Manappuram Finance Ltd (NSE: MANAPPURAM) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
V.P. Nandakumar — Chief Executive Officer and Managing Director
Bindu A.L — Chief Financial Officer
Unidentified Speaker
Analysts:
Abhijit Tibrewal — Analyst
Shriya Shivani — Analyst
Unidentified Participant
Mona Khetan — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day and welcome to the Manapuram Finance Q3 FY ’25 Earnings Conference Call hosted by Motilal Oswal Financial Services 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 this call, please signal the operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Abhijit Tiprewal from Motilal Oswal Financial Services. Thank you and over to you, sir.
Abhijit Tibrewal — Analyst
Yeah, thanks,. We have with us today the senior management team of Monapon Finance to discuss the conference call to discuss our Q3 FY ’25 results. I’ll briefly introduce the management team. We have with us today Mr V.P. Nandikumar, MD and CEO; Dr Sumita Nandan, Executive Director; Ms AL, CFO; Mr Rajun, Head; Mr B.N Ravindra Babu; MD, Microfinance; Mr Rajesh Nambu; CFO, Micro Finance; Mr Kamal Parma, Head Vehicle and Equipment Finance; Mr Suveen PS, CEO, Mannapura Home Finance; Mr Robin, CFO, Manapura Home Finance.
With that brief introduction, I think I will hand it over to Mr Nandkumar and the senior management team of Finance for their opening remarks, post which we will open up the floor for Q&A. Thank you and over to you, sir thank you. Sir, your line has been unmuted. You may proceed with the presentation.
V.P. Nandakumar — Chief Executive Officer and Managing Director
Okay. So thank you. Good evening, ladies and gentlemen. It is always a pleasure to join with this group to share our company’s periodical financial results for the 3rd-quarter of FY ’25. I wish and my heartfelt thanks to all of you. Before presenting, I wish you upcoming Holy West. Despite global uncertainties and continue strengthening of the dollar, the Indian economy remains strong and resilient. In the words of finance Minister, it is on a speedy report.
It is also noteworthy that the NBOC sector has remained stable despite challenges. NBOCs are also actively diversifying their fundings also, including increased issuance of listed non-convertible debentures and foreign currency borrowings. This indicates the resilience of the sector and its ability to withstand the macroeconomic headwinds quarterly result. It also used great satisfaction to mention that 2025 has started on a positive note for our company with RBI lifting the supervisory restrictions on our major subsidiary, Micro Finance Limited.
So the remedial actions undertaken by have satisfied the RBA. So the company has fully revamped its processes and systems and is fully committed to adhering to the clarity guideline. I’m pleased to report that the company has posted a profit-after-tax excluding also worth of INR467 crores. The company’s AUM, excluding has risen to INR34,204 crores, reflecting 18.7% year-on-year growth and 1.9% quarter-on-quarter increase.
For Q3, accruals AUM stood at INR10,013 crores, which includes on AUM of INR818 crores and net NPA at 2.48%. Gross profit — profitability has been affected by the collection challenges in the MFI sector is due to several factors, including climatic disruption, dilution of joint liability group, LG model, weakened borrower discipline and external influences on microfinance borrowers. Has underwritten comprehensive — the remedial undertaken comprehensive remedial measures to rationalize the cost and disbursement with strict underwriting.
Yes, as Ashir was aware, we loss of INR188 crores during this quarter, the consolidated profit-after-tax corporate quarter declined to INR278 crores, which is down by 51.3% quarter-on-quarter and 51.6% year-on-year. It is also pertinent to note that with RBA in the circular dated 30th September 24 issued certain directions including regarding practices. We view these regulatory measures as beneficial for the sector stability. Through our industry association, we are actively participating in the development of standard practices. We have executed the mandated review policies and implemented necessary enhancements To our operations. The vehicle finance business has an AUM of INR5,085 crores, recording a 4.9% quarter-on-quarter increase, while our home loan portfolio has increased an AUM. It has an AUM of INR1,778 crores, reflecting 5.1% quarter-on-quarter increase. The organized goal loan markets comprising both banks and NBFCs has experienced significant growth. According to the rating LG, the market is projected to reach INR15 trillion rupees by March 2025. Companies have also been steadily increasing their online lending and a sustained scale-up will improve their operating leverage and expand their customer-base. Thank you all for your continued support in business. Our focus will be on fortifying our core gold loan business and ensuring continued growth across all the secured lending business. As we capitalize on opportunities created by India’s economic resilience and security reforms, we remain dedicated to our vision of empowering customers and stakeholders alike through prudent, sustainable growth and innovation. For a more comprehensive review of our financial performance, I now can hand over the floor to our CFO,.
Bindu A.L — Chief Financial Officer
Thank you, sir. Good evening, ladies and gentlemen. Thank you for joining us for the discussion on our financial results for the last quarter and nine months ended December 2024. Our consolidated AUM was INR44,217 crores, down by 3.3 percentage sequentially and 9.5 percentage Y-o-Y. The decline is as explained by sir, is on account of the challenges in our subsidiary, Microfinance. If we exclude the our share of the portfolio, the growth is 1.9 percentage sequentially and 18.7 percentage Y-o-Y growth.
That also with the help of the growth in the gold loan portfolio. So profitability INR278 crores for the quarter, which was down by 51 percentage. But if we exclude the the losses, the Q-on-Q decline is only 2.4 percentage. ROE is 8.9 percentage and ROA was 2.2 percentage and our leverage is currently 2.9 times.
Our standalone NPA 2.46 percentage versus 2.42 during the previous quarter. Cash-and-cash equivalents INR4,592 crores and undrawn bank line was INR2,524 crores. Exposure 1 percentage in the standalone entity and our subsidiaries do not have CPA exposure. Standalone borrowing cost has gone up by 6 basis-points during the quarter.
We have raised fresh term loans during the quarter and the liquidity position is comfortable. In the gold loan business, the proportion improved to 55.4 percentage of consolidated AUM compared to 53.3 percentage, an improvement of 2 percentage compared to the earlier quarter. The consolidated gold loan AUM of INR24,504 crore 0.6 percentage Q-on-Q, but the standalone entity could achieve a 1.9 percentage Q-on-Q growth and 18.8 percentage year Y-o-Y growth.
We were able to add 3.3 lakh new customers and the outstanding number of customers stood at 24.66 lakhs. Our LTV at 60 percentage, online book, 79 percentage of the total book. And the standalone PAT was INR453 crores, which is slightly down sequentially and up by 5.8 percentage Y-o-Y. The decline was on account of a higher provision arising from the — from one of the corporate borrowers and a longer DA income compared to the earlier quarter.
Coming to microfinance business, AAM at INR10,013 crore, including gold loan of INR818 crores, down by 17.6 percentage Q-on-Q and 13.4 percentage Y-o-Y. Lost INR188 crores versus profit of INR75 crores, CRAR at 23 percentage. Vehicle finance AUM of INR5,085 crores, which is up by 4.9 percentage Q-on-Q and 41.4 percentage Y-o-Y growth.
And the GNPA increased to 5.2 percentage. The vehicle finance AUM comprises of commercial vehicle, which is 48 percentage and passenger vehicles 31 percentage and two-wheeler 15% date and farm equipment of 6%. Home loan business INR1,778 crore, AUM as on 31st December, which is up by 5.1 percentage Q-on-Q and 25.7% Y-o-Y growth.
Number branches 89 and they reported a profit of INR7 crore during the quarter GLP at 3.86 and the home loan AUM comprises of Home Loan 71 and LAP of 29 percentage, loan to MSME and allied activities at INR3,001 crores with a disbursement of INR356 crores. On lending AUM at INR653 crores and the disbursement only INR5 crore during the quarter.
The capital position is strong with a CRAR of 29.88 percentage and the company’s net-worth INR12,776 crores. The book-value as on 31st December 150.94 crores. Thank you. Now we can go for the Q&A session.
Questions and Answers:
Operator
Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on the touchdown telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles we have the first question from the line of Shriya Shivani from CLSA. Please go-ahead.
Shriya Shivani
Hi, thank you. Thank you for the opportunity. I have two questions. First is on the growth — growth front on the gold loan business. So while I understand that the bit of gold loan business may have seen some challenges, on our standalone book, our gold loan has slightly slowed this quarter versus the last couple of quarters. How much of it is — does it have to do with competition coming back into this space because some of the peers have reported whether in banks or NBFCs have reported much stronger numbers and what is our outlook on the standalone gold book for the coming quarter or for FY ’26 as well?
That’s my first question. Sir, and on the second question, I wanted to understand what has been the provision coverage on Stage 3? I know you’ve taken about INR400 crores of technical write-off, but if you can help us with provision coverage on Stage 3, that would be useful. Thank you
V.P. Nandakumar
The gold lawn is that used to be law, that quarter used to be law because of festivals, et-cetera, et-cetera, that our we expect the gold loan to grow at a rate of 15% to 20% and it will be — that is expectation for the future. This is earlier we were telling us about 10% to 12% and now we believe that around 15% to 20% is possible because with the customers have more-and-more customers are coming in and we see some increase in the ticket size, et-cetera, et-cetera, going-forward.
So this is our — we see the opportunity for gold loan growth. So quarter-to-quarter there may be some difference in the — yeah, regarding the second part, can answer.
Shriya Shivani
Yeah. So the question is on the provision coverage, Stage 3 will be the 50%
Bindu A.L
50% 59%
Shriya Shivani
And ma’am, what was it last quarter, the Stage
V.P. Nandakumar
3? 55%.
Bindu A.L
Yeah.
Shriya Shivani
Okay. So we’ve taken about 4% increase over there. And what about the standard asset provision? How much of that have that moved on-book?
Bindu A.L
Standard assets provision, stage two will be having
V.P. Nandakumar
14%
Bindu A.L
And stage one will have 1.2
Shriya Shivani
How much was the 14% and 1.2% last quarter?
Bindu A.L
Similar.
V.P. Nandakumar
That is similar.
Shriya Shivani
Okay, okay. Okay. Got it. And okay, sir, these answers my question. Thank you so much.
Operator
Thank you. And the next question is from the line of Shweta from Elara. Please go-ahead.
Unidentified Participant
Thank you, sir, for the opportunity. Sir, I have couple of questions. Sir, if I look at gold tonnage both sequentially and year-on-year, it has declined. So clearly, that is outcome of also gold price increase and festival season in the quarter gone by. But then what gives you confidence going-forward to resume growth at 15% to 20% because both the branches as well as customers have sort of are lurching. So the productivity gains are going to be lower in the interim periods at least, right?
That’s the first question. And just the allied question to that. Sir, what is the RBI communication now in terms of opening of gold branches? So I’m not talking about MFI, lead gold or MFI branches, the standalone gold branches. That’s the question. And second, so just coming back to the bit of first participant question. So you have been technical write-offs of INR400 odd crores, right, this particular quarter.
So just a data keeping question, what was this number previous quarter and a year-ago corresponding quarter a year-ago? Thank you.
V.P. Nandakumar
Regarding the growth of decline all depend on the gold price. See, when the higher number amount is available with a lower quantity, people will bring only lower quantity. They borrow force up meeting their requirement and not because there is some — yeah, the value — old value is higher, i.e., LTV side, they don’t borrow like this.See, one thing which you should appreciate is gold loans without any compulsion, even without sending any or anything around within three, four months, almost 70%, 80% of the loans are getting redeemed.
So when somebody plus just their gold, they have some clear anticipation of their cash — upcoming cash-flow. Only on the base of that they borrow. So you will see when the gold price goes down also, you can see growth at the same when at that point of time, you can see as the growth — tonnage growth higher. So this is simply because of the function of the LTV, cold value. And regarding RBA permission of operating the branches, yeah.
Today, we had a meeting. I am in Mumbai because we had a meeting with RBI governor, larger NBFC were invited and I had the opportunity to raise this question to the governor and also I it in the forum and the outside also during lunchtime, I had discussed with him and deputy. Yeah, only governor also wondered why only for gold companies this restrictions he said I don’t see any reason he ask the deputy governors to examine and if there is no genuine reason to that branch opening restriction only for gold loan companies.
And after that, I had the opportunity to discuss with the senior officials and they were positive and they asked us to resubmit obligation. This is where it is. This is in the open discussion we had when the meeting was invited by the BA governor to understand the challenges of the company. We explained to him, I explained to him how this can help in-building away the customers from serious lenders, et-cetera, which was appreciated.
I hope we will get permission for opening branches without much delay. And the other part you can answer.
Unidentified Speaker
Yeah. For Q2 last — this Q2 it was 40 and previous Q3 it was. We did not do any write-off in the previous Q3.
Unidentified Participant
And sir, corresponding quarter last year?
Unidentified Speaker
Yeah, that was nil. That was nil.
Unidentified Participant
Okay. And as well in Q2, Q2 FY ’25,
Unidentified Speaker
40%.
Unidentified Participant
Okay, okay. Sir, coming back, sorry, I’m just harping on the same thing. So coming back to the first question, the first point which you made, so it’s understandable that in a price rise scenario, tonnage would look lower. And like you rightly pointed out, you have been communicating with RBI for acquiring the branch opening approvals, which is very positive. But in the interim periods, as we move ahead, say, in Q4 and Q1, what brings the confidence to put up a, a, 15% 20% growth? Thank you.
Unidentified Speaker
Since annual growth in some quarters because of the demand from the target audience, it grows because for example, a season or school college admissions, et-cetera, et-cetera, then RO season goes down as it has it up. But we — we believe that 15% to 20% is possible and this year also we expect it to get around — around 15%. So that’s the expectation. It is all dependent on the demand only, not because of the coal price as it is mistakenly the impression of the markets.
Unidentified Participant
Understood, sir. Fair point. Thank you so much and best of luck.
Unidentified Speaker
Thank you.
Operator
Thank you. The next question is from the line of Rajiv Mehta from Yes Securities. Please go-ahead.
Unidentified Participant
Yeah, hi, good evening. Sir, firstly, you spoke about RBI directions on gold loan practices and then you said that we’ve also responded and you’ve done some enhancements in-process in operations. Can you elaborate on any specific changes that we would have implemented on-the-ground from say December or January.
V.P. Nandakumar
See, this was a discussion point by the major companies in the gold loan sector today with RBA governor and so they promised
Bindu A.L
This can I answer that or
Abhijit Tibrewal
Yeah, yeah,
Bindu A.L
Okay. So on the 30th September circular, two important points, one is the LDV monitoring and the other thing on rolling over of the pledges, the re-pledge, etc. So on the LTV monitoring, at specific LTV ratios, we are sending SMS letters, et-cetera and there will be an accelerated auction. That is one change we have implemented.
And the — during the tenure of gold loan, the rollovers with partial servicing of interest that is also we have introduced. And beyond the maturity repledges only with the full repayment and then yeah, full repayment of interest. So these are the changes we have implemented. Then NBUs we are capturing in the condicate more clearly acknowledged by the borrower. These are the three points applicable to which we have implemented.
Unidentified Speaker
Okay. What is the top of that, I want to add few more things. So some of the practical challenges in the proposal has been discussed with that the governor and the team today
Unidentified Speaker
He said, yeah, we are consulting with you out. Then on the basis of this understanding the practical challenges and our customers face, et-cetera, et-cetera. So we are — we will come out with a top guideline and then we can have another round of discussion. It appeared that the governor is very positive the setup today is very positive and we expect positive outcomes for that.
Unidentified Participant
And in the standalone company, the other opex has increased Q-on-Q. Any particular reason why the non-employee expenses have gone up by 7%, 8%,
Unidentified Speaker
But it is — we have some unsecured loans which we have stopped in the past like a digital personal loan which we have stopped already and some mustn be lending which we have already stopped. So yeah, we are also that is we have the past buying up and we have completely moved to secured lending in the standalone entity. About the numbers with you can share.
Bindu A.L
Yeah. So the OpEx has gone up, the around INR7, 8 crore because of the employee cost. And the other one in that main expenditure, it is on account of the increased IT costs the cloud usage, etc there is some over usage and we paid some extra amount and lot of automation is also happening. So our change request, that expense has also gone up. So that is the.
Unidentified Participant
Sure. Just one follow-up., you spoke about a couple of changes that you’ve implemented in the process for gold loans with regards to LTV monitoring and rollover of loans. Presuming that it would have got implemented from December or January, incrementally in January and February, are we seeing any impact — negative impact on growth because of that? Or are we seeing the AUM growing? So maybe in terms of customer volumes, because I think the customer-base had declined in Q3 that can be attributable to pledges being released.
But in January, February post the implementation of the new discipline, are we seeing that customer-base is further going out.
Bindu A.L
The — like for any changes, there will be a resistance. So in the first few days, we have seen some impact. Now customers also adjusted to that. And I think the quarter we expect like similar to our last year quarter like.
Unidentified Participant
Okay. Thank you. I have more questions. I’ll come back-in the queue.
Operator
Thank you. Thank you. Thank you. The next question is from the line of Kushant Parik from Morgan Stanley. Please go-ahead.
Unidentified Participant
Hi, sir. Thanks for taking my question. My question was on Microfinance. So given that we have restarted disbursements after the RBI clearance, this would be at a lower interest-rate as well as we had alluded to previously. So wanted to get your take on what will be the refresh strategy for the subsidiary in terms of the growth that we will be pushing for as well as from a margins and ROA perspective for this entry. That’s one question
. My second question is datakeeping question, if you could give us the options number for the quarter for Gold.
V.P. Nandakumar
So the microfinance industry was reporting a reasonable profit even when there was a cap on the net interest fund. But it was 10%. It was till later removed, etc., etc. What has happened is with the removal of almost all the companies strived to the price and thinking that some additional rules can be taken in the pricing some 2%, 3% of focus on et-cetera, et-cetera.
So accordingly, every company has in the spect. And what actually that has led to the indiscriminate lending from all the lenders. So multiple papers which are earlier the number of tenders were restricted that has gone up and that has a network situation. So because of the regulatory changes. Now all the companies understand that and it will gradually come.
But this transition is definitely little painful because as nearly as the law is changes the loans were repaid for using another loan, et-cetera, that source has come down. But now the discipline will come and things will go back to the cost — the change across the liberalization environment. And the — even with that, with our cost of building was contained, et-cetera, I hope is our microfinance industry will go to that level where even was reporting around nearly 5% ROE.
So with that discipline and more-and-more encouragement will be there for group meetings, etc., etc. So this transition phase for every microfinance company will be a little difficult. So I feel like two, 3/4, things will come back auction number is the auction amount during this course
Unidentified Participant
Sir, if you could just guide on the growth for the MFI business as well going-forward.
V.P. Nandakumar
So with the — what we plan to have is to contain the growth and gradually we plan to increase our secured lending business in the term overall book — consolidated book. So gold and other non-gold secured business. So in a phased manner, we plan to bring it down to within 18% now or even it may go down gradually. So other businesses will prioritize other opportunity and we hope we can open branches also.
There will be greater emphasis in growing both.
Unidentified Participant
Understood. That’s all from my side. Thank you.
Operator
Thank you. The next question is from the line of Lav Sharma from JPMorgan. Please go-ahead.
Unidentified Participant
Hi, thanks for taking the question. Just a couple of questions from me. I think more as a follow-up on the previous question first on Ashivad. If you could highlight what is the growth you are looking at on AUM side for Ashidwad in the next one or two years? And any sense of how the asset quality is likely to be likely to evolve over the next few quarters as well within?
And another question related to Ashidwad gain could be a given some of the commentary around the covenant breaches there, could you just highlight what is the discussions with lenders as of now? And any sense in terms of fresh lending or borrowing rates, which have gone up for you within especially?
V.P. Nandakumar
Work, so we have tightened the underwriting process. So we have kept capped the maximum number of lenses that is the — and we have reduced the long size also cycles also at a longer period and from one cycle to the next cycle, the increase also is reduced. So this way, we have tightened the processes.
We are taking — we are giving loan-only to our good customers now work a good track-record all these years, et-cetera, etc. So through some branches which are seen safer, et-cetera. So this way, we expect the growth of, the MFI will come down to around 10% — 10% to 12% annually. I don’t expect that to be more. And we expect the collection efficiency to go up to around 99% because of the tighter underwriting. And we will bring down the employee costs and the other costs by the year. So the clearly planned cost-reduction plan, which is being worked out , the employee productivity has to be improved. So then the brand size also brands in number also will have to be evaluated as we are working out a strategy and we are as I said, in the next two, three years, we expect a growth of around 10% to 12% for MFI with a collection efficiency of 99%.
Unidentified Participant
And could you just comment on the covenant side for the, any impact on borrowing cost or fresh lending which is largest?
Unidentified Speaker
So right now, we have had some disbursements against which we could not give the — I mean the assets. So we are on discussions with them. Because of this current situation of the — I mean which we had this season business impact as well as the overall microfinance sector issues. So banks are — we are in discussion with the banks and we are very hopeful we’ll get some solution for those.
Unidentified Participant
Do you mean that that’s essentially more about higher borrowing costs, which banks could lead — could lead to their could lead to for or any other impact you see?
Unidentified Speaker
Not much, not much, not much.
Unidentified Participant
Okay. Okay. Thanks. That’s it from me. Thank you.
Operator
Thank you. The next question is from the line of Shreepal Doshi from Equirus. Please go-ahead.
Unidentified Participant
Hi, sir. Good evening and thank you for giving me the opportunity. Sir, my question was on something that Bindu alluded to her answer to one of the participants, wherein she highlighted that there has been some process policy changes in-line with the RBI circular. So ma’am, just like — so did you — like I just couldn’t understand that, do you mean to say that we will be maintaining 75% LTV throughout the loan tenure or will be closely monitoring it for each of the customers in the gold segment?
And also you highlighted something on the auto renewals of the loans. So if you could just explain both these aspects again, please?
Bindu A.L
Okay. So on the LTV monitoring, we are strictly ensuring that at the time of disbursement, this is within 75 percentage as permitted. And then the — then the interest accrual will also be added and we will monitor the LTV position. And if it is a small variation maybe up to 5 percentage, we will not act on those cases above 5 percentage, we will start sending SMS, then we will do at 85 percentage, letter, 90 percentage auction notice, etc. Like that, there will be a continuous monitoring and activities, which will ensure a better discipline from the borrowers.
And on the — yeah, that is one point on the LTV monitoring. And second, on the rollover of loans, during the tenure within the permissible LTV, borrowers may need additional working capital, so they used to avail the loan. So during the tenure, now it should be with the cash-flow coming in. So the 50 percentage interest should be serviced during the tenor if they’re all over the loan. Then after maturity, they should service 100 percentage of time risk.
So these are the few changes we made.
Unidentified Participant
Got it, got it. And just one more point here. So sir, as you highlighted, you met the governor recently. So was there any discussion on these regulatory framework front, sir wherein you know they are they are highlighting these aspects to be covered in the processes and policies incrementally for the first time we are getting meeting after the government was taken by the from the governor’s office.
And what he has said is this will continue. This will continue the region-wise. She will take — office will take the initiative and call PQ and sector-wise. So he yes, he was very positive in this thing, yes, sir, the regulation will be successful only when they understand the regulated challenges also. So how to do the business — piece of business is very important in other words we use the piece of business is important and the challenges in each of the business, the regulatory environment should we look at it.
Unidentified Speaker
That’s why he plans to hold such meetings national level as well as regional level and sectoral level and banks also. He said he believes in understanding the stakeholders in ensuring an effective regulation. So it’s very positive. He sat with us for almost four-hour. So we had a coffee break with him. We had the opportunity to discuss. And also large meeting, one-to-one meeting and every participant was given enough time to their concerns.
This is something very positive. This is the words we heard from the RBI government.
Unidentified Participant
Got it. Got it, sir. Thank you, sir. Sir, just one last question. So with this like what highlighted on the process policy front, so do you see that — while we want to implement that and scale and then ramp it up, so do you think that can hamper or have some impact on our business momentum at least from the medium-term perspective?
V.P. Nandakumar
Like this is what — in the forum itself, open forum itself, I raised the question, when too much of regulation, this is going to benefit in the unorganized sector where the major portion of the gold loan is still ruled by drum, et-cetera, et-cetera. So the customers convenience and concept in this regard has to be taken into consideration, et-cetera, et-cetera.
So then he said, yes, so our people had a discussion with new people and we are framing aircraft so you can respond to each of these points. So then only we’ll come out to the final existing. So some of the things which we are — we were asked to implement if these are found difficult support as far as the customer service is concerned, that I hope there may be some changes.
Unidentified Participant
Got it, sir. Got it. Thank you, sir and good luck for the next quarter to the team. Thank you.
Operator
Thank you. The next question is from the line of Pranoj from JPMorgan. Please go-ahead.
Unidentified Participant
Hello, thank you for taking my question. So a couple of questions. One is on the cost of funds that continues to inch up for you. So what segment is actually driving the rise over there? And also, I think 18% is ECB borrowings. So are these 100% hedged from your end?
Bindu A.L
Yeah, is 100% and on the cost of borrowing there is a small change in the bank cost of borrowing it is six basis-points during the quarter, overall cost of overall increased basis-points.
Unidentified Participant
Okay. So this is essentially MCR repricing that to it?
Bindu A.L
Yeah, yeah.
Unidentified Participant
Okay, okay. Got it. And second is on — if I look at your housing finance and your vehicle finance GNPA, they have risen quite substantially despite the loan book also displaying a healthy growth. So what segments are actually seeing higher stress in these two particular sub-verticals?
Bindu A.L
You somewhere?
Unidentified Speaker
Yeah. Thank you for the question. We are basically catering to the bottom of the profiles and the recent issues that we have seen in the market at the macro-level and also in terms of the weather conditions, plus the other challenges that the retail profile have faced, they generally tend to get impacted the earliest.
So that’s one reason why we’ve seen this going up. But from this month, we have started seeing a positive collection. So we are definitely hopeful that things would look better from this quarter onwards. Sir, one follow-up. In-vehicle
Unidentified Speaker
Finance, in particular, there has been a very sharp price. So within your sub-segments of PVCs, what is actually driving the higher stress over here?
V.P. Nandakumar
We have faced with higher increase in delinquencies in the two-wheeler and the farm equipment segments. But now there is, there is improvement seen from January onwards.
Unidentified Speaker
Okay, so it’s mainly two-wheelers and tractors that has driven the rise.
V.P. Nandakumar
Majorly, yes.
Unidentified Speaker
Okay. Got it. Thank you. That’s it from my end.
Operator
Thank you. The next question is from the line of Subranshu Mishra from PhillipCapital. Please go-ahead.
Unidentified Participant
Hi. First a few datakeeping questions. What were the auctions in this quarter? What was the LTV in rupees you gave in percentage and what is the interest accrued? Those are datakeeping questions. I’ll come to the second question after this is answered. Thanks.
Yeah, not audible, sir. Say that again.
V.P. Nandakumar
INR150 crores. INR120 crores.
Unidentified Participant
Okay.
V.P. Nandakumar
The price is taken for our LTV of 60% is it price is INR7,110 crores.
Unidentified Participant
Sir, it is not clear. Say again,
Bindu A.L
INR11,110,
Unidentified Participant
Okay
Bindu A.L
On which 50% is the LTV as on 31st December and INR120 crore auction interest receivable INR1,094 crores. 1,094 crores.
Unidentified Participant
Okay, sure. My next question is on. We’ve seen multiple cycles and there has been management change, there has been some degree of attrition at the branch levels. Do we really intend to build this business for the long-term or we want to sell it out after some point in time? Because clearly, we have had multiple issues running this at a point in time, there was no convergence of gold loans there. I think four, five years ago, we were doing barely 2% of the book was gold loans.
Then we had management change and we started doing more of gold loans versus MFI. So what do we think of this business? Do we really want to run this in the long-term or we want to just do some bit of restructuring and sell it off? Will that make more sense?
V.P. Nandakumar
We are doing the business of the planning it long-term. So we will do that business yeah with a prudent purchases and manage the cost also very prudently and we’ll with regard to risk-based other this secured and unsecured lending. All these are going by our policies which will evolve from time-to-time. Now it is too premature to talk about that.
Unidentified Participant
Right, because we have been speaking about this non-gold loan book when a gold loan was not in flavor, now we are talking more of gold loan when it is a flavor. So just the strategy gets a bit haywire in an investor’s mind. So just wanted to understand what is the clarity there.
V.P. Nandakumar
So the gold loan, we have not said that any point of time here the gold loan is today our, no. We are not told that. So we — what we told us, yeah, we also wanted to grow non-gold business. Yeah. So non-gold also, we have repeatedly said our priority would be secured lending like a the based the EMS army. So then vehicle finances, etc, et-cetera. So this will be the two segments and earlier also our capital allocation will be limited to 10% of the network. So we plan to contain the EMFI book within around 10% to 18% of our total AUM going-forward.
We expect the MFI to grow at around 10% to 12% as I mentioned earlier with our very strict underwriting, et-cetera. So that is — that’s a scenario we expect?
Unidentified Participant
Just one last question, given the fact that we — in our previous answer, it was said that we generally cater to the bottom of the pyramid and vehicle financing. So we’re not getting to choose a customer. Hence, we are always doing a higher-risk segment, which could be beneficial when the rates are coming down. But when the rates are hardening, again, we’ll face these kind of issues, right?
If you’re not able to choose a customer segment with — or is it a strategy to cater to the bottom of the pyramid all-the-time?
V.P. Nandakumar
See, we are serving the through our products like affordable housing, the gold loan or like commercial vehicle where the ticket size is around INR10 lakhs, et-cetera, et-cetera. These are those products used to buy the common man.
Unidentified Participant
Understood. Thanks. I’ll take some — rest of your questions offline. Best of luck for quarter. Thanks
V.P. Nandakumar
. Yes.
Operator
Thank you. The next question is from the line of Mona Khetan from Dolat Capital. Please go-ahead.
Mona Khetan
Yeah. Hi, good evening and thanks for the opportunity. So firstly on the booking. Could I know over the last nine months, how much has — how much of loans have been added to Stage 3, that is the gross additions is three over nine months
Bindu A.L
We will take-up the question offline.
Mona Khetan
Okay, and do we have the pass zero in the book?
Bindu A.L
It is in generation
V.P. Nandakumar
. Slide 25
Mona Khetan
That will include up to 30 days, right?
Bindu A.L
Yeah, yeah, yeah. So I was looking for one plus BPD or par zero,
V.P. Nandakumar
Whatever.
Mona Khetan
Okay. So I’m and sure. Got it. And on the gold book, can you share the loan mix by ticket sir?
V.P. Nandakumar
Yes. Up to-1 lakh, 41.7 percentage is 1 to 2 lakh 22.12 to 3 lakh 11.5, above 3 lakh,,
Mona Khetan
Okay. And just finally, so sir, mentioned at some point about doing a visit some of the unsecured lending. So is it fair to say that apart from MFI, incrementally, we are not taking up any other unsecured lending?
V.P. Nandakumar
Surely. You are right.
Mona Khetan
Okay. Okay. Got it. Thank you so much.
Operator
Thank you. The next question is from the line of Kushant Parik from Morgan Stanley. Please go-ahead.
Unidentified Participant
Thank you for taking my follow-up question. My question was around the standalone asset quality. Just trying to understand the Stage 3 provision coverage, we have seen that moving from 15% in 1Q to now less than 10%, while the GNPA numbers have been increasing only over the last two, 3/4.
So just trying to understand why that is the case? And also if you could help us with the provisioning policy for the gold loans as well as the non-gold portfolio in the standalone business?
Bindu A.L
Okay. So the main business gold loan is the credit cost is negligible and we are following and the provisions based on the historical data. So on the gold loan business, the overall provision on the total book is around 0.4 percentage. On the, MSME, et-cetera, this also again based on the India is working based on historical record and we are doing based on the segment-wise. So this is for vehicle finance, which is ranging between 15% to 25% 15% to 25 percentage and for the MSME it is around 27 percentage all put together, secured and unsecured it is 27%
Unidentified Participant
Understood. This is — this is helpful. If you could just also give some guidance around the standalone credit cost going-forward, given that we are seeing improvement in the non-gold asset quality example.
Bindu A.L
Yeah, we had the one corporate borrower default. That is the reason it has gone up. Otherwise it would have been in the range of 0.5 percentage or 0.6 percentage.
Unidentified Participant
Understood. Thanks for taking my question.
Operator
Thank you. Thank you. Ladies and gentlemen, to ask a question, you may please press star and 1. We have the next question from the line of Gaurav from Capital Farming Consultants. Please go-ahead.
Unidentified Participant
Yeah. Good evening and thanks for the opportunity. I hope my voice is audible.
V.P. Nandakumar
Yeah.
Unidentified Participant
Yeah. Thanks. So my first question is on microfinance since that seems to be one vertical which has given the maximum pain in this particular quarter, right? So in that, I think as per the last con-call, the dataset was given like almost 10% is in gold loan AUM and vast majority is in the microfinance only, right, within the book. So if you can just give the updated number that as per Q3 FY ’25, what is the AUM split between MFI, Gold loan and MSME within the microfinance book?
And correspondingly the GNPA and net NPA number for the three segments within the microfinance. That is my first question.
Bindu A.L
So in Slide 9, we have given the microfinance AAM split-up. So the MFI book is INR9,133 crores and gold loan is INR818 crores and MSMA is INR61.8 crores. Of which the maximum ENP a coming from microfinance book is around six per 5.85.8% gold loan is below so
Unidentified Participant
Okay, okay. Second question is like there were some media articles, some talks in the online platforms also that some private-equity investor is willing to take some stake in the listed entity, right, Manapura, right. So are there any serious discussions where promoters are looking to exit or they want to onboard some strategic investor within the listed entity, entity management finance.
V.P. Nandakumar
It is just quite common to have discussion, but the discussions doesn’t mean that we have reached anywhere,
Unidentified Participant
Sir, question or intent behind asking that question was because when we look your nearest peer within the gold finance industry, quarter-on-quarter they are just growing like anything, right? And they are establishing, yes, they are the market-leader and that’s what they are doing as a leader. Vis-a-vis, the performance of Manapuram doesn’t seem that good. But to be very honest, right, even you will appreciate that fact the performance is not at par what a second-largest player must display vis-a-vis when the number-one player is displaying, right.
So either there is not much interest from the management to grow the business or things are not working in-line or they need some fresh blood, right, of some new-generation leaders within the business that they want to operate the business and take it to the height where Manapuram deserve it, right?
So that was the intent. Maybe your thoughts on that line, if you would like to share will be a great help to the investor community.
V.P. Nandakumar
They are pricing an advantage as far as the customer is concerned. So there is a pricing difference we are trying to gradually match that. We can’t do that all of us are well. So gradually it takes some time to so the difference in pricing between gum and it is getting gradually with narrow down. You can see that narrowing down going-forward. So even now we can — you will see gradually. So that will help us definitely to grow at their rates. It’s only a question of time.
So our government now whatever is the difference, it will narrow down gradually.
Unidentified Participant
Sure, sure. Last question, if you may allow me. Considering the intensity of competition like one of the player who was again by the RBI has now revived their gold loan lending operations. And some of the other NBFCs like Bajaj Finance Group, Padhita Birla Capital, right, and recently L&T Finance also acquiring some of the gold loan portfolio from one of the other NBFC, right?
So how do you see the intensity going-forward in couple of next quarters, right, specially specifically if we look our position at the second-largest gold loan provider in the Indian NBFC space
V.P. Nandakumar
Many players would like to enter in the past also there had been many attempts, but only very, very, very few could succeed in that because we have a challenge is see how to manage the, which are clearly different from the other. So we need to have the branches, we need to have very skilled — highly-skilled people to appraise gold, et-cetera.
These are all done physically without any technology support. So it’s a highly-skilled job. So aggregating everything is the challenge. How much time it will take, but was the challenge for the players who intended to start this business even 10 years back..
Unidentified Participant
Okay. Thanks a lot.
Operator
Thank you. Thank you. Thank you. Ladies and gentlemen, we have no further questions. I would now like to hand the conference over to the management for closing comments. Over to you.
V.P. Nandakumar
So thank you so much for your question. Very good question. We expect that we have answered to your satisfaction. So we tried to do that and we look-forward for your cooperation and support. Thank you.
Bindu A.L
Thank you.
Operator
Thank you. On behalf of Motilal Oswal Financial Services, that concludes this conference. Thank you all for joining us. You may now disconnect your lines. Thank you