Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.

Good afternoon, sir. Sir, on the legacy book, we have seen the provisions that you have made, but are you expecting any further losses which have to be routed via P&L on the legacy book?

So we have guided for an annualized credit cost of 100 basis points. What we have also guided is that the write-backs that we hopefully will get would be back as it in terms of release from the P&L would be back ended. So yes, the company would continue to incur credit costs, those credit costs are well within the budget of what our PPOP can handle. So if your question is do we expect in the near term , any near to medium term , any dip from capital, no, that is not the expectation. I think we are provided well enough. If the other question is do we expect any write- backs in the near to medium term, no, we would continue to carry those provisions as provisions and use them tactically for accelerating the pace, or at least making sure that the pace stays in line with what we have guided. In due course of time, as we come towards the end of Fiscal ‘27, based on the overall success we ha ve achieved, we will take a call on if there are residual provisions, what to do with those residual provisions.

So this 100 basis point is inclusive of legacy as well as the growth book. So it will be on the entire?

Yes, everything.

And secondly, sir, in this quarter, I can see that versus the previous quarter, there is some 10-15 basis point spike in the GNPA as well as net NPA and last quarter, I think the impairments credit cost was also very low for only Rs. 6-Rs. 7 crores, this quarter, we are seeing Rs. 290 crores. So you can you throw some light on this?

Yes. So if you recollect in quarter 2, we had done a large provision. So we had done going forward 90 days sort of dive and as part of that exercise itself done whatever we could. Our more normalized net NPA number as I shared in my remarks is about 120 basis points. And that is what we will probably be averaging over the next few years. So unless we are significantly breaching that 120 basis points, I think it is all built into our business model.

On the overall model, so we have around Rs. 20,000 crores plus of net worth , but if I look at your plans excluding the legacy book on the growth side, most of it is looking to be very asset lighted nature. AIA again would be very asset light, so for this Rs. 1 lakh crore book, how much would be the equity requirement? And once this legacy loans are sort of taken down, then won't we be very over capitalized in terms of equity if we are having this sort of an asset light model?

We are already barely geared, so we are already in a fairly well capitalized situation. In order to get free flow of capital , in order to get a reducing cost of debt funds, you need to remain in an over capitalized situation for an extended period of time for lenders, rating agencies and other debt side stakeholders to get increasingly comfortable till whatever is the business model that you are striving for, achieves maturity in terms of scale size, season cycle and all of that, so at least over the next 2-3 years, I expect that we would continue to stay in an over capitalized state.

So then, sir, let us say in FY '27 exit, what could be the ROEs that we are looking at from the growth AUM and overall on the company conventions?

On the growth AUM, we are targeting high teens, on the overall book we should be hitting mid sort of teens.

Thanks.

Thank you. The next question is from the line of N iraj Chhajer from Pransh Capital Partners. Please go ahead.

Hi, Gagan. With regards to Sammaan Finserve, is there a requirement to dilute majority stake in the company under the RBI guideline? And if there is by when you have to get this thing by detail?

Yes, there is no RBI guideline on this. There is RBI dispensation that we currently enjoy as far as an NBFC owning an NB FC and that is not a structure which will be long term enabled. So during the course of this year , we will go back to RBI with a firm plan around how exactly do we want to run this business and build a distinct business model. As part of that process, we had created a distinct business model in the second half of Fiscal ‘25. So that is what we would be engaging with the Reserve Bank on and then seeking their g uidance in terms of timelines, etc. So as and when there is any update on that, we will certainly inform you. Of this time, we are working on trying to get to Fiscal ‘26 and AUM of Rs. 10,000 crores and then once we get to that size, with just that size, a lot of optionality happens i n terms of whether we want to de- subsidiarize it, whether we want to list it or do what with it. So at this point in time, the focus is more execution in terms of moving forward on a distinct business plan as well as creating the options which would facilitate the overall group.

So just a follow up on this one. The current dispensation given by RBI is for 12 months, which ends in June of 2025. So have you already made an application for extension of that?

I would not like to comment on whether we have made or not. All I am saying with a high degree of confidence is that as of right now, we are moving forward to be creating in a n AUM of Rs. 10,000 crores in Sammaan Finserve as 100% subsidiary of Sammaan Capital and we will take it from there.

Thank you.

Thank you. The next question is from the line of Nilesh Doshi from Pros peroTree Asset Management LLP. Please go ahead.

Yes. Hi. Just a small question from my side. In Q2, we did a provision of around Rs. 4,000 crores. So can we now assume that this current provision is sufficient enough to cover this current size of a loan book and that no additional provision will be made? And another question that what is the blended borrowing cost and lending cost in terms of percentage? That is all.

Yes. In terms of provisions, at that time, what I spoke about a few minutes back as a response to the first question as well as through the course of my presentation , we expect an annualized credit cost of about 100 basis points. And that is what we are fairly hopeful and confident that we would continue to run with and the business can get managed within a credit cost of 100 basis points. We currently are borrowing at about a little over 9% and the book is yielding something around with all fe es etc., about 13% of which interest income would be coming at about 11%-12%.

And just another thing, out of the total, what is the total provision that we have made from our legacy book and how much of it have we already recovered?

The total provisions that we have made would be in the ballpark of, so we are carrying existing provisions plus fair value provisions of Rs. 3,710 crores. We expect from stuff that we have written-off which would be in the ballpark of Rs. 10,000 crores, recoveries of around Rs. 3,750 crores. And then there are other recoveries expected of about Rs. 875 crores. So our imputed provisions are at over Rs. 8,335 crores.

Thank you. The next question is from the line of Asm Raju, who is an Individual Investor. Please go ahead.

Good evening, Gaganji.

Good evening.

I like to ask when does our AUM start growing as it is declining from last year? And when will our rating improve, overall rating?

Yes. So as I have been explaining on various calls, you have to look at the AUM in two parts, growth and legacy. There is net reduction in the legacy basis, a strategic decision taken. We have done cash collection with Rs. 12,834 crores. If we continue with these kind of collections, then I believe sometime in the second half of Fiscal ‘26, we should be in a position , on a net basis, grow the overall AUM. So the growth AUM will be growing faster than the reduction in the legacy AUM. As far as rating upgrade is concerned, i t is not on me to be able to give guidance on that. We have had a long, good solid relationship with rating agencies. Most of the relationships are 15-20 years old. I think our financials reflect a very solid picture and we expect that through the course of this year, the ratings are put on a positive trajectory . Exactly which quarter, which month, that is very difficult to say.

Overall you are in growth path?

Yes.

All the best. Thank you.

I will take one last question, please.

What about the dividend, sir?

So dividend, we will discuss with the Board and propose a small dividend this year and hopefully a larger dividend next year.

Thank you. The next question is from the line of Sumit from MK Ventures. Please go ahead.

Yes. Hi, Gagan. Thanks for taking this question. Just couple of questions. First on the funding side, so with the recent rate cut and our fundraising also behind us and the new governor being little supportive of the NBFC funding environment, we have seen a lot of changes on the liquidity front. So how has the liability side funding side eased up for us in terms of say, incremental borrowing rates as well as quantum? That is one ? And secondly, on the co-lending, so the plan that we have for the next 2 years, we see now we are at a stage when look forward to scale up aggressively and co-lending of book is a vital part of our strategy. So what is your sense on the overall systems ability to absorb our volumes and if you can give some color on that, where do we stand on that, whether if we go to say Rs. 1 lakh crore in terms of overall book, including the Finserve, whether we would be able to do that kind of quantum in terms of book to the bankers?

Sure. Thanks, Sumit for the question. So our incremental rates that we are getting are about 35- ish basis points lower than what we were getting. The back book would get repriced as and when it is a cycle, so we typically would be running at MCLR plus 3-month MCLR or 6-month MCLR. So over the next 3 to 6 months, whatever is the reduction in MCLR so far would also get priced into the stock of bank borrowings. From a quantum perspective , last year as I mentioned we have done 2.3x. In the first 45 days of the quarter, we have probably done 5x of what we would have done in the first 45 days of last year. So very clearly, we are seeing the benefits of reducing rate environment, a steady hand in terms of regulations and so on, so all of that is clearly flowing in from a capital flow perspective. Your question on co -lending is very important. So as we mentioned in a couple of our earlier calls, co -lending is one of the 3 structures which exist, co - lending, direct assignment and pass through certificate. There is both macro and micro traction in all 3 and I will spend a minute on this. Co -lending is a business which has its advantage in terms of the capital circulating very fast . From return on asset, which is the residue left on our balance sheet, it is not as revenue rated as direct assignment. Direct assignment requires you to season the book for 6 months, but then on a longer -term basis, you only have to hold 10%, so you are able to work your capital that much harder. We were mindful of our own liquidity requirements and capital requirements and therefore were not wanting to commit that kind of capital where it is 6 months of money is locked in . Now, with all the positive developments of last year, I think we are in a position. So we are steadily working towards building a larger portion of our mix towards direct assignment versus the earlier years. And by Fiscal ‘27, I expect direct assignments to rise to 40%. Very interesting development, which also happening is I have been speaking for the last 2 years about the Government of India, focusing on setting up a residential mortgage-backed security issuance system in the country , that has finally taken off , the first transaction of our RMBS happened on the 6th of May. And soon all the other entities would also start working with this company, which has been promoted by the National Housing Bank. And so PTCs in due course of time would also emerge as a very interesting option because just because of the pricing advantage that instrument would have, the transactions would happen at a ballpark range of 7.5%. So asset light is Sumit where we will go, we will not get restricted with co-lending or direct assignment or PTC. We will tactically keep moving between these 2- 3 options, depending on where are we getting the maximum return on asset for ourselves and where is the maximum scale that we are being able to build up on disbursals. Co-lending is also restricted to priority sector. There is a proposal to free that up. Let us see where that regulation eventually lands up. So at this point in time, just to sort of summarize, it is a asset light strategy, which is evolving and tapping into pass through certificates , direct assignment of co -lending tactically as and when whatever is best for us, we will use that and probably use each of them every month or every quarter and assign different proportions. As things are right now, it will probably be a 40% co-lending, 40% direct assignment, 20% pass through certificate. This will be the core funding structure which will emerge over the next 4 -6 quarters . And if this is something that we are able to move forward on, then I think our desire to get to a 4% sort of ROA should get comfortably met.

Thanks, Gagan. Very helpful.

Yes. Thank you, everyone for your questions, for your support and for patiently listening into us. As I said, Fiscal ‘25 was transformative, Fiscal ‘26 should be a year of improving returns, returns for all shareholders, returns on all metric, that is what the company is looking at and we finally should be in a position to get to a comfortable ROE, competitive ROE by Fiscal ‘27. That is the goal with which the management team is working on. So thank you again and look forward to speaking to you shortly.

Thank you. On behalf of Sammaan Capital Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.