Home First Finance Company India Ltd (NSE: HOMEFIRST) Q4 2025 Earnings Call dated May. 02, 2025
Corporate Participants:
Unidentified Speaker
Deepak Khetan — Head Investor Relations
Manoj Viswanathan — Managing Director and Chief Executive Officer
Nutan Gaba Patwari — Chief Financial Officer
Analysts:
Unidentified Participant
Renish — Analyst
Abhijit Tibrewal — Analyst
Raghav Garg — Analyst
Rajiv Mehta — Analyst
Mona Ketan — Analyst
Nidhesh — Analyst
Rajiv Mehta — Analyst
Anusha Raheja — Analyst
Sanjay Jain — Analyst
Shreya Shivani — Analyst
Aravind — Analyst
Pavan — Analyst
Ravi Naredi — Analyst
Abhishek Jain — Analyst
Anusha Raheja — Analyst
Siraj Khan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Home First Finance Co. India Ltd. Q4 and FY25 earnings conference call. As a reminder, all participant line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Ketan, head investor relation of Home First Finance Co. India Ltd. Thank you. And over to you sir.
Deepak Khetan — Head Investor Relations
Thank you Sejal. Good afternoon everyone. Welcome to Home First Finance Company’s earnings conference call to discuss the financial results for the quarter and financial year ended March 31st, 2025. We hope you have had the chance to review our investor presentation and press release both of which are available on our website and the stock exchanges. Additionally, we have uploaded an Excel fact sheet containing historical data on our website. For your easy reference from the management Today we have Mr. Manoj Vishwanathan, Managing Director and Chief Executive Officer Ms. Nutan Gaba Patwari Ch, Chief Financial Officer. With that I now invite Mr. Manoj Vishwanathan to share his insight on our overall performance. Over to you sir.
Manoj Viswanathan — Managing Director and Chief Executive Officer
Thank you Deepak. Good afternoon everyone and thank you for joining us today. Before diving into our business performance, I would like to touch upon a significant strategic milestone that we recently achieved. During our previous call we mentioned about the enabling resolution by the board to raise fresh equity. In April 2025, we successfully raised 1,250 crores to a qualified institutional placement, issuing 1.3 crore equity shares to Maki Institutional investors. Details of which are available on our website and exchanges. The overwhelming response to our QIP reflects the market’s strong confidence in our vision, business model and execution capability.
This capital inclusion will enable us to accelerate network expansion, enhance operational capabilities and seize emerging opportunities in affordable housing space. Coming back to the business, we are absolutely delighted to share that FY25 has been another year of strong and consistent performance for Home first marked by robust growth, operational excellence and strategic execution. Let me walk you through some highlights. Our assets under management grew to 12,713 crores registering a 31.1% year on year and 6.4% quarter on quarter increase while delivering a PAT of 382 crores with an ROE of 16.5% for the full year 2025 we touched an ROE of 17% in quarter 4 FY25.
Our disbursements for FY25 stood at 4,805 crores up 21.2% year on year in line with our guidance for the year. For the quarter, disbursements grew notably increasing by 6.7% quarter on quarter. Business growth has driven by expansion and distribution strength in large affordable housing markets. During the fiscal 2025 we further expanded our network adding 40 touch points including 22 branches. This added our reach to 10 more districts within our 13 states and Union Territory. As of March 2025, our total touchpoint stand at 361 with 155 branches. As we expand our operations, we also added a net of 385 employees during the fiscal 2025 taking the total employee strength to 1,634.
Importantly, despite the continued rise in the NCLR of banks, we were able to leverage a strong balance sheet and well diversified borrowing mixed to maintain a competitive cost of borrowing EX colony of 8.4%. For the fiscal 2025, our borrowing stood at 9551 crores as of March 2025 and we are carrying a solid liquidity buffer of rupees 2468 crores. Our asset quality remains resilient with sequential improvement in early delinquencies. One plus GPD improved to 4.5% which is a decline of 30 basis points on a quarter on quarter basis. 30 plus BPD improved to 3.3% which is a decline of 10 basis points on a quarter on quarter Basis.
Gross stage three assets remain stable at 1.7%. Our credit costs continue to be contained at around 30 basis points. We maintain our conservative annual credit cost guidance of 30 to 40 basis points. Now turning to technology which continues to give us a competitive edge. Today 75% of our sanctions are being facilitated via the account aggregator framework, 80% of our loans are digitally fulfilled through the agreements and enact mandates and 96% of our customers are registered on a mobile app with 88% of service requests now raised digitally. On the regulatory front, environment continues to be supportive with two back to back rate cuts of 25 basis points each by the RBI and clear policy focus on promoting liquidity growth and governance.
The conditions are right for strong momentum in housing demand. Finally, I’m thrilled to share that our ESG journey is accelerating. We expanded our Green Home initiative during the year with 120 homes certified as of March 2025. Our ESG efforts are being acknowledged and appreciated by independent global agencies in the form of high ESG scores 46 by S&P Global for 2024 and 16.2 by Morningstar First analytics indicating low risk. All in all, it has been another exciting year. India’s housing story is only getting started and Home first is uniquely positioned to lead this transformation. With that, I now hand it over to Ms. Nutan Gaba Patwari to take you through the financials in a little more detail. Over to you, Nutan.
Nutan Gaba Patwari — Chief Financial Officer
Thank you Manoj. Good afternoon everyone. Let us start with the key financial metrics. Total income for the year stood at 1539 crores up 33.1% year on year and our profit after tax increased by 25% to 382 crores. This translates into a very healthy return on assets of 3.5% and ROE of 16.5% for the quarter. The 1,200 crores marked in profit as we posted a net profit of 105 crores with ROE of 17% demonstrating that even as we grow we continue to deliver strong profitability. Spread for Q4FY25 our spread excluding co lending is at 5.1%. Our cost of borrowing excluding co lending maintained at 8.4%.
Net interest margin for Q4 was at 5.1%. It expanded by 20 basis points on a Q O QIP driven largely by better liquidity management. Operating expenses to assets was at 2.7% for the quarter in line with our expectations. Moving to provisions and asset quality credit cost for Q4 and for the year so that 30 basis points. We continue to maintain our conservative medium term credit cost guidance of 30 to 40 basis points. We continue to adopt a conservative approach to provisioning, maintaining a provision overlay above ECL requirements. As of March 25, our total provision coverage ratio is 46.6% as against 50.9% as of March 24.
Moving to balance sheet and capital position Our balance sheet remains robust, providing a solid foundation to support the company’s growth plans. Our borrowing profile continues to be well diversified and cost effective. Reflecting our prudent financial management. 60% of borrowing come from public and private sector banks, 16% from NHV, 17% from assignment and co lending and balance from NCDs, ECBs and NBSCs. As part of our liquidity management strategy, we executed a direct assignment transaction worth 230 crores during the quarter. We continue to focus on CO lending business and are looking to scale with newer partners. We aim to take CO lending contribution to 10% of disbursements as we scale.
Our cost of borrowing is competitive at 8.4% enabling us to maintain our spread. Our current rating is AA minus From leading rating agencies coming to capital adequacy and liquidity. As of March 25 prior to April QYP, our capital adequacy stands at 32.8% with tier 1 at 32.4%. As at the end of fiscal year 25, our net worth stands at 2521 crores with book value of 280 rupees reflecting a strong capital position. The capital position looks very robust. 450. I would like to highlight some pro forma key numbers. Given our enlarged equity base post the capital infusion, our pro forma leverage has come down to 3.3 times pro forma capital adequacy Post capital raise will be 51% and a net worth of 3751 crores. To summarize, our financial position is extremely strong. Our balance sheet is well capitalized and we are sharply focused on scaling profitability while maintaining high asset quality. With that we conclude our opening remarks and now happy to take your questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ranesh from ICICI securities. Please go ahead.
Renish
Yeah, hi. Congress on trace of numbers Manojinhutan and also Congress for successful qip. Just two things. One on the spread side, right? So when we look at the incremental spread at 4.7 and when we look at the last four quarters trending spread is declining. So how confident we are that we will be able to sustain this 5 to 5.25 over medium term range when it comes to spreads.
Manoj Viswanathan
So Ranesh, if you look at the book spreads we have been. We are above the 5% mark and we have always maintained that, you know, we run a fully floating date book. So depending upon how the cost of borrowing is going we will transmit the difference to the customer. Of course now we are kind of entering a declining interest rate position so situation. So that is why we have not really embarked on any increase in rate. So the trend should reverse and margin should get maintained on the book. So that is how we are looking at it.
Renish
So basically we don’t foresee any pressure on spread from this level. Is that the assumption lower end of the guidance at 5%?
Manoj Viswanathan
Correct. So 5% plus we should be able to maintain, you know, because it is the, like I said, a floating rate book. So if you are going below 5% we will transmit the difference to the customer.
Nutan Gaba Patwari
Just to be clear, the guidance is on that excluding co lending book.
Renish
Yeah, but that is only 10 basis point of difference. Right.
Nutan Gaba Patwari
See our expectation is that we will be able to hold on to the cost of borrowing moving ahead. So we are comfortable with that 5% plus guidance on the spread excluding colendus.
Renish
Got it, got it. And just, you know, hypothetical situation, let’s say if there is no rate cut cycle, I mean, how do you see the asset yield moving? Just from a competitive perspective?
Manoj Viswanathan
Asset yields we likely hold in the 13.5% kind of a range. So. 13 point. 13 to 13 and a half. We normally maintain the tubes. You’re talking about the origination. Incremental origination.
Renish
Yeah, yeah.
Manoj Viswanathan
So we should be able to maintain it at that level.
Renish
Okay. Okay. And the lab mix, how should it stand out over next couple of years?
Manoj Viswanathan
Lab mix broadly in the 15 to 20% range. 15% is the current share of AUM while share of disbursal is slightly higher. 16, 17%. So that catch up is something that we have already communicated that over the next five years it can move up from 15 to 20%.
Renish
Okay. Okay. And lastly on this, you know PCR on the stage three, last year we were close to 30, now we are close to 25. So how one should read this data point on the pcr?
Nutan Gaba Patwari
So Ranesh, it’s essentially an outcome from the ACL model. So the only way to read is that the credit cost is improving and the resultant requirement of provisioning on the book is now kind of coming at around 25%.
Renish
And how often we refresh our VC on annual basis?
Manoj Viswanathan
Every year? Yes, every March we do the full activity of refresh. So we have just done this exercise in the last two, three months.
Renish
Okay. Okay. And just to clarify, on stage one we’ll be using 12 months ruling data, right?
Manoj Viswanathan
No, on stage one we use 12 month probability of default. But the database is used from business to date.
Renish
Okay. Okay, got it. Okay, thank you so much. Thanks.
Manoj Viswanathan
Additional comfort, we just had new auditors this time for as we know that, you know, auditors have to. So this is BSR’s first audit and they have done a full detailed verification of the ECL model and as you can see there is no meaningful change to what we were doing in the past.
operator
Thank you. The next question is from the line of Abhijit Debriwal from Motilal Oswal Financial Services limited Please go ahead.
Abhijit Tibrewal
Yeah, good evening everyone. Congratulations on a good quarter. I’m just nitpicking. Just wanted to understand bounce rates have inched up a little bit sequentially though it came down again in April. Also when you look at the asset quality GS3 for last seven quarters being in that 1.7% range, I mean I would admit we are seeing shades of this in other product segments as well given how the economy was. Right. So I’m just trying to understand, I mean today are there any customer segments, some cohorts or maybe geography wise where you are seeing some stress and which is actually leading to this or is it just a pure weak macro which is leading us where we are today in terms of collections or asset quality?
Manoj Viswanathan
No. So again as we have mentioned in the past, you know, can’t read too much into the bounce rate because that is just the data immediately after the first presentation and large percentage of customers actually make the payments immediately after the bounce. So if you see our early delinquencies, it is actually compressed this quarter. So I mean even in spite of the bounce rate being little high last quarter, you can see that the early delinquencies have come down. The one plus delinquency has come down to 4.5%. So there’s a 30 basis point reduction and even 30 plus 30 day past two has come down by 10 basis points.
So I would say we are not seeing anything other than what you are seeing on the asset quality. There is nothing which we are reading from the ground level data that we are getting.
Manoj Viswanathan
Basically bounce is more like some behavior change change that has happened in customers and which is where maybe they bounce when the national date is presented but pay up later when we follow.
Nutan Gaba Patwari
Correct, Correct.
Abhijit Tibrewal
Got it. Thank you. The second question that I had was for Nuptin more on the cost of boarding trajectory in this upcoming financial year. Let’s say it has 75 to 100 basis points cumulative rate cut. I mean what is the benefit that we are going to see in our cost of borrowings? The related question here again is now that we’ve already seen 50 basis points, have there been any changes in our PLR? And I mean lastly how are we thinking about margins now in this year?
Nutan Gaba Patwari
So I’ll try to go in the sequential order. So assuming a hundred basis points cumulative rate cut, what we have observed generally is that there is a 60% transmission if we take a very long term 10 year data but the transmission takes about 12 months to happen. So by now 50 basis points have happened another 50 basis points in this conversation so about 60 basis points but it will take cumulatively 12 months to come through on the bank borrowing part of it. Logically speaking it should also happen on the repo book and other EBLR book as well.
So that is the answer to your first question tlr. No, no changes have been made. What benefit has come through thus far is that if you remember our projection was 850 for quarter of four we’ve been able to hold it at 840 so we’ve been able to actually hold the cost of borrowing flat for now 3/4 despite the MSLR creep up because you know there are some shorter tenor linked lines which are getting repriced downwards. Moving to margins I think before margins spreads are important. Spreads is going to be in that 5 to 520 range that we have guided just now.
Margins is an outcome of equity because we’ve just had an equity raise the margins will expand for let’s say next few quarters and again as leverage starts to pick up six, eight quarters out we will see compression on margin. So the right number would be to look at spreads of five plus.
Abhijit Tibrewal
Got it. And then the last question I had here is, I mean now that the equity raise is complete have we or are we at least thinking about engaging with the credit rating agencies once again? So that’s so unity. And lastly again from Manoj, I mean from what we picked up from other housing finance companies during this quarter is maybe in the month of March the PSU banks were a little aggressive in mortgages but we’ve not really seen that kind of a competitive intensity from the private banks just yet. So if you could just briefly give some color on how the competitive intensities.
Thank you.
Nutan Gaba Patwari
So credit rating agencies, yes, we have started doing some work because the results have just got signed yesterday. We are hopeful that in the next few months we should be, you know, let’s put a six month timeline to this that we should be able to see initial signs of a credit rating upgrade. From my confirmation the banks, you’re right, private sector banks are not so focused today on mortgage. In fact there’s a significant sell down of books from their side on the secured side from a more on ground market feedback. I’ll just hand over to Manoj to walk you through.
Manoj Viswanathan
Yeah, so on ground feedback, you know I think news in the market is that yes the private banks are slightly less excited about mortgage but there is more activity amongst the nationalized bank and of course the larger SFCs are also quite Active.
Abhijit Tibrewal
Got it. This is all from my side. Thank you for taking my questions and I wish Manoj and you and your team the very best. Thank you so much.
Manoj Viswanathan
Thank you.
operator
Thank you. The next question is from the line of Raghav Gar from Ambit. Captain, please go ahead.
Raghav Garg
Hey. Hi. Thanks for the opportunity and congrats on the quarter and capital raise. I have three questions. So one is on the employee part. You hired a lot of people in FY25. The employee basis up some 31%. This is highest growth in any of the last four or five years. What are your hiring plans for FY26? Will you continue at this rate or will the hiring toned down materially, say compared to a 31% growth rate in FY25? Let me also ask my second question which is sort of connected to the first one. Historically we have not seen such a dip in 4Q employee base.
This time it was around 4% lower quarter on quarter. And I understand that employee attrition has been a challenge for the sector in general. From this backdrop, how was attrition on F25 and what do you expect for F26 on the attrition part? Thanks. And I have a third question which I can ask later.
Nutan Gaba Patwari
No problem. Raghavat. So on the employee part, yes, in absolute terms, the increase has been close to 400 employees. This is representative of our branch growth and our overall scale. The right way to calculate and forecast this will be about 10 to 11 employees per branch. At an organization level, actuals will actually be split between head office and branch. But from a modeling perspective, 10 to 11 employees per branch is what we should look at. Attrition for last year is 30%. It will be disclosed in an annual report which we will publish shortly. Year on year, attrition has come down by almost 2 to 3%.
So those were your two questions?
Manoj Viswanathan
Yeah, I think he’s looking at basically quarter four over quarter three and why the number of employees has gone down. So that is largely because, you know, the hiring gets bunched up. You know, so quarter one, there would be a large influx of employees. Quarter four, normally there is no influx of, I mean, additional employees because we do campus hiring. So the campus season kind of, you know, the hiring season ends in March and then people start joining from April. So the number of people joining in the last quarter is a little less. So basically the attrition catches up and there is a reduction in employee days in the last quarter.
Raghav Garg
And you expect that attrition would continue to come down even in FY26. Right. That’s the expectation right now, attrition coming.
Manoj Viswanathan
Down because between 24 and 25 attrition moment is this 2, 3 basis.23 or percentage points. So broadly, we think attrition in this segment remains at this level only. So 25 to 30% attrition is something that is kind of path for the course in our business.
Raghav Garg
Understood, Understood. Fair enough. The third question is, you know, so I will see some numbers and whatever hiring that you need.
operator
Sorry to interrupt, sir. Your audio is not clear. I would request you to please use your handset.
Raghav Garg
Is this.
operator
Yes, sir. Please continue.
Raghav Garg
Okay, so I would say that if you look at some of the data points that you provide, then it appears that the pile productivity has come down at F25, obviously because of such hiring, which indicates that it’s more of a denominator effect. Do you expect that this employee productivity will go up substantially? And if yes, can you give a number, say 5% or 15% increase over F25 or do you think that the productivity gains will be very limited given that you’re already best in the industry?
Manoj Viswanathan
So I would not project too much increase or decrease in the productivity. So those would be largely, like I said, quarterly movements, depending upon addition of new employees, etc. So when there is a large influx of new employees, the productivity drops a little bit. But broadly it should be. It will be range formed. We can’t expect a substantial improvement in productivity under 663.
Raghav Garg
Whatever run rate that was there for F25 is maybe a marginal improvement over that, not more than 3%. Is that something that we can assume?
Manoj Viswanathan
Yeah, broadly, in the same range, you can say last two years, average productivity is what we will be able to maintain.
Raghav Garg
Okay, thank you.
operator
Thank you. The next question is from the line of Rajiv Mehta from yes, securities. Please go ahead.
Rajiv Mehta
Hey. Hi. Congrats on strong results at the qip. So my question, first question is on two markets, Tamil Nadu and np. So as I see in the last three four quarters, the growth in Tamil Nadu on a sequential basis has been coming off. And we’ve not been adding multiple branches also in that particular market. Contrary, I think we are growing very fast in NP in the last two years and we are adding a lot of distribution out there. So just to understand these two trends in.
operator
Hello, Rajeev.
operator
Hello, Mr. Rajeev, we can’t hear you. I would request you to please use your handset.
Nutan Gaba Patwari
I think his call is disconnected.
operator
Yes, sir. We’ll move on to the next question. The Next question is from the line of Mona Ketan from Dalit Capital. Please go ahead.
Mona Ketan
Hi, good evening and thanks for taking up my question.
operator
Ma’am, I would request you to please use your hand, sir. Am I audible? Yes, ma’am. Please continue.
Mona Ketan
Yeah, so firstly, was there any element of recovery from written off this quarter? Because I see that net write offs are higher and yet credit cost is low. So just.
Nutan Gaba Patwari
Yeah, very minimal, not significant.
Mona Ketan
Okay. And just on the co lending business, wanted to understand if it is RO equative and you know, given that the yields are a tad lower than the overall portfolio yield, where is the accretion coming in the P L if you could throw some light there?
Mona Ketan
Or is it more like a volume business?
Nutan Gaba Patwari
So the co lending structure is roe accretive because we are able to move away the assets from the balance sheet. So that is the main reason why it becomes roe accretive because like I said just mentioned in the pml it appears in the interest income line and the interest expense line. Unlike assignment. If that’s your question.
operator
Right. Okay.
Mona Ketan
Okay. Yeah.
operator
So ROA wise it may be a. Little diluted but it’s roe accretive because. You use less capital.
Nutan Gaba Patwari
Absolutely. Yes.
Mona Ketan
Got it. And just finally on the OPEX to asset. So we did see some improvement last fiscal and Opex 2 assets seem to be at the lower end of your guidance at this point or for the full year FY25. So any color on the trajectory as.
Nutan Gaba Patwari
We go ahead Broadly in the same line, the OPEX has a significant contribution of employee cost and we are assuming the productivity in similar levels. We just touched upon that. So operating cost to assets we will also want to keep in this 2.7, 2.8 range.
Mona Ketan
Got it, thank you.
Nutan Gaba Patwari
More focused on growth for the next few years now.
Mona Ketan
Sure, got it.
operator
Thank you. The next question is from the line of Nadesh from Investec. Please go ahead.
Nidhesh
Thanks for the opportunity. First question is on growth for next year. What is the target of disbursement growth that we are targeting in FY26 and how do you plan that in terms of new branch addition as well as growth from the existing branches?
Manoj Viswanathan
Disbursement growth we are targeting around 20% plus. So somewhere in the 20 to 25% range is what we are looking at for disbursement growth and the trend will be similar. About 20, 25% will come from new locations, branches, expansion, distribution and 75% will continue to come from existing branches.
Nidhesh
Okay, sure. Second is on coal ending. So there have been draft guidelines from the regulator. Do you see any, any adverse impact of these guidelines on us?
Manoj Viswanathan
Adverse impact? I think, you know one thing that we are watching out for is basically the, you know, they are not mentioned the modus operandi of how this, you know, assets will get transferred. I mean till now we were following the co lending model too. But the draft guidelines do not have mention of that Model 2. So I think that is our only kind of, you know, thing that we are watching out for. Because If Kulning Model 2 is not allowed then how the assets will get transferred to the bank is something that we love to see.
I mean if it is as per model 1, then it is little tedious from a logistics perspective. Operationally it is a little tedious. So we have to watch out for that.
Nidhesh
Sure. Lastly, a data keeping question is active connectors as of March 25th and number of RM size of March 25th and what percentage of disbursement has come from top 10 car connectors.
Manoj Viswanathan
Yeah. So total connectors active as of now is about 3800. Close to 3800 connectors. Active connectors and number of relationship managers that is sales team would be got close to 1200 salespeople.
Nutan Gaba Patwari
And top 10 is below 4%.
Nidhesh
Okay, thank you. Thank you. Thank you.
Manoj Viswanathan
Thank you.
operator
Thank you. The next follow up question is from the line of Rajiv Mehta from yes, securities. Please go ahead.
Rajiv Mehta
Yeah, I’m sorry about last time. I hope I’m audible. Yeah, yeah. Hi. Congrats on strong result in QIP. So my question is on Tamil Nadu. So this 5 was to calculate growth on sequential basis. There has been some moderation in growth of Tamil Nadu market and we also have not been adding many branches in the last few quarters out there. So how should we read this? I mean are we seeing any competitive pressure, pricing pressure out there or any delinquency issue? And you know the reverse question is for you know, Madhya Pradesh where we have been growing very fast and by adding a lot of branches, I mean is that market, I mean besides the opportunity, is that market behaving well in terms of early relationship trends and hence that is giving us confidence to grow out there.
Manoj Viswanathan
Yeah. So as far as Tamil Nadu is concerned, we already have about 20 plus branches, about 24 branches there. So we have to, we are just kind of taking a step back and to see, you know, where we can expand, etc. And some leadership changes and those kind of, I mean kind of a recalibration over there in np. You’re right. I mean our, you know Initial calculations have gone right and we are able to expand and do well over there. So we are kind of investing more there. So these kind of, you know, you can say opportunistic moments will be there.
There will be some states where we are kind of taking a step back whereas another places where we are expanding etc. So this will continue. This will continue. I mean it’s not that we have, we have kind of capped out in Tamil Nadu. We will, you know, we are looking at making some changes and we’ll come back stronger.
Rajiv Mehta
Okay. And Nutan, about this borrowing mix, when I look at from a lender profile. So we have basically, you know, reduced our dependence on private banks and increase our dependence on banks pretty significantly over the last seven, eight quarters. How does it help us in the rate easing cycle? I mean, does it help us in terms of, you know, benchmarking of loans or negotiations or if you can explain that.
Nutan Gaba Patwari
So not so much specifically like that, Rajiv. It’s largely driven by relationship depth, size. For example, one of the reasons I can call out for the public sector bank expansion in March quarter is a large line from SBI and it just happens to be bunched up in a particular quarter. So that would expand substantially. But if you, I mean broadly it’s 30, 30 plus minus 5% between either of the two pools.
Rajiv Mehta
But if I were to ask you that the borrowings from PSU banks, say the stock and even incremental, are they coming at a final rates and private banks?
Nutan Gaba Patwari
Yes, at par. I would say that would be one. Of the key considerations for us to move ahead.
Rajiv Mehta
Got it, got it. And just one clarification about this. When you report collection efficiency and then you also did collection efficiency for unique customers, so the difference will be your OD collections and until recovery, right?
Manoj Viswanathan
No, no. It is basically the number of collections over. So if the same customer for example makes two payments in the same month, okay, that will get counted in the first bar, the higher one, but in the other one it will be counted as one.
Rajiv Mehta
Okay. So it can also be in advance and not just OD or.
Manoj Viswanathan
No, no, we don’t take advance. So it will be basically customers for example who are overdue by let’s say two or three people.
Rajiv Mehta
Yeah, exactly. So OD collections and.
Manoj Viswanathan
Yeah, yeah, overdue and NPS is so overdue and nps.
Rajiv Mehta
Correct. Okay, yeah, got it. Thank you.
operator
Thank you. The next question is from the line of Anusha Raheja from Dalalan brochure. Please go ahead.
Anusha Raheja
Thanks for taking my question. My question is Basically what is on the margin side, only the total borrowing 60% comes from bank borrowing 60. Tell us how much is repo rate linked or the NCLR rate linked? And secondly, our NHP drawdown, because I’m not mistaken, is closed from 16% off. So how do we see this number in FY26 more drawdowns? It is expected. And thirdly, again on the margin side. The origination yield in Q4 is 13.3%. Versus 13.5% of your blended yield. So that’s lower around by 20 basis points what the blended average yield is. And on the borrowing side also, I. Think incremental marginal cost of borrowing is at 8.6% versus 8.4% blended cost of borrowing. So if we need to throw some light on all these things and how this could impact the margins, I understand that you said that you will be maintaining 5% plus, but if you can also throw some light on all these things.
Nutan Gaba Patwari
Yes, sure. So starting with the first question on the repo and short term link borrowing, that is about 18% to 19% that is already there. And I also mentioned to one of the previous questions that we’ve already started getting some benefit through that and that is one of the primary reasons why we’ve been able to hold the cost of borrowing flat. Your second question was on NHV mix. NHP mix is about 16%. So NHP mix is in that range of 15 to 20% which we feel is appropriate for the size of our company. So we will continue to try to maintain in that particular range.
On the last question that you had around yields, so yields will be right now it’s about 13.3% and like we mentioned just a few minutes ago, the origination yield is range bound between 13 to 13.5 and we have a fully floating book. So if we have an origination yield in that range and when we start seeing the cost of borrowing moving downwards, we have the flexibility to pass it on to the borrower. And that gives us the confidence why we will be able to maintain this 5% plus spread on an excellent basis.
Anusha Raheja
Okay. And ma’am, you also mentioned the disbursements run rate of around 20 to 25% and so is that sufficient to maintain AUM growth of 30%? So what is a broad assumption in the rundown run out, run out of the book that you would have assumed.
Manoj Viswanathan
This runoff we have assumed is around 17 to 18%. So with the 20 to 25% dispersal growth, we should be able to get to about 26, 27 to about 30% in that range of AUM growth in that 17 18%.
Anusha Raheja
How much is the BTI out rate?
Manoj Viswanathan
BTO trade is about 77 ish. 7 and a half.
Anusha Raheja
Fine. Sorry, I did not answer. 17 18% is the total rundown or 20 25%. 17 18% is the total runoff. Thanks.
operator
Thank you. The next question is from the line of Sanjay Jean from Eventus Capital. Please go ahead.
Sanjay Jain
Hello. Yeah, thank you for taking a query. So my first question is on the aum. So as for the future guidance by the management, the AUM was 20,000 cr for FY27. So how comfortable are we to achieve that in the next two quarters and into financial year? And also are there any hindrances or risks that we may be facing to achieve those numbers?
Manoj Viswanathan
No, we are fairly confident of achieving the 20,000 mark in the next two years. We don’t see any anything at this point. We don’t see anything which is could be an entrance to achieving the 20,000.
Sanjay Jain
Okay. And could you give me any guidance on the 35,000 AUM as guided about for FY30? Yeah.
Manoj Viswanathan
So there again we don’t see anything that is seen as a major hindrance to reaching that number. We overall we seem to be on track to achieve achieving those now.
Sanjay Jain
All right, so thank you very much.
operator
Thank you. The next question is from the line of Shreya Shivani from clsc. Please go ahead.
Manoj Viswanathan
Hi.
Shreya Shivani
Thank you for the opportunity and congratulations on everything. I just have only one of my questions is unanswered. It’s again on the cost of funds. So you have reduced the liquidity buffer this quarter and Also you mentioned 18 20% is your report linkages right? So shouldn’t the cost of fund reduction. Shouldn’T that have been a little more. Or maybe if you can quantify the breakup of how much benefit came in. From repo, how much came in from. Lower liquidity and or something like that. That will be a little useful, no problem.
Nutan Gaba Patwari
So lower liquidity benefit will not come in the cost of borrowing line. It will come in a NIM line. So when we focus on the cost of borrowing line essentially what we are talking about is just these repo linked. When we talk about repo EDLR and short term it also includes for example a 3 month t bill but a 3 month t bill has not got repriced substantially. Then there is a repricing date. So everything has to be in order for that for it to become effective. So what has become effective is broadly just the repo rate.
So Then you know, you start slicing the 18% down to somewhere, let’s say 10%. So that is why you see a significantly or other flatter curve. Now let’s take a hypothetical situation. If this policy rate had not happened then we would have been at 850. So the delta really is about 10 basis points. Right. And we can look at double decimal to comment that exact number. The second question which you had was around liquidity. So liquidity is now giving an FFM a net interest margin line. So net interest margin Is improved from 490 to 510largely contributed by liquidity.
So I would say you can consider about half of it that has come through the liquidity line. And you know there are some other accounting entries that we have to take on mark to market transaction that you know the borrowing cost. So those who have contributed to the expansion of min.
Shreya Shivani
Got it. So of the 20bps 10bps is just. From the liquidity benefit that has thrown into the margins. Right. That’s that that broadly has there been a pickup in the cost of borrowing for any other lines that we have or. Mostly yeah.
Nutan Gaba Patwari
Yes. So whenever there is a historical like a 6 month NCL or a 12 month MCLR because bank and CLR has not come down yet, especially for public sector banks as and when they are coming on the repricing date they will increase. But if you’re asking me from a marginal cost of borrowing, no, we have been able to maintain in the broad range of 840 to 860 and we are hopeful that now we should start improving on that starting this quarter.
Shreya Shivani
Got it, got it. This is very useful. Thank you for explaining and all the best.
operator
Thank you. Thank you. The next question is from the line of Arvind from Sundaram Alternatives. Please go ahead.
Aravind
Hello team, thank you so much for the opportunity and congratulations on the good set of numbers. So like this BPO trade has been going on going up for a few quarters now. Like is there any like you know, competition reason like what to read there? That is one my first question and the second question is on like the coolanting norms which came out. So what do you like see like as opportunities or like you know all the headwinds or tie ins to our existing co lending model like in terms of either for you know margin impact or for the growth opportunities like whatever you would, you would like to you know call out in terms of you know very important takeaway from there.
Manoj Viswanathan
So on the BTO trade it is largely range bound so we normally see you know, last two quarters it is slightly higher first of quarter, slightly lower. So that kind of trend continued last year also. And so not much of a. I mean if you actually see quarter four versus quarter four it is a little lesser compared to last year. Quarter four 24 for 24 quarter of over 8.3%. This time it is 7.5%. So slightly lower the BTO traitors. So we expect it to be largely in that range bond between 6 to 8% only. And as far as co lending was your second question, right?
Aravind
Yes sir.
Manoj Viswanathan
On co lending. So new guidelines have been released and we have to kind of wait and I think there are still. They are still under discussion. We have to wait and watch on certain areas. It is definitely beneficial because now there is no ticket size gap on the co lending part. So that is actually beneficial. And you know, of course as I mentioned earlier in the call, there is no mention of the co lending model 2 in the draft guidelines. So that is something that we need to watch out for because that if coloning model 2 is eliminated from colending from the coloning process then it will make the coloning process a little tedious.
So that is a thing that we need to watch out for. But otherwise the guidelines are beneficial in the sense that it expands the addressable market for us.
Aravind
Sure.
operator
Thank you. The next question is from the line of Pavan from Ratnataya Capital. Please go ahead.
Pavan
Hi team. Congrats on the results. I just wanted to understand. The growth of this particular quarter has been pretty good. Actually it has been much better than last two to three quarters. So what has changed in this quarter? And there seems to be a spike in disbursements not only in home first but almost all the home finance lenders. So I just wanted to understand is there any structural change or is this a seasonal kind of thing that happens in Q4?
Manoj Viswanathan
Generally Q4 is always a big quarter for all the companies. And I think the same trend that we are seeing this year also in our case generally Q Q4 is not such a big skew. There is no, there is no major skew in Q4. It’s slightly better than the other quarters but not there is no major skew. So the same trend continues for us as well. So yeah, that. So that is broadly what it is. So we were like, I mean like we mentioned last quarter call also that we are broadly on track to achieve the annual numbers and so there was a slight increase in the quarter four and which helped us meet the annual numbers.
Pavan
Okay. On the assignment book, do we have any targets on direct assignments per year or how do we look at it overall?
Nutan Gaba Patwari
Overall largely, you know, driven by liquidity needs, relationship with the bank pricing, you know, some of those factors. No targets per se.
Manoj Viswanathan
Sorry, no targets. But broadly strange bond if you see as a percentage of a given.
Nutan Gaba Patwari
Yeah.
Pavan
Okay. And last question on the leverage side. Now since we have raised money, so how do we think about the leverage in let’s say two years ahead? I mean what is the kind of leverage we would like to operate on?
Nutan Gaba Patwari
See right now immediately after the fundraise we are at 3.3. We can easily go up to 5 plus. So we are good for four years thereabouts.
Pavan
Okay, so you are saying until next four years you might not need to raise again.
Nutan Gaba Patwari
That’s right. Because right now we will have a optical reduction in ROE and eventually that will also start catching up. So the equity will start accruing and that will also further support the growth on the AUM. So F530 probably we until that we are good. Unless of course we grow faster than our projections, then it’s another story.
Pavan
Okay, and as per your predictions, when we get back to the roe of let’s say around 16, 17% that we currently have.
Nutan Gaba Patwari
So our first milestone is to get to 15 plus which is in about six to seven quarters from now. Thank you.
Pavan
Thank you.
operator
Thank you. The next question is from the line of Ravi Naridi from Naridi Investments. Please go ahead.
Ravi Naredi
Thank you very much. Mammoji, you are really doing great. My question to Gabaji. Our borrowing rates are 8.4% which is higher than other recruit NBFC. They borrowed at 7.2 to 7.4. Why you pay higher rate? This rate of interest came down to us in 7.2% in financial year 22. But again it has rised.
Nutan Gaba Patwari
Yes sir. Sir, I think the larger NBSP that you’re comparing us with will be likes of Bajaj and PND Housing and perhaps some of the other names. So their credit rating is aaa. We are a professionally set up entity. Our credit rating is double A minus and the big difference is scale. Sir, we are hopeful that one day we will definitely get to AAA and then you know, we will match those rates. But we need some time to get there.
Ravi Naredi
So in how many years we’ll attend aaa?
Manoj Viswanathan
Right now we are double A minus. And we are hopeful that with this capital raise that we have done recently, we should be able to get one notch improvement. That is move to aa. After that you know there will be Double A plus which should probably take. It would take several years to get to a double A plus. So then after that we can look at. Look at our further increase.
Ravi Naredi
Yes sir. Again this GABA man HB maintain liquidity 2700 crore almost equal to one year. Aum, why we maintain such a higher liquidity buffer when we have unavailed bank credit limit?
Nutan Gaba Patwari
The 2500 that you are seeing, it’s not on the balance sheet. Out of that 1200 is on the balance sheet. The rest is on unaware lines only.
Ravi Naredi
Okay, okay, okay. And 28.7 crore we write off this year. How much recovery of earlier, earlier year write off we received during the year.
Nutan Gaba Patwari
You’re looking at the credit line, right?
Ravi Naredi
Right.
Nutan Gaba Patwari
But it’s not full write off. The write off portion of that number is about 17 crores. And the recovery that we’ve had is about 2 crores.
Ravi Naredi
So 15 crore is a net loss. Ultimate.
Manoj Viswanathan
Yes.
Ravi Naredi
Okay. Okay. Okay. Thank you very much and carry on. Yes sir. Thank you.
operator
The next question is from the line of Subrato Sarkar from Mount Infra Finance. Please go ahead. Sir, I would request you to unmute your line and speak please. Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Abhishek Jean from Alpha Accurate Advisors Private Limited. Please go ahead.
Abhishek Jain
Thanks for opportunity and congratulations for strong set of numbers. My first question on the industry growth in the affordable housing segment. So what is your expectation for FY26? And we have seen that many financial institutions are increasing their presence into this space. So how do you see competition?
Manoj Viswanathan
So as far as the overall market is concerned for FY26, we think it should be another year of good or decent demand. Because affordable housing demand has largely been secular. The growth has been secular in the range of 10 to 15% a year. So we are expecting a similar kind of a growth rate this year as well. As for the competition is concerned, you know, it has been again very, you know, very uniform across several years. Every year there are some new players entering this business. But at the same time there are, you know, some of the larger entities who move up in terms of the ticket sizes and no customer profile.
So in some ways they kind of, you know, exit this segment. So, so it has been, you know, from a competition perspective we expect it to be another year of similar competition. Nothing very difficult.
Abhishek Jain
What is your current market share in this space and how do you see the market share going ahead?
Manoj Viswanathan
The market share, if you look at it as A percentage of the overall affordable housing segment. We are at about 2% share of the share of the market and our ambition is to reach somewhere between 4% to 5% market share in the medium term that is maybe in the three to five year kind of.
Abhishek Jain
Okay. And in terms of the TZ what kind of the growth you are looking in the coming years in average ticket.
Manoj Viswanathan
Site the average ticket size has been growing at about 3 to 4% every year and we expect a similar kind of increase in the coming years. So every year maybe around 3 to 4, 3 to 5% increase in ticket size.
Abhishek Jain
Okay and my last question on the delinquencies side. So are you seeing any increase in the delinquencies in the fuel stakes and your courses would like to give some comment on that.
Manoj Viswanathan
Broadly at least last several quarters we have seen most of the states moving together. That is when there is increase, there is an increase across the board and there is a decrease across the board. So largely it is seasonal. So we are not seeing anything specific to any market or any particular specific state or region where there is an increase or decrease for any reason.
Abhishek Jain
Okay J thanks. That’s all.
operator
Thank you. The next question is from the line of Aditya Singh from MSC Capital Partners. Please go ahead.
Unidentified Participant
Hi. Thank you so much for the opportunity. Congratulations and mano sir for the great set of for great performance. So wanted to quickly understand that when we look at the branches which have a vintage of more than two years what would be the profile of these branches in terms of AUM per branch opex to AUM rox head office so.
Manoj Viswanathan
Two plus years generally the branches reach AUM of between 30 to 50 crores and in terms of profx2 assets they would be I mean if the country is at 2.7% I mean these would be slightly higher than country because they still have not reached kind of a mature level. So maybe around 3 to 4% of flex to assets would be the broad range. I mean we would call these kind of just pre mid size. The mid size would be around 50 to 70 crores aum so pre mid sized branches in the 2 years time frame I mean by the time they reach about 3 to 4 years they reach the mid size which is about 50 to 75 crores and if you.
Unidentified Participant
Have the number handy with you would you know would you know vintage wise number of branches Today we had total branches of 155. How many would be less than one year? 1 to 2 year and then 2 to 3 and then 3 year plus.
Manoj Viswanathan
Yeah so not at such a granular level. I mean we can give you that.
Nutan Gaba Patwari
But.
Manoj Viswanathan
Yeah, broadly we categorize in three buckets. You know, so there are smaller branches which are, you know, less than 25 crore, you know AUM. Then there are 25 to 75 crores which would be the mid sized branches and 75 crore plus branches. So so generally the ratio is around 1/3 each. So you can say 50 to 60 branches in the smaller category, about 50 branches in the mid size and about 50 branches in the larger category.
Unidentified Participant
Another question was that now that we raised 1250 crores in GRP, any congratulations on that? Do we see a branch expansion that is number of branches per year increasing from what a Status quo was 25 to 2022 to 25 branches per year. And another question would be that a target of 35,000 grows in FY30. Would we need another fundraise in the interim before we do that.
Manoj Viswanathan
Branch expansion? Yeah, well you know the number of branches will increase in the because of the base being. Base being higher. So we would like to expand at about 20 to 30% every year. The AUM is expanding at about 25 to 30% every year. The branches also will expand the same pace. So you know we were growing at about 2025 branches every year. So that number will go up slightly maybe to 3035 or 35 to 40. And as far as capital is concerned we are good for about four years now. So maybe by 2030 is when we will need to look for fresh capital.
Unidentified Participant
Just one last question. This was more to do with the thought process when we see statewide AUM program. So they are quite different. For example there are states with 65 to 70 crores Aum Prabh like your Maharashtra, Tamil Nadu. And then there are states which have any umper branch of 100 crore plus like Gujarat, Karnataka, Telangana. Just trying to understand is there any different strategy we are deploying in the state or the states which have 100 crore per grant? These are more high conviction states for home first?
Manoj Viswanathan
No. Maybe. I mean it will be largely to do with the vintage. So where we have started the branches a little earlier. So when the size would have become bigger it would have gone, the branch would have become larger. So there would be newer states like you know mp we started, I mean we started the expansion over the last two, three years. So there you would have a lower YOM per branch.
Unidentified Participant
But a state like Tamil Nadu, also Maharashtra which have. Which we’ve been there for a very long time but they have a same. I Would say somewhat similar branch to Madhya Pradesh.
Manoj Viswanathan
Yeah. Because you know, if you see the. I mean it will also go in line with the growth rate in that. In that particular state. Right. So some states are growing faster, some states are growing at a slower. So Ayum branch also would dislike that.
Unidentified Participant
But there’s no. There’s no different strategy that we’re deploying. Like these states will have larger branches.
Manoj Viswanathan
No, no, nothing of that sort. Nothing of that sort. Our general position is that, you know, irrespective of where the branch is located, it should be able to run at about 200 crores per branch.
Unidentified Participant
Last question was for. So when I calculate the yield, I am getting 13.2% as my portfolio yield. This is including the. The co lending fees. Is it a timing difference that. Because we would have dispersed a lot in the end of March.
Nutan Gaba Patwari
Not silent of March, but. So when you look at a monthly disbursement, it will be about first half to second half, about 40, 60, maybe in some months, 35, 65. Which will lead to the portion that you just mentioned. But like you just mentioned, it is a timing difference.
Unidentified Participant
Understood. Thank you so much and wishing the team all the very best. Yeah, thank you.
operator
Thank you. The next question is from the line of Nopur Kota from Nariti Investments. Please go ahead. Sorry to interrupt, ma’am. I would request you to please use your handset.
Nutan Gaba Patwari
Yeah. Hello.
Unidentified Participant
Am I audible?
operator
Yes, ma’am. Yeah.
Unidentified Participant
So. Good evening team. I have two questions.
operator
First one is we could see a good EOM growth of 31% and interest.
Unidentified Participant
Income growth of 32%. But growth in profit is 25%. Further looking into this, I got to. Know that there was an increase in our overall interest cost by 43% year on year despite our cost of borrowing rising only marginally to 8.4% visible to 8.2% last year. So can you throw some light on this increase in interest costs?
Nutan Gaba Patwari
Right. So when you look at the fact sheet and you analyze the PNL, the total income has gone up by 31% but the net interest income has gone up by 26% which is broadly where the overall profit increases also. So the cost of borrowing rise has been slightly higher.
operator
You are.
Nutan Gaba Patwari
The question that you’re asking is on year, on year or quarter? On quarter?
Unidentified Participant
Year on year.
Nutan Gaba Patwari
So when you look at the fact sheet, the interest expense has gone up by 43% because the cost of bond has. And the total income has gone up by 33%.
Unidentified Participant
Exactly.
Unidentified Participant
Yeah.
Nutan Gaba Patwari
So that is the most important reason.
Unidentified Participant
Yeah.
Unidentified Participant
So what Is the reason behind the. Rise in increased cost by for interest cost by 43%.
Nutan Gaba Patwari
Okay.
Unidentified Participant
So because our cost of borrowings is almost at the same level of 8.4%.
Nutan Gaba Patwari
So if you look at year on year it has gone up from 8.2 to 8.4. That is a 20 basis point increase on a sharply increasing growing borrowing book. So that is the cost contributors to the difference. And my second question is how much.
operator
Commission do we give to our connectors.
Unidentified Participant
And also do our connectors help in recovery?
Manoj Viswanathan
No. So commission we give about 40 to 50 basis points to connectors and it’s helping in recovery is is more ad hoc. It is not part of their contract or part of their part of their agreement with us.
operator
Thank you and all the best. Thank you. The next follow up question is from the line of Anusha Raheeja from Dalal and Brocha. Please go ahead.
Anusha Raheja
Yeah, geographies that you have catered tool for example an SNP or so how has been the asset quality performance in these newer states? How the credit discipline?
Manoj Viswanathan
Credit has been fairly good. So in MP and Rajasthan, I mean so if you see three, the three new states, four new states where we are present, mp, Rajasthan, Utrakhand, up I would say in mp, Rajasthan and Uttarakhand the performance has been better than what we expected. And UP does just what we expected.
Anusha Raheja
And in Gujarat which is the domain state, the growth is coming down in that state relatively on a yoy basis. So is it because other states are growing at a higher rate or demand per se in that state is relatively lower, you will choose to grow at lower?
Manoj Viswanathan
No. So we are still growing at about 21, 22% in Gujarat and so we have some plans to kind of re energize etc. So as I mentioned earlier in the call, there are some states where we are kind of restructuring, you know, the teams and we will come back more strongly. So there are some places where we are going with 20% there are places where we are going with 30%, 40%. So there is a range. So there will always be that strategy of, you know, kind of going very strong in a particular state in a particular year.
And in other states we are kind of regrouping or you know, consolidating.
Anusha Raheja
Okay. And lastly you said that CO lending model 2 is eliminated from the new RBI guidelines and Co lending model one is detailed. So in what way that is.
Manoj Viswanathan
So yeah, so what I mentioned was they have actually omitted mention of co learning model two. So everybody is still wondering whether it is allowed or not allowed. And I think there is still discussions going on on whether this will be allowed. So we are hoping that the co learning model two will be allowed. But if it is not allowed, then yes, we have to go to coloning model one, which is, which is a little more tedious. The way the. Why it is tedious is because as for Colonial Model 1, the disbursal of the loan has to be done simultaneously by both the entities.
So primarily that makes the process more tedious because when the loan is onboarded, the 20% sits on our books and 80% will sit on the bank’s books. And the disposal also has to be then proportionately done by the respective entities. Currently the disposal is done by us and then it is kind of paid back by the bank to us. So which is a easier model. But if that all disposals have to be made simultaneously by the two entities, then it makes it more tedious.
Anusha Raheja
Okay. And you follow co landing model too, right?
Manoj Viswanathan
Correct. We follow two.
Anusha Raheja
Okay, sir.
operator
Does that answer your question? Ma’am. Thanks. Thank you. The next question is from the line of Devyansh Gupta from Leighton Advisors. Please go ahead.
Anusha Raheja
Hi. Couple of questions around the LAP book. So would you be able to make up our NPAs between LAP and home loan separately? Because last time we discussed. Because the ECL is coming down because LAP is going up and we end up incurring a lesser loss there. So what would be the PA trajectory for LAP versus home loan? And what would have been this number in FY24?
Nutan Gaba Patwari
Yeah, so I can tell you the March 25th numbers right away. LAP is around 1.2, 1.3% NPA and the home loan is about 1.9. Actually the numbers are disclosed in our QIP placement document and it is already published on the stock exchanges. So you will get the full detail with the three year comparison there.
Anusha Raheja
Got it. So I missed it. So I’ll check back. But just typically lab would have a higher NPA and home loan would have lower NPAs. But our numbers are a bit different from the general expectations. So how should we read into it?
Manoj Viswanathan
We are reading it is that we, because we have a lower proportion of labor, our teams have the luxury of selecting better customers. And we don’t have aggressive targets for lap. So they have the luxury of selecting better customers for lap. And which is the reason our NPAs are slightly lower compared to the market as well as compared to our own products.
Anusha Raheja
When you say lap, it is not a top up on a home loan. Right?
Manoj Viswanathan
Because then you can get that advantage on A home loan you are giving a top up and then it is considered lap. So this is pure play lap. These are new customers we are acquiring from the market.
Anusha Raheja
Got it? Understood. And second question related to LTR lab. So our presentation shows that our LTV at origination, less than 80% is going down, which can also be a factor because of LAP going up. Right, Because LAP I don’t think you will do at 80% LTVs. So what would be our more than 80% LTV at origination for home loans? Business.
Manoj Viswanathan
Lab forms a smaller proportion. So I would say, you know, because lap is only 15% of the AUM. So to that extent it should not impact the ratios too much.
Nutan Gaba Patwari
Yeah, that’s right.
Anusha Raheja
Effectively LAP is also given at 80% LTV. That would be very that way. The risky thing.
Manoj Viswanathan
No, no, a lab would not be given at 80% LDB. The lab LDB will be generally, or rather in almost all cases it will be less than 60%. If you can ask, ask me ask the question again because I the.
Anusha Raheja
So in our presentation we give a pie chart origination.
Manoj Viswanathan
Right. LTV at origination.
Anusha Raheja
Origination, yeah. So if I look at the more than 80% has been consistently coming down, which makes sense if you are giving lab loans because they will be at lower LTV. But.
Manoj Viswanathan
Yes, yeah, yeah, yeah. So more than 80 coming down is the explanation is that, you know, our Basically more than 80 LTV actually is in the apartment segment, developer led apartment segment. So over the years our exposure to apartment segment has been coming down because we are, you know, we are doing more of self construction, more of loan against more of sorry, retail and other products compared to apartment product compared, compared to new apartments. So that is the reason for the marginal decrease in LTV which is above 80%.
Anusha Raheja
Understood. And the last on the LAP is that if I look at the mix of self employed and Charlie and LAP and other LAP and home loans, would it be a fair statement to say that salaried LAP is going up?
Manoj Viswanathan
Why would you say that there is. I mean we have, we don’t have any such direction internally.
Unidentified Participant
It might be, not deliberately but just happening. Because if I see the self employed mix, it is going down or LAP is going up and self employed is largely similar at whatever range it was, it’s not falling down. So then it implies that LAP would be taken up by salaried also.
Manoj Viswanathan
Yes, yes, LAP is taken by salaried also. We have, I think at the moment we have an equal mix of salaried and self employed as far as LAP is concerned and that ratio has been largely constant across the years. So the question was that what would be the purpose? Is it loan consolidation or any other threefold?
Manoj Viswanathan
There are basically broadly three reason, three purposes of lap. Why people take lap. There are some customers, about 30% of the customers who have actually started their construction by borrowing from others and would have kind of finished the construction and then now they want to repay those loans. So that is one reason. So it’s like a delayed housing loan. That is one key reason for lab. The other reasons are the normal traditional reasons where it is used for consumption or it is used for business purpose.
Unidentified Participant
Got it? Got. Understood. The second question. So LAB questions are done. So the other one was that last time we mentioned that we studied bajaj and chola and we figured out that let’s say we will come back to market every two to three years to raise equity. Now in this call we said that we are going this equity raise will suffice for us for at least four to five years. So is there a change in thought process of the growth assumptions that let’s say we had earlier versus now or how should we read it to that.
Nutan Gaba Patwari
Is in the amount of equity that we raised. So when we were on the call last time, the number that we had in mind was thousand crores and we had taken an enabling resolution for 1250 crores. But because of the response we actually ended up raising the full 1250 crores which had added an additional year.
Unidentified Participant
Understood? Understood. The next question was the digital partnership sourcing through digital partnerships saw a big race from 1 point something to 2.2. Is it a one off? Is it some structural changes that we have done which is let’s say which has taken this to this level or just trying to see if how is it a one off or some structural changes that we have introduced?
Manoj Viswanathan
Not a one off. It is, you know, we had the, I think last couple of quarters back for the A new partnership was added which is phonepe and so that is giving us a slightly increased number for digital partnerships.
Unidentified Participant
Got it. Understood. So I’m assuming given the franchise that they have issued but is it a BT product or it’s a fresh new home loan kind of loan that we are getting?
Manoj Viswanathan
We don’t do BT product, we only do new home loans. I mean BT product is going is not a focus area for us. It is a very insignificant portion of our business. And in all these digital partnerships also the focus is on new acquisition only.
Unidentified Participant
Got it. Because for them it becomes a very easier selfie. Home loan and we can give it at a cheaper one. That’s why I thought it’s not.
Manoj Viswanathan
I mean so that is more of a strategy by some of the larger lenders because they have a cost of borrowing advantage and they can pass it on to the customer. We don’t budget at all so we only focus on new one.
Unidentified Participant
Understood. So two more questions. The 300 crores of net gain on DA and if I look at our PPOP or even even PBT, right? So around 20% of our profit is coming from this upfronting of DA sales which does not necessarily to go, right? 300. Sorry, yeah, 30 crores. Sorry, my bad. 30. But PBT net is still 20%, right. So the question was that how should one is if you can break the split into what was the medium from fresh DA done and the earlier ones would have been some assumption change. So if you can just give a breakup of this, right.
Nutan Gaba Patwari
So the breakup largely is not more than 10% which will be there from the old one. But I want to address the more important point of, you know, whether this is sustainable. See the thing is that we are upfronting the income because it is a requirement. Now the question is if I did not upfront it and if I blew up my PNL and look at the profit after that or the network in the old IGAP method, what would be the difference? Because you know, either I can do IGAP accounting or I can do index accounting.
So on a network basis, because it is a timing difference, at the end of the day I am still going to recover the same amount of money from the customer and my spread is not going to change. So from a network basis the difference is not more than 30, 40 crores. From an annual profitability perspective, the difference is less than 10 crores and it fluctuates depending on whether the assignment proportion to the AUM is increasing or decreasing. Because the gap is so narrow, we have chosen to kind of focus on more why DA needs to be done rather than, you know, the contribution to the income.
Because either we come to the net gain line in India’s accounting or we come to the interest income and expense line in IVF accounting.
Unidentified Participant
But see this quarter itself, it was 30 crore and you said for the year it is around 10 crores. How sorry am I missing that? I misunderstood something? No, there is a net gain, right? So if I just cumulatively look at it, it would be a higher number.
Nutan Gaba Patwari
No? So if I did not want it gain, I have a DA book on which I Will on the spread.
Unidentified Participant
Yeah.
Nutan Gaba Patwari
So my da would have been.
Unidentified Participant
That would have been crore is what you are saying?
Nutan Gaba Patwari
No, my DA book is about 1500 crores on which I would earn a 5% plus spread.
Manoj Viswanathan
Done it that way it would be 10 crores lesser than the profitability would.
Nutan Gaba Patwari
Be in the range of 7. 10 crores difference. Yes.
Unidentified Participant
Got it. Got it. And what is the overlays that we are carrying in our ECL? 13 crores. And what would be the write off in this quarter and for the whole year?
Nutan Gaba Patwari
I’ll just tell you, give me a moment earlier.
Manoj Viswanathan
Is 17 crores approximately.
Anusha Raheja
This is the gross right. Net of. Not net of recup.
Manoj Viswanathan
That’s right.
Nutan Gaba Patwari
I think it’s 4 or 5 crores. I’ll just tell you in a moment.
Unidentified Participant
Sure. Yeah.
Manoj Viswanathan
About five crores.
Unidentified Participant
Got it. Got it. Yeah. That’s all that I had. Thank you. And all the best. Thank you.
operator
Thank you. The next question is from the line of Siraj Khan from Asian Capital Partners. Please go ahead.
Siraj Khan
Thank you for the opportunity and good set of numbers. I have two questions. One with respect to the data that is given in the fact of the new to credit loan accounts. So in F20 from F24 to 25 that has reduced. So this is by design or by you know, default. I mean are we actively going toward having credit information customers or the number of customers in the new segment are reducing? How is that?
Manoj Viswanathan
Yeah, the number of customers in the new to credit segment are reducing. We are not actively seeking out customers with credit history. It’s just that in the market such customers are reducing because credit is easily available now.
Siraj Khan
Okay. And on similar line self employed AUM is constant. I mean it’s installed very moderately. But what is the you know split that you see say FY26 or ahead.
Manoj Viswanathan
Broadly in the same range, only 60. I think right now 68, 32. You know, one or two cases, one or two percentage points, we can’t say. But broadly 65, 35, 270, 30 is the range that we see.
Siraj Khan
Understood. And what will be the incremental ticket size of loans? Because what I also see is in the fact sheet is the proportion of the 1.5 to 2 and 22 to 2.5 has jumped by 2 to 1% each. So is the incremental ticket size higher than say close to 18, 20 or above 18. Max 20. Next.
Manoj Viswanathan
No, no. So the growth zone for US is now 1 to 1 million. So sorry, 110 lakhs to 25 lakhs. Right. So below 10 lakhs is not a very large growing segment. So there you will between 110 lakhs to 25 lakhs you will see larger, more growth.
Siraj Khan
Okay, but what would be the incremental.
Nutan Gaba Patwari
Yeah, size is 11.7 lakhs.
Siraj Khan
I think that is the average. What is the incremental dispersal? The dispersals that I would have happened in Nesta, 13 to 14 lakhs and the final one on the promoter. So with the capital raise, each of their holdings has come down below 10, 7, 7% and 5%. And now Warboy remains the similar at approximately 11. So what, what will be their role going ahead and how will the, will there be any specifically specific change in the management or anything of that sort with respect to the direction? That is a question.
Manoj Viswanathan
No, there is no change. I mean so you know, the promoters have largely functioned like public market shareholders over the last three, four years also since the time we listed. So we do not anticipate any change as such as far as the management or company functioning is concerned because we have been led by the independent, independent board also these years. So no change anticipated.
Siraj Khan
So no specific strategy or anything with respect to, you know, sourcing or anything of that sorts?
Manoj Viswanathan
No, absolutely not. Because like I said, you know, we have been led by the independent board even over the last four to five years. So we don’t expect any changes. You know, so largely it has been management and independent board led strategy. The promoters, you know, our large shareholders have not played a role in that. So nothing is expected to change.
Siraj Khan
Okay, thank you. And just a final one on the state wise asset quality. So we have seen good growth in multiple ways and in other income states of Karnataka and such. But what I want to know is are you seeing any signs of early stress maybe in the TPD or one plus tpd? Because it has been inching up, although it’s been controlled, but it has been inching up year over year. So either in specific state or any specific product or a customer type that is seen any early kind of a warning because say for example approximately 22% YoY but Tamil Nadu and other states have grown slightly lower.
So is there a even a reason wise issue or some state wise issue, anything of that sort?
Manoj Viswanathan
No, the growth pace of growth is not directly linked to the, you know, asset quality experience that we are facing in the state. It is more related to various other things like getting the right people, expansion of branches, you know and various other factors. So yeah, so it is not like I said earlier, most of the state, most of the locations have a similar, you know, similar profile. As far as the credit behavior is concerned, we are not seeing any dramatically different behavior.
Siraj Khan
And just a clarification, the active connector account that was shared earlier was 3800. 3800 active connector accounts. Thank you.
operator
Thank you, ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. Manoj Vishwanathan for closing comments. Over to you, sir.
Manoj Viswanathan
Thank you everyone for participating and engaging in the call. We hope that we have been able to answer the questions to your satisfaction. In case you want to reach out for further questions, you can always reach out to Deepak Kisan or write to us on investor.relationshomefirstindia.com thank you very much.
operator
Thank you. On behalf of Home First Finance Co. India Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.