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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Q1 FY '24 Earnings Conference Call for Indiabulls Housing. We have with us on the call today, Mr. Gagan Banga, Vice Chairman, MD and CEO; Mr. Rajiv Gandhi, MD and CEO, ICCL; Mr. Ramnath Shenoy, Head, IR and Analytics; Mr. Ashwin Mallick, Head Treasury; Mr. Sachin Chaudhary, Chief Operating Officer; and Mr. Mukesh Garg, Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Gagan Banga, MD and CEO. Thank you, and over to you, sir.
Thank you. A very good day to all of you, and welcome to the quarter 1 fiscal '24 earnings call. Banks and financial institutions fail, not because of bad credit, but because of lack of liquidity to service dues or debt, essentially an ALM management failure. This is true in the case of Lehman Brothers back in 2008, and it is also true of the recent bank and nonbank failures globally.
ALM risk is inherent and all the more acute for nonbank mortgage lending in India that relies on wholesale borrowing, which is at best of 3 to 4 years average maturity, while the loans extended are off an average maturity of 7-plus years. After the default final IL&FS, credit flow to nonbanks without storied corporate parentage shrunk to a trickle. Some sections of the debt markets like those from mutual funds completely closed the tap.
Indiabulls Housing through these last 5 years, has been trying to monetize -- has been trying and making attempts on 3 fronts. One is monetization of assets, refinance and funding to mobilize liquidity to service debt in a proactive and timely manner; two, derisking the balance sheet, especially from wholesale loans to builders who are suffering twin challenges of a weak housing market and the shutdown of credit flow from nonbanks; and the third was building prospective business in an asset-light mode such that reliance on large ALM mismatch borrowings is done away with.
I say all this because at the end of this quarter, the July, August, September quarter, as a matter of fact, by the end of this month itself, we would have declared victory on all of these 3 fronts. In this quarter, which is quarter 2 fiscal '24, we have total repayments of approximately INR 4,800 crores, which comprises of domestic bonds, $270 million of ECB borrowings, et cetera. For ECB repayments of USD 270 million plus interest, we have liquidated the voluntary created FDs and have initiated the transfer of funds ahead of repayment due next week.
We hope to have this account funded with the trustee at least 1 day prior, if not earlier, 1 day prior to the due date. The fund movement of that has already started. Further, we have also, as per our exchange disclosures today, earmarked trustee managed FDs of INR 628 crores corresponding to 50% of the FCCB put option dues payable in March '24. Total outstanding of these FCCBs are $149.5 million. While one is fairly confident this is the outlook on business that this option may not get exercised by bondholders. But as a matter of prudent ALM management, we have gone ahead and created 50% of the dues coming up in terms of deposits.
At the end of this month, and a lot of the investors on this call are perhaps foreign investors, it would be of interest for them that at the end of this month, which is August 23, we would have repaid all of the over $3 billion of foreign currency borrowing we did in the last few years. What is very important to note is that $2 billion of this $3 billion has been repaid after the IL&FS default. We are now only left with, of course, high equity convertible bonds and $100 million of dollar-denominated borrowings done from Indian banks. So all the [indiscernible] of foreign lenders, I would like to express my thanks to them at this stage and hopefully come next week, we would have parted with perhaps temporarily on a very good note with all of you having received all of your principal and interest in full. Thanks once again for the support.
From here on out, and this is an important point to appreciate, we believe we have hit a key turning point for ourselves. Going forward, our debt repayments are only in the ballpark of INR 500-odd crores a month, which will be more than comfortably covered by the repayments that we received regularly from the loan portfolio. Even if we have to assume some chunkiness of FCCB put options, for which we are anyways creating FDs, even then the average repayment on a monthly basis from October '23 will only increase to INR 650 crores per month against a contracted loan portfolio repayment receipt of about INR 850 crores a month.
As at the end of June, our borrowings has shrunk to just about INR 40,000 crores, which will be down to about INR 36,000 crores at the end of September '23, which is about almost INR 80,000 crores lower than what it used to be at its peak.
When you see the detailed ALM on the liability side, which is borrowings plus securitization liabilities, et cetera, the ALM stands fully matched and against INR 36,000 crores of borrowings, we will have about INR 11,000 crores of cash investments and other assets, plus around INR 42,000 crores of loan assets net of securitization liabilities translating to 150% cover over our borrowings with the borrowings being comfortably ALM matched.
Excess collections over debt repayments which would be in the ballpark of INR 600 crores to INR 1,200 crores a quarter. And all incremental borrowings will now be available for asset growth. Here again, our asset-light model has fully matured. And as we have been sharing in the past, we have co-lending relationships with 8 partner banks for each of whom we have a strategic relationship contributing significant amount to the total disbursals.
Importantly, being asset-light co-lending, we will not need to build large borrowings to support this, and we can grow and earn on the entire AUM without building ALM risk.
Our derisking of the wholesale book has been supported by a very buoyant housing market, which has turned around and is witnessing strong growth. Projects that had been problematic and sticky for a long time are either getting resolved or have already been resolved with us roping in partners, both development partners for project execution and partners for funding and refinancing.
We have thus hopefully been victorious on all the 3 fronts that we have been fighting on for the last 5 years. And this fight, while it was bought through an extended pandemic with complete lockdowns, et cetera, I hope we have emerged victorious. And by the end of this quarter, we should restart our growth path and demonstrates strong growth going forward.
At the macro level, the economy has emerged very strong and resilient, and the housing sector is seeing strong secular growth across 5 segments, many long-standing industry observers and experts are unanimous in the view that this is the start of a long upcycle for the sector. Growing urbanization, nuclearization of families and a fast-growing economy and concomitant rise in incomes are factors that are always favoring housing demand in India. All of these are now playing out.
For the company's stability in profits, good recovery traction from wholesale loans and receding risks means that we are now on a good, strong footing. Accordingly, the Board of Directors in their meeting held on July 28 recommended a final dividend of INR 1.25 per share, subject to the approval of members at the ensuing Annual General Meeting. While the amount per share is more a token amount, it was more a message that we wanted to send out to our stakeholders, especially our shareholders that time for growth is back. And hopefully, going forward, we should be able to get back to our strong dividend track record through which we have distributed over INR 11,000 crores of dividends through our listed districts.
As business has now stabilized and the company gets back on the path of growth, subject to regulatory limits, we aim to resume consistent payment of dividends. There are now regulatory guidelines for NBFCs around this. So we will have to operate within that. After a period of consolidation through the last 5 years, it is now the management's focus to also besides dividends, focus on ROEs. And I'm quite hopeful that we would be a mid-teen ROE company over the course of the next 3 financial years.
In the near term, another priority for the company is the entire reorganization and rebranding exercise that we have been focused on for the last 4 to 5 years. The company has over a period of time, transformed itself to a board run, professionally managed and diversely held financial institutions. The company's Board of Directors exercises effective oversight over the running of the company through Board constituted subcommittees with key committees shared by independent directors.
The erstwhile promoter who is now classified as a public shareholder, along with the entities he controls had a shareholding of 9.77% at the time of de-promoterization. This has now declined to around 1%. And as per my understanding, he is probably going to be completely exiting the company.
With the completion of the de-promoterization and we are also in the process of transforming and changing our brand identity, we've already gotten our Board approval for this, and we are awaiting regulatory approval, post which we will be going back to shareholders and getting shareholders' approval. All of this should hopefully happen within this quarter. And over the next 45 to 60 days, we should have a new brand identity for ourselves.
Gradual regulatory changes have been done away with any meaningful differences between HFCs and NBFCs. The entire regulatory framework is now scale-based. We are in the upper level of NBFCs being amongst the largest NBFCs in the country. And accordingly, since we do not get any advantage of being -- of remaining in HFC, we have written to the RBI to change our certificate of registration to that of an NBFC. That should -- that change should also happen along with the name change, hopefully within this quarter itself.
Coming to the updates for the quarter. In this quarter, we have disbursed retail loans of around INR 1,837 crores under the asset-light model. These loans have been disbursed in partnership with our banks. There is no concentration on any one bank, and all paid partners are almost equally contributing.
To go -- take you through the Q1 FY '24 numbers. Please refer to Slide 3 of our earnings update. The net interest income is at INR 562 crores, profit at about INR 296 crores versus INR 261 crores in quarter 4 fiscal '23 and INR 287 crores in the same quarter last year. Retail disbursals, as I said earlier, stood at INR 1,837 crores, and cumulatively since fiscal '22 stand at almost INR 13,000 crores.
Net interest margin is very stable at 3% and our ROA has marginally expanded again to about 1.7% from 1.4%. It's on an upward trajectory. Gross NPAs and net NPAs are at an 11-quarter low, gross NPAs are at 2.87% and net NPAs at 1.69%. Our net debt to equity is now as low as 2x and capital adequacy on a consolidated basis stands at 31.2%, of which almost 27% is Tier 1 capital. On a stand-alone basis, the capital adequacy is 23.46%. As part of the reorganization, if the path chosen is to consolidate the subsidiary, then the stand-alone would also go up to 31.2%. That is work-in-progress. We are engaged with various stakeholders on how to take this forward, and hopefully through the course of the quarter or early next quarter, we should be able to give in more specific guidance on the reorganization plan and the organization structure, et cetera.
As I spoke at the beginning of the call, we are also undertaking a rebranding exercise. We've already shared the time line for it. As part of our strategic discussions, suitable name has been chosen. But I would like to emphasize that the company would remain mortgage-focused NBFC. It would still focus on home loans, loans against properties and via the alternate investment platform, a small contribution or a co-lending equivalent for builder loans.
For quarter 1 and 2, the focus is basically to scale up the retail engine, and to do prudent ALM management. From quarter 3 onwards, we will have bandwidths to scale up the retail engine further and perhaps hopefully also scale up the wholesale platform with our partners. Our focusing on retail lending, which is our growth engine, along with our 8 banking partners, we continue to grow the retail AUM in an asset-light model. At the end of quarter 1, 35% of our AUM is now funded through either co-lending or securitization, up from just 10% in fiscal '18.
We've disbursed, as I mentioned earlier, almost INR 13,000 crores of loans since last fiscal year. And we hope to sustain the present 3% ROA that this incremental business is generating. So our 1.7% ROA will steadily inch up towards the 3% run rate ROA that we are generating for the incremental business as the incremental book becomes larger than the back book.
We continue to invest in expanding our reach, building up trained manpower and awake to keeping a key eye on the disbursal growth which will result in OpEx remaining elevated through fiscal '24 and fiscal '25. By fiscal '26, the cost income will more normalize and that's how we will be able to get to 15-ish percent ROE by fiscal '26.
The derisking of the business by running down of the wholesale book continues, and it will only gather pace over the course of the next 6 to 12 months. A lot of capital has been put into projects where construction is going on and steadily these projects are getting completed. And now we're getting into a situation where collections are increasing in the Escrow accounts on a healthy basis. As this trend continues over the next 6 to 12 months, I hope to see this book run down at an even faster pace.
Now if you can please turn to Slide 5. We are sourcing now about INR 600 crores to INR 800 crores of retail loans a month under the asset-light model. It is evident from the CIBIL scores, which is the Credit Bureau scores and the average ticket size that the customer segment is prime with strong demand, both from end customers and our partner banks. We had invested in expanding our retail franchise. Our branch count is up 18% from last year, and we've added almost 300 employees in this period. We are now at about 217 branches and 5,166 people.
We've also been working on the further digitization and integration with various banks. And hopefully, as we complete that 1 by 1 with various banks, the scale up can be reasonably rapid since our sourcing engine is already in place. This is all to make sure that the ROA tends and trends towards 3% and the ROE trends towards fiscal '26. The growth should be evident from H2 of fiscal '24.
Now that the ALM has been managed, the repayments are in the process of happening, a lot of it by the end of this month should be behind us. We should start utilizing the surplus of repayment inflows. And that is how the entire fund strategy would be working towards growing the AUM.
Now a little bit on asset quality. As of the end of June '23, our gross NPA stood at INR 1,886 crores, which translates to 2.87% of the -- 2.87% and net NPA stood at 1.69%. We are fully compliant with the RBI circular on NPA recognition based on daily DPDs, days past due. And these NPAs will not be regularized unless all overdues are repaid. Between the provisions we already carry and our conservatively estimated recoveries over the next 3 years and some other releases, we carry imputed provisions of INR 6,385 crores, which is 12% of the loan book, and covers our gross NPAs 3.4x.
The engagement with the rating agencies continues to stay positive, we are AA rated. And I believe, given the rapid deleveraging that the company has done and the high capital adequacy, the ratings have a reasonable amount of support, especially given the stability on the balance sheet also, which has been witnessed over the last 4 quarters as well as the earnings and the improving asset quality.
All in all, I think it has been tough 5 years. We have come to the end of the very tough period. By the end of this quarter, we would have done perhaps even India proud in repaying such large amounts to international investors. We've certainly done the company proud and the management is, again, extremely thankful and -- of the support given by international debt investors. We will continue with our engagement. And hopefully, we will have a good transaction soon stitched up, which will help us grow our business. Engagement with investors is continuous.
On the equity side, also, I believe once growth is back, the company's valuation, et cetera, would improve. As a gesture of stability and growth being around the corner, the management and the Board declared a small dividend, which should get confirmed in the AGM. Equally importantly to all of this is the entire reorganization, where a lot of strategic initiatives are being taken about the group structure, the ownership structure and so on and so forth. And what is really happening is the fact that we are significantly smaller to what we used to be. Our borrowings have shrunk significantly, and the large shareholders now are all financial institutions, both domestic and international, and therefore, can work very closely with a well-managed Board, which is extremely mature and a management to come out with structures, which are long-term good for the franchise.
On this note, I will end this call, and now we are open to questions. Thank you.
[Operator Instructions] The first question is from the line of Ritesh Gandhi from Discovery Capital.
And apologies if something is actually a blunt here. Just had a question. We've been sort of highlighting the today's companies that are distancing from the erstwhile promoters. But the leadership team has obviously been with the erstwhile promoter and loyal to them for very long period of time. And also in the case like recently, where the erstwhile promoter has actually exited a -- it was in real estate business, there was some legal lawsuits which have come up with embassy with regards to some loan repayments and stuff like that. So I just wanted to understand how should we be thinking about this going forward? And how independent really is that? And are there any potential in the liabilities which could arise that we don't -- that which we aren't aware of that.
Sure. That's a very relevant question. I would like to put it on record that Indiabulls Housing and its erstwhile promoters have no financial entanglements. He owes us nothing, we owe him nothing. There is no recourse that either party has on each other for any open transaction of even a single rupee. So there's no -- I hope this is as transparent as one can get on this, right? On your other question about the leadership team being loyal. The leadership team is loyal to the company, which is why through a period of extreme stress where all of us as management are pretty little shareholders, we've decided to stick together as a group, manage this crisis. While if you look at practically all the NBFCs and HFCs of similar size, smaller, larger, through this period of crisis on the NBFCs, practically each of them, whichever survives has seen a change in leadership. So that just indicates that this period of turmoil has taken a toll on professional managers, such as myself, and my colleague. But because we are more loyal to the company than to any individual while the individual has exited, we have not. So it's a situation which has not witnessed in any other NBFC. In other NBFCs, typically, the owners continue to remain the same. The managers have changed and gone. In our case, it is the opposite.
So I would -- the way I think of it is I have given personally my best to make sure that the company in the first place, survive, then transform. And hopefully, we are now at the cusp of growth. This is the best that we as a management team could do. My appointment is decided practically every other year by shareholders. If they feel that I'm doing a good job, they will allow me to continue. Otherwise, in a diversified -- in a company which is as diversified owned as Indiabulls Housing is, shareholders have ultimate power, right? And there is no one group which can block anything that shareholders don't want to happen.
So I don't want to be negative about this. I think this is a time of perhaps not celebration, but a time where one can at least take a step back. Once this quarter is through and say, okay, 5 tough years, now let's get started with something else. That's what I'm focused on. That's what the team is focused on. We keep our heads down, work every day to make sure that we continue to repay our lenders and continue to take care of our employees and of our customers. And frankly, that's the best that we can do.
And we appreciate all of the efforts. And we are reasonably confident that like how the issues came up in the case of Indiabulls real estate. We don't -- I mean, we've sort of scraped through each of our accounts to ensure that there aren't any potential exiting skeleton which will come out of the closet.
I'm putting it on record here and this call is recorded and is up there for the rest of my life, that between Indiabulls Housing and the erstwhile promoter group, there is no financial entanglement. There is not INR 1 that either he owes us or we owe him, it's been a smooth transition. As a matter of fact, he has been fairly graceful in his entire exit and has been supportive of the company.
So I doubt that there could have been a more graceful exit than this. That said, I think there's also a lot made about this whole de-promoterization et cetera. The quality of the portfolio is if one takes a minute to reflect on it, one could not have paid INR 1,50,000 crores on gross basis, INR 75,000 crores on net basis, that INR 75,000 crores has come from the portfolio. It hasn't come from heaven. I am not the Central Bank. I can't print money. It has come from the portfolio. So that is the best reflection of the portfolio quality, which has been built, which should hopefully put any such concern at rest.
And as a financial entity, we've also gone through a fair degree of rigorous inspections and audits. This the other day, I was taking stock with my risk and compliance team. In the last 4 years, we've gone through 32 regulatory audits and inspections, and compared to what was being alluded to at times, I think we pulled through with practically no issue at all.
Another thing which may not be of knowledge to the wider audience is that since October of 2019, the lenders of the company have started a process of a concurrent audit, where every rupee in and out of the company is compiled and reported back to the lenders. There are only, I think, 1 or 2 collection and disbursal accounts that we have, which the banks have complete control over. So all of these, plus the fact that now we are in upper layer NBFC and therefore, there is tremendous regulatory oversight, which is all extremely good for the long term. That's how the sector and all of you will get greater confidence with these questions will ever be asked again, but this is all that we have to, let's say, action speaking louder whatever I can assure you while...
And the last question I had was that -- is there any indication as to given the actually -- I mean, valuation we are trading at and given effectively the growth that's in front of us that -- I mean with the promoter, I can understand if he isn't going to be operationally involved. Is it -- any sort of indication as to the reason you would be sort of exiting at these prices and as opposed to potentially exiting to -- in a private equity, you could sort of come in and bring some of stability just sort of exiting [ at all ] in the public market? And sort of the thoughts around that? And I understand, obviously, you guys are under promoter, but I am sure that would be...
I'm not the promoter, I can't speak for him. I can just speak commonsensically. As I said, this is a company that he started, he took up to a large size, and he's obviously -- he continues to remain fond of the company. And in a situation where you're not a promoter, but you're still the largest shareholder, it becomes very difficult for the management to go out there and propose any sort of a strategic transaction with such a large shareholding still vested in someone who is not involved in day-to-day management and therefore, we'll not be in a position to give any sort of commitment to the wider market or the strategic partner or anything of that sort.
So I think he understood the -- that this situation was neither here nor there and if the company had to move forward, the situation had to get resolved, and he voluntarily chose to help the company resolve the situation and today put us in a position where we can have more meaningful and consequential discussions with all the institutional investors having any sort of meaningful shareholding. Otherwise, the shareholding is extremely widely spread out. So he has only facilitated the progress that the company needed to show on a multiple number of fronts, including being well diversified in terms of its ownership, and I appreciate his gesture.
Sir, and I appreciate all of you [indiscernible]response here.
The next question is from the line of Craig Elliot from NWI Management.
Congratulations, sir, on great results and taking a step back on these as you said, several years of transformation, we've always believed in you and we've always delivered. So thank you. We look forward to the next 5, 10 years.
On that note, Slide 29, there is spectacular promise in the macro and in the housing. What do you think is the smart target range for you to grow book? Just very broadly, let's say, over the next few years or beyond?
So thank you, Craig. You guys have been amazing supporters through this transformation and both as financial investors as well as giving both moral support and advice. So I really appreciate NWI has helped through this entire period.
On the growth path, I believe that through the next 5 years, which should have a reasonably buoyant residential real estate cycle, and therefore, the underlying business will have momentum in home sales and stability in home values, et cetera to be able to -- from where we start fiscal '25 in terms of monthly disbursals, which should be in the ballpark of $200-odd million a month. We should be able to grow that at a steady rate of around 18% to 20% every year for the next 5 years.
So if -- by April of -- the first quarter of '25, fiscal '25, which is April to June '25 is to be considered the base, wherever we are at that time and the estimation is $200-odd million a month, we should be able to grow that disbursal base at about 18-ish percent steadily for the next many, many years. So that's the broad guidance. It's obviously needs to be caveated for interest rate movements, real estate historically has been a step inflation asset class, home should not become unaffordable, et cetera. So if things are to move more in a logical manner, both on interest rates as well as home prices. This is the kind of a guidance that -- this is the kind of growth one can expect.
The next question is from the line of Kenny Lee from Vontobel.
Congratulations with good results. I think just a quick question for me. I see we have built out the [ $270 million ] in the Escrow to repay the ECB and also 50% of the FCCB. Can you give a sense in terms of the source of funding? How did we do that? Do we use -- raise more debt to replace those then?
No. So our -- the leverage and the reduction in debt indicates that all of this is happening through collections. There would be some debt, which we have raised and some securitization that we have done, and money is fungible. So I can't say that every dollar in a practical way comes, but a large portion of these repayments or the repayments which have been happening over the course of the last 5 years have all been happening through customer collections.
Excellent. Excellent. And can I ask if we're going to do similar structure where we try to do the Escrow for the September 2026 FCCB as well?
That's something which I first want to get this quarter done and then this is how is the engagement with rating agencies and other stakeholders. The ALM now is extremely smooth. This was all done in order to give confidence to stakeholders that there were chunky periods in some months and quarters. And therefore, we prepare well in time for those chunky periods in order to not have any last minute pressure on ourselves.
I think that, if you go through our ALM, and I mentioned this in quite a bit of detail, the monthly run rate, even if we had to assume that the put gets done is only about INR 675 crores, which is roughly $80 million a month, which is insignificant. And therefore, these kind of steps may not be required, but I do not wish to rule it out. It was a well thought out plan along with the Board. Let this quarter end, and then we will certainly group back with our Board as well as our domestic lenders since most of the money now is only of domestic lenders and we confirm this back to you.
That said, it is management's endeavor to make sure that we keep doing proactive ALM management. So if it's required, we will certainly walk that path. But I don't want to put myself on record here and then later not do it because what you will appreciate is that all of this has a tremendous negative carry cost on the company. And as we granularize our asset book, as we retailize it more, the earning power of the company will obviously continue to take a hit. We can't keep putting more and more pressure on the earning power of the company and still expect the same kind of profitability, return on asset, et cetera. So it's a measured call to be taken. It's also -- as the situation transforms, both at the macro and the micro, the different times require different actions. So I will be able to confirm this to you by next quarter.
The next question is from the line of Shorya Chaplot from MUFG Bank.
My question is related to the voluntary reserve fund for the USD 270 million. So as per March '23 results, you had created 50% of the fund. So I just wanted to know that as on date, have you created 100% of voluntary FD for which the liquidation has been initiated? Or is it like 50% of the voluntary FD that we created plus 50% contribution will from balance sheet cash. And also, the balance sheet cash, which is around INR 5,300 crores, does that include the voluntary reserve funds as well?
Yes, it does include the voluntary reserve fund. And since then, all the FDs have been liquidated, we are something like I think 6 working days from transferring the monies and it requires that much time, and we have 2 holidays in India. So it requires that much time to move the money, convert it, move it to the trustee and so on. And we usually -- if you've been an ECB holder for a while, you would realize that we usually try our level best depending on working days, et cetera, to try and credit the money 1 day in advance. So given that, as we speak, the money movement is in motion.
The next question is from the line of Nischint Chawathe from Kotak Institutional Equities.
But just a small point, if you could sort of remind us what is the max proportion of CLM or sell-downs that we can have in our AUMs.
The max proportion is 100%. So we -- all the disbursals that we do, we do with an intention of co-lending. I think a couple of quarters ago, I had shared the statistic that almost 98% of what we had disbursed in the past 12 months, we were able to successfully co-lend. So that's the kind of a track record we're trying to maintain.
And as we speak, we are at similar numbers. And our goal is to just lend in the background of being able to co-lend it quickly with the bank within 45 days or so. And there is no limit. So if we see, like I indicated to Craig that we should be touching a $200 million kind of run rate on disbursements. That $200 million by April of '24, that $200 million would all be with an intention of doing co-lending. So eventually, we will land up holding $40 million on our balance sheet, and the balance, $160 million would be going on to our bank's balance sheet.
So when I'm saying -- when you say 35% of the OEMs are funded by the CLM and sell-down, then what we are trying to say is that these 35 is the gross amount 100, right? And 20% is what you want on your balance sheet?
Yes.
Okay. So got it.
Yes, we'll take the last question now, please.
Sure. We will take the last question from the line of Rishikesh from RoboCap.
[Technical Difficulty]
Rishikesh, your voice is breaking. We can't hear you.
[Technical Difficulty]
Sorry, I can't hear anything.
Rishikesh? Hello. We seem to have lost the line for Rishikesh. We'll take the next question from Nitin Garg from Aviva Life.
I have 2 small questions. First of all, did you have any discussion with the rating agencies on this change of the status from HFC to NBFC?
Yes, we've kept our rating agencies and all stakeholders updated, and there is no consequential change in anything as a subject as a result of this. The company's ability to lend or borrow or service its debt or grow its book does not, in any way, get either hindered or improved by this. This is more technical. And this basically enables us to do as much co-lending as we would like to do rather than holding assets onto our balance sheet, which is what a classic HFC would require to do.
The rating agencies have been assured that the business model of the company is not going to change. We're not going to become an NBFC, which is what to be doing personal loans or gold loans or commercial vehicle loans. Mortgages is our area of focus, and whatever we've been doing for the last 16, 17 years, is what we would continue to do. And I believe, therefore, there should be no concern out of this transition.
And secondly, sir, if you can tell me, throw some light about that recoveries out of those impaired or return of assets, anything happened in last quarter, we are...
We had meaningful recoveries of almost like, I think, INR 400-odd crores. And then -- and as I have shared, we will not try and write back this amount significantly. We will continue to carry higher provisions. So that's what we've done. We've written back an insignificant amount, and we've just used other loans to continue to carry those provisions. But yes, the recovery is a track record, if not for every other quarter, you can expect INR 500 crores to INR 1,000 crores recovery. Thank you, everyone, for joining in. And I hope that by the end of the current quarter, this entire period of struggle and trouble ends and from H2 fiscal '23 -- fiscal '24, we can be back to reporting to you steady growth. Thanks for your support through this period. And thanks once again to all the foreign debt investors who supported the company over the past 10 years. Thanks.
Thank you very much. On behalf of Indiabulls Housing, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.