INDIABULLS HOUSING FINANCE L (IBULHSGFIN) Q2 FY23 Earnings Concall Transcript

INDIABULLS HOUSING FINANCE L (NSE:IBULHSGFIN) Q2 FY23 Earnings Concall dated Nov. 14, 2022

Corporate Participants:

Gagan Banga — Chief Executive Officer and Vice Chairman

Analysts:

Abhiram Iyer — Deutsche Bank — Analyst

Unidentified Participant — — Analyst

Craig Elliott — NWI Management — Analyst

Kayur Asher — PNB MetLife — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Indiabulls Housing Finance, Q2 FY23 earnings conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] From the management team we have with us Mr. Gagan Banga, Vice-Chairman, MD, and CEO; Mr. Ashwini Hooda, Deputy Managing Director; Mr. Sachin Chaudhary, Chief Operating Officer; Mr. Mukesh Garg, Chief Financial Officer; Mr. Ashwin Mallick, Head Treasury; Mr. Ramnath Shenoy, Head IR and Analytics; Mr. Hemal Zaveri, Head Banking; Mr. Veekesh Gandhi, Head Markets. I now hand the conference over to Mr. Gagan Banga. Thank you and over to you sir.

Gagan Banga — Chief Executive Officer and Vice Chairman

Thank you and a very good day to all of you. Welcome to the quarter two of fiscal ’23 earnings call. Before we get into the numbers for the quarter, I will briefly cover the update on macros. The growth trend in the real-estate sector continues to be strong as per a recent Knight Frank report housing sales in top eight Indian cities recorded a 15% Y-o-Y growth in-quarter three, calendar year ‘2022, and a 20% growth compared to the quarterly average sales observed during the pre-pandemic times of 2019.

Suppliers also picked-up, growing 18% Y-o-Y in quarter three calendar ’22. Units launched have also picked up. Developers have responded well to the upswing in demand levels over the last past[Phonetic] year. Launching new projects compatible with the current need of homebuyers, though they continue to wonder where future capital for construction and finance sector is going to come by and that’s something that I will ponder upon with you during the course of this call. The commercial real-estate market has started showing strong growth momentum after the pandemic with 16.1 million square feet getting transacted during quarter three fiscal ’22. It represents a 30% year-on year growth. But we also see the likes of the largest commercial real estate investors and then, what they call a harvesting mode rather than investing mode and therefore what one has to think off is it opportunity for an organization such as ours or should we continue to use this as an avenue to exit whatever loan investments we have made in the past.

On the retail side, the repo rate hike has resulted in a pass-on in terms of the referenced rate hikes from us that has resulted in our book spreads expanding from — to 3.1% at the end-of-the fiscal as of 2.7% a quarter ago. This is transitionary but at the same point in time it indicates our pricing power and the pricing power of NBFCs in general to be on hold or to be able to hold-on to their spreads. I will now quickly cover the headline numbers for the quarter, the balance sheet, loan book, and AUM has stabilized as I had been promising you for the last three quarters. And now I think we form the base as you may have read from our earnings update, the balance sheet has marginally grown. The AUM and loan book has stabilized and, I believe in the second-half of this year we should be able to record conservatively at 10%, optimistically at 15% AUM growth.

Here on we will track AUM growth only. I promised to you, two quarters ago that we will stabilize AUM balance sheet etcetera and then start growing AUM which we have achieved, and here on the management would like to be tracked on AUM growth. The PBT and the profit-after-tax has been stable for many-many quarters. So while there has been serious volatility in our peers in terms of various numbers I think over the last six to seven quarters we have while maintaining a picture of absolute stability, been able to manage our transformation which is how our retail disbursements have grown. Not by a small number but nine times of what we did in H1 of fiscal last year, this year. Nine times is not a joke by any standards and we are firmly back as the third-largest housing finance company in terms of retail disposals and that too at a — for the portion that we are disbursing and holding onto our balance sheet at a 3% ROA, so it’s a very, very profitable business that we are doing.

In order to continue to enhance on this profitable business there is a significant investment in people. We’ve added over 1,500 people this year. We’ve continued to reward our performing employees and I would imagine that starting fiscal 24 we should start seeing efficiency gains and a trajectory which is back to a reducing number as far as our cost income is concerned, having made the investments through fiscal 22 and continue through fiscal 23. Our gearing, which makes the company a lot more safer from a debt investor perspective, it’s now down to 2.5 times and as I had indicated in the past this is about a floor that we would hit so we are at our floor, balance sheet has stabilized, our AUM has stabilized. I believe that our gearing here on will remain in the range of 2.5 to 3 times.

We are very-very comfortable on capital at 34% of which Tier-one capital is 28%. ROA at a company level has inched[Phonetic] up marginally but that is more because of the profitable increase in our retail disbursements so though it is up all of 10 basis points, the retail disbursals are earning us as much as 300 basis-points of ROA and that is going to continue to add 10 to 15 basis-points every quarter to our company-wide ROA. Most importantly our NPAs have been stable and we’ve been able to manage our NPAs at both an absolute as well as percentage level in a very-very tight range while maintaining a very healthy provision cover, which remains at 3% of our loan book and over 2.6 times of our regulatory environment.

From a long-term strategy perspective I think the company has finally achieved a situation which was for the situation that it had created for itself back in — around 10 years ago in 2011-12 where it had created a series base of transforming itself from a multi-product NBFC back in 2008-09, to a mortgage-focused NBFC by 2011-12. The same sort of base has been created. We have much like in the US where the securitization market is extremely streamlined there is a — it’s a more marketplace approach, there are standardized loan documents, it is standardized credit appraisal process. There is a standardized servicing process.

Your company has been able to achieve that today, we have half of the public sector banks in India buying loans from us. One particular public sector bank a very, very large one amongst the largest one, we just recently concluded a pilot there. The entire buying process of a loan is hands off, neither do we nor do they had any sort of a human intervention. It’s completely hands off. Our documents are read by their systems and then the loans are purchased and there is a transaction which happens where we receive funds. So that’s the kind of a future which we perceive that we will continue to focus on our distribution, invest in people. As I mentioned earlier, we’ve invested in 1,500 people. Through the course of the year, we have invested in retention and it’s a very-very profitable business at a 3% ROA.

Why the banks let us do that is because of the positive credit cycle cost — cycle that we have. We go out there and invest in distribution and place young boys and girls at various sites which for various constraints, public sector banks cannot and that distribution gets us to this profitable [Indecipherable] ROA. Our disbursals under the asset-light model in the prime segment had been able to get to and scale-up in the first-half as high as, INR4,600 crores. As I had mentioned in the last call our strategy for this fiscal year, we’ll continue to be in retention of our employees which is reflected in our employee cost. We have just executed an annual increment, which has averaged at about 16%. Our [Indecipherable] continued to be extremely lucrative. We have repriced some of our [Indecipherable] and made sure that there is a wealth effect coming into our employees.

As we work on our retail loans we are focusing specifically on the affordable segment. We have already created a book of around $200 million with an average ticket size of about INR10 lakh which is focused on what we call Bharat[Phonetic] which is Tier three for applications and we continue to expand on those locations where we hope to get into a market domination position very-very soon. As we do that I think the focus of the last four years as the IMF[Phonetic] crisis worked itself out. The company chose to focus on maintaining a fortress balance sheet through the strong pillars of capital adequacy, low gearing, high liquidity, and robust provisioning. All of that has played out that has enabled the management to focus on operational priority.

The operational priorities remain at unwinding the wholesales book, which is clearly getting tailwinds by the real-estate up-cycle and enhancing the retail book and specifically the retail disbursals cycle. As we sit today we are even unwinding our costs on the wholesale side and focusing on backing up our retail disbursals these branches or people[Phonetic] and that should all play out to us getting to about $2 billion of disbursals in fiscal 24. Now, let’s look at our gross NPAs. If we look at slide five of the earnings update on the asset quality as of the end of September 22, our gross NPA stood at INR2,123 crores which in absolute value as flattish for the last four to five quarters which translates to 2.94% and net NPA stand at 1.70%.

Our stage three provisions stand at 42% of the stage three assets. Our total provision stands at 3% of loan book which is as I mentioned earlier 2.7 times of our regulatory requirements. The retail collection efficiency stands at as high as 98.8% for quarter two fiscal ’23. Very, very importantly over the last seven quarters I have been consistently communicating that we should be able to hold our gross NPA range at between 3% to 3.5% and today at the end of the first half of fiscal ’23 we stand at 2.94%. For this year I have communicated that we expect our credit costs to be between 100 to 150 basis points. We are trending that and as I’ve said earlier if after this crisis and the last eight quarters if one has to believe me then our credit costs should come down at half of these levels next year onwards.

On the liquidity side, we stand comfortable more importantly we continue to adopt a very conservative approach. Most of our stakeholders are aware that when it came to a large rupee redemption of our public issue bond that we had done of about $1 billion we created proactively the reserve for that. When it came down to paying down mutual funds we bought back bonds and now when it comes to ECB lenders today our Board has approved the creation of a term deposit buffer much in line with the dollar. Term deposit buffers that we had created, the dollar bond term deposit buffer we had created, and more importantly then this near term payment which comes due in fiscal 24 even for the the convertible bond due for repayment in fiscal 24-25.

We were proactively continue — we will proactively create a term deposit buffer over four to five quarters for the same. So this is going to get triggered in the next seven to eight days as we negotiate with banks and get the best term deposit rates. We fortunately already got in the same Tier through our domestic banks and we are firmly in-place to adopt this as a regular operating practice for our ALM management for all of our overseas borrowings be it our external commercial borrowings as well as our convertible bond borrowings. If they’re not to convert that is for time to tell but at least as management we will assume that they will not convert to that and we will have to redeem them and we will create deposit buffers for them.

External commercial deposit buffers will start getting created over the next seven to eight days and the FCCB buffers will follow suit. Now moving on to the regulatory side, there has been a lot of transformation on the regulation front, your company has being classified as a upper layer NBFC much in line with the large status of NBFC that it has. We are incorporated company and we are in the process of doing the transformation. The good thing is we did a deep-dive into the transformation today in our board meeting and I’m happy to report that there is no significant P&L or balance sheet impact item as the result of the transformation to the upper layer basis the provisioning or any other requirement or the capital transformation requirement which is — which it has. There will be no P&L or capital charge that you will witness because of the hard transformation to the upper layer NBFC.

As a stakeholder, it will be heartening for you that we will be regulated and supervised, much like a bank so we become that much more safer. Just as an indication, much like banks now we also follow LCRs which is liquidity coverage ratios and as against the minimum prescribed of 50% LCR we stand at about 200% LCR, so we are operating very, very conservatively even basis[Phonetic] what RBI has prescribed for NBFCs. On the ALM side we continue to remain positive and now with these fixed deposits or term deposit buffers, we will be even more conservative. As we stand today, I believe that we are at a very important transformation point for the company. The company over the course of the last four years has transformed itself from a business model perspective from a company which was looking at continuously growing its balance sheet, so when we touched INR1[Phonetic] trillion the balance sheet we thought that we should be guiding the market to when we will touch INR2 trillion.

When we touched five times of gearing we said that we can go as high as seven times with gearing. The business model has completely transformed. Through this transformation process, we had to face macro and micro headwinds. The macro headwinds in terms of its full regulatory overhaul as well as a risk of as far as our industry is concerned. On the micro front because you were trying to do things very differently. There were all kinds of mocks which was thrown on us. The good news is that the company has been able to fairly seamlessly migrate from a near seven times gearing towards the 0.5 gearings. Over the course of the last seven odd quarters, it has been able to stabilize across all operating parameters. We have said that we will continue to de-grow our balance sheet for some time and very boldly we did de-grow that.

A lot of our stakeholders thought that it was about access to debt capital markets. We said this is just the more conservative and long-term, more stable way of growing the business and at some point in time we will stabilize. Over the last three quarters, we’ve stabilized. We also indicated that the business for NBFCs, especially NBFCs which lend to sectors where the borrowing is long is not about keeping assets on balance sheet. It is about originating assets and becoming a lean and mean origination machine. I think we managed that fairly successfully and compared to our peers who are holding assets on their balance sheet. We actually for the capital that we put on our balance sheet gearing[Phonetic] 2x of the return on assets. In absolute value terms it will take us another 12 to 18 months to grow this in absolute profitability but from ROA perspective it is already very healthy at 3% for incremental disbursals which has started now tickering[phonetic] in terms of book ROA as well and there has been a 10% — a 10 basis-points increase. That 10 basis points will continue to increase at a steady pace over the next few quarters and should settle at about 200 to 250 basis points of ROA which would mean that the company will settle in at around, 14% to 15% ROE by middle of fiscal 24 or so.

So that’s the goal that we’ve been trending towards. We don’t want to be a company or a management team which is known to shock or surprise. We would like to state things upfront. We said upfront that we would like to de-grow, we de-grew. Sometimes in life and you have to transform, you have to dig deep, we dug deep. I think we’re now at a stage where we can stabilize and that is the act that we’ve been following, we have stabilized, and from here on, you will see not a 9x type of disbursal growth that you’ve seen in the last one year but at least 2x type of disbursal growth for the next two years year on year which should get us to a level where we are disbursing like $300 to $350 million of absolute retail granular loans a month and that is a very-very unique franchise, where you are adding something like 20,000 customers a month and these are very prime mortgage customers which stay with you and have a lifecycle of seven to eight years, where you can sell multiple products on pure capital allocated basis you make 3% and then if you add other sources of income it makes 3%-plus ROA from these borrowers and these are prime borrowers.

So that’s the business model that we will follow. We will continue to unwind our wholesale book. The real-estate business is doing extremely well in terms of the wider industry and that is benefiting us because the projects that we have mortgaged are selling and selling very well, so on the NBFC balance sheet, we will continue to unwind. As a result, we also would tweak the team and focus more on growing the retail team and for cost rationalization, we will see how we have to best utilize our wholesale team. Our AI platform is also growing slowly. It is already at about INR3,500 crores and it should get to about INR5,000 crores by the end of this fiscal year. That’s the other area of focus. So from next year onwards, the AI platform should start contributing to our profitability and that’s the key metric that I would like to keep for fiscal 24.

For fiscal 23, I would just request all of you to measure our success on growing our AUM by 10% and managing to maintain our delinquencies, our stage two, etcetera. Incidentally, our stage two is down almost 30% since the start of the year and almost 50% from the end of fiscal 21, so we are trending extremely well, this[phonetic] is the real-estate cycle and, I assume that this is the numbers that come in front of me we should be down in another 30% by the end of this fiscal year. So all in all the business is in a very, very stable position and several of our stakeholders have continued to support us. We brought down our leverage, given exit to several of our other stakeholders. We have covered our ECB lenders by creating this term deposit. We are committing to cover our FCCB lenders by following suit on the term deposits.

This is the best foot forward that the management can put forth and I would like to end my comments with a request of your continuing support. We are open to questions now and thank you.

Questions and Answers:

Operator

Thank you very much, sir. [Operator Instructions] Our first question is from the line of Abhiram Iyer from Deutsche Bank. Please go-ahead.

Abhiram Iyer — Deutsche Bank — Analyst

Hi, thank you for taking my questions. So given the importance of AUM. Could you please, let us know what the number is at the end of the September quarter? That’s question one. And question two is could you also elaborate a bit more on the higher provisioning costs that have been taken in this quarter as well.

Gagan Banga — Chief Executive Officer and Vice Chairman

So when we have high PPoP we will continue to take higher provisioning and make sure that we continue to be better placed than having a volatile picture. I am not in Bombay I’m traveling so I don’t have the specific number but my IR team can give you the specific number in terms of provisioning. As far as AUM is concerned we are pretty much flattish to where we were last quarter. This is despite a INR2000 odd crore inflow — gross Inflow from our wholesale book and I expect and then we would have disbursed another INR600 to INR700 crores on the wholesale book to get projects completed.

I would like to draw your attention to some of our key projects in the city of Mumbai. 25 South which is one of our large exposures. This is opposite the famous temple in Prabhadevi area that has achieved occupancy certificate. In the racecourse area in other large exposures which was two — what is the tallest building in India which is called Minerva. That has applied for occupancy certificate. It has achieved all the preliminary certifications required for that and I would imagine that by November the occupancy certificate would come in. All of our LCR exposures are seeing extremely robust growth. A few of our stressed loans in the southern part of India as well as the Northern part of India because of steep appreciation in land prices today, actually seeing [indecipherable] to $1 where we would have imagined basis[Phonetic] the provisions that we had created that we will actually recover $0.80 to $0.90 to $1 so that’s a pretty good situation to be in. So all in all, the AUM on the wholesale side, will have a little bit of pressure at a rate where we will receive INR2000 odd crores a month back — sorry a quarter back but our retail disbursals are growing rapidly and I imagine that we should be doing about INR4,000 odd crores of retail disbursements plus around INR700 to INR800 crores of wholesale disbursement.

So all in all AUM as I said should be growing at about 10% as we speak quarter-on-quarter it is flattish.

Abhiram Iyer — Deutsche Bank — Analyst

Got it sir. Thank you.

Operator

Thank you very much. Our next question is from the line of Ronak Mantri[Phonetic], Individual Investor. Please go ahead.

Unidentified Participant — — Analyst

Yeah, hi good evening and thanks for giving the opportunity. Sir, last quarter you had written off INR500 crores [indecipherable] this year obviously you will not be giving any dividends to shareholders.

Gagan Banga — Chief Executive Officer and Vice Chairman

It will be very sad if we don’t give dividends because we gave dividends to all of our listed history. Since 2005, we listed in September 2004 and from March 2005 onwards, aside of last year we have given dividend so there is no reason why we should not be giving dividends as we speak. Back of [indecipherable] I think we are technically enabled at least as of the end of half year to give dividends. That said I don’t want to be that management which gives a commitment and does not live up to it so it shall be my endeavor to propose to the Board to give dividend that we will see. We have a tricky second-half with the geopolitical situation being where it is, with inflation being where it is, with interest rates being where they are, it has been a very hectic credit growth in the first-half, now deposit rates are increasing so we could even have a very, very rapid increase in input costs so given all of that I will not make a firm commitment.

The firm commitment that I’ll make today is that the retail AUM will grow, retail disbursals will grow. As far as dividend is concerned it is clearly the management intention. Much like you, we are all shareholders so we would love to get some dividends from the company but the more important thing for the company is to be financially strong and regulatoraily compliant. Within the compliance perspective as we speak we should be able to give, we will take this decision or rather the Board would take this decision towards the end of the year. It shall be my personal endeavor to make sure that shareholders get dividends this year.

Unidentified Participant — — Analyst

Okay. Thanks just one more question.

Operator

Sir, am sorry. We request you to return to the question queue. We have several participants waiting. Thank you. Our next question is from the line of Craig Elliott from NWI Management. Pease go-ahead.

Craig Elliott — NWI Management — Analyst

Good evening. Thank you for taking my call. Congratulations on your great success, completing the transformation which you’ve nicely went through. We’ve been here with you the whole time and. I think importantly the base that you set for growth is one for very-high quality growth with your new business model, so my question is what, do you think and when will it take the general equities market participants, those who don’t know you as well as we do [Indecipherable] to really appreciate what they’re missing about how great this business is?

Gagan Banga — Chief Executive Officer and Vice Chairman

So, Craig. Like you rightly said NWI is one of our most incredible investors which is having faith[Phonetic] in the management despite all the odds so firstly thanks to you and the rest of the investment team at NWI for continuing to support us. I believe now that with three quarters, four quarters of stability around AUM, balance sheet, et cetera, now that the process of de-growth has kind of stalled over the next quarter or so the process of growth would take place and would accelerate and as that happens with the limited experience and knowledge of the capital markets that I have and my interaction with investors. I believe that should be 50% of so to say the problem getting unraveled for equity investors.

The balance 50% is around governance consumption which is a topic which is uncomfortable. It’s basically the elephant in the room and it should be addressed squarely. The fact of the matter is that the company has suffered a hell of a lot for folks who were trying to short[phonetic] the company and trying to take advantage. Because we were vulnerable because we were so widely held[Phonetic]. We’ve gone through that and we’ve come through that with fire and just in India had this festival of Diwali, where we celebrate lord Ram’s return and then I was celebrating Diwali. I was thinking that this is almost like the Diwali for Indiabulls, right, so we have returned and we have returned with glory. We were put through a test through fire and we’ve come through that.

The courts have upheld us. The various regulators have upheld us and as we speak today we have perhaps one of the strongest boards in the country amongst financial institutions. I just come through a Board meeting which lasted three hours to just discuss regularly — regular quarterly results. The Audit Committee lasted for two and half hours. We have a regulatory measures oversight committee which convened on Saturday and lasted for three hours, so before we come in front of you with the numbers that we come in front of you there has been eight and half hour discussion at the Board level. That is with people who are deputy governors and bank MDs and Supreme Court judges and audit partnerers and what you have — what have you. So with this kind of governance and with the kind of come through that we’ve seen there is — and with growth returning, I see no reason why in a quarter or two we would not start trading at par and then perhaps beyond our book value.

I needed to give a growth indication to our stakeholders. I think today I am firmly in a position to give that growth indication and there is no reason why book value and past book value should not get issued over the next two to three quarters. That said the management team is not taking any pressure and we are being abundantly honest about this, about the market cap et cetera. We’re going about our job. We want to be focusing on investing in our capital, in technology, in being the best in class as far as technology is concerned. So that by fiscal 25 that starts reflecting in our cost-income. We continue to invest in our people so that through fiscal 25-26 we have single-digit attrition numbers on our employees. And if all of this increase the stock market it is very good for us.

If it does not as a management team we will still be very happy creating a massive retail franchise which is creating half a million customers or so on an annualized basis and these are the most finest[Phonetic] customers that you can get in India, so that’s the way that we’re approaching this whole issue. I’m quite sure with my experience that there is no reason why the capital markets would not value us appropriately.

Craig Elliott — NWI Management — Analyst

Thank you.

Operator

Thank you. Our next question is from the line of Kayur Asher from PNB MetLife. Please go-ahead. Mr. Asher your line has been unmuted please proceed with your question.

Kayur Asher — PNB MetLife — Analyst

Yeah, thank you for this opportunity. Sir, if you could kindly share the data on the developer loan book. Sir, you mentioned about the benign trends that we’re seeing, so if could mention what is the outstanding book as of September 22 and what is our guidance as to where would we look — to see this book by the end of FY23.

Gagan Banga — Chief Executive Officer and Vice Chairman

So the book is managed to last quarter. I believe the AUM would be in the handle of INR70,000 odd crores as was the number last quarter and as far as balance sheet is concerned we have reported that to have also stabilized. For the guidance, we formally guided if you go through the earning update the first page itself says that we look to grow our AUM by 10% odd in the second half of this year and that’s the AUM growth number. Here on we will talk only AUM growth and I’m quite sure that we’ll grow 10% here on.

Kayur Asher — PNB MetLife — Analyst

The question was specifically regarding the developer loan growth. So what is our guidance for that and what is the current drive[Phonetic] at development loan growth?

Gagan Banga — Chief Executive Officer and Vice Chairman

That will de-grow by about 20% for the — in the second-half of this year.

Kayur Asher — PNB MetLife — Analyst

Sir, any absolute number you would like to quote?

Gagan Banga — Chief Executive Officer and Vice Chairman

De-grew by, about INR2000 odd crores.

Kayur Asher — PNB MetLife — Analyst

Understood, sir. Thanks, that was my only question.

Operator

Thank you. We will take one more question from the line of Chandrashekhar[Phonetic], Individual Investor. Please go ahead.

Unidentified Participant — — Analyst

Hi, Mr. Gagan. Thanks for giving me the opportunity. I just would like to ask on the last commitments right after [Indecipherable] so is that exist talk approved by all the authorities and then the updates on the PIL in Delhi High Court and then the ED cases in Supreme Court as well as the NCLT cases — I can see lot of NCLT — cases pending in NCLT and your earlier commitments of NSE prime, AIF partners, name change, offering the Board seats to the [indecipherable] investors and all this, so one concern actually you know I’m not disclosing all this to the exchanges and we being the retail investors actually finding very hard time because we are — because we are very long time investors and then our capital eroded almost half of it actually. So could you please kindly help on this. I would really appreciate. Thanks everyone. Thank you.

Gagan Banga — Chief Executive Officer and Vice Chairman

Craig [Phonetic] sorry that your capital eroded and it’s beyond my control in terms of how capital markets move. But I would kind of disagree as to that we’re not reporting anything to the stock exchanges, whatever we communicate with you either here or we put it in writing in our earning update is all uploaded on our website and on our stock exchange disclosure section. Everything is up there and we are not trying to do anything which is off the record on such a formal sort of platform. Mr. Gehlaut and I’ll deal with each of these points and if I leave any of them feel free-to kind of say that you did not answer this. Mr. Gehlaut states same sale happened to the world’s largest financial institutions. Its stake fell down to 9.5%. We have formally approached the various relevant authorities as well as stakeholders for his deep[Phonetic] authorization. I would say 80% to 90% of the stakeholders have approved. The balance 10% to 20% should approve fingers crossed through the course of the next 30 days.

As they approve but [indecipherable] would happen. And once that happens then we will logically move away from the Indiabulls brand and rebrand ourselves. It has to be a step-by-step thing. The Indiabulls brand has a large brand recall and it will be a massive investment in rebranding assets but before that we have to take a step by step logical parts to it and we are on that part. The most important step in that was in the context of India where deep amortization is a rare sort of a thing. We must salute the founder to say that the institution is more important than him and for him to have taken this initiative so I believe that, he will continue to make sure that the organization and the institution over the weeks and months to come become more and more independent. He is anyway is not on the Board. The Board is completely independent of him and the Board is led by Mr. Mundra, for the last two years.

So it’s well on course. As far as the PIL is concerned to the best of my understanding for one reason or the other and the legal luminaries[Phonetic] are better placed to elaborate on this but despite our best efforts to get that PIL listed it does not yet listed. If it does not get listed how do we get it dismissed. The prayer of the folks who came on the PIL when they find it against us was that someone should look into our books and they prayed someone should look into our books and what happened was that everyone looked into our books. And then everyone looked into our books and filed affidavits saying that their books seem okay and there’s nothing out of the ordinary in their books. They never came back. So after this what else can management do. I do not know.

As far as the ED matter is concerned we’ve already filed with the stock exchanges that first the honorable Bombay High Court quashed the underlying predicating offense as they call it in the ED terminology and then the honorable Delhi High Court quashed the ED proceedings itself. So as we speak there are no proceedings against the company both the division ventures have noted that there has been a grave abuse of law against the company which has resulted in all stakeholders getting harmed. Your capital has halved, my blood pressure has increased, so both of us are sufferers but today I’m quite sure that the management team will focus on execution and recoup your capital and slowly, my blood pressure will also get okay. So we are as far as that proceeding is concerned also on a strong wicket all in all I think we are in a pretty good place where we are today.

We have to focus on execution. We have to focus on building our retail dispersal franchise. We have to transform our wholesale business from the NBFC balance sheet to the platform for that we have to right-size the organization, move people, do all of that which is hardcore execution. Fortunately, we finally have the management bandwidth to focus on execution versus focusing on fighting these very, very motivated battles. So having done that there is no reason why we will not be able to excel on execution and create value for all of you. So that’s where I would like to end this call unless I’ve not answered someone’s question which was already asked. If there are any further questions please, feel free to email them to us and we shall certainly reply. And, we shall connect sometime in towards the end of January or February for quarter three earnings which I hope will be as stable as the first-half earnings. Thank you so much and look forward to speaking with you in the New Year. Goodbye.

Operator

[Operator Closing Remarks]

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