Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Sammaan Capital Ltd (NSE: SAMMAANCAP) Q4 2026 Earnings Call dated May. 20, 2026
Corporate Participants:
Aryan Sumra — Investor Relations
Gagan Banga — Managing Director and Chief Executive Officer
Peter Abraham — Chief Strategy and Growth Officer
Dalia Korshit — Chief Executive Officer
Analysts:
Varun Ahuja — Analyst
Unidentified Participant
Renish — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Salman Capital Limited Q4NFY 26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nikunj Jain from MUFG.
Thank you. And over to you sir.
Aryan Sumra — Investor Relations
Thank you, Elric. Good evening ladies and gentlemen. I welcome you to the Q4 and FY26 earnings conference call of Salman Capital Limited to discuss the company’s performance for the quarter. We are pleased to have with us the Mr. Peter Abram, Chief Strategy and Growth Officer, IXC Her Excellency Dalia Korshit, CEO Avilora holding and Mr. Gagan Banga, MD and CEO along with other members of the senior management team. Before we proceed with the call, I would like to mention that some of the statements made in today’s call may be forward looking in nature and may involve risk and uncertainties.
For more details, kindly refer to the investor presentation and other filings that can be found on the company’s website. Now without further ado, I would like to hand over the call to the management for their opening remarks. Thank you. And over to you sir.
Gagan Banga — Managing Director and Chief Executive Officer
Thank you. Good evening and a warm welcome to Saman Capital’s quarter four and full year financial year 2026 earnings release call. I’m Gagan Banga, managing director and CEO of Saman Capital. Thank you for joining us. And before we start, our most sincere apologies for the 30 minute delay which was for unavoidable reasons. This call marks a significant milestone taking you through our first earnings release since ISC’s acquisition of a strategic stake in Saman Capital and the beginning of what would truly be a transformative chapter for this institution.
Introducing the speakers. Before we move into the results, I want to introduce our new promoters. Joining us on this call, Mr. Peter Abraham, Chief Strategy and Growth Officer of IFC. Peter will speak to IHC’s global speak of IHC’s global investment philosophy, India’s extraordinary trajectory as a long term investment destination and the strategic vision they bring to Saman. Her Excellency Dalia Kaushit. She is the CEO of Avalora holding, the dedicated global banking platform within Jordan Financial Holdings, a subsidiary of IHC established specifically to unify, expand and bring value creation to the Group’s financial services investments across emerging markets.
Her Excellency will walk us through the depth of diligence undertaken and the strategic ambitions we are all pursuing together. We are also joined by my other senior executive management of the company. Now I hand over the call to Peter to take this forward. Peter,
Peter Abraham — Chief Strategy and Growth Officer
Sorry, I just had to unmute. Thank you Dirgan and greetings to all. Let me tell you a little bit about IHC’s vision for Saman and the Indian market. IHC is one of the world’s largest investment companies with a diversified portfolio of 1,300 subsidiaries across four key Technology, Infrastructure, financial services and consumer. Our approach is centered on long term value creation. We invest in businesses and sectors where we see strong fundamentals, clear strategic relevance and the ability to build sustainable growth over time.
Today, IHC operates across more than 100 countries with investments and partnerships that reflect both global reach and long term strategic ambition. As an organization, we focus on identifying opportunities where capital, operational discipline and long term alignment can support transformation and scale. That is the approach we are bringing to Ceman Capital. You would ask why? Saman Capital? Our USD 1 billion investment in Saman represents an important milestone for IHC. It is our first promoter level investment in India and reflects our confidence in both the company and and the broader Indian financial services sector.
What stood out for us with Simone Keppel was not only the platform itself but the foundation that has already been built over many years. The company has had a long operating history and an established presence in the Indian lending market supported by a nationwide branch network and deep local market understanding. Equally important is the experience of the management team. Over the years they have navigated different market cycles and periods of significant change. We’re continuing to maintain the operational platform and positioning the business for its next phase of growth.
For us, the investment is not about short term positioning. It’s about supporting the long term development of a financial institution with strong potential in one of the world’s most dynamic markets. India is a strategic and long term market and is probably one of the most important growth markets globally today. Its economic momentum, scale, demographic profile and ongoing structural reforms continue to create significant long term opportunities across sectors. For ihc, India represents a market where we see strong alignment with our long term investment strategy.
We believe the country’s financial services sector in particular will play a central role in supporting economic expansion, entrepreneurship and consumer growth over the coming decades. Our investment in Saman Capital reflects that broader conviction. This is not a standalone transaction. It is the beginning of a long term relationship with the Indian market and with one of its established financial platforms. Our long term conviction in Saman Capital Limited and IHC’s already invested substantial capital into India and across multiple sectors continues to see significant opportunity for long term partnerships and growth with Saman Capital.
Our objective is to support the company’s next phase of of development both responsibly and sustainably while working closely with management and stakeholders over the long term. We see this as a strategic partnership built on alignment, stability and shared ambition for the future. Thank you Gadav.
Gagan Banga — Managing Director and Chief Executive Officer
Thank you Peter. And now may I request Her Excellency Dalia to also address all of us please.
Dalia Korshit — Chief Executive Officer
Thank you Gagan. Thank you Peter. It’s a pleasure to be here today with everyone to continue to what Peter has elaborated from IHC’s perspective. Now getting into the details and the deep dive of the financial services sector within IFC Group. The financial services sector is under the Jordan setup where Avalora being the consolidator of the non banking FI and FI platforms within the group is the new setup that consolidates all of the groups activities from Asia, Middle East, Africa, Central Eastern Europe and Latin America.
So from this perspective Saman Capital comes and is in the core part of the investment strategy in Asia. As Peter has elaborated and as everyone is aware, financial services is about people and systems. From this perspective with Saman Capital’s management team as well as with our systems, together we create the financial hub and our investment in India. Our confidence is in the team during their evolution and their maneuvering during the Pact period together with the capital as well as the digital and the AI technology integration that is coming forward.
This is going to be the NBFC platform where it is very strategic from an Asia platform perspective for the non banking FI business within Avanora. The other important thing that we wanted to note is how have we been integrating and engaging ever since the acquisition? Ever since the acquisition we’ve started to focus on our liability side and on our rating. Every single local rating agency has been visited, has been worked on and have upgraded us. So this very quickly and this represents the confidence of bringing in IHC coming in as the new promoter for Saman Capital with its institutional framework.
So this is something that is important to point out and mention. We have been constantly engaged with all the rating agencies and we view this as a meaningful external validation reflecting the improved governance, strong institutional backing and a credible strategic outlook. Continuing to strengthen our Ratings profile remains our priority. We are going to be working on it and this is very important because it has a direct impact on our cost of funds and our lender relationships. What is also important is that from an AI and technology integration perspective, the application of our technology and our AI within command is part of the business and our DNA.
It is already started and it is actually going to impact both our front offerings as well as our operational efficiency and therefore this is going to come in our day to day business. The priorities are in our credit decision, in our customer experience, in our organizational productivity as well as our organizational efficiency. So this is another core part of focus that we are going to be focusing on as part of the investment and our positioning. Saman Capital is positioned in the market to come and to start operating and performing.
Although it is one of India’s largest MDFCs. However, we are working on it on an institutional transformation basis with respect to all the credit decisions, the operational decisions as well as the risk decisions, the governance and the compliance. So we are working with them, we are hands on together from this perspective. So before I close I want to make sure that the strategic opportunity is well defined. From our perspective, the execution capability is in place and the commitment from us is to the business is long term and is there.
So thank you Gagan and thank you Peter.
Gagan Banga — Managing Director and Chief Executive Officer
Thank you Her Excellency Dalia. Thank you Peter again. And now I will run all of you through the presentation deck which has been emailed, is on our website and is also uploaded on the stock exchanges. If we can please flip to page number four which provides an update on the transaction. So Saman Capital is now a part of the IFC Group. The transaction stands closed with share allotment to IFC having been completed on 31st of March 2026. IFC’s current equity ownership stands at 28.5%. IHC will own 43.5% of Samman after the warrant conversion which has to happen within the next 18 months.
IHC is the promoter and strategic shareholder of the company. Mr. Alvin Trasta Group CFO has been appointed as Nominee Director on the board on 15th. IASC has direct operating oversight through nominee directors and here on via board subcommittees. Saman Capital’s operating teams are already directly engaging with the IHC group experts across IT, artificial intelligence, risk management, credit development and Synapse. All in all we’ve already received approximately 5,652 crores or $592 million on issuance of equity shares and on the 25% upfront payment on warrants.
The balance approximately 3,200 crores or $335 million has to be received within the next 18 months on conversion of the warrants. It may have come to your attention that when our honorable Prime Minister visited UAE as a stopover to his visit to Europe, he and the King met. The press statement coming out of that event by the mystery of external affairs highlighted this investment and subsequently even today Economic Times carries the statement of the UAE Minister of Foreign Trade emphasizing priority of large private sector joint ventures and strategic investments between India and UAE in key sectors where again the high investment in Saman has been highlighted.
This we believe signals long term commitment to India’s financial sector of IHC and to Samantha capital growth platform. Moving on to slide number nine. IFC has become a strategic promoter and has committed US$1 billion. And obviously that has happened after an elongated process of a very detailed financial and legal diligence. And that should give each of us, including management, all stakeholders, all shareholders, a tremendous amount of comfort. When a global reputed global institution with strong financial services expertise invest, it does not invest only as a mere financial investment.
It’s a shared conviction and it will certainly accelerate the growth strategy of Saman Capital. IFC has experience of operating in multiple geographies. They have very superior risk management and governance practices. This will enable superior compliance, better asset quality, stronger board led governance, technology oversight and extremely important for financial services. As Dalia rightly said, it’s a peoples based business continuity and succession planning. The balance sheet has already been fortified for growth with this capital which is also reflected in the the rating upgrades which have started unlocking lower borrowing costs.
This in due course will help us continue to maintain a very well diversified and matched borrowing program. Lenders will obviously be comforted with the backstop provided by the promoter. Rating agencies have already gained confidence. Lenders in due course would and this accelerates the path to lower cost of funds. The lowest cost of funds is the journey towards which we are walking. That coupled with various tech led initiatives which would be supported by the massive tech ecosystem of IHC would accelerate the digital transformation to facilitate growth.
It would improve our credit underwriting practices to reduce credit costs and improve our cost income efficiency. Each of these are significant strategic enablers and differentiators in a financial services business. We strongly believe that with this strong balance sheet which is levered by debt, the lowest cost of debt funds which will come our way as the ratings continue on an upward trajectory will enable a capacity to tap both organic and inorganic growth opportunities in India in financial services.
Now Moving on to slide 11 we built a fortress balance sheet. We have a two decade knowledge and we are primed for growth. Now let me run you through where we stand today and what all have been the achievements thus far. We start with an opening AUM which has a zero gross and a zero net npa. No incremental net provisions are required in future with respect to this opening AUM of roughly 53,160 crores. The provision buffers capture terminal credit costs. If I look back at the disbursements through which from rundown this 53,160 crores has emerged.
The disbursements were to the tune of 3.6 lakh crores which have over the years run down with all the provisions taken earlier as well as in quarter 4 fiscal 26. The annualized credit cost for this 3.6 lakh crore disbursement adjusted for the rundown every year comes at 1.9% annualized credit costs which is fairly healthy and competitive and from a long term perspective given that it is a terminal credit cost, gives us a very very unique insight into how to provide for the disbursements that we do here on It’s a demonstrated book.
The most important demonstration of the quality of a book is via cash flow. The opening AUM is cash flow tested and has serviced borrowings which stood at 1.35 lakh crore at the end of September 18 almost eight years ago. Since then the company and this book has managed to create business history of the highest ever deleveraging program in corporate India by servicing 1.3 lakh crore on a net basis. All of this navigation has obviously created institutional knowledge. The management team has stood together and now the management team has seen cycles learn from our mistakes and most most importantly we know what not to do which is the key to building any successful business.
Over the course of the last 45 years we’ve also proven that the asset light model can be scaled up. Over the last few years we’ve disbursed as much as 1.05 lakh crores or $11 billion and sold that down across 24 bank non bank relationships. Our asset light model playbook is fully operational. What now happens is that the management bandwidth is freed to focus on growth which results in us. Though we are the largest multinational non bank finance company in India, we retain the agility of of a startup.
Moving on to slide 12 we focus on residential housing finance, we provide loans to business owners, we provide loans for Commercial real estate project loans, plot loans, etc. And we also do a little bit of unsecured lending, both business and personal. All in all, the book stands at 53,160 crores which is the AUM. The chapter of the legacy book or the book itself stands firmly closed once and for all. The demonstrated collection efficiency with all of the credit cost is well north of 98, 99% in each of the product categories.
Each of these product categories we will continue to pursue. There is a funding strategy around each of them. As far as residential housing is concerned, the prime mass market home loans which yield us 8.5 to 10% would be more sourced with an idea to sell to banks and the affordable portion of this book would be used to hold on our balance sheet which should be yielding US 10 to 13%. Similarly, the business loans, the secured business loans to individuals, SMEs, corporate and the micro lab segment itself will also be split between the prime mass market loans which yield us 9.5 to 11% would be sourced to sell to banks and the affordable semi urban and micro LAP loans which would be yielding US 11 to 13.5% would be sourced to hold the CRE project loans, etc.
Would be done strictly on a co originate model with credit funds in a pari passu structure without any credit guarantee where our stake would be roughly 10 to 15% of the overall disbursements that we do. We would slowly invest in new products, some of which would be unsecured products. There would be other secured products which would be added. I would run you through the entire product suite in a couple of minutes. What is very important to note is that our current opening AUM will give us the financial flexibility via the ROA it generates of approximately 1.6%.
To make all the investments which we need to do in tech, in the branch network and enhancing the people network. As Dalia mentioned, IHC has been working with us with all the credit rating agencies, CRISIL upgraded us on 9th of April, care on 12th of May and ICRA earlier today. Just about 30 minutes ago we uploaded the upgrade information on this topic changes as a result within the first 50 days of the ISC investment and this is the power of the investment to be noted. All three domestic rating agencies have upgraded us, CRISIL and ICRA a notch each and CARE two notches and we continue to remain very very optimistic and confident of this rating trajectory remaining in the positive zone over the course of the next few months.
As we continue to demonstrate and this will apply to international rating agencies as well. The yield movement Post the IFC announcement While the market still absorbs these rating upgrades, our bonds have already domestically appreciated by about 100 basis points. So our cost of funds, if we are to in theory raise money, should hypothetically be happening 100 basis points lower between where we were prior to the announcement of IRC’s acquisition which is September 2025. Today, our international bonds have appreciated almost 250 basis points.
International borrowings are a relatively smaller component of the overall borrowing mix, so the number to really track is the domestic borrowing program which has improved by 100 basis points and should be moving in the direction of improving by at least 60 to 70 basis points more, especially now that all three rating agencies rate us at AA. Thus it is a consensus AA credit rating. Slide 14 IFC and its senior management across all of their investee companies believe a lot in the digital and AI transformation of each of these companies.
We’ve been working with the relevant teams and a variety of their companies to also create AI adoption model and AI policy and AI integration. We built as many as 37 use cases. I’ll take you through some big picture aspects that we are pursuing. The first is about enhancing customer experience and service responsiveness which is vital to any sort of sustained growth. The AI tools which are currently under either evaluation or implementation will improve our response quality, consistency and resolution while enabling a human led relationship driven experience experience which is very very important for a lender which has tremendous experience in dealing with the self employed, small business owner, SMEs, micro companies and so on which all require significant amounts of handholding and would continue to remain an important segment of focus for the company.
Cost income ratios have to trend down. As I run you through the projections later, it is very very important to ensure that the cost income ratio is below the 30% ballpark and that cannot be achieved while one is pursuing strong growth which is compounding steadily without great operational efficiency. So the other area of focus is to drive operational efficiency at scale. AI driven automation enhances consistency and scalability, creating greater operating leverage as we pursue growth. Having early warning signals and the appropriate risk management framework is important.
We are putting in place all the analytical models which which will improve portfolio visibility and ensure proactive risk management irrespective of what we do. Some loans would require collection efforts again how to improve our efficiency and productivity there while personalizing every complaint, every customer and ensuring a customer centric recovery process program using bots and other such experiences is also being implemented. Fraud is an integral part of any business which deals with money and therefore we have to continuously strive for better fraud prevention.
Cyber security is a continuous risk. We have to become digitally resilient. We have to continue to evolve our fraud risks through the use of a variety of technology tools which strengthen the trust monitoring and the overall cyber security and operational resilience of the company. The overall governance model has to also be completely focused on AI. What happens in board meetings? What is the outcome of board meetings? How do directors oversee the management? Through the board subcommittees Today, all of that can be tracked via various CIS tools which read through minutes and put out red flags or action points.
This is a key tool for continuous governance going forward. We’ve tried to Also, on slide 15, Tangibilize some of these outcomes. We believe through all of this, our agent productivity, which is the people who are actually dealing with the borrowers every day, that productivity should go up by 30%. Our loan turnaround time on the secured mortgage side, which currently is about five to seven days, should reduce to two to three days. The fraud detection rate, as minuscule as it may be, will also meaningfully increase.
And the cost income ratio, as I mentioned, would be in the ballpark of 26% by fiscal 13. Through the various operational efficiencies that we are targeting to achieve the financial year target is to expand our workforce to 20,000 people, have a branch network of 1600 branches and have over 15 products. We are not in any rush to hypergrow. We will continue to play on our strengths. Of the three to four products that I highlighted, which we have disbursed to the tune of 3.6 lakh crores, run the whole cycle, have the unique experience of understanding terminal cost, etc.
And then we will build on that via loans against securities and gold loans again, both which are secured at this point in time. Gold loans especially requires a completely different type of a branch network, so we will focus on that. It requires a different type of assurance and oversight function. We will focus on that and from fiscal 28 we will widen that to include a lot of other opportunities which we envisage would continue to remain in the marketplace. The large products would be products that we are already doing or we will start doing in fiscal 27 and 28 and there would be additional opportunities which we have identified.
All in all, we have to make sure that there is a lot of granularity in the book. The book is well diversified across many loan programs. Moving on to slide 17, which is probably the most key slide from an Analysis perspective. We intend to through this year disburse approximately 30,000 crores. We are targeting a profit after tax this year of 1400 crores. Dividend payouts are key. We would have a steady dividend payout policy of at least 25%. We would be targeting 40% which has been projected here.
The net interest margin would start this year at 3.5%. As we start to see the benefit of cost of funds and as cost of funds declines by 150 basis points over the next three years, we would see just by that 150 basis points addition on our net interest margin. Plus with the leverage etc. The net interest margin margin should be touching a ballpark of 8%. The cost to income ratio should halve from here. We are currently at about 50%. We are targeting to go down to 26%. The ROA will double year on year and thereon also increase 50%.
We intend to target high teen ROES and be best in class in Both ROA and ROEs. The asset light strategy remains key but so does the balance sheet strategy. So we would focus on both the return on asset as well as we are introducing a new evaluation metric return on managed assets which are currently at 1.5%. As the scale improves we will get to about 3%. The branch network would grow fivefold. The employee network from here would also grow fivefold. By the end of this year itself we will be 8,000 people and the borrower base would grow about tenfold.
As a result of all of this, the book value per share which is currently at about 160 rupees per share would increase to and go past 200 rupees per share. Most importantly and I continue to highlight this fact that the well buffered 0 net and gross NPA opening AUM which is generating a 1.6% ROA gives us a very unique position. While we are startup NBFC with 19,000 crores of net worth, we have the earning power coming out of this 53,000 crores of assets under management. All of this growth is our good healthy targets.
But they would sustain and sustain over a period of time. If we have to ensure multi decade compounding and steady best in class ROA and roe. We have to responsibly grow grow while staying within the guardrails on the portfolio mix. We would target 60% secured lending, 20% unsecured or semi secured lending. So 80% of the book would always remain retail. The balance of portion of the AUM with a minor stake on our balance sheet and the major with a variety of credit funds would be approximately 20%.
On the balance sheet side, we have historically maintained a capital adequacy of north of 20%. We are starting with a capital adequacy of 20.2% pro forma for the warrants we would be in the ballpark of 29%. So we have a lot of capital. But despite that learning from the various cycles, we would cap our gearing at about 3.5 to 4 times. We would continue to maintain liquidity principles which would be higher of six months of borrowings or 10 to 15% off. Six months of repayments or 10 to 15% off borrowings.
The asset light model has been immensely useful. We have a lot of experience around that. It has been immensely profitable as well. And now we have integrated with a large number of banks. Across the various products, the numbers would range to as high as 60% for prime home loans to probably zero for some unsecured products. On an average, for the incremental disbursements that we do, we will have approximately 30% of the loans of the disbursals being done with a target of pursuing our asset light strategy.
Under co lending or direct assignment arrangements, we would be back to dividend paying. We would have a policy which is at least 25% with the target going to about 40% of profits to be distributed as dividends. That brings me to an end as far as the financial strategy is concerned. I again thank Dalia and Peter for their time. And now the management team is open for questions. Thank you.
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 their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Varun Ahuja
Our first question comes from the line of Varun Ahuja with Blackrock. Please go ahead.
Unidentified Participant
Thanks so much for the results. A couple of questions. One is obviously great outcome on the onshore agencies. Any thoughts or discussions with the offshore agencies? Any color on that would obviously be helpful given that you do have fair amount of bonds in the offshore space. So that’s one. Secondly, I noticed that your cost of funds they are falling but obviously it’s a slow kind of decline over the next few years in your business plan. Can I presume that that’s more because you can’t do much liability management exercises and they are non call Fixed maturity nature of instruments and which is why they have to fall only when they mature.
Gagan Banga
Thank you Varun. Thank you for sparing time to attend this call and thanks to BlackRock for being a true rock. As far as the support to Samban is concerned, both on the debt and the equity side, we are varun engaged with international credit rating agencies. Both Saman’s management team as well as IHC’s management team has had multiple meetings and now that the financial results are out, our engagement would continue. And I would imagine that the positive rating trajectory that we have witnessed with our domestic rating agencies should get replicated with the international rating agencies as well.
For them a very important metric is the cost of funds. Approximately 90% of our borrowings happen onshore and it is but logical that as an outcome of these upgrades our marginal cost of funds would Decline by approximately 160 basis points. I mentioned that our current return on asset is 160 basis points. So just as an outcome of this upgrade, our return on asset automatically doubles very high level math. So this would obviously go into whatever modeling international rating agencies would do. And I am fairly optimistic that given how our overall conduct has been as well as now with such a strong promoter as IHC, much like the first 50 days have resulted in the domestic rating agencies upgrading, I would imagine the next 25 days would result in a similar action from international rating agencies.
On the cost of funds. We have been extremely cautious. We have looked at all of our borrowings and whatever is long term maturity and most of our borrowings would be three to four years maturity. That stock would stay. We have a fair amount of borrowings from banks we would like to negotiate with them. Let’s see how it goes. We are a very attractive borrower from them having repaid almost 80% of of the loans which were given to us by banks on an absolute basis. So banks like we have seen terminal credit costs on our portfolio.
Banks have seen how money lent to SALMAN comes back and that is obviously giving a lot of credit comfort to them. And that should result in possibly us being able to also negotiate our stock cost of borrowings as far as banks are concerned which may accelerate the decline in the cost of funds. The bonds can’t be negotiated and they would also have a similar three to four year maturity. It’s our incremental borrowings which will come in at a lower cost. So the cost of funds in that slide is a mathematical outcome of how we feel that this trajectory would go down.
Today aaa borrows at sub 7.5%. So as we move in that direction, our cost of funds have to move in that direction with a lag of a couple of years given the existing stock of fund borrowings. I hope I answered your question.
Operator
Thank you. Participants, in the interest of time and fairness to others, please restrict yourselves to one question. For any more questions you may rejoin the queue. The next question comes from the line of Renish from ICICI Bank. Please go ahead.
Renish
Yeah, hi, thanks for the opportunity. Just one thing, right. I mean we are aiming at touching AUM of 2 trillion, right. But our experience historically has been going through mortgage now to reach 18% expirational ROE. I’m sure you know we want to grow more in non mortgage portfolios. So just on that, I mean how we are thinking as a management to build some of these portfolios and more importantly, who are going to drive these products because internally our experience has always been on the mortgage side.
So to build a non mortgage book on a scale would obviously require different skill sets, etc. So how we are thinking to build some of those portfolio. And as far as investment is concerned, you did mention about, you know, we’ll be very focused on cost to income, you know, bringing down. But just wanted to understand what, what will be the maths. Right. When we are investing in building such portfolios, how we will manage cost. Yeah.
Gagan Banga
So just as a high level reaction to that and I will then come down to specifics. As Dalia had mentioned, this is a people’s business. We well recognize that the management team here has, has managed and me personally have managed secured and unsecured loans, personal loans, commercial vehicle loans, loans against securities, all done at scale running into tens of thousands of crores. So these products are not new to us. What is a great enabler now is that tech allows you to control and continuously monitor the decisions being taken either by your system.
So a lot of the unsecured lending actually happens on your app, which is a continuously learning process. And the second thing is we obviously have to invest in people. It is clearly not possible that I expect the mortgage team on the ground to now start doing personal loans or the personal loans team to start doing gold loans. The branch network has to be unique for gold loans. The personal loan business is more an outcome of how well is the experience as far as the app is concerned. And on top of all of this, the huge amount of profitability is also derived by how successfully are we able to sell other products.
Like today we very successfully sell insurance to over 90% of our borrowers. So that type of cross sell which is also not something which is stressed on the borrower but helps borrower manage their own risks is also very, very important. So we would invest in people, we would invest in tech. What is going to enable this in terms of our ability to be probably as good or better than some other players? One is the fact that we are already starting when we start to to grow towards 2 lakh crore book.
We already have a profitable 53,000 crore book which is giving us earnings and steady earnings and is not giving us headaches. So whatever has been done has freed up and it has been done very thoughtfully to ensure that the management bandwidth is fully dedicated to growth. The second part which I would like to highlight and which probably underscores the overall strategy of Samban in my personal experience. This business is not about asset management. This business is about liability management.
This business is about firstly understanding that the real asset of this business or the real strength of this business comes out of the way that you manage liabilities. Liabilities could be having a very diversified portfolio from where you borrow in terms of both lenders as well as the instruments that you utilize as well as heading in the direction of the lowest cost of funds. It is known to our promoter, it is known to us that cost of funds is the most significant competitive advantage that we will have which will enable all and every growth that we are taking up on ourselves and committing to all of you in the presentation that I am made to you guys.
This cost of funds is obviously supported by a strong promoter but it has to be executed every day by the management. The most important thing is we don’t try and do any cute stuff which is why these guardrails have been built. Liquidity principles have been built, Capital principles have been built. All of this will ensure that we have a very stable liability franchise which frankly is going to be the single biggest competitive advantage which will continue to accrue to us over a period of time.
I strongly believe in the India growth story. I strongly believe India is underserved. It may be a cliche but I believe Bharat is more underserved. So as we go into tier 4, 5, 6 cities, we would be presented with opportunities where the asset growth is almost endless. It is about being able to push the last mile credit. Non bank finance companies, the well governed non bank finance companies have been able to grow by pushing the larger last mile credit. Our further learning is that we have to do this in collaboration with banks and not competing with banks which would also allow us to pursue prime assets and Continue to leverage on the partnership that we have built with banks.
All in all, I believe between investing in people, investing in tech, ensuring consistently reducing cost of funds and having the guardrails which will sustain the steady compounding, we will get to the 2 lakh crore or the 18% ROE target or the NIM target, the ROA target, the cost income target. Each of those would eventually result in the profit targets being met. Without a key focus on any of them, nothing will happen. But we are in no hurry which is why voluntarily, before anyone asking me this question, we said growth for this year and growth for next year would largely be via mortgages.
They are also higher ticket loans while we build capacity, reduce our cost of funds and build the other enabling factors. I hope your question is answered.
Operator
Thank you. The next question comes from the line of Bhanu Chauhan with Barclays Bank. Please go ahead.
Unidentified Participant
Hi, thanks. Banerdu Saeed from Barclays. Congratulations to the IHC and SALMAN Capital teams on the successful completion of the transaction. I wanted to check given the ambitious KUM growth targets outlined through FY30, could you help elaborate on the execution roadmap as well? Specifically what proportion of growth is expected to come through the existing core segments versus the new product lines?
Gagan Banga
Thanks Ranu and thanks to Barclays as well to have supported us through this journey the next couple of years. Almost 80% which is fiscal 2728, 80% of the disbursals would be dedicated to existing products which would continue to come down as the other products increase. By fiscal 30 we would probably be having 50% of their dispersals through mortgage backed products and 50% through other products. The direction in which we will head to irrespective of which product is how much of the overall proportion of disbursement has been articulated in guardrail number one which is that 80% of the disbursal would be retail, 60% of the overall book would be secured and a large part of that would be mortgages.
The other secured product that we see at scale operating is gold. So the mortgage products and the gold products would be the secured products and the business. Unsecured business loans and unsecured personal loans would be the major drivers of the unsecured product. All in all I think the mortgage products would give us the size and the other products would help bring in the franchise by increasing the number of customers and then as order two impact starts the cross sell opportunity. Each of these activities have been thought through all in terms of people, branches, tech and the mid office variety of Other assurance functions and work is ongoing in all of that.
We want to do it slowly yet steadily and which is why we’ve said the front loading of the business growth would be from what we have already been doing which can be done at much much greater scale. I would like to everyone to bring back to everyone’s attention that the quantum of dispersals that we are talking about in the year 2030 is, sorry year 29 is 72,000 crores which is roughly 6,000 crores. In the year calendar year 17, calendar year 18 we had disbursed 50,000 crores. So we’ve already seen this kind of scale.
The scale that we have to do this year and next year is something that we have done eight, nine, ten years back. So we know how to handle this scale and we have the experience of being able to navigate the new products especially with all the tech led enablement which is available today. Thank you Dhanav.
Operator
The next question comes from the line of Avinash Singh with MK Global Financial Services. Please go ahead.
Unidentified Participant
Thanks for the opportunity. Just one question, I mean around your business projections given that, I mean yeah the rating updates will probably follow but yet I mean if we look now we are in a situation where we have, I mean AAA retained strong parenting, packed so many, I mean large NBSCs and well capitalized, many of them have excess capital as well. In this kind of a market competitive scenario, how do you see, I mean because this is very very different than I will say 18 years backfield India bull scenario when again that time you were AAA but there were not so many AAA today your last list of AAA is strong and large in the NFC.
In that scenario how do you see this company scenario playing out? Because your projections are not just growth, it is a massive increase or improvement in profitability. So that is my question. One second. If I look again the projections, I mean the kind of the ROA roe numbers that have been talked and even if I look at the cost to a cost to income that is something, I mean not many NBFCs in a data scale have done and there are very few and far. So what gives you sort of a confidence about the projections that okay this time you are going to achieve these numbers and on that front I mean I guess there is some kind of a error minor I guess in your FY30 ROA projection because that’s already going to eat or prototype.
I think that something is on there. Thanks.
Gagan Banga
Sure. So I will certainly check on the FY30 number and if there is any correction I will try and make that live here or or update this presentation. Is there an error? There is an error. It is 4 point. This is also 4.4. This is also 4.4. Yes there is an error and that number is 4.4% in financial year 30. We will update the presentation and resend it to you. Also update that on the presentation on the stock exchanges. Thanks for bringing that to our attention. So the ROA, just so that everyone is clear, fiscal year 27 we expect that to improve to 1.8% fiscal 28 to 3.7% fiscal 929 at 24.4% and in fiscal 30 also the at 4.4%.
So we are targeting around 4 plus percent ROA on a steady state basis. You are right. There are now not many, a handful probably of AAA rated NBFCs. Several of them have in MORs as AAA rated nbsp in the very recent past they have built this business from a relatively small scale over the last six to seven years. So if we have to look at most of the conglomerate backed nbsp’s, apart from one, they were of significantly smaller size to where we are right now. Some of these nbsp’s are already adding and doing disbursals of the quantum that we are talking of five years later.
And obviously they don’t control a very very large market share. Nobody in well diversified financial system like India controls a very large market share. So there is a market to be taken. The front ending would happen via mortgages. We have a material hold on mortgages. And now with the asset light strategy being more an enabler than a compulsory type of a strategy, our productivity almost almost instantly month on month. So between March and April our productivity has gone up 2x. So that’s the quantum of improvement that we are seeing.
And we would disburse in the first quarter at least 50 to 60% more than what we disbursed in quarter four. First quarter, all of you know is a slower quarter and then we will probably use the that as a base and increase that by 30 to 40%. So all of these numbers are reasonably thought through. We’ve gone through days and days of discussion with the IFC team. These numbers are also getting consolidated at various levels and therefore they have gone through a reasonable degree of review from a doability position.
From an opportunity perspective. Very clearly the play field is becoming larger and larger provided your cost of funds are lowering, which is why there is so much of an emphasis on credit ratings. The AA is just the first stop AAA is the destination. We will get there much quicker than what may be captured in these sheets. We are working very hard to ensure that we build that compulsive case. I am sure, at least within my team, nobody was thinking that a AA would happen in the first 50 days itself.
In our projections we had thought of this as a quarter three event. But we’ve achieved it in the first 50 days. So very clearly the journey is towards AAA. The direction is upward. We have a strong promoter, we have a very, very strong operating team and with that we will get to aaa. Then it becomes a question whether there is opportunity in India to be able to disburse 50,000 crores next year, which is 4,000 crores with other AAA players or three, four other AA players. We strongly stand behind these disbursals, these yields.
And the cost income ratio is obviously going to be an outcome of the existing team becoming more operational, more efficient. Currently my productivity is at 0.6 loans per person per month which will go to 2 plus loans per person per month. That itself is a huge reduction in the cost to income ratio. The entire centralized team or the senior management, that cost gets amortized over those many disbursals and that much larger book that also drives down the cost to income ratio. Is it possible to run a high teen ROE company in India?
Yes. Is it very easy? No. Therefore, our unique ability of having managed liabilities, having managed assets, can scale them down, scale them back up, scale them up to very significant levels, scale them down again. No one in this country, and I say this with great pride, no one in this country has handled cycles like we have. India will go through cycles and if we continue to do steady compounding, we will a year here or there get to 18% ROE. That I am super, super confident of.
Operator
Thank you. The next question comes from the line of Nantara Ghosh with Deutsche Bank. Please go ahead.
Dalia Korshit
Thank you. And firstly congratulations on the IHC transaction and the rating upgrades. Gagan. So my question is on the new product suite that you’re expanding into, how much investment do you expect is required for setting up these new products? Thank you.
Gagan Banga
Thanks Nantara. And thanks to Deutsche bank again has been a core banker to us the last few years. Appreciate the bank support. Through us the investment is less in terms of how much of upfront investments in something. So this is not a great grand fact factory that I need to set up or a big power plant that I need to set up. I have to invest in branches, branch or gold loan takes about 20 lakh of rupees to set up. It takes about three years before it becomes fully productive and profitable. Our 213 or whatever 240 branches can are already sized up to do the other products.
So in physical distribution we would have to invest. But these are not investments which are running into tens of hundreds of crores. The expensive part is in expanding the workforce which we will do at a steady clip over the next few years. But again, again given the core management team is there, we will require to do more assurance function handling, hiring and product level hiring. So that’s again something which we feel is with our earning trajectory right now, we can well afford. So whatever are these investments in terms of per person cost, per person, product per branch, how much will it take?
How many loans will it be able to do? What is the tech investment, how many loans will our LMS be able to take and how many more will we have to do? We invested in CRM upgrade, we invested in Salesforce six months ago in anticipation of this. So that cost is already taken. It is typically a huge cost. So these costs are all built in. None of them are, so to say capitalized. They’re built in. They would run through the P and L and the P and L as a result of these costs would throw up the profits that we have projected.
If you would want a more product level ROA or something like that, I can. You can always engage with the team and they can run you through the ROA tree for each product for your knowledge.
Operator
Thank you. The next question comes from the line of Vineet Sharma with Param Capital. Please go ahead.
Unidentified Participant
Thank you so much for the opportunity and many congratulations on the successful close of the transaction and the rating of pay. My question was last year on the NIM expansion that we are seeing in FY27 to FY28. It’s projected to go from 3.5% to 5.8% whereas the cost of funds is not declining to that measure. And the leverage also on the book is increasing despite what I consider equity increasing also which has been assumed during FY28. So just wanted to understand what are the levers which are actually leading to this Such a significant yield expansion which is leading to this increase in mints.
Gagan Banga
So the cost of funds that you see are cost of debt funds. These are not blended for equity. The equity which comes in is a very significant billion dollars which directly impacts the P and L. And while I have the highest regard for shareholder money from a P and L perspective, it does not come with any added cost. The Other enabler of the ROA is if you just go two lines below or below an im, just go, go to ROA and then more importantly go to return on managed asset. Since the strategy for the first two years is to continue to do mortgages and on mortgages we would continue to do a fair amount of sell down.
As the return on managed asset goes up, it has a direct impact on on net interest margin from a perspective of. Our net interest margin. My colleague Ramnath will just explain the calculation to you. Yeah. See what also adds to the NIM is our sold on book. So the spread that we make on the sold on book directly adds to the NIM and hence you see that expanding. So in FY28 if you see the difference between the AUM and the loan book, that’s about 30,000 crores which expands to 45,000 crores. So this boosts the NIM.
The cost of funds mentioned here is only the cost of funds
Operator
On the borrowings that is on our balance sheet.
Gagan Banga
So that does not factor in the additional equity which has come in which is liquidity. So there are two parts to two aspects of equity which is coming in. One is the cost the equity which is liquidity and then there is the capital buffer. We’ve consumed the capital buffer but we still have the liquidity which we will continue to enjoy.
Operator
Thank you. The next question comes from the line of Arun Anthony with JM Financial. Please go ahead after
Gagan Banga
This. I’ll take one more question, please.
Unidentified Participant
Hi. Hi team. Hi team. Thank you for the opportunity. Congratulations first of all on the transaction and rating upgrades that were received recently. Just wanted to hopping back on the cost of funds side. I think in the previous conference call it was mentioned that over FY27 around 270bps decline in cost of funds is expected. So in the current backdrop of this West Asia conflict and yields hardening currently, do you think this 270bps reduction in cost of funds is still achievable for FY27?
Gagan Banga
Yeah. So what we had said is 270bps of cost of fund improvement will happen as we complete our journey from AA to aaa. It can’t obviously come in on the overall stock of funds. And double A to triple A is not a direct journey. It will come with a stop which is probably a pit stop and we will be able to move up with a very strong case, both operational as well as the promoter. Once we are able to demonstrate to rating agencies that we have settled in as a AA credit and we are Ready for a AAA in all aspects the balance sheet is very, very solid.
It is as strong as when I look at it very dispassionately and compare it with any of my AAA rated peers, peer NBFCs then we are there as far as all aspects of the balance sheet are concerned. So operationally we are ready. Financially we are ready. From a promoter perspective we are ready if it’s just a matter of time. We stand by the 270 bps number that on a marginal basis would require us to grow go from AA to AAA. As we go from AA to AA, we would capture about anywhere from 120 to 150 basis points out of that and then the next 120 to 150 basis points would come via the double A plus to triple A target migration and upward movement.
Operator
Thank you.
Gagan Banga
Now the last question please.
Operator
The last question comes from the line of as Raju, an individual investor. Please go ahead.
Unidentified Participant
Good evening. I’m shocked with your write off. What is the total outstanding write off as of 31 March roadmap for writing? What will be the percentage of recovery? Some write offs as the projections include all these writings or not.
Gagan Banga
So the projections, Mr. Raju, do include recoveries. We would recover close to about 7,7000 crores from what we have provided and that has been baked into all of these projections in due course of time. I would refrain from calling this write off. These are credit costs which will enable management to focus on bandwidth. So yes, we have different to our capital one time to be able to add much more to that capital in due course of time via growth. A lot of time has been spent by the management team in consolidating the company.
Companies don’t go anywhere by just hanging in there. Either they have to grow or the phase of consolidation would lead to something which is not very positive. We’ve navigated that and I’m fairly confident that with whatever buffers we have on the balance sheet, as we have shown to you in the past, Even if we for example do sales to asset reconstruction companies, we recover 70, 80% of that and all of that has been discussed in various calls in the past. So this is just a technical step to make sure that we have the right buffers we can fully focus and the 53,000 crores of assets are painless assets which give us full bandwidth to focus on growth and support us with the earning power of the 1.6% ROA which will continue to expand as the cost of funds reduces.
So that is my humble submission to you Recoveries will be very comfortable and recoveries are part of the numbers that we have presented to you.
Operator
Thank you, ladies and gentlemen. In the interest of time. That was the last question for today. I would now like to hand the conference over to Mr. Gagan Banga for the closing remarks.
Gagan Banga
So thank you everyone. May I request Dalia and Peter, if you would like to any concluding words. And then what I had to say, I’ve said. So thank you, Dalia. Peter.
Peter Abraham
Thank you, Gargan. Look, I just would like to reiterate. It’s our pleasure. It’s a wonderful opportunity for both IHC and saman. We think that this relationship will benefit both organizations and we see nothing but a very bright future. I want to thank you for the opportunity. It was great to listen to a number of people who have spoken today. It’s wonderful to see their support for the bank. And I think that we look forward to working closely together with you. And I think there is nothing but strong prospects as we move forward.
Thank you.
Gagan Banga
Thank you, Peter.
Dalia Korshit
Thank you, Peter. Thank you, Gagan. And thanks for everyone who participated with us today. Of course, this is the start of a number of series of calls that we are going to be coming back and we’re going to be constantly giving updates on. So we are looking forward to working closely with the management team, as we’ve mentioned, in order for us to ensure that we have the operational and the product efficiency and to transform and to set all these trajectory KPIs going forward. So we thank you all for your participation and looking forward to a great journey together.
Gagan Banga
Thank you, Dalia. Thank you everyone for participating, supporting us and we are as a team, very, very optimistic about the future and look forward to engaging with you next quarter. Thank you.
Operator
Thank you. Ladies and gentlemen, on behalf of Salman Capital. That concludes this conference call, thank you for joining us and you may now disconnect your lines.
Unidentified Participant
Thank you.