BSE Limited (BSE) Q4 FY23 Earnings Concall Transcript

BSE Limited (NSE:BSE) Q4 FY23 Earnings Concall dated May. 11, 2023.

Corporate Participants:

Anand Sethuraman — Head, Investor Relations

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Mr. Nayan Mehta — Chief Financial Officer

Analysts:

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Amit Chandra — HDFC Securities. — Analyst

Divesh Agarwal — IISL Securities — Analyst

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Rishabh — Individual Investor — Analyst

Vikram Kotak — Ace Lansdowne Investments. — Analyst

Rahul Kumar — New India. — Analyst

Presentation:

Operator

Ladies and gentleman, good day and welcome to BSE Limited Q4 and 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 guarantees of future performance that involve risks and uncertainties that are difficult to predict.

[Operator instructions]

I now hand the conference over to Mr. Anand Sethuraman, Head, Investor Relations BSE Limited. Thank you and over to you sir.

Anand Sethuraman — Head, Investor Relations

Thank you so much, Faizan. Good evening, everyone. This is Anand from Investor Relations and welcome to BSE’s Earnings Call to discuss Q4 and FY 2023 results. Joining us today on this earnings call is BSE’s leadership team consisting of Mr. Sundararaman Ramamurthy, Managing Director and CEO; Mr. Nayan Mehta, Chief Financial Officer; Mr Sameer Patil, Chief Business Officer; Mr Girish Joshi Chief Operating Operations and Listing Sales; Mr. Subhash Kelkar, Chief Technology Officer; and Mr. Kersi Tavadia, Chief Information Officer.

The conference is being recorded and the transcript of this call along with the earnings release and presentation can be found in the Investor Relations section of the BSE India website. Before we get started, I would like to once again take this opportunity to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements and any forward-looking statements that we make today on this call are based on assumptions and BSE assumes no obligation to update these statements as a result of new information or future events.

With this, I would now request Mr. Sundararaman Ramamurthy, MD and CEO, to give a brief overview of the company’s financial and business performance for FY 2023.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Thanks, Anand. Good evening, everybody. And thanks a lot for joining the call today. It gives me great pleasure as always to address you all today. It’s been an interesting journey for me since Jan 04, 2023, when I joined as MD and CEO of BSE. As you may recall, in the last quarter call, that I have informed that’s my primary priority is to make BSE a wide[Phonetic] brand exchange. And glad that we entered the FY 2023 having made progress in this regard. The major priority areas driving our roadmap are trading segments of equity, currency derivatives and equity derivatives segment. Some of the changes that we have brought till now are as [indecipherable]. In equities cash segment, BSE has reduced the tick size for strips below 100 to INR0.01 from INR0.05.

As you know, this is unique for BSE. In currency derivatives, we have introduced another unique feature. New strike price intervals of INR0.10 for USD INR contracts with addition to — in addition to the existing INR0.25 paisa strike prices. In the equity derivatives segment, I’m happy to inform that we are re-launching Sensex and [Indecipherable] derivatives contracts with lower [Indecipherable] and a different expiry. Expiry on Friday, from the traditional Thursday expiry. We believe that these changes will be [Indecipherable] action. This relaunch is happening from May 15, 2023. It is early days, still I am happy to inform you, the changes in equity cash and USD INR options that we have already brought in have been well-received by the market. We are seeing some positive traction in this regard.

I also want to update you that BSE has discontinued the liquidity enhancement schemes that were ongoing for equity derivatives and commodity derivatives with effect from April 01, 2023. In addition, BSE has discontinued software services and hardware infrastructure services that were being offered and the technology program with effect from May 1, 2023. At the standalone level, for these schemes and services BSE had incurred a cost of about INR32 crores in FY 2023. The relaunched equity derivatives contract, we feel, will attract volumes and hence we have discontinued the [Indecipherable].

Let me now start with the financial updates. FY 2023 was a challenging year. As I mentioned earlier, we have however, made good progress on our main priority and setting ourselves up to deliver better results in the days to come. Surpassing all previous year’s performance. I’m happy to inform that BSE delivered a record year again in terms of revenues to reach a total revenue of INR954 crores for FY 2023 as compared to INR864 crores in FY 2022. A growth of 10%.

Similarly, BSE’s operational revenues have grown by 10% to rupees INR816 crores from rupees INR743 crores. The net profit attributable to shareholders of the company stands at INR221 crores from INR254 crores in the previous year, which is a decline of 13%. The decline is due to the added contribution to the core settlement guarantee fund, we call it as core SGF, to the tune of rupees INR55 crores at a consolidated level, which is an increase of 89% year-on-year. This is on account of added contribution to the currency derivatives and EGR segments.

I will now share some of the key financial numbers on a consolidated basis for the year ended March 31st 2023, as compared to the previous year. The clearing and settlement operational revenues increased by 64% from INR45.3 crores to INR74.3 crores. Treasury income from clearing and settlement funds has increased by 51%, from INR55.1 crores to INR83.2 crores. Other operating revenue, which includes data dissemination fees, training income, software income, has increased by INR32 crores — sorry, by 32% from INR68 crores to INR90 crores, actually, it’s a INR32 crores increase as well. 32% and INR32 crores increase.

Investment income increased by 12% from INR97.5 crores to INR109.3 crores. The operating EBITDA for FY 2023 stands at INR197.4 crores from INR213.1 crores last year, operating EBITDA margin reducing to 24% from 29% earlier. The net profit margin stands at 22% as against 28% last year as a result of increased income growth [Indecipherable] related expenses, an increase in core SGF, as stated earlier.

On back of these financial results, it’s my pleasure to inform you that the Board of Directors of BSE Limited has recommended a final dividend of INR12 per equity share, having a face value of INR2 for the financial year 2022-23, subject to the approval of shareholders in the ensuing Annual General Meeting. The total payout — with a dividend payout ratio of 98.8% of the current year’s profit would be INR165 crores on a standalone basis. I am confident that as we enter FY 2024, we are well-positioned to meet the evolving needs of our customers and create value for our shareholders.

On the business side, let me start by covering our primary market segment. Fundraising by India continues to be buoyant. And BSE platforms continue to remain as one of the preferred choice by Indian companies to raise capital. In FY 2023, the BSE platform has enabled issuers to raise INR14.4 lakh crores to issue of equity bonds, commercial papers, municipal bonds, [Indecipherable] etc. The total number of investor accounts registered with BSE now stands at 13.05 crores, which was 10.15 crores in the previous year, a growth of 29%. As you may be aware, the equity cash segment has experienced is the period of subdued performance in FY 2023, likely attributed to the challenging market conditions. But mutual fund segment at BSE has been showing impressive and sustain the growth.

For the year ended March 31st, 2023, the average daily turnover in equity cash segment stands at INR4,132 crores, down by 23% as compared to last year. The average daily turnover in equity derivatives segment stands at INR1.38 lakh crores, down 48% as compared to the last year. The average daily turnover in currency stands at INR18,569 crores, registering a growth of 50% as compared to the last year. The average daily turnover in currency options stands at INR7,030 crores and with the changes that we have brought in, we feel there will be growth in this segment.

Moving onto our mutual fund business. BSE StAR MF, our comprehensive platform, this continues to generate compounding revenue growth and delivered another year of record revenues and performance, up 56% year-on year to reach rupee INR78.6 crores. This strong growth is a testament to the strategic broadening of our business model, which gives us the ability to deliver growth through an array of macroeconomic environment and BSE’s continued commitment to the equities market and mutual funds in India. The total number of transactions processed today BSE StAR MF grew by 43% to reach 26.5 crore transactions in FY 2023 from INR18.5 crores the last year. BSE’s market-share stands at 87% among exchange distributed platforms. The BSE StAR MF has been consistently reaching new heights, in terms of transactions in the platform, processing a new high of 52.3 lakh transactions in a single day in April 2023. On an average, the platform processed over 2.2 crores transactions per month in FY 2023 as compared to 1.54 crores in FY 2022. This demonstrates the scalability and reliability of BSE’s platform StAR MF.

Now, I shall cover developments with our subsidiary companies. At India International Exchange IFSC or India INX, the BSE promoted International exchange at GIFT City. The average daily trading turnover stands at USD13.1 billion, with a market-share of over 90% for FY 2023. India INX has about USD17 billion medium-term notes established and about USD50 billion of bond listing till-date. India INX global access platform for investors wanting to invest in global securities has grown to reach a total trading turnover of USD27.1 billion for FY 2023.

On the insurance distribution front, BSE Ebix Insurance Broking, where BSE owns 40% stake through its subsidiary, BSE Investments is now integrated with 26 insurance companies. The total premium collected is INR24.3 crores for FY 2023, a growth of 103% compared to the previous year. BSE e-agricultural markets called as BEAM, a transparent commodity spot trading platform to facilitate spot commodities transactions across the value chain has now enrolled 1,342 members and executed trades worth INR148 crores in agri and steel segments on the platform during the year. The company is working very closely with several state governments under agencies for direct procurement and disposal of commodity.

In closing. I can say FY 2023 was a challenging but pivotal year for BSE. We have made important progress on our priorities and we have taken significant steps to improve our product profile. As we move forward, we feel that there is a significant opportunity to continue to expand and evolve the products and services within our core business. From the continued investment in our mutual funds, tp the innovations that we bring to our trading systems and market data products, BSE is well-positioned for long-term success and growth. I’m very focused on doing this in a way that helps BSE as well as the market participants and this will stay our theme for the years to come and will make BSE more vibrant. We are set-up well to build-on — build-on this work in FY 2024 as we continue investing for future growth, while remaining focused on delivering strong financial performance.

With these updates, I now hand over the call back to Anand. Anand?

Anand Sethuraman — Head, Investor Relations

Thank you so much sir for these updates. With this overview. Let me now welcome you all once again for the Q&A session.

Now, handing over the call to Faizan. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session.

[Operator instructions]

Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prayesh Jain from Motilal Oswal. Please go-ahead.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Yeah, hi, good evening, everyone. And first let me congratulate on a great set of numbers. So just a question on the financials. So if I look at the revenue, or the income line-items, there are some like the other security services which has jumped from INR26 crores to INR45 crores on a Q-on-Q basis, other operating income has doubled almost from INR18 crores to INR35 crores, and so as the other income has jumped from INR6 crores to INR12 crores. So can you explain these line items,as to what has caused the jump in these line-items?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Prayesh, just come again one by one?

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Other security services has gone up INR26 crores Q-o-Q.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Okay, then other things? Other operating income going up from INR18 crores to INR35 crores. Okay.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

And other income growing up from INR6 crores to INR12 crores — INR12.5 crores.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

So Prayesh, when — the other security services income comprises from the revenue which we have derived from other group companies, in terms of not only treasury income from clearing and settlement, it is clearing and settlement transaction charge, clearing and settlement charges. And it also includes various — it also include various fees — your admission fees, processing fees and other, all other fees. So this is a –because this year there was an increase in margins in deposits also which we received and the overall clearing activity which has happened. So there is an increase in other security services. Other operating income basically comprises of — other operating income comprises of income which we have received, which is considered with respect to our subsidiary, [Indecipherable] our technology subsidiary, which is the BSE technologies and BSE Institute. So there’s — our technology services from — BSE Technologies has actually had a better year. And it actually earned — its revenue rose significantly during the current-period, current year. And that was the reason why you see a big jump from INR18 crores to INR25 crores there.

And the other income hike which you are seeing. that is arising mainly out of the income tax refund, which we have received, the interest thereon, which is considered as an income for the current year. And there is a minor reversal of about INR2 crores with respect to certain expenses of earlier year, which has added to about INR600 crores of the overall increase.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Okay, that’s helpful. So, which other securities services and other operating income run-rate, is it sustainable at this rate or should we think about it indefinitely?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

More or less, it is a forward-looking statement, which you have been asking for, but we are, I think will try to do as much as we can. Just reframing this question, converting into a forward-looking one. Out of the INR35 crores in the other security services and INR35 crores of operating income, is there any one-off items in these line-items? No, there is no one-off item in this front.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Okay Great. Under other cost, other question was on the expense line-item, so if I look at your employee expense run-rate has been trending down, we are at INR42 crores in this quarter and also say technology costs has come up on a sequential basis, but on a

Y-o-Y basis is still higher. So how, how should we think about these two line-items from a FY ’24 perspective?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Form a FY ’24 perspective again, Prayesh, employee costs, obviously, means, we need to retain talent, we need to hire new talent to come up with — to manage the new initiatives and obviously, there’ll be an upward pressure, which be normal, which can be seen in any other organization. Then there’s technology costs also, while we will do our level best to manage cost to the best of our abilities but there are normal escalations which cannot be avoided year-on-year, and obviously, there are certain improvements which we need to make, upgradations which we need to make year-on year, which will be there as usual. So obviously, that the cost cannot be the same as the previous year in the subsequent year.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Okay, all right. And just one more thing on the tax side, what is our tax rate for the next year?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Tax rate will be around 35% odd, we have a huge MAT, which is — which is unutilized as on-date. And for that we are investing heavily, whatever we are investing, we are investing in taxable securities. So, we will attract maximum marginal tax-rate for the foreseeable future.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Okay, okay and yeah, I’ll come back-in the queue for more questions. Thank you.

Operator

[Operator Instructions] The next question is from the line of Rishabh, an Individual Investor. Please go-ahead. Rishabh, please go-ahead with your question. Your line is in talk mode.Your audio is breaking. We can’t hear you. Mr Rishabh, we request you to please rejoin the question queue.

I’ll move on to the next question from the line of Amit Chandra from HDFC Securities. Please go-ahead.

Amit Chandra — HDFC Securities. — Analyst

Yes, hi sir, thanks for the opportunity. Sir, my question is on the steps that we’re taking to revive the market-share and the cash and also the steps we are taking on the currency side. Also we are launching a new derivatives contract, so all these steps obviously, are on the positive direction and we are seeing improvement in our numbers and margins also. But how confident are we in terms of gaining back market-share in the cash segment, which now, with the initiatives that we’re taking?

And also, we have spent on the LES schemes over the last many years and we have tried that earlier also, maybe five years back on the derivative side and again, we are again — you’re trying on the derivative side to regain some market-share. As of now we have, I think maybe even market-share there, what’s your thoughts on other BSE segments?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Yes, thanks for this question, Amit Chandra. My reply maybe slightly sounding philosophical. The efforts, whether we believe it will bring back the market-share, any one effort in itself is not going to bring market-share. We just narrated only a few of the efforts that we are making. Market-share is a function of how much of market participation happens. And there’ll be multiple interventions that would be required from a market perspective for this to effectively happen. This not only make includes making changes, but also making members aware of the requirements and importance and talking to them, and bringing them back and getting attention into the BSE’s platform from the larger public as well. Which is all what we are trying to do at this stage and more-and-more every day, new things emerge for us giving us ideas as to how we can better reach-out to the marketplace.

So if you ask us, whether we are confident that it will bring back, of course, yes. We have to feel confident about whatever we are doing and we go into the right directions. At some point of time, all the efforts that we’re putting in will fructify and we will gain back whatever we have ceded away in the past, that is the feeling.

The second question is, well, LES was there, it was discontinued now, lot of effort was made in the past, we are re-launching, what is our view about it? When I think about it, I actually remember a story in the past. I’m not sure you would have heard about this story as well of Robert Bruce. Who launched multiple times war against the King of England and he ran away from one of the battles into a cave, and he was sitting. And he was watching a spider. It was trying to climb up the wall of the cave, it was going on falling down, but the spider never gave up. It tries multiple times, on the seventh or eighth attempt, it succeeded and then climbed up. That was a big news, that was a big inspiration for Robert Bruce. This is an actual story of 1300s, I’m sure if we Google, you’re able to see. Then Robert went back and with rejuvenated energy fought back and he won the battle. The message is try, try, try again once or twice though you may fail, try, try, try again, till you succeed, try again. And we are doing it, with rejuvenated energy, we’re trying changes, which may look really simple, but which may be very material. We have taken market participants into into confidence we have requested them as to what markets impact what changes would bring in. So maybe what did not work-in the past may work and this is the confidence and expectation with which we are proceeding.

I hope I’ve answered your question?

Amit Chandra — HDFC Securities. — Analyst

No, sir, it was a very comprehensive answer and I also now expect BSE to do well in these segments. But the second question would be on the cost side. So historically, I know we have spend on several initiatives, which are not yielding results. So are we becoming more cognizant on the spending that we’re doing on these initiatives now, mostly from an ROI perspective and also, I don’t if you can throw some more light on what is happening on the INX side, with — is there some consolidation happening, like one exchange there? And also on our extensive that we’re doing on INX, can you see some [Indecipherable] there, also in terms of expenses there?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Yes. So M&A decision in respect of listed corporates like us, if you look at it — are taken collectively, considering the fact that are available at the point of time, in the best interest of the corporate entity. All the expenditures that would have been made prior to me coming and joining here would have been done, or were done in that same-period, and some of them work, some of them did not work. The enhanced liquidity, Liquidity Enhancement Scheme that was tried. In retrospect and in hindsight when we look at it, probably it has not delivered us much.

So what is not delivering results should be abandoned and we should try something new, that’s why we are now thinking about product differentiation and product interplay, which is what we should highlight to try to garner volumes, that’s what we’re shortly are trying to do now. When you do that, incidentally what happens there is better a better position in the balance sheet and profit and loss, and there is a better return on investment. It is just not only the return on investment which is driving you to cut-down expenditure, it is also what is effective, what is not effective, what is the cost, what is the benefit, that type of an analysis is what is driving us to take these type of steps. That is one part.

On the INX part, it’s a very-very-very important question that you have asked. It is very close to our heart, because it’s a national priority, and that we would like to ensure and do anything that is possible, that we, as India, are able to provide a place where all the farmers are able to converge and trade with us, with no export of Indian markets abroad. This noble thought has made us to start the exchange Trust and Clearing Corporation, well-capitalized it and we are running it well, it’s a good amount of market-share as you would have seen, it’s 90%. So this is just starting in my opinion.

Lot of changes are happening in that space and we are going to be present there in whichever way we can to ensure that the national dream of having a GIFT city in India materializes and BSE is as always a leading part in this noble effort.

Amit Chandra — HDFC Securities. — Analyst

Okay, thanks for that. And then one last question, so. This is for Nyan, sir, so we have seen the operating cash flows being negative for this year. Can you please explain what has led to this and now?

Mr. Nayan Mehta — Chief Financial Officer;

As you’re aware, that this year was bad for Capital Markets. All exchanges trading volumes went down, not only in India, globally also. And it had a cascading effect on all our revenues were across-the-board. So, since the operating income has a hit, arbitrate also affects operating EBITDA and operating margins. At the other side, you know our Gross Settlement Guarantee Fund, we had to make an additional contribution of INR26 crores over and above our previous year. So, we’ve made INR56 crores of contribution to core Settlement Guarantee Fund in the current year, which was one of the main factors resulting in our operating income actually showing a dip as compared to what you would have expected.

Operator

Thank you, Mr Chandra, may we request that you return to the question queue for follow-up questions?

Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue.

The next question is from the line of Divesh Agarwal from IIFL Securities, please go-ahead.

Divesh Agarwal — IISL Securities — Analyst

Good evening, gentlemen and thank you for the opportunity. And many congratulations on a good set of numbers. Firstly, sir, I would like to know this discontinuation of PPD enhancement schemes and the support that you are with ability to. So hybrid solutions. The total shaving to general to come out of deference will be announced. I was going to be pretty facilities. Well just closer crores from the semi industry. We expect you to the continuation of the scheme.

Okay and so the way we have discontinued for FY 24, are you having any in terms of start charging on some of the segments where we are not charging. So is there any thought process around that?

Mr. Nayan Mehta — Chief Financial Officer;

So that’s a very good point that you’re making. There are two objectives, always for any entity like ours. One is improving liquidity in-market segments so that we are being at-the-market let’s say very primary objective. That’s our commitment to the market. Commitment to the shareholders making revenue out of it. While both of them run hand-in-hand, the timing, we will have to be very ask to is that both are fulfilled properly. So while we today, have some of the services where we are not getting any revenue, which was given free, we are not in any case. I think any market-share. So that is the place where we are trying to trying to sort of increase our presence and we are trying to get more liquidity there. And once we are able to get some traction, we will of course be charging. So that we serve both the second interest that is not the interest which we need to take care of the shareholders. So it goes hand-in-hand.

Divesh Agarwal — IISL Securities — Analyst

Understood sir. But more numbers that you can share probably, gets level when or 5% market-share, something like that, but we would look to charge, so that we have some indicators, which we can track.

Mr. Nayan Mehta — Chief Financial Officer;

And that’s a very valid question that you’re asking. I wish I am able to provide you a number. I will, if it is anything which now BSE as an entity can give us an answer, we would have immediately given. It is all purely market-driven, as you would certainly appreciate, you’re from a securities firm, I’m sure you appreciate what I say. So it’s a question of evaluation, right. So we have to see from May 15th, how the equity derivative segment is shaping up. The changes that we brought all from March only, so it is just 1.5 months that has run away. So we need to do more, we need to wait-and-watch, so I will not be able to say at what level of market-share I’ll be able to start charging more in respect of whatever new segments where I am not charging.

In equity options, equity derivatives options already I am charging, it’s a smaller number, it will be revisited soon. In equity futures, I’m not sure equity index, which is they’re not charging anything, once there is some traction, we will charge. Some of the charges we have already started, as you may be knowing, whatever free services were there in respect of colocation, today we are already charging to defray the cost at least to start with, and over a period of time attempt to convert it into a profit center. So it will be busy ships. It will be in the right direction. It will not take too much time, but it will take some time to ascertain.

Divesh Agarwal — IISL Securities — Analyst

Understood, sir. [Indecipherable] FY ’23 into our profits. Based on the exit run-rate, do you think that there could be further contributions which would be required under SG&A for the time-being we don’t see any significant contributions coming in?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Divesh, contribution to us depends on many-many parameters. One is your total volumes, concentration of positions — concentration of positions open interest, volatility in the contracts, so frankly, it is simply impossible for us to give you a — to judge or project anything about the next year, because we ourselves don’t know.

Operator

Thank you, Mr Agarwal, may we request that you return to the question queue for follow-up questions? Thank you. The next question is from the line of Pankaj from Ace Lansdowne Investments. Please go-ahead.

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Thanks for the opportunity and congratulations for the great set of numbers. My first question is, as you mentioned that there is some changes in the last quarter [Technical issue].

Operator

Pankaj, the audio is not clear from your line. Please use the handset mode.

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Okay, am I clear now?

Operator

Yes, sir.

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Hello, am I audible? Sorry. So, yeah, my first question is, sir, you mentioned that we did some changes in last quarter around the tick size like for equities and for the currency options, so last couple of months, have you noticed any traction in the volumes because of this? It this true or [Indecipherable]

Mr. Sundararaman Ramamurthy — Managing Director and CEO

No, it’s a fair question that you’re asking, what we have seen is in respect of tick size. The market, there are multiple things which we have seen. The overall impact costs in respect of the securities we have found that coming back. If you look at it, what was the origin? The origin is upto INR15, whatever securities were there we had a tick size of INR0.01. We found in respect of these securities, we had a better market-share, better delivery percentages and also we have a better impact costs in respect of these securities. We thought that is very beneficial to the market, we wanted to mimic it for slightly higher number of securities. So we went up to a INR100, whatever is upto INR100, the tick size was changed. We find all the three things holding good. We find the impact cost has come down. Our market-share in these securities used to be around 9%, now it is around 11%, a 2% increase in two months, which is shot, I can say 20% — 20% we can say it has increased in the volume — in the market-share, because from 9% to 11% is roughly that way. It is still a long way to go, but certainly it has started showing green shoots. And in terms of delivery percentages, we are very happy to tell you, around 80% of the total trades in respect of securities upto 100 rupees at BSE results in delivery. When you compare it to the national average of 19% in other exchange. I think is a very big number I feel. So I think the purpose for which we launched this is materializing. But as you also rightly pointed out, it is early days, there will be some more traction happening.

In respect of equity of currency options, what we found is, in respect of this $0.10 strike rate intervals around 65% of the trading is happening in these strikes. So that means you have made some difference. We have started making some meaningful difference in respect of multiple new partners –participants, who are entering into this market. So these are some early indicators for us. Currency options change came around March 6th, or March 5th, I guess, it’s early days, but I think we are making a dent.

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Okay, okay. Thanks for that. My second question is around that ASBA implementation in the secondary market. So what can be the possible impact for our treasury revenue with ASBA implementation in the secondary market?

Mr. Nayan Mehta — Chief Financial Officer;

It will be too early to comment. It will be too early to comment, Pankaj, because you are talking about ASBA implementation, where the contours of the regulatory change in itself is — it’s not becoming evident. You may like to note that this is not an exercise from SEBI side to increase the revenue of MIIs. It is an exercise from the regulatory side, for improving the investor protection. So the add on which it looked in itself is very different and contours are not clear, so it will be very difficult to give any comment on this stage.

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Okay, okay. No problem. The last question is, what is the cash-and-cash equivalent as on 31st March, cash-and-cash equivalents?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Pankaj, as you know, that we distributed more or less the entire income, which we received during the year. So, and our capex is not very-high as compared to many other organizations. So we still have INR1,400 crore as we would have told you last year also, on calls, we have been telling that and we continue to have INR1,400 crore of free-cash for shareholders in our standalone books.

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

INR1,400 crores?

Mr. Nayan Mehta — Chief Financial Officer;

Yeah.

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Okay, yeah, sorry, the. I think the last last quarter it was around INR2,200 crore.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Pankaj, that is the total cash in our books. But when you talk about cash books, I generally understand that it is meant to free-cash for shareholders, right?

Pankaj Rawal — Ace Lansdowne Investments Services LLP — Analyst

Got it. Okay. Thank you. That’s all from my side. Thank you very much.

Operator

Thank you. The next question is from the line of Rishabh, an Individual Investor. Please go-ahead.

Rishabh — Individual Investor — Analyst

Hello. Yeah, am I audible?

Operator

Yes.

Rishabh — Individual Investor — Analyst

Could you please guide me regarding the fee structure in the StAR MF platform?

Mr. Nayan Mehta — Chief Financial Officer;

What happens Rishab is that — means — what we recover from the agency towards towards the services, comprises of two-parts, one is the transaction charges for processing the transactions orders. And the second is the recovery of the costs which we incurred and handling any processing those transactions. Fortunately, those transactions.

So there are various slabs which become applicable to different parties depending on different levels of operations. So, I can tell you one thing that the overall recovery for us is about INR4 per transaction.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Nayan, if I may add, Rishabh your question is whether there is any cost to the retail investors. There is no-cost. If you’re — if you’re asking whether there is any, any cost to the intermediaries, there is no-cost. It is what is the recovery what we make from the AMCs for the services we render to the AMCs.

Operator

Mr Rishab, your audio is not clear from your line.

Rishabh — Individual Investor — Analyst

Hello?

Operator

Yes, sir. Please go-ahead.

Rishabh — Individual Investor — Analyst

Yeah, I’m saying that during [Technical issue] concerned with the core SGF. Can I know the reason for that?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

As Nayan told sometime back, the SGF competition is based on the complex algorithm that works, which takes into account multiple things like volatility, cleared volumes, etcetera, etcetera. So that is the reason because of which, based on the algorithm, the number changes, a number is arrived at and if we have to contribute, we have to contribute. There is a SEBI stipulated algorithm and based on which this happens.

Operator

Thank you, Mr. Rishabh, may we request that you return to the question queue for follow-up questions?

We’ll take the next question from the line of Vikram Kotak from Ace Lansdowne Investments. Please go-ahead.

Vikram Kotak — Ace Lansdowne Investments. — Analyst

Thank you. I am audible? Hi, Sundar sir, hi, Nayan, hi everyone at BSE. First of all, congratulation for a good set of numbers. I can see a lot sweat In the numbers. And a lot of small, small changes [indecipherable] paying somewhere. So I had two questions, one is the — I don’t know whether — I joined late, so maybe if it’s answered, then you can — sorry for that. So one question which you’ve brought INR0.01 tick size, how do you see this as you know kind of helping because you took a survey for brokers, so how that’s helping you to kind of get more closer to the investors and the broker community? That’s my question number-one.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Can I answer it?

Vikram Kotak — Ace Lansdowne Investments. — Analyst

Yes.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Actually you missed the answer. It was a very elaborate answer for it.

Vikram Kotak — Ace Lansdowne Investments. — Analyst

Sorry.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

It’s okay. I will just repeat it in a sort of summarized form. The three guiding factors which because of which we thought we should know this is one is the impact cost, improving derivatives percentage and third is know more investors through market-share. All the three, we are finding some traction. The delivery percentage in respect of these securities at BSE is 79%, around 80%, you can take. The impact cost is significantly reduced in respect of the stocks as we compare it with the other exchange and our market-share, which was hovering around 9% before the change, has gone up to around 11% in these securities overall market-share, that is a 2% increase over a base of 9% increase.

Vikram Kotak — Ace Lansdowne Investments. — Analyst

Right. Right. And Sundar sir, second question for you is that, I know you started a few months back and we have gone through the first one full-quarter and where do you where do you see in terms of transition and where do you see in terms of low-hanging fruit, in terms of the strategy, do you see a long way to go or you are seeing that things are panning out quite quickly? And this is a difficulty also. It’s not easy to really implement and really see the result because the half year from capital market. Do you see whatever steps you are taking [Indecipherable] of bull market of good run and the equity market, do you see the more operating EBIT will be playing out through what changes we brought till now and what are the more changes till now? That’s my question. Thank you.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

No, I’m honestly not able to answer your first part. If you are asking for what change is in the offering, that is easier to answer. I’m sorry, I did not understand the first part of your question. Can you simplify it in a single-line?

Vikram Kotak — Ace Lansdowne Investments. — Analyst

I’ll simplify it. Whatever changes we taken — done in last three months, that is the INR0.01 transact, INR0.01 thing or putting the currency derivatives [Indecipherable] bringing no more products, right. But it’s tough year. So it’s not, you can get all benefits in a tough year. So if the year was good, do you a huge operating leverage to play out in all these areas of changes which you brought? That’s my first question.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Okay, so the simple answer to it is, yes, it was a tough year, and I joined in the last quarter and the government is joined immediately you don’t hit the ground running, itt takes some time. Notwithstanding that, we are trying to bring in in the first quarter in itself multiple changes. And as you may be aware, we are launching — relaunching rather Sensex and banking derivatives, in slightly a modified form which is based on market feedback from Monday onwards, I’m sure you’ll be tracking it?

Vikram Kotak — Ace Lansdowne Investments. — Analyst

Yes, yes.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

And incidentally whoever, any of you are trading, we would like your full support to BSR and these derivative contracts. We feel that they are wonderful contracts for multiple reasons. Sensex as you know is one of the oldest index in India, it represents 30 stocks in 12 sectors. And since there are 20 stocks less than this and two sectors less than this, this is quick, this is sensitive index, that’s why it’s called as Sensex. It incorporates the market price into the — price information into the index very fast. and therefore, that in itself creates a situation of need a live with the other big market index, which is Nifty, giving a lot of product interplay possible between Nifty and Sensex which is, as part — sensex derivatives [Indecipherable] trading.

Apart from that, because our contract is expiring one day late, in respect of people adding positions on Nifty options on Thursday. If they think that they should recover the entire by waiting one more day they will be able to transform the position of Nifty options to Sensex options by paying a smaller [indecipherable] and probably landing up in-the-money. These are just two strategies I’m talking about, there are multiple strategies. This is the reason why we have carefully selected Sensex 30 and Bankex derivatives. Bankex is very akin to bank [indecipherable]. And as you know, both of them enjoy a 99.96% correlation with other indices of the other exchange and they have better volatility profile and the return profile of Sensex is far superior, and the CAGR has been a very-high percentage in the last five years, all these you will be aware of. The reason for bringing this is to rejuvenate the market and bring in vibrancy.

You were asking me whether we have belief that it will change the operational capability. The honest answer is, yes. As far as what the future plans are, this is the second question that you’ve asked, multiple changes could be there and multiple products could come. We are only talking about two products now and they are both in that index product. Today, if you looked at the market, the market is suffering from a very big concentration risk, the entire volumes are concentrated in a single trading venue, in a single segment, in a single-product with around two or three indices alone. Taking care of almost everything in the market. This is a huge concentration risk, we are seeing in order to provide vibrancy, it’s trying to address this risk for the nation and for the investing public but providing in new products, we are charging with index. We are sure in the to come, we’ll be having more equity-related products coming in derivatives, more indices, broad-basing the market and providing protection to the market from the concentration risk, which er are public, they are covering. This is the vision that we have and it is not going to happen in a day, as you would appreciate, it will take some time. And the entire tenure of mine, which is next four years is there for me to contribute whichever way I can to the growth of the nation and BSE. Supern, superb. All the best sundar sir and all the best to BSE. Thank you so much for elaborate on this. Thank you. Thank you. The next question is from the line of Rahul Kumar from New India. Please go-ahead.

Rahul Kumar — New India. — Analyst

Hello, good evening, sir.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Good evening.

Rahul Kumar — New India. — Analyst

Well, my question is what is the future of goal extending and social extending. Are we — in the future, will get some revenue from this segment?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

Sorry which? Gold, what you said?

Rahul Kumar — New India. — Analyst

Gold exchange and Social exchange.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

See Social exchange you will not be able to get any — That’s not a revenue making exercise, that is a contribution to the society Gold actually enable access to social exchange, you will not be able to get any, that’s not the revenue, making exercise, that is a contribution to the society as a corporate citizen, what we all need to do. From social stock exchange, at least at this point of time, I’m not expecting any revenue. I am here to serve the larger part of the sections of the society through SSE.

Gold bullion exchange is a separate exchange which is the shareholding of multiple other exchanges. So it is a fledgling exchange. Gold has a great potential in India, we are talking about 800 tons and whatnot, but still we are not the price setup. So India is having interest in trying to make India the price setter for gold. I’m sure, since it’s a single exchange with multiple people joining together to promote this exchange, this is — and this being in GIFT City, which which is very close to our heart, a nation’s interest, I’m sure in the coming days, it will grow well.

I’m not sure whether you are tracking our EGR, that is another effort for onshore participants we have put in-place, it is early days. There are some teething troubles in terms of taxation and other areas, we feel we will be serving the market better very soon with some changes, if it comes through, through the e-gold circle within India.

Rahul Kumar — New India. — Analyst

My next question is how much revenue we’ll get from power [Indecipherable] We have from shareholdings from Hindustan Power, do you get some revenue from that?

Mr. Nayan Mehta — Chief Financial Officer;

So Rahul, right now we are not earning any revenues or share of revenue from HP, it’s still in the process of, it’s a new exchange and it will take its own time to grow up and add revenues. So with, it will be very difficult to — I think it’ll be very difficult to say what type of revenue-share or profit-share we can get from them. I will be providing technology to them through our group company, BSE Technologies and that is the revenue which we have against our services to them. So we will probably have to wait for some time before we get some return from the investment to share made in HP.

Rahul Kumar — New India. — Analyst

Okay, thank you. Thank you sir.

Operator

Thank you. Ladies and gentlemen, we’ll take the last question from the line of Prayesh Jain from Motilal Oswal. Please go-ahead.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Yeah, hi, thanks for the opportunity again. Firstly, on the existing businesses fund, finance transaction charges or listing fees, any thoughts on increasing — increasing the rates in FY ’24?

Mr. Sundararaman Ramamurthy — Managing Director and CEO

See, I probably do not understand the question, are you talking about transaction charges or listing fees, which one you talking about, or both?

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Both, both, I’m asking. Whether any thoughts of increasing them in the — in times to come.

Mr. Sundararaman Ramamurthy — Managing Director and CEO

The rates are sort of competitive rates as far as listing is concerned, so unilaterally, to make a comment that we will increase is not possible. It is, it’s not any sort of giant effort to increase or decrease, but the market is very competitive, so accordingly the pricing gets made, so it will be a function of multiple things, where the — where the entire market is moving towards in terms of capital rising, IPOs that come into market, [Indecipherable] that come into the market and on and on, And so that’s what, it is — it is not a unilateral point of time decision to say that yes, indeed, we will be raising listing fee, that is one part.

On the transaction charges. I’m not sure whether you missed the point which. I was making slightly earlier. We do charge a subsidized rates in multiple areas and we don’t charge some in some areas. If you look at it, for example, in equity options our charges are very low, currency options are our is almost 1/10th I guess, compared to the competitor and in respect of equity futures, we do not charge anything at all. Point of time, it is not making a difference, because we are not having much of a market-share to boast. But we are doing everything to ensure that we will get some market-share. So as and when we will get market-share, will we be revising the charges, meaning will we be introducing charges? Yes, we will be introducing. We have already started charging certain services which we were not charging before. Like for example, in Codo[phonetic] where we it was all free earlier, which was in a way taking some amount of the P&L, right, so which was talked about, the technology scheme which has talked about. So today, we have started defraying the cost, so like that, in currency again, to mention our charges are 1/5th of what the competition charges.

So there are scope for us to increase, we are trying to deepen the markets and once we are deepening the market, certainly we will be working towards increasing the charges and taking care of the shareholders revenues increase as well.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

On the StAR MF you mentioned that it’s INR4, but if I look at FY ’23, it’s far lower than that, so, is that the run-rate that we should look-forward going ahead or how should we think about that?

Mr. Nayan Mehta — Chief Financial Officer;

It’s like that. Over a period of time, as our volumes increase, the adverse labs will get applicable. And to that extent, that’ll be a downward trend with respect to average charges which are earning per transaction. But as you will note that we are able to influence our revenue by almost 55% from INR50 crores to INR78 crores in this current — in this current year. So obviously, with higher transactions coming on — coming on us, obviously, that will have an upward, that can have an upward thing — impact on our revenues.

Prayesh Jain — Motilal Oswal Financial Services Ltd. — Analyst

Got that. Got that. Yeah, that’s it from my side. Thank you and all the best.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Anand for closing comments. Thank you, Faizan, and thank you everyone for joining us today. If you have any further questions, please feel free-to reach-out to us at BSE.ir@bseindia.com. Thank you so much. Thank you. [Operator Closing Remarks]