JM Financial Limited (NSE: JMFINANCIL) Q4 2025 Earnings Call dated May. 13, 2025
Corporate Participants:
Vishal Kampani — Vice Chairman & Managing Director
Nishit Shah — Group Chief Financial Officer
Sonia Dasgupta — Managing Director & Chief Executive Officer , Investment Banking
Manish Sheth — MD & CEO, Home Loans
Analysts:
Digant Haria — Analyst
Chintan Shah — Analyst
Ravi Purohit — Analyst
Prolin B. Nandu — Analyst
Himanshu Upadhyay — Analyst
Hari Kumar — Analyst
Ashadeep — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Earnings Conference Call of JM Financial Limited. 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. Should you need assistance during the conference call, please signal an operator by pressing star turn zero on your touchstone phone. Kindly note that any forward-looking statements made on this call are based on the management’s current expectations. However, the actual results may vary significantly and therefore, the accuracy and completeness of this expectations cannot be guaranteed.
Please note that this conference is being recorded. I now hand the conference over to Mr Vishal Kampani. Thank you, and over to you, Mr Kapani.
Vishal Kampani — Vice Chairman & Managing Director
Thank you. Thank you. On behalf of JM Financial, we extend a very warm Welcome to all of you to the earnings conference call to discuss our financial results for the quarter and year ended March 2025. We have uploaded our results, presentation and press release on the website and stock exchanges. I hope you’ve had a chance to go through the same. On the call, we also have with us our senior management team, Chirag, Managing Director, Dream Financial Limited, Sonia, MD and CEO of Investment Banking; Manish and CEO of our Home Loans business; Dimple, Head of Investment Advisory and Distribution; Anuj, Head of Private Wealth; Amitab, CEO for Asset Management business; and Nishit Shah, our Group CFO. I will give the key updates and then I’ll hand over the call to Nishit to take you through the numbers. During the quarter, we increased our shareholding in JM Financial Credit Solutions from approximately 47% to 97% and we paid out a sum of INR1,500 crores to the investors who were invested in Credit Solutions. We have also consolidated our asset reconstruction business under JM Financial Credit Solutions. Our focus will now be on the big opportunities in the private markets business, comprising of private credits across corporate, bespoke and real-estate with a focus on origination to syndication and also private investments on the equity side through our private-equity fund and growth-focused funds and investments in REIT fixed-income. In-line with our earlier guidance and a shift to an off-balance sheet model, the loan book across wholesale real-estate, including land funding and financial institution financing and MSME has run-down from approximately INR7,500 crores as of, 31 March 2024 to INR3,570 crores as of, 31 March 2025. This is a significant reduction that we have achieved and with minimal impact on-balance sheet. In light of the above rundown of the loan book from a strategic perspective, it’s important that the overall financial and operating metrics should ideally be compared on a Q-on-Q basis as compared on a year-on-year basis. I would now like to take you through the update on the focus businesses as follows. And first, the Corporate advisory and Capital Markets business. This includes the investment banking and institutional equity business, the pipeline of transactions for both our equity capital markets and M&A business continues to remain strong. We are happy to report that we stood number-one in QIP deals done in terms of volume in FY 2025. And during the quarter ended March ’25, we have seen a strong traction of M&A and P syndication deals. In Wealth and Asset Management, the AUM of our wealth management business stood at approximately INR1.1 lakh crores, 11% increase Y-o-Y. The recurring AUM of our non-retail wealth has increased from INR12,500 crores to approximately INR19,000 crores, which is an increase of almost 50% on a Y-o-Y basis. The margin financing book increased to INR1,583 crores, which is a 12% increase Y-o-Y. There was some volatility that we saw in this book in the JFM quarter. We are hoping that this will stabilize and continue on the growth path from this quarter onward. Our mutual fund business AUM has doubled in the last one year to INR13,400 crores, private markets. This business includes loans and investments in private securities, unlisted largely unlisted securities of mostly private companies. We will focus our energies on the private markets business using our capital, our connectivity and our core innovation and solutions-led expertise. As you know, India has a long history of family-owned and entrepreneurial first-generation businesses that need not only advice, but despoke solutions and access to private capital, both on the debt and equity side for a period of time before they go public. My endeavor at private markets is to be the partner of choice. Our rich history of providing solutions to businesses will drive a co-mingled strategy, providing both advice from our investment bank and capital from private markets to these businesses and families. Affordable home loans, the business includes our home loans business in the affordable segment. We now have a branch network of 128 branches and our AUM is at INR2,830 crores, which is an increase of over 26% Y-o-Y. The net-worth in this business stands at INR800 crores. With this, I hand over to Nishit, who will take you through some details on the numbers and then we can open it up for Q&A. Thank you.
Nishit Shah — Group Chief Financial Officer
Thank you, Vishar. During the quarter, income from fees commission and brokerage has increased by 22% quarter-on-quarter to INR435 crores. For the full-year ended March 2025, the fees commissioned and brokerage excluding ARC and NBFC stood at INR1,407 crores, registering a growth of 15% year-on-year. This income stream is a strong focus area for the group going-forward. We continue to focus on further scaling up these businesses to generate operating leverage.
Interest income for the quarter is lower on account of the planned reduction in the loan book in real-estate, financial institutions and MSME. However, interest income for the home loans business has increased by 7% quarter-on-quarter and has remained flattish for steady margin financing book on account of the volatility in the market. With a significant part of the planned reduction in the loan book already being done with, we anticipate interest income to normalize and increase going-forward in-line with the trend in the loan book.
As guided in the earlier quarters, we have concluded the two-year cycle of provisions with the impairment on financial instruments reducing significantly for the quarter ended March 2025 to INR7 crores as compared to INR117 crores for quarter ended December ’24. For the full-year ended March ’25, the impairment on financial instruments stood at INR425 crores compared to INR577 crores for year ended March ’24.
Over the last two years, the provisions taken in the books have aggregated to INR1,000 crores. We continue to focus on recoveries and have reasonable visibility on some recoveries in FY 2026. Despite the volatility in the markets, profit-after-tax and non-controlling interest for quarter-four FY ’25 stood at INR210 crores as compared to INR209 crores for quarter ended December ’24.
It may be noted that the P&L impact on account of the transaction involving increase in stake in credit solutions has not been considered for quarter ended March 2025 as these transactions concluded in the last few weeks of March ’25. The consolidation of P&L shall be done from the quarter ended June 2025.
Considering the impact of consolidation for quarter ended March 2025 on a pro-forma basis, the PAT would be INR238 crores compared to INR210 crores for quarter ended December 2024, which is an increase of 13% quarter-on-quarter. The impact of consolidation of higher stake has been given in the balance sheet. We continue to witness strong traction in JM Financial Home Loans and JM Financial Asset Management as we look to further scale-up these businesses.
Total income for JM Financial Home Loans for quarter ended March 2025 has increased to approximately INR100 crores, which is an increase of 32% year-on-year and stood at INR369 crores for FY ’25, which is an increase of 43% year-on-year. Profit-after-tax stood at INR59 crores for FY ’25, which is an increase of 49% on year-on-year basis. JM Financial Asset Management reported an AUM growth of almost 100% on a year-on-year basis.
The total revenue for FY ’25 stood at INR43 crores, which is an increase of 49% year-on-year. The management fees for quarter ended March ’25 stood at INR13 crores, which is an increase of 1.4 times as compared to the earlier year. During the quarter, JM Financial Asset Management announced the rights issue of INR100 crore of partly paid shares, of which INR50 crore has been paid-up by March 2025.
The consolidated net-worth of the group excluding minority interest stood at INR9,675 crores, translating to a book-value per share of INR101 compared to INR93 for the quarter ended December 2024. The Board of Directors of the company have recommended a dividend of INR2.7 per share. This dividend is the highest dividend ever recommended from the operating profits. With this brief update, I would like to hand over the call to the moderator for further questions.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your 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 the moment while the question queue assembles. The first question comes from the line of Digant with Queenage Wealth. Please go-ahead.
Digant Haria
Yeah. Hi, team, congratulations on a good set of numbers. So Vishal, the first question is there is a bit of positive surprise in the corporate advisory business because this was the worst quarter for the stock market this Jan to March quarter and we have perhaps done like the best profit in the last four quarters. So I’m assuming this entire surprise would have come from the M&A transaction advisory business. So if any color you can give on what did we do in the quarter and like how does this part of the business behave In terms of growth over the next two, three years. That’s my first question.
Vishal Kampani
Yeah, sure. So I think you’re right. The M&A pipeline, which was built a significant part of that execution happened in the last quarter. Even in the private-equity syndication, a lot of the transactions were completed in the last quarter. Also a good uptick on the institutional equity side in terms of gains in-market share across lot of clients, which has also helped the first segment perform very well.
This segment is, as I’ve always said, is extremely profitable segment. It operates at almost 50% ROE and at almost 40% kind of PAT margin, PBT margin and I think our pipeline continues to be very robust. ECM was weak last quarter, but ECM was weak for the entire industry, not just us. And I think the pipeline is very robust, as I said, and we expect a very decent growth to continue in the next foreseeable future. So there anything else you want to add, Sony or?
Sonia Dasgupta
So I think I think JM has built — have been here for five decades and the entire senior management team are having experience of more than two decades has helped us leverage a lot of these relationships that we have and you know, build traction across industries to deliver sound advisory practice and we’re very confident to maintain our market leadership in this space. Got it. All right. Thank you for the detailed answers. Second question is on the — on this entire pivot, which we did from last June when we announced moving to this asset-light model. So now the first leg of that pivot was the balance sheet running down and us consolidating our stakes in credit solutions and ARP. So I think that has happened pretty well. And now probably a lot of money has come back.
So we are sitting with a good amount of cash, more cash will come over the next 18 months. So if you can give more color on how we will use this in the private syndication business, number-one. And number two is, we have given good dividend this time, but as I can see from the balance sheet, there is still scope for doing a lot more on the dividend part as well. So any thought here would be appreciated.
Vishal Kampani
Yeah. So that’s a good question,. I think because of our — our good capitalization, we are in a very fortunate space where we will not only grow, but despite growth, we will also have a very good dividend payout ratio. And just so investors understand this our first business, which we talked about earlier in your first question, the corporate advisory and Capital markets business, as I said, will generate a very decent ROE and does not require much capital.
And we feel that we should have a payout ratio in excess of 50% in that business. And even in private markets, we do not need excess capital, we are very well-capitalized. And as Nishit explained in his call that we’ve done over INR1,000 crores of provisioning and we feel we are — we are fully provided and the business should see very good traction and profitability over the next few years.
And again, as we are well-capitalized, we should be able to again sustain between a 40% to 50% payout ratio in terms of profits of that business’s dividend. And I would — I would say assuming that — assuming that the capital markets are healthy and the state they’ve been in the last three, four years and the pipeline continues to get executed, then I think dividends will stay, you know, higher from the levels we’ve done in the last three years.
So three years back, the dividend was INR1.8 a share. Last year was INR2 and we’ve proposed INR2.7. So in effect, in the last three years, we’ve doubled our dividend. And if the profitability continues, which I’m fairly confident we should we should be able to double dividend in another three years as well.
Digant Haria
And that’s great to hear, Vishal. And just on the private syndication business, like at least as of now, the numbers look small, but how — what is the glide path for the next two years? How much capital gets consumed there, how much fee income or transactions can we do? Any progress in the last 12 months in and if you can highlight that.
Vishal Kampani
Yeah. So as you know that last one year, we were very focused on taking control of JM Financial Credit Solutions, which we have. We have used a significant portion of our cash, INR1,500, INR1,500 crores to buy-out the minorities, but that cash is visibly sitting anyway in JM Financial Credit Solutions. And I think the consolidation of the ARC under Credit Solutions gives us an integrated approach on the credit side, where we can work with a host of private companies, promoter families. We have brought down the real-estate book to a very comfortable level now.
As you know, our real-estate book at peak used to be INR10,000 crores. The bulk of the provisions of INR1,000 crores are sitting in real-estate and the real-estate book today is at less than INR3,000. So we have extremely healthy coverage on the book of almost 27% 28%. So I expect that this INR1,000 crores we should be able to recover over the next three years to four years and there is no further provision needed.
And if we are able to maintain even a INR2.5 crores to INR3,000 crore real-estate book and our corporate plus the spoke book of another INR6,000 to INR7,000, I think there is very good earnings potential in the private market business at a debt-equity of less than one is to one. And on-top of that, we will also power through using our corporate advisory, Capital markets and wealth Management segment to do interesting stuff in the private-equity side through our private-equity fund.
We are also entering into a lot of co-investment partnerships where we will be able to execute not only for balance sheet, but even syndication on the unlisted side, a tremendous amount of equity investments for our clients and we’re very excited to even roll that business out from balance sheet in private markets through co-investment model.
So it looks very exciting. Obviously, we were not disclosing the full strategy of what we want to do with that business in the last two calls because we were purchasing the minority stake from the investors. Now that it is done, we will be fully focused on executing this strategy over the next two years.
Digant Haria
Perfect. That’s very heartening to you, Vishal. Thank you so much and all the best.
Vishal Kampani
Thank you.
Operator
Thank you. Next question comes from the line of Chintan Shah with ICICI Securities. Please go-ahead.
Chintan Shah
Yeah. Thank you for the opportunity and sir, congratulations on the quarter. So just a follow-up. Just adding on that AIF or private — private-equity syndication business, which we are talking about. So what we could just so given that now we won’t be doing that wholesale lending wherein we have a strong connect, but we will be doing that business indirectly via this syndication business.
So how big can the total AUM via syndication be over the next two years? Any thoughts on that? So basically, just want to understand how much can it add to the bottom-line in terms of fee income and given that the cost is very limited, it could add to the overall profitability of the group. So firstly, just wanted to get some thoughts there., thank you.
Vishal Kampani
So let me explain to you that when we talk about private credit and private credit syndication, it’s a — it’s a limited balance sheet business. It’s not a zero balance sheet business, because in most of these cases when you originate, right? You have to originate, underwrite and then you have to syndicate.
The idea is that when you’re not running a very-high leverage model and not trying to build a financial institution where you have to chase loan growth quarter-on-quarter, then the syndication business becomes very important. And we’re seeing a lot of traction syndication on real-estate, in corporate as well as on the equity side and private in private situation.
So the idea is how do we build a franchise, which is very strong at not only originating, making sure that they have a strong enough hold position on-balance sheet through which we generate very good NIM and we also are able to have good fees on the syndication side that adds to the return-on-equity in the business.
So I think imagine a scenario just to put numbers down, where if we have, say, close to around INR5,000 crores of equity and we supplement that with INR5,000 crores of debt. I think on a INR10,000 crores book, we should be able to earn easily Any yield of anywhere between 12% to 13%. And the idea is how do we churn this balance sheet in such a way that we are constantly making at least 1% to 2% of additional fees. So that’s how we are thinking about the business. And the business is fully staffed. We have all the people that we need to run that business. We don’t need to add too many people. And we have all of these relationships, which we want to mine, work with, provide interesting solutions as well as keep the profitability at a very decent level. Now this business will never hit a, 30% 40% kind of ROE, which the advisory business hits because the advisory business does not need capital. But the way we look at it is our endeavor will be to hit the early teens. So if we’re able to hit 13% to 14% kind of returns on the on the syndication side and we have 30% to 40% returns on the corporate advisory and institutional equity side. I think the blended return on that capital that we are deploying should be in the high-teens.
Chintan Shah
Sure. So, sir, if I just understood it correctly, so basically just hypothetically as you told INR50 billion of equity and INR50 billion of debt. So basically assuming a INR10,000 crores book, so half of it would be funded by us and half would be wire syndication. Is that a correct understanding?
Vishal Kampani
No, no. So I think the book eventually will be at INR10,000 crores. It will be funded by a one is to one net-debt to equity. Yes. The syndication amount will be over and above that.
Chintan Shah
Okay, okay. In syndication also we would be inputting some number 20%, I guess, or 20% would be funded from our side, right?
Vishal Kampani
And Italy, not necessarily. In some positions, we could be as low as even 10%. In some cases, we’ll hold even 30% or 40%. I think it’s — it’s very deal-to-deal related. It’s very hard to say that you will be approximately 20%. So it depends. So right now, the balance sheet capacity is very strong to be able to hold and sell-down at our terms. So if you see interesting transactions, we will underwrite and sell-down at our terms. If the markets are very, very liquid and we can do pure syndication and make returns from it, they will do pure syndication and make returns from it.
The numbers I’m giving you roughly are not today’s numbers are the numbers where we went to — we want to reach an endeavor to reach. Today, the numbers are way smaller because the balance sheet has come down dramatically. But the growth plan takes us to around INR10,000 crore book is the objective in a matter of three years?
Chintan Shah
Sure, sure. And so sir. And secondly, I think Nishit sir mentioned that we have reasonable visibility of some recoveries in FY ’26. Also, given that we have already almost forwarded 90 — more than 90% is on the wholesale portfolio as well as ARC, we have a sizable provision. So can we also expect some provision right back? And also if you could throw some light on the quantum of how much recoveries are expected and how much is the — yeah.
Vishal Kampani
Yeah. I think you should assume safely assume something like a one-third, one-third, one-third. I said this on one of my earlier calls also, I think, assume off to INR1,000 crores, we’ll recover one-third this year, one-third in ’27 and one-third in ’28.
Chintan Shah
Okay. So INR1,000 crores each year. And what would be the provision, sir towards this?
Vishal Kampani
Not each year, INR1,000 crores in the total provision, so we’ll recover roughly INR300 each year. Okay, okay. We are fairly confident that we’ll recover everything that we’ve provided.
Chintan Shah
Okay. Sure. So the entire provision be written back over the next three years.
Vishal Kampani
Yes.
Chintan Shah
Sure, sir. Okay, okay. I’ll join back-in the queue. Thank you and all the best.
Vishal Kampani
Yeah. Thank you.
Operator
Thank you. Next question comes from the line of Ravi Prohit with Securities Investment Management Private Limited. Please go-ahead.
Ravi Purohit
Yeah, hi. Thanks for taking my question. I have two questions. So one is if you could just spend some time on our mortgage-lending business, both wholesale as well as retail as to what’s our long-term game here? This is probably one of those businesses which will require constant infusion of capital and ROEs are still subpared. So if you could just share some of the thoughts on that.
And broadly, if you look at JM as a whole today has, let’s say, about INR10,000 odd crore net-worth with about INR5,000 crores in treasury. Now if this is not deployed over a longer period of time and the network keeps expanding, at what point of time or what path will the company take to achieve that 15% 20% ROE assuming this net-worth is not paid out and this cash stays on the balance sheet, which effectively means when — what’s the path to kind of making INR1,500 crores to INR1,800 crore profit?
Because I mean the ROEs will come either you shrink the net denominator or deploy significant amounts of money over a period of time and generate you know, significantly higher ROEs on that. So if you could just spend some time on both these repeat?
Vishal Kampani
Yeah. So let me start with your second question first. So I think of the INR5,000 crores that we have in treasury assets, I think we’ll take an additional close to INR2,800 back into business and we will leave surplus of around 2,000 2,200 in cash and we will give all of those details in our June quarter in terms of where the cash is being deployed and in terms of which business and how. And yeah, so you should also understand the ROE, right.
I mean, if you look at our profitability ex the investments that we are making in digital, in physical branches in terms of our broking platform, the additions in manpower and wealth management as well as the burn that is on in asset management to scale the business. Ex that burn and ex those businesses, the ROE is anyway already in the early teens.
The idea really is to make sure that we scale businesses and our businesses become much larger than where they are today over the next two years. And we started this journey of investment two years ago. It’s kind of a three to five-year plan, and we will continue investing over the next two years because right now, size, scale and the momentum to be much larger in some of these segments is very important to us and strategically important to us.
And therefore, that investment is, you know, reducing profits a little bit. But as these businesses breakeven, many of them scale in terms of their revenues, you will see a lot of increase in profitability over-time. And some of these things we are already seeing when we see data on a lag basis. You’re already seeing a lot of these investments become profitable. It’s just a matter of time, year or two down the line where there’ll be much more profitability from the same.
So coming to your question on mortgage-lending, I will have Manish talk about retail, but before he starts, on the wholesale side, we have shrunk the mortgage-lending business on the wholesale side for a couple of reasons. One is that there was changes in regulation, which came from RBI over the last two years, some of them increasing provisions and some of them are sort of raising a question mark-on what kind of financing is possible through an MBFC structure.
And land finance, early-stage approval finance are all not clearly permitted by — by these regulations and therefore, there is a necessity to shrink the book. Also, I think we’ve realized that the recoveries from many of these segments take much longer compared to what we had estimated earlier and that digs into ROA. That really reduces ROA by almost 100 to 150 basis-points and therefore reduces the profitability of the model over cycles.
And therefore, we are focusing on high-quality real-estate developers who we will work with, where we can do equity transactions with them, where we can do credit transactions with them and we will do more construction finance and more syndication of the same construction finance and syndication of land finance.
And therefore, keeping a book at less than INR3,000 crores is probably healthier long-term from a balance sheet perspective, but doing more fee-based business with the same developers and relationships is a better sort of business model and that’s why we pivoted the business model a year-ago. I’ll pass it on to Manish now, who will talk you through our retail home loans plan.
Manish Sheth
Yeah. So hi, Ravi, this is Manish here. Basically, asking about home loan business, okay, now we are in the eighth year. And as we speak this year, we have now opened out of 128 branches, roughly INR2,900 crores of AUM, our net-worth is around INR800 crore and rightly said by you, our ROE is 8.5% and our ROA is 2.5%. The question is that now how will you grow this business? So even in the last call, what we said and we are maintaining the same that we grew at least 30% 30% last year. So we will take this business AUM from INR2,800 crores — INR2,900 crore. By FY ’27, we will be at INR5,000 crores and by FY ’30, we will be at INR10,000 crore and that rate. While we grow this business, our branches will grow from 128 today to roughly 200 branches by FY ’28 and roughly to 75 branches by FY ’20. The question was more on ROE, which is today at 8.5%, we are budgeting that we will be at roughly 11.5% to 12% in FY ’28 and roughly 14% by FY ’23. And that means we will take our ROA up from 2.5% to around 3% by FY ’27.
Ravi Purohit
Okay. Okay. Thanks, Manish for that. Just one clarification on the numbers in the P&L. There is a line-item in our P&L called net gain on fair-value changes. If you see that number for the full-year financial year, it is about INR735 crores versus last year’s INR560 crores. Now what is this net gain on fair-value changes?
Because what we are trying to establish or at least what I’m trying to understand is what is really our operating income versus some of these fair-value changes in investment book and all. So this net gain on fair-value changes, is it mark-to-market changes, these are actual changes? What is — because bulk of our profit, let’s say if I mark to — I mean, if I look at the reported profit and the net gain on fair-value change number, they are probably the same. So if you could just clarify what exactly this line-item constitutes.
Nishit Shah
Yeah, hi, this is here. So net gain on fair-value changes includes the realized as well as the unrealized profit. So under IndAS, we have to mark-to-market the financial instruments so that everything comes under this net gain on fair-value changes. Now even the investments that we do of surplus liquidity for some of the NBA — some of our NBFCs, which are technically operating in nature actually move through the gain on fair-value changes. So it’s more accounting from that perspective.
Ravi Purohit
So how do we assess the core profitability of our businesses? And this is when we adjust for — so should we take-out next gain on fair-value changes from our operating profits to assess the true profitability of the business? I’m just a little confused on that angle. So like we — many of us do like non-recurring income or non-cash income or expenses we net out from P&Ls of companies to establish what their true business incomes are.
This net gain on fair-value change is such a large number that one is kind of — I understand we have given business-by-business breakup in the PPT, but all of those also will include this segment-wise numbers, right? So this really kind of — no, no.
Vishal Kampani
For example, when was trying to explain to you even the mutual fund investments that we make, which are in the nature of liquid mutual funds, right, which is the earnings from the cash that we’ve had on-balance sheet. So we’ve had on an average basis the highest cash on-balance sheet last year because the payout of INR1,500 crores for credit solutions also happened in the last two weeks of March, right? Right. So even the liquid investments that we make, all of that goes through the same line-item, right? So it’s literally kind of a treasury income.
So it is not — it is not core income, it is income from your treasury investments in mutual funds and of course, gains in some of the other instruments, whether debt or equity that you have, but large part of it is investments in mutual funds.
Ravi Purohit
Yeah. Okay. Okay. All right. Thanks a lot.
Vishal Kampani
That number — that number over-time will reduce because we won’t be holding so much cash like we’ve been holding in the last two years. Cash will get deployed more-and-more in business. And therefore, what we are seeing today as treasury income will actually become interest income as we start deploying to build our private market syndication business in.
Ravi Purohit
Fair point. I think I got that.
Vishal Kampani
If you see the way the balance sheet has moved over four, five years, right? So INR10,000 crore real-estate book has become INR3,000 crores and credit Solutions on average had INR3,800 crores of cash last year. So it is interest income which reduced, which became cash. We tried to prepay as much of loans that we could where banks were accepting and the mutual funds were accepting.
And then whatever cash remained on-balance sheet was invested in mutual funds which gave you a return, right. And we have 10% of treasury, which we invest in equity, which did very well, which gave you a return, right. So 90% of that return is from liquid mutual funds and 10% of it is from equity treasuries.
Ravi Purohit
So in a sense, if I look at the line items and the revenue from operations, the first-line item is interest income, which is right now actually on a reducing glide path, whereas others going up. Over a period of time, there should be over the next — over the next five years.
Vishal Kampani
Now five years are done, this is the reset year. Over the next four to five years, you will again see it reverse. You will see interest income going up and other income coming down.
Ravi Purohit
Okay, fair enough. That’s very, very clear. Thank you so much for this explanation. Really appreciate that.
Vishal Kampani
Thank you. Of course. Thanks.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Nandu with Edelweiss Public Alternatives. Please go-ahead.
Prolin B. Nandu
Yeah. Vishal, thank you so much for giving me the opportunity. Just your comment on you wanting to take the credit solution of book back to INR10,000, right, with 5,000 of equity and 5,000 of debt. So — and so will it be that the syndication will start once you build this INR10,000 crores book and no syndication is already?
Vishal Kampani
No syndication is already?
Prolin B. Nandu
Understood. Understood. So what I’m saying is that you have a — do you have a number in mind as to how do you want to balance the yield income that we on this — and the syndication? This is like a 50-50 mix that you have in mind or 70-30 mix. Any comment on that as to how should one think about the
Vishal Kampani
I think that’s a good question. It’s very hard to put a number down in terms of what the mix will be. But I think on average, we should be able to syndicate at least 1 to 1.5 times of what is on-balance sheet. So you can churn the number out. So assuming if your balance sheet is, say, INR100 and you have INR150 of syndication, that means you make your fees on syndication and you make your NIM on the INR100 rupees that you’ve invested. So that’s roughly the kind of math you can work-in your model.
Prolin B. Nandu
So then it means that it will still largely be in, let’s say, next five years will largely be a yield business rather than a fee business, right? Is that statement correct? While you can’t put the number but below?
Vishal Kampani
Because there will be — there will be a lot of deals where we will be only syndicating. This is the combination deals where we are holding on-balance sheet and we are doing syndications. Now the only syndicating business is very hard to put a number because it’s like the equity capital markets number. You may have two quarters of great syndication going on and you may have two quarters of no syndication going on. So it’s very hard to tell you how much of your syndication will happen and when.
Prolin B. Nandu
No, so Vishal, I’m not talking about the quarterly number, but I mean, can it be a 50-50 mix,
Vishal Kampani
Let’s say, right, in terms of no, no. Interest income will be a higher mix for the foreseeable future, at least the next two to three years.
Prolin B. Nandu
Okay. That’s it from my side. Thank you so much.
Operator
Thank you. Next question comes from the line of Himanshu with Google Rock PMS. Please go-ahead.
Himanshu Upadhyay
Yeah, hi. Good afternoon. My first question was on the ERT side, we see a purchase of asset of INR260 crores. Is it a single-asset or it’s a things retail side of asset what we have acquired.
Vishal Kampani
No, this is a asset which we bought in partnership with a corporate group where we are doing helping the corporate group in the recovery process. So it’s not a retail asset, it is a wholesale asset. So as we explained our strategy a couple of quarters back, we will only do two strategies in our ARC. One is partnerships with our corporate clients, high-quality corporate clients in identifying and helping them acquire stressed assets where we will have some form of hold with them in those assets.
And we will do retail assets — retail assets more on the secured side, where again we are able to get some kind of a minimum return at least in the low-teens, which is, you know sort of very NBFC like-kind of returns and not really taking on the whole load of restructuring and collections. The collection piece has to be in partnership with the NBA to the bank that we acquire asset from. Of course, we will follow all our processes in the ARC in terms of collection, but we don’t want to build today a full-blown retail collections Business because the operating cost of building that can be very significant.
Himanshu Upadhyay
And one more thing. This is on the private market side. So we had two assets. One was wholesale in the financial institutional financing, okay. One of the things what we were seeing on builder loans was the demand was very low and the cost or the lending rates are very low and it had become very unattractive.
But with some softening in, let’s say, purchases, are we seeing the builders are coming to-market for incremental higher capital and higher rates? What is the sentiment on that side? And some thoughts over that business or how are you looking at the opportunity in next six to months-to one year?
Vishal Kampani
Yeah. So-far — so-far we have not seen a surge in requirements from builders because of the slowdown in sales, but your question is a very good one. If a lag in sales or a slowdown in sales has to continue for the next couple of quarters, then we will see a surge in financing requirements to go up on the construction finance side because for completion, builders will have to draw on the construction finance.
But so-far, I mean, at least till the last quarter, we’ve not seen a big surge. I mean, having said that, you know, most developers are in very good shape from a credit perspective. I think the large developers specifically have done very well in the last three to four years. So they have lot of buffers in terms of cash-flow management. So we’ll have to see — to see over the next one year how the growth trajectory for this business pans out?
Himanshu Upadhyay
In this environment, what we are looking at or what seems now, do we think this business will start or we should start getting growth — seeing growth in this business, let’s say,
Vishal Kampani
There is a — there is a lot of — there is a lot of growth in real-estate, in-land financing as well as the mid-tier and some of the smaller developers who you can lend to. The point is, we don’t want to be in that business. Having seen a long-cycle now for the last over 15 years, we believe it is better to stick to the quality end-of-the developer, work with them with interesting bespoke solutions and maintain a construction finance book with the quality developers and not go down the curve to chase higher yield.
But if you’re willing to lend, there are lot of transactions available at 18% and 19% and 20%. There are a lot of land finance transactions also available at similar rates, but those are all better done through fund structures and not on-balance sheet structures. So our very clear strategy is to keep — one is balance sheet light, one is to one net-debt — net-debt to equity is what we want to work with.
Number two, work with absolutely high-quality customers, high-quality clients and you manage that risk you know and manage that higher risk-adjusted returns through bespoke solutions and high-quality advice and not take unnecessary risk at all chasing higher yields that we are very, very clear about that
Himanshu Upadhyay
I missed the point or said, what would be the group level borrowing currently?
Vishal Kampani
Around INR11,000 crores okay. So when I talk about the one is to one net-debt to equity, it is about the NBFC business. Of course, the HFC and the loan again share in the margin trade financing business will keep growing and they would be at anywhere between 4 times, 3.5 to 4.5 times debt-to-equity. But those are retail granular businesses they can afford to have high leverage.
Himanshu Upadhyay
No, I get your point. Actually, yeah, okay. So currently, we are at around INR11,000 crores. Last quarter it was INR12,000 crores. Yeah, okay. Thank you so much, sir.
Operator
Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Next question comes from the line of Hari Kumar, an Individual investor. Please go-ahead.
Hari Kumar
Thank you for the opportunity, sir. Am I audible? Am I audible, sir? Hello.
Operator
Hello? Yes, Mr Kumar, you are audible. Speakers. Okay, go-ahead.
Vishal Kampani
Okay, okay.
Hari Kumar
So my question, sir, regarding this division is doing good, but it’s and distress credit or like how much of the legacy recoveries should they happening?
Operator
Yes, second-line has been disconnected. Please be a hold while we quickly get them reconnected ladies and gentlemen, the management line has been reconnected. Please go-ahead.
Hari Kumar
Yeah, thank you, sir. One second. Sorry, I clear.
Vishal Kampani
Yeah, I can hear you.
Hari Kumar
Can. Okay, okay, sir. How about this business, sir, how much of the legacy amounts we are at record because we are not at seeing any positive return on the listed amounts? That’s the only question I have.
Vishal Kampani
Sorry, I didn’t get the question. Could you repeat that?
Hari Kumar
I would like to discuss the great business, sir.
Vishal Kampani
Yeah, ARC business, yes, tell me.
Hari Kumar
Yeah, we are not seeing any positive returns on these division sir. All other divisions are doing good. But how much is the legacy assets like we have to recover in this business, sir? And can we positive surprises going ahead?
Vishal Kampani
Yes, hopefully, we should have some positive surprises this year and next year. Though we’ve not had profitability, we’ve had our best collection year last year. I think we were able to collect almost INR1,400 crores. We’ve paid down a significant amount of our debt using the correction and the cash-flow. The debt-equity is at very, very comfortable levels, more than comfortable levels in the business. And this year and next year, I think we should see a good turnaround in profitability in that business
Hari Kumar
By when period can we expect the legacy assets to be fully dissolved, sir?
Vishal Kampani
Yeah. I think borrowing, I think three assets, I think everything is resolved. Okay. Okay. Cash is collected. The only big asset which I had mentioned last-time as well is Unitec, which has not seen any progress on resolution. Otherwise, every other single-asset is either in NCLT, in the mid-stage or advanced-stage or there is some settlement going on where resolution is taking place.
So the only asset where we have no visibility on resolution is Unitec, but there is positive news where in last quarter, the Supreme Court said that the management as well as the lender should try and come on the table and reach some kind of a settlement. So we are waiting to hear back from the management of Unitec on what they have in mind.
Hari Kumar
Okay, sir. Two why are we not seeing any profitability even after recurring all the amounts?
Vishal Kampani
Because we made provisions against the — some of the assets where we don’t expect recovery to be as high and therefore, we cautiously provided in the ARC as well, just the way we provided against the real-estate book.
Hari Kumar
Okay, okay. Nothing of them have thrown any positive surprise.
Vishal Kampani
Okay. Yeah. So forward, but this year and next year should be good.
Hari Kumar
Okay. Thank you. Thank you very much sir.
Vishal Kampani
Thank you.
Operator
Thank you. A reminder to all the participants that you must press star and one to ask a question. Once again, a reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Himanshu Opadia with Rock PMS. Please go-ahead.
Himanshu Upadhyay
Any update on that Bombay Reyon write-off what we took on the ERC side, one big write-off.
Vishal Kampani
Yeah, that is — that’s fully that was a Large part of the collection we had last year.
Himanshu Upadhyay
Okay, sir. So that gets it is done now.
Vishal Kampani
Yeah, that is done.
Himanshu Upadhyay
Okay, yeah, that was it from my side.
Vishal Kampani
Thanks.
Operator
Thank you. Next question comes from the line of Sadeep, an individual investor. Please go-ahead.
Ashadeep
How much more cash we have now, sir.
Vishal Kampani
INR2,600 crores.
Ashadeep
And any update about app digital of our brokerage from brokerage stuff.
Vishal Kampani
Yeah, yeah good. Yeah. So I think we made very good progress. We — the app is fully stabilized. It is in sort of flow of marketing, but because of the low volumes on the option side in the last three to four months, we did not push the pedal very hard on the marketing side. And this year, I think we’ll see a lot more traction on BlinkX, hopefully markets being very supportive. But the app has come out very well. The ratings are very positive. The initial of feedback that we have on the app is absolutely fantastic.
Ashadeep
How much customized on this app for trading. Now can you update for this?
Vishal Kampani
I can’t hear you clearly. How many customers?
Ashadeep
How many customers now trading on app? New customer added for only for the app.
Vishal Kampani
Yeah, we are not — we’re not giving the breakup data of that as of now. We’ll start providing it from June quarter.
Ashadeep
Okay. Okay. Thank you.
Operator
A reminder to all the participants that you may press star and 1 to ask a question. Once again, a reminder to all the participants that you may press star and 1 to ask a question you. If there are no more questions, we can continue with an hour.
Vishal Kampani
If there are no more questions, we can continue with an hour.
Operator
All right ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr Vishal Kampani for closing comments.
Vishal Kampani
Thank you. Yeah, thank you very much, everyone, for attending the call. As we said earlier, we’ve had an excellent year in terms of resetting and making clear our business priorities and we look-forward to a tremendous growth over the next two to three years in all of our businesses and we look-forward to our call-in the June quarter. Thank you.
Operator
Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us. You may now disconnect your lines