Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Edelweiss Financial Services Limited (NSE: EDELWEISS) Q4 2026 Earnings Call dated Apr. 30, 2026
Corporate Participants:
Priyadeep Chopra — President
Rashesh Shah — Chairman
Analysts:
Jeel Dunagaria — Analyst
Shobhit Sharma — Analyst
Parth Jariwala — Analyst
Sujal Chandaliya — Analyst
Presentation:
Operator
Ladies and gentlemen, good afternoon and welcome to the fourth quarter FY26 earnings conference call of Edelweiss Financial Services Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing STAR and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms.
Priyadeep Chopra, President, Edelweiss Financial Services Limited. Thank you. And over to you, ma’. Am.
Priyadeep Chopra — President
Thank you, Sagar. And a very warm welcome to our earnings call today. We have on the call with us today Mr. Ashish Shah, Chairman and MD of Edelweiss. And Ms. Ananya Suneja, CFO, Edelweiss Financial Services. We hope you all had a chance to review the investor presentation that we filed with the exchanges earlier today. During our discussion we will be making references to it. Please take a moment to review the safe harbor statement in our presentation. We will be making statements that may be forward looking in nature and hence may involve certain risks and uncertainties.
With that, I’ll hand over the call to Rashesh to begin the proceedings. Thank you all for being here again. Over to you, Rashesh.
Rashesh Shah — Chairman
Yeah. Good afternoon to all of you. And a warm welcome for earnings call for the quarter and the year ended March 26th. Thank you once again all of you for joining us. I was supposed to start with the geopolitical tensions and oil price. But I guess all of us know the headwinds that India is currently facing. But in spite of the headwinds, we do believe India remains relatively well positioned in the businesses we are. We don’t see a very large impact of this headwind except at the India macro level.
And we do think there is some amount of pain. The inflationary risk and the geopolitics for the next five, six months. There is some pain. When we talk to investors, we see that they also. I have the same hypothesis, but I think there is some near term pain. But India seems to be positioned enough to be resilient to the pain. The pain is not going to be there, but I think we feel that India will withstand the pain and come out of this strongly. At enterwise level. You would have seen the investor presentation.
We had growth in the consolidated profit after tax and the key matrices for the operating businesses. Our console PAT has grown by 27%. This was in Spite of some exceptional items. I’ll speak about that. In a lot of our businesses because of the labor code impact, the GST impact on our life insurance business. With all of that post minority investment our profits have gone up profit after tax from 399 to 547 crore. So 27% increase in that pack. There have been some headwinds in the fourth quarter on a lot of our businesses because of the market volatility, the treasury income impact in the mutual fund and our even corporate treasury because of the March volatility there has been some impact.
But as we have seen markets have stabilized in April. So that has been fairly stable. All other businesses continue to grow. Alternative Asset Management FP AUM has grown by 32%. YoY at 44,000 crores. Mutual Fund AUM Equity AUM is now grown by 25% to 78,000 crores. Our MSME disbursements have grown obviously very largely by 200% because we have started scaling it up again. Housing finance disbursements have grown by 27%. GI business had a growth of 28% in GWP and LI has grown by 11% in AUM and AUM has now crossed 10,000 crores.
But ARC also had a good year. Arc recoveries were 8. So 8590 is extremely good. ARC is always, it is a very paradoxical thing because the more you recover the more your AUM keeps on falling down. So but it’s always good to recover because that means you are reducing the risk in the portfolio and returning money to the banks who are holding the srs. So we continue to grown that. And before going into strategic updates let me give two or three special updates and I’ve got some queries and questions from a few of you in the last couple of hours on that.
So the first one is on insurance breakeven. So insurance both the insurance businesses put together for the year had a had a loss of almost 216 crores which was an increase from last year which was about 170 crores or so. So there has been a growth, the loss have gone up in insurance business instead of going down because we have been working towards break even. So the way to look at the insurance business is there is almost 110 crores exceptional item largely the GST impact on life insurance which was a one time one.
We are not talking about the recurring impact which we are managing and we’ll get to break even in spite of that. But out of the 159 negative of G of the life insurance business. Almost 70 is from the GST impact. And then we had the labor code impact on both the businesses. So there has been a exceptional hit on both the insurance businesses which our estimate is about 110 crores. So if we take that away then the minus number is 100 crore as compared to 170 crore of the last year. So there is a significant improvement on the performance of the insurance businesses.
If you remove the impact of the exceptional items which are truly one of which are not going to recur in the coming years along with that, we still remain committed to that. We will be breakeven for the year FY27 in our insurance businesses. We are strengthening ourselves. We are focusing a lot on that. And even without index because we have index will come a year after now. Even without index coming in we will reach breakeven. Obviously I spread earlier. If India’s comes, we are break even even now.
But without indus we still as per IGAP we expect to be breakeven in the insurance businesses in the coming years. On question number two which has been on the operating businesses our operating businesses also have shown a fall in path from 5666 crores to 520 crores. So there is a 46 crore fall in the operating businesses. But as you have seen in the presentation there is a exceptional item and those exceptional item is about 134 crores. So if you adjust for the exceptional item the businesses have actually grown by 17% at a PAT level where 566 has gone to 640 odd or something.
So there has been a fall in the underlying businesses profit. Operating profit of the underlying businesses by 46 crores. But that is after 130 crore exceptional item on that. So adjusting for exceptional item we still see that on apples to apples basis the operating businesses have shown a 17% growth. The operating businesses also have an ESOP cost embedded in that which will be recurring. So we are not removing that with the soft cost. We expect to continue to grow our operating business profit at approximately 20% per year.
That is what we have maintained in the last four years. This year also apple to Apple we are at 17%. But we have had these exceptional items which is mainly has been graduating and impact of the new labor code and the GST impact that has come which I think all of you are aware about. And the third question I wanted to answer was on the corporate debt. Our Corporate debt is about 6400 crores as of now. Which remains almost flat from last year. But we have done a lot of activities to bring down the debt from our underlying businesses.
In this year we expect dividend and capital through buyback and other stuff of almost thousand plus crores. So for this year thousand crores odd will come from dividend and buyback and other stuff from the underlying businesses. We expect between thousand to fifteen hundred crores from the EAA IPO and the stake sale of NEDO and EML should give us another 750 crores and other things like we have a couple of offices that we are in the process of selling to investor, doing a sale and lease back and we have some investments in the underlying funds which will also come back.
So through this stake sale and dividend we expect almost three, three and a half thousand crores to be realized in the coming year. So when we look at the 6400 against that we have 3,3500 crores of the liquidity cash flow coming in out of the balance 3000. Our property investments and the offices we own, Edelweiss House and others are about 2000 crore and thousand crore are the investment we have in the underlying company, in the underlying funds and all that we have. So we have thousand crores of investments, 2000crores of property and between three to three and a half thousand crores of stake sal and dividend realizations that we expect in this coming year.
So I think on the corporate debt though it looks flat, we remain comfortable to go by our earlier guidance that we will keep on reducing it and we will I think bring it down to below 3,000 crore in the next one year to 18 months for sure. That is our plan and we continue to work towards it. Along with that the other update is EAA placement. As you may have seen we have got the SEBI approval for the IPO. Now as soon as markets stabilize and we have a little bit of bandwidth we will work towards the IPO.
We did do a 4.4% placement of the EAA to a group of high net worth investors but more importantly people who’ve been investors in our funds. They were key LPs and select individual investors who have been long term supporters of fund. They are fairly large investors in the fund and we wanted to create a alignment of interest with them. So we are very grateful that the 4.4% placement happened. We got 375 crores out of that. The other important milestone we achieved was we got our transportation focused inbit I think listed it got it started trading yesterday.
It had a very successful IPO and a successful listing. So CS has a portfolio value of almost 11,000 crores and it’s our first transportation focused in this so we’re very excited about it. The update on Strategy Investment by Carlile Nedo we have got the CCI approval. We are still awaiting RB approval but everything is on track. We’ve been replying to the queries and we hope that the process continues smoothly. Fourth important update has been the Edelweiss ARC. The MD and CEO appointment has been finalized.
We have appointed Mr. Arun Mehta who was earlier MD and CEO of SBI Capital Markets is going to join us in the next three, four weeks. We got approval from RBI for his appointment and now we are just finalizing the paperwork and we are very excited for the next innings of Edelweiss ARC for the growth again to start. We’ve seen that ARC business opportunities are growing again and with Arun Mehta coming on board we are pretty excited by that. So I think along with that both the asset management businesses continue to click along well.
Both the insurance businesses have also shown good growth and should get to break even in this year. And our credit businesses started growing again in a calibrated manner. ARC recoveries have been strong and we expect them to grow. As I said, corporate debt we feel is under control. The plans we have, we are very confident that those plans will allow us to get to the reduction of corporate debt as fast as possible. So with that I wanted to leave a lot of time for the QA and I just want to sum up by saying our consolidated profit has grown.
There was some misunderstanding because of the of the reporting, but the investor presentation clears it out pretty well. The operating businesses pat was muted because of the exceptional items and the market volatility in the last quarter. Overall, we expect that our businesses will continue the healthy growth because that has gone on for last three, four years in spite of all the volatility and the uncertainty and the businesses have only got stronger. All the other strategic projects as I’ve given update are on track and we truly want to thank all our stakeholders, all our bankers, all our shareholders for the support and the feedback they’ve given us over the years.
Thank you with that and we’ll now open up for question and answers.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to Use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles again. To register, please press Star and then 1. Our first question comes from the line of Jeel Dunagaria from Equilias Securities.
Please go ahead.
Jeel Dunagaria
Hi, good afternoon. Thank you for the opportunity. So I had a few questions. So sir, firstly as you mentioned about the E AAA placement. So I wanted to understand more about the same. Particularly the profile of the investors who participated in that.
Rashesh Shah
Can you repeat the question please?
Jeel Dunagaria
Yeah, so you mentioned about the EAA replacement. Right. So I wanted to understand more about that. Particularly the profile of the investors who participated in that.
Rashesh Shah
So all the investors are our are actually investors and the limited partners in our funds who have invested with us over the years and they’ve supported us. So they are HNI investors, family offices who have all been there. We wanted to do only a 4% placement because it was a long standing ask from them. A lot of investors. As you know, we have an AUM of more than 64,000 crores out of which almost 30,000 is from Indian investors. And a lot of that is from Indian high net worth. A lot of that is from Indian HNI family offices.
So. And we had kept a cap of about 40 crores per head. We had a lot of people who wanted to invest even more than that. But we said only 40 crore. So we had a group of investors. All of them were our LPs. Our requirement was that they are, you know, already investors with us. And we I think had about 40, 45 investors in total.
Jeel Dunagaria
Okay, understood. Secondly, I wanted to ask regarding the ipo. So the DRHP was approved last week. Right. So could you walk us through the next steps and also when the IPO is expected, the timeline of the ipo. And additionally I wanted to ask if you are considering any other further placement rounds and what could be the shareholding structure post the ipo?
Rashesh Shah
We not finalize anything. We don’t intend to do anything besides the ipo. Now we think obviously as you know, the markets are still in a state of uncertainty because of the Gulf situation. So we will wait for a couple of months for things to stabilize and then our idea will be to launch. So. So we are in no hurry because I think we have enough business momentum going on. But if you ask me, I think in the next three, four months I expect. I expect the global situation to stabilize and for us to be able to do the AAA ipo.
So maybe July, August.
Jeel Dunagaria
Okay, got it. I have one last question. So you Also mentioned about the NeoCarlyle transaction. Right. So could you share the expected timeline for closing that transaction and also if there are any positive shifts that we foresee like such as the cost of funds or the credit rating trajectory or even the acceleration in the disbursement growth.
Rashesh Shah
So growing steadily, we are not putting a lot of high growth pressure on that because we want to close the Carlyle Tunnel. We also investing in opening some offices and increasing our footprint on affordable housing. So on that basis I think it’s on a, on a steady footing. The Carlyle transaction we expect the only thing awaiting is RBA approval which is we filed this in February and usually RBA approvals have taken three to four months. Normally is what the lawyers inform us. So if we file this in February, we announced March, April.
So I think somewhere between May, June, I think we should get the approval. All the other approvals are in place.
Jeel Dunagaria
Okay, thank you. That was very helpful. That’s it from my side.
Operator
Thank you. The next question comes from the line of Siddish Narmadikari from PL Capital. Please go ahead.
Jeel Dunagaria
Hi, thank you for the opportunity. Am I audible?
Operator
Yes sir, you audible.
Rashesh Shah
Yeah, it is.
Jeel Dunagaria
Zuno has been a pioneer in insurance with products like usage based insurance and telematics. So with the rapid evolution of AI, how do we see the opportunity for further product innovation and differentiation? Sir?
Rashesh Shah
Yeah, I think it’s a, it’s a very important question because as you know in Zuno we have been focusing more on auto insurance. Our aspiration is to be one of the best auto insurance companies in India. It will take time but our. The reason we are very bullish on auto insurance, you know, motor insurance is because we think it is very data based, it is very data linked. And with cars also having a lot of data on driver, on fuel consumption, on even the, even that the cost of repair and all, a lot of that is now getting standardized.
Karajis have become very professional. So I think India is where the U.S. Car insurance market was about 40, 50 years ago. And on that basis with the kind of data and AI available, this business has a lot of possibilities for innovation. You can do a lot of innovation in pricing, really allow customers to pay for what real risk they want. You can slice risk. You can also quote pricing which is customers to customer, pin code to pin code, you know, car make to car make, all of that. Even on the claims settlement, you will be able to do claim settlement within, you know, three hours and all that.
We have already been experimenting with that because with a lot Of AI you can look at through, you know, cameras and all, you can look at the damage done, you can assess the cost very quickly. So there is a lot of improvement on all three. There are three parts of the auto insurance business. One is the pricing and the policy. The second is the customer experience. And third is the claims is a claims management. All three of them have a huge amount of AI application that is there. So we have large teams doing agentic AIs and all that because a lot of your call center and customers, customer support and all can also use AI in a fairly big way.
So though we are very proud about our product innovation at Zuno and you would have seen since inception Zuno has been growing at between 25 to 40% every year. And the motor insurance market has not been an easy one as I’m sure a lot of you would have seen. Health has been growing much more easily. Motor has been a difficult market. But in that difficult market we have innovated a lot. But we also very proud of our customer service and claim settlement. And in that also AI is going to be a big help.
So we are investing fairly big in that data was always very important to us. Now how that data will be used, I think AI will make it easier and easier.
Jeel Dunagaria
Understood sir. And on the SIF side, Altiva sif has crossed 3,000 plus crore in AUM, making it one of the largest in the industry. So how do we view the long term opportunity in this space and are there any plans to expand the product suite further?
Rashesh Shah
Yeah, I think SRF is a new asset class. Everybody thinks it’s like, you know, you know, another mutual fund or another AIF or another pms. But it actually has some elements of a mutual fund, some elements of an AIF and some elements of the of the PMS category. So if you go back and study the underlying needs, because a PMS serves a very different need than AIF does and that serves a very different need than the mutual fund does. Because as you know, a lot of people ask that why do PMS exist when there is an income tax advantage, capital gains advantage, which is a mutual fund, but because they’re serving different kind of needs.
In the same way an SIF is also solving a very different need at the customer level, which is some parts of it are available in aif, some parts are available in PMS and some parts are available in a mutual fund. So it’s a very hybrid product. You really have to understand customer needs, create the product as per that and more importantly market it Very carefully as per that. Because even if it’s a product which is marketed as another AIF or another PMS or you know what some people call it a poor man’s aif, it’s not true.
I think it is a very different, very, very nuanced product that is there. We are pretty bullish on that. There are some specific customer needs that an SIF will cater to and your ability to create products in that is important. We have already launched the first product which is as you said done very well. We are the leaders in that. We are currently looking at couple of other products also. We should launch our second product in the next few weeks. But we do a lot of research to understand customer need and then create the product and communicate with the distributors.
Product is for this kind of customer, for this kind of need and that is important. Just, just using a distribution to sell, you know a product in a very average manner will not really allow you to capitalize on this new asset class and new product very, very effectively.
Jeel Dunagaria
Understood. So thank you very much. That’s, that’s, that’s all from my side.
Operator
Thank you. The next question comes from the line of Shobhit Sharma from HDFC Securities. Please go ahead.
Shobhit Sharma
Yeah. Hi sir. Thanks for the opportunity. So I have multiple questions. So firstly on the alternate piece if I look at your fee paying AUM on the retail assets have surpassed the private credit fee paying aum. So what actually are we doing on that piece? What is what differentiates us from the competition and what are what are our plans to expand that kind of business. Secondly, coming to your mutual fund business, the growth on the profitability seems to be material. So how should we think about the yields on the PAT level?
Yields for the medium term and similarly on the mutual fund business we have seen strong growth on the SIP book. So if you can give us some color on this SIP book, how this book has behaved during the last quarter and why, what kind of sense we are getting for the month of April and where are we seeing the sips new SIP folios being generated? Is this on the passive side or is it on the commodity commodity funds. And last question is on your insurance business. Are we, are we going to seek a forbearance from the IDI for the for applicability of the India’s for FY27?
Yeah.
Rashesh Shah
Okay. I hope I remember all the, all the questions you asked and answered them. I’ll try and do it in reverse order. So in insurance index, yes, we have asked for the forbearance because I think most of the industry players are going to ask because the clarity is still emerging. There is a lot of investment to be made and you still have to run I gap. So if you don’t ask for forbearance then for this year you will end up running INDES and I gap both and you might end up, you know, spending a lot of money and effort on that.
So I think the idea currently is to take forbearance for a year. So both the insurance businesses will implement index from the next year. Though it is actually very useful from a profitability point of view. From a profit after tax reported point of view, index is a lot better for us than IGAAP. In order to avoid complexity, we have taken the four patterns. That’s your first question. Second SIP book we are now more than 600 crores in SIP in the mutual fund. A lot of this is in equity and commodities, largely equity and a little bit in our international funds, but largely I think it’s about our main focus has been equity AUM and we are getting a fair amount of inflows into that through SIP on the mutual fund growth.
As you can see now we are at a pat yield level of about 6 paisa which is still low. And we have some headroom to grow as our product mix is undergoing a change, as our equity component is going up, as our new money is coming at slightly better economics and all that. When we add up all of that, our aspiration is that from current 6 we should go to 10 basis point by 2030. So it’s going to be a slow improvement. We want to be fair to our distributors, we want to be fair to our partners and we want to improve our yield but not by reducing theirs, but by calibrating the product portfolio, by introducing high economics on product, by having higher economics on incremental flows that we get.
So we think we will continue to grow on the AUM the way we’ve been growing at about 20% a year. But on the PAT margin which is about a 6 basis point, we would like to go to 10 basis point in the next 3, 4 years. So we are no hurry. We want to do it in a very careful calibrated manner in a win, win, win manner with the, with our partners and distributors. And creating products like SIF is actually one example that we are creating products which truly add value to the customer and hence improve our economics on EAA or fbaum.
Now the real asset has become higher than private credit because private credit we have not raised a big fund in the last three, four years. So our expectation they will both be equal though in private credit, the assets keep on going down because you keep on returning money to the customers. An average private credit fund, average tenure is only two and a half years while in real asset the average tenure is about four to five years. So the real asset is a slightly longer duration. Funds while private credit, because we also keep on getting income and realizations, we keep on returning the money.
So we expect our average private credit fund to have an average in and out average horizon of three years while the real asset will have five years. So that would be the difference. But again, a lot of this is based on the new fund launches. And we launch a new fund every two years or so, two to three years in private credit. So as a new fund is getting launched in this year, we expect private credit fpa, um, will also go up in this year.
Shobhit Sharma
Okay, understood. Thank you.
Operator
Thank you. Your next question comes from the line of Parth from dam. Please go ahead.
Parth Jariwala
Hi sir, Am I audible?
Rashesh Shah
Yes,
Parth Jariwala
Yeah, sorry sir, I joined the call late if my questions are just repeating. So I have two questions. One, right now, given the volatility in the market, are we seeing any challenges on raising of funds from foreign investors in and what are the FPA women fundraising targets for the next year? And could you also give some color on the pipeline of new fund launches? That would be my first question, sir. I will take after second question afterwards.
Rashesh Shah
So we don’t have a lot of challenges from global investors on the products we have which have a higher yield. So the products will have a yield of more than, you know, 16 to 18% rupee yield. Their foreign investors are still very keen and all where the yields are about 13, 14 lakh in performing credit. Foreign investors are slightly worried about the rupee effect. They are actually very hot on India. But a lot of the, even the FBI selling we have seen in the market, a lot of that is now driven by the view on the rupee and not the view on underlying Indian opportunities in the market.
But we also have a lot of products. We are looking at offering a hedge hedge, you know, offering to our international clients which will be in US dollar and we’ll hedge the dollar to rupees to remove any uncertainty. So I think there is opportunity on creating new products because hedging and rupee stability has become a key need for a lot of foreign investors. But where there are high elite products like our Special Situations fund, which you know, expects to make around 18% plus there I think investors are Fairly okay.
Because at that yield, rupee is not that big a problem. But the biggest problem across the board for all foreign investors in India today is their view on the rupee and they’re looking for some stability on that.
Parth Jariwala
Understood? Understood. So secondly, our MSME disbursements have tripled in FY26. So could you just highlight what were the key drivers or initiatives that has contributed to such significant growth here? And also with our wholesale scaling down, and the wholesale scaling down now largely behind us, when can we see our earnings actually starting to reflect the real retail mix? So could you just share some outlook there and what would be our MSME growth and the ROE trajectories for next two to three years?
That’s it from my side.
Rashesh Shah
So, yeah, I think on ECL Finance, as you know, we have a lot of equity out there. We had decided that we will grow MSME only after wholesale book is scaled down, after all the cleanup is over. So around March 25th is where we concluded that the wholesale is behind us. The stress on the wholesale is behind us. We also hired a new managing director, Ajay Khurana, who came on April 1, 2025. And we have almost grown our disbursements 3x in this year. We did about thousand crores of disbursement in this year.
We expect to keep on growing and we’ll be happy if you do between,700 to 2,000 crore disbursements in the coming year. We are currently investing a lot also in that business so that the NIMS will be there. But we are also opening a lot of branches and hiring people and all of that and focusing a lot on MSME only. So we expect that the profitability and all is maybe 18 months to two years away. But the growth has started coming and we always said growth before profitability. If you look at our asset management business mutual fund also until two years ago, profits were very low, but we had been growing for five years before that.
So growth and then profitability rather than try to get profitability and growth at the same time, which becomes much harder. So currently MSME will be in a growth mode for the next couple of years and we do feel confident about the disbursement growth and the profitability will follow that.
Parth Jariwala
Thank you. And so just think how, what would be the kind of ROE trajectories over the next two to three years for us
Rashesh Shah
In,
Parth Jariwala
Yeah, ECL Finance.
Rashesh Shah
In two years time to get to a 10% ROE because we are still very under gear, so we should get to 10% ROE once we get the scale up done, which is about 18 months to two years from now. So the we have quite a bit of equity there. So our idea is to get there and you will see improvement. It won’t be overnight but it will be gradual. But I think getting to a double digit ROE is an important milestone for us.
Parth Jariwala
Understood, that’s very helpful. Thank you so much.
Operator
Thank you. The next question comes from the line of Rajesh Ganesh Kumar from JM Financial. Please go ahead.
Jeel Dunagaria
Hi. Thank you for the opportunity. Am I audible?
Operator
Yes, you’re audible.
Jeel Dunagaria
Great. I just have two quick questions. First one being the cost to income in mutual fund it has improved by approximately 10% by Oy. And it’s the current fi. And you know as we continue to scale what is the steady state efficiency level that we are targeting and you know how, how does one view the near term growth potential in the equity aum? I’ll ask the second question, post this.
Rashesh Shah
So as I said earlier, our aspiration in the mutual fund equity AUM is to grow at 20% plus. We’ve been growing faster than that but our aspirations grew at 20. As you know 8, 10% comes out of your MTM growth in a normal year and the other comes from new money. We already have also a very strong SIP book, 600 odd crores and all. And as we introduce a couple of new products, NFOS and all that also helps you collect additional AUM. So I think getting to 18, 20% AUM growth in equity is a good target to have cost income ratio.
We are in the 60s now. I think eventually according to us a good cost income ratio for a mutual fund should be 45 to 45, 50% and hopefully I think we should also get there as the scale happens in the next two, three years. So we do expect that we would also want to list our mutual fund at some point of time. So when we list we would hope that you know the cost income is 50% but you constantly I think invest in efficiency and technology and not allow your cost to grow as the income is growing.
Jeel Dunagaria
Understood. This was helpful, thank you. The last question I have is, you know EPAA’s recently launched Citus transferring with IPO which has received overwhelming response. The question that comes to the mind is how does invit as a class of asset is different from other infra yield funds in terms of let’s say risk or income generation on overall return profile. If you could just throw some light on that.
Rashesh Shah
So there are different kind of in bits are there Some inbits which are mainly steady in bits, some are declining in mid where their, you know, assets are declining. Because as every year goes by then you have roads, you know the road concession which is 20 years become 19 years becomes 18 years every year. So there are also in which of growth in it where you are keeping on adding assets, you keep on buying new assets so that you get, you know, your, your Inbit horizon keeps on expanding. So we want our Inbit to be a growth in bit.
We’ll keep on adding assets as we go along. We understand this business very well. The second is we also have a very strong operating team which actually can manage the asset and run the asset. So we are not just financial investors, we also run the the assets pretty well. And most of the inbits are road inbits. Ours is a transportation inbit and though the difference seems very nuanced, a transportation in which can do a lot of other things besides roads. So we can do things like airports and ports and other transportation hubs.
You know, we can do cable car which is a big growth in India. All the tourist spots are going to have a lot of cable cars coming in. A lot of the transportation is going to be via cable car because that is easy to do and it doesn’t require a lot of infrastructure. So in a lot of smaller cities that will also be the game. So when you have a transportation ingredient, your options on what assets which are there transportation as well. A lot more than in the road Inbit. Road is a big part of transportation but transportation has a little bit more optionality on much higher ending assets also.
Jeel Dunagaria
Right, that’s very helpful, thank you. Good luck.
Operator
Thank you. Your next question comes from the line of Sujil Jain from Walford pms. Please go ahead.
Sujal Chandaliya
Hi sir. Am I audible?
Operator
Yes sir, you’re audible. Please go.
Sujal Chandaliya
Yeah. So sir, just couple of questions. Given the bearish market environment in March, how did it impact performance across our business segments? Like which PBT largely flat for the year. What is your assessment of the overall financial impact?
Rashesh Shah
Very hard to put an impact but I think you know a lot of our mutual fund also has a lot of sponsored investments, right? They have almost 100 odd crores which are compulsory sponsored investments. We also have a lot of treasury activity on arbitrage and other things. So I would say overall March would have impacted about maybe 40, 50 crores on a consolidated basis. But they’re hard to estimate because there are many factors different businesses. But across all the businesses because you know there are equity investments in A quite a few businesses also.
So across all the businesses maybe a 40, 50 crore impact would have come. But it’s normal. I think these things happen in India. We would have learned to live with all this.
Sujal Chandaliya
Another question sir. How does the private credit opportunity in India differ from the global markets? Which key asset class within private credit do you see as the most attractive for in terms of growth perspective going forward?
Rashesh Shah
So all actually there are three categories in private credit. One is special situations. One is performing credit. Other is called investment grade credit, IG credit. They all are good, they cater to different investor needs. IG credit usually is about 12 to 14% or 12 to 14, 15% performing credit is 14 to 18%. Special sits is 18 plus. They all have different nuances, they have different capabilities and they cater to a different kind of investor needs. So all of them are good. We obviously have been very strong in the special situations category almost.
If you look at our FP AUM out of the private credit approximately 20,000 crore, we have almost 65% is in special situations also it differs from international because international lot of private credit funds are slightly open ended. They are called semi liquid that every quarter you can go and redeem your holdings. And actually of late that is where you are seeing some of the problems that are happening in India. There are no liquid credit funds. All AIFs in credit are close ended. So the fund has a lot of holding power.
There is no redemption pressure that can come. So one of the biggest difference between private credit globally and India is that India all funds are closed ended. So there is holding power. You don’t have to try to liquidate something in distress. I think globally a lot of private credit funds have gone into open ended or things which are liquidable. On top of that, on top of that the international private credit market has also been very competitive and very high growth. So a lot of people have gone down the disc curve.
That has not happened in India. Because in India there is still a scarcity of capital. It’s not easy to raise a private credit fund of scale. I mean, you know private trade fund which are more than 4 to 5,000 crores of AUM. You can count them on your fingers. There are a lot of 500,000 crore funds. But today’s a big fund is not easy. So I don’t think there is a the intensity of competition which is creating asset quality issues globally are happening in India. So on that count India is a pretty okay.
There’s still a very small market but we hope that it continues to grow. But In a steady manner, not a very fast growth.
Sujal Chandaliya
Thank you.
Operator
Thank you. Our next question comes from the line of Siddharth Shah, an individual investor. Please go ahead.
Jeel Dunagaria
Yeah, hi. Thanks for taking my question. Both of them relate to eaa. You know I think we spoke a lot about operating leverage in the business this year. I think revenues were up about 22, 23%. Costs were also up about 25%. So is that due to some of the exceptional items that we were referring to at the start of the call?
Rashesh Shah
We will operate at 50 to 60% cost income ratio because there it’s a very people driven business. You need people and we constantly invest in new businesses and products. So this year a little bit of optic in cost have happened is because we expanded the team, the the international sales team, the local sales team as well as we introducing new couple of new products. So the, the investment in that has started. So partly I think that will be. I would expect that to be a cost income ratio of about 50 to 60% range will fluctuate in that from a quarter to quarter basis.
The mutual fund is the one where there is a lot more operating leverage because it’s a more retail business while this is more institutional, more wholesale. So you need salespeople, you need investment team, all of that.
Jeel Dunagaria
Understood. And just the second one was, you know I think we spoke about the 1500 crores going towards debt reduction once the IPO happens. Have we utilized the, you know we sold the 4.4% for 375 crores. Did we utilize that for debt reduction? Because you know net debt seems to be flat year on year.
Rashesh Shah
Yeah, we do some math. I think on that 6,000 crores of debt. We have an annual interest burden. I mean every quarter is about 150 to 200 crores. So there is an interest meter also on the other side. So the fact that for an investment holding company the fact that we are flat itself means that at least whatever interest was that that has come from state sale. And as I earlier clarified a lot of the activities we did last year like Nero, like mutual fund, like E AAA IPO prep, like the, you know, dividend coming from underlying companies.
A lot of the work has gone in the last year FY26 but the actual cash will come in FY27. So I think on that basis we expect that a lot of the over and above the interest. We have a say about 400500 crore will get added only because of interest. But this year we’re expecting a two and a half to 3,000 crores of cash flow realization. So there’ll be a significant fall in that.
Jeel Dunagaria
Understood. Got it. Thank you.
Operator
Thank you. The last question comes from the line of Capital Ltd. Please go ahead.
Jeel Dunagaria
Hello sir. Am I audible? Yes. So sorry sir, if the questions will be repetitive as I joined in late but I have a couple of questions. So the first questions question is on our insurance business. So like combined losses in our insurance business declined by 23% over the last two years. And losses in life insurance has remained flat because of GST and other exceptional items. Also in Q4 we saw market volatility as compared to last year. So how confident are we about achieving break even over the next four quarters?
That is my first question. Second question is how do you see our India’s capital market position in the context of this global uncertainty that is there? So these are my two questions.
Rashesh Shah
So I think on the first one we are pretty confident that we’ll get to break even. We are working very hard for that. There were some exceptional items this year like gstl, neighbor code and all. But we are doing a lot of things to get to break even. So we keep. We remain reasonably confident of getting there. I think as you said, the global geopolitical event and the global uncertainty and the high oil price is going to affect India. We do think there is some pain for the next three to six months.
But I think India is resilient. Enough reserves are there. Plus I think economy is in a pretty good place to be able to handle that. Just because you handle it doesn’t mean it will not be painful. It will be painful but handleable. Thank you, sir.
Operator
Thank you. Thank you very much. We will take that as the last question. I would now like to hand the conference back to Ms. Priyadeep Chopra for closing comments.
Priyadeep Chopra
Thank you Sagar and thank you Rashesh for all the answers. Thank you each one of you for your time today. It’s been a joy to have you all and listen into your insightful questions. Please do write it to us at Edelweiss Investor Relations for any other questions and feedback or any additional information you may need. Thank you and have a great day ahead. Bye bye.
Operator
Thank you very much. Ladies and gentlemen, on behalf of Edelweiss Financial Services. That concludes this conference call. Thank you for joining us and you may now disconnect your lines.