Good evening, everyone. I welcome you all in the IIFL Finance investor conference presentation call.

My name is Vikas Jain, CFO, IIFL Finance. We have today Mr.

Nirmal Jain, MD, CEO, IIFL Finance; Mr. Girish, who is CEO of IIFL Home Finance; and Mr.

Venkatesh, who is the CEO of IIFL Samasta Microfinance. Now I will hand over to Mr.

Nirmal Jain for macro and strategic overview for the quarter.

Thank you, Vikas. Good evening, everyone, and thank you for joining us today.

On the macro backdrop, the West Asia situation has reignited over the last 2 weeks after the June ceasefire framework, keeping crude and shipping volatile. RBI held the repo rate at 5.25% in June with a neutral stance, but it trimmed FY27 growth outlook to 6.6% and nudging inflation up to 5.1% on account of geopolitical and external pressures.

However, domestic credit demand, particularly in retail and MSME, has remained structurally resilient regardless. Coming to our main core business, gold prices, despite corrections, have been elevated through this period of uncertainty, and while that has supported our growth and which has been tonnage-led growth as well, but we are equally mindful that a sharp correction is a real tail risk in this environment, and we are therefore constantly focused on maintaining loan-to-value discipline and collection.

Coming to performance, for the quarter, our return on equity annualized is close to 20%, 19.5%, return on assets is 3.1%, and on a book that is nearly 90% secured. Our AUM has crossed ₹1.15 lakh crores, is up 38% on a year-on-year basis.

Gold loan has remained our primary engine, but as I said, we are managing growth deliberately. Our home finance and microfinance businesses typically have a first quarter comparatively slower, but both these businesses are structurally on track, and we expect the trajectory to strengthen through the rest of the year.

Our co-lending continues to scale, albeit slower than our plans in the first quarter, but now with 15 active bank partners, we expect it to gather momentum. Also, our AI-led operating model is moving from pilot to measurable impact across collection, fraud detection, frontline productivity, and so on.

Also, the board has approved enabling resolution for fresh equity, which is subject to shareholders' approval in day after tomorrow's AGM, which will give us flexibility to raise capital during the year as and when needed. In summary, this was a quarter where our profitability and operations are back to their natural levels, and from here on, we expect organic growth to continue and also AI and operating leverage to support the profitability acceleration in the near future.

With this, I'll hand over to Vikas for the detailed numbers. Thank you.

Thank you, sir. To start with the financial numbers for the quarter, for the quarter, IIFL Finance profit after tax before non-controlling interest was ₹713 crores and up by 14% on quarter-on-quarter basis.

We recorded pre-provision operating profit of ₹2,252-odd crores, up by 50% y-o-y basis and 7% on a quarter-on-quarter basis. For the quarter, consolidated loan AUM grew by healthy 38% y-o-y and was up 7% on quarter-on-quarter basis at ₹1,15,523-odd crores.

Driven by gold loans close to around ₹58,406 crores. Further dissecting the AUM, our core product loan AUM comprising home loan, gold loans, MSME loans, and microfinance up by 43% y-o-y and was up 8% quarter-on-quarter basis to ₹1,11,717-odd crores.

This segment now comprises 96.7% of our overall AUM mix. On the asset quality side, our gross NPA stood at 1.6% and net NPA stood at .8%, both which are stable and slightly up by 9 basis points from the quarter-on-quarter basis.

The company maintains a cautious stance on unsecured MSME and MFI segment, focused on recovery and collections. Happy to inform that provision coverage ratios on NPA stands at 94%.

The assigned loan book stands at ₹26,118 crore, up by 73% on y-o-y basis and up by 10% on quarter-on-quarter basis. Besides this, there are co-lending assets of ₹14,647 crores, which is up by 27% and 2% on quarter-on-quarter basis.

Quarterly average cost of borrowing has decreased by 3 basis points on a quarter-on-quarter to 9.13% and 33 basis points on a y-o-y basis. A brief update on liquidity.

During the quarter, we have raised ₹17,183 crore through term loans, bonds, commercial paper, and ₹5,283 crore was raised through direct assignment on loans. Our cash and cash equivalent and committed credit lines from the banks and institutions is ₹7,148 crores, are adequate to meet not only the near-term liability, but also to fund our growth momentum.

We have a positive ALM whereby inflows covers or exceeds our expected outflow across all buckets, and net gearing is at 4.0x. Our ROE for the quarter stood at 19.5%, and while ROA stood at 3.1%.

Basic earning per share for the quarter is ₹15.9 per share. As of June '26, our capital adequacy ratio for NBFC is 17.1, HFC 14.7, and for Samasta is 24.9%, which is well above minimum threshold of around 15%, reflective of our successful off-book model which we have implemented.

Also in the quarter, Moody's rating has assigned us Ba3 issuer rating and (P)Ba3 GMTN program rating to the IIFL Finance, outlook stable. We have raised USD $500 million through social bond issuances proceeds, which are directed to income-generating loans for women, low-income, and rural, semi-urban borrowers.

CRISIL ESG rating has assigned an ESG rating of CRISIL ESG 66 and core ESG rating of CRISIL core ESG 69 to the company. With this, I come to an end, and now we are open for Q&A.

Thank you very much.

Sir, thank you for the opportunity and congratulations on really good set of numbers. Two questions.

At the current rate of growth, when will you be required to go for equity raise considering CET1 is already at 12.24 in the standalone entity? Because the gold loans I understand the risk weights are 125% and though you have alluded to reduction in the gold loan growth rate, but even then we are very close to the regulatory minimum, so that's one question.

Second question, in the IIFL Home Finance entity, can you give us the disbursements separately for home finance and LAP? Do you think that Q1 is the bottom for the disbursements and the AUM growth going forward, the housing finance growth and LAP growth will pick up?

What is the kind of expectation there for FY27? Thank you, sir.

Thanks, Pavan. Gold loan industry growth has slowed down in this quarter, but we are still growing maybe faster than the industry, I don't have the data, but that's what I think so.

Then about capital, I think we need to fix the capital adequacy issue in the parent company, and that's why we're taking shareholders' approval in this meeting, which is day after tomorrow. Now, we have multiple options.

Basically, we can raise QIP or we can do a secondary sale of subsidiary companies. We are also looking at a strategic divestment partly or this thing of microfinance.

We can raise equity through subsidiary companies. Also, co-lending is gathering momentum now.

That will also ease the pressure this quarter. We can raise subordinate debt and perpetual debt also, which we had raised quarter before.

That will also help us. We are very conscious of the capital adequacy, which in the parent company is kind of at the edge, and we want to fix it.

All these options are open, and we want to keep all the options open so that Once we have shareholders' approval is valid for full year. At appropriate time, we can make sure that the capital adequacy for this business is properly maintained.

About home finance, Girish will give you the disbursement data. I think there's strong pick-up in the disbursement, but let Girish give you the data.

Sir, Girish before Girish sir gives, just one clarification. Because, share sale, stake sale in the subsidiaries takes time, right?

The due diligence, everything will take some time. Even if you raise Tier 2 debt again, AT AT2 debt, that will be Tier 2, right?

It won't be counted towards Tier 1, and the way

No, perpetual is counted towards Tier 1 subject to certain numbers. The perpetual debt is counted as Tier 1 up to 50% of the equity,

and

I think, maybe there's some certain restriction on the total quantum, but it is counted as Tier 1. Subordinate is counted as Tier 2.

We have been working on this. I'm not saying this will happen tomorrow, but it can happen very quickly.

Got it, sir. Your preference is towards not raising that equity in the immediate term,

but We can raise equity also. We are open.

It all depends on the valuations in the market. We don't want to be in a desperate situation, we are trying to work on everything, including co-lending, perpetual, subordinate debt in this quarter.

Yes, something which is equity, we are open to raising equity also. It's not that we don't want to raise, but we want to raise at some reasonable valuations.

Got it, sir. Thank you.

Under home loans, basically, Quarter 1, if you look at last few quarters, I think we registered highest disbursement growth. Sequentially, we have grown disbursement by 39%.

This is high compared to last three quarters. Even we could see good growth on the AUM, which is 4% sequential, and book growth is 7%.

This trend will continue. Generally, in housing loan industry, Quarter 1 is soft, and from Quarter 2 it picks up.

We expect that the momentum to continue, and we will be able to further improve upon it. Not just this, we have also improved our onboarding yield.

In last two quarters, we have increased about 68 to 70 bps on the overall incremental book.

Sir, the 39% growth is between home loan and LAP together, right, in IIFL Home Finance?

Yes, this is overall sequential growth in disbursement, 39% overall. Both put together.

Home loan is about 80% of the portfolio, and LAP is about 18% or 18, 19% kind of thing.

Sir, can we say that like this quarter, like going forward the growth will be much faster like home, particularly home loans, which has grown only 3% quarter-on-quarter?

This is sequential. If you look at the overall year, we are looking at growth of about 17 to 18% on book and AUM.

Disbursement growth will be over 30%.

Got it, sir. Is that the kind of growth estimate for the full year also, 17

to 18%? For the full year.

This is for the full year.

Full year the book growth

No, no. For FY27, for the full year FY27.

Yes.

For FY27, yes.

Okay. Sure, sir.

Thank you so much. I'll come back in the queue.

Thanks for the opportunity and congrats on good set of numbers. My first question is on the target that you have given in slide 20.

In FY27, the credit cost is expected to be 1.5 to 1.7, which is sharply dropping in the next 2 years. Which segment do you see will be contributing to this higher credit cost in the current year, because microfinance as I can see in Q1, it's turned in favor of the industry, and even the gold loans and all are not witnessing any higher provisionings?

Just trying to understand the higher credit cost for this year and what will lead to a steep decline in the next 2 years.

This year in our housing finance, because there's a smart portfolio of micro LAP that is there. If you really look at our housing finance, GNPA they're much higher than the peers, and that is what will be fixed in next 2 years.

What is the outstanding micro LAP book as of Q1 end?

The outstanding of micro LAP is about ₹440 crores.

₹440 crores.

₹440 crores.

The other BLD

is about ₹260. This is a problem book.

Okay.

It's not significant, but it is just the residuals, it will have clean-up in this year.

Got it. Second question is on Just continuing the previous participant's point on the fund raise.

You are looking at stake sale in microfinance subsidiary. What is the multiple that you would be looking at bare minimum if you want to exit Samasta?

Would it be a partial stake sale or you are planning to exit microfinance completely?

No, we can do partial stake sale also. Now the business has recovered this year, but it's very difficult to give any guidance on this, because it depends on the negotiations and deals and this.

The environment has improved now, and therefore, it may be a time to raise capital there. Also, in our parent company, the subsidiaries are valued at cost, so that basically is disadvantage when we compute the capital adequacy for the parent.

Even if we demerge, then also the capital adequacy gets released. We're looking at various options, but as I've said in the previous question that we are very conscious of this, and we want to make sure that this is addressed properly.

Because diluting at the current valuations would be your last option that you would be looking at, right?

I think we can still continue for a quarter or two more with the co-lending picking up, and perpetual and subordinate, our capital adequacy will be better as we go along. We are not, as I said, that what you're saying is right, but we need to look at the multiple options and take one.

Understood. One more question on this Project SPACE.

You have given some data points on slide number 19. The ranges are very wide.

Loss prevention, you are saying 10 to 40%, operating cost 8 to 20%. Any specific reason why such a wide range

and

also on the opex to AUM, if you can give a guidance, how we should look at it going forward?

AI is a new animal, and I think we are also a human organization, business moves slowly. This is something which will be achieved over a period of time.

If you say the cost reduction over 3 years, then I'm very optimistic that it might be on the higher side, but in the first year, it'll be on the lower side. As I said that this is completely everybody is sort of talking about it, doing it.

In my opinion, more or less everybody will get the AI right. Just like mobile or any other technology, few months here and there, everybody has adopted.

I think, we are also looking at it as a completely new thing, and that is why the range is wide. This is not a tested technology.

This is not something that you have precedents or a model, and you can say this is what I'll achieve.

Okay. On the opex to AUM, what is your?

Opex to AUM, I think we are down to 3.4. From here there can be a marginal decline, because we are also setting up new branches.

Last year we did not set up any new branch. I think 3.4, 3.3, or this is the range that you should look at.

AI benefit is again a black box. We'll see over next 2, 3 years that probably we can contain it further.

This 3.3, 3.4, are you considering any benefits from what you have mentioned about Project SPACE? Are these factored in already?

Yes.

If you really look at our fixed cost in this quarter and last quarter, despite growth in the business, it has grown by 2% or something like this. Obviously, you see that the AI benefit is already start to kick in.

It's very difficult to estimate, but what I can tell you is that the operating cost over next 2 to 3 years, you'll see a downward trajectory, which is combined impact of AI and also as our scale goes up. Our branch-led model with 4,500 or 5,000 branches, we are a very heavy fixed cost model, because the branches' costs are fixed, employees have fixed salaries.

If the scale goes up, then the operating leverage benefit us a lot. I am also trying to factor in the expansion that we are going to do, because as I said, this year we want to set up 500 new branches.

That will to some extent mitigate the benefit of operating leverage.

Understood. That would be it from my end.

Thanks, and best of luck.

Hi. Good evening.

Thanks for taking my questions. I've got a couple of those.

First, on asset quality, can I understand what's driving the higher gross NPAs both in home and gold loan segments quarter-on-quarter? Is there anything systemic that we need to worry about?

I think gold, one should not worry about, because these are customers that generally don't default, and their jewelries are emotional value, you have to be a little careful and give them some more time. In housing also, as I said, that we are mending it structurally, so as we go along, you will see that coming down significantly.

Compared to, say, last year, we are significantly down, and now that we are pivoting towards a secured portfolio, then you see our credit cost and losses will become minimal.

Got it. If I can just follow up, in case of your housing loans, on an average, whenever we see a default and an actual loss, what's the LGD on a blended basis for the housing book?

If we take on the entire book, LGD will be anywhere between 33 to 34%, and our coverage also is accordingly done.

Got it. Okay.

My second question on your long-term strategy, and I'm sorry if you've already answered this, but your guidance of effectively increasing ROA by 50-odd basis points, a lot of that appears to be coming from credit costs, but outside of credit costs, are there any areas you think which can also help in terms of getting to the higher ROA, including operating leverage or margins or otherwise? Also, I just wanted to understand what's the outlook for margins for the next two, three quarters?

Have your cost of funding worries come down, especially after the spike in yields in initial part of the quarter? Those are my two questions.

Thanks.

ROA, I think 40, 50 basis point post-tax, something like 50, 70 basis points pre-tax, which is coming 40, 50 basis from credit cost, 20, 30 basis point from maybe rest of the things, which can be operating cost as well as the NIM improvement. Now, in terms of the cost of borrowing, cost of funds, I think the general industry is of the view that with the CRR liquidity will ease in the system, and we should be able to borrow at a lower rate.

In the last couple of quarters, we have paid slightly higher rate, and also our dollar bond has been at a higher cost. Margins are stable in the gold loan despite competition.

We focus on a very small segment, which is the customers which are ticket size is small, there I personally don't think any pressure on margin, because the rate at which we lend, given our scale, we afford, but otherwise for small-ticket loan, that's a very fair rate, we expect margin to be stable. Margin will remain in this range, and benefit will come from operating cost and also credit cost.

Other income constant with AI, we should achieve some benefit there also.

Got it. In fact, in this quarter, the gold loan yields are up slightly.

Have you increased pricing for any particular gold product, or what is driving this almost 40, 50 basis points increase?

It's a portfolio yield. When we started after embargo, initially the yield was lower, but as we have been talking about in earlier, and this call also, we've picked up, and so as quarter after quarter you see the advantage coming in, and as I said that because we're focusing on small-ticket loan, we are able to maintain our yield.

Typically if you see the loans are for 6 to 12, 24 months actually. As the new loans are at a higher rate, you'll see yield improving.

Got it. Thank you.

Those were all my questions. Appreciate this.

Good evening, everyone, and thanks for taking my questions. Congratulations on a good quarter.

Nirmal sir, first on gold loans, just trying to understand with so many other larger bigger NBFCs now foraying into gold loans in the last one or two quarters, have you heard anything from the ground in terms of they being aggressive or higher competitive intensity, or this is still just a narrative right now? Basically, what I'm trying to understand is while in housing finance, Girish sir said earlier that we have managed to take yield hikes about 60, 70 basis points on the incremental loans that we are doing, is that something similar we are able to do on gold loans as well?

They are two different products. In housing, what is happening is that there's a mix, and earlier we had this micro LAP, which had a higher yield of almost 20 18 to 24%.

That portfolio is declining. If you see that although Girish talked about boarding yield going up, the portfolio yield has come down in housing finance, because that high yield portfolio is running off.

In gold, it's one product, and here while the competition is there, I'm not denying that there's competition is, and competition can be aggressive in two ways. One is they can drop the yield, and two is they can increase the LTV.

We are seeing some of the new players getting aggressive in both ways. There's a huge market, and we have a customer franchise, we really aren't chasing cut-throat competition or a growth, because we have our customers, our branches, and we are maintaining that relationship as well as our business.

Also, there's a learning curve. Many competitors that set up new branches, you need to get the system, security, people, training, everything right.

It's a process. It's a massive market.

There's a very large market. Still, part of the market is unorganized sector.

Banks have a very large market, maybe two, three large public sector banks have more than ₹3 lakh crore kind of portfolio. I think the market is there, and also now that unsecured lending has become difficult, more and more customers are veering towards lending or borrowing against gold.

Got it, sir. Sir, then the second question I had was about a lot of these management changes that we've seen in the last 1 year.

I think we had a change in our CFO. I think today we have said that our business head unsecured lending is moving to another role within the company.

Girish sir himself has come on board for us.

How Let me explain. Unsecured lending is discontinued.

Obviously that role has to be redefined somewhere. CFO is still there in lending strategy, but they are personal and health issues, so that is a different question.

Other than that, if you really look at our Tier 2 management or even Tier 1, many of them have been there for 15, 20, and 30 years. If you look at our gold loan head, he has been here in the company now almost for maybe 30 years, almost 25, 30 years, there are many old people, and that is the strength of the company.

Some changes will happen in a company as large as this.

Got it, sir. Sir, are we looking to introduce any newer products into the standalone entity now, while gold will remain the core product, any newer products that you are looking to introduce, or in other

LAP or secured MSME is another product which will be there in our listed company. A very small product, loan against shares, continues, but other than that we don't have any plans to introduce any new products.

Got it. Lastly, sir, one clarification.

When we said that we have discontinued unsecured lending, we've stopped doing unsecured business loans as well?

Absolutely right. Unsecured business loan, personal loan, both we have discontinued.

Got it. Lastly, Girish sir, just trying to understand while you laid out that you're looking at about a 30% disbursement growth, 17 to 18% loan growth this year, and the fact that what Nirmal sir explained that disbursement yields are higher, but given that micro LAP used to be a higher-yielding product and that is running off and you're not doing that product anymore, how are you thinking about kind of improving the ROA trajectory over the next couple of years?

I spoke about what is going to be the plan for this year in terms of book growth, AUM growth, and disbursement. I think that trend will continue for next few years, because we see lot of potential.

In spite of Quarter 1 being soft, we have done pretty well on all the three fronts. To a certain extent, probably last year was soft, but even if I compare with Quarter 4 sequentially, we have done a good lift on disbursement, book, and AUM.

If I continue with this, maybe in next 3 years' time, we are looking at ROA of about mid-teens. I think that's the plan.

We are focused on that. Now we are pivoting more towards affordable, and the balance, we are also into emerging.

We have completely cut down on prime, which means low-margin business. Every year if you take, if you look at any company's portfolio, I think the year's disbursement will account to 18 to 20% of the entire book, right?

In next 2 to 3 years' time, which means 50 to 60% of the entire book color will change, and that should lead to profitable growth, and it will also give us good return ratios. Girish, in terms of trajectory, probably what they're trying to understand is that how the acceleration will happen.

Based on our thing, our plan, quarter after quarter, we should see profitability improving faster than the loan growth.

Got it, sir. That answers all my questions, sir.

Thank you so much, and I wish you and your team the very best.

Hi, thanks for the opportunity. I just had the first question on the income tax footnote that's there in the financial statement.

If you could just elaborate on the 4 ₹475 crore impact that's there.

It's nothing. This is what we discussed last time.

There is no new development on that. There's a demand of ₹475 crores, against which we filed an appeal with CIT, and the process of income tax is that first you file appeal with CIT, then you can go to tribunal, and then you can go to high court and supreme court.

There is no new development there.

Thank you. Also for the SRs, I see that the standalone entity, the SRs are the same quarter-on-quarter, and if you could just elaborate on the SR position for the subsidiaries, where that could be.

SRs basically, the redemptions will happen in lumpy way. As we have guided last time that in 12 to 18 months, probably more or less all the SRs will be fully redeemed, and as I said last time also that we believe that we'll realize more than what the book value is.

Actually last quarter there was not much movement, but in the rest of the year and so I think by September '27, more or less, this book will be completely wound up.

Got it. Thank you.

Thanks a lot.

Hi. Thank you for taking the question.

If you could just highlight what was the credit cost for FY26 in this quarter, that would be useful. Secondly, on the credit ratings on the international market given that you have been very active, any indication of what your engagement has been with the agencies, given you are on positive outlook from two of them?

I know you recently got a higher rating from Moody's, but just from the other two, where do we stand in terms of your communication and the discussion? Thank you.

Thanks, Love. Moody's has upgraded our rating with one notch above Fitch and S&P.

Fitch has been actively engaged, and immediately after the results they will take it to a committee. We are very optimistic that even Fitch rating should get upgraded.

Also we'll engage with other agencies, other international agencies as well as local. Our credit cost for the first quarter is how?

1.6%.

1.6.

Yes.

1.6%.

For the entire FY26?

When we say credit cost is based on the average loan book.

Okay.

I think we have guided similar number around 1.5 to 1.7.

Okay. Understood.

Going forward, gold loan reported GNPAs can be slightly higher as the book grows and the prices are volatile. We always have enough cushion.

If the gold prices have fallen, then we don't press the button, trigger, and just auction everything depending on the margin that we have. Reported number can vary, but the loss given default in gold in the last 15, 16 years has almost been zero.

Okay. Understood.

Just on your borrowing cost, I know there's a slight uptick in the cost of funds for this quarter given I think probably you have to raise more in the international market, but just generally where do you see the trend for the next quarter?

We raised $500 million by dollar bond, which is, with the fully hedged, cost is slightly higher. This is international market which we used to diversify and we should tap.

Companies like Shriram has done a wonderful job by being consistent in this market, and over a period of time, the cost comes down. That has basically been one of the reasons for increase in our weighted average cost.

As I said that the expectation is that after this FCNR, liquidity will improve domestically, and we should see the cost coming down.

Understand. Thank you so much.

That's it from me.

Hello? Good evening, everyone, and congratulations on a very good set of numbers.

Few questions. First, on our gold loan business, we have done a fantastic 21% Q-o-Q growth there.

If you can just touch upon how much of this growth would be tonnage-led and how much would be value-led? If you can share that number.

Secondly, if you look at the LTV, I think from March we were at 63%. Right now we are going to an LTV of 70%.

Is there a headroom for us to now increase the LTV, or now the growth will primarily be a volume-driven growth going forward for the next couple of quarters? That is on the gold loan part.

On the asset quality, maybe we'll take it up later.

Rajiv, I think our gold loan growth has not been 21, but 11% quarter-on-quarter. Hello?

Hello.

It has been 11% quarter-on-quarter.

Sorry. 11% quarter-on-quarter, yeah.

And 5,

6% has been the tonnage growth. The gold prices had corrected in February and not in this quarter.

I think we're maintaining a healthy cushion there. Okay.

Okay. On the asset quality in the gold loans, if you were to look at the 1 to 30 DPD and the breakup that you generally give, we have seen an increase as compared to Q4.

Basically, the gold loan portfolio and the MSME, both secured and unsecured, have seen an increase in the 1 to 30 and the 30 to 90 DPD buckets. What are the reasons?

Okay. Gold loan, I think this question I had answered earlier also.

The customers basically, because we don't have any penalty or any penal charges in case customers pay before 90 days, and normally these are the small amounts that customers our branches collect on a monthly basis. Typically they know that just before 90 days they have to collect it fully.

In some small state cases, there can be some delay. Therefore, 0 to 30 and 30 to 60 can be higher.

Mostly these are small traders, shopkeepers, businessmen, mom-and-pop shops. You generally collect before 90 days.

I won't be worried about slight increase in DPD in the gold loans.

Okay.

Okay. Which is also not very significant if you compare number quarter-on-quarter.

It's very marginal.

Yeah. In terms of absolute amount, it is not huge.

Basically, if you were to take a point, that means you're saying that while the gold prices may be volatile, maybe even downward going over the next two quarters, for example, your buckets may move in between 30, 60, but your 90 DPD, you don't think that will go up, right?

Yeah. Even if that goes up a little bit, few basis points, the losses will not be there.

Ultimately, it comes back.

Sure. Sir, on the MSME part, both secured and unsecured?

MSME unsecured is a discontinued business, there I think we are recovering whatever is the balance portfolio. The denominator keeps shrinking, you might see some increase.

In case of MSME secured again, I think there is very marginal movement. There's hardly any 2 basis point movement.

Okay.

Yeah. Okay.

Okay. Sir, on the microfinance portfolio, we have seen a growth coming this quarter also.

Would you see a same quarter-on-quarter AUM growth trend now going forward, and even for the profitability and ROA in this business improving quarter-by-quarter going forward?

Microfinance industry has picked up, there's about 3, 4% growth quarter-on-quarter. Within that also, the microfinance is also diversifying more into retail and the secured other loans, which is really cater to other products that we do.

Microfinance industry okay, it will not grow at 30, 40, 50, 60% what it grew in '24, but steady 4%, 3, 4% growth per quarter will happen.

What is the ROA, ROE targets that you would have here?

ROA target for?

Microfinance, Samasta.

I think it will be around 2.5 to 3%. Venkatesh, is that right?

Nirmal. We'll hit around 2.5

to 3%. 2.5 to 3%.

So 2.4 will go to 2.5, 3% under prevailing by the end of the year. Closer to 3%.

Yeah.

Okay. Thank you very much, and wish you all the best.

Thank you.

Hi, sir. Thank you for giving me the opportunity.

My question is pertaining to the gold finance book. In this quarter, we've seen the new RBI framework being implemented for the lenders.

What sort of challenges or developments that we've seen during the quarter while doing the business? As well as have we made any changes in terms of tenure, in terms of let's say product launches within the gold loan portfolio, or we are still continuing with the vanilla gold loan portfolio product that we had?

Income assessment has become mandatory. You can define the loan as consumption or income-generating loan.

In consumption loan, you cannot go beyond 75% LTV, and in income-generating loan, you can go beyond 75% LTV, but you have to make sure that you do the assessment of cash flows and income. We're working with this.

We have a good technology-driven system to do that for small businesses that borrow from us. In a way, I think these developments are healthy from a long-term point of view, and our systems are fully tuned to that.

To just follow up on that, we have launched an income-generating gold loan product as well, do you mean to say?

We have income-generating gold loan products also, and we take udyam certificate and business proof for that also, yes.

Got it. Sir, with respect to the new framework, as you also put up, you have launched this product as well.

At ground level, did we change anything on the tenure side, because in the consumption loan product, implementing the newer LTV norms could actually lead to lower disbursements for the customers. Have we tweaked anything on the tenure side during the quarter?

Not very much. We always had a tenure of 2 years available for customers, and that continues.

Okay. Got it, sir.

Thank you so much for answering my question. Thank you.

Yeah. Hi, sir, and thank you for taking my question.

Congratulations on a good set. I just wanted to understand as on the on the previous question that one of the participants asked, if you could just walk us through the 30-plus the 30-plus slippages and and if there's if there's any part that you're concerned about.

I'm sorry if you've already answered this.

So 30-plus slippages in which product you are saying?

Overall in the asset quality metrics that you've mentioned, right, 1 1 to 30 and 30-plus. If you look at our slide 12

If you look at our slide 12, that gives you the numbers for every product on 30-plus, 60-plus, and beyond.

Yeah. No, I'm aware of the metrics.

What I'm trying to get at is there's a sharp increase in those metrics especially in gold, just if there's anything concerning about it.

No, gold loan, I think the 30-plus is how much now? 1 second.

3.9%? 4.2%.

30-plus is 3.8?

3.8.

As I said, it's a very marginal increase first, and secondly, in gold loan, sometimes some customers don't pay on time, then, based on our margin, we hold back. We just don't auction.

This is not something which is not manageable. This is more or less, if you see historically, the numbers have been in this range.

Okay. This is sort of seasonal, and nothing that you're worried about, right?

Yeah.

Okay. Thank you.

Hi, thank you. In continuation of Shripal's question from earlier, right, couple of gold loan companies mentioned they are looking to structure gold loans as interest-paying instead of bullet loans.

Have you made any such change on the interest side? That's one.

The second thing, on the standalone entity, right, the assignment quantum actually increased year-on-year from ₹4,200 crores to ₹4,800 crores. This is the Q1 number.

The assignment income has come down from ₹173 crore to ₹43 crore. Any reason for that?

Lastly, earlier used to give data book. Have you stopped it?

It used to be quite useful.

No, data book is there. It's uploaded already on our website.

I think there was a link in the presentation, that we should add. We uploaded it separately.

Data book is already there on our website,

huh? Sir.

I missed it. Thank you.

No, you can check that. Now,

I think the link which is there on the last page is not there, but I will just make sure that's there. That is about the data book.

Your other question was?

On the interest instead of being bullet loans, are you looking at?

We always had that product. See, in gold loan, when a customer walks in, you can have a monthly interest payment, quarterly interest payment, 6 months, 1 year, or bullet, and the interest rates differ.

If you would say choose monthly interest, then your interest rate is lower because we also know that the customer is a regularly income generating and is a good customer. We always had these products, there's nothing new we need to introduce.

Is there any traction for that particular product particularly monitoring income-generating loans is quite difficult compared right?

Maybe I think too early, because the entire income generating and these things have started in this quarter. We'll see the trend now, but as of now, I don't have much variance or something which is significant.

Got it, sir. The assignment income going down from ₹170 crore?

Just 1 second, huh? Hello?

Assignment income of housing finance has gone down, because the assignments are smaller, but standalone has gone up. The assignment income in home loan, because of 15-year product or even 7, 8-year behavioral, will be significantly more.

Sir, I'm referring to standalone entity, the ₹173 crores to ₹43 crores net gain on derecognition.

Oh, yeah. I think you're talking about the standalone this

thing. Correct.

Now

that co-lending has picked up, but our assignment was also higher. Sometimes what happens, assignment they happen towards the end of the quarter, then you can just take for a limited this thing.

Just give me 1 minute, huh?

Sure, sir.

What has happened, the incremental deals in quarter are lesser now, because co-lending has picked up. Although the portfolio might have gone up, but this happens based on the transactions done during the quarter.

That is why you see lower assignment income in standalone.

Sir, you disclosed that the amount of loans assigned are ₹4,800 crores this quarter.

The upfront income is based on the transactions done during the quarter.

Correct. During the quarter

The transactions done during the quarter are fewer as compared to the previous year same quarter.

The quantum of loans assigned was ₹4,200

Sorry?

Please go ahead, sir.

No, you're saying ₹4,200. These are the portfolio

that you're talking about.

No, last year I think ₹4,600 what you're referring to, is it the transactions done during the quarter?

No, sir.

As per the data

sheet, ₹4,200 crores was the last year amount assignment done. This year you have done ₹4,800 crores.

There is a ₹600 crore higher assignment done this year versus last year, but the assignment

In the first quarter itself, you're saying?

Correct, sir.

Maybe I'll have to look into this. We'll get back to you.

Sir. Sure, sir.

Thank you.

We'll just analyze this and get back to you, Pavan.

Thank you so much, sir, and congratulations.

Going forward, at least in standalone, we will see that this income comes down as the co-lending picks up, and this entire upfronting will become almost negligible in next few quarters.

Got it, sir. Thank you so much for that.

That's it from mine.

Thank you for allowing me a follow-up. Nirmal sir, the new gold loan guidelines that got implemented from April and what you mentioned consumption loan and income-generation loans.

On the co-lending arrangements that we have with banks, are banks ready with their assessment or the way they want to underwrite these income-generation gold loans?

All banks have different policies. Some banks are more conservative and they have a lower threshold than RBI's regulatory allowance, and every bank has a different requirement.

I answered earlier that we are fully aligned with the new framework, which is income generating, assessing the income, and tracking them. That has not impacted our business much.

In a way, we think that's a positive development, because, see, there's a discipline in the type of loan that you're doing, for consumption or for business. For consumption, you'll be more conservative, for business can be a little more liberal based on the income and the prospects of the cash flows of the business.

Got it. For this, banks need to be ready, right, in terms of how they want to assess this income-generation loans?

Is that the right understanding?

No. The bank basically works along with us, it's like a joint lending.

We work with bank in terms of what kind of income proof, and actually most of the banks that we work with, they are very happy with our process. We do a CIBIL pull, and then we also look at the digital data, and then based on what we talk to customers, we estimate the income.

When you do co-lending, banks have to accept your process, and that should meet their standards also, and then only you can start off. We talk to them, we engage with them, and we work out a joint process.

Many of our process they need some more things to be added. For every bank, we will work separately.

Got it, sir. Thank you so much for answering my questions.

Thank you, and if you have any more queries or any questions, you can reach out to our investor relations or our CFO's department. Thank you so much.

Have a good evening ahead. Thank you.