Transcription révisée de la conférence téléphonique ou de la présentation des résultats de l’IIFL.NSE 29-May-20 8:30 GMT


Mumbai 2 juin 2020 (Thomson StreetEvents) – Transcription modifiée de la conférence téléphonique ou de la présentation des résultats de IIFL Finance Ltd Vendredi 29 mai 2020 à 8h30: 00 GMT

Ashmore Equities Investment Management (US) LLC – Conseiller stratégique non discrétionnaire

* K. SivaKumar

Unifi Capital Pvt. Ltd. – Vice-président adjoint et gestionnaire de fonds

Bonjour et bienvenue à la conférence téléphonique sur les résultats du quatrième trimestre de l’exercice 2010 de l’IIFL Finance Limited. (Instructions pour l’opérateur) Veuillez noter que cette conférence est en cours d’enregistrement.

Je remets maintenant la conférence à l’équipe de direction pour les commentaires d’ouverture. Merci et à vous.

Bonjour à tous. Au nom de l’équipe IIFL Finance, je vous remercie tous de vous être joints à nous pour cet appel. Je suis Rajesh Rajak, directeur financier; accompagné de Nirmal Jain, notre président et directeur général à plein temps; Sumit Bali, PDG; et Anujeet Kudva, CRO. Je passe maintenant la parole à notre Président pour commenter l’aperçu de la stratégie et des plans du groupe.

Merci, Rajesh.

D’accord. Merci et bienvenue à tous les participants, à tous les investisseurs. Et nous avons des investisseurs en actions et en dettes sur cet appel.

Je pense que je ne prendrai pas beaucoup de temps sur COVID-19 parce que tout le monde a beaucoup plus d’informations à ce sujet. Mais une chose est sûre, personne ne sait ce qui va se passer à l’avenir. L’incertitude n’a donc jamais été aussi élevée, et personne n’a de vague – ni d’indice sur ce qui va se passer. Et dans ces circonstances, nous devons encore planifier pour l’avenir.

Et cette fois, je pense que nous avons fait beaucoup de brainstorming interne dans notre discussion stratégique, même au niveau du Conseil. Donc, dans notre présentation, je vais vous présenter les quelques diapositives, qui sont différentes et qui peuvent être complètement – un modèle commercial, nous pouvons – qui peuvent [begin standing, that can rely standing] pour l’entreprise. Et plus loin, je vais vous guider à travers le processus de réflexion que nous avons.

Et donc si vous avez déjà une présentation avec vous, ce sont – je couvrirai de la diapositive 20 à la diapositive 36. Et même si cela va plus haut, vous pouvez simplement écouter.

Donc, aujourd’hui, en termes de risque, comme je l’ai dit, que l’avenir est si incertain, que tout le monde ne sait pas comment et quand les choses vont s’arranger. Donc, d’une part, nous avons un virus et une pandémie qui vont se dérouler d’une manière que personne ne connaît aujourd’hui. Et puis d’autre part, nous avons la réponse du gouvernement de l’Inde ainsi que RBI. [As well you know], ils ont prévu une certaine liquidité. Plusieurs plans ont été annoncés. Et [many lines] et il y a des plans, et la façon dont ils sont exécutés, beaucoup de leçons en termes d’intention et de la façon dont l’exécution se produit. Et en même temps, le gouvernement n’a rien fait jusqu’à présent pour – pour compenser la perte de revenus des MPME ou des très petites entreprises qui ont été touchées.

Alors, où en termes de risque, si vous regardez le pire scénario possible ou pire, et puis il y a 5 domaines majeurs que nous identifions.

La première est que le ralentissement et la récession ou la dépression, comme vous l’appelez, dans l’économie, ce qui est tout à fait possible, peuvent entraîner une détérioration importante de la qualité des actifs. Et en termes de flux commerciaux ou de projets immobiliers, ainsi que peut-être dans une certaine mesure, de prêts immobiliers, cela peut en être affecté.

La crise de liquidité de la NBFC existe depuis maintenant 20 mois. Les choses se sont un peu améliorées entre les deux, mais elles se sont à nouveau détériorées.

Et aujourd’hui, les banques ont une aversion au risque et perçoivent les MPME comme des entreprises risquées. Ainsi, la crise liquide de la NBFC peut ne pas avoir de réponse ou de solution facile. Plusieurs fois, lorsque le gouvernement pousse la liquidité, cela se calme pendant un mois ou deux, puis quelque chose peut se produire, et encore une fois, il peut entrer dans une crise. Nous pensons donc que nous sommes dans un secteur où les problèmes de liquidité peuvent être continus et pérennes, et il faut vraiment en tenir compte. À l’heure actuelle, le sentiment négatif de notre secteur financier a eu une incidence sur les conditions boursières et, évidemment, cela limite notre capacité de lever des capitaux propres. Et même avec une dilution importante, vous pouvez obtenir plus d’équité, ne résoudra jamais le problème.

Le numéro quatre est maintenant, les règles du jeu seront inégales, car comme nous l’avons vu, non seulement à la NBFC, même dans les banques, l’argent et le dépôt affluent dans une poignée de banques, peut-être 1, 2 ou 3 ou peut-être 4, comme la State Bank of India sur une grande base. Je veux dire, c’est la plus grande banque. Ils représentent presque 20%, 25% du volume [of deposits], il y a [800%] augmenter au mois d’avril. Donc, si ce genre d’aversion au risque pour [small business] continue, il y aura une poignée de banques et peut-être très peu de NBFC qui auront probablement la liquidité et l’argent, et certaines d’entre elles obtiennent de l’argent à un taux très bon marché; et il existe de nombreux autres NBFC qui ont du mal à lever des liquidités. Ce genre de terrain de jeu inégal peut donc se produire.

Et le cinquième est que, comme le verrouillage continue depuis très longtemps, les gens travaillent à domicile, il y a des risques opérationnels, informatiques et de cybersécurité et toutes sortes de risques.

Donc, dans ces 5 risques qui sont des risques majeurs dont nous parlons, ne perdons pas de vue les opportunités. Et en fait, il n’y a pas de crise qui a – je veux dire, au moins je maintiens qu’il n’y a pas eu de crise qui n’ait pas eu d’opportunités qui se trouvent en eux.

Notre volume est en hausse. En fait, la technologie numérique et l’e-tout, que ce soit eKYC ou eSign, la documentation électronique, s’accélèrent désormais. Et après avoir beaucoup investi dans la technologie numérique, nous avons été pionniers dans de nombreuses technologies – bon nombre de ces technologies, nous en sommes très enthousiastes. Le sans papier, sans présence physique, [virtual] les entreprises et toutes ces choses peuvent désormais devenir possibles. Bien que la technologie existe, mais qu’il y ait des réticences, il y a une résistance à l’adopter sans réserve. Ces choses changent donc.

Deuxièmement, les banques obtiennent d’énormes liquidités. Comme nous l’avons vu, il existe des crores INR de 8,5 lakh de fonds bancaires excédentaires avec un RBI qui ne fait que gagner environ 3 – déjà 3,25% ou [3.35%] actuellement. De toute évidence, ils ne peuvent pas continuer ce genre de scénario trop longtemps car leurs marges seront affectées. Et évidemment, ils doivent trouver – même s’ils vont à la banque, NBFC, ils ne trouveront pas d’actifs de détail parce que l’économie est – nous ne voyons pas trop d’actifs de gros ou de projets de gros demandant du financement. Et ces actifs de vente au détail, ils n’ont pas la connectivité du dernier kilomètre avec le client, alors les entreprises comme nous avec un énorme réseau seront là en demande. Je veux dire, nous pouvons trouver des actifs pour eux.

Ensuite, notre troisième opportunité est une opportunité d’économie sans précédent. Lorsque les gens travaillent à domicile, dans leur ensemble – et ce que nous avons vu au cours des deux derniers mois, vous avez toujours des coûts. Les gens travaillent, parfois la productivité est plus élevée car 30%, 35% du temps, ils perdaient en naviguant sur leur trajet. Cela vous permet également de retarder et de créer une organisation plus plate car, au bureau, les gens pensent que 10 personnes peuvent avoir besoin d’un chef d’équipe, mais réalisent ensuite que les personnes travaillant à domicile ou dans une entreprise distante, le télétravail et toutes ces choses, peuvent sauver un beaucoup de coût.

Notre quatrième et dernier, comme moi – la consolidation qui se produira à cause de ce genre de, comme je l’ai dit, [borderline] et du navire avant de la confiance, dans la confiance. Et puis, la contrainte de capital qui entraînera une contrainte de capacité, de sorte qu’elle subsistera, les petites NBFC et de nombreuses petites banques du secteur privé auront également du mal à poursuivre leurs opérations de prêt. Et donc, ceux qui survivront auront des opportunités car, du côté de l’offre, nous verrons des contractions. Alors que du côté de la demande à mesure que les choses se redressent, nous espérons que l’expansion recommencera.

Maintenant, la cinquième chose est que je connais des gens – ce que nous avons vu au cours des deux derniers mois, au moins dans notre société de groupe, que beaucoup d’argent a commencé à affluer dans les fonds communs de placement, les marchés boursiers et de nombreux nouveaux clients ont commencé à arriver au marché. Et en fait, notre hypothèse est que les gens sont incertains quant à l’avenir, ils commencent à dépenser moins et à épargner plus. Ensuite, cela crée une opportunité possible pour des entreprises comme nous, où toutes nos succursales sont également nommées centre de prêts et d’investissement, où nous obtenons des frais de référence importants de la société du groupe pour les contrats d’investissement et d’assurance croisés.

Donc, dans ce genre de scénario, que faisons-nous? Donc, en fait, le nouveau modèle d’affaires sur lequel nous travaillons, et c’est un – jeu de mots, mais c’est aussi un nom que nous voulons construire: une organisation COVID. Et le COVID, CO signifie capital optimisé et VI signifie innovation de valeur. Il s’agit donc d’une organisation à capital optimisé et axée sur l’innovation.

Alors laissez-moi – en gros ce que c’est. Nous sommes propriétaires du client, mais vendons le prêt. Ensuite, nous avons un modèle de revenus qui augmente le flux de revenus répartis, ou la différence entre le rendement et le coût, le taux auquel nous avons vendu un actif et le taux auquel nous [file] le client et aussi le revenu de vente croisée parce que nous possédons le client.

En fait, comme beaucoup d’entre vous qui ont suivi l’entreprise le savent, près de 40% de nos actifs sous gestion sont déjà vendus à la banque. Et c’est quelque chose, si vous sortez sur ce modèle d’affaires, nous pouvons le porter à, ce que notre objectif pourrait être, à 75%, 80%, et l’argent restant peut être simplement financé par la comptabilité d’exercice générale. Nous possédons maintenant un portefeuille d’actifs qui n’est pas [said portion], est maintenant cantonné et juste être le sponsor du fonds ou d’un SPV et essayer de libérer du capital. Maintenant, c’est ce que nous avons commencé plus tôt, alors que malheureusement, en raison de la perturbation du COVID-19, cette chose a été encore retardée. Mais dès que les choses redeviennent normales, nous devons achever ce projet. Et il y a pas mal de fonds qui sont intéressés car nous sommes de notre rendement objectif, et bien sûr, comme nous pouvons être un sponsor pour ce type de fonds ou SPV.

Donc, peut-être que nous ciblons globalement maintenant, ce sont des choses sans précédent, mais au moins, nous pouvons dire que nous gardons un objectif de 9 mois pour forger des relations bancaires, aligner le flux de travail, intégrer la technologie et élaborer ce nouveau modèle commercial COVID.

Alors, quand vous dites, capital optimisé, qu’est-ce que cela signifie? Réseau de succursales IIFL de 2 377 succursales, 430 ont été lancées au cours de la dernière année, ce qui, encore une fois, tout au long de l’année, nous avons eu des problèmes de liquidité, mais nous sommes convaincus du crédit au détail dans ce pays, et nous avons continué de croître, et 25 États, 600 villes et les villes couvertes.

Nous pouvons tirer parti de notre réseau pour trouver les actifs de vente au détail, et les banques obtiennent une qualité d’actifs relativement supérieure, non seulement grâce à notre réseau, mais aussi grâce à notre expertise et à notre compréhension des actifs de vente au détail des entreprises et des secteurs prioritaires. Donc, dans le cadre de la relation, c’est quelque chose que nous pouvons faire avec plusieurs banques.

C’est donc une NBFC à capital léger qui possède le client. Et nous pouvons faire une intégration technologique rapide parce que toutes les banques ont des systèmes technologiques qui sont – ont été empruntés à de grandes sociétés technologiques, ou certains d’entre eux sont des composants propriétaires. Notre avantage est que nous avons [people] équipe et toutes nos technologies en interne. Et par conséquent, cela nous a donné un avantage à intégrer et à être flexible.

Maintenant, lorsque les banques acquièrent un accès en utilisant [MBL], ils sont très enthousiastes. Nous avons vu au cours des 18, 20 derniers mois qu’ils étaient un acheteur de premier plan d’actifs tout le temps parce qu’ils [have funds to spend] et ils n’ont pas d’actifs de vente au détail, il y a donc une cession directe des actifs de prêt.

RBI a annoncé [fund-lending] régime où ils nous financent juste et ensuite nous devenons un secteur prioritaire pour eux. Nous générons – nous créons des actifs et nous les leur donnons. Un refinancement est également disponible pour [when it should be up]. Et aussi le co-prêt, qui n’a pas décollé. Mais un autre modèle, qui est – comme l’origine elle-même, nous pouvons la donner à la banque, en quelque sorte agir comme un agent. Mais ce n’est pas un [deals] agent, mais c’est beaucoup plus que cela parce que ce que nous faisons, c’est que vous avez construit des efforts de souscription de crédit, des directives bancaires et des frais supplémentaires que vous faites, mais aussi que vous servez les clients, vous faites la collecte. Et tout au long du cycle de vie du client, vous êtes engagé avec le client.

Et bien sûr, nous allons repenser pour répondre aux exigences de chaque banque partenaire individuelle. C’est donc le modèle à capital optimisé dont je parle.

En termes d’innovation de valeur, nous nous concentrons sur les quelques produits qui sont notre cœur: le prêt immobilier, le prêt commercial et le prêt or. Nous avons déjà 40 lakh, soit 4 millions de clients. Si nous nous concentrons sur cela, nous atteignons l’échelle.

Maintenant aussi, nous avons vu que la flexibilité du personnel, le travail à domicile peut réduire les coûts. Nous avons beaucoup investi dans la technologie numérique et l’automatisation des processus, ce qui nous donne un avantage de coût.

Du point de vue des clients, nous sommes devenus un guichet unique. Nous pouvons leur offrir tous les produits de prêt au meilleur taux, car nous les remettons à la banque, où nous pouvons les obtenir, pour nos clients ayant une cote de crédit élevée, le meilleur taux possible. Nous entretenons un engagement à vie avec le client et pouvons lui vendre plusieurs produits. Et comme je l’ai dit, l’expertise en produits d’investissement est présente dans le groupe.

Nous avons un fossé unique dans le montage et le recouvrement des prêts. Il existe de nombreuses startups qui sont venues parler de leur modèle d’affaires, mais nous sommes là depuis plus de 2 décennies dans l’industrie. Et notre réseau physique d’un si grand nombre d’agences nous donne un contact direct avec le client et une compréhension de la façon dont les normes de souscription de crédit ont été mises en œuvre.

Notre présence numérique via le site Web et l’application est également très forte. Des millions de personnes utilisent notre application et notre site Web. Nous avons une technologie propriétaire qui est une tablette qui fonctionne et offre un très haut niveau de sécurité, car en cela, nous avons investi au cours des 3 dernières années. Donc, même dans nos succursales, il y a des PC ou des câbles fournis, les gens travaillent sur mobile, mais ils sont très bien contrôlés. Et puis ils ont centralisé [information systems]. Voilà donc les douves que nous avons, et l’origination des prêts, la collecte et tout ce que nous pouvons faire.

Le modèle économique est très ambitieux. C’est quelque chose qui est en quelque sorte révolutionnaire. Et quel est notre rêve et quelle est son ambition? Je peux résumer ce que peut être notre rêve, réaliser en 3 ans en 3 mots, [get our head around this], cela semblera très ambitieux pour des modèles encore plus grands, mais si cela fonctionne vraiment bien, alors nous pouvons devenir un NBFC sans dette. Donc, même si nous n’atteignons pas 100% de notre rêve, même 30% ou 80%, 60%, nous serions allés créer un modèle commercial complètement différent, et qui est si léger.

Quand j’ai commencé ma carrière, [and this sounds industry], et peut vraiment – je peux comprendre que, j’apprécie, le plaisir de travailler dans une entreprise où vous n’avez pas besoin de capital pour faire croître l’entreprise. Voilà donc le modèle d’affaires sur lequel nous allons travailler.

Maintenant, vous emmène très rapidement à travers la liquidité, où – [liquidity, you talk about?] D’accord. D’accord.

Une section de plus que nous avons ajoutée parce qu’il y a beaucoup de questions sur le projet immobilier que nous avons. Nous avons donc nommé JLL et PwC pour faire notre diligence au dernier trimestre sur chaque projet. Et nous en avons nommé 2 de plus [SMPs] de les faire sur une base continue. Et nous avons inclus certaines analyses basées sur le stade d’achèvement du projet; le segment cible, qu’il soit abordable, à revenu intermédiaire ou élevé; la répartition géographique; l’historique du développeur; ainsi que la sensibilité à la baisse des prix, qui peut survenir en raison du COVID et du ralentissement de l’économie qui en résulte.

Donc, si vous regardez vraiment très largement, je pense que vous pouvez parcourir les diapositives, je ne prendrai pas beaucoup de votre temps. Mais 92% des projets que nous finançons sont résidentiels. Et donc, notre vulnérabilité à la baisse des prix commerciaux, qui est désormais plus redoutée, est beaucoup moins importante. 60% de nos projets sont à un stade avancé de réalisation. Et ce sont les détails projet par projet si vous le souhaitez. 76% des projets sont abordables, où la valeur unitaire est inférieure à [total housing] dans la plupart des villes comme Bangalore, Hyderabad, moins d’une sorte de crore INR 1 à Delhi et Bangalore et Kolkata; mais dans d’autres villes, c’est 50 INR lakhs; et à Bombay, moins de 2 crores INR. Il y a donc la classification des logements abordables.

Les banlieues de Mumbai et Gurgaon qui sont dans des régions à forte densité, elles représentent 52% de nos projets financés.

Alors que 93% des développements que nous avons financés ont plus de 10 ans de succès. Et 97% des projets financés, même si vous prévoyez, par exemple, une baisse de 25% des prix de l’immobilier à Mumbai ou des prix commerciaux, baisseront de 20% ou auront une correction comme celle-ci, alors aussi, ils auront une couverture de plus de 1x pour notre niveau de prêt. C’était donc un peu de plongée dans le projet immobilier que nous avons.

Je vais céder la parole à Rajesh, notre directeur financier, pour vous expliquer un peu plus en détail nos informations financières, puis nous pourrons l’ouvrir pour les questions et réponses. Je vous remercie.

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Rajesh Rajak, IIFL Finance Limited – Directeur financier [4]

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Merci, Nirmal. Je vais simplement vous donner une brève mise à jour sur l’activité, la liquidité et l’impact COVID et d’autres sections.

Du côté des affaires, le bénéfice net de IIFL Finance s’est établi à 216 crores INR au quatrième trimestre, en hausse de 16% d’un trimestre sur l’autre et stable sur une base annuelle. Le bénéfice net de l’année s’est établi à 756 crores INR, en hausse de 8% d’une année sur l’autre. Cela exclut l’impact ponctuel de la fourniture par COVID-19 de crores de 211 INR nets d’impôts, une reprise d’impôt différé de 50 crores de INR et un gain sur cession de la cession de l’activité CV de près de 94 crores INR l’année précédente.

L’actif sous gestion des prêts a augmenté de 9% en glissement annuel et de 5% en glissement trimestriel pour atteindre 37 951 crores INR. Tous les segments ont augmenté plus rapidement à 12% en glissement annuel pour atteindre 32 773 crores INR. Les prêts aux particuliers, y compris les prêts à la consommation et le financement des petites entreprises, représentaient 88% de notre portefeuille de prêts. Notre adéquation des fonds propres de catégorie 1 s’élève à 13,6% et l’adéquation totale des fonds propres à 18,2%.

Les principaux moteurs de notre croissance de l’actif géré sont les prêts sur l’or, qui ont augmenté de 47%; et les prêts de microfinance, qui ont augmenté de 49% en glissement annuel. En revanche, le financement de la construction et de l’immobilier et le financement des marchés financiers ont diminué en glissement annuel.

En ce qui concerne les prêts immobiliers, nous continuons de privilégier les prêts à petit prix dans les sections des salariés et des indépendants. Le segment des prêts immobiliers à la croissance la plus rapide est le segment des prêts immobiliers abordables ou des prêts Swaraj avec une taille moyenne de billets de 13 INR.

L’IIFL Home Finance est un acteur important du programme Pradhan Mantri Awas Yojana CLSS. Jusqu’à présent, il a approuvé des avantages pour 38 300 clients et octroyé des subventions de près de 900 crores INR.

Une autre caractéristique forte de notre portefeuille de prêts est la grande proportion de prêts qui sont conformes aux normes PSL de RBI. Environ 63% de nos prêts immobiliers, 48% des prêts aux entreprises et 91% des prêts de microfinance sont conformes à PSL. Au total, il est clair que 43% de nos prêts sont conformes aux PSL. La part importante des prêts aux particuliers et aux prêts conformes aux PSL a une valeur importante dans l’environnement actuel, où nous pouvons vendre ces prêts pour augmenter les ressources à long terme.

Notre coût moyen des emprunts à 9,4% pour le trimestre est resté stable Q-on-Q; et pour l’année, a augmenté d’environ 40 points de base.

Nous avons ajouté 430 nouvelles succursales au cours de l’année, portant le total à 2 377 succursales.

APM bruts et APN nets consolidés, comptabilisés comme [per RBI’s prudential] les prêts, et provisionnés selon la métrique ECL prescrite dans Ind AS, s’établissaient à 2,31% et 0,97% au 31 mars. Il était de 1,96% et 0,63% au 31 mars 2019. La couverture des provisions, y compris les actifs standard provisionnés selon les limites Ind AS des actifs de la phase 3, était de 128% pour le trimestre. La couverture, hors provision complémentaire pour impact COVID, reste à 88%.

Le rendement des actifs pour l’année a été de 2,2% et le ROE de 16,9%, hors impact des éléments exceptionnels.

Une brève mise à jour sur la liquidité. L’accès au financement à long terme a – désolé, nous avons levé 1 169 croupons INR sur les prêts à terme et refinancés auprès des banques. Au cours du trimestre, nous avons également levé 400 millions de dollars ou 2 855 crores INR par le biais d’une émission de billets à moyen terme. Nous continuons d’être peu exposés au papier commercial. Notre composition de financement est bien diversifiée, dont 28% de MNT, qui comprennent la dette subordonnée et l’émission de MTN; 35% provenant du refinancement des prêts bancaires à terme et du refinancement NHB et du financement du fonds de roulement; et 23% de titrisation et cession. Nous avons réalisé des opérations de titrisation et de cession pour un montant de 2 308 crores INR au quatrième trimestre, contre 2 382 crores INR au troisième trimestre, 3 721 crores INR au deuxième trimestre et 4 595 crores INR au premier trimestre. catégories, y compris le prêt immobilier, le LAP, les PME, l’or et la microfinance au secteur public, aux banques privées et étrangères au cours de l’année.

Une brève mise à jour de l’impact COVID. Au 25 mai, 58% de notre portefeuille consolidé était sous moratoire. Une provision supplémentaire de 282 crores INR a été constituée sur la base d’une augmentation de la probabilité de défaut de 20% à 25%, selon le produit, pour tous les produits de détail. Pour les produits en gros, nous avons augmenté la PD et la LTV chez tous les clients sur la base d’une analyse détaillée au cas par cas. Alors que le verrouillage commence à prendre de l’ampleur et au fur et à mesure que la RBI et les mesures gouvernementales commencent à atteindre les clients finaux, nous nous attendons à ce que les choses s’améliorent.

Brève mise à jour sur le numérique. Nous avons continué de nous concentrer sur la numérisation en englobant tous les aspects du parcours de prêt client. Au cours du trimestre, nous avons lancé des prêts personnels numériques en un clic pour aider les clients ayant un bon historique de leurs besoins de financement à court terme. Nous proposons également à nos clients existants des prêts immobiliers et des prêts complémentaires par le biais d’un processus numérique de bout en bout. L’application IIFL Loans est de plus en plus utilisée pour diverses transactions par les clients et a été particulièrement bénéfique pendant les fermetures, offrant aux clients une facilité et une commodité d’accès. Nous avons environ 150 000 utilisateurs actifs mensuels en moyenne sur l’application et avons maintenu des notes de 4 et plus sur les magasins d’applications Android et iOS.

Analytique. Dans Analytics, nous continuons de stimuler l’utilisation du moteur de décision de crédit, de l’intelligence artificielle et de l’apprentissage automatique par le biais de la collecte comportementale et des fiches de score de fraude. Cela a continué de se concentrer sur la vente croisée et la reconquête. Grâce à nos prêts pour l’or basés sur l’analyse, les reconversions génèrent des volumes importants pour les activités aurifères ainsi que pour les produits à l’échelle du groupe.

Au cours du trimestre, nous avons également accru les efforts de – sur les campagnes liées à la promotion des collections numériques et des décaissements numériques.

Cela met fin à la mise à jour. Nous allons maintenant ouvrir la parole aux questions et réponses.

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Questions et réponses

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Opérateur [1]

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(Instructions pour l’opérateur) La première question vient de la ligne de [Rashiv Shah from Castro Capital].

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Analyste non identifié, [2]

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Pourriez-vous nous éclairer sur la façon dont vous avez atteint ces dispositions COVID du crore INR 282? Et quelques étapes que vous auriez faites pour votre secteur d’activité en dehors de l’immobilier.

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Nirmal Bhanwarlal Jain, Inde Infoline Finance Limited – Directeur à temps plein [3]

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[I’ll — comment]

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Représentant de l’entreprise non identifié, [4]

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Donc, lorsque nous avons fait notre provision COVID, nous avons fait une analyse détaillée de notre portefeuille de vente au détail. Ainsi, au sein du portefeuille de vente au détail, nous avons augmenté nos PD d’environ 20% à 25%. Et lorsque nous avons examiné notre portefeuille de gros, nous avons effectué une analyse au cas par cas. Et là encore, les PD et les LTV ont été augmentés pour donner un impact sur la quantité de stress qui pourrait probablement survenir en raison du COVID.

Lire  Transcription modifiée de la conférence téléphonique ou de la présentation des résultats de HZD.L 27-Apr-20 11:00 GMT

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Analyste non identifié, [5]

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Et qu’en est-il de vos prêts aux entreprises, des prêts aux petites entreprises?

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Représentant de l’entreprise non identifié, [6]

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Premièrement, dans le cadre des prêts aux petites entreprises, nous avons augmenté la PD de 25% pour que le taux non garanti tienne compte peut-être d’une augmentation à l’avenir pour un défaut plus important.

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Analyste non identifié, [7]

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D’accord. Et pourriez-vous également partager une partie de – je veux dire, quel pourcentage de vos prêts aux entreprises ou de la microfinance serait dans les services financiers? Et pourriez-vous nous donner une idée du type de prêts que vous avez accordés dans les prêts aux entreprises et sur la microfinance?

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Rajesh Rajak, IIFL Finance Limited – Directeur financier [8]

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Nos prêts aux entreprises sont donc assez granulaires. Ce sont principalement des prêts sous-INR de 15 lakh, et ils sont également couverts par le régime CGTMSE du SIDBI. Et en effet, cela va d’environ 19% à 20%. Globalement, le livre comprend 2/3 du crédit immobilier et 1/3 du crédit aux entreprises.

Votre deuxième partie de la question portait sur la microfinance. C’est en grande partie pour l’activité génératrice de revenus pour les groupes d’entraide, regroupant des femmes.

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Analyste non identifié, [9]

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D’accord. D’accord. D’accord. Et j’ai une question sur le front de la liquidité. Ainsi, sur votre diapositive n ° 3, vous avez dit que vous disposez d’un équivalent bancaire de 1 900 crores INR et de lignes de crédit non utilisées de 3 500 crores INR.

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Rajesh Rajak, IIFL Finance Limited – Directeur financier [10]

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Oui. Les 3 500 crores INR au 31 mars, cette diapositive explique cela. Et les 2 200 crores INR de la diapositive # 29, [this is the main.]

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Analyste non identifié, [11]

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OK OK. D’accord. parce que…

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Rajesh Rajak, IIFL Finance Limited – Directeur financier [12]

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Une partie de la ligne de crédit aurait été utilisée pour rembourser les prêts en cours en avril et mai.

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Analyste non identifié, [13]

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D’accord. Donc, fondamentalement, c’était la chronologie qui est différente. [The amount is not]…

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Rajesh Rajak, IIFL Finance Limited – Directeur financier [14]

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Au 25 mai. Et graphique # 13, à compter de l’exercice, 31 mars.

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Opérateur [15]

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La question suivante vient de la ligne de [Venu Agarwal from Bank].

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Analyste non identifié, [16]

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Encore une fois, je voulais vous ramener à la diapositive 29. Pouvez-vous s’il vous plaît nous présenter les différents scénarios potentiels – en ce qui concerne à la fois la MF / Assurance et les Banques / IF? Comment voyez-vous cela s’étendre?

Et en plus de cela, il serait également utile d’obtenir certains scénarios de votre part du côté des actifs. Je regarde donc essentiellement votre situation de financement net. Et comment voyez-vous cela s’étendre, étant donné le moratoire qui est là dans le livre. Encore une fois, personne n’a une visibilité complète sur la fin des blocages, et cetera, mais que voyez-vous? Et comment voyez-vous cela?

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Nirmal Bhanwarlal Jain, Inde Infoline Finance Limited – Directeur à temps plein [17]

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Il y a donc beaucoup d’incertitude quant à savoir si nous avons toujours un moratoire ou non. L’industrie a donc présenté au gouvernement, ainsi qu’à RBI, plusieurs présentations qui se sont produites parce qu’il devient très injuste que RBI annonce que tous les clients de NBFC peuvent bénéficier d’un moratoire, mais les NBFC obtiendront un moratoire de leur banque principale. Mais la plupart des banques, je pense, ont – envisagent actuellement un moratoire. Certaines banques le sont déjà, d’autres sont en train de le faire.

Donc, ce que nous avons fait dans le graphique, c’est que nous avons séparé les prêts qui sont dus aux banques. Et quand je dis [have high distribution] comme NSB, qui tombera également sur le même modèle, puis il y a les prêts, la différence, dans les sociétés de fonds mutuels et les compagnies d’assurance, où les obligations et les entités sont – c’est une question publique, au public. Donc, le fond, le financement là-bas, nous ne pouvons pas – nous ne voyons aucune possibilité de moratoire. Mais la partie supérieure est essentiellement des prêts qui sont dus aux banques où je pense que le scénario le plus probable est maintenant que le moratoire sera accordé.

Donc, si vous regardez, disons, pour le 1er juillet, et nous avons INR 286 crore en raison, disons, d’un fonds commun de placement et d’une compagnie d’assurance. Et nous avons 1 271 crore INR [this is somewhat better]. Alors peut-être 1 271 crore INR moins 286 crore INR est dû aux banques. C’est vraiment [at risk to moratorium]. Donc, si vous regardez vraiment, si nous obtenons le moratoire des banques, c’est probable, alors notre liquidité couvrira même au-delà de décembre ’20. Si nous n’obtenons aucun moratoire, ce pourrait être jusqu’en septembre – ou tout ce que nous avons ou quoi que ce soit entre les deux. Ce sont donc les cibles.

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Analyste non identifié, [18]

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Mais évidemment, cela suppose 0 afflux d’actifs, non? C’est selon votre approche actuelle …

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Nirmal Bhanwarlal Jain, Inde Infoline Finance Limited – Directeur à temps plein [19]

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C’est vrai. Nous sommes — [that’s right so, assumes, okay] 0 coule du côté des actifs, mais ça va. Et aussi, nous avons des coûts d’exploitation pour gérer l’entreprise. Mais net, même avec le [year out], mais nous avons aussi un [system]. Nous avons donc également continué à négocier de nouveaux prêts. Mais pour – hypothétiquement, si nous cessons de décaisser un nouveau prêt et que nous continuons à ne récupérer que ce que nous attendons de notre prêt existant, combien collectons-nous, Sumit, auprès de l’entreprise en activité?

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Sumit Bali, IIFL Finance Limited – PDG et directeur exécutif [20]

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[Probably crores], INR 250 crores impaires.

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Nirmal Bhanwarlal Jain, Inde Infoline Finance Limited – Directeur à temps plein [21]

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On a net basis, we’ll have [INR 250 crore] this coming term, even after moratorium.

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Unidentified Analyst, [22]

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And your ongoing costs are, per month?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [23]

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[So first off] around INR 70 crores, INR 80 crores, maybe, that [is result after investment].

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Unidentified Analyst, [24]

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Okay. So that’s very useful. The other question that I had is with respect to the various schemes that the government has announced. It was starting with the TLTRO, et cetera, which didn’t really have the desired impact, and then they have announced subsequent schemes. So can you give us some sense of what could be the impact on you as an NBFC? I’m not talking about your eventual customers. But as you as an NBFC, how are you looking at it?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [25]

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No, I think there are a lot of different schemes that we, as an NBFC, are [helped with] because the one scheme is only for AA and better or not for AAA. So we are AA-evaluated, so we obviously can feel the benefit from that. So there are a number of schemes, so there is TLTRO, and the INR 30,000 crores in liquidity finance for NBFCs for 3 months but might get extended. Why they give us 3 months? Because to meet the moratorium equivalent.

There’s the INR 45,000 crore piece of another scheme, which is partial guarantee, a different format where it will give partial guarantee only for a pool where we are selling certain assets to bank, but this can be even for bonds or securities issued by GSEs.

And on top of that, there is INR 3 lakh crore of MSME working capital loans which can be guaranteed. So there, to our existing customers where we give an MSME loan, we do a [mutual fund, 30%, 20% loan,] and that is — that part of loan or the last line loan is guaranteed by the government.

So the [current] schemes, the final guideline are coming. And then, of course, you have more TLTRO. All these things put together, I think, a very — and there’s a very positive light in next few days, next few weeks. We still have some good liquidity coming from these — from banks and some other institutions.

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Unidentified Analyst, [26]

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Do you have sort of like very rough ballpark numbers? I’m not tying you to any particular number, but just one of — just like you have very nicely illustrated in the Chart 29 about various liabilities, is there any sort of range you can give us on what additional sort of direct benefit you can get from this? Excluding the INR 3 lakh crore MSME working capital guarantees, because that probably goes to MSMEs directly. But as far as you are concerned, is there any scenario you can give us?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [27]

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Oui. So from all these schemes, we can get a lot of difference. We really don’t know how banks have the process [in that level]. But maybe out of around INR 3,000 crores, INR 2,000 crores, INR 3,000 crores we should get. And on top of that, we also have a normal application, which are about — on lending as well as in our term lending, which is in the normal course. So no, I think our target that it would be INR 5,000 crores to INR 6,000 crores in the next 4 to 6 weeks and seek that kind of buffer in case, I mean, [that is of course] we’re trying to work for, so that we can continue to grow your book and feel comfortable with that.

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Unidentified Analyst, [28]

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Sorry, just to understand that. What you mean is that this cash and undrawn line cushion that you have INR 2,200 crores, you would hope to get it up to INR 5,000 crores to INR 6,000 crores in the coming weeks. Am I right to understand that?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [29]

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Oui. INR 5,000 crores to INR 6,000 crores. Oui. Tu as raison.

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Operator [30]

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The next question is from the line of Anitha Rangan from HSBC Asset Management.

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Anitha Rangan, Hsbc Asset Management (India) Private Limited – VP of Fixed Income [31]

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Just a few questions here. As I saw, you said that 58% of your customers have availed moratorium. So once the moratorium is off, by when do you expect that 100% will be restored? Say, between August to December, or is it August to March? When do you expect it to be restored?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [32]

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So this figure is as of end of May. Our sense that we sell to our customers specifically, [sector]. I think they are [already] but there is some kind of opening up. So I think once this INR 3 lakh crore reaches the end customers, you will see that number of customers who avail moratorium will reduce [moving forward]. We’ve already started seeing activity which is worth now the NPV is historic low and the gold prices have gone up, we expect volume, probably after 3 months, [come back] 3 months, the situation should be pretty close to normal. Microfinance will take anywhere around 3 to 5 months in that [term]. So by same, I think 2 quarters from now, we should be about 80-odd percent of normalcy, depending on the collection side.

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Anitha Rangan, Hsbc Asset Management (India) Private Limited – VP of Fixed Income [33]

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Okay. And you spoke that you also have to do some kind of disbursement. So is that like a part of your contractual obligations for the money which you have to disburse? Or it is like even like normal course of disbursements?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [34]

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So we have had some disbursement linked to construction [after]. Now given that the process will be delayed, that also would get delayed. And then we don’t have too much of undisposed asset or undisposed money. There is some in the real estate book, but very insignificant.

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Anitha Rangan, Hsbc Asset Management (India) Private Limited – VP of Fixed Income [35]

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Like your disbursement which, is like, you have to, like, do, especially when it comes to construction finance per month?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [36]

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No, there’s home loan. That’s supposing you got a home for [INR 25 lakh], we’ll give [loan which we flag,] we keep paying. So we will keep the 80% loan. Then with every installment that you pay to the developer — term, [about] 80% comes from the lender. But as I say, these things are very small. They’re not really significant in [as percent of book].

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Anitha Rangan, Hsbc Asset Management (India) Private Limited – VP of Fixed Income [37]

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Okay. Okay. And just one more. Out of this INR 1,159 crore which you have refinanced in Q4, how much would be like a refinance of, let’s say, once the existing term loans are over and you get that substituted with a new loan or working capital refinance? And how much would be new, fresh sanctions of the new banks or completely new term loans?

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Unidentified Company Representative, [38]

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Okay. We didn’t quite get your question. Are you asking how much is renewable and how much is it…

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Anitha Rangan, Hsbc Asset Management (India) Private Limited – VP of Fixed Income [39]

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Oui. How much is fresh loans? Oui.

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Unidentified Company Representative, [40]

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Yes, I don’t have that information right now for us. [Fresh].

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Anitha Rangan, Hsbc Asset Management (India) Private Limited – VP of Fixed Income [41]

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Okay. Okay. And just one final notion. What are your thoughts on securitizations? Like because you have been doing securitization in a very robust manner until Q3. So I mean, what are your thoughts because in Q4, you haven’t been able to do because of COVID situation and so on?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [42]

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So securitization [always] is considered in the — towards the end of the quarter. Unfortunately, in Q4, suddenly, came the standstill on 20th of March because the pipeline got delayed. You could still complete a few. But I think now, most of the banks are trying to work completely digitally and even without physical. But I think this will gain momentum as things move along. Normally, what happens, is the [separation transitions] will have agency leading, or sometimes, when we have our auditors basically audit. And sometimes, there is relevant checking of [QIP file] and the borrower. So all these processes, they work in a normal environment, but they slow down because of the lockdown.

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Operator [43]

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The next question is from the line of SivaKumar, K. from Unifi Capital.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [44]

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With respect to the home loan segment, what will be the salaried and self-employed bifurcation?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [45]

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So 58% of AUM is salaried, 42% is self-employed.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [46]

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Okay. And sir, in business loans, you said 2/3 are secured and 1/3 will be unsecured. Est-ce correct?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [47]

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Yes, that’s right.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [48]

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Okay. Sir, what is the rationale for giving a moratorium by default? Because that seems to be the reason why we are seeing a higher number or higher percentage of AUM getting into moratorium. And have you extended this moratorium until August again by default?

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Unidentified Company Representative, [49]

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So we have asked the customers for opting in. So we have given them a choice. So that’s the protocol we are following. And the number we’ve said, 58% as of May end. For the next quarter, we get to know in about 4 weeks’ time.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [50]

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Okay. And within business loans, is the moratorium higher in the unsecured part? Or is it equally distributed between secured and unsecured?

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Rajesh Rajak, IIFL Finance Limited – CFO [51]

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So it’s slightly higher on the unsecured part.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [52]

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Okay. Okay. And we see that in terms of GNPA, business loans has again spiked this quarter. Is that structurally worrying you in terms of how the asset quality has been performing over the last few quarters, business loans?

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Rajesh Rajak, IIFL Finance Limited – CFO [53]

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So when you look at it, there has been — even before the COVID, the economy was soft. Post that, there has been further impact. Now given that 2/3 of the book is collateral-backed, which roughly runs at about 60-odd percent of NPV, and we assessed cash flows on the customer while giving loans, though it is on the past situation. And again, the 1/3 business which is a business loan is a higher-margin business. So this is a business where there will be something in times to come because these are loans given for generation of income. So last 2-odd months of develop of business activity would result in some pain in this segment.

But we are also watching it closely because this INR 3 lakh crore, which is roughly 20% of the entire outstanding, once it reaches the customer, it will help them in restarting their business, which is — and ease the cash flow for them because it has a staggered repayment tribute. So we’ll have to wait and watch as to how things open up, how much time it takes to get to normalcy. But given that we have 2/3 of the book secured, 1/3 having higher margin, we are not unduly worried on this segment at all.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [54]

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Okay. And the entirety of the business loans would qualify for that INR 3 lakh crore scheme?

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Rajesh Rajak, IIFL Finance Limited – CFO [55]

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Oui.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [56]

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Je l’ai. And now finally, one question on the construction finance book. We see that it has increased by 2% on a sequential basis, but the understanding was that we would actually bring it down over the next 6 months. So should we actually expect increase in the construction finance book going forward?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [57]

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No, there are some disbursements that happened based on the — where the pending approved amount is there. And this also [data] with the approval and with the — in progress. But out of this, the collection was impacted for last 10 days. And many of these installments become due in the last 10 days, and that is what has impacted this.

But it is unlikely to [write] — actually, there is some resolution of some projects getting kind of moved. It could have fallen, but for certain lockdowns and things that really standstill. So under normal circumstances, should taking down.

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K. SivaKumar, Unifi Capital Pvt. Ltd. – Assistant VP & Fund Manager [58]

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Sir, what is the yield level for the gold loan book?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [59]

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[19.67%].

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Operator [60]

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The next question is from the line of [Ran Sunisha] from BOB Capital Markets.

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Unidentified Analyst, [61]

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Some of my questions have been answered. My question is about the gold loans. Have we offered moratorium to our gold loan customers?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [62]

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In case of gold loan — the balances are closed for more than 2 months. Now they just opened. So the [because normally], even the customer want to pay digitally, but he won’t do that till getting [job back]. So almost 82% of gold loan, if you see our slides, they are in the moratorium. But as the bank is open, now last 1 week and last — we have seen a lot of traction on this. Almost 90% of our branches are open, customers are coming back, and hopefully, the moratoriums will go down now actually. And many customers will just pay their interest or [gold loans].

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Unidentified Analyst, [63]

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No, my only question there in fact, how can we offer moratorium on gold loan? Because moratorium is only to be extended on term loans and not on bullet loans, or bullet repayment loan?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [64]

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Is that gold loan?

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Unidentified Analyst, [65]

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As per the RBI regulation, you can’t offer moratorium on gold loans.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [66]

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First of all, gold loan has multiple products. It’s not necessarily just should be a term loan and a bullet loan because [actually, there] are repaid in a monthly installment also. And in this case, I think [there is a restriction] on bullet loans versus term loans. And most of our gold loan customers are also small businesses. They basically take a loan against a portion of gold.

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Unidentified Analyst, [67]

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No, I understand that. But gold loan, the understanding is that it’s a bullet loan. And RBI clearly mentioned that the moratorium is to be extended for a term loan and not to a bullet loan.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [68]

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A bullet loan is not a term loan? I don’t think bullet loan is exclusive of term loan. So term loan can be paid in a bullet payment or it can be paid by monthly installment. Many of them, even if they borrow from banks, is a term loan but pay bullet. So bullet loan is a part of term loan.

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Unidentified Analyst, [69]

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Okay, sure. And — sure. And what is the outlook from the gold loans as we go forward into FY ’21? What kind of growth…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [70]

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Very positive. Gold prices are holding up high, and higher as people need working capital to start their businesses or because they were impacted. But I think gold loan outlook is very good.

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Unidentified Analyst, [71]

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So any — would you see a volume net growth or a value net growth?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [72]

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Tous les deux.

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Operator [73]

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The next question is from the line of Lucinda Zhou from Allianz Global Investors.

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Lucinda Zhou, [74]

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So my question is pretty similar to Anitha. I mean, it has been answered previously on the gold loan. Just want to understand also the percentage of AUM under moratorium for this gold loan that’s actually pretty high as compared to one of your peers who have already announced results. Can I understand why? Is there more or rather less people paying via online apps? Or how do you see that?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [75]

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We do think the company has invested in, how much is it? Can you share the number?

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Lucinda Zhou, [76]

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They mentioned that gold loans on the moratorium is a lot. I mean, it was an article on Bulldog, and then they mentioned that more people are willing to pay gold loan because it’s — so they do other loans as well, right? But more people are willing to pay gold loans than other loans because the LTV ratio is pretty low. And on top of that, they do not want that interest to roll on as well.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [77]

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No. So what they are saying is right. But business calendar moratorium in this period because the branches were closed, branches were shut. So by default, they got into moratorium. And also what happens that in market, most of the loans, we collect interest on a monthly basis. So we have to put them in moratorium, and most of the customers would electronically agree for that.

But as I said that since last 1 week, branches have started opening all over the country again. And we are only seeing there’s a footfall of customers coming back and paying interest and paying — so in all, as within the next few months, you’ll see that the moratorium percentage in gold loan will go down significantly.

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Lucinda Zhou, [78]

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Okay. Okay. Then my next question is regarding your cost of funding. I know you mentioned about the cost of funding as of end of March. In the last 2 months and the worsening of the COVID situation, we have also seen some onshore funds being closed. So can we get a sense of how it’s affected your cost of funding? And also in terms of the ability to extend the market.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [79]

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So cost of funding has remained stable. In fact, this last year, 9.4%. So when we get refinanced from NHB and other institutions, we get them in a very good rate. Banks also, although there’ve been little. So there’s a bit of a — the entire decision making process has been stalled. So most of the banks have been waiting for the clear indications from government and RBI about who’s going to authorize the risk. So it’s not that they have said no. But fact of the matter is that new rules have been very slow in the last 2 months. We have raised some money, but not enough.

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But as we speak, and what we are seeing is that since last few days, last 1 week or a little more than that, most of the banks have become positive. They have starting looking at the proposal. They have started sending queries to us. And it looks like, it appears that in the next couple of weeks, we’ll see good flow of money coming in on new rules.

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Unidentified Company Representative, [80]

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Just to add to that, last quarter, 9.4% also includes the cost of funding for the MTN program, which was the higher, and that is an important diversification and was a main issue. So overall, as banks constitute larger and larger funding portion, the rates would be going down going forward.

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Operator [81]

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The next question is from the line of [Vivek Ramatisan] de [DSC Mutual Funds].

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Unidentified Analyst, [82]

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Very good presentation. I would start with the strategic question. In terms of automation, whether it’s automation execute, do you feel like you seeing any resistance because banks have already put in their infrastructure, and they have their political infrastructure. And so this getting a product from another institution is something that there’d be internal resistance, and that’s why it’s not taking off? And related to that is, in terms of the home loan business, is it a long-tenor loan, and NTC is generally not able to get over 3 years, 4 years at the very best. Is it best that this business moves to ultimately related organizations and banks?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [83]

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Come again? What is home loan you’re saying?

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Unidentified Analyst, [84]

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It’s a long-tenor business. I mean, when you give a home loan, it’s a 15-year loan or a 20-year loan. And then typically don’t get that kind of tenor unless it’s SPV financed, or one of its regulatory bodies. So (inaudible) actually moves more particularly of traditional banks, we see a lot more of home loans and keep it on the books.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [85]

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Okay. So let me answer both parts of your question. First, is that banks are expanding their infrastructure to give more loans to (inaudible), they can source on their own. If they could, the 8.5 lakh crore, which is a hell lot of money for banks to have a negative carry and put it back with RBI and reverse report it. Also, the short-term GSEC record has fallen below even reverse reported now, the 6 months GSEC. So the fact of the matter is that, so no bank would like to carry liquidity and/or lessen their cost of funds, obviously. They could lag. So obvious, this country is very large. And the last-mile connectivity, the number of people, like companies like us employ 18,000 people. So it (inaudible) so that we can get that kind of loan origination, probably need as many people. And we can receive 5% more or less efficient, but we need 18,000 people to replicate what we do. We’ve got 2,300 physical locations all over the country, obviously. So the fact of the matter is that the network, whatever banks have and NBFCs have, NBFCs are low in the system. It’s 25 lakh crore, which almost like, amount-wise, we are talking about around $30 billion.

So NBFCs as a network is very large. And also banks are (inaudible) network, but this — they can’t reach up to everything. And that is our guidance, that we’re willing to buy assets from NBFCs. So we’re prepared to do as much as they can. But imagine, they obviously, can’t double or triple that (inaudible) to online. And so that’s one.

Secondly, housing demand, (inaudible) no country, no economy, no system. We cannot (inaudible) because it has to be normal because within the country, there are different types of risk assets and everything is still financed. So imagine, so you’re in a bank, that’s what I’m saying, there is a polarization, there are only 2, 3, 4 entities remain. Some of the (inaudible) entities are there, maybe 1, 2, 3 or whatever. A country as big as this can never achieve a $0.5 trillion economy.

Also, what happens that most of the customers won’t qualify for this. So the 90% of borrowers, I guess, won’t be (inaudible) in terms of their credit score or whatever. Most of them still repay a loan, spend the need. But to say that whether it’s a — so it starts on the corporate borrowers. They are the ones who have funds or projects and expansion. Then we want to talk about MSMEs, who want to borrow for the businesses or indigenous ones who borrow for corporate need. If you restrict to AAA, just to give you some data points, out of distinct 10,000 rated companies, only 1.5% are AAA. 98.5% are not AAA. Then I think it’ll be a disastrous situation for the economy.

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Unidentified Analyst, [86]

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No, I — no, so I won’t belabor this point. What you’re saying is logical in the sense that (inaudible) even the FDA of a bank in terms of its NBFC loans as (inaudible) — sorry, in terms of its SME loan, (inaudible) on a private sector bank or an Ind AS 6 months loans. So it’s a logical progress here. But somehow and I hope that progresses. And home loans, what I meant was, this search for liquidity, I mean, (inaudible) lakh crores, because given the situation of NBFC getting advanced liquidity and current story at the moment. But I like your covert strategy, which makes it capital-light model. But I’ll note the next question. In terms of…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [87]

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Liquidity from NHB, whether like HBC limited, takes refinancing from (inaudible), we take it. We get it at the same rate. And based on the underlying footprint, and not based on the rating of the housing parent company.

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Unidentified Analyst, [88]

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C’est vrai. So..

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [89]

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Our portfolio is pretty affordable. Some of the loans, we have got a 5.5%, 6% also based on the underlying portfolio.

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Unidentified Analyst, [90]

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No. I agree. So in the sense there will be that component of regulated (inaudible) and in fact, in TLTRO also, we believe that the regulators, it’s NHB, certainly you kind of (inaudible) going to play a bigger role than anything else. But more or less, and again, I just want to hear your thoughts on that. In terms of home loans, as well as micro finance, there’s been the jump in gross NPAs. So I wanted to ask whether — is it there (inaudible), the non (inaudible) segment and (inaudible) 6 months?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [91]

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So I think there is the industry-wide impact. One is that the 30 days or 60 days delever assets on 1st March got classified as this, but many of them under normal circumstances, would have got resolved. So the culture, and I mean this is how industry evolved, that people know that up to 90 days, not NPAs, and they might pay between 80 and 90 days kind of a thing.

Secondly, even before COVID, (inaudible) had a bit of a slowdown in our liquidity (inaudible). So what we are seeing is industry-wide phenomena. But having said this, we fared far better than the industry averages on the PL book. So if you put in a capital format and look at the regulation and quality of assets who are coming variable, you’ll find that we did much better.

Like in MSME, our GNPAs have gone about to 3.5%. But the banking sector is around 15% and for the mobile, more than 20%. And if I look at the average ticket size of our loan is more comparable to (inaudible) loans [4, 5] typically. The video side is the one I’m talking about.

So again, it’s a process, which is a (inaudible) process and also your collection infrastructure. Then in our branches, you have young people who go and collect more of the (inaudible) and your digital infrastructure in terms of how do you vividly engage customers and make sure that our collections happen, your underwriting standards, which is our analytics. So they’re very good at (inaudible).

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Sumit Bali, IIFL Finance Limited – CEO & Executive Director [92]

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Oui. You also had a question on the micro finance. So micro finance, the increase primarily is accounted by what happened in Assam, so we started the business there. We have an insignificant, about 2% portfolio there. But there is — there was a issue there. And also with the Mangalore region in Karnataka, so those 2 impacted it this quarter.

Based on, most of the book is for income generation to rural customers. So therefore, we are clearly confident that this set of customers already had very good intention to pay. And they’re very resilient even in the face of flood, cyclone, they’ve come back. And this time around, the disruption on the economic side is not too severe in the rural area. So we are fairly confident that as and when teams can operate, meet customers, this segment will also recover pretty quickly.

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Unidentified Analyst, [93]

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Sumit, that was very useful. The last question, since your COVID strategy’s kind of as at (inaudible) holding like a dense group in cricket, let me ask this question. In terms of [RTS], government support of banks and appreciate it, I mean, in one bank case installment, please don’t take a deposit (inaudible) in your private sector banks. But NBFCs have never got that kind of support. Is it possible that also that you might not look at the banking strategy going forward? So you have said that, of course, only a few banks have gotten deposits. But by and large, it seems more stable than the NBFC model.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [94]

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No doubt about it, actually so we’ll better evolve into a bank. And opportunity will be there to have a very new age, new era bank, which can be far more digital, far more customer-centric and much more lighter not only on capital, but on cost also. And we should look at an opportunity. And we can by — in a way, if we — this is our COVID strategy. We work very closely with bank, and meet the bank’s credit standard, the bank offices, then the transformation is a little bit easier for us.

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Operator [95]

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The next question is from the line of (inaudible) from (inaudible) Mutual Fund.

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Unidentified Analyst, [96]

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Two quick questions. So firstly, just to reconfirm, IIFL Home Finance announced INR 15 dividend, right?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [97]

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Oui.

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Unidentified Analyst, [98]

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So just wanted to understand the rationale, it was increasing in home finance.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [99]

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(inaudible)

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Unidentified Analyst, [100]

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No, home finance. I mean home finance.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [101]

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Home finance, yes. I think home finance is a subsidiary of IIFL Finance. So that dividend comes through the parent company, the parent company already has a dividend in the month of March.

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Unidentified Analyst, [102]

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No. Right. So my concern, so I just want to understand the rationale of, first, infusing equity into home finance business and then taking out 35% of the equity the next year in dividends. So just wanted to understand the rationale.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [103]

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Okay. I’m not very sure of the number, 35% because the dividend payout has been around 15% to 35% as per our dividend policy, one. Two, what the track record of dividend also help you, I mean, this is now, what you’re saying, the logical question, but the way it happens is, that when you go to banks and you go to LIC, then you go to NHB, saying that application, (inaudible) were designed years ago, they look at our track record of profit and dividend. We have built a track record of dividend. That is one. Second, home finance is more than 30% of our business. So in the parent company, whatever dividend we have been giving, we don’t want to reduce it. So it’s better that we get dividend from the subsidiary companies in the proportion of profit made rather than the (inaudible) from the stand-alone, with actually enough model business in the entire group.

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Unidentified Analyst, [104]

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Droite. No. So my concern was so, in FY ’18 as well as in FY ’19, we had nothing for IIFL Home, I think, hardly announced anything. And in FY ’19 itself, I think we — so IIFL…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [105]

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No, it’s a good observation. But as long as outside shareholders are concerned, the dividend, which is given by IIFL Finance matters. And internally, that can be given out of dividend ratio from subsidiary companies, or out of stand-alone profitability. But as we have seen that the subsidiary businesses like micro finance and housing finance has become larger. So we will upstream the dividend so that we can maintain our dividend track record at the parent level to (inaudible) shareholders.

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Unidentified Analyst, [106]

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Okay. And next one, for the RE book. So what I understand is around 61% of our book has (inaudible) from moratorium. So just wanted to understand what percentage of the balance, 39%, would be in natural moratorium?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [107]

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No. Because everybody has (inaudible) the moratorium. And so it depends on how the whole crisis are unfolding. So actually, on 31st March, 11% on the moratorium, and now it’s in large numbers, some more have opted for moratorium. It (inaudible)

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Unidentified Company Representative, [108]

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So just to answer that, the balance book we are talking about is that all our (inaudible) loans are interest paid on quarterly. So there is no — there was no moratorium on that. So that continues to be growth on the balance book. So the only ones which have opted for moratorium has been already mentioned rightly, (inaudible). The balance continues to (inaudible).

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Operator [109]

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The next question is from the line of [Sneha Aravali] from Barclays.

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Unidentified Analyst, [110]

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Just wanted to know what would be the percentage of digital collections you have to forward? And what is it now?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [111]

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Yes, the (inaudible) digital collection actually, because typically, the material is not (inaudible) really recently.

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Unidentified Analyst, [112]

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And (inaudible) COVID?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [113]

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Well actually COVID, our business loans, home loans are more or less fully digital direct bank transfers from the customers, very small part of the cash collections. Home loan (inaudible) where we can have physical connections. (inaudible)

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Unidentified Company Representative, [114]

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(inaudible) digitization.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [115]

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So 30% of home loan is digital and 60% is physical. But we are making a concerted effort to increase this 30% to a significantly higher number. By (inaudible) the customers.

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Operator [116]

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The next question is from the line of (inaudible) from HSBC.

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Unidentified Analyst, [117]

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Oui. Just wanted to understand the difference. My first question on the liquidity slides. There are 2 slides, which is both 29 and 30. One is on debt repayment review and the others on ALM. So I’m just looking at the outflow numbers in the ALM slide versus the retail number, which are mentioned on Slide #29. So I mean I’m not able to understand the difference between…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [118]

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The slide is up to December ’20. It’s just about 6 to 7 months. And the ALM slide is for 5 years and longer.

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Unidentified Analyst, [119]

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Droite. But even if I look at, let’s say, outflow in the next 6 months, that shows that about INR 6,300 crore in the Slide 30. And in Slide 29, if I look at the total number 20 during (inaudible) [30] (inaudible)

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [120]

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So there will be debt obligation. So that doesn’t take care of any operational cost and other cash flows that we’ll have. So there will be 4 difference there. But I think there are 5 or more slides that you take a look at the only 6-month component, and then it may be more to corresponding than that other slide, which is just up to December 2020.

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Unidentified Analyst, [121]

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Okay but then the outflow, which is…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [122]

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It’s only debt payments. So it won’t take into account dividend, expenses, operating costs and other things.

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Unidentified Analyst, [123]

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Okay. This outflow, which you have mentioned, does that include securitization also?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [124]

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Yes, that’s right. So the full slide will have a separation outflow also, but the collection of the customer is given kind of a thing. So that is (inaudible).

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Unidentified Analyst, [125]

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Droite. And I just want to understand on this securitization piece. Like given the customers have opted for moratorium and okay, I mean, particularly in some more shops and then loans like gold loans, which (inaudible). I mean, like how does it work? I mean, because do you have to repay the bank or the holders of the…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [126]

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No. Because when we are trying to securitize, cash flow is whatever we get from the customers, there will be times we’ll get. And so there is a bit of a confusion on this in terms of how the pools will get rated or whatever. We’re steady because the secondary count of (inaudible) are new. So there has been some clarification. But as far as we are concerned, so somebody assigned the loan, rural bank loans. So customers get a bank or a customer in a bank will get it.

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Unidentified Analyst, [127]

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Okay. Je l’ai. My other question was on your capital. So your overall capital adequacy has come down to about 18%. Earlier, that’s excess 20%. So any reason for a sharp decline in the past quarter?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [128]

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Oui. So one aspect — a couple of things that happened. One is that the few (inaudible) also go out be postponed. And so you see a sudden increase in the year end loan on the balance sheet. Secondly, the investment actually has gone down. So we can — we have some room to rationalize and optimize there, whether it’s the equity debt or the guaranteed loan. So we’ll be — one is that if the business loan is going to come down. The dividend payout also happens in the last quarter, and also there’s a huge (inaudible), so the normal samples that get added is also low. So all these things put together are impacted. So the profitability for the quarter is very low because of the poor equation, and there is a dividend outflow.

And on top of that, the (inaudible) project got delayed. So all these things are combined for the — it used to come down to 18.2%. But it will improve a little bit in the whole, based on our plans and target. It should move up nicely as things get normal.

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Unidentified Analyst, [129]

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Okay. But like, I mean, why would that be? Because like this…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [130]

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You have internal (inaudible) which we will paying in March quarter. Then the (inaudible)

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Unidentified Analyst, [131]

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(inaudible) packaged in part would still (inaudible)

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [132]

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Yes, we’ll process. (inaudible) it will take certain assets are diluted. And as I said that certain subsidiary companies also will try and structure (inaudible) on the capital. As I said, the last quarter of the (inaudible), we had a certain disruption. But with — so by internal approval, the securitization and rationalization of possibly investment, all these things will help us improve the capital just a little bit.

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Unidentified Analyst, [133]

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Again just on securitization. Just want to understand as, going forward, do you expect banks to or like banks and other places to participate enthusiastically? Because, I mean, given the moratorium and worry on the underlying assets itself in terms of like repayments, would they be more comfortable lending on balance sheet as compared to taking the pool?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [134]

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So if you look at it, 2 things. One is that they’re not able to adequately lend on balance sheet. And today, they have a huge sort of liability and shortfall of assets. And so that’s why they put such a large amount of (inaudible) and surplus (inaudible). Two, their own track record in collection critical is not so good, particularly for the smaller loans and then (inaudible) a hand in the industry. Three, this is not one rule apply, where one size fits all, because there are some (inaudible) they have a track record and where they have comfort. I would like to believe that this is more high level. If you look at our last 8 years track record of assignment and securitization, there are also something lower than what typically concerns, or any rating agency would estimate or where banks would directly estimate to take into account in the pricing.

So again, question of it’s a rolling thing. We will build comfort and confidence over a period of time in the business. So our COVID strategy is that rather than doing it post sector, we’ll get into some alliances with the banks where we do it simultaneously as we originate loans and don’t have to even wait for (inaudible). So we’ll align our credit policies, processes as if we are working for the bank and originate only assets which banks are willing to take. So then 100% of assets can be given to them. And we can — hopefully, this will be negotiating with a few banks. (inaudible) where there’s a clear understanding at the time of originating itself that this (inaudible) given to that bank. Banks really have to be very profitable for them. See what happens at (inaudible) is legal. Today, they don’t have much appetite to do wholesale corporate lending. So how would they build assets when they’re getting deposits? So they need retail assets.

They are doing their best, but they can’t do on their own much. So it’s a win-win for both of them that way.

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Unidentified Analyst, [135]

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Oui. Actually I understand the point. Only upon (inaudible), given the current situation that there is moratorium and so on or to be given on weak loans. I mean, given that scenario, they might go cautious, probably for…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [136]

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(inaudible) I think — so until this — things get normalized, we may be (inaudible) and on the things they are capable of so quickly. And to that extent, as the world gets normal, this will actually be, we can experience this.

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Operator [137]

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The next question is from the line of Ashwini Agarwal from Ashmore Investment Management.

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Ashwini Agarwal, Ashmore Equities Investment Management (US) LLC – Non-Discretionary Strategic Advisor [138]

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So I have 3 questions. One is the Tier 1 capital. I mean, I know you said in your opening remarks that right now, even if you do a very large dilution, you’ll be able to raise a very small amount of capital. So I’m assuming that raising equity is out of the question. But if you do stress testing and you look at your Tier 1 capital at 13.6%, I mean, you have very little room for error. So have you had conversations with your large institution shareholders like CDC or the others, often probably a convertible structure or something, which might give you access to Tier 1 capital, maybe not at the current depressed prices, but if need be, you might have access to it? Have you had something about that?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [139]

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Oui. So Fairfax and CDC both, we are in regular touch with. And so that is there on our mind. But as I have said that maybe last quarter was a little bit of an exception in terms of Tier 1s going down a little bit more for the reasons which I’ve said in my response to the earlier question.

But okay, 10% is a threshold. And internally, we want to keep at least a safety of 13%, 13.5%. So you’re right that we don’t have much room here. So we’re very consistent in all the options that can be convertible. It can be perpetual bond. It can be — and what also qualifies as Tier 1, or it can be one of the options that — as well as structuring in a manner that we can assign more and reduce the capital. But I agree with you, I assure you that we are very mindful of this. So we are looking at that very carefully.

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Ashwini Agarwal, Ashmore Equities Investment Management (US) LLC – Non-Discretionary Strategic Advisor [140]

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Okay. And second question is the moratorium, which was a very small number as of 31st March for obvious reasons has now grown to 58%. But what was the progression? I mean, has — as time has progressed and lockdown has gotten extended, are more and more people opting for moratorium? Or do you put a…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [141]

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As lockdown is getting extended, most of our customers are small businesses for the past (inaudible). So initially, there were not many customers who want to say, okay, a couple of weeks, we’ll manage it less than a (inaudible). But as we got lockdown 2, lockdown 3, lockdown 4, then the moratorium has increased. And because their source of income are shut and then they’re also — I think they are forced to take this.

Lire  Transcription modifiée de la conférence téléphonique ou de la présentation des résultats STR.VA 29-Apr-20 1:00 pm GMT

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Ashwini Agarwal, Ashmore Equities Investment Management (US) LLC – Non-Discretionary Strategic Advisor [142]

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Because the reason I’m asking is that when we look at many of the commercial banks who also reported over the last few weeks, they’ve kind of given out moratorium numbers for April and they’re in the ballpark of 30%, anywhere from 25% to 35% for end of April. But in the conversations we’ve had with them, most of them are saying that they haven’t seen any increasing incidence of moratorium, principally because people don’t want to incur these interest cost. And especially in the case of a bank where they may — they feel that they may be treated slightly differently as compared to well-behaving loans. You’ve not seen that. You’ve seen a continuous increase in morat request.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [143]

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You see, the 2 components of our business is gold loan and micro finance, they have limited balance. And that’s why what is applicable for banks may not be applicable to us because these 2 businesses account for almost around 35%, 37% of our total portfolio.

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Ashwini Agarwal, Ashmore Equities Investment Management (US) LLC – Non-Discretionary Strategic Advisor [144]

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And here the morat rates are quite high…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [145]

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Oui. 98% of micro finance is moratorium. So if you look at it, it’s just a very micro finance company, and you understand the micro finance component of ours. So I mean we do have customers like (inaudible), Reliance or Tata. (inaudible) large customers are. So the micro finance is 98%; gold loans, 82%. So this is revenue we still take. But as things open up, these are also segments which get the bounce back fairly quickly.

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Ashwini Agarwal, Ashmore Equities Investment Management (US) LLC – Non-Discretionary Strategic Advisor [146]

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Okay. And last question, I wanted to — I was confused…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [147]

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(inaudible) the balance is skewed because micro finance is volume reported.

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Ashwini Agarwal, Ashmore Equities Investment Management (US) LLC – Non-Discretionary Strategic Advisor [148]

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Droite. Droite. So I’d like to draw — I have a question relating to Slide 34. So there are 2 tables there, right? Micro market prices and project mix. Now the top table suggests that bulk of your principal outstanding in your real estate is towards affordable projects. But if I look at the bottom table, you have 11 projects where the micro market prices are in excess of INR 31,000 a square foot, which accounts for almost about, whatever, INR 1,500 crores of principal outstanding, which is 39%. So how — the 2 tables don’t seem to tally? Or at least I couldn’t understand what they mean.

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Anujeet Kudva, India Infoline Finance Limited – Head of Internal Audit & Operational Risk [149]

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Oui. Actually, this is Anujeet here. So the very simple explanation to that is that 31,000 purchase is on [CAF 1] and second is for projects which are in Mumbai, because essentially, the smaller one DSP kind of units and so on. So therefore, in Mumbai, anything which is under net about [INR 2 crores] just qualify as affordable to a large extent, and these are mostly in the (inaudible). So therefore, even though the per square foot on a project (inaudible) looks higher (inaudible) the outside is just slightly better. So therefore, it does qualify in Bombay.

And we do have about 2 or 3 projects, which are also there in the western suburbs (inaudible), which have already established something like 78%, 80% sales. So with that, a little on the higher side. But then the supply is being a constraint in (inaudible) suburbs (inaudible) suburbs of Mumbai. We’ve never (inaudible).

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Ashwini Agarwal, Ashmore Equities Investment Management (US) LLC – Non-Discretionary Strategic Advisor [150]

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Okay. And last question, over the last 3, 4 weeks, will this whole migrant labor reverse to accelerating in such a big way? Do you think the press on your residential projects, real estate projects could get worse?

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Anujeet Kudva, India Infoline Finance Limited – Head of Internal Audit & Operational Risk [151]

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Well, I would say that there would probably be a February start. And why I say February is that ultimately, the migrant labor is coming because of want of opportunity to earn money. And given that opportunity is very limited in the places where they come from, it’s a question of time that they have to come back because whatever schemes the government has, MGNREGA and all that, the amount of money which they’ll make is a fraction of what they would make here.

And also one thing what I see also is what is happening on the ground is that developments are providing for accommodation and labor camps, which are far superior to what they were earning to attract them back. So I see that (inaudible) lasting not more than maybe about 3 to 4 months.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [152]

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But you are right that for 3 to 4 months, impact will be there, 3 to 4 months cost and all. It will impact the cost and because it’s all [SKDS].

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Operator [153]

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(Operator Instructions) The next question is from the line of Harsh Agarwal from Deutsche Bank.

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Harsh Agarwal, Deutsche Bank AG, Research Division – Head of Asia Credit Research [154]

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Two questions for me. One was, can you give a sense of how much of the bank loans you’ve been able to get moratoriums since the RBI direction came out? Just a rough sense would be helpful, I think. And secondly, your cash and undrawn lines have declined a fair bit from 31st of March to May. So I mean just use to get a sense, is that mainly because the bank loans were not in the moratorium and you were likely repaying the bank loans? Or what else, if anything, led to the decline in the cash and undrawn lines in the net?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [155]

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Tu as raison. So the earlier moratorium was not there. So we think we almost ended up paying INR 2,400 crores of bank loans and thus new (inaudible). But only very recently, like the money that are due in last 2, 3 years have been (inaudible) today, yesterday, we have started getting some confidence about moratorium. So moratorium was not available, and we didn’t want to take any chance in terms of rating because banks are not confirming moratorium, we don’t pay and somebody can certainly report, which can cause a lot of problems, although we are in touch with the banks. So this clarity is emerging only about a week ago as stated (inaudible) and a news article came that okay, they have now agreed to give moratorium (inaudible). Today, they will wait. But at least what was the circumstances in March and April, even in April, and we are largely (inaudible) which should bill about 15th May. For sure, there was no moratorium (inaudible). After that, now I think moratorium is not just blanket and (inaudible), but still, I think most of the banks are now considering moratorium. And hopefully, almost all the banks now early. And that is why we have separated the outstanding, which are likely to get moratorium or not moratorium, both in our debt obligation.

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Unidentified Company Representative, [156]

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And to add to that, a lot of the lines and cash has been used to pay off NCDs during April and May, for which obviously moratorium is not applicable. Those are to the tune of approximately INR 800 crores. So those were repaid on time during April and up to now.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [157]

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So we have (inaudible) liquidity (inaudible) because the environment is so fluid and volatile to (inaudible) the routine investors are (inaudible).

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Operator [158]

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The next question is from the line of Amit from 2Point2 Capital.

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Amit Mantri, [159]

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There was an announcement about the auditor’s intention of resignation. Can you provide a bit more color on that? Whether the auditors already resigned? Or this is something that will be discussed at the next Board meeting? And whether it’s preferable to have a change in auditor at this current point of time, given the uncertainties in the market?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [160]

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Merci. So in yesterday’s Board meeting, Deloitte has given their intention to resign because they feel that the fees they are being paid as proposed by the Audit Committee, those are not commensurate or — and the expectation has not increased in a certain percentage, but many fold increase. Now while I do not see official documentation of it, but it looks like that most of these (inaudible). And last year, there were (inaudible) the current company (inaudible) a problem. So Deloitte basically directed by their global parent, the increment fees many fold. They’re trying to add the risk premium into it. And some of these before have been involved in some of the entities in the financing sector, NBFC banks that came under a bit of — a lot of stress on default and things like that. And I have a feeling that they’re trying to restrict or relatively balance and therefore, downsize the practice in BFSI space, and balance it because I think over a period of time, this a very large component. This proposal is a large component of their audit practice.

So these are circumstances. Under ideal circumstances, we would have done this. But now we’re in COVID, we are trying to put a lot of pressure on continued cost optimization, cost containment, salary cuts, including me and all senior people have taken it. We don’t want to have something which is (inaudible) increase in the fee, which will be like very exorbitant. So we negotiated with them, but it looks like that the expectations are way too high than what probably we can — where we all agree. So the Board will take it up on the 5th, the meeting, where we look at all the proposals, everything, and then — but the — this last year’s balance sheet in audit, Deloitte is going to sign, and they will complete. So there’s no conflict, no doubt about that.

So even if we part ways, it will be amicable, and we can reengage the second (inaudible), but for the time being, it looks like the fees are not tenable. But this is not — the Board (inaudible) what I’m saying is (inaudible) but I really can’t talk on behalf of the Board.

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Operator [161]

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Next question is from Aman Shah from Jeetay Investments.

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Aman Shah, Jeetay Investments Pvt Ltd – Equity Research Analyst [162]

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Sir, I have one question on (inaudible) some previous participant’s question on gold loan moratorium. When you compare to (inaudible), the gold loan is like some 90% of the customers have opted not to take moratorium, while your (inaudible) like 90% have opted for moratorium. So the numbers look at very extreme. Would you be able to actually explain what would be the reason for this?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [163]

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So I’ll say (inaudible) explain what it is in (inaudible) competitor.

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Unidentified Company Representative, [164]

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So my understanding is that every gold loan NBFCs runs different schemes in terms of attracting customers. So one of the popular schemes which a lot of NBFCs ran around retail schemes, which essentially means that we have a (inaudible) repayment and which stores perhaps even a 7-month or a 12-month tenor. And then as someone starts paying earlier, you’re restarting the rebates on the loans. Certainly, those are themes where eventually customer repayment is an elongated one, which wouldn’t have come. So that’s why perhaps tomorrow figures are low.

Most of our portfolio is under monthly repayment schemes. So where — based on that, we see a larger number of customers in different branches also under lockdown until about a couple of weeks back, that’s why the numbers are higher. But now that branches have opened, I think a lot more customers are coming forward to repay, and we should see the number trending downwards.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [165]

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So if you collect monthly, there are advantages and disadvantages, but the advantages are that credit discipline is maintained. Secondly, the loans become assignable because as far (inaudible) only if you have collected 3 installments for a short tenor loan or a 6 for a long tenor, and they will evolve. And I think we will assign (inaudible) also a fairly significant number.

And secondly, in case of a bullet — (inaudible) obviously, unless the bullet is falling in the same period, you really don’t want to do anything because (inaudible) funding due. So a yearly scheme or a 2-yearly scheme, then maybe only about (inaudible) I think will typically fall due the year in March time. Others are not falling due, and I don’t want to talk about moratorium also because of the (inaudible).

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Operator [166]

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Your next question is from the line of Rocky Andaya from Lion Global.

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Rocky Andaya, [167]

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So just 2 questions. First one is, given the moratorium that you need to grant to your customers, how will it impact the ALM situation because you’re a positive ALM, right? So for the next maybe 6 months, what’s the ALM situation with the moratorium that you’re granting to your customers? And the next question is, I think you bought 15 million of the dollar bonds in April. So is there a plan to increase more — to buy more U.S. dollar bonds going forward? Or do you have any approvals from RBI to do such thing?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [168]

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No, we don’t have approvals from RBI. So I think as (inaudible) we really can’t do any buyback more, but 15 million we did in the month of March. And in terms of moratorium, in fact, we’ll be — so if you’re getting, say, running through on the moratorium of a bank, then obviously, they get inventories. So if you look at the part that we’ve given, if you don’t get moratorium from the bank, then sorry, even for next few months you’re taken care of. And obviously, we can securitize as we now raise more funds. But if the moratorium is corresponding from the bank, then the AML is not impacted as much.

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Rocky Andaya, [169]

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Okay. So just to clarify, if you don’t get moratorium from the banks, you will have basically negative…

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [170]

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But yes, so the difference to our liquidity are the results that we see. But we’ve provided for that. So even if we don’t get moratorium from a bank, because we’re seeing our operations and liquidity for the next 6 months at least.

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Operator [171]

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The next question is from the line of [Ajiv Agarwal] from (inaudible) Advisors.

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Unidentified Analyst, [172]

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My first question is on the gold loan segment. You seem to be quite bullish about it. And some of your peers who have reported the numbers also seem to be very bullish about it. Are you seeing increased competitive intensity in that space? And how is that impacting the business?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [173]

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Competition, I think, has been increasing in the space, but I think the (inaudible) learning in terms of to get it right from testing the gold to get like kind of customers restoring security and getting the product delivered early. So actually we’ve been building the business over a period of time. Also, this business traditionally has been done like a consumer business with advertisement marketing. So if you see some of this gold loan company, there are always new celebrity models to create the brand awareness. I don’t know if you noticed, but we also signed up (inaudible) has become our brand ambassador. And because like the (inaudible) business, you create the brand awareness.

So it’s competitive. And I think the gold business will have competition. But we would like to believe that we will be in the business for 10 years, so we have much higher value income in terms of understanding why the business is very important. So it’s competitive there, but we are not overly concerned about it.

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Unidentified Analyst, [174]

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Je l’ai. The second thing is can you talk a little bit about total amount of disbursement you would have done from end of March till sort of the May 15, where you have reported your ALM? Because I still have the question around how the ALM or the total cash from bank lines have come down from more than INR 5,000 crores to INR 2,200 crores. So I just want to see how much of that is driven by the disbursement that you have done?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [175]

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Oui. (inaudible) we have, as I said, INR 2,400 crore of bank notes (inaudible) we repaid. So currently, the (inaudible). But most of these retailers due on 31st March and April, they’ve been paid.

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Unidentified Analyst, [176]

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Sorry, so how much was the disbursement you said? I missed that?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [177]

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Disbursement (inaudible) at this rate (inaudible)

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Unidentified Analyst, [178]

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Okay. So while you’re taking that, one more question from my side. And that is, if I look at your assignment income, the assignment income seems to be goes around 5% of the amount of size.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [179]

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Can you repeat?

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Unidentified Analyst, [180]

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The assignment income, the percent of assignment income as a percentage of signed assets is around 5% plus. Is that something that is sustainable?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [181]

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Yes, it’s quite sustainable because like gold loans, our business loan and business is (inaudible), higher operating costs and a higher margin. So this would be sustainable. The total of this business would have been about INR 100 crores in (inaudible).

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Unidentified Analyst, [182]

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INR 100 crores in the last 1.5 months?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [183]

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Yes, yes, slightly less than that also.

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Operator [184]

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The next question is from the line of [Adira Maya] from Deutsche CIB Centre.

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Unidentified Analyst, [185]

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My query actually continues with respect to the loan increase that you were talking about. You mentioned that you are getting today is around INR 4,000 crores, INR 5,000 crores in the next 4 to 5 — sorry, INR 2,000 crores to INR 3,000 crores over the next 4 to 5 weeks. Do you have any sanctions, which have been like granted? Or are we still in preliminary things in terms of rating funds?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [186]

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So there are various stages, actually. I would say that there are confirmed sanctions, whether it (inaudible). But they are very stable. So the [fourth] banking system have been — and maybe I would like to believe that (inaudible) in this sector, we’re not alone. But there is waiting for a clarifying guidance from government and RBI about the credit guarantee as well as (inaudible). There is (inaudible) very recently (inaudible) in next year, we’ll see good (inaudible). But nothing much will happen last (inaudible)

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Unidentified Analyst, [187]

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Je l’ai. Then coming to the liquidity, are there any cost rationalization that the company is planning? Like is there any cost-cutting measure? Or is there any (inaudible) measure that the company is thinking about?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [188]

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Cost cutting, yes. (inaudible) no. So we have the high — and we also have not reduced number of people also. And more or less our average spend in March and in April ended (inaudible) 1% or 1.5% difference. So the high cost people are taking are salary cuts. We are trying to rationalize the branches and limit the costs, including travel. And we are trying to cut down on the marketing activities in states and local. So we know that salary will have been brought down by 10%, 12% the operating cost. We’re trying to bring them down by 30%. So a lot of work is happening on that front also.

The great opportunity to rationalize cost in this kind of environment and with the new revolutions that have happened about how much people need to travel and where people can work from and what kind of productivity we can target. So I think a lot of effort is having cost (inaudible).

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Unidentified Analyst, [189]

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Je l’ai. And the last question is actually pertaining to the assigned assets. I’m sorry, I’m not just — is there a way that I can see with respect to the previous years how the assigned assets work and how the income works because — but I think that there has been a chart provided on Page 30 (inaudible) corresponds to whatever the historical assigned assets are and the income that has been provided there.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [190]

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So that includes assigned asset premium. So if the assets are not repaid, then we will just base on the assets.

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Unidentified Analyst, [191]

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Okay. So just the understanding, the INR 575 crore that has been mentioned, and the 5.8% income that is mentioned, that is on the base of the INR 9,700 crores that has been (inaudible) asset?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [192]

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Absolutely right.

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Unidentified Analyst, [193]

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And that INR 500 crores will — is those assigned assets (inaudible), that INR 500 crores or — will come — INR 570 crore will come in, in the year?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [194]

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Absolutely right.

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Unidentified Analyst, [195]

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Sorry, just one more question. (inaudible) in what sense are you looking at what — in terms of the bank balances, how much of them has (inaudible)?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [196]

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Come again?

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Unidentified Analyst, [197]

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I think you mentioned that there are INR 2,400 crores of cash and income lines. Are any of them lien marked?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [198]

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Non.

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Unidentified Analyst, [199]

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Okay. Those are not lien marked.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [200]

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No. (inaudible) this is not anything that is lien marked.

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Operator [201]

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The next question is from the line of [Lamar Zaveri] de [JNJ Holdings].

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Unidentified Analyst, [202]

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Can you just throw some light on the gold loan PTC, which are not for the banks, but to the retail and retail customers. So how is the yield over there for our company since you offer some higher buffer in terms of security as well as some personal promoter guarantee also. I’m just trying to understand this product.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [203]

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No, we don’t have any promoter guarantee product. Like I said, we don’t really promote a guarantee.

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Unidentified Analyst, [204]

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Not loan interest. Gold loan PTC. Gold loan pass-through certificates, I’m referring to. So in that, basically, how are the yields compared to the assignments that you’ve given to the bank?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [205]

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So gold loans may be slightly higher. But as a part of our strategy to diversify and have different sets of investors and providers of money. We are working on this. So here, we end up growing about 10% plus, maybe around that way. But the bank probably be in work at 9%.

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Unidentified Analyst, [206]

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And how big is that in the total assignment?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [207]

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What was? More PTC?

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Unidentified Analyst, [208]

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Oui.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [209]

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Not very significant. I mean, maybe it’s not even 4%, 5% or so of our (inaudible) numbers, but not much.

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Unidentified Analyst, [210]

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So just one question over there. I suppose there is some — in this specific instrument about PTC. If there is some higher delinquencies, would that affect the rating of that pool? And in turn, affect — would affect the whole pool, right?

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [211]

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So it wouldn’t be — unlikely to happen because historically, delinquency, you always have option to hold and repay the loan. So the deferred in delinquencies are very few and far in between.

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Operator [212]

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That was the last question in queue. I would now like to hand the conference back to the management team for closing comments.

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Nirmal Bhanwarlal Jain, India Infoline Finance Limited – Whole Time Director [213]

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Thank you so much. (inaudible) but we are very happy to answer more questions. If you have, you can email it to our Investor Relations Manager, Pooja Kashyap and he’ll be very happy to respond, and so take care. Merci. Merci beaucoup. Bye.

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Operator [214]

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On behalf of IIFL Finance Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.

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