ICICI Securities Ltd (ISEC) Q1 FY23 Earnings Concall Transcript

ICICI Securities Ltd (NSE: ISEC) Q1 FY23 Earnings Concall dated Jul. 21, 2022

Corporate Participants:

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Harvinder Jaspal — Chief Financial Officer

Vishal Gulecha — Head Equity Products

Anupam Guha — Head of Private Wealth Management

Participants:

Digant Haria — Antique Stockbroking Ltd., — Analyst

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

Deepak Khatwani — Girik Capital — Analyst

Prayesh Jain — Motilal Oswal Securities Limited — Analyst

Unidentified Participant — — Analyst

Aejas Lakhani — Unifi Capital — Analyst

Piran Engineer — CLSA Limited — Analyst

Nidhesh Jain — Investec Bank plc, — Analyst

Sanketh Godha — Spark Capital Advisors (India) Private Limited — Analyst

Presentation:

Operator

Good evening, ladies and gentlemen, and welcome to the Earnings Conference call of ICICI Securities Limited for the quarter ended June 30, 2022. We have with us today on the call, Mr. Vijay Chandok, Managing Director and Chief Executive Officer; Mr. Ajay Saraf, Executive Director; Mr. Harvinder Jaspal, Chief Financial Officer; Mr. Vishal Gulecha, Head Retail Equities; Mr. Kedar Deshpande, Head, Retail Distribution, Product and Services Group; Mr. Anupam Guha, Head, Private Wealth Management; Mr. Subhash Kelkar, Chief Technology and Digital Officer; Mr. Ketan Karkhanis, Head Digital Client acquisition and Co-Head, New Solutions Group; Mr. Prasannan Keshavan, Head, Operations; and Mr. Nilotpal Gupta, Head, Data Science Unit. For the duration of this presentation, all participant lines be in the listen-only mode. I will be standing by for the Q&A session. [Operator Instructions] Please note that this conference is being recorded. The business presentation can be found on the company’s corporate website, icicisecurities.com, under Investor Relations. I now hand the conference over to Mr. Vijay Chandok, MD and CEO, ICICI Securities. Thank you, and over to you, sir.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Thank you. Thank you very much. A very good evening to all of you, and welcome to ICICI Securities Quarter one Earnings Call for Fiscal 2023. So I’m sure that by now you would have all through our investor presentation, which has been uploaded as was pointed out on our website. I shall start this discussion with highlighting some of the industry performance for the quarter, which has just ended, and then take you through some of the key areas that we have been focusing on during this quarter. So the first thing that we have seen was apparent in this quarter was there was a clear moderation in the industry. In a way, when we look at this moderating trend, it started off sometime in the month of October last year. So quarter three FY ’22 is when it started. It continued in quarter four FY ’22, and it quite sharply intensified in quarter one FY ’23. And this is visible from trends on multiple parameters. And I’ll just take you through the parameters where this moderation is clearly visible. First, in the growth of new DMAT accounts that are getting opened. So when you look at this indicator, you will find that this has been losing momentum. And on a sequential basis, the new DMAT accounts actually declined by 25%. The second parameter is the NSE active for the industry. This grew by about 5.5% sequentially, and this growth rate is the slowest that we’ve seen since 2019 December. Currently, this number has now stacked up by the end of this — for this quarter to about 20 lakh NSE active. And what is interesting is that this momentum is showing a declining trend on a monthly basis with industry adding only five lakh customers on NSE active in May, which came down further to a little less than three lakh customers in the month of June. The third parameter I want to talk about is the cash volumes. Cash volumes for quarter one further reduced with retail equity ADTOs, declining by 15% sequentially. Within this quarter, if you look at the June retail cash ADTO, it actually declined 22% vis-a-vis May and 35% vis-a-vis March, clearly indicating that there’s a weakening trend as we enter into quarter 2. Coming to F&O trading activity.

Here, I would say that F&O trading activity fared better relative to the cash segment with growing retail derivative ADTOs. However, what is noteworthy is that the pace of growth has moderated. It actually moderated in the last quarter compared to quarter three to 25% and further moderated sequentially in the current quarter to 11% compared to quarter four of last year. Coming to the overall ECM activity, which is there in the industry, again, this showed growth — degrowth sequentially. It was large — rather it showed a short growth sequentially, and this was largely because of the LIC IPO. If you look at the residual primary market activity, it was actually quite weak. Coming to mutual funds. The gross flows in equity mutual funds declined by 15% and 16% on equity and debt, respectively. And flows into SIPs, however, continue to show an increasing trend, and it increased by about 3% sequentially. However, what was noteworthy is that the SIP count addition declined sequentially by more than 20%. In such a context of a very clearly moderating industry, our revenue has actually grown on a Y-o-Y basis by about 6.3% and came in at about INR794.8 crores. This is on the back of our efforts to diversify and texturize revenue and was led principally by growth of nonbroking equity revenue and also the distribution income. However, when you look at it on a sequential basis, you will find that it has declined by 11%, and this is clearly attributable to the moderation in the industry that I just mentioned. When we talk of profit after tax, profit after tax actually declined 12% on a Y-o-Y basis and 20% sequentially and came in at about INR273.6 crores. If I were to explain the decline on a Y-o-Y basis, it is on account of lower revenue in the institutional businesses. All other businesses have actually grown on a Y-o-Y basis. And higher cost base was the second reason why this has actually declined. Higher cost base was on account of the increasing spend that we have been doing in identified focus areas comprising talent and capabilities, primarily in technology, analytics and marketing.

When you look at on a sequential basis, the decline can be attributed to weakness across both primary and secondary market activities and also to an extent on account of seasonality in some parts of the distribution business. Under the circumstances of a difficult quarter, I would say and reemphasize that we are completely committed to our medium-term strategy that I’ve shared with you in the past. However, our immediate focus as a company has remained in four important areas: The first one is improving market share across various areas of business; second is in diversifying our revenue mix; third is judicious cost containment without compromising on growth opportunities; and lastly, building a pipeline of business and products to be future ready. Now coming to market share. I’ll draw your attention on some of the important elements. We’ve been making investments in the Derivative segment, and we started seeing some early encouraging signs. If you look at our retail derivative market share, it improved from about 3.3% to 3.5% on a sequential basis. However, when you look at it on a monthly basis, June market share came in at about 3.6%. And as we’ve entered into the new quarter, we continue to see increase in number of customers’ orders and even market share. Looking at MTF, we’ve maintained our leadership position with a market share which marginally increased. It went to about 22.4%. We recently launched commodities, and commodities has been shaping up well, and we continue to gain market share there. It came in at about 4.4% in the current quarter sequentially from 4.1% in the last quarter. With respect to NSE active, our market share remained stable at about 8.4%. With respect to DMAT accounts sourced, our market share increased from 5.5% Y-o-Y basis to 6.5% Y-o-Y basis. Mutual fund AUM actually increased by 10 basis points from 1.7 to 1.7% from 1.6%. While on the above parameters, we gained market share, our retail equity market share, I would say, remained broadly range bound and stood at about 9.7%.

We continue to introduce new tools, new plans, new propositions to strengthen our offerings across all businesses, and our market share focus in difficult markets is going to be a very important deliverable from our side, and we’ll remain committed to that. Second, coming to our focus area in current difficult situations is diversification of revenues. Now talking about diversification of revenues, if you look at our nonbroking retail equity revenue, it grew by 87% Y-o-Y and sequentially by 9%. This is largely driven by the growth in the MTF book, and the average MTF book on a Y-o-Y basis increased by about 97%. Distribution income grew by 28% on a Y-o-Y basis, driven by a strong performance from mutual funds, insurance and all the remaining other products. ISEC mutual fund AUM, excluding direct, actually was up by 11% Y-o-Y. Equity AUM was up by about 20%. Revenue from mutual fund insurance and other products grew by 21%, 61% and 31% — 34% on a Y-o-Y basis. The total distribution income on a sequential basis declined by 10%, but this is primarily on account of seasonality associated with the insurance business. Our own PMS book grew by 10% on a Q-on-Q basis and crossed about INR800 crores currently. As a consequence of the above, when you look at it on a Y-o-Y basis, the contribution of broking revenue to the overall revenue came down from 53% last year same time to 38% currently. And contribution of allied revenues within equity increased from about 25% last year same time to about 45%. And contribution of distribution income actually increased from 16% last year same time to about 19%. So clearly, diversification as a theme has been playing out. And within equity texturization of revenues as a theme has been playing out. With regards to cost containment, I think the noteworthy point for us to share is that the cost, which has been increasing in absolute rupee terms seven quarters in a row, actually declined on a sequential basis by 2%.

This is because we reduced discretionary costs in the context of weak market conditions. While the decline itself is marginal, I think it’s important to note that it’s a clear commitment and direction that we have taken of containing what we call discretionary costs and focusing only on growth-oriented cost elements. And we’ll continue to look at costs in a similar manner as we enter the remaining part of this fiscal year. Talking about the last aspect, which is what are the products that we are launching to be future ready. I would say that with a view to put an enhanced focus on the Trading segment, we rolled out a few of products. These are what we branded as smart order platforms, easy options, trading views, which provide a much superior experience. We also have a pipeline of products like clash trade, single-screen training, trading platform for high-volume traders, which we’ve called all these are getting launched during the course of this quarter. We launched a product, which we branded as a digital assistant. This is to facilitate investors to select investment options for meeting their life goals. We consciously upgraded and continuously upgraded our Markets and Money app to launch several of the tools and products that I described about and also insurance and loan products and also focused on improving customer journeys. And in that context, I’m actually quite pleased to report to you that our Markets app today is rated better than most of the competitive apps that you find in both Playstore as well as App Store. And this I’m comparing including with the new age players, clearly endorsing some of the efforts that we’ve been taking in improving our digital offerings to our customers.

We also launched which is a new age learning platform. It is refleet with short videos, podcasts, and we’ve also introduced an investor community platform, which is showing an initial traction, which is pretty encouraging, and it is also helping us increase engagement. Recently, we received approval from our Investment Committee of the Board to take over the business of a company called MultiPhy. It’s a networking platform for investors. This is, of course, subject to legal due diligence being satisfactory. How — and once this is done, we believe, along with the brand and the business and the people, should further assist in modernizing our efforts to educate and engage and create network of investors on our platform. We also recently entered into an exclusive partnership with HSBC Bank, which is for them, first of its kind globally to offer a 3-in-1 broking account, just like we do to our — with our ICICI Bank partners to their partners in India. This will clearly provide us access to provide equity products to their customer base. On the Issuers and Advisory services business, markets were weak. So we use this pipeline — we use this time to build a strong pipeline. And today, we have a pipeline of about INR82,500 crores across 42 deals, and there are many more deals that we are engaged with. And we feel quite optimistic that as soon as market sentiment improves, many of these deals will get executed, and we are keeping them several of them in a ready to launch state. So as we move forward, I think it would be fair to say that the near-term outlook remains uncertain.

However, despite these short-term headwinds, we continue to believe strongly in the medium, long-term story of the segments of industry that we operate in. And we’ll continue to look at all these opportunities with an agile mindset and remain committed to expand our presence and market share across the products that we offer, of course, in the segments of savings, investments in wealth, loans and insurance to the various customer segments that we offer. That is all I thought I will share with you. I’ll end my commentary and throw it open for whatever questions you may have. Thank you very much for a patient hearing.

Questions and Answers:

Operator

[Operator Instructions] My first question is from Digant Haria from GreenEdge Wealth. Please go ahead.

Digant Haria — Antique Stockbroking Ltd., — Analyst

Yeah. Hello, Mike. Mike. My first question is that if we look at the cash ADTO in the last 12 months, they have fallen by roughly 30% or 40%. But derivatives ADTO even on a Q-o-Q basis haven’t fallen much. So maybe someone like me would read that F&O trading is probably the future, how much ever we may like it or not, F&O trading is occupying the center stage of the entire equity markets. So in that context, my first question is on the F&O that six months back, Vijay, you said that in F&O trading, we need three things. We first need the pricing, right? Second is, we need the tools and the ecosystem of — to help the traders. And third is actually getting the customers and making them stay engaged. So where exactly are we on this journey because we see the market share gains, but — if you can give some more color in terms of where exactly in this stage are we?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Thanks, Digant. So yes, you’re very right. I think you cited some numbers, 35% broadly was the decrease in the cash ADTO and if you look at derivatives. While on a Y-o-Y basis, the growth was some more than 2.2 times on a Y-o-Y basis. I think what is to be noted is that sequentially, while it is growing, it is growing at a slower pace. So yes, all the numbers that you mentioned, I completely — I can resonate with what you are saying. Just one point I would comment on this is that as a company as a firm, our approach is always diversification, not be dependent on just one singular revenue or market opportunity. Right now, it is growing. Is it an important opportunity? Definitely important opportunity. Are we committed to increasing our presence there? 100%. And how are we going to do this? As you correctly pointed out, three things. Actually, just to refresh, I pointed out four things. I had mentioned pricing, I had mentioned reliable platform, then I had mentioned about tools, and I had mentioned about what you said, which is the basic ecosystem of APIs and other research stuff that you can add to this, absolutely. Pricing, I would say, we have done with stability of our platform, I think, is very much something that we’ve established. I made a comment in my speech. I think the proof of the pudding is just go to the App Store, just go to the PlayStore take our rating. We’ve got more than 11,000 ratings, which are customers have given us on the PlayStore. Compare it with any other new age app, and you’ll find that we are right up there. I think we’ve kind of sort of made take big progress there. And it’s a big movement that we’ve made there.

So I would this platform has clearly actually been created. Number of tools are launched, number of tools are coming. Even as we speak, I’m sitting with a testing — test version, which we are going to launch maybe tomorrow or maybe at first on Monday, which will throw more tools into the market. These tools are being really loved by our customers as reflected in what they’ve come in the social media and direct mails that come to us. That is what has helped us gain market share. The market share on a month-on-month has increased by 20 basis points sequentially. As we entered into July — I mean it’s too early days. I mean I would still wait for some more stability to give any sort of comment there. But I think the trends are encouraging. We’ll launch more of these tools. We’ve got a bunch of about seven or eight such tools that we are launching. So they are all coming and then it’s a question of increasing popularity. Completely resonate with you that derivative important. We are going to invest in that, and we want to increase our penetration presence and make that as an important line item of revenue. But that is not going to be our only line item of revenue. We are also going to be focusing on other areas, clearly.

Digant Haria — Antique Stockbroking Ltd., — Analyst

Right, right. Absolutely. My question was just because this is the only area where probably we’re not the strongest. All other areas, they’re very like to ask because we have done a good job anyway.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Completely agreed. We will make you — we will deliver in this area. We have to deliver, and we are committed to that.

Digant Haria — Antique Stockbroking Ltd., — Analyst

Perfect. Sir, and specifically on the wealth part, the whole distribution part, not just wealth, but the whole distribution part, do you see any pricing pressure coming in the market or across products like and insurance and wealth management, is there no pressure on pricing?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

So Digant, this is a competitive industry. I think clearly, two cannot run away from the fact that there is a lot of competition, entry barriers are relatively low. So pricing pressure is always knocking on our doors, whichever product that we offer. So the name of competition requires us to clearly be innovative, be more sort of relevant and keep being reasonably priced. We’ve always moved that price — looked at pricing with an agile mindset. We managed to hold our positions and increase market share. You mentioned distribution products. I think under penetration is so massive in the distribution products that there is space to grow despite competition. Pricing pressure, yes, will remain. Our approach to pricing pressure is through trying to innovate, add value and try and maintain pricing. A classic example I can give you, just to make my point, is on the mutual fund side. I think mutual fund, there is enough and more competition from direct plans. However, you’ve seen that despite that, we managed to inch up on market share. If you look at our SIP market share, SIP market share has grown — actually, it is now in the vicinity of about one million SIPs getting triggered on a monthly basis. This used to be 650,000 about six quarters back. So that’s growing. We’ve been gaining market share there. If I recollect, it’s about 3.4% market share. It used to be much lower than that 4, 5, six quarters back. So we’ll continue to invest. The product I just alluded to is another such product, which will help us do gold planning, marriage planning, planning for buying a car, planning a holiday and so on and so forth. And therefore, what investments I should do, they are pretty cool tools that will connect well with both affluent — younger market affluent segment as well as the newcomers. So idea to grow the SIP franchise, add value and be reasonably priced. Competition [Foreign Speech]

Digant Haria — Antique Stockbroking Ltd., — Analyst

Right, right, right. Just lastly — just a suggestion that since you alluded that in these difficult markets or in markets which are not very buoyant, market share will be a very big focus for us. So we used to share a slide at the end of the presentation where we can get the market and our mutual fund AUMs and all of that. So that just made our lives easier to track that market share. If we can just reinstate that slide, that would be great. That’s just a suggestion from my side.

Harvinder Jaspal — Chief Financial Officer

Digant, Harvinder here. Just a quick clarification. So we have, over the last 2, three quarters, started giving a much more detailed breakup in a separate file called disclosures, an Excel file, which has all the market shares, ADTOs, on various parameters detailed revenue breakups…

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

It’s already there, sir. Just dig it up from there can always clarify it.

Harvinder Jaspal — Chief Financial Officer

I’ll send you to you.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

It’s already there. and nine is a 100 billion.

Digant Haria — Antique Stockbroking Ltd., — Analyst

Thanks, Vijay for very detailed. Thank you, sir. On this.

Harvinder Jaspal — Chief Financial Officer

Thank you.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Thank you.

Operator

Next question is from the line of Madhukar Ladha from Elara Capital. Please go ahead.

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

First…

Operator

Madhukar, sorry, to interrupt you. Your voice is breaking. May I request to come in a better reception area, please.

Deepak Khatwani — Girik Capital — Analyst

0 Hello? Can you hear me now?

Operator

Sir, sorry, your is still breaking. Hello. Yes, sir. Please go ahead.

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

Okay. So just on the retail equity and allied revenues, I see other fees and charges, that has grown quite well to INR32 crores in this quarter. Maybe you can explain that. On the second thing, other distribution is holding up quite well. I wanted to understand what are the drivers to other distribution? And what sort of will move that line item? And finally, within retail brokerage, how much is from the cash side, and what percentage is F&O, if you can sort of give that out? Lastly, what is the adoption of Yes, those would be my four questions.

Harvinder Jaspal — Chief Financial Officer

Madhukar, so the first question, others within the allied revenues that have grown from about INR17 crores to INR32 crores. That’s primarily on account of increase in a lot of these transaction-based charges that we have introduced. So it’s an entire portfolio of charges under Neo, Prime, etc., small, small charges. So that quantum, the overall cohort is starting to grow. That is the primary mover and shaker. You have seen that the interest income is at about INR150 crores. Prime is at about — so went up from INR26 crores to INR30 crores. This other piece and charges, this is the Prime…

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

This also includes the Neo charge, right?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Yes, other charges are completely Neo oriented

Harvinder Jaspal — Chief Financial Officer

No. So it will be Neo it will be the payment gateway charge, DMAT charge, exchange transaction charge trade charge, all those type of charges are payment transfer. So that cohort has started to grow. That is question number one.

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

Broadly from the non-ICICI Bank-based customer. Would that be right to say?

Harvinder Jaspal — Chief Financial Officer

Largely, that could be to true, but it could be a mix. So for example, within Prime also, there will be some DMAT charges. But yes, Neo customers and Neo customers could have ICICI Bank and non-ICICI Bank customers both. Neo is a trader’s proposition. Many of our existing customers also opted for Neo. So it could be a mix. It will not be correct to classify it only one way. And I will answer the fourth question also linked to this. Neo adoption is now roughly at about — touching about 50-odd percent in terms of the overall trade. And the overall subscription is about 2.5 lakh. So this is the Neo contribution. You also asked about distribution revenue it is holding up. What are the drivers for that? So on a sequential basis…

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

The other distribution, yes.

Harvinder Jaspal — Chief Financial Officer

Yes. So other distribution is a whole long range of products. For example, our wealth products, fixed income products, loan products. Some of these products have kind of — they are holding sequentially. The decline that we saw was primarily on insurance and mutual fund, which you must have noted. But these other products, especially these categories, we have seen holding up behavior. Our own payment…

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

Which categories exactly — sorry.

Harvinder Jaspal — Chief Financial Officer

What I mentioned, the fixed income, distribution, loan distribution, wealth products, AIF, PMS. Sequentially, these are the ones which are holding. Sorry, Madhukar, there was one more question between which I missed. I think you mentioned something about F&O.

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

Yes, the split in booking revenue between cash and F&O if you can — I remember earlier, it would be a rough sense was sort of about 65% would be cash, 60%, 65% broadly would be cash.

Harvinder Jaspal — Chief Financial Officer

So broadly, it will be around that range. I mean, it keeps varying in and around that range, Madhukar.

Madhukar Ladha — Elara Securities (India) Private Limited, — Analyst

Okay. Right. I’ll come back in the queue. Thanks.

Operator

[Operator Instructions] The next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.

Prayesh Jain — Motilal Oswal Securities Limited — Analyst

Yeah, hi, good evening, everyone. Firstly, continuing on the question, which we had from one of our participant. While there is so much a traction, the regulator seems to be talking about restricting the activity of retail in terms of — in F&O. So — and we are hearing that a lot of data has been sought from brokers, by exchanges as well as the regulator. So how do you think that this is panning out? And what could be the measures according to you that could be brought to restrict trading activity or kind retail participants if any? And the second question is on the Prime customers where we haven’t seen any addition in this quarter. So what is the reason there? And how do you see this traction going ahead? That would be my two questions.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Okay. So yes, you are very right. Prayesh, when you said that regulator has been asking a lot of questions. In fact, all of us in the industry, including I’m sure your company as well would have been probably called in, for these kind of conversations. I think when you get behind the skin of what exactly the regulator is looking at, I think they are concerned about: a, the growing volumes, it’s pretty high; b, the fact that a lot of younger, less experienced people, who have come into the markets, are participating in F&O market. And obviously, from a sustainability of and stability of the market viewpoint, they do not want any one to actually get an adverse experience of making these investments. So their intent is clearly to protect the retail investor and also to ensure that there is stability in the market. So I think they are clearly coming from a risk on lens so to speak. The type of data that they have been asking and the kind of conversations have been asking is reflecting information to satisfy themselves that indeed, there are enough controls, enough risks, enough sort of transparency that is being shared with the customer so that he clearly understands what he’s getting into and he has a sense of what he’s either making or not making in the market. So that is where they are coming from. Vishal has been having direct discussions. Maybe he can add a little bit of color and also talk a little bit about the Prime and what’s the outlook there.

Vishal Gulecha — Head Equity Products

So I think the regulator is definitely interested in seeing a very robust derivative market. But at the same time, they want to take all precautions to prevent any kind of undesired experience to these retail customers. So I think we have completely aligned with that thought. And two counts. I mean, one is the kind of tools which we are bringing it, it clutters the entire derivatives space, doesn’t let customers go too far from the reality and keep customers within those — the practical aspects of derivatives like you will see one of the products which we have done recently which clearly tells these option traders that don’t go too far and trade in something where you can lose money. So I mean, these kind of initiatives we will keep taking. Secondly, how do we help our customers in terms of research recommendation. So I think we are increasing our intensity there as well so as to give a very, very guided tool to customers in derivatives. Also, in terms of due diligence, etc., when customer comes to trade, I think that those steps will be welcomed by the investor community and we as well, and we will abide by whatever new framework…

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

I give one comment that wherever we have seen any kind of regulatory sort of intervention, it kind of probably has short-term impact, which may be sort of reducing volumes and activity. But I think in a period of time, the market sort of absorbs it and moves on and comes out and emerges more stable. I think, for example, I can say that this round of market correction, which has been quite, I would say, visibly there, we’ve not seen too much of leverage in the market. And I think that’s why while I see pain in the market, I don’t see panic in the market. I think good from a regulatory stability point of view. So I think short point is that things should be eventually okay, even if there are some actions. And in any case, our dependence on one product never been part of our strategy. We are broad-basing, we are not overly dependent on one product. We’ll continue to keep that lens as we move forward. Coming to prime…

Vishal Gulecha — Head Equity Products

Yes. So Prime in Q1, I would say that the performance or the subscription was slightly muted in comparison to Q1, but that is more to do with the market conditions and the inflow of a new set of customers. But bearing — and that also is not too out of the place. I think we will be down by only about 12% in terms of overall Prime numbers in comparison to the Q4. But when we look at any other quarter before that, I think the Q1 will still be far better than what we have done previously. So it is more — I mean short point is it’s more market reflective. Actually new account DMAT market share has gone up by about 100 basis points in the quarter.

Prayesh Jain — Motilal Oswal Securities Limited — Analyst

Just a further clarity on this F&O thing, so when we source the information from the customer, while allowing him to trade in F&O, what kind or what major balances do we keep by allowing the customer to trade in.F&O?

Vishal Gulecha — Head Equity Products

Yes. So I mean there is a format which regulator has also defined that customer before entering into a derivative segment should fulfill what kind of conditions. So meet the financial documents which customers should give to activate derivate segment or a DMAT statement or a bank account should be six months old, etc., So I think we do comply with all those. And before enabling any derivatives customer, all these steps are completely ensured. So that is the guideline defined by investor, and we are complete [Technical Issues] Yes. And the product construct is also very, very contained. So I mean, that responsibility is with us that we create products which kind of gel well with this kind of people. Promoting products like stop-loss products where the downside is contained. And as I said, promoting products like where not promoting too much out of the money options kind of thing where the loss has been higher historically also. So I mean, those are the steps which we are taking on a continuous basis and as well when customer comes in for the first time.

Operator

Next question is from the line from Quantum Advisors. Please go ahead.

Unidentified Participant — — Analyst

Yeah, hi, thanks for taking my question. I mean, I just wanted to understand the last few quarters, there’s been a burst of new client additions. I’m assuming there has been a substantial marketing spend to acquire those clients. I don’t know if there’s a life cycle costing number, when do these clients become sort of net positive for you? I’m assuming there is an EBITDA drag because of large marketing space that have been undertaken. And — but at some point, they will — these clients which are dragging margins start becoming — or start adding to profitability. So is there some sense you can throw on that?

Harvinder Jaspal — Chief Financial Officer

Yes. Harvinder here. So at — so we measure internally and keep tracking something which we call as a payback period. The amount of time that we take to recoup by way of revenues, whatever spends we do directly to acquire a customer. At a firm level, we have a payback period of slightly more than a year, so about 13 months or so, give or take a few months — one or two months, plus or minus a month on month, there could be variations. And within — more specifically within the digital clients that we are acquiring where there’s a lot of scale, and it’s a more recent channel, there, the payback currently is slightly higher. It’s about 24 months, two years vis-a-vis company level average of one year. And what we have seen is that we started this digital acquisition journey about two years back. So first, five, seven, 10 cohorts are already deep in the money in terms of starting to already make profit. And every subsequent month, we keep seeing some of the cots turning into the green zone. But at a portfolio level, this is what the current trend is.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

I’ll just add one point. We’ve been very, very careful about not overextending ourselves on spend. In fact, I think at an overall level, the numbers don’t really move the overall — what should I say, overall cost — not cost, but PBT number by too much.

Unidentified Participant — — Analyst

Okay, okay. And just I think in the last call, you suggested you might there would be substantial spends on the technology side. I think the number was around INR60 crores or something. Is that primarily on the balance sheet or you’ll be expensing into the P&L? How will the expense be?

Harvinder Jaspal — Chief Financial Officer

Yes. So first of all, let me clarify the numbers. So we have had a capex spend of about INR70-odd crores in FY ’22. And we had given a guidance — and an opex spend of about INR80 crores. So that’s the total outlay in FY ’22 already. We had said that our sense is that we have almost more than two times is the kind of growth. But currently, we expect a more moderated spend on technology, just getting it deferred between maybe instead of four quarters, maybe six to seven quarters. So that’s the standard we are taking. It will be a similar mix of capex and opex So part on balance sheet and part on opex.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Yes. But just the point to be taken away is that the kind of aggressive guidance we had spoken last time, we have started looking at it in a more judicious way, focus more on the high impact here and now growth-oriented spend. And what is good to have, we’ll defer it for a later time.

Unidentified Participant — — Analyst

Okay. And just on the balance sheet, I know the margin funding business. I mean just already your debt to equity is about three times. I know it’s backed by liquid assets. But how comfortable are you and how much can you push that number?

Harvinder Jaspal — Chief Financial Officer

Regulatorily, we can go up to six times leverage ratio. That’s what’s kind of in trend in the SEBI regulatory framework and margin trade finance product. And just to understand the construct of the product itself, it’s a secured lending because what happens is that the underlying security for which you are doing margin trade financing, that is in your pledge. And that has been our experience also over a long period of time. So we definitely like this particular product, and it’s a part of our both diversification strategy as well as client acquisition strategy. We have enough headroom, both from a financial perspective in terms of our ability to lever and from a regulatory perspective.

Unidentified Participant — — Analyst

But is there any internal limit beyond which you not go or you’re okay with going up to six times?

Harvinder Jaspal — Chief Financial Officer

Yes. So the regulatory limit sets the bar. Today, we have — so for whatever lending we do or assets we create, we need to take shareholder approval. Our current shareholder approval is of INR11,000 crores. And so that is the current approval against which we had about INR8,000 crores. Given the future direction, medium-term direction, we have been — shortly be taking an approval of enhancing that from INR11,000 to about INR15,000 crores to keep enough headroom for over a medium term. Also, if I may add that apart from the basic design of the product. And basic — by basic design, I mean, substantially higher margins as specified for this particular product versus an over product overlay that with our own risk framework, which basically says that there’s a set criteria for choosing the securities, which will be offered under MDF. It’s completely automated, it’s real time. So those are some of the parameters on which we have built this business. And from — in that sense, I mean, we would be happy to kind of scale this up.

Operator

Next question is from the line of Aejas Lakhani from Unifi Capital. Please go ahead.

Aejas Lakhani — Unifi Capital — Analyst

Yeah, I can. Hi team. Thanks for the opportunity. Some of my questions have been answered. But the one kind of pending or one is, team, could you speak about the MTF and ESOP book a bit? Because sir, if you look at the exit MTF book, that’s tapered down to five 200. So how should one look at that for the next quarter?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Yes. So thanks, Aejas. MTF and ESOP, to our mind, is something that is an area of focus, but we will not be moving ahead without it fitting into our risk framework. Now there is a risk framework with what we do, what type of customers we do with. And there is a team which is very carefully administering this on the ground. In this quarter, as you correctly pointed out, sequentially, there is a marginal decline. It is reflective of the fact that there is a weak market. And inherently, MTF is a product which is more suitable when the outlook of market is constructive and positive. In such a context, what are we doing? We are — we found that the penetration number of customers that we’ve offered this product vis-a-vis the number of customers we have, the penetration was a miniscule percentage. And obviously, it means that there is a huge untapped opportunity sitting within our own portfolio rather than deepening within the same customer doing more. And that was — that the approach we have taken. So this quarter — last quarter, while the numbers might have declined, the number of customers have actually increased, which means that the gunpowder available for scale-up for as markets improve can be quite quite scale up at a short notice. That’s the approach we are taking. As far as — so we are actually going to be playing this by risk framework and by market opportunity combination.

We don’t want to grow for the sake of it. Idea is granular, broad-based your risk, broad-based your larger set of customers. And then when the market times are right, then give them the win to group. That said, on the ESOP side, as we had mentioned in some of the earlier meetings as well that we are following the RBI guidelines, not more than INR20 lakhs. However, this product inherently is something that customers want larger amounts. So we have recently tied up with Chola Finance. And under that arrangement, we source the customer and manage the relationship. Chola provides the credit which is required beyond the amount that if it exceeds INR20 lakhs, so that we retain relationship. There is obviously an earning that we get because we are the finder for that particular deal. So there is some protection of revenue that we are able to manage on that. And we will continue to use this channel to scale up. Right now, it is working on a physical format. We are digitizing Cholo into our platform so that this whole thing can become digitally delivered to him. So that is what is going on. And on MTF, I think fair to say market share is not just holding up. In fact, I think slightly it has inched up. We are — we were, last year, same time around 22%, it’s gone to about 22.4%. So idea is to maintain market leadership, broad-based, risk framework under operator with the right customers. Broad-based is so that when the times are right, you can scale up fast.

Aejas Lakhani — Unifi Capital — Analyst

Got it. That’s very helpful. And sir, the ESOP book rundown that we were expecting. So is it fair from what I’m listening to you that the rundown could be much slower than our anticipated and some of it would get compensated through the Chola piece. Is that fair?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

See, rundown has been slower, but I think you should attribute this to a weak market. People who had taken ESOP position don’t want to because they are all very, very strong companies. They don’t want to just — exit for the sake of it. They believe that there is more inherent value when markets — they believe markets are right now in a transient stage, they will improve. And when that happens, they will sell. So decline is lower than what probably you had anticipated. Having said that, definitely, both the MTF growth by broad-basing. And also, I would say, Chola’s presence into our business should, to some extent, timing the negative impact of…

Aejas Lakhani — Unifi Capital — Analyst

Yes. Got it, sir. And Harvinder, one question to you. You mentioned about those other fees and charges, which were those transaction-based charges. So is it — is my understanding fairly right that as the derivative piece increases because everything is Neo linked that this number also will be reflective of the same?

Harvinder Jaspal — Chief Financial Officer

It will be a combination of derivative, yes. Derivative — but a combination of derivative and equity and trading number of orders because it’s quite diversified. If you look at the nature of these charges, something is based on a number of times the amount gets transferred. Something is based on how many calls you decide to make. Something is dependent on how many systems So it’s quite diversified. So yes, broadly, the level of activities…

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

So traders business, which includes trade equity and activity on equity and Neo increases, I think it will all stack up here. It’s not singularly attributable to Neo.

Aejas Lakhani — Unifi Capital — Analyst

Got it. Got it, sir. And sir, finally, is there any weaning off of competitive pressures from the sort of brokers?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

So I think market has slowed down. I mean, one of the places where we did see competitive activity, very heavy was on marketing spend on acquisitions. One can sense that, that has traded out in the last couple of months. That’s one place which one can probably get a hint as to what is the stance being taken by the new-age players. Beyond that, has it faded out? I think too early to comment. They are still there. They are still prominent players in the market. So we’ll wait and watch what happens.

Operator

Next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.

Unidentified Participant — — Analyst

Hi, good evening. A few questions from my side. First is on the SIP. If I see your data, it seems that on a sequential basis, the SIP flows have been a little weak, whereas for the overall market, they have got stable business some color on that. So it was first question. My second, if you can quantify the tech spends and the marketing spends on the P&L due the quarter? And third, on the insurance business, if you can give some color on what are the type of products that you are trying to — what are the products during the quarter and how it is shaping up?

Harvinder Jaspal — Chief Financial Officer

Yes. So on the SIP, as we mentioned, the market share is 3.5%. There has been a bit of softness now. But the total number of SIPs, they continue to hold. It’s about one million. In fact, slightly eased up from last quarter. In terms of flows, also, it has been stable. There, I think a lot of initiatives like our Money app, digital client engagement with customers simplified these are some of the things which are helping in that particular business in terms of getting our share. Here also, if you look at our — I mean SIP AUM, there, our growth has been slightly ahead of industry. However, the flows were slightly soft on SIP. I think your second question was pertaining to the tech spends. So the tech spends — and marketing spend. As we said earlier also that, sequentially, we have tried to put a more measured focus on the areas that we spend. And marketing spends actually registered a slight decline. So they have been in the range of about INR20 crores to INR27 crores in the last quarter. That has come down to slightly less than INR20 crores for this quarter. So that’s on marketing spend. On the tech spend, we have been consistent. So the range has been about INR20 crores odd — INR20 crores to INR22 crores, and we are holding up that trend in terms of opex for the current quarter as well.

Unidentified Participant — — Analyst

Sure. And on the third part on the insurance product that kind of quarter.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Insurance.

Harvinder Jaspal — Chief Financial Officer

So insurance, primarily, currently, the portfolio is life insurance dominant. There, if you look at it, our revenue was about INR12.5 crores, which was up almost 40% on a Y-o-Y basis from INR7.5 crores to INR12.5 crores. We are also building a line of general insurance products with our partnership through Coverfox. And there, we have designed — it’s in the process of getting fully launched, and we have integrated with our partners. We now have about four partners through which we provide general insurance products. And we have integrated two-wheeler, four-wheeler, health insurance, these are the products in general insurance, and we expect to start gaining traction in that soon. Right now, it is still dominant by life insurance products. Also just to clarify on the last question, the marketing spend, I gave a slightly wide range of INR20 crores to INR27 crores, it is more towards the upper end last quarter. So about INR29 crores was the spend for Q4 for marketing, which has now come down to less than INR20 crores.

Operator

The next question is from the Piran Engineer from CLSA. Please go ahead.

Piran Engineer — CLSA Limited — Analyst

Yeah, hi, thanks for taking my question. So firstly, just wanted to understand whether we’ve been reducing brokerage rates for our Prime as well as non-Prime customers?

Harvinder Jaspal — Chief Financial Officer

On the rate per se, nothing specific now. We had launched a lifetime prepaid — lifetime Prime and prepaid plans in March. So both plans basically offered on a subscription fee a lifetime benefit of the same reduced rates that we were earlier also offering. That was the change that we made. On Neo also, the pricing remains the same. On the non-Neo part, also, the rate and the pricing is currently the same. We have not made any changes.

Piran Engineer — CLSA Limited — Analyst

But then, Harvinder, how do I reconcile your ADTO trends and your revenue trend like ADTO cash is down 15 70

Harvinder Jaspal — Chief Financial Officer

Primarily mix, Pirna, because what has happened in the current quarter is that the delivery ADTO. So the waterfall in broking yield is that delivery is at the highest level, followed by followed by F&O. So that’s a waterfall. Right now, delivery has been weaker in the current quarter. And therefore, has gone up. So it’s primarily mix. On a unit rate, it is — there is no other pricing interventions that we have done.

Piran Engineer — CLSA Limited — Analyst

Can you give some numerical color like retail ADTO was down 17% Q-o-Q. Would delivery ADTO be down like 35%, 40% or at least maybe 30%, 35%?

Harvinder Jaspal — Chief Financial Officer

Yes. It’s possible. I can maybe separately kind of come back with you with the number, but it is quite possible that within this, the delivery mix would be lower.

Piran Engineer — CLSA Limited — Analyst

Understood. Okay once again half on this other fees of INR32 crores. I just want to understand, have you started charging on something that you were not charging And if not, I don’t really understand what explains doubling this? And is the Chola scheme also included here?

Harvinder Jaspal — Chief Financial Officer

So the Chola initiative is a very recent one. That I think over the next couple of quarters, we will start building up. On this, as I said, we do keep looking at various charges. It will be difficult to kind of give a full breakup of what charges and what aspect of charges being competitive. But yes, there are changes that we keep evaluating and configuring. We keep benchmarking also with competition. So — which kind of makes the bouquet of for these charges. And they are dependent on various — a variety of parameters. So for example, it could be the number of trades or DMAT fee or payments, as I was elaborating earlier.

Piran Engineer — CLSA Limited — Analyst

I’m just trying to think that how do we as analysts we we model it. I know [Technical Issues] Just lastly, our nonemployee opex going down. How much of that is actually due to just lower customer acquisition volumes and therefore, lower referrals fees and all of that versus the all curtailing expenses on your own?

Harvinder Jaspal — Chief Financial Officer

Yes. So the two examples that I gave on both marketing is one example where we have done a bit of a curtailment. The variable cost has also gone down, and that is evidenced in our operating expense line. So that is a line which gives you the variable expense reduction on three counts. One is investment banking, second is brokerage-related pass out. So whatever is the revenue share arrangement we have with various partners that has come down. And third is what you mentioned, which is the planned acquisition going down. So these are the three elements which are variable in nature, which have reduced expenses. The fixed elements are some bit of marketing expenses we have curtailed and some of the other discretionary spends we have tried to put some…

Piran Engineer — CLSA Limited — Analyst

And sorry, one numbers question. How many of your — like what percentage of Prime customers year?

Harvinder Jaspal — Chief Financial Officer

Prime, see — Prime as a composition has been a retention tool. If you look at our chart, the inventory of Prime customers has been going up. It stands at about one million, slightly above one million customers as of now. It’s not a very material number, not giving out the exact number, Piran, but it’s not a very material number.

Vishal Gulecha — Head Equity Products

And also, we do see at times that customer at right, and that’s where we have made this proposition even more attractive by making it life time. And additionally, two more cards were also introduced to attract higher-value customers. So overall, I mean, we contain things in time. Also Prime has now been extended to NRI. So there also, we have seen some traction, very initial days, but I think things are picking up now.

Harvinder Jaspal — Chief Financial Officer

So with the lifetime variant, Piran, actually, the attrition concept for Prime is actually not relevant, not very relevant.

Operator

Next question is from the line of Mittal from HDFC Securities.

Unidentified Participant — — Analyst

Please hi, good evening, everyone, and thanks for this opportunity. Sir, firstly, could you throw some color on the activation rate of the customers, which were acquired in like 4Q FY ’21? What’s the status on those customers? What percentage of those customers are still trading or still active with us?

Harvinder Jaspal — Chief Financial Officer

Yes. So there are varied nature. So for example, the cohort that we have acquired digitally has one kind of behavior. Within that also, we have seen and we have elaborated in a few earnings calls earlier as well that there are a few channels which have a much lower continuity rate, where the second transaction, third transaction, etc., is lower. We have also seen a lower level of activity in the current quarter, not necessarily at our platform only, but in general in the month. So that also puts a bit of pressure on the activation rate. And the third aspect is in the industry, also, as Vijay mentioned, there’s a number of newcomers. So what happens is it’s a waterfall. Then there’ll be new customers who will keep coming, they are active and some of the old customers keep getting dropped off. That rate has come down. Some of the channels, yes, we have seen a decline — a sharp decline in activity rate in their first 12-month period. And that is the reason why we have stated earlier that we are looking for more measured channel mix and longevity of customers, sustainable customer profile. That is what we are looking at. We can expect a reduction in active client or activity level for some of these customer cards.

Unidentified Participant — — Analyst

Right. I mean, sir, if you could just talk about the customers we acquired post the — I mean, after the lockdown started around April 20, May 20.? I mean what are those customers still active? What — yes, just to get a sense if the current customers, which we are acquiring as cross subsidizing the customers deactivation of those customers which are getting.

Harvinder Jaspal — Chief Financial Officer

As I clarified, those customers are also active from a particular set of channels and some of the customers may have dropoff. So it’s a mix. It’s not a month-wise behavior that April customers have all stopped or May customers have all stopped. There is a particular personal or profile of a customer, and there’s a channel profile. Some of the channels have resulted in weaker continuity after 12 months as compared to some of the other channels. So it’s not a particular month where we can say that everyone is behaving very homogeneously.

Unidentified Participant — — Analyst

Right. And if just share your retail cash market share, retail ADTO cash and derivative market share? And how does it sequentially?

Harvinder Jaspal — Chief Financial Officer

Yes. So we have disclosed that in our presentation and disclosure file. It’s 9.7% for retail cash market share, and it’s about 3.5% for retail derivative market share. Cash market share sequentially was 10% to 9.7%, and derivative market share sequentially was 3.3% to 3.5%.

Unidentified Participant — — Analyst

And just to check what’s the status on the new app, which trying to come up with the super.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

You’re referring to the new app, which is the — you’re talking about the new sort of brand that we spoke about? Or are you talking about something?

Unidentified Participant — — Analyst

Yes. During our last analyst meet, the Analyst Day, which we hosted we spoke about this app coming up. So do you have the status on that?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

So yes — so it’s getting made. It’s coming up quite well, I should say. We hope to do the launch sometime during the course of this year.

Unidentified Participant — — Analyst

Any time lines? I mean —

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Yes, we do have time lines, but these are internal time lines.

Unidentified Participant — — Analyst

Got it. And just to get a sense of the staff cost for the full year. I mean, the staff cost was up on a sequential basis despite a decline in our top line. So I mean how should we build it for the full year?

Harvinder Jaspal — Chief Financial Officer

It’s flattish, If look at it, it’s about 2%. That’s the kind of growth, and you have to factor in the fact that Q1 will have the impact of increments, etc., also coming in. So it has been flattish over here. And so from one 72 to one 75. So that has been the movement.

Operator

[Operator Instructions] The next question is from the line of Nidhesh from Investec. Please go ahead.

Nidhesh Jain — Investec Bank plc, — Analyst

Thanks for the opportunity. Sir, and congratulations for a decent set of numbers in a difficult environment. Sir, one question, we have started this journey of open architecture almost two years back. So how much of our retail revenue is coming outside of ICICI Bank customers?

Harvinder Jaspal — Chief Financial Officer

Nidhesh ICICI Bank customer is still the lion’s share because they are, one, the more vintage customers and the profile is also better. It’s relatively much lower from the new open architecture set. It started and gained traction about 14 months back if you really look at it. And there is some kind of a time. So it will not be — on an overall basis, the contribution will not be very high. But the buildup and the scale is what we are

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Yes, but it’s growing, it’s growing well.

Prayesh Jain — Motilal Oswal Securities Limited — Analyst

Sure, sure. And secondly, we used to disclose that more than 50% of our revenue is coming from the customers acquired more than five years back. Is it still — is it still holds true for this quarter? Or…

Harvinder Jaspal — Chief Financial Officer

Yes. So 60%, Nidhesh. 60% of our revenue coming from customers, which are more than five years, that’s holding. Although we are starting to get a decent traction in the recently acquired customers also, but that metric is holding.

Operator

The next question is from the line of Sanket Gora from Spark Capital Advisors. Please go ahead.

Sanketh Godha — Spark Capital Advisors (India) Private Limited — Analyst

Yeah, thanks for the opportunity. I mean Harvinder, in the past you have a target to get our cost-to-income ratio closer to 45%. I understand it’s difficult environment. So whether that target will be largely missed in the current quarter — the current year because of the in the market? Or those highlighted there are some levers But do we see the cost-to-income ratio to be upwards of 50% the way we have reported in the current quarter? And on similar lines, how do we read the employee cost, which is around 22 percentage. And in the past, we used to guide it to be around 22. But last year, it was less than 20. So how do we see employee cost as a percentage of the total revenue to move going ahead?

Harvinder Jaspal — Chief Financial Officer

Sanketh, so two things. One, our guidance was about 40% by FY ’25. That is what our aspiration was. We had guided earlier and continuously continue to guide that, in interim, we do expect cost to go up. So last quarter, for example, the cost-to-income ratio was 49%, and we had guided that we do expect this to go up in the intervening period from these levels. Currently, if you look at it, the absolute costs have actually come down. If you exclude the finance costs, the costs have actually come down by about 5%. But obviously, it’s more of a function of revenue which is playing out right now in the cost-to-income ratio that we are seeing. Our guidance continues to be the same that in the intermediate term, which is two to three years, we do — we are focusing on getting the cost-to-income ratio to a lower level. It will be a function of revenue and our cost initiative. So that continues to be…

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

Yes. I’ll just add two comment here, Sanketh, that we’ll be judicious in spend, but I don’t want to compromise on growth opportunities. So we are in the investment mode, and we will judiciously and in an agile way spend where we need to spend. But what is good to have and we’ll probably defer it.

Sanketh Godha — Spark Capital Advisors (India) Private Limited — Analyst

Got it. On employee cost, if you want to compare.

Harvinder Jaspal — Chief Financial Officer

I’m coming to that. So on the same basis, when we had an employee cost-to-income ratio of 20%, we had very clearly guided that this is not the long-term employee cost trend. We should definitely see an increase on this trend. 20% was actually one quarter, and we had explained also that, overall, I mean, we should see an expansion over here. We are investing in very identified focus areas in the areas of technology, analytics, marketing. Some of these areas we have identified, and we are investing, building up talent. On an absolute basis, as I was just responding to two of the earlier questions, the employee cost has gone up by 2% in the quarter, which is after increments, etc., And increment this year has been better than the past trends in the industry as well. So despite that, we have seen a 2% growth in on absolute amount. So that, I think, should give you some sense.

Sanketh Godha — Spark Capital Advisors (India) Private Limited — Analyst

Got it. And the second, probably another question is that open architecture, probably added the customers, but probably not to be revenue. But just wanted to understand these open architecture customers somewhere have started contributing to the investment part, which was clearly anything when largely ICICI Bank customer company. Any trajectory you are seeing which is meaningful, which maybe you can highlight that And how do you see this if a regulator really comes with the kind of a thing for the secondary market to?

Harvinder Jaspal — Chief Financial Officer

Yes. So the digital customers, every month, what we have seen is the contribution to the revenue and absolute revenue is rising. They are becoming meaningful, as I was just responding in the early part of the call. If you place it back from where we started, we started in April 2020 this journey on a small level. From April 2020 to today, June 2022, there are about 25 cohorts of customers — monthly cohorts of customers that we have acquired. Of these cohorts, the first 8, nine cohorts have already broken even in terms of their payback period. And whatever we are getting is a straight follow-through the bottom line. And this stock is becoming greater. So every month, it is not still substantial compared to the current existing Vintage customers, but it is growing. Also from the revenue of a current month, we are — I mean that’s almost equal to the cost of acquisition of that particular one. So the entire cohort is able to self-fund in a manner of speaking right now. So from that perspective, yes, it has started to contribute. Number two, these customers are a part of what is contributing to the overall flow. So we have, let’s say, about INR1,000 crores plus of float that we have now gain.

And these customers are also contributing to that. Plus, it’s also contributing to roughly about INR1,300 crores of float currently. And these customers are also contributing to various charges, etc., Small, small charges that we are levying. So idea by year is completely digital engagement, multiple charges, smaller products and engagement. That is the plan over here, and that is what we are working on. There are various properties that we have learned various experience. So recently, we have launched something which we call It’s an app focused on learning completely new age format with snippets of videos, short articles, engaging format and so on and so forth. So all these things, and there’s a team which keeps on looking at various ways to engage these customers. We have also recently invested in marketing tech stack and social networking, investor networking platform, we are building some of those capabilities to try and engage these customers digitally to have longevity as well as high lifetime value. But I mean, it is building up is the short point.

Operator

The next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.

Prayesh Jain — Motilal Oswal Securities Limited — Analyst

Yeah, hi, thanks for the follow-up. Just on the part where we take the subscription revenues. Firstly, how do we account that the lifetime fee that you get, how do you account that? And what is the kind of float that you would be earning on that? So basically, what’s the size of that pool?

Harvinder Jaspal — Chief Financial Officer

Yes. So Prayesh, once we have converted them into a lifetime variant, there accounting is instantaneous. There are two variants which are in subscription mode, the INR299 variant and the INR900 variant. These two are still in subscription mode, which are annual fee. The annual fee gets amortized over four quarters, one year. And the instantaneous lifetime fee is accounted in the quarter, which we get the fee. So that’s the difference between lifetime and subscription. Your second question was pertaining to what is the total quantum, right?

Prayesh Jain — Motilal Oswal Securities Limited — Analyst

Yes..

Harvinder Jaspal — Chief Financial Officer

So the total quantum of — so we have about one million Prime customers, roughly 90% of them would be on the lower plan. So the total — so that is the Prime contribution. In a quarter, if you look at it, I mean, we have disclosed that Prime fee revenue separately.

Operator

The next question is from the line of from Investor Capital. Please go ahead.

Unidentified Participant — — Analyst

Yeah, hi, thank you for the opportunity. Sir, I had a couple of questions regarding your private wealth segment. So you have given the AUM of private wealth. So in that result, can you also give the number of customers that how many customers you have in private wealth and then how that customer base has grown over the last few quarters? That’s first. Second thing is about acquisition, that how are you acquiring these customers? Is there any separate vertical to acquire this customer apart from the — normally the way you are acquiring, mass affluent customer? And third is the customer mix that how many of these customers are from the ICICI Bank and and how many of these customers are at the ICICI? And the fourth one is on your team within the private wealth that how many agents are there and how the team is structured to to cater to these customers? And finally, your vision on this private wealth that firstly, what is your target customer segment? And where do you see your private wealth AUM going and with the contribution in overall revenue? Those are my couple of questions.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

You’ve asked a bunch of questions. Let me go one by one. Your first question is that how many customers are there in private wealth, right? I think did I get it right?

Unidentified Participant — — Analyst

Right.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

So first of all, I’ll take a minute to describe what is private wealth definitions by us. Any customer individually has got INR one crore of rupees of AUM with us is what we call as a private customer. If you look at the total number of such customers today, we would have across 70,000 customers meeting this cut. And during the quarter, we added about 1,600 customers to this cohort. The total aggregated AUM for — from all these customers, 70,000 customers, would be slightly lower than INR2.8 lakh crore as on June 30. So that’s the total AUM. If I have to describe what is the profile of this customer and a little bit about their persona, I think it is fair to say that most of our customers that we have acquired are not typically the born-rich customers, but they are grown-rich customers. These are customers who started off their careers as either a self-employed person many years back, and he has scaled his business up and he’s become a rich person today or alternatively a professional who has risen the ranks in a corporate setup and today is belonging to a senior management position and he’s wealthy person in his own right. Therefore, if I were to translate this into a typical AUM that this person has got, he would be typically between, let’s say, INR two crores to INR three crores at the lower end of the spectrum at his AUM level and go up to INR30 crores, INR35 crores of AUM at the higher end. This whole segment is a sweet spot. This segment, we believe, is the fastest-growing wealth segment in the country.

Number two, it is a segment which is, I would say, very fertile from — they are more DIY style rather than the segment which is very pampered style, the born-rich guys. And therefore, they relate very well with the brand. They have come to us because they have partnered with us in the past and they have grown over the period of time. Our strategy has been and our customer segment has been brand led rather than led. And I think that’s a very unique differentiation of our wealth franchise. We have very strong ambitions in this segment. When we started focusing on this segment about maybe three years back, it was roughly 1/3 the size of this. In 3.5, four years, we’ve tripled the size. We have brought sharp focus, we have improved revenues similarly and — by the similar sort of proportions. And clearly, the — we have emerged as today the largest, I would say, nonbank private wealth company in the country. We have overtaken everyone else in the process. We will continue to put our pedal on this and broaden our presence and deepen our presence. Today, these are serviced by a team of about roughly 300 relationship managers. They are also, in turn, supported by a bunch of product experts in this space. So if you add all these together, it would be in the ballpark of about 350, 375 kind of people servicing this entire segment. What else did I miss? I think…

Harvinder Jaspal — Chief Financial Officer

He also asked I think about the rate of acquisition of customers. So that…

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

I mentioned about roughly 1,500, 1,600 customers in a quarter. That’s broadly the run rate. Anything else…

Unidentified Participant — — Analyst

Right. Outlook. I mean what are your targets in next, say, 2, three years, where do you want to see the AUM growing contribution in overall revenue?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

So I think we find — we feel that rather than chasing a target, we will chase the opportunity. It’s a massive underpenetrated opportunity, growing opportunity. We just want to maximize it. I think we are not looking at anything and we want to do the right thing because, see, it is very — you go chase a number, you will land up with a bunch of customers who will be very upset with you. We don’t want to do all of that. We want to grow this segment in the right way because for us, it is about longevity of customers. That is how this DNA of this company has been because many of our customers have spent 15, 20 years of their life. And we find that the lifetime value of these customers is enormous. So for us, it is about getting the right customer and serving him well and growing with him. And we will do that in a very, very, I would say, focused and active manner. And tripled in less than four years is where we have — what we have achieved following this approach. And our approach will be to intensified. So let us see where we go.

Unidentified Participant — — Analyst

Sure, sir. And just one last thing on this. So if you can just give the breakup into non-ICICI customers in private wealth ICICI customers?

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

I think it would be fair to say 100% of the 70,000 would be belonging to the ICICI fraternity. Even if there is any — we don’t look at it like this, but our sense is that it will be close to 100% or Anupam, our Wealth Head, wants to just chip in, so maybe he will add a couple of comments around that.

Anupam Guha — Head of Private Wealth Management

So from a client perspective, again, as Vijay just mentioned that, we have fairly robust in the specialized team. We have in excess of 300 private bankers. So we go out in the market and do open market sourcing as well. And that we’ve been doing over the years. Having said that, as Vijay mentioned that, we also have a lot of clients who have been part of the ecosystem for a long period of time where we have deeper mined and really grown. So it’s really a combination between a large part from the existing base as well as trying to look at it from an opportunity and trying to onboard clients from the open market sourcing. And I hope that answered.

Operator

Sir, the line for the participant broked. As there are no further questions, I will now hand the conference over to Mr. Vijay Chandok, MD and CEO, for closing comments.

Vijay Kumar Chandok — Managing Director, Chief Executive Officer and Additional Director

So yes, thanks a lot. Thank you, everyone, for a patient hearing. Thanks for the support you’ve been giving us. We will connect with you in the course. And if there are any follow-up questions, unanswered questions, please feel free to reach out. We are all there to respond. Once again, thanks a lot and good night.

Operator

[Operator Closing Remarks]