Edelweiss Financial Services Limited — Q3 FY26

Edelweiss Financial Services Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=GR6bXpc6lXQ Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good afternoon and welcome to third quarter FY26 earnings conference call of Edelwise Financial 0:11 11 seconds Services Limited. As a reminder, all participant lines will be in the listenonly mode and there will be an 0:18 18 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 0:26 26 seconds operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:35 35 seconds I now hand the conference over to Miss Priya Chopra, president Edelwise Financial Services Limited. Thank you and over to you ma'am. 0:46 46 seconds Thank you Michelle and a very warm welcome to the earnings call for the quarter and 9 months ended December 2025. 0:56 56 seconds Today we have on the call with us Mr. 0:58 58 seconds Rashes Sha chairman and MD of Adel Wise and Miss Ana, Chief Financial Officer Adel Wise Financial Services Limited. We 1:08 1 minute, 8 seconds hope that you've all had a chance to review the investor presentations that we filed earlier today. During our discussions, we will be making references to it. 1:18 1 minute, 18 seconds This quarter, we've also filed two special presentations titled Understanding EFSL's PNL and a 1:25 1 minute, 25 seconds presentation on our growth journey. We hope you find them useful. 1:31 1 minute, 31 seconds Please take a moment and review the safe harbor statements in our presentations. 1:35 1 minute, 35 seconds We will today be making statements that will be forward-looking in nature and hence may involve certain risks and uncertaintities. 1:43 1 minute, 43 seconds With that welcoming you all, I hand over the call to Rashes to begin the proceedings. Thank you all for being here once again. Over to you Rashes. 1:54 1 minute, 54 seconds Thank you. Thank you Priya and good afternoon to all of you once again. 1:58 1 minute, 58 seconds Welcome to our earnings call for this quarter and for the 9 months. A lot of you have been part of our journey and 2:05 2 minutes, 5 seconds this interactions that we have after our results has been one of the high points for us where we enjoy your feedback, 2:14 2 minutes, 14 seconds your questions, your uh inputs. So I do hope that uh today is the same and thank you once again for being here. uh to 2:23 2 minutes, 23 seconds start the call as I think Indian economy we know we are in that goldilocks stage where economy is doing well inflation is 2:31 2 minutes, 31 seconds down even the union budget this time was very steady the least disruptive uh you 2:38 2 minutes, 38 seconds know issues were there but it also I think uh highlighted one new thing which is the start of the credit reforms and 2:47 2 minutes, 47 seconds uh what I call a doubled barrel capital market or capital market has been equityled and I think equity plus bond 2:55 2 minutes, 55 seconds because I think we do now need our credit system to also scale up the way our equity systems have scaled up. Uh 3:04 3 minutes, 4 seconds good um fiscal discipline on the government and RBI is maintaining liquidity very healthy and obviously the 3:11 3 minutes, 11 seconds US deal and the EU trade deal all these are great boosters. Of course, we have this very paradoxical situation that in 3:18 3 minutes, 18 seconds spite of things being so good for the economy, the foreign investors have been on a on a spree of selling and for some 3:29 3 minutes, 29 seconds reason whether it's the rupee or the earnings growth or the valuations uh a lot of them have still been selling in 3:36 3 minutes, 36 seconds India. I was in the US recently and I still found that unfortunately a lot of them are still viewing India with a lot 3:44 3 minutes, 44 seconds of skepticism. India opportunities a lot of skepticism but at least fortunately on this we are in a good place in India. 3:52 3 minutes, 52 seconds Our capital markets are fairly atma the local uh investors household savings via 4:00 4 minutes mutual fund insurance SIPs all of that are actually now the real source of our capital for capital formation. So I 4:08 4 minutes, 8 seconds think that's the good news for India. I do believe foreigners will be back. they uh you know they keep on shifting their 4:16 4 minutes, 16 seconds allocations but on a long-term basis I do believe that once there are some catalyst maybe the US trade deal was one 4:23 4 minutes, 23 seconds catalyst maybe a little bit of growth coming back is another catalyst private capex maybe the rupee which is stabilizing will be another catalyst so 4:32 4 minutes, 32 seconds I do hope that in the next 3 4 months we'll start seeing foreigners coming back or at least not selling as aggressively as they've been selling So 4:41 4 minutes, 41 seconds with that let me give you an update on AL wise. I think uh before we go into the business growth and all some of the strategic updates first as you would 4:50 4 minutes, 50 seconds have seen we announced today that Kalile is investing in our housing finance subsidiary Nidato. Uh I think a lot of 4:59 4 minutes, 59 seconds you know Kalile is one of the world's largest and most diversified global investment firms. They will totally invest 2,100 crores in this deal. 5:10 5 minutes, 10 seconds uh they will do a 600 odd crary transaction and they will invest 1,500 crores into the company as a primary 5:19 5 minutes, 19 seconds investment. So the company already has approximately 800 crores of equity. So with this additional 1,500 the total 5:27 5 minutes, 27 seconds capital of the company will become 2,300. 5:31 5 minutes, 31 seconds Uh by buying secondary Kalai will get 45% and then they will infuse another primary 1,500 crores. So the uh eventual step will be closer to 74%. 5:43 5 minutes, 43 seconds The good other news is Aditya Puri who's an I think an icon all of us respect him 5:49 5 minutes, 49 seconds a lot. I I've been a big fan uh is also an adviser to Kal and he's also in his 5:57 5 minutes, 57 seconds personal capacity participating with an investment in this. So there'll be Kalin, there'll be Adelise and there'll 6:03 6 minutes, 3 seconds be Aditapuri as an investor. three investors in this deal after closing also in Kalile Sunil call who is a 6:11 6 minutes, 11 seconds partner at Kaline who's done a lot of great deals like SBI cards and yes bank and PNB housing he has been leading the 6:20 6 minutes, 20 seconds transaction so for us the partner has also been very important and the skill set and capability that they bring truly 6:27 6 minutes, 27 seconds will allow us to scale up this platform which has been on a steady growth path but I think with the capital and and the 6:36 6 minutes, 36 seconds and the platform we have I think it will be it will be ready for takeoff and it is a win-winwin I think for Kalile they 6:44 6 minutes, 44 seconds get a good stake in a good platform for Adelise this allows us to partially get some cash to delever our corporate debt 6:52 6 minutes, 52 seconds but also we have a stake in this which we think will grow pretty well and even for the management team this will be who 6:59 6 minutes, 59 seconds all have stock options in the business this will be a way of you know creating value and also So I think creating a 7:07 7 minutes, 7 seconds really uh very high value franchise in affordable housing. Uh the second update 7:14 7 minutes, 14 seconds friends is on EA IPO update. We have filed DRSP last month. Uh we are waiting 7:21 7 minutes, 21 seconds to get feedback from SEBI in the regular process and we do believe that this year we will want to list EAA and again the idea of listing EAA has many objectives. 7:33 7 minutes, 33 seconds One is we have given stock options to our employees and this IPO and listing of EAA will allow also those stock 7:39 7 minutes, 39 seconds options to to showcase value also it will allow us some capital for AI to to deliver uh our corporate debt as you 7:48 7 minutes, 48 seconds know EAA is is throws out positive operating cash flow they are pretty 7:55 7 minutes, 55 seconds strong their growth uh trajectory [clears throat] has been good so they don't need capital but this will allow us to deliver our corporate debt but as 8:04 8 minutes, 4 seconds well as also get listed and create uh you know value for employees in their stock options. Third, the third is the 8:12 8 minutes, 12 seconds best brbridge investment in Adelise mutual fund. The the first round of transaction has been done uh in the last 8:20 8 minutes, 20 seconds quarter. They bought 10%, they have another 5% they will buy by June. So that is also a steady state going as you 8:28 8 minutes, 28 seconds would have seen in the results the mutual fund profit has been on a fairly good growth trajectory. So even the mutual fund which was always growing 8:36 8 minutes, 36 seconds very well on AUM is now starting to go well on the profitability curve also. 8:42 8 minutes, 42 seconds And before I get into the quarterly updates of Adel Wise as Priya said we have filed a couple of documents uh along with this u investor presentation. 8:53 8 minutes, 53 seconds Uh one is on how to understand a wise profit and loss account consolidated. 8:58 8 minutes, 58 seconds quite a few of you have given us the feedback uh of you know that there is a lot of grapple involved. So we try to simplify it how to understand our P&L 9:07 9 minutes, 7 seconds and what are the drivers of that and the second is our growth journey and the reason for that growth journey in charts is the last few years a lot of our 9:15 9 minutes, 15 seconds communication a lot of our conversation has been dominated by NBFC and the wholesale book where we we had issues 9:23 9 minutes, 23 seconds and we have delivers that and reduce the wholesale book but that conversation actually did not allow us to really 9:31 9 minutes, 31 seconds highlight in this five is how a lot of our other businesses EA mutual fund uh 9:39 9 minutes, 39 seconds both the insurance businesses how all of them even MSME in our NBFC how they are growing. So there was growth happening 9:46 9 minutes, 46 seconds in other parts of AI wise group but uh maybe it was not highlighted as much. So we've tried to also to all our 9:55 9 minutes, 55 seconds stakeholders showcase the last 5 year journey in various businesses and where growth has happened and uh how we have 10:03 10 minutes, 3 seconds performed. It's a pure data slide. There is no commentary around that. So that's a growth journey on EFSL P&L broad 10:11 10 minutes, 11 seconds structure as we have explained and I'll just try to to summarize it out here. 10:17 10 minutes, 17 seconds Uh the consolidated profit and loss of a wise that you all see has two distinct buckets. One is the operating businesses PAT [clears throat] the profit after tax 10:26 10 minutes, 26 seconds of the seven underlying businesses we have and the holding company and the holding entities which is the corporate. 10:32 10 minutes, 32 seconds So we divide in two parts underlying business and corporate. 10:36 10 minutes, 36 seconds The good news has been the underlying business uh profit has been on a steady growth. Uh each of the underlying 10:43 10 minutes, 43 seconds business is standalone with a fully dedicated management team independent board have their own P&L balance sheet 10:51 10 minutes, 51 seconds and they control a large part of the journey. We get involved at governance at board level. We get involved at strategy level but largely they are very 11:00 11 minutes board run. We are all on the board. So even entities which are 100% subsidiary are still run as standalone 100 uh 11:09 11 minutes, 9 seconds standalone independent entities. The corporate group focuses on supporting this underlying business through capital 11:16 11 minutes, 16 seconds allocation investment oversight. Uh we provide treasury support services for their liquidity management. We have a 11:23 11 minutes, 23 seconds lot of experience on that. some core uh shared services and the corporate also is also looking to incubate and invest in new capabilities and new businesses. 11:35 11 minutes, 35 seconds So the corporate job and the operating business entity jobs are fairly well divided and are very much in harmony. So 11:42 11 minutes, 42 seconds our PAT is a summation of both this pad the business pad and the corporate pad. 11:47 11 minutes, 47 seconds The business pad is where the heart of the value creation is. Uh that has been growing and we would like to grow it at 11:54 11 minutes, 54 seconds 20% a year. That is what we've been saying and given the stage at which all our businesses are the platforms they 12:01 12 minutes, 1 second build we think it is it is it is possible. 12:05 12 minutes, 5 seconds So the business p a lot of stability a lot of um you know uh uh growth around that. However, corporate PAT will always 12:14 12 minutes, 14 seconds be volatile because corporate is like a holding company. uh we have uh income coming from dividend and stake sale uh 12:23 12 minutes, 23 seconds and capital gains and we have expenses which is uh interest cost and also corporate uh PAT is always volatile and 12:32 12 minutes, 32 seconds as you know in the last few years we did uh take a little bit more debt on the 12:38 12 minutes, 38 seconds corporate balance sheet to make sure the individual operating businesses were well capitalized and did not suffer any 12:47 12 minutes, 47 seconds lack of resources. So our insurance company even our asset management companies even 5 years ago when they needed a little bit of capital we were 12:55 12 minutes, 55 seconds always providing that. So we didn't allow the NBFC uh deleveraging to result in lack of 13:03 13 minutes, 3 seconds resources for our other operating businesses and that is why they've been able to grow but in order to do that the corporate had to borrow some debt. We 13:11 13 minutes, 11 seconds also made sure the NBFC always had adequate liquidity and that is the corporate debt we have spoken about that we are going to you know delever with 13:20 13 minutes, 20 seconds stake sales and all. So the corporate has a lot of episodic and and volatile P&L. Businesses have steady P&L and when 13:28 13 minutes, 28 seconds you add the two that becomes the consolidated P&L for a wise. So would be very happy to hear that because we are 13:35 13 minutes, 35 seconds not a uh one operating company we are an investment company with multiple businesses as various stages of business. 13:44 13 minutes, 44 seconds uh friends the scale up on profit of underlying businesses have spoken last two years we have been growing at 22%. 13:54 13 minutes, 54 seconds Uh our asset management and the alternative asset EA mutual funds have grown at 28% and 58% CAGGR over the same 14:03 14 minutes, 3 seconds period. Our insurance business is on track for break even and we are on the path for reducing corporate debt. As we 14:10 14 minutes, 10 seconds have seen the Kalile deal, the the mutual fund stake sale in the EA IPO all this is going to help us reduce the corporate debt. Now it is fairly 14:19 14 minutes, 19 seconds manageable. We are not uh unduly worried about it but we want to bring it down because I think that that interest 14:27 14 minutes, 27 seconds burden itself is a drag on profitability. 14:30 14 minutes, 30 seconds uh for AD wise update for the quarter ended um December and the 9 months uh steady growth in profit consolidated PAT 14:39 14 minutes, 39 seconds is up because of the EAA yeah the EAMC stake sale and uh there have been lot of underlying exceptional items in this 14:47 14 minutes, 47 seconds quarter as you know there was GST impact in life insurance graduated impact on labor cord plus in this year we have implemented ESOP across all the 14:56 14 minutes, 56 seconds businesses and each business uh runs the ESOP cost through their P&L and and we are okay with that because we also think 15:04 15 minutes, 4 seconds ESOP is a cost that the business is incurring. It is uh you know part of the the upside that that the employees get. 15:13 15 minutes, 13 seconds So it goes through the P&LN though it's a non-cash item. So uh alternative asset management FPM has been steady growth 15:21 15 minutes, 21 seconds 33% growth in this uh yi we have 40 almost 42,41,900 crores of fee paying aum our total amum 15:31 15 minutes, 31 seconds is obviously much higher because we have dry powder and all but 41,920 is what we look at as a key metric as a 15:38 15 minutes, 38 seconds fee paying aum which makes us one of the larger alternative asset managers in the country. U mutual fund AUM also grew by 15:46 15 minutes, 46 seconds 33%. Equity AUM is 83,000 crores. Now we have been targeting 100,000 crores of equity AUM for quite some time. I'm 15:55 15 minutes, 55 seconds happy to report that we're getting closer to that. And both MSMA and housing in the last year have started growing again. So MSME disbbursements 16:04 16 minutes, 4 seconds have grown by 84% in the 9 months and uh housing finance by 38% on a Y basis. So 16:11 16 minutes, 11 seconds good growth in disbbursement in the both the credit business though they're very small and they've been consolidating for the last few years but now the growth is 16:18 16 minutes, 18 seconds starting on that and insurance the loss has come down a general insurance loss has come down customer franchise is 16:27 16 minutes, 27 seconds growing at 13% at at 31% peranom we have our total customer is about 13 million is a 16:36 16 minutes, 36 seconds customer franchise we have and our total customer assets are 2 lak4,000 000 cr. 16:41 16 minutes, 41 seconds So that is also steady growth. So again as you would have seen all the businesses are well capitalized capital adequacy and uh they have been growing 16:50 16 minutes, 50 seconds pretty well. We hold a fair amount of liquidity. Now we've gone into surplus liquidity zone and uh just a few highlights on the individual businesses 16:59 16 minutes, 59 seconds alternative asset management business we raised about 7,500 crores in the first 9 months which is a growth of 67%. So this 17:08 17 minutes, 8 seconds is a good amount of uh fundraising fresh fundraising that happened. Um we have to we have an inbit already 17:16 17 minutes, 16 seconds listed called ENZEN where we did a preferential issue of almost 700 crores. 17:21 17 minutes, 21 seconds Our uh the NZEN is [clears throat] very energy focused in bit. It's a toz on energy. Uh we have a second inbit for 17:29 17 minutes, 29 seconds which we have filed a document called CTS which is has an issue size of 1,300. 17:34 17 minutes, 34 seconds This will be a transportation inbit. So our invits are not asset specific but theme specific. So energy is one invit 17:42 17 minutes, 42 seconds transportation is another invit and for those of you follow in bit and reit they also becoming a very important asset class in India. We have also launched 17:51 17 minutes, 51 seconds our uh esoft 4 the performing credit fund 4 and we getting good interest from local and international clients but uh 17:58 17 minutes, 58 seconds this year we will raise that money we'll have to raise that money and close that fund. um mutual fund as I said good 18:05 18 minutes, 5 seconds growth our SIP book is now 558 crores is the is the monthly SIP book which is a 18:12 18 minutes, 12 seconds 55% growth um the retail folios are 34 lakhs so good growth in folios SIP book 18:18 18 minutes, 18 seconds equity aum in this uh in our arc we have recovered 842 crores this quarter so arc 18:25 18 minutes, 25 seconds continues to be still a business where um the recoveries of old AUM is a primary uh function we are buying new uh 18:34 18 minutes, 34 seconds assets also especially in the retail side and now the retail assets in ARC as a percentage of total capital deployed 18:42 18 minutes, 42 seconds has gone up to 25%, it was 15% one year ago. So as I said NBFC and housing both of them they've started their 18:51 18 minutes, 51 seconds disbbursement scale up again and both uh general insurance has grown by 47% on a Y basis in the quarter and uh life 19:00 19 minutes insurance our uh gross premium has grown at 15%. So again to sum it up friends u 19:07 19 minutes, 7 seconds before we open it up for questions we are on track for all our priorities growth reducing corporate debt but again 19:15 19 minutes, 15 seconds it's it's like you know one quarter at a time and the journey is ongoing but I think India is in a good place and uh I 19:22 19 minutes, 22 seconds hope that awes also uh uses the opportunity India has to grow and create value for all our stakeholders. Thank 19:31 19 minutes, 31 seconds you very much. Now I'll hand it over to all of you for any questions. 19:37 19 minutes, 37 seconds Thank you very much sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask questions may press star 19:47 19 minutes, 47 seconds and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handit while asking a question. 19:59 19 minutes, 59 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions at this time. 20:21 20 minutes, 21 seconds The first question is from the line of Kartika Mohata from Motilal Otwal Financial Services. Please go ahead. 20:29 20 minutes, 29 seconds Yes. Uh thanks for the opportunity. Uh first of all uh congratulations on the deal with Carlile. uh could you please share your perspective on the key 20:38 20 minutes, 38 seconds strategic synergies and uh value creation opportunities expected for the business post this transaction and was there any reason why we did not sell the 20:46 20 minutes, 46 seconds entire 100%. And particularly basically I wanted to know like the needle medium-term road map in terms of AUM 20:54 20 minutes, 54 seconds growth and all after card line being on board. 21:00 21 minutes So yeah as you as you know last three four years in in Nido we have pivoted to affordable housing and also earlier a 21:07 21 minutes, 7 seconds lot of origination was through DSS slowly we are doing a lot more direct. 21:12 21 minutes, 12 seconds So the deal with Kalai Air they do bring a lot of uh understanding and expertise in housing finance having done PNB and 21:19 21 minutes, 19 seconds having adapuri also investing in that so there'll be a lot more capabilities that they will also bring along with the platform that we have built. So we have 21:28 21 minutes, 28 seconds a good platform. Last three years we've been actually uh building very robust affordable housing finance business. 21:37 21 minutes, 37 seconds Also this will give us additional capital because I think uh now uh NBFC housing finance is also very capitalled 21:45 21 minutes, 45 seconds and first you need equity then you borrow and scale up. So I think that 1,500 cr equity capital will also 21:52 21 minutes, 52 seconds transform the business. So we have a platform we could have grown but with the additional capital it will be uh you 21:59 21 minutes, 59 seconds know doubly strong and thirdly we could have sold the whole thing but we didn't want to sell because we uh wanted to 22:07 22 minutes, 7 seconds sell a little bit obviously as I said to reduce our corporate debt so if we had sold the whole thing we would have maybe 22:12 22 minutes, 12 seconds got another 5 600 crores more but we do think the stake we are holding the 26% 22:20 22 minutes, 20 seconds could be valued a lot more in the future and you can do the math with or 800 crores of current equity and 1,500 22:27 22 minutes, 27 seconds equity coming from them, equity will be 2,300. And if you add up and if you really build a robust business with our 22:35 22 minutes, 35 seconds team, our platform, their capability, their handholding um and we have seen that Noama also if 22:41 22 minutes, 41 seconds you saw after getting PG as a partner, the platform was very strong. The entire management team is the same wise 22:48 22 minutes, 48 seconds management team. But giving some independence, some flexibility, some capital does allow the business and the 22:56 22 minutes, 56 seconds platform to be scaling up in a very optimized manner. So we could have grown on our own slowly slowly slowly but this 23:03 23 minutes, 3 seconds will give us a opportunity to turbocharge and uh I think that 26% that we want to retain uh we hope will also 23:11 23 minutes, 11 seconds be valuable. So our idea was both. It's a win-win. we we've got some capital now to reduce debt but some other to also create value and that will also be 23:20 23 minutes, 20 seconds liquid because in you know 2 three years this business should hopefully scale up well so that's broadly the thinking we 23:28 23 minutes, 28 seconds had uh that's really helpful sir one uh one more question uh so with most of your subsidiaries like some of your subsidies 23:36 23 minutes, 36 seconds actually which have either completed or announced as part of the value unlock journey could you share your thoughts on the next phase of value creation. Are 23:45 23 minutes, 45 seconds there any additional businesses under evaluation and what could be the broad time frame for any potential announcement? 23:54 23 minutes, 54 seconds Uh as we have said and again when we say value lock unlocking it is not always a sale of the business or a majority stake 24:01 24 minutes, 1 second sale and all that. It's a combination of many things like we did value unlocking via de merger of newama and giving uh giving shares in the hands of the 24:09 24 minutes, 9 seconds shareholders. Even AAA IPO will be value unlocking because we we'll showcase the value of EAA get some capital which will 24:18 24 minutes, 18 seconds reduce our debt at a corporate level. So the three things we [clears throat] had announced a year ago that three things we are exploring one was the mutual fund 24:26 24 minutes, 26 seconds where we have completed the stake sale one was housing finance that we announced today and third was EA where 24:33 24 minutes, 33 seconds we have filed the the TRSP and we expect to dilute say approximately 15% equity. So in the mutual fund we 24:43 24 minutes, 43 seconds still will own 85% equity in AAA we loan 85% equity and as we finalize any other 24:50 24 minutes, 50 seconds unlocking plans we'll keep on announcing it. So this was what we had announced a year ago and we are just executing. I 24:56 24 minutes, 56 seconds think this uh we also want to endorse that every announcement we have made we have follow through on that whether it 25:04 25 minutes, 4 seconds was the reduction of debt reduction of the wholesale book stake sale. So we have been uh you know very consistent in 25:11 25 minutes, 11 seconds executing what our plans are and uh as we make new plans for more value unlocking. So I think value creation 25:19 25 minutes, 19 seconds comes from building great companies great platform and value unlocking comes after that because once you build a good 25:26 25 minutes, 26 seconds like if you look at NUMA it was a great platform and then value unlocking became easier. Same thing with Nero. So I think 25:34 25 minutes, 34 seconds value unlocking gets easier if you build value and as I said the the the building value is the growth and quality of our 25:43 25 minutes, 43 seconds of our of all our businesses that we are building. 25:48 25 minutes, 48 seconds Sure. Sure. Thank you sir and all the best. 25:54 25 minutes, 54 seconds Thank you. The next question is from the line of Prahav Sha from Equiras. Please go ahead. 26:01 26 minutes, 1 second Uh hello thank you for this opportunity. 26:04 26 minutes, 4 seconds I have two sets of questions. Uh so the first one is like EAA as you mentioned EAA recorded impressive 67% yearon 26:14 26 minutes, 14 seconds growth in fundraising for the first 9 months. So like could you tell us how do you see this fundraising going forward 26:21 26 minutes, 21 seconds and like any new fund launches or strategies are there in pipeline and secondly on like you mentioned initially 26:28 26 minutes, 28 seconds that the geopolitical environment is uh due to geopolitical environment the investors are still still doubtful about 26:38 26 minutes, 38 seconds investing in India. So like is this affecting our operations in any way? 26:47 26 minutes, 47 seconds So I think on the second one as I said investors globally are slightly um you know colder to India and they have been 26:54 26 minutes, 54 seconds for the last couple of years but even in that we've been able to raise money because as you know private credit and real assets uh infra business that we 27:03 27 minutes, 3 seconds have that still has it attraction so last quarter we had announced energy transition fund which is we got the 27:10 27 minutes, 10 seconds anchor investor from a which is a large European investor And now we are we are we are raising money on the energy 27:18 27 minutes, 18 seconds [clears throat] transition fund ETF as we call it. Then as I said we have just launched performing credit 4 uh fund ESO 27:25 27 minutes, 25 seconds 4 in in EA you know each of these funds in private markets is a four five year fund. So by the time you get to fund 27:33 27 minutes, 33 seconds four you already spend about you know 14 15 years in that business. So building track record is very important. So we have gone to through ESOF 3 has been 27:42 27 minutes, 42 seconds invested and now we are we have launched ESOF 4 where we have got traction. So as you know we are a multist strategy 27:50 27 minutes, 50 seconds uh alternative asset manager. So at every year there'll be couple of funds we'll be raising. So this year it's 27:56 27 minutes, 56 seconds energy transition fund ESO for performing as I've said we have raised money in a init but we are we have filed 28:05 28 minutes, 5 seconds for raising money in a transportation initi. So that fundraising should happen and uh as we also have other funds like 28:13 28 minutes, 13 seconds our uh special sit fund which is also three is is getting invested when that 28:20 28 minutes, 20 seconds gets over we launch four so all that goes on so we will every I think every 3 four months we'll be launching a new fund which then goes on for a year and 28:29 28 minutes, 29 seconds all. So our idea here is that if you look at last few years we have uh in we have raised about about you know 6 to 28:38 28 minutes, 38 seconds 8,000 crores a year. We invested about um you know 7 to 8,000 crores a year and we have uh realized or returned about 5 28:47 28 minutes, 47 seconds to 6,000 crores a year across our strategies and we hope to continue to grow on that. I think the E paying AUM 28:55 28 minutes, 55 seconds has been growing at approximately 21% a year for the last few years and that is a growth we would hope to maintain. 29:04 29 minutes, 4 seconds Thank you for the detailed answer like I have one more question like on mutual fund side like uh you achieved like two 29:11 29 minutes, 11 seconds new milestones. So one was that equityum is now 50% of the total AUM and your SIP book as you mentioned has crossed 500 cr with 55% increase quarter and quarter. 29:23 29 minutes, 23 seconds So like could you share some insights on where is this growth coming from whether it is from tier one or tier two cities 29:31 29 minutes, 31 seconds and like what are you targeting? What is your target equity mix in the next two three years? 29:39 29 minutes, 39 seconds I think our as I said equity aum we want to we want to continue to grow hard to make a forward-looking statement in this 29:46 29 minutes, 46 seconds because you know the industry grows at a particular pace but I do believe the equity aum for the industry should grow 29:53 29 minutes, 53 seconds at at about 14 15% a year and we have been growing faster than the industry because we still have a lot of you know 30:01 30 minutes, 1 second wide spaces where we have not opened branches and not activated distributors and all so we are doing that we opening a lot more branches is uh I think for 30:10 30 minutes, 10 seconds the first 10 years we maybe had 30 branches we have added 30 more in the last couple of years. So we are now uh 30:19 30 minutes, 19 seconds on an aggressive expansion of that it coming from all mainly tier 2 and three is where there is a lot of growth 30:26 30 minutes, 26 seconds happening which is where we are opening branches. We always had branches in the the larger cities but now we are uh two and three where we are seeing a lot of 30:35 30 minutes, 35 seconds growth. So it's actually across the board and equity AUM becoming half of our total AUM was a key milestone and uh that we want to continue to grow. 30:46 30 minutes, 46 seconds Uh thank you. Thank you so much. That's it from my head. 30:55 30 minutes, 55 seconds Thank you. 31:04 31 minutes, 4 seconds The next question is from the line of Siddesh Dharma Dharma Adikari from PL Capital. Please go ahead. 31:15 31 minutes, 15 seconds Opportunity. Am I audible? 31:17 31 minutes, 17 seconds I'm sorry sir, we lost you. Can you please? Yes. Now you're audible. Am I audible now? 31:23 31 minutes, 23 seconds Yeah. So uh general insurance delivered a strong 29% year-on-year GDPI growth with GWP up 49%. And in Q3 we see GWP 31:33 31 minutes, 33 seconds stood at rupees 404 crores versus GDP of rupees 350 crores implying higher than usual reinsurance assessments. So what 31:41 31 minutes, 41 seconds has driven the significant jump? Have we entered any partnership or something like that? 31:49 31 minutes, 49 seconds No, I think uh uh we obviously have been expanding opening you know activating more dealers and our direct expansion 31:57 31 minutes, 57 seconds and all that but the last quarter of growth is as you know after the GST cuts the industry had a big jump especially 32:04 32 minutes, 4 seconds auto sales and all and we are we are related to auto sales plus we've been building uh our market share even in the renewals and all that. So all that 32:13 32 minutes, 13 seconds effort has come to shape but I think the key if you ask me the key uh jump has been the the auto sales that jumped up 32:22 32 minutes, 22 seconds post uh the GST cuts and as you know our GI business is largely focused on motor 32:29 32 minutes, 29 seconds insurance. We are not very big in retail health. We have made a strategic choice that we can't do both. They both are 32:36 32 minutes, 36 seconds very attractive markets but all our energy and our focus is on auto and motor insurance. And last quarter after 32:44 32 minutes, 44 seconds a few quarters of you know very subdued growth I think uh motor insurance also started growing again. Retail health was 32:52 32 minutes, 52 seconds always growing but uh motor was stagnating but now last quarter same motor also has started growing. 33:02 33 minutes, 2 seconds Understood sir. And uh I had uh one more question. Corporate uh net debt has remained broadly stable in the quarter 33:09 33 minutes, 9 seconds with with the consideration received from recently concluded mutual funds. We were expecting to see some downward movement. Can you please explain this 33:18 33 minutes, 18 seconds and what levels do we expect FY26 to close at? 33:24 33 minutes, 24 seconds So I see as you say it's more or less flat because there is also interest that goes out every year and uh last year we 33:33 33 minutes, 33 seconds closed the the mutual fund sale only in December. So even that money has come only in December. So I think that 33:40 33 minutes, 40 seconds interest element and now we have a approximately 6,500 cr corporate debt 33:47 33 minutes, 47 seconds out of which we have 1,500 against the office building and property. so that we can keep it because I think borrowing 33:55 33 minutes, 55 seconds against office and all is very normal and it is it pays for itself. So out of that 6,500 1,500 is the value of our 34:04 34 minutes, 4 seconds Adel Wise house and Cohen house and other other property we have. So we year mark 1,500 crores of debt against office 34:13 34 minutes, 13 seconds and other properties. So 5,000 is the debt that we really have which is against the business that we have. We do 34:21 34 minutes, 21 seconds hope that between Nidato now and and and and the balance value of the stake sale of Nidato in the next couple of years 34:29 34 minutes, 29 seconds total value should be 1,500 to you know 2,000 crores. EAA uh we should get between,500 34:38 34 minutes, 38 seconds odd crores. So between EAA and and Nidato it's about 3 three and a half thousand cruction and we are now getting 34:46 34 minutes, 46 seconds dividend of about 1,000,200 crores in the next 2 years from the businesses. So if we get uh about 11 34:54 34 minutes, 54 seconds 1200 cr dividend plus need plus uh EAA I think approximately 4,000 4,200 crores 35:04 35 minutes, 4 seconds out of that 5,000 will be uh will be handled. So broadly I think uh the 6,500 35:12 35 minutes, 12 seconds cr debt we have year marked in that our our current target is in the next 18 months to bring this down below 3,000 cr 35:20 35 minutes, 20 seconds out of which 1,500 will be earmarked against the property and 1,500 will be the real debt. And now we have all the 35:27 35 minutes, 27 seconds all the businesses we want a lot of stakes. And as we have demonstrated that good businesses when we want to to to monetize it is possible to to monetize. 35:38 35 minutes, 38 seconds We'll still as I said hopefully own uh 85% of EA even after the IPO we'll own 35:46 35 minutes, 46 seconds 85% of uh mutual fund. We'll own 26% of Nero. So all these are also fairly monetizable assets. So that is our math 35:55 35 minutes, 55 seconds that out of this current debt we slowly bring in. So we are not concerned about it anymore because the path is very 36:02 36 minutes, 2 seconds clear to us. We still have to execute but as I said earlier what we said one year ago we have gone and executed in the last one year. So in the next year 36:10 36 minutes, 10 seconds or 18 months we will continue to execute on this. 36:15 36 minutes, 15 seconds Understood. Thank you so much sir and wishing you all the very best. Thank you. 36:23 36 minutes, 23 seconds Thank you. The next question is from the line of part Jiala from DAM Capital. Please go ahead. 36:30 36 minutes, 30 seconds Hi sir, thank you for the opportunity. 36:32 36 minutes, 32 seconds So sir, in the in your comments, you mentioned that your FPAM has uh grown 33% Y growth. So it has delivered a 36:40 36 minutes, 40 seconds strong growth. Could you share some medium-term aspirations on the growth uh here? Uh and what would be the key 36:47 36 minutes, 47 seconds driver sustaining this momentum? And sir, second question is that uh so I've seen your MSME disments have grown at a 36:55 36 minutes, 55 seconds very strong pace of 84% Y basis. So is there any some strategic initiatives that you have undertaken for driving 37:03 37 minutes, 3 seconds this growth? Any new products or geographic expansions or any channel enhancements that you have done here? 37:09 37 minutes, 9 seconds Those are my two questions sir. 37:14 37 minutes, 14 seconds So on the MSME we obviously as you know we hired a new MD last year in April Ajay Kurana who was earlier executive 37:22 37 minutes, 22 seconds director of Bank of Bura has a lot of experience on MSME and we had actually staggered our plan to first saying we'll 37:30 37 minutes, 30 seconds clean up the wholesale book we'll bring down the debt which got done last year. 37:35 37 minutes, 35 seconds So once we reached that point we said now we can you know start growing the MSM business. It would have been also 37:42 37 minutes, 42 seconds possible to grow MSME aggressively and uh and clean up the wholesale but you know we are very careful so we did it very 37:50 37 minutes, 50 seconds carefully we we said let's do one thing at a time so that was broadly on the MSME I think there is a lot of opportunity we have introduced some new 37:58 37 minutes, 58 seconds products we have invested in technology we opened some you know 40 branches in the MSME and there are three four 38:05 38 minutes, 5 seconds categories of MSME and we are still very small but I think we are now hitting about 100 125 cr disbursement per month. 38:13 38 minutes, 13 seconds We used to be at about 25 30 cr disbbursement per month 18 months ago. So it's a business we we 38:21 38 minutes, 21 seconds maintain for the last few years by we cleaning up wholesale and uh getting a new MD getting we have also hired three 38:29 38 minutes, 29 seconds four key people out there in the first quarter of the last year and then we have now started scaling it up. So 38:36 38 minutes, 36 seconds that's on uh what was your other question? Uh excuse me Mr. Jiala. 38:49 38 minutes, 49 seconds Uh we couldn't hear you. 38:51 38 minutes, 51 seconds Yeah, it was on uh so what are the medium-term growth aspirations there and what are the key drivers do you see the momentum sustaining? 39:02 39 minutes, 2 seconds So aspirination on alternative EA is to be one of the leading alternatives firm. 39:07 39 minutes, 7 seconds We already are there with you know 40 1,000 crores of free paying aum. Uh uh it makes us you know pretty large and we 39:16 39 minutes, 16 seconds are a multi strategy. There are alternative firms which are single strategy. Some people do only P or some do only private credit or some do you 39:25 39 minutes, 25 seconds know uh you know venture debt. Some do only equity AIFS. We are we have about eight strategies in our portfolio. We 39:33 39 minutes, 33 seconds have dedicated management teams MDs for all of that. So and in a lot of our key funds flagship funds we are on third 39:40 39 minutes, 40 seconds fund and fourth fund now. And this business continues to grow but each fund is a is a four five year fund. So our 39:48 39 minutes, 48 seconds idea is as I've said our fee paying aum has been growing at about 21% a year for the last 5 years. We would like to 39:56 39 minutes, 56 seconds maintain that because this is a business which can grow without capital. We don't need to infuse capital. It throws out 40:03 40 minutes, 3 seconds capital now pays dividend to us. But it's a truly I think unique asset management. If you look at alternatives 40:10 40 minutes, 10 seconds today the total AUM of alternatives is about 20 lakh K. The total AUM of mutual fund is about what 85 you know 85 lakh 40:19 40 minutes, 19 seconds KES. So the AUM is about 1/4 but the average profit on AUM is about three times. So on a profit pool basis the 40:28 40 minutes, 28 seconds mutual funds uh profit pool is about close to about 20,000 cr. Now while the 40:35 40 minutes, 35 seconds alternative amum profit is about 15,000 crores. So I think on a profit pool basis the alternative market and the 40:43 40 minutes, 43 seconds mutual fund market as two arms of asset management are becoming fairly equal now and that is what the excitement is. 40:50 40 minutes, 50 seconds While mutual fund is a very different business alternatives is a very different business and globally you have you know firms like black rock are big 40:59 40 minutes, 59 seconds in mutual fund while if you look at black stone they're very big in alternatives. So globally there are large firms like Blackstone, Apollo, 41:07 41 minutes, 7 seconds KKR, Kalile who are all very leading alternative firms and I think the market in alternatives in India is starting to 41:15 41 minutes, 15 seconds come. So we are we are pretty optimistic. We think it's a 105 year story to an idea. Blackstone started in 41:23 41 minutes, 23 seconds US in 1984 with a I think a hundred million fund and they now have close to 1 trillion plus uh AUM over 40 years. So 41:33 41 minutes, 33 seconds I think India alternative market should grow. There are a lot of other firms which will also come in. There'll be many players in this industry. But is it 41:42 41 minutes, 42 seconds is a space to watch from an from a growth point of view? 41:56 41 minutes, 56 seconds Mr. Jariala any further questions sir? 42:00 42 minutes No thank you so much. Thank you. We'll take the next question from the line of Jui Manani from Ahant Capital. Please go ahead. 42:14 42 minutes, 14 seconds I'm sorry to interrupt you ma'am. Your voice is breaking. We are unable to hear you clearly. Uh hello. Are you hearing me? 42:23 42 minutes, 23 seconds Ma'am, your voice is breaking but still you may try. 42:28 42 minutes, 28 seconds Okay. So for the off and thanks uh that result if any audible ma'am I'm sorry to interrupt you your 42:36 42 minutes, 36 seconds voice is uh breaking I would request you to kindly rejoin the queue please and try again 42:44 42 minutes, 44 seconds ma'am please rejoin the queue thank you we'll take the next question from the line of Adita Maria from HTSC securities 42:52 42 minutes, 52 seconds please go ahead yeah hi sir uh so we obviously heard your plans for ramping up DAA uh you know I just wanted to ask a broad 43:00 43 minutes question what are the timelines for the IPO I know your DRP has been filed uh also are you planning any preIPO you know anything on the valuations for the 43:09 43 minutes, 9 seconds same in whatever discussions uh you're targeting with investors uh we have not announced anything we 43:17 43 minutes, 17 seconds just filed our DRSP I think uh about 3 weeks ago so we'll allow the DRSP process to go on we have quite a few 43:25 43 minutes, 25 seconds clients and investors who've been with us for some time and the IPO process will be like a normal IPO process which is in India is usually four to 6 months 43:34 43 minutes, 34 seconds from when you file. So we'll follow the same process as I have earlier also said this quarter is a very important quarter for us Jan Feb March because quite a few 43:43 43 minutes, 43 seconds of our fund raising is going on right now. So I think uh the IPO we hope will be in about four to 6 months from now. 43:54 43 minutes, 54 seconds Okay. Okay. Got it. Uh second is uh you know this uh life insurance business there was a one-time GST related uh 44:02 44 minutes, 2 seconds expense. Uh what are the mitigation measures we're taking you know to manage this uh ongoing impact of the GST 44:09 44 minutes, 9 seconds regulatory changes and uh you know does this also impact our break even targets for FI27. 44:18 44 minutes, 18 seconds So one is this one time impact was the carry forward uh you know GST credit you had which for everybody got extinguished 44:27 44 minutes, 27 seconds on on that day effective I mean it's you can use it up it can be carried forward but as a prudent measure we have taken a 44:34 44 minutes, 34 seconds provision against it so when we when we use it it'll come back in the P&L but as of now we have said so this is the old 44:41 44 minutes, 41 seconds GST which was which was an existing credit ongoingly as you rightly said all insurance 44:49 44 minutes, 49 seconds companies are grappling with this because this has been a cost impact. So there are various measures everybody is following. Some are changing product 44:58 44 minutes, 58 seconds mix, some are changing incentive structure, some are changing what is outsourcing activities to insourcing because outsourcing you have to pay GST. 45:08 45 minutes, 8 seconds So we do feel over two years we will be able to mitigate this impact. However, our plans for break even remain the same 45:16 45 minutes, 16 seconds because we will calibrate other things and we'll eek out other efficiency. So, we are not changing our break even plan. 45:23 45 minutes, 23 seconds The other good news on on the insurance front for the industry as a whole is the new insurance bill has been very 45:30 45 minutes, 30 seconds positive. I think it's a good step in the right direction. But along with that I think there is a lot of movement going 45:38 45 minutes, 38 seconds on on implementation of IFRS and risk best capital for uh insurance companies. 45:45 45 minutes, 45 seconds So IFRS will provide a lot of relief on the P&L side because you will be able to because the income is amotized but your 45:52 45 minutes, 52 seconds expenses upfronted. So that will also get partly amotized. So there'll be uh some more uh some I think balancing of 46:00 46 minutes the P&L stress that insurance companies have because of this upfronting of cost. 46:06 46 minutes, 6 seconds So if FRS will come whether it will come in 1 year or 18 months is the only thing we have to see but right now it seems like by March 27 if FRS will be rolled 46:15 46 minutes, 15 seconds out for insurance companies that will be good for all insurance companies. 46:20 46 minutes, 20 seconds uh along with IFRS they will also bring in risk based capital and uh as you know our business in the life insurance is 46:27 46 minutes, 27 seconds very heavy on par and nonpar what are called traditional savings product we are not very big on ULIP because we do 46:35 46 minutes, 35 seconds believe that ULIP is actually uh much easier sold via banks and maybe customers can do an SIP and a term 46:43 46 minutes, 43 seconds insurance on the other side uh insurance companies obviously provide risk mitigation 46:49 46 minutes, 49 seconds but also provide investment you know uh an investment service. So the PAR and nonpar are very investmentoriented 46:57 46 minutes, 57 seconds products and we are big in that. The RBC will give relief to uh the current reserving that is there on par and on 47:04 47 minutes, 4 seconds par for everybody which is a lot more uh you know conservative. So RBC will be good for insurance companies which are 47:13 47 minutes, 13 seconds use which are very heavy on par and non-par like LIC is also very heavy on par and nonpar and ones who are not very 47:21 47 minutes, 21 seconds heavy on ULIP. So I think on that basis we hoping that IFRS and RBC happens but that will be extra for us our break even 47:29 47 minutes, 29 seconds plans we remain on the same path as we are now. 47:33 47 minutes, 33 seconds Got it sir. Thanks for the elaborate explanation and wish you all the best. Thank you. 47:41 47 minutes, 41 seconds Thank you. We'll take the next question from the line of Vishal Satia from Bastian Research. Please go ahead. 47:49 47 minutes, 49 seconds Hello. Am I audible? Yes sir, please proceed. 47:54 47 minutes, 54 seconds So I just wanted to ask regarding the EA IPO. So uh how will it unlock value for 48:02 48 minutes, 2 seconds uh uh shareholders? You mentioned uh unlocking value for employees. So how will it unlock value for shareholders? 48:10 48 minutes, 10 seconds Can you please mention that? 48:15 48 minutes, 15 seconds I think it will unlock value in one way but there'll be a deterministic value to that stake. We can always use that. We can do many things. We can do spin-offs. 48:23 48 minutes, 23 seconds We can do uh we can use that to sell some more and do equity buyback. But unlocking for us is what is the value as 48:32 48 minutes, 32 seconds a private company is now visible in the market to all stakeholders. So employees also you know ESOP will get unlocked and 48:40 48 minutes, 40 seconds we will still still own 85% and what we do with that is then stage two. So I think stage one is to at least get this 48:48 48 minutes, 48 seconds uh you know value uh visible and be out there in the market. So that that is what we mean by value unlock. 48:58 48 minutes, 58 seconds Okay. So my second question is on uh the mutual fund business. 49:07 49 minutes, 7 seconds uh how do you uh hence the growth there in the equity aum 49:15 49 minutes, 15 seconds side like everybody else opening more branches covering more customers as 49:24 49 minutes, 24 seconds you've seen last five years uh it's a very competitive industry but we have I mean it's it's a it's a steady state you 49:31 49 minutes, 31 seconds make sure like our mutual fund is very focused on consistent performance we want to be quarter ILE one quartile two consistently we don't mind being 49:39 49 minutes, 39 seconds quartile two also but we don't want to slip into quartile we don't like fund which is quartile one one quarter and quartile four the other quarter so our 49:48 49 minutes, 48 seconds our positioning market is we are very innovative we did SIF and we did Bat bond so we come out with new products 49:55 49 minutes, 55 seconds and international funds are also very popular our global funds so we do have a lot of innovative offerings we do uh 50:05 50 minutes, 5 seconds focus a lot on performance once which is more consistent and stable have a very we you know we don't have a star fund 50:12 50 minutes, 12 seconds manager approach and along with that we are also opening more branches activating more distributors adding more 50:20 50 minutes, 20 seconds um you know customers so it's the same I think you know steady bit by bit to give you an idea we we will not I think I 50:28 50 minutes, 28 seconds don't know the last count of offices we have but we are not more than 60 offices uh a lot of others are 300 500 offices 50:37 50 minutes, 37 seconds of mutual funds all over India. So we have a long way to go but I think geographical expansion, product innovation, 50:45 50 minutes, 45 seconds performance management, all of that are the ways to grow and it's a as I said it's also fortunately an industry where equity AUM should grow at 14 15% a year. 50:55 50 minutes, 55 seconds It'll be a a steady MTM growth about you know 6 to 8 9% and another 6 to 8 9% 51:02 51 minutes, 2 seconds coming from new inflows. So I think equity AUM for the industry conservatively should grow at 15% a year 51:09 51 minutes, 9 seconds and we are smaller. We have a lot more space to cover plus hopefully we are more agile more innovative to get that 51:16 51 minutes, 16 seconds little bit of being able to grow a little bit faster and that is good enough for us. 51:25 51 minutes, 25 seconds So on the ARC business side how I'm sorry to interrupt you Mrs. Fitia. 51:29 51 minutes, 29 seconds I'm sorry to interrupt you sir. I will request you to kindly rejoin the queue for followup questions. Okay, there are others who are waiting for us. Thank you so much, sir. 51:37 51 minutes, 37 seconds We'll take the next question from the line of Shri from IFL Capital AMC. Please go ahead. 51:44 51 minutes, 44 seconds Yeah. Hi. Uh thank you for the opportunity sir. Uh just couple of questions. Can you please give some updates on the equity yields in the 51:54 51 minutes, 54 seconds mutual fund like uh have we seen any improvement this quarter or something and also like what are the key 52:02 52 minutes, 2 seconds levers you have focused on to drive further yield announcement from here on. 52:11 52 minutes, 11 seconds So as I said earlier I think we are obviously focused on performance uh expanding our distributor reach 52:18 52 minutes, 18 seconds expanding folios direct customers also now we have us uh cover a lot of the institution and and corporates and all 52:28 52 minutes, 28 seconds directly. So it's a it's it's actually the same old thing that everybody has to do. We are smaller, we are more agile, we are more focused on innovation 52:37 52 minutes, 37 seconds continuously like some uh few a few months ago. Uh you know the SIF category came out. We were one of the early 52:46 52 minutes, 46 seconds movers on that. We had everything ready at the back end. We worked 6 months before the actual notification came out. 52:52 52 minutes, 52 seconds We were quick to launch and our SIF itself has now got uh more than 2,000 crores of AUM and it's been 3 months but 53:00 53 minutes we have scaled it up in that we have a gold and silver fund that has been doing well thanks to gold and silver. So I think our products are innovative, our 53:08 53 minutes, 8 seconds performance we try to make make it as consistent as possible which we have seen and uh we are small and we have a lot of ground to cover. Even in 53:17 53 minutes, 17 seconds distribution we have not even covered a large part of the market that is also available to us. So there is a lot more 53:25 53 minutes, 25 seconds room out there. It means steady investment, management, bandwidth, all of that and we are continued to do that and I think our uh franchise with the 53:34 53 minutes, 34 seconds distributors is also improving as our performance is consistent as our scale is going up. We're also investing a lot 53:41 53 minutes, 41 seconds in managing distributor relationships managing their needs also. So I think it's a combination of all that and and 53:49 53 minutes, 49 seconds we do think that um as I said earlier the equity aum for the industry as a go as a whole should grow at about 14 15% a 53:57 53 minutes, 57 seconds year so we should continue to plug away that all right uh sir have we seen any 54:04 54 minutes, 4 seconds improvement this quarter in our yield in uh inequity yields of army equipment. 54:16 54 minutes, 16 seconds Yeah, I think uh as as our as some of our funds have been doing well which are having higher yield. So we are seeing an 54:24 54 minutes, 24 seconds inching up of the yield and uh I think the idea is to continue to maintain that. We are in the 30s uh in our 54:31 54 minutes, 31 seconds retention ratio and uh we have uh I'm going to ask quite a bit of room to grow in that also but idea is to add value to 54:41 54 minutes, 41 seconds the customers to the distributors and then enhance yield. The the first two have to come before you start only working on yield. So we are fairly 54:49 54 minutes, 49 seconds patient and I think this the the curve is upwarded on our average yield average retention rate uh you know over the 54:57 54 minutes, 57 seconds years and if you see our results that is also showing the growth but we want to do that only by adding value to customers and distributors. 55:08 55 minutes, 8 seconds All right sir. Uh and sir on the ARC business has uh AR business has continued to report steady profitability 55:16 55 minutes, 16 seconds which is encouraging but uh however the equity levels have declined sequentially. So is this because of any 55:23 55 minutes, 23 seconds dividend payouts or uh um like is it because of dividend payout or something and if yes so can you quantify it like what is the amount or anything? 55:36 55 minutes, 36 seconds Yeah. So the arc business as you know the capital adequacy is 85% which is you know ridiculously high as you will 55:43 55 minutes, 43 seconds admit. So they have a lot of excess capital excess liquidity they have almost uh any at any point between 500 55:50 55 minutes, 50 seconds to,000 crores of cash on hand. So the board of arc has also been working on by 55:57 55 minutes, 57 seconds our calculation they have about,500 crores of excess capital they have 3,000 crores equity they need only 1,500. 56:05 56 minutes, 5 seconds So they have been dividending it out to the extent possible so that they can rationalize their uh their equity. So 56:13 56 minutes, 13 seconds they they have to become lean uh on their equity side which will improve roe and all that because currently that 56:20 56 minutes, 20 seconds extra capital is a drag on roe. So they've been they have been working on that and the steady profit is there because a the equity is there plus the 56:28 56 minutes, 28 seconds old AUM is there. The acquisition of new AUM has been slow. I do believe it will take another year or 18 months for ARC 56:37 56 minutes, 37 seconds industry as a whole to start growing with new acquisition because the NPA in the banking system and NBFC's is not as 56:46 56 minutes, 46 seconds large as it was a few years ago. So ARC you must understand is a very cyclical industry. There are 7 8 9 years cycles. 56:55 56 minutes, 55 seconds So I think from from 2013 to 2020 was an acquisition cycle. There were a lot of NPAs. You could buy NPAs. You had to 57:04 57 minutes, 4 seconds deploy capital. I think from 2020 to maybe 2728 is going to be a recovery cycle where 57:12 57 minutes, 12 seconds you those AUM you will resolve them, recover them, restructure them and uh and bring it out and then again maybe 57:19 57 minutes, 19 seconds another acquisition cycle will start. I don't think the NPAs are going to get very bad but we are seeing growth of assets in mortgages in MSME in retail 57:29 57 minutes, 29 seconds and ARC is also developing expertise in those areas. Last round most ARC expertise was on large corporate loans 57:36 57 minutes, 36 seconds you know one big power plant and steel plant and all. Now we also have have actually developed a retail MSME 57:43 57 minutes, 43 seconds expertise on NPA and the industry has also done. So there is a lot of growth that may come in those areas also. But 57:51 57 minutes, 51 seconds ARC will always be cyclical because banking NPS will always be highly cyclical. You should be patient. So when 57:58 57 minutes, 58 seconds the industry is in down cycle, you will have excess capital. When it goes in upcycle, you can always raise more capital. 58:06 58 minutes, 6 seconds Okay. But sir uh as you have earlier indicated that this business has surplus equity. So how we are going planning or 58:14 58 minutes, 14 seconds uh something to optimize these equity levels going forward? 58:20 58 minutes, 20 seconds So they don't retain too much equity and uh you know they don't uh um retain too 58:28 58 minutes, 28 seconds much equity. So whatever profit they make they try to dividend it out every quarter. So it is good for the shareholders also good for awesome 58:35 58 minutes, 35 seconds because uh it helps us with our corporate debt and others. So they will do everything that is available via 58:43 58 minutes, 43 seconds dividending it out and all to pay back the excess capital to the shareholders. 58:48 58 minutes, 48 seconds They need about,500 for the current expected business for the next 2 three years. But they also generating profit every year, right? You 58:57 58 minutes, 57 seconds must have seen they are at about 75 crores a quarter. So whatever they are generating they are dividending it out. 59:07 59 minutes, 7 seconds Okay sir. All right. Thank you so much. 59:12 59 minutes, 12 seconds Thank you. We will take the last question from Sujal Chandala from Walford PMS. Please go ahead. 59:19 59 minutes, 19 seconds Yeah. Hi sir. Thank you for the opportunity. I got couple of question from my side. Firstly, over the last 5 years, we have we have seen a shift in 59:28 59 minutes, 28 seconds our FBA mix towards real estate and infra strategy from 9% in March 2020 to 52% in December 25. Can you please throw 59:37 59 minutes, 37 seconds some light around it and what kind of sub strategies currently we have and uh similar what are what are our future plans around this? 59:48 59 minutes, 48 seconds So yeah I think now on FPAUM uh I think you you have highlighted a very important point on FPAUM we are half 59:55 59 minutes, 55 seconds private credit and half in real asset. A lot of people see this as a private credit business which is where we started but in the we started our 1:00:04 1 hour, 4 seconds private credit in 2011 in EAA and we started our infra in 2017. 1:00:12 1 hour, 12 seconds So the the what we call real asset it's real asset and infrastructure assets. Uh in our real asset we have we have three 1:00:20 1 hour, 20 seconds verticals currently. One is an uh what we call transportation vertical where we have roads. Uh one is our energy 1:00:29 1 hour, 29 seconds vertical where we have transmission line and uh renewable energy and one is our commercial real estate where we have 1:00:37 1 hour, 37 seconds office buildings and all. And each of these verticals are many other asset classes like in transportation vertical you can add warehouses and you can add 1:00:45 1 hour, 45 seconds airports and ports and many other things. anything that helps transport of people and goods is the transportation 1:00:52 1 hour, 52 seconds vertical uh and asset which have a steady uh cash flow. So we buy only operating assets. Uh we don't take green 1:01:00 1 hour, 1 minute field risk. We just try to make sure that there is a fair amount of certaintity around cash flow. Uh our 1:01:08 1 hour, 1 minute, 8 seconds energy uh vertical has we have some transmission lines and we have uh 1:01:14 1 hour, 1 minute, 14 seconds renewable energy. And the third one is uh our commercial real estate which is our 1:01:22 1 hour, 1 minute, 22 seconds office RIP fund. So this is and then we have invitation and also we have one inviten and one other getting launched 1:01:29 1 hour, 1 minute, 29 seconds CTS. So I think uh there has been a growth in that what happens in private credit is though that has also been 1:01:36 1 hour, 1 minute, 36 seconds growing in private credit we also been repaying to our investors because these are yield funds. So every time the yield comes you repay it back to the investors 1:01:45 1 hour, 1 minute, 45 seconds and unlike a private equity fund which for 8 years has a lot of internal growth aum growth a private credit fund usually 1:01:53 1 hour, 1 minute, 53 seconds is a four four to four and a half year cycle. So it gets churned very fast plus you end up paying back a lot of uh 1:02:02 1 hour, 2 minutes, 2 seconds inflows to your investors. So private credit uh has also grown but our infra and real assets have grown faster and we 1:02:11 1 hour, 2 minutes, 11 seconds are very happy because there are three strategies in private credit we have there are three strategies in real assets we have so on the whole it's it's 1:02:20 1 hour, 2 minutes, 20 seconds a pretty good mix okay s also recently there was a news article about Adela being one of the 1:02:29 1 hour, 2 minutes, 29 seconds contenders to acquire PGIN's India AMC business so you And uh so can I throw some light around this and are we 1:02:36 1 hour, 2 minutes, 36 seconds exploring any inorganic growth opportunities? 1:02:42 1 hour, 2 minutes, 42 seconds We are always exploring inorganic growth opportunities. Uh I think we did put in a bid uh but uh we believe there are 1:02:50 1 hour, 2 minutes, 50 seconds other other higher biders out there at a higher price. So I think we are always very conservative because unlike a lot 1:02:58 1 hour, 2 minutes, 58 seconds of other people who have to buy, we can also build. So our capital can either be used for build or buy and we look at 1:03:05 1 hour, 3 minutes, 5 seconds both. I think if it's a good strategic fit as you know Adel wise in his history uh 25 years ago we acquired rational 1:03:14 1 hour, 3 minutes, 14 seconds securities which became our intrusion provoking business. We acquired anagram which became our mass affluent uh wealth management business. We acquired 1:03:23 1 hour, 3 minutes, 23 seconds forefront which became our you know alternatives uh part of our alternatives business. So we have acquired companies 1:03:31 1 hour, 3 minutes, 31 seconds we acquired JP Morgan asset management which is part of our AMC. So we have done about four or five acquisitions in our in our so but we have grown 1:03:40 1 hour, 3 minutes, 40 seconds organically also and we have the capability to do both. Uh we will always do acquisition not for quick growth but 1:03:47 1 hour, 3 minutes, 47 seconds for strategic sense if it's a bolt-on acquisition. So we do look at opportunities all the time and we have a 1:03:55 1 hour, 3 minutes, 55 seconds team that evaluates it. Uh and if you find the right one, we will always be um looking for inorganic growth opportunities. 1:04:05 1 hour, 4 minutes, 5 seconds Okay, thank you for your answer and all the best for future. Thank you. 1:04:13 1 hour, 4 minutes, 13 seconds As that was the last question for today, I would now like to hand the conference back to Miss Priyad Chopra for closing comments. Thank you and over to you ma'am. 1:04:24 1 hour, 4 minutes, 24 seconds Thank you Michelle. Thank you Rashes for the insightful answers and thank you all for your time today. It's been a joy to 1:04:31 1 hour, 4 minutes, 31 seconds have you all and listen in to your questions. Please do write into us at Adel Wise Investor Relationships 1:04:38 1 hour, 4 minutes, 38 seconds for other questions and feedback and additional information. Thank you all and have a great day ahead. 1:04:47 1 hour, 4 minutes, 47 seconds Thank you members of the management. 1:04:49 1 hour, 4 minutes, 49 seconds Ladies and gentlemen, on behalf of Alise Financial Services, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.