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Edited Transcript of LICHSGFIN.NSE earnings conference call or presentation 22-Oct-19 6:30am GMT

Half Year 2020 LIC Housing Finance Ltd Earnings Call

Mumbai Oct 24, 2019 (Thomson StreetEvents) -- Edited Transcript of LIC Housing Finance Ltd earnings conference call or presentation Tuesday, October 22, 2019 at 6:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Siddhartha Mohanty

LIC Housing Finance Limited - MD, CEO & Director

* Sudipto Sil

LIC Housing Finance Limited - CFO

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Conference Call Participants

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* Aakash Dattani

HDFC Securities Limited, Research Division - Research Analyst

* Abhijit Tibrewal

ICICI Securities Limited, Research Division - Research Analyst

* Aditya Srinath;Quantum Asset Management;Research Manager

* Deepak Poddar

Sapphire Capital Management LLC - Portfolio Manager

* Devesh Kayal;Carnelian Capital;Analyst

* Dhaval Gada

DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials

* Hardik Shah

Max Life Insurance Company Limited - Chief Manager Investments

* Jignesh Shial

Emkay Global Financial Services Ltd., Research Division - Research Analyst

* Kunal Shah

Edelweiss Securities Ltd., Research Division - Associate Director

* Mohit Mangal;CRISIL;Analyst

* Nischint Chawathe

Kotak Securities (Institutional Equities) - Senior Analyst

* Pranay Rajani

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Praveen P. Agarwal

Axis Capital Limited, Research Division - Executive Director of BFSI

* Rakhi Prasad;Alder Capital;Investment Manager

* Udit Kariwala

AMBIT Capital Private Limited, Research Division - Research Analyst

* Umang Shah

HSBC, Research Division - Analyst of Financials

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and a very warm welcome to the LIC Housing Finance Q2 FY '20 Earnings Conference Call hosted by Axis Capital Limited. (Operator Instructions) Please note that this conference call will be for 60 minutes.

I now hand the conference over to Mr. Praveen Agarwal from Axis Capital Limited. Thank you and over to you, sir.

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Praveen P. Agarwal, Axis Capital Limited, Research Division - Executive Director of BFSI [2]

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Thank you, Ali. Hello, everybody, and welcome to this earnings call of LIC Housing Finance. From the management team, we have Mr. Siddhartha Mohanty, MD and CEO; and Mr. Sudipto Sil, CFO. I would request Mr. Mohanty to share his initial thoughts on the result, post which we'll open the floor for Q&A.

Over to you, sir.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [3]

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Good afternoon, and welcome to the post earnings conference call of LIC Housing Finance Limited. As you'd be knowing, LICHFL declared its Q2 FY '20 results on Saturday, 19th October. The key highlights of the results are: Revenue from operations INR 4,973 crore as against INR 4,202 crore for the corresponding quarter of the previous year, with a growth of 18%. Outstanding loan portfolio is at INR 2,03,037 crore against INR 1,77,393 crore as on September 2018, reflecting a growth of 14%. And out of this, individual loan portfolio stood at INR 1,89,351 crore as against INR 1,66,457 crore with a growth of 14%.

Within the individual loan portfolio, home loan portfolio stood at INR 1,54,059 crore against INR 1,36,350 crore with a growth of 13%. Disbursements during the quarter were INR 12,173 crore as against INR 14,295 crore (sic) [INR 14,294 crore] for the same period in the previous year. Disbursements in the home loan segment clocked a healthy growth of 16% during the quarter and stood at INR 10,136 crore. Disbursements in the project loan, construction segments were lower at INR 445 crore against INR 2,970 crore.

Net interest income for the Q2 was INR 1,213 crore against INR 1,047 crore, up by 16%. Net interest margin for the quarter were at 2.42% as against 2.41% for quarter FY '19. Profit before tax clocked a growth of 15% to INR 856.06 crore from INR 745.35 crore. Profit after tax for the quarter stood at INR 772.20 crore as against INR 573.16 crore, with a growth of 35%.

Environment during the second quarter of financial year 2019-'20 continued to be quite challenging. However, considering the situation, company performed fairly on the business front, recording an overall disbursement of INR 12,173 crore, out of which individual loans disbursed was INR 10,136 crore against INR 8,739 crore for the corresponding quarter in the previous year, recording a growth of 16%.

Among the regions, our Central, Southeastern and Northern regions registered good growth. On affordable housing front, under PMAY CLSS scheme, company continued to perform exceedingly well. For the half year, the company disbursed nearly 25,000 accounts, totaling INR 5,000 crore under this scheme, accounting for nearly 26% of retail disbursements in volume terms and 24% in value terms and has received a subsidy of more than INR 400 crore for the beneficiaries. In terms of growth, this segment has shown 68% growth in volume and 77% growth in value terms on a year-on-year comparison basis. Looking at this, we are very confident of significantly improving upon our last year's performance.

Considering the overall market conditions, we have done lower disbursements in the project loan, construction finance, which is INR 445 crore against INR 2,970 crore. Disbursements in LAP and other non-housing has also come in lower by almost INR 1,000 crore. On the portfolio growth front, the total portfolio recorded a stable and consistent growth of 14%. Growth in the individual home loan segment registered 13% year-on-year. Pursuant to the introduction of Indian Accounting Standard, companies are required to report expected credit loss, ECL, on their loan assets and provision thereon.

In terms of asset quality, there has been an increase in Stage 3 exposure at default, which has increased by 40 basis points from June '19 from 1.98% to 2.38%. This is a matter of highest priority and concern for us, and we are taking necessary action. However, we are also receiving some part payments in several accounts and are confident of recovery since the value of the underlying security is quite higher than our loan exposure. Many of the projects are either complete or nearing completion, which gives us confidence that the recovery will improve as the sales increase. As mentioned, we are [according] highest priority to this area across the company.

Provisions under ECL has also increased from INR 1,559 crore to INR 2,195 crore (sic) [INR 2,194 crore] out of which Stage 3 ECL provisions has increased from INR 1,170 crore to INR 2,083 crore.

On the cost of fund side, margins have remained largely stable at 2.42% as against 2.41% over the previous year and against 2.35% over June 2019. We have witnessed a reduction in incremental cost of funds by 20 basis points from 8.24% in Q1 FY '20 to 8.04% for Q2 FY '20. The funding environment and liquidity conditions remain quite favorable. During the quarter, under review, we have raised INR 10,000 crore through NCDs, INR 3,600 crore through CPs and INR 3,000 crore through public deposits in addition to bank loans.

With this brief introduction, I would like to invite you for your queries. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from the line of Aditya Srinath from Quantum Asset Management.

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Aditya Srinath;Quantum Asset Management;Research Manager, [2]

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There were just a couple of questions that I had. First off, in terms of the pure floating rate loans, I noticed it fell between the first and second quarter from 93% to 82%. I was just wondering what drove that? Secondly, I would like -- in terms of the INR 13,685 crore split, the project loan that we have reported, I just wanted to know what is the split between the corporate and builder book over there and the split in disbursements over there, if that would be available?

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Sudipto Sil, LIC Housing Finance Limited - CFO [3]

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Yes. Aditya, yes, actually, in -- I mean, for the second question, mostly there's the builder loans only, builder and project finance. And disbursement figures, we have already shared -- on the opening comments that it was for the quarter INR 2,907 crores -- as against INR 2,970 crore for the previous quarter, we have only INR [45] crores.

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Aditya Srinath;Quantum Asset Management;Research Manager, [4]

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And for the first question, sir?

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Sudipto Sil, LIC Housing Finance Limited - CFO [5]

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See, actually, the first is, this is basically some new product which we had launched. We had an initial period, which was fixed, that is the only difference.

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Aditya Srinath;Quantum Asset Management;Research Manager, [6]

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Okay. And would we be -- and just lastly, would we be looking at a capital raise as well within this year?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [7]

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That will be taken care of -- whenever we require, our Board will take care.

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Operator [8]

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The next question is from the line of Aakash Dattani from HDFC Securities.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [9]

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So my first question. Could you give us the split of GNPAs between individual home loans, LAP and other products and the construction/developer finance book?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [10]

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Yes. See, individual loan NPA is 1.2 -- 1.20%.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [11]

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Okay. And sir, is this for home loans only?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [12]

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This is individual retail home loan. And our total average under individual, it comes to 1.66%, including individual LAP and commercial, all those things if you take together, so it is 1.66%. But including project finance construction loan, it is coming to 2.38%.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [13]

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Okay. That's great. Sir, and secondly, do you see also over the past couple of quarters, there has been a significant buildup in stress. While not too alarming, do you see this trend continuing?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [14]

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You see, actually, now I believe since government has taken so many initiatives on both sides, on the side of supply-side of credit as well as boosting consumption demand in retail side, so I believe there will be some improvement, some positive indication will be there in coming quarters. Even during the quarter also, out of the NPA, because our NPA has gone up, you have seen. Despite that, we have recovered from the -- during the quarter some INR 40 crore from those accounts, INR 28 crore for part principal payment and INR 12 crore for interest payment. Even if we have received, but that -- those accounts still continue to be NPA as per norms That indicates builders, our borrowers, they demonstrate their intention to pay. They are making part payment means their intention is to pay.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [15]

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Okay. And this is from the developer finance book you're saying, right?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [16]

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It is from all. The retail and the developer is also there. If you take a developer and retail both, amount will go up. Principal will be nearly INR 38 crore and interest will be something INR 27.50 crore or INR 28 crore, total, retail and developer total together, INR 38 crore and INR 28 crore. But these are part payment. These are from NPA accounts only we have received this much amount.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [17]

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Sir, and with banks now offering a lot of external benchmark linked loans, how do you see -- how will LIC Housing Finance compete? What is the outlook or strategy there?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [18]

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You see actually external linking your rate to external benchmark, actually that is for banks, not yet for HFCs. But in any case, we are -- we have to operate in the ecosystem, unless my rate is competitive, I cannot compete with banks, okay? Whether linking to external benchmark or not, our rate will be competitive and looking to cost of fund being stable or going down, you'll find that we'll be there. We'll have a competitive rate. And today also, we have the most competitive rate in the market.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [19]

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Okay. And sir, on cost of funds, when -- how -- could you see -- shed some light on the repricing of your borrowing in the coming year? How -- when -- how would you see that happening?

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Sudipto Sil, LIC Housing Finance Limited - CFO [20]

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See in the next 6 months -- this is Sudipto here. From the next 6 months, that is October to March, about INR 17,500 crores of bonds are going to get redeemed, getting matured. And they are currently carrying a coupon of around 8.3. And looking at the blend, we expect that we should be able to fund them at least by 35 to 40 basis points lower.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [21]

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Okay. And my last question is...

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Sudipto Sil, LIC Housing Finance Limited - CFO [22]

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Yes. Okay. Please carry on.

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Aakash Dattani, HDFC Securities Limited, Research Division - Research Analyst [23]

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Yes. Sorry. My last question was, sir, on the previous con call, there was a mention of this task force that was constituted to adjust asset quality matters in the developer book. So any progress or any insight that you all would like to share on that?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [24]

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Yes, yes. We have formed a dedicated team to follow up with the builder loans, dedicated team is there. They are monitoring, and they are advised to take all action, including legal action. And they are negotiating with the builders. Even last moment, we could not get some big loan amount that which I expect in the coming days. That's why it has gone up. So dedicated team is closely monitoring each account, and our objective is to ensure that there is no further slippage at least. Whatever has been done that has to be recovered. Further slippage, how to arrest that, so they are looking into that.

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Operator [25]

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The next question is from the line of Dhaval Gada from DSP Mutual Fund.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [26]

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A couple of questions. First, on asset quality. Could you just give the split between gross NPA for salaried and self-employed segment? And also, gross NPAs in the top 7 cities and rest of India. Just wanted to understand what -- where is the problem.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [27]

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Actually, we don't maintain that salaried or like that. But salaried class, as such, it is very negligible. Salaried class, we don't have any bad experience. Overall, you see, retail and construction finance, so there is gap. Obviously, our builder percentage is higher than individual retail. So looking to both sides, average it comes to 2.38% and -- but salaried class, there is no such -- we don't maintain such type of thing, but the experience is good.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [28]

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Okay. And sir, between geographies, top 7 versus rest of India, any color there?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [29]

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It is spread across.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [30]

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Okay. Okay. And just, sir, one data point on asset quality. Could you give individual home loan GNPA for 2Q FY '19, the same number, 1.2 number that you gave. What was the number same period last year?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [31]

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That's -- last September, the individual housing loan was 0.76.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [32]

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Okay. And overall individual was 0.81.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [33]

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Overall was 0.81. And now it is 1.05 for Q2, individual housing.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [34]

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Sir, is it 1.2 or 1.05, sir?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [35]

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1.05 is only individual. If you tell total, that will come because in individual housing loan, nonhousing individual loan, nonhousing commercial, we segregate to 3 categories under individual, then -- that is the total retail. Retail constitutes individual housing loan, nonindividual loan and nonindividual commercial.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [36]

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And individual housing is 1.05.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [37]

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Individual hosing is 1.05.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [38]

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Okay. Understood. Understood. And just one last thing. On LAP disbursement, I missed, I joined the call late, but what was the number for this quarter, LAP disbursement?

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Sudipto Sil, LIC Housing Finance Limited - CFO [39]

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1,592.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [40]

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LAP, INR 1,000 to INR 590 crore, I think, INR 90, 92 crore -- INR 1,592 crores.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [41]

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Yes. And Sudipto, just one question on number restated for the base year. What is the reason, if you have mentioned that ever?

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Sudipto Sil, LIC Housing Finance Limited - CFO [42]

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This is which line item? Can I please...

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [43]

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So no -- so the loan figures for the base...

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Sudipto Sil, LIC Housing Finance Limited - CFO [44]

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For the loan figure, there is no restatement.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [45]

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No restatement.

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Sudipto Sil, LIC Housing Finance Limited - CFO [46]

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Loan figure, outstanding loan?

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [47]

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Yes, yes, yes. So between...

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Sudipto Sil, LIC Housing Finance Limited - CFO [48]

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See outstanding loan, the only restatement could be the impact of Ind AS. As you would be knowing that the outstanding loan as per Ind AS and the outstanding loan as per IGAAP, there is a slight difference. But the difference is not even 1%.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. - Assistant VP of Investments & Equity Analyst for Financials [49]

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Understood. Okay. Perfect.

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Sudipto Sil, LIC Housing Finance Limited - CFO [50]

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And now it is at par, I mean, both are comparables.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [51]

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Yes.

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Operator [52]

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The next question is from the line of Hardik Shah from Max Life Insurance.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [53]

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Sir, a couple of questions. Sir, builder book NPAs last quarter, I believe, was around 11%. What would be that for now?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [54]

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That has gone, I think, another 3% gone up.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [55]

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So around 14%?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [56]

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Yes. Yes. Yes.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [57]

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In terms of recovery measures, have you enforced SARFAESI in any properties and...

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [58]

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Oh, no, no, no. [All action] -- some are -- we are deciding and some are ready -- SARFAESI action is already in place.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [59]

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What would be the quantum of that?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [60]

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Quantum, exact quantum is 50 -- 60% of the NPA amount already under SARFAESI.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [61]

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Okay. And sir, what is the capital adequacy for the -- for your second quarter?

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Sudipto Sil, LIC Housing Finance Limited - CFO [62]

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Yes. Capital adequacy, approximately, should be in the range of 12.3 to 12.5.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [63]

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Okay. So is your ...

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Sudipto Sil, LIC Housing Finance Limited - CFO [64]

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Tier 1.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [65]

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Tier 1.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [66]

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Tier 1. Okay. And overall?

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Sudipto Sil, LIC Housing Finance Limited - CFO [67]

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Overall will be more than 14%.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [68]

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14%. (inaudible)

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [69]

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And sir, finally, in terms of ALM, how would your less than 1 year profile look like?

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Sudipto Sil, LIC Housing Finance Limited - CFO [70]

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Sorry, can you please repeat?

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [71]

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ALM profile for less than 1 year?

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Sudipto Sil, LIC Housing Finance Limited - CFO [72]

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Less than 1 year within limit, within limit, within NHB limit of 15%.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [73]

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And what would be the mismatch as a percentage?

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Sudipto Sil, LIC Housing Finance Limited - CFO [74]

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Sorry?

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [75]

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What would be the mismatch?

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Sudipto Sil, LIC Housing Finance Limited - CFO [76]

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No mismatch will be -- maximum permissible is 15%, ours will be around 13-odd thereabouts.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [77]

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Within 14%.

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Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [78]

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And unutilized lines for you guys?

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Sudipto Sil, LIC Housing Finance Limited - CFO [79]

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Unutilized lines will be more than 15,000 -- INR 10,000 crores to INR 15,000 crores.

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Operator [80]

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The next question is from the line of Pranay Rajani from B&K Securities.

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Pranay Rajani, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [81]

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Sir, just a few data-keeping points. If you could just provide the interest income breakup for individual and for project, I mean, the total split between individual and project?

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Sudipto Sil, LIC Housing Finance Limited - CFO [82]

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Yes. I'll -- the interest income?

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Pranay Rajani, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [83]

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Yes.

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Sudipto Sil, LIC Housing Finance Limited - CFO [84]

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Okay. I'll just give you the data.

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Pranay Rajani, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [85]

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Apart from this, what would be our incremental yields, I mean, product-wise, I mean, on overall basis, home loans, non...

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Sudipto Sil, LIC Housing Finance Limited - CFO [86]

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See total interest income on individual will be, that is there in the presentation Page -- I mean, Slide #14, but I'll just repeat for your convenience. The -- just one minute -- 4,530 that is for the individual, that is for the quarter. Project will be around 380.

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Pranay Rajani, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [87]

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All right, sir. And also on the incremental yield basis, if you could share the data for product-wise, segment-wise?

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Sudipto Sil, LIC Housing Finance Limited - CFO [88]

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Incremental yield-wise, I'm just giving you the non-annualized numbers. You can annualize them that the impact will be around 40 basis points. Separately, it is, say, for the individual retail home loans, only for pure home loans, incremental, this is around 8.84. So you can annualize that will add about 40 basis points. And for the non-home loan retail, that will be 10.5%. Builder loans will be 12.7%. Blended will be 9 point...

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Pranay Rajani, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [89]

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All right, sir. And one last question...

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Sudipto Sil, LIC Housing Finance Limited - CFO [90]

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Blended will be 9.3.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [91]

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Yes.

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Pranay Rajani, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [92]

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I'm sorry, sir?

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Sudipto Sil, LIC Housing Finance Limited - CFO [93]

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Blended will be 9.3.

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Pranay Rajani, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [94]

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Blended will be 9.3. And also, if you could just share the net NPA number for the quarter?

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Sudipto Sil, LIC Housing Finance Limited - CFO [95]

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Net NPA, actually, if you look at it, as of now, the net NPA figures for the NHB purpose only, we are calculating. We are not -- I mean for the provisioning purpose, it is always the figure for the ECL. The net NPL, as for the ECL Stage 3 is concerned, it is INR 2,083 crores.

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Operator [96]

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The next question is from the line of Udit Kariwala from AMBIT Capital.

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Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [97]

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Sir, I had 2 questions. First is that we've seen that the corporate tax rate has gone down. And as per my understanding or as per the regulations, HFC's earning certain profits on the individual book can be parked in the -- as reserves and you don't need to pay tax on that. So what is the reason for a drastic decrease in the tax in the current quarter? And has that been done in consultation with the IT department or it's an internal call which the management has taken?

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Sudipto Sil, LIC Housing Finance Limited - CFO [98]

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No. See, it is actually as per the [change. I'll give you the difference.] The tax rate which was applied in the first quarter, you're probably referring to that. The first quarter tax rates has been applied at the -- almost the full rates because it is to be prepared on the basis of the amount of anticipated profit and the rate of taxation, which comes out of that. So that was the reason for preparing the tax provision as -- on the Q1. Now in the Q2, what has happened is that there has obviously been a change in the taxation structure in terms of lower tax rate on the corporates. We will continue to get the benefit of a particular section 36(1)(viii) because that apparently is a rebate. That is what we are interpreting it. So the overall tax rate has come down and will stabilize by and large at around 21%, 22%, plus whatever surcharge is applicable.

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Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [99]

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Sir, so -- sir, correct me if I'm wrong. Sir, what we are trying to say is that...

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Sudipto Sil, LIC Housing Finance Limited - CFO [100]

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So whatever impact has to be taken for the extra taxation, which was provided for the first quarter has already been absorbed in the second quarter.

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Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [101]

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Which is fine. But what I'm trying to understand is that for -- without the benefit of the section 36, which you mentioned, the rate has to be 33 -- around 33%. But taking the benefit, it comes to around 28%, broadly, right?

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Sudipto Sil, LIC Housing Finance Limited - CFO [102]

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Right.

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Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [103]

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Now after the corporate taxes now reducing to 25%, the benefit will still continue or -- on the -- on that section 31?

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Sudipto Sil, LIC Housing Finance Limited - CFO [104]

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Yes, section 36.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [105]

--------------------------------------------------------------------------------

Earlier we are not taking this.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [106]

--------------------------------------------------------------------------------

Or Section 36, not 31.

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [107]

--------------------------------------------------------------------------------

Yes, sorry, so that benefit continues.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [108]

--------------------------------------------------------------------------------

That is a rebate.

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [109]

--------------------------------------------------------------------------------

Okay. Okay. And hence, you're saying, for this quarter, the tax rate is currently around 10%, right, which is because of Q1...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [110]

--------------------------------------------------------------------------------

See that is because the 10% rate is not the applicable tax rate. 10% is because there was some extra...

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [111]

--------------------------------------------------------------------------------

Yes, 1Q you have factored it in...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [112]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [113]

--------------------------------------------------------------------------------

Okay. And sir, you already spelled out the delinquency numbers, but I got a little confused between the 3 numbers which were given. So if you could just give out the NPA number...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [114]

--------------------------------------------------------------------------------

So I'll first explain. I'll just first explain, sir will give you the numbers. There are 3 different categories of loans. One is the builder loans as you are aware. The second is your home loans. And the third one is within the retail segment, there is also a segment, which is the non-home loan segment. So that is the reason 3 numbers were given. Now sir will tell you the number.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [115]

--------------------------------------------------------------------------------

No, actually, as I told earlier, home loan total, it is coming to 1.05% NPA. And nonhousing individual, it is 2.36.

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [116]

--------------------------------------------------------------------------------

Nonhousing individual?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [117]

--------------------------------------------------------------------------------

Individual. So overall retail coming to 1.52%, but project construction, that comes to 14.8%. So overall comes to 2.38%. That is the breakup of our NPA segment-wise.

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [118]

--------------------------------------------------------------------------------

Okay. Okay. So the housing loan you're saying is around 1 point...

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [119]

--------------------------------------------------------------------------------

[1.105,] yes, yes.

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [120]

--------------------------------------------------------------------------------

Okay, which is the core housing book, there is...

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [121]

--------------------------------------------------------------------------------

Core housing [fee] or pure housing, yes.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [122]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [123]

--------------------------------------------------------------------------------

And within that also, if you see, our experience in, particularly affordable, Pradhan Mantri Awas Yojana, NPA is almost nil, 0.07%. So that is the area we are focusing now.

--------------------------------------------------------------------------------

Udit Kariwala, AMBIT Capital Private Limited, Research Division - Research Analyst [124]

--------------------------------------------------------------------------------

Okay. And just one follow-up on this. So if I just break the numbers, then the delinquency in the LAP book has gone up in this quarter, right?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [125]

--------------------------------------------------------------------------------

No, it has not gone up significantly. It was around 2.2-ish in Q2. From there, it has gone up to 2.36.

--------------------------------------------------------------------------------

Operator [126]

--------------------------------------------------------------------------------

The next question is from the line of Kunal Shah from Edelweiss.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [127]

--------------------------------------------------------------------------------

Yes. Again, coming up on tax. So was there any DTA markdown during the quarter? Or because we had DTA in our books and most of the financial companies have marked it down, so has there been any adjustment on that count?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [128]

--------------------------------------------------------------------------------

See there was also a provision of DTL in our book, deferred tax liability.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [129]

--------------------------------------------------------------------------------

No, on a net basis -- on a net basis, there were still deferred tax asset impact.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [130]

--------------------------------------------------------------------------------

Yes. That has -- that impact has been absorbed already.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [131]

--------------------------------------------------------------------------------

No, sir, that should have been round about INR 150-odd crores. So how much was the impact in this quarter?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [132]

--------------------------------------------------------------------------------

No, what I understand is that the full impact has been already absorbed.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [133]

--------------------------------------------------------------------------------

It's already taken.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [134]

--------------------------------------------------------------------------------

No, if you can quantify the amount.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [135]

--------------------------------------------------------------------------------

The amount, exactly, I'm not having right now, but the full impact has been already absorbed.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [136]

--------------------------------------------------------------------------------

Okay. So entire...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [137]

--------------------------------------------------------------------------------

Because we have to also see from the DTL, deferred tax liability, which was there. So the -- further creation of deferred tax liability under ECL is not required. So you have to also compute -- you have to also compare that aspect.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [138]

--------------------------------------------------------------------------------

Okay. But whatever was around, it is largely taken care of in this quarter?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [139]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [140]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [141]

--------------------------------------------------------------------------------

Okay. And secondly, in terms of Stage 2, so despite the Stage 3 moving up, we have seen Stage 2 being there at 4.74-odd percent. So going forward, do we see similar kind of run rate even in the Stage 3 because finally it flows largely from Stage 2 and there is no change as such. So maybe 30, 40 bps kind of an increase, should that be the expectation going forward as well? Or how different is this Stage 2 from what it was there in the Q1?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [142]

--------------------------------------------------------------------------------

Actually, I see some improvement will be there. There won't be much NPAs from Stage 2 to Stage 3. But let us see because there are some cases where we were to get at the last moment we could not get, some of these accounts that could have been out of NPA, but somehow that could not materialize. But as I told earlier, we have received a good amount, principal INR 37.5 crore and interest INR 27.5 crore from this NPA accounts. So there, I don't think there will be much NPAs from Stage 2 to Stage 3.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [143]

--------------------------------------------------------------------------------

Some payment is still coming. Even in the NPA accounts, we have just captured the NPA account details about whatever accounts were NPA as on 30th of June. Within that also, within -- during the last 90 days, we have received about INR 64 crores total, including INR 37 crores of principal plus interest of around INR 27 crores. That is only for the quarter. Similarly, whatever has been categorized in Stage 2 also there are some payments which are coming. It may not be full payment, but part payment is coming. So that gives some confidence that at least the payment cycle has not completely got stopped. In fact, in the retail segment, we can share that about 2,000 accounts which were NPA as on -- out of total number of retail accounts, which were NPA as on 30th of June, there were 2,000 accounts which have made payments.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [144]

--------------------------------------------------------------------------------

Out of?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [145]

--------------------------------------------------------------------------------

Out of the NPAs, which was there in the -- as of 30th of June, so roughly around 20%, 25% of the accounts have started making payments also.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [146]

--------------------------------------------------------------------------------

Okay, okay. And overall, when we look at the deterioration which is there, maybe almost like 15% of the developer pool, 1.5% of the individual side, definitely, it seems to be much...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [147]

--------------------------------------------------------------------------------

1.05.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [148]

--------------------------------------------------------------------------------

Individual.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [149]

--------------------------------------------------------------------------------

No, overall individual...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [150]

--------------------------------------------------------------------------------

(inaudible)

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [151]

--------------------------------------------------------------------------------

(inaudible) loan and the non-home loan that is 1.52%. And in fact, like when I look at given like the pure home loan that is also upwards of 1-odd percent. So what is the reason? Maybe I think is it -- so maybe when we look at most of the other players, in fact, they are at a much lower level. So was it like the conservative approach, upfronting of most of the stress in the book, and we are more or less done with, wherein say the other players will catch up? Or maybe this was largely because of the underwriting or specific geographies wherein we were present, which is leading to this kind of maybe higher GNPLs compared to the peers?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [152]

--------------------------------------------------------------------------------

No, you can see current business pattern, actually, this builder book has gone down. There is significant degrowth in builder loan in the current year. These are loans which were given earlier. And looking to overall scenario, sales has gone slow. So some of the projects, they are at final stage of construction, but they are not able to complete and hand over the projects. Some of the projects are 80%, 90% complete. So overall, if you see, these are the problems. But looking to present initiatives by the system, government, banks and everything now credit flow is there, so I am hopeful at least that will help in easing out the present position. And festive season sale will also increase. So let us see in the coming third quarter some improvement will be there.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [153]

--------------------------------------------------------------------------------

No, sir, main question is on the retail side, which is much higher than...

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [154]

--------------------------------------------------------------------------------

Retail is -- retail particularly, within retail affordable segment, we are focusing in retail not high end or premium, we are focusing on affordable. So that is doing very well.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [155]

--------------------------------------------------------------------------------

No, but something like under construction, wherein we are seeing more GNPLs flowing for us compared to the peers? Is it largely because of that even on the LAP side or maybe the non-housing, there has been increase. So what is leading to overall rise and being much higher than the industry average?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [156]

--------------------------------------------------------------------------------

See we cannot comment about that as far as the other competitors, et cetera, what you just mentioned some time back. But if you see the whole retail home loans, if you look at the quality and the, I would say, the nature of the loans with a very low LTV, this is mostly in the nature of delays as far as the home loans are concerned. Under construction does not impact LAP.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [157]

--------------------------------------------------------------------------------

Yes, but on retail home loan, it would.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [158]

--------------------------------------------------------------------------------

It does to some extent, but it is not such a problem because at the end of the day for a retail home loan customer what is more important is his individual CIBIL score, which will get impacted if he stops payment for whatever reason.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [159]

--------------------------------------------------------------------------------

No, but what would be the proportion for us to under construction on the retail side home loan?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [160]

--------------------------------------------------------------------------------

No, the exact -- it is not immediately available, but generally, over the last 3, 4 years what we have seen, the share of under construction has been coming down because of some kind of uncertainty related to completion of projects. And steadily, the customers' preference towards occupying readymade or ready-to-move-in, that has increased steadily, and it has not happened a couple of quarters, it has been happening for the last 3 to 4 years. So the share of customers opting for ready-to-move-in has increased significantly in the last 3 to 4 years. And if you see in the last couple of years, the rate of new launches have also been coming down.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [161]

--------------------------------------------------------------------------------

Okay. And lastly, in terms of the rise in the corporate or maybe the developer book. If you can just give some color on it in terms of the number of accounts, whether this has flown purely from the Stage 2 to Stage 3? And how has been the behavior of this portfolio maybe? Was it like over last 3 months, wherein we saw this deterioration or it was maybe the stress over last 6, 9 months?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [162]

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See actually, it was the movement from Stage 2 to Stage 3. So Stage 2 means that already, probably they were in the 30 to 90 days basket already. So that 30 to 90 days has now moved on to a Stage 3, which is more than 90 days. And in the interim period, maybe a couple of months have added. So it's last 3 to 4 months. Number of accounts would have been around 4 to 5, which would have contributed predominantly.

--------------------------------------------------------------------------------

Kunal Shah, Edelweiss Securities Ltd., Research Division - Associate Director [163]

--------------------------------------------------------------------------------

Okay, okay. And any specific region or it is in general everywhere?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [164]

--------------------------------------------------------------------------------

No. It is across.

--------------------------------------------------------------------------------

Operator [165]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from the line of Hardik Shah from Max Life insurance.

--------------------------------------------------------------------------------

Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [166]

--------------------------------------------------------------------------------

Sir, what portion of the builder book would be under moratorium today?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [167]

--------------------------------------------------------------------------------

4 -- I think, 4...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [168]

--------------------------------------------------------------------------------

30 to 40.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [169]

--------------------------------------------------------------------------------

Yes, 30 to 40 accounts.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [170]

--------------------------------------------------------------------------------

30 to 40...

--------------------------------------------------------------------------------

Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [171]

--------------------------------------------------------------------------------

In terms of percentage of the book.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [172]

--------------------------------------------------------------------------------

Percentage, 30 -- 35%, 36%, within 40%.

--------------------------------------------------------------------------------

Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [173]

--------------------------------------------------------------------------------

And this moratorium would be over how much period?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [174]

--------------------------------------------------------------------------------

Generally, between 12 to 18 months.

--------------------------------------------------------------------------------

Hardik Shah, Max Life Insurance Company Limited - Chief Manager Investments [175]

--------------------------------------------------------------------------------

So for that 12 to 18 months?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [176]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [177]

--------------------------------------------------------------------------------

12 to 18 months, generally.

--------------------------------------------------------------------------------

Operator [178]

--------------------------------------------------------------------------------

The next question is from the line of Mohit Mangal from CRISIL.

--------------------------------------------------------------------------------

Mohit Mangal;CRISIL;Analyst, [179]

--------------------------------------------------------------------------------

Sir, I was just looking at your presentation and I found that the bank in the overall borrowing mix has increased from 13.65% to 15.46%, and there is also a benefit in terms of weighted average cost on it for about 20, 25 basis point. So do we see this trend going forward, wherein we use bank as a major funding source for the company?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [180]

--------------------------------------------------------------------------------

Yes, it will be one of the important sources. And certainly, what we will be focusing upon is to see wherever we can get the best...

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [181]

--------------------------------------------------------------------------------

Best rate.

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Sudipto Sil, LIC Housing Finance Limited - CFO [182]

--------------------------------------------------------------------------------

pricing and within the ALM requirement. So bank funding incrementally has been increased, but the rate of -- the cost of funds there also will be coming down, as you would be knowing that most of the banks have been reducing their NPLs. So that presents us a slight opportunity in reduction of cost also.

--------------------------------------------------------------------------------

Operator [183]

--------------------------------------------------------------------------------

The next question is from the line of [Sagar Shah] from [Alphaline Wealth.]

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Unidentified Analyst, [184]

--------------------------------------------------------------------------------

My questions have been answered. There's just one actually...

--------------------------------------------------------------------------------

Operator [185]

--------------------------------------------------------------------------------

Sagar, you're not audible.

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Sudipto Sil, LIC Housing Finance Limited - CFO [186]

--------------------------------------------------------------------------------

Can you please speak louder?

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Unidentified Analyst, [187]

--------------------------------------------------------------------------------

Yes. Hello, can you hear me now?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [188]

--------------------------------------------------------------------------------

Yes. Yes. Yes.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [189]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Unidentified Analyst, [190]

--------------------------------------------------------------------------------

Yes. My first question is, can you give me a geographic diversification of your loans, please, sir?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [191]

--------------------------------------------------------------------------------

Yes. You can refer to one of the presentations, where we have mentioned in one of the slides that we -- there are -- the definitions we have given is metro versus nonmetro. If you look at the metro versus nonmetro, that is on Page -- Slide #9.

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Unidentified Analyst, [192]

--------------------------------------------------------------------------------

Yes, in top 7 cities...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [193]

--------------------------------------------------------------------------------

Top 7, that is basically metro. Top 7 cities is Mumbai MMR region, NCR, Bangalore, Chennai, Hyderabad, Pune and Kolkata. That contributes 44% current year's disbursements and the balance 56% from all other cities.

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Unidentified Analyst, [194]

--------------------------------------------------------------------------------

From the non others, okay. My second question is a follow-up for the -- actually the Phase 1. The Stage 2, as you're referring to 4.74% of your total loans actually, the Stage 2 loans exposure at default. So what -- how confident are you on that percentage of your portfolio to not to slip to the Stage 3.

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Sudipto Sil, LIC Housing Finance Limited - CFO [195]

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No, as we mentioned, see, payments are coming. Payments are coming, but the fact is that, as far as the builder loan is concerned, which comprises a major portion of the incremental NPLs in the last maybe 1 year or so, there the sales have been coming down, sales have reported slower. So we expect that once the sales position improves, there is an improvement not only in the stage 2 but also in the stage 3. Whatever sales are happening, the money comes to us. But the sales which were happening at a particular rate per month, that has come down significantly in the last maybe 2 to 3 quarters.

--------------------------------------------------------------------------------

Unidentified Analyst, [196]

--------------------------------------------------------------------------------

So how much percentage of the builder loans is from stage 2?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [197]

--------------------------------------------------------------------------------

Stage 2 -- let me just -- stage 2, about maybe INR 400 crores will be stage 2.

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Unidentified Analyst, [198]

--------------------------------------------------------------------------------

INR 400 crores?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [199]

--------------------------------------------------------------------------------

Yes, INR 400 crores to INR 500 crores.

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Unidentified Analyst, [200]

--------------------------------------------------------------------------------

Okay. And from the developer loans of the total developer book, how much percentage is actually kind of a project loans? How much percentage of that projects is 50% or below constructed actual in your total book?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [201]

--------------------------------------------------------------------------------

Around 50% completed.

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Sudipto Sil, LIC Housing Finance Limited - CFO [202]

--------------------------------------------------------------------------------

Can you please repeat your query?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [203]

--------------------------------------------------------------------------------

These are all of the 50%, 70%...

--------------------------------------------------------------------------------

Unidentified Analyst, [204]

--------------------------------------------------------------------------------

Of your total project loans, what percentage is 50% of less construction is being done?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [205]

--------------------------------------------------------------------------------

More than 50%, 60%.

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Sudipto Sil, LIC Housing Finance Limited - CFO [206]

--------------------------------------------------------------------------------

More than -- (foreign language) it will be more than 50%, 60%, when the construction is ahead of 50%. Whatever disbursement you would have made in the last maybe 1 year or so, obviously, the -- for those projects, the -- our exposure will also be at the stage of this construction.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [207]

--------------------------------------------------------------------------------

[Consequently our] construction mix.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [208]

--------------------------------------------------------------------------------

Our disbursement in the stage of construction mix. And there, obviously, whatever we have disbursed recently, the stage of construction will be initial.

--------------------------------------------------------------------------------

Unidentified Analyst, [209]

--------------------------------------------------------------------------------

Okay. So currently, you're focusing more as subsidies, you are focusing more on the affordable housing [party PMAY Yojana.]

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [210]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

Unidentified Analyst, [211]

--------------------------------------------------------------------------------

So going ahead, are we going to see disbursements more in that field itself because for the last 1 year LIC Housing Finance the gross NPAs have been inching more -- have been inching up, moving up actually every quarter-over-quarter and building loans only, that's why. So it doesn't make any sense for the company to move ahead in that segment, especially in this kind of environment.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [212]

--------------------------------------------------------------------------------

When you're talking about affordable, obviously we'll focus on affordable and the PMAY because there you see asset quality is far, far better, superior, experience is good. But that does not mean (foreign language) if good projects come, particularly projects which cater to this segment, projects which cater to affordable housing, projects which are under PMAY, those also we'll be definitely funding those projects, good projects because more (inaudible).

--------------------------------------------------------------------------------

Unidentified Analyst, [213]

--------------------------------------------------------------------------------

But that won't be in the -- okay. But that won't be in the -- those PMAY projects, I guess, they won't be in the metro cities, right?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [214]

--------------------------------------------------------------------------------

No. Those are in metro cities only. Yes, yes, yes, we are, in fact, metro cities, PMAYs are there, outskirt of metropolis, those are there. And they get also some incentive. Developer also get some incentive from the government, some tax rebates, those things are there if that is registered under PMAY.

--------------------------------------------------------------------------------

Unidentified Analyst, [215]

--------------------------------------------------------------------------------

So if that is the case, can we expect at least the ECL [statutory] from 2.38% to at least below 2% in FY '20 or maybe in FY '21?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [216]

--------------------------------------------------------------------------------

Yes, definitely. Definitely, that position will improve.

--------------------------------------------------------------------------------

Operator [217]

--------------------------------------------------------------------------------

The next question is from the line of Rakhi Prasad from Alder Capital.

--------------------------------------------------------------------------------

Rakhi Prasad;Alder Capital;Investment Manager, [218]

--------------------------------------------------------------------------------

I wanted to get a sense more about the builder book in terms of the split between metro and nonmetro cities, and also how the NPA for the builder book has split between metro and nonmetro cities.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [219]

--------------------------------------------------------------------------------

Actually, internal builder book is spread across the 7 cities, 7 top cities. And our experience is across all the cities. We cannot say the particular region has more NPA or particular region has less NPA. Our experience is mixed across.

--------------------------------------------------------------------------------

Rakhi Prasad;Alder Capital;Investment Manager, [220]

--------------------------------------------------------------------------------

So any -- and Bombay, Mumbai and Delhi, would that proportion be larger amongst the top 7?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [221]

--------------------------------------------------------------------------------

Yes. Proportionally, everywhere it is there.

--------------------------------------------------------------------------------

Rakhi Prasad;Alder Capital;Investment Manager, [222]

--------------------------------------------------------------------------------

It's equally spread across the...

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [223]

--------------------------------------------------------------------------------

Yes, yes, yes.

--------------------------------------------------------------------------------

Rakhi Prasad;Alder Capital;Investment Manager, [224]

--------------------------------------------------------------------------------

Okay. So then all these NPAs are sitting in these top 7 cities then?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [225]

--------------------------------------------------------------------------------

Yes, yes, yes.

--------------------------------------------------------------------------------

Rakhi Prasad;Alder Capital;Investment Manager, [226]

--------------------------------------------------------------------------------

Equally spread?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [227]

--------------------------------------------------------------------------------

Equally I cannot say. There will be variation but it is spread.

--------------------------------------------------------------------------------

Operator [228]

--------------------------------------------------------------------------------

The next question is from the line of [Gaurav Kochar] from Mirae Asset.

--------------------------------------------------------------------------------

Unidentified Analyst, [229]

--------------------------------------------------------------------------------

Hello? Can you hear me?

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [230]

--------------------------------------------------------------------------------

Yes. Yes, please.

--------------------------------------------------------------------------------

Unidentified Analyst, [231]

--------------------------------------------------------------------------------

Yes. Just one question on your stage 2 assets, which was disclosed in June, which was around 4.74% of the book and still stands at 4.74% of the book. And you said, sir, correct me if I'm wrong, about INR 500 crores of the project loans form part of this. So if I deduct that amount, then the remaining would come from individual home and LAP side, if I'm not wrong.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [232]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Unidentified Analyst, [233]

--------------------------------------------------------------------------------

So -- which means that roughly around 4.5% sort of stage 2 assets come from your individual home loans and LAP.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [234]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [235]

--------------------------------------------------------------------------------

Around 4 point something, yes.

--------------------------------------------------------------------------------

Unidentified Analyst, [236]

--------------------------------------------------------------------------------

That's a very high number if you consider the NPA. NPA stage 3 is only 1%, 1.5%. Your Stage 2 asset, it's 4.5% of the total.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [237]

--------------------------------------------------------------------------------

So that is okay. Then there is nothing wrong in that because, obviously, as we mentioned, majority of the accounts in the retail, especially in the home loans, are in the nature of dealers, and that has always been the case. Right now we are disclosing stage 1, stage 2, stage 3 separately because this account, this segment, which was more than 30 days and less than 90 days, that has always been in this.

--------------------------------------------------------------------------------

Unidentified Analyst, [238]

--------------------------------------------------------------------------------

Okay. Because if I look at the previous, right, in June 2018, that number was 3.83%.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [239]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [240]

--------------------------------------------------------------------------------

It was 4.16% in the last September.

--------------------------------------------------------------------------------

Unidentified Analyst, [241]

--------------------------------------------------------------------------------

Yes. Yes, that number...

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [242]

--------------------------------------------------------------------------------

Total.

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [243]

--------------------------------------------------------------------------------

And that included the project loans also.

--------------------------------------------------------------------------------

Unidentified Analyst, [244]

--------------------------------------------------------------------------------

Right. So you're saying the individual home loan experience has been similar?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [245]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [246]

--------------------------------------------------------------------------------

We do.

--------------------------------------------------------------------------------

Unidentified Analyst, [247]

--------------------------------------------------------------------------------

Why are you confident that this number would not...

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [248]

--------------------------------------------------------------------------------

Just in consistence. We didn't say it's similar, but it is consistent.

--------------------------------------------------------------------------------

Unidentified Analyst, [249]

--------------------------------------------------------------------------------

Okay. So you're reasonably confident that this won't slip into stage 3 assets in the near future?

--------------------------------------------------------------------------------

Sudipto Sil, LIC Housing Finance Limited - CFO [250]

--------------------------------------------------------------------------------

Yes. For example, in December 2018, the Stage 2 asset overall was 4.93%. So today, if you see, as compared to December, the stage 2 has actually come down to 4.73%. So it has been in that range.

--------------------------------------------------------------------------------

Unidentified Analyst, [251]

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Okay. And any reason for your provision? ECL provision on stage 2 assets has gone down from INR 129-odd crore in last quarter to INR 82 crores in the quarter...

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Sudipto Sil, LIC Housing Finance Limited - CFO [252]

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The ECL provision is a formula designed kind of a number which comes out depending upon the expected credit loss in a specific segment. So when a particular asset has been considered, so for example, in the stage 3, to get moved from stage -- that particular lumpy asset has moved from stage 2 to stage 3, then obviously it will not be required in stage 2.

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Operator [253]

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The next question is from the line of Nischint Chawathe from Kotak Securities.

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Nischint Chawathe, Kotak Securities (Institutional Equities) - Senior Analyst [254]

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Am I audible?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [255]

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Yes.

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Nischint Chawathe, Kotak Securities (Institutional Equities) - Senior Analyst [256]

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So just one question, and this pertains to really the disbursement figure. I guess your retail disbursement or retail individual home loan disbursement was in single digits. I think my math was up around [3%, 7%]. So I'm just curious as to what is -- what are your thoughts or your -- when does it really pick up?

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Sudipto Sil, LIC Housing Finance Limited - CFO [257]

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No, no. Individual home loan disbursement is not in single-digit, Nischint. Individual home loans disbursement for the quarter, if you're asking, INR 10,136 crore as against INR 8,739 crores, and it is 15.9%, around 16%. Maybe you are looking at including the LAP.

Including the LAP, obviously, as we mentioned in our opening comments, what our MD mentioned in the opening comments, the LAP disbursements are almost INR 1,000 crores lower as compared to Q2 of last year. So if you add these 2, then yes, what you're saying is right. But I'm talking only home loans. Home loans, there is a 16% growth.

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Operator [258]

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The next question is from the line of Piran Engineer from Motilal Oswal.

As there is no response, we move to the next question from the line of Devesh Kayal from Carnelian Capital.

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Devesh Kayal;Carnelian Capital;Analyst, [259]

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Yes. What is your provision -- cumulative provision you have provided May till now on the loan book?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [260]

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So the total is INR 2,083 crores.

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Operator [261]

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The next question is from the line of Umang Shah from HSBC Securities.

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Umang Shah, HSBC, Research Division - Analyst of Financials [262]

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Just wanted to know, so if you look at our bank borrowing weighted average cost, we have seen quite a bit reduction in the weighted average cost of fund, but the similar fall doesn't reflect in our NCD borrowings. Has it to do something with our older borrowings?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [263]

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Obviously, these are old...

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Sudipto Sil, LIC Housing Finance Limited - CFO [264]

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Yes. Obviously, [where] the bank borrowing is a floating borrowing.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [265]

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It is obvious.

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Sudipto Sil, LIC Housing Finance Limited - CFO [266]

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So as and when the MCLRs have reduced or whenever we have been able to negotiate, it has come down. But NCDs are fixed-rate borrowings. So NCD overall borrowing cost will come down as and when [view] in future of funds come in at a lower rate and also the existing book, which matures, the number which we have shared a few minutes back. When that runs off and that gets replaced, you will see a benefit there also.

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Umang Shah, HSBC, Research Division - Analyst of Financials [267]

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So basically, over the next 2 to 3 quarters, we should see some sort of -- some meaningful reduction in the NCD borrowing cost?

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Sudipto Sil, LIC Housing Finance Limited - CFO [268]

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Yes, yes, yes.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [269]

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Definitely.

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Sudipto Sil, LIC Housing Finance Limited - CFO [270]

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It is happening even as we speak. It is happening even further -- just to give you an example of the movement which has happened since last year around this time, that is October 2018, say, a 10-year paper would have been placed at upside of 9%. Today, if we do it, it will be around 8%. Similarly, for a shorter-end paper, maybe 2-years paper, would have been placed at -- in the ballpark of 9.2% to 9.6%, that was an inverted yield curve. Today, it will be almost 200 basis points cheaper.

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Umang Shah, HSBC, Research Division - Analyst of Financials [271]

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Okay. Understood. That's helpful. Second question was regarding one of the result notes mentions about inspection report for 2017-'18 received from NHB. Any specific observations? Or it's just business as usual?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [272]

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It's a general inspection. Every...

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Sudipto Sil, LIC Housing Finance Limited - CFO [273]

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No. It is a normal inspection, normal. Every year, it happens.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [274]

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Every year, they do inspection, and they have their observations maybe.

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Umang Shah, HSBC, Research Division - Analyst of Financials [275]

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Okay. Just last data point which I wanted to confirm. So LAP disbursements were at about INR 1,590-odd crores this quarter versus INR 2,500-odd crores in the previous year?

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Sudipto Sil, LIC Housing Finance Limited - CFO [276]

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Correct.

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Umang Shah, HSBC, Research Division - Analyst of Financials [277]

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Okay. And our steady-state tax rate should be now closer to about 25%, so 22% plus the surcharge?

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Sudipto Sil, LIC Housing Finance Limited - CFO [278]

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Yes, surcharge.

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Operator [279]

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The next question is from the line of Abhijit Tibrewal from ICICI Securities.

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [280]

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Just had a couple of questions. So one thing is, I'm seeing our intangible assets have gone up materially. Is it because of that Ind AS 116...

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Sudipto Sil, LIC Housing Finance Limited - CFO [281]

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Yes.

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [282]

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Right-to-use asset?

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Sudipto Sil, LIC Housing Finance Limited - CFO [283]

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Yes.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [284]

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Yes.

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [285]

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Okay. All right. Sir, something that you talk about on the secured floating rate loans coming down to 82% because of the new product that we have. I'm guessing it's a semi-fixed kind of a product, right?

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Sudipto Sil, LIC Housing Finance Limited - CFO [286]

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Yes. Correct.

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [287]

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So for how many years is it fixed? And...

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Sudipto Sil, LIC Housing Finance Limited - CFO [288]

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So it's a short period, 6 months.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [289]

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6 months.

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [290]

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Okay. All right. And sir, I mean, what I'm noticing is, I mean, our processing fees, which includes the fee and commission income, they've been coming down. So I mean, what I'm seeing on your website as well, we've been raising up the processing fees, right?

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Sudipto Sil, LIC Housing Finance Limited - CFO [291]

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No, not necessarily. See actually, the processing fee waivers only may be for specific sales promotion activities like a festival of our often exhibition, et cetera. Fee collection has increased, but the accounting of the fees post the introduction of Ind AS changed. Now it will -- it's only the unamortized portion of the fees will be reflected as fees and commission, everything else will be categorized along with the -- for the assets in an effective interest rate methodology.

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Umang Shah, HSBC, Research Division - Analyst of Financials [292]

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Okay. And sir, sorry to bother you again on the taxation bit, I just wanted to understand. I mean if we look at H1, our blended tax rate comes to about 18.5%. And when I look at your balance sheet, there are no...

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Sudipto Sil, LIC Housing Finance Limited - CFO [293]

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Reflecting on what?

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [294]

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I mean if I take your PBT and the tax rate.

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Sudipto Sil, LIC Housing Finance Limited - CFO [295]

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For the PBT, you have to add back the provision.

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [296]

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Right. Okay. All right. So I mean just -- okay. I mean even if I were to add that back, this another thing that I had is, we had no DTLs as on March 31, right, in the balance sheet?

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Sudipto Sil, LIC Housing Finance Limited - CFO [297]

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DT?

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [298]

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DTLs. There were no DTLS as on 31st March in the balance sheet.

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Sudipto Sil, LIC Housing Finance Limited - CFO [299]

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DTL?

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [300]

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DTL, right. So I mean -- so whatever DTAs that we had on the balance sheet, they were supposed to be, in fact, down, I mean, after the new taxation comes in. So how is it that we got a benefit? I mean what I'm trying to understand here is if that was...

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Sudipto Sil, LIC Housing Finance Limited - CFO [301]

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[That benefit was because] of different issues. There are 2 different issues. One thing is that the benefit, what benefit -- I mean the benefit actually is the reduced tax rate. You should not look at it as a benefit. It is only because of the reduced tax rate and also because we had actually provided much higher and much higher tax rate in the first quarter. So that is what is getting set off. And whatever impact of DTA had to be taken has been taken. So it is net of that. It is not that the DTA impact has not been passed (inaudible).

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Abhijit Tibrewal, ICICI Securities Limited, Research Division - Research Analyst [302]

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Okay. So you mean the entire DTA impact has been done away with in Q2? There will be no further impact in the rest of the financial year?

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Sudipto Sil, LIC Housing Finance Limited - CFO [303]

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Yes.

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Operator [304]

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We will take the last 2 questions. The next question will be from the line of Deepak Poddar from Sapphire Capital.

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Deepak Poddar, Sapphire Capital Management LLC - Portfolio Manager [305]

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So sir, in your remarks, you had mentioned that your NCD borrowing cost was going down. Even your cost of fund, you expect to come down. So do you expect your NIMs to improve? If yes, at around what levels?

And given your NPL levels are elevated, and -- so any sort of credit cost outlook you want to share?

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Sudipto Sil, LIC Housing Finance Limited - CFO [306]

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So as far as the margin visibility is concerned, we are at -- in the previous call also we had said that margins will be stable with a slight positive bias. We would, by and large, like to maintain the same outlook, of course, assuming that the overall interest rate scenario in the economy remains wherever it is today. If there is any major change, then, obviously, to that extent, we stand corrected.

As far as the credit cost is concerned, there also -- there is some stability. First 2 quarters, we have seen more or less in the same trajectory.

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Deepak Poddar, Sapphire Capital Management LLC - Portfolio Manager [307]

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So I think this quarter, it was about 0.6%, 0.53% around?

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Sudipto Sil, LIC Housing Finance Limited - CFO [308]

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Yes. And Q1 also, it was by and large similar.

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Deepak Poddar, Sapphire Capital Management LLC - Portfolio Manager [309]

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So this is what we might be -- going forward, we might be expecting.

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Sudipto Sil, LIC Housing Finance Limited - CFO [310]

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Yes.

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Deepak Poddar, Sapphire Capital Management LLC - Portfolio Manager [311]

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Understood. And then my second question is related to your AUM. Now you mentioned that you do expect some business environment to kind of ease out. So in spite of challenging environment, we are seeing a 15% kind of a growth on a Y-o-Y basis. So do we expect that to kind of accelerate as you go into second half, and you expect the environment to...

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [312]

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Yes, yes, yes. We are very much hopeful.

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Deepak Poddar, Sapphire Capital Management LLC - Portfolio Manager [313]

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So around...

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [314]

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There will be growth. Our effort will be to continue the growth rate which you are seeing today. Our effort will be to continue that growth rate for the year.

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Operator [315]

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We will take the last question from the line of Jignesh Shial from Emkay Global.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [316]

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Hello?

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Operator [317]

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Jignesh, you are not audible.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [318]

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Yes. Sorry. Is it better now?

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Operator [319]

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Yes.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [320]

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Just -- most of the things have already been answered. But just reconfirming it on one, on this individual interest income, you say it is INR 4,530 crores, is it correct for the quarter?

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Sudipto Sil, LIC Housing Finance Limited - CFO [321]

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Yes.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [322]

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And what will be the same amount for the last year, same quarter, Q2 FY '19?

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Sudipto Sil, LIC Housing Finance Limited - CFO [323]

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Just hold on. For the Q1 of -- Q2 of last year, it's INR 3,917 crores.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [324]

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INR 3,917 crores, right?

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Sudipto Sil, LIC Housing Finance Limited - CFO [325]

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Yes.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [326]

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Okay. And secondly, there were a lot of confusions around -- with your -- with the individual gross NPA numbers and all, but just total summing up, the right now number would be 1.52%, the gross NPA individual, combined, altogether? Is it correct?

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Sudipto Sil, LIC Housing Finance Limited - CFO [327]

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Yes. NPA combined.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [328]

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Combined altogether. Yes.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [329]

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Which was 1.25% last quarter?

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Sudipto Sil, LIC Housing Finance Limited - CFO [330]

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Yes. 1.26%, I think.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [331]

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Yes. And 0.81% in Q2 FY '19, am I saying that number correct?

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Sudipto Sil, LIC Housing Finance Limited - CFO [332]

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Yes.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [333]

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And your -- by that calculation, your corporate or your developer book NPA goes to 14.28%.

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Sudipto Sil, LIC Housing Finance Limited - CFO [334]

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Correct.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [335]

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Is that correct, against 11.8% last quarter?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [336]

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Yes.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [337]

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Is my calculations correct, yes?

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [338]

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Yes, yes.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [339]

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Okay. And just the spread for this quarter would have improved by around 10 bps. So it should be around 10 -- 2.28% to 2.29%. Is my calculation roughly correct?

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Sudipto Sil, LIC Housing Finance Limited - CFO [340]

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Yes. Sequentially, there's been an improvement.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [341]

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Approximately 10 bps sort of, and this will continue, as you already mentioned, close to INR 15,000 crores with inflation.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [342]

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Even better.

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Sudipto Sil, LIC Housing Finance Limited - CFO [343]

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Will maintain.

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Jignesh Shial, Emkay Global Financial Services Ltd., Research Division - Research Analyst [344]

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With INR 17,500 crores getting -- bonds getting matured at a coupon of 8.3%, this should improve further.

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Sudipto Sil, LIC Housing Finance Limited - CFO [345]

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Some improvement is there.

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Operator [346]

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That was the last question. I now hand the conference over to the management for their closing comments.

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Siddhartha Mohanty, LIC Housing Finance Limited - MD, CEO & Director [347]

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So I thank all the participants. And I'm very much hopeful in the coming quarter, company will definitely improve in all parameters and whatever challenges are there. I can assure we are meeting the challenges very, very effectively, and there will be improvement on certain fronts which is now visible.

So with that, I assure all my investors to have confidence in the company. Thank you. Happy Diwali to all.

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Operator [348]

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Thank you. Ladies and gentlemen, on behalf of Axis Capital, that concludes this conference call for today. Thank you for joining us, and you may now disconnect your lines.