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Edited Transcript of BSEL.NS earnings conference call or presentation 2-Aug-19 10:30am GMT

Q1 2020 BSE Ltd Earnings Call

MUMBAI Aug 19, 2019 (Thomson StreetEvents) -- Edited Transcript of BSE Ltd earnings conference call or presentation Friday, August 2, 2019 at 10:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Ashish Kumar Manilal Chauhan

BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director

* Yogesh Joshi

BSE Limited - Head of IR

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Conference Call Participants

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* Ajay Bodke;Prabhudas Lilladher Pvt. Ltd.;CEO & Chief Portfolio Manager

* Amit Chandra

HDFC Securities Limited, Research Division - IT Analyst

* Ashish Chopra

Motilal Oswal Securities Limited, Research Division - Research Analyst

* Ashok Shah;LFC Securities, LLC;Analyst

* Jayesh Gandhi;Harshad H. Gandhi Sec Pvt Ltd;Director

* Rahil Jasani

ICICI Securities Limited, Research Division - Research Analyst

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Presentation

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Operator [1]

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Thank you for standing by, and welcome to BSE's Q1 FY '20 Earnings Conference Call. My name is Basu, and I will be the moderator for today's conference. (Operator Instructions) Please note that this conference is being recorded today. I now hand the conference over to Mr. Yogesh Joshi, the Head Investor Relation Officer, BSE Limited. Thank you and over to you, sir. Please go ahead.

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Yogesh Joshi, BSE Limited - Head of IR [2]

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Hello. Hello, everyone, and welcome to BSE's earnings call to discuss Q1 FY '20 results. This is Yogesh at Investor Relations.

Joining us today on this earnings call is BSE leadership team consisting of Mr. Ashish Kumar Chauhan, Managing Director and CEO; Mr. Nayan Mehta, Chief Financial Officer; Mr. Neeraj Kulshrestha, Chief Business Officer.

Do note that the conference is being recorded, and a transcript of the same will be available on our website. The financial results and investor presentation are also available on our website. I would now request Mr. Ashish Kumar Chauhan to give a brief overview of the company's performance, followed by a question-answer session.

Please note that BSE does not provide specific revenue for earnings guidance. Anything said on this call which reflects BSE's outlook for the future or which could be consumed in a forward-looking statement must be reviewed in conjunction with service that the company faces.

With that, I would like to turn the call over to Mr. Ashish Kumar Chauhan.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [3]

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Thank you, Yogesh. Good morning or afternoon or evening to all of you, wherever you are. I'm happy to share with you that the BSE has paid final dividend of INR 25 per equity share of face value of INR 2 each on July 17, 2019 after taking into account the interim dividend of INR 5 per equity shares.

And in the month of December 2018, the total dividend paid for the financial year 2018/'19 was INR 30 per equity share of face value of INR 2 each. The dividend payout ratio for the financial year 2018/'19 was 97%.

BSE proposes us to buy back 67.65 lakh fully paid up equity shares of INR 2 each at over [INR 60] per equity share through tender offer route. The number of shares proposed to be bought back (inaudible) 13.06% of the total payout equity capital of the company. The total amount of buyback would be mainly of INR 460 crore. The buyback offer size represents 24.73% of the aggregate of the total paid-up capital and free reserves of the company based on the stand-alone audited financial statement of the company as of March 31, 2019.

We've already filed (inaudible) with respect to the same on July 22, 2019, and in the process of providing certain mission of documents, information is required. As you must be aware that over past few years due to various reasons, BSE income from transaction charges on equity segment has been exhibiting volatility. BSE has therefore consciously adopted a strategy of going by expanding into other segments also and related aggregation and distribution services.

While BSE was dependent only on one trading segment earlier, over the last few years, BSE has steadily increased its revenues from other services and platforms such as mutual funds, book building, SMEs, currency derivatives, interest derivatives, et cetera. Further, BSE has also launched platforms for bonds, commodity revenue and start-ups.

BSE's International Stock Exchange, India International Exchange (inaudible) yesterday in Gujarat state has been steadily increasing its turnover and has recorded a turnover of USD 4.9 billion, INR 34,000-plus approximately on 25 July 2019. Taking advantage of property to grow at global scale, BSE also set up a stock exchange and Clearing Corporation (inaudible). Further, it is tied up with Power Trading Corporation ICICI Bank to set up a power trading exchange.

BSE has tied up with Ebix Incorporated, a leading international supplier of on-demand software and e-commerce services to the insurance and other industries, to set up and to transact insurance business Life and nonlife through authorized distributors allowed by insurance regulatory and development authority of India.

Financial services (inaudible) platforms and to grow at nonlinear scale over time. This intends to appropriately monetize the above-mentioned services over time, taking into consideration the market share and other influencing factors. It is important to point out that in spite of the public perception regarding BSE's dependence on income from [conduction] channels and equities market, the revenue generated from this segment is just 14% of its revenue from operations.

Our stakeholders may kindly note that BSE's (inaudible) platform has already proved itself as a platform of choice for investing in mutual funds electronically. BSE has been able to effectively monetize the same and the revenue earned from the services provided under BSE's [RMF] is [11%] of its revenue from operations, which is almost 80% as much as what it has earned by the BSE in the equity segment.

BSE continues to upgrade and bring technology innovations to its stock platform. BSE's newly launched StAR MF mobile app has processed over 10,000 transactions in first month, amounting to INR 101 crore. The mobile app was launched to help the independent financial advisers to raise for clients on real-time basis and execute paperless transactions.

As you must be aware, as this segment enables investors across India to investment -- to do investment and redeem the investment in mutual fund through intermediaries on a fully automated electronic platform. While (inaudible) are unbanked fees and commission for their services, the mutual funds pay BSE 1% of the transactions. As per estimates, approximately 200,000 distributors are working on BSE's StAR MF platform, of which around 26,000 distributors are direct independent financial advisers registered with BSE. Others are working to aggregate [recent] stockbrokers. As per estimates, BSE StAR MF accounts for 12% of all mutual funds transactions in numbers, almost 20% of all value and 40% of all new subscribers coming to the mutual fund industry.

The daily number of orders received on this platform in the quarter ended 30th June 2019 has increased by 75% to 122 lakhs per day as compared to 70 lakhs in corresponding quarter previous year. On 10th June 2019, the exchange set a new record by crossing over 7.6 lakh transactions in the day in this segment, surpassing the previous record of 7.2 lakhs on March 11, 2019.

BSE started charging to mutual funds for its services since financial year 2017/'18. Income in this segment has grown by 97% from INR 6.04 crores in Q1 FY '19 to INR 11.90 crore in Q1 FY '20. The number of registered mutual fund distributors in the mutual fund segment increased by 146% to 26,269 as on July 31, as compared to 10,678 as of June 30, 2018.

This network is over and above BSE's 1,400 members, backed by our close to 2 lakh authorized representatives covering length and breadth of our country. The total number of (inaudible) of this segment increased by 27% to 4.67 lakhs for the quarter ended June 30, 2019, from 3.68 lakhs for the quarter ended June 30, 2018. The total value of orders processed with mutual fund segment increased by 39% to INR 54,499 -- INR 54,449 crore for the quarter ended June 30, 2019, from INR 39,125 crores for the quarter ended 30th June 2018.

Further, the total number of orders received in the month of June 2019 are higher by 57% as compared to the orders [reserved] for the month of June 2018. BSE's market share in this segment for the quarter ended 30th June stands at more than 75%. The continued growth in the Mutual Fund segment is in line with our expectations. BSE continues to pursue the strategy of appointment of distributors and optimizing for its services in this segment to maintain the rapid growth in business and revenues witnessed over the last few years.

In Commodity Derivatives segment, ever since the launch of gold and silver futures on October 1, 2018, BSE has been expanding its [bouquet] of commodities. BSE has launched contracts in Oman Crude Oil Futures on October 26, copper -- October 26, 2018; copper contracts on November 2018; guar seed and guar gum on February 6, 2019; cotton futures on February 18, 2019; and turmeric on June 28, 2019.

As informed in our earlier investor calls, BSE is tied up with various associations as well as exchanges in the commodities business for growth and development of Commodity Derivatives business in India. This include traditional Indian export organization: London Metal Exchange, (inaudible) Mercantile Exchange, Bombay Metal Exchange, Cotton Association of India, Federation of Indian Spices Stakeholders, agriculture price commission, gem and jewelries, steel council of India, [William] federation (inaudible), et cetera.

The total number of members admitted in this segment is 264. (inaudible) turnover in Commodity Derivatives Segment for the quarter ending June 30, 2019 was INR 238 crores per day. Currently, as per BSE circular dated 27 September 2018, BSE has waived transaction charges in this segment till September 30, 2019. BSE SME platform has 308 companies listed on its platform as on date. During the month of July 2019, BSE listed 6 companies on its SME platform. Further, the number of companies listed on SME platform has grown by 19% or past 1 year from (inaudible) companies as on June 30, 2018, to 302 companies listed on 30th June 2019.

Of the total number of companies listed, 63 companies have migrated to the BSE's main board as on June 3 -- 30, 2019. The total market capitalizing on these companies, as on 30th June was INR 18,500 crores. And total funds raised by this company is also INR 3,184 crores.

Number of market makers listed with BSE SME as on 30th June was 126. Company with strong BSE SME segment has shown outstanding growth over the last 7 years, and SME equity index, which was launched on 14th December 2012 with 100 as a base has increased to 711 as on June 30, 2019. BSE's market share in listing of the company -- SME companies is now 61% as on June 30, 2019.

Recently, in July 2019, BSE signed a Memorandum of Understanding with Department of Industries and Commerce, government of Haryana, to encourage and support our SME in raising capital, gain visibility and credibility with very large corporates. BSE launched platform for electronic book mechanism, BSE BOND, on July 1, 2016. This platform facilitates issuance of debt securities on private person basis. Issues in this segment included non-corporates from public as well as private sector in India.

During the quarter ended 30th June 2019, amount raised on the BSE debt platform grew by 59% to INR 73,570 crores as compared to INR 46,411 crores for the corresponding quarter in the previous year. BSE BOND platform, as a member, the issuance of debt securities of more than INR 6.39 lakh crore since July 1, 2016 when it was launched.

India International Exchange, a wholly owned subsidiary of BSE, continues to expand its footprint through various listings, product offerings and growth of turnover. Average daily turnover at India INX, BSE's wholly owned subsidiary in GIFT City, (inaudible) witnessed a lot -- growth of 321% to USD 1.879 million -- USD 1.879 billion for the quarter ended June 30, 2019 from USD 447 million for the quarter ended 30th June 2018.

Turnover comprises of significant contribution by Currency Derivative segment as well as Commodity Derivatives segment. Including the (inaudible) segment contributed to 91% of the (inaudible), the commodity derivative segment contributed 9%. And we noted that average daily turnover for the month of June was USD 2.779 million -- USD 2.779 billion. In the index, INX witnessed an all-time high turnover of USD 4.9 billion on July 25, 2019.

Indian INX' market share for the quarter ended June 30 is 84%. As on 31st March 2019, the INX global security market cumulatively established medium-term notes amounting to USD 42.5 billion and listed debt securities, including Masala bonds, Green bonds amounting to USD 14.7 billion. About 35% of Indian issuance of debt securities in the international markets are listed on India INX' Global Securities Market. Several large Indian corporates entities, public sector units, banks, financial institutions, (inaudible), Housing and Urban Development Corporation, National Highway operator of India, National Thermal Power Corporation, (inaudible) Corporation, State Bank, Industry Bank have established NPS and our listed debt security on the global security market of India Energy Exchange.

On April 3, 2019, India INX signed Memorandum of Understanding with Moscow Exchange with an aim to connect the investor community and companies in both countries and allowing our capital formation platform on larger scale. India INX, the first Indian Exchange to enter into the MoU with Moscow Stock Exchange. BSE along with PTC and ICICI Bank have filed a petition with the power market regulator CERC on September 7, 2018 for grant of license for starting up a new power exchange.

This proposes institutional action subject to national regulatory approvals for leverage on the experience and expertise of its stakeholders, industries, knowledge of the power sector, funding of power projects and associated [per sector] setting up and running various exchanges and platforms in India and offered the market participants a credible power trading platform. BSE has a stake of 41% as on June 30, 2019 in the proposed power exchange. So it's wholly owned subsidiary, BSE Investment Limited, which will be brought down to around 25% as for the regulatory requirements.

BSE has set up a joint venture with Ebix called BSE-Ebix Insurance Broking Private Limited for connecting insurance broking, where BSE owns an equity stake of 40% through its subsidiary, BSE Investment Limited. Regulatory approval from insurance regulatory and development authority of India for a [similar meeting].

(inaudible) listing of securities, the number of companies listed with the equity capital (inaudible) are BSE, which are available for trade was 4,118 as on July 30, 2019. BSE has highest number of companies listed on the exchange around the globe. Market capital assurance companies listed on BSE is about 140 or INR 2 lakh crore. A total number of investors listed on BSE exceeds INR 4.13 crore.

BSE has been undertaking calibrated increase in listing fees over the last few years to (inaudible) same company but with charges living by combining exchanges as well as to cover increasing cost of compliance.

With effect on April 1, 2019, BSE increased its renewal listing fee charged to clearly listed companies by INR 50,000 in the listed capital if they give up to INR 20 crores and by INR 20,000 in case listed capital is between INR 100 crores and INR 200 crores. BSE has become India's first-year stock exchange to get certified with International Standard for business continuity management system, ISO 22301:2012 BCMS. BSE has been accredited with ISO 22301:2012 certification for business continuity management standards.

Indian Clearing Corporation Limited, BSE's clearing corporation and wholly owned subsidiary, has gone live and implemented interoperability framework starting from 3rd June, 2019. Last date for migration to interoperable framework was fixed at July 15, 2019; for equity segment -- July 29, 2019 for Equity Derivative segment and [fixed] dollars for currency derivative segment. 403 [clear] members have signed up with Indian Clearing Corporation Limited as on July 15, 2019.

BSE has signed a Memorandum of Understanding with Shanghai Stock Exchange into (inaudible) to support development of small and medium enterprises, dual listing development of fixed income market, development of joint trading platform for offshore RMB products experience sharing and cooperation on IT system. The MoU was signed on July 22, 2019.

India International Clearing Corporation, ICC, has received recognition of a third-party central counterparty by the European Securities and Markets Authority, ESMA, in accordance with the European market interested regulations (inaudible) April 24, 2019. On a consolidated basis, the total revenue for the quarter ended 30th June 2019 is lower by 9% to INR 165.97 crore as compared to previous quarter.

Operating EBITDA for the quarter ended on 30th June 2019 is higher by 130%, of INR 5.48 crores as compared to INR 2.38 crore in previous quarter. Net profit for the quarter ended on June 30 is lower by 30% to INR 41.32 crore compared to INR 51.86 crore in previous quarter. Increase in operating profit during the quarter ended 30th June is mainly attributable to a decrease in operating expenses by 6% to INR 106.66 crore, offsetting the decrease in the revenue from operations by 3% to INR 112.14 crore.

The operational revenue to the total revenue has been increasing and extends at 68% for the quarter ended June 30, 2019, as compared to 64% for the quarter ended March 31, 2019. On a stand-alone basis, total revenue for the quarter ended June 31 -- June 30, 2019 is lower by 10% to INR 142 crore as compared to the previous quarter. The decrease in the revenues during the quarter ended 30th June is mainly attributable to decrease in other income by INR 9.81 crore. Over time, the operational revenue to the total revenue has been decreasing and stands at 67% for the quarter ended 30 June 2019 as compared to 62% for the quarter ended 31st March 2019.

And on 30 June, the total (inaudible) segment [guarantee for maintain] by Clearing Corporation's INR 400 crore.

With this overview, let me welcome all of you once again and invite all of you for question and answers. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) First question comes from Mr. [Gaurav Gupta], individual investor.

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Unidentified Participant, [2]

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My question to the management is with respect to investor (inaudible) as a company we have done in our subsidiaries. So considering the kind of investment that we have done, the return on investment on those investments, specifically like in Indian Clearing Corporation, we have done there whole INR 350 crore investment. And as per the latest standard reporting IFSC, we have done INR 125 crores in Clearing Corporation of IFSC in about [INR 80 crore]. So considering the huge amount of investment that we have done in the subsidiaries, how we are expecting the return going forward because our core business, that is the exchange -- BSE exchange, I think on quarter-on-quarter basis, we are seeing nothing but the reduction in our net profit margins over there. So that is the first question.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [3]

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So you have made 2 statements. One is that quarter-on-quarter, you are seeing the reduction in profit margin, which is not true. As I said in my statement, actually the EBITDA margin has increased.

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Unidentified Participant, [4]

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(inaudible) I meant to say.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [5]

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Yes. So sometimes, we look at sort of some numbers and we make up our minds. But I just wanted you to be aware that actually the EBITDA margins have grown slightly, not -- but it's not by that degree.

Having said that, the second question on the India International Exchange part, basically most of the investment is in a way regulatory in nature, regulatory capital, because starting an exchange is not an easy task and governments also put many conditions, including in large regulatory capital. So the action as well as the Clearing Corporation there has necessitated a minimum amount of investments. And their annual loss, as always been discussed, is around INR 32 crore per annum. That is pretty much in line with what has been being said over the last many years. And I had mentioned earlier also, over the last 2 years that the investment in the India International Exchange as well as in other businesses of ours is basically more like optionality you are buying -- that the money you are actually putting in, in case they grow up, EBIT can grow up for many (inaudible) and basically, as and when GIFT City has its own single regulator and many more products including the currencies, Indian rupee, U.S. dollars and so on and so forth, it can have a very large -- in fact, in terms of its own revenues as well as profitability. It remains to be seen (inaudible) clearly, Special Economic Zone and International Financial Center, which is coming up, so volumes are increasing, BSE-promoted exchange and gaming corporation are the market leaders. And it remains to be seen how we are able to monetize as and when sort of we have market power to do it.

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Unidentified Participant, [6]

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Use on Indian Clearing Corporation? Or that we have investment of (inaudible) [INR 350 crore]?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [7]

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In India Clearing Corporation, it's not INR 350 crore.

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Unidentified Participant, [8]

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(inaudible)

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [9]

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In ICCL, that is India Clearing Corporation Limited, we have almost now before INR 354 crore, and put together by its own profits and all exclude more than INR 400 crore currently.

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Unidentified Participant, [10]

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Okay. And right, you're saying that current rate of loss in the IFSC entities is something (inaudible) INR 35 crore per annum.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [11]

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Yes, INR 30 crore to INR 35 crore.

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Unidentified Participant, [12]

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Yes, yes. Yes. (inaudible) so how we are going to -- from the cash accruals of the BSE limited? And since how long, like 2 years, 3 years? Like, what is the time horizon that we will be consistently incurring this kind of a loss? So that as an investor, we can have a fair idea that what's going to be 5 years down the line. Maybe this staff will stop throwing money out of the box.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [13]

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This quarter, ICICI Bank has decided to invest in that exchange and also the Clearing Corporation. I think INR 36 crores or 10% they have decided to invest. In ways when this was set up because they [wrecked] for 5 years. We do run the exchange to check out whether it is making any headway or not. I'm happy to report to you that almost about $4 billion plus of turnover in one day, almost [INR 31,000 crore] is basically putting it amongst the largest exchanges in the IFSC sector. For your information, I think in month of May or June, the transactions at India International Exchange index futures, where our index perimeters were larger than -- at invest on the Singapore Exchange, so basically in a way -- in a very short time, it has suffered a lot of doubt. And at the same time, the revenues are -- get to be realized in a significant way. There is some revenue (inaudible) of bonds and things like that. But it is early days and minimum priority is what we have given. We are happy that in 2 years, the (inaudible) has become large-market players, more segments and corporates in.

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Unidentified Participant, [14]

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One more question, if you will allow me. That last con call and a couple of earlier calls as well, you talked about the interoperability between the Clearing Corporations, like Energy and CSDL (sic) [CDSL]. So since that has been implemented, if you can just throw some light at how exactly that is going to pan out and how -- if it is going to impact positively our business as BSE Limited as compared to competition?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [15]

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In a way, interoperability has been long-pending reform in India market. For almost 9 years, it has been talking about. It has been implemented for [Equity] Derivatives now. For the currencies, I have been told today that there might be minor postponement of 1 or 2 weeks, and the biggest are in then (inaudible) metal exchange. But BSE is fully equipped and BSE is implemented. Last few days there [was seen] -- some increase in BSE's trading volumes. I thought (inaudible) was a trend, but it's early days. It will allow many more experimentations going forward. And hopefully it'll be beneficial to BSE as well as Indian markets.

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Operator [16]

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Next question comes from Mr. (inaudible), individual investor.

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Unidentified Participant, [17]

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So my first question is that, why we are not spending much amount on -- much focus on advertisement? As of now, the interoperability is implemented. So I think it is our chance to go aggressive on advertisement. So if you can throw some light on that? If I can remember in like 2 years ago, there was 1 advertisement coming like feel the financial pulse of the nation. So it was a good campaign from our company.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [18]

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In a sense, it's a good idea to do advertisement. We have to basically meet the balance between what is possible and what needs to be done. We have primarily a B2B market. It's not a B2C market where advertisement makes too much difference. Currently, the interoperability is in early days. People are still trying to figure out also a lot of (inaudible) go on saying 95% of the members decided to go not with ICCL and all. As I told, I think 450-odd members, [everything's over to] BSE's clearinghouse. And so it's a [many] long information road, but ultimately the people who need to know are close to around 1,000, 1,400 total.

And so all of them, we are making them aware. We have hired several rounds of discussion with members in different cities across all last 6 months and made them aware, gave all answers which nobody else could do because in a way, we have been prime mover of this framework. And people take it at the top leaders in this business of interoperability. And hopefully as you rightly say, it is a chance we have, and hopefully people will use it to create a more level playing field across (inaudible).

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Unidentified Participant, [19]

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Okay. So my second question is regarding a mutual fund business. So as you say, the -- our market is at 75%, right?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [20]

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Yes. (inaudible).

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Unidentified Participant, [21]

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Yes, so what kind of (inaudible) like in that? If you can give me just a picture of next 5 years, how it could be planned out and it could be one of the important segment for us? So that would be helpful to project the morning or future revenue from that segment.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [22]

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Yes. It's same thing in the front, and we don't give any future guidance.

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Unidentified Participant, [23]

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No, no, I'm not...

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [24]

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Effectively, we have a good base now around 43 lakh, 44 lakh [transactions] a month. It has been a bad time for mutual funds over the last 6 months, but we have continued to dominate in some ways. More and more people are joining BSE StAR MF, and an industry distribution framework, which was cheaper to -- unorganized as (inaudible) become completely automated, and many people recognize that, over the last 5, 6 years, the funds which are flowing to the mutual fund industry, to some extent are due to good advertisement but to a large extent due to the distribution framework which BSE has created.

At the same time, today, I believe I just -- I've been told that we account for 12% of -- in a way, our revenues are from the number of transactions and not value of transactions. Value of transactions-wise, we are larger but number of transactions is around 12%. That's what I've been told. Some people say it is 20%, but I would take a conservative figure of 12%. And that -- if it -- the industry doesn't grow at all for next 3, 4 years, still the growth potential is almost 8x.

And if industry grows over the next 5 years to, say, become double, then we have a even larger growth potential. And that is what we are looking at, that we add value to the industry. We bring down the cost of distribution in a more secure -- more certain way. For everybody, it becomes a win-win solution. And the industry ends up supporting BSE's initiatives in this regard.

So we have come a long way. 10 years back, when we started, nobody paid, nobody even thought that this was possible. Today, we are a force to reckon with. But it is an outcome, not out of a fluke or not out of luck. It is an outcome of tremendous hard work against many odds, including many of the large players from within the industry, also a key against it. And still, this has become successful because its time has come and hard work has happened. And if we continue to do that, well probably this might become a prime mover of our revenues going forward.

As I said today also, the mutual fund in this quarter has given almost 80% revenues compared with our trading volumes coming from equities market, which is a much more older segment, almost 144 year old. And so you can see that it's catching up very nicely. And hopefully, going forward, it will do even better.

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Unidentified Participant, [25]

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Okay. Sir, just last question on Power exchange. So I -- when we should expect -- we're getting the old approval and incorporating exchange. It's like I don't -- may have made the time lines. But just like the index 1 year, 2 years or 3 years, like that?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [26]

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The regulator has given 3 months' time for compliance with the regulatory standards in terms of the shareholder norms. And so the efforts are currently on to bring in additional shareholders on -- and we've also shown some interest by writing to us to bring them on to the platform so that we are more broad-based, share-owning structure (inaudible) 3 months currently.

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Operator [27]

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(Operator Instructions) Next question comes from Mr. Ashok Shah, LFC Securities.

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Ashok Shah;LFC Securities, LLC;Analyst, [28]

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My first question, Ashish, can you throw some light on when this buyback is to be implemented?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [29]

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The -- if everything goes as per schedule, probably by October 1, everything should be over.

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Ashok Shah;LFC Securities, LLC;Analyst, [30]

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So what's the tax to be paid by the exchange and investors?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [31]

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No, (inaudible).

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Ashok Shah;LFC Securities, LLC;Analyst, [32]

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(inaudible) clarify by the government?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [33]

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Exchange will be paying I think (inaudible) of tax.

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Unidentified Analyst, [34]

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Sir? Sorry, so not a 20% tax on total buybacks?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [35]

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There are -- what I call, there are situations within the finance at this time which has allowed us to pay lower tax because the -- when the BSE shares are issued to foreign investor, they were issued at a higher price. So it's basically a premium -- minus premium is where basically we are currently due to (inaudible) fate or luck, we are to pay only INR 12 crore extra tax. And the investor is not getting up, paying any tax at all.

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Ashok Shah;LFC Securities, LLC;Analyst, [36]

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Yes. Okay. Can you take another question?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [37]

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Yes.

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Ashok Shah;LFC Securities, LLC;Analyst, [38]

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Yes, the second question is regarding BSE being a very old -- oldest exchange. We have our largest number of the companies listed. But unfortunately, opportunity [de-mating] of ourselves is a very tedious work now on, and still 15% to 20% of sales has not [de-mated] by the investors due to the -- some problem but was from the part of the registrars and everything. So can we take initiative in the largest number of [clubs de-mating] processes becoming easy and the largest BSE relationships like that [de-mated.] So sitting on the BSE actually get increase and our income also get increase?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [39]

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That is a very good idea. But once you tell me the real (inaudible) by ensuring that those [de-mate] people will only trade on BSE and not other exchanges, we will discuss that.

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Ashok Shah;LFC Securities, LLC;Analyst, [40]

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No. Well, for the BSE-listed sales, it is to be getting on the BSE only. And they all are in India. Just BSE being the largest sale -- company being listed, it will be carried on naturally on BSE only.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [41]

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It's a good idea. It's a noble cause. We continue to work on it, but the largest value [is in top 700] stocks which are commonly listed. And so the remaining are basically not trading much. But (inaudible), and we'll work on it.

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Ashok Shah;LFC Securities, LLC;Analyst, [42]

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But in the [de-mating] with the other (inaudible) everything is only met. So it's easy to de-mating the procedures and for all the tests came to compulsory [de-mate] 100%. And yes, we saved -- simple procedure is followed.

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Operator [43]

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Next, we have Mr. [Carter Johnson] from [AGS].

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Unidentified Analyst, [44]

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My question was on your commodity side. It's pretty new for BSE. Can you just throw some light like what is the road map laid down by BSE going forward? Because (inaudible) October (inaudible) will now in FY '20? So what is the road map going forward, sir?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [45]

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Basically, we have started many (inaudible) commodities. We have started also non-equity commodities, (inaudible) commodities, oil and gold and silver. And then we want to be smart with some of them. Then we went to guar seed, guar gum, turmeric, cotton. Turmeric, guar seed, guar gum and cotton, we are already delivering large market share now. In gold or silver, we have not been able to capture that market share. And oil, we did not have a price framework which was -- [in a way] benchmarked against the best in the world. Now we have got a (inaudible) done with ICE, InterContinental Exchange, for the [vent] contract. And so we will launch the contract with them sometime soon. You might be aware that there are 2 types of crude oil that get traded, WTI and Brent. And so we have now the ICE, which is the largest exchange in that Brent area, has tied up with us. So we have some good interesting products coming up, even almonds and other things in commodities, I mean agriculture commodities. So you will see some interesting developments going forward in commodity segment from our side.

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Unidentified Analyst, [46]

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Okay. Sir, my question (inaudible) charge adding a particular fee, what does -- how do you perceive the segment to grow?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [47]

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Because you people are used to paying. And currently, we are opened newly -- so we are basically adding it free, but once people see our services and (inaudible) charges and better technology, slowly people will come in more numbers, like what happened in currencies. In currencies, we started around 2013 December or 2014 early, and we were starting almost 7, 8 years after other exchanges. And today, on day after day, we have more than 50% market share in currencies. And we started having 0 for the first full year or more. And slowly, we started increasing. And still people have stayed with us because they tested our services [at large] and all, and that is -- basically whenever we get market power, we start charging. And we charge reasonably, which makes it a win-win thing for users as well as BSE.

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Unidentified Analyst, [48]

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Okay. And sir, coming to the previous gentleman's question on buyback, I believe (inaudible) will go over 20% tax plus surcharge and all the other stuff. So can you just throw some light on why do you expect INR 1 crore tax per (inaudible) and not the higher amount?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [49]

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But there is a very complex question, but I am giving you, on this public platform, INR 12 crores. It has been discussed ad nauseam in BSE AGM also and answers have been given. But effectively, the basics is that we have issued shares at a premium earlier. And now we are buying back. So the difference between the 2 premium is what the tax is payable to. Okay? So you might not have read the details. You might have read only newspaper (inaudible) details. And that's why you may have this perception, which is in a way invalid for this specific case. And that's why INR 12 crores is the amount which we will (inaudible) end up paying.

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Operator [50]

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Next question comes from Mr. [Ankit Donwe].

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Unidentified Analyst, [51]

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Sir, I have a question regarding our growth. Our growth has been consistently improving. But the share, not the price of the stock, has been consistently dropping. Can you suggest a few important reasons why this may be so?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [52]

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We are completely unaware of why this happens. So I will be at a loss to give you any answer on that.

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Unidentified Analyst, [53]

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Okay. Okay. And sir, with respect to buyback, this is my last question. Like how many shares can original investors participate or pledge for the buybacks? Is there any maximum ceiling on that?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [54]

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Yes. I have been told, if you consider yourself as a retail investor, then it will [3 80] shares can offer maximum.

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Unidentified Company Representative, [55]

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If anyone's reading, less than (inaudible).

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [56]

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Anybody holding less than 300 shares is a retail investor.

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Unidentified Analyst, [57]

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So if someone has more than 380 shares, he can pledge all the 380? Or he's not eligible?

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Unidentified Company Representative, [58]

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No, he can take (inaudible)

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [59]

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It's not a place (inaudible) buyback category. So he will be considered as a (inaudible) investor.

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Operator [60]

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Next question comes from (inaudible) from (inaudible) Capital.

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Unidentified Analyst, [61]

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Sir, earlier in the call, you mentioned that ICICI Bank has decided to invest in IFC, right?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [62]

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Yes.

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Unidentified Analyst, [63]

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[So usual for] any details regarding it?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [64]

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As I told you, they are going to invest up to INR 36 crores for 10% each in the Indian International Exchange and India International Clearing Corporation.

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Unidentified Analyst, [65]

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And we're invested (inaudible) how much in both combined?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [66]

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INR 205 crores.

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Operator [67]

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Next question comes from Mr. Shivam Gupta from CWC Advisors.

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Unidentified Analyst, [68]

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I've got a couple of questions. So the first one is around the Equity Cash segment for us. So this is the first quarter in fact after a series of quarters where we saw a decline in the revenues, and it -- this time it flat-lined on a Y-o-Y basis despite the fact that the broader markets are probably in a downward trend. So just wanted to understand why -- what could be the underlying lever why this may have gone through? And secondly, given the fact that [improv] is about to come in, we'll run into a very weak base for this particular segment on a comparable basis, would it be incorrect to be optimistic and (inaudible) about BSE share going up in this segment?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [69]

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See, if you are looking at the price, I don't know what happens to prices. Prices in many ways are not in consonance with the realities. So the way we look at it now, the business is working. And BSE's overall EBITDA margins have improved a little. We would of course have been more happy if it would have been better. But currently, post-interoperability, it was just still stabilizing it right now. We think people who are facing more orders today or last 1 week, the number of orders has increased by substantial amounts.

The value traded has increased a little bit. Although -- I mean it is large by BSE's percentage. But if you take overall percentage, it is small. And so it is early days. I keep my fingers crossed and hope that even the equity derivatives -- we have seen even some -- whatever green shoots, even in equity derivatives, we have a couple of transactions have happened on BSE liquidity derivatives post-interoperability. So it's interesting.

It's few days since it started. We will still wait and watch how this pans out going forward. But clearly, we are fully equipped. We are facing no technical issues at all. And we have also changed our technology rapidly to mitigate any issues that may come about, even if the other trading corporations [don't have] new data in time and so on and so forth. So effectively, we have always prided ourselves over last 10 years in having the best technology in the world, and that is what continues on this side. Hopefully, when the currency's interoperability starts and when, we would have even bigger market share because of the -- I mean better service, cost and technology. But it's still early days, I would say.

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Unidentified Analyst, [70]

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So in the [old system], what explains this quarter because inter-op was not like this quarter. This quarter see our nonexclusive segment grew 23% in terms of transaction charges.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [71]

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So (inaudible) see, we are a liquidity (inaudible) segments, the SME, (inaudible) physical. So there is a limit of freedom of (inaudible) communication, which happens in the (inaudible) in one particular segment, which has all been good within the equity-type segment. So when the segment also takes [the worst] through. So that's why you see that we have been able to maintain the similar income from equity segment.

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Unidentified Analyst, [72]

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Got it. And I have just 2-part question, the last one from my side. So the service to corporate segment, this is the third straight quarter where it has not performed well. So is it like -- because it is extremely highly correlated to the primary markets activity? Or is there any other thing to read in there?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [73]

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Yes, it's basically -- what happens is not -- I mean, primary market is not only new IPOs but also price issues, bonus issues, any change in capital structure for that. The companies end up paying money (inaudible) fees to BSE. And the last pretty much entire year, there has been down very low activity in the -- that primary market side of it. And that's where basically we have seen some reduction.

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Unidentified Analyst, [74]

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All right. And the last question, if you could also just give me some highlight of how should we think about the clearing and settlement income that we get in the consult, which also has been running slightly subdued de-acceleration for some quarters now?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [75]

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Sure. We've consolidated and the clearing and segment income is basically from the treasury income, which is earned by Clearing Corporation (inaudible) there's some other (inaudible) estimate there, pretty minor (inaudible) the trading corporation.

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Unidentified Company Representative, [76]

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The income which comes from the consolidated.

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Operator [77]

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Next we have (inaudible), individual investor.

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Unidentified Participant, [78]

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I think this point was, now we are into so many segments. I mean we are competing with multiple exchanges. But most of the places, the competing exchanges is a very, very huge challenge, the commodities, power exchange or in (inaudible) focus on this and try to get the market share higher that? Because everywhere we (inaudible) from the sources, so is there some sort of a time frame where we can really narrow down and say this segment really will be gone?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [79]

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It's a good question, which management asks itself all the time, every day. And the answer is you cannot be priority aside where you will become successful. But at the same time, like mutual funds, BSE is very large, right? So BSE will continue to work harder to maintain its leadership. SMEs, BSE is large. So BSE will continue to do it better. IPOs BSE is large given the recent IPO, which gone over. BSE has more than 60% means, standard comes from the -- its own platform. So there are many segments like bonds, the distribution, offer to buy, offer to sell. BSE is very, very, very large compared to that -- comparing, but it's not helping us much revenue. But tomorrow, some of this may start earning revenues. Even in commodities, we give you our [existing] until October. Today, we are not existing in some of this, even till last month, but all these (inaudible) Turmeric. Today, we probably would close at 60% market share. Today, in 1 month’s time. Guar gum, guar seeds, probably 40% market share. So sometimes what clicks, you don't know, but you need to continue trying that, what I call controlled cost basis. Post our results were announced, somebody wrote about the cost, meaning we have simply managed last year. And for me, basically when you want to do from 9 to 5 -- 9 to [3 30] transactions to -- from, say, 9 to 11 in the night, you need to have people -- additional people, additional technology, interoperability, all those things basically end up costing you. And so our (inaudible) what I call a fixed cost (inaudible) with variable income. Fortunately, we also have fixed income in former listing fees. So unlike, say, commodities exchange, which (inaudible) we operate fixed cost, a variable income, we have like fixed cost, fixed income to some extent and then variable income to other extent -- play. So somewhere along the line, we need to continue to increase our fixed income, control our fixed cost and keep on trying to get more variable income going forward, and that is now building up in mutual funds. In some ways, on variable basis, in SMEs on a fixed income basis or listing fees. Even overall, listing fees are generally doing well. Variable part is in the IPO, so if and when they happen, we end up getting some money. On transaction charges, the largest transaction charges [took] 3 years back, we are getting directionally from the exclusively listed stocks, and they have gone down 80% in value. And so our financial side also have gone down even more because [the drilling money reversal] dried up. If they come up again, you will see a different kind of a -- sort of a revenue that is going to happen. So effectively, all these things, of course, equity derivatives remains aspirational for us because we did not participate from 2000 onwards, when they were allowed -- we tried in between for 2, 3 years. Again, most interoperability, new opportunities come up. Our technology is considered the best. The liquidity continues to be in some other place. So hopefully some of it may flow back. If you could (inaudible) a discount where it really counts. Otherwise, currencies, we are doing very well. Interest rates, futures, we are doing well. IPOs and SMEs and so on and so forth. So we are bringing very, very well in many areas, which probably you are not observing because you are not watching that intently. And they also currently don't give us much revenue except in currencies, in SMEs and largely in mutual funds.

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Unidentified Analyst, [80]

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To observe your other areas. The reason why I put out, these are the big farming areas for the power exchange and the good chunk from Power Trading MCX and from (inaudible). So that might be the reason why I asked this question. The second question which I have is, last time somewhere in the annual report you mentioned that data center and data related thing can also be a new driver. Any progress on that? Or how do we see it planning going forward? Because we collect data, we have a lot of data. Any monetization plan which we see there?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [81]

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So India, basically the data-related services for both actions is not very high vis-à-vis other markets because there, those markets, the action is actually charged given the numbers for the data, while in India, actions are forced to give data free of cost [in real time] even to the investors. And so in a way, what is considered data business for international, actually is [India mix yield. You] don't have that comparable, but we are trying to work on some additional areas like we are just now in the process of signing through our subsidiary, a new services for data security for third parties, including stockbrokers.

And let's see how this works out. But we also have through our subsidiaries implementation happening in shift because we are now the subsidiary market (inaudible) also a partner of [fresh now], they are a service (inaudible) swift in India -- swift India. And we also implement many, many projects on behalf of other companies and so on. Also there are interesting outcomes of that strategy that is happening. There are other things on our schedule you might have seen. There is a company called (inaudible), which provides the social media trend of BSE's traded companies. And there is one company called [Markets Mojo], which probably have much more detailed information about the (inaudible) company, and there we are revenue sharing on advertisement services. So there are interesting models we are working on. They're all currently very small. But it's basically experimentation mode currently.

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Operator [82]

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(Operator Instructions) Next question comes from Mr. Ajay Bodke, Prabhudas Lilladher.

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Ajay Bodke;Prabhudas Lilladher Pvt. Ltd.;CEO & Chief Portfolio Manager, [83]

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Firstly, I think you mentioned in the presentation that you're awaiting approval for a composite proofing license from RTA for the insurance booking. By when do we expect this license? And secondly, you also mentioned that currently you're not levying any fees towards the use of the [e-platform] facility for the BSE BOND platform. So any thoughts on when do you intend to start levying fees for this?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [84]

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So EBITDA part, I don't know. It's very close, but still the best are coming. So we keep on giving them answers, some new questions got raised. Hopefully, it should happen because we are already in technology and everything as now, but you never know what -- I mean when these things happen, actually. Because we are not regulatory sort of compliance related issues. In terms of BSE BOND platform, basically -- currently, we have around 60%, 65% of market share on all bonds. Still, the competition has a habit of cross-subsidizing the newer segments by not charging anything, therefore reducing any sort of revenues that (inaudible) smart competition like us, and there is one thing to go to competition commission like (inaudible) and news back, and they are still struggling to get their [financials] despite winning. And so we don't want to go that route. We'll continue to fight and whether when we get market power like what we did in currencies, we will start charging even mutual funds. For 8 years, we did not charge, and 9th year, we start charging. Now it's basically -- in 10th year we are -- probably it looks like if we might have larger revenues from there and on from the trading revenues in (inaudible) market going forward. So as an end, media market power will start charging because it's no point in fighting legal battles in India. It just drains you out emotionally, financially and otherwise. And still the resolutions don't come so fast.

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Ajay Bodke;Prabhudas Lilladher Pvt. Ltd.;CEO & Chief Portfolio Manager, [85]

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Sir, on -- a couple of slow quarters back, you had mentioned about the kind of nonlinearity in the incomes that could have proved to you on platforms like the StAR MF platform that you have reached so successfully. Now the kind of proceedings that are accruing to the mutual funds, you had mentioned that you would -- progressively are trying to negotiate a better deal with the mutual funds. So if one looks at the medium term, what kind of sort of improvement in, say, for transactions of -- can accrue to the BSE?

And also, sir, in terms of the 2 emerging businesses of insurance located and power exchange, if you could give a medium-term perspective, what kind of potential do these 2 emerging businesses hold for BSE? That possibly could help the market appreciate I think the kind of undervaluation that it is currently according to the franchise that we are building so successfully.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [86]

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Last year, if you see our mutual fund revenue was around INR 6 crore, okay, at this point in time in Q1. This year, it's almost double, INR 11.9 crore. Okay. INR 6 crores total, almost INR 12 crore. So you can see the increase in the volume as well as value, and it will continue. Of course, the base has become large enough, so we may not grow at the rapid pace we were growing earlier. But the revenue base is pretty, sort of, interesting. It is growing very rapidly. More and more people are joining, even the ones who have joined are putting now more transactions to us because they are feeling more comfortable. And so, as I said, currently, we are doing 44 -- 43 lakh transactions a month. The industry tells me that we are 12%, 13% of the market yet. So we have like 8x more to grow and -- even if the industry doesn't grow. And if industry grows at a good pace, then in 5 years, if they double, probably, India will like a very large growth upside that is available. And this is pretty much the industry standard. Now everyone is on this platform wants to join in, if they are not there. And it's easy to operate. And mobile has been in -- I mean, the mobile StAR MF [IFA] has like become a very important tool in the hands of the IFA community. So we hope this continues. We will work hard to consolidate those. And second was on? (inaudible) So commodities, early days. We are having somewhat a real -- winning some areas. We are fighting hard in other areas. Hopefully, by next year, this time, you will see much more confident BSE in commodities because -- although we launched (inaudible) which doesn't happen irrespective of whenever you start. Like vendors are not ready with the back office and front office. They get delayed. And so those kinds have started now gearing out. BSE terminals also, along with other commodity exchange terminals. And so -- and of course, we have been winning some areas. So people are more confident coming over to BSE for commodities. We are increasing our product range. And that is also helping people who are pure, basically, commodity players, not exactly the goers or hedgers, but just the people who trade. They want many more products, so which we are now offering as a book in commodities. So there are still early days, but we are very confident the response which we are getting from many, many players across India in various commodities.

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Operator [87]

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(Operator Instructions) Next question comes from Mr. [Manon Patel] from [Equitas BMS].

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Unidentified Analyst, [88]

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Congratulations for great performance in many segments. So my first question is regarding StAR MF. So I wanted to understand what would be the profitability in that segment? So do we take cost structure very separately from the entire company? How does it work, sir?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [89]

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Yes. See, there are some costs associated with processing certain transactions, which went in also. But then overall, our net margin should be more than 50% to 60% in this segment.

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Unidentified Analyst, [90]

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Okay. So we are already profitable and (inaudible).

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [91]

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(inaudible) Overall, you must understand that ours is a fixed cost business. We have fixed cost of doing a business, and all of that put together, any new business, marginal cost is pretty close to 0. And so if you make a lot of money there, the -- what I call the marginal cost is not there. But the overall cost gets allocated, and that's where you can talk about 50% margin or 60% margin. But the cost remains fixed because running (inaudible) now is for 5 products or 10 products, it's pretty much the same cost.

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Unidentified Analyst, [92]

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Understood, sir. So my next question is on interoperability, you have talked a lot. So just wanted to understand. So are we trying -- are we planning to make another push to get the derivatives market share from (inaudible) to 5, 6 years back. So are we trying (inaudible) again?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [93]

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Yes, we continue to try every day. So we'll try even tomorrow and day after tomorrow. So we'll continue trying incessantly.

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Unidentified Analyst, [94]

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Okay. And sir, my next question is, we are doing fantastically well on India Inc. platform. So what are the risks that competition might take some market share from us over there?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [95]

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I mean risk is of course there. That is a proposal to do some sort of a SGX IFSC-NSE combined transaction, and all the approvals are yet to come. We don't know the details. But as and when it comes, we'll have to see how things work out.

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Operator [96]

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Next question comes from Mr. Amit Chandra from HDFC Securities.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [97]

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Sir, my question is related to the StAR MF realization. So if you see in first quarter, the realization has jumped from [INR 7.8] to just around [INR 9.8 per] transaction. So have we changed to see that it's all to mutual funds or (inaudible) [INR 9.8] will be the fees that is going to be there, no? For the next quarters?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [98]

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Let's see (inaudible) has increased. Let's see how we are able to sort of work with the industry players. [Mentally], an increase has its own repercussions. And so at the same time, the value provided is very high. So slowly people adjust to this new (inaudible).

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [99]

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Okay. Okay. [So I know like] when we have taken the hike, this hike, when we have taken?

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Unidentified Company Representative, [100]

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So from basically April 1 onwards.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [101]

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Okay. And sir, my question -- second question is related to [NIB] hike in listing fees that we have done for the exclusive listed segment. So the total listing revenue that we get, how much is that on excluded and non-excluded segments? And [I know almond-blended], which is what kind of increase you can see in listing revenues for FY '20?

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Unidentified Company Representative, [102]

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(inaudible) revenue as far as the exclusive segment is concerned, we will be getting a fee from around 2,500 companies, which will be at [3 lakh fix] on leverage. So that INR 75 crores is revenue would come from the [other companies.]

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [103]

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And basically, in a way, 3 lakhs is a very small amount. And so there is some upside for the next few years in that area for BSE.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [104]

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Okay. Okay, sir. Yes. Agreed, agreed. And sir, last would be on the Ind AS treatment that we have done in this quarter. So we have seen foreign depreciation charges. Can you please explain how we have taken the Ind AS -- Ind AS treatment? And how much rent do we paid and how much rent is being the commodities and not -- the detail [running] there?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [105]

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Yes, (inaudible) right?

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [106]

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Yes. Yes.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [107]

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So the impact on us is insignificant. So we are continuing to win existing treatment for the time being.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [108]

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So the depreciation has fallen. Any particular reason for that?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [109]

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Depreciation is the numbers, a function of the applicable rate [availability] on the asset base.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [110]

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Okay. So the Ind AS impact is -- it isn't (inaudible) right?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [111]

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Yes.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [112]

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Okay, okay. And also, my last question would be on the cash that we have as of now. So what is the cash that we require for regulatory requirement? And in terms of the exposure to Ind AS, how much provisions -- additional provisions we have taken in this quarter? And (inaudible) total cash, how much now cash would be required for the future investments or for the regulatory requirements in the future?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [113]

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The first one is, as far as (inaudible) impairment is concerned, we are now

(technical difficulty)

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Operator [114]

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(Operator Instructions) Sir, you may go ahead. Yes. Yes. [We can hear you]. Please continue.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [115]

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Yes, so my question was the [accrued task] that we have is then [I know] provide the breakup of cash between the income (inaudible) cash [more than] cash that we have for BSE? And how much is the exposure to (inaudible)? How much provisions we have done as of now? So just the breakup of cash and the provisions.

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Unidentified Company Representative, [116]

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So with respect to ILFS, as I mentioned earlier

(technical difficulty)

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Operator [117]

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Are you there? (Operator Instructions)

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [118]

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Which will be collected (inaudible) requirements.

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Amit Chandra, HDFC Securities Limited, Research Division - IT Analyst [119]

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I was unable to hear you because -- so (inaudible) we can take it off-line.

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Operator [120]

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Next question comes from Mr. Rahil Jasani from ICICI Securities.

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Rahil Jasani, ICICI Securities Limited, Research Division - Research Analyst [121]

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Just one question. We said that the annual charges to the corporate annual listing fees have been increased for the exclusively listed companies from 1st April, but when I see the listing fees growth in the presentation, it's largely the same from Q1 FY '19 to Q1 FY '20, around $395 million. So how do you explain that?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [122]

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Rahil, listing fees, if you (inaudible) companies, we see (inaudible) annual listing fee, initial listing fee. So the component, which we have increased is the annual listing fee part. So if there is any offset due to the number of listings in this year, but we don't have it in significant initial listing fees in the current year. So this is a bit set off.

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Rahil Jasani, ICICI Securities Limited, Research Division - Research Analyst [123]

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No, I'm talking about the annual listing fee. Sir, you gave the breakup in the presentation, the annual listing fee tells us [INR 397 million] in Q1 FY '19 and [INR 394 million] in Q1 FY '20. So that's largely flattish year-on-year.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [124]

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Yes. And one more thing on that side, as I said earlier, we have got certain areas of listing fees. And that actually [is traded amount], which (inaudible) listing fees the previous year.

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Operator [125]

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Next question comes from Mr. Jayesh Gandhi.

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Jayesh Gandhi;Harshad H. Gandhi Sec Pvt Ltd;Director, [126]

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It's been one month since interoperability. Can you throw some light on -- has there been any increase in volume post -- I mean this past 1 month and maybe you gained a little bit of market share?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [127]

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It looks like, looks like. Just now, if I tell you today's statistics in equities, we received a INR 31.82 crore order, which is pretty much higher compared to, say, what we used to assume last month. Probably, it has gone up by almost 70%, 80%. The number of orders have gone up. The value today trade-in equity is INR 2,745 crore, which was, say, close to INR 2,000 crore last month. So it has gone up, but I wouldn't take it as a trend. It's early days. The number of orders are daily increasing. And that's a hard (inaudible).

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Jayesh Gandhi;Harshad H. Gandhi Sec Pvt Ltd;Director, [128]

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Okay. And if I'm not wrong, your interoperability in future and options are supposed to start from 1st August. Has it started?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [129]

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Yes, it did. And surprisingly, today, we have the 4 plays in equity derivative a very long time. So again, it's a little bit of open interest also. I can see that and almost close to 50 lakh orders there, too. So there is some -- what I call green shoots, we need to work hard to ensure that we are able to kind of get more people, start their algorithms and then the other people will come.

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Operator [130]

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Next question comes from Mr. Ashish Chopra from Motilal Oswal Securities.

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Ashish Chopra, Motilal Oswal Securities Limited, Research Division - Research Analyst [131]

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Sir, just a couple of questions. Sir, you mentioned that the annual expenditure currently on the INX is close to INR 32 crores. That would be after including the liquidity enhancement?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [132]

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Yes. [Everything].

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Ashish Chopra, Motilal Oswal Securities Limited, Research Division - Research Analyst [133]

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Okay. And similarly, since we are not yet charging on the Commodity Derivatives, then so what could be the operational costs of that platform as of now or the losses attributed to that segment?

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [134]

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See basically, what happens is our cost is fixed. There is no specific costs there in a way because [margins] are thin. People who come and start in the morning, afternoon, evening surveillance, we have added few people everywhere to ensure that the market runs longer (inaudible) commodities. But otherwise, there is no special attributable costs. Overall, costs have increased a little bit because of all this. But the revenue level then become, that will basically (inaudible) largely a fixed-cost business. Right?

So for example, if [RBI] allows evening trading and currencies, currently, we close currencies that high [IBM.] But it is allowed. That is the top there is, right? So if it allows, we don't have to spend extra now. But the revenues might become extra, right?

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Operator [135]

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As there are no further questions from the participants, now I would like to hand floor back to Mr. Yogesh Joshi. Thank you and over to you, sir.

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Yogesh Joshi, BSE Limited - Head of IR [136]

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Thank you, sir. Thank you for joining today's calls.

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Ashish Kumar Manilal Chauhan, BSE Limited - MD, CEO, Member of Clearing Council, Member of Governing Council & Director [137]

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Have a nice morning, afternoon, evening, and a great weekend. Thank you for joining, and my apologies for the drop of the line in between.

Thank you.

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Unidentified Company Representative, [138]

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Thank you.

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Yogesh Joshi, BSE Limited - Head of IR [139]

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Thank you.

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Operator [140]

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Thank you all. That does conclude our conference call today. Thank you for participating on the line (inaudible).

You may all disconnect.