Earnings Call Transcript - XNSE:FINKURVE 2026-11-06

Operator

Ladies and gentlemen, good day and welcome to the Fincur Financial Services Limited Q2 and H1 F527 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star than zero on the touch room 4. Please note that this conference is being recorded. I now hand the conference over to Ms. Forum Ghoshar from AdFactors PR. Thank you. And over to you, Ms. Ghoshar.

Forum Ghoshar, Head of Investor Relations

Good evening, everyone. I'm Forum Ghoshar from AdFactors PR Investor Relations. On behalf of FinCurve Financial Services Limited, it is my pleasure to welcome you all to the Q2 and H1 FY27 earnings conference call. We have FinCurve's management team with us. We will begin today's call with opening remarks from the management, following which we would open the floor for Q&A session. Before we begin, I would like to remind everyone that certain statements made during this call may be forward-looking in nature. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Finco Financial Services Limited undertakes no obligations to publicly update or revise any forward-looking statements based on subsequent events or developments. With that, I would like to hand over the call to Mr. Priyank Kothari to deliver his opening remarks. Thank you and over to you, Priyank.

Priyang Kothari

Good afternoon and happy Dhanteras to everyone, and thank you all for joining us for the Fincur Financial Services Earnings Call for the second quarter of financial year 27. We are pleased to share that we have continued to make steady progress during the quarter, with the business remaining focused on discipline growth, portfolio quality, and strengthening our operating platform. Our journey over the last few years has been about building a sustainable gold loan franchisee. And we continue to remain committed to our core philosophy of putting risk management, governance, and execution excellence ahead of growth. During the quarter, we continue to see steady progress across our key operating initiatives. Our focus remained on improving branch productivity, strengthening customer relationships, expanding our lending partnerships, and building the capabilities required to support the next phase of growth. From an industry perspective, The quarter continued to see the gold loan sector adapt to the revised regulatory framework. While these changes have resulted in some near-term recalibration across the industry, we believe they are positive for the long-term development of the sector by creating greater transparency, discipline, and customer confidence. Another important development during the quarter was correction in gold prices from the highest witnessed earlier this year. We would like to reiterate that our business model is not built on the assumption that gold prices will continuously rise. A strong gold-owned franchisee should be able to perform across cycles, whether gold prices move upwards, remain stable, or correct. Our conservative lending practices, disciplined loan-to-value approach, continuous collateral monitoring, and robust risk management processes have ensured that the recent volatility has had no material impact on the quality of the portfolio. During this period, we've also continued to strengthen the organization and build capabilities for the future. We've further strengthened our leadership team with the appointment of a chief compliance officer and continue to invest in a risk, technology, operational, and governance framework. Another important milestone is our transition towards adopting the Ogmon brand across our gold-owned business. Historically, operating under different brand identities created some confusion among customers. Moving towards a single, unified Augment brand will provide customers with greater clarity, strengthen our ability to build greater trust and recognition in the market. We believe this is an important step towards creating a stronger customer-facing franchisee while leveraging the long-standing credibility and ecosystem of the Augment brand. Overall, our focus remains unchanged. To build a long-term, sustainable gold franchising institution, Where risk management and operational resilience remain ahead of growth. With that, I would now like to request our CFO to take you to the financial performance for the quarter. Following that, we will be happy to take your question.

Aakash Jain, CFO

Thank you, Priyank, and good afternoon, everyone. Happy Dhan Tereh. This is Akash Jain, Chief Financial Officer of the company. Priyank has already set out the strategic picture, and I will now take you through the second quarter's financial performance. So, let me start with the headline numbers. Our AUM has grown about 95% year on year, and profitability is again up. So, this is one of the best quarters wherein the highest profitability has been reported. Operational profitability has been reported, and it is up by 62% year on year. Our branch network again has increased from 92 branches last year, 30th September, to 122 branches, which is almost, you know, two and a half branches per month. Our total income has grew from, you know, by 88% almost. We have maintained adequate, you know, liquidity in terms of ALM. We have positive cumulative mismatches across all our buckets. Our capital adequacy ratios, in terms of ratios, we have very healthy ratios. Capital adequacy today is at 28.7%. Our ROE is at 3%, and ROE has crossed 10% first time after a couple of quarters, despite of having a leverage of more than 2.5x. So, these are our critical key highlights. With that, you know, we also have increased our, you know, share of coal ending. That's, again, a very efficient way of, you know, managing your tier one capital. So, you know, with continued focus on, you know, increasing the off book, we will, you know, ensure that this particular proportion grows to, you know, a reasonable number in the coming quarters. With that, I will ask the moderator to, you know, now open the floor for Q&A. Thank you.

Operator

We will now begin the question and answer session. Anyone wishes to ask a question, remember star and one on the touchstone telephone. If you wish to remove yourself from the question queue, remember star and two. Participants are requested to use handsets while asking a question queue. Ladies and gentlemen, we will wait for a moment while the question queue serves. The first question comes from the line of Vedanta Trivedi with Vinayak Capital. Please go ahead. Hello.

Thunraj Solani, Analyst — Kuwait Advice

Yes.

Vedan Trivedi, Analyst — Vinaya Capital

Please go ahead. Yeah, am I audible?

Operator

Yes, you are.

Vedan Trivedi, Analyst — Vinaya Capital

Perfect. Perfect. Thank you for the opportunity, sir, and happy that there is to be seen. My first question is, with banks becoming increasingly aggressive in gold lending and offering more competitive interest rates, how does the company plans to differentiate itself from banks and larger gold NVFCs?

Priyang Kothari

So, in terms of product differentiation, there is no differentiation, but there's a lot of different customer segments that exist. So, even today, if you see there's a lot of, there's a different customer segment that has access to, there is no access to banking channels and large NBSDs. That is the customer segment that we are focusing on. And also, if you see our yield, that is the reason our yields are also higher. So, if you see our branch center, we are currently in tier 2, tier 3 cities. If you see our customer segment also, we lend to customers who have absolutely no access or maybe very little access to official banking and large banking channels and with large NBFCs. So, that's the kind of bifurcation we do and that's how we've been able to maintain our yield. See, if you talk about competition, competition exists in every industry and gold loan sector is no different. If you see Augment as a group, we've been a part of a broader world ecosystem for over five decades, and we understand the markets very well. And with that, of course, we know that the market, as and when the time goes on, it becomes more competitive. But we're in a very good position, you know, to ensure that we keep up the pace, you know, with the competition authorizing, as you can see in Anambas.

Vedan Trivedi, Analyst — Vinaya Capital

Sir, just want to, just a follow-up. Is the competitive advantage primarily driven by pricing, or pricing faster loans, processing, and turnaround times, or deeper geographic reach?

Priyang Kothari

It's a mixture of both. It's not only pricing. See, pricing is always, is probably one of the factors. But a more important approach would be that how fast am I able to serve to the customers, which is our turnaround times. How, you know, in terms of schemes, how good of a scheme am I able to offer our customers? So, these are all important factors that make an important part of, you know, how competitive an organization becomes.

Vedan Trivedi, Analyst — Vinaya Capital

Understood. Understood. Sir, one more question. Revenue increased by around 20% across QOQ, despite AUM growth of only 3%. So, my question was, what were the key drivers for this divergence?

Aakash Jain, CFO

See, our yields on gold loans are rising from 20% to 20.8%, right? So, that is one of the key drivers here, which has pushed to the increase in revenue.

Priyang Kothari

Also, if you see, so one is, of course, our yields have risen from 20 to 20.8%. With that, our share of gold lending has also gone up to almost 5.8%.

Vedan Trivedi, Analyst — Vinaya Capital

And how much of the growth was contributed by the personal loan portfolio, higher yields or any one-off income?

Aakash Jain, CFO

No, so there are no one-off incomes as such. The personal loan portfolio is again, you know, the yields are a little higher there, and that portfolio has been at an average of about 45 to 50 crore quarter on quarter. So, that's a very steady portfolio with a steady set of income. So, you know, there's no, you know, one-time gain that we have recorded in our revenues.

Vedan Trivedi, Analyst — Vinaya Capital

And how sustainable is the revenue growth going forward?

Aakash Jain, CFO

I think in terms of personal loans, see, the portfolio mix, what we are, you know, trying today is about a 90-10, wherein 90% has to be our secured portfolio, which is currently today gold, and 10% is what we aspire for, the personal loans. So this share may go up in the future quarters, the share of personal loan portfolios, and, you know, we may see that, you know, delta coming in our revenues as well. But again, this is a partnership-led business, and what we get to keep is a net hurdle rate, So, you know, whatever incremental income that we get in this particular portfolio is again passed on to the partners, right, in the form of commission fees and commission. So, you know, that's the partner's income, whatever they get. Whatever we get to keep is on the gold loan portfolio. So, what actually impacts our profitability is the increasing yields on our portfolio.

Vedan Trivedi, Analyst — Vinaya Capital

Understood, sir. Understood. That's all from my answer. Thank you so much.

Operator

Thank you. A reminder to all the participants, I do not press star and want to ask a question. Next question comes from the line of Zain Appetail with Shah Family Office. Please go ahead.

Zain Appetail, Analyst — SS Family Office

Good afternoon, sir. Thank you for the opportunity. I have a couple of questions. My fourth question is regarding the NCDs. Sir, NCDs currently account for around 57% of our total borrowings, supported by a retail investor base of around 30,000 bondholders. Given the relatively higher cost of NCD funding, what is our strategy to diversify this borrowing mix and increase the share of bank borrowings?

Aakash Jain, CFO

Thank you, Zena, for asking this. So, we are pretty much on track of increasing our bank borrowings. So, if you look at our Q2, we have not raised anything fresh from an NCD. Whatever we had raised was already committed by Q1 itself, and there are no further fresh borrowings. In fact, NCD borrowings today are on par with the institution's borrowings, you know, maybe sometimes cheaper because, again, these NCDs are coming at a fixed cost, whereas, you know, borrowing from institutions are rising because of the rising repo rates, right? All those are linked to the repo rates. So, NCDs are on par with them today. But then, yeah, we have capped internally, what we have done is we have capped that to not more than 40-45% of our overall borrowing. And once we start adding more banks in the coming quarters, we have already received enough sanctions at our end. And, you know, it's all about how do we take it or when do we take it, you know, depending on the overall business requirement. Again, to diversify our liability profile, we are again increasing our share of coal ending. So, one of our partnerships has fueled the growth in Q2, and we are reviving the older partnerships again in Q3, Q4. So, impact of that will also be coming in. So, that will also be one of the sources to diversify our sources of funds.

Zain Appetail, Analyst — SS Family Office

Got it, sir. Got it. So, my next question is regarding the off-book AUM. What is the company's medium-term target for our off-book AUM as a proportion of the overall portfolio over the next two, three years?

Aakash Jain, CFO

See, our target is to take this share to a reasonable one-third kind of an overall book number, which is roughly 30-35%, right? So, you know, we are already on, we have embarked the journey and we are on track of achieving that in the next three years or so, yeah.

Zain Appetail, Analyst — SS Family Office

Understood. And sir, do we have any plans to onboard additional co-lending partners? What is our vision to accelerate this growth? Any strategy around that?

Aakash Jain, CFO

So, as I said, you know, we already have two partners. We are signing, we have already signed with one more, which will go live in Q3 and, you know, reviving an old partner, which will go live in Q4. We are also, you know, looking for partners who can help us with, you know, better cost of funds again. So, the efforts are on and, you know, the discussions are at multiple places. We're likely to onboard a few more by end of this financial year.

Zain Appetail, Analyst — SS Family Office

Okay, so we are open to looking out for more partners. Lovely. Thank you so much. That was really helpful. All the best.

Operator

Thank you. Thank you. A reminder to all the participants, study my best star and one to ask a question. Next question comes from the line of Nikita Mehta with Mehta Investments. Please copy.

Nikita Mehta, Analyst — Mehta Investments

Thank you, sir, for the opportunity. I have a couple of questions. So, first, the NNP increased sharply from around 2.6% during the quarter, while the NNP stood at 2.4%. So, what were the key reasons for this deterioration? And was this increase primarily driven by the gold loan portfolio, personal loans, or specific large accounts? And, sir, how much of the stressed portfolio is expected to be recovered through auctions over the next one or two quarters?

Priyang Kothari

So, Nikita, I'll take your first question. I'll take your first and then I'll take the second one. So, our first question was why when pH increased, correct?

Nikita Mehta, Analyst — Mehta Investments

Right, right, right, right.

Priyang Kothari

One thing is, so in this business, in gold loans, I think it's important to look at gold loan NPAs very different from unsecured lending. If you see other products, higher NPAs naturally translate to higher credit costs. In gold loans business, it's completely different. Higher NPAs do not mean credit losses because there is significant equity. Firstly, there is significant equity of the customer in the gold, plus we have enough margin on that account to recover, right? Right. So the increase that you're seeing in terms of our entry is primarily due to one or two reasons. One is, of course, the recent changes in the regulatory framework. Traditionally, if you see that all the gold loan customers prefer bullet repayment structures aligned with their cash flows. Right. And now as the industry transition towards new repayment frameworks, like, you know, paying monthly, bimonthly, quarterly, it's becoming a little difficult for them to regularize their accounts. So this is typically one of the reasons why, which you know why, which the NPAs have gone high. So, naturally, high NPAs is not a concern. So, the reported NPAs is the number that you're seeing. Substitute to that, I think, the majority of the accounts have already been cleared and regularized. So, higher NPAs traditionally have not been a problem for this product.

Aakash Jain, CFO

And the second question was, Wait, how do we plan to auction in the next two quarters? So, your next question is, how do we plan to auction?

Nikita Mehta, Analyst — Mehta Investments

The next portfolio is, like, expected to be recovered through auctions over the next one to two quarters.

Priyang Kothari

Okay, so in terms of our business, auction is our last resort. First, we counsel, speak to customers, we understand the intent of the customer. If you historically see, all your NPA accounts have been regularized because customers, like I mentioned, have a lot of equity plus they have margin. So there is no incentive or motivation for them to not pay. So auction becomes a last resort, right? So, options are not our mechanism to solve NPAs, but we usually send repayment reminders, and we talk to them, and that's how it gets resolved, usually.

Nikita Mehta, Analyst — Mehta Investments

Okay, okay, okay, got it. And one more question I have. So, the collection efficiency declined to around 90% from approximately around 98% in the previous quarter. So, how do we calculate the collection efficiency, particularly like given the bullet repayment structure of core loans? And is the decline attributed to the same portfolio that contributed to the increase in the NPA?

Aakash Jain, CFO

Yes, that's right, Nikita. Because of the, you know, declining collection efficiency, the delinquencies have increased and that's why you see a higher NPA as compared to the previous quarters. But also to answer your question, you know, if you look at our NPA numbers, it is, you know, on par with what the industry averages. You know, this is what we have seen when gold rises are, you know, on a steady state basis, right? So, for us, NPA is only a technical classification and not really a credit cost, right, as Priyank has already mentioned. We still have our, you know, sufficient margin left, you know, for the recovery of this, either by resolution or by option, whichever way we go, but then we still have sufficient, you know, space for us there.

Nikita Mehta, Analyst — Mehta Investments

Okay, okay. I think it answers my question. Thank you so much, and I wish you all the best for the coming quarters.

Operator

Thank you. Thank you. A reminder to all the participants that you might be a star and one to ask a question. Next question comes from the line of Anirudh Sharma with Ekan Investments. Please go ahead.

Anirudh Sharma, Analyst — Investments

Hi, good afternoon. Am I welcome you?

Operator

Yes, you are.

Anirudh Sharma, Analyst — Investments

Yeah, so I just had a few questions from my side. So, your age modulated to around 3% QOQ in Q2, which was around 16% in Q1, and over 30% in Q4. So, what were the key factors behind the slowdown, and was it a conscious decision or driven by the new RBI regulations, funding constraints, or competitive pressure? And what quarterly age of 100 can be expected for the remainder of F27?

Priyang Kothari

Sure. So, see, I think one quarter of slowdown, I wouldn't call it a slowdown, but I would call it a transition that is happening in the industry. If you see our growth from last year, it has been more than 100%. So, one quarter of slowdown wouldn't technically be a slowdown for us. So, we continue to remain very positive of our growth. In terms of our growth guidance, you know, what we have given guidance is of 50% to 60% of AUM growth. As of now, we are not seeing any concerns in terms of reaching that number. But, of course, in the coming quarters, we will give some guidance if we see any change of guidance that is needed to be done. And, of course, you answered your question only because, like, you asked why growth is moderated. It is, again, a mixture of all the reasons that I had given before. One is, of course, your revised regulatory framework. Second, you know what happens is when gold prices have corrected sharply, right? So when gold prices usually go down, customers usually tend to defer taking a loan because, for example, if the requirement is of 10,000 rupees and when gold prices go down, he's only able to realize 7,000 out of it. So they usually tend to defer their requirement for a quarter or two until price is stabilized. So again, that is one of the reasons. Competition intensity, again, is part of the reason, but again, we're in this business and we're in this industry for more than five decades. So I think competition is here to remain, and our objective is very clear that we will focus on, you know, of course, expansion and focus on our execution capabilities.

Anirudh Sharma, Analyst — Investments

Okay, got it, forgot it. So, secondly, the customer additions stood at around $1,500 during the quarter, while the average ticket size declined. Is the company consciously focusing on smaller ticket loans, and to what extent is this shift driven by the slab-wise LTV restrictions?

Priyang Kothari

So, again, yeah, it's a mixture of both. We are consciously trying to reduce the ticket sizes. I think in terms of, you know, your portfolio health, it's always wise to have a lower average ticket size. Of course, that is driven by, you know, the different schemes that we have because of the new LTV structures that are in place. So, yeah, again, it's a conscious decision, and we expect the average ticket sizes to come down further in the coming quarters. I'm sorry, what was your second question?

Anirudh Sharma, Analyst — Investments

My second question was to what extent is this shift given by slab by LTV restrictions here?

Priyang Kothari

In terms of, sorry, I didn't get a question directly. So, we don't have the data handy. Can we send the data to you, post this call, if that helps?

Anirudh Sharma, Analyst — Investments

Yeah, yeah, absolutely. Sure.

Priyang Kothari

Thank you.

Anirudh Sharma, Analyst — Investments

So, I just have one last question. So, what was the share of renewals and top-ups in the total discussions during the quarter compared with the loan to new customers, and how has the customer retention been at the time of loan maturity?

Priyang Kothari

In terms of customer retention, I think, you know, in terms of our numbers, we have more than 60% of customer retention during maturity. In terms of renewals, you know, we will share a precise data with you post this call. But historically, if you see, you know, when prices were high, our renewals used to be upwards of 60-65%. But now, as prices have corrected, I think that should be anywhere around 10% or 15%, not more than that.

Aakash Jain, CFO

Okay, got it, got it.

Priyang Kothari

You will still share a precise number with you so that you have a correct silver in place.

Anirudh Sharma, Analyst — Investments

Yeah, sure, sure. Absolutely, yeah. Thank you for the opportunity. Thank you.

Operator

Thank you. The next question comes from the line of Sachin and Individual Investor.

Sachin, Analyst — Individual Investor

Hello. Have you had a question?

Operator

Yes.

Sachin, Analyst — Individual Investor

Good afternoon, sir. Congratulations and happy that there is a good set of numbers. My question is, from a view of shareholders, revenue has grown strongly over the past several quarters, and yet the stock has gone nowhere. The market clearly isn't giving the credit. I'm not asking for about the daily retirement, but over the life, we can see from past four to five quarters, that's a good increment on revenue and in net profit side. But why market is not rewarding yet? Is there any disconnect between the share price and results?

Priyang Kothari

Yeah, sure. So yeah, just to answer your question, I mean, in terms of market prices, I think the organization has nothing to do with it because it is very independently, you know, your prices are driven. So I may not be able to comment on why the prices are low or why the prices are high. But again, to answer your question, you know, the organization is on track to achieve, you know, the numbers and targets that we are given in order to maximize, you know, the shareholder returns. So our objective is to work towards that. But in terms of the share prices, I think I may not be able to comment on why, you know, the prices are going down.

Sachin, Analyst — Individual Investor

Fair enough, but the share price is the market verdict on your execution. So, if you believe the business undervalued or execution is top-notch, what's the market missing? Like, at the end, for me, it's the share price which I am getting the business. Yeah, numbers are top-notch, numbers are regularly growing, but at the end, what it is for shareholders?

Priyang Kothari

Correct. I mean, in terms of your question, I understand your question, but I still may not be able to comment on the share price. I can say it's market-driven. I mean, we don't operate or we have no say in our share prices. As a company, we will focus on three things. One is increasing the net interest margin, increasing the yield, increasing the net interest margin, reducing the cost of operation, and reducing the cost of operation. All these things are in the right path. Going forward, rent interest margin will increase because our cost of money is likely to come down. When the PERM branch outstanding loans is increasing, AVM is increasing, naturally cost of operations, the cost income ratio will also come down. We will deliver our best. Market will recognize over a peak. Now, presently, there is some concern about the gold loan companies because of the gold price volatility, not only our price. All the gold loan companies have come down a great bit us. Market is not able to understand gold loan business and differentiate it with other NBFC business. Gold business will not be affected by this slowdown which is happening in the NBFC as a whole. Market doesn't recognize this. Market will recognize over a period and at that time you will find the right price is reflected in the market. We will do what we are supposed to do. We will perform better. Market will recognize it over a stage.

Operator

Thank you. Mr. Sachin, please reach on the queue for more questions. Next question comes from the line of Vivek Jha from Jhalla Family Office. Please go by.

Vivek Jha, Analyst — Jhalla Family Office

Thanks for the opportunity. I have two questions from my end. Firstly, the LTE has increased consistently. What has given this improvement? Is the increase part of a deliberate strategy to support higher ticket sizes? And what internal LTV ceiling does the company intend to maintain? Secondly, follow up on that, following the implementation of the RBI's new gold loan directions in April 2026, what changes have been observed in appraisal, documentation, and credit assessment, particularly for loans above 2.5 less? Have the revised requirements affected turnaround times or disbursement volumes?

Priyang Kothari

I'll start with answering your first question. Your first question was, why has LTV increased? So, LTV has increased. So, one is that in terms of our data, our LTV data is with accrual of interest, right? So, there may be a difference of our data, and there are other certain NBFCs who report the LTV without accrual of interest, so there could be some mismatch there. We reported with accrual of interest. Plus, one is that, you know, with your new regulations, RBI has allowed you to go up to 85% in consumption loans. But in loans wherein, you know, you can properly assess the income of the borrower, which becomes an income generating loan, that RBI technically, you know, has no ceiling. You can also go up to 100% LTV, more than 100% LTV. So, it all depends on how well you're able to assess the quality and ability for the customer to repay. So, that is one factor wherein we're doing 85% LTV also as for the RBI guidelines, and we also have a small share of income generating loans, but we don't go beyond 85% as of now, even though income generating loans do not restrict you from going beyond 85%. Plus, with that, the prices have corrected you a little. So these are the two major reasons why, you know, there's increase in LTV, but also, of course, with increase in LTV, we still have a lot of margin and cushion for us to, I mean, I do not see any, you know, incremental risk towards, you know, your LTV numbers that we have as of now. So, this was your, I hope I answered your question correctly, the first one. Yes, yes, yes.

Vivek Jha, Analyst — Jhalla Family Office

And your second question was, Following the implementation of the RBI's new gold loan direction in April 2026, what changes have been observed in appraisal documentation and credit assessment, particularly for loans above Rs. 2.5 lakhs, and have they revised the requirements affected turnaround times or disbursement volume?

Priyang Kothari

It's an evolving business now. All the gold loans were only the consumption loans so far. There was no credit assessment involved. It is a loan against the gold. Okay. Now the situation is it is a loan with gold as a collateral security for a purpose-driven loan. Okay. So naturally the future cash flow assessments ought to be done. In which case there is no limit for the LTV. I can go up to under 22% also, which means I take gold as a collateral and take cash flows into consideration and we can lend based on the cash flow. The gold loan company staff are not qualified or trying to do this assessment in every branch. There are very few branches where people have come from other NBFCs can do this assessment. Most part of the gold loan as on date is only loan against the gold without any cash flow assessment. When we start doing the cash flow assessment, which we have started training the people, the LTV will become a less important one, and cash flow will become a more important one. At that time, the yields can also go up, and the risk can also go up. The default ratio can go up. All these things will be there. This will be more of a secure loan than a go-to loan. Go-to loan losses possibilities very, very, very minimum. When the LPG increases and be based on the cash flow for lending, probably the credit risk will also go up. Credit cost will go up. Accordingly, it is to be price. Entire gold loan market is not ready for it yet. This is a new guideline. The entire staff are to be trained on this cash flow based lending. That will happen over a period. Very minuscule portion is there which is being called as a cash flow based lending. The advantage is when cash flow lending is happened, we can classify it as a priority sector, we can classify it as a SME loan, micro loan, agriculture loan, then these portfolios can be sold to the bank which have not achieved the priority final advances, which will be a separate revenue stream for the NBS. So there is a great opportunity, but it requires a lot of training at the field level and also modifications to our system. These are all in process, it will take some more time to settle down. And just to answer your question also, with that, in terms of documentation, yes, about two and a half last you take business registration proofs, income documents, and so on and so forth, to understand the ability and the intent of the customer. You started doing that.

Vivek Jha, Analyst — Jhalla Family Office

That's all for myself.

Operator

Thank you. Thank you. A reminder to all the participants that you may best are and want to ask a question. Next question comes from the line of Preeti with Invest First Advisors. Please go.

Preeti, Analyst — Invest First Advisors

Yeah, hi. Thank you for the opportunity. I have two questions from my side. Firstly, so basically, given the group's presence across the gold value chain, do we have any plans to further expand beyond conventional gold loans, basically through products such as loans against digital gold or something?

Priyang Kothari

See, going against digital gold is not possible as of now. We've tried, we've understood the protocol, but as of now, you know, you can't, in terms of, you know, regulatory, you can't, you can't do that. So that is one. But of course, you know, as an organization, I think we're too small to think about doing other things. So we're completely, the organization is completely focused towards. Scaling, you know, the gold loan franchisee. But with that being said, we also remain, you know, available or maybe we remain open to understand if there are any, you know, adjacent synergistic opportunities for the organization. And if we come across anything like that, I think we would, you know, be willing to explore something like that.

Preeti, Analyst — Invest First Advisors

Understood. And my second question would be in terms of the industry. So, basically, around 60% of India's gold-owned market remains with informal lenders. So, basically, what specific initiatives will help FinCurve capture this unorganized market share and what customer segments or geographies offer this opportunity?

Priyang Kothari

Unorganized marketing is going down. They are not able to get their bank funding. Earlier days, they were doing re-pludging with the banks. All the Kerala-based banks were doing the re-pludging facility. They would take from the customer, re-pledge with the banks, and they were able to rotate the capital many times. Now, RBA specifically restricted that you cannot do the re-pledge. So, naturally, the private money lenders are not able to leverage their capital, so that market is going down very fast, and the people are moving to the organized segment. So, that is one area why the growth you are seeing in the organized segment is much higher. Automatically, these independent money lenders, the portfolio will go down, limited to their own capital, and borrowed capital may not be available to the markets from the banking system. And also, if you see the data, like you just mentioned, we've already moved towards 65-35 kind of a number, wherein every year the organized segment takes 1% of the unorganized segment's share. So I think with more education about our products and all the other large NBSs and banks also being in the product, I think that will gradually come down, and I think the organized sector will continue to gain market share from there.

Preeti, Analyst — Invest First Advisors

Great. Thank you so much and all the best.

Operator

Thank you. Thank you. A reminder to all the participants that you must have a star and want to ask a question. Next question comes from the line of Akshara Joshi with RJ Investment. Please come back.

Akshara Joshi, Analyst — RLH Investment

Hello. Good afternoon. So, I had a couple of questions. The company added only four branches during this quarter compared to 13 branches in quarter one. So, what is the branch expansion target for 27? And how should the brand's addition run rate evolve over the coming quarters?

Priyang Kothari

Yeah, I'll take it question by question. So, in terms of the branch expansion guidance, we had given a guidance of 50 to 60 branches for this year. We are very sure that we would be able to get to that number. So, like you mentioned, we've added only four branches. So, our strategy is very simple that first two quarters, usually, we tend to go slower on the branch expansion, and last two quarters, we generally pick up space. So if you see by December end, we would be anywhere around 150 kind of a branch number, which means from 122 to almost adding about 28 more branches by December end. And then, of course, we have a lined up expansion until March. So the guidance that we gave of adding 60 to 70 branches for this year, I think we would be able to comfortably achieve that.

Akshara Joshi, Analyst — RLH Investment

I had one more question. The Augmount has an ecosystem of over 5 crore customers and more than 5,500 dwellers. So, what proportion of the company's gold loan originates currently comes through this ecosystem? Can the company quantify the customer acquisition cost advantage from this partnership?

Priyang Kothari

Correct. So, yeah, as of now, Agmon, like you rightly mentioned, has more than 5 crore registered users on their platform. As of now, Fincurve Financial Services does, we have not leveraged that customer base. So, that's a large amount of pool, you know, that can be leveraged. But, of course, we have to do it more strategically, wherein, of course, all those customers on the Agmon platform usually go to buy gold, right? So, they're naturally not of the thought process of taking a loan against it. So, we have to naturally make different cohorts of different customers and target those customers. So even smaller cohorts of that customer base is a large pool for us to leverage on. So at the right time, with the right strategy, I think we will tap into that pool. As of now, all the role-in customers on our books are individually acquired by the branch network of financial services. It will work the other way. Augment has more than 350 standard products which are being distributed by various gold loan companies, including ours. So that is just a picking up in our case. Going forward, we will be in a position to sell many of the standard gold products, jewellery products, to our existing customers. The spending is right. The investors are not the borrowers in the market. Borrowers at the lower medical class level. So, they are not the investors. Aghmandash moves to the investors. Whereas these borrowers are also investing in the gold jewelry, we have handed patents of jewels available from us. A leading company, gold loan company, is selling more than 28 tons of Augman gallery in the market today. We have just started, we have trained our people, this will become a non-interest income for the company over a longer period.

Akshara Joshi, Analyst — RLH Investment

Thank you.

Operator

Thank you. A reminder to all the participants that you know the star and one ask a question. Next question comes from the line of Thunraj Solani with Kuwait Advice. Please go.

Thunraj Solani, Analyst — Kuwait Advice

Yeah, hi, sir. So mainly I have questions on AEM part. So if I could see personal loans contribute approximately 4% of AEM, but account for nearly 27% of interest income. So what are the key product details, including average ticket size, tenure, interest rates, and the nature of lending partnership? So how sustainable are these yields from this portfolio?

Aakash Jain, CFO

Yeah, so if you look at our personal loan portfolio, these are short-term, you know, unsecured personal loans. The average ticket size ranges from, you know, so average ticket size ranges from 5,000 to about 2 lakhs per customer. That's the broader range. The average is about, you know, 20,000 here. And, you know, the average tenure is, again, we start anywhere from 15 days to up to, you know, this goes up to three, six to nine months kind of, you know, personal loans. So, you know, this is the kind of, you know, economics that's around the personal loan product. Talking about, what was your next question?

Thunraj Solani, Analyst — Kuwait Advice

So, mainly, what are the main product details, including advertising, how sustainable are these years for the portfolio?

Aakash Jain, CFO

So, this particular digital, so this is, again, the partnership is through digital lending apps, LSP, and these are, again, well established players in the market. The market of these STPL players is now expanding and increasing, right? So, in terms of the partners that we are working with, today has a robust portfolio and adequate vintage. They have been into this business for almost a decade now, and our share of portfolio amongst their overall AUM is not even closer to one-fourth, one-fifth or one-fourth. So, in terms of the overall scope of this particular portfolio, I think what we are talking about is almost like 7 to 8 or maximum 10% of our entire portfolio. And, you know, we have enough space for us to, you know, be there in the market for our size of company. Right. So, you know, even if we are at like about 1600 crores, doing 150 crores kind of an AEM by, you know, end of this year in personal loans is no, not a challenge here.

Thunraj Solani, Analyst — Kuwait Advice

Okay. Okay. And also, it would be great if you could provide a breakup of on-book and off-book AEM because if I could see off-book AEM nearly double to around 78 crores in this quarter. So this is, we could say that almost the entire sequential AUM grid was driven by cold ending. Because this ongoing AUM remaining is largely packed. Yes. This would be great if it could break up our own grid.

Aakash Jain, CFO

So, that's correct. I mean, what you have observed is correct. You know, our AEM proportion of on-book and off-book has changed. Until Q2, Q1, we were at, you know, almost 1%, 1% and 2%, 3% kind of, you know, proportion, which we have taken it to 6%. So, the entire growth that you see in terms of overall AEM is now passed on to the co-lending partners because for multiple reasons, right, it comes at a cheaper cost of one. And you can manage your capital efficiently, right, the tier one capital here. So, you know, again, you know, in my earlier questions or responses to the earlier questions, we have reiterated that our idea is to take this particular output proportion to a reasonable size of at least 30% to almost one-third of our overall portfolio in the next mid-to-long-term, you know, time frame.

Thunraj Solani, Analyst — Kuwait Advice

You got it. Okay, thank you for that. That's all for my time.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of the question and answer session. I now hand the contents over to the management for closing comments.

Priyang Kothari

Thank you all for joining the call today. We wish you a very happy Diwali and a happy Lantaras, and we look forward to having you all for the next couple of calls that we are going to have. Thank you so much.

Operator

Thank you. On behalf of FinCurve Financial Services Limited, that concludes this conference. Thank you for joining us. You may now see us.