growing. That is the problem. Yes, we are addressing it. We have asked our field people to meet all the existing customers to understand their concerns so that these takeovers are limited, minimized. That is one issue. And wherever reduction in interest rates are sought for by the customer, yes, we are addressing. We are agreeing to it so that it doesn't go below our MLR and we are not out of pocket. Third one is we are planning to introduce CIBIL-uated products so that a person with a better CIBIL score or who has improved their CIBIL score after coming to us, we are able to fund him more so that his temptation to go to another organization is limited. All these things we are addressing. Hopefully -- it is gradually decreasing. I should say in the last quarter, our 3 -- that is Stage 2 was around INR 460 crores or something, which is coming down gradually. In the current month, it is around -- only around INR 60, 70 crores. I do not have the exact number, but very less. So gradually, things are coming down. I think I will be able to address -- the management will be able to address the takeovers as such.

And from a system readiness perspective -- I know the previous management was working on overhauling the loan management system from an IT perspective. How is that moving along? Are you satisfied? Is there substantial changes need to be made for you to implement your strategic plan?

See, the IT system is already -- the change is already under implementation. Hopefully, by September, our new system will be in place, a new element system will be in place Along with this, the peripherals are also being implemented. The other related systems like HR, risk, all these things are also getting implemented. So hopefully, by September quarter, the new system will be in place.

And if I were to do a apples-to-apples comparison, if we ignore the RBI circular, how are the loan buckets behaving as in compared to last year at the same time, say, March '21? How much is your 90-plus? How much is your 60 to 90 and 0 to 30? If you can just give some breakup -- broad breakup of the book so that this…

I understand the question. I don't have the exact numbers. But broadly, I think it has come down slightly. The bucket too has come down. It was INR 1,000 crores or something. It has come down. It is coming down gradually. And we are addressing it vigorously.

Yes. Any broad numbers you can give? 90 plus, it was 4.1%, I guess, last March. How much it is…

I'll have to give you post the conference.

Sure. Okay. And anything about segments that you are missing out on? Or the current underwriting policy is good enough for you to -- I mean what's holding back this growth, if I may ask that?

This broadcast -- can you please repeat this again -- your question?

I'm saying what is it that is holding back the growth as a lot of NPAs and other things are -- also because the loan book is not growing. So I just wanted to understand as to what is it that -- are you not targeting a particular profile of customers? Or there are very strict underwriting norms which has led to this lack of growth other than the takeover issue?

See, put -- maybe I do not want to go into the past. Maybe we were targeting more high-risk, high class customers with a very good score and all that. And there, the competition is too huge and we are competing with a giant with a lower cost. Maybe that was one of the reasons why our loan book was not growing. Now we are more practical. We know where we are. Of course, along with the quality -- along with the numbers, we are also seeing the quality. Hopefully, things are -- things will change. In fact, things are changing. I should say things are changing. The entire field -- I visited the branches and the regions of ours. Every [indiscernible] -- hopefully, things will change in the current year.

The next question is from the line of Sanket Chheda from B&K Securities.

We understand this quarter's provision, as you said, maybe was to strengthen the balance sheet. But what credit costs we expect in FY '23? That's one. And you said that we would see asset quality improvement starting Q2. So on the current [Technical difficulty]…

Sorry to interrupt you Mr. Chheda. The audio is not clear from your line.

Is it clear now?

Yes, sir. Please go ahead.

Yes, now it's clear.

Yes. So the first question was what will be the FY '23 credit cost guidance for you? And secondly, you mentioned that you would see the steady improvement starting [ Q2 ]. So will there be further [Technical difficulty] Stage 2 in first quarter that you expect…

I'm sorry to interrupt you, Mr. Chheda. The audio is breaking from your line, sir. Please check.

Okay. It's okay. I think asking on the asset quality. See, we have planned to bring down the NPAs from around INR 800 crores as of now to around INR 700 crores by March '23. That is the thing. See, there is nothing significant as far as the slippages are concerned. Only one issue that -- what to inform is related to the restructure portfolio of around INR 600 crores. I think that we had already given in the previous concall. Those segments are falling due for payments in the second quarter onwards. As of now, there is no worry. Let me be very clear, as of now, there is no worry. As of now, things are doing well. Around INR 200 crores, INR 300 crores already they have repaid. They are all in line. But going forward, there may be some small slippages from this particular portfolio. So anticipating that only, we have given a moderate reduction in NPAs only by around INR 100 crores, even though we could have presented more.

Okay. And what would be the credit cost, sir, for FY '23? Any ballpark number that you can guide?

Around INR 80 crores to INR 100 crores.

Okay, sir. And sir, any change in strategy [Technical difficulty] we have been [Technical difficulty] despite the [Technical difficulty] coming back [Technical difficulty]. So how do we plan to [Technical difficulty] book in FY '23? And do we have any growth number per se which we will work on?

See, the voice is not clear.

Mr. Chheda, the audio is breaking from your line. So I request to please rejoin the question queue. We'll move on to the next question from the line of Darshan Deora from Indvest Capital.

I had a question regarding the slippage -- I mean, regarding the provisions of INR 61 crores. So in the commentary, you guys mentioned that in Q4 the slippages as well as the recoveries were almost at par, right? I think you mentioned a figure of, I think, INR 90 crores and INR 86 crores. So this provisions of INR 61 crores, where is this number reflecting in your -- in that GNNPA (sic) [ GNPA ] slide in your presentation?

This is the operator. Sir, we are not able to hear you.

Yes. See, in Stage 3 -- we are saying [ it looks around like ] INR 16 crores -- INR 60 crores. In Stage 3, around INR 15 crores. In Stage 2, for restructure also we have increased our position. So the INR 60 crores has gone between the Stage 2 and Stage 3.

Okay. So about INR 15 crores in Stage 3 and about INR 45 crores then in Stage 2, essentially?

Yes. Correct.

The next question is from the line of Rishikesh Oza from RoboCapital.

Sir, my question on the -- earlier -- in the last quarter, we had added provisions and -- as per the RBI circular and the -- so just wanted to know -- like you have been taking a lot of provisions in this quarter. So I wanted to know whether there is more [Technical difficulty]…

Sorry to interrupt you, Mr. Oza. The audio is breaking from your line, sir.

Hello?

Yes, sir. Please go ahead.

So my question is [Technical difficulty] For [Technical difficulty] -- for us, NPAs has peaked out…

Sorry to interrupt you again, sir. Mr. Oza, the audio is breaking from your line, sir. We are not able to hear your audio clearly.

Am I audible now?

Now you're audible, sir.

Okay. I was asking if the NPA issue, is it structural now? Or have the NPAs peaked out?

I can say the NPA issue has peaked out. NPA has peaked because -- in second -- first quarter itself. But there will be a normal slippage of -- I think you should understand, there will be a normal slippage of -- for any organization of our -- like ours. So there is nothing special. Even that NPA peak that was there in third quarter was not because of any new asset concern. It's only because of the implementation of the new ruling from RBI. As of now -- and as of now, there is no concern as far as asset quality is concerned. If you still have the same norm -- only thing is because of the RBI circular, we had to declare higher NPA now.

Okay. And if I heard correctly, you said -- for FY '23, you said credit cost of around INR 80 crores to INR 100 crores, right?

Yes. Also…

That would mean that from the next -- somewhere in H2 of [ FY '22 ], we should be back to our normal profit, right, of INR 80 crores to INR 100 crores?

It should be, sir -- it should be, sir. I'm just being conservative. I'm saying that by end -- 2023, we will be better off. But as you see, by -- maybe by second quarter itself, we will be able to cover the entire thing. But I don't want to give false numbers to -- better to take it to fourth quarter.

Okay. And sir, if you could comment on what is the branch expansion plan?

Yes. Sir, this quarter, there may not be much, 1 or 2 only. But from second quarter onwards, yes, we already have -- concerning certain branches which have been approved by our Board. And we will be adding another 5 or 10 maybe by the year end. So it will be gradual over the various -- for the whole year it will be gradual.

The next question is from the line of M. Agarwalla from PhillipCapital.

Yes. Sir, I have a couple of questions. One is can you quantify your Stage 3 -- asset and provision on Stage 3?

Yes. INR 820 crores. INR 261 crores is the provision.

Sorry, sir, I missed that number. Can you repeat for me?

INR 820 crores [ assets ]. Provision is INR 261 crores as of now.

INR 261 crores. And sir, sorry to be repetitive, but it will be very helpful for all the investors present in the call if you can provide us a milestone which you want to achieve in terms of growth in next 1 year, 2 year? That's one part. And second part, if you can be more elaborative in terms of how do you want to restrict the prepayment, which is very high in your organization? These are the 2 parts. If you can clarify, that would be very helpful.

See -- okay, don't -- see, this year I'm more conservative, so I'm making a growth expectation of only around 10% to 11%. So from around INR 11,900 crores or 12,000 crores, we want to move to a maximum of INR 13,000 crores by March '23. Maybe '23-'24 and '24-'25, we would be accelerating, as far giving the broad number as far as growth is concerned. Addressing the takeover issue that you were talking of. Yes, I told -- I'll repeat. One, we have asked -- see, the customers are not being met. Unlike other financial institutions, the customers here are one-off transactions. The come, they avail a loan and they are making payments through ECF and all that. So the customers are not being met. So possibly, these customers are moved up other institutions who are also in the same field by interest rate and all that. So the first instruction that I have given to our field is: "Please meet all the existing customers. Maybe he may be a 10 years old customer or a 5 year old customer, he should be met. The chief concerns should be heard. Wherever it could be redressed, let us redress. See, possibly, he may come up with a request like interest rate. He may come up with a request like top-up loans and all that." So we are addressing this issue. We are developing a product, which is: CIBIL-based top-up loans which could be given for the same customer if his CIBIL score has increased. What is happening is the customer when he enters our company, his CIBIL score may not be good. Maybe -- let us say it 500 or 600. Maybe because of his strong repayment in our company, his CIBIL score improved to -- from 385 to 795. Based on this, he is being sanctioned by other institutions, that too with a cost [ that is attractive ] compared to ours. So these organizations try to take over. Because of that, we are losing. This is the type we found on the field. So we are trying whether we can device our own products so that these customers can be met by ourselves instead of he being -- going to other companies. This is one way we are doing. So this -- wherever reduction in interest rate is possible. Let us say within our system, if it meets our MLR requirements and all that, wherever it is feasible, we are agreeing for interest rate reduction for the existing customers with a good track record. In fact, as of now, we do not have any pending request for interest rate reduction. All interest rate reductions running to hundreds of numbers, we have already submitted. Maybe -- there may be a slight decrease in the income, but at least it will prevent takeover.

So do you expect your margins or spreads to see some moderation as we go along?

That can be met by our volume growth, sir. Yes, there could be -- for the same book, if -- in doing -- decrease in the interest rate, there could be challenges. But by increasing the volume, I think I will be able to meet and maintain the existing margins.

And the final question, sir. Do you plan to move to low ticket size loan book?

See, the volume of low ticket -- see, we need to be there in the market. See, you can't have a flat 15 lakhs -- as of now, our low ticket rate is 14 lakhs or something. You will agree that at this thing, you will not find a flat in places where we operate. So we need to be practical and we need [ to do ] some an increase in our ticket size, which will be in line with the market requirement.

Next question is from the line of Aviral Jain from Siguler Guff & Company.

Yes, I -- my other question was around any plans to get into asset pool buyouts of other housing finance companies through securitization transactions? I mean, some of the lesser funded HFCs would have some funding interest, and given Repco has very strong capital adequacy and low cost of funds, is that an area that is also being explored?

Yes, it is, let me admit. But it is not immediate. But it is in the horizon. Creating our own [ shutters ] like approval of [ contemporaries ] and all that. Maybe if opportunities present and if it is top line growth, we will take a look.

And what would be the amount of -- as in the size of the market that you could be targeting? As in, there would be a certain 10%, 10.5%, 11% sort of source -- as in acquisition, you would be probably looking at similar to the current loan pool you have. Or you would be looking at a lesser sort of yield on that portfolio given it would not require any servicing? So my question is twofold. As in, what would be the characteristics of such loan pools? And what is the addressable market that you could look at available at that cutoff yield for you?

See, I think it's too early. We have still not devised our full strategies as such. But definitely, it will be more or less in the same bucket that we operate - will be in the bucket that we operate. [indiscernible] forming the details.

Okay, sir. And you've already given clarification twice on the GNPA. But I was just curious to understand. If you plan to bring down the GNPAs by INR 100 crores or INR 150-odd crores, then the provisions required next year could be way much lesser than INR 80-odd crores assuming you were to -- as in you have -- your desire would be to have 50% coverage -- specific provisions because you would always have general provisions as well, right?

Okay. I think you know better about -- see, we will require that definitely. If we don't require, definitely we will not making that provision. The idea is to reach a provision coverage ratio of -- I believe around 50% over a period. If we are able to make the same numbers with a lesser provision, we will be too happy to do that.

And just to clarify, the overall provisions that you are carrying on the balance sheet is around -- in the -- is of INR 500 crores, I mean. INR 260 crores are specific provisions against Stage 3 assets, but you have another INR 540 crores -- or another INR 250-odd crores of provisions also sitting against restructured book as well as standard provisioning for even fresh disbursement side.

Yes. See, we have a total provision of INR 470 crores. For Stage 3, it is INR 260 crores. And the remaining is in Stage 1 and 2, including the [ exceptions ].

The next question is from the line of Dhaval Gada from DSP Mutual Fund.

So first question was a data keeping question. If you could give the yield on loans for home loan and home equity for FY '22? What's our blended yield in each of the segments? And similarly, for salaried and self-employed, including the nonprofessional?

Okay. See, the yield is -- for home loan it is 9.7%; that is salaried 9.3%, non-salaried 10.2%. Average is 9.7%. And home equity is 12.8%. This is for March '22. And the average for the company as a whole is 10.3% I believe.

The second question was relating to disbursement. So what kind of disbursement target are you sort of trying to achieve in FY '23. And more -- like 2-year down the line, FY '24, what's our aspiration on disbursements, absolute disbursements?

See, FY '24, has not been given out so far figure. As far as FY '23 is concerned, it will be around INR 3,000 crores, hopefully.

Okay. Okay. And last question was relating to -- so what would be our employee attrition for, let's say, full year FY '22?

FY '22 -- FY '22, we did not inform. Around 90 people left in the fourth quarter. That much I know. But just for your information -- [ Bhat ]?

980, sir.

From 980, the employees have come down to 925. But just for information, we are also planning to recruit so that is met -- this requirement is met.

And not further reductions…

And I think we are having a recruitment in the current quarter.

Understood. And large part of the reduction is attrition. Is it?

Yes. Yes, probably.

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

Sir, just one question. So considering a 10%, 11% annual growth in FY '23. So sir, what sort of repayments rate are we looking at? Means, will that be higher than FY '22 or lower than -- any ballpark number on that?

It should be same. As of now, it should be same. See, our normal repayment is around INR 75 crores per month. That is around INR 900 crores to INR 1,000 crores, the normal repayment. The accelerated repayment will be around INR 890 crores, INR 900 crores. And we expect the same to continue or it can come down also. Because of our customers' need and all that, we expect the accelerator repayments to come down.

Okay. And so, sir, on the 17.6 percentage rate which we quoted a repayment ratio for FY '22. So can we have a breakup between balance transfers and the regular repayment?

FY '22 -- you want the FY '22?

Yes, sir. Yes.

FY '23 Q4, INR 466 crores was the balance transfer. We had a total repayment of INR [ 601 ] crores, out of which INR 466 crores was accelerated repayment. Other 3 quarters were INR 140 crores, INR 210 crores, INR 284 crores. And Q4 was very exceptional.

Q4 was exceptional. And for the -- means, for Q4, it was INR 466 crores. And for the remaining quarters, it would be?

That's what I said. Now first quarter, INR 140 crores; second quarter, INR 210 crores; third quarter, INR 285 crores; and the last quarter, INR 466 crores. This is prepayment. That is any payments made other than the normal repayment.

Okay, prepayment. So this would include the balance transfer as well as the regular prepayments? Means, apart from balance transfers, prepayments would also be included here, right, from own funds?

No, no, normal prepayments always balance out, sir. See, [indiscernible] be repaid. [indiscernible] of repayments.

[Operator Instructions] The next question is from the line of Rajiv Mehta from Yes Securities.

Yes. Sir, I had a couple of questions. So sir, firstly, on the margins, right? So where you gave some perspective on margins with regard to what -- the rate reduction that you would want to offer to rein in the [ BT ] out. But from your interest rate movement perspective, if one were to understand how the margins can move. So then what is the percentage of loan assets which is fixed and floating? And then what is the frequency of repricing of the floating book? And then on the liability side, we have certain bank borrowings and NHB borrowings. Then what will be the floating proportion out there?

Okay. See, we don't have any fixed lending. That is one point with regards to -- almost all of our assets are in fact floating. And we will be popping up -- if at all there will be increase in the cost of our borrowings, more or less we will be popping up on the same borrowing, because the market is also popping up. You will understand that already the banks have started increasing their [ NPL ] and their -- so we will also be popping up, but we will be maintaining the margin. That is for sure. But as far as the liability phase is concerned -- how much is, madam, fixed and…? Almost -- at least 70% to 75% is NPL-based. They are -- mostly those are NPL. And that too -- I researched that. I think 50% to 60% of the 70% is annual reprice. As far as our asset side is concerned, reprices are annual, right? Reprices are 6 months -- only 6 months.

Okay. So the loans reprice every 6 months?

Right. Our loans are repriced every 6 months.

And our MLR is reviewed every monthly or every quarterly?

Every month.

Every month. Okay. And those bank borrowings are -- so you said majority MCLR. The rest will be EBLR or REPO, right?

Yes.

And out of MCLR, what will be linkage to 3-month MCLR?

I don't have the number, Rajiv, immediately. I'll be able to give you, okay?

Okay.

I don't have immediately. I'll…

Yes. What was the write-off for the full year FY '22, sir? I know that there was no write-off in fourth quarter. But full year FY '22, what was the size of write-off?

I'll get you. Before the conference is over, I'll get you. It's not much.

Okay, sir. Okay, okay.

It's not much. I'll tell you -- [indiscernible]…

Right. Sir, my question is now on asset quality. Now that with daily stamping coming in, it increases the flow of slippages -- yes. With daily stamping coming in, it increases the flow of slippages every quarter. So either -- otherwise, we need to align customer to this new system and educate them to pay on time on the due date. So how much of effort has gone there in terms of bringing customers on board on daily stamping. And secondly, from collection side, I think you spoke about putting up a collection team for early buckets. So what is the plan to increase collections in the pre-NPL buckets?

I told you know. See, as far as the collection bucket is concerned, we are trying to recruit exclusively for collection some 40, 50 people. Already we have issued advertisement and all for our recruitment. In that, we plan to have an exclusive collection team only for targeting the early buckets. The bucket 1, bucket 2 issue, only for that we are trying to have a collection team to be monitored from our head office. So this is just to bring down the likely slippages in the future quarters. This one -- what was your second question -- first question rather?

Now in terms of customer alignment with the daily stamping or…

That is the most difficult part, because people are used to paying on the last day, paying only the critical amount and all that. I understand this is a difficult path. So we have been telling our branches -- that is why -- if they meet the customers, they will also be able to impart on them the requirement to pay -- work on their installment whenever they phone you. I believe it is getting results. Maybe the customer is not paying 2 installments vis-a-vis what he was paying earlier. But at least he is paying something more than on installment. That is why 10,000 is his EMI -- or they pay, say, INR 11,000, INR 10,000 and all. So slowly things are improving.

Okay. And sir, this restructured portfolio of INR 670 crores is getting -- is starting -- building from second quarter, you said, right?

Yes.

Okay. So the moratorium offer was roughly 1 year to most customers?

Yes, 1 year only.

Yes. Hello?

Hello?

This is the operator…

Hello?

One moment, sir. Mr. Mehta, your…

What is the current origination mix for us in terms of branch hosting, loan stamps and DSAs? And whether we can add more channels -- or can we activate more channels so that we get more business or feedback?

Yes. Already, we have DSA channel of around 20% (sic) [ 15% ]. Hello?

Yes. Hello?

Am I audible?

Yes, sir.

Yes. See, already we have a DSA channel of 20% (sic) [ 15% ]. We like to make it 20% to 25% as far as DSA is concerned because we already have enough of brick-and-mortar system in this company. We will be increasing our numbers, branch numbers by around 10%. As of now, we have 155 branches as of March. So maybe another 15 branches we may open during the year.

Okay. And you said DSA contribution is around 15-odd percent, which can be taken up to about 20%, 25%, right?

Yes.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you very much. And I will just kindly -- who have come, participated in the conference, faced all these issues. I would like to assure the investors as well as the analyst that the company is on the right path the new management has taken. And the entire team of Repco Home Finance are all enthusiastic. They are doing their best. Definitely, I'm sure that 2023 will be a [indiscernible] year. And '24, '25 onwards, we will be back to where we were, let us say, 5 years back. And once again, thank you all, including moderator, and especially you.

Thank you. Ladies and gentlemen, on behalf of Yes Securities, that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.