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Muthoot Finance Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '21 earnings call of Muthoot Finance hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Kunal Shah from ICICI Securities Limited. Thank you, and over to you, sir.
Thank you, Maria. This is Kunal Shah from ICICI Securities. So today, we have with us Mr. George Alexander Muthoot, our Managing Director; and Mr. Oommen Mammen, Chief Financial Officer from Muthoot Finance to discuss their FY '21 earnings as well as medium-term strategy and outlook. So congratulations for a robust growth and ROE even in this challenging year. And on behalf of entire investor and this community, I would want to convey our -- my deepest condolences and heart felt [indiscernible] demise of [ Chairman ]. So over to you, sir.
Thank you. This is George Alexander Muthoot, Managing Director of Muthoot Finance. I have with me our Chief General Manager, Mr. K.R. Bijimon; Executive Directors, Mr. [ Tipaaa ]; and Mr. George M. Jacob; and also the CFO, Mr. Oommen Mammen. I'm sure the other directors are also on the call listening from elsewhere. We are speaking from the head office of Kochi. Yes, you may be aware, we would like to place on record our definite heartfelt condolences and on the passing away of our Chairman, my elder brother, Mr. M.J. George Muthoot on 5th March 2020 -- 2021, last -- 5th of March last -- this year. So at this meeting, we have appointed Mr. George Jacob Muthoot, one of the promoters of the company, was unanimously elected as -- appointed as the Chairperson -- Chairman of the Board of Directors. A position left behind by Mr. M.J. George Muthoot due to his untimely demise on 5th March. He is the younger brother of M.J. George Muthoot, of course, my elder, too. He's taking over the mantle, Mr. George Jacob Muthoot said he is truly honored and humbled to accept the chairmanship of the company and privileged to take this wonderful company and the team Muthoot Finance forward to the next decade and beyond. Remembering the past Chairman, Mr. George Jacob Muthoot [indiscernible] a feat, that he, along with the other members of the family, are truly committed in upholding the values and benchmarks set by our elder brother in the business, profession and in life. We are all sincerely and severely focused on achieving the vision and mission set by late Mr. M.J. George Muthoot, whose guiding principles, ethos and values continue to guide us today and in the years to come. So with that, as our condolence on Mr. M.J. George Muthoot, our former Chairman. I would like to formally present to you the financial results for the financial year 2020,'21. Key milestones is something which I would like to present here. Our long-term rating has been upgraded to AA+ by CRISIL and ICRA. Our loan portfolio crossed INR 52,000 crores mark in this year. Our total revenue for the year also crossed INR 10,000 crores. These are good and clear milestones. Profit before tax also crossed INR 5,000 crores and net worth cost INR 15,000 crores. The total loan disbursements in the year is INR 1.24 lakh crores or INR 1 lakh 24,000 crores in the total loan disbursement in this year. At this point, I would like to slowly think back about the shareholder value, which our company has been able to create. Our initial public offering was in April 2011, and our listing happened in May 2011. The issue price at that time was INR 175. And today, it is around INR 1,400, a good INR 600-plus share price increase. The market capitalization at the time of issue was 6,504. And today, it is around 50,000 plus. The BSA, which is 644% growth whereas the BSE from 18,000 has gone to 49,000 and 50,000, and it is growth -- it has grown by 167%. The gross loan assets at that time in 2011 was INR 15,800 crores, which is today INR 52,600 crores, a growth of -- accumulative growth of INR 36,000 crores or in percentage terms, INR 232 crores. The revenue also has more than doubled from INR 4,500 crores to INR 10,500 crores. And the profit after tax from INR 892 crores to INR 3,722 crores, a growth of INR 317 crores. Our net loss, as I said earlier, has increased from INR 2,900 crores to INR 15,000 crores, a 421% increase. Dividend per share, which is 4% at that time has now come to 20% -- INR 20 per share, which is a 400% growth. And the total dividend payout at that time was INR 149 crores, which is today, INR 802 crores, which we paid 2 month -- months back. The total dividend we have paid to the shareholders in the last 11 years is INR 3,544 crores. This, we personally feel -- I personally feel has been reward -- has been rewarding to the investors who have been with us, even from the initial public offering at INR 174. The key financial highlights, as I said, the consolidated AUM has increased by 24% year-on-year at INR 58,280 crores. The consolidated profit after tax is now at INR 3,819 crores, which is a 21% year-on-year growth. And the stand-alone AUM has grown by 26% year-on-year at INR 52,600 crores. Standalone profit after tax increased by 23% to INR 3,722. CRISIL and ICRA upgraded us from AA to AA stable -- AA plus stable and dividend of 200% on face value of 10 involving a payout of INR 850 crores. The branch network, which is 5,400 -- INR 5,330 has come to INR 5,451. The group bank we took and the contribution from the whole loan business in the consolidated gross AUM has grown 27% to INR 52,000 crores. The other -- the whole finance subsidiary has really grown its book, but it is now on a growth path now. And this year, we plan to do good disbursal in this year. Last year, our disbursals were very, very low, and we were doing a consolidation and collection at that time. Belstar Microfinance, the micro finance has grown its book to INR 3,300 crores as against INR 2,600 crores, which is a year-on-year increase of 25%. And this year, the loan portfolio this quarter has increased by INR 414 crores. The profit after tax has certainly come down -- has come down to INR 47 crores from INR 99 crores, mainly against the provisions, which had to be made, mainly due to the COVID impact. The Muthoot Insurance Brokerage, again, 100% subsidiary has generated good profit and will generate a profit after tax of INR 32 crores against INR 11 crores in the previous year. The Sri Lankan subsidiary, which is gradually becoming like Muthoot Finance, a gold loan company. Initially, when we entered the company, it had mill gold alone. In the last 8 years, they have grown their gold loan book. And today, they are -- almost 50% of their book is gold loan. And we hope that -- we expect that it should also become, just like Muthoot Finance, a 90% plus gold loan company. This year, against the previous year tax after -- profit after tax of INR 7 crores this year, it has reached only INR 5 crores. Again, the COVID impact, et cetera, had its impact into the accounts also. The Muthoot Money, which is the vehicle finance arm of Muthoot Finance has also not grown its book last year. It has actually degrown its book because its book has been running down. They are restarting the business from next month onwards. We are sure it will also go up. And it has generated a revenue of INR 70 crores and a profit after tax of INR 4 crores as against INR 3 crores in the previous year. These are very new companies, only 2 years and 3 years old. We hope that this will come -- this will turn around and come out of these issues next year. And today, our gold loan book, which was 88% last year. Today constitute 90% of our book. And the subsidiary constitute 10% versus 12% last year. This year, the focus has been on growing the gold loan book at the cost of even regrowing the other book. So concluding the initial remarks, I would now throw open the floor to the investors who have been really supporting us all these years, all these times. And we have definitely certainly value your support, and we request you to continue to support us in days to come also. And now the floor is open for questions. Thank you.
[Operator Instructions] The first question is from the line of Piran Engineer from Motilal Oswal.
Congratulations on a great set of numbers. I have 2, 3 questions. Firstly, as of end December, our LTV was 67%, 68% and we had a 10%, 12% decline in gold prices in the fourth quarter. So is it fair to say that by end March, our portfolio LTV would have increased to 75% and maybe breach that. And in some cases -- in such cases, what do we do? Do we ask the client to top-up the portfolio or to top-up collateral? And if he doesn't, then do we start repossessing and auctioning? So that's my first question. And there could be other ones after this.
You can continue asking.
Okay. Sure. Sir, my second question, basically, on Slide 32, where you talk about your customer base. Now if I add up the disbursement made to all the different categories of customers, that adds up to INR 10,000 crores or INR 11,000 crores. But your total disbursement this quarter was INR 23,000 crores. So the balance INR 12,000 crores is a rollover. Is that how we read it? And my third question is despite having AA+ rating, our cost of funds is pretty high at north of 8%. And we are also maintaining a low share of TP. So when do we really see our cost of funds coming down to the levels of other AAA rated players, other NBFC? So that's all from my end.
Okay. Thank you. And the LTV -- if you look at the LTV from the today's price, the LTV is 66%. So this keeps fluctuating in months. Some months, it goes up, it goes down. So we don't get -- we don't panic when the LTV goes up, goes down because these are all gold ornaments. It's not all gold orders. We have sufficient margin headroom with elbow room with us. And we have not seen people abandoning the good. We have been in this business and the listed company for the last 10 years, and they are listed after 10 years. So we have not had any reason to panic. There's nothing to panic there. So we always give only maximum of 75% of the current LTV. That itself is good enough for us, and we have not had any issues because of that. So LTV, it becomes 70%, 60%, 67% because every day, price changes. So we don't -- nobody needs to panic and we don't call up customers and ask them to bring gold, et cetera because we have sufficient margins with us. And there are some invisible margins also, like we do only ornament, we don't to hold bullion, et cetera. And we regularly contact customers to pay their interest also. Those are the indicates we have, among other things, because that we have never had any problem with the issues. About the...
Even if it crosses 75%, we don't -- in the interim, we don't call the customer?
We don't look at it also because we don't need to look at that because today, it will cost 75%, hypothetically. And tomorrow, it comes to 73%. Then what happens. So we don't do anything like that. That's not the business model. The second point, I like to look at is Slide 32, et cetera, AA+ [ anything ]. Yes, incrementally, our borrowing cost should come down because the legacy loans are there, that is why your loan -- cost loan is high. As and when the legacy loans get off our books down from our books, see where the interest rates should come down. It's not that people are still charging -- the lenders are charging a small money. It is that it takes -- there is a time for them to adopt to the company to come to the whole book to come to a [ lower rate ]. So we are -- I'm sure, compared to our peers, our incremental borrowing costs are equal or if not lesser than others. And about the Slide 32...
So there are 2 points in this. The number of customers which we have shown is the outstanding as on 31st March. There are several loans, which have been disbursed during the quarter. As you know, gold loans are very short term. Customers would have close between -- before creditors' mark. So within the quarter. Intra quarter, a lot of customers would have closed. So that is one point. So there is also a sizable number. The remaining, as you said, there could be rollovers. Rollovers could be happen because of switching up schemes by the customers. Suppose we have a lower wage scheme at a particular location. So the customers move from the higher rate schemes to the lower rate scheme. So that also contributes to the balance disbursement.
Got it. Got it. And if I may just squeeze in one more question. Now that the banks no longer have the 70% -- 90% LTV arbitrage, how is competition shaping up in April and May?
On April and May is [ washer ] because many of the branches are not able to open properly. I'm sure by 15th of June, things will start improving. And people will start coming out and businesses will start reviving. Only when business starts picking up, the demand for loans will start. The demand for loans will start when business starts picking up and people need to rebuild -- restart their business or start new business. The cost of banks are giving 80%, 90%. I don't know how many banks would move at that rate. It has never really affected -- impacted our business, as you would have seen. We have grown much better than previous years in spite of this. But surely, if the banks have also gained some business, it is because the market has grown. The market is expanding. That's what I should say, when banks are also doing it. Market has expanded. We have not lost any business. Neither have really lost any business. We have grown, the banks would have also grown. I'm not sure about their numbers. We -- from last night, we don't see any threat of competition, et cetera.
The next question is from the line of Digant Haria from GreenEdge Wealth.
Sir, congratulations on great performance despite whatever challenges we keep on facing from the economy and otherwise. Okay, my question was mainly on the 2 new -- 1 new product and service that you've launched. If I look at financial year '21, we started home delivery of gold loans in a few cities. So if you can just talk a little more about it, how has been the initial experience. And eventually, what is your larger plan for over the next 2, 3 years on this product? So that's my first question. And the second question is, then I saw some ads where we are giving large loans at a very, very competitive rate, maybe 10%, 11%. So like is this product more aimed at competing with the customers who will look for banks as an alternative? And what is our strategy on these low rate loans? Yes, so there's 2 questions from my side.
First of all, loan-at-home. Loan-at-home is a service, which we are offering to our customers. It's a paid service. So loan-at-home, in terms of cost for all and their cost for the customer. So any customer who wants to avail this loan or facility, he phones us, he keeps an appointment. Our branch staff go to their place, take the gold loan, check it, wait, assess it and then bring the gold to our place. And at the same time, simultaneously released the goal to the customer. There are some customers, especially some large value customers who opt for this. But generally, what we have seen is 95% of the customers are more comfortable bringing their gold to the nearest branch, sitting with the branch and giving it to them. There's only a few people who sometimes want the service. If anybody wants the service, they are there to give it to them, and it is definitely a small charge is there for that because generally, people with 2 lakh, 3 lakh is where it makes sense for them also to take this gold loan at this rate. So loan-at-home is a service which we offer. It is good. Our own people go there and take the -- give the -- take the loan and give it back. And if they want the delivery at their home or the same thing we can do there also. So that is the 2 things which we do for the loan-at-home. Regarding large loans, yes, some -- occasionally, we also have to come up with some low interest schemes to attract customers. We cannot add a pace. In the case of the [ incentive ], we are charging 18% -- 17%, et cetera. So when we add this, we have to add this for the lower rate. It is just a rate which you offer to big customers, not that we have 1 crores and 2 crores large number of customers. There are very few customers. But then it gives a sense of, what should we say, we are also there with anybody else who is competing at low rates. We are also able to compete at low rates. Our average yield, that will down because of that. A few customers might take it, but then certainly, we need to offer -- attract larger, bigger customers as well as the smaller customers. The smaller customers are our main state.
Right, sir. If I can squeeze in one more question. Sir, you crossed the INR 50,000 crores milestone on the gold loan book. So maybe next 4, 5 years, somewhere, maybe we'll cross INR 1 lakh crores also. So in that journey, what are the few risks and opportunities that you as a company, as a promoter thing for Muthoot Finance are? So your thoughts on this?
INR 50,000 crores we crossed in December. In March, we crossed -- we reached INR 52,000 crores. So -- but I've also -- our Chairman always used to say we should pay for the INR 1 lakh crores market. I think you must have heard our Chairman, that is why you're also repeating this INR 1 lakh, of course. He tells us, not to you. he tells us that we should -- yes, definitely, we can reach it. We should be able to reach it, I'm sure. Going forward, we all would like to reach that. The challenges there wouldn't be much we are -- this is operationally challenging one thing. And we are every day trying to, what should we say, fine-tune our operations to adjust to these things also. So because today, the average branch business is INR 12 crores, around INR 11 crores to INR 12 crores. So if you reach INR 1 lakh crores means we should have INR 25 crores in the branch. There are branches in INR 25 crores. So we can technically -- theoretically reach that. But then we hope to do that. The challenge is there. I don't think -- as long as [ human ] is there, we don't feel any, any problem in the funding side, so that is not there. On the [ jovial ] side, I said, we will not have funding issues. But then operationally, it is very challenging. That's what I wanted to say here. But operationally challenging is something which we are heavily trying to fine-tune. Everything will increase, every issue will increase, and we should be able to fine-tune that going forward. As a calibrated growth, every year, we should be able to reach there also.
Right, sir. Sir, I generally hope your late Chairman's vision and you and the team's execution will be there sooner than later.
The next question is from the line of Anand Bhavnani from White Oak Capital.
First of all, congratulations for the wondering performance for the year. Sir, my question is about our credit rating. You must be having the discussions with rating agencies to talk about our robust performance doing funded loans [indiscernible]. Even in the gold price [indiscernible] and our gearing is very low. So is there a [ core ] for our rating upgrade? I mean, what is that you would need to do to for a AAA rating?
Thank you. Thank you. We always would like to get a higher rating. That is always in our mind. As they say, it goes only by steps and steps. The next step, I think, after AA+ should be AAA. So we are there. Probably, we will be constantly engaging with the rating agencies so that -- and we'll not rest until we get the AAA. From our side, definitely we always feel that we are much better placed than many others who personally enjoy AAA, they are a much better place. But usually, a little bit of convincing we need to do. And the conviction which the rating agency also has to have. Probably every year of performance, every year of stable and good performance, will help them to decide on giving us a AAA rating. And I'm sure if we perform like this, well, it should not be sooner than later, but we also get a AAA rating. There are no issues with them, but it is only that they also think that the rating should be -- should be given in steps and stages. So if we are across the AA+ stage. So we'll probably -- we'll have wait a little while for that. The little while can be 6 months, 1 year, 2 years. We also would like to come into the AAA league. Just like you, we would also like to come into the AAA league.
So it's on consideration, we keep talking and maybe it works out in a year, 1.5 years, you should be there. Is that the right expectation?
Yes. So every discussion we have with them, we reminded them that we need to get the AAA. I personally reminded them every time, every discussion we have. We have sometimes discussion every quarter, once in a quarter, once in half year, we have a discussion with them. I always remind them that we should be able to AAA.
Got it. Sir, second question about this disbursement in a quarter disbursement. Typically, what is the ratio? I mean, if we defer, let's say, 100 in a quarter, what percentage of it will be acquired of. It's as high 60% or I mean, is it 25%, what's the typical number?
See, usually, people who take a loan, I think that 10% of them cross the loan in the same month itself. I think there is a number.
Yes. I think in the presentation, there is a slide on that. So I think with this Page 29, it is there. The details are there, how the loans are retired in the first 6 months. So then, if you look at for last 5 years, about 60% of the loans get retired in the first 6 months. The first 3 months or so, a good number, yes. No, generally, the thumb rule is in the first month, it said about 10% gets liquidated. In the second month, about 20%. So like that first 6 months, no, the normal pattern is about 60% basically. The contractual others, 12 months.
Of what we disbursed, not the outstanding, sir, of what we disbursed.
Yes, sir, I got it. And sir, thirdly, we started diversifying through Microfinance, CD and component. And due to various reasons, there were TSA, and exchange, so on and so forth. And then there was this economy and now COVID. So all these products, we probably haven't scaled up to the extent that we should have, then we start again. Now given our experience in these products of last 3, 4 years, and what is your take? Like if assuming things get normal, and from here on there are no such limiters, which of these products would you like to grow aggressively over next 3, 4 years?
As far as Microfinance is concerned, it is not related to the gold loan customers. So it is a separate vertical, and maybe we have a 70% investment there. That is a different class of customers. So that has its own growth business. The other 100% subsidiaries, which we have the vehicle finance and the home finance. These 2 are -- definitely, the customers are potential customers of gold loan, are potential customers of these vehicle finances that is to used to car and the home for homes. These are typically our own customers. So we want to leverage on this. We want to see that the customer remains with Muthoot. That is the reason we started this. We are still -- it is just that in the last 2 years, there have been some issues with the pandemic and also I don't know about GSP, but general economy, et cetera. These businesses are bound to come up better. Affordable housing is something which India definitely needs and it is only that there were some issues with builders and also the pandemic, which has actually affected the home finance. I'm sure both of that are getting sorted out. Once this is out, there is very, very good potential for this and that we will be start increased -- growing much better in those areas, those ones also. The same thing with vehicle finance. Today, it is -- there is an issue. Vehicles are not selling, pandemic is there. People are not going out. In fact, the productions are -- but it going to take -- it cannot remain forever. Probably, it will take 3 months, 6 months, 9 months, then we are ready for that. So these are 2 businesses, which we would like to grow. We have -- we see potential, and there is a relationship throughout this business with our own gold loan customers. That is why we started that. It is a related business that we -- we started that. And after maybe this year and next year, we should see reviving and coming back to normal.
The next question is from the line of Subrat Dwibedy from SBI Life Insurance.
Congratulations for a good set up numbers. So I have a couple of questions. First one is on Slide 31, where you have shown the margin of 50% on loans, and that has been reducing consistently. Now it is at 25%. And this does not include the accrued interest on the gold loan assets. So at what stage this becomes a concern, and you would start auctioning aggressively? And the related question to this is incrementally at what LTV would the disbursements be made?
Okay. Thank you. So I think the second question can be answered first. The -- incrementally, our new loans are given at 35%, maximum, 75%. Not that everybody takes 35%. Some customers take only 60%, 65%. But the maximum we give is 75% of that base is gold. So that is fixed. We will not do more than 75% of that base. So the margin, which you are required to keep or will we please say 25%, that is always there. So sometimes if the gold price goes up, then the general LTV, as you said, would be only 50%. Then it goes to 60%, 65%. Today, at today's price, the overall portfolio, the LTV is 66%. If the price goes up, it will come down lately. If the price comes down, it will go up. But then we are not -- we don't panic there because these are all gold ornaments. These are our risk mitigate, these are household, gold ornaments, which is used by the people. It's not that just because the price has fallen for a day, everybody will abandon their goal. That is not what we have seen in the last several decades. And in the last 10 years, our figures are all reported public. We had public because we became public. So we have not had any issue because of that all through, and we don't expect anything like that now. So now the final thing is auctioning the gold. We can always give more time to the customer. And today, we -- as a policy, we are not in favor of auctioning gold, we try to keep the optioning to the least possible. The barest minimum, which is required. So whenever customers come and ask for more time to the branch, we try to give adjust the customer and give more time to the customer. We have not lost any money because of that. But in fact, we have gained customer confidence and customers generally feel that we are more reasonable with them. And probably, that is one of the reasons is we are not aggressively auctioning the gold. One of the reasons customers prefer to come to us. Many of our competitors have almost a similar number of branches, but they have only 1/3 of our business. That is because people generally see that Muthoot their gold is safe. That is what people generally want. My gold ornaments should be safe, and that is safe with Muthoot. So even when we carry some NPA with us, probably today, the NPS is low, 0.8% is the NPA. We can actually have that NPS flow and auction the gold. But we don't want to do that. We don't want to -- we want to empathize to the customer and [indiscernible], we can afford to have this NPA in our books, 0.8% in -- having loans. You are sure that the customer will come and take it. Finally, the customer that will come and take it, that is when we go for auction. This year, our auctions have just very, very little. We auctioned only INR 170 crores of gold on a book of INR 52,000 crores, only INR 170. Last year, it was about INR 500 crores. Previous to that, it is INR 1,000 crores. So actually, we are now coming to the fact that we are giving more and more time to the customer so that the least [ demos ] are auctioned. So if you look at INR 171 crores of auctions, in the last full year, it is just 0.03%. It is just nothing. So we give more -- so people generally relate Muthoot Finance as a company, which they feel their ornaments are not auctioned very quickly. It is kept, and they get maximum time from us. Only very, very sparingly, we use the auction method. We have never lost money because of that. We have only gained profit, and we obtained the customers.
Okay, sir. And one last thing on the collection efficiency. So how is it shaping up now in April, May, et cetera?
In gold and all, actually, there is no issue of a collection efficiency because collection efficiency has been very good in March. That is why our NPA is only 0.8%. In the other 2, the home finance, et cetera, the production efficiency was 99% in March. Now we just -- in this month, it is just coming down slightly because of the lockdown, I'm sure it will come back to the 99% in Muthoot Money. It is 97%, and to home finance is 99%. That is in March. April, it has come down a bit, but I'm sure when the branch starts functioning and people are able to go out, we will be able to collect the full amount. So we don't see any big issue there. And also, the portfolio there is very minimal.
[Operator Instructions] The next question is from the line of Dhaval Gada from DSP Mutual Funds.
Two questions from my side. First is related to the MFI business, what is the current Par [ 0 ] in the portfolio? And if you could talk a little bit around collections in April and May, how was this entered in the investor portfolio? And the second question is related to -- if you look at per -- the holding per gram of customer, so about 33 grams is what the customer owns on average based on disclosure. And this number has been broadly steady or coming down in the last 2, 2.5 years. So is it a metric that you look for? And is there a driver to increase? Or how should one think about it? Because basically, the reason I ask this question is when I look at tonnage growth, pre-pandemic as well, it used to be 5% to 6% for the industry, even now while we've had a pandemic year, but tonnage growth seems to be a big challenge for the industry. So how should one think about volume growth for the industry? Yes, those are 2 questions.
So I think we have been talking about this tonnage growth for the last 2, 3 quarters. What has happened is when the gold price is high, I cannot insist on a customer to give you more gold or gold as equal to the gold price, which is -- today, the gold price is also as well the tonnage at the time of 2,500 -- you should have to bring 20 grams. Today, for the same amount, he needs to bring only 10 grams. How can I ask him to do 20 grams? So he will go in and hold. So when the gold price goes up necessarily the gold which he needs to do to us also comes down. And please understand that just keeping more gold with us doesn't give us any income. Our income is derived only from the loan he takes. For the amount of loan, he gives the adequate cold. So the adequate gold today is because of the gold price size, it's lesser than what it was earlier. That is why the challenge is there. If you look at the same gram rate, probably 2 years back, the price would have been only INR 2,000 or INR 3,000. Today it is INR 4,000. So customers will bring in only the required amount of gold. That is where the challenge difference is there. So we did not see anything into the tonnage business. And the gold loan on our company derives income only from the loans which we keep, the amount of loans, that is on the loans, not on the tonnage. So that is growing. We are quite happy. We get the correct -- the LTV based gold is there, we should be happy. So that is the -- this is part of Microfinance. I think our Chief General Manager can tell you something.
The INR 39 on or March 1st 30 day far was...
It's very low. It's actually on -- compared to industry, we are better than the industry standard, the Microfinance.
Sir, the Slide 68 has the Stage 3. I was looking for the overall portfolio overdue outstanding right now. So -- and the collection trends.
Overall portfolio outstanding is INR 3,300 crores.
Overdue, sir. Overdue.
We'll come back to you.
We can take it with Oommen, sir.
The Stage 3 number is INR 78 crores.
INR 78 crores as of March.
Sir, I'll take it offline. No worries.
It is 2% -- 2.2%, yes. The net NPA is only 0.5% because of the promotioning.
INR 80 crores additional provision has been created in this year.
The next question is from the line of Prashanth Sridhar from SBI Mutual Fund.
Most of my questions answered. Just 2 or 3 of them. So one, even due to some price change, if the LTV crosses 75% that is in breach of RBI regulation, right? So we would have to do something to control that. If you could just talk about that. And number 2, if you could just give us the restructuring numbers you would have done in the non-gold loan business? And how the collection trend over there? And number 3, just a bookkeeping question, there's a item net gain on fair value changes in [ motor ] stand-alone, what would that be?
Okay. Now as is LTV, I think I just answered it earlier also. When we give the loan to 75% maximum, 35% is because of the pricing on -- theoretically, if it goes above 25%, we don't need to call back the customer and ask anything. That is not our practice doesn't involve contacting the customer and the same because we still have good margins with us. The margin is still there. So we have not faced any is because of that. So we don't ask them for additional collateral, et cetera. So regulation, I mean regulations also doesn't warrant us to do that. That is number one. Okay. Then second is, even at this stage, we always collect regularly the interest of the customer. So we have an app, which is called [ Click to Call ]. Click to Call app is there. And all this stuff, they can call and talk to the customer just by a click of a button, and that is actually keeping the customers in contact and our staff also are able to easily contact them even during the [indiscernible], we were able to contact all the customers through this new app developer payers, which we have named it as Click to Call, an app which enables staff to connect to the customer immediately as the process in the click of a button. So to answer your question, 75%, even in fact, sometime it breaches, we don't go up to the customer. That is number 1. Number 2 was about...
The net gain on fair value changes. I think you are asking about the income side, right?
Yes, yes.
So that is mostly no investment gain -- the returns from investments in liquid funds, et cetera.
Okay. Okay. So nothing to do with the hedging. That's what I wanted to say.
So that hedging comes under the other comprehensive income. That is after the profit -- PAT. So those numbers are primarily because of the exchange fluctuations happening on the reporting date. Now if you look at last 1 year, what has happened is the exchange rate has gone up and subsequently because it has come down as on March '21. So those fluctuations are captured. But at the end of the day, all these foreign exchange borrowings have been fully hedged. What is going to hit the P&L is only the actual, the hedge cost. All the mark-to-market impact will remain in the OCH.
Understood. Understood. Just on the restructuring in the non-gold loan business, sir.
Yes. Please go ahead.
Just one clarification, sir. At what LTV would you start to take action? Just one follow-up, sir.
No. No. It is not based on the LTV. It is not an Excel formula which runs this business. I think it is actually something I was telling the earlier -- earlier investor also, that we have a good relationship with the customer of the branch. So even if the gold goes into the NPS risk or if it goes across with the NPS risk, we persuade the customer to pay interest. Sometimes, the customers come and ask us, "Please give me 1 month time more, 2 months' time more." If the branch feels that it is a genuine customer, minimum requirements, we give them more time at the cost of keeping it as an NPA in our books, hoping that he will come and take it. So even if it fails after that, we go for auction. So auction is our very, very last resort, and we try to keep our auctions to the minimum. See, our auctions are about INR 1,000 crores 3 years back. Last year, just INR 500 crores. This year, it was only INR 170-odd crores. We are trying to keep the auctions to be minimum possible and give more empathy with the customer so that we don't auction his gold. If we auction his gold, we lose the customer and [indiscernible] customers feel free to come into Muthoot. So they feel we are most reasonable in this respect.
So the restructured loan account is about INR 6 crores? That is a non-gold portfolio?
INR 6 crores. INR 6 crores is the restructured portfolio.
Across everything, HFC, MFI, vehicle finance all put together?
Yes.
Also, I'm talking about the parent company.
Very limited.
Very limited. Other businesses, subsidiaries, it is very limited.
Very limited. Smaller than this.
[Operator Instructions] The next question is from the line of Manan Tijoriwala from ICICI Prudential Asset Management.
Sir, I just wanted to understand, on the OpEx to AUM, we see a dip there. So where do you see it on a stable basis? And what are the incremental efforts taken to bring it down this year?
No. No. That is because the assets under management has grown 27%, and the number of branches, still almost maybe only 80 or 90 branches have gone up. So the per branch business has gone up from INR 8 crores or INR 9 crores to INR 12 crores. That is one of the main reasons why. It is the economies of scale that we are seeing. But that is for this year. Probably in the next 2 quarters, it is -- inch just a little more, but then it may not remain this low because this time, it was quite low, mainly because the assets under management, the denominator went up quickly.
Fair enough. Sir, one question on the gold auction. So I understand you've been keeping it on the lower side. Could you shed some light on what sort of profit or losses do you see on account of auctioning the gold?
So there is no profit or loss there. If we have an excess, we have to refund to the customer. So there is no profit or loss there. Sometimes, we lose some part of our interest, very little part of our interest. That's all. So the loss is always on our side of it. If there is a gain, the auctioning is more, we have to refund it to the customer. We correctly refund it to the customers.
But sir, on the downside, if you were to look at, how much will be the downside in case you lose money on a transaction with the auction?
We lose only a part. See, instead of collecting 22%, 23%, we will end up with 20% in some cases. That's all. It's -- [ as far as we know ]. And that's also only on the interest part. Principal, we have never lost INR 1 until now.
That's right. That's what I was looking for. So just one additional question, how much will be the accrued interest on the gold loan outstanding at the end of the year?
INR 2,145 crores.
INR 2,145 crores.
The next question is from the line of Aswin Balasubramanian from HSBC Asset Management.
My question is with regard to the chart which you've given on the disbursements and collections quarter-wise. So I mean if I look at, let's say, the collection -- monthly collection this quarter is at about INR 7,000 crores versus a couple of quarters back, it was about INR 15-odd thousand crores. So just trying to understand, I mean, is this a function of the rollover being lesser during the quarter? And I mean again, is that connected to gold price falling during the quarter? And like how would the rollover proportion have changed, let's say, over the last 6 months?
We will talk about the Slide 28. Slide 28, in Q1, it was -- mostly, it was a lockdown period. So people were not able to come to the office. We were not able -- both the advances and the releases were low. So what was -- what we lost in Q1, we gained in Q2. That is where you see the difference. So in Q3 and Q4, it will be coming back to normal.
Right. But even if I compare this to, let's say, the previous year also or Q4 or Q3.
Every year...
So this is -- second quarter even is specific due to COVID. In the first quarter, there was a severe lockdown and lockdown restrictions. So the disbursements were low, but we could make up in the second quarter. As we said during that time in the analyst meetings, et cetera, we went aggressive in terms of top-up loans. And a lot of customers benefited out of it. Even at that point of time, the average LTV was quite low. So a lot of customers took the benefit of it, in taking top-up loan. So that's why the existing loans would have closed, and they would have booked fresh. That is the reason why there is a higher churning, which has happened in the second quarter.
Right. And one additional question in terms of, let's say, what will be the average sort of tenor of the loan on the books, I mean, the sort of remaining tenor, the average residual tenor. And how would that have changed, let's say, between 1 quarter, 2 quarters back to Q4? Or it is more or less constant?
I think 95% of the loans are less than 12 months.
At the time of disbursement, you're saying, but I think like...
As on the reporting date, 95% of the loans are less than 12 months duration. About 5% of the loans are overdue. So this includes the NPS also.
And how much would be like, let's say, more than 6 months and less than 6 months?
I don't have a breakup readily available, but most of the loans will be less than 6 months. If you read it together with the other chart in terms of Slide 29, you can figure out how the repayment pattern happens. More or less, it is -- that is the pattern that we have seen in the past. So most of the loans gets revolved in the first 6 months.
The next question is from the line of Amit Ganatra from HDFC Mutual Fund.
I'm referring to Slide #13, the slide on dividend payout. Now in 2015, your ROEs are lower than FY '21. Your capital adequacy today is much higher. Isn't there a case for increasing the dividend payout ratios?
Yes. It's something we'll have to take a decision. The Board has to take a decision on that.
That was one because you will not have a year like FY'21 hopefully in future, right? So in this year, if your capital adequacy will improve and the kind of ROEs that you reported, that just indicates the overall strength of the business. So please take this as a feedback.
I think if you see Slide 48, we are generating an ROE of 27, 28 percentage. This is an [indiscernible] in spite of the higher capital.
No. Correct. So that's one. So that, in fact, is the extent of the business, that capital adequacy is so high despite that the ROEs are, I mean, so strong. So there is a case for increasing the dividend payout. That was the feedback. The second is that last year, now this year, you had given some growth guidance, and you've exceeded that guidance quite strongly. Have you -- any -- do you want to give any growth guidance for the upcoming year?
We have been giving a guidance of 15% every year over the last several years. We have -- next year also, we would like to use that guidance of 15% only. Probably, we should do better. But anyway, we didn't want -- we wanted to do a very conservative guidance. We have given the guidance of 15% for the last several years. Previous to previous year, we grew by 17%. Previous year, we grew by 19%. And last year -- previous to that, we grew by 22%. And this year, we grew by 26%. So probably on -- this year also, we may do better, but we didn't want to give, I should say, too optimistic guidance. We wanted to do a conservative guidance. That's why we have been telling that we will be growing 15% year-on-year, minimum.
The next question is from the line of Alpesh from Motilal Oswal.
Yes. Congratulations, sir. First question is on Slide #31 wherein the active customers and the number of loan accounts are given, right? If I see the trend, 60% of your overall customer base is normally active. So any specific steps that you are taking in order to increase this share of active customers on the pool of your overall customers? Secondly, whether the new overall customer base or the active customers is really growing by 5%, right? So -- and then we are talking about 15% AUM growth. That means we are largely banking on the 8%, 10% kind of increase into the gold prices for that kind of growth, if we are moving to 75% kind of LTV. So what is the strategy at play here? And the last question would be just a data point. What percentage of customers have got more than INR 1 lakh as the ticket size in terms of the AUM and the number of customers?
So I think that you are looking at the number of customers. These are the number of active customers. Our customer base is much more. It is more than 2 crores customer base we have. Some customers take -- pledge their loans, take it back in 1 month, and they may come back after 3 months, 6 months, 8 months, 9 months. So our customer base is 3 to 4x the active customers. So active customers...
Sorry to interrupt. So how do I read this, number of loan accounts are also the active loan accounts or those are the...
It is active loan account. These are active loan accounts. The customer base is much higher. So some customers who have been transacting -- we have a few systems of calling up customers. We call it win back customers. So we call them back and tell them about these things, and they come back to us because they have banked or done business with Muthoot earlier. So the churn is very high. So people keep it. After 1 month, 2 months, 3 months, they take it back. Then they go back. They may come back later, probably 2 months, 3 months, 6 months. So our customer base is very high. The active customers -- active loan accounts in the books is what you see there.
One customer will have a 1.6x as the loan amount. Is that the way to gauge this?
Exactly.
And what is the strategy to increase the active customer base? So -- because its growth is hardly 4%, 5% on an -- every year, and we are not growing in it aggressively, so how are we -- because our growth would largely be dependent upon the gold prices. So how are we planning to address this issue?
So we have plans of that. We have very many marketing and sales techniques in place, and we have a good marketing team. We have a good research team also. We utilize all those things to get new and new customers. Finally, our AUM is also growing, and we have been doing that even in spite of when the gold price fluctuations were there, still our AUM has been growing. So when people need money, they will come to Muthoot.
Okay. And lastly, the data point, more than INR 1 lakh as ticket size as a percentage of AUM and the number.
That will be about 50 percentage.
That is number of customers or the AUM?
That is on the AUM.
And what would be as a percentage of the number of customers?
Number of customers, I don't have that data.
But safe to assume around 20% or that will be too...
Our average ticket size is INR 60,000 -- average ticket size is INR 61,000.
The only problem with that is it's just averages. So I was looking for specific data point.
So that only means that we have sufficient number of more than INR 1 lakh customers also. INR 1 lakh is not a big amount today.
And the next question is from the line of [ Vikas Kasturi ] from [ Focus Capital ].
Sir, I had a couple of questions regarding your -- so say for the next 10 years or so, what would be your sort of a plan for growing the business? So would it be the increase of newer products related to gold loan, newer branches? And some sort of some light on that, sir. And second question would be, sir, how are you grooming the next generation of the Muthoot family in the business?
Thank you. Today -- actually, on a lighter side, we're actually thinking of tomorrow, tomorrow, are we able to open the office because of COVID. That is the lighter side. That would be tomorrow, is there a lockdown, is there a lockdown in my area, et cetera. That's on the lighter side. On the serious side, yes, we are always thinking day in and day out, day in, day out on how to grow the business. Not only 1 year, 2 years, 10 years. We are always thinking about it, strategizing it, et cetera. So I don't think I can explain all those things there. So we are definitely on top of it. We are aware of it. We want to grow the business. Somebody -- Digant was saying earlier that we should reach INR 1 lakh crore. Yes, that is a dream for us also. So we should look at that. The next generation, I think we are starting to get into the company. One of the Chairman's son has already become the Deputy Managing Director. He is based in North India, Delhi. He has been there for the last 20 years. So they are looking after the North India business. The other boys are also gradually coming into the business. Probably, let say, we have some plans for them also to enter into the next generation also coming into the business. That is only the generation. The other senior employees are also being groomed to take up more and more responsibilities in the company. And the newer verticals, et cetera, we are also having newer people coming in to take up senior position in newer verticals. In the existing verticals, the senior people who have been with us are continuing to take more and more additional responsibilities. So succession in the family side and the nonfamily side, both are on track.
The next question is from the line of Vikram Subramanian from Spark Capital.
First of all, my deepest condolences on your loss, both personally and to the entire company. So my question has mostly been answered. Just a clarification. So again on the LTV. Just to clarify, if the falling gold price environment has continued into the current quarter as well, that is 1Q, am I right on understanding that at a branch level, to the new customers, we would have still offered incrementally 75% LTV? There wouldn't have been any change in that. We won't have reduced LTV -- the LTV that is offered to the new customers. Am I right in understanding that?
So no, the LTV is set every day based on the gold price as on the previous day as per the RBI working. So whatever is the maximum possible subject to internal policies, we give the loans to customers. So sometimes it can go up to 75%. Sometimes maybe because of the fluctuations in the gold price, we don't permit maximum up to 75 percentage. So that is the general rule.
Okay. Okay. Got it. And in the presentation, you have mentioned about the number of new customers that have been onboarded. So that's coming close to about 7 percentage cash loans to new customers that's coming to about 7 percentage. Could you please give the number and the trend of how many customers have either closed accounts or have gone back from active to inactive?
See, there's a general number. We expect that our total customers who have had accounts with us in the last 4 years should be in the range of 2 crores. So today, actively, 50,000 or 50 lakhs of them have -- are having a loan today. They may come back after 1 month, 2 months, 3 months, 6 months. They will come back at any point of time. They are our customers. It is only when they need a loan they come back. This is -- actually, we should not compare this to the home loan or a vehicle loan, et cetera. This is a very quick loan. There is no entry load. There is no exit load. And whenever customers get the money, they would like to close the loan and go. So -- because they pay interest to you on the actual number of days. So whenever they have money, they close it. And whenever they need money, they quickly come to us. So these are our active customers. So what you see is there is new customers, which is an addition to the hypothetical figure of 2 crores that is being added, newer and newer customers. So some customers, after 2 years or 3 years, they may not even come back. But we wouldn't know that they are not going to come back, but they still are our customers. They are still our customers. Probably after 3, 4 years, probably would have died and gone or maybe changed place, et cetera. But we still have a very big customer base with us. The active customers who are having a loan today is what you're seeing there.
Got it, sir. So just to understand that from a fundamental trends perspective, I got what you were saying, but -- so along those same lines, once the peak of the first wave got over and things started opening up, by fourth quarter, that is Jan, Feb or March, when things started opening up more and more, I'm just trying to ask, was there an attrition in customers? Where we seeing an increase in attrition in customers as normalcy started seeping into the economy?
So there is no attrition of our customer. Customer doesn't -- he takes the loan and goes home. So we don't call it as an attrition. He has crossed the loan. He has taken the ornaments and gone home. He'll come back after 1 month or 2 months.
The third quarter, we had added 3.88 lakh customers. In the fourth quarter, we have added 3.61 lakh new customers.
New customers.
So that is a regular phenomenon. We cannot expect the same customer to come again and again. Probably he might come after 1 month or after 6 months. Our ability should be to deliver the service to whoever comes in. We cannot force any customer to take a loan, right? So our ability to bring more and more new customers so that there is a ready pipeline of people wanting to take a loan.
The next question is from the line of Sayantan Bhowmick from Pinebridge Investments.
I just had one question. I just wanted to get a sense of the current quarter and if I had to compare it with first quarter of FY'21, if you can please give some color as to what is the current situation on the ground. And what are your thoughts on the current quarter? That's the first one. And second is more of a data housekeeping. If you could just give the total provision that you hold in the stand-alone entity, and that's including standard specific -- basically the total provision that we hold.
Thank you. I think this year, from ground -- from what we are hearing from our branches and managers and staff, et cetera, almost the same as last year. But the small difference which we have seen is last year, the first year lockdown was absolute lockdown. This time, it is not that. This time, it has been left mainly to the states. So some of them have given, what should we say, localized lockdowns. So some places, there's fully lockdown. So that is one really. But then this time, it is extending a little more I think so because I see this time more and more deaths happening. That's what personally I see. Last time, the number of deaths are not this much. This time, I don't know. Number of deaths are high. But then as a -- from the business side, I think it is almost the same. So last year also -- last year, it started in end of March. This year, we started in -- the second wave started end of April. So there's only 1-month difference. So quarter -- this quarter will be a difficult quarter. It will be a difficult quarter because it's not opening up. Yes, probably by 15th of June only businesses will get opened up. So this quarter, we should see a very, very slow growth or maybe steady state of affairs. And next quarter, I'm sure when business starts reopening, things will be much better and people will start restarting their business. They will need quicker loans and Muthoot will be there or others will be there with gold loans to offer customers to restart their business and also for expanding their business, et cetera. So we should see better growth in the next 3, 4 months. Surely, we should see that. Your next question was about...
ECL provision is INR 625 crores. Apart from that, we are keeping some extra provisions of about INR 295 crores that we have kept as excess provision in the balance sheet. So totally, we have around INR 920 crores of provisions.
Now that you asked about provisions, there's actually no need for any provisions in gold loan company because we never have NPA loss. We have never had an NPA loss. We don't technically really -- practically, we don't need any provisions. So actually, that is also a reserve for us. It's a network for us actually. So that's on the -- what should we say, not a technical side, but it is actually -- we don't need any provisions. None of these things translate in the loan loss because of this NPA, et cetera. We just keep it there. That's also part of the network, you can say.
The next question is from the line of Susmit Patodia from Motilal Oswal Asset Management.
Sir, my question is on excess liquidity. And what is the thinking now around that? You've been through one of the toughest years, and it was not as bad as we had thought, anybody has thought for that matter. So I was just wondering, what is the excess liquidity now? And what is the thinking...
Sorry to interrupt, Mr. Patodia. Sir, your audio is not clear, sir.
We heard it. We heard it, sir. We heard it, madam. No issue.
No. Like we explained in the last -- I think last 4 quarters, we have answered this. In today's environment, we need to keep extra liquidity. One, there is an uncertainty. Second, RBI also has brought in the LCR requirement. So to meet that also, we need to keep additional liquidity. Third point, like last year, we have -- we could grow by 26%, 27%. Because we were able to raise resources in advance, we were prepared to meet the demand -- additional demand in a very short period of time. So these are the 3 reasons why we should keep extra liquidity. Of course, there is a negative carry. But we are also now raising resources through commercial paper, et cetera, at a very low rate. So net-net, I don't think the negative carry is not much.
So how much will be the excess liquidity now, Mr. Mammen?
Yes. As on the reporting date, I think it's around INR 7,000-odd crores.
So you will keep that proportion of around that number until things become normal. Is that understanding correct?
It's not that there is no hard and fast rule that we should keep INR 7,000 crores or INR 8,000 crores. But then we will have good liquidity for the customer. Even if there's a small negative carry there, I think we can -- it's better to do that.
The next question is from the line of Dipanjan Ghosh from Kotak.
Just 2 questions from my side. One is, do you have any plans to infuse capital in the subsidiary? The second is, what is the plan for branch addition incrementally over the next few years?
So maybe one question earlier was that, no, we are having excess capital. So we don't need any additional capital. One of the growth requirements, we are -- we already have capital, and we are also internally generating additional capital. In terms of the branch addition, generally, we would like to have about 100 or 150 new branches. But because of lockdowns, et cetera, there are certain challenges. But I don't think -- no, our focus is not on the branch additions for driving growth. Our focus is on existing branches to bring in more customers and availing services from our branches. So that is a focal point for growth in business than new branches because 100 or 150 branches on a 4,500, 4,600 branches is not going to be material.
Just one data housekeeping question. You mentioned the number of INR 170 crores of auctions for FY '21. How much of that will be in the fourth quarter?
So no, we -- last year, we auctioned INR 171 crores. And out of that...
A good part of it was in the third and fourth quarter because the first quarter is all lockdown. Second quarter, it is lockdown.
And generally, we give good time to the customer, like MD, sir, mentioned earlier. So INR 150 crores we auctioned was pertaining to 2006 loans, which are originated in 2016, 2017, 2018, et cetera.
Very old loans.
Very old loans. So we are giving adequate time. Of course, our control is on the collateral quality. That's all.
The next question is from the line of Sanket Chheda from Batlivala & Karani Securities.
Congrats on very good set of numbers. My question was particularly on the funding mix. Now that we have received a rating upgrade, where do you see the shares going up in terms of listed NCDs or -- that definitely will go up, but where the share would come down, either bank borrowings or do you see ECB shares coming down going ahead?
So no, today, we have a good, decent, diversified funding mix. I think we will try to raise all sorts of funding banks of NCDs, retail NCDS. In terms of external commercial borrowing, rate plays an important role. But again, it is a very, very long-term money. So we have not taken any call on that. So depending upon the growth and funding requirements, we'll take a call -- a decision on that.
Okay. And sir, on this tonnage growth, if I understood correctly, by the end of Q4, we had reached an LTV of 75% order book, which has now come down to 65% because of the gold price, right? Is that correct? And that's why the tonnage growth was lower than the AUM growth?
Yes. So if you look at the gold price has fallen to about INR 4,000 towards the end of March, but subsequently, the gold price has recovered. I think now it's around INR 4,500, INR 4,600. So when we have drawn up the reports, we have considered INR 4,000 as the gold price. That's why the LTV is INR 75 -- 75 percentage.
Okay. Okay. And sir, last one. Again, this question was asked that whether we maintain our 15% AUM growth guidance going ahead. In last quarter, we were confident about 15% plus. But this quarter marks a remarkable performance, wherein the gold prices were down 10% to 12% in the quarter, still we managed to grow 5%. So we would still refrain from guiding anything more than 15% going ahead?
It is just that we would like to be on a conservative guidance. That's all. Nothing more than that. We don't see anything more than that. Just giving a conservative guidance of 15%. Probably, we would like to tell 15% and achieve more rather than say 20%, 25% and achieve lesser.
Sure, sir. And lastly, the auction in Q4 was how much? INR 170 crores was for the full year. But in Q4, it was how much?
I think majority was in quarter 4 because that was the time when everything was open.
Sure, sir. That's all from my side and congrats again on a very good set of numbers.
Due to the time constraint, we'll be taking the last question for today, which is from the line of Vikash Agarwalla from Bank of America.
Congratulations, sir, for a great set of numbers. Just a couple of questions. Most of my questions have been answered, but a couple of questions. Would love to hear your thoughts. One is on the disbursement side. Can you give us some sense of what was the disbursement trend in the month of April and May compared to the disbursement trend we have seen in the last couple of quarters? So that's one. And the second question is on the borrowing side. Can you also give us some idea on what was the incremental borrowing cost, meaning all the cost of incremental borrowing in the last quarter, which will give us an idea of the current cost excluding the legacy loans?
So the April and May, it has been lockdown here and there. Most of the places, it's locked down. Business is not -- we are not able to open the branch. Customers are not able to come. So this quarter, the business will be much, much lesser. Compared to last year, maybe April and May, it will be almost same, I think. Last year, April and May also was the same. We were in the same situation. Probably last year, it was March and April. This year, it's going to be April and May. I think that's going to be what -- but then we are sure all the demand, which is -- all the business, which we -- which is not able to come to the branch because of lockdown in April and May will come in June, July, August. So that's the first part. Second part, incremental, I think Oommen will...
In terms of the fundraising, of course, with the rating upgrade, we have done a public issue. We have raised about INR 1,700 crores of NCDs through public issue. There, the rates have been in the range of maybe about 6.6 to 7.1 on a 2-year and a 3-year. I think the bonds are traded well. I think we should see better levels coming now on the NCD front. So there is a lot of room for bringing down our incremental cost of borrowing.
Sure. Sure. Maybe, sir, just one small follow-up to this is you mentioned about ECB being a factor of the cost. And previously, you had mentioned that the offshore cost was slightly higher than compared to what you're getting onshore, and onshore market has actually done well post that. So from that perspective, how should we look at the cost-benefit analysis for ECB? And then something which you also mentioned about ECB being the long-term money. So how should we look at that? And then where does ECB fit in your overall funding mix?
See, ECB expenses are -- the cost for fundraising to ECB is not currently being looked at because the domestic fundraising happen -- can happen at a very much, much lower cost. So currently, we are not looking at the ECB. In terms of very longer-term funding, we have been able to raise 10-year money also. I think those ones are also locked down in the domestic market, 5 years and 3 years. So long-term funding is currently available. So currently, we are not looking at ECBs, but in case there is a larger growth available and certainly -- and if there is a very -- need for a very long-term money, probably we can look at it. But because of the cost factor, we are not currently looking at ECB. It's only because of the hedging cost.
I would now like to hand the conference over to Mr. Kunal Shah from ICICI Securities Limited for closing comments.
Yes. Thanks. Thanks, Mr. Muthoot and Mr. Mammen for patiently answering all the questions. And thanks, all the participants, for being there on the call. Thank you.
From Muthoot side, management side, I also take the opportunity to thank ICICI and also the organizers for this and also definitely the participants who have always been our strength. And you have always given us strength and guidance, and there's probably a lot of suggestions also. Suggestions are always welcome. Thank you all for supporting us. From our side, we will try to do the best possible.
Thanks. Thanks, sir, and all the best. Yes.
Thank you, Kunal. Thanks for arranging the call. Yes.
Thanks.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.