PNB Housing Finance Ltd

NSE:PNBHOUSING

Earnings Call Transcript 2022-Q4

[Operator]

Ladies and gentlemen, good day, and welcome to the Q4 and FY '21/'22 Earnings Conference Call of PNB Housing Finance Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Ms. Deepika Gupta Padhi. Thank you, and over to you, ma'am.

[Deepika Padhi, executive]

Thank you, Margaret. Good evening, and welcome, everyone, and sorry for the delay from our end. We are here to discuss PNB Housing Finance Q4 and financial year '21/'22 results. You must have seen our business and financial numbers in the press release and the presentation is also uploaded just now, shared with the Indian Stock Exchanges and it's also available on our website www.pnbhousing.com.

With me we have our entire management team across vertical sitting over here led by Mr. Hardayal Prasad, Managing Director and CEO. We will begin this call with the performance update by the Managing Director and CEO, followed by an interactive Q&A session.

Please note, this call may contain forward-looking statements, which exemplify our judgment and future expectations concerning the development of our business. These forward-looking statements involve risks and uncertainties that may cause actual development and results differ materially from our expectations. PNB Housing Finance undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances. A detailed disclaimer is on Slide 40 of the investor presentation.

With that, I will now hand over the call to Mr. Hardayal Prasad. Over to you, sir.

[Hardayal Prasad, executive]

Thank you, Deepika. Thank you, Margaret. Good evening, everyone, and welcome to our Q4 and financial year '21/'22 results. On behalf of the company, I extend a very warm welcome to all of you.

Let me start with the business update. As we informed during the last quarter, we intensified our focus on retail disbursements. In Q4 FY '22, we have disbursed INR 3,698 crores, registering a growth of 31% on a quarter-on-quarter basis. For financial year '22, we have disbursed INR 11,246 crores, registering a growth of 8% as compared to the previous financial year. Of the total disbursement done during the year, 97% was in the retail segment. On the back of the retail disbursements, we [ observe ] decline in the loan assets during the quarter. The loan assets stand at INR 56,889 crores as on 31st March '22, as compared to INR 56,798 crore as on 31st December '21.

The retail loan assets increased by INR 693 crores to INR 49,730 crores, and corporate loan assets decreased by INR 602 crores to INR 7,159 crores. The corporate book has registered a decline of 39% during the year, primarily on account of sell-down accelerated payments of INR 2,664 crores during the financial year. As per our ticket strategy, we have reduced our corporate assets to 11% of the assets under management. As on 31st March '22, our AUM for the Unnati segment was INR 3,108 crores. With our focus on this segment, we have increased our presence to 29 new locations operationalized during the second half of the financial year.

Talking about our asset quality. As a result of our continuous efforts to improve our asset quality, our retail GNPA registered a decline of 140 basis points quarter-on-quarter to 3.6% as on 31st March '22. The corporate book GNP stood at INR 2,561 crores as on 31st March. The increase in corporate GNPA is on account of 1 large Gurgaon-based developers that moved from stage 2 to stage 3. With this, the gross NPAs of the company stood at INR 4,332 crores as on -- which is 7.61% of loan assets as on 31st March. The net NPA as on 31st March stood at 4.49% The retail collection efficiency for quarter 4 FY '22 stood at 99.5% as compared to 98.5% in Q3 FY '22 and maintained around 98% during the whole year.

Talking about the liability, the company has registered downward trajectory in the cost of the borrowings as on a quarterly basis. The incremental cost of borrowing for FY '22 stood at 5.8%, registering a decline of 96 basis points as compared to FY '21. The cost of borrowings declined by 61 basis points to 7.3% as on 31st March '22. The Company has maintained liquidity of around INR 5,400 crores as on 31st March '22.

The net interest income during the quarter stood at INR 377 crores compared to INR 593 crores, registering a decline of 37%. During Q4 FY '22, there is a net income reversal of INR 58 crores on derecognized loans due to unwinding impact of spread contraction and runoffs whereas -- there was a net positive impact of INR 58 crores on derecognized loans due to fall in assignees' MCLR in the same quarter previous years. Further in Q4 FY '22, there is an IndAS adjustment, net interest income reversal of INR 70 crores.

The profit after tax for Q4 FY '22 increased by 33% to INR 170 crores versus INR 127 crores for Q4 FY '21. The company is comfortably capitalized with CRAR at 23.4% and Tier 1 at 20.7%. The leverage has come down to 5.4x as on 31st March '22 with reduced share of corporate book. On the back of improvement in PNBHFL's leverage, a reduction in the share of corporate book, ICRA, on April 12, '22, revised the nonconvertible debenture rating outlook to stable from negative.

On the strategic priorities laid by the company in January '21, we are pleased to inform you that we have achieved sustainable business performance for a few key monitorables, which are maintaining adequate provisions, maintaining over 80% of our turnaround time, maintaining healthy mix of retail. The company will continue its focus on retail loans, including self-employed and affordable housing, enhanced credit underwriting processes, improved collections and upgraded technologies to improve -- to grow and improve efficiencies. The Board of Directors on March 9, '22, approved capital raise of up to INR 2,500 crores through rights issue.

With this, I would like to open the floor for questions and answers. We have the entire management team sitting over here, and we welcome any questions that you have, and we'll be more than happy to answer that. Thank you very much.

[Operator]

[Operator Instructions] The first question is from the line of Aditya Doshi from Chanakya Capital Services.

[Unknown Analyst]

Congratulations on the ratings outlook update and the rights issue approval. My question was from the long-term industry perspective. With the large HFC merging into a bank and recent regulations have been amended in line to be in banks for NBFCs. How do you think a sustainable model can be made for NBFC HFC for the next -- in a long-term horizon? I understand we need NBFC in a country like us as we do different segments. Second, what a data keeping question. So what is the [ BD out ] percentage? And third, the large corporate slippage in Stage 3 of the Gurgaon account, how much provision has been made in the books up till now?

[Hardayal Prasad, executive]

I'll talk to you a little about the growth strategy and the impact of the announcement that has been made within the merger. So as a receiver focused housing finance company, we will leverage. I'm very clear about that we leverage our expertise in self-employed and mass housing where the company has a finish in terms of distribution network. In the market, we are known to be extremely good in underwriting, not only in acquisition, but also in underwriting of the self-employed and other books. So we are going to continue to look at it. There are massive opportunities coming in. And there is a cycle in the housing industry that is very clearly visible.

So the underwriting capability services will play a major role in terms of the acquisition and underwriting. Additionally, the company will also really focused on affordable segment, as we have mentioned it earlier, which is the Unnati segment. We have created a vertical. We're bringing in -- we have opened 29 branches. So the retail disbursement is going to continue to be the major focus area. And what are going to do is that, we have already brought down our corporate book to about 11%, which is something that we had very clearly said that we'll take it down to 10%. And after that, we will start looking at it.

So once the decision is taken at the right appropriate time on what exactly we are going to do at the corporate book, that is one which has an opportunity of giving us higher REIT and it also has opportunity of retail linkages that come. We have already opened a massive amount of APF tires that we have. And these builder tires play a very important role in terms of the leakages that we have. We have again reconnected with all the DNA, DSTs and everybody to ensure that there is a significant amount of business that keeps on coming and flowing in.

One of the biggest things and actually that's what going forward, that should be an important milestone. But we are actually in the process of upgrading our technology, our acquisitions platform, our business rule engine. Now these are some of the things that will help us significantly in handling very large volumes. Once we start handling large volumes with the acquisition model and the automated underwriting model, it is at that stage that we should be in a position to breakeven very quickly and start handling large volumes, which the market today is ready. If you go and talk to the market, the market says, there's massive opportunity. All of us are fully aware.

Another important significant thing that we have done is that we have also tied up with 2 banks on the core lending. The last one has been with the largest bank. And they are very upbeat, we are also very upbeat, so wherever we find that there is an interest rate arbitral, and it's again, we can sell our product, we are going to push that. So the growth strategy, this is what -- and the capital raise as it comes, we are going to ensure that these things are taken care of. But on the other things -- BT out for the year was 16.7% approximately. So that's how it was. Earlier, it was more than 18%, which has come down now to some extent, and it's already under control.

[Unknown Analyst]

Okay. And regarding the large NPA account of Gurgaon, which is related to stage 3, how much provision as of now we have on the books?

[Hardayal Prasad, executive]

See, the company has -- overall level in the corporate book in stage 3, we are maintaining the stage 3 company ratio of around 46%. And on those lines only, we have been building our provision for all the fresh accounts -- on the fresh slippages what we have.

[Operator]

[Operator Instructions] The next question is from the line of Himmat Anand, an individual investor.

[Unknown Analyst]

And I'm actually not really happy looking at the financial numbers. And I would like to know what your view that why the company has not been able to bring any growth since its IPO and the share price has disgusting massively because of that. And what would you like to say on the rising percentage of gross NPA and net NPA as well as something concrete about the rights issue which got approval last month?

[Deepika Padhi, executive]

Sir, on the rights issue, what we can say is that the Board has approved the capital raise of up to INR 2,500 crores, and we have started the process. And with the bankers and retail counters all on board, the time lines would be, of course, contingent on the market conditions as well as the final approval from the Board. PNB has already applied to the RBI. This is the communication which we have received last from them as well. So this is where we are. I can just say -- we can just say that the work has already begun on rights issue, and we are working on to that front with all the councils and bankers onboard.

[Unknown Analyst]

Yes. But Reliance Industries announced a rights issue, they were ready with the details, upcoming details of ratio and everything in the next 10 days, and it's been already a month that the company doesn't look like in a position to have the details.

[Deepika Padhi, executive]

Yes. So if you recall, when we had also announced after that, PNB had also shared it's press release to the stock exchanges where they've clearly mentioned that they have the intention, but they need the approval from the regulator. So this is where the status is. I mean the example which we are taking, there are a few regulatory approvals which are required and because of this we will not be in a position to give any further details to this thing. Well, as I mentioned, the councils, the bankers, everyone is onboard. We are working with them on the requisite documentation and everything.

[Hardayal Prasad, executive]

Two things. One is that actually was the company. The company has done everything possible to ensure that the moment the approval is there to the PNB from the regulator, we are ready to go. So it's just that approval that is expected. Whenever it is going to come from the regulator, we are -- everybody remains committed towards raising the capital as quickly as possible.

[Unknown Analyst]

And anything that you would like to tell the other shareholders as well regarding why the gross NPA is having so much that it is becoming so threatening that in the coming years it can't be denied that the company might go into liquidation because of that?

[Hardayal Prasad, executive]

See, I think we have to see the things in a better perspective. The statistics actually truly saying that there's a rise in NPA, but we need to understand the reasons behind the rise. I think we have already discussed this thing and company has taken lot of initiatives. I would just like to think put the things into that perspective.

On the retail side, if you see the company's NPA numbers in absolute term, it has risen from the level of INR 600 crores to INR 1,200 crores in March '20. Then there is a -- due to the COVID impact, okay, it shoot up to a level of INR 1,600-odd crores. Then with the RBI circular of November 12, we did clarified that, there was an addition of INR 829 crores. I'm talking about just retail. So that take us to the level of somewhere around INR 2,431 crores of NPA.

And today, after the tremendous efforts, once we get all the legal resolution channels available at our disposal, which is SARFAESI, our retail NPA numbers are standing at INR 1,770 crores. So the COVID impact was large. There is no denial that we should have been done better because our total dependence on the resolution goes to a legal SARFAESI channel, we learned during this period, we strengthened a lot of early delinquency behavior resolutions, we strengthen our team, we worked on the advanced analytics and today our position is that from the level of INR 2,431 crores of NPA, we're at INR 1,770-odd crores on the retail side. And we are quite confident that going forward, our NPA resolution with these efforts will continue and will perform better.

One should not -- just a second. Now I have talked about the absolute numbers. Now if you look at the denominator side, the denominator continues to degrow. I mean after 9 quarters, the organization has achieved -- in this quarter per se, a positive growth in the portfolio on the retail side. On the corporate side, yes, we have our own share of problems. We are resolving it. We have resolved in the last 2 years, some [ deactivate ] account, we have given already information about this. In many of the accounts, resolution is going on. Unfortunately, we have got a one large exposure slipping into NPA in this quarter. And we are working on it. Hopefully, we will have a resolution very soon around those. But rest assured, in all those assets, wherever you are working, we have got a good cash flows underlying, good security and dissolution is also on the cards.

So this is the -- I don't want to say that the situation is so bad that it could go in liquidation, I was very clear. One is that there are 2 very, very good green shoots. One is the first time after a long time that the company actually has shown a positive growth. It's almost about INR 600 crores, INR 700 crores of growth that has come in the retail. The second is almost about INR 600 crores, INR 700 crores reduction in the NPAs of the retail, which is significant, let me tell you. After all the COVID-related problems, the kind of book that we have, there was this issue, but however, the company has started.

Lastly, the total provision to total asset is 4.5%. Now this big account, I mean the situation would have looked so good if this large account, which is a Gurgaon-based developer, if this account would not have turned NPA could have looked absolutely good that -- I'm not saying that it's absolutely amazing. But the journey towards that would have started very clearly. Now this is one of the largest builders of India with a tie up with another second largest, third largest builder in India. So there are some disputes that are going on. Those disputes have resulted into this account, which has gone into NPA. We are trying to resolve our debt. We have already taken projection -- symbolic projection of the property.

So we are trying to resolve it as quickly as possible. It is multiple times than the value of that property -- the value of the loans, outstanding of the loan. So we are very confident that we are working with -- the way we are working with these players, we should be in a position to actually start resolving lot of accounts that we have already done, and we will continue to look at this.

[Unknown Analyst]

Yes. Okay. And don't you think that the absence of the valuation we got last year when the QIB was done in favor of Carlyle and General Atlantic and which was bringing Aditya Puri on board. The company has suffered a massive setback that if Aditya Puri could have come on Board, the shareholder value would have been tremendously unlocked. And the company would have readily gone into a very positive perspective from the market approach. And just -- as there is a mail absence of valuation report cost, all that Supreme Court legal drama, all that happened and then appeal and everything, because of that, the company lost opportunity as well as growth.

[Hardayal Prasad, executive]

I would not -- we'd not like to comment on it. The matter stands unenclosed. We have whatever was required to be done, we have done it. And at this stage, going back 6, 7 months and reopening something that -- I would not like to comment on it, we'd like to move forward now. And by announcing the rights issue, we're moving forward.

[Operator]

[Operator Instructions] The next question is from the line of Rikin Shah from Credit Suisse.

[Rikin Shah, analyst]

I just have one question. I wanted to understand if you could help simplify what is driving this net interest income reversal on derecognized loans due to unwinding of the spread contraction versus the gain in the previous year? And for how many quarters do we expect this to continue? Is there any kind of indication you could provide when this could stabilize?

[Unknown Executive]

See, when you look at the yield, the spread contraction is primarily on account of vertical reasons, we did for 2 large accounts fully in this particular quarter. So on account of that, as a standard, whatever interest which we have recognized earlier in those accounts needs to be reversed back to the P&L. It is on account of that particular piece, there is a contraction in this -- in the interest rate, which is the yield you were looking at as of now. So if you adjust a particular one-time adjustment which has been made in the rules of accounts on account of making provision against a large account, yield would be up by 50 bps.

[Rikin Shah, analyst]

And for how long we have been having these reversals for a few quarters now. So any indication on when this could stabilize? Or we do expect this reversals to continue in the near term?

[Unknown Executive]

See, it depends. These are the accounting adjustment depending upon when a particular account is turning to bad and needs to be written off, so the income needs to be reversed back. So we are on a growth trajectory and on a recovery phase. So we don't think that in the near future we would be like -- we would be having the subsequent reversal. These are the IndAS-related adjustment and the notional adjustment. But the overall yield on the pool is pretty much stable.

[Deepika Padhi, executive]

So Rikin, just to add to what Manish mentioned, there are 3 reasons because of which the interest income has come down. One is that there is a decline in the corporate loan book, which is of a higher rate, higher -- it gives us higher yield. The second reason is the repricing or the repricing of my retail book to some extent that also impacts, but 2 major for the reasons because of this interest income has come down. One is a reversal of income because of securitization. We have seen a negative impact of INR 58 crores during this quarter, which is Q3 -- Q4 FY '22. This negative -- this was actually positive INR 58 crores in Q4 FY '21. So that's the kind of impact we have seen because of the securitization, the securitization impact.

And the fourth is, there's some IndAS adjustment on the reversal of interest income on some of the corporate accounts and the net -- the net of that is around INR 70 crores. So overall, because of these 2 factors of securitization and the reversal of interest income, we see an impact of around 50 to 60 basis points on our yields. And accordingly the impact of course comes on to the spread and NIM sales as well.

[Unknown Executive]

Quarter numbers can also give the annual numbers again on the...

[Deepika Padhi, executive]

On the annualized -- on the FY '22, when we talk about the same thing, the primary impact is because of the securitization. So there is a negative impact of INR 216 crores in FY '22 because of the securitization, whereas it was a positive impact of INR 178 crores in FY '21. Net impact actually is like approximately INR 400 crores, which comes on to the year and hence the EBIT.

[Rikin Shah, analyst]

And maybe if I can just squeeze in one more question. I just wanted to understand what is your best interest rate on the retail side, retail mortgages is what I'm looking at. And what's your view on interest rate and trajectory from here in the sense that are you going to take any further cuts? Or this is bottom, pretty much bottom of where we are?

[Unknown Executive]

Yes. So on the overall AUM is we are currently at 8.80% and on the ENR front, it is 8.74%. So on the incremental side, we are doing business at 8.44% that was what the incremental yield for the financial year '22 was. So we have seen that last few quarters we were not able to get the interest -- our interest rate gap was too much, and our book was also not growing. So to ensure that we also have the positive growth on the R&D business growth, we try to seek out the opportunities wherever that was possible due to the lower cost of borrowing also some impact on the cost of borrowing. Because of that, we had those opportunities, and that's how we have been able to bring down some amount of rate of interest. There were 2 reasons. One was to ensure that we were able to retain our existing book and second was also to have an incremental upside on the fresh disbursements.

[Operator]

[Operator Instructions] The next question is from the line of Miten Lathia from Fractal Capital Investments.

[Miten Lathia, analyst]

Just wanted to understand the Unnati outlook. So we've sort of pretty much has similar AUM at the year-end of last year. If you could sort of give some sense of what that group should be a couple of years out or 3 years out, which is your plan?

[Unknown Executive]

Yeah, on Unnati, yes, the company's focus has remained. And in this particular quarter, we have been able to get 29 -- open new 29 new branches across pan India. And the focus will continue to remain there and we'll also open a few more branches in the next couple of quarters where the business opportunities would be there. So as of now, we have already -- we are doing approximately about -- close to about INR 90 crores, INR 94 crores kind of a business in a month. And this will grow as we open up new locations and new branches. For the pan India, we have done INR 794 crores worth of disbursement in financial year '22, and that will continue to grow from here on with the increased focus on the Unnati business.

[Miten Lathia, analyst]

Then there is -- that is the level of disbursement, the rundown shouldn't be as deep, right? I mean what are you missing here?

[Deepika Padhi, executive]

Miten, can you just repeat?

[Miten Lathia, analyst]

So if you overlay the last year end's closing AUM on Unnati and the disbursement that you had, the rundown on the book seems pretty steep. So I was just trying to understand what am I missing.

[Unknown Executive]

Let me tell you what we are looking at Unnati is a completely new Unnati portfolio. It's going to be a new product with a completely new with this 29 branches, the model is totally different. We are no longer going to now work on this product as we source business on the prime segment. The way we do business, the same people going ahead and bringing in. Now here we are looking at ticket sizes, which are actually going as low as INR 5 lakh. So totally different model. So the growth you will not see in the long term. These are numbers that are going to be reflected.

And secondly, based on the risk metrics, the interest rates will also vary. So it's going to have a little more -- maybe about 100 basis points more yield on the total loan. So those are -- I think that is more critical from our perspective. And once we start these 29 branches, which we have opened from December, which they are functioning now. Once they start kicking in, you have to give about 2, 3 months for these launches. Once they start kicking in, I think we would like to talk to you on the number of loans go and the portfolio will come subsequently.

[Miten Lathia, analyst]

I was wondering if you have a target in mind to get to for the [ INR 2 crore ]?

[Unknown Executive]

Target, you have the target? I think we'll share it. We will see -- I think we don't -- we'll let you know.

[Deepika Padhi, executive]

Miten, we are -- as you are aware, we are in the midst of this rights issue and we are working on it. So we are not talking about the numbers as of now, what is the targeted numbers per se. But what Pankaj has mentioned that the focus is on Unnati. We have opened till now 29 locations in Tier 2 and Tier 3 cities, and we are looking forward to add more locations in the coming financial year, which will help us in increasing our disbursements in this particular segment and hence the AUM. As of now, the disbursements in Unnati is around 8% of our individual housing loan disbursement and we are looking forward to increase these numbers.

[Operator]

The next question is from the line of Ankit Agarwal from ARC Capital.

[Unknown Analyst]

Sir, I have a question on the corporate book level. So do we see this corporate book level stabilizing? When do we plan to start disbursing on this book?

[Unknown Executive]

Yes. Ankit, as of now, you must have seen that we've -- as a deliberate strategy being bringing down this book to a very, very comfortable level now, which is close to 11% of our AUM. So we've somehow reached our target, which we had in mind in terms of our -- reducing our corporate exposure because of the market scenario at that point in time. So we are reevaluating the scenario now. I mean we are relooking at this segment, and we'll -- at the opportune time we will probably look at these disbursements again. So that is something in the works right now. But definitely, what we plan to achieve by reducing the book that more or less we are there.

[Operator]

The next question is from the line of Akhil Hazari from RoboCapital.

[Akhil Hazari, analyst]

So just regarding the statement about the green shoots being shown in the AUM growth right now. So going forward, what would the growth look like? Does the management focus now on increasing growth? Or is it more focused on credit asset quality and reducing the NPAs further?

[Unknown Executive]

See, from an organization perspective, growth is also important. And as well as the credit quality is also important, right? Now in terms of the growth, as we told you that after the 9 months -- 9 quarters of negative trajectory that Pankaj talked about, various initiatives we have taken in terms of realigning our interest rate and sales and marketing strategy. So that mojo of the disbursement is coming back. That will continue. But as we have reduced the retail NPAs by a large quantity of almost INR 700-odd crores, that efforts will always continue. In line with that, wherever realignments we have done in the policy platform that has been done, the technology framework has been enhanced. And from here on, both will go parallel.

[Unknown Executive]

So I would also like to add here would be, we all know that the market have really moved positively. There is an upside in the developer sentiment and a lot of positivity has come in. So we have also seen green shoots in our last 4, 5 months disbursement. We have started increasing our monthly disbursement, log-in sanction and disbursements all. We have also put in a lot of records. We have improved our productivity. We have reconnected with the lot of good developers, and we have also reconnected with the DMAs, the corporate channel partners. So we are coming back in a very strong manner, and we are increasing our efficiencies at across all levels.

So yes, we are very, very positive. And as far as forward outlook is concerned, exact numbers can be given as we all know that we are in the midst of the right issues. So it will not be appropriate for us to share the exact numbers of what -- yes -- but yes, what we can just -- at this point in time, we can reassure that yes, we are looking forward to a positive VLR growth with a lot of efforts, internal efficiencies that we have brought in, and that would continue to be the endeavor of ours.

[Operator]

The next question is from the line of Bhuvnesh Garg from Investec Capital.

[Bhuvnesh Garg, analyst]

My question is on reversal of securitization income. So I just want to understand what is driving this reversal of securitization income? I mean on which -- what all parameters you are having different experience from the assumptions that you had made earlier, which is leading to the reversal of securitization income, one. Secondly, how are you calibrating those assumptions so that such volatility where you recognize income aggressively earlier and later you have to reverse that doesn't happen again? And thirdly, is there any third-party verification or audit on those assumptions by recognizing this securitization? These are me questions.

[Unknown Executive]

See, securitization income, see, as you are aware, that we actually not do any securitization. We are doing the assignment of transition, assignment of loans. So as per these standards, you need to offend that particular income on the date on which you are recognizing that particular -- on the date on which you are selling that particular pool. So that needs to be unwinded based on the assumptions which you have factored on the day 1 itself. So based on the runoff of that particular pool and the extensional spread, you have to unwind it over the remaining life of that particular pool.

So if we compare the March '21 results and March '22 results, in March '21, what happened is that we have securitized a pool of INR 700-odd crores, whereby there is an incremental income, which is coming to our P&L. Plus in March '21 -- 2021, there is a reduction in the MCLR. Normally, the rates on which we have sold the loans to the bankers earlier to MCLR. Because of the winding of the MCLR and that is not under our control, there is an increase in the spread, which we have found on that particular pool. This resulted in the upfronting of an income.

So last year the same time we have recorded an income something close to INR 177 crores in the financial statement. Because of two factors: one is we have sold the new pools; secondly, there is an increase in the spend on account of changing -- change in the MCLRs. Now in this financial year, what happened is, there is no change in the MCLR, and we have already -- we have not sold any new additional pools. So there will be a natural unwinding of the pool, which will happen and there will be a reversal of so-called unwinding of income on account of securitization.

As far as the assumptions are concerned, the runoff of the pool is being utilized to arrive at the unwinding impact in the P&L. As far as betting is concerned, the same has already been betted by the internal and the statutory auditors and the assumptions are looked after by them thoroughly.

[Operator]

The next question is from the line of Piyush Jain from BNP Paribas.

[Unknown Analyst]

Just a quick question that since all the HFCs are growing in a phenomenal manner, and we all believe that the housing market is in a boom, but we are still yet to come out of the hoods. So can you just tentatively tell us that what time line we are looking that we would be in the same growth phase where other HFCs are growing? And secondly, what -- because since last 8, 9 quarters, we are hearing the same story. We are trying to do this, we are trying to do that. But things are not happening the way we are, as a shareholder, we want. So can you just give us obviously brief us on that also? Because one HFC has already been divested. So that opens up a huge space for us. And we being a huge brand, we cannot even enter there. So what is stopping us? I don't understand.

[Unknown Executive]

I think we have made it very clear, we have had a very positive growth this time. We have already done about almost about INR 700 crores of growth in the retail segment. So the growth journey has already started. All the problems that we had in terms of our NPAs, in terms of pricing, in terms of a very deliberate decision of bringing down the group to a certain extent, ensuring the profitability is there, ensuring that the productivity and efficiency remains over there, we have actually -- so more or less, we have factored in, we have overcome it, and now the journey has started.

The industry is expected to grow this year by 9% to 11%. I think we expect to do the same thing. We will try and do what best if possible. But the ICRA's report very clearly says that the industry will grow by about 9% to 11%. And that's what we are targeting that we will also be over there in terms of the HFCs.

Now when can you start comparing with the previous numbers at this company, one of the important thing was actually the corporate book that grew by project base. That is a business that we are not doing it. We can very easily ramp up the numbers, but somebody is doing a corporate book. So retail is one that we have started and we have shown a growth in this quarter.

[Unknown Analyst]

So just a quick question in that. The other HFCs are actually eating up our market price. So how do we plan to reach there, which we have already lost?

[Unknown Executive]

There are a couple of things I did mention to you in terms of the reactivation that we did. We had moved out completely of the APFs market, which is actually the builder tie-up. We have reactivated everything, and there are almost 1,000 APFs that we have restarted, and we are sourcing business from there. Then the DMA channel was because we had decided that we will exit from large ticket loans, so we have reactivated and those are the ones who bring it. So we have reactivated those channels then we are going ahead. We are reconnected with almost all builders who are very clear and we say it very, very frankly. Then it is about -- they have a lot of confidence in PNB. It's a question of you coming and winning in the race, which are very, very attractive -- or which are not attractive.

The more important thing is that, what kind of service you provide, what kind of track you have, and what kind of -- how quickly can you deliver the loan. Even if it is a little expenses, maybe 25 basis points -- 15 to 25, 40. But can you actually handle it? Do you have the ability to the right? I think we have the ability, and that is why in this quarter, there is a significant amount. But there are certain things that have happened. Very clearly, we are seeing a change in the mix of the business also and the way we are sourcing business. There's an all-time high number that we are actually looking at it as we move forward.

[Unknown Analyst]

So sir, if I have to ask one thing that maybe after 2 quarters or 3 quarters, we would be in a much better picture. Is that what you're trying to say?

[Unknown Executive]

Deepika very clearly says there's no forward-looking statements and all that, but I told you that we have started the year.

[Unknown Analyst]

So 9 months we already had the statement that we are doing -- are coming out of the woods, out of the woods. That was always the forward-looking statement. And sir, you have demonstrated it, but you have been always giving this statement that, yes, we are trying, we are trying and we are trying. And every time the results are getting worse and worse. Now the whole point is that other HFCs are growing and we are not growing. So at least you can give us this statement that yes, we are looking for the next 2 quarters, 3 quarters we would be in a much better shape. At least this much assurance can be given to the shareholders, right?

[Unknown Executive]

Definitely, we will be in a better shape. There is no second thought about it.

[Operator]

The next question is from the line of Sanket Chheda from B&K Securities.

[Sanket Chheda, analyst]

So as of now, we source about the 40% from the retail. For the next year how do we plan to do in our channel [indiscernible] one of the largest delays there. We have set up a very ambitious target at the start of the year. I just wanted to know what is the thought process means, in FY'23, how much do we plan to go through BSS? But how much will we do it organically?

[Unknown Executive]

See, MD sir also mentioned that, yes, we had improved our strategies on the sourcing mix. Our internal channel was always doing well. So we have improved our sourcing in our internal channel. We have improved the efficiencies there. But what is -- importantly, what we have done simultaneously is also in last 4, 5 months, we have reconnected with lot many DMAs who had been disassociated with us due to our internal issues and last couple of years that we had faced. But then we are regaining their confidence. We are reigniting those relationships, and we are getting our pie of business from there, increased pie of business. But yes, since the market has gone away from us and those large number of those large bigger DSAs and important channel partners, they are not returning back. They are also reposing faith in the team, and we have increased our business share, which was -- I can share those numbers. We were doing close to about 30%, 35% kind of business now, which has already moved to 40%, 41% kind of number. And we have already reached that level.

So I can only -- at this point in time, I can only say that, yes, with the increased regard, with the increased connectivity, with increased better relationships, better management, we would be increasing both our internal channel business as well as DMA business. And that should reassure everyone that yes, we are on the right path, and we are doing all the right things.

[Sanket Chheda, analyst]

So just one more additional questions. So offset has been made that all these DSA, whatever loans they sold, they kind of have some tie-ups with the [ ARCs ] also for the solution where you could have some sort of recall. It may not be direct recall, but do they provide these kind of provisions that BSS has have partnership with some ARCs which help resolve the asset in case 2 years back?

[Unknown Executive]

No, no, we don't have such kind of clauses and we don't work in that manner, yes.

[Unknown Executive]

We don't subscribe to this kind of the work culture.

[Sanket Chheda, analyst]

So my question was rather not for us, do this kind of setting up leveling or coming up in the space as you would have written up for others?

[Unknown Executive]

We are not aware of any such practices within the market. And since you asked you are informing us, we are clearly saying we don't subscribe to any kind of this structure or a facility in the market.

[Operator]

The next question is from the line of Abhijit Tibrewal from Motilal Oswal.

[Abhijit Tibrewal, analyst]

So I joined about 10 minutes late, so I missed a part of your opening remarks. Is it possible for us to remind what could be -- what color will be shared on the corporate book? I mean, which accounts kind of moved it or slipped into NPA in this quarter? And what was the quantum of exposure?

[Unknown Executive]

So on the corporate side, only one large account, which is a Mumbai-based asset, a very prominent one had moved into NPA in Q4. And that is the only forward movement in terms of corporate account. Apart from that, if you look at 64% of the book still remains to be in Stage 1.

[Abhijit Tibrewal, analyst]

And what was the exposure to this Mumbai account?

[Unknown Executive]

It's INR 659 crores.

[Abhijit Tibrewal, analyst]

INR 659 crores?

[Unknown Executive]

Yes.

[Abhijit Tibrewal, analyst]

Okay. And have you seen any resolutions in the last, let's say, 2 quarters -- this quarter, let's say, Q4 and Q3, have you seen any resolutions? If I am looking at Slide #18, where we are talking about corporate book remedial actions, I don't know, where is this radius account sitting there? Is it the project with -- where is it, the radius account where you used to have exposure of about INR 250 crores?

[Unknown Executive]

It's there in the slide.

[Deepika Padhi, executive]

So Abhijit, radius is an account which we have written off last quarter.

[Abhijit Tibrewal, analyst]

We've already written off radius, is it?

[Unknown Executive]

Yes, technically written it off, we fully provided for it.

[Abhijit Tibrewal, analyst]

Okay. All right. But you're still sort of trying to pursue resolution in radius?

[Unknown Executive]

Absolute radius, yes, we...

[Unknown Executive]

It's just a technical write-off. We will continue to work to resolve accounts and move forward. But from the balance sheet, we have actually written it off.

[Abhijit Tibrewal, analyst]

All right. And then, I mean, these 4 accounts that I see on Slide #18, I mean, I'm guessing 3 of them are super tech [indiscernible] which is the fourth account here?

[Unknown Executive]

One is -- so there is arena, which is -- so in the final stage of evolution, there is one arena, which is there, which we are very close to resolution. And apart from that, the account that we mentioned, which has moved into NPA in Q4, that is also mentioned there.

[Unknown Executive]

And just to add one more point. Since you joined late and missed out the opening comments and the commentary given by the Managing Director, this particular slippage is coming from one of the top end developer in India and another joint -- they are into a joint venture with the second top most developers in India. So it was -- we will say it's unfortunate because there are some internal issues, it has happened. The underlying asset and collateral and the security value is super. And it was never into delinquency, it just slipped into the delinquency in a month short.

[Abhijit Tibrewal, analyst]

So it is then fair to say that given that this is the largest developer in India, maybe the second largest developer, you expect a resolution in this soon, is it?

[Unknown Executive]

Yes. So it's basically an interstate dispute, we are working with the developers to solve the issue there. But otherwise, we are still going strong on the asset itself. We've taken the value position as well. We are putting all kinds of resolution strategies in play to resolve it at as early as possible.

[Abhijit Tibrewal, analyst]

Okay. And my last question is, I mean while I understand we're working on the rights issue and which is why maybe we are shied away from being forward-looking guidance. But basically, I mean, as being the management team, have we seen some churn or exists? What I'm trying to get to is, I mean, I recall -- I mean, last quarter, we informed about our CFO kind of deciding to move on. I mean recently, I gathered our business heads -- business head retail has moved on to another [ peer ]. I've heard of a few state heads, I think, moving on. I mean, what is your sense? I mean, is it because of purely in personal reasons, better opportunities that we see the churn in our team? Or do you think that the team that we have now is kind of stable and you can look forward to, I mean, stable your times ahead?

[Unknown Executive]

Okay. So see, we have no doubt a few senior leadership exits during the course of the year. But we've also kind of added a few senior leaders within the team. We also have focused a lot on bringing in internal talent and growing them for leadership roles. So that's one thing that we have done quite successfully this year. In fact, quite a number of people have been provided an opportunity to pick up senior roles. And this is a process which will continue to happen over a period of time. I think we also haven't faced significant challenges in attracting talent over a period of time. So we've done, in fact, a significant amount of hiring this year in terms of filling positions aside from junior level to senior level. So that has happened quite well for us. We haven't faced any challenges.

I don't think there is also a significant business pressure that we have experienced on account of accretion. Just on the accretion front, on overall, we are in line with industry. In fact, quarter-on-quarter comparison, we, in fact, have been able to sustain the same level of accretion, and that has not kind of increased in Q4. So which means that we've been able to [ arrest ] that and it's been in line with what the industry is today.

[Operator]

As there are no further questions, I now hand the conference over to Ms. Deepika Gupta Padhi for closing comments.

[Deepika Padhi, executive]

Thank you, everyone, for joining us on the call. If you have any questions unanswered, please feel free to get in touch with Investor Relations. A transcript of this call will be uploaded on our website, and the audio of the call will also be uploaded on our website, that is www.pnbhousing.com. Thank you.

[Operator]

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