India Shelter Finance Corporation Ltd (NSE: INDIASHLTR) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Rupinder Singh — MD & CEO
Ashish Gupta — Chief Financial Officer
Analysts:
Chintan Shah — Moderator
Vivek Ramakrishnan — Analyst
Sonal Gandhi — Analyst
Raghav Garg — Analyst
Kushagra Goel — Analyst
Varun — Analyst
Shreepal Doshi — Analyst
Vishwateja — Analyst
Darshan Deora — Analyst
Shreya Shivani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the India Shelter Finance Corporation Limited Q3 FY ’25 Earnings Conference Call, hosted by ICICI Securities Limited. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Chintan Shah from ICICI Securities Limited. Thank you, and over to you, sir.
Chintan Shah — Moderator
Thank you. Yeah. Thank you, Sejal. Good morning, everyone, and welcome to the Q3 FY ’25 earnings conference call for India Finance Corporation. I would like to thank — congratulate the management for a good set of numbers and giving us the opportunity to host the quarterly earnings call. We have with us from the management, Mr Singh, MD and CEO; Mr Ashish Gupta, CFO; and Mr Rahul Raja Gopal and Head IR. So now without further delay, I would now like to hand over the floor to the management. Thank you and over to you, sir.
Rupinder Singh — MD & CEO
Thank you, Chintan. Very good morning, everyone, and wishing you all a very Happy New Year. On behalf of the company, I extend a warm welcome to all of you. Thank you for joining us on the call today. We hosted our first earning call around same time last year post listing and we stayed committed to the words what we mentioned that time. We remain steadfast on a focused approach of providing home loans and mortgages in Tier-2 and Tier-3 geographies. Let me reiterate what we communicated during our IPO first earning call and our current state. We shared how we have done our horizontal expansion and focus on deepening our presence in existing geographies. I’m happy to share that we are progressing as per the plan. We plan for 40 45 branches each year for next few years. On that note, we opened 42 new branches in first-nine months of this financial year. We guided for an AUM growth of 30%, 35% for next few years and continue to grow as per the plan. There is a reduction in opex to AUM and currently stands at 4.3% for quarter three financial year ’25.
On asset quality front, we guided for a credit cost in a range of 40 to 50 bps and is maintained at this level. Our spreads continue to remain in the range of 6% as per the guidance. I’m happy to share that in the last one year, we got a rating upgrade and in rising interest-rate environment, our bank height MCLR, there was no rate cuts, we were able to contain our cost of funds at a similar level. Further, we were able to reduce the gap in our cost of fund versus peers from 0.7% in-quarter three financial year ’24 to 0.4% in-quarter three financial year ’25.
On that note, let me move towards some broader updates. We continue to see growth potential in Tier-2, Tier-3 cities, particularly for home loans and mortgages. Government initiatives particularly are helping into it. Further, we continue to monitor the situation on-ground and are keeping close tab on our customer behavior. We witnessed a marginal uptick in 30 plus to 3.7% in-quarter three financial ’25. Forward flow stabilized in December and traction looks positive going-forward. Moving on to the quarterly updates, we are pleased to announce that the company delivered strong performance in 3rd-quarter of financial year ’25, driven by demand environment in an affordable housing sector. Our AUM crossed INR7,600 crores, net-worth crossed INR2,500 crores.
We continue to source internally within house sourcing of 97%, 98%, 100% of book is secured. Basis our conservative approach, LTV on the book stands at 52%. 90% of AUM comes from Tier-2, Tier-3 cities. Average ticket size continued to be in a range of INR10 lakhs. Moving to the results for the quarter, we are pleased to report AUM growth of 36% year-on-year to INR7,619, supported by disbursement growth of 29%. This quarter, we clocked INR879 crores of disbursement. In this quarter, our branch network expanded to 265 branches by adding five new branches in this quarter itself. On profitability metrics, PAT came in at INR96 crores, registering a growth of 54% year-on-year.
ROA stands at 5.5% and return-on-equity further improved to 15.1% in this quarter. We continue to maintain our guidance what we indicated during our previous calls, that is branch addition somewhere 40 to 45 years year-on-year, maintaining margins of around 6%, credit cost in the range of 40 bps, 45 bps, 40 bps to 50 bps, loan growth in a range of 35%. Now I would like to hand over call to Ashish Gupta, our CFO, to take you through the financial metrics. Over to you, Ashishi.
Ashish Gupta — Chief Financial Officer
Thanks,. Good morning, friends. Let me take you through the key financial numbers. AUM as of December ’24 is at INR7,619 crore. Year-on-year growth in AUM is 36%, while quarter-on-quarter growth in AUM is 8%. Total income for the quarter is up by 39% year-on-year, largely driven by growth in AUM. Total income is up by 7% quarter-on-quarter.
Portfolio yield is at 14.9%, year-on-year up by-10 basis-point. Our disbursement yield is running at 15%. Our cost of fund is stable at 8.8% in-spite of increase — increase of about 30 basis-points in the MCLR by banks in last 12 months. Our marginal cost of funds for the quarter is 8.8.8%. We have undrawn sanction of INR450 crore from National Housing Bank as well. Our lending margins are consistently about 6%, in-line with our guidance for medium-term. OpEx to AUM is down by-10 basis-points quarter-on-quarter, while for nine months, it is down by-20 basis-points.
Credit cost for the quarter is stable at 50 basis-points, which is broadly in-line with our guidance. DPD30 is at 3.7%, Stage 3 is stable at 1.2%. ECR for Stage 3 asset is stable at 25%. Our total ECL is INR61 crore against the regulatory threshold of INR37 crore. We have advocate provisioning buffer is in-place. PAT for the quarter is INR96 crore year-on-year up by 54%, quarter-on-quarter up by 7%. ROA for the quarter is stable at 5.5%. ROE for the quarter is 15.1% at a leverage of 2.8 times. It is up by-40 basis-points quarter-on-quarter. With this, I conclude and now we can open the floor for Q&A.
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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vivek Ram from DSP Mutual Fund. Please go-ahead.
Vivek Ramakrishnan
Sir, congratulations on steady performance. My questions are on the asset quality. You said you were watchful of your customer segment and the 30 has gone up. And of course, in the market now over leveraging is the theme of the day. So I wanted to know-how is your customer behavior, where do you see any trouble spots? And is the lap as well as home loan portfolio behaving in-line with the past of where the extra 30 DPD is coming from.
Rupinder Singh
Good morning, Vivek. Yes, I think you mentioned very clearly this is a flavor of the time when we talk about asset quality largely. So when we see in a market, the propensity of calls has increased towards the customers we have to follow-up more than what used to be a year back-in terms of collection and all. So there is a 10 bps higher when compared to the last quarter. But what we see, you know, things are not beyond control. That’s the first thing. This is a tough time for entire industry largely. But seeing the earlier process that we put on, the collection mechanis that we put on, I think that’s working decently well. So this blip time, which is for I think not for long — long days anymore, I think we’ll be able to control in coming quarters.
So normally, you have been seen that quarter-four is most of the time better than quarter three and we can see the traction coming around. So, yes, this is a time where everyone has to be on tours, we are also there and closely watching each and every activity in its branch level where we have to take a certain action, we are taking it so that everything is steadfast. Our lab and home loans are exhibiting same behavior, they are largely exhibiting same behavior, the same trend what is used to be a one-year back basically. No difference around that piece basically.
Vivek Ramakrishnan
Okay, excellent, sir. And wish you all the best. Thank you.
Operator
Thank you. The next question is from the line of Sonal from Asian Market Securities. Please go-ahead.
Sonal Gandhi
Yeah, congrats on the steady performance, sir. I had couple of questions. So first one was on fee income and other income. So your disbursements have grown broadly at 6% Q-o-Q, but the increase in fee income and other income is higher. So just wanted to understand how do we see this line-item going ahead and how should we build it as a percentage of disbursements or as percentage of AUM?
Ashish Gupta
Okay. So if you look at the fees and our overall fee and commission income. So broadly, it remains at around 1.7% to 1.8% of the total average AUM and it broadly consists of three, four parameters, which include cross-sell, foreclosure income, our loan servicing income and loan application fees. And it is well distributed across all these foreheads. So as you are aware that we have got our corporate agency license in Q1. And as process and products are getting — are getting stabilized, our income for Q2 — for Q3 is slightly higher than Q2. Secondly, you know as our co-lending arrangement with banks are gradually picking-up, so our co-lending disbursement is about 8% of the total disbursement. So as that particular business is picking-up, that has higher proportion of fees to the — to the India shelter. So that is also contributing to the growth in fees income. I believe that in Q3 and Q4, this income percentage should get stabilized at around 1.7% of the AUM and should continue there for some time.
Sonal Gandhi
Sure. And sir, also, if you could just let me know what is the write-off for the quarter and any change in the write-off policy? And again a related question would be what would be the overlap, like what proportion of our customers would also have MSI loans if you could just give out those numbers?
Ashish Gupta
We have a very consistent write-off policy that whenever our NPA count crosses the age of two years, we do a technical write-off, while our recovery actions remain continuing. So during the nine-month period, we have done a technical write-off of about INR6-odd crore. And while parallelly we have also recovered about INR4 crores from the NPAs that we have written-off in earlier years. So largely the credit cost is driven by the incremental provisions that we have made.
Sonal Gandhi
Okay. And sir, the repayment rates, I mean, I’ve seen it’s for you across the industry, the repayment rates have come down. So if you could quantify what is the BT out rate for the quarter and I mean, how should we look at it going ahead? And could also allude that 8.5%
Ashish Gupta
Hello?
Sonal Gandhi
Yeah. Yes, sir. Please go-ahead.
Ashish Gupta
Yeah. So BTV rate remains in the range of 5.5%, that is consistent from quite a few quarters and that looks strength as of now, basically. So most of these BTs are going to the large FIs and sometime to banks also, typically our Tier-2 customer. So that is a trend what we observe.
Sonal Gandhi
Yes. And any diversion is on your yield and incremental yield because some players alluded that their on-book yield is higher than incremental yield. So anything that you’re seeing and how do you see your spreads would kind of remain over next two, three years
Ashish Gupta
Or be in a range-bound of 14.9% to 15%, at least for a year or so, we feel that we’re going to maintain it. But as time keeps changing, there may be rate cuts or things around that piece, so we can tweak out. But what is our consistency is manage the spreads of 6% that we always like to keep the consistency on that side.
Sonal Gandhi
And Sir, this datakeeping questions, fixed and floating-rate books on asset and on borrowing side?
Rupinder Singh
Yeah. So on asset side, we have around 40% of the book at variable-rate. And if you look at our borrowing profile, about 90% of our borrowings are variable-rate. Yeah. So there is some cap of overall variable-rate book in terms of borrowing and asset, but that largely that gap is filled by the equity at this point of time. But still there is a gap of around 15% 20% that is unfulfilled at this point of time. So we are gradually doing incremental disbursement in variable-rate product. If you look at our current disbursement run-rate, around 85% to 90% of the monthly disbursement are happening in variable-rate book. Given the high-growth rate, that book is increasing at a steeper pace and we should be able to fulfill this 15% 20% gap that is there at this point of time yeah.
Sonal Gandhi
Okay. And so say, sir, two years down the line, should we expect that 40% would be a fixed-rate or 30% would be fixed-rate and 70% would be on floating-rate? Is that a fair assumption?
Rupinder Singh
Is that 50% fixed-rate down the line 12 months, you can expect that we should be able to bring down the fixed-rate book to around 40%.
Sonal Gandhi
Okay. Okay. And sir, just in case if repo rate comes in, you know-how do you expect the benefit on your cost of funds, say, over next three months and six months.
Rupinder Singh
I believe as the rate — as the repo rate down comes in, so we’ll have to wait for the reaction of the banks, how they react to it, how much benefit they like ultimately pass-on to us. So if you look at our borrowing profile, around one-third of the total borrowings are linked to repo rate, which may come down in a in a quarter period of time. But the larger part of the borrowing is linked to MCLR, wherein we’ll have to remain dependent on the like when the bank will pass it on and what kind of frequency we have in terms of reset. So if you see larger part of the MCLR linked borrowing is that one year at a one-year reset. So that will have some lag in terms of the rate cut benefit that we will have. So down the line six to eight-month kind of period of time, we can expect there will be some benefit that we can see in terms of whatever the repo benefit will come will start getting reflected in the cost of funds.
Sonal Gandhi
So sir, will you be able to quantify like how much is linked to six months MCLR, how much is linked to one year MCLR?
Rupinder Singh
It depends on how the — how the banks will pass-on the repo cut in the form of MCLR cut. So if the bank will — if the RBI cut report say like by 25 basis-points, banks will cut the by only 10 15 basis-points gradually over the period of time, then obviously the benefit that will come will be delayed. It is tough to at this point right now.
Sonal Gandhi
Okay. Okay, sir. That helps sir. Thank you so much.
Operator
Thank you. The next question is from the line of Raghav Garg from Ambit Capital. Please go-ahead.
Raghav Garg
Sir, good morning and thank you for the opportunity and congrats on the results. The 60% fixed-rate book, this is entirely non-loan.
Operator
I would request you to please use your hand, sir.
Raghav Garg
Okay, just give me that. Is this better now?
Operator
Yes, sir. Please continue.
Raghav Garg
Yeah. Okay, sir, I wanted to ask that this fixed-rate book, which is 60% of the total, this would be entirely the home loan piece. Is that understanding correct?
Rupinder Singh
So like you know, so you’re right that larger portion of this is coming from — from the housing loan book. But if you look at about two years back, we were doing entirely home loan and lab book at fixed rate. So we have started gradually doing variable rates starting from lab — from lab book and then move down to the housing loan book as well. So obviously proportion of fixed-rate book is there larger in-housing loan and slightly lesser in non-housing loan.
Raghav Garg
Okay. And see, you know assuming that there is a rate cut, do you think that your customers could come in or could be posed you from a balance transfer point-of-view, at least from the larger ticket sized loan say the threshold is 15 lakhs where you have 15 lakhs or above, where your exposure is about 25% of the total book. Do you think that in case of a rate cut scenario, your customers could come and ask for a BT unless you lower your rates?
Ashish Gupta
Well, rather our major chunk of customer that lies in the range of between 5% to 25%, which is more than 95% customer and 5% to 50 is the most focused customer segment that we work on. Secondly, when we talk about the book which we created in loan against property in last two years, that is largely variable basically. That’s almost — all these cases are variable category and talk about loan against property. There, if you also have a scope of cutting the rate back, that is a one-piece. Plus we have internal mechanism which takes care of engagement customer. You might have seen that on quarter-on-quarter basis, our BT rates are consistently in the same range-bound basically. And this is not a story of quarter or two-quarter. This is what we are executing from last almost 10 to 12 quarters basically. So anything which is in happening in-market, we always have a cautious around — caution around that piece and we accordingly raise our bars to evade that thing. So if anything happens, we are very well prepared.
Raghav Garg
Understood. No, sir, my only reason to ask that question was that the system loan growth has slowed down. You can see that in the numbers for the industry. And if the rates are cut, the competition for volumes is only going to go up. So just from that perspective, I was thinking that if you will either have to let go of growth or you will have to cut-down on your pricing either of the two, but your point is well noted that you’re well-prepared. So that point is taken. The other question is in a scenario where the growth has slowed down quite significantly for the economy, your lab book has grown by 13% quarter-on-quarter. I know low-base is one reason, but is there anything else to read into that? Any kind of seasonality at play here?
Rupinder Singh
So I think there is nothing big-picture to read-out here basically. Yes, there can be of seasonality because before Diwali, generally you always find there is a traction coming on the lab side basically because most of the small segment of customer they look for raising some amount to reinforce their requirements basically. So that is some temporary big blips basically. You can find that.
Raghav Garg
But that would have been there last year also, right, in Q3, but that is not the case. So that just makes me wonder if there’s anything else here. But you’re saying it’s just seasonality, right?
Rupinder Singh
Largely, yes, you can say so.
Raghav Garg
Understood. And sir, last question, quarter-on-quarter growth in-home loan portfolio, that’s only 5%. But if I look at last several quarters, the sequential accretion has been about 8%, 9%. So is this — why is the slowdown in sequential growth rate for the home loan book? Is this more consumption led where we are seeing trends slowing down or you’ve tightened your underwriting criteria or is it both factors at play here? That’s my last question. Thank you.
Ashish Gupta
So there is a small tweak we keep doing here and there basically. And if you see overall, we have to maintain that is 60-40 ratio, right, that we always consistent about it basically. That’s our thought basically. So on quarter-on-quarter, there may be small changes here and there. So there is nothing — we have changed the gears typically for one-product or we have not done about certain products. That’s a very small uptake here and there. You may find some changes happening in next quarter also that is possible because ultimately we have to maintain those parameters and we are quite committed towards that.
Raghav Garg
Understood. Thank you. And that’s all.
Operator
Thank you. The next question is from the line of Goel from CLSA. Please go-ahead.
Kushagra Goel
Yeah. Hi, thanks for taking my question.
Operator
Sorry to interrupt, sir. I would request you to please use your handset.
Kushagra Goel
Hi, is this better?
Operator
Yes, sir, please continue.
Kushagra Goel
Sure. Hi. So congrats on a good set of numbers. Just coming back to asset quality. Can you tell us what is the movement in your 1 plus DPD on a sequential basis? And if you could give some more color as to what improvement can we expect in 4Q? So, yeah.
Rupinder Singh
OnePlus is around 7%, 7.5% and quarter-four has been a trend across. That’s our history says is better normally than the rest of the quarters and we also expect so as we enter the new quarter and spend almost 30 35 days into that piece. So we are positive optimist about it, but let result comes. It’s more on a ground that we have to work more than speaking.
Kushagra Goel
Okay. Okay. And can you tell us the increase in on a sequential basis? So right now it’s 7%, 7%, 7.5%, but what was it?
Ashish Gupta
It has been increased by almost 100 bps if we see that from last one year basically.
Kushagra Goel
So on Y-o-Y basis, it’s up 100 bps. Yes. Okay. Okay, sure. Yeah, that’s all. Thank you.
Operator
Thank you. The next question is from the line of Varun from Kotak Securities. Please go-ahead.
Varun
Hi, sir. Congrats on a good set of numbers. I had a few questions. I would like to start with the yield. So if you look at our peers, many of them have reported yield pressure during the last two, 3/4 and the disbursal yields have been lower than their book yields. For us, you said that the disbursal yield is almost at par with the book yield at 14.9%, which appears a bit surprising, especially given that we are moving from a fixed-rate of floating-rate and floating-rate typically tends to be a bit lower in order to incentivize the customers. Can you help me understand this a bit?
Rupinder Singh
So our fixed-rate book is majorly in the home loan, as I mentioned. The floating-rate is being offered to the lab customer earlier and recently we started for the floating-rate customer — floating-rate for the home loan customers, which is very recent. Secondly, when we are adding a new branches, we are going deep penetrating the geographies. So whatever the branches we added in last one year or so, that is in Tier-3 markets. So there you always have advantage to get a better age. Third important factor that is more on a sourcing pattern. We largely try to source through a direct channel, which is around 97%, 98% of in-house fees. There at least you have a control on a customer as well as our drive basically. That also somewhere plays a role around that side.
Varun
Yeah. My next question is on the portfolio in MP. So last quarter you had highlighted that there was an exit in the team and that had led to heightened stress. Now we are seeing that the AUM is down sequentially. So have things not stabilized in that state or do we expect some more deterioration on what do you call collections or on growth in that portfolio.
Rupinder Singh
So we have had a new set of people in-state. We are talking about Pradesh particularly. So our new resource, the lead there is there, both in sales and collection. And yes, it takes some time to come to contraction, but things are large in control. So it’s no further deterration which is coming from there. Coming back to the previous position, little time we have to give to them and we are confident we’ll bring that provision back very soon.
Varun
Yeah. Thanks for that. And I had one other question on the self-employed ratio. Self-employed ratio is coming down on-book. And again, we don’t see a reflection of that in the yields. So why are you moving more to — going up? Okay, sorry. I think I got it wrong.
Ashish Gupta
Self-employed is increasing from year-on-year basis. Last year it was around 70%, 72%. Today, it stands around 74 something in that piece. So it is improving that side.
Rupinder Singh
I do not finding any increased stress on the self-employed originations as opposed to salaried. So when we see the ratio-wise, there is no much difference between the two for us.
Varun
Okay. And with regard to other income, I’m sorry if you’ve clarified it earlier, but it appears to be low in the last two quarters like 2Q and 3Q as opposed to the run-rate you were doing in the last previous six quarters. Is there anything fundamental that has changed over there?
Rupinder Singh
No, there is no fundamental change, but there is a — so we need to club the other income and the fee income and then see it together.
Varun
Okay. One final question I have on the
Rupinder Singh
Q1, we have got our corporate UC license. So the income is going into the fees and commission income now.
Varun
Okay, got it. And one thing on the employee expenses. Can you split your employee expenses between how much is spent at the corporate headquarter level, how much on the supervisory and in the field-level?
Rupinder Singh
So if we break-down the total the manpower itself first. So if you see around 78% of the total manpower is in the form of executives, which include our loan officer, our collection officers, our credit people. And then we have about 15% to 18% in the supervisory layer who are there as a branch manager, area manager, regional manager and then we have around 4% to 5% people sitting at head office who are — who are adding various functions and doing the supervisory from there. And if you see the cost-wise, the cost-wise, it is slightly different. Overall, about 60% of the cost is coming from the field and remaining 40% is coming from the supervisory and the head office.
Varun
Okay. Thanks for that.
Operator
Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Shreepal Doshi from Equirus Securities. Please go-ahead. Hi, sir. Thank you for giving me the opportunity. Sir, I don’t know if you’ve answered this question earlier because I joined it little late. So the question is on tightening of underwriting norms given the given the kind of you know noise that you’re hearing in the segment that we operate or notch below. So have we tightened underwriting norms or looked at them again in terms of the revisiting the four-year or the kind of LTV levels that we are comfortable with.
Rupinder Singh
So every quarter we review the credit norms. In fact, our credit pack runs on month-on-month basis and this is a continuous process. So we instead of tightening a norm at a general company-level, we go a little deeper and we even, you know, try to understand what’s happening in typical geographies even up to the branch level and then we take a certain calls, which includes empowerment of the resources down the line, some changes between accrual, keeping in mind the particular challenges which this ground face, somewhere we have to add the people also. So this is all entire quarterly mechanism that we do keep doing it. So this is nothing just because of scenario alone, but that’s a continuous process for us. That’s the beauty of data that we capture day-in, day-out and from the activities that we are doing from so many years. And these tightening and releasing, it’s all a matter of how the quality of the portfolio is behaving and in those particular geographies, that particular geography. So this is not a something new, but it’s a continuous process for us and we are doing it.
Shreepal Doshi
Got it, sir. And which are these, I mean, locations and what really was the parameter that probably, you know, pushed us to tighten or I understand that it’s a normal-course of action, but still like what parameter do we closely monitor and which geography, for example, this quarter are the net-debt we have tightened.
Rupinder Singh
So in any zone, there can be even the single branch there, we have to change a certain mechanism basis of we find some nods around that side. We have to tighten up, whether it’s a best-performing zone or whether it’s a average performing zone. So those — typically we take care of last 30 40 branches where we try to implement that these are the branches we have to come up across the curve. So they are the all actionable items taken care not only by underwriting team, but rest of the folks which are sitting in head office. So in most of the cases, if required, even the senior management also get involved to that side basically. So if you talk about particularly, as I mentioned in previous call, we put some titans, the major maximum branches which came around was in MP. And I think those things have start giving the results now what we see in a very recent time, the things becoming little more stable there.
Shreepal Doshi
Got it, sir. This is helpful. Thank you, sir. Thank you so much for answering my question.
Operator
Thank you. The next question is from the line of Vishwathe from Salcon Capital Partners. Please go-ahead.
Vishwateja
So hi, sir. Great set of numbers. Sir, I just wanted to ask about the demand-side situation like our guidance of AUM growth of more than 30%, 35% for the next five years. I just want to know when the industry is going at around 70% to 80%. So I had — I just want to know where the extra set of growth is coming from.
Rupinder Singh
So Vishwa, actually we have not given any guidance for the next five years particularly. So this guidance was given last year that for next three years, we have this range bond and there is an advantage to us keeping in mind, we have currently a low AUM size compared to the peers which you’re talking about, which are currently at very large level, set of level. And secondly, our distribution network. So we are operating in 15 states and not being a regional player, we have advantage to pull the levers from wherever the things are important and we feel that the scope is there basically. So I feel that this distribution is playing very well across states, irrespective of certain geographies and all. So all levers since functioning in the right direction. I expect that things can very well be stabilized between 30%, 35% for next couple of years also.
Vishwateja
Yeah. Okay, sir. Sir, the second question is regarding the BT rates. So few of the RPs having less than 2% and few players having less than 5% of the BT rate. So what are the measures that we are taking to reduce the BT rate, sir.
Rupinder Singh
Our BT rate runs between 5% to 6% and this is a trend for not a year or so, but from pretty long-time since we start getting a recognition to that extent. And most of these customers, they move to the bigger institution. And these BT BTs generally happen in bigger markets like a Tier-2 market for us in that case because there is a more intensive competition in those places and customer generally look outside and being posed by a third-party DSA for the other institutions and all, that is a trend. So that we have very well put in our business plan accordingly that this is something which we have to keep in mind. Secondly, we have an in-house mechanism where there is a separate team which engage the customer from the head office itself along with the support of branches where we take a lot of data, and things around and try to engage this customer and it is helpful in many ways basically. So you’ll feel — you can see consistency in the beauty rate also, which is in a range of 5% to 6%, which happen in our case, basically.
Vishwateja
Okay. Okay, sir. That’s all from my side. All the best.
Operator
Thank you. The next question is from the line of Deora from Invest Group. Please go-ahead.
Darshan Deora
Hi, thanks for the opportunity for asking your question. So regarding the experience that you had in MP where I believe some of your staff was poached by competition, what changes have you all made in terms of your HR policies or you know, any steps you all are taking to ensure that similar incidents don’t get repeated in other states? Are you guys extending some ESOPs or something to the supervisory layer or taking any other steps to prevent this sort of poaching from happening in the future.
Rupinder Singh
Yeah, good question, Darshan. Actually, if you see, we have elaborative — we saw policy to a large extent. So earlier, apart from frontliners, which includes loan offices or collection offices. We were having a some 10% of people covered under ESOP policy that has been extended to now 25%, which is branch manager and above basically to that category of people. And again, there are certain policies which can be driven. One is the ESOP obviously, then other engagement tools, what we can go with the time basically, plus strengthening a team with a backup, that is the second thought that we built-up and that’s working better in terms. So it’s always learning as you on-ground. So if you’re learning what we find out, we have implemented strongly in that.
Darshan Deora
Got it. Thank you. That’s all from my side.
Operator
Thank you. The next question is from the line of Shreya Shivani from CLSA. Please go-ahead.
Shreya Shivani
Hi, thank you for the opportunity and congratulations on a good set of numbers. Just following-up on this — on this staff ESOP policy, et-cetera, I wanted to understand that what has been the attrition rate for us per say employees who join us in the first one year and post that, how much difference is there in the attrition rates that you have generally seen? And this is not particularly about MP, but for the company largely? And my second question is that in the budget, there were certain the PMAY second version has been announced, etc. Can you help us understand how much did we participate in those or how much portion of our disbursement in the earlier — earlier version till 2021 was from the PMFI scheme and how much can we scale it up this time as well? Thank you.
Rupinder Singh
Yeah. Sure, resources, which are under ESOP policies, we have seen the attrition level less than 10% in those particular categories. So that’s always an advantage with these kind of policies, both has been extended a pretty large set of people, but yet that is there. Now if we talk about attrition, we identify in a various aspects. One is the frontliner, the new journeys who take some time to adjust and these are the roles, which is totally target based. Typically the loan officers to go into field, get a new leads and get a new sourcing around. So that first couple of months, three, four months are really important for that and quite of them get come to that piece. So this does happen. But if you see the attrition level overall the company, if it is, 37% 38%, if you break between less than six months and greater than six months, there is a drastic change. If you talk about greater than one year, what you asked, I think that attrition level is 15% to 17%.
Shreya Shivani
Perfect. Yeah. And on the PMFI scheme as well.
Rupinder Singh
And secondly on a PMFI scheme, last-time when this scheme came, we were able — our home loans particularly because this scheme is largely for home loan. So 18% to 20% of sourcing happened in particular through the help of the scheme particularly when it came in 2021. It has come recently. We have to come out the numbers in couple of quarters where we can explain how the scheme is working for us.
Shreya Shivani
Got it, got it. So the PMAY disbursals as per you will start. I believe the industry has signed an MOU with the government, right?
Rupinder Singh
So the disbursals should start in two quarters you’re saying for the so our disbursement and the PMFA has started borrowers, about 15% of the total borrowers, home loan borrowers are eligible for the PMFI scheme. But the data entry on the PMI by portal has just started. So we have to see how much of the borrowers input their data on the PMI scheme, what is the success rate? This is their Radhar number is coming out from the PMFI portal. So that data will be there in next 1/4, we’ll be able to present a better picture of the success of scheme of interest in.
Shreya Shivani
Got it. Very useful. Thank you so much and all the best.
Operator
Thank you. The next question is from the line of Chintan Shah from ICICI Securities. Please go-ahead.
Chintan Shah
Yeah. So just one question. So on the geography, sir, as you mentioned, on the stress pool, we have seen some rise in the DPD, one plus DPD on a Y-o-Y basis. So any specific geographies or specific states where we are seeing a higher stress than the unusual ones?
Rupinder Singh
Yeah. I think the trend in-market is currently not as easy as it was one year back. So yes, this — there is a certain amount of stress which you can find across. This is across geographies, you’ll find some things you know going little up because of the macro scenario, what is — we all understand that, please. Our objective is to curtail that. So action is thorough on that side. And what we look as we close December, the things should improve, particularly in-quarter four, which is always better than quarter three most. That’s what history talked about.
Chintan Shah
Sure. And sir, sir, just as we say the quarter-four to be better. So what are the early signs in terms of January? How has been the collection in January as compared to December? Has it held up or has it been better than December? Any thoughts there?
Rupinder Singh
So exactly on that basis and giving this confidence because when January is better than December, then only we can give this kind of indication. But these are the early indications as we see that. Still there are two months and I think we are positive about the progress around that side.
Chintan Shah
Sure, sure. And sir, lastly, on the BT out, so what percentage of customers means we said 5.5% to 6% is the BT out run-rate. So — but typically, how many customers ask for the BT rate and how much percentage of them are we able to contain and how much percentage are we able to let go? Any percentage on that would be helpful. Yes, please.
Rupinder Singh
When generally customer approach us, he doesn’t reveal about the BT out particularly. He only look for a foreclosure in that case, right? So we don’t distinguish between the customer who is going for BT or customer who is closing from own source. So as far as possible, try to curtail that. But yes, when customer is persistent, we as a compliant company, we have to oblige that piece. During that engagement, if customer is mentioning that he is going for BT out, then we give them idea of the cross and cons and try to retain them on our books basically. So this is a philosophy that we run around. See, we don’t differentiate this as a BT out customer, this is closing from own funds. Engagement is required across basically.
Chintan Shah
Sure, sir. This is very helpful. Yeah. That’s it from my side. Thank you. And all the best.
Operator
Thank you. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Mr Singh from India Shelter Finance Corporation Limited for closing comments.
Rupinder Singh
Thank you everyone for taking your valuable time for attending our earning call. An audio recording and the transcript of this call will be uploaded on our website in due course. Looking-forward to hosting you all-in the next quarter. Further, if you have any questions or require additional information, please feel free-to reach us out. Thank you so much.
Operator
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.