Can Fin Homes Ltd (CANFINHOME) Q2 FY23 Earnings Concall Transcript

Can Fin Homes Ltd (NSE:CANFINHOME) Q2 FY23 Earnings Concall dated Oct. 18, 2022

Corporate Participants:

Girish Kousgi — Managing Director and Chief Executive Officer

Prashanth Joishy — Chief Financial Officer

Analysts:

Nidhesh Jain — Analyst

Dhaval Gada — DSP Mutual Fund — Analyst

Harsh Shah — L&T Mutual Fund — Analyst

Punit Mittal — Global Core Capital — Analyst

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Ratik Gupta — Guardian Asset Management — Analyst

Rishabh Dugar — CD EquiSearch — Analyst

Ankit Shah — White Equity Investment Advisors — Analyst

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Sakshi Goenka — Sohum Asset Managers — Analyst

Punit Bahlani — Nomura — Analyst

Anusha Raheja — Dalal & Broacha Stock Broking Private Limited — Analyst

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Jigar Jani — Edelweiss Broking Limited — Analyst

Aahan Tulshan — Trivantage Capital Management India Pvt Ltd — Analyst

Umang Shah — Kotak Mahindra AMC — Analyst

Gaurav Jani — Prabhudas Lilladher — Analyst

Bhuvnesh Garg — Investec Capital — Analyst

Chirag Sureka — UTI Mutual Fund — Analyst

Varun Basrur — Julius Baer Wealth Advisors (India) Private Limited — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the CanFin Homes Limited Q2 FY ’23 Earnings Conference Call, hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Nidhesh from Investec Capital Services. Thank you. And over to you.

Nidhesh Jain — Analyst

Thank you, Mike. Good afternoon, everyone. Welcome to the Q2 FY ’23 Earnings Call of CanFin Homes Limited. To discuss the financial performance of CanFin Homes and to address your queries, we have with us today, Mr. Girish Kousgi, MD and CEO of CanFin Homes; Mr. Amitabh Chatterjee, Deputy Managing Director; Ms. Shamila, Business Head; and Mr. Prashanth Joishy, CFO of CanFin Homes Limited.

I would now like to hand over the call to Mr. Kousgi’s opening comments. Over to you, sir.

Girish Kousgi — Managing Director and Chief Executive Officer

Good afternoon to all the investors, and welcome to the earnings call.

It’s been a fruitful quarter. Very good quarter, I must say, because we’ve done well in almost all the key parameters. If you look at book, we have grown by 22%. And if we have to talk about disbursements, even sequentially, we have grown by about 2%. And if I have to compare on a Y-o-Y basis, it is marginal growth. That’s only because last year quarter one, there was COVID and therefore, we couldn’t disburse much. So, there was a spillover effect. And last year, quarter two, we did very well.

We did about INR2,208 crores. And this quarter, we have done INR2,245 crores. So if I have to compare Y-o-Y quarter, I think there has been a marginal increase. And if I have to talk about revenue, on a quarterly Y-o-Y, we have grown at 40% and half yearly 38%, operating profit 33%, and if I have to compare H1 and H1, 37%. There is a growth of PAT by 15%. If I have to compare half yearly, it’s 31% over last year.

So, NIM has been pretty stable at about 3.55%. There has been a 5 bps drop in NIM. And spread is 2.51%, dropped from 2.66%. So, I had indicated earlier, on a steady state, we’ll be able to maintain 3% and 2.4%, even though we’re at 3.55% in NIM and 2.51% in spread. We will be able to maintain 3.5% and 2.5% for next few quarters. But in the long run, I think it’ll someway settle down around 3% NIM and 2.4% of spread.

I think in last few quarters, there has been increase in the cost. And especially for last quarter, the cost went up from 5.8% to 6.04%. So, there has been increase in cost by about 24 bps. And last quarter, the yield was 8.46%, which improved to 8.55%. Incremental yield is about 9.02%, and incremental cost is 6.48%. Our portfolio yield, as I mentioned, is about 8.55%. And if we have to look at asset quality, it improved. Last quarter was 0.65%. This quarter is 0.62%.

Net NPA on a like-to-like basis, apple-to-apple comparison, last quarter was 0.3. This is under IRAC. And under IRAC, this quarter, it is 0.28%. What has happened is that we have moved to ECL model. We have migrated to ECL model. And therefore, there has been re-arrangement within the total provision between NPA and standard. So, we have withdrawn INR21 crores from NPA and that is now sitting in standard provisioning.

So total standard provisioning is about INR33.5 crores. Out of INR33.5 crores, INR21 crores is something, which has moved from NPA. And that is why you will see net NPA increased from 0.3% to 0.35%. The 0.3% is what we’re referring to last quarter is IRAC. Equal comparison now is 0.28%. Under ECL, it is 0.35%. And therefore, we see that the net NPA has gone up and the PCR has come down. It’s only an internal adjustment because of migration.

If you have to look at total slippage, it is INR1 crores net slippage because we have, I think, INR12 crores is the slippage and we have recovered INR13 crores. And therefore, we will see there the asset quality and the slippages being pretty okay. In terms of credit cost, it is 0.04%. Demand is pretty good. We are seeing this across all geographies, all segments. We are seeing this amongst all the products.

In terms of salaried and self-employed, we see salaried to be driving a better growth compared to self-employed non professional. Self-employed non professional has improved. It’s improving every quarter. But I think another quarter or two, I think it will be back to 30% incrementally, otherwise we see good momentum across in spite of interest rate hike and also in spite of cost of construction going up.

There has been, on an average, in some markets 10% to 12% increase in the property prices, especially on the apartment side. And construction, the cost has gone up by 6% to 7%. In spite of this increase, we are seeing robust growth. This is a quick brief on what happened in quarter two. We’ll be happy to engage because I’m sure there’ll be lot of questions because we have moved from IRAC to ECL. There will be lot of questions. So, I’ll be happy to take any questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We have the first question from the line of Dhaval from DSP. Please go ahead.

Dhaval Gada — DSP Mutual Fund — Analyst

Yeah. Hi, sir. Thanks for the opportunity. I had three questions. First one is relating to the borrowings. So in the last six quarters, we’ve sort of seen commercial papers’ share in the borrowing mix come down from 18%, 19% to about 8%. Incrementally, I mean, what is your thought process on the overall borrowing mix and specifically for CPs, if you could give some perspective? So that’s question number one.

The second question is relating to spreads. So, we’ve seen some moderation in spreads this quarter. Just if you could give — I know you’ve given a medium-term guidance of spread. But just directionally, would you expect next couple of quarters to be more in the similar zone as we’ve seen in the second quarter or there is further pressure likely? Some perspective around that would be useful?

And the last question is relating to the provisioning change. Could you provide the stock of standard asset provisioning and any other provisioning, be it restructuring provision, etc.? So some perspective on the entire provision bit. That would be the third question. Also the restructured book number. Yeah. Thanks.

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. Sure. On the borrowing mix, no, we don’t see too much of a change from the current mix in the near term. Yeah, CP rates are going because the overall rates are going up, which is also we can see higher rate on NCDs. So, we are seeing the increase in rates across, be it term loan from banks, be it bonds or CPs. So what we will do is, it is very dynamic. So we will — we are agnostic in terms of the source beyond regulatory requirements. And therefore, we will be very, very watchful because our endeavor is to keep the cost of funds low.

So to that extent, we will be quite conscious about getting the right mix at the right cost. Having said that, I think we will not be able to see too much of a change in the next couple of quarters. So borrowing mix will be almost — for example, today, we have from bank 54% as a mix. So that 54% maybe can become 52%, but it will not become 45%. So, there’ll be a small change here and there, otherwise not much of change in the mix. In terms of margin, yes, we did increase rates in last one year.

One thing is very sure, we have given guidance for long-term, that is 3% NIM and 2.4% spread. So that definitely we will protect. How we will do is depending on the cost of funds, we will try to increase the yield so that we get the right margin and profitability. But having said that, in the near term, I think it will be somewhere around 3.5% or 2.5%. This would continue for next couple of quarters. But in the long run, it will be about 3%, 2.4%. This is more to do because of our profile.

As a CanFin, we are completely into retail, affordable, low ticket. So, we are not into high value. We are not into non-home. We are not into builder funding. We are not into corporate funding. And therefore, the ability of the portfolio to generate higher yield is limited to that extent. And therefore, we want to moderate in the long term our NIM at 3% and spread at 2.4% with respect to provisioning.

Joishy will give you the details.

Prashanth Joishy — Chief Financial Officer

Yeah. Regarding the NPA provisioning — in fact, I’m getting a lot of calls also, so I thought I’d give you a detailed explanation. The provisioning requirement to be maintained, as per the RBI or NHB direction is IRAC norms or ECL model, whichever was higher. Till last quarter, it was the IRAC norms, which was higher. Because in the ECL model, the standard asset adapts the provisioning at a higher range compared to the IRAC norms on account of PD, LGD and non-recovery percentage. In June, the provisioning what we disclosed is INR97.85 crores for NPA, INR101.17 crores for standard assets, put together, it is INR199.02 crores. This is the provisioning held in the books as of June 30, 2022.

Now when we do that calculation, we do the calculation as per the ECL model also. The ECL model provisioning at that time stood somewhere around INR184 crores. The gap was to the extent of around INR15 crores. During this quarter, we have disbursed INR2,245 crores. The full amount is the standard asset, which requires the provisioning at the rate of standard asset provisioning as per the ECL model. So on account of increased disbursement, the ECL model provisioning stood at INR208.86 crores, whereas the IRAC provisioning stood at INR204.83 crores.

See now the scenario has changed. ECL model has become more and IRAC has come down. So company has to hold the provisioning whichever is higher. So, we have to migrate to the ECL model. On account of that, the provisioning required for NPA as per the ECL model comes to INR77.53 crores, which was INR97.85 crores in June. So that means the provision has come down by INR20.31 crores, whereas as per the standard asset provisioning, which is required to be maintained, comes to INR131.33 crores against what we held INR101.17 crores. That means there is a difference of INR30.16 crores, which we have to provide.

Further, for undisbursed line of credit, we too have to provide as per the ECL model, which comes to INR3.38 crores. So on account of this, during the quarter, there was a withdrawal of provisioning on NPA to the extent of INR20.31 crores and creation of additional provisioning in respect of standard asset to the extent of INR33.55 crores. So with this, the total provisioning held in the books will be INR131.33 crores for the standard asset, INR77.53 crores is for the NPA, put together it’s INR208.86 crores. Apart from them, restructured for provision, we are holding in the books to the extent of INR67 crores. So total provisioning in the books, as on date, stood at INR279.94 crores. This is the total provisioning movement because we are getting the repetitive calls. I thought this is the right opportunity to explain everything in detail. So most of the repetitive calls can be cleared out. Thank you.

Dhaval Gada — DSP Mutual Fund — Analyst

And, sir, the stock of standard restructured book?

Prashanth Joishy — Chief Financial Officer

Dhavan, these have been disclosed in the SEBI result. It is INR704.85 crores. It is there in the SEBI result second page note point number six.

Dhaval Gada — DSP Mutual Fund — Analyst

Thank you, sir. All the best. I’ll come back.

Girish Kousgi — Managing Director and Chief Executive Officer

Also, Joishy, please share the original amount of INR709 crores. What is the outstanding today? Because this will be with interest restructured [Phonetic] outstanding.

Dhaval Gada — DSP Mutual Fund — Analyst

Correct.

Girish Kousgi — Managing Director and Chief Executive Officer

No, no. The original amount outstanding of the [indecipherable].

Prashanth Joishy — Chief Financial Officer

Yeah. It was INR694 crores at that time.

Girish Kousgi — Managing Director and Chief Executive Officer

Now it is how much?

Prashanth Joishy — Chief Financial Officer

INR708.95 crores [Phonetic], out of which [Technical Issues].

Operator

This is the operator. Can you hear us on the call, the management?

Prashanth Joishy — Chief Financial Officer

So from the initial restructured book, close to about INR62 crores have been closed. Now the INR704.85 crores includes interest accrual, which means out of the original book INR60 crores worth of loans are closed already.

Girish Kousgi — Managing Director and Chief Executive Officer

So the outstanding is, sir, INR645 crores approximately?

Prashanth Joishy — Chief Financial Officer

From the original amount, because what happened with restructured accounts, there will be interest accrual, right? So this INR704.85 crores includes interest accrual, but the cause of this is — six — that is INR709 crores minus INR62 crores. That is the actual cost.

Dhaval Gada — DSP Mutual Fund — Analyst

Understood, sir. Thank you. All the best.

Girish Kousgi — Managing Director and Chief Executive Officer

Thank you.

Prashanth Joishy — Chief Financial Officer

Sir, it’s about INR647 crores, outstanding is INR647 crores. With interest, it is INR705 crores.

Operator

Thank you. We have the next question from the line of Harsh Shah from L&T Mutual Fund. Please go ahead.

Harsh Shah — L&T Mutual Fund — Analyst

Yeah. Thank you for the opportunity. Sir, just couple of questions. One, you mentioned the long-term NIM guidance of around 3%. Just two questions on that. Currently, we are at 3.55% and for this year, we are guiding for 3.5%. First, what are the levers to maintain that NIM? And once we come down to 3% on an average or plus, minus 10 basis points, what are the levers that we will have at that time to maintain our ROAA at 2% because our credit cost is also lower, our total cost as a percentage of asset is also not inched up significantly. So at 3% NIM, will we be able to go 2% ROAA?

Girish Kousgi — Managing Director and Chief Executive Officer

See, our guidance on margin in the long run is about 3% and not in the near future. For the simple reason, I think once we grow, on a larger base, showing growth would be difficult, but still we want to maintain that growth level and therefore there it will be a trade-off between growth and margins. The margins, the threshold would be 3% and 2.4%, right? Now having said that, we will also figure out avenues where we can try and increase our NIM. But we don’t want to tell that at this point because it’s very, very dynamic.

I’m not getting into the ratios. All I’m saying is that our growth in terms of disbursement and book will be 18% to 20%. In terms of margins, it will be 3% and 2.4%. In the near term, 3.5% and 2.5%. So whether we’ll be able to maintain ROAA of 2%, I think all those things, I will leave it to the investors. We can also work on that, but at this point in time, we are confident of — see, because for us, margin is more a function of what is the profit level that we need to maintain and it depends on the cost.

So depending on the cost of funds, we would moderate the yield. So today, we are at a particular yield because that is the decision point. And if you have to improve yield on portfolio A, B, incrementally also that we can try and do. So it is something which is in our control. It’s only a decision point from when we want to trigger that action. So wherever — okay, just to cut short the answer, if you have to maintain profitability and the return ratios, we can always moderate the yield and ensure that we show a higher profit, we show higher margins. It’s an action point. When we reach that time, then we will trigger the action.

Harsh Shah — L&T Mutual Fund — Analyst

Sir, when you say moderate yield, what do you mean by that?

Girish Kousgi — Managing Director and Chief Executive Officer

Moderate yield is increase or decrease in yield. For example [Speech Overlap]

Harsh Shah — L&T Mutual Fund — Analyst

So it is the flexibility you are saying?

Girish Kousgi — Managing Director and Chief Executive Officer

Exactly. Yeah. So for example, today, we are at yield of, let’s say, 8.55% now and let’s say, over next few quarters, if you have to increase yield to show better margins, so we will also try and build the book at a higher rate and also on the portfolio, depending on the increase in the overall interest rate in the market.

Harsh Shah — L&T Mutual Fund — Analyst

So, sir, that change in yield, does that require you to lend to a new set of borrowers? I mean, you’re not — that does not classify under your current set of borrowers? Or is it the existing borrowers where you will increase the rate? Or is it a mix?

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. Whatever we have discussed till now and what we’ll be discussing in this call will be based on no change in profile or the segment. There is no change in policy, no change in product, no change in profile, no change in segment, no change at all. The only change is going to be, today, we are 100% retail. What we’re discussing now going forward will be 99.5% retail and 0.5% would be builder funding. So that we are experimenting now with very small ticket size. So, that’s why this small change of builder funding up to 0.5%. Over a period of next three years, there will be no change in strategy whatsoever.

Harsh Shah — L&T Mutual Fund — Analyst

Understood, sir. And just, sir, second question to the rest of the team also. Where are we in terms of hiring the new CEO? Are we at a preliminary stage? Have you shortlisted? Are we at an advanced stage? Where are we?

Girish Kousgi — Managing Director and Chief Executive Officer

See, we have already given the task to headhunting agency and we are in the process there. Short listing has begun. So, we expect interviews to take shortly, depending upon which candidate is selected. We expect that whoever is selected will be given some time. By that estimate, we estimate that around, maybe new MD and CEO will be able to join at the end of this quarter.

Harsh Shah — L&T Mutual Fund — Analyst

Okay. So before the end of the calendar year?

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah.

Harsh Shah — L&T Mutual Fund — Analyst

I understood, sir. Okay, sir. That’s it from my side. Thank you. And all the best.

Operator

Thank you. We have the next question from the line of Punit Mittal from Global Core Capital HK Limited. Please go ahead.

Punit Mittal — Global Core Capital — Analyst

Hi. Can you hear me?

Girish Kousgi — Managing Director and Chief Executive Officer

Yes, we can.

Punit Mittal — Global Core Capital — Analyst

Hi. Just one question. When — one observation and if you can comment on it, when the news of the resignation of the MD came out, the stock price started falling way before the official announcement came out on the exchanges. So naturally, this information was passed on externally before the material news was published on the exchanges. Has the company looked into it of why that happened and who is responsible for that? Or has the company not observed any such thing?

Girish Kousgi — Managing Director and Chief Executive Officer

Now see, as far as we are aware, we have maintained complete confidentiality till such time we reported to the exchanges, right? So, I think as far as we know from the company, management side, I think there has been no laps on managing this entire resignation process.

Punit Mittal — Global Core Capital — Analyst

Okay. Thanks.

Operator

Thank you. We have the next question from the line of Shreepal Doshi from Equirus. Please go ahead.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Hi, sir. And congrats for the strong growth that you’ve delivered during the quarter. Sir, just one clarification. On the outstanding restructured — standard restructured book, you said that is INR647 crores on which we are carrying a provision of INR67 crores. Is that right?

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Okay. Okay. And sir, with respect to the ECL norms, like would we be going — like going forward, would we be disclosing the Stage 1, 2, 3 and the coverage on the same? Or if you could share currently, it would be very helpful.

Prashanth Joishy — Chief Financial Officer

The disclosure will be as per the RBI guidelines what we are required to do. So the same format is maintained.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Okay. Okay. And sir, on the yield side, have we taken any rate hike during the quarter, any changes on the rack rate?

Girish Kousgi — Managing Director and Chief Executive Officer

In quarter two, we haven’t increased because we had increased in quarter one.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Okay. And so going ahead like, are we planning to increase it in the next quarter?

Girish Kousgi — Managing Director and Chief Executive Officer

This quarter we are planning to.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

It would be by how many basis points?

Girish Kousgi — Managing Director and Chief Executive Officer

That we have not decided because last quarter, I think just before quarter two could begin, we had discussed in our internal meetings and therefore, we decided that we should not immediately increase because we are pretty comfortable on the yield spread and the overall margin and therefore, we didn’t increase the rates. So this quarter, we plan to increase and it will be marginal because even now we are pretty comfortable on the margins.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Okay. Got it. Sir, one last question. It is with respect to the Chief Risk Officer. So, I think there was a filing wherein Mr. Uthaya Kumar was designated as an Interim CRO. Because I think there was a superannuation of Mr. Narendra, I suppose. So are we in process of finding a replacement for that position as well?

Girish Kousgi — Managing Director and Chief Executive Officer

Yes, yes. We are in the process of hiring CRO, and that process is already on. And we have shortlisted few candidates and we have to see when — who is going to join.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Okay. So is there any update that, that is there for the CFO position?

Girish Kousgi — Managing Director and Chief Executive Officer

This is the same thing with CFO also. Same holds true for the CFO also.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Got it, sir. Thank you, sir. Thank you so much for answering my questions and good luck for the next quarter.

Operator

Thank you. We have the next question from the line of Ratik Gupta from Guardian Asset Management. Please go ahead.

Ratik Gupta — Guardian Asset Management — Analyst

Yeah. Hi, sir. So, I wanted to understand the relation between a average business per branch and the employees. What I see is, there has been a decrease in your average business per branch for this quarter as against the previous quarter, while there has been an increase in the average business per employee. And also we are seeing a decrease in employee expense for this quarter in a significant as compared to the previous one. So can you give a limelight on that?

Prashanth Joishy — Chief Financial Officer

Regarding the employee expenses last quarter was INR22 crores. This quarter it is INR17.83 crores, mainly on the account of actuarial valuation that is as per accounting standard 15, where we have to make the provision if the valuation of the investments are less than the committed. Now as we are aware, the G-Sec valuation has gone up this quarter, so the provisioning, what is required has come down.

Last quarter, that is Q1 we made a provision to the extent of around INR4.5 crores for the AS 15 considering of PL encashment, sick leave and gratuity expenses. That is why it has climbed to [Phonetic] INR22 crores but for which it was hanging around INR16.8 crores. This year it is INR17.8 crores with the additional provisioning of INR15.51 crores or INR51 lakhs what is mandated for AS 15, but for which it is INR16.87 crores. Employee cost almost remain the same as such.

Girish Kousgi — Managing Director and Chief Executive Officer

In terms of income average business per employee, last quarter was 30.87 and now it is 30.0. This is a marginal increase.

Ratik Gupta — Guardian Asset Management — Analyst

Yeah. But there has been also a decrease in the average business per branch. So I mean, what we can [Speech Overlap]

Girish Kousgi — Managing Director and Chief Executive Officer

We have opened four new branches. So, there is no difference in the branch count as well, but for four.

Ratik Gupta — Guardian Asset Management — Analyst

Okay. And my second question is on the borrowing going forward. Are we looking to increase our deposits or how is it? And if you can give me interest wise on what is the average interest rate that you’re carrying for market borrowing and the CP deposit?

Girish Kousgi — Managing Director and Chief Executive Officer

See, in terms of deposit, of course, definitely, we are keen on increasing our deposit base, but it also depends on what is the additional cost burden we are willing to take in our cost structure because as of now, the cost of raising deposits is much higher than many other sources. So having said this, a long-term strategy would be to try and increase the deposit base. Near term, it depends on how well it will fit into a cost structure.

Ratik Gupta — Guardian Asset Management — Analyst

Okay. And can you give me the average interest — the rate you’re carrying for market borrowing and the CP?

Prashanth Joishy — Chief Financial Officer

Market borrowing is below 5% as of now. And the deposit cost is higher than the average borrowing cost of the company.

Ratik Gupta — Guardian Asset Management — Analyst

Okay. Yeah. Thank you, sir.

Operator

Thank you. We have the next question from the line of Rishabh Dugar [Phonetic] from CD Equisearch. Please go ahead.

Rishabh Dugar — CD EquiSearch — Analyst

Good afternoon. So want to understand what is your competitive advantage in lending compared to banks and other housing finance companies?

Girish Kousgi — Managing Director and Chief Executive Officer

Okay. So today, if you look at market, market is quite large. There are a set of institutions which are building book at 8%, even less than 8% and some at 9%, some at 11%, some at over 14%, 15%, okay? Now if you see, there’ll be slight difference in the profile and there’ll be a slight difference in the nature of property, and there will be a slight difference in the geography in which they operate. So, we are in between. We are not as competitive as banks by design in terms of pricing. And also now we are very competitive compared to the next set of institutions which are raising — which are building book at a higher yield. So, this market gives scope for institutions to operate at different yields depending on the risk appetite of each institution.

So if you have to — so for example, we will have overlap in terms of business with PSU banks, with private banks, with HFCs with NBFCs. At the same time, we’ll also have — within HFC, there are different categories of HFCs, broadly categorizing based on the yield at which they build the portfolio. So, we are in between. So, we have advantage of moderating if we want to grow our book.

Now, we can be a little competitive on pricing and slightly better on profile and growth. At the same time, if you want to balance and increase our margins and profitability, assuming we have enough and more growth coming in, then we can probably try and build book at the higher portfolio. So just to answer your question in short, I think market is quite robust. It’s huge. And therefore, there is opportunity for all types of institutions to build book at different yield levels. So we are, as of now, somewhere in between.

Rishabh Dugar — CD EquiSearch — Analyst

Okay. So, you talked about that there is opportunity for all yield levels, but I just want to understand that how much do you think these things matter when money per se is a commodity and whoever lends competitively gets the business?

Girish Kousgi — Managing Director and Chief Executive Officer

It actually depends on the risk appetite. So for example, today, banks, they have cost of funds advantage and therefore, they go to CAT A builders, CAT A corporates. We don’t have cost of fund advantage compared to banks. We have an advantage compared to all the HFCs and NBFCs, rather we are the best in the market as of now. But we can’t really compete with big banks on cost. And therefore, our segment is CAT B builders, CAT C builders, CAT B corporate, CAT C corporate. If you look at a set of other institutions, they’re focused on probably CAT C builders, CAT D builders. So there are different segmentations. So depending on the risk appetite and how well they underwrite and manage the portfolio, they can figure out in which segment they need to operate.

Rishabh Dugar — CD EquiSearch — Analyst

Okay, sir. Thank you.

Operator

We have the next question from the line of Ankit Shah from White Equity. Please go ahead.

Ankit Shah — White Equity Investment Advisors — Analyst

Thank you for taking my question. Sir, just one question. What is the collection efficiency in restructured book, which become due?

Girish Kousgi — Managing Director and Chief Executive Officer

See, in restructured, as I mentioned now, the outstanding is about INR647 crores from the original pause of INR709 crores. In restructured book, about 21% of customers are paying in advance. Now out of the cases, what has fallen due, not even a single case is in DPD.

Ankit Shah — White Equity Investment Advisors — Analyst

All right. That’s it. Thank you.

Operator

We have the next question from the line of Mahek T. from Yellow Jersey Investment Advisors. Please go ahead.

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Hello. Sir, first of all, congratulations on good set of numbers. Hello?

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. Please go ahead. Thank you so much. I think a small correction. Out of the entire restructured pool, INR1 crores is in NPA now. And initially, we had anticipated that 7% of the restructured book that is approximately INR700 crores. So 7% would come to INR49 crores. So INR49 crores would slip to NPA and after a couple of quarters looking at the performance, we moderated that to 5%. That is about INR35 crores. Now the outstanding is INR650 crores. So, we expect in future 5% of INR650 crores to move into NPA. That is about INR32 crores approximately. We have close to INR49 crores, which we plan to recover from the existing NPA pool. So on a net basis, I think our GNPA would be still — it will be around 0.6% to 0.65%.

Yeah. Please go ahead.

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Okay. Okay. Sir, first of all, like are there any plans for the — like for Canara Bank to exit from our company? Or do they plan to stay with us for the long term?

Girish Kousgi — Managing Director and Chief Executive Officer

As of now, I think bank doesn’t have any plan to exit from the company. I think last earnings call, Canara Bank has clarified, they don’t have any plans to exit from the company.

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Okay. And sir, how do we look at the growth from here in terms of net disbursement going forward? And comparing ourselves to other companies, like how do we place ourselves in the market in terms of the growth journey from here on? Do we plan to have any strategy to capture the market share as such in the affordable housing segment itself?

Girish Kousgi — Managing Director and Chief Executive Officer

No. See, we don’t chase market share. We have a plan, we have a vision, and we try to execute to reach there. As of now, our plan is to grow at 18%, 20% for next three years to four years’ time. And I think that is well in place looking at the demand and the way we generate, source, underwrite and manage the portfolio. So, we are right up there.

So, we generally don’t focus on market share, but we focus on we need to double in the next four years. And therefore, what should be the growth rate and therefore, what should be the internal enablement that we need to be ready with, to try and achieve that growth rate. So growth story is very much there. We will grow. Our focus is on growth. We will grow. At the same time, maintain profitability, keeping the risk fabric unaltered, which means GNPA will be very much under control, of course, with high liquidity.

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Okay. And sir, you mentioned that you are trying your hands with the builder finance with a small ticket size, of course. If this works fine, like how and what time journey — like in how much time will you be able to comment if this worked in favor or not? And if it works fine, does the company plan to increase the exposure in this particular direction as well?

Girish Kousgi — Managing Director and Chief Executive Officer

So actually, we raised funding to builders few years back. So it’s not that we are new to the segment. We wait, but of course, that was few years back. And this might take another, let’s say, 12 months to 18 months’ time to have some reasonable exposure, not in terms of percentage because we don’t never intend to cross 0.5% of the portfolio at least in next three years’ time.

So in next 12 months to 18 months’ time, we might have a very small book. I think then will be able to comment, but we don’t want to lose out this opportunity. Having said that, we know it’s very risky. So, we will start very, very small. And this is more of a pilot, I could say. And I think once we are successful in pilot, then we will gradually probably try and increase, but definitely not more than 0.5% in next three years at a portfolio level.

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Okay, sir. And sir, like from this quarter’s results, we see the interest cost has gone up further in absolute terms, of course. Is it primarily because we have not passed on the cost to the user — to the customers?

Girish Kousgi — Managing Director and Chief Executive Officer

Partly, yes. You’re right.

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Okay. And what will be the other reason for that?

Girish Kousgi — Managing Director and Chief Executive Officer

There has been increase in cost by 24 bps from 5.8 to 6.04. Now if you look at the yield, I think yield has gone up only by I think, 7 bps or 8 bps.

Mahek Talati — Yellow Jersey Investment Advisors — Analyst

Okay. Thank you. Thank you so much.

Operator

Thank you. We have the next question from the line of Sakshi Goenka [Phonetic] from Soham Asset Managers. Please go ahead.

Sakshi Goenka — Sohum Asset Managers — Analyst

Hi, sir. Congrats for a good quarter, and thank you for the opportunity. Hello? Am I audible?

Girish Kousgi — Managing Director and Chief Executive Officer

Yes, ma’am. Please go ahead. You’re audible.

Sakshi Goenka — Sohum Asset Managers — Analyst

Yes. Thanks, sir. Sir, just two set of questions. First, if you could tell us what is the rack rate? And secondly, sir, I just wanted to understand the cost of funds. You mentioned that your incremental cost of fund is currently at about 6.48%, 6.5%. Sir, if I look at all sorts of borrowing avenues, the one-year CP or even bank MCLR, they are much, much higher than your incremental cost of funds. Sir, I just wanted to understand, is your bank borrowing fixed in the sense it’s not linked to MCLR because how are you managing such low incremental cost of funds?

Girish Kousgi — Managing Director and Chief Executive Officer

Thanks for the question. I think we’ve been a leader in managing cost for many, many years. You’re right, our rack rate is 8.75%. And depending on the product, depending on so many other parameters, the rate would be more because our incremental yield is 9.02%. Our rack is 8.7%. The incremental yield is 9.02%. Incremental cost is 6.48%. At a portfolio level, our yield is 8.55%. And cost is 6.04%, which has increased by 20% [Phonetic] compared to last quarter.

Now, I think I must really thank my team for managing costs very effectively. So, we have a very efficient team and they’ve been managing this. Having said that, the way we manage cost is that we don’t use CP for funding purpose. We use CP as a cost effective — not tool, but to keep the cost lower because we feel that generally CP rates would be little lower than other source of borrowing. And therefore, we have that arbitrage, which we can try in cash. Suppose if CP rates goes up, then we will not avail any CP.

So, we are agnostic in terms of source as long as we get the right cost and if it fits into a structure, then we would try and go. And this is beyond the regulatory norms. So for example, for all the incremental borrowing, 25% has to come in by way of NCD. So that irrespective of costs will go and raise, time the issue to keep the cost low. Otherwise, we are agnostic with respect to the source. And that is why we’re able to manage our cost better.

Sakshi Goenka — Sohum Asset Managers — Analyst

Sir, is our bank borrowing linked to MCLR?

Girish Kousgi — Managing Director and Chief Executive Officer

See, in fact almost all, barring some of the borrowings from NHB, which is fixed. Some are fixed for some period and then, of course, it’s floating. Other is, by and large, all the borrowings are linked to variable in some way or the other. It could be repo linked, it could be T-bill linked, right? I think in some form or the other, almost all the loans are variable, but for the lending what we get from NHB, so there we have some portion of fixed.

Sakshi Goenka — Sohum Asset Managers — Analyst

Understood, sir. Thank you so much.

Girish Kousgi — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. We have the next question from the line of Punit Bahlani from Nomura. Please go ahead.

Punit Bahlani — Nomura — Analyst

Hello?

Girish Kousgi — Managing Director and Chief Executive Officer

Please go ahead, sir.

Punit Bahlani — Nomura — Analyst

Yeah. Just one data keeping question from my side. Can you share the number of — like the amount of write-offs for this quarter and like for the entire H1 ’23?

Girish Kousgi — Managing Director and Chief Executive Officer

This quarter is zero. Last quarter is zero. Last one year is zero. We have not written off anything at all. Last one year is zero. In fact, the last two years — last two years is zero. We’ve not written off. So it’s zero. Last two years is zero. In fact, we’ve not written off at all.

Punit Bahlani — Nomura — Analyst

Okay. Yeah. Okay. Yeah. That’s it from my side. Thanks.

Girish Kousgi — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. We have the next question from the line of Anusha Raheja from Dalal & Broacha. Please go ahead.

Anusha Raheja — Dalal & Broacha Stock Broking Private Limited — Analyst

Yeah. Thanks for taking my question. Just one question from my end. Why you’re looking for replacement at the top team? Like you said, there will be a replacement for CRO, CFO, and MD and CEO. MD and CEO, we understand, you got a better opportunity, but why at the CRO and CFO level?

Girish Kousgi — Managing Director and Chief Executive Officer

See, Board has decided since company is going to hire some professionals from the market, so in line with that, it has been decided that CFO and CRO has to be hired from the market.

Anusha Raheja — Dalal & Broacha Stock Broking Private Limited — Analyst

Apart from that, any other reason?

Girish Kousgi — Managing Director and Chief Executive Officer

No, no, there is absolutely no other reason. All the existing CRO and CFO are the employees of the company since long and they will remain with the company.

Anusha Raheja — Dalal & Broacha Stock Broking Private Limited — Analyst

Okay. Okay.

Operator

Thank you. We have the next question from the line of Shreepal Doshi from Equirus. Please go ahead.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Sir, thank you for giving me the opportunity once again. Sir, the question was on yields. So if I look at the calculated yields and the difference between calculated yields and the reported yields is significant. So the calculated yields comes out to be at close to 9.3% versus your reported yield of 8.6%. Sir, just wanted to understand what explains this significant difference here? Like what all things does come in the base when you calculate it? So just wanted to understand it, sir.

Prashanth Joishy — Chief Financial Officer

No, calculated yield — see, incremental yield is 9.02%, as we told earlier in the con call. The book yield is at 8.55%. So what you told is correct. 9.02% is correct yield, but it is only for the quarter earnings. Let me stress that disbursement what we’ve done is 9.02%. And overall is 8.55%. There is a book yield.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Sir, in the book, you only take the advances or like, right?

Prashanth Joishy — Chief Financial Officer

It consists of all advance; housing loans, non-housing loans, yield on our investments and all put together. It is the average yield of each and every loan.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

Okay. And sir, what would be the impact of the investment yield on our overall yield if you could just give some color for this quarter at least?

Girish Kousgi — Managing Director and Chief Executive Officer

Yes. Investment yield will be now almost at par with slightly higher than our incremental average cost.

Shreepal Doshi — Equirus Capital Private Limited — Analyst

[Foreign Speech] Okay. Okay. Okay, sir. Thank you so much. I’ll come in the queue if I have more questions. Thank you.

Operator

Thank you. We have the next question from the line of Dhruvish Pujara from Mirabilis Investment. Please go ahead.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Yeah. Thanks for the opportunity. So, I have two questions. First is on the four branches which we expanded in the current quarter. So three out of the four come from Telangana. So wanted to understand like the thought process there. So like is the market dynamics different there, less than competition? Or what is driving that? And secondly, what is our Telangana geography AUM mix? And also you can state the top three states AUM mix? So that’s the first question.

And second, you already touched upon this, but I’m trying to reiterate and understand it better. So in the annual report, you have disclosed the bank wise burn [Phonetic]. There we have shown the exposure versus the rate. So if you do a weighted average of that and if you compare that with the respective bank MCLR, it is at least 100 basis points to 120 basis points lower. So trying to understand what is making the banks lend us at 100 basis points to 120 basis points lower and what will make them to continue doing this? So yeah, those are the two questions. Thanks.

Girish Kousgi — Managing Director and Chief Executive Officer

Okay. So if you look at the entire country, what is working for Can Fin well is southern region. So within south, if you see, I think initial days, Karnataka was doing really well. Now along with Karnataka, Telangana is doing really well, which is basically Hyderabad and a few districts, right? And therefore, of course, even TN1, inter-TN is doing well. AP is doing well. But within five states in South, Kerala is very, very, very small for us. From the rest four states, I think top two states are Karnataka and Telangana.

And therefore, we had planned to open more branches in Telangana and Karnataka. So, we have opened two branches in Karnataka, that is Bangalore and two branches in Hyderabad — three in Hyderabad, okay. So, our focus would be on the states which can give us more value in terms of business proposition and therefore, we had chosen this. This is the first question I think.

And see, today, I think we feel that for any finance company, be it HFC or NBFC, the starting point is asset quality, which is NPA. So if the company is able to manage the portfolio well because we — basically we do business based sort of — basically it’s a leverage business. So the entire business works on borrowed funds. And therefore, the company has to be very, very clear in terms of managing the portfolio well.

Since we are the lowest in the industry, I think lot of banks draw that comfort and they lend us at AAA rate rather sometime we get the best rates. So I think, fortunately, this has been continuing very, very long time, and we feel that as long as we’re able to show growth, maintain profitability and keep portfolio well, keep asset quality stable, I think we will enjoy this recognition from all the banks to be lend at a lower rate.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Okay. Got it. So sir, just one question here. So can you also state the percentage of AUM coming from Karnataka and Telangana individually?

Girish Kousgi — Managing Director and Chief Executive Officer

Okay. So Karnataka and Telangana would be close to about 42% to 43%.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Okay. And out of this, 30% would be coming from Karnataka, right?

Girish Kousgi — Managing Director and Chief Executive Officer

No, no, no. See, for example, Karnataka and Telangana would be almost same.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Okay. Okay. Got it. Thanks. So over time, I think Karnataka exposure AUM would have come down because earlier I think it was [Speech Overlap].

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. Yeah. Even though absolute numbers, it has gone up. As a share, it has come down because other states are now contributing.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Got it. Yeah. And last question. So is there any change in the guidance which we have given on the 10 to 15 branch expansion for the first ’23 breakup? I mean this quarter it’s four [Speech Overlap].

Girish Kousgi — Managing Director and Chief Executive Officer

On an annual basis, I think around 12 to 15 branches is the plan. So, there is no change in that guidance.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Got it. Thanks. Branches, which we will open in this year, I mean, in what timeframe do we expect them to do a disbursement per branch what we have right now? So would it take like maybe a year or two?

Girish Kousgi — Managing Director and Chief Executive Officer

For us, on an average, a brand would take about eight months to nine months to break even.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

And what time would it take to do the disbursement per branch?

Girish Kousgi — Managing Director and Chief Executive Officer

Month one.

Dhruvish Pujara — Mirabilis Investment Trust — Analyst

Month one. Okay. Okay. Got it. Thanks.

Operator

Thank you. We have the next question from the line of Jigar Jani from Edelweiss. Please go ahead.

Jigar Jani — Edelweiss Broking Limited — Analyst

Yeah. Thank you for taking my question. A couple of questions from my end. The first one is on the restructured book. So can you let me know how much could be still in moratorium and how much would — and when would it — most of the book come out of moratorium? That is the first question.

And the second is on credit cost. What would be your — would be your guidance for the full year now because I presume the provisions that you have taken in this quarter are largely to — because of the increased standard asset provisioning, if I’m not wrong because we have not had any incremental tax slippages this quarter?

Prashanth Joishy — Chief Financial Officer

So credit cost guidance for the full year would be in the range of 0.12 to 0.14.

Jigar Jani — Edelweiss Broking Limited — Analyst

Okay. Thanks.

Prashanth Joishy — Chief Financial Officer

And this is the maximum cap I am talking about. In fact, for this quarter, it is 0.04.

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. Regarding the restructured books, we have given this. Did I answered your question?

Jigar Jani — Edelweiss Broking Limited — Analyst

So restructured book is in moratorium? Is it the entire book as of now?

Prashanth Joishy — Chief Financial Officer

Yes. See, we have disclosed annual-semi results in the notes. Outstanding restructuring book as on date after the [indecipherable] accounting is INR704.5 crores. And they are coming out of the restructuring in a sales manner from December, January, February and March. And by the end of the financial year, all the loan accounts will be out of the restructured book.

Jigar Jani — Edelweiss Broking Limited — Analyst

Okay. I understood. Thank you so much.

Operator

Thank you. We have the next question from the line of Aahan Tulshan from Trivantage Capital Limited. Please go ahead.

Aahan Tulshan — Trivantage Capital Management India Pvt Ltd — Analyst

Hi. Thank you for taking my question. I just had one question. If you could speak a little more about the demand trends that you’ve been noticing whether across customer — different customer segments and different geographies, if you could talk about that a little bit? Thank you.

Dhaval Gada — DSP Mutual Fund — Analyst

Yeah. So, we are seeing demand from almost all geographies, but we are going little slow on Kerala and a little slow on Delhi-NCR region. But for this, we are seeing demand coming from all other geographies. So in terms of segment, it is very good and affordable. It is very good in non-affordable also. Affordable is slightly higher than non-affordable. And because of the increase in construction costs, in the premium segment, we see slightly less demand maybe by 5% or so. Otherwise, I think, by and large, demand is good across geography, across segment, across products. In terms of profile, self-employed still slightly less demand vis-a-vis compared to salaried. This is for Can Fin. So, we feel that in another one or two quarters, we will again get back to incremental mix of 70 salaried and 30 self-employed.

Aahan Tulshan — Trivantage Capital Management India Pvt Ltd — Analyst

Okay. Thank you. That’s it from me.

Operator

Thank you. We have the next question from the line of Umang Shah from Kotak Mahindra AMC. Please go ahead.

Umang Shah — Kotak Mahindra AMC — Analyst

Yeah. Hi. Thanks for the opportunity. Sir, two questions that I have. One is on the provisioning front. So how should we look at it going forward? I mean, do we follow the ECL model? Or depending on the balance sheet structure, we’ll keep on providing as per IRAC or keep switching between IRAC and ECL?

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah, I think it’s a very good question. I think structurally, even though technically, it says IRAC or ECL whichever is higher, but if you see the structure, ECL is always going to be higher compared to IRAC. And therefore, going forward, the provisioning would be based on ECL model.

Umang Shah — Kotak Mahindra AMC — Analyst

Okay. And basically, the credit cost guidance that you have spoken about takes this into consideration?

Girish Kousgi — Managing Director and Chief Executive Officer

Yes. Exactly.

Umang Shah — Kotak Mahindra AMC — Analyst

Okay. Perfect. Sir, second question is on how should we look at the equity raise that we had anticipated earlier. So about INR1,000 crores is what we were looking at. Any changes in terms of timelines or plans? Or we still intend to kind of close it by the end of this fiscal?

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. We are planning to raise capital. This could be now probably before March. So having said that, it may not be the full amount. It may be part of the enabling total quantum. Because as of now, our DR is less than 8 and capital adequacy is very comfortable. So basically, if we raise, it’s going to be growth capital. So we have planned, but we have not decided on the timing and the quantum. Of course, we’ve been saying this for a long time. That’s only because we are ready. We are ready to raise capital. As and when we feel the need, we will raise capital. But it may not be near future, but we are ready in terms of raising capital. And therefore, each time we take enabling approval and be ready.

Umang Shah — Kotak Mahindra AMC — Analyst

Understood. All right. Thank you so much, and wish you all the best. Thanks. Thank you so much.

Operator

Thank you. We have the next question from the line of Gaurav Jani from Prabhudas Leeladhar. Please go ahead.

Gaurav Jani — Prabhudas Lilladher — Analyst

Thank you, sir. And congrats on a good quarter. Couple of bookkeeping questions, please. One is, sir, what was the investment income for the quarter?

Girish Kousgi — Managing Director and Chief Executive Officer

Yes, sure. Second question?

Gaurav Jani — Prabhudas Lilladher — Analyst

Yeah. So, I would want the investment income for Q1 and Q2. That is the first half put together also. Secondly, the tax rate this quarter was higher. So what could be the reason for that?

Girish Kousgi — Managing Director and Chief Executive Officer

So actually — no, no. In fact, the tax — there’s no change in the tax rate. See, we had withdrawn INR21 crores from NPA, right? So on that, there was additional tax. And therefore, if you calculate the total amount of tax, it comes to INR30 crores, actually, there is a change in the tax rate. Only because we withdrew from NPA and now is sitting in standard, I think that additional thing is adding on to the total tax component.

Prashanth Joishy — Chief Financial Officer

And the interest from investment income, what we held for SLR, LCR is INR41.52 crores as of half year ending 30th September. The same was INR19.12 crores as of June.

Gaurav Jani — Prabhudas Lilladher — Analyst

Okay. Got it. This helps, sir. Second is more of a structural question. So if I had to look at the cost of funds trajectory, the pass on or the pass-through was pretty quick in terms of the rise, right? Now I’m sure systemic rates would stabilize at a point in time. So would that mean that the following quarter or the immediate quarter, this cost of funds rise would immediately get divested and probably we are looking at a better margin direct?

Girish Kousgi — Managing Director and Chief Executive Officer

No, this quarter, I think given the interest rate scenario in the market, I think the rates could slightly go up. So, we’re also prepared for that and we’ll also increase our yields. Just in case if it stabilizes, then we might still increase but by a small portion, small amount.

Gaurav Jani — Prabhudas Lilladher — Analyst

No, I meant stabilization in terms of, say, about two, three quarters down the line.

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. Definitely. We don’t expect interest rate increase by a large extent in next few quarters. So in that sense, it will get stabilized. Even our yield will get fixed.

Gaurav Jani — Prabhudas Lilladher — Analyst

Sure. Last question, sir, more on the management side. So one is, when is the CEO, CFO, CRO tenure ending? And how would — if that is the case, would it impact the intensity of the business?

Prashanth Joishy — Chief Financial Officer

I think our present MD is demitting office on 28th of this month. And I think it will — business will be as usual because the team remains and the guidance remains for the same. And we will do as — as we have been doing well, and so we are confident that the present momentum will be continued.

Gaurav Jani — Prabhudas Lilladher — Analyst

Sure, sir. In the interim, someone else would — maybe Interim CEO or something, or how would that come through because I think you mentioned that by the year end is when the new person could join.

Girish Kousgi — Managing Director and Chief Executive Officer

Till such time new person joins, Board has given me — I am the MD of the company to run the assets of the company.

Gaurav Jani — Prabhudas Lilladher — Analyst

Sure. And sir, when is the CFO and CRO tenure ending?

Girish Kousgi — Managing Director and Chief Executive Officer

So, CFO and CRO are the present — they are — nothing — they don’t have any definite tenure. They are the permanent employees of the company. Till new CFO, CRO joins, they will be functioning as CFO and CRO. Got it. Thank you very much. This helps. All the best.

Operator

Thank you. We have the next question from the line of Bhuvnesh Garg from Investec Capital. Please go ahead.

Bhuvnesh Garg — Investec Capital — Analyst

Yeah. Hi, sir. Thank you for the opportunity. I just wanted to know your gross Stage 2 number for the quarter and provisions against it.

Girish Kousgi — Managing Director and Chief Executive Officer

Can you please repeat again?

Bhuvnesh Garg — Investec Capital — Analyst

Sir, gross Stage 2 number for the quarter and provisions against the gross Stage 2?

Prashanth Joishy — Chief Financial Officer

You want to know the Stage 2 accounts. Stage 2 loans are around INR1,050 crores and provision held against the Stage 2 loans is around INR60 crores.

Bhuvnesh Garg — Investec Capital — Analyst

Okay. This INR1,050 crores includes the restructured book as well, right?

Prashanth Joishy — Chief Financial Officer

No. Restructured books separately INR704 crores. Put together, it you take into consideration, it’s INR750 crores against which we hold the provision of INR60 crores.

Bhuvnesh Garg — Investec Capital — Analyst

Okay, sir. All right. Thanks.

Operator

Thank you. We have the next question from the line of Chirag Sureka from UTI Mutual Fund. Please go ahead.

Chirag Sureka — UTI Mutual Fund — Analyst

Thank you for the opportunity, sir. Can you throw some light on the existing funding lines and the liquidity policy that we follow? And have you seen any cost impact in the incremental funds that we’re raising from banks and capital market?

Girish Kousgi — Managing Director and Chief Executive Officer

Yeah. We generally maintain seven months to eight months of liquidity. This used to be higher earlier, but we thought that is too much. So therefore, since we have better planning and better milestone in terms of business as well as fundraising and therefore, we maintain seven months to eight months of liquidity. Yeah, we have seen increase in cost. And sometimes it’s very dynamic. So, we see increase in cost between various sources of funds. So, this will continue for the next few quarters as well, may not be drastically, but to a certain extent, the cost would go up. So, our liquidity is in the range of seven months to eight months. Okay.

Chirag Sureka — UTI Mutual Fund — Analyst

And in absolute amount, what could be the sort of bank lines that we would be having currently, unutilized bank lines I mean?

Prashanth Joishy — Chief Financial Officer

Unutilized banks, what we are presently is having to the extent of around INR3,860 crores.

Chirag Sureka — UTI Mutual Fund — Analyst

And this would include NHB funding as well?

Prashanth Joishy — Chief Financial Officer

NHB funding is sanctioned for the company. That will be around INR2,500 crores. That is in the pipeline. We have a couple of loan sanctions which are in the final stage. If we take, that will be around INR5,000 crores, and this is already documented [indecipherable]. The amount is INR3,860 [Phonetic] crores. If you see the NHB and other banks, which have been in their final stage, consider that will be totally going to come around INR8,800 crores. That is around six months to seven months of our commitment line.

Chirag Sureka — UTI Mutual Fund — Analyst

Sure, sir. Thank you.

Operator

Thank you. We have the next question from the line of Varun Basrur from Julius Baer Wealth Advisors. Please go ahead.

Varun Basrur — Julius Baer Wealth Advisors (India) Private Limited — Analyst

Yeah. Good afternoon, sir. Thanks for taking my question. Just two questions. One is what percentage of the advances is from self consultant property? And in this case, what is the loan to value?

And the second question is, how much of the loans that we have are sourced from the parent company?

Girish Kousgi — Managing Director and Chief Executive Officer

Okay. The self construction would be about — self construction also includes plot purchase and construction. So this is about 30%. And business from parent bank, we don’t have any formal arrangement at the parent. So, we do market sourcing.

Varun Basrur — Julius Baer Wealth Advisors (India) Private Limited — Analyst

All right, sir. And market sourcing, how much is from DSA and how much is from our — from our own branches?

Girish Kousgi — Managing Director and Chief Executive Officer

DSA is about 79, and the rest is from branch. So when we say DSA, it’s only origination and the entire process is managed by the branch. But in terms of mix, 79 is DSA and the rest is from branch.

Varun Basrur — Julius Baer Wealth Advisors (India) Private Limited — Analyst

Okay. Okay. Sorry — construction, what’s the LTV?

Girish Kousgi — Managing Director and Chief Executive Officer

LTV will be — so if it is self construction, that is without including composite, LTV is about 65%.

Varun Basrur — Julius Baer Wealth Advisors (India) Private Limited — Analyst

All right. Okay. Thank you.

Operator

Thank you. That was the last question. I would now like to hand it over to the management for closing comments.

Girish Kousgi — Managing Director and Chief Executive Officer

From Can Fin side, we thank all the investors for standing with us since all this long year and we expect the same patronage will continue in the future also. Thank you. And I thank all the investors for supporting Can Fin and supporting me in this entire journey of three years. I think with all your support, Can Fin has put up very good show in last three years. Every single quarter, I think it has been a milestone quarter for us. In spite of COVID wave one, wave 2 and wave 3, then we had moratorium, we had restructuring, we had difficult times. I think in all the times, I think all of you have supported Can Fin and me.

I thank you all and look forward to engage with you very shortly. Thank you.

Operator

[Operator Closing Remarks]