UGRO Capital Limited (511742) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the UGRO Capital Limited Q3 FY '24 Conference Call hosted by Centrum Broking Limited. [Operator Instructions] I now hand the conference over to Ms. Sonal Gandhi from Centrum Broking Limited. Thank you, and over to you, ma'am.

Thank you, everyone. On behalf of Centrum Broking, I welcome you all to this Q3 FY '24 Earnings Call of UGRO Capital. I would like to thank UGRO management for giving us this opportunity to host the call. I would now like to hand over the call to Mr. Shachindra Nath, Vice Chairman and MD, for his opening comments. After which, we will take Q&A. Thank you, and over to you, sir.

I am the Managing Director of UGRO. I welcome you all in our December Quarter's Earnings Call. Along with me, the senior management team, consisting of Mr. Kishore Lodha, our CFO; Mr. Anuj Pandey, our Chief Risk Officer; Mr. Amit Mande, our Chief Revenue Officer; and Om Sharma, our Chief Operating Officer, are also present in the call. Our investor presentation is already uploaded, and I will be referring to the same presentation in our conversation with you. Kindly refer to the Slide 3 of the presentation. Over the past few quarters, we have been consistently spoken -- speaking about the large addressable market opportunity for MSME and how the credit gap for them has widened post-COVID. This slide demonstrates the strong rebound by MSME, post the initial dip during COVID. If you look at the left-hand side of the chart, based on the data we have gathered from applications, we see that loan sanctioned per customer average INR 40 lakh in 2019. This number halved during the first and second wave of pandemic. However, in Q3 '21, there has been a strong resumption in business activity. In the first year, post-pandemic, that is in FY '22, 77% MSME in UGRO's target segment experienced a business resumption. Next year, 68% of MSME saw more than 10% year-on-year growth in the turnover. This has led to increase in credit sanctions per customer post-COVID, as seen in the right-hand side of the chart. Over the last 3 quarters, the loan amount sanctioned per customer has averaged around INR 90 lakhs, much higher as compared to the pre-COVID. Both these charts demonstrate the resilience of the MSME sector, increase in credit flow to this sector and the importance of timely credit for small businesses. Besides this macro trend, which gives us the confidence that building a large institution around MSME financing, this power of Datatech is a real possibility. Now moving to the performance of the business. Please refer to Slide 4. Our early OpEx and infrastructure build continues to deliver strong top line and bottom line growth. In 9 months '24, we have delivered 64% year-on-year AUM growth, while our PAT has tripled on a strong operating leverage. Our return ratios have improved to 2.3% return on assets and 9.7% return on equity from 1% and 3.5% last year, respectively. And our Slide 5 in the presentation, gives you a snapshot of other key business metrics. If you refer to the Slide 6, our net disbursement stood at INR 1,552 crores during quarter 3 FY '24, which represents 33% year-on-year growth, led by a strong growth across our prime business loans, micro enterprises secured loans, machinery secured loans and partnership and alliances segment. This has led to a 64% year-on-year growth in AUM, which has touched INR 8,364 crores, explained on Slide 7. We have now reached the coveted INR 1 billion AUM club. This journey from INR 2,500 crores AUM to INR 8,300 crores in AUM over last 8 quarters has been an outcome of our early investment in multiproduct distribution channel, deep partnership with banks and large NBFC on co-lending and co-origination, investment in GRO Score and continuous support of our balance sheet liability providers. On Slide 8, you'll notice that this solid top line growth has led to significant operating leverage with PAT growing 8x over the same period. On Slide 9, you will see that our collection efficiency continue to be stable, while GNPA and NNPA stood at 2% and 1.1% of total AUM, respectively. Our GNPA has increased by 0.1% quarter-on-quarter and 0.3% year-on-year basis, which is as per the plan. The increase is a function of our portfolio, which has been maturing over a period of time, and we do not see it as a credit deterioration as our collection efficiency and bounce rate data have remained stable and tracks well. We intend to cover ourselves well with respect to provision coverage ratio, and it has remained stable at 49%. As we have mentioned in the past, our liability strategy is a function of our on-balance sheet lending from diversified set of lenders, co-lending partnership with banks and NBFCs, and direct assignments with financial institutions. On next slide, you will see that our off book share is 45% of premium. This is as per our long-term vision of reaching 50% mix. We are seeing our relationship maturing with our bank partners and new partners are coming onboard. We believe that next few quarters our contribution of co-lending would gradually start inching up beyond 50% as well. On Slide 13, you will see our cost of borrowing increased 4 basis points quarter-on-quarter. Our borrowing stands at INR 4,173 crores with 43% and 10% of this mix coming from banks and NBFC, respectively. DFIs, FIs and capital markets contribute to 18%, 10% and 19%, respectively. So our borrowings are fairly diversified across various financial institutions. We continue to believe that the increased risk weight on banks lending to NBFC would not affect us adversely, given our diversified liability strategy and less reliance on banks. On Slide 14 to 16, details of our financial numbers and key ratios and the remaining slides give an overview of the company. We will continue to believe that UGRO, in coming quarters, would increase its penetration, yield profile and operating leverage. We would be happy to answer any questions now. Thank you.

[Operator Instructions] The first question is from the line of Darshil Pandya.

Congratulations on the good set of numbers. A couple of questions from my end. Sir, are we on track to achieve our aspirational INR 10,000 crore AUM by this fiscal?

Mr. Pandya, that's why the term -- we have used the term aspirational. We are striving very hard to get there. But at the current run rate, we are focused on 2 things. Obviously, AUM is one aspect of the business, but we are simultaneously controlling our OpEx so that we can deliver the operating leverage. So if given a choice between increasing just the AUM and reducing the profitability, we would actually do the contrary here and we will maintain the profitability. I think so we will be somewhere near to that, but we don't think that we'll get there completely at INR 10,000 crores.

Got it. And sir, on the Slide 9, where the GNPA -- product by GNPA is given. So there I see that the prime unsecured loans contribute around 3.6% of the GNPA. So any measures that you have taken to take it down, or maybe -- because that's showing one of the...

Yes, Anuj?

Yes, I will take that. So the planned GNPA number for unsecured loan as we had been commenting on various in investor call, is between 4.5% to 5% lifetime. And right now, it is -- most of the portfolio -- around 8%, 9% of the portfolio is post-COVID, and it is now seasoned up to about 24 months. So we are -- from traction perspective, we are at where we want it to be. So we expect a lifetime NPA of around 4.5% for unsecured loans.

And annualized credit cost of around 1.5% to 2%. So the way you should look at it, and that's why we give this data, we construct the portfolio to arrive at 2% credit cost. And we want to make sure that not just the GNPA, but the total credit cost is within our tolerable range. And that's why you mix a certain percentage of portfolio, which have certain defined credit cost metrics. So actually, as Anuj said, this is as per the plan. At the 19.25% yield, at a 1.5% to 2% of total credit cost on an annualized basis, we think so this is a good product for us. But obviously, that's why we maintain this at near about 30% of our total portfolio.

Got it. One final question. Have you opened any new branches this quarter? You said that you'll be opening around 75 more branches. So what's the update on that?

So we started this around 1.5 months back. Look at the -- physical infrastructure rollout is a long journey of around 6 months. It has to be broken in identification, which we have identified, so we are expanding in UP, MP and Andhra and certain branches in all 4, 5 states. Then it is our identification of physical infrastructure, then people and then it goes live. At the first 2 stages, we will be ready with 30 locations by end of this month. Operationally we would be around 25 to 30 locations live, starting business by end of the quarter. So over a period of next 2 quarters, we expect all of these branches to go live. And as you know, the micro branches takes around 12 to 15 months to get to the stage of breakeven. But I should tell you this, that relative OpEx increase by increase of the physical infrastructure has very limited impact on our overall profitability.

Got it. Got it. And sir, any guidance on the cost of borrowing?

As far as cost of borrowing is concerned, we have been able to manage the cost of borrowing at fairly reasonable level for last 4 quarters when the things were really tough. RBI has increased the rate multiple times. And on the guidance, general guidance on liquidity is not very encouraging at this point of time. Still, because of the diversity and because of our relationship with all the lenders that we have for all these 5 years of our journey, we've been fairly consistent as far as borrowing cost is concerned. It may inch up a little from here on, but we are not expecting a significant jump as far as borrowing cost is concerned.

The next question is from Avinash Singh from Emkay Global.

Good set of numbers. A couple of questions. First one, if you can sort of elaborate in addition to your branch expansion plan that would be largely for the micro enterprise loans. So what sort of aspirations we have over the next year and beyond that to grow that micro enterprise book because that will be largely kept on book and of course, will be equity to the yields and all? So I mean, what sort of AUM target you have, particularly in that segment in the micro enterprise driven by the branch expansion part. So that will be my first question. And second, some color, if you can sort of provide around some bit of an increase in the credit cost and slight moderation. I mean, not Q-o-Q, but Y-o-Y basis in terms of the -- that regular collection efficiency if you can share some kind of a color in what is leading to a slight increase in this credit cost and moderation in the collection efficiency.

Yes. I will take first one broadly, Amit can actually comment more detailed. So as you rightly said that the micro enterprises Avinash is a slow burn, but highly accretive business to the balance sheet. We have been in that business for almost 2.5 years and we have now through a very hard route, have learned how to penetrate into the most profitable, but most underpenetrated business of micro enterprise segment. We now have 75 matured branches delivering roughly around INR 75 crores a month. And once we touch that milestone -- we have committed to ourselves that first round of our 75 branches, when they will get to the INR 75 crores, we will do the second set of 75 branches, and that's why we started ourselves. And these branches, we expect that over a period of 12 to 14 months would also deliver INR 75 crores per month basis. Incrementally, we would -- as we gain the traction, we would also continue to open more branches, but we will have to manage it basis the operating leverage, which we are promising to investors at large, and the incremental OpEx we can take. But I think so we have to constantly invest into the business for long term, while delivering the quarter-on-quarter profitability as per the expectation. I hope this answers the question you in some way. On the -- you want to add something, Amit?

No, on the AUM at this point of time, December ending our micro branches' AUM is just crossed INR 1,000 crores. And from here, we will be able to in next 1 year more than -- just look at doubling this AUM with a typically average run rate over 12 months of about INR 100 crores. So that is what we're going to achieve, and that will be extremely profitable to the bottom line.

Anuj, on the collection efficiency, credit cost.

So the overall -- from our movement on year-on-year basis, we had seen a additional 12 months seasonally are unsecured loans. So the contribution of the unsecured loans, GNPA in overall GNPA has gone up, as is our provisioning on that. So that is what is accounting for a little bit of increase in the GNPA as well as on the credit cost. But this was well envisaged, we have been tracking the bounce rates and collection's efficiencies very minutely, and they continue to remain stable and in a comfortable zone. Overall, the portfolio construct, if you recall, was 30% unsecured and 70% secured. And the weighted average, the way we have designed it, is to have a combined gross NPA of -- at a steady-state level of about 2% and a credit cost aspiration of less than 2% on a steady-state level. Today, we are at 1.5%, because it will slightly go up in next 2, 3 quarters and then it will become stable just below 2%. I hope that answers.

Yes, yes, that very much answers, I mean this stabilizing and peaking out of credit cost, I just wanted to sort of confirm, yes. So I mean a kind of estimated 2% will be achieved and before that, there will be some kind of a spike, very clear.

And the next question is from Omkar from Vasuki India Fund.

Congrats on the good set of results. So just on the net interest income, so what we can see is the net interest income line item, which you show, that has been flat over the past 3 quarters. But of course, that was offset by the co-lending income, which came higher. So I just wanted to know how we should look at this and try to model this in our number?

So Omkar, as far as net interest income is concerned, as you rightly said that it is a mix of on book and off book. But despite interest costs going up or cost of borrowing going up, we are able to maintain our NIMs, which is encouraging. So we explained earlier that with micro vertical taking some yield and with high yielding product controlling more in next 12 months, it can expand further. But at this moment when the interest rate cycle is on the high, our cost of borrowings are increasing. And where we are able to maintain our earnings, we think that it is satisfactory at this moment. And as we increase the mix of higher yielding products, it will expand further. And it is possible that by next year, we may see a reversal in this interest rate cycle. By year-end, probably the softening of interest rates may start kicking in. That point of time, it will be the additional kicker for the NIMs of the company.

And also, I would add, the industry at large actually model everything on the basis of NII, but for players like us, you have to model ourselves on the basis of total income. So as we said, that if we presume of our total AUM, half of that is off balance sheet and we will continue to be in that range or we'll go up. So the total income would continue to increase, NII may remain flat. But I mean it is the -- so the spread, which we are earnings is not just the spread of interest but the spread of fees or the interest spread, which we earn on the co-lending as well.

Understood. So there has been an increase in cost of borrowing, as you said. So I just wanted to know that this pressure doesn't translate into co-lending spread as well? So banks would naturally try to curtail there as well.

No, sir. Actually, if you look at -- so there are 2 parts to it. One, when the RBI increased the risk weight on banks' lending to NBFC, which means their capital allocation becomes higher, which means that translates to the higher cost. There is only one part of it. Second, also, because the year-on-year growth by banks lending to NBFC is more than 21%. There is a moderation in terms of the total lending by NBFC to the bank. But having said that in the co-lending when bank books the MSME which is a priority sector asset, the risk weight of that is either low or lower -- at least lower than the NBFC lending. So actually, it's my hypothesis that the moderation in their portfolio, which is a bank lending to NBFC would have a consequential indirect positive benefit to the co-lending because banks should now try to gain more asset on their balance sheet to the same NBFCs. So I don't think there is a correlation where in the lending to -- by bank to NBFC the cost would increase would mean that the cost of co-lending would also increase, I think so either it would remain stable or it would come down.

The next question is from [ Arvind Dalal from CapitalEnd ].

My question is more in terms of the mix of liabilities from banks. So is it fixed rate or it's MCLR linked, and that is the case then how have you managed to maintain the overall cost of debt in spite of MCLRs going up for most banks. And on the asset side, how does it translate to -- I mean, is it fixed price -- fixed rate pricing? Or is it again variable rate linked to some benchmarks. Just to understand the translation mechanism with some bank lending to the assets. That's question one. The second question is, we understand that the credit cost will go up by 50 basis points in the medium term. And the sense I'm getting is that, part of it will be offset by higher yield on the portfolio. So which sections do you plan to kind of recalibrate in terms of your asset side achieve that yield mix, which will offset the higher credit cost?

Yes, as far as the our lending is concerned, so barring the unsecured portion our lending, which is roughly around 30% rest is all -- most of the loans are floating rate loans. So we can pass on the incremental cost of borrowing to the customers. As far as our ability to contain the rates where most of the large player' cost of borrowing has gone up significantly, while we could hold our rate, it is a factor of the consistent hard work that we are putting in the next -- in last 3, 4 years, where we have very deep relationships with a multiple set of lenders. And our ability, how we have demonstrated that our -- whatever we have committed on portfolio side that as a company, we have delivered that. That has created a lot of goodwill among the lenders. And now they are more comfortable lending to us at a softer rates, seeing us going through the cycle. So this is our primary reason where our rates -- cost of borrowing has not gone up as much as some of the large lenders, which are directly linked to the MCLR of the bank. On your question, that how much percentage of our borrowing is linked to MCLR and how we are affected, roughly 43% of our borrowings are from banks and which are MCLR linked. So wherever there are increase in MCLR, Of course, that increase would come upon us. So last 4, 5 quarters, we have not seen -- 4 quarters, we have not seen RBI increasing the benchmark rate. And very recently, some of the banks have increased their MCLR by 10 basis points. Otherwise, last prior 3 to 4 quarters, benchmark rates have remained more or less stable. On credit cost, Anuj would take it.

Yes. So that -- what we have mentioned is that the overall credit cost traction in the next few quarters, and this is from 4 to 6 quarters, in a steady state basis, is likely to be around 2% or below, and which is as per the design which we had envisaged. But we have been adding the higher-yield segment already. Shachin mentioned that we have planned to add 75 new branches in micro. Out of that, 30 became active in this quarter and the rate in next quarter. We've also been adding a lot of infrastructure and resources to gain our retail financing base, which is granular supply chain business for small retailers and have been gradually transitioning out comparatively lower yield supply chain portfolio. So this is already in process and part of plan.

Yes. But this is not a reaction to any credit cost moderation. We have been on a long-term journey of 5 to 10 years. We have just completed our 5-year of which we saw 2.5 years got wasted in liquidity crisis led by DHFL, IL&FS and YES Bank. We saw a COVID period, but we have remained on how we will build this business. And the core hypothesis would be that we will granularize, we will use data, we will use technology, and we'll go to the deeper market segment of customer, which is within INR 15 lakh to INR 15 crore band, we'll design the yield and the portfolio segment wherein the total credit cost can remain in 2%, and we can deliver our 4% return on asset in 15%, 16% of -- or more of return on equity, and we are on that path.

The next question is from the line of Sonal Gandhi from Centrum Broking Limited.

Congrats on good set of numbers. I just wanted some clarification on how do you calculate IRR for the portfolio. So there were certain questions on the NIM. So just to give you some numbers, I mean, your AUM is up 10% Q-o-Q. But if I look at interest income, that is up only 6% on a Q-o-Q basis. Even your on-book AUM is roughly up around 10% Q-o-Q. And the yield for the IRR that we've given on portfolio, that is up by 10 basis points. So where is the difference? Or how do we calculate this portfolio yield?

So when we mentioned portfolio yield, it means that how -- what is the customer IRR on the various segments of our borrowers. So 16.2%, 16.3%, which is the IRR we disclosed, it is that customers' ROI for us on an overall basis. But when you look at on balance sheet it is again dependent on that how much of that various segment we feel secured, unsecured micro remains on our balance sheet, and how much goes into off balance sheet. So it does not necessarily mean that whatever remains in the balance would have similar impact as that of overall customer IRR. It will depend upon mix of portfolio that remain on the balance sheet, which can be lower or higher compared to our overall IRR. So if for -- if I have to give an example, if Sanjeevani which is a lower yielding product if that remains higher on balance sheet, then our balance sheet interest income would be lower. Our customer IRR would remain same. So vis-a-vis if our micro, which is a higher yielding product if that remain in balance sheet, then our balance interest income would go up, but it may necessarily mean that our co-lending income may be lower. So it is a mix of that.

So Sonal, if you want to really calculate and reconcile, so you should look at our -- we give you a customer level yield, we give you gross disbursements. And on our co-lending slide, we'll also give you co-origination and co-lending. So if you combine the 3, you will be able to understand that how the -- how much of total origination, how much has gone into off balance sheeting and how much has remained on to the balance sheet. And if you do that trending for a few quarters, you'll be able to come to a model analysis of that.

Sure. Sure, sir, that's helpful. Another question that I had was the micro enterprises loan. So if I look at net originations, that has gone down Q-o-Q. So what explains that? Because I think micro enterprises has been the core focus segment for us.

Yes. So as you say micro enterprises business, it is I think so the -- it is INR 6 crores lower than the last quarter, that is predominantly we were operating 2 products in micro enterprises. One was micro enterprises secured, which is the predominant large portfolio, and also, we were adding micro enterprises without collateral loans. What we have realized over a period of time that giving micro enterprises, non-collateralized loans was cannibalizing our secured loan and we have moderated that. So that if a customer comes, which has an ability to offer you a collateral, if you open up a non-collateralized, and tendency was not to offer collateral. And that's why have in a way, curtailed it down. That's why there was a moderation of INR 6 crores. And as you say, next quarter, you'll see a jump from there.

Understood. And sir, just one more question. So the co-origination has been going down as a percentage of our off-book AUM. So basically, the share of co-lending is going up. So basically, I mean, you said it at the beginning of the call that co-lending is something that you will be focusing on. But why is co-origination dropping? That is one. And second is the fair value gains that we are recognizing on direct assignments around co-lending, that has increased substantially this quarter. So how should we look at that number from the modeling perspective?

Yes. So as you know, the co-origination has gone down for 2 factors. One, mainline -- at least 95% to 98% of our co-origination were happening with the larger NBFCs, where we were also providing some kind of first loss cover. But with the credit guarantee scheme coming for the co-lending, and now the interest rate cap on has been increased from 19 -- 18% to 21%, the adoption of business loan within the banking segment has accelerated at a very faster pace. So some of our NBFC-led co-origination has been towards bank. And that's why you have seen a drop from co-origination and it has moved to the co-lending. Most of the origination, which has moved to the co-lending this quarter has happened in option 2, which means that there is a fair value gain, which came into the balance sheet. But I think so we are making consistent efforts to moderate it and take it under option 1 and increase the volume so that it remains same balance. As we were doing with NBFC, we will try to do it with the bank itself. I think it would take another 2 quarters to get to a stable position. You are getting more new number of partners, banks find it very difficult to do under option one. The turnaround time when we land at that same time bank's ability to do that. So banks predominantly get attracted to say, you do it on your balance sheet and then we'll take it later. While we keep saying that, in order to generate capacity, you do simultaneously. All of that is going on right now. But in summary, the good thing is the banking system is now adopting all products which UGRO does. And actually, that is a very healthy thing. So right from our prime secured business to prime business loan segment to machinery to our micro enterprises loan, if you look at the chart on the co-origination and co-lending, you'll see, except supply chain, which is very difficult to do co-lending. And most of our products are in co-lending segment, which means that our engine and its credibility, its origination, its credit quality within the broader banking system is now getting accepted.

Understood. And sir, just one last question from my end. So if you could run us through credit cost product-wise, I mean, on a mature basis, what kind of credit cost product-wise do you estimate or do you expect?

So on a mature basis from credit cost perspective, although in the investor slides, we have given a GNPA number and not the credit cost number. So I'll start with the GNPA, first. And then we will correlate it with the credit cost. For prime secured loans, the steady state GNPA would be in the range of 0.5% to 0.75%. For prime unsecured loans, we expect it to be around 4.5% lifetime at a steady-state basis. So annualized would be around -- so -- and I will also tell the annualized credit cost impact for each of those so for prime unsecured loan, actually the credit cost percentage annualized would be less than 0.2%. For unsecured loans, it would be close -- a little less than 2%. For micro enterprises, a steady-state GNPA would be around between 2.5% to 3%, where the credit cost -- corresponding credit cost would be in the range of 0.75% to 1%. On supply chain, it is a little higher than expected at this point in time. But when see we are transitioning towards retailer finance and a steady-state GNPA should be about 2% to 2.5%. On machinery loan, the expected GNPA on a steady-state basis is between 0.75% to 1%, and the corresponding credit cost in the range of 0.2% to 0.3%. And in partnership and ventures, because we have a great enhancement in place, we don't expect any credit cost going forward, though it can happen in rarest of rare cases.

Yes. The only thing I would say, Sonal, that for analysts like you to model our business is a little difficult because the translation of this credit cost to our balance sheet is depending upon how much of that portfolio is held on to the balance sheet and held in co-lending and held in co-origination. So wherever you model the credit cost guidance we are giving, you should look at on balance sheet plus co-origination coming to the balance sheet and actually no credit cost coming when it comes to the co-lending. So I think so that you have to be careful. It's not a straight-through model that you do for banks and NBFCs.

Understood. But sir, when we are talking about 2% credit cost or lower than that, we are talking about AUM, right, on the AUM basis?

Yes, Yes.

The next question is from the line of Pruthul Shah from Anubhuti Advisors.

Yes. Sir, so congratulations again for good set of numbers as always. One update that the company has made recently with respect to entering into the factoring business, so it would be good if you give some gains of this business, how the government platform would be used and how it would be beneficial to UGRO? And probably what would be the yields in credit cost that we are internally expecting by entering in this business?

Thank you. This is a factoring license. It is not expansion of new line of activity for us. While -- so around 4 years back, mainline NBFCs were allowed to additionally have factoring license, and it's taken roughly around 1.5 years for us to get, and we are now a factor. What it does for us, one, obviously, we are eligible to now participate on the TReDS platform. But I don't think so the NBFC like us are competitive to play on the TReDS platform because the yield at which the invoices get discount there is predominantly for banks and very large NBFCs. But what it does it facilitates and improvise certain product of ours. So to give you a practical example, in our retailer financing and in our supply chain ecosystem, we do sales invoice discounting. Where sales invoice discounting means that if I'm selling honey to Dabur, I've been doing it for 5 years, and UGRO want to discount the invoice, which as a vendor to Dabur I have sold a material, and I want to get in money against that. When today -- in today's scenario, Dabur pays back that money to me, when I'm a supplier, and then I pay back to UGRO because there is a financing against that. The risk is that if I have some other need at that point of time, I would -- when the Dabur pays to me, I will use that money for something else. Now we convert that as a factor, which means I assign that receivable to be under factoring act and Dabur is obligated to pay that money directly to me. So I have a recourse against the vendor as well as Dabur. So some of our products actually would now be more palatable and we should be able to grow that, how much is what we are making an assessment. But I think so it is potentially giving us a regulatory cover wherein the very large need of getting working capital against invoices, we should be able to enable through this license.

Okay. And sir, like going forward like 2, 3 years or any longer-term time frame, what would be the percentage AUM that we might be having through this business?

Factoring? I think so the percentage AUM of our supply chain is what you should look at, it should remain in the same percentage than what it is today. So our portfolio construction is a long-term strategy. 70% of our portfolio we would like to be secured by some form of collateral, 30% of our portfolio we would like to do without collateral. Of that bucket of 70%, there is a certain percentage of portfolio, which we'll do against receivable and other form of business. I don't think so that this changes the construction of our portfolio. We'll continue to grow in the same defined risk metrics and portfolio metrics. But I think so the credit cost, because of this, might come down by certain basis points.