Emerald Leasing Finance & Investment Company Ltd (BSE: 538882) Q2 2025 Earnings Call dated Oct. 11, 2024
Corporate Participants:
Sanjay Aggarwal — Managing Director
Gurmeet Kaur — Chief Risk Officer
Talin Aggarwal — Chief Technology Officer & Head Strategic Partnership
Analysts:
Chandni Chande — Analyst
Analyst
Mann Ashar — Analyst
Chandan Mishra — Analyst
Darshil Jhaveri — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Emerald Finance Limited Q2 and H1 FY ’25 Earnings Conference call hosted by Kirin Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Chandni Chande from Kirin Advisors. Thank you and over to you, ma’am.
Chandni Chande — Analyst
Thank you. On behalf of Kirin Advisors I welcome you all to the conference call of Emerald Finance Limited. From management team we have Mr. Sanjay Aggarwal, Managing Director; Mr. Talin Aggarwal, Head of Business Development; and Ms. Gurmeet Kaur, Chief Risk Officer.
Now I hand over call to Mr. Sanjay Agarwal. Over to you sir.
Sanjay Aggarwal — Managing Director
Good afternoon everyone. I am very pleased to welcome you all to our Q1 FY ’25 and H1 FY ’25 earnings call. Thank you all for taking time to join us today as we review our company’s financial and operational performance for the second quarter and for the first half of the financial year. With me is Ms. Gurmeet Kaur. She is the Chief Risk Advisor. She was earlier with the Citi Financial as Deputy Head [Indecipherable] and with Bajaj Finance as CRO. Also with me is my son Talin. He is CTO and Head for Strategic Partnerships.
As far as income is concerned, our total income for the Q2 ’25 on consolidated basis has grown by 80% to INR5.01 crore. And on consolidated basis, our staff has more than doubled by 139% to INR2.06 crore. For the first half year, our consolidated income has increased by 56 footprints to INR9.41 crore from INR6.04 crore, and bad has increased in the first half year by 108% to INR3.77 crores. Also we have received full payment against the warrants issued to monetary-based fund invested global in the month of May and in this current month in the month of September we are allotted at 26.7 lakh shares.
With this the total FY holding in our company has increased to 9.23% for the fifth row in a year in a row. We have declared a dividend and we will shortly pay in this current month. I’m very happy to report that we have zero delinquency in the first half of the year. There was a nil NPA in the first six months of the year. Also we have issued ESOPs to four senior in last year. And we are also in the process of issuing to five more employees in the current quarter. As far as our main product EWA is concerned, we have operational with almost what, 25 companies as of now.
We have just started funding salaries of the strike and charities of Chandigarh in Ministry Corporation and we are also in the process of tying up with at least one more such corporation in Uttar Pradesh. We have also tied up in the past month with a very large corporate in Mumbai which is providing back-end services to banks like Kotak Mahindra, Axis, and ICICI for EWA product. Throughout subsidiary in the distribution business we have funded in the first half of the year more than INR110 crore in gold loans. This is mainly done through HDFC Bank and Axis Bank.
I would like to keep it very short so you have more time for questions and answers. In the closing, I would like to express my gratitude to all of our shareholders, customers, partners and especially to our employees as they continue trust and support. We are really excited about their opportunities in the coming months and years and we continue to hope to continue delivering sustainable growth and value.
I’m looking forward to some questions from your side, please. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Vishal Singh from Investor [Phonetic]. Please go ahead, sir.
Analyst
Am I audible?
Sanjay Aggarwal
Yeah Mr. Vishal.
Analyst
So, first of all, congratulations on a good set of numbers.
Sanjay Aggarwal
Thank you very much.
Analyst
Sir in last call, sir, you have said that in your EWA program, you will tie up with — your target is to tie up with at least 100 corporates. And what I am seeing by following your company right now, we are at 25. So I think the guidance, you’re very optimistic or you have some plans to meet your target by the end of this financial year? And the second question is, sir, I’ve gone through your media review and what I can see that you have started a loan kind of thing. So is there any NP overview in there because it is very dependent on media program. So what is overall thought process on this?
Sanjay Aggarwal
Come again for the second part. I cannot understand the second question please?
Analyst
Sir, I have gone through your media release — media release you have given and I can see there is some something written like you started a token loan kind of thing that will be starting within — starting from Q3. So what will be the NPA overview on this because our company is not up to any NPA?
Sanjay Aggarwal
Got it. Got it. See as far as your first question is concerned, we have tied up with already 25 companies and what we have established and started producing results. Now we are planning to target at least 15 more companies in this quarter. That will take us the numbers to 40 and then we should open as a network spending and the number of companies also onboarding is started increases. So at least 15 we should onboard in this third quarter and the balance will hopefully we should be able to in the fourth quarter. And your second question regarding new product lines in static?
Analyst
Yes sir. Yes sir. The new product that is [Indecipherable]?
Sanjay Aggarwal
Gurmeet, would you like to discuss this?
Gurmeet Kaur
Yeah, Sanjay. So when you talk about the new product line, it is going to be variation of the unsecured loan small ticket size that we are talking about. We are going to be introducing small ticket-size personal loan to our EWA corporate partners and we are also looking at an option of tying up with various merchants who provide different services or products online. And so an EWA, EWA customer can opt to use the limit to purchase that particular product as well.
Analyst
And ma’am, in EWA product the salary which are given by the corporate, the EWA advance is being deducted from the salary slip. When your customers is opting for this loan the same thing will be done by corporate either online?
Gurmeet Kaur
Yes please. So depending upon the eligibility criteria which will be different in order to mitigate our risk and also what is the percentage of the salary that we’ll give as a small ticket personal loan, this will become more like an EMI product. So an EMI product to be paid between three months to six months. So the repayment every month will be deducted by the employer from their salary. And during this particular time when the first loan is going on, he cannot withdraw on his EWA limit. So that is how we will be mitigating the risk.
Analyst
Yeah. Okay. That’s very good — great to know, ma’am. Thank you very much for your endeavors. And I see this company on the new world scales. Thank you.
Gurmeet Kaur
Thank you very much.
Operator
Thank you. The next question is from the line of Mann from GrowthSphere Ventures. Please go ahead.
Mann Ashar
Hello.
Operator
I would request you to please use your handset.
Mann Ashar
Yeah, I’m using my handset. Am I audible? Yeah, yeah, yeah. Hello, sir. Congrats for a very good and healthy set of numbers.
Sanjay Aggarwal
Thank you.
Mann Ashar
So I’ll start my question with a simple — I think that the understanding of mine is missing here. So like you are tying up with the corporate and you are advancing in [Indecipherable] loans up to one month of advance, right? So and hence there is zero delinquency. But what if the employee leaves the organization after taking the loan in? That is the NPA arises and the guarantee given by the corporates or that will be on our books.
Talin Aggarwal
Hi, if I may answer this. So the advance we give is a percentage of the recruit salary. So let’s say someone’s worked for 10 days, they have accrued salary was 10 days. In that case it spent four days worth of advance. So eventually if the person even leaves the organization, there’s enough in the full and final settlement with the company from they pay up.
Mann Ashar
Okay. Okay. So I think that. Yeah. This was missing from my understanding. Okay. Second was that [Indecipherable], right? The personal loans that will be tied up with the salary. So that is very similar to what the corporates are big, sorry, big banks are doing, right? So it is unsecured small finance kind of a product. So the NPA’s are bound to arising in those. It will not be zero delinquency into kind of a situation, right?
Gurmeet Kaur
It’s very possible. Of course it’s very possible. But then the way we make our business plan, we always bake in what is the presumed risk that we are willing to take because if there is no risk, there is no return. So the pricing of this particular portfolio is also going to be different. The underwriting assessment that we would be doing for this customer is going to be both stricter than what we currently do for the EWA customer. And thirdly, what is also important to note is that they would be a minimum eligibility criteria that we will set for the employee of a company, right?
Who would be eligible for a product like that? We should have shown some kind of attraction on the EWA before we offer this particular product to this particular employee. And lastly, in order to mitigate the possibility of the customer leaving, we also have an EMAC which is set on his verified bank account. So in an event the deduction doesn’t happen, we can also automatically invoke the EMAC to, take the money from his account. And lastly, we also have an adequate selection set up. In an event a delinquency happened, we would do the systematic follow-up to collect our money.
Mann Ashar
So you said about certain qualities while underwriting. Can you expand on the underwriting process or the minimum criteria after which you will be advancing the loan to that person?
Gurmeet Kaur
I think one of the key things is that the policy will be very captive to the organization. However, just to give you a flavor of three key components of an underwriting process, is one, is the extensive KYC verification of the customer, including the video KYC. The second key element is the minimum eligibility criteria, where we look at the employment term, employment term. The net salary over a period of time, and whether this particular employee is permanent or permanent, contractual, or yet under his probation period, for example.
Yeah, there could be more minimum eligibility criteria depending upon different income brackets and organizations that we work for. And the third key component comes is what are the different assessments that we possibly do on this particular customer. It is going to be the bureau check that is going to be happening in case of. And this would be a physical verification that could be conducted to verify his current residential address, apart from, of course, the income and the debit that we would take from the bureau and from the employer. And then that will lead to a debt burden calculation.
Mann Ashar
Okay, got it. Coming back to the EWA part, right? So this is like a very low-risk kind of a business. I just wanted to understand the total time of the market, if it is possible [Indecipherable].
Talin Aggarwal
So the total TAM of the market I mean this is an evolving market. So EWA is a very new product in the Indian market. It’s very robust in the western countries, but in India, it’s very, very nascent where we have few players there. So all of us together are sort of creating the market. But if you want the total TAM on a monthly basis, that would come to a couple of thousands of crores. I mean, if you see the overall salary, data of India, and you just take a certain percentage of that, that would come to a couple of almost tens of thousands of crores per month.
Sanjay Aggarwal
So that is essentially the overall TAM we’re targeting. But again, as I mentioned, this is an evolving market. And us plus the competition of the screen, sort of started to create the market as of today. It will take a couple of years for us to, reach a decent, uh, business and, more or less ease the TAM.
Mann Ashar
Got it. So, uh, in that case, if it is very developed outside India, then why the giants like HDFC, Axis, ICICI, they have like salary account tied up with big corporate. So for them, it is very integrated kind of a product. So why haven’t they targeted this market? Any reason?
Talin Aggarwal
So the thing is, one, this is a short-term small ticket loans. These are typically loans, with an average ticket size of INR25,000 for a tenure of one month. Plus they’re unsecured. So all these banks, the big banks, have a certain percentage of portfolio which they can allocate to unsecured loans. Plus they essentially do not prefer to do such small loans. Again, if you see, the market evolving from 2020 to 2021, there were hundreds of players doing loans less than INR50,000. But in the last year or so, a lot of them have moved on to greater than INR50,00 INR1 lakh loans because this is slightly riskier. Does the unit economics don’t work here in such a small ticket size.
Gurmeet Kaur
Talin, if I may just add another thing, there is also regulation for the banks that they can’t offer NIL interest products, okay? So EWA product that we offer is supported by a disbursement fee based on the amount of disbursements the person takes, and we don’t charge any rate of interest. So when you look at the consumer durable lending, which Bajaj Fincorp does, and it’s an NBFC or other companies who are doing it, they typically do a zero interest but it’s assessing fee-driven model. So the bank, because of the FASA and — the other compliances that they need to meet, they can’t do 0% lending, small ticket price clubs with 0% lending, and hence this particular value proposition does not fit.
Mann Ashar
Okay, got it. So in that case you see right, there are a couple of players who are building this Indian market. So just wanted to know the players who have, who are competing with you whether in private or public spaces. And also if it is possible, how the global scenario has evolved in past a decade or one and half decades. And who are you players in the global market who have shaped these market assets?
Talin Aggarwal
If I may take this. So in India, biggest competition is coming from right now, Jesse. So there’s a Bombay-based company called Jiffy. There’s a Bombay-based company called Jiffy. Then there’s a Bengaluru based company called Refined. So these are mean players other than us, who have been offering this to the Indian market and in terms of global competition. So this is a very advanced product in the United States. So us may, you have the likes of Oriente, you have DailyPay.
There’s another earnings state there. So there is a very, very, developed product. So the likes of Walmart, Taco Bell, McDonald’s employees use these products in those economies. So our target is also to, essentially eventually when the markets, as it is growing, could tap into these larger corporates services to their employees?
Mann Ashar
Right. So what is your view? So I think that U.S. doesn’t have that unorganized money lending which India has. So what is your view? Since it is a very small ticket size, like INR10,000 INR15,000. So that is one of the biggest competition that you might — you guys might be facing. So any views on that part?
Sanjay Aggarwal
That’s the biggest advantage we have at our end because these unorganized money lenders, they tend to charge exorbitant interest rates because they’re highly unregulated. So that is a very, very good opportunity we have. You know, once the market awareness is there, then I think we can very quickly tap into these stages because, as ma’am mentioned, we do not charge any interest. We only charge processing fees. It only comes to about1%, 1.5% on the transaction value as compared to a 5% 10% interest that these undergraduate players charge.
Mann Ashar
Sorry, sir, I was of the view that you are. You guys are charging the processing fee of 2%, 2.5%, 3% because I read the same on our first phone call so why this discrepancy?
Sanjay Aggarwal
It’s a range based on average it comes to about 2%.
Mann Ashar
Average it is 2%. Okay. And in that case, what IRR on the whole year comes out, if you were [Indecipherable]?
Sanjay Aggarwal
Aggregate IRR comes to above 26% to 28%.
Mann Ashar
26% to 28%. Yeah, cool. And so you guys are planning the personal loans which are tied up to the salary as well as EWA loans, right? So any particular disbursement figure or aum figure that you have in your mind right now?
Sanjay Aggarwal
As quickly we can grow and as much as we can grow this business,
Gurmeet Kaur
I think — this question you should ask us in the first quarter next year. Yeah. When we do this, when we do the next fiscal, you should be asking. We are in the phase of designing the product construct and getting our policies ready. So we would be able to give you most of [Indecipherable] information in another two months time.
Mann Ashar
Yeah, but the intention behind asking this question was just that I wanted to know what amount of funding will you guys require? Do you have certain debt with the ratio in mind? I guess it is two one. So what kind of funding?
Gurmeet Kaur
Talin, can I ask you to take this question? [Indecipherable]?
Talin Aggarwal
Yeah, see, funding is not an issue. We have sufficient credit lines and so very well capitalized funding is not an issue at all. There are a lot of underpriced limits also with us and we are very well capitalized right now.
Operator
Thank you. The next question is from the line of Aman Baheti from Mool Capital Private Limited [Phonetic]. Please go ahead.
Analyst
Hi, thank you for the opportunity and big congratulations to the Emerald team for a great set of performance this quarter. I have a few questions related to operating margins and strategy. So my first question is on operating margins. Sir, we have done around 70% this quarter and 68% for the first half. So are these kind of margins sustainable in the long term or? I. They seem to dip in the future?
Sanjay Aggarwal
As far as the either product is concerned, as we grow the business, we need to increase our team size. Currently we have a team of eight people, five or eight of consultants. So as the business grows, we need not increase the corresponding increase in the short employee pace. Plus our marginal rates are higher because most of its funding by the equity as we take — debt, more funding that may be heard, that margin might slightly increase because of that.
Analyst
So sir, do you have any figure in mind like a sustainable margin figure that you want to continue with?
Sanjay Aggarwal
We don’t have any figure in mind as such. Let’s see whether things come to this. As far as I think for the EWA product on the very that we are doing what one and a half close of investment right now, even if you go up to INR100 crores, you may not have to corresponding increase in the team size. You just need help towards the people and maybe some collection teams.
Analyst
Right sir. So are we keen to hire some people because we want to get like hundred clients this year or next year? So are we looking to hire more people to get more clients?
Sanjay Aggarwal
We are engaging with more and more agents because they are not a very good forfeiture. They are not a fixed forfeiture. We already have a team of three people in our office who are handling business development. But we are planning to use engagement more and more against Pan India source more clients for us.
Gurmeet Kaur
Oh, can I just add here Sanjay?
Sanjay Aggarwal
Yeah, yeah.
Gurmeet Kaur
Yeah. So Aman, this is regarding the stand up control. So we have already built a foundation in such a way that most of our processes are automated. And because this is a small ticket size loan and it’s 100% automated kind of process, the need for having a very, a very large operational team is not required. You are right. As we grow the business we may end up having one or two senior people who will manage a more strategic alliance. But this particular business is not a people-driven business. This is more of a process-driven business, process and systems-driven business. Yeah.
Analyst
Right, right. And sir, I mean I’m asking on a corporate basis what is the average size? I mean of the corporate, I mean in terms of number of employees that we are targeting?
Sanjay Aggarwal
Currently, every ticket says about 200. But now like what we have tied up with Municipal Corporation of Chandigarh, we are still staff thinking about 3,000. And we have tied up with a very large it company, Chandigarh. Their staff strength of 1,500 and we are tied up with a large back end company in Bombay. Their transference for 900 but current, now the average ticket, ’25 or six-year term average ticket sales will be around 200 employees.
Analyst
Okay sir. Okay. And sir, apart from the EWA, do we charge any fee for just the salary processing thing for them? Sir, apart from our EWA product let’s say a company comes to you and asks you to just process their salary. So do we charge a fee for it or what’s the business model there?
Sanjay Aggarwal
No, we don’t charge them anything.
Analyst
Okay.
Gurmeet Kaur
And Sanjay, no this is a slightly different question if I may add. We don’t do any organization salary processing fees. We are not funding the salaries for the corporate.
Analyst
Right, right. I mean just what Razorpay does, right? Razorpay also does.
Gurmeet Kaur
We are not payment gateways. We are an NBFC sale. So we have an unsecured product which is an EWA product. So for the amount that the customer based on his eligibility that he withdraws and we take a withdrawal or a disbursement fee on that particular amount.
Analyst
Okay. Okay, got it. And Sanjay, sir, this is for you. So what is your outlook on the traditional business side regarding the SME loans and gold loans?
Sanjay Aggarwal
[Indecipherable] See, there are three lines of business. One is EWA. Second is the business owns what they’re doing. And third is the distribution business. Both and the distribution are the asset life and we continue to grow that. And that book also is performing extremely well.
Analyst
Right, sir? Right. Okay. So thank you for answering my questions. Thank you.
Sanjay Aggarwal
Thanks so much.
Operator
Thank you. The next question is from the line of Chandan Mishra from Finvesto. Please go ahead.
Chandan Mishra
Thank you, sir, for giving me chance to ask questions. First of all, I want to congratulate you on your good results. My question is regarding the guidance. During last phone call you have given guidance for 8 to 10 times in next three months — in next three years. My question are we maintaining for the same?
Sanjay Aggarwal
Yeah, definitely. I’m talking about the pack eight to 10 times growth in Pac in the next three years. Yeah.
Chandan Mishra
Thank you.
Operator
Thank you. The next question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead.
Darshil Jhaveri
Hello. Good evening, sir. Thank you so much for taking my question. I hope I’m audible? Hi, sir. So just first I just wanted to understand the business a bit better. So what is our average ticket size of the loan that we are giving in? So — just want to know. Okay. Who’s the person who’s taking a loan? Are they like the. So what would be like? It would be they’re giving around INR5000 INR10,000 loan or what is it?
Talin Aggarwal
The average ticket size for a customer is about INR20,000 per month.
Darshil Jhaveri
Okay. Okay.
Talin Aggarwal
These are people typically earning between INR30000 to INR50,000 per month out of which they.
Darshil Jhaveri
Okay, okay. Okay. Fair enough, sir. And so would you say that like our main competition in this from EWA would be that if someone could take a EWA loan or would they take — small loan that, other microfinance companies are offering. So is there like a direct competition from them or are we like most or are we more better than these loans?
Sanjay Aggarwal
So there is two things in this. So one, microfinance companies normally do not give a loan worth INR20,000, INR15,000 that for a tenure of a month or two months. Secondly, they are embedded into the corporate. We have a partnership with the corporate that the repayment is made by the corporate [Indecipherable] deduction so that you see the hassle of repayment on the customer.
Darshil Jhaveri
Okay. Correct. Correct, sir. Okay. And so just wanted to know like so our major income that we have like in the current quarter. So what we also do some part of gold, right? So gold loan business. So what part of comes from EWA services? And give me the basic breakup, like what percentage comes from which, like our income streams?
Sanjay Aggarwal
See almost 50% is right now from distribution income for the golden. What I’m talking about. We are distributors for HDFC, distributors for HDFC access bank where we get only fee income. There is no risk on our books. And currently, right now the income from EWA is not that high. But going forward, we expect that this will become a major portion of the revenue.
Darshil Jhaveri
Okay, okay, okay. Okay. Got it. Fair enough, sir. So just like wanted to know, like we’ve given a guidance of, you 8 to 10 times the pat in the next three years. So how would it be? Would it be a linear way or — maybe just like a year of building up and then we would see? So, just like maybe in the near term, like, what could you call, what can we expect next year for like, our growth?
Sanjay Aggarwal
What is organic growth — so, like, we have quarter on quarter we are growing [Technical Issues].
Darshil Jhaveri
Okay. Okay. Fair enough, sir. That helps a lot.
Sanjay Aggarwal
As the market expands [Technical Issues].
Darshil Jhaveri
Yeah, it’s a very interesting product that I think has, a lot of penetration is not there or awareness is not there in our markets. Okay then.
Sanjay Aggarwal
Very popular in U.S. [Indecipherable] Indonesia, Philippines. They’re completely becoming really big, I was really surprised, the way that companies are growing in Philippines and Indonesia, EWA companies are going to that part of the world.
Darshil Jhaveri
Okay, so, sir, do we have, like, any competition from any existing players who are doing this? Like, any threat of, like, there will be more competition and — like, we are taking a 2% season in that, come to a price war or something like that? So — could you.
Talin Aggarwal
Just, if I can answer this, please?
Sanjay Aggarwal
Yeah, yeah.
Talin Aggarwal
So honestly, all of us together as a [Indecipherable] is expanding the market, just, creating market awareness. So in our case it’s better that we have competition. So when the faster the market grows, once the market is developed and then the question of size was product comes into place. But for us to reach the market needs to grow first. So it’s better for in our case that we have good competition coming in.
Operator
Thank you, ladies and gentlemen [Operator Instructions] The next question is from the line of Ankur [Phonetic] from ABC Capital. Please go ahead.
Analyst
[Technical Issues] how many loans were disclosed?
Operator
Sorry to interrupt you, sir. I would request you to please use your handset.
Analyst
Hi. Just wanted to know some KPI’s on EWA for this quarter? I think you mentioned some 40 odd clients are there. But what is the total employee?
Sanjay Aggarwal
Existing we have 25, we are planning to increase the 15, more than 40 in this quarter.
Analyst
So in 25 clients, what is the total employee strength? And out of those employees, what the loans actually will dispersed first? I’m just trying to find out percentage of offtake, if I may call it.
Talin Aggarwal
What is the query, sorry?
Analyst
Okay. What I’m trying to understand is the percentage of offtake amongst the employees?
Talin Aggarwal
About 15% of the employees use this program on a monthly basis. We have a retention rate of 90%. But in any corporate, 10% to 15% is the engagement rate as of now.
Analyst
And retention rate is at corporate level, right? Because you are ongoing?
Talin Aggarwal
On an employee level. On an employee level. So the employee transact today, the 90% chance they transact again next month.
Analyst
Okay, so 90% of 15, right? So next month, basically 13.5%. Is that fair?
Talin Aggarwal
[Technical Issues].
Gurmeet Kaur
And if I may just add here, Talin sir, this is also a journey. So when the program gets launched and the more and more awareness gets spread about this particular program to the employees, there are new employers who are also joining on a monthly basis from the same organization. At first, this is not like one-time onboarding where we are just doing the eligibility and we are offering.
So we would keep on having organic customers and we have the repeat customers that keep on coming from the organization. But an uptake rate on a stable study basis, about 15% of the people will use the facility. And it is very similar to when you do the market tax on unsecured loans as to what percentage of the population is actually facing unsecured loans so which is very kind of synonymous.
Analyst
Yeah, that’s fine. And of the clients who have been with you, let’s say for a quarter or so has the 15 clients like, what’s the journey like? They do start with 10% and peak out at 30% or is it too early to figure around that part?
Sanjay Aggarwal
I mean it’s all over the place. In the first one is a bit slow, when the awareness is setting up amongst the company. But eventually when people start transacting, they tend to — the word of mouth tends to spread. And then we see a uptick in the second and the third month, and then it keeps, in a linear fashion, keeps going up, up to a certain point.
Analyst
So what is the highest?
Sanjay Aggarwal
[Technical Issues] they are a company of almost 400, 400 employees and we have about 80, 80, 90 people transacting on a monthly basis.
Analyst
Sorry. Is that Talin?
Talin Aggarwal
Sorry.
Analyst
Sorry, I didn’t catch your name. Is it Talin?
Talin Aggarwal
Talin, correct.
Analyst
Talin, what is the peak penetration you have seen so far in any client?
Talin Aggarwal
About 20%.
Analyst
Okay, that’s fine. And if you guys can just give more details of that unsecured loan product you are referring. So you will offer it same clientele who are offering opting for EWA or what?
Talin Aggarwal
We will operate within the companies are EWA, EWA corporate. And again, to people who have been, transacting, who have been our regular EWA client transacting for EWA. And we, according to the minimum analytic criteria that we set for the entire company, accordingly, we, for listed clients for whom we can offer the loan.
Gurmeet Kaur
And Talin, if I may just add here, we would be starting with qualifying the employees who are already transitioning on either. But this particular product also would be proposed into the corporate as a standalone product for other employees who are not keen on a salary advance. But then, they may have, they may have emergency fund requirements or systematic fund requirements where they would like to pay us in three to six months installments. So there would be different underwriting criteria for both the categories. One, because we already have a history of performance with us and the other person is a new guy. So there would be some more underwriting — steps that we will execute. And we can also offer them standalone small ticket size.
Analyst
So two questions. One, when you’re signing a corporate, do you get access to salary data of all the employees or you get data only for the employees who [Technical Issues]?
Talin Aggarwal
Depends for companies corporate to corporate, whatever their IT policy demands.
Analyst
Talin, what I’m trying to understand is, let’s say you’re saying you have a 15% off-take, right? If you get data, salary data for entire 100%, then there is a massive database being created on the credit history of a larger pool which can be monetized differently. So is it possible to monetize the entire 100% database or that is not the strategy, or that is not [Technical Issues]?
Talin Aggarwal
As I mentioned. So again, in not all the cases we get the 100% database, it’s only in certain cases we do, because a lot of companies have strict it policies in place that they cannot share the data without the consent of the employee. Only when the employee logs in gives us the consent that I want to obey this facility, only then do we extract the data from the databases of the companies. So one is that, and second, again, we are trying a level best, to monetize as much as we can, not only with EWA, but even distribution of our other products through us, the other employee.
Analyst
Sorry. Then the unsecured loan, whatever the quantum today is or going forward, do you guys want to take it on, keep it on balance sheet, or do you think you will be down pulling or is it more of an aggregation model and then basically slow it down to even bigger NBFC or banks? What’s your current view on this insecure book, which you guys will build over a period of time?
Sanjay Aggarwal
[Technical Issues] keeping on our books also, something is not an issue with us.
Analyst
Yeah, that’s okay, sir, but just trying to understand, I mean, lower down a year later, you guys still want to carry it on your balance sheet or you want to downsell?
Sanjay Aggarwal
No, we like to carry on a balance sheet only. Since only very large ticket size cases, where they’re not very comfortable, you might, pass it on to some other distribution levels only. Other than that we keep it on our books only.
Analyst
Okay, and what was the EWA distribution in September month specifically in month?
Sanjay Aggarwal
INR1.4 crore.
Analyst
INR1.4 crore. So the annual run rate is still close to INR18 crore ARR?
Sanjay Aggarwal
So it will keep on increasing up [Technical Issues] customers to come from [Indecipherable] business. A lot of big corporate fees tied up in the month of September, so they should start maturing this quarter.
Analyst
Yeah. And one last question if possible, in your quarterly presentations. If you guys can just put down the trend of number of EWA clients, number of total employee base of those clients, and what penetration like that so that will actually help get us better?
Sanjay Aggarwal
Sure. Sure.
Analyst
All right. Thanks a lot. All the best.
Sanjay Aggarwal
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Dharmesh Patel [Phonetic], who is an individual investor. Please go ahead.
Analyst
Am I audible sir?
Sanjay Aggarwal
Yeah, Mr. Patel.
Analyst
This actually I wanted to ask your CRO Mrs. Gurmeet Kaur. Ma’am, we have a very concentrated set of customers in EWA program. Can we get clients from other cities like Mumbai, Kolkata, indoor etc, other cities because right now we are just following Chandigarh or places around Chandigarh?
Gurmeet Kaur
I think that is the endeavor. When we started at EWA, it’s always better to start nearer to your own house because we did an extensive pilot for the first three months when we were setting the entire process and automation in place. And as we look at now the pipeline of clients that we’re talking to, we are already expanding the geography. So Talin and Sanjay, we have got now one of the biggest IT back services clients which is based out of Bombay.
Sanjay Aggarwal
[Technical Issues] clients from Pune, Hyderabad.
Analyst
And second question was ma’am, in the last con call we had tied up with an HR firm in Mumbai and we were planning to get some top clients like Tata’s or Mahindra’s. Any progress on this discussion with HR firm?
Gurmeet Kaur
Talin, would you like to take this question?
Talin Aggarwal
We are in talks and these are large corporates, very large corporates you’re talking about. So there, penetrating and then conversion takes a lot of time with this triangle. We’re just trying our level best convert these forms.
Sanjay Aggarwal
We were able to convert one very large U.S. corporate. The Indian office has cleared the proposal and has gone to U.S. now for approval.
Analyst
Okay, fine. And sir, I wanted to ask CMD, Mr. Sanjay, sir, I think in last, when I read our annual report you were allowed to, you drew less salary which was allowed to the CMD. Why was it, sir?
Sanjay Aggarwal
I don’t like to put more pressure on the company. Let’s see [Technical Issues].
Analyst
Okay. We appreciate this gesture. So you drew less salary than what you could take. We appreciate that.
Sanjay Aggarwal
We run a very tight ship.
Analyst
Okay. So we were trying to conserve funds for the growth of the company, is it?
Sanjay Aggarwal
Yeah, yeah, obviously, obviously. Small companies like to run a tight ship. Our expenses are very tightly controlled.
Analyst
Okay, that’s it. Thank you. All the best, sir.
Sanjay Aggarwal
Thank you.
Operator
Thank you. The next question is from the line of CA Vicar [Phonetic] from Accenture. Please go ahead.
Analyst
Yeah, thank you. [Technical Issues] last Con Call on the 17th and 15 July. Right now in last Con Call we have serving the 15 May. Right now is it 25 companies? Correct, sir?
Sanjay Aggarwal
Yeah, yeah.
Analyst
Yeah. And what is our business loan is there? Last time is INR47 crores. And new loan is INR2 crores. What is right now in the current quarter?
Sanjay Aggarwal
I think we close on INR56 crores. Approximately INR56 crore total.
Analyst
INR56 crore in business loans or including?
Sanjay Aggarwal
Both combined. I think INR1.4 crore is at the EWA. And the balance is the business loans.
Analyst
But in the last quarter is INR2 crore. Reduced number [Technical Issues]?
Sanjay Aggarwal
Come again? Come again.
Analyst
The last quarter you just mentioned the business loan is INR47 crore [Indecipherable] INR2 crore. Is a total INR49 crore?
Sanjay Aggarwal
I can’t [Technical Issues] we have INR65 crores total. So the book size is INR65 crore.
Analyst
INR65 crore.
Sanjay Aggarwal
Yeah. INR65 crore.
Analyst
INR65 crore is there. Business loan is there? Business loan what is the breakup of?
Sanjay Aggarwal
INR1.5 crore is what. [Technical Issues] and the balance is business loan.
Analyst
INR1.5 crore means is a INR64.5 crore is a business lone?
Sanjay Aggarwal
INR63.5 crore.
Analyst
INR63.5 crore. Okay. That is the reason. INR63.5 crore. Okay, understood, INR63.5 crore.
Sanjay Aggarwal
EWA is asset-light. And if every market gets turned on and the distribution fee income is almost 50% of the total revenue. And for the fee business also we did not have so no funds requirement for that.
Operator
Thank you, ladies and gentlemen. We will take that as the last question. I would now like to hand the conference over to Miss Chandni Chandra for closing comments.
Chandni Chande
Thank you, everyone for joining the conference call of Emerald Finance Limited. If you have any queries, you can write to us at researcheriskadvisors.com. once again, thank you for joining.
Sanjay Aggarwal
Thank you very much.
Gurmeet Kaur
Thank you very much. Have a good evening.
Talin Aggarwal
Bye. Thank you. Thank you, everyone. Bye.
Operator
[Operator Closing Remarks]