Angel one Ltd (NSE: ANGELONE) Q2 FY23 earnings concall dated Oct. 14, 2022
Corporate Participants:
Hitul Gutka — Head of Investor Relations
Narayan Gangadhar — Chief Executive Officer
Vineet Agrawal — Chief Financial Officer
Bhavin Parekh — Head of Operations, Risk & Surveillance
Prabhakar Tiwari — Chief Growth Officer
Ankit Rastogi — Chief Product Officer
Devender Kumar — Head
Ketan Shah — Chief Strategy Officer
Dinesh D Thakkar — Chairman and Managing Director
Analysts:
Prayesh Jain — Motilal Oswal Securities Limited — Analyst
Uday Pai — Investec Bank plc — Analyst
Pujan Shah — Congruence Advisers — Analyst
Aditya Dixit — Morgan Stanley India Company Private Limited — Analyst
Deepak Sonawane — Haitong Securities — Analyst
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
Gautam C Jain — GCJ Financial Advisors — Analyst
Sahej Mittal — HDFC Securities — Analyst
Prashit Pandya — Fintrust Capital Advisors — Analyst
Sarvesh Gupta — Maximal Capital — Analyst
Anshuman Jain — ICICI Securities — Analyst
Kajal — Isec Services Private Limited — Analyst
Sumit Jankar — Motilal Oswal Financial Services Limited — Analyst
Sakshi Goenka — Sohum AMC — Analyst
Presentation:
Operator
Good morning, ladies and gentlemen, and welcome to Angel One Limited’s Q2 FY ’23 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Hitul Gutka. Thank you and over to you, sir.
Hitul Gutka — Head of Investor Relations
Good morning and welcome, everyone. Thank you for joining us today to discuss Angel One’s Q2 FY ’23 financial and business performance. The recording of today’s earnings call and transcript will be uploaded on our website under the Investor Relations section. The financial results, investor presentation, and press release are also available on the website. For today’s call, Angel is represented by its leadership team. We have with us today Dinesh Thakkar, Chairman and Managing Director; Narayan Gangadhar, CEO; Vineet Agrawal. CFO; Dinesh Radhakrishnan, Chief Product and Technology Officer; Jyotiswarup, Chief Technology Officer; Ankit Rastogi, Chief Product Officer; Prabhakar Tiwari, Chief Growth Officer; Ketan Shah, Chief Strategy Officer; Dr. Pravin Bathe, Chief Legal and Compliance Officer; Subhash Menon, Chief Human Resources Officer; Bhavin Parekh, Head of Operations, Risk and Surveillance; Devender Kumar, Head of Online Revenue; and SGA, our IR consultants.
The leadership team will give us a brief overview of the operational and the financial performance of the quarter gone by followed by a Q&A session. As a reminder, I would like to inform you that the company does not provide any operational and financial guidance. There may be certain forward-looking statements during the call, which must be viewed in aggregate with the risks that the company faces.
With this brief introduction, I now invite Narayan Gangadhar for his opening remarks.
Narayan Gangadhar — Chief Executive Officer
Thank you, Hitul, and good morning, everyone. Q2 FY ’23 has been a strong quarter for India’s capital markets with indices returning 8% and 16% for NIFTY and NIFTY MIDCAP, respectively, supported by healthy volumes in cash, F&O, and commodities. This is auguring [Phonetic] to negative returns of 4% to 21% delivered by some of the developed and developing markets. Global investment climate has been dampened by rising interest rates, rising inflation, geopolitical tensions, the risk of recession, etc. During the period India too raised interest rates to rope in inflation, which has been higher than the comfort zone of RBI, which may moderate growth prospects of the country. However, the silver lining is that India added another 6 million plus Demat accounts during the quarter thus expanding its Demat base to approximately 103 million as of September 2022.
We strongly believe we have a strong long runway ahead of us. This stems from the fact that India’s demographic dividend is largely under-represented by the current investor base. With nearly 435 million unique PAN cardholders as of March 2019, there is enough growth opportunity available. When the headline Demat count is about 103 million — while the headline Demat count is about 103 million in terms of unique accounts, this may be significantly lower as many investors have multiple Demat accounts thus indicating a robust growth opportunity for the industry as we progress towards achieving penetration levels into other developing or developed markets. Diversification of assets is another growth driver for us and this coupled with rising wallet share across financial products. The country is already witnessing a fall in the share of physical assets as the current generation better understands the virtues of investing in financial assets.
With an average age of just over 28, India has the youngest population across the world. As this cohort grows in their working careers, they will try to become future wealth holders with a larger deployment in financial assets. We at Angel are clearly building products and are fine-tuning our acumen to service this category of population especially from Tier 2, 3, and beyond cities of India. Since most of these clients will be first-timers, there’s a greater responsibility on regulators. Over the last year or so, the regulators have played a phenomenal role in creating a conducive environment for investors and reducing the risk of investing in the capital markets. We sincerely appreciate their efforts to increase retail participation in equity and the overall financial markets. Such insulated environment encourages more investors to participate in India’s growth story and players like us are using technology to empower these investors to better leverage this opportunity.
Our digitally enhanced products enables us to steer ahead of our peers. This is evident from our robust operating performance we have been reporting month-on-month amidst volatility in the market. Our endeavor to bring capital markets to large parts of the society is playing out well as we continue to onboard over 1 million clients per quarter for six consecutive quarters now with more than 93% coming from Tier 2, 3, and beyond cities. We garnered about 19% share in incremental Demat accounts opened in India during Q2 FY ’23 thus representing almost one out of every five clients onboarded. Rising share in incremental accounts led to a steady expansion in overall Demat market share to 11.3% as of September 2022 from 7.5% six quarters back. This demonstrates the superiority of our digital marketing strategies. The robustness of our business model is depicted from the rising turnover market share, which now stands at over 21%.
Our clients transacted average of more than INR12 trillion daily through 230 million cumulative orders in FY — in Q2 of FY ’23, which makes this our best quarter ever. September ’22 was our best month in terms of average daily orders and turnover. Our emphasis on deploying advanced analytical capabilities based on data science, machine learning, and AI across acquisition, onboarding, engagement, communication, etc. has aided us to consistently grow despite tough market conditions. Last few quarters have been challenging for the industry due to market volatility. In this background, new to market investors have taken some time to start their investment journey and this is reflected from the approximately 300 bps quarter-on-quarter contraction in active client ratio for the industry to 36.4%. At Angel too, we have seen our active ratio decline by approximately 250 bps quarter-on-quarter.
However, what is heartening and a testimony to our client acquisition strategy is that despite this decline in active ratios, we clocked our highest-ever ADTO and the number of orders in Q2 FY ’23. To further extend and benefit from the maturing ecosystem, we rolled out the first phase of our Super App on iOS which is Apple and the web platform to a limited set of clients, which was progressively offered to the entire iOS population. We have become one of the first listed fintech companies at our scale in the country to successfully demonstrated such a large migration to a new app without operating two parallel versions of the app. With the new application, we have a far better capability to iterate quickly and we have demonstrated a industry high SLA, service level agreement, of 99.995%. Over the last few months, we constituted a customer council to proactively assess clients’ experience and receive feedback from our clients. We are now better position than ever close the loop faster and course correct wherever required.
There are still some upgrades planned, which will be integrated and rolled out during this current quarter. With the changes incorporated on iOS, we experienced constant decline in client complaints and we experienced a corresponding increase in Net Promoter Score, NPS, for our journey by over 0%, which was an important learning for us as we replicated the critical responses on to our Android version as well and we are now ready to initiate the Android rollout during the quarter. During the quarter, we focused on scaling up our organic traffic and have revamped our website with this purpose in mind. The optimized site led to 11% increase in page load spend — page load speed on mobile. We also got rid of technical debt built over years of extended workflows and layers of cash, which stagnated our portfolio features and made it sluggish. And it was imperative for us to rewrite the entire code, which now makes the future nearly seven times more efficient.
Customer requested updates are now faster and easier due to fewer touch points. We deployed fully managed cloud solutions for improved traceability, reliability, and monitoring of our services; which further improved our troubleshooting process. We have also scaled up efficiency on charts as well as integrated the upgraded version of trading new library and resolved issues that led to slowness, etc. We continued to ruggedize the core trading services thus building improvements for better reliability, monitoring, and alerting, and automated deployment of services. A new data center was commissioned as a replacement to our vintage data centers. This one has better hardware and networking capabilities. We recently concluded mock testing and validation of the same. I’m very happy to share that the Board of Directors have approved distribution of 35% of the quarter’s consolidated post-tax profit as the second interim dividend to shareholders.
With this, I now request Vineet Agrawal, our CFO, to brief you on the financial performance of our company. Thank you very much. Over to you, Vineet.
Vineet Agrawal — Chief Financial Officer
Thank you, Narayan. Good morning, everyone. It is heartening to see that despite the tumultuous phase in capital markets globally, India continued its resilient performance and we reported healthy operating and financial performance quarter-on-quarter. Q2 of FY ’23 continued this trend as we report our best quarterly performance across all key parameters. Our gross revenues grew by 9% sequentially to a historic best of INR7.5 billion. Gross broking income continues to remain the mainstay revenue driver at INR5.2 billion contributing 70% to our gross revenues. Interest income, which includes interest on our client funding book and interest earned from deposits with exchanges, remained stable at INR1.2 billion contributing about 17% to our gross revenues. Higher volumes on our platform led to approximately 20% sequential increase in our ancillary transaction income to INR651 million accounting for about 9% of our gross revenues.
Depository income contributed 4% to a gross revenues at INR270 million. Income from distribution of third-party products declined sequentially due to muted IPO environment and accounted for 1% of our gross revenues. For quarter two FY ’23, gross broking revenues further split as follows. Share of F&O segment increased to 82% while contribution of cash segment came down marginally to 13%. Share of commodity and currency segments remained flat at 4% and 1%, respectively. The average revenue per client, which is calculated on the entire client base at the end of the quarter, stood at INR430 for the quarter. This trended lower primarily due to a higher share of the new to market clients, which were 88% of our gross acquisitions for the quarter. This is our experience. These clients initially are low revenue accretive, but stabilize from time to time. Despite this, we have been able to maintain our growth and profitability metrics.
On a cohort basis, we have seen revenue per client mature as we progress into year two and onwards of the wealth creation journey. In contrast to our pre-digital model where year two revenue per client was significantly lower than year one, the same is now more stable. Since we acquired clients at a robust pace over the last two years, their share in the net broking revenue continued to dominate at 69% in quarter two FY ’23. Here I wish to draw your attention to the fact that now some of the older clients are moving to the next aging bucket of two to five years. As a result, we are witnessing an increase in our net broking revenue from this cohort thus indicating longevity of clients and their corresponding activity levels. Our net broking revenue under the flat fee plan continued to witness very strong momentum contributing to a significant 85% of our overall net broking revenue.
Share of total net income from our flat fee clients to the consolidated total net income grew 1.5 times to 85% in quarter two FY ’23 from 58% in quarter two of FY ’21. Since quarter two FY ’23 has full quarter impact of the grants issued in quarter one, ESOP cost appears higher on a sequential basis. This will normalize going forward as the older grants complete their tenure and corresponding cost will not be reflected. Upfront merchant penalty was earlier passed on to the clients. However, basis clarifications received from the regulator, we have now reversed the same and provided the entire amount of INR166 million pertaining to the period from October 2021 to September 2022 in current quarter. This amount forms part of our other expenses. As discussed in the previous earnings call, we witnessed some softening of cost towards acquiring clients in quarter two of FY ’23. This is likely to normalize further as we progress into future quarters.
Our payback metrics continue to remain efficient with breakeven being achieved within two quarters. Our quarter two FY ’23 operating margin came at 52.4%. Accordingly, we achieved our lifetime best quarterly profit of over INR2.1 billion. Our consolidated earnings per share stood at INR25.6 per equity share on quarterly basis. On the balance sheet side, cash and cash equivalent increased to nearly INR53 billion. Our financial — other financial assets increased to INR19.4 billion. This increase is largely due to the cash collateral part with the clearing corporations as a run-up to the quarterly running account settlement in early October 2022. The period ending client funding book was at INR16.7 billion. Our borrowings increased to INR30 billion at the end of the quarter. A large part of this incremental borrowing is temporary in nature, which has already been repaid as we speak.
The borrowings were utilized to partly fund our client funding book, place margins with the exchanges to fulfill the incremental margin and allocation requirements partly to temporarily fund the running account settlement obligations. Our continued investments in development of the Super App and augmentation of our IT infra, that is data center in BSI, led to an increase in our fixed assets by INR540 million to INR2.2 billion as of September 2022. Our net worth increased to over INR18.9 billion as of September 2022 with our book value per share at INR226.5. Our annualized average return on equity stood at 45.5%.
With this, I conclude the presentation and open the floor for further discussion. Thank you.
Operator
Sir, should we open for the Q&A session?
Narayan Gangadhar — Chief Executive Officer
Yes, please.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.
Prayesh Jain — Motilal Oswal Securities Limited — Analyst
Yeah. Hi team. Congratulations on a great set of numbers. Just a few questions from my side. Firstly Narayan, could you talk about customer acquisition and the way you are thinking about spending on customer acquisition and what channels that you will use in this new environment that they’re coming in? So firstly, could you talk on that front as in how do you see this shaping up going ahead? Secondly, would want a deeper explanation on the increase in the financial assets and borrowings from Vineet, if you can give some more clarity as to what happened? And Vineet, it will be great if you could explain that content help us understand as to really how the things shaped up when the payout on the first Friday of the previous week happened? So, that would be great if you could explain that. And yeah, so that would be the questions that I have right now.
Narayan Gangadhar — Chief Executive Officer
Great. Thank you, Prayesh. So, you’ve asked three different questions so let’s go one by one. So, see our acquisition strategy. Our acquisition strategy has not really changed in the past — from the past few quarters. We believe that this is a market that is currently in expansion phase. We believe there is a lot of new entrants commissioned to the market and we want to tap them when they are young. We want to tap them when they are young and we want to curate them. So very specifically by young, I mean people who are under the age of 25 who are in their first jobs and they are just getting started with their journeys. This cohort is continue — is going to continue to mature over time as you see in our financial results already. As as the –because the cohorts have matured, our revenue streams and our businesses have stayed pretty robust.
Because as these client groups continue to get better understanding of the markets, better understand the financial ecosystem, better understand the products involved; they tend to act — they tend to trade more and also they tend to look at the whole — they then look at wealth management in a holistic portfolio. So, our game plan for acquisition has really not changed. We are focused on acquiring these customers young. Secondly, as far as how we continue to curate these customers. Our strategy has always been we believe that there is going to be a need for introducing a portfolio of products, which is why we are investing very heavily in our Super App. And as the Super App gets launched, we are going to be introducing multiple journeys in the future so that this same cohort that you acquire today can continue to nurture and expand their own investment horizons over a longer period of time.
Now you asked another question about borrowing, which I’m going to defer to Vineet, he can give you some more data there. But let me just answer one of your final questions, which is around payout. So payout, as you guys know, it’s been a major event for — it was a much anticipated event for the whole industry. But I’m extremely happy to report that we have performed exceptionally well on this front and we have had pretty much zero business loss at all. In fact if anything, our business numbers have improved post this payout event because we used this opportunity to reinforce our technology strength and actually come up with better experiences to allow clients to refurbish their platform with capital and things like that. So, I will leave this now to Vineet who can touch on the the borrowing cost and others.
Prayesh Jain — Motilal Oswal Securities Limited — Analyst
Narayan, before Vineet gets in, could you give certain examples as to really what transpired on that side and so whether you were able to get the money from the clients on the same day or whether you got the money by over the weekend? Because this leads to a loss in float income for you guys to a certain extent so could you give some examples as to what really transpired in those things?
Narayan Gangadhar — Chief Executive Officer
Sure. So see, the payouts happened on — I’m sorry, on the 7th as you guys already know and we basically swung into action pretty much that same weekend. We hardened our processes, we hardened our product experiences around the pay-in factor and because of this hardening and the investment that we made upfront, we saw that we had recovered almost 80% of the capital within the first week of those businesses. So as a result of that, right on the very first day that is the very first day after the payout, we actually didn’t see any loss in our order volume. Of course we don’t share those numbers, but we didn’t see any — we didn’t see pretty much any loss. On the contrary within two days, the order volumes were up, right.
So this essentially is testament to not only our technology products in handling this transition smoothly, which I’m sure you’re aware that many — that there were many other institutions that stood with actually this process of payout pain with downtimes and things like that. But fortunately, we were well prepared. We had approached this very scientifically and accordingly much ahead of time and we ran a lot of extensive campaigning also from a product strategy perspective, which really helped us communicate to the client in terms of methods in which they can have zero loss in productivity as they continue to pay. So, this is really how the whole thing materialized. Now over to Vineet, who can address the questions on borrowings. Vineet, over to you.
Vineet Agrawal — Chief Financial Officer
Thank you. So, I’ve already explained in the speech that the incremental borrowings that we see at the period-end balance sheet were largely temporary in nature and these are primarily to use the proceeds to fund the incremental client funding book, the margins that we placed with the exchanges towards segregation as well as allocation requirements, and of course some was used towards the fulfillment of the client payout in the first week of October.
Prayesh Jain — Motilal Oswal Securities Limited — Analyst
What was the other financial assets jump?
Vineet Agrawal — Chief Financial Officer
So this money that we borrowed and the FDs that matured over a period of time, we just parked them as cash with the clearing corporations in anticipation of the payout. So, most of the FDs were maturing towards the end of the quarter or early in October.
Prayesh Jain — Motilal Oswal Securities Limited — Analyst
Okay. I’ll take this offline. Thank you.
Operator
[Operator Instructions] The next question is from the line of Uday Pai from Investec. Please go ahead.
Narayan Gangadhar — Chief Executive Officer
The line has gone silent, we can’t hear anything.
Operator
Mr. Pai, I have unmuted your line. Kindly proceed with your question.
Uday Pai — Investec Bank plc — Analyst
Hello. Am I audible?
Operator
Yes. Please proceed.
Uday Pai — Investec Bank plc — Analyst
Yeah. I wanted to know the impact of the regulation of margin requirement at a client level and not at a company level. What would be the impact of this on the business?
Narayan Gangadhar — Chief Executive Officer
So see as far as the regulation change is concerned, I’m assuming you’re still talking about the payout. Correct?
Uday Pai — Investec Bank plc — Analyst
No, no, margin requirement at a client level.
Narayan Gangadhar — Chief Executive Officer
So, you’re talking about the margin side. So essentially at a client level, there is no perceived in fact per se largely because it’s a better workflow and a better orientation of client funds to help and protect their ability to trade. So from that perspective, the upfront margin which anyway we were — which now we have to pass it back to the client, right, it’s anyway something that the regulatory changes which have happened have already been factored. We have already baked those systems in our — we have already built those features in our products and our back office systems. So, ultimately all this has actually done is it has introduced a much greater level of transparency around how the costs are managed both from the regulator from a broking standpoint and also it helps the client manage their costs very well. So if anything, I think this is a great catalyst to help more people come to the market. So with this, I will just hand this over to Bhavin who can maybe add a few more — he’s our Head of Operations so he can add some more perspective here.
Bhavin Parekh — Head of Operations, Risk & Surveillance
Thank you, Narayan. Good morning, everyone. See pertaining to the location circular where anyways — segregation and allocation circulars that you are referring to, this came into existence in this quarter itself and we are well ahead of articulating. See anyways whatever customers assets that we get as funds or securities, it starts at the exchange. The only — anyways pledge of securities went live almost a year back so that was actually allocated to that particular customer who is pledging the security. The fund allocation went in this quarter and there is no impact in the business as such because we used to follow the same earlier also.
Vineet Agrawal — Chief Financial Officer
Just to add to what Bhavin said — this is Vineet. So, we’ve been able to place enough and more bank guarantees with the claim corporations to take care of the incremental working capital requirement for margin segregation and in fact we’ve not seen any decline in the business. In fact this can actually be an opportunity for us to actually grow our business with some tweaks.
Narayan Gangadhar — Chief Executive Officer
And just to add to that just to conclude this out, I think we are going to see more push from the regulators which is actually great for the rest of the industry because what they are trying to minimize is the amount of clients payout which is under — which is either unutilized or not clearly utilized at either their end or with the broker. So, I believe this is actually a great move on behalf of the — for the rest of the industry and, as Vineet said, this will open doors for better innovation on the product side.
Uday Pai — Investec Bank plc — Analyst
Okay. Thank you.
Operator
Thank you. The next question is from the line of Pujan Shah from Congruence Advisers. Please go ahead.
Pujan Shah — Congruence Advisers — Analyst
Hello. Sir, my first question would be our quarterly average revenue per client has been mostly INR430 and it has been declining since from last six quarters also. So can you just quantify on that part, it would be great for me?
Narayan Gangadhar — Chief Executive Officer
I don’t understand the question. So, what do you want me to quantify?
Pujan Shah — Congruence Advisers — Analyst
So from Q2 2022 we were earning average revenue of INR714 and now we are earning average revenue or INR430. So what is the — actually the declining like what we — what’s your view on this actually?
Narayan Gangadhar — Chief Executive Officer
Yeah. See, I think this is happening because our industry is maturing. There are more and more people coming to the market. And if you look at our business let’s say five years back, this business was — the participants were only few and far in between. Most people would not even enter in the equity markets about five years ago, it was still considered a niche product. Today what has happened is this commodity appeal of equity investing has significantly broadened. And as Dinesh bhai always says, he’s our Founder, so he always makes this point that this is poised to expand over the coming decade. Now as this expansion happens, as new entrants come to the market, I think it’s very natural to see two things go wrong. One is obviously the average revenue because the ticket slice and everything will go down and adjust itself to the average mean of the people we acquire and second is so will our operating costs because ultimately we are now starting to offer this product at almost planning scale.
So because of this, what’s going to happen is as a business as a whole, I do think that at some point this trend will materialize. It will normalize at some point, but that point is not today. So, it will normalize maybe in a few years when things have just started to plateau out a little bit like I think the customer acquisition has started to plateau out a little bit. But at the same time if you look at the way we are approaching the business, we want to run the business at a healthy operating margin between 45% and 50%. That’s our stated objective. And to that end, we look at our goal is to expand this market and continue to penetrate under-penetrated segments and drive broader retail participation. So long story — if I were to give you a full 360 view on it, yes, I think this trend is here to stay. But at the same time I think with greater volumes coming in, I think the robustness of the business will only continue to get better and better and better with time.
Pujan Shah — Congruence Advisers — Analyst
Okay, sir. Thank you so much. My second question would be on employee stock option. Sir, can you just quantify how much expense would be there for FY ’24 and FY ’25?
Narayan Gangadhar — Chief Executive Officer
Vineet, can you take that please?
Vineet Agrawal — Chief Financial Officer
You you were asking how much expenses would be there for FY ’24?
Pujan Shah — Congruence Advisers — Analyst
Yes, and half of FY ’23. So, you can quantify for FY ’23, FY ’24 if you can.
Vineet Agrawal — Chief Financial Officer
With the current grants that have been already done with, the estimated cost for FY ’24 would be about — for the incremental grants would be about INR47 crores and for FY ’23 it should be in the range of about INR25 crores, INR30 crores.
Pujan Shah — Congruence Advisers — Analyst
Okay. That’s it. Thank you, sir.
Operator
Thank you. The next question is from the line of Aditya Dixit from Morgan Stanley India Company Private Limited. Please go ahead.
Aditya Dixit — Morgan Stanley India Company Private Limited — Analyst
Hi. Many congratulations first of all on an amazing set of numbers. I actually just have one question. As you continue to acquire new customers in Tier 2, Tier 3 cities; from a top of the funds perspective, what are you really seeing in terms of behavior? Is that acquisition really happening from a digital sort of channel purely? Is it a mix of two through your sub-broker networks or is it predominantly physical initially and then moving the market?
Narayan Gangadhar — Chief Executive Officer
Thank you, Aditya. Great question. So, the entire acquisition is digital. There is actually no — there is nothing physical at all. What we are seeing in Tier 2, Tier 3 is the penetration from a digital standpoint is extremely robust. What we are also seeing is that as these clients onboard, their engagement with the product is also very significant because these — because in these under-developed markets, right, under-penetrated markets; what we are seeing is that there is a lot of appetite to understand the products, to understand what are the options available, to understand what kind of financial tools are available at their disposal. So, this is a very ripe customer base for us to harvest. So from our perspective obviously in terms of terminal value. we really don’t see much difference between Tier 2, Tier 3, or Tier 1 and that’s testament to our strong economic growth the country itself has seen across. And this is a cornerstone of our strategy because we want to continue building our presence and our brand in Tier 2 and Tier 3 and eventually even Tier 4, 5, and 6 markets. We are already strong there, but we need to make it even more stronger.
Aditya Dixit — Morgan Stanley India Company Private Limited — Analyst
Thank you so much for that. Can I also ask one more question?
Narayan Gangadhar — Chief Executive Officer
Yeah, go ahead.
Aditya Dixit — Morgan Stanley India Company Private Limited — Analyst
As you again think about your customer split irrespective of which tier, do you see more customers coming in from the salaried segments or more coming in from the self-employed segments?
Narayan Gangadhar — Chief Executive Officer
That is a very interesting question. I don’t think we have any greater insights than what’s available in the market so I won’t be able to tell you what’s the actual split in terms of salaried versus non-salaried. We generally look at only a macro level view from the KYC. So yes, there is some KYC data, but I’m not sure if it is truly representative. But if I were to gauge just based on what we are seeing in the KYC, I would say majority of them would be employed and there would be a small percent maybe 5%, 10%, whatever who are in the self-employed bucket. So, this is what we see so far.
Aditya Dixit — Morgan Stanley India Company Private Limited — Analyst
Understood. Thank you so much for this. Congratulations again.
Operator
Thank you. The next question is from the line of Deepak from Haitong Securities. Please go ahead.
Deepak Sonawane — Haitong Securities — Analyst
Hello. Am I audible?
Narayan Gangadhar — Chief Executive Officer
Yes, Deepak, you’re audible.
Deepak Sonawane — Haitong Securities — Analyst
Thank you, sir, for the opportunity. I have two questions mainly related to our cost of acquisition. So, can you give us a breakup of — I mean your advertisement and business promotion expense has been sitting in other expenses so can we have the absolute number for your marketing cost for the quarter?
Narayan Gangadhar — Chief Executive Officer
See, Deepak, we don’t share those those numbers largely as I’m sure you appreciate that there’s a lot of — that’s very sensitive data. Clearly it’s a competitive moat that we don’t want to do that — that we don’t want to share. Now that said, just to give you a broader sense of our cost of acquisition. The core metric that we are after at the topline is we want to make sure that we run the business always between 45% and 50% OPM. So no matter what the operating costs, no matter what the overall situation, our goal will be always to grow the topline and maintain this operating margin going forward. So as far as the financial envelope of computation is concerned, this is the macro level number. Similarly our turnaround, when we see our time to recoup, is still breakeven, it’s still at around two quarters and we have not really changed that or moved that significantly. So within these parameters, our company operates the whole business and this across. What I can tell you is this metric is true across most of the channels that we pursue for acquisition. So, that’s how we look at our entire business plan and our entire holistic acquisition strategy.
Deepak Sonawane — Haitong Securities — Analyst
Okay. Fair, sir. Sir, my second question is towards Vineet sir. How do we account our marketing costs? I mean do we defer it over the year, I mean book it on a quarterly basis or it’s on a monthly basis?
Vineet Agrawal — Chief Financial Officer
The entire customer acquisition cost is expensed off in the month in which the customer is acquired.
Deepak Sonawane — Haitong Securities — Analyst
Okay. Thank you so much, sir.
Operator
Thank you. The next question is from the line of Prachi Kodikal from Bay Capital Partners. Please go ahead.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
Good afternoon, sir. My question is first related to the chart that you put on your…
Operator
I’m sorry to interrupt, Ms. Prachi, you’re not audible. I would request you to use your handset.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
Is this better?
Operator
It’s better. There is a static, but still continue.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
Sir, my first question is regarding the chart you have on Slide 10 of the presentation. See, here you’re saying that the share of Top 5 digital brokers in incremental NSE clients this quarter has drastically reduced so it’s been in the 70%s and this quarter it’s almost come down to 40%. What is the reason for that this drastic drop that has happened?
Narayan Gangadhar — Chief Executive Officer
See, there’s a couple of things, right. First is what has happened overall is that the current market conditions are still recovering. It’s not fully fully recovered just yet, right. And already the country has seen its fourth interest rate hike within this year alone. The repo rate today at the RBI level is 5.9%. And any time there is a 40 bps to 50 bps hike in the Central Bank interest rates, naturally there is going to be a muted participation in the market because cost of capital becomes more and more expensive and things like that. So for this reason, there is also another factor at play here is that every central bank; if you look at what the Central Bank of UK is going through, if you look at what the Central Bank of China just for example is going through; almost in every case there is a macro theme which is being developed and because of this, what has happened is overall participation is a little bit subdued than it normally was. I think apart from this what we — we don’t see any other extraneous conditions that can explain why the situation is what it is.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
But my question was directed more towards the share of digital brokers going down so drastically and that of traditional brokers going up. So, I mean if you — the data in Q2 ’21 and this is the first time we’ve seen this trend in almost two years that is.
Narayan Gangadhar — Chief Executive Officer
So as I was explaining, a couple of things. Because for many of the other digital brokers that are continuing to play in the market, their acquisition strategies and their strength are directly correlated to the strength of the overall investment climate and many of these digital brokers, they are also VC backed. Unlike us, we are publicly traded and we operate with full fiscal transparency and such. In many cases, the numbers have gone down because the VCs have started putting less money into the ecosystem. So yes, so this trend is also a combination of what’s playing out in the venture world which we are seeing today in the Top 5 digital brokers and as you can see out of the Top 5, almost everybody is a — there’s no bank based broker in there, it’s basically all new age brokers, right. And out of those — out of the Top 5, three of them are VC funded. So as the mature climate is dried out, which is what I was explaining earlier, because of rising interest rates and such, this is not — the climate is not right, is not perceived as right for further investment at least from the Top 5. But from our perspective, our game plan and our acquisition play and our strategy hasn’t changed. If anything, we continue to increase our investment and our participation to drive this number overall.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
Got it. Sir, my second question is if you could just help me bridge the gap. So when I look at your average daily turnover, that has been increasing steadily. But on the other hand, ARPU has been falling on a quarterly basis. So just these two numbers, how should we think about it increasing average daily turnover and reducing ARPU?
Narayan Gangadhar — Chief Executive Officer
See, increasing ADTO is very clear that our existing customers are participating and increase — they’re participating heavily in the markets and they are participating heavily in the sense they are participating at the expected rate of clip which we are normally always see in the previous quarters, right. So, that part is going well. Now at the same time the ARPU, as we explained, the ARPU decline can be attributed to the fact that as this business becomes a more commodity business, we are going to start seeing the net ARPU obviously go and normalize to a certain level, right. And as we see that, what we are seeing though is the overall unit economics of the business are still very strong, which is what I was explaining earlier is that with the falling ARPU, with the growing customer base, with more cohorts getting mature; our terminal value for the business is only going to continue to get stronger and stronger. In many ways, this business is becoming more like a commodity stock and this is where we are in the very early days of that. So if you look at the trajectory over the next five years, we are essentially seeing the makings of a rapid-fire commodity business which is going to grow very substantially and it’s in a serious acceleration pace at this point in the industry.
Vineet Agrawal — Chief Financial Officer
If I can just add, the average revenue per client as we disclosed is on the entire base at the end of the quarter. So while we are adding clients month-on-month, the calculation is done for the entire base at the end of the quarter. And that way — if you see that, the ARPU will show a slightly lower trend because those clients who are coming in, let’s say, in the first — in the last few days or couple of weeks may not be immediately trading. That’s one. On the turnover side, the turnover is increasing because the number of orders and the activity levels have increased for those who are trading.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
Correct. But that’s what I was trying to get at. So if the activity level is increasing, shouldn’t that translate to higher ARPU was all I was trying to get at.
Vineet Agrawal — Chief Financial Officer
So, actually the number of orders have increased. If you see the orders quarter-on-quarter have grown considerably so that shows that the activity levels have grown.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
But does that also mean concentration is increasing so the top trading clients are trading more? Is that a fair comment to make?
Vineet Agrawal — Chief Financial Officer
Whatever is the industry trend, that’s continuing. I mean it’s not like we have a significantly lower number of clients trading a larger volume. It’s the — whatever is the industry trend, that continues for us as well.
Narayan Gangadhar — Chief Executive Officer
And to just add to that, right, what we are also seeing is that our — as I said our latent base, latent base is customers who are residually in the system who have been there for a long time and their engagement is obviously continuing to get stronger and stronger, which is what explains — which is how the numbers can be rationalized and explained, right. Because you’re acquiring new guys. Let’s say 80% or 90% of your customers are new, they are obviously not contributing significant portion of the revenue. But the folks that we have acquired in the past who we have curated and they continue to remain in the system and their participation — their engagement actually goes up, which is why you’re seeing the order volumes at 230 million orders. So, that explains the macro trend and this is what I was explaining earlier that I expect the ARPU to normalize. It’s going to normalize at some point and that some point I don’t think anybody in the industry can predict when it is, right, because we are still in rapid-fire growth mode.
Vineet Agrawal — Chief Financial Officer
In fact one more important thing is to decouple the way we look at the turnover and then compare it with the ARPU because ARPU is now largely driven by flat fee plan, which is driven by the number of orders placed on our platform, executed on our platform. So, it’s very important to see how the number of orders is growing. The turnover in some ways could be misleading because if there is no trade happening, then the turnover constitutes the contract value. So, it’s always good to check the number of orders to get a better sense.
Prachi Kodikal — Bay Capital Investment Managers Pvt Ltd — Analyst
Thank you so much. Those are my questions.
Operator
Thank you. The next question is from the line of Gautam Jain from GCJ Financial Advisors LLP. Please go ahead.
Gautam C Jain — GCJ Financial Advisors — Analyst
Yeah. Good morning, sir. I was just looking at your balance sheet, couldn’t understand it properly. So you said some time back, what is lying in other assets that INR1,939 crores?
Narayan Gangadhar — Chief Executive Officer
Vineet, can you take this?
Gautam C Jain — GCJ Financial Advisors — Analyst
Yes. The other assets INR1,939 crores, what is that?
Vineet Agrawal — Chief Financial Officer
INR1,939 crores. So, that large part of it — almost all of it is the cash that we place with the exchanges in form of margins.
Gautam C Jain — GCJ Financial Advisors — Analyst
Okay. And you report cash and cash equivalent that is cash in your bank, right?
Vineet Agrawal — Chief Financial Officer
That would be cash in our bank and the fixed deposits so equivalent means the cash in some other form, which is fixed deposit. So if you see cash, cash equivalent, bank balance put together which is INR53 billion; that would be in the form of fixed deposits and cash. And other financial assets INR1,939 crores, almost the entire amount is the liquid cash that we place with the claim corporations because there was a payout event happening in the first week of October.
Gautam C Jain — GCJ Financial Advisors — Analyst
So, we increased some cash level. That’s right to understand because the borrowing has gone up.
Vineet Agrawal — Chief Financial Officer
Sorry, come again please.
Gautam C Jain — GCJ Financial Advisors — Analyst
So, we increased cash level at our end just to make sure that we are smooth in terms of payout, right?
Vineet Agrawal — Chief Financial Officer
Yes, absolutely.
Gautam C Jain — GCJ Financial Advisors — Analyst
That is the reason why the borrowing has gone up sequentially?
Vineet Agrawal — Chief Financial Officer
Yeah. So, part of that was funded through short-term borrowings.
Gautam C Jain — GCJ Financial Advisors — Analyst
Okay. And can you help me understand your ESOP cost because it’s volatile; in Q1 it was INR17 crores, this quarter is INR22 crores. So on what basis we understand it would be going forward?
Vineet Agrawal — Chief Financial Officer
So the ESOP cost of INR17 crores in quarter one, large part of it was the grants were done towards the third week of April. Hence in the quarter one, the entire 90 days cost was not there. Now if you extrapolate that cost, it will come to about INR22 odd crores and that’s what we’ve reported in this quarter. And I’ve said about INR30-odd crores would be the cost for the next half year of the grants that have already been done.
Gautam C Jain — GCJ Financial Advisors — Analyst
Okay. So, INR25 crore each quarter?
Vineet Agrawal — Chief Financial Officer
Yeah, roughly about that. No. INR25 crores each quarter. INR30 crores would be the incremental cost for the entire half year going forward H2.
Gautam C Jain — GCJ Financial Advisors — Analyst
Okay. Got it. And sir, if I look at your number of orders, the September quarter was — September month was quite higher than — significantly higher than July and August. So were there any one-off because we were running at INR7 crore order and suddenly in September month it was INR9 crores plus. Sir, just help us understand was there any one-off or were any demand because of that, the order has gone up because we are consistently going above one-ninth here? I mean can you just throw some light on that.
Narayan Gangadhar — Chief Executive Officer
Yeah. See, I think the September month — this month was a good month for the market overall. But just to keep things in perspective had the global political situation not been so tense, naturally this year you would have seen most months operate at this number. Because if you look at the history of where the market was two years ago and the rate of growth, the growth got muted. From its normal rate of growth, it actually got muted because of the geopolitical climate. So we see what is happening is at a macro level, India has been one of the few countries; in fact I would say in developing economies is perhaps the only country; which has operated with a very high degree of economic resilience and very good fiscal policies by the Reserve Bank of India which has helped us against — which has helped us kind of deal with the headwinds in a much more better manner.
This is why capital markets, the impact is not as high as you see elsewhere. So this, the rate of growth I don’t think anybody can explain to you what is the — if there is any one event that has caused it. No. In fact if you look, the fourth interest rate hike actually went on September 30, right. So if you look at the history at the RBI has been doing it, almost all of those have actually protected our country against severe inflatory pressures and severe fiscal pressures. So I think what you’re seeing in the market is this is the way of the market to reward and kind of show that trust back in our entire financial system. That’s really the only explanation that at least I have to this and therefore that’s a macro trend which has changed.
Gautam C Jain — GCJ Financial Advisors — Analyst
This is purely a normal number, right?
Narayan Gangadhar — Chief Executive Officer
Yeah. There is nothing unique that has happened except that the country has done a good job.
Gautam C Jain — GCJ Financial Advisors — Analyst
Okay. And the final question is we have provided some reversal of margin which we charge to the client around INR16 crore, INR17 crores. That is one-off, right? That is not recurring and that won’t come in Q3 and Q4, right?
Narayan Gangadhar — Chief Executive Officer
Yes. No, that’s not a recurring item.
Gautam C Jain — GCJ Financial Advisors — Analyst
Okay. Thank you so much and all the best for the future.
Operator
Thank you. The next question is from the line of Sahej Mittal from HDFC Securities. Please go ahead.
Sahej Mittal — HDFC Securities — Analyst
Good morning, everyone. Congratulations on a great set of numbers. So, couple of questions from my side. Firstly on the marketing spend. So in FY ’22 the marketing spends were close to about INR300 crores, which formed about 55% of your admin and opex, right? So what percentage of your marketing spends are fixed in nature? So if your customer additions go to zero in a hypothetical case, even then how much would we continue to incur? And the second one is also this question was about what proportion of our customers are now coming from the organic channels? That was the two questions.
Narayan Gangadhar — Chief Executive Officer
Okay. So two questions, I’ll go one by one. First is see, we don’t — on the marketing spend, we don’t divulge the split or we don’t talk really about how we — we don’t talk about the makeup of our spend in a public domain. So, this is where our key competitive intelligence and our strategy is kind of playing out in those numbers. So obviously for obvious reasons, I could not tell you why and what and whatnot. Now let’s talk about whether the — what is your — I guess your important question is what is the degree of elasticity in the marketing spend. The elasticity is almost 100% in the sense that yes, there is some residual spend which comes quarter — which is there month over month obviously. For example things like brand, we cannot just turn that down to zero. But 90% of whatever we spend every month is elastic by nature and by nature this depends on the market conditions, which is what we continue to — which we continue to monitor and then scale. I want to have Prabhakar Tiwari, who is our Head of Marketing & Growth, I want him to just add a few things here. PT, over to you.
Prabhakar Tiwari — Chief Growth Officer
Thanks, Narayan. See, we operate in a competitive market and our venture-backed competition, they are also hungry for growth and we have been keeping on the top-notch in terms of incremental acquisition and we are going after market share. So of course our marketing expense will be higher percentage of our cost. But I agree with Narayan that it’s 100% elasticity as far as our marketing spends are concerned. There are basic levels of maintenance level of spends which are required and rest of it directly goes into brand building and getting better and more incremental market share so — and we have a growth path where we want to be Number 1. So this marketing spends, we are very efficient on that as Narayan already pointed out. So, that’s what I wanted to comment on.
Sahej Mittal — HDFC Securities — Analyst
Right. I respect the confidentiality, but just to get a sense maybe some flavor around what percentage of your customers are coming from the organic…?
Narayan Gangadhar — Chief Executive Officer
I mean we cannot comment on the individual makeup numbers, but I can tell you that this has gone up and it’s on a higher double-digit number.
Operator
As the line of Mr. Mittal has been disconnected, we move on to the next participant. The next question is from the line of the Prashit Pandya [Phonetic] from Fintrust Capital. Please go ahead.
Prashit Pandya — Fintrust Capital Advisors — Analyst
Hello, sir. Sir, as we have seen in our commodity and F&O segment share going up, but one is that where do you look at this stuff and the other is the cash segment part which we have seen de-growing or you can say stable part. So can you throw some light on that, where do you it in the next few quarters?
Narayan Gangadhar — Chief Executive Officer
We don’t see the mix between these three segments change dramatically within the next two quarters and that’s largely because as we have discussed, our Super App strategy is just going to materialize in this quarter. This quarter, next quarter is the best time for us. We are going to be launching the Super App, we are going to launch new journeys. So as of this point, there is no product impetus to actually change the composition of F&O to cash or such. So, I expect this current split to kind of remain the same or within the same standard deviation. If the standard deviation is 5%, then you can do the math on what it will be. So, I think it will continue to be within this norms. Now obviously as we have already communicated, our long-term strategy however is to introduce more diverse financial products which will eventually have an impact on the revenue streams which you are seeing today. But today we are not ready to have that conversation because our very first leg of the journey has not gone live from a product side.
Prashit Pandya — Fintrust Capital Advisors — Analyst
Okay. And sir, one more question. We have around 28% of the population which is on the young side or we can say major population coming into the younger side. So do you see the addressable market — I saw the presentation. But do you see our numbers being much higher than what is anticipated in the investor presentation part?
Narayan Gangadhar — Chief Executive Officer
That is an excellent, excellent question. To we honest, this is — I am 1000% bullish on this because my personal prediction is that that number is only going to explode because of exactly the reason that we have been discussing in this call. You have a captive customer base who is already digital, the cost of acquisition in the sense the cost of learning is kind of next to zero and they are already familiar with the instruments available in the market. Now maybe are not really — maybe they don’t really understand the full scope of those instruments well because they’re still learning. But my sense is that as the Prabhakar was saying earlier, we will do 2, 3 and then eventually 4, 5, and 6 opening up; my belief is that the numbers will be actually higher. But of course for when we do the math, we only practice it like normal based on whatever — our line of sight is only related to the market that we operate in today. We don’t really try to extrapolate more than where we know we can — that what we know we can get that make a difference, right.
Prashit Pandya — Fintrust Capital Advisors — Analyst
Right. All right, sir. Thank you so much and congratulations on the good numbers. Looking forward to you see in the next quarter.
Operator
Thank you. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.
Sarvesh Gupta — Maximal Capital — Analyst
Hi. Most of my questions have been answered. Just one thing on the expense side and the flexibility that you now have maybe because of the launch of Super App, which has already been done. So in terms of the major incremental spends on your opex side, how much more flexibility do you see now and is it that we should take this as a new norm in terms of the opex that we have or there are some big chunky items that you foresee in the coming quarters or years?
Narayan Gangadhar — Chief Executive Officer
So Sarvesh, see as — see, we are a company that is growing. Our book is not who — we are not a Hindustan Lever or anything like that. We are not a commodity shop. We are a fast-moving growth company. If you look at the next five years of the company, it is going to be in aggressive investment phase. So, the metric that we hold ourselves to is really the operating margin. At the end of the day whether the operating expense goes up or even it goes down or whichever or it stays same, right. What I am looking at is topline and P&L. Within those parameters is that on an absolute level if the revenue continues to on tear and if I’m spending even more 2x more, I think as far as the business is concerned it still doesn’t lag because we are maintaining absolutely healthy and grow the business. So, my focus is really — our focus is the company getting to the Number 1 position.
Operator
Sir, you were not audible. I’m sorry. Could you repeat your last line.
Narayan Gangadhar — Chief Executive Officer
So, I was saying that we are — given that we are in this investment phase for the next five years, I see us continuing to build out multiple products, multiple portfolios. And to that end, I also see that our operating experiences or operating expense will continue to reflect back. But at the same time we are holding ourselves to the 45% to 50% OPM and that’s the overall metric that the business is going to be — that’s the framework in which we are operating the business. So the actual absolute number will go up or go down, I don’t think that’s very relevant.
Sarvesh Gupta — Maximal Capital — Analyst
Sure. So, that is well understood that if the revenues were to go up on a tear, then you can rapidly expand your opex as well. Just wanted to understand that do you have that flexibility on the other side. So for example if you were to see headwinds coming through because of macros or anything, do you have enough flexibility or the levers in your operating structure to also maintain that sort of a margin for those?
Narayan Gangadhar — Chief Executive Officer
Correct. So, that’s a very good question. And I think here the proof is in the pudding, right. We have been sharing our numbers for the last now six or seven quarters. If you go and look to all the quarters, there have been cycles in which the VCs have pumped in a lot of cash. You yourself can see that with last year’s number. You see our margin when the VC community was going guns blazing on the acquisition route, but we have stayed the course. And today when the VC funding has dried up, our strategy is still the same. So if you look there is actual — I can answer your question best with the last 18 months data that we have already presented to you — presented in our finances. Now going forward obviously from what I see, the obvious view that these [Technical Issues] at this particular point is if there is some macro happens which is complete not within our control. But from my perspective, our mission is very clear. We have to get to a — equity and start introducing other wealth management journeys within our Super App. So to that end, there is no other extreme event which I see that is working against the industry or against the business. So, this is at least my two cents on the whole topic.
Sarvesh Gupta — Maximal Capital — Analyst
Understood. There was recent news of the regulator might be considering ASBA sort of a structure when it comes to the maintenance of excess margin at the client level. So do you have any comments to offer if that were to be implemented? Of course in F&O there is a requirement of a margin and so from your understanding, of course I know that this is not yet implemented. But if this were to be implemented, then what can be potential impact on our interest income and other revenue line items?
Narayan Gangadhar — Chief Executive Officer
See, the ASBA thing is an eventuality. It’s going to happen. And I feel that it is one of those regulatory changes which is going to increase our market penetration. It is actually going to help us accelerate it because what has happened is that SEBI has cleared the excellent safety net, we’ve created a very good safety net that eliminated every margin of [indecipherable] from the broking side. And my hats off to them because they have done their job and when this regulation gets imposed and when it comes to pass, we in our business we now have to come up with clever and interesting ways from a product perspective, continue to drive that — to build on that innovation, fund stay out [Foreign Speech] we used to do fund stay out, now this is the first time it went live [indecipherable]. We harnessed all our energies and to our very surprise, the very next Monday we actually ended up trading more than what we did the previous month because we channelized their energy from the product side, from the tech side, we introduced better product features, better [indecipherable] client engage continuously on a continuous basis. Similarly, there is some loss to interest income, now, we have not done any quick math, which is how much it is. Maybe Vineet can come in and it doesn’t look that material at least as of this point, by then, I think we will continue to innovate on the product side, we would have had multiple journeys like, so the compensation expense will be very different. Vineet, do you want to add anything here?
Vineet Agrawal — Chief Financial Officer
Actually, it’s very difficult to forecast anything. This entire concept is at a very nascent stage. Let us have some clarity around it and the timelines and perhaps then we can do some math and come back with some numbers but today it’s very difficult to quantify anything.
Sarvesh Gupta — Maximal Capital — Analyst
Understood. Thank you and all the best for the coming quarters.
Narayan Gangadhar — Chief Executive Officer
Thank you.
Vineet Agrawal — Chief Financial Officer
Thank you.
Operator
Thank you. The next question is from the line of Anshuman Jain from ICICI Securities. Please go ahead.
Anshuman Jain — ICICI Securities — Analyst
Yeah, hi, sir. Thanks for the opportunity. So, I had a question regarding the Super-App launch. So as you said, this is going to happen this quarter on the Android app and one of the metrics, which we should see ideally improvement in activation ratio. So if you could share the outlook on planned addition and the activation ratio in FY’23 and FY’24, that is my question.
Narayan Gangadhar — Chief Executive Officer
Yeah. See, what I see is that obviously the engagement, right, I think your question is mostly around the engagement. So what I see that as the app launches it generally takes about two quarters for the app to mature. Okay. This is true for any application not just our application and case in point, if you look at Flipkart’s app, if you look at the PhonePe [Foreign Speech] right, I mean every major tech company, there is a baking period for this app. Now what we are seeing is that in our gestation period, call it baking period, that we do post launch, I expect the numbers to continue to remain the same. I expect no major change on either the activation journey or anything of that sort, whether it is 15-day activation or one month activation or one year activation. I don’t expect a lot of movement largely because customers are getting acclimatized. But as the products change, as it gets to 100% rollout and such, I do expect that over time, the level of engagement will go up. Now, in absolute terms, I can’t quantify for you what that would look like because our client base also will continue to accelerate at the same pace, but I — but if you were to just look at a macro level, I think you can expect these robust numbers to continue and historically we have done a phenomenal job on the activation side, we were only at somewhere in the 30% — in the low 30s or even late 20s as early — as late as one-and-a-half years, two years ago, whereas you look at the numbers now. I mean it’s substantially higher and that’s largely because of improvements in product and tech and that is likely to continue, that trajectory will continue.
Anshuman Jain — ICICI Securities — Analyst
Thank you, sir. And in terms the 100% launch, so all these parameters, the progress that we have, you have been giving periodical updates obviously which has been very helpful but in FY’23 — by FY’23, we should have a fully — the full launch of the app, right. So the benefits, which should start accruing from FY’24 on a steady state basis.
Narayan Gangadhar — Chief Executive Officer
The launch will be done by FY’23. I think you’re spot on about that. And what I see is post that we will be starting to launch other journeys, right, because — and I’ll have Ankit who is our Chief Product Officer, just comment on this. Basically, at the maximum level, we are obviously building the Super-App platform to launch other new journey and I’ll let Ankit just talk about how he’s thinking about the long-term growth there —
Anshuman Jain — ICICI Securities — Analyst
And also — other new journey if you could also share that, what are those specific journeys chronology as such?
Narayan Gangadhar — Chief Executive Officer
Yeah, Ankit —
Ankit Rastogi — Chief Product Officer
Yeah, so — and you heard right we are pretty clinical in the way we are launching, iOS is already done and we’ll be starting with Android very soon in this quarter. And as we mentioned, it will be done by FY’23. The way we are looking into this is that the first asset class while we are robust in our equities after that would be mutual funds. We have already informed this, the [indecipherable] mutual funds and we will closely monitor each of the state. And this is the fundamental definition of Super-App how better we are able to cross sell, engage across these asset classes and then this is a constantly pre trade all the customer accounts. And I think one we checks, which is mentioned in the earnings call which continues to be our obsession. Is the net promoter score. So we closely monitor our feedbacks, we’ll continue doing that. And as a result, I think it’s rollouts will be monitored.
Anshuman Jain — ICICI Securities — Analyst
So if they come — just one last thing, from my side. So basically in FY’23, we will have a full launch and in FY’24 we would have some of the benefits of the launch. And in terms of new product, it would be the MF part, which would be activating in a big way in FY’ 24.
Narayan Gangadhar — Chief Executive Officer
Correct, that is absolutely correct.
Anshuman Jain — ICICI Securities — Analyst
Thank you.
Narayan Gangadhar — Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Kajal from Isec Services Private Limited. Please go ahead. Ms. Kajal, your line is unmuted.
Kajal — Isec Services Private Limited — Analyst
Hi, congratulations on good set of numbers. Thanks for opportunity, sir.
Narayan Gangadhar — Chief Executive Officer
Thank you.
Kajal — Isec Services Private Limited — Analyst
Yeah. So, couple of things, sir, as I think it was initially also discussed that the activity level has gone up because you have seen orders going up and also the number of per ticket size per order has also gone up accordingly, because volumes have gone up, but the activation rate per se in that way quite low. So, any other specific reason that you have seen why activation is only 2 lakhs versus that 12 lakhs new additions?
Narayan Gangadhar — Chief Executive Officer
Yeah, so let me actually give you first, the macro answer and then I’ll turn it over to Devender who can give you a little bit more deeper insight into how we are looking at it. See, first is, our overall at a macro level, our overall activation numbers are still within the healthy range that we have [indecipherable] company. Okay. So from that perspective, if you look at the — the total — the proof is in the total number of orders, actually that’s ultimately that’s the proof of the pudding, right, if you look at total number of orders, that’s steadily grown and if you look at the engagement, that has also steadily grown and clearly that is visible in the bottom line numbers. Now macro level obviously because of the current economic climate, there has been a headwind against it. I’ll turn it over to Devender now who can just shed some more light on it and give us perspective on how we are thinking about activation, and how do we see this trend changing going forward. Devender, over to you.
Devender Kumar — Head
Yeah, hi, thanks, Narayan. Hi Kajal. Kajal, I had the two questions, one on the activity level and the second one is on the activation rate. I think if you look at the activation rate in the last quarter at an overall industry level, I think what Narayan has highlighted, again, I will say the same thing is they see the market conditions have been muted. I know, large activation is constituted by the large number of investments and there is an opportunity that existing because of market conditions. So we have seen industry-wide difference and change in the last quarter, particularly, which is also reflective with us. The difference can be that the whole industry has done it more gone down more steeply whereas we have been in the positive side reflective created by the positive active clients that we have added in the last quarter, which is around 1.6 lakhs now whereas the industry has actually degrown. So it actually talks about at an overall level what are the market conditions and opportunities looking like and how are the participants participating and we have seen that we have done better than the industry. That’s from the point of view on activation side and I think a lot of activities that we do is to teach clients in terms of what is the right reason for investments, what is the right ways of investment with the right instruments of investments and obviously there is wholesome industry which guides how people will actually propensity towards taking positions in that. So that teaching has remained robust. We have found that a lot of people are still engaging at a very, very high level with the various kinds of teaching activities [indecipherable] activities that we’re doing. And instrument that were bringing in terms of investment. are really, really showing high engagement and which we will continue doing so that people who are finding the right opportune times which as the industry is again, I think I believe as it goes up, we’ll bring back all the people in a much more larger phase, so that should address the same part on the activation side. And on an activity level, as you can understand that why the orders are going up and like the opportunity in terms of for the trading clients has been very high, in the last quarter. So more opportunity is reflecting in the ticket size of the client or let’s say the activity level of the client, which is actually creating a lot of a large number of orders for us. So there are two sides to it and both are reflected in the last quarter and we see very opportune times because Indian economy has been resilient in these tough times. This will be reflected more prominently as we go ahead, more people will find the right reasons to invest more towards the Indian markets, so that’s where and we are going to Tier 2, Tier 3, Tier 4 markets, which are maturing to these understanding and taking positions in them. Hopefully that addresses your question in terms of our activation is is actually moving.
Narayan Gangadhar — Chief Executive Officer
Thank you, Devender.
Kajal — Isec Services Private Limited — Analyst
Yes. Second, one question is on during the conversation sir, some terminal value you see no change in your Tier 2, 3 or like 1 clients, so is it in terms of like traded value that you see the Tier 1 client or a Tier 2, 3 is seeing the same number or is it that ARPU provided by these clients is the same across geographies. So what is your reading there?
Narayan Gangadhar — Chief Executive Officer
Yeah, see, generally speaking, right, they are all within the same ballpark. [Foreign Speech] the Tier 1s always have a greater concentration of greater than of folks that are greater than the age of 30 and who are professionals. If you take their ARPU, obviously, it will be higher than somebody who is equivalently placed who is in a Tier 3 city in the same age group, right. So there are differences like that, but those differences are not material enough for me to change our product strategy or our acquisition strategy. They are just simply data points, which we see and we continue to hone in our acquisition play based on them. But macro level, there isn’t much difference to answer your question very precisely, it’s within the same marginal product.
Kajal — Isec Services Private Limited — Analyst
Okay. Sir, lastly, one question on — since you are one of the highest in F&O space and even now also in this market you saw your share rising, did you do any studies since you have retail customers that what will be the share of making profit versus making losses, if hundred are trading, what will be that ratio?
Narayan Gangadhar — Chief Executive Officer
Yeah. See, I think, let me first answer this question, it is a very philosophical question, we’ll have to answer it a little bit — we have to look at what our vision is as a company. Okay. First of all, Angel One is platform. Angel is the platform. Okay. Our job is when customers come on the platform, we have to educate them, we have to curate them and you have to give them the right kind of information to make the right decision. Now this is our — within our responsibility is to provide enough guardrails in the system so the client doesn’t accidentally do something stupid, okay, so when folks come on to a system, we take extra precaution to make sure they understand the market, we teach them, we are the only company today, the only one in FinTech that invests so heavily in education and the truth is, if you go look at the number of Angel videos, there are more than 6,000 videos that are there that cover everything under the sun right from option strategy to intraday to how you can make money to what is the stop loss order, what is the product. So we go into a lot of detail to educate. Secondly, on the product side, as Ankit told you guys, just a few minutes ago, right, the product is built with enough guardrails so that the customer understands what are the parameters within which he can exercise his financial outcome. If you look at InstaTrade, which is one of our most popular features, it is the only, only, only feature in the market where you can actually quantify your risk even before you made the first investment. So our job is to provide these kind of things, provide these kind of levers. Now beyond that, what happens for the client perspective, how many of them make money, how many of them lose money this and that, that actually in many ways is not even [indecipherable] for us as a company to go look at, because it’s an intrusion into their privacy, which we don’t want to do, right, so our is as a platform build the right platform, give the highest level of transparency, give client enough tools using machine learning and AI so they can understand how trading — how equity trading fits into their overall wealth management strategy. This is why we are investing in the Super-App because some of our customers — in fact, a lot of our customers want the mutual fund product, it’s not like we woke up one morning and said we need to do mutual fund, our customers have asked us for it. Our customers have — we are coaching our customers that you should be investing in bonds, you should be investing in corporate bonds, right, we are the only ones who have even a product around that. So our job is to give this diversification, then ultimately the client can decide based on their level of list what works and what they need. So hopefully that gives you a — it’s a little long-winded answer but I wanted to give you the philosophy behind how we are approaching the company.
Kajal — Isec Services Private Limited — Analyst
Yeah. Thank you. Thank you very much.
Narayan Gangadhar — Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Sumit Jankar from Motilal Oswal Financial Services Limited. Please go ahead.
Sumit Jankar — Motilal Oswal Financial Services Limited — Analyst
Yeah, thank you miss for providing me the opportunity. My question is related to commodity market share. So upon last year, it is increasing every month. So what actually has helped you to — in growing your [indecipherable], also you are acquiring now half of the market share. Can you please put some light on this? And my second question is, what is your current currency market share?
Narayan Gangadhar — Chief Executive Officer
Yeah, so I will defer this over to Ketan, who can — who heads our commodity business, and he can give you idea on what’s going on there. Ketan, over to you.
Ketan Shah — Chief Strategy Officer
Yeah, thanks. Narayan. So commodity, see, if we look at commodity markets — market largely, the industry market, the volumes are growing in options, which is a new product launch from MCX site and we were the first entrant in terms of providing options on mobile — mobile platform and our platform, and that’s the large reason for us to gain the market share.
Narayan Gangadhar — Chief Executive Officer
Yeah, so as Ketan just said, that sums up very, very well actually, and as you said, [Foreign Speech], the market share is kind of constant for us and options may obviously increase and I think one of the things, Ketan, correct me if I’m wrong, right, we also have built the model journey, right, in the options for this since last year or something like that — since we launched that —
Ketan Shah — Chief Strategy Officer
Last two years.
Narayan Gangadhar — Chief Executive Officer
Yeah, so that’s another thing, it’s a combination of that product as well as what Ketan just said.
Sumit Jankar — Motilal Oswal Financial Services Limited — Analyst
Thank you.
Operator
Thank you. The next question is from the line of Sakshi Goenka from Sohum AMC. Please go ahead. Ms. Goenka, I have unmuted your line, kindly proceed with your question.
Sakshi Goenka — Sohum AMC — Analyst
Yeah, hi, am I audible?
Narayan Gangadhar — Chief Executive Officer
Yes, you are audible. Yes, you are audible, yes.
Sakshi Goenka — Sohum AMC — Analyst
Thank you so much for your time and congratulations on a good set of numbers. I had a quick question around the MCX books [indecipherable] iron exposure has gone up significantly, I think [indecipherable] used to be in 45,000 to 50,000 range, it’s now trending more towards — at much higher levels, so I just wanted to understand is there any some kind of reinstatement or do you have seen a trend of higher client exposure?
Narayan Gangadhar — Chief Executive Officer
Please take this.
Vineet Agrawal — Chief Financial Officer
Hello. Hello.
Narayan Gangadhar — Chief Executive Officer
Yes, Vineet, you are audible. Go ahead.
Vineet Agrawal — Chief Financial Officer
Yeah. So yes, the client — per client exposure is growing, but if you see the overall spread of the book, almost 80%, 84% of the clients are less than 1 lakh in the exposure about I think about 10% or 11% are between one lakh to five lakhs so that I think is a healthy trend. And this is a complementary product, bridge financing kind of arrangement for clients, so if they see an opportunity to leverage their margins and take some exposure in some stock, where we see some value in between, let’s say 30 to 90 days, the offer this in terms of the, you know, the churn and all, so this book churns in about 45 to 60 days. So there is not a very long exposure in this book, and I don’t see any reason to be concerned about this increase in the exposure per client.
Sakshi Goenka — Sohum AMC — Analyst
Understood. I think I have the question since this industry has slowed down significantly, but you guys have stayed and done a great job in terms of customer acquisition. Has the [indecipherable] for incremental customers gone up vis-a-vis what we were spending maybe six, eight months back, or you think we are pretty much okay in terms of CAC [Phonetic]?
Narayan Gangadhar — Chief Executive Officer
Yeah. So see, as we discussed earlier, right, even a year ago, we were aiming to breakeven in six months and even today we are breaking even in six months. So from a risk reward adjusted perspective, I think materially nothing has changed. Now the actual numbers, some months, as you know, like during IPL time the CAC actually does go up, but then we acquire it in a way that we know we can still [indecipherable] and from our perspective, really nothing changes. Prabhakar, if there is anything you want to add here, you can just add — go for it — over to you.
Prabhakar Tiwari — Chief Growth Officer
So Narayan, what you commented is absolutely right, nothing much to add.
Sakshi Goenka — Sohum AMC — Analyst
Understood. And just one final question from my end. Any outlook on your expense [indecipherable] launched and ball is rolling, do you think expense can start to come down going forward?
Narayan Gangadhar — Chief Executive Officer
Yeah. See, as we said now we are in a investment. So as of this point we don’t expect that we are not optimizing for conserving our expenses. We are optimizing for growing our cash flow, that also include growing other businesses that we want to get into. So at a macro level, we are trying to keep — our stated goal is to keep the company operating between 45% to 50% [indecipherable]. Some months, it might be higher, just as last few months ago or last quarter I think it was a little over 50, it has even gone higher 56%, right, and some months or some quarters it might go below 45. But that said, we will always normalize it to between 45% to 50% and that ends this, as we enter next year. I do expect operating expenses to increase, but at the same time, there’ll be diversification — there’ll be further new businesses that we need to build out, we need to scale and I still expect the OPM to be within the same number that we have just talked about.
Sakshi Goenka — Sohum AMC — Analyst
Understood. Thank you. That is very clear. Thanks a lot.
Narayan Gangadhar — Chief Executive Officer
Thank you.
Operator
Thank you. As that was the last question that the management could answer today, I would now like to hand the conference over to Mr. Narayan Gangadhar for closing comments.
Narayan Gangadhar — Chief Executive Officer
Yes, actually I would hand it over to Dinesh Thakkar for his comments. So let me hand it over to D.T.
Dinesh D Thakkar — Chairman and Managing Director
Let me just flip it, okay. So again, finally, thank you everybody for joining us on this earnings call. New age India is gradually understanding the potential of equity markets as stacked up against conventional rig and tangible assets. In times to come as the ecosystem scales up and more investors gear up to learn and better understand benefits of long-term investing coupled with continuous development of mobile and Internet infrastructure, I am very confident that more individuals will have larger wallet share towards financial assets. We have to clear — we have a clear pathway laid out to provide access to capital markets to a large population. Our endeavor is to garner a large share of the 65% population that resides in Tier 2 and Tier 3 cities, our superior products give us an ability to stay ahead of the competition, the resilience of our business as demonstrated over many quarters gives me a lot of confidence about the growth trajectory going forward. Angel will be the torch bearers of equity proliferation in the country. We continue to endeavor partner our clients in achieving their financial goals, while improving their overall investment journey, we have successfully demonstrated the superiority of our digital strategy and plan to augment the same as we move forward to attain the number one position in the industry. I am certain this goal is not too far away. I wish to thank all of you for your continued support, confidence in Angel One. For further inquiries and queries, please do reach out Hitul Gutka, our Head of IR or SGA, our Investor Relation Advisors. I wish you all a good day ahead, stay safe, stay strong. Thank you.