Ravi Purohit

Ravi Purohit asked for an update on the 15-20 basis points of stress assets from the erstwhile HDFC book that were performing but classified as NPAs. He also sought insights into SME loan opportunities and the implications of RBI's new policy on cross-border M&As for large banks.

Answer

Srinivasan Vaidyanathan (CFO) confirmed that the 10 basis points upgrade mentioned earlier was part of the erstwhile HDFC book's stress assets. Kaizad Bharucha (DMD) noted positivity and actual credit demand in the SME segment, with the bank continuing to participate while maintaining underwriting standards due to good asset quality. Regarding cross-border M&As, Kaizad Bharucha (DMD) stated that the new RBI policy certainly opens avenues for banks, which will be examined upon release of final guidelines, as this market was previously financed offshore or by non-bank entities.

Ravi Purohit asked about the repayment path for borrowings given recent reductions, the status of former HDFC Limited corporate deposits, and the reasons for deviations from the initial EPS accretion guidance post-merger.

Answer

CFO Srinivasan Vaidyanathan confirmed that pricey corporate deposits from the former HDFC Ltd. were intentionally run down. He explained the recent INR 600 billion borrowing reduction included both scheduled maturities and opportunistic repayments. He also stated that the initial EPS accretion guidance was based on different economic and regulatory conditions, but noted the current EPS is stable and comparable to pre-merger levels.

Ravi Purohit asked for details on the repayment path for legacy HDFC Limited borrowings, whether the run-off of HDFC Ltd.'s corporate deposits impacted overall deposit trends, and for clarification on why the initial 'EPS accretive from day 1' merger guidance did not fully materialize.

Answer

CFO Srinivasan Vaidyanathan confirmed that pricey legacy HDFC Ltd. corporate deposits were intentionally run down. On borrowings, he noted a INR 600 billion reduction in the quarter from maturities and prepayments. Regarding the EPS guidance, he explained that economic conditions and regulatory forbearances have changed since the merger announcement, but highlighted that the current EPS of 21.3 is very close to the pre-merger EPS of 21.4.