has met Street expectations when it comes to Q2 earnings. Though the DHFL numbers have not made it to P&L, assets under management are up by 40%. What is your view on the road ahead?
Last quarter was the most transformational quarter that we have had. There are two major events that have taken place in the quarter. One of them has been the merger of DHFL and PCHFL. This merged entity came only on September 30 and therefore AUM has gone up by Rs 20,000 crore. But the profits have not come in because of the merger. That is one point that I want to bring home. So what did the merger achieve? Today we want to improve the proportion of retail loans. Before the merger, retail loans were about 11% of our total book. Post the merger with DHFL, the retail loans are 34%. That is one big change that we have got.
The second big change that has taken place in this quarter is the announcement that we will demerge our pharma business and in the next 12 months, we will have two independent listed entities; one is pharma and the other is financial services which is also what we have been promising for a while. Now both these two things have come and therefore now there will be a solid pharma company and the other will be a financial services entity.
As far as the DHFL merged entity now is concerned — which is Piramal PCHFL or Piramal Capital — we have added Rs 20,000 crore on to our AUM. The way we have accounted for Rs 20,000 crore is a fair value of the total asset which came with DHFL because of this. We have taken a very conservative view. The total value of the assets of DHFL was almost Rs 88,000 crore at the beginning. There was some accounting because of fraud and therefore at the beginning of June quarter, it was Rs 44,000 crore and we have now brought it down to Rs 20,000 crore. GNPA has gone down from 4.4% on the expanded book to 2.9%. And the NPA has also come down to 1.4%.
That is very heartening because it seems like the worst is over for the financial sector because that has been one broad theme that we have seen this earning season. As you pointed out, your retail book has grown from 11% last June to 33% this September. You want to hit 66% when it comes to the retail book. How are you going to do it?
In retail, the growth is coming in the tier two, tier three cities. Today our book consists of affordable housing loans. The average ticket size of our home loan today is Rs 17 lakh and 50% of this is from salaried class and 50% is from non-salaried class. For the banks and the other institutions, the sweet spot is in the salaried class. Our focus has been to move into both salaried as well as non-salaried on one hand and to move from the larger cities and the metros into the tier two and tier three cities and that is one strategy that we are doing.
We are going to increase the number of branches. Secondly, we are also using technology. Incumbent banks have some legacy systems. We are fortunate that we are still young and are bringing in a whole technology infrastructure which will help us assess the quality of fisc and quality of credit much better. Third, we are introducing new products other than housing loans, whether it is through small business loans, MSMEs or other unsecured lending. A combination of all this is where you will see growth in the retail space.
