Ujjivan Small Finance Bank Limited (UJJIVANSFB) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to Ujjivan Small Finance Bank Q3 FY '22 Earnings Conference Call, hosted by IIFL Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Alpesh Mehta from IIFL Securities Limited. Thank you, and over to you, sir.

Thanks, Lizan, and good morning, everyone, and welcome to Ujjivan Small Finance Bank 3Q FY '22 Earnings Conference Call. From the management, we have Mr. Ittira Davis,MD and CEO; Ms. Carol Furtado, Chief Business Officer; Mr. Martin, Chief Operating Officer; Mr. Ashish Goel, Chief Credit Officer. Mr. Vibhas Chandra, the Business Head Micro Banking; and Deepak with the Head Planning Strategy and Investor Relationship. And now without much ado, I hand it over to Mr. Davis for the opening comments. Post which, we will have a Q&A session. Thanks and over to you, sir.

Thank you. Good morning and welcome to our Q3 financial year '22 earnings call. As you are aware, we have drawn a 100-day plan in August, and the focus of 3 areas that we had was rebuilding business volumes, improving asset quality and retaining, attracting good talent. In early December '21, we rolled out till March '22, the extension of this plan. Also looking during August '21, we had shared the financial year '22 credit cost guidance after a detailed audit was conducted on asset book quality and ground reality. With 5 months of performance under the plan, we believe that currently, we are in a good state in comparison to the first half of '22. Before I go into the details of the business and financials, I wanted to highlight certain important aspects. After extending the vaccination drive to cover 99% of our employees and families, we launched an initiative to help our customers and families get vaccinated. Over the last 5 months, we have been able to help over 60,000 beneficiaries under Sanjeevani Kavach, which is a unique and a very necessary initiative to cover the pandemic and reduce the impact on our society. We have been progressing well on attracting good talent at all levels. At senior level, we have strengthened our Board in August '21. And over the last 5 months, we have hired some very good and experienced leaders to lead different parts of the bank. Our CIO and Head Digital Banking have already joined us. They come with strong and relevant experience across large banks. Our CFO and Head Internal Audit, would join us in mid-March and early April, respectively. Also, Ujjivan is known to promote internal talent, continuing with the tradition, we have identified deserving candidates who have performed well with the bank and especially during the challenging times to fill up some of the critical business roles. As a matter of fact, today, all positions reporting to the CEO have been filled or either offers have been accepted. So there are no vacant positions at this moment. Now moving to the reverse merger. On the reverse merger side, we have applied to RBI, SEBI and the exchanges in early November. SEBI asked us to comply with a minimum public shareholding requirement before the reverse merger. As separately intimated, our Board has approved a QIP of up to INR 600 crores through the issuance of equity shares subject to the approval of the shareholders. This will help us to achieve minimum public shareholding of 25%. Soon thereafter, we will -- soon hereafter, we will initiate the reverse merger process, which is likely to take about 12 to 15 months from today. Now let's move to the business and take a look at how things have progressed. As I mentioned, rebuilding business volumes is one of our primary focus area. Q3 disbursement at INR 4,809 crores was highest ever quarterly disbursements in Ujjivan's history. The growth was gradual built up month-on-month with December '21 delivering INR 1,900-plus crore disbursements. This was led by secular growth across all verticals. Micro banking being the leader to steer growth as new customer acquisition is increasing, 16% fresh loans in Q3 as against 9% in Q2 with focus on productivity and process improvements, our other 2 large verticals, MSE and affordable housing also did highest ever quarterly disbursements. FIG, vehicle and personal loans also made meaningful contribution to overall growth. With strong disbursement growth, gross advances books stood at INR 16,463 crores as on 31st December '21. This is registering a healthy growth of 21% year-on-year and 13% quarter-on-quarter. We look to continue to build momentum in the fourth quarter as well, and January this year has been fairly strong -- has been strong, actually. Deposits continued its growth momentum, closing at INR 15,563 crores, up by 34% year-on-year and 10% quarter-on-quarter. We continue to generate sticky deposit base as evident from our improved retail deposit ratio, which now is at 53% on December '21 against 48% last quarter. Deposits from retail branch banking grew 50% year-on-year, driven by customer acquisition and rising average ticket sizes. For example, retail branch banking savings account average balances have moved to 24,000 and in December '21 against 21,000 in September '21. Our cost of deposits continued to decline. It was 6.1% for Q3 versus 6.2% in Q2. Overall, the cost of funds also declined to 6.2% from 6.3% in Q2. Moving to collections. Collections have improved consistently under our focus strategy laid down by the 100-day plan. We strengthened the collection team further and had a detailed approach towards different buckets and stress pools. The results are visible and heartening. January '22, collection efficiency now stands at 97%. Restructured book collection efficiency at around 80% is in line with our estimates. NPA collections have also been rising given the alleviated ground efforts. Collection ex GNPA is already at 99%. With improvements in collection, power book has declined substantially from a high of 30.8% in June '21 to 14.9% in December '21. Healthy collection and improving business also improved our asset quality with GNPA declining to 9.8%. NNPA almost halved to 1.7% from 3.3% in September '21. SMA book is now at 5% against 7% in September '21. Most of the SMA book is in the 0- to 30-day category. While the overall picture looks good on the improvement in collections and asset quality, we believe some bit of scope is still left especially in the segments like MSC and housing. A decent portion of the book was restructured under RF 1 as well as RF 2, wherein collection for both the set of the book -- of the restructured book started from October '21. This has restricted the improvement in overall collections, whereas restructured book collection is below the overall collection. Also, we have made some changes in the credit policy and expect benefits to accrue in the coming quarters. We have cut down on high-risk segments and contributed to -- which had contributed to higher slippages. These include identified segments in the housing lap and MSC lap. Another area of improvement is from the legal actions in the secured book. Last quarter, we had mentioned that we would have started the process. In Q3, we have seen recoveries and upgrades improving. We expect the momentum to build up further in Q4 and the effect would be visible. In addition to this, we have not used our floating provision of INR 250 crores despite improving portfolio quality. We are maintaining a high PCR of 84%, which builds an adequate buffer to support growth. With growing book and reducing NPAs, yields and NIM have started to improve across segments. Q3 NIM was 9.1%, a healthy increase of 100 basis points from 8.1% in Q2. Business profitability is back on track as we recorded pre-provision operating profit of INR 141 crores, double that of Q2. I just want to touch very briefly because we have taken some time in the -- but I would like to touch upon the building blocks of Ujjivan strategy of mass market banking, which is technology and digital. Now since the inception of Ujjivan, we have focused on this part of the business. And I'm pleased to say that if you look at the UPI statistics, Ujjivan is the top among all SFBs in UPI usage as well as compared to other banks. So I think it doesn't -- it goes without saying that our focus here will continue. And to this extent, we have this month brought on board one of our new persons in the committee, which is Mr. Sriram Srinivasan as Head of Digital Banking. He has come with 25 years of digital banking experience and has worked extensively in Citibank, HSBC, Standard Chartered and Digital14. He, along with Ashwin Khorana, who is our Chief Information Officer, will spearhead our digital and technology initiatives of the bank. And I think this emphasis will continue, and you will see results as we go forward. Now I just wanted to quickly touch upon the outlook, for the rest of the year and beyond. As you are aware, India is going through COVID 3. We have been very cautious during January '22 in terms of growth and focused on collection efforts. As mentioned earlier, the January '22 collections were better than December '21. Having said that, I believe the improvement could have been better if the third wave wasn't there. What we believe is that the daily fresh cases have already begun to reduce, and we remain confident on delivering a fourth quarter, which is strong in terms of business growth, collections and profitability. We do not change our growth and credit cost guidance, and we keep the same impact. On the OSP growth guidance of 15% to 20%, we might end financial year '22 towards the higher end. Our credit cost guidance was made assuming that we would utilize the floating provision. However, we are hopeful to contain financial year '22 credit cost within INR 1,200 crores without using the floating provision as we carry it forward on our balance sheet to provide a buffer. We look to close this fiscal and start financial year '23. We are witnessing increasing confidence from our team members and expect the momentum created in the last 5 months to continue, driving a strong next fiscal. That's all from my side. We will now open for question and answers. Thank you.

[Operator Instructions] We'll take the first question from the line of Darpin Shah from Haitong Securities.

So my first question is on the -- correlated provisions of 14 provisions, which you mentioned of INR 250-odd crores. So this is already part of our calculated PCR, right, of 85%?

Yes, it is part of the PCR of 85%.

Okay, interesting. Second is, if you can provide some color on the movement of NPAs in the last quarter, you had mentioned INR 600 crores of slippages. So how much capacity this quarter recoveries, if you can throw some light there?

So in terms of slippages, we had about INR 200 crores to INR 290 crores as against INR 660 crores and INR 620 crores in the previous 2 quarters. And in terms of the countries, in micro banking as well as in retail banking deal had a substantial increase. Micro banking has gone up by about INR 242 crores, INR 242 crores for the quarter.

Okay. Okay. And sir, one last question is on the ticket sizes. If I look at the ticket sizes for group loans that have significantly increased on a sequential basis, so what explains that, sir?

So actually, our ticket size on the lower side before the pandemic, and we see a good demand. We are seeing a good demand on our customers for higher ticket size loan. Also higher tenor because the business requirement at this point of time, the ticket side requirement on the higher side. So what we have done is we have tried to increase ticket size for the customers who have larger business and have been able to pay throughout the pandemic period. And at the same time, we have also increased the tenor, so the EMI further customers remain the same, but it is largely because of customer demand and the market demand.

But sir, the income levels would have not gone up this significantly for these borrowers, right?

Income levels, if you see our customer activation pattern in the last quarter also, our customers are coming from existing customers who are repeat customers. We are -- who are 2 or 3 cycles old and 16% customer -- 15%, 16% customers are new customer acquisition. So these customers who we are trying to land the recent part of the customers who have -- who are with us for a long period of time and with very good track record even during the pandemic period. And hence, the ticket size for these customers will be on a higher side naturally as the ticket size progresses with the number of cycles.

The next question is from the line of Rohan Advant from Multi-Act.

My first question is on the operating expenses to average assets, which is at 7.9% in Q3 FY '22. I understand that we've beefed up our collection teams and that has yielded good results. But going forward on this line item, what is your outlook? Should that start coming down going forward as income increases or the OpEx intensity reduces as collections normalize, if you could close or not on that?

Rohan, this increased elevated efforts on the collections will continue for a quarter or 2, maybe at least for next 2 quarters or depending upon how the collections and how our power levels move. But definitely next year, second half onwards, it will come down significantly.

Okay. Okay. And my second question was in your opening remarks you sand that the collection efficiency in the NPA bucket is improving like you stated for the restructured it is 80%. Can you state what is the collection efficiency within the NPA bucket?

For -- I think I'll answer this with 2 metrics. One of them is the cash collection and the second is the percentage efficiency. In terms of cash collection, micro banking, we have done about INR 215 crores during the quarter as against INR 136 crores in the previous quarter. And in terms of retail assets, we'll have done about INR 85 crores of cash as against INR 16 crores. So both of them have improved by more than 50%. In terms of efficiency, it is about 40% for both micro banking as well as retail.

Within the NPA bucket, right?

In the NPA, that's right 40% for both.

And my last question is, you've taken a board approval for INR 600 crores. To meet with the RBI norms, you would require a much lesser dilution. So while we do the minimum public shareholding norm, will you also raise some gross capital now?

Rohan, we have not decided on the quantum of the QIP. It is a board resolution that we have taken of INR 600-odd crores. And accordingly, we'll go ahead -- when we decide on the size and all that, we'll decide later on.

The next question is from the line of Renish Bhuva from ICICI Securities.

So sir, 2 questions. So one on the incremental growth, especially in the MSE segment wherein collection is still sort of lagging the overall portfolio collections. And still, we are witnessing like a 10% sequential growth in this portfolio. So sir, how we are making sure that incrementally, we are onboarding quality customers and asset quality? And in this portfolio going ahead, will start off for better than what we have witnessed in the pandemic? That is my question #1, sir.

So we are taking the growth in the microfinance segment very cautiously, but we are seeing MSE. So the MSE segment is growing cautiously, and we will be also looking at cleaning up our portfolio quality to a large extent and then introducing a lot more products in the higher ticket sizes.

But still, we have grown like 10% sequentially?

Yes. We...

Is there any underwriting process or a credit process has changed, let's say, still we are cleaning up the book? I was just trying to sort of understand that point.

Okay. So in terms of current 2x in the last 3 months, we have seen our collection efficiency in the NNPA bucket at between 98.5% and 99%. So our incremental slippages in 2 delinquent portfolio have come down in MSE. Number two, we had identified at September end, we had identified certain high-risk segments, which had not shown resilience to COVID 2. Those segments we have cut down from our underwriting starting first October. And point number three, and these were largely segments, which had got impacted in COVID. Point #3, we have seen some very good traction on the fintech partnerships. And this segment has shown very good resilience, and these are all 30-day kind of build accounting products, where the money gets rotated within 30 days. So this has given us some very good traction and very good customer quality in the last 2 quarters, and this will gain momentum in Q3.

Got it. So sir, any color on the tenure of the loan, I mean, if it is bill discounting, then I'm assuming the rundown will be pretty fast.

30 days.

Okay. So tying our run rate is pretty similar to what we have seen in 9 December in MSE disbursement?

Pardon me, sir?

So I'm saying since a non will be pretty fast in this product. the 10% sequential growth is sustainable going ahead? Or how do you see disbursement spending out in the MSE segment, sir?

So we actually have seen some very good traction after COVID 2 starting -- in our last earnings call, we had mentioned this, that starting August, September, we have seen some very good traction on our high ticket size loans, and that traction continued in October to December. So that segment has done well, and that's where our focus area is going to be in the next few quarters. So while we have cut down on certain risky segments but gained momentum on the higher ticket side.

Got it, sir. Got it, sir. And sir, secondly, again, this is sort of repetitive, our earlier participant has asked on the ticket size. So sort of we have seen pretty sharp increase from almost INR 36,000 to INR 45,000. So would you be able to give some more color on the sort of let's say, a customer profile or a geography or, let's say, to which segment they are operating, which are sort of witnessing such a high credit demand ?

Yes, yes. So see, as I mentioned earlier, that we, after the second wave, we are focusing more on our existing customers, whom we were not able to serve in the pandemic. Though these customers were paying regularly, even doing the pandemic, and these are very good customers. So -- and mostly the customers are old customers, who are getting loans from us for many cycles. And has been our ticket size here, if you focus on more on repeat with customers in multiple cycles -- ticket average ticket size will go up. Second, in the recent past, we have also increased our focus towards our subsegment, which is individual lending. We have an average ticket strategy on the higher side. Individual lending, we provide loans up to INR 2 lakh, and there also, we see a very good traction happening in the last 3 months as we have opened up business. And as far as geography is concerned, our average ticket size all across is growing except some exemptions like Assam, where we have, our industry is facing issue. But average ticket size have gone up across it.

[Operator Instructions] The next question is from the line of Deepak Ajmera from KIFS Group.

So by when we are expecting to resume like INR 30 crores, INR 40 crores of provisioning per quarter instead of higher provisioning due to COVID, et cetera? So by which quarter we are expecting to normalize provisioning?

See, when we started the last 2 quarters, we had a significant amount of portfolio in SMA and NPA portfolio. If you look at the PCR on micro banking, which was the highest impact in the last 2 quarters in terms of delinquency, our PCR already touched 94%. And therefore, you will see that the trajectory of provisioning where it will come down sharply because with the 94% PCR, it doesn't -- 94% on the micro bank. It will -- the incremental provisions over the next 2 or 3 quarters will drop sharply because most of the book is provided. In terms of restructuring, our RF 1 pool, which was restructured in December '20, that has now got 95% provided. The restructured 2 pool is almost 20 -- carrying 23% to 24% provisions. And therefore, again, in terms of additional provision requirement for restructured pool also, we don't see too much of provision happening. So it will probably reach normalcy in the next couple of quarters.

Yes. And this collection employees you are increasing, that should reflect in employee costs? Any specific reason of increase in other operating costs? Is it outsourced employee? Or what's the reason?

Deepak, it is outsourced employee. If you look at the slide where we have given the makeup of how the collection team has increased over the last couple of quarters, that breakup can simply say how the outsourced employees have increased in the collection team.

Last question, if I may ask, is on reverse merger, any timeline on after, I mean when we are planning to apply NCLP for shareholder meeting, et cetera?

As Mr. Davis mentioned, the entire process will take around 12 to 15 months. I cannot give a breakup of the timeline of when we'll get the approval or when we'll get the approval. Right now, the first step will be to meet the requirement of MBS, Minimum Public Shareholders. So once we are done with that, we'll seek a PV approval again and then we'll see how we can move forward.

As we go through each process, we will update our investors and shareholders about the remaining time frame. But we are trying to do it as soon as possible to comply with RBI requirements and RBI guidelines.

The next question is from the line of Abhinesh Vijayaraj from Spark Capital.

My question was in terms of the team build, you had indicated that all positions reporting to the CEO are filling. What about the second, third, fourth management positions that are we close to closure of everything? Would it be fair to assume that beginning financial year '23, all positions required and the bank would be up and running?

I mean any organization has a regular turnover. Our objective is to bring our turnover or attrition levels back to normal, which is industry normal. And then once we get there, which I think is almost going to happen in the next month or so. Once that is achieved, then we make sure that we try to even push it below. Happily so, when I joined back the organization, I'm happy to say that Ujjivan is already among the Great Places to Work once more. And that is an indication of the morale of the staff. And I think sooner or later, we will be able to get back to the levels that we were. And normal business, normal attrition will be there, that nobody can stop. But my objective is to fill the positions from both within and from outside, and we'll give opportunities to both possibly a 50-50 vacant, but that's how we're going to take things forward. Good people in the organization will get a chance to move up and take up their positions as well.

All right. Good to know. The second question I had was in terms of the floating provisions, we are INR 250 crores. Is that the buffer you're looking to maintain into FY '23 as well? Or are you looking at adding on a certain amount there?

If I understood your question correctly, you was asking whether this 250 is going to stay or are you going to add, no?

You add or utilize it during [ FY '23 ]. Yes, yes.

No. So we are not going to add any floating provisions. We believe that this is enough cover for any adverse event that may happen. And therefore, we are going to maintain this floating provision as a [indiscernible]. And our PCR is quite high. So we don't need to actually take any specific provisions.

The next question is from the line of Abhijeet Sakhare from Kotak Securities.

The first question is on the [indiscernible] of growth recovery. Clearly, a normal environment has had, but can you talk in a little more detail what sales inside the bank? And what has, what were the changes that were brought about for such a sharp turnaround that we've seen in this quarter?

So in the last 100 days, we really took a step back and looked at what needs to be done to build our business momentum. So we had a good analysis of all the business verticals where we stand. And we put in program a few of the credit policy tweaking took place, some of the process revisions took place, and we also understood the need from the ground. A lot of our senior management team, the leadership team went across 2 branches and understood the needs there from the customer and the employee side. And putting programs in place that would help us in the growth. We also ensure that, as Mr. Davis touched upon in his initial talk, we also put in a program all with Sanjeevani Kavach, which also -- through which we've activated more than 60,000 customers. And also our branch staff, our employees across the organization where vaccinated. So this helped us in bringing back the momentum also to has supported the economy growth. And this is -- even the third wave, we see that there has been very minimum disturbance. We are able to grow in all the business verticals. We are taking a cautious approach, but we are growing across in all the business verticals.

Yes. Just to follow-up, ma'am, it almost seems like a step-change in terms of how we are now looking at the micro banking business. So just wanted to kind of break it up in terms of how much has your view of the situation on the ground has changed? And have you become a little more aggressive or more willing to participate on the recovery that is happening? And to that extent, do you really see the borrower situation actually turning around to an extent?

So our long-term strategy remains the same of our portfolio, the composition of our portfolio. But on-the-ground situation, the customers in the micro finance segment are very resilient, and they are able to bounce back quickly. So that is helping us in the growth. And a lot of our customers are repeat customers. The ones who have stood by us and the ones who are able to repay their installments timely, we are giving them a repeat loan. Also, our new customer acquisition in a lot of our branches have restarted. And like it was said earlier, we have around 16% of our growth coming in from the new customer acquisition across branches.

Sure. Second one was...

So just to add to that, our collection efficiency in the NDA bucket is around 99.5%. So that is also giving us the confidence to grow.

Sure. Sure. second is that given that on a relative basis, the nonmicro banking business looking a little bit soft. So would we kind of be willing to let the micro finance share in the overall AUM increase over the next [ 12 ] Months or so?

So the nonmicro banking segment is also growing. We will be -- I mean, with improvements in collections and the power book, we will be able to relook at our growth in the nonmicro banking segment and grow there. Like, I mean, it was said earlier also in Mr. Davis' speech that, we would also be growing our other segments through productivity, process improvement and relooking at the strategy there. Mostly, we are getting a lot more into the secured lending of a higher loan size. And...

Tires.

Yes. And in fintech tires, right. The fintech partnership is going to help us in that.

I just want to add to what Carol has said. Part of the exercise that I am undertaking after joining, and I think my timely joining in January, middle of January gives me the opportunity to look at things as we go forward before and plan for the new financial year. So we are in the budgeting period, and we are looking very carefully at how to balance this growth. And our long-term objective is to be able to grow other businesses in a slightly faster way so that the proportionately in between micro banking and others is in the direction that we have projected a couple of years ago. So we will be moving closer to that balanced proportion as we move forward.

Sure. And just finally, a data question, if you can tell us the amount of interest reversals that have happened in the last financial year and the current financial year.

Abhijeet, in the current year 9 months is around INR 63 crores for the last financial year, I'll check and come back on the number. Given NPAs were not recognized till December should not be a very high number, but I'll still check and come back on [indiscernible].

Thank you. We'll move to the next question that is from the line of Arun Kejriwal from Kejriwal Research.

Davis, are you now quite comfortable with the team you have with the results that you have been able to deliver your 100-day program? And does that give you the comfort that the next 60-odd days would be even better than what we have seen?

Well, thank you for that question. I mean, I've spent about a month with the team right now. Quite confident and understanding of the team is very good. They have -- I think the very fact somebody once asked me how the last quarter operated without a CEO. And I think that tells you the Board and the team were able to communicate with each other and delivered a sterling performance. So I think the team is a very good team, and I am no doubt about it. My guidance will be to help them move -- tweak the model a little bit here and there. But I think I'm confident that the fourth quarter and into the new financial year, we should be all well set to deliver good results.

Okay. One other question. While I'm not seeking from you any guidance for the year ahead, but do you think the banking sector, particularly the SFPs are now getting over COVID 1, COVID 2 and whatever little of COVID 3 we are having and you can say with reasonable surety that we should be back on the growth path? I'm not talking of Ujjivan per se alone but the sector. And particularly, when I asked this question, the fact that there has been a huge demand for growth, does that all go really well for this sector going forward?

No, I think in the first 2 waves, the economy of people and government were a bit unsure of how to react. Now that we have seen what the reaction is in the third wave, and this is not just in India, it's a global phenomenon. We are now -- everybody is trying to build and work within the COVID wave as business as usual. And it can be done. It has to be managed. And I think that is what we are seeing that we COVID is under control in its own way. People are managing with it. And then the customer base that we operate with are very resilient. And I think that resilience is an important factor. In the first 2 waves, they were unsure of how to react, how to take -- how to respond. But now 1.5 years, 2 years down the road, they have adjusted. And we are seeing this across the country. And I think it's quite an eye opener that people will come back and overcome their difficulties. And I think that is the important factor that we are seeing across the country. And it will help all SFBs help the banking sector across not just individuals, but I think some will benefit better if they have got their information and able to use it proactively.

Right. One last question. There are SFBs and SFPs. Would one differentiating factor as we move forward be the fact that you are highly digitalized and is a great user of fintech. So could we call Ujjivan a highly digital based bank with a lot of fintech in it?

Mr. Kejriwal, thank you for the question. So I think Mr. David touched during his speech, I think given Ujjivan has one of the highest mobile banking transaction during the month of November, we have the -- it is highest among the small finance banks. In terms of share, it is [ 49% ] share among the small finance bank. And also happy to let know that we have been ranked 31 among the 451 banks which participates on this platform. And our UPI transactions touched 1 million during quarter 3. It's an increase of 14%. And in terms of value, it has increased by about 28%. We have also enhanced our security features on our mobile banking so that our customers can transact freely on this platform. We already have signed up with the 2 large payment gateway operators. Talks are in the 3 more payment gateway operators so that our wallet of transactions increases multifold. On the terms of robotic process automation, we had committed in the last quarter that we'll be adding some more, we have added 3 more in the quarter, and the 10 more are in our pipeline. So our robotic process transactions have gone up to INR 4.85 crores. And in terms of fintech partnerships, so 6 partnerships are live, and 2 more are in the same conversation stage which is the [indiscernible] advanced stage. And in terms of our API, the 169 APIs are live, and we see a good retraction in the number of transactions happening through the API banking, it will increase by about 36%. And we are on track in digital banking and with the joining of Mr. Sriram to be free to propel further.

Look forward to a much superior number when we report for the year ended FY '22.

Thank you, sir.

Thank you. The next question is from the line of Vijay Karpe from Bryanston Investments.

So I have just one question, and this was on the state-wise collection efficiency. So we have seen the collection efficiency improving from October to December for somewhere from 92% to 96%. What has that number been for January '22? And what would have been your billing efficiency for October, November, December and January for Tamil Nadu and also for Maharashtra if possible?

[indiscernible] give it to you.

So TN is at 94% and Maharashtra is at 98%.

For January?

For the month of January.

And what has been the billing efficiency for October, November, December and January.

So for Tamil Nadu, the efficiency has moved from 94 in October to 93 November and 96 in December. For Maharashtra, it has moved from 92 to 93 to 98 in October, November and December.

This would be the collection [indiscernible]. What would have been the building efficiency?

Which one did you say? Sorry, your voice was not clear.

Yes. So the numbers which I shared in the presentation, this would be the collection efficiency. What would have been the billing efficiency?

Vijay, we have not given billing efficiency for any of the state or overall. In general, the billing efficiency is around 3% to 4% lower than the overall collection efficiency.

Got it. Got it. And how much of this improvement in collection efficiency is attributed to the write-off [indiscernible]?

So we had a total write-off of about INR 150 crores during the quarter. And so therefore, the difference will be very marginal, the impact would be very marginal. Collection in the write-off account would not be very high. And the overall write-off is also less than 1% of the book. So like Ashish said, the impact would be very marginal.

The next question is from the line of [indiscernible] from Haitong Securities.

I just have two questions from my side. Can I get the CASA breakup for this quarter?

Yes, just a sec. Just a sec, we'll give it.

Yes, okay. And my second question is like also segment-wise GNPA breakup for this quarter?

So staff for the December period is around INR 440 crores, rest is [indiscernible].

Okay. And what is the D&C breakup for this quarter?

So on micro banking, it is 11.4. Housing is 5.6. MSC 11.4; personal loan 8.4 and micro loan 6.7.

[Operator Instructions] The next question is from the line of [indiscernible], an individual investor.

Sir, my first question is what is -- I mean, what about branch expansion. You haven't opened any branch from last many quarters. So what is the way forward?

Yes. I mean during this COVID crisis, it didn't make sense for us to open branches when business was -- had slowed down or come to a standstill in some parts of the country. So as part of the plan for the next financial year, we are looking at opening branches. And once we make a decision in the next con call, we'll let you know how many branches we are doing.

Okay, sir. And sir, many of the banks now are tying up with neo banks. And what about Ujjivan in this regard?

Yes, it's part of our road map. The discussions have started, and we'll be letting you know once we make significant progress on that.

Okay. Okay. And sir, in quarter 1 investor presentation, you mentioned about credit card business. What is the update on that?

Yes. The credit card business is something that we have been checking with our customers, whether they need it or not. And I think going forward, we will launch it in some form or the other, but it will be, again, something for the next financial year.

The next question is from the line of [ Raja Kumar ], an individual investor.

Yes. Sir, just 2 questions. I just want to know when do you expect to close the QIP and also, just wondering whether you are able to price the QIP at a good price given that your share prices are subdued because of the losses?

We won't be able to comment on market outlook right now. We are confident on the business and the performance and all those things. And we said that we'll test the market when we go and meet investors. Basis our interactions after we have released Q3 business numbers, and after the quarterly results, we see a good amount of production coming back, so we remain confident on it.

Okay, sir, great. Sir, the next question is, what is the credit guidance for FY '20 to '22? And also would you be able to maintain or improve the lens for the upcoming year?

We see the credit cost to be significantly lower in the upcoming year as compared to the year gone by because of obviously the COVID impact and this was an external event on which no one had a control. So we see the credit cost normalizing over the next 2 or 3 quarters. We already have a very, very healthy PCR. So the incremental costs, as I said earlier, will be nothing in comparison to what we have seen in the last 2 quarters. And we see that it will be somewhere in the range of 1%. We also carry a floating provision of about INR 250 crores, which is yet to be utilized. So that can be used as and when we require in case of an adverse event.

Sorry, sir ,so you said 1% is the credit cost guidance for next year. Is that correct?

So we are not really giving any guidance what Ashish gave was an indicative assumption that aspiration that we want to have in FY '23.

Okay. Great. And any color on the NIM?

The NIM is something that depends also on how your GNPA book moves. There's no pressure on the yield as such because the interest rates that we are charging on the various products are where they were. So as the GNP reduces on the book, NIMs should improve. So that actually gives us some scope of relooking at the product portfolio also, and given that the micro banking book is also performing well, so there's absolutely no reason for us to believe that there will be any kind of a pressure in the NIMs going forward.

So you'll be able to maintain it at least that's what you're [saying]?.

So again, like I said, we're not giving any guidance, but directionally, there would not be any pressure on NIM.

The next question is from the line of Gaurav Jani from Centrum.

Just one question from a regulatory standpoint. As per [SEBI] when would we have to comply with the minimum shareholding [indiscernible]?

Yes. We had our IPO in December 2019. So the SEBI guideline requires us to be 35% public shareholding within 3 years of that IPO.

Okay. So...

December '22 is the outer limit as far as SEBI [indiscernible] -- December timeline.

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Davis for his closing comments.

Well, we appreciate the time that all of you have taken to participate in this call and the questions were very useful. And I hope our answers have benefited you, and we look forward to continuing our dialogue with you on a quarterly basis. And thanks to IIFL for hosting this call.

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