Kfin Technologies Limited (NSE: KFINTECH) Q1 2026 Earnings Call dated Jul. 25, 2025
Corporate Participants:
Unidentified Speaker
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Vivek Narayan Mathur — Chief Financial Officer
Analysts:
Unidentified Participant
Devesh Agarwal — Analyst
Swarnabha Mukherjee — Analyst
Karthik Chellappa — Analyst
Supratim Dutta — Analyst
Vaibhav Sharma — Analyst
Dipanjan Ghosh — Analyst
Lalit Deo — Analyst
Lalit Deo — Analyst
Pranuj Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good morning and welcome to the KFin Technologies Limited Q1FY26 earnings conference call hosted by IIFL Capital Services Limited. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Divesh Agarwal from IIFL Capital Services Limited for opening remarks. Thank you, a nd over to you.
Devesh Agarwal — Analyst
Thank you, Ryan. Good morning everyone and welcome to the Q1FY26 earnings call of KPN Technologies Limited today from the company we have with us Mr. Srikanth Nadella, the MD and CEO, Mr. Vivek Mathu, CFO and Mr. Amit Murarka, head of Global Business Finance, M and A and Investor Relations. I would now hand over the call to Srikant for his opening remark which will be followed up by a Q and A session. Thank you. And over to you Srikanth.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Thank you so very much Sirsh. Very good morning and a warm welcome to one and all. It gives me great pleasure for me to come back to you again with yet another stellar quarter for us. I will start with the qualitative commentary and we’ll discuss the financials at the very end. We continue to be the country’s largest registrar by a mile. Be only qualified RTA who straddles across both sides of the registry business. One of it is the investor solutions and services which is mutual funds alternatives, pensions, private retirement schemes, what have you. And on the issuer side where we are the share transfer agent for a vast majority of the corporates, it gives me great pleasure to call out some few important standout milestones we have accomplished this quarter.
I’ll start with mutual fund business. To start with, we continue to outgrow and outperform the industry in terms of UN growth, albeit by a small margin this quarter we grew marginally ahead of the overall industry on the AUM and by the number of asset management company wins that we have secured this quarter. We have won three new mutual fund mandates out of four that have gone for discussion and negotiation this quarter. So that’s a 75% win rate and it gives us a great deal of pride in terms of Several marquee professionally run asset management companies continue to use casein to be their preferred partner.
Our SIP inflows by market share continues to be ahead of our total market share as I always maintain. I believe that in the medium to long term it is the market share of the SIP which is the surest indicator of the overall AUM. Given our overall AMA is roughly about 32.5 and SIP market share is about 39. I do hope should this trend continue we should continue to see upward trajectory in terms of the overall market share again that K Fintech would see. We have had one of the new AMC Capital mine that has just gone live their first impact.
It is happening as we speak and it is a matter of honor for us that Mark Epms who has just ventured into mutual funds and have adopted our latest and which is XaaS, which is to stand for everything as a service. Which means that we not only just manage the core RTA operations but we also take care of everything else. We provide services and solutions around marketing, content, full stack digital including infrastructure and also everything to do with the partner solutions as well. So that’s on the mutual funds and I’ll give a little bit of deep dive along the way.
On the second larger business and one of the other core business we have issued solutions Again we’ve had a spectacular quarter and indeed right in the wave of the overall expansion of the primary market in terms of IPOs and the number of entities that have gone public over the past 12 months. But we’ve been outperforming the industry by quite a distance there. We improved our market share from about 48% about 18 months back now to close to 15% in terms of the nifty listed companies by market cap. The total roster of the corporate clients has swelled up now closer to 9,000 clients.
We are hopeful by end of the year we will cross 10,000 mark and be the largest registrar by online. There are several IPO mandates that we have won which are expected to hit the street into the coming quarter to 2, which would obviously help us in terms of the run revenue as well as the historical IPO revenue that we will get for the issue solutions into the Q2 Q as we all know it is the Q2 3 and Q4 which are more impactful quarter for issue solutions. Given several corporate actions continue to trigger this being the Q1 for most of the financial services.
I’d like to believe that the number of financial growth of around 50% is normal and the trend tends to pick up into the subsequent quarters. What’s even more heartening is our continual focus on market share expansion. New client wins in the international space we have one several new clients in this particular quarter. This gives us nearly 13 additional new clients which are yet to go live and some of them are large. One of them is Maybank and we have one several trustee driven contracts which gives us access to not a singular client but to several of them who that particular trustee has under their client.
We have about five in Malaysia, two in Singapore, one in Philippines and several in Gift City which are under transition and yet to go live. Yet another business which we are extremely optimistic into the coming years as I believe that this is a pure playtech play and one that probably will have a higher margin albeit business which was loss making which has just turned the corner now and has broken even which is a national pension system. We’ve been outgrowing the industry by a factor of two and happy to inform you that in a very very short period of time we cross the del double digit market share of 10% in the overall brands in the country despite the fact that we do not operate in the government sector which means that government plus non government together on the total share of the brands that exist in the country we just alone on the private mandates have crossed 10% less as compared to the overall market.
AIF has been growing at a sharing pace. We continue to expand Our market share from 34 to 37% at this point in time. We are now the most preferred alternatives pair in the country given the only one with the proprietary platforms integrated both Transparency Fund Admin, Full Stack Digital Play and Full Stack analytics platform as well. We continue to expand our solutions in this space not just in India in Gibbsity as well as on to the rest of the world given we are a large public infrastructure utility player security is always paramount interest and in the sunfare in terms of both the board and the management in terms of making sure that we are on top of it.
We continue to expand our investments and both effort wise as well as dollars to continue to drive our bit side score. Securities are now crossing 810amongst the best in the industry and we’ll continue to get that probably to be the best in times to come. The volume transactions has been steadily on the rise. Now we processed a little over two and a half million on an average on peak days it touches 10 million transactions and we expect these numbers to compound at about 20 to 25% into the coming few. This quarter also saw an important milestone in terms of several new products and platforms that we have delivered to.
I will also call out outside of the core businesses. Happy to inform to you that we have launched our KRA business and within a matter of few weeks we signed up with five marquee clients and it’s a very auspicious start for us which I’d like to believe will all go well in terms of the growth of this industry. Would like to also call out that our KRS solution is the only one which is onto the tokenization world which is probably the first to introduce and the very many applications that we expect to see in time to come will be seen by the world and will definitely further the onboarding journey to be far more frictionless and far more cost effective refining.
I would also like to call out and give you a little bit of update on the acquisition of SM Fund Services which I have called out in the previous quarter. Very very pleased with the overall progress we could made in just a matter of two months we have secured all the necessary regulatory approvals in India and even as SM Fund Services is securing its approval from some of the jurisdictions, as one would recollect they are present in 18 different countries and hence there are a few more jurisdictions and regulatory approvals that are ought to be sought is in the works and I’m quite hopeful that in the coming weeks or so or months we will get through that and then we will get on with the integr.
It also gives me great pleasure to continue to deliver the point in terms of growth prospects of Global Fund Admin Solutions. The organization that we have acquired has shown tremendous growth even in this quarter and the previous one they grew at about 35% and we believe that we have visibility into our fast growth in that number as CAFIN combined with Essent will have greater potential to grow into the coming quarters once we get through the regulatory approvals. We have also completed once we have launched the wealth platform about 2/4 back which I’ve called out and we won about five mandates.
Again gives me great pleasure to let you all know that we have now formally gone live on two large contracts on wealth which gives us an inlet not just into the Indian wealth industry but also into the global wealth industry. Sorry. And that again has a great potential given the platform is developed is multi currency, multi geo, multi asset, multilingual in fact and given it is not as regulatory driven a business as pure play asset management, we expect a far fungible and a path which we can easily traverse into many different countries rather quick time with ascent.
We have already started taking these solutions to many of the geographies that they are part of without necessarily having to wait for any of the integration which has no bearing on this particular activity that we are trying to do. I quickly come back to the mutual funds the three mandates that we have. One I’ll call out. One is Abacus Asset Manager, one is Marcellus. Both marquee professionally run entities and very happy to also inform about the win of Pantomap. Our continued intent to grow the digital development for clientele across whether it is KFIN service, JMCs or otherwise continues to gain traction.
That is a testimonial of not just our domain skills but also technological superiority in terms of creating big data solutions that are being leveraged across the industry including by the regulator and the industry body. If I may, we are also obviously blessed to have several of the fastest growing AMCs to be with us. Six out of the top 10AMCs that are growing in our country fastest growing are with K Fintech. Clearly this is incredible performance of our clients of which we are only passive recipient but but solutions and services I’d like to believe contribute in a significant manner to grow as well.
In terms of the 880 corporates that we have added during Q1 that is absolutely spectacular. We have never added that large client to a single quarter. Of course this consists of both unlisted and the listed and that obviously has contributed to our overall market share to go up to 51. We are hopefully in terms of several large IPOs including IPRU, asset manager, Misho and so on and so forth. Others to hit the street into the coming months and quarters which obviously will all go well for the overall issue solutions revenue so to speak. We have covered the international in terms of the wealth.
I also want to call out that we have plugged our first international wealth win in Philippines. If you recollect we have announced a win of Sun Life Asset Management client both the ANC and the trustee in Philippines about 2/4 back on the back of a solid delivery execution and purely based on the experience the client have seen and based on the credentials that they can that they saw. In terms of our Empower wealth platform we have one of Maidland International wealth deal in Philippines as we look to expand this into family office and the wealth outfits into many parts of the world starting with Philippines, Malaysia, Singapore and so on and so forth.
In the case of Gift City we have a pretty large market share of nearly about 60% and you add the ascent market share of roughly about 12 to 15. You know we get to nearly about three fourths of all the GiftCity funds that are operational and we believe that we’ll continue to grow at the similar clip given in the differentiated solutions that we’re able to offer on top of our platform, the AUM for international alternatives and pensions, all of them AUM and revenue has been growing north of 30%. It is no different this quarter as well.
We’ve grown nearly about 30% plus in this particular segment. Also have called out our intent to step away from a non core business called Global Business Solutions which was Mortgage management. As we all know this all stood out as a line of business which was not CO2 Kiffin. As we concentrate on driving our agenda and vision to be a global fund administrator, we did not want any distraction. So we have initiated moving out of our mortgage management solutions nearly about 3/4 back. We have another probably 1 or 2/4 left in terms of the remedy that was dropped in the previous year no longer will be available now and by which time we completely exited, keeping our focus entirely on the asset and the wealth management solutions not to get aggressive to other businesses.
So if not for that particular purposefully orchestrated degrowth in the Global Business solutions, we have crossed 30% plus growth in our younger faster growing businesses. The overall industry performance is something that everyone is fully aware. I think India is mutual fund industry is on the verge of crossing a trillion dollars. I expect that to happen most likely in the next 12 to 14 months. And that growth still pales in shadow in terms of the overall potential that we have with a series of initiatives that are being taken by the regulator by the industry body and certain asset management companies including the rts in terms providing the necessary solutions, products and platforms to drive financialization to every nook and corner, provide solutions for quick onboarding, quick transacting, quick query resolution, so on and so forth.
I believe that this in terms of growth of 20% plus of the AUM can continue to happen for a foreseeable future even as nearly 10 million odd fresh investors come to the industry every single year. And that number could easily be deciphered from the fact that it’s a similar number that get added into the provident fund wage for year after year and the number of individuals coming into the formal employment sector, most of whom are extremely intent for investing into the mutual fund as a preferred asset class and after market gain is anyone’s call, but making into moderate gains this year.
Given we’ve had a spectacular rise, I’d like to believe that we continue to see potential to grow up north of 15% in terms of the revenues in these businesses into this year as well. I will also spend a few minutes in terms of some of the other initiatives that are incidental ancillary into the mutual funds, one of that is the mutual fund. So MF Central MF Central continues to expand its growth More than the growth I want to call out the impact that this platform has. As for many ecosystem partners, investors of course are probably the most benefited.
To be able to secure such a solution where the entire industry comes together under a singular platform provide the ease of doing business is absolutely unparalleled anywhere in the world. With that as a solution, many fintech companies in India have based their business on the back of the APIs that we’re able to extend. Many of those have been helping the mutual fund investors us to stay put in the industry. For example, taking a loan against mutual funds as against simply redemption, so on and so forth. It helps the entire industry and the fintech ecosystem and very happy to inform we have onboarded nearly 230 clients as of June and that number continues to expand nearly 10% every single quarter.
So on the mutual fund side innovation continues to be absolutely Ben Mark we have have also launched IRIS as a platform which is K Fintech’s gift if I may to the financial intermediation as a service class which is the first of its kind, multi asset, multi tenant, fully integrated CRM solution for the entire financial intermediary class. So it is not just for the mutual fund distributor, it is for the loan syndication, it is for insurance, it is for selling pensions, it is for selling CASA bank accounts, credit cards, what have you with a singular focus and view to enable and help individuals who choose to be financial intermediate professionals make their livelihood in a far more effective manner.
A single asset class or a single financial instrument sale does not render itself to a very large meaningful career for many old financial intermediaries. So this platform basically solves for that in terms of any financial intermediary can come onto this platform and for the same investor can upsell, cross sell several different assets which itself is one thing for the citizen, if you keep your hand as that of a citizen where a single person can take care of many of your financial services needs and not just having to look at multiple of them. The release two of that particular platform is lined up for later this evening.
Hopeful and glad that it would be warmly embraced by the interfinancial intermediary community. So products and platforms and innovation will be a large focus for K Fintech. It is irrespective of its revenue potential. We believe that the things that we have to do to give back to the entire partner class which is helping the industry to grow quite substantively in terms of the RTA wins that we’ve had. I already called out the names are extremely excited in terms of the growth potential. These are marquee AIF PMS player in the country, all of them and given their pedigree we expect rapid growth of their AUM in times to come as well.
Just quickly call out a few things on the international side. As we all know it is a composite solution of both RTA and fund administration Overall client contracts this quarter happy to announce that we have crossed the count of 100 today we roughly stand about 111 and the overall clients quarter on quarter even as they’ve been growing. Very pleased to see the AUM growth which was not the case in the past few years, even the number of clients have increased. There were no mark to market gains unlike in the case of India. We have seen that happening and that is obviously one of the most important reasons why there has been a 30% plus growth in revenue in this Notwithstanding the fact that close to about 11 contracts are yet to generate revenue in the context that they are under transition and hence in times to come, the revenue for in addition to the AUM growth of the existing clients will contribute to faster clip of growth in the overall international business.
Now we started winning more clients in Singapore. As I said we already had two and then now we have two more clients in Singapore that we’ll be going live with. The traction in that geography, which is arguably one of the largest in Asia will further be propelled as our integration with ascent hopefully will conclude into the coming weeks and months. Outside of that, I think some of the lois that we have won especially for a full service fund admin mandate for the treasury desk of Malaysia is a very important milestone for us as we continue to expand our footprint in Malaysia.
I think today we manage nearly 55% predict class of the market by the number of clients in a matter of five years. I think that’s a pretty good accomplishment. Of course I continue to believe that it is the top three to top five AMCs which will make material shift and we are right now talking to the larger AMCs and hopefully we’ll have some good news to share in the coming months. Lastly, I would like to just spend a minute on the national pension system which I have already called out in terms of our growth. We have grown about 32% plus year on year on the subscriber base with the largest service provider in this being nearly at 90% and obviously a virtual monopoly till About a few years back we take good thought and having broken even every planned addition from here on I would directly add to the margin and I’d like to believe that in the next three to four quarters we should start seeing decent EBITDA contribution even though the scale is small.
But we are expecting faster growth in the pensions. There’s been a change of guard in the overall PFRD as an organization and we are seeing a very, very strong and great intent to drive India to be a far greater pensionable society. A lot of interest and a of intent was asked of us as well in terms of what is that we can do to contribute in that regard. So we have active discussions with several regulators in order to drive the overall market itself. In that context the order management system of npower Gram is a revelation in terms of the number of clients we have been able to win.
And it all goes well in the context that so far there haven’t been too many Indian alternatives, you know, to large platforms like Bloomberg for example. We have started to see green shoots in terms of our ability to displace large global order management systems. And as we scale it up and as we take it to global clients, we’d like to believe that this is a medium to long term play. But I’d like to believe that there will come a time when we will be reasonably well positioned to take several of the global large platforms head on even as we consolidate our position here in India.
So with that I will hand over the financial highlights to be provided by Mr. Mathur and we’ll take the questions after mine.
Vivek Narayan Mathur — Chief Financial Officer
Thanks Vikan. On the financials, the revenue has gone up year on year by 15.4%. Within that the domestic mutual fund grew by 17.2%. Within this 17.2% the the fee based revenue has gone up by 15.7% and the VAS revenue has gone up by 51%. Year on year the yield has come to 3.43 bips as compared to 3.6 bips last year same quarter. And that’s a combination of telescopic pricing impact and some volume based discounts to some far crying AMCs that we have given. So we have been giving a guidance that yield will come down here and here by 3 and a half to 4% with a combination of telescopic pricing and you know, some selective discounts that we will give.
But there is no yield shocks that we expect from K Fintech. So we maintain that in terms of issuer solutions the growth has been 25.5% year on year year. And as Srikanth mentioned we have been adding IPO mandates and unlisted clients. You know almost 800 clients have been added in the last quarter itself. If you look at International and other investor solutions, the growth other than gbs which Srikanth clarified that, you know that’s a non core business that we don’t want to continue to grow. The growth is 29% year on year and you know within that International has gone up by about 36% year on year.
AIF has gone up by 31% and PH has gone up by about 33%. And you know overall we continue to remain balanced about this segment in terms of growth trajectory and you know in terms of overall expenses, you know the growth has been about 16.9%, 16.6% and that is mainly because of payroll cost going up. And this is something where to support new clients. We have added some headcount and as you know in the Q1 the increment hits. While the impact of growth in business revenue will come in subsequent quarters and we have been investing in technology and crowd charges have marginally gone up.
Other than that if you look at the EBITDA margins there is a healthy growth of 14.2%. We maintain a EBITDA margin of 41.5% which is in the range of guidance that we gave of 40 to 45%. Typically the first quarter is tepid because you know the increase in payroll cost and in the issuer solutions business the corporate actions take place in Q2, Q3 rather than Q1 and therefore usually the Q1 is stipend but it picks up from Q2 onwards. If you look at, you know, Pat, Pat has gone up by 13.5% year on year and maintains a healthy margin of 28.2%.
We have good amount of cash and cash equivalents which is 750 crores at the end of June. One to pay out dividend and another is to make the acquisition of peasant. We are well equipped to continue to have surplus cash beyond the working capital after paying out the dividend and the acquisition diluted. ETH has gone up as 13% year on year and we believe that we’ll continue to grow confidently as Srikanth mentioned both on the top line and bottom line and we maintain our guidance. Thank you. We are happy to take questions now.
Questions and Answers:
operator
Thank you ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone tab. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Swarna Mukherjee from BNK Securities. Please go ahead.
Swarnabha Mukherjee
I said good morning, thank you for the opportunity. First question on the mutual fund business. So as you highlighted on the yields, just wanted to understand how much you know so broadly from the end of last quarter the yields are down around 5 odd percent which is more or less, I mean I think you Normally guide around 3 to 4% for a year and in a quarter we are seeing that. So just wanted to understand that how much of this is because of telescopic pricing, how much because of the volume discounts that you gave to pass going clients and this volume discounts that you have given.
Say assuming that the mutual fund industry continues to see steady flows and growth remains, then would this likely be recurring at periodic intervals and would imply that should expect maybe slightly more than 4% kind of a drop in yields compared to what you have guided earlier. So that would be my first question. Also if I look at sequentially the value added services, revenue growth also looks weaker quarter on quarter. I wanted to understand that because I thought that that would be relatively most, you know, a stickier kind of a business. So while on year on year I think it looks very strong but quarter on quarter it is a bit weak.
So know your thoughts. Wanted to know your thoughts on that. Thirdly, Amber Abhiraput throw some light on. There’s been good control this time. So is this because we have cut down on discretionary expenses and why should we see the numbers going forward?
Venkata Satya Naga Sreekanth Nadella
Thanks. Thanks for the questions. So. So on the first question I’ll take it on terms of the basis points and the yield compression we were at about 3.6, now down to about 3.43. You’re right. I think it’s marks about close to 5% as against a typical year of 3 to 4%. I just want to call out that number is more an average. The contract renewal is entirely and solely dependent on the time of the signing of the contract itself. It is a coincidence that this year we’ve had more number of clients whose contracts came up for renewal.
For example, if you look into the next year and the year after, we just have one each. And if you were to normalize it over a three year period, I’d like to believe that it will still come back to the 3 to 4% kind of a number. You may have a particular year where number may look a little longer and of course bigger and that particular whatever the discounts etc, whether it is because of of the overall AUM growth or otherwise, they have all been baked into the Q1 and we have no further renewals for the rest of the year, so to speak, in terms of the share of what was because of the expansion.
So when we say volume, what you’re really talking about is the AUM growth, not the volume of transactions. For example, the previous year many of us know that the mutual fund industry has grown north of 80% and our revenue also has grown up north of 30%. So it is a reasonable expectation and ask of our clients to partake in some of the that we have in terms of the growth that they are seeing. And that’s what happens when you see 30, 35, 40% kind of a growth. There would be a slight moderation of the basis points and that get I guess more than adequately compensated by the continual AUM growth into the subsequent quarters.
So that’s as far as the basis points is concerned in terms of the value added solutions. See this is a pure tech revenue and the tech revenue across business lines, not just mutual funds, but into the solutions, into the alternatives, into the wealth, so on and so forth. Typically a large number of tech contracts get delivered in the last quarter one also because many a client have their budgets locked down to the end of the 31st of March and they expect the contracts to be delivered as well. And that’s a very typical phenomenon in industry.
And typically and hence we end up seeing a large growth on the value added solutions in the Q4 Q3 and Q4 Q4 and probably a flattish or a slight dip into the Q1 of this year. But as you rightly pointed out, if you see the year on year growth, the value added solutions stacks up at an impressive 50% plus. And I’ve called out back in the day from the time we went public that in addition to be dependent on the vagaries of the market and our clients growth, we want to orchestrate several lines of business which is controllable at our end.
And value added solutions is one such thing. So for me a 50% growth is year on year is a very good indication in terms of where we head into the coming year. In conjunction with the fact that we have several new products and solutions that are going live and have gone live in the recent past. I’d expect many of them to convert into hard pipeline and then into deals and delivering to the coming quarter, so to speak. On the cost. Yes, we continue to have a very close grip onto the cost expansion, the revenue expansion in the core business businesses to an extent come with a higher cost expansion unless there is a continual transformation that is happening. To give you an example, a simple 100 rupee sip probably will earn us 3 paisi, but we would have spent easily more than the 3 paisa in just creating the data records for that SIP for the next 70 years, which is the norm in the industry. So. So until and unless we continue to invest significant sums and efforts in terms of ingeniously reducing the tech cost, which is largely the big tech players into AWS and Microsoft and so on and so forth, the scale business will have an issue and hence we have a very large scale of data scientists who continue to look at it.
And hence the non discretionary spend has come down. But the non discretionary spend vis a vis new products, new platforms, new solutions continue to expand. We believe that the future lies in innovation. Whoever could innovate faster, take go to market solutions for our clients and for our partners and finances and the regulators will have a far superior edge in terms of new client wins. And that we’ve been.
Swarnabha Mukherjee
Right sir, Helpful. Just one follow up on the yield part. So we are right now in this quarter at 3.43. Assuming that there is no other renewals and you know, normal telescopic pricing will continue to play out, should we expect Maybe another say 2 to 3% drop through the rest of the year? So if I were to think about where should we end up with is what I wanted to understand.
Venkata Satya Naga Sreekanth Nadella
I don’t expect any further drop on the basis points into the rest of the year. I think on the telescopic pricing we all know how it works, right? So once the AUM crosses a particular threshold, let’s say we have an agreement that says that 50 to 75,000 crores only the incremental AUM that comes after the 75,000 crores may come with a smaller basis point. And much of that as I said, has already been baked into Q1. So I do not anticipate any further yield compression. I want to call out another thing that has contributed to a dip.
Probably about 20% of the dip was because of a larger expansion of passives. If you saw our overall AUM has grown but the equity AUM in terms of market share was slightly below that of the market. That’s largely because of a slow performance of the top three mutual fund houses in our country. However, for us there has been a substantive expansion of non equity asset classes, whether it is debt, whether it is passives. And this particular trend is more the strategy of the fund house in terms of what they see as a time to stay invested in the market versus not to stay invested in the market.
If you saw the math, I guess it clearly points to the fact that our clients have chosen to be more cautious and stick to passage. But that can easily change, right? And depending upon the market sentiment and you know, their own strategy, investment strategy, and as that happens, that will positively contribute to the yield. And so I guess what I’m saying is I do not anticipate a reduction but if there is a reversal in the investment strategy of our clients, there can actually be a slight positive surprise.
Swarnabha Mukherjee
Understood sir, very clear. Thank you so much.
operator
Thank you. The next question comes from the line of Karthik Chalapa from Indus Capital Advisors Ltd. Please go ahead.
Karthik Chellappa
Yeah, thank you very much for the opportunity. Am I audible?
operator
Just if your audio is a bit low, could you please use your handset and ask your question?
Karthik Chellappa
Sure. I hope this is better. So my first question is assuming the normal yield declines at about 3 to 4% and we are assuming an overall AUM growth in the region of let’s say 12 to 15%, would it be fair to assume that we should be able to hold our domestic mutual fund margins at these levels or what else do we need to happen for margins to kind of sustain in this current range?
Venkata Satya Naga Sreekanth Nadella
Thank you Karthik. Great question. One that I can assure you is always on the top of our mind. I think the good and bad part of, I guess the way the industry is structured is a basis point or a mark to market gains. It starts both ways. You will have months, quarters, years when mark to market gains will add both to your top line and to the bottom line. And likewise it cuts both ways. When there is a mark to market dip and or if there is a basis point reduction, it goes both from the top line and the bottom line.
So that obviously is not the same. If you were to extra into any other industry, for example, if you were to win a contract in manufacturing or if you lose, there is a corresponding increase or decrease in the cost and hence it does not, you know, the 100% loss of revenue does not permeate into 100% loss of margin, but in our industry it does. So the control in our hands are two. One obviously is to have a much more meaningful discussions and deliberations with our clients. And that is something that always Happens when you’re able to add significant value and not just do basic work.
And that is something that I’m proud that as an organization we have been doing it and that is clearly visible in terms of, you know, I guess where our basis, where our yield lies, visa vis others. The second is in terms of the cost. We continue to, as I said, work on the basically have a target of near zero on non discretionary spend. We’ll never get that far. I fully recognize it. But we have to look at mutual funds, given it is the largest book of business, probably the most complex and also the most voluminous and most tech intensive for the other businesses.
We continue to work with our partners to continue to normalize and optimize the cost. And that I like to believe is probably the surest way to hang on to the margins, even if there were to be marginal erosion of yield. And if you see from our organization standpoint, I think every single quarter we have been able to maintain that margin in this particular line of business. And I will also call out our transformative initiative of Finnex, which is a complete free platforming of our core solution, you know, which was, you know, in existence for the last 35 to 40 years whilst we have made incremental standout, you know, changes into the overall platform to support the needs of the industry.
The platform for the future is getting built and I’m hopeful that into the next three to four quarters on an incremental basis. It’s not a zero sum game that everything will happen on one day. We have already deployed several in a modular fashion. We’ll continue to deploy several more into the coming quarters. As that happens, we should see a faster clip of cost optimization to happen which will help us to hold on to the margin and probably even drive a margin expansion at that point in time.
Karthik Chellappa
Got it. Okay, thank you very much for the detailed explanation. My second and last question is on the issue of solutions. So we are seeing very strong momentum on the corporate clients, which is welcoming. If I were to look at our investor portfolios, that growth has moderated this quarter, whereas in the last few quarters we’ve been seeing that investor folios and corporate clients were growing more or less at the same rate. So anything to be read into this moderating growth rate and what needs to happen for the folios to start accelerating?
Venkata Satya Naga Sreekanth Nadella
Thank you, Balpik. See, I think yes, there is a sequential marginal decline. I think Cafing Tech today manages near about 15 to 16 crore plus folios. On the issue of solutions, what you saw is roughly about 12 to 13 lakh odd degrowth in the folio count into the Q1 obviously are sequentially compared to Q4. This again is a natural phenomenon. Nearly every year it repeats itself. What truly happens in the markets is in Q3 and Q4 especially there is a far more influx of retail investors. Part of it is corporate action driven in terms of securing the dividends and bonuses and what have you.
And part of it is to capitalize on the very large number of IPOs that have happened. People have made quick money and I have also exited the market in real quick time. We have also seen, if you recollect, the month of April wasn’t particularly a good month in terms of the capital markets. The sentiment started to turn mid May onwards and at this point in time it looks reasonable Though the mark to market gain, I mean in terms of why on the index level is pretty much flat. And so that’s what truly happens. There’s basically a marginal flight of investors who have capitalized on the IPO and the dividends.
And that’s something that happens every single year into the Q1 as we move into Q2, Q3, Q4, I would call out to take a look at the trend of issuer solutions trends revenue in terms of how it expands into 2, 3 and 4 as compared to 1. This is normal. I wouldn’t read too much into that. And the RMBS of 16 crores, about 12 to 13 lakh folios. I’m sure it’s a very small marginal number which basically has not impacted much on the revenue. As you see, the revenue on issue solutions has grown nearly about 24 billion on year.
Karthik Chellappa
Excellent. That’s all from my side. Wish the team all the very best for the the remaining quarters. Thank you.
operator
Thank you ladies and gentlemen. If you wish to ask a question, please press star and one, we take the next question from the line of supratim from Ambed Capital. Please go ahead.
Supratim Dutta
Thanks for the opportunity. Now my first question is on the issuer solution business. So if we look at the market share in mainboard IPOs that was around 18 versus it being around 50, 70% in the previous years. So just wanted to understand has the competitive dynamics in this segment changed or you know, what are you seeing different which has resulted in casein not being able to win the larger mandates. That was my first question. I have two more.
Venkata Satya Naga Sreekanth Nadella
Yes please.
Supratim Dutta
Okay, so the second question you do. Want me to go.
Venkata Satya Naga Sreekanth Nadella
No, let me, let me answer that, let me answer that and we can go to the second question. So here’s the deal. So I think by count of IPOs, we’ve done over 40% in the industry. Yeah. And by value it was 18%. It is, you know, simple math in terms of, I guess HDB Financials having gone public, which was the largest IPO in the previous quarter, which was by our competitor, and that skewed the overall share by value. And this is not a reflection of the win, but this is a reflection of when the particular company has gone public.
I mean, we have, for example, close to 175 odd IPO mandates which have won over the last bunch of years and they are yet to go live. So it is possible that in the next quarter more mandates that AFIN has won have gone public rather than competition, at which time you may see a market share jumping up to 60, 70, 80. Also, if I were to call out your attention, in the previous year when we’ve done Bajaj Housing Finance or the year before lic, our share of IPO buy value actually stood at almost 85% in that particular quarter.
So this is a timing discussion as against the wins of that particular quarter. For example, if you have signed up a new IPO mandate in the previous quarter, it is easily three to four quarters away for that company to go public. So what you’re now seeing in the previous quarter is actually the wins that either of us have had over a long period of time. But which company decided to go public? So again, I wouldn’t read too much into the value now dynamic has changed. As you could see, our market share has swelled in by market cap from 47 or 48 to close to 51%.
We have now made up significant dent into even the SME IPOs. We have I think in the previous quarter been the largest in the SME IPOs, a business sector that we have largely not been into. We have moved into the social Stock exchange as well. So into the coming quarters, for example, many of our new clients, such as iq, AMC and Meesho and Pine Labs, and should any of them go public, you would see that 18% easily move up north of 50, 60%.
Supratim Dutta
Got it. That’s very helpful. Sukanth. Now, on the KRA business, you outlined that you have won five key clients. Could you highlight, you know, which are. These clients and how are you looking at embedding your Kiara services with your MFRTA service? Would it be, are you making it available to all your MFRTA clients? And slowly this then five can, you know, become similar to the number of mfrt. So wanted to understand, you know, what is the development pipeline here and currently. Is the K revenue being built into. The MF RPA revenue itself or is it being shown separately in international orders?
Venkata Satya Naga Sreekanth Nadella
A great question. No. So there’s no revenue at this point in time. So none of it’s been clocked into any business. Right. We just went public, we just signed the contract. This is a separate entity altogether. It’s a CAFIN services and the revenue will be clocked into that different entity because the KRA business is not expected to remain in the same mutual fund business. In fact, KFIN as an RTA is one of the five clients of CAFIN KRA. The other four are our clients as AMCs. And the short answer to your question in terms of our go to market strategies, obviously to have every one of KFIN clients to be the Kiari clients, which I’m confident will happen into the coming few months.
Second of course is for everyone because this can easily be a multi tenant model. This is not a zero sum game. Unlike in the case of Mutual Fund RTA, AMCs can have multiple KRAS onboarded. And in fact that is at least a highly recommended strategy, at least from my standpoint because it is always a business risk to have a single point failure. If you recollect about two years back one of the KRA had a problem which basically had impacted the mutual fund industry. So it’s always a good solution to have multiple service providers, whether it is carriers, whether it is payment gateways, payment aggregators, any of these entities at all.
So that there is a failover. It’s just like I guess a part generator as a fail back mechanism that you have. So we expect to have nearly every mutual fund client to be our client in the KRA in time to come even as within literally 15 days of launching we managed to secure five mandates. And it is not just the mutual funds. We have to aggressively work with the brokers and the RIAs. Much of the new investor onboarding actually happens from the broker platforms, the distributor platforms such as growers and paytmoneys and many of the large entities.
So working with them is going to be very very important one because technologically I’d like to believe our solution is far ahead and something that I’m confident will find favor with many of the large tech players who bring in far more, far greater number of new investors into the industry as against traditional RT and ANC I guess equation, so to speak. So it is a solution that is not just for ANCs but also for the entire partner ecosystem to bring in the investors. And the revenue will be clocked in a separate entity. And as of now there is no revenue which you will start seeing into the next project onwards.
Supratim Dutta
Got it. You know that’s helpful. Now moving to Ascent. You know, thanks for the updates that has been provided on, you know, on the quarterly performance there it seems like the revenue has grown by around 36% but when I look at the EBITDA January versus the April quarter, there hasn’t been any movement. Is it a rounding error or you know, because against the 36% revenue growth, I don’t see any movement in the EBITDA. So just wanted to understand what has happened.
Venkata Satya Naga Sreekanth Nadella
Amit Subek, would you want to take that?
Vivek Narayan Mathur
Yeah, sure. See they have still been investing. So while revenue will grow, they have been investing in terms of hiring senior people in the markets in which they are expanding. Like recent hire was in us. And therefore you want see the immediate impact of increase in revenue and EBITDA margins. And as they start winning large contracts across these markets, you will see the EBITDA improvement over a period of time. And you know, the good thing for you to know is that the future payouts to the founders is linked to the achievement of ebitda. And there are both positives and negatives.
So if they don’t achieve the target EBITDA, they will get the multiples. So rest assured, the focus is in terms of growing EBITDA and growing a profitable business with Ascent.
Supratim Dutta
Got it.
Venkata Satya Naga Sreekanth Nadella
Thank you. I will also just add one thing. So this is the testimonial of any fast growing entity. I think as the entity is present in 18 countries, new geography is getting open. I think a lot of the revenue expansion is getting funneled back for faster growth. We have a path to profitability in terms of your numbers as we move into the year three, year four, year five, as the deal is structured, which is basically more on a lot more, you will see the EBITDA expansion happening at this moment in time. It is to drive growth technologically.
New country expansion, creation of the new sales channels, pipelines and the technology. So to that extent this is by design and as per plan.
Supratim Dutta
Got it. And Sheeta then. What kind of EBITDA exit EBITDA margin can this business achieve? Because some of the listed peers who have EBITDA margins closer to 40% whereas your MFRTA business and the issue RTA businesses, they operate at more than 40, 55%. So where can this business sit once it achieves that scale?
Venkata Satya Naga Sreekanth Nadella
So this business is what does asndu, right? I mean see the large, the global peers that you’re referring to. You know, if you kind of split between bank based fund admin and the non bank based fund admin, we will fall into the category of the non bank based fund admin which has several large global fund admins like you know, your CITCOs and SSNCs and APEX codes and IQ EQ several others. Now they are into both public mandates and into private mandates. And I’m differentiating public mandates more as mutual funds and pensions and what have you, private mandates more as alternate investment funds, hedge funds, digital funds, digital currency funds, so on and so forth.
The private side of it is far more profitable book of business for many of these fund administrators beyond India. First of all, because the public mandate funds work in a very different model. They do not have the RTA construct there. They work in the face of omnibus model which is very very different. Second, the reason why we have partnered with Ascent and they have also partnered with us is that we are highly differentiated in our cost structures. We do not have the legacy challenges which many of these entities possibly have. Which is basically a technological proliferation that happens through large scale acquisitions into multiple geographies, geographies and legacy systems.
Whereas we work on the cutting edge on the technology innovation and proven engineering, our cost base is substantively low. Those organizations are now trying to set up captives in India to optimize their cost. We on the other hand are India domiciled right from day one broadly. So we believe that our margin profile for the entity in conversation will be similar to that of CAFIN and maybe even higher as we partner with them. To take for example Empower to the rest of the world using third party software, we try far more productivity through many of our home brewing solutions.
We are able to take for example the LP portals, the GB portals drive data and analytics solutions to the rest of the world which are far more margin accretive. So simply put, I wouldn’t compare Ascent with the global fund admins because those are, you know, a lot more go into those particular entities, you know, and. Not just the rca. In fact those entities also have custody as a business within that, possibly even basic depository solutions within that. So we didn’t have a likelihood comparison of a pure play fund admin only solutions for private mandates which I’d like to believe will be far more accretive than many other global fund administrators.
operator
Thank you ladies and gentlemen. In the interest of time and fairness to others, we request you to Restrict to one question per participant. We take the next question from the line of Vaibhav Sharma from Luwama Wealth Management limited Please go ahead.
Vaibhav Sharma
Hi. So I just wanted to know from the international business side, so there is qq drop of 11% so is there some like one off or something and like X Global business, how what is the growth that looks like? Also on the Ascent side, have we added any new clients and when are we expecting the consolidation to take place and if there are any developments happening in the blackrock Aladdin space?
Venkata Satya Naga Sreekanth Nadella
Thank you. I’ll take the last two questions and I’ll request Vivek to answer the first one. In terms of essence, you know, new client acquisition, there have been plenty of new client acquisitions. They have started Saudi Arabia with one of the largest clients and there is an expansion of nearly 60 plus funds in the previous quarter across multiple geographies. They have also signed a marquee contract with one of the largest banks in Singapore to be able to provide onboarding solutions which is a large contract in the context of the overall revenue profile of the organization.
The current revenue rate of revenue tracks to 20 million plus revenue on an annualized basis and should the current growth rate persist we should expect the number to be much higher than that. So yes, so it is a combination of new client wins and certain AUM expansion of Ascent that has helped us in terms of the integration, as I said, it is hard to, you know, give out a data and a time given this is an acquisition which involves multiple jurisdictions. So CAFING ought to have gotten its approvals from our regulators, which is pf, RDA and rbi.
And I’m very glad to inform you that we have secured all those approvals. Ascent has more than three approvals to secure given their present in multiple jurisdictions which they have also really secured for nearly three fourths of those. So we have another three countries I think that are yet to record the approval. They’re in the public process of diligencing it and certain questions being asked and I’d like to believe it’s just a matter of time, you know, that will come through and integrate, you know will happen. That said, that has not impeded our intent to work together.
We’ve been working on a series of initiatives together on go to market, on technological integrations, so on and so forth so that you know, the receipt of the event approval marks more a milestone as against critical success factor to start that particular activity refining. In terms of the blackrock Aladdin, as I said in the previous quarter as well, it is 2 to 3/4 engagement in terms of integration of the solutions. We’ve had several promising meetings. We’ve been working at tech to tech layer. We are in the process of integrating Aladdin with our back end system which is mpower.
Again I will call out that Aladdin is a front office order management system and a risk management system. You know, at its heart it needs to be integrated with our core office and back office middle office being your settlement solutions. And the P and L and to the back office will get into the stage of nav computation what have you. The integration of these two platforms is the basic first step for us to take it to the market as a viable alternative to many of the global fund administrators. So I would expect only into mid part of Q3 that we would have reached out to the clients and the traction would have completed our go to market sales strategy, the commercials, the contracting structures and possibly even having identified certain sales personnel in various important geographies.
And it is strongly the potential that as essence integration gets completed thus 18, 19 countries that they are part of, you know, where Aladdin has a significant market share we would have already been, you know, blessed, you know, with the fact that several salesperson already exist in the form of, you know, having their personal data on the ground. So in that context I think once we complete our technology we have it also working in the form of the commercials, the contracting go to market and the sales and the feet on the street which may come from SN10K Fin.
Vivek Narayan Mathur
I’ll pick up the question on sequential decline of 11% quarter on quarter on the international end. Hello, can you Hear now on 11% decline on international solutions the reduction is mainly because of GBS and some part of it is because of NPS. NPS as you know is seasonal and you know typically Q4 is a tech season and people contribute because of the tech season in the last quarter about 50 lakhs is because of that. But you know, little more than 3 crores impact is because of GBS where we are consciously declining the number of FTEs and the whole focus is to move away from BPO kind of a business and start focusing on international global fund administration.
So that’s the reason that you see a decline. But you know, but if you consider, you know last year versus this year, you know, except for GBS, all businesses have grown by more than 30%.
operator
Thank you. We take the next question from the line of Dipanjan Ghosh from Citi. Please go ahead.
Dipanjan Ghosh
Hi, good morning sir. There’s two questions from My side first, you know, from the previous participant question, if I look at the international and domestic wealth or AIF businesses, excluding GBS and excluding pension growth rates which was tracking. Hello.
operator
Yes, please go ahead.
Dipanjan Ghosh
Question. In terms of the international and other industrial solutions, excluding VBS and tension, also the growth rates which are tracking, let’s say 45, 50% in the first, second third quarter of last year, last year on a YY basis now has come down to like 25, 30% in the last two quarters. So in terms of incremental plant onboarding or in terms of the pipeline, you know, given the fact that, you know, master market is also probably a little better than historical averages, how should one think of the business incremental? And second on absence part, you know, if I just look at third quarter metrics compared to the first half or the last two, three quarters of the previous year, also it seems that the incremental number of clients added incremental AUM growth quarter on quarter, all these metrics have kind of tapered down quite a lot.
So if I just look at the most queue, that’s up like 5% AUM is a 5% compared to historical average which is far, far higher. So just wanted to get some sense of this new sales people that they’ve onboarded. Should that kind of drive some amount of revival in the business momentum?
Vivek Narayan Mathur
Yeah, so I’ll pick up the question on, you know, if you have question on, you know, other than GBS, the businesses are growing. Used to grow at 40, 50% that was more in AIF. But if you look at core international business, that is that has grown year on year at 36%. AIF, PWM, PMS has grown at 31% and PM GBS has grown at almost 33% year on year. So it’s mainly the GBS impacts. Overall we still believe 30, 35% growth in international and other businesses except GBS will continue to behave like that. And with ascent coming in, you will see the growth rate going up because you know, their win rate and the growth in the funds under administration and the revenues for them is upwards of 30, you know, 35 to 40%.
So you know, you may see that, you know, the trajectory will continue to improve beyond 30% in future quarters. I’ll just add to this, you know, historically, if you see the business, I mean Q1, as we have always been saying that, you know, it’s a quarter which is a leanest among all the four quarters and all. So across all the line of business, you know, the Activities start picking up as we move into the subsequent quarters. And also, I mean given where we are in the market conditions and all, I mean we believe that we are in a, you know, we have a very strong footing across all the three lines of, you know, the younger businesses which we are talking about from the lean perspective.
And I think, I mean whatever the guidance that we have given in terms of that 30, 35%, that is something that we are fairly confident that we kind of, you know, be ahead of those guidance.
operator
Thank you. We take the next question from the line of Lalit Dev from Aquarius Securities. Please go ahead.
Lalit Deo
So just one question. So when we have highlighted that the use in the domestic business is likely to remain for the remaining part of the year. So just wanted to understand the margins also in this business in this particular quarter, which has dropped to around 55% unlike the previous quarters, that’s around 59 to 60%. So would we be back to that. Similar levels of around 59, 60% in the coming quarters or is this then normal of around 55%? Thank you.
Venkata Satya Naga Sreekanth Nadella
I think it’s a reasonably linear math given that the pricing has been closed for the rest of the year. So the AUM expansion that will happen into the next three quarters, resulting in the revenue expansion month on month, quarter over quarter obviously will expand the margin profile. So I do not anticipate that territory to differ. Again, I’ll just call out. It is the exact same phenomenon we see every stage, single year. Q1 we see two specific items. You know, hit of inflation on April 1st because AUM remains largely similar 31st March to 1st of April there is a cost inflation that goes up and the aum, any discounts that are given in the beginning of the year, the AUM continues to grow at a click faster than that of the discount that have been recorded.
Thereby the margin expansion into that business will expand as well. In subsequent.
operator
Thank you. We take the next question from the line of Pranoj from JP Morgan. Please go ahead.
Pranuj Shah
Yeah, thank you for the opportunity. In the opening comments you were mentioning about top five AMCs being onboard on. The fund administration platform. So just want to get a sense of what could be the ticket sizes of these contracts. Thank you.
Venkata Satya Naga Sreekanth Nadella
See on the fund admin, basically we have multiple clients getting onboarded. So given this is an international platform. It is. You know, we won contracts in Malaysia, in Thailand, in Singapore and several of course in India and within India. Again, not just mutual funds but also in insurance. Right. For example, in insurance I’ve been onboarded for webinar inside in the case of mutual funds, it is JM and Cosmia. Internationally, several large trustees, including Aman Raya, trustee manager, so on and so forth, have been onboarded on that the revenue would be in two factors.
I think some of these are platform solutions and some of these are ongoing services. So ergo the revenue will be split, some will be more for a particular year followed by amount of amc. And some of these are pure play services, just like the RTA contract, which means that month on month, you know, for the service layer that we generate, we get a certain basis point. So the exact number I would request you know, Amit to discuss with you offline in terms of, you know, having computed what is one time episodical versus what is a run rate on that.
operator
Thank you ladies and gentlemen. We take that as the last question and conclude the question and answer session on behalf of IIFL Capital Services Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.