360 One Wam Ltd (IIFLWAM) Q4 FY23 Earnings Concall Transcript

360 One Wam Ltd (NSE:IIFLWAM) Q4 FY23 Earnings Concall dated May. 05, 2023.

Corporate Participants:

Sanjay Wadhwa — Chief Financial Officer

Anshuman Maheshwari — Chief Operating Officer

Karan Bhagat — Managing Director & CEO

Analysts:

Mohit Mangal — Bank of Baroda Capital — Analyst

Prayesh Jain — Motilal Oswal Institutional Equities — Analyst

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Vivek Ramakrishnan — — Analyst

Abhijeet Sakhare — — Analyst

Nidhesh Jain — — Analyst

Dipanjan — — Analyst

Presentation:

Operator

A very good afternoon, ladies and gentlemen, and welcome to 360 One Wam’s Q4 and FY’23 Earnings Call. [Technical Issues] Managing Director and CEO, Mr. Anshuman Maheshwari, Chief Operating Officer; and Mr. Sanjay Wadhwa, Chief Financial Officer.

I now hand it over to Sanjay to take this conference ahead.

Sanjay Wadhwa — Chief Financial Officer

Thank you, Anil, and a very good afternoon to everyone on the call today. The last fiscal in aggregate witnessed most meaningful volatility in the global markets as concerned related to-high inflation rates and interest rate hikes continued to persist. The last quarter Q4 FY’23, more specifically, saw some turmoil in the global banking front on account of which the global market sentiments as well is that in India remain negative. However, Indian markets continued to be resilient to the best extent relative to other global indices.

Having said that, we bridge our base case on a conservative note as the sentiment continues to remain cautious on the back of these headwinds. Despite all market-driven challenges, our business portrayed not just resilience, but growth with robust improvement in ARR assets backed by strong net flows, thereby improving our profitability with steady retentions. Before we deep dive into the financials, we would like to highlight that we have proposed an interim dividend of INR4 per share. This is our first interim dividend for FY’24.

Now coming to the financials, some specific financial numbers. Starting with the AUM. In line with our focus on ARR assets, our total ARR AUM is now more than INR167,000 crores, up 15.7% Y-o-Y for full-year FY’23. With this, the share of assets in total AUM now stands at 61%, and we continue our relentless focus on high quality recurring revenue. Happy to share that despite market volatility, our ARR net flows have been robust for the year at INR28,059 crores. Our loan book also for the year stood at INR5,367 crores, which was up 24% year-on year.

Moving on to Revenues and retentions, our recurring revenues have increased 15.1% Y-o-Y for the year at INR1,050 crores. As a percentage of operating revenue, recurring revenues now comprise 67%. Going forward from Q1 FY 24 onwards, we will move to an accrual method of accounting for clarity. And as such, the guided interest accrual will be clubbed with recurring revenue. The approach will be very conservative recognition on funds which are close to maturity and this add to the steadiness and predictability off carry estimations. Just to reiterate, this will be accounted in recurring revenues. Our total revenues for the year were up 2.2% at INR1,569 crores, which was mainly impacted on account of lower other income. Our retentions on ARR assets have remained strong at 69 basis points with Wealth ARR retentions at 70 basis points and asset management at 69 basis points.

Moving on to expenses for the year. Our cost-to-income ratio stood at 45.8% versus 51.1% for FY’22, demonstrating very strong cost discipline. Our increased technology and digital spends continue to drive better efficiencies, enhance productivity, resulting in improved cost-to-income ratios. Total costs are down 8.4% Y-o-Y at INR718 crores for FY’23, mainly due to lower variable employee costs, which are now fully aligned with the firms recurring revenue model.

Coming to profitability, our operating profit before tax stood at INR847 crores, up 38% Y-o-Y, whereas PAT for the year stood at INR668 crores, an increase of 14.7% Y-o- Y. Importantly, our tangible ROE, which is ROE excluding goodwill and intangibles continues to remain strong at 26.7% for the year. This is result of prudent capital management and regular dividend payouts.

With that, we come to the end of financial highlights. I’ll now hand it over to Anshuman to cover the key business and strategic highlights.

Anshuman Maheshwari — Chief Operating Officer

Thanks, Sanjay. Good afternoon, everyone. Before getting into the strategic highlights, I do want to call out that we have completed 15 years in April 2023. It’s a great marker to reinstate the tremendous success we’ve had, and I’ll also reiterate our use as reflected in the highly entrepreneurial DNA and vibrant client-centric culture.

Specifically, if I look at the last three to four years since we started our transition to the recurring revenue business model in FY’20, our business has delivered successfully on all critical metrics, laying a very strong foundation for the period ahead. As you would recall, our three key focus areas were first, lead the industry in the transition to recurring revenues. On this our ARR AUM has grown 2.5 times in the last three years, while keeping retentions at a healthy 75 bps plus. Our ARR revenues has correspondingly grown at a CAGR of 30% and we are by far the industry leaders with any ARR AUM at 61% of total AUM and the ARR revenues at 67% of total revenues. This has been enabled through our very sharp proposition and platform built on the advisory business and the gradual establishment of the most comprehensive alternates platform in the country. Our relentless focus on high-quality ARR AUMs will continue and we are guiding for robust ARR net flows of INR40,000 crores with ARR revenue share of total revenues trending towards 80% in FY’24.

Second, focus on cost with a realignment on the overall structure to get it in line with the recurring revenue business model. On this, our cost-to-income has been brought down to 45 odd percent from a very-high 66% as we started the transition, and we the other targeted steady-state of 43% to 44% with both employee cost and administrative costs in line with guidance. This also factors for our increasing investments on the technology side. Correspondingly, our operating profits have grown at 34% CAGR and PAT has grown at an aggressive 48% CAGR over the same three to four-year period. We are confident on our overall cost structure and continued cost efficiency measures, translating to a 44% cost-to-income guidance for FY’24. Accordingly, our operating PBT is expected to increase to a INR1,000 crores and PAT is expected to see a near 20% growth to INR800 crores.

Thirdly, disciplined and sustain capital management which has translated to our tangible ROE improving by 19 percentage points to 27% for FY’23. While we continue to pay out 70% to 80% of our profits as dividends, we expect this to again continue going into FY’24 as well. Our key strategy tenants which we have discussed in the past as well remain growth resiliency and agility. We remain on course to execute against these successfully and see the translation into metrics shared by Sanjay in the quarters ahead.

On growth, we reiterate our bullish outlook on India. We believe there are several natural tailwinds for the managed investment industry in the foreseeable future with current leadership and in wealth and alternate asset management, we see ourselves in pole position to benefit from these macro factors.

With that said, our next phase of growth strategy is based on several factors. First, our continued focus on deepening existing relationships. On an ongoing basis, we maintain our relentless focus on sharpening our proposition, expanding our platform offering, and bringing a richer understanding of our clients to serve their needs through sharper business intelligence. Secondly, expanding our geographical footprint both domestically and in selective offshore locations. It is evident and public UHNI and HNI Wealth continues to grow at an unprecedented pace, and the market size therefore continues to grow exponentially for us. Further, a large part of this new wealth creation is happening in Tier 2 and Tier 3 cities, where access to-high quality advice is usually not available. Our focus would be to place ourselves in these domestic locations as well as selective offshore locations where we believe we have a strong right win.

Thirdly, to build out the next segment of clients who mid market business built. This will allow us to cater to clients in the five crore plus segment in a profitable manner. We have made significant strides on the proposition technology delivery model and all the other elements that are required and expect this to be live in the second half of the financial year.

On the asset management side with the completion of the Truescale transaction and Sameer Nath coming on board, we believe our five strategies have the right leadership and teams to drive the next phase of growth. In addition, we are gaining traction on the global institutional mandates and look to further deepen our footing in the India investments. Having said that, the alternates penetration and revenue shore in India still remains small in compared to developed economies, but is steadily growing, thus providing a huge potential for players like us who are leading in maintaining and innovating India’s most comprehensive alternates platform offering.

Our next core tenet is resiliency. I’ve already discussed this earlier as I spoke about the transition to a sustainable recurring revenue business model. We continue to strengthen our advisory to discretionary and fund management propositions to remain clear leaders in our business areas. The underlying metrics on client and Senior Relationship Manager retention continue to be strong, highlighting our leadership position as the wealth manager of choice for our clients and the employer of choice for the best talent in the industry.

Our last and very important tenet is agility. As mentioned in our previous calls, we’ve been accelerating our digital transformation and technology investment journey. This is mainly to provide seamless experience to our clients on one side and ease of operations for advisors and sales teams and our internal folks on the other.

To sum up, I just want to thank all of our investors for supporting us through the last 15-year journey and we look-forward to a tremendous next phase of growth and performance, creating sustainable value for all our clients and stakeholders.

With that, I would like to handover to Karan and open the session for question-and-answers.

Questions and Answers:

Operator

Thank you. Anshuman. We’ll now open the session for Q&A with Mr. Karan Bhagat joining in. [Operator Instructions] First in line, we have Mohit Mangal. Mohit, kindly unmute yourself and ask your question.

Mohit Mangal — Bank of Baroda Capital — Analyst

Yeah, hi, thanks for the opportunity and congratulations on completing 15 years. My first question, I mean I do understand you know the quarter four was hit by lower other income and interim losses, but even if I look at the guidance for financial year’ 24, you know I think it’s little conservative at INR800 crores given that around four to five quarters back people were expecting around INR840 crores profitably for financial year ’24e. So would you further throw light on that?

Karan Bhagat — Managing Director & CEO

Thanks, Mohit. No, so I think from a guidance perspective I think the INR840 crores coming down to INR800 crores is broadly a little bit of reflection of the TBR going down. I think there is a potential, obviously depending on the way the markets are for that 4% 5% TBR to go up. But if you see in our guidance, we’ve taken a fairly conservative TBR of INR300 odd crores, and I think the ability to do another INR50 crores depending on the function of the market will be there. But on a very steady-state basis, the two adjustments we’ve made, we’ve been much more conservative in our guidance on the other income, which we had assumed to be a larger number in our last guidance. And second, I think we’ve made our TBR slightly more conservative. So this is really what’s led to the INR840 crores to INR800 crores.

I think we realized both of these factors a little bit, especially the other incomes out of our control so we want to be slightly more conservative on it. And TBR by itself, I think the INR40 crore, INR50 crore number will be a bit of a funds markets. But, I guess we’ve done the guidance slightly on the conservative side. We may end up somewhere between the INR800 crores to INR840 crores depending on how the markets are.

Mohit Mangal — Bank of Baroda Capital — Analyst

Perfect The second is basically you are expecting around INR40,000 crores of net flows, so what would be the key focus areas for those to achieve?

Karan Bhagat — Managing Director & CEO

So, I think all of different of the net flows of INR40,000 crores, I think they’re really two or three parts in some senses. I think one part is obviously the older AUM kind of coming out that gradually year-on year is kind of reducing. I think from next year that number will be closer to the INR7.500 crore, INR8,000 crore number. I think of the INR8,000, INR8.500 crore thereabouts number will be — we’ll surely be able to retain back 65%, 70%, 75%, which will be a INR5.500 crore, INR6,000 crore number. So that be around about 10% to 15% of the entire INR40,000 crore.

I think the conversion really from transaction and assets to be RI assets is really accelerating in a very large way, especially in the second-half of March, and especially from the first week of April because from this year we’ve changed the balance scorecard for the relationship managers for the first time to be reflecting on the ARR AUM. So I think we believe the actuation of the change of TBR to ARR will happen in a much more actuated manner. And that I personally feel will add around about INR10,000 crore to INR15,000 crores. And another INR20,000 crore to INR25,000 crores will really be net flows which we’ll have to go out and get from new to — from either increase in wallet share from existing clients or new to the firm clients, both on the asset management side as well as on the wealth management side.

So I think absolutely new for the firm would be INR20,000 crores, INR25,000 crores and you need to gross that up for round about INR6.500 cores, INR7,000 crores of outflows which will happen automatically given the redemption in some of our schemes. So overall INR30,000, INR35,000 crores would need to come to net flows from existing clients, increase in wallet share, new strategies on the asset management side and new clients on the wealth management side. The remaining INR10,000 crores, to INR15,000 crores will be a function of the existing AUM converting into — converting into ARR.

Mohit Mangal — Bank of Baroda Capital — Analyst

Perfect. Sir, last con call you said that we are present in around 24, 25 cities and you intend to expand it to 40. So just wanted to know how are we progressing and how is that shaping up?

Karan Bhagat — Managing Director & CEO

So that’s a great question. I think see, out of the 25 cities — 24, 25 cities I think our plan is to move to around about 40 cities and potentially have another office in Dubai also and a smaller office in Singapore. So effectively 42 odd cities. But effectively in the expansion from 25 to 40 cities, our on-boarding process and our entire order execution process is intended to be substantially much lighter than what we’ve curated for for our business traditionally. And these kind of build a much lighter on-boarding mechanism as well as trade execution platform, which I think should be up and operational over the next 30 to 60 days, and simultaneously we’re recruiting people in these 15 locations. I think both are equally important because having heavy infrastructure either in terms of people or in terms of trade execution, some of these cities may not necessarily work.

So I think from a recruitment perspective, we’ve seen a large number of new team join us over the last three to six months. So that’s gone really-really well. And especially from across-the-board from competition and also in different regions. So from a resources perspective, we feel we are very confident with the number of people joining us, and who have joined us over the last three months, plus the number of people joining us in the next three months.

From a resources perspective, we’ll be well set to cover these locations. From a technology and infrastructure perspective over the next 45 days we should be in good shape. So I think by the end of the year we should be closer to adding another 10 odd cities, plus Singapore and Dubai. Maybe the remaining five cities will come through in the first-half of the next financial year.

Mohit Mangal — Bank of Baroda Capital — Analyst

Perfect. My last question is in terms, I mean our attrition is low, but in terms of client addition, I mean could you tell how much clients we added in financial year ’23? Any sense on that?

Karan Bhagat — Managing Director & CEO

So, I think what’s happening really Mohit is, with our RM profile changing, our client profile is also changing a little bit. I think what’s really going through from a firm perspective is I think there are two real distinct parts of the business which are kind of coming out once the advisory consult and discretionary part which we kind of conventional called IIFL ONE and now 360 One plus. That’s becoming more-and-more tuned towards the INR50 crores plus, if not be INR100 crores plus over a period of time. But definitely will remain towards the INR50 crores plus because with the average retentions in of 40, 45, 50 basis points over the longer-term, really sustaining and servicing clients below INR50 crores will be a bit of a challenge.

On the flip side, the 5 crores to 50, the 10 crore to 50 crore client is effectively where you would see slightly higher retentions, but will need a slightly better platform and technology to go out and get those clients. I think where we’ve really done well is the 50 crore plus clients. I think where we could do better potentially is the 10 crores to 50 crore clients, and that’s something which we worked very hard over the last nine, 10 months to get us our systems equipped for it. And we’ve kind of done a small internal 10, 15 employee launch already over the last week and we are hopeful by September — August-September we should be able to kind of, at least test it out for our first 300, 400 clients. So that will accelerate the on-boarding of clients between 10 to 50 crores.

Mohit Mangal — Bank of Baroda Capital — Analyst

Alright. Thanks and wish you all the best.

Karan Bhagat — Managing Director & CEO

Thank you.

Operator

Thank you, Mohit. Next in line we have Prayesh Jain. Prayesh, kindly unmute yourself.

Prayesh Jain — Motilal Oswal Institutional Equities — Analyst

Yeah. Hi, Karan. So firstly on this guidance, when you mentioned that you retentions are on the ARR are likely to be flattish, I think there is a component of carry income out there. So ex of carry, do you think that the retention would be flattish or because if I look at your ARR model in whatever components we have so we have seen pressure on IIFL One or 360 ONE plus retentions, the AMC piece might undergo some pressure because of the mutual fund business or possibly and even the AIFs regulations are changing, possibility for some pressure out there. So how do we think about the ARR regulations ex of carry income?

Karan Bhagat — Managing Director & CEO

So I think the carry income really doesn’t cause a big impact on the retentions, honestly. I think in the previous — in the previous year also it’s kind of a amount approximately totaling to around INR100 crores, INr210 crores and some years it will will go down to INR75 crores, INR80 crores, some years INR120, INR130 crores, but we don’t see too much of an aberration beyond that. So to just kind of put the carry question aside, I think on an average AUM, if I just look at AMC AUM of INR70,000 crores, INR75,000 crores, INR80,000 crores, I think on the broad steady-state basis it is going to be in the region of 9 to 12 basis points or 8 to 12 basis-points of the AUM. On the overall AUM, if I look at the INR1,60,000 crores, INR1,70,000 crores ARR AUM, it’s going to broadly have an impact of give or take 6, 7 basis points from a carry retention perspective, So I don’t see that really changing dramatically for last year as well as next years.

Coming to the questions on the on the retention on both the IIFL ONE advisory, 360 One advisory piece as well as the asset management piece. I think on the asset management piece I think the listed equities portion I think can see some bit of pressure. Historically, on the PMS side I think we’ve seen retentions, the MSME have retentions remain between the 75, 80 to 90 basis-points. As of now the industry structure has not changed. I think most of the better portfolio managers continue to have the 80 to 90 basis points kind of retention.

On the on the segregated managed accounts, I think 50:50. 45 to 60 basis points is the right benchmark which is where we are. On the mutual fund side which is relatively a smaller business for us, having 40 to 50 basis points is the retention. So on the listed equity side, honestly, unless we grow more on the mutual fund side as opposed to growing on [Indecipherable] side, I think our retention will broadly be in line. On the alternate side, I think the big joker in the pack in some senses in terms of retentions will really be the growth of the private-equity assets relative to the credit and the infra assets. So I think the credit and the infra assets are slightly more conservative in retentions in the form of being around about 75, 80 basis points, which are a very decent number, but more conservative than private equity. Private equity typically tends to be in the 90 to 100 basis-points range and obviously I think we’ve collected a large amount of money in private equity over the last two-three years. And we’ve got our first large fund of 2,000, which we have collected INR7,000 crores, INR8,000 crores in 2017-’18, getting redeemed over the last two years and a third of the redemption, which is left will happen in this year.

So how that gets replaced will may potentially have a bit of impact on the retention. If that obviously gets replaced with equal private equity assets, I think the retention will be the same. If it gets replaced with credit assets or listed assets, then it can have an impact of 3 to 5 basis-points on the retention for the undisturbed piece, which is around about a third of the AUM. So I think depending on the mix, while I don’t see a change in the top-line, but the mix may cause an impact of 1 to 2 basis points depending on what the mix looks like. If the mix looks similar to what it is today, which is a third private equity listed in a third credit and in fact it will be looking at the same. If unlisted equity become slightly lower in proportion, then the retention might go down by 2 to 3 basis points.

On the IIFL One and be advisory piece, I think — I honestly think retentions will settle down. I know the numbers currently are kind of showing a little bit of a dip in quarter four, but I think it’s largely to do with two or three specific things in quarter four rather than me believing it’s still a trend. I think discretionary, nondiscretionary as well as advisory, I think there’ll be a substantially — is some senses there will be a re discovery of the yield. I think most of our larger clients we are now seeing on the advisory side come down to 30, 35, 40 basis points. And when I’m saying advisory, I’m just using it as a fungible term with nondiscretionary PMS. It’s broadly going to be in the 30, 35, 40 basis points zone.

I think discretionary, last quarter we ended up having a couple of really large mandate shift from equity to debt predominantly for the taxation. So we had a couple of really large mandates move from equity to debt because they wanted to invest the money before 31st March when the taxation was getting changed, which has got impacted the retentions a bit. But overall I think maybe discretionary we were expecting 5 to 7 basis points higher. Hopefully, they’ll normalize with more flows coming in through the year.

On the advisory side and MD PMS side, I think the entire discussion on the 35 basis points will hold, barring corporate treasuries. Corporate treasuries will obviously be substantially lower, but that’s not really a big focus area for us. So I think as time goes by, I’m fairly sure we’ll still be at the 40 to 45 basis points with advisory and nondiscretionary being in the region of 30, 35-ish and discretionary being in the region of 45 to 50. So 5 basis points lower than what we would have liked, but it’s around zone.

Prayesh Jain — Motilal Oswal Institutional Equities — Analyst

Okay. Thanks for that elaborate answer. Another another question was on the mix of the ARR assets. So in the past you’ve mentioned that 361 plus, we’ll kind of see a faster growth than overall ARR AUM. Do you still stick to that? And if that is the case, then the retention would definitely kind of come off, right, because here the 361 is a much lower than the overall ARR basket deal.

Karan Bhagat — Managing Director & CEO

So I think, first is true for sure. I think as time goes by I think the advisory assets will definitely, definitely outpace the growth in distribution assets, for the 100 crore-plus stroke, the 50 crore-plus client, so I think that’s the given. I don’t see any reason over the next two, three, five, seven years why a 50 crore client or a 100 crore client won’t deal on an advisory business. And like its happened in the rest of the world for 100 crore-plus client, you don’t offer them advisory, it’s pretty much becomes a bad word in the sense that if you go and tell him that your only a distributor and not an advisor, it becomes really-really challenging for you to be able to do business with them.

Ideally speaking, it should get offset by incremental increase in volume and your ability to be able to charge an advisory fee on ETFs and bonds and so on and so forth, which on the distribution side is anyway falling. And now today on the distribution side you can pretty much come on to a brokerage platform and execute on direct without paying a single fee or extremely nominal brokerage. So I think time will tell whether finally the distribution trail or the advisory fees, which one is going to be larger. Our feel is for 100 crore-plus clients, definitely the advisory fee yield will be larger because of three reasons. One, the client don’t want to deal with you. Secondly, your wallet share with the client will be larger. And third, the mix of the assets will also move a little bit from active to passive which will anyway force your distribution commission down.

So three broad tenants I think the 100 crore or 50 crore-plus client for a minute I think has to be on the advisory side. The 5 to 50 crore client I think will continue on the distribution sided. And I think that’s the mix we have to achieve carefully between the 10 to 50 or the 5 to 50 as well as the 50 plus so that our retentions can remain in the broad range. I think if you go absolutely only under 50 plus, then I think you’re right, the debentures might come off a bit. But if you have the right balance between the 10 to 50 plus, will be okay.

Prayesh Jain — Motilal Oswal Institutional Equities — Analyst

And my last question is on the 5 crore to 25 crore offering that you guys have kind of — just you mentioned that you’ve done a soft launch for your employees, and in fact launch is expected by September. Could you give some more details now that you know what kind of business model there and what are the things that’s going to be expected out there?

Karan Bhagat — Managing Director & CEO

There is going to be 5 to 25 or 10 to 50 1 said before also on a few calls. This is something which time will tell. But I honestly as is developing, it’s more towards the 3 to 50 or 10 to 50 rather than the 5 to 25. Obviously, from a platform perspective it has two or three very distinctive features. I think the first distinctive feature is not really going to be a platform. So we’re not really looking at building out another tech platform on a marketplace for people to come out and buy products. What we’re really looking from it is three things honestly.

The first thing is the fact that — what we’re really known for and what we really stand for is our ability to get the right set of differentiated, curated as well as approved products on the platform. And we want to ensure that the platform we get to these set of clients has the distinction of those specific products being there.

Second is and which is a very, very critical is to increase the span of control of relationship managers. Today most of our relationship managers in spite of putting in the best would really struggle to handle more than 15, 20, 25 clients with more than 50 crores. In this kind of mechanism by by kind of lightening up everything right from portfolio analytics to the ability to to on-board and execute, we think we should be able to expand the span of control of our relationship managers with clients, so definitely 50, 75 and eventually maybe we’ll 100 clients, but start out with 50 clients.

And thirdly I think it will give us the ability to access a larger pool of clients. So I think in some sense its a — in that sense it will be a three-pronged strategy. I don’t think so it’s going to be a beyond marketplace strategy. Its going to be about something which we stand for. Second, it has to be digital model, allow the audience to have a larger access and greater span of control. And thirdly, I think allows us to kind of — with a greater amount of focus and diligence focus on clients between the 5 to 50 or the 10 to 50 crore category. I was looking for more granularity, if you can talk about some kind of retentions or scale that you want to achieve, say like three-year down the line, fast elements — all those elements, if you could just throw some light. Honestly I think it’s a little early for it, but I think I’ll just give a topline numbers in some senses. I think retentions will be — it should be typically 10 to 20 basis points higher than advisory piece. So you will you should ideally see a 50 to 75 basis points kind of retention on the distribution side, but it will need some bit of product innovation which we’ve done over the last en number of years to follow through. In terms of costs, so obviously there are two elements. I think still over a period of three to five years the largest element of cost eventually will still be people. Now in the initial two or three years, obviously, it’s going to be around technology. I think from our perspective, I think we believe the spend will be somewhere between the 40 crore to 100 crore, 125 crore number over a period of three years. And a large part of — third part of it is something which we’ve kind of already heard. And the remaining 60%, 70% will be kind of follow-through over the next two odd years. From a unit economics perspective, don’t see it phenomenally different from the existing business except for the fact, that thanks to the span of control, I think the operating leverage might be slightly better. So what you see today is 45% cost-to-income can typically move down to the 35%, 36%, 37%, once we’ve reached some bit of optimization in terms of the number of clients we service.

Prayesh Jain — Motilal Oswal Institutional Equities — Analyst

Thanks, Karan. All the best.

Karan Bhagat — Managing Director & CEO

Thanks.

Operator

Thanks, Prayesh. Next in line we have Aejas Lakhani. Aejas, kindly unmute yourself and ask your question.

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Yeah, hi Karan. Congratulations on 15 years. Karan, couple of questions. I wanted to understand the mark-to-market impact. So, here is my question. So you have about INR3,600 crores of your own capital, part of that is part for your loan book as your HD capital, I’m guessing the number is closer to INR1,000 crores and the balance INR4,000 crores is borrowed. So of the INR2,500 crores, that’s your capital that you’ve invested in your products like AIF, now that’s your treasury money and the movements on this is basically the difference in other income. Is that correct?

Karan Bhagat — Managing Director & CEO

No, I’ll just maybe — just maybe correct the numbers a little bit. So I think total net worth is about INR3,000 crores, INR3,100 crores, of which goodwill and intangibles broadly work out to around about crores550 crores, crores600 crores, so which is INR2500 crores, or INR2,600 crores give or take. Of the INR2,600 crores, 1INR1,4 00 crores to INR1,500 crores is the capital deployed in the lending business. So we broadly got a cash balance of around about INR1,100 odd crores. Of the INR1,100 crores at peak we had around about INR1,110 crores invested into our own Afs., okay, and the remaining INR700 crores, INR800 crores is broadly in-transit bond investments which are facilitating bond trades for clients. So effectively the larger portion of the mark-to-market which you are seeing is the INR1100 crores of Afs effectively, which is causing the big aberrations in the other income.

Of the INR1,100 crores, obviously, there is a INR350 crore, INR400 requirement for working capital which is usually presented by INR100 odd crores for the broking business and INR300 odd crores is the broad fees and interest we collect at end of three months. So we just see the working capital in the businesses is around about INR350odd crores, the remaining INR750 crores, INR800 crores is the treasury and the remaining INR1,400 crores, INR1,500 crores is the NBFC.

Now like I had said in my previous call, our AF investments is more than what we would like. So currently is close to the region of INR1,100 odd crores. We would ideally want it to come down to around about INR400 crores, INR450 crores, INR500 crores. In the initial years of our investments, especially in the first three years from when we started the business, our clients expected us to put large amounts of capital. That expectation has gone away. Over the last six to eight months I think we put only INR55 crores in most of the new funds we’ve launched. For example, our credit fund which will close around about INR2,000 crores, we’ve just put in INR45 crores or INR10 crores. So effectively in some senses over the last six, eight months our ability to back these As with a a small amount is disproportionately high. So over the period of this year itself, over the next 12 to 15 months, you will see this INR1, 100 crores come down to the region of INR500 crores, INR600 crores, and then maybe six months from there come down to the INR450 crores, INR500 crores.

So I think our first step to kind of just improve that other income predictability is to get our AF book down from [Technical Issues] close to around about INR500 crores. And I think once that is done, more or less the current volatility in the other income will reduce substantial. Obviously, this comes off to two years where the other income was phenomenally high, because in both the years we had other income well in excess of INR100 odd crores. So last year in some senses is balanced it out. And though the operating PBT obviously shows a big pickup because of the same reason, but last year the other incomes become soft relative to the two years before that.

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Noted. That’s quite helpful. hanks for that. And the second one is on distribution assets on a trail fees and mutual funds in particular. So you know here the yields have come off. And if you typically look at the quarters prior to these two, this one and the one prior, you used to do about 48, 50 bps which has come down to 41 and 39. So could you please comment?

Karan Bhagat — Managing Director & CEO

Sorry, on the mutual fund side, it’s just…

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Sorry, sorry, you were in the 40 bps range, its come down to 37, my apologies.

Karan Bhagat — Managing Director & CEO

Don’t worry, I was correcting that. 40 is come down to 36, 37. So broadly I think there are two changes there. I think both of these things of cost 1 to 2 basis points impact. I think the mutual fund itself has seen a lot of movement from, rather it’s become slightly heavier on the debt portion in the last three odd months as compared to equity. But that would be for the last quarter would be only a half points kind of, or maybe a 1 basis points impact. The larger impact of2, 2.5 basis points is largely on account of our distribution assets of private equity moving away. We’ve got a large redemption which has happened in the quarter three and quarter four for 3,500 crores of our Special Opportunities Funds going out. While we got a large part of that money back in, but it’s not necessarily come back into the private equity assets and that’s caused a bit of the dip in the distribution assets. So those are the two reasons why it’s come off. I think as the fund comes to [Technical Issues] and we raise another fund, I think we should see that 2, 3 basis points of the private equity piece pickup up again. So both of these changes are really in terms of little bit of asset class changes as opposed to anything else.

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Got it. And Karan, on your loan book, right, is interest rates have been up, but your NIMs on the book are lower. So is it that you have not passed on all the rate increased to clients.

Karan Bhagat — Managing Director & CEO

We passed on maybe 40%, 50% percent of it and the rest of it we passed it on towards the end of March. I mean, we just didn’t want to burden clients with too much because they already had the larger issues and on around the bond stacks and MLDs and so on and so forth to deal with. So I think we pushed out 30%, 60% of the NIM increase towards the end of March rather than in the middle of the quarter.

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Perfect. And just lastly on IIFL One, again the discretionary mandates. You commented earlier that this was one-off because of what’s happened in the last two quarters, the shift from equity to debt, that’s the only reason why you are seeing the yields you know sort of slightly compressed in that sub-segment of discretionary, that’s it right? There is no other reason there.

Karan Bhagat — Managing Director & CEO

There is — broadly discretionary works on three modules, right? So one is the all-in fee. Second is the 0.6%, 0.5% kind of just pure discretionary portfolio management fee. And third in some few cases, which is where the aberration has come, we work on an asset class fee, where we are charging differently for equity and debt. But if you see today, around about 30% of our mandates are on the all-in side, 30% to 35% are asset class agnostic, and 35% to 40% are a function of the kind of asset you invest in.

So where you really seen some bit of compression is because of three reasons. One is because the last portion, which is the 35%, 40% has seen a sharp movement from equity to debt specifically in the last quarter. Second, we got a — we’ve kind of got a largest flow., around about 5%, 6% of our AUM, which becomes few chargeable only from June as opposed to from February from where it comes — from where it came because clients kind of putting in some money into advance tax, purchasing a house, so eventually it becomes chargeable post that. So those are the two reasons, but I don’t see a structural shift there, maybe a basis points here or there, but I don’t see it’s going to be dramatically different from what we’ve looked at.

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Got it. That’s very helpful. Thank you. And just lastly on — Anshuman in his opening comments mentioned about the institutional mandates. Could you speak a little bit more on how you’re thinking about that piece? What kind of — how should we look at it?

Karan Bhagat — Managing Director & CEO

No, so I think institutional mandates in some senses are extremely interesting from a perspective of the fact that they have a little bit of Ill effect that once you get one, you can get the second and 3rd and 4th. And on the other side, paradoxically if you got a bit of a capacity you can take in every year, right? So in some senses I think we are blessed in way where we’ve kind of post on who coming in, in a very fairly short period of time, managed to get four fairly large mandates aggregated into 1.5, 1.6 billion on the listed side. But at the same point of time, we have not really been able to necessarily emulate the same on the private equity and the credit side yet.

And I think going-forward it would be fair to say that on the listed equity side we are already in advanced stage of discussion with at least a couple of people more, where at least we feel we can add two or three more [Technical Issues] trough the whole of next year. On the private equity and credit side, I think we’ve had, especially on the credit side we’ve had a fairly taking over the last. Last 18 to 24 months and track-record of lots of transactions because we’ve ended-up raising close INR5,500 crores, INR6,000 crores on credit. So I think credit seem very interesting again from an institutional mandates perspective. So I think between credit, private equity as well as listed equities, we would would hope to get three to four mandates over the next 18 to 24 months.

Aejas Lakhani — Unifi Capital Pvt Ltd — Analyst

Got it. Thanks a tone and all the best.

Karan Bhagat — Managing Director & CEO

Thank you.

Operator

Thank you. Next in-line we have Vivek Ramakrishnan. Vivek, kindly ask your question.

Vivek Ramakrishnan — — Analyst

Hi. Mostly the mute button of the front screen, I was wondering how I’m going to do that. Karan, congratulations on excellent performance over 15 years. My questions are conversely on the loan book in terms of — you said about how you’d like to decrease the investment AFs. So what is the kind of debt-equity would you like to have on your loan book? What causes the growth of the loan book is about INR5,000 odd crores right now. At market volatility would it come down?

And the last question is you were talking about NIMs also and the ability to pass on cost. Are the client sensitive to interest rates because of the risk of the portfolio? And with the MLDs going off on the liability side on the other hand, will the spreads decrease? Thank you.

Karan Bhagat — Managing Director & CEO

I’ll try and kind of answer the the question in the order of my thoughts coming in. So I think MLDs would have been a bit of an issue and the cost would have gone up if the taxation for all other instruments would have not changed. So I think then really a choice between an MLD and a debt mutual funds for three years would have been substantially more difficult do choose. So honestly if you would have asked me this on 26th of March, the answer would have been, yes. But on 27th March, obviously tax for everything is kind of changed and everything is equal. So I think in that sense there might be a 15, 20, 25 basis points impact. But honestly the kind of impact we were imagining prior 27th March we have not seen. And all the new MLDs also which we raised in the month of April and post the announcement 27th March is pretty much at par with the current prevailing interest rates.

On the proportionate increase or decrease of the loan book itself, I think it’s fairly — most of our loans are at four to six months in maturity. So they are fairly transient — it’s a fairly transient loan book and it’s largely a function of different set of plans having different liquidity needs who end up borrowing against their portfolios rather than necessarily liquidating their investments. My typical kind of experience over many years is it tends to be around about 1.5% to 2% of our AUM, and I think that’s where we have broadly add for INR4,500 crores, NR5,000 crores. I think that’s really where we would end-up being.

In a very-very active market, now, obviously, it goes on our debt. But in a very-very active market this might move up to 25% of AUM, but otherwise more often than not it would be somewhere in the region of 1.5% to 2.1$, 2.2%. What we have not done and we don’t intend to do is really change the risk profile of our book to accelerate growth. For us is really in some senses Lombard lending where we are lending largely against the portfolio, so we intend to keep that and therefore we don’t intend to — we don’t we don’t see the loan book kind of growing disproportionately.

In terms of your last question in terms of debt-to-equity, I think we end-up adding close to around about 50% of the profits of the NBFC back to capital every year and that’s the portion which doesn’t get paid out as dividend. So I think that’s automatically adding to the capital of the NBFC. And I think from a leverage perspective, I think around about debt-to-equity ratio of around about 2.5 is to 1 is really where I see it kind of settling down.

Vivek Ramakrishnan — — Analyst

Thank you so much. That answers all my questions and good luck.

Karan Bhagat — Managing Director & CEO

Thank you.

Operator

Thank you. Next in line we have Abhijeet Sakhare. Abhijeet, kindly unmute and ask your question.

Abhijeet Sakhare — — Analyst

Hi, good afternoon.

Karan Bhagat — Managing Director & CEO

Hi, Abhijeet.

Abhijeet Sakhare — — Analyst

Hi, Karan. So a couple of questions on flows to start with. So for F’23, is it possible to kind of break it up, the entire flow in terms of, let’s say, new customers versus increased wallet share on existing set of customers?

Karan Bhagat — Managing Director & CEO

I haven’t done it Abhijeet, but it’s possible to do it, for sure. I can give you some numbers intuitively but maybe we can come back to you with that number. Well, my guess is it will be 60:40 in favor of our new customers, but It will be plus-minus 5%. We’ll come back to you with the exact numbers.

Abhijeet Sakhare — — Analyst

Got it. And then on the on the INR40,000 crore flow guidance for next year, again any thoughts on where does it come from? Is it the IIFL One Piece versus distribution versus asset management? Because we are seeing very different flow trends across different lines of businesses in the last few quarters.

Karan Bhagat — Managing Director & CEO

So I can take a good estimate. There’s no way for me to know for sure. But I think if I was to take a guess, an educated guess, not a guess, I think it would be in the region of, I would say INR14,00 crores to INR16,000 crores on the 360 ONE plus, which is the IIFL ONE. INR14,00 crores to INR16,000 crores on the asset management side and around about INR8,000 crores to INR10,000 crores on the distribution side.

Abhijeet Sakhare — — Analyst

Got it. And then just lastly…

Karan Bhagat — Managing Director & CEO

But this is a complex question to answer because you will have to net it off from the redemptions also. So it’s a tough question to answer, but it should be broadly in that range.

Abhijeet Sakhare — — Analyst

Just just wondering because when we look at the flow numbers on the discretionary portfolio side, so there is little bit of a softening on the IIFL One piece, but interestingly the distribution part of the discretionary portfolio still seems to be delivering flows.

Karan Bhagat — Managing Director & CEO

I think you will see it change a bit because for two reasons. One, I think we have general attractiveness of AIFs, generally speaking will be slightly lower. Second, I think our own incentive structure has changed and are aligned more towards the advisory side from April. And thirdly speaking, I think if capital markets remain a little flattish, generally speaking appetite of clients to do alternate stuff is slightly lower than what it was a couple of years back. So all put together I think in the last couple of years we’ve seen distribution assets do slightly more, but I think going forward I think it will be more a balanced approach.

Abhijeet Sakhare — — Analyst

Got it. And just, sorry one follow-up on the IIFL One piece. What’s the current penetration level on that one?

Karan Bhagat — Managing Director & CEO

Penetration level terms will be lower than a third I think. It will be around about the 25%.

Abhijeet Sakhare — — Analyst

Got it, got it. Okay, that will be all. Thanks a lot.

Karan Bhagat — Managing Director & CEO

Thank you.

Operator

Thank you. Next in line we have Nidhesh Jain.

Karan Bhagat — Managing Director & CEO

Yeh. Just to clarify, 25% in number of client terms, maybe 30%, 33%, 34% in value terms.

Operator

Thanks, Karan. Next in line we have Nidhesh Jain. Nidhesh, kindly ask your question.

Nidhesh Jain — — Analyst

Thanks. Good afternoon, Karan. The first question is on IIFL ONE. So first of all, we have seen some moderation in yields. So once the retention is down, how can we increase that retention going forward given that customer is already being used to paying a lower retention, so how can we convince customer to pay higher retention from next year onwards?

Karan Bhagat — Managing Director & CEO

So I think it’s a function of all the four things which I already spoke about. A little bit of the asset class mix, a little bit of the size of the customer, between the 10 to 50 and the 50 plus. Thirdly, a set of customers who kind of maybe come in towards the end where the fee charging only starts from May and June. And fourth is a mix between the discretionary and nondiscretionary advisory fees. I think it’s going to be a combination. It’s not really what existing clients I think we have.

Nidhesh Jain — — Analyst

I think increment clients will also be coming at the same fees, right? It just because of the mix change that we expect to get better retention.

Karan Bhagat — Managing Director & CEO

That’s just exactly right. When you say incremental clients, we have the same fee structure. This more of a quarter phenomenon. If you actually see the retention for the broader year is broadly in liner. I don’t see it changing dramatically for next year also.

Nidhesh Jain — — Analyst

Okay, secondly in terms of RM count I don’t think we have shared that data what is the count of RM we have as of March “23. But if you look at data in last two to three years, we have not been adding much of RM’s. So doesn’t that we are not expanding the capacity of the organization to take care of future growth and that may have repercussion going forward not probably next year but three years, five years down the line, that may have repossession given the RM’s that we will hire today will start become productive over next few years. Isn’t it lead to lower growth outcomes in the future versus pressure on cost-to-income today.

Karan Bhagat — Managing Director & CEO

No, no, you’re right, but you need to take it up, as I said earlier between the the client segment you are servicing. I think with the — our focus has largely been under 25 crore-plus clients till, and I think there we are fairly well serviced. I think what we’ve really seen between our number of 200, 230 for the last three years is a change in the kind of RM between in this 200, 230, right? So we ended-up with substantially more senior Rms with six to seven, eight years experience with the ability to go and sell advice to clients as opposed to doing distributions. So last three-four years has really been about, I won’t call it quality, but the mix of the kind of RM between this 230, and that was really our first focus given the 25, 50 crore-plus segment we are servicing.

As we go down a little bit, there obviously it’s going to be slightly also number driven. So as you build the 10 to 25, 10 to 50 crore segment, you will see the number or RM’s increase. But where we are today on the 25 and 50 crore plus, I think it’s more about the mix of the RMs and the kind of RMs rather than just increasing the RM count.

Nidhesh Jain — — Analyst

Sure, sir. And lastly the count of [Indecipherable] also has also been quite stable in last two to three years. So how should we look at that number?

Karan Bhagat — Managing Director & CEO

I think more or less same thought process to be able to [Indecipherable] for a little bit more quality than quantity, very similar to the RM stream. But you will see that change once we go down the ladder a bit. On the higher side, obviously, we have not got that data yet, but if you kind of just break-up the data between 1, 10, 25 and 50, maybe next time we can do it along with the other question. You will see the improvement in a bit of the wallet share above the 10, 25, 50. So while we not kind of maybe made that many strides in the 1 to 10 or 1 25 crore segment. The significant improvement in the [Indecipherable]

Nidhesh Jain — — Analyst

Sure, sure. And then what is the estimate of the total wealth Management AUM of the existing clients that you are having with the industry. Is 3 times of that, 10 times of that, that you are currently managing.

Karan Bhagat — Managing Director & CEO

We have a good estimate, I can give it to you. Obviously, I’m giving you now top-down estimate not a bottom-up estimate to kind of look at it with a pinch of salt, right? So, I think broadly you can take the mutual fund industry around about INR40 lakh crores, we brought INR20 lakh crores on the equity side, of which I think 80%, 85% will be broadly retail money which will be INR16 lakh crores to INR17 lakh crores. Of the remaining, there’ll be another INR4 lakh crores, INR5 lakh crores, INR6 lakh crores in a combination of long-term debt, short-term debt as well as our G6 and balanced funds. So that INR5, INR6 lakh crores also you can multiply broadly by 80%, the rest of the INR13 lakh crores, INR14 lakh would be corporates, institutions and so on and so forth.

So broadly around the two, INR24 lakh crores, INR25 lakh crore industry I would guess would be around about give or take 25% to 30% would be the segment which — or maybe 20% would be the segment which we are kind of catering to. 65%, 70% or 80% would be the mass-affluent or the retail segment. So I think on the mutual fund side I think maybe it’s a INR7.5 lakh crore, INR8 lakh crore kind of serviceable market or slightly broadly in that range, of which we are servicing, whatever the INR30,000, INR40,000 crores on the distribution side, another INR30,000 crores on the on the advisory and the I&Z platform.

So I think on the mutual funds broadly our market-share or maybe somewhere in the region of 5% to 8% on the mutual fund side. On the AIF side, I think the full industry is broadly, give or take, around about INR4.5 lakh crores, INR4lakh crores of drawn commitment, INR5.5 lakh, INR6 lakh crores of total commitments. So undrawn commitment would be around about INR2 lakh crores. Of the INR4 lakh cores for us, we represent around about INR35,000 crores, INR40,000 crores. So the AFPs will be around 9% to 10%.

PBMS again, including, again we would we would be closer to the. Closer to the 15, 000, 20,000 crore kind of number. I think the overall AUM excluding the PF and the institutional mandates, I think the size of the industry will be closer to the 2.5 lakh to 3.5 lakh crores. A large part of it would be high-net worth. So I think again on the PMS side we should 7% to 8% market-share. So I would broadly put 6% top-down on, 4% to 6% on mutual funds. 6% to 8% on the PMS and 8% to 10% on the AIF side. I think that’s a quick estimate for me on the ultra high net worth side in terms of the products.

Nidhesh Jain — — Analyst

Sure sir. And lastly any comment on competition. We keep on hearing that a lot of new players are entering into the sector. They are trying to hire from the existing wealth managers. So how do we prepare ourselves for intense complement density in the segment?

Karan Bhagat — Managing Director & CEO

Competitions are given, to be honest I think it’s just that the business as it becomes more-and-more complex tis not easy for competition to deliver. So especially on the advisory side its a team approach, its no longer an individual approach. So you may be entire team, you need a set of relationship managers in a product exports, you need investment counselors, you need the tax team, you need the investment Research team, you made the entire tech team, you need the family office platform. So it’s a very-very comprehensive platform to be able to charge that 40, 50 basis points. And effectively it needs to be done at-scale otherwise it doesn’t work.

So I think just given the way we started in 2008 where initially it was a lot of distribution and it gave you cash flow and the ability to build-out the business strongly in the first seven, eight, 10 years and then adapt. I think that luxury is not there today. So I think anybody who starts off afresh today would need to kind of put in that two-three years, four years of incremental capital before you really can see the advisory piece kind of play-out.

On the distribution side, I think there will be new players who will come in especially on the back of technology, attacking different sets of markets, so that it be an interesting thing to see. But as of now, obviously I think it’s been a bit of a model where you really are not seeing people kind of trying to monetize it. So it’s not really worked out that well. But overall I think competition can be broken up into three big parts. I think first is really the domestic focused bespoke wealth management players, who are obviously going to invest the maximum in building our teams and resources. Second, obviously you will have the larger MNC, private banks who are trying to set-up and trying to set-up in India. Of them, honestly, only one is kind of looking at India seriously right now as we speak. Third, you will have domestic banks which are currently maybe slightly more focused on the 5 to 25 crore segment. And lastly you will have independent financial advisors and external asset managers who essentially be ex wealth managers who want to go out and set up family offices of their own with three or four clients.

So I think to be to me, I think the first and the fourth will be competition in the medium-term. And there will be some select players in the second and third basket who will kind of eventually get there in terms of their own understanding on the wealth management and capital markets business.

Operator

I think we’ll move to the next question. Dipanjan kindly unmute yourself and ask your question. Dipanjan, are you there. Kindly unmute yourself and ask your question.

Dipanjan — — Analyst

Hi, hi, hope I’m audible now. So, Karan firstly congratulations on 15 completion — completing 15 years. Two-three questions from my side. Again, going back to the flows. And on the sale 400 billion ARR flows that you forecast for next year, how much of in your mind you kind of build in from the corporate treasury and from the institutional mandates that you mentioned? To my understanding, this will come in at relatively lower retention. So because this year if you see like for IIFL ONE in the overall flows between corporate treasury versus PMS its seems corporate treasury was relatively on the higher side, at least in second-half or something.

Karan Bhagat — Managing Director & CEO

Out thought process less than 10%.

Dipanjan — — Analyst

Got it. Secondly, IIFL ONE you mentioned that over the last few years we have been focusing more on the quality customers. So in terms of your ticket size-wise — broad ticket size mix of IIFL One and — if you can give some color between the initial clientele that you may be acquired in 2020, 2021, and maybe incrementally how that is changing?

Karan Bhagat — Managing Director & CEO

So I think the kind of client w were attacked in 2021 was all kinds of clients, to be honest, above 10 crores, where I think we’ve figured out that eventually the right way to play it is more on the 25 crore-plus and the 50 crore-plus. And that’s really where we got the right amount of success and our ability to also map our resources to the expectation of the client is really there.

So I think when kind of triggered a change today and we are fairly clear, it’s only going to be towards the 50 crore-plus kind of segment as opposed to going down below that. Obviously, there may be scenarios and profiles of clients for whom we start with a slightly lower amount. But I think we are fairly clear that any advisory mandate below that number may not really may not really make sense. And I think at the same point of time we spend a lot of time, energy and effort hopefully productively on building a platform for the next set of clients where effectively you are able to offer the distribution platform to clients.

Dipanjan — — Analyst

Just two small questions. One, on the product pipeline in the AMC business, how does it stack up?

Karan Bhagat — Managing Director & CEO

Our pipeline is good. I think we’ve crossed across-the-board I think both on the — both on the alternate side as well as on the listed side I think we got a good platform going. Even in the last three to four months we did really three large really interesting innovative products, we had a we had a very interesting credit fund which has ended-up raising INR2,000 crores. We did a real assets fund where we invested in an infra asset along with CDPQ, that’s ended-up, again raising close to INR16,000 crores, INR17,000 crores. We did a global dollar bond which is now nearly INR750 crore, INR800 crore of fund. So I think from a from an asset management piece, we have the ability to do a lot of innovative things. We’re at least six, seven ideas for the year. So I think we will end-up doing a lot of things. I think the only place where we need to ensure that we are able to kind of recycle a part of the, that’s a good monies on the crossover funds. I think we did collect nearly the entire money of crossover funds, 14, 16 months back. But as we get the last portion of redemptions, we have to ensure that kind of comes through because otherwise that has a bit of an impact of 30, 40 basis points on debt portion, which effectively has an impact of 1, 2 basis points on retention otherwise. So outside of that I think this strategy is quite clear. We have to just kind of ensure that the mix is maintained.

Dipanjan — — Analyst

And, Karan, just lastly going back to the similar question on the cost side now. You mentioned that you ill be venturing into 10 more geographies, while it will be low-cost, low infra, asset-light sort of a model, maybe the RMs will also have different quality, or maybe different vintage of something. Just wanted to get — in terms of near-term cost and you’ve given us guidance, but how comfortable will you be on the cost amidst rolling out of this new strategies?

Karan Bhagat — Managing Director & CEO

I’m quite comfortable with the cost. I think don’t see too much of an issue there. Honestly, I think from a cost perspective I think maybe a INR5 crore, INR10 crore per plus-minus don’t see it massively beyond that. But having said that, I think from a productivity perspective it’s important that as you build-out the new team or rather not the new team, the extended team, we are able to give them the right tools and arms and ammunition to be successful on on the street because if they’re not, then the productivity can kind of start showing up reflect in the cost-to-income basis. So I think from a pure absolute cost base very-very comfortable. From a cost-to-income basis, obviously, the productivity on the revenue side also needs to be comfortable.

Dipanjan — — Analyst

Sure. Thanks, and all the best.

Karan Bhagat — Managing Director & CEO

Thank you.

Operator

Thank you. I think that’s all we have time for. Karan, in case you have anything else to add.

Karan Bhagat — Managing Director & CEO

No, thank you. Thank you. Thank you, everybody. Thank you, Anil.

Operator

[Operator Closing Remarks]