Multi Commodity Exchange of India Limited (NSE: MCX) Q3 2025 Earnings Call dated Jan. 21, 2025
Corporate Participants:
Praveena Rai — Managing Director and Chief Executive Officer
Chandresh Shah — Chief Financial Officer
Rishi Nathany — Chief Business Officer
Analysts:
Amit Chandra — Analyst
Devesh Agarwal — Analyst
Prayesh Jain — Analyst
Arpit Tapadia — Analyst
Shalini Gupta — Analyst
Kunal Tokas — Analyst
Akshay Patel — Analyst
Ajox Frederick — Analyst
Chintan Sheth — Analyst
Parikshit Kabra — Analyst
Deepak Ajmera — Analyst
Ashish Pareek — Analyst
Nandini Agarwal — Analyst
Sunil Desai — Analyst
Sanketh Godha — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Multi-commodity Exchange of India Limited Q3 FY ’25 Earnings Conference Call. Joining us on the call are Ms Praveena Rai, Managing Director and Chief Executive Officer; Mr Manoj Jain, Chief Operating Officer; Mr. Chandresh Shah, Chief Financial Officer; Mr. Rishi Nathany, Chief Business Officer; and Mr Praveen D.G., Chief Risk Officer. 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 now hand the conference over to Ms Praveena Rai, MD and CEO. Please go-ahead.
Praveena Rai — Managing Director and Chief Executive Officer
Good evening, everybody. Welcome to the call. Wonderful to be talking to all of you. MCX has had another really good quarter. We’ve just released our results yesterday evening. As you would have seen, we’ve closed our Q3 consolidated income from operations at INR301 crores. That’s 57% growth over same time last year. For this quarter, the PAT has increased to INR160 crores. Same time last year we were under the water by INR5.35 crores and last quarter was at INR153 crores. On the trading front, the numbers have been very healthy. For nine months ending the quarter, our average daily turnover, the ADT of futures and options together reached 2 lakh 9,000 crores and I’m giving approximate numbers here. This is 106% year-over-year. Now this comprised both options and futures, options saw an ADT of INR182,000 crores with 124% growth while futures was at INR27,000 crores with a growth of 33%. So both showing very healthy trends there together giving us good business growth and momentum. Now this really came from a equally healthy growth in traded clients, the growth of 49% hitting for the first time, 11 lakhs during the Nine-Month period. Now MCX also surpassed the last milestone of the all-time daily turnover and touched INR5 lakh crores on the 13th of January 2025. And this also had the crude oil options clocking the highest turnover on the same day at INR4.1 lakh crores. So behind all of this has been a healthy growth across our products and including the new products that have been launched in the last few months, noteworthy would be to speak about the growth in gold options, the 1KG option monthly contract and here the numbers cumulative from year-over-year, the growth has also been very positive. The cotton seed wash oil was launched, so was the crude oil and NG Mini in the last few months. Further, as far as the base metals future contract goes, the tender period has been reduced from five days to three days. All of this will lead to further simplification in the way the contracts can be managed. The modified gold option has had a really enthusiastic response and ADT has grown to more than INR43,500 crores in the month of December 2024. And this is against INR33,000 crores over the previous quarter. As we move forward, MCX will be continuing to look at launching new commodity derivative contracts as well as looking at innovations in our existing products and processes, mapping and studying the evolving needs of the industry. The exchange will look to address the needs of all sections of the commodity economy of India and continue to be the platform for robust price discovery and efficient risk management. MCX also observed the World Investor Week. This was between the 14th and 20th of October 2024 organized by SEBI and the International Organization of Securities Commissions. And this had over 150 awareness programs and several other activities that were related to commodities. MCX is also proud to have won the Digital Transformation and Resilience Award at the Red Hat APAC Innovation Awards 2024 and we also were named the leading commodity exchange by CPAI at the 10th International Convention. The exchange will also have a live trading session on February 2025 from 9 AM to 5 PM, and this should facilitate market participants to take or calibrate their positions associated with any announcement that would be made in the union budget. I have joined MCX as MD and CEO and I am looking-forward to working on all these opportunities for the growth of MCX as well as the commodities derivatives market of India. So I look-forward to your continued support and to deliver and drive the potential of MCX in the days and months-to come. So thank you very much the leadership team of MCX and I are available for any question-and-answers following the session.
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 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 once again a reminder, ladies and gentlemen, if you wish to ask a question please press star and 1 the first question comes from the line of Amit Chandra from HDFC Securities. Please go-ahead.
Amit Chandra
Good. Yeah, thanks for the opportunity. Yeah. So my first question is to ma’am. So ma’am, it’s been three months you have joined as the MD and CEO of MCA. So what has been the top three priorities in terms of the changes required in the exchange? And like what are the areas you want to focus to scale the exchange volumes and also to improve participation? And secondly, as we have — as you all know that the technology transition is behind us and the focus has shifted to innovation of products and like launching new products. So you have explained where we have like been in the journey, but we are very curious to know about where we are in terms of timelines, in terms of launching of the weekly options and the index weekly options contract and what are the technological challenges and the regulatory challenges we might encounter in this journey? Because from here on to take MCX to the next level, we need some innovative products and as we see — as you see in other exchanges, index and weekly are the ones which are the most traded contracts. So we are curious to know about your plans or on this. Thank you.
Praveena Rai
Thank you, Amit. Thanks for the question. So when I look at the top three priorities, I’m observing and evaluating the priorities for MCX. The first is operational excellence. And when we say operational excellence, it’s really our ability to interact with our members as well as our clients in a way that makes trading at the exchange the level of performance and best-in-class that it needs to be. It continues to involve and engage a high degree of focus on our technology. So operational excellence, including our continuous development going-forward on technology will be a priority. The second is to really keep our hat on the compliance side very strong as a market infrastructure that’s the expectation from the regulator and it will be a high focus area for MCX. And on the back of these two really gives us the ability and confidence to start the innovation. And there, we will be looking at new products and I spoke about that a little bit in the session. Looking at new products, looking at new contracts to our structures to our contracts, commodities that we currently do not have life contracts in. So all of these are areas that we will be continuing to explore. Now in terms of regulatory and other challenges, I think we do believe that on the back of a strong focus on one and two operational excellence and compliance that we will be able to work-through this and really drive this journey on our innovation.
Amit Chandra
Okay. And in terms of launches, any timelines that you want to like you have in mind because in the earlier calls, like we were of the view that within a year of the transition of the platform, maybe we are ready in terms of technology for the new products. And as we see that there is a huge concentration of electrode products on the auction side, which is crude and natural gas, which are mostly contracts. So we need more contracts to like diversify and also index and weekly are the ones which will be mostly and that can scale the volumes to the like next level and also in terms of what we’re doing to improve the participation institutional and to increase the depth in the option side.
Praveena Rai
So in terms of where we stand-on our internal readiness with respect to new products, we do not have constraints. We are — we are that way ready with our infrastructure. Now, as you rightly said, in addition to what we would look at from the deliverable contracts would be other contracts around indices, for example. So we are looking to revive Metaldex, which is our index that has not really had the kind of focus that it can have. So we believe there’s opportunity there. We will also be looking to bring in options on the. So I think this is really the plan on the index side. And as for — as far as timeline goes, I think you will see all of this in the next few months.
Amit Chandra
Okay, ma’am. Thank you and all the best.
Praveena Rai
Thank you.
Operator
The next question comes from the line of Devesh Agarwal from IIFL Securities. Please go-ahead.
Devesh Agarwal
Good afternoon, everyone, and thank you for the opportunity. Many congratulations to the entire team for another good quarter. Ma’am, just first thing, continuing with what Amit was asking in terms of new products. Now is there an update on the series contract that we were kind of designing? And can we put a timeline around that, the new series contracts?
Praveena Rai
Yeah. Hi, Divesh. Good to speak with you. So yes, we are continuing to explore all options in terms of growth, in terms of the requirement of the industry. At this stage, we really can’t comment on a timeline, but this is something that we continue to explore.
Devesh Agarwal
All right. And ma’am, if you see for our equity — if you see on the equity platforms, co-location is a big opportunity, which has been kind of driving volumes on the equity platforms. Now do you see a similar potential of can play in the commodities as well? Is there any thought process or aspiration out there?
Praveena Rai
Yes, I think that’s a very good question. And as you know that this is not currently under a regulatory approved approach as far as Kolo is concerned for commodity derivatives. So it is something that we will continue to explore.
Devesh Agarwal
Right, ma’am, sure. And just one on the quarterly results. What I see that the technology cost on a sequential basis has seen a decline despite a TCS AMC starting from this quarter onwards. So just — I wanted to have clarity on two things. What has been the payout to TCS in terms of AMC for this quarter? And secondly, despite this, what has led to this Q-o-Q decline and whether that is a sustainable number going-forward?
Praveena Rai
I’ll request Chandresh, our CFO, to take this.
Chandresh Shah
Hi, Devesh. So Devesh, the provision for TCS AMC is there in this number. However, due to the contractual terms, we cannot disclose that number. And the slight reduction in cost is due to some efforts which we have taken to reduce some of the premier services which we were availing. So whether it will be sustainable, we are trying to keep it sustainable, but we’ll have to wait-and-see. If there is a requirement to incur that cost, we may have to incur it in the coming months.
Devesh Agarwal
So would we be able to quantify what was the savings in this premium services cost in this quarter?
Chandresh Shah
Devesh, it’s a very intermingle thing, multiple services are there. So to give a number would be difficult.
Praveena Rai
But we do expect our cost to be stable, Devesh.
Devesh Agarwal
Understood. Thank you. Thank you so much.
Operator
Thank you. The next question comes from the line of Prayesh Jain from Motilal Oswal. Please go-ahead.
Prayesh Jain
Yeah, hi. Congratulations team. And ma’am just extending that question on the series contracts. As to where we are with respect to that product, whether we have tested it completely and we are readiness — our readiness is there and when can we file it with the regulator? And also any clarity there? Because I think that is something which the markets have been anticipating for quite some time, the crude series contracts. So anything where at what stage we are with respect to that product will be very helpful for us.
Praveena Rai
Hi. Hi, Prayesh. Nice to connect with you. So, Prayesh, when it comes to the CVs contract as you Call-IT, as I mentioned, our internal readiness on whatever products we want to launch is there, so there will be a small delta of work, but that’s a — that’s more of a procedural item. So from a readiness standpoint, there is no major bottleneck. However, this is something that we are continuing to explore, continuing to work on and we can update at the right time as and when something comes up.
Prayesh Jain
Got that. Ma’am, secondly on the — you know the base metal contracts, rightly that you mentioned that you would want to revive the metal decks and then bring in the index options on both build decks as well as metal decks. But as base metals volumes have not kind of picked-up the way we would have liked it to be. So what were the reasons for that and what could be the further driving factors for this that you could revive these volumes?
Praveena Rai
So we have had a reasonably good performance in base metals, especially when you look at contracts around copper and so on. And we believe that some actions might drive this further. So we are exploring rationalization around warehouses and certain actions that could help us to simplify the actual execution of the contract along with the deliverables, which will then be a little bit of a filip to that business. But we do strongly believe in both the and the Metal opportunities.
Prayesh Jain
Okay. Yeah. Man, just a couple of more questions. One will be on the regulation, right…
Praveena Rai
If you look at, Prayesh, that when we look at our base metal numbers from last year, our numbers have practically doubled. So the growth is there and of course, we will continue to focus on really driving the absolute volumes as well.
Prayesh Jain
Perfect. Just on this the regulations, the interoperability of margins, you know, which is not there between say in the stock exchanges and commodity exchanges. Any thoughts that the regulator might consider this and can provide some filip? And my last question would be on the SGF as to how do you see the settlement guarantee fund from here on, the contribution that we will have to make.
Praveena Rai
The regulatory guideline on Interop is really only for equity exchanges, so it does not, you know, include commodity derivatives at this stage. It’s very difficult to comment on that and we are not a part of what works. And your second question was on SGF. Now the requirement for SGF is not as intense by way of contribution. However, we will need to continue to review this based on need. And if we — and given the growth that we are seeing and to support the growth on open interest, if we need to strengthen the corporate, then we will do so.
Prayesh Jain
So ma’am, just clarification, is it a — the way one of your — like for example, NHC was given a target to reach a certain number of on the — for the derivative segment. Is this something that comes as a direction from the regulator and then we contribute and whether is there any such thing that you would voluntarily contribute or some ratio that we can link to the top-line that will continue to go into SGF.
Praveena Rai
Those don’t apply to the commodity derivatives exchange. I think it’s a very different space and operates on different rules as you will be aware.
Prayesh Jain
Got that ma’am. Thank you so much and wish you all the best.
Praveena Rai
Thank you. Thank you, Prayesh.
Operator
Thank you. The next question comes from the line of Arpit Tapadia from IGE Family. Please go-ahead.
Arpit Tapadia
All my questions have been answered. Thank you for the opportunity.
Operator
Thank you. Thank you. The next question comes from the line of Shalini Gupta from East India Securities. Please go-ahead.
Shalini Gupta
Could you please say what was the transaction fees during the quarter? And if possible, if you could break it up into options and future.
Chandresh Shah
So transaction charges for the quarter were around 300 crores and 72% of that is contributed by options and 28% is by futures.
Shalini Gupta
And sir, if you could please give the corresponding figure in the second-quarter — second-quarter of this year, Q2 FY ’25 financial year ’25.
Chandresh Shah
Q2 FY ’25 I mean, yes. So the previous quarter transaction charges were INR245 crores, 70% was contributed by options and 30% by futures. And just one correction, this in Q3, the transaction charges is INR265 crores.
Shalini Gupta
INR265 crores. Okay. Okay. Yes, sir. Otherwise, my questions were on the new product launches, which have been asked amply. I — so thank you so much.
Chandresh Shah
Thank you.
Operator
Thank you. The next question comes from the line of Kunal from Fair Value Capital. Please go-ahead.
Kunal Tokas
Hello, am I audible?
Operator
Yes, Kunal. Please go-ahead.
Kunal Tokas
Okay. My first question was really — I wanted to ask about if you had any updates on electricity derivatives and will — in your collaboration with IEX.
Praveena Rai
Hi, Kunal. So Kunal, it’s a very good question. So when we look at our new products, electricity is one that is top of the radar for us and we continue to work on it and explore that option. We believe it’s a good opportunity. Also given the maturity of the spot exchange, as you rightly mentioned. So this is something that’s on the radar.
Kunal Tokas
Okay, any timeline that we can expect or will you take it out?
Praveena Rai
We are not in a position to share timelines.
Kunal Tokas
Okay. Understood. And also in your PPT, you mentioned that another initiative is coal exchange. If you can explain that more, please?
Praveena Rai
Coal exchange, it’s something that you know we have been working on. A lot depends on how the coal spot and so on plays out and a lot will depend on governmental actions. So maybe it’s not a very-high priority or it’s not an expected item in the short-term but it’s something that we are keeping our eyes on and being ready for it.
Kunal Tokas
But this is the same thing that the Ministry of Coal was also referring to. I mean, they were referring to second of a coal exchange or will it be a different thing?
Praveena Rai
Yeah, it’s the same thing.
Kunal Tokas
Okay. And the third question was about natural gas. Gas we have a large competitor in this product IGX. My question was: how does one exchange you know, take-away volume from another exchange what sort of things have to go right for that to happen and what do you need to protect against?
Praveena Rai
So Kunal, you know not to comment really on IGX business model or they are they are numbers but as far as we are aware, IGX is a spot exchange for gas and our focus is only on derivatives, trading of derivatives. So we are in a completely different space and we don’t see — yeah.
Kunal Tokas
Okay. Thank you, Ham. Thank you very much. Have a good day.
Praveena Rai
Thanks.
Operator
Thank you. The next question comes from the line of Akshay Patel from CD Integrated Services. Please go-ahead.
Akshay Patel
Hello, ma’am. Am I audible?
Operator
Yes, Akshay, please go-ahead.
Akshay Patel
Yeah, yeah. So last question is that we have grown — we have grown very significantly in the first 3/4 of FY ’25. So my question was on the front of the revenue growth, sustainability of the revenue growth. So how sustainable is the revenue growth for BMPS can we expect the same growth rate to continue in the next year and years to come?
Praveena Rai
So I think the growth of the last few months has been steady and it has been consistent. And you know, we don’t see a reason for the growth to not continue. So the — I think the numbers reflect the point that you’re making and that’s really our own view to the situation as well.
Akshay Patel
Okay. So we can expect the same growth rate in FY ’26 as well. And ma’am, my second question is regarding the extension plan on the trading volume of the MCF. So how — how can we expand — how can we actually extend our plan in terms of trading volume and increase the participant — market participants and overall revenue per exchange?
Praveena Rai
Yeah. Thanks for that, Rakshay. That’s a wonderful question. I think we’ve spoken about the kind of products we are working on and the fact that we’re going to continue to explore the kind of contracts we need as well as new commodity areas that we’d like to enter. But we are also at the same time looking to increase our participation and we did talk about the full-year number of clients traded — who traded is at about 9 lakhs and we see that number as a focus to increase and they’re also looking at bringing in participants of both SPIs as well as hedgers and commercial participants. So growing the breadth of participation in the exchange will also drive this growth. So both on products as well as participation. The third angle, of course, and I spoke about it earlier is really the MCX good delivery, which we have both on Boolean as well as on some of our metals on lead and which we plan to expand further. So that’s another third element, which really gives Indian refiners an opportunity to participate in the exchange and we believe that’s also important access of growth. So all of these together will really contribute to that growth that you’re looking at.
Akshay Patel
Okay, ma’am. And last one follow-up question on that would be that our 65% of the revenue comes from just and gold contracts. So do we foresee any challenges or risk regarding that two products hold 65% of our revenue?
Praveena Rai
I don’t think 65% of our revenue is coming from Boolean. But as I said, we will be looking at expanding our range of products and that will certainly lead to a situation where we will have more products coming in with growth numbers in-place., you just want to talk about the current concentration.
Chandresh Shah
So 65% is bullion contribution only in the futures, whereas in the options, the natural gas and energy products are having higher contribution.
Akshay Patel
Okay. Okay. And ma’am one last question, do we have any planning to come into the high-frequency trading or LGO trading or something like that?
Praveena Rai
So Akshay, that’s a permitted category and we do have participants who have algo trading with MCX even as we speak.
Akshay Patel
Okay. Okay, thank you, sir.
Operator
Thank you. The next question comes from the line of Ajox Frederick from Sundaram Mutual. Please go-ahead.
Ajox Frederick
Hello, hello. Hello, ma’am. Thanks for the opportunity. My question is on the new client addition. You mentioned in your opening remarks about 11 lakh clients, which used to be 9 lakhs. So what has driven that increase in growth during the year?
Praveena Rai
So hi Ajox. So increasing the traded client participation is an important objective for the exchange. And we have had a number of initiatives including awareness sessions, working closely with our members to increase the client you know, trading participation and so on. So that has led to the increase in numbers that you’re seeing here. And it’s something we track every month and we see a month-on-month growth in these numbers.
Ajox Frederick
Okay, okay. And going-forward also, you feel this traction will continue, right? That’s what you’re saying. Your steps are indicating that.
Praveena Rai
The interest in commodity derivatives trading will continue to grow. We continue to stay focused on these initiatives around creating awareness, so are our members. And I think we should see the results according to that.
Ajox Frederick
Thanks. Thanks a lot and all the best.
Praveena Rai
Thanks, Ajox.
Operator
Thank you. The next question comes from the line of Chintan Sheth from Girik Capital. Please go-ahead.
Chintan Sheth
Thank you and congratulations, ma’am for the role. One question I had on the FDA participation, you mentioned that we are working towards increasing participation from both every strut of trading community. If you can throw some light on how has been the FDI participation overall transaction in the quarter and how you do see this improvement going-forward?
Praveena Rai
Yeah. I’m just going to request Rishi, our Chief Business Officer, to take this.
Rishi Nathany
Yeah, hi, Chintan. So we are seeing heightened interest from FTIs in our products. As of now, they are only allowed to trade-in cash-settled contracts of crude oil and natural gas. If we have around 140 FPIs on the platform and many are participating very actively. And it’s heartening to know that they are actually building a lot of OI on the exchange. So for example, in crude oil, know, we have around 17% OI on the long side and 32% on the short side from FPIs. So that is something very healthy. And also in terms of natural gas with 17 on both sides. So overall, we are seeing that their participation is overall growing month-on-month and we see this as a very strong segment going-forward with more-and-more coming on-board.
Chintan Sheth
So we have — from — if you look at the crude contract for last couple of months starting from September, it has started to even soften a little bit month month-on-month. Any reason you know which participations are kind of leading to lower volumes or lower transaction in the crude contract?
Rishi Nathany
So it’s not like that. If you look at historically, the quarter three is always a soft quarter for — especially for international reference contracts, given all the festival season, etc, both in India and globally. Having said that, this quarter has been better than the last quarter. So more or less, you know, it has always been that trend that Q3 has been softer than Q2 every year.
Chintan Sheth
Okay. And if you look at SGF contribution we are now earlier it was an ad hoc contribution policy which now we have revised it to every quarter. We will be charging or provisioning the ICF contribution every quarter. Do we see the need for any tweaking in the rates or you know, taking in the fees? Transaction fees, given the regulatory burden seems to be heightening in the derivative side both on equity and commodities.
Praveena Rai
So, at this stage I think our contribution is being well managed and under control and I think we addressed it earlier that we may need to review this we will continue to review it and if we need to contribute to further to support the open interest growth that we see, then we will take action accordingly.
Chintan Sheth
Sure. And ma’am, just book a question on how much cash we hold on our books, present day and any thought process on how to utilize this.
Chandresh Shah
So, as on date, as on the 31st of December, we have around INR1100 crores surplus cash. And the utilization will depend on the plans, business plans and how we want to invest in technology, new products.
Chintan Sheth
Sure. Thank you. That’s all for me.
Operator
Thank you. The next question comes from the line of Parikshit Kabra from Pkeday. Please go ahead.
Parikshit Kabra
Hi. Thank you for the opportunity. So, I’m actually struggling a little bit in terms as an investor to figuring out how to underwrite the growth of the company. Because yes, on the one hand you are uniquely positioned to tap into this growing market. But on the other hand, in terms of any form of operational guidance, in terms of how are we adding more clients, what our target for the clients that we’d be adding over the year, the instruments, we’re left a little bit in the dark. So, number one request is can we start at least showing the number of active clients on a quarter, on quarter basis in our presentation so that we can at least start tracking that number?
Rishi Nathany
It is already, if you can look at our presentation, we are already giving the active clients both in futures and options separately. And also we are giving it at the consolidated level. Also we are giving quarterly as well as we are giving it on yearly basis.
Parikshit Kabra
Okay, I apologize then I seem to have missed it. I thought I had gone through it in detail, but fair enough. And secondly, in terms of actually adding clients, you mentioned briefly just now that you’re doing awareness campaigns. But is it possible to understand this more? Like what were we doing before, what are we doing now, are we adding new avenues to increase awareness? Are we adding new features, not just products, but new features that enable certain type of clients to increase their trading volumes, so on and so forth?
Praveena Rai
So, I think over the months we have added the products and contracts that are more amenable to a wider range of clients. So, I think in fact last year or earlier this year we have launched the Mini, the crude oil and the NG Mini. We also have our one gram gold leaf, we have the gold guinea at eight gram. So, there are products which are specifically suited to this purpose. And this is something we will continue to explore.
Chandresh Shah
Just to add to it. In fact, we have recently come out with even the monthly contracts like gold. We have done that 1. So, we are looking for both product variants and also we are looking for like one of the another initiative that we have taken in the recent first is like the branding empanel mentor branding. So, we are looking at how we can able to add the value chains to the market. That is one side of it. And also we are looking at doing like looking for opportunities in experimenting on the variants part like meanings. We have come out monthly contracts we have introduced and also looking for the new products. So, there are very series of actions have been taken up. one is to product enrichment and also looking for the new products and also looking for new avenues.
Parikshit Kabra
All right, thank you.
Operator
Thank you. The next question comes from the line of Deepak Ajmera from IGE India Family office. Please go ahead.
Deepak Ajmera
Yeah, thanks for the opportunity. My question is also on the similar line the we are saying that we are we will be launching lots of new product, and we will increase FBI participation etc. But as there is no clear timeline given by the management. But can you highlight what progress already we have made in the part whether it is Weekly option expiry etc. Means what progress we have made and what is holding launching the same etc. that will help us in understanding it more. Thank you.
Praveena Rai
So, we are not in a position to comment on any timelines at this stage. I think we did call out that we are operationally have a certain level of readiness that will allow us to move fairly fast.
Now a lot of these will be under regulatory purview, and we continue to explore various options that we will need to look to market based on the industry’s requirement and at the right time we’ll be able to communicate this back.
Deepak Ajmera
Yeah. Similarly for electricity derivative it means yes, we agree you will be launching maybe later or sooner. But to understand it more details what is holding these things one is and what progress we have made from the last 2, three calls which we have attended.
Praveena Rai
My comments are the same Deepak, from what I mentioned earlier, nothing more specific to add for electricity and I think we discussed earlier on that it is high on our agenda, and we believe it’s a very significant opportunity. So, we will be working in a very focused manner on that.
Deepak Ajmera
Okay, thank you.
Operator
Thank you. The next question comes from the line of Ashish Pareek from Emkay Investment Manager. Please go ahead.
Ashish Pareek
Hi. Thank you. I just wanted to have a brief understanding as to how margins differ from say cash settlement versus physical settlement. And just to follow up so in terms of margin so which will be the most profitable? Say gold or bullion or something like that. Thank you.
Rishi Nathany
So, margin. Hi Ashish. So, margin doesn’t differ per se from cash settlement or delivery settlement. It’s only in the delivery period that you can face higher margins. That is because the chances of being marked for delivery are there. Having said that each contract has different margins depending on their volatility. And as we as you know we all have that span margin system. So, basis that or if there is, if you see heightened volatility there can be additional margins over and above.
Ashish Pareek
I’m sorry, margins I mean the revenue side for the company. So, say in terms of physical settlement. Yeah. Which would be the most profitable for a company?
Rishi Nathany
Misunderstood the question. Sorry, misunderstood your question. So, naturally Chandresh, if you want to.
Chandresh Shah
See margins, I think since we have a common system it is not so easy to compute margins product wise but the contribution from maybe energy and bullion would be the highest.
Ashish Pareek
Okay. Yeah. Thank you.
Operator
Thank you. The next question comes from the line of Nandini Agarwal from Globe Capital Markets. Please go ahead.
Nandini Agarwal
Hello everyone. Thank you ma’am. For the agenda I wanted to ask that we have talked a lot about increasing the participation in the exchange but on the lines of media participation I wanted to know your view on that since you’ve seen an in tremendously increased interest by people in the age group of 20 to 30 and 35 plus. For if you’re not trading in the equity markets what is your take apart from awareness sessions and, of course, the products that you have launched to increase participation in the retail segment.
Praveena Rai
So, the 11 lakh number that we’re talking about when it comes to unique traded clients really reflects that growing interest from the retail segment. About 25% of our volumes, 24% of really our turnover is also coming from mobile trading which can reflect the retail segment as well.
Now obviously we don’t know the age group of the segment or anything of that sort but we do see this increasing interest, and we believe that this participation will continue to grow.
Nandini Agarwal
Thank you.
Operator
Thank you.
Praveena Rai
And also, number of our members who are large retail brokers will also contribute to this growth.
Operator
Thank you. The next question comes from the line of Sunil from ICICI securities. Please go ahead.
Sunil Desai
Hello, good evening ma’am. Congratulations on a good set of numbers. So, my question is more on the same lines of the client participation. So, in your PPT you give the credit clients data, right? So in this quarter if I see on A sequential base that has not been any increase in these clients which has, was increasing on a very exponential scale. If I look at the past few quarters. So, any reason why this quarter there was not much growth and if I may continue on this, that if I look, as you said, there are 11 lakh unique participants but now if I look at equities, there is about around 96 lakhs. We had participated in FNO in the last year. So, how much do you think is, the potential of the commodities market in this?
Praveena Rai
Yeah, so we are seeing growth in the numbers of participants and traded clients.
Now the numbers for equity will, of course, be much larger. So, you know, the commodity derivative numbers will be a subset of those numbers. But we do believe that there is potential for more retail participants to come into our numbers here. So, for example, I think we are seeing more than 50% a growth happening. If we look at this even quarter on quarter over last year quarter, we are looking at nearly close to 50% a growth. So, I think that interest, that increased interest will continue to be there.
Sunil Desai
Correct. So, just if I may ask that you know, from let’s say there are 90 lakhs in equity, what is the number you would assume in let’s say next to three years or from 11 lakhs, how much do you think that could grow in the next 2, three years? Or what would be an internal target if you can share?
Praveena Rai
Yeah, so it will be difficult to put a number in the air there. But I think if we look at our ADP versus equities, I think you know, that growth will reflect in the retail participation growth as well.
Sunil Desai
Thank you ma’am.
Operator
Thank you. The next question comes from the line of Sanketh Godha from Avendus Spark. Please go ahead.
Sanketh Godha
Yeah, thank you for the opportunity. So, 2, three questions. one on the tax rate. So, in the past we guided that our tax rate will be around 22 odd percentage and for the nine months that number seems to be lower than that. So, is it fair to assume that the tax rate will be closer to the current levels what you are reporting? Or it will go, it will be closer to 20 odd percentage.
Chandresh Shah
Sanketh, tax rate would be around this level.
Sanketh Godha
Okay. So, around 2021 percentage is the fair number to assume, sir.
Chandresh Shah
25.
Sanketh Godha
Okay. In the current quarter the tax rate came at 20.8. So, just wondering…
Chandresh Shah
Tax rate you check the standalone numbers.
Sanketh Godha
Oh, okay. Fair point, fair point. Perfect sir. And the second Question was, is it fair to tell that your SGF cost will be closer to seven Percentage of transaction? Because that’s the trend what we can see in last three quarters. So, with the volume growth, your open interest keeps on going up and maybe if I link it to transaction income broadly at 7%, that’s the trend we believe it will continue. Sir, for the SDF cost or you believe this number can taper down as the volumes will kick up in dachshunds.
Chandresh Shah
So, Sanketh, the number we keep monitoring that as per the requirement. And like ma’am explained earlier, we would like to keep the corpus healthy so that it meets the regulatory requirement also. And the volumes, the incremental open interest is all taken care of.
Sanketh Godha
Okay And the last 1, Last 1. So, see, the premium to notional has. Has fallen in November, December and probably January seems to be on similar trend. So, is it fair to tell that monthly bi. Monthly becoming monthly in gold has contributed to that decline in premium or you believe that it is more to do because with volume increase, people taking positions more in out of the money contracts and that premium to notional number is coming off and as the volumes pick up, this trend will be downward only going ahead.
Rishi Nathany
Are you looking at the premium to notional turnover?
Sanketh Godha
Option Notional turnover. So, that percentage for the quarter was.
Chandresh Shah
Yeah, I’m just looking at that 1. So, for example, the quarter one it was around 1.62, quarter two it was 1.69 and quarter three it is 1.74. So, there is no significant change in this 1, it is more or less around.
Sanketh Godha
No sir, I was more referring to November, December and January what you disclose in your website. So, October was insanely very good at 2.2, but it fell to 1.6, 1.54 and 1.57 for January till date. So, I was referring from that perspective because you had a very healthy October that numbers look optically better at 1.74. But November December numbers are closer to below 1.6 percentage. So, I was just coming from that perspective whether this trend will continue downwards or not.
Chandresh Shah
Typically multiple factors impact your options to turnover ratio. Okay. One is the volatility factor. And suppose even the markets are in the growth phase. It is very difficult to say that what ratio it will continue because you are still in the growth phase. Still the stability takes place. It is very. That means the markets mature. It is not possible that you will be able to give a particular trend. But I am saying that at least in the recent times I think it is more like maybe if you take a particular month, maybe the impact could be because of one or two contract but the volatility also could have played important.
Rishi Nathany
So, Sanketh, if you see October, there was heightened volatility. Because of that you are seeing that number and it was outlier of a month. Otherwise if you correlate to the months of heightened volatility you will see this ratio higher. Otherwise as you all know that December normally is a very stable and placid month. So, accordingly you have seen those numbers. So, I do not see that how could anyone predict these numbers going forward?
Praveena Rai
So, if I can add. I’m also just looking at the premium turnover for options and the premium turnover is increasing because really the you know, ADT is supporting that and Q2 was about 3264 crores and there’s been 11% growth to 3600 crores in Q3. So, I think the two have to be seen hand in hand to really look at their impact.
Sanketh Godha
Got it ma’am. Sorry. My only reason why I asked this question is that if volumes pick up is a general observation at the exchange level that out of money contracts volumes increase and that naturally leads to a structural decline in the premium to notional. Because we have seen the same thing in equity market. So, is it fair assumption to make that if the growth continues at the current momentum level out of money contracts contribution will increase and that will lead to automatic lower number premium to notional?
Chandresh Shah
It could be one or 2, but we cannot say that is the only factor. Okay. Because suppose growth is happening, that means if more strikes become more liquid there is a possibility that yes, all of the money contracts can become more liquid and it can get treated. But we cannot say that is the only factor.
Rishi Nathany
So, net-net, we cannot use this as a predictable trend to put it.
Sanketh Godha
Got it sir. And last question. If you can give the floating come on margin money in the current quarter that will be useful as a data keeping point and maybe if you can tell that number for nine months and for the quarter.
Chandresh Shah
So, that number bifurcation we cannot provide, Sanketh.
Sanketh Godha
Okay, okay. Okay sir, that’s it for me. Thank you very much.
Operator
Thank you. Ladies and gentlemen. That was the last question. I now hand the conference over to Ms. Praveena Rai for her closing comments.
Praveena Rai
Thank you very much. I think we had some very, very good questions coming in. I hope clarity of really the results as well as where MCX stands today was made available through both the session, the interactions and the Q and A. Thank you very much for your. Your time here and your very active participation. I also want to thank my colleagues in the room for being here and being available for this conversation. Thank you.
Operator
Thank you. On behalf of Multi Commodity Exchange of India, Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.