Home First Finance Company India Ltd

NSE:HOMEFIRST

Ladies and gentlemen, good day, and welcome to the Home First Finance Company India Limited Q4 and FY '25 earnings conference call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Khetan, Head Investor Relations of Home First Finance Company, India Limited. Thank you, and over to you, sir.

Thank you, Sejal. Good afternoon, everyone. Welcome to Home First Finance Company's earnings conference call to discuss the financial results for the quarter and financial year ended March 31, 2025. We hope you have the chance to review our investor presentation and press release, both of which are available on our website and the stock exchanges. Additionally, we have uploaded an excel fact sheet containing historical data on our website for your easy reference.

From the management today, we have Mr. Manoj Viswanathan, Managing Director and Chief Executive Officer; Ms. Nutan Gaba Patwari, Chief Financial Officer. With that, I now invite Mr. Manoj Viswanathan to share his insight on our overall performance. Over to you, sir.

Thank you, Deepak. Good afternoon, everyone, and thank you for joining us today. Before diving into our business performance, I would like to touch upon a significant strategic milestone that we recently achieved. During our previous call, we mentioned about the enabling resolution by the Board to raise fresh equity. In April 2025, we successfully raised INR 1,250 crores through a qualified institutional placement, issuing INR 1.3 crore equity shares to market institutional investors, details of which are available on our website and exchanges. The overwhelming response to our QIP reflects the market's strong confidence in our vision, business model and execution capability. This capital infusion will enable us to accelerate network expansion, enhance operational capabilities and seize emerging opportunities in the affordable housing space.

Coming back to the business. We are absolutely delighted to share that FY '25 has been another year of strong and consistent performance for Home First, marked by robust growth, our operational excellence and strategic execution. Let me walk you through some highlights. Our assets under management grew to INR 12,713 crores, registering a 31.1% year-on-year and 6.4% quarter-on-quarter increase while delivering a PAT of INR 382 crores with an ROE of 16.5% for the full year 2025. We touched an ROE of 17% in quarter 4 FY '25. Our disbursements for FY '25 stood at INR 4,805 crores, up 21.2% year-on-year, in line with our guidance for the year. For the quarter, disbursements grew notably increasing by 6.7% quarter-on-quarter. Business growth is driven by expansion and distribution strength in large affordable housing markets. During the fiscal 2025, we further expanded our network, adding 40 touch points, including 22 branches. This added our reach to 10 more districts within our 13 states and emerging territory.

As of March 2025, our total touch points stand at 361, 155 branches. As we expand our operations, we also added a net of 385 employees during the fiscal 2025 taking the total employee strength to 1,634. Importantly, despite the continued rise in the MCLR of banks we were able to leverage our strong balance sheet and well diversified borrowing mix to maintain a competitive cost of borrowing, ex co-lending of 8.4% for the fiscal 2025.

Our borrowings stood at INR 9,551 crores as of March 2025, and we are carrying a solid liquidity buffer of INR 2,468 crores. Our asset quality remains resilient with sequential improvement in early delinquencies. 1 plus DPD improved to 4.5%, which is a decline of 30 basis points on a quarter-on-quarter basis. 30-plus DPD improved to 3.3%, which is -- it's a decline of 10 basis points on a quarter-on-quarter basis. Gross stage 3 assets remained stable at 1.7%. Our credit costs continue to be contained at around 30 basis points. We maintain our conservative annual credit cost guidance of 30 to 40 basis points.

Now turning to technology, which continues to give us a competitive edge. Today, 75% of our sanctions are being facilitated by the account aggregator framework. 80% of our loans are digitally fulfilled through the agreements in E-NACH mandates. And 96% of our customers are registered on our mobile app with 88% of service requests now raised digitally. On the regulatory front, environment continues to be supportive, with 2 back-to-back rate cuts of 25 basis points each by the RBI and clear policy focus on promoting liquidity growth and governance, the conditions arise for strong momentum in housing demand. Finally, I'm thrilled to share that our ESG journey is accelerating. We expanded our Green Home initiative during the year with 120 homes certified as of March 2025.

ESG efforts are being acknowledged and appreciated by independent global agencies in the form of high ESG scores 46 by S&P Global for 2024 and 16.2 by Morningstar Sustainalytics indicating low risk. All in all, it has been another exciting year. India's housing story is only getting started, and Home First is uniquely positioned to lead this transformation.

With that, I may now hand it over to Ms. Nutan Gaba Patwari to take you through the financials in a little more detail. Over to you, Nutan.

Thank you, Manoj. Good afternoon, everyone. Let us start with the key financial metrics. Total income for the year stood at INR 1,539 crores, up 33.1% year-on-year and our profit after tax increased by 25% to INR 382 crores. This translates into a very healthy return on assets of 3.5% and ROE of 16.5%. For the quarter, we closed INR 100 crore profit as we posted a net profit of INR 105 crores with ROE of 17% demonstrating that even as we grow, we continue to deliver on profitability. Spreads for Q4 FY '25. Our spread, excluding co-lending, is at 5.1%, our cost of borrowing, excluding co-lending maintained at 8.4%. Net interest margin for Q4 was at 5.1%. It expanded by 20 basis points on a Q-o-Q basis, driven largely by better liquidity management. Operating expenses to assets was at 2.7% for the quarter, in line with our expectations.

Moving to provisions and asset quality, credit cost for Q4 and for the year stood at 30 basis points. We continue to maintain our conservative medium-term credit cost guidance of 30 to 40 basis points. We continue to adopt a conservative approach to provisioning, maintaining a provision overlay ECL requirements. As of March '25, our total provision coverage ratio is 46.6% as against 50.9% as of March '24. Moving to balance sheet and capital position.

Our balance sheet remains robust providing a solid foundation to support the company's growth plans. Our borrowing profile continues to be well diversified and cost-effective, reflecting our prudent financial management. 60% of borrowing comes from public and private sector banks, 16% from NHB, 17% co-lending, and balance from NCDs, ECBs and NBFC.

As part of our liquidity management strategy, we executed a direct assignment transaction were INR 230 crores during the quarter. We continue to focus on co-lending business and are looking to scale with near contribution to 10% of disbursements. Our cost of borrowing is competitive at 8.4%, enabling us to maintain our spreads. Our current rating is AA- from leading rating agencies. Coming to capital adequacy and liquidity. As of March '25, prior to April QIP, our capital adequacy stands at 32.8% with Tier 1 at 32.4%. As of the end of fiscal year '25, our network stands at INR 25 crores, INR 21 crores with book value of INR 280 reflecting a strong capital position.

The capital position looks very robust post the QIP. I would like to highlight some pro forma key numbers. Given our enlarged equity base post the capital infusion, our pro forma leverage has come down to 3.3x. Pro forma capital adequacy post capital raise will be 51% and a net worth of INR 3,751 crores. To summarize, our financial position is extremely strong. Our balance sheet is well capitalized, and we are sharply focused on scaling profitability while maintaining high asset quality. With that, we conclude our opening remarks, and now happy to take your questions.

[Operator Instructions] The first question is from the line of Renish from ICICI Securities.

Congratulations on a [indiscernible] numbers [indiscernible], also congrats for QIP. Just 2 things. One on the spread side, right? So when we look at the incremental spread of 0.7% and when we start trending spread is declining. So how confident we are that we'll be able to sustain this 5% to 5.25% of a medium-term range when it comes to spreads?

So Renish, if you look at the book spreads, we have been -- we are above the 5% mark. And we have always maintained that -- we run a fully floating rate book. So depending upon how the cost of borrowings is growing, we will transmit difference to the customer. Of course, now we are kind of entering a declining interest rate situation. So that is why we have not really embarked on any increase in rate. So the trend should reverse and the margin should get maintained on the book. So that is how we are looking at it.

So basically, we don't foresee any pressure on spread from this level? I mean, is that the assumption of -- I mean this is a lower end of the guidance at 5%?

Correct. So 5% plus we should be able to maintain because it is, like I said, a floating rate book. So if we are going below 5%, we will transmit that difference to the customer.

Renish, just to be clear, the guidance spread excluding co-lending book.

Yes, yes. But then that is only 10 basis points of difference, right?

You see, our expectation is that we will be able to hold on to the cost of borrowing moving ahead. So we are comfortable with that 5% plus guidance on the spread, excluding co-lending.

Got it. Got it. And just hypothetical situation, let's say, if there is no rate-cut cycle. I mean how do you see the asset yield moving just from a competitive perspective?

Asset yields we largely hold in the 13.5% kind of a range, so 13% to 13.5% we normally maintain the yields. You're talking about origination yields, incremental origination...

Yes, yes.

So we should be able to maintain it at that level.

Okay. Okay. And the LAP mix, how should it pan out over the next couple of years?

LAP mix broadly ends up 15% to 20% range, 15% is the current share of AUM while share of disbursal is slightly higher, 16%, 17%. So that catch-up is something that we have already communicated that over the next 5 years, it can move up from 15% to 20%.

Okay, okay. And lastly, on this PCR on the stage 3 last year, we were close to 30% now, we are close to 25%. So how one should read this data point on the PCR?

So Renish, it's essentially an outcome from the ECL model. So the only way to read is that the credit cost is improving. And the resultant requirement of provisioning on the book is now kind of coming at around 25%.

And how often we refresh our ECL on annual basis?

Every year, yes. Every March, we do the full activity of refresh. So we have just done this exercise in the last 2, 3 months.

Okay. Okay. And just to clarify, on Stage 1, we'll be using 12 months rolling database, right?

No. On Stage 1, we use 12 months probability of default, but the data that is used is from business to date. For additional comfort, Renish, we have just had new auditors this time for -- as we know that auditors have to rotate every 3 years. So this is BSR's first audit, and they have done a full detailed verification of the ECL model. And as you can see, there is no meaningful change to what we were doing in the past.

The next question is from the line of Abhijit Tibrewal from Motilal Oswal Financial Services Limited.

Congratulations on a good quarter. I'm just nitpicking. I just wanted to understand bounce rates have inched up a little bit sequentially, though it came down again in April. Also when we look at the asset quality GS3 for last 7 quarters being in that 1.7% range. I mean I would admit we are seeing shades of this in other product segments as well given how the economy was right?

So I'm just trying to understand, I mean, today, are there any customer segments, some cohorts or maybe geography-wise where you are seeing some stress and which is actually leading to this? Or is it just pure weak macro, which is leading us where we are today in terms of collections or asset quality?

No. So again, as we have mentioned in the past, I can't read too much into the bounce rate because that is just the data immediately after the first presentation. And a large percentage of customers actually make the payments immediately after the bounce. So if you see our early delinquencies has actually compressed this quarter. So I mean, even in spite of the bounce rate being a little high last quarter, you can see that the early delinquencies have come down.

The 1 plus delinquency has come down to 4.5%. So there's a 34 basis point reduction. And even 30 plus 30-day past due has come down by 10 basis points. So I would say we are not seeing anything other than what you are seeing on the asset quality. There is nothing which we are reading from the ground level data that we are getting.

Got it. So basically, bounce is more like some behavior change that has happened in customers and which is where maybe they bounce when the NACH mandate is presented, but pay up later when they follow...

That's right.

Correct, correct.

The second question that I had was for Nutan, more on the cost of borrowing trajectory in this upcoming financial year, let's say, with a 75 to 100 basis points cumulative rate cut, I mean, what is the benefit that we are going to see in our cost of borrowings? The related question here again is now that we've already seen 50 basis points, have there been any changes in our PLR? And I mean, lastly, how are we thinking about margins now in this year?

So Abhijit, I'll try to go in the sequential order. So assuming a 100 basis points cumulative rate cut, what we have observed generally is that there's a 60% transmission if we take a very long-term 10-year data. But the transmission takes about 12 months to happen. So by now, 50 basis points has happened another 50 basis points in this conversation. So about 60 basis points, but it will take cumulatively 12 months to come through on the bank borrowing part of it. Logically speaking, it should also happen on the repo book and other EBLR book as well.

So that is the answer to your first question. PLR, no, no changes have been made. What benefit has come through thus far is that if you remember, our projection was 850 for quarter 4. We've been able to hold it at 840. So we've been able to actually hold the cost of borrowing flat for now 3 quarters despite the MCLR creep up because there are some shorter tenure linked lines, which are getting repriced downwards.

Moving to margins. I think before margins, spreads are important. Spreds is going to be in that 5 to 20 range that we have guided just now. Margin is an outcome of equity because we've just had an equity raise. The margins will expand for, let's say, next few quarters. And again, as leverage starts to pick up 6, 8 quarters out, we will see compression on margin. So the right number would be to look at spreads of 5 plus.

Got it. And then the last question I had here is, I mean, now that the equity raise is complete, have we -- or are we at least thinking about engaging with the credit rating agencies once again? So that's for you, Nutan.

And lastly, again, Manoj, I mean from what we picked up from other housing finance companies during this quarter is maybe in the month of March, the PSU banks were a little aggressive in mortgages, but we've not really seen that kind of a competitive intensity from the private banks just yet. So if you could just briefly give some color on how the competitive intensity?

The credit rating agencies, yes, we have started doing some work because the results have just got signed yesterday. We are hopeful that in the next few months, we should be -- let's put a 6-month time line to this that we should be able to see initial signs of a credit rating upgrade. From my conversation with the banks, you're right, private sector banks are not so focused today on mortgage. In fact, there's a significant sell-down of book from their side on the secured side. From a more on-ground market feedback, I will just hand over to Manoj to walk you through.

Yes. So on-ground feedback, I think news in the market is that, yes, the private banks are slightly less excited about mortgage, but there is more activity amongst the nationalized banks. And of course, the larger HFCs are also quite active.

The next question is from the line of Raghav Garg from AMBIT Capital.

Congrats on the quarter and capital raise. I have 3 questions. So one is on the employee part, you hired a lot of people in FY '25. The employee base is up some 31%. This is highest growth in any of the last 4, 5 years. What are your hiring plans for FY '26? will you continue at this rate? Or will the hiring tone down materially, say, compared to a 31% growth rate in FY '25?

Let me also ask my second question, which is sort of connected to the first one. Historically, you've not seen such a dip in 4Q employee base. This time, it is around 4% lower quarter-on-quarter. And I understand that employee attrition has been a challenge for the sector in general. So in this backdrop, how was attrition in F '25? And what do you expect for F '26 on the attrition part? And then I have a third question, which I can ask later.

No problem, Raghav. So on the employee part, yes, in absolute terms, the increase has been close to 400 employees. This is representative of our branch growth and our overall scale. The right way to calculate and forecast this will be about 10 to 11 employees per branch at an organization level. Actuals will actually be split between head office and branch. But from a modeling perspective, 10 to 11 employees per branch is what you should look at. Attrition for last year is 30%. It will be disclosed in our annual report, which we will publish shortly. Year-on-year, attrition has come down by almost 2% to 3%. So those were your 2 questions.

Yes. I think you're looking at basically quarter 4 over quarter 3 and why the number of employees has gone down. So that is largely because the hiring gets bunched up. So quarter 1, there would be a large influx of employees. quarter 4, normally, there is no influx of, I mean, additional employees because we do campus hiring. So the campus season kind of the hiring season ends in March and then people start joining from April. So the number of people joining in the last quarter is a little less. So basically, the attrition catches up and there is a reduction in employee base in the last quarter.

And you expect that attrition would continue to come down even in FY '26, right? That's the expectation right now?

Attrition coming down because see, between '24 and '25 attrition movement is just 3 basis points -- 2, 3 percentage points. So broadly, we think the attrition in this segment remains at this level only. So 25% to 30% attrition is something that is kind of par for the course in our business.

Understood. Understood. Fair enough. The third question is, I was just doing some numbers and whatever hiring that...

Sorry to interrupt, sir, your audio is not clear. I request you to please use your handset.

Is it better now?

Yes, sir. Please continue.

Okay. So I was saying that if you look at some of the data points that you provide, then it appears that the productivity has come down in F '25, obviously because of such hiring, which indicates that it's more of a denominator effect. Do you expect that this employee productivity will go up substantially? And if yes, can you give a number, say, 5%, 10% or 15% increase over F '25 or you think that the productivity gains will be very limited given that you're already best in the industry...

We -- so I would not project too much increase or decrease in the productivity. So those would be largely, like I said, quarterly movements depending upon addition of new employees, et cetera. So when there is a large influx of new employees, the productivity drops a little bit. But broadly, it should be -- it will be range bound. We can't expect a substantial improvement in productivity.

Understood. So whatever run rate that was there for FY '25 is maybe a marginal improvement over that, not more than 3%. Is that something that we can assume?

Yes, broadly in the same range, you can say last 2 years, you can average productivity is what we will be able to maintain.

The next question is from the line of Rajiv Mehta from Yes Securities.

Congratulations on strong results at the QIP. So my question -- first question is on 2 markets, I mean, Tamil Nadu and MP. So as I see in the last 3, 4 quarters, the growth in Tamil Nadu on a sequential basis has been coming off, and we have not been adding much branches also in that particular market. Contrary, I think we are growing very fast in MP in the last 2 years, and we're adding a lot of distribution out there. So just to understand the trends in...

Mr. Rajiv, we can't hear you, I would request you to please use your handset.

I think his call has disconnected.

Yes, sir. We'll move on to the next question. The next question is from the line of Mona Khetan from Dolat Capital.

So firstly, was there any element of recovery from written off this quarter because I see that the net write-offs are higher and yet credit cost is low. So just...

Yes, very minimal, not significant, Mona.

Okay. And just on the co-lending business, I wanted to understand if it is ROE accretive. And given that the yields are lower than the overall portfolio yields, where is the accretion coming in the P&L? If you could throw some light there? Or is it more like a volume business?

So the co-lending structure is ROE accretive because we are able to move away the assets from the balance sheet. So that is the main reason why it becomes ROE accretive because like I just mentioned. In the P&L, it appears in the interest income line and the interest expense line, unlike assignment, if that's your question.

Right. Okay. So ROA wise, it may be a little dilutive, but it's ROE accretive because you use less capital?

Absolutely, yes.

Got it. And just finally, on the OpEx to assets. So we did see some improvement last fiscal and OpEx to assets seem to be at the lower end of your guidance at this point or for the full year FY '25. So any color on the trajectory as we go ahead?

Broadly in the same line. The OpEx has a significant contribution of employee cost, and we are assuming the productivity in similar levels. We just touched upon that. So operating cost to assets, we will also want to keep in this 2.7%, 2.8% range. We're more focused on growth for the next few years now.

The next question is from the line of Nidhesh from Investec.

First question is on growth for next year. What is the target of disbursement growth that we are targeting in FY '26? And how do you plan that in terms of new branch addition as well as growth from the existing branches?

Yes. Disbursement growth, we are targeting it on 20% plus. So somewhere in the 20% to 25% range is what we are looking at for disbursement growth. And the trend will be similar. About 20%, 25% will come from new locations, branches, expansion, distribution and 75% will continue to come from existing branches.

Okay. Sure. Second is on co-lending. So there have been draft guidelines from the regulator. Do you see any adverse impact of these guidelines on us?

Adverse impact, I think one thing that we are watching out for is basically the -- they have not mentioned the modus operandi of how those assets will get transferred. I mean till now, we were following the co-lending model 2, but the draft guidelines do not have mention of that co-lending model 2.

So I think that is our only kind of thing that we are watching out for because if the co-lending model 2 is not allowed, then how the assets will get transferred to the bank is something that we'll have to see. I mean if it is as per model 1, then it is a little tedious from a logistics perspective. Operationally, it is a little tedious. So we have to watch out for that.

Sure. And lastly, a data keeping question is active connectors as of March '25 and number of RMs as of March '25 and what percentage of disbursement has come from top connectors.

Yes. So total connectors active as of now is about 3,800 close to 3,800 connectors, active connectors. And number of relationship managers that the sales team would be about close to 1,200 salespeople.

And top 10 is below 4%.

The next follow-up question is from the line of Rajiv Mehta from Yes Securities.

Yes, I'm sorry about last time. I hope I'm audible. Congrats on strong results in QIP. So my question is on Tamil Nadu. So if I were to calculate growth on a sequential basis, we are seeing some moderation in growth of Tamil Nadu market. And we also have not been adding many branches in the last few quarters out there. So how should we read this?

I mean, are we seeing any competitive pressure, pricing pressure out there or any delinquency issue? And the reverse question is for Madhya Pradesh, where we have been growing very fast and by adding a lot of branches. I mean, is that market -- I mean, besides the opportunity, is that market behaving well in terms of early delinquency trends and hence, that is giving us confidence to grow there?

Yes. So as far as Tamil Nadu is concerned, we already have about 20-plus branches, about 24 branches there. So we have to -- we are just kind of taking a step back and to see where we can expand, et cetera, and some leadership changes and those kind of -- I mean, kind of a recalibration over there. In MP, you're right. I mean, our initial calculations have gone right, and we are able to expand and do well over there. So we are kind of investing more there. So these kind of, you can say, opportunistic movements will be there. There will be some states where we are kind of taking a step back, whereas in other places where we are expanding, et cetera. So this will continue. I mean it's not that we have kind of capped out in Tamil Nadu. We will -- we are looking at making some changes, and we'll come back stronger.

And about this borrowing mix when I look at from a lenders profile, so we have basically reduced our dependence on private banks and increased our dependence on PHC banks pretty significantly over the last 7, 8 quarters. How does it help us in the rate easing cycle? I mean does it help us in terms of benchmarking of loans or negotiations or if you can explain that?

So not so much specifically like that, Rajiv. It's largely driven by relationship depth size. For example, one of the reasons I can call out for the public sector bank expansion in March quarter is a large line from SBI. And it just happens to be bunched up in a particular quarter. So that would expand substantially. But if you look -- I mean, broadly, it's 30%, 30% plus/minus 5% between either of the 2 pools.

But if I were to ask you that the borrowings from PSU banks, say, the stock and even incremental are they coming at and private banks?

At par, I would say. That would be one of the key considerations for us to move ahead.

Got it. Got it. And just one clarification about this when you report collection efficiency and then you also give collection efficiency for unique customers. So the difference will be your OD collections and NPL recovery, right?

No, no. It is basically a number of collections. So if the same customer, for example, makes 2 payments in the same month, okay? That will get counted in the first bar, the higher one. But in the other one, it will be counted as one.

Okay. So it can also be in advance and not just OD or ...

No, no, we don't take advance. So it will be basically customers, for example, who are overdue by, let's say, 2 or 3 payments.

So OD collections and NPL recoveries as well?

Yes, overdue on NPLs, yes. So overdue on NPL recovery.

The next question is from the line of Anusha Raheja from Dalal...

My question is on the margin side. Of the total borrowing 60% comes from bank if you could just tell us how much is repo rate linked or the MCLR rate linked? And secondly, NHB drawdown, if I'm not mistaken, is close to around 16% up. So how do we see this number in FY '26? More drawdowns is expected? And thirdly, again, on the margin side, the origination yield in Q4 is 13.3% versus 13.5% of your blended yield. So that's lower around by 20 basis points, what the blended average yield is.

And on the borrowing side, I think incremental marginal cost of borrowing is at 8.6% versus 8.4% blended cost of borrowing. So if you can just throw some light on all these things and how this could impact the margins? I understand that you said that you will be maintaining 5% plus, but if you can also throw some light on all these things.

Yes, sure. So starting with the first question on the repo and short-term linked borrowing, that is about 18% to 19% that is already there. And I also mentioned to one of the previous questions that we've already started getting some benefit through that, and that is one of the primary reasons why we've been able to hold the cost of borrowing flat. Your second question was on NHB mix. NHB mix is about 16%. So NHB mix is in that range of 15% to 20%, which we feel is appropriate for the size of our company.

So we will continue to try to maintain in that particular range. On the last question that you had around yields. So yields will be -- right now, it's about 13.3%. And like we mentioned just a few minutes ago, the origination yield is range bound between 13% to 13.5%, and we have a fully floating book. So if we have an origination yield in that range and when we start seeing the cost of borrowing moving downwards, we have the flexibility to pass it on to the borrower. And that gives us the confidence why we will be able to maintain this 5% plus spread on an co-lending basis.

Okay. And ma'am, you also mentioned the disbursement run rate of around 20% to 25% and so is that sufficient to maintain the AUM growth of 30%? So what is the broad assumption in the run out of the book that you would have assumed at this?

Runoff we have assumed is around 17% to 18%. So with the 20% to 25% disbursal growth, we should be able to get to about 26%, 27% to about 30% in that range of AUM growth.

So in that 17%, 18%, how much is the BT out rate?

BT out rate is about 7-ish, 7.5.

So sorry, I did not understand 17%, 18% is the total rundown or 20%, 25%...

17%, 18% is the total run down.

The next question is from the line of Sanjay Jain from Avendus Capital.

So my first question is on the AUM. So as for the future, your guidance by the management, the AUM was INR 20,000 crores for FY '27. So how comfortable are we to achieve that in the next 2 quarters -- into financial years? And also, are there any hindrances or risks that we may be facing to achieve those numbers?

No, we are fairly confident of achieving the INR 20,000 crores mark in the next 2 years. We don't see anything -- at this point, we don't see anything which could be a hindrance to achieving the INR 20,000 crores.

Okay. And could you give me any guidance on the INR 35,000 crores AUM as guided for FY '30?

Yes. So there, again, we don't see anything that is seen as a major hindrance to reaching that number. We -- overall, we seem to be on track to achieving those numbers.

The next question is from the line of Shreya Shivani from.

Congratulations on everything. I just have only one of my questions is unanswered. It's again on the cost of funds. So you have reduced the liquidity buffer this quarter. And also, you mentioned 18%, 20% is your repo linkages, right? So shouldn't the cost of fund reduction, shouldn't that have been a little more? Or maybe if you can quantify the breakup of how much benefit came in from repo, how much came in from lower liquidity and -- or something like that, that will be a little useful.

No problem. So a lower liquidity benefit will not come in the cost of borrowing line. It will come in the NIM line. So when we focus on the cost of borrowing line, essentially, what we are talking about is just the repo linked. When we talk about repo EBLR and short term, it also includes, for example, a 3-month T-bill. But a 3-month T-Bill has not got repriced substantially. Then there is a repricing date. So everything has to be in order for that -- for it to become effective.

So what has become effective is broadly just the repo rate. So then you start slicing the 18% down to somewhere, let's say, 10%. So that is why you see a significantly or rather flatter curve. Now let's take a hypothetical situation. If this policy rate had not happened, then we would have been at 850. So the delta really is about 10 basis points. right? And we can look at double to that exact number.

The second question, which you had was around liquidity. So liquidity is now giving an effect in the net interest margin line. So net interest margin has improved from 490 to 510 largely contributed by liquidity. So I would say you can consider about half of it that has come through the liquidity line. And there are some other accounting entries that we have to take on mark-to-market transactions that form part of the borrowing cost. So those 2 have contributed to the expansion of NIM.

Got it. So of the 20 bps, 10 bps is just from the liquidity benefit that has flown into the margins, right? That broadly -- has there been a pickup in the cost of borrowing for any other lines that we have? Or Yes.

Yes. So whenever there is a historical like a 6-month MCLR or 12-month MCLR, because the bank MCLR has not come down yet, especially for public sector banks, as and when they are coming on the repricing date, they will increase. But if you're asking me from a marginal cost of borrowing, no, we have been able to maintain in the broad range of 840 to 860 and we are hopeful that now we should start improving on that starting this quarter.

The next question is from the line of Aravind from Sundaram Alternates.

Congrats on the good set of numbers. Sir, BTO has been going up for a few quarters now, is there any like competition increasing like what to read there? That is one -- my first question.

And the second question is on the co-lending norms which came out. So what do you see as the opportunities or the headwinds or from that to our existing co-lending model in terms of either margin impact or for the growth opportunities like whatever you would like to call out in terms of very important takeaways from there.

So on the BTO trade, it is largely range bound. So we normally see last 2 quarters, it is slightly higher, first 2 quarters, slightly lower. So that kind of trend continued last year also. And so not much of a -- I mean, if you actually see quarter 4 versus quarter 4, it is a little lesser compared to last year quarter 4. FY '24, quarter 4 was 8.3%. This time, it is 7.5%. So slightly lower the BT out rate is. So we expect it to be largely in that range bound between 6% to 8% only. And as far as co-lending was your second question, right?

Yes, sir.

Yes. On co-lending, so new guidelines have been released, and we have to kind of wait and -- I think they are still -- they are still under discussions. We have to wait and watch. On certain areas, it is definitely beneficial because now there is no ticket size gap on the co-lending part. So that is actually beneficial.

And of course, as I mentioned earlier in the call, there is no mention of the co-lending model 2 in the draft guidelines. So that is something that we need to watch out for because that if co-lending Model 2 is eliminated from co-lending from the co-lending process, then it will make the co-lending process a little tedious. So that is the thing that we need to watch out for. But otherwise, the guidelines are beneficial in the sense that it expands the addressable market for us.

The next question is from the line of Pavan from RatnaTraya Capital.

Congratulations on the results. I just wanted to understand the growth of this particular quarter has been pretty good. Actually, it has been much better than the last 2 to 3 quarters. So what has changed in this quarter? And there seems to be a spike in disbursements, not only in Home First, but almost all the home finance lenders. So I just wanted to understand, is there any structural change? Or is this a seasonal kind of thing that happens in Q4?

So generally, Q4 is always a big quarter for all the companies. And I think the same trend that we are seeing this year also. In our case, generally, Q4 is not such a big skew. There is no major skew in Q4. It's slightly better than the other quarters, but not -- there is no major skew. So the same trend continues for us as well. So yes, so that is broadly what it is. So we were -- like we mentioned in last quarter call also that we are broadly on track to achieve the annual numbers. And so there was a slight increase in the quarter 4 and which helped us meet the annual numbers.

Okay. On the assignment book, do we have any targets on direct assignments per year? Or how do we look at it overall?

Overall, largely driven by liquidity needs, relationship with the bank, pricing, some of those factors. No targets per se.

Sorry, no targets per se but broadly range bound if you see as a percentage of AUM.

Yes.

Okay. And last question on the leverage side. Now since we have raised money, so how do we think about the leverage in, let's say, 2 years ahead? I mean, what is the kind of leverage we would like to operate on.

See, right now, immediately after the fundraise, we are at 3.3. We can easily go up to 5 plus. So we are good for 4 years, thereabouts.

Okay. So you're saying until next 4 years, you might not need to raise again.

That's right. Because right now, we will have an optical reduction in ROEs. And eventually, that will also start catching up. So the equity will start accruing and that will also further support the growth on the AUM. So FY '30, probably -- until that, we are good. unless, of course, we grow faster than our projection, then it's another story.

Okay. And as per your projections, when will we get back to the ROE of, let's say, around 16%, 17% that we currently have?

So our first milestone is to get to 15% plus, which is in about 6 to 7 quarters from now.

The next question is from the line of Ravi Naredi from Naredi Investments.

Manoj Ji, you are really doing great. My question to Gaba Ji. Our borrowing rates are 8.4%, which is higher than other NBFC. They borrowed at 7.2% to 7.4%. Why you pay higher rate? This rate of interest came down to us 7.2% in financial year '22. But again, it has rised...

Yes, sir. Sir, I think the larger NBFCs that you're comparing us with will be likes of Bajaj and PNB Housing and perhaps some of the other names. Sir, their credit rating is AAA. We are a professionally set up entity. Our credit rating is AA- and the big difference is scale. Sir, we are hopeful that one day we will definitely get to AAA, and then we will match those rates, but we need some time to get there, sir.

So in how many years we'll attend AAA?

Sir, right now, we are AA-, and we are hopeful that with this capital raise that we have done recently, we should be able to get one notch improvement that has moved to AA. After that, there will be AA+, which would probably take -- it would take several years to get to a AA+. So -- and then after that, we can look at -- I mean, further increase.

We maintain liquidity INR 2,700 crores almost equal to 1 AUM. Why we maintain such a higher liquidity buffer when we have unavailed bank credit limit?

Sir, the INR 2,500 crores that you are seeing is not on the balance sheet. Out of that INR 1,200 crores is on the balance sheet, the rest is unavailed lines only.

Okay. And INR 28.7 crores we write-off this year, how much recovery of earlier year write-off we received during the year?

Sir, you are looking at the credit cost line, right?

Right.

Sir, it's not full write-off. The write-off portion of that number is about INR 17 crores and the recovery that we've had is about INR 2 crores.

So INR 15 crores is a net loss write-off...

Yes sir.

The next question is from the line of Subrata Sarkar from Mount Intra Finance. Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Abhishek Jain from AlfAccurate Advisors Private Limited.

Congrats for a strong set of numbers. Sir, my first question on the industry growth in the affordable housing segment. So what is your expectation for FY -- and we have seen that many financial institutions are increasing their presence into this space. So how do you see competition over there?

So as far as the overall market is concerned for FY '26, we think it should be another year of good or decent demand because affordable housing demand has largely been secular. The growth has been secular in the range of 10% to 15% a year. So we are expecting a similar kind of a growth rate this year as well. As far as competition is concerned, it has been, again, very uniform across several years.

Every year, there are some new players entering this business. But at the same time, there are some of the larger entities move up in terms of the ticket sizes and customer profile. So in some ways, they kind of exit this segment. So it has been -- from a competition perspective, we expect it to be another year, nothing very difficult.

So what is your current market share in this space? And how do you see the market share going ahead?

The market share, if you look at it as a percentage of the overall affordable housing segment, we are at about 2% share of the market. And our ambition is to reach somewhere between 4% to 5% market share in the medium term. That is maybe in the 3- to 5-year kind of horizon.

Okay. And in terms of the ticket size, what kind of the growth you are looking in the coming years average ticket size?

The average ticket size has been growing at about 3% to 4% every year, and we expect a similar kind of increase in the coming years. So every year, maybe around 3% to 4%, 3% to 5% increase in ticket size.

Okay. And my last question on the delinquency side. So are you seeing any increase in the delinquencies in the few states and courses would like to give some comment on that...

No, broadly, at least last several quarters, we have seen most of the states moving together. That is when there is increase, there is an increase across the board and there is a decrease across the board. So largely, it is seasonal. So we are not seeing anything specific to any market or any particular state or region where there is an increase or decrease for any reason.

The next question is from the line of [ Adityapal ] Singh from MSA Capital Partners.

Congratulations, Nutan and Manoj sir, for the great set of -- great performance. So wanted to quickly understand that when we look at the branches which have a vintage of more than 2 years, what would be the profile of these branches in terms of AUM per branch, OpEx to AUM, ROA ex head office?

So 2-plus years, generally, the branches reach AUM of between INR 30 crores to INR 50 crores. And in terms of OpEx to assets, they would be -- I mean, if the country is at 2.7%, I mean, these would be slightly higher than country because they still have not reached kind of a mature level. So maybe around 3% to 4% OpEx to assets would be the broad range. I mean we would call these kind of just pre midsize. Midsize would be around INR 50 crores to INR 70 crores of AUM. So pre-midsized branches in the 2-year time frame. I mean, by the time they reach about 3 to 4 years, they reach the midsize, which is about INR 50 crores to INR 75...

Understood. And if you have the number handy with you, would you know vintage-wise number of branches today, we have total branches of 155. How many would be less than 1 year, 1 to 2 years and then 2 to 3 and then 3 year plus?

Yes. So not at such a granular level, I mean we can give you that, but Yes. Broadly, we categorize in 3 buckets. So there are smaller branches, which are less than INR 25 crores AUM and there are INR 25 crores to INR 75 crores which would be the midsized branches and INR 75 crore plus branches. So generally, the ratio is around 1/3 each. So you can say 50 branches -- 50 to 60 branches in the smaller category, about 50 branches in the midsize and about 50 branches in the larger category.

Understood. Another question was that now that we raised INR 1,250 crores in Q3, many congratulations on that. Do we see our branch expansion that is number of branches per year increasing from what a status quo was 25 to 22 to 25 branches per year? And another question would be that our target of INR 35,000 crores in FY '30, would we need another fundraise in the interim before we reach that?

So branch expansion, yes, the number of branches will increase because of the base being higher. So we would like to expand at about 20% to 30% every year. The AUM is expanding at about 25% to 30% every year. The branches also will expand at the same pace. So we were growing at about 20, 25 branches every year. So that number will go up slightly maybe 30, 35 to -- and as far as capital is concerned, we are good for about 4 years now. So maybe by 2030 is when we will need to look for fresh capital.

Understood. Understood. Just one last question. This was more to do with the thought process. When we see state-wise AUM per branch, so they are quite different. For example, there are states with INR 65 crores to INR 70 crores AUM per branch like Maharashtra, Tamil Nadu. And then there are states which have an AUM per branch of INR 100 crore plus like Gujarat, Karnataka, Telangana. Just trying to understand, is there any different strategy we are deploying in the states or the states which have INR 100 crore AUM per branch, these are more high conviction states for Home First...

No. Maybe -- I mean, it will be largely to do with the vintage. So where we have started the branches a little earlier, the size would have become bigger. It would have gone -- the AUM per branch would have become larger. So there will be newer states like MP, et cetera, where we started -- I mean, we started the expansion over the last 2, 3 years. So there, you would have a lower AUM per branch.

Understood. But a state like Tamil Nadu also or Maharashtra, which we've been there for a very long time, but they have the same, I would say, somewhat similar AUM per branch to or lower than Madhya Pradesh...

Yes, because if you see the -- I mean, it will also go in line with the growth rate in that particular state, right? So some states are growing faster, some states are growing at a slower pace. So AUM per branch also would reflect that.

But there's no different strategy that we're deploying these states will have larger AUM per branches?

No, no, nothing of that sort. There's nothing of that sort. Our general position is that irrespective of where the branch is located, it should be able to run at about INR 200 crores per branch.

Understood. Last question was for Nutan. So Nutan, when I calculate the yield, I am getting 13.2% as my portfolio yield. This is including the co-lending. -- co-lending fees. Is it a timing difference that because we would have disbursed a lot in the end of March?

Not end of March, but -- so when you look at the monthly disbursement, it will be about first half to second half, about 40, 60, maybe in some months, 35, 65, which will lead to the dispersion that you just mentioned. But like you just mentioned, it is a timing difference.

The next question is from the line of [ Nour Ka ] from Naredi Investments. Sorry to interrupt, ma'am. I would request you to please use your handset...

I have 2 questions. First one is we could see a good AUM growth of 31% and interest income growth of 32%, but growth in profit is 25%. Further looking into this, I got to know that there was an increase in our overall interest cost by 43% year-on-year despite our cost of borrowings rising only marginally to 8.4% vis-a-vis 8.2% last year. So can you throw some light on this increase in interest cost?

Right. So when you look at the fact sheet and you analyze the P&L, the total income has gone up by 31%, but the net interest income has gone up by 26%, which is broadly where the overall profit increase is also. So the cost of borrowing rise has been slightly higher. You -- the question that you're asking is on year-on-year or quarter-on-quarter?

Year-on-year.

So when you look at the fact sheet, the interest expense has gone up by 43% because the cost of -- and the total income has gone up by 33%...

Exactly.

Yes. So that is the most important reason.

Yes. So what is the reason behind the rise in cost -- interest cost by 43%, because our cost of borrowings is almost at the same level of 8.4%...

No. So if you look at year-on-year, it has gone up from 8.2% to 8.4%. That is a 20 basis point increase on a sharply increasing growing borrowing book. So that is the contributor to the difference.

Okay. And my second question is how much commission do we give to our connectors and also do our connectors help in recoveries...

No. So commission, we give about 40 to 50 basis points to connectors. And it's helping in recovery is more ad hoc. It is not part of their contract or part of their agreement with us.

The next follow-up question is from the line of Anusha Raheja from Dalal & Broacha.

Sir, in newer geographies that you have catered to, for example, in SP or UP, so how has been the asset quality performance in these newer states? How is the credit discipline...

Has been fairly good. So in MP and Rajasthan, I mean, if you see the 3 new states, 4 new states that we are present, MP, Rajasthan, Uttarakhand and UP. I would say in MP, Rajasthan and Uttarakhand, the performance has been better than what we expected. And UP, it is just what we expected.

Okay. And in Gujarat, which is a domain state, the growth is coming down in that state relatively on a Y-o-Y basis. So is it because the other states are growing at a higher rate or demand per se in that state is relatively lower or you would choose to grow at lower...

No. So we are still growing at about 21%, 22% in Gujarat. And so we have some plans to kind of reenergize, et cetera. So as I mentioned earlier on the call, there are some states where we are kind of restructuring the teams, and we will come back more strongly. So there are some places where we're going with 20%, -- there are places we're going with 30%, 40%. So there is a range. So there will always be that strategy of kind of going very strong in a particular state in a particular year. And in other states, we are kind of regrouping or consolidating.

Okay. And lastly, you said that co-lending model 2 is eliminated from the new RBI guidelines and co-lending model is. So in what way that is...

So yes. So what I mentioned was they have actually omitted mention of co-lending model 2. So everybody is still wondering whether it is allowed or not allowed. And I think there is still discussions going on, on whether this will be allowed. So we are hoping that the co-lending model 2 will be allowed. But if it is not allowed, then yes, we have to go to co-lending model 1, which is a little more tedious. The way why it is tedious is because as per co-lending model 1, the disbursal of the loan has to be done simultaneously by both the entities.

So primarily, that makes the process more tedious because when the loan is onboarded, the 20% sits on our books and 80% will sit on the bank's books. And the disbursal also has to be then proportionately done by the respective entities. Currently, the disbursal is done by us, and then it is kind of paid back by the bank to us. So which is the easier model. But if all disbursals have to be made simultaneously by the 2 entities, then it makes it more tedious.

Okay. And you call a co-lending model too, right?

Correct. We equal or 2.

Does that answer your question, ma'am? The next question is from the line of Divyansh Gupta from Latent Advisors.

A couple of questions around the LAP book. So would you be able to break up our NPAs between LAP and home loan separately because last time we discussed the ECL is coming down because LAP is going up and we end up incurring a lesser loss there. So what would be the NPA trajectory for LAP versus home loan and what would have been this number in FY '24...

Yes. So I can tell you the March '25 numbers right away. LAP is around 1.2%, 1.3% NPA and home loan is about 1.9%. Actually, the numbers are disclosed in our QIP placement document, and it is already published on the stock exchanges. So you will get the full detail with a 3-year comparison there.

Got it. So I missed it, so I'll check back. But just typically, LAP would have a higher NPA and home loan would have lower NPAs. But our numbers are a bit different from, let's say, the general expectations. So how should we read into?

The way we are reading it is that -- because we have a lower proportion of LAP, our teams have the luxury of selecting better customers. And we don't have aggressive targets for LAP. So they have the luxury of selecting better customers for LAP and which is the reason our NPAs are slightly lower compared to the market as well as compared to our own other products.

Got it. And so when you say LAP, it is not a top-up on a home loan, right? Because then you can get that advantage fee on a home loan, you are giving a top-up and then it is considered LAP. So this is pure play LAP...

New customers. These are new customers we are acquiring from the market.

Got it. Understood. And second question related to LAP. So our presentation shows that our LTV at origination less than 80% is going down, which can also be a factor because of LAP going up, right? Because LAP, I don't think you will do at 80% LTVs. So what would be our more than 80% LTV at origination for home loans business?

LAP forms a smaller proportion. So I would say because LAP is only 15% of the AUM. So to that extent, it should not impact the ratios too much.

Yeah, that's right.

That effectively LAP is also given at 80% LTV, that would be very -- that way is a risky thing...

No, LAP would be given 80% LTV. So LAP LTV will be generally -- or rather in almost all cases, it will be less than 60%. So if you can ask the question again because I...

So in our presentation, we give a pie chart.

Origination, right? LTV at origination...

Origination, yes. So if I look at the more than 80% has been consistently coming down, which makes sense if you're giving LAP loans because they will be at lower LTV.

But. You're talking about [indiscernible] then, correct?

Yes.

Yes, yes. So more than 80% coming down is the explanation is that our -- basically, see the more than 80% LTV actually is in the apartment segment. developer-led apartment segment. So our -- over the years, our exposure to apartment segment has been coming down because we are doing more of self-construction, more of loan against -- more of -- sorry, retail and other products compared to apartment product -- compared to new apartments. So that is the reason for the marginal decrease in LTV, which is above 80%.

Understood. And the last on the LAP is that if I look at the mix of self-employed and salaried and LAP and other LAP and home loan, would it be a fair statement to say that salaried LAP is going up?

Why do you say that? There is -- I mean, we don't have any such direction internally.

It might be not deliberately, but just happening because if I see the self-employed mix, it is going down. LAP is going up and self-employed is largely similar at whatever range it was. not fallen down. So then it implies that LAP would be taken up by salaried also?

Yes, yes. LAP is taken by salaried also. We have -- I think at the moment, we have an equal mix of salaried and self-funded as far as LAP is concerned, and the ratio has been largely constant across the years.

Got it. So the question was that what would be the purpose? Is it loan consolidation or any other...

This is threefold. There are basically broadly 3 purposes of LAP why people take LAP. There are some customers, about 30% of the customers who would have actually started their construction by borrowing from others and would have kind of finished the construction. And then now they want to repay those loans. So that is one reason. So it's like a delayed housing loan. So that is one key reason for LAP. The other reasons are the normal traditional reasons where it is used for consumption or it is used for business purpose.

Got it. Understood. The second question, so last questions are done. So the other one was that last time we mentioned that we studied Bajaj and Chola and we figured out that, let's say, we will come back to markets every 2 to 3 years to raise equity. Now in this call, we said that we are going -- this equity raise will suffice for us for at least 4 to 5 years. So is there a change in thought process of the growth assumptions that, let's say, we had earlier versus now? Or how should we read into that...

In the amount of equity that we raised. So when we were on the call last time, the number that we had in mind was INR 1,000 crores -- and we have taken an enabling resolution for INR 1,250 crores, but because of the response, we actually ended up raising the full INR 1,250 crores, which has added the additional year.

Understood. Understood. The next question was the digital partnership sourcing through digital partnerships saw a big raise from 1 point something to 2.2. Is it a one-off? Is it some structural changes that we have done, which is, let's say, which has taken this to this level? Or just trying to see how -- is it a one-off or some structural changes that we have introduced?

Not a one-off. It is -- we had -- if you see, I think last couple of quarters back, we -- a new partnership was added, which is Phone Pay. And so that is giving us a slightly increased number as partners...

Got it. Understood. So I'm assuming given the franchise that they have, we should -- but is it a BT product or it's a fresh new home loan kind of loan that we are getting.

We don't do BT product. We only do new home loans. I mean BT product is not a focus area for us. It is a very insignificant portion of our business. And in all these digital partnerships also, the focus is on new acquisition only.

Got it. Because for them, it becomes a very easier sell home loan and we can give it at a cheaper one. That's why I thought...

That is not -- I mean, so that is more of a strategy by some of the larger lenders because they have a cost of borrowing advantage and they can pass it on to the customer. We don't have that advantage, so we only focus on new.

Understood. Understood. So 2 more questions. The INR 300 crores of net gain on DA and if I look at our PPP or even PBT, right? So around 20% of our profit is coming from this upfronting of DA sales, which does not necessarily lead to actual profit INR 30 Yes, INR 30 crores -- sorry, my bad. INR 30 crores, but PBT is still 20%, right? So the question was that how should -- one is, if you can break the split into what was the net gain from fresh DA done and the earlier ones would have been some assumption change. So if you can just give a breakup of this?

So the breakup largely is not more than 10%, which will be there from the old one, but I want to address the more important point of whether this is sustainable. See, the thing is that we are upfronting the income because it is a requirement. Now the question is, if I did not upfront it and if I go up my P&L and look at the profit after tax or the net worth in the old IGAAP method, what would be the difference?

Because either I can do IGAAP accounting or I can do Ind AS accounting. So on a net worth basis, because it is a timing difference at the end of the day, I'm still going to recover the same amount of money from the customer and my spread is not going to change. So from a net worth basis, the difference is not more than INR 30 crores, INR 40 crores. From an annual profitability perspective, the difference is less than INR 10 crores. And it fluctuates depending on whether the assignment proportion to the AUM is increasing or decreasing.

Because the gap is so narrow, we have chosen to kind of focus on more why DA needs to be done rather than the contribution to the income because either it will come through the net gain line in Ind AS accounting or will come through the interest income and expense line in IGAAP accounting.

But see, this quarter itself, it was INR 30 crores. And you said for the year, it is around INR 10 crores -- sorry, am I missing -- did I misunderstood something?

No...

Because every year, there's a net gain, right? So if I just cumulatively look at it, it would be a higher number.

No. So if I did not do a net gain, I have a DA book on which I would earn the spread.

Yes. That would have been INR 10 crores is what you're saying?

No, no. DA book is about INR 1,500 crores on which I would earn a 5% plus spread.

Done it that way, it would be INR 10 crores lesser than the total for this year.

Profitability would be in the range of INR 7 crores, INR 10 crores difference, yes.

Got it. Got it. And what is the overlays that we are carrying in our ECL? INR 13 crores. INR 13 crores. And what would be the write-off in this quarter and for the whole year?

I'll just tell you, give me a moment.

Full year is INR 17 crores approximately.

This is the gross write-off, right, not net of recovery.

That's right.

This quarter, I think it's INR 4 or INR 5 crores. I'll just tell you in a moment.

Yes, about INR 5 crores...

The next question is from the line of Siraj Khan from Capital Partners.

Good set of numbers. I have 2 questions. One with respect to the data that is given in the fact sheet of the new to credit loan accounts. So in -- from FY '24 to '25, that has reduced. So this is by design or by default? I mean, are we actively going towards having credit information customers or the number of customers in the new to credit segment are reducing? How is that?

Yes, the number of customers in the new to credit segment are reducing. We are not actively seeking out customers with credit. It's just that in the market, such customers are reducing because the credit is easily available now.

Okay. And on similar lines, the self-employed AUM is constant. I mean it's very moderately. But what is the split that you see, say, FY '26 or ahead?

Broadly in the same range only 60 -- I think right now, 68-32. 1 or 2 basis -- 1 or 2 percentage points, we can't say, but broadly 65-35, 70-30 is the range that we see.

Understood. And what will be the incremental ticket size of loans because what I also see in the fact sheet is the proportion of the AUM in the 1.5 to 2 to 2.5 has jumped by 2-odd percent each. So is the incremental ticket size higher than, say, close to INR180 or above INR 1...

No. So the growth zone for us is now -- sorry, INR 10 lakhs to INR 25 lakhs, right? So below INR 10 lakhs is not a very large growing segment. So there, you will between INR 10 lakhs to INR 25 lakhs, you will see larger more growth.

But what would be the disburse...

Size is INR 11.7 lakhs.

I think that is the average. What will be the incremental disbursements that would have happened in FY '25...

INR 13 lakhs to INR 14 lakhs.

INR 13 lakhs to INR 14 lakhs. And the final one on the promoters. So with the capital raise, each of their holdings has come down below 10%, 7% and 5%. And now Warburg remains the single largest holder at approximately 11%. So what will be their role going ahead? And how will the -- will there be any specifically specific change in the management or anything of that sort with respect to the direction? That is a question.

No, there is no change. I mean, so the promoters have largely functioned like public market shareholders over the last 3, 4 years also since the time we listed. So we do not anticipate any change as such as far as the management or company functioning is concerned because we have been led by the independent Board also these years. So no change anticipated.

So no specific change in strategy or anything with respect to sourcing or anything of that sort?

No, absolutely not because like I said, we have been led by the independent Board even over the last 4 to 5 years. So we don't expect any changes. So largely, it has been management and independent Board-led strategy. The promoters, our large shareholders have not played a role in that. So nothing is expected to change.

Okay. And just a final one on the state-wise asset quality. So we have seen good growth in Madhya Pradesh and in others -- in some states of Karnataka and others. But what I want to know is, are you seeing any signs of early stress maybe in the city of TPD or TPD, where because it has been inching up, although it's been controlled, but it has been inching up year-over-year.

So is there any specific state or any specific product or customer type that is seeing any early signs of a warming Because, say, for example, Madhya Pradesh has grown approximately 72% Y-o-Y, but Tamil Nadu and other states have grown slightly lower. So is there a region-wise issue or some state-wise issue, anything of that sort?

No, the growth -- pace of growth is not directly linked to the asset quality experience that we are facing in the state. It is more related to various other things like getting the right people, expansion of branches and various other factors. So yes, so it is not -- like I said earlier, most of the locations have a similar profile as far as the credit behavior is concerned. We are not seeing any dramatically different behavior.

Understood. And just a clarification, backfill account that was shared earlier was 3,800 active connect accounts.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Manoj Viswanathan for closing comments. Over to you, sir.

Thank you, everyone, for participating and engaging in the call. We hope that we have been able to answer the questions to your satisfaction. In case you want to reach out for further questions, you can always reach out to Deepak Khetan or write to us on investor.relations@homefirstindia.com. Thank you very much.

Thank you. On behalf of Home First Finance Company India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.