Q3FY26 NTI compression revised down to 8-10 bps from 15-20 bps.

Have we cut our home loan rates after the 50-bps repo rate cut and is it only on incremental or also on the back book?

Yes, on the acquisition of course because we are in a competitive industry, we have to cut in line with what competition is. To the second question on the portfolio, yes the benefit has been passed on in the acquisition while there may be some differential. On the repo book, we have to pass on in line with the repo cut. On the Non-repo book, while there is a differential vs Repo book but there is a benefit which has been passed on. 50 bps is the repo. So, the repo book, it's a full 50 bps has been passed on, while on the non-repo book there is a differential; you can say in the range of 10 to 15 bps which has been passed on.

What percentage of your home loans are repo linked versus say PLR linked on book?

Our Repo book is close to 13,000 odd crores which is repo linked out of 64,000-odd crores, 13,500 crores is repo linked book against 64,000-odd crores of home loan book.

How many on-roll employees and how many contractual agents will be deployed and what percentage of our construction finance book would be still in morat?

So, the absolute number is 1,977 are company on-roll employees and total manpower is 4,811 as of 31st March '25. So, you can say balance 2,900 are off-roll or contractual employees. On construction finance Morat - When we give construction finance, there is not a case where we don't have a sweep from the day one in terms of principal repayment as the sales happen. So, largely in that sense if you look at from the contractual term it is larger part of the book will be Morat. However, the sweep on the sales collection starts from the day one. If I look at the past experience of last four years, there is no case which eventually comes out of the Morat, because before the three years because of the sales and the cash flows coming stronger, the entire loan gets repaid before the Morat period is over.

In Maharashtra, there was recent hike in ready reckoner rates on the home loan average ticket size. Can we increase our growth disbursement guidance for FY'26?

So, there is no impact of ready reckoner rates on the home loan growth, because ready reckoner rates are in terms of increase by the government, after three years, government has increased the ready reckoner by 6%-7%. In my individual assessment, I don't think it is going to result into any impact in demand for homes or versus home loan demand because if you are buying a house, it is not dependent upon the ready reckoner rate and ready reckoner rate in any case is the reflection of what is the pricing in the market which you are currently buying.

You mentioned on that hedge book to kind of manage this fixed rate borrowing that you have done. So, can you quantify the extent of this hedging, is it material at all which can help us convert this fixed kind of liabilities into floating nature effectively?

It is to some extent material. It is close to 2,300 crores if I have to give the absolute number. 2,300 crores because there is a hedging taken in various forms. So, like if you have a 10-year NCD, you don't take a hedging against the 10 years because that is supposed to play out the interest rate cycle. It is largely a five-year bond what you hedge because that is where on the one end of the interest rate cycle you can enter at the same rate interest cycle and exit at the same.

Now we are still at 12 bps kind of a credit cost and with no more buffer provisions there and also some bit of changing book mix like say within LAP, the share of self-employed is increasing, when do we see kind of, say, normalization on the credit cost front?

There is another complexity to the credit cost, which is the factor of what assignment we do, because when we do an assignment, there is a stage 1 provisioning goes down. So, that's why when we guide for the credit cost, we say on a steady state basis, 20 to 25 bps of the credit cost is what we envisage. So, if I have to say that if we don't do any assignment and the book mix remains same. In terms of a medium term that is the 20-25 bps of the credit cost is the guidance what we give which is put as a part of our medium term guidance.

If you can quantify the impact from the removal of the exit penalties on the floating rate loans, which is say, LAP, the proposed circular from RBI, what could be the impact of that if at all that gets into implementation?

It won't be very material for us at an absolute level because home loans, as you have already called out are already exempt from exit charges, commercial business is also as per the draft circular are exempt. So, the only impact would be loan against property. If I look at the last year entire foreclosures as collection in that business was less than 12 to 13-odd crores. So, if we have to take a zeroization, that is the kind of a number we are talking about, it's not a material number for us.

There's been a sharp increase in the OPEX on a QoQ basis? And also secondly the PBC number on a sequential basis seems to have increased by around 100 odd basis points despite, say, home loan growing slower. What can be the explanation for both of these things?

First part we had already called out that we are investing deep, and we are going to invest deeper both in the management team and the new businesses, both SBU which we have set up and the top-6 plus markets team, we are investing. So, that sequentially it has moved up by close to 1%, it has not moved up dramatically in that sense. PBC has moved up, Viral on account of two factors; while home loan growth has been lower than the overall growth, it's the assignment out during the quarter was largely non-home loan assets. So, the PBC is calculated on the assets if there was a large assignment out of non-home loan assets, so that's where PBC you see an improvement by 1% on QoQ.

Can you please comment on the trajectory for cost of funds for FY26? What is your expectation in terms of how much can it decline because of the repo rate cut?

So, Raghav, our estimate is assuming the two cuts which has happened, and one cut more happens. YoY I think we should see a drop; 34-35 bps roughly. On a 75-bps rate cut cumulatively we should see 34-35 bps kind of a pass-through on a full year basis in FY26.

When you said about the assumption of a 75-basis points repo rate cut, you foresee a 34-35 basis points pass-through. Are you talking about the pass-through to the customers if there is a 75-basis points rate cut?

No. We are talking about pass-through in our cost of funds to the company. The pass-through to the customer would be higher; it will be 45 to 50 bps kind of a number which will get passed through. Of course, it will depend upon the competitive intensity in the market, the yield impact can be 40-50 bps on a 75-bps kind of a cut.

In these last three months or so, has anything changed in terms of aggression from bank?

If you're talking about public, I think the aggression has not changed even post March end. From a private sector bank, we saw a clear bit of aggression in the month of March. I think April in our assessment what we have seen in the market is we are yet to fully firm up the mind. I think public sector banks continue to be much more aggressive. Private sector banks are not that aggressive in the month of April, but in March, everyone was as aggressive as what we could have assumed.

How are we thinking about assignments more structurally going forward?

So, assignment is an integral part of a mortgage balance sheet because of an ALM match what we get because we are essentially lending for long term and our borrowings are not for that long term. For a mortgage company assignment at a particular portion of a 12 to 15% of our book normally we keep it and that's a long term strategy as well. You will continue to see the percentage of assigned out at that ratio. It is nothing to do with the upfronting of income.

Is it safe to assume that next year we could see about 10 basis points of spread compression from where we end Q4?

On your first question, if we maintain as it is book mix, yes, you can see NIM compression of a 10 to 15 bps during the year because if we are saying 34-35 bps is what we expect, the differential in the cost going down and I said 45-50 bps on the yield impact which can be there if we take a 75 bps kind of a rate cut scenario. However, as you have only called out, there is a target type mix which is a play around for us available whether a developer finance book going up from 12.5% to 15% what we had called out in last year also which results into compensating the increase of our non-top six markets which we have invested deep or increase of contribution from the SBU in terms of a near prime and there.

The minimum public shareholding, how do you intend to sort of get to that 75%, will there be fresh equity, etc., in FY26 or we intend to use that in FY27?

It's 2.5 years away, Dhaval, to meet a 25% requirement. Of course categorically, I can tell you there is no plan to raise new capital in FY26 because our leverage is 5.1 or 5.2 as of 31st March '25. As a mortgage company, it does not make sense for us to raise money anywhere less than 7.5 kind of a leverage. So, there is no conversation or a thought process around any public issue part. For meeting the guidelines there is a mix of whether it can be a secondary offering from Bajaj Finance shareholders. But there is no primary conversation which will happen for next at least 1.5-2 years. There's no primary requirement of the capital.

On what basis do you decide whether you have to link it to repo or your PLR, like is it purely based on competition?

So, this is dependent upon market scenario and also our ability to sell to the customer. So, incrementally you should see more of a PLR because repo it's internal settings, we offer repo asset size only to the extent of a repo liabilities we have to not to carry a interest rate risk in the balance sheet. So, the ability to grow repo book is linked to our ability to grow repo linked liabilities, rest has to be in the internal PLR.

On your affordable and near prime SBU unit, will the growth over here be purely organic or will you also try to BT out customers from some of the affordable housing companies?

We are looking at organic growth here. The BT is in this business what we have started as an SBU will not be more than 10% to 12% of the mix. Even now what we are acquiring is 10%-12% of the mix only comes as a balance transfer because we want to look at an organic number and we want to build a purchase transaction mix because we are yet to learn the ropes of the trade in this business as we are going forward and we know from experience that balance transfer is slightly more riskier than the organic purchase. The yield product wise, in a home loan to home loan versus a prime home loan to a near prime and affordable book, the difference in yield will be close to 180 bps on acquisition.

You mentioned about approximately a 10 basis points kind of a hit this year because of the fall in the interest rates. Is this only for the home loan book or is it kind of doing a math for the entire book?

You are talking about book stock as of today, so which includes the book stock. That is where we said that the part of it or larger part of it will try to mitigate through the asset mix change as we acquire during the year. Because we are taking the stock on the stock today when we are calling that out. Yes, I am talking about stock. Sorry, entire company book stock. On bank borrowing side of 34,000-odd crores, MCLR is close to 23%-24%, balance is either repo or repo equivalent which can be a T-bill or a g-sec where the pass through is as close to repo.

How do you manage ALM risk in this business? What would be roughly the tenor of the loans that you extend across these product classes of home loans, LAP, and how are we placed on the borrowing side?

Asher, the loan tenor what we offer in the various products is different like for a home loan, let us say the tenor can be anything from 15 years to 30 years as well. However, I have to follow that the behavioralized maturity of the home loan is less than 7 to 8 years because the extension of tenor initially is a one conversation, but there is a behaviorialized maturity of the book, which is 7 to 8 years, which is largely in line with what is in industry or what we see. The ALM is to be managed by the company actively, which is in like with all mortgage play if I have to say so.

On developer finance, is there some reading with respect to decline in the conversion rates with respect to enquiry to purchase ratio in the real estate sector that you see?

Shreepal, no, we are not seeing any decline. While there is less launches which is happening in the last six to nine months, which is as per various reports available in the market, there is less launches which is happening, but at our state we have not seen kind of a decline. While there is a slowdown in sales, that is what if you're referring to the market, the reports in terms of a slowdown of the sales, but you look at the inventory ratio it's the ever lowest in the country today because the launches have declined more than the sales ratio. So, net-net no impact in terms of an inventory because as the inventory is still going down only while the sales are slow, but there is no stock also available proportionately in that.

When you said 35 basis points reduction in funding cost, you meant that over the next one year, right, so 35 basis points lower on the exit for the run rate for '26?

No, I meant YoY cost. So, for the year, what was our cost of fund versus next year projected cost of fund. For the year-to-the year, I did not mean exit-to-exit quarter, I meant for the year.