Angel One Ltd
NSE:ANGELONE
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
2 051.4
3 805.65
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Earnings Call Analysis
Q1-2025 Analysis
Angel One Ltd
Angel One kicked off the first quarter of FY 2025 with impressive results, achieving an all-time high quarterly gross revenue of INR 14.1 billion. This reflects a solid 4% growth compared to the previous quarter. With an average of 7.7 million daily orders, the company processed a total of 462 million orders during this period, showcasing robust client engagement and operational strength.
Gross broking revenue remained stable at INR 9.2 billion, contributing approximately 65% to total gross revenues. Notably, 84% of the gross booking revenues stemmed from Futures & Options (F&O) trading, while cash savings made up 11%. The commodity segment also saw an increase, now representing 5% of total revenues. Direct clients were responsible for about 78% of the net booking revenue, indicating a strong reliance on direct relationships for revenue generation.
Client funding has shown significant upward momentum, increasing the average client funding book by 29% to INR 26.3 billion. The ending client funding book reached INR 34.1 billion. This growth has also positively impacted interest earnings, which rose by 18.9% sequentially to INR 2.9 billion, accounting for about 21% of total gross revenue.
Operational expenses climbed by 15.5% sequentially to INR 4.9 billion, partly due to the company's sponsorship of the IPL which accounted for over INR 1.1 billion in costs. However, when excluding this expenditure, the operational expenses would have seen a decline of 6.4%. Employee benefits, including ESOP costs, also rose by 27% to INR 2 billion due to an increase in headcount, highlighting the company's commitment to scaling its workforce in line with growth ambitions.
The reported EBITDA margin was 37.7%, impacted by higher promotional spending. However, normalizing for IPL-related expenditures, the margin improves to 48% compared to 47% in the prior quarter. The profit after tax from continuing operations decreased by 14% quarter-on-quarter to INR 2.9 billion, primarily due to one-time costs. In light of regulation changes, the management is confident in maintaining operational margins between 47% and 48% in the upcoming periods, leveraging internal pricing strategies and operational efficiencies.
As Angel One navigates the evolving regulatory landscape, management reassured stakeholders about the company’s resilience. With upcoming changes related to 'true to label' turnover charges, the company believes it has sufficient levers and price elasticity to offset potential impacts on revenue and maintain competitive growth without sacrificing client experience.
Investment in brand visibility, including strategic IPL partnerships, is expected to yield long-term benefits by enhancing market reach and attracting younger clients. Angel One is also focused on expanding its asset management and wealth management services, targeting a significant market opportunity. Continuous innovation in client onboarding processes, including features like fully digital joint demat accounts, positions Angel One to capture further market share amid a growing base of young, tech-savvy investors.
The board has decided to postpone dividend payouts in order to conserve capital for future growth initiatives. This strategic decision is aligned with enhancing the balance sheet and financial stability as the company captures emerging opportunities in the expanding fintech landscape.
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to Angel One Limited's Q1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. This conference call may have forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
I now hand the conference over to Mr. Hitul Gutka from Angel One Limited. Thank you, and over to you, sir.
Thank you. Good morning, and welcome, everyone. Thank you for joining us today to discuss Angel One's Q1 FY '25 financial and business performance. The recording of today's earnings call and transcript will be uploaded on our website under the Investor Relations section. The financial results, investor presentation and press release are also available on the website.
For today's call, Angel One is represented by Dinesh Thakkar, Chairman and Managing Director; Vineet Agrawal, Chief Financial Officer. We also have the senior leadership team of Angel One, along with SGA, our IR consultant. The team will give us a brief overview of the operational and the financial performance of the quarter gone by, which will be followed by a question-and-answer session.
Please note that there may be certain forward-looking statements during the course of the call, which must be viewed in aggregate with the risks that the company faces.
With this introduction, I now invite Mr. Dinesh Thakkar for his opening remarks.
Thank you, Hitul. Good morning, everyone. India's fintech industry has witnessed robust growth over the past few years, and platforms that help build wealth for young Indians have since significantly adopted across the country. Digital enablement of products and services and Internet penetration ensure that an average Indian citizen now has multiple options that were previously unavailable. Seeing the rate of adoption on our platform indicates that future growth should be unprecedented.
Angel One continues to remain at the forefront of this evolution, but continuously working on deepening adoption and closely observing customer BACS, shaping favorable outcomes for both the consumer and platform. Encouraged by this deeper validation of our digital platform across the country, we find it prudent to associate ourselves with IPL, a household voting brand with powerful regional loyalty, innovative marketing, a broad reach and more importantly, high youth engagement. This effort will not only help build a lasting brand, but will also deepen the category as a whole.
An independent third-party study recognized Angel One as 1 of its top 3 most visible and recall brands during IPL 2024 season. Step investments yield long-term benefits, enhanced visibility and recall and support our growth strategy as we diversify our product offering to include distribution of lending fixed income products, along with launch of asset and wealth management business.
We remain committed to excellence with client-centric approach, constantly exploring breakthrough strategies to capitalize on future trends and opportunities. We have implemented initiatives like offering a debt user experience for those who have yet to register a valid account, simplifying journey for SIPs in ETF and single stocks, and innovating in areas like stock discovery duty.
I'm happy to share that Angel One is the only major broker offering a fully digital process for opening joint demat accounts. It is equally worthwhile to note the nature of new clients on our platform. They are young, new to market, gen Z with unique and aspirations. Recognizing this need, we have invested in social media company initiatives to entertain, engage, empower Indian youth with high-quality financial content.
This youth, coming from cities from Tier 2, 3 and beyond, need help in learning about stock market, personal finance, business case studies and much more in the language they understand and on the platform they engage with. In quarter 1 FY '25, we witnessed healthy trading volume with the peak orders growing at 31% sequentially.
During the quarter, the platform executed over 13 million orders in a still trading session, thus establishing a new benchmark. To maintain our high standards of reliability and uptime, we have continuously evaluated and we invested in our infrastructure.
In quarter 1 FY '25, we moved our process to new data centers and conducted regular disaster recall drills to enhance agility and preparedness. We also instituted innovative monitoring tools to track and improve our system performance in real time. Our assisted business have seen multiple products aimed at enhancing the NXT platform, offering our channel partners a superior digital experience.
Some of the key initiatives include streamlining and automating the onwarding process for mutual fund distributors, creating journeys to empower our partners to effectively cross-sell and to their clients. Leveraging our strong data analytical capabilities, we expanded into new areas while protecting our margin profile for the segment.
Originally experiments with differentiated MTF, pricing has yielded positive results with blended yields ranging between 15% to 16%. At Angel One, we harness the power of data science and analytics to drive informed business decisions and validate strategies for sustainable growth and efficient operations. By leveraging advanced techniques, able to devise accurate growth models targets the right cohort with precise campaigns and enhanced client retention. Our focus on personalizing the platform experience and improving overall plant satisfaction and shows a tailored journey for each user.
We have automated customer service tasks with large language models, allows us to effectively provide accurate and prompt response to client inquiry, thus freeing our team to handle more complex issues. Augment to building a secure cutting-edge data platform that offers a comprehensive 360-degree view of our customer, enables us to provide appropriate merges, makes strategic decision about costs, enhance customer lifetime value and improve resources allocation. This data driven approach not only fosters business growth, but also improves customer satisfaction. Thus, continuous investment in technology, product and data science are essential to curating a better client experience and deepening the market while also giving us an edge over our peers.
We have achieved new milestones in mutual fund distribution, reflecting the excellence of our mutual fund journeys. We reported our best quarter with over 0.5 million unique FID registration in June 2024 alone and nearly 1.5 million in a quarter overall. We also commissioned Germany that [indiscernible] to do and manage their mutual fund investments seamlessly across different platforms. These solutions reinforce our position as the second largest player in incremental registered SIPs.
Efforts are underway to integrate credit income product into our platform. We are making the necessary efforts to ensure reliability and effectiveness as we integrate our system with manufacturers ecosystem. We are expanding our wealth management team and have instituted an advisory council and [indiscernible] with renowned industry experts.
In Wealth Management, we aim to focus on product innovation across diversified verticals to cater to a wide spectrum of clients by leveraging technology. Our AMC business awaits final definity approval, and we'll provide updates in due course.
Operationally, Angel One continued to deliver healthy performance and acquire about 2.6 million clients in the quarter with 90% from cities from Tier 2, Tier 3 and beyond, expanding our client base to over 24 million. Consistent investment in expanding the client base have increased our share in India's demat account to 15.2% as of June 2024. Our client executed over 460 million orders during the quarter, translating into an ADTO of nearly INR 44 trillion with an 18.9 share in overall retail equity turnover. We continue to witness sustained improvement in our cash segment market share, which expanded to 16.6 percentage. Funds raised via the QIP in April 2024 have been deployed to grow the business, as evidenced by our healthy order volumes and robust growth in our client funding book, which average at over INR 26 billion in quarter 1 FY '25. That is 29% higher sequentially.
I would like to allay any [indiscernible] about the potential impact on company's revenue and margin from recent regulatory guidelines on true to label recovery of exchange turnover charges or any other intention that can potentially affect our stream of revenue. At Angel One, we are extremely sensitive to the overall experience we offer to our clients, while ensuring appropriate safeguard of the interest for all the stakeholders. I assure you that our business has inbuilt safeguards and provides adequate business levers including transaction, thus ensuring continuity of our growth and profitability.
Just like any other business, we are subject to an evolving regulatory environment. Regulatory interventions lend long-term clarity business, operations making them predictable and resilient. The support regulation that protect investors and their long-term value.
And the transparency and disclosure help manage risk, provide fair access to market and enhance market integrating. We are also really engaging with regulators on all aspects, the only foster higher confidence, a long runway that the sector has yet to exploit in terms of penetration and growth.
The Board has decided to defer dividend payout for the next few quarters to conserve resources, optimize our balance sheet and support our growth trajectory. I will now ask Vineet to take you through our financial performance before we open the floor for any questions you may have.
Thank you, Dinesh. Good morning to everyone. We continue to deliver a healthy operational and financial performance in quarter 1 of financial year 2025, with our average daily orders sustaining at 7.7 million, taking our aggregate order count to 462 million during the quarter. We clocked our highest ever quarterly total gross revenue at INR 14.1 billion, registering a 4% quarter-on-quarter growth.
Our gross broking revenue remained at par with quarter 4 of FY 2024 at INR 9.2 billion. Gross booking revenues accounted for 65% of our total gross revenues with F&O contributing about 84% in quarter 1. Cash savings contributed 11% of our gross booking revenue, which optically appears low since we do not charge on cash delivery orders for clients under the flat fee plan.
Share of the commodity segment increased to 5% in quarter 1 of FY 2025. Since majority of our clients are part of our direct business, their share in our net booking revenue stood at approximately 78%, while the balance 22% was contributed by clients acquired through our assisted business. While our cash delivery order volumes continue to remain strong in quarter 1, momentum in cash ADP was in upward trajectory. Higher activity in this segment, coupled with availability of capital from the recently concluded QIP, led to 29% pension growth in our average client funding book to INR 26.3 billion for the quarter.
Our period ending client funding book stood even higher at INR 34.1 billion. This led to a corresponding growth in the interest we earned on this book. The interest and the client funding, along with the interest earned on deposits with exchanges, grew by 18.9% sequentially to INR 2.9 billion. This, accounting for about 21% of the total gross revenues for the quarter.
The ancillary transaction income linked to the value of the orders executed by our clients on our platform remained stable at INR 1.1 billion and accounted for nearly 8% of our quarter 1 total gross revenues. It is these charges we referred to in the recent Q2 label SEBI circular of July 1, 2024. The net income from these charges for the last financial year was INR 3.5 billion.
Quarter 1 FY 2025, we fully utilized the proceeds from our recently concluded QIP in funding our margin obligation with the clearing corporation and growing our client funding book. This limited the utilization of borrowed capital for the business despite a 29% growth in our average client funding book and healthy turnover volumes, leading to stable finance cost at INR 556 million.
Employee benefit expenses, including cost of granting ESOPs, was at INR 2 billion for the quarter, sequentially higher by 27%. This was primarily on account of headcount increase in our broking and wealth management businesses, increments and apportionment of variable pay for the current financial year. Our operating expenses for the quarter grew by 15.5% sequentially to INR 4.9 billion. This includes over INR 1.1 billion on account of proportionate cost towards IPL associate partnership sponsorship and related digital and media adverse spends. The entire cost of IPL season 2024 has now been accounted for.
Net of this brand spend for both quarter 1 FY '25 and quarter 4 FY '24, our other OpEx declined by 6.4% sequentially. The decline effect over 10% lower gross plant acquisition, partly offset by higher spend on cloud infrastructure, demat charges and CSR-related spend. Here, I would like to inform you that Angel One will continue to invest in scaling up its brand over the next few years.
Our brand spend for the last -- for the rest of the year will be in line with our pre-IPO quarter trend. Such spend help us significantly amplify our brand across the country, giving us better reach to our target audience. Our reported consolidated EBITDA margin declined to 37.7% for the quarter, primarily on account of higher IPL associate sponsorship-related spend. Normalizing both quarter 1 and quarter 4 for the spend on IPL, our EBITDA margin expanded to 48% in quarter 1 of FY 2025 from 47% in quarter 4 FY 2024. This normalized margin also presumes the expenses of incubating our new businesses of asset management and wealth management.
Depreciation and amortization costs increased by 35% sequentially to INR 226 million in quarter 1 of FY 2025, as this was the first full quarter post capitalization of our data center and disaster recovery sites in quarter 4 of FY 2024. In addition, incremental assets capitalized in quarter 1. Our reported consolidated profit after tax from continuing operations begin by 14% quarter-on-quarter to INR 2.9 billion against a very strong quarter 4 PAT of INR 3.4 billion.
Netting out the impact of IPL-related costs from both these quarters, the normalized profit after tax grew by 5.7% sequentially to INR 3.8 billion in quarter 1 as against INR 3.6 billion in quarter 4 of FY 2024. Period ending cash and cash equivalent increased to INR 110.8 billion on the back of increase in client margins and cash generated from the business. Period ending client funding book nearly doubled to INR 34.1 billion as of June 2024, as compared to INR 17.7 billion as of March 2024.
Consolidated net worth of the company grew to INR 48.3 billion, which includes INR 15 billion raised via the QIP in April 2024 and profit for the recently concluded quarter. In quarter 1 of FY 2025, annualized return on average equity stood at 29.8%, which was impacted with a higher net worth account of the fund raise and softer margin due to the higher IT-related spend.
The leveraging of funds raised via the QIP, coupled with us revisiting the tariff profile, should further strengthen the margin profile for the forthcoming quarters. We also expect the ROE to come back closer to our historic levels over the next few quarters.
With this, I conclude the presentation and open the floor for further discussion. Thank you.
[Operator Instructions] The first question is from the line of Prayesh Jain from Motilal Oswal.
Congratulations on a good set of numbers. Sir, firstly, on the regulations. There's just too much being spoken about. Firstly, it was the true to label charges. Then second, there was a change in the way the pledge -- the stops qualifying for pledge would kind of [indiscernible]. Angel is one broker who offers 100% pledge allowance to the customers. That is second. And third is obviously all the aspects of the media article which came in spoken, speaking about number of expiries declining as well as the lot size increasing. Could you give some granularity on our businesses, particularly from the fact that what pricing actions or what other levers we have to offset the impact of true-to-label element?
And secondly, also on the aspect of what is the average lot size trading of customers. In the past, you've mentioned about 20% customers accounting for 80% of the volumes or revenues. So how should we look about this if all these changes were to be implemented in total, then how would volume get hit? That will be my first question, actually.
Yes. Thank you. Let me take one by one. First, true to label. So as you have seen this quarter, we have turned around and then INR 12 crores. And what we believe is that, okay, like we have enough levers to offset this impact, not ruling out a change in pricing and all that, that includes even charging for collateral that we accept for a segment and all that. So that way, we feel that our business has enough levers, which we can play to offset this true to label.
Okay. Second, on expiry, that has not come out, what would be their approach and what kind of like. But said and done, what I understand that the few indices, which will expire weekly and rest of this would be having among the expiry. So there will be previous options across the month. So customer for -- that customer in that whatever option he likes, you like to trade on that, that is available across the month.
So I do not think that, okay, there will be a big impact because ultimately, what happens, customers have a certain wallet share for clearing. So if I then can connect weekly expiry or there's a monthly expiry, which is available across the month, they would tell in that. There's been a small impact in volume. But if you look at kind of like number of trades that we do in a year, we believe that is not going to decrease in a substantial way. And whatever small terms and reduction of changes we can think, collectively, we work out what are the kind of like levers we have to offset that kind of like impact on our revenue, margins or growth.
As I said, that there are a few levers that we would like to use, including pricing certain services and pricing on certain kind of like areas that we are not charging. We have to relook based on what impact we'll have, but definitely will ever look after all the announcements are in place. And on average trading lot, I think Devender or Bhavin, if you can take that question or Amit.
Yes, sir. So the average trading lot, the lot size increase is still under discussion, and we are waiting the final say from the study. But we presume there won't be any impact because recently, only the lot size has been decreased in [indiscernible] and we did not see a major difference in terms of how the customer behavior is towards that.
So we'll wait for the regulator to announce on this particular part. And regarding the pledge question that you had, yes, recently, there was a circular from MS, where some 1,000 scripts have been removed from the collateral and in a staggered manner, it'll be removed in October.
We are evaluating internally. And as Dinesh said, we have internal levers and if it means that we have to pass on this particular thing to the customer, we will take an appropriate call on that as well.
So Prayesh, overall, we think that we have enough levers and there's enough elasticity in our pricing. So that will take care of this announcement that we have heard until now. This is more competition sensitive information, we would not like to reason and allow our competition to have some insight on what we are thinking about.
Yes. Sir, just on this lot size. In the past, when you have mentioned that 20% of your customers account for 80% of the volumes, would you say that it will be 20% accounting for 80% of the revenues? And would it mean that this still would not get set if the lot size increases to, say, 3x or 4x? Would that be a fair assumption that at least this 80% of the revenues or volume will not get impacted under the lot size increase of 3x or 4x?
My belief is that it's still get impacted. As I said, that clients with that has some allocation towards trading investment and all that. And if you look across [indiscernible] cycles, you might experience. Our consumer will find out way how to trade. If they want to trade, they will choose their kind of like contract size or all that, unless it becomes like a banning of options.
Okay. But is the live product, what they are used to? Excluding this [indiscernible], not like the decrease a lot size, that did not mean that our volume went up 100%. It has a small impact, and it gets utilized within some time.
So we believe that this change in lot size, if it is substantially higher, then it can have subpart. But what will happen this people, a client who want to do trading, they will find out some other instruments to trade. What we believe is that people who are trading, they have certain allocation towards speculation risk. They have some risk capital. So that is going to stay in this market. Which instruments they are going to use, what expiries they are going to use, that all depends based on changes that the regulator will announce. What I'm trying to say, I don't see any consolidated volume moving out from this market.
Okay. Got it. Sir, last question on the AMC license. It's been -- the final approval is pending for a very long period now. Now this time gap is possibly the longest for any of the applicants, what we've seen. So is there any -- so what's the challenge out there that we are not getting the final approval? .
I think Hemen is the right person to take this question. Hemen, please?
Yes. There's a process for seeking the MMS license. So we -- I put it that we are in the final stages. And as a part of the process, there are different things from filling an application, getting intangible approval to getting the inspection done. So most of our things are in place. And as of now, we do not have any further comments from anybody to address.
We are awaiting the license. And as a general trend, I've seen, during the time of election, the overall process approvals is a little bit slowed down, okay? So given that we are done with the election process, et cetera, I think things should now pick up pace and we should hire our final approvals very soon.
The next question is from the line of Ajox Frederick from Sundaram Mutual Fund.
Sir, you mentioned that the dates of expiry decreasing will not have a major impact. I'm just trying to understand that, sir. Can you please elaborate on that?
See, as I said, that if you look at customers who are coming to the market, they have some allocation of capital or training trading or investment and all that. I do not think that a lot of this going to change. Even if like there's a weekly instrument or a monthly instrument, it is stated on daily basis.
So we believe this customer, instead of trading expiry contract, which was available daily, they are still on track, which may expire after a month. But for them, what is important to take a position on the day basis or 2-day this is a period basis, that options are available. So in that sense, whatever content wallet share they have for trading purposes that will remain in this market.
You're saying that instead of the last day, we should to manage [indiscernible]?
Yes, exactly. And we have seen our experience is that when a customer trades like 1 day or 2 day prior to expiry, they, in fact, move lesser times of amount. So what I believe is that, that extends their life in the market.
Understood, sir. And sir, second question, you also mentioned about pricing elasticity. But if you look at the market, we're all around 1 large players pricing. And therefore, you think the large player moving will directionally indicate where we will end up with.
All large players you say in this market right now is driven and expanded by large 4 or 5 players. So unit-wise economy of every player is safe. In fact, we are far more efficient, but taken every efficiency of this industry. If we are impacted by certain percentage and we try to use that lever of price, everybody would be impacted in terms of unit-wise pricing. So that way, I feel when I say elasticity, customer does not mind paying few rupees extra per order or paying for that segment and all that. What is important for them, they should get this service on this platform.
When they are paying in any kind of like contract, they take a calculated call for them. In fact, they don't mind paying more. But what is important is that are they getting service? Are they able to associate with the particular brand or taking investment purpose? So that way, Angel One is fortunate in terms of great efficiency and great brand value for people who want to come to capital markets. .
The next question is from the line of Nidhesh from Investec.
First on the timelines for the launch of blade products as well as fixed income products. What are the timelines when we should start seeing some pickup in that?
Yes. Great question, Nidhesh. I would ask Saurabh to answer this. Because just to brief you that we are seeing a very positive trend in that. We have completed our integration with our platform. I think Saurabh would be the right person to give you more information on this.
We are currently in a beta on the credit product side, we have integrated with the lender, we should be integrating with 3, 4 more lenders in this quarter. And this should largely be out of our data by the end of the quarter. And in terms of traction that we are seeing on the product on the platform, even though we have opened it up for a very insignificant base of our overall KYC customers, we are seeing great positive traction on the credit product side.
Again, on the fixed income side, we are in beta. We have made it live to A select audience base. By the end of the quarter, we should have rolled out to our entire audience base.
Okay. So by the end of this quarter, Q2, both these products will be tight for all customers?
Yes.
And secondly, what is your strategy in Wealth Management? Because I see that we are targeting all customers across income levels. But our capital customer base is becoming more in the mass category of customers. So why are we targeting the UHNI customer segment, which is very different and the entire investment supplier will be quite different and have very low synergies with the existing platform every customers that we have.
Wealth to our strategy that we believe that we have to sell all individual needs when it comes to capital market. And there is a segment of investors, which we feel that can benefit by combining technology and people with domain knowledge. And we have got a great team of co-founders who we believe that they, first of all, have a domain knowledge, and they understand importance of technology.
So I would like [indiscernible] to answer you on this wealth management which area they are targeting. And just to give you a brief that we have seen a great response in terms of attracting talent. So we are very optimistic in terms of achieving great content like business through this vertical. So [indiscernible] over to you.
So the third question is that we are seeing a very, very strong tailwind both in terms of the emerging HNIs and HNIs that the country fee. And some of us who have joined the team have had a number of years of experience in managing the money for HNIs and the clients. And that's the domain that we think we will be able to bring to the table very strongly.
And as Dinesh rightly answered, I think in order to reach out to a large number of growing emerging HNIs and HNIs across the country, I think the need of having a very strong technology platform in place to be able to reach out to those many customers is going to be essential. And I think that's the synergy that is really strongly looking at.
No doubt, the market returns is providing great opportunities where Indian investors interim in terms of taking risk and deploying money into financial products is also growing. So I think it is a combination of all 3 pillars, a strong domain scheme and a strong technology platform. And of course, ours is meant to be an omnichannel platform. There will be additional relation changes who will also be reaching out to those set of customers. So I think those are the 3 strong pillars which we think that the SMA needs can be fulfilled the best, and that's what we are going to capitalize on.
Just a clarification, are we also targeting S&I segment individuals with a INR 25 crores plus of that or life segment in?
Yes, we will be.
The skill side and the platform requirement will be very, very different across all 3 categories, 3, 4 categories within in this segment. So -- and what is the investments that we have already made in this business or in terms of team building?
Like you want to investment that we have done.
I want to understand the operating cost that is increasing on -- the employee cost that is increasing, how the trajectory will be? Are we fully invested in wealth management, asset management? Or we will see further increase in the operating cost from these businesses?
Vineet, if you can just take this question?
Sure. So as I communicated in our last earnings call, the impact of the new businesses, the integration of the new businesses in the overall operating margin of the consolidated entity will be about with 1 and 1 and 100%. So this is going to be there. This quarter also, the expenses that we've incurred towards the new businesses has contributed to about 0.6% of the overall operating margin of the business.
So 60 basis point of revenue is being -- is the investment in these businesses, in the cost of these businesses as of now.
I was able to get your question, if you can just repeat the last one. .
Yes. The clarification of 60 basis points of the revenue is the operating cost of these businesses in this quarter?
No, 0.6% of the operating margin of the broking business is the impact of the new businesses. So the new businesses have warned about 0.6% of the overall operating margin.
[Operator Instructions] The next question is from the line of Ankit Babel from Subhkam Ventures. .
Most part of my question has been answered, but just a clarification. Sir, you mentioned that your ROE will go back to previous highs in the next few quarters. Now we understand that there would be a big impact from 1st October due to this fab regulation on turnover charges. At the same time, you also mentioned that there are enough levers available to compensate that. But just wanted to understand, are those levers enough to fully compensate this loss without impacting your overall growth and client experience?
Ankit, as I mentioned that there are enough levers to offset this increase or maybe benefit that would be withdrawn. But what we are looking at is that, as I said, that size that we have in this industry, our efficiency is better than average 4, if I take an average of all 4, 5 digital players. So whatever impact we see in terms of unit wise cost that can be easily offsetted with using all that levers.
Okay. But to compensate this current loss and any future losses, which might come due to change in regulations, is increasing the brokerage rate option available? Will you consider that?
Yes, definitely. This is what I am saying, that we are waiting for management on other things. We'll evaluate what kind of impact it can have on volume. If you see certain impact, which needs some correction in pricing also, we would definitely do that.
Okay. So lastly, as investors, should -- is it fair to assume that going forward, you will maintain this 47% to 48% kind of operating margins in the coming years without impacting your growth?
After the capital raise, Vineet, if you can just like answer this? Profit and capital ROE will be different.
Not ROE, EBITDA margins.
Yes, EBITDA margin generally we would bounce. You see today also as our margins are quite decent enough. So there are lots of levers which we can play in terms of looking at new regulation, what kind of like inflows we see in customer coming new to market and all that. So it's too early to say, but as I said, there are lots of news including looking at increasing our price, which are available.
If you look at variable costs at that, that we do there lots of things that we can use to get this OPM back. So we are very confident that we'll be able to, in a few quarters, we will come back to this.
The next question is from the line of Gautam Trivedi from Nepean Capital LLP.
This is to Dinesh Thakkar. The figure that stood out...
May I request you to use your handset, sir, you're not clearly audible.
Yes, I'm using my ear pods. Can you hear me now?
Yes, we can hear you.
Okay. So 1 of the things that stood out for me was that your client funding book is up [indiscernible], as you mentioned, to INR 234 billion year-on-year. And then your exposure per client is also up 80% to INR 1.8 lakh. So both these numbers obviously are much quite bigger on a year-on-year basis, quite staggering. My question is, do you think that the market at this point is overheated?
It is very difficult to say when market is repaid. I think best of expert would not be able to say when market is oversold and all that things we have been tracking market include you all in 30 years for we have predicted the call at the bottom.
I think looking at fundamentals definitely, everybody is bullish. We don't feel that it is over retail. Lots of consent value there is still in the market, and we are expecting lots and lots of inflows, retail as well as in all that. they are not an analyst tracking the market, but what we been sale, the best phase of market we have took on.
Fair enough. And 1 last question from my side. On Slide 25, on the extreme right, you've got the client funding book station. And there, it says 84% of your client funding book is blue. So the blue color says 0.1 million. So what is that 0.1 million? Is that the average contract size AUM of the customer? What is that? How do I read that?
Vineet, if you can take this question.
The line for Mr. Vineet dropped, sir. I'll just reconnect.
Okay. Yes. Anybody, like Amit or somebody can. We need to take this question. Slide #25. We question, would you repeat it?
VIneet, I'm happy to repeat the question, if you're back on.
No, one second. He's not back on.
Ladies and gentlemen, we have the line for Mr. VIneet connected. Sir, you can go ahead.
Vineet, do you want me to repeat the question?
No, I understood your question. So what this bar, which is deep blue, it denotes you that the 80% of our total book comprises of clients having exposure of less than INR 100,000.
Okay. So that's the -- so that equates to the low per client exposure of INR 1.79 lakh. Is that...
That's the average. The average across the entire book is about INR 1.8 lakh or INR 180,000. 84% of this book is about less than INR 1 lakh. And then 9.6% is between INR 100,000 to INR 500,000, and about 6.4% of the book is between more than INR 500,000.
Understood. Okay. Just 1 question for Mr. Thakkar. You mentioned that you are postponing your dividend, you don't want to declare for the next few quarters to conserve capital. What are you -- where is that coming from? What's the concern? Or why are you doing that?
If you see that we have -- we are still dividend, we have raised the amount because we feel looking at the growth of this industry, lots of capital is required to support this growth. So we would like to watch the trend for a few quarters and then again start coming back to give dividends.
The next question is from the line of Vijit from Kotak Securities. .
Sir, I have a couple of questions again on the MTF book. One is that how should we see this book growing now that with fresh capital, you're already seeing the impact on growth, but what's the untapped potential with our current customer base and where can we take it to the next 6 to 12 months?
We are seeing a good traction on MTF in direct business as well as assisted business. So if we -- like we feel that growth in this segment will continue at a decent rate. Devendra and Mishan, if you can take this third question in terms of... .
This is Devender. So on the MTF front, there are 2 big changes which are coming. Obviously, the funds coming in has allowed us to expand our base of users who we were restricting in terms of usage because the same thing so that I expanded, which has allowed large customers or large ticket also to comment. Secondly, there are major innovations is that we have done on the product front, where we have introduced or product base, we people can actually have a complete experience of an it was not available earlier as well as we have introduced some journeys where clients who are trading or buying investments, we have come in with journeys where if there are store on funds. We are giving them an option of using MTFs, which we were not doing earlier, which has now obviously allowed label to know generally people who are investing in the market to come ahead and use these funds for their investment purposes for short-term purposes.
So combining all those activities has resulted in the overall increase in NPL that you're looking at, which has got to our player today. So we continue to look at now going ahead as well. This will continue as we are bringing more innovations and more simplified products for our customers to use this in a much more higher customer experience-oriented base, which is what is now driving this growth at this point of time.
Further to add Ashanti, further to add what Devender mentioned. The market remains to be highly robust. The overall book at the industry level is at about INR 73,000 crores. And we believe that from here on, we would definitely be seeing a 50% upside in the next 6 to 12 months, if that was the question that you have.
Got that. And just qualitatively, I guess, the customer profile of MTS clients would be somewhat different from the rest of the client base. So if you could give us some color in terms of what are the average patients that hold with us as a profile vintage?
We don't look at it. But generally, when we have looked at data, we have found that they are very similar to our investor category and trading data. We don't see a difference in terms of their profile and general trading clients or investing lines. We don't see that difference in terms of age and [indiscernible].
Okay. Got it. And one last data question is that what's the revenue share for the AP clients who are borrowing through MTF? What share of interest income is getting shared with the APs?
I don't think we share that data. Vineet, do we share this data? .
No, we don't.
We don't share this data.
The next question is from the line of Ashish Kol from Invest Sari Portfolio Management LLP. .
Yes. I'd like to ask that while I understand that there was not much of an impact when the size is reduced, but if the lot size has significantly increased, which seems to be what [indiscernible] trying to do indicated numbers given in one of the articles indicated that is going to as much as 20 to 30 lakhs.
Now clearly, I understand the estors have a certain amount of capital which they want to use for trading. But if the lots are those 2 back along, then how do you mitigate that risk? And what is the kind of impact you would see on your business?
It's very difficult to say that what CB is going to introduce. What we understand would be certain measures, which I think that we have seen no size from, say, like flat by INR 15 lakhs, INR lakh. And we did not see much of an impact on revenue. I'm not saying across 8, 10 years. So size has been changing time and again.
So undetermined it is very kind of like different than what we are thinking. We cannot comment on what sold SEBI would come as a final figure. But whatever discussion we are having and what we are understanding does not seem to be very substantially high. But even if there's like your range, what you are saying, I don't think it is going to impact in a big way. Because we have seen that as even loss size increases, then to retail made tail less.
But what we have seen is that capital allocation towards trading does not change across life sell. I've seen this industry since last 25 years, whatever leverage model the save customer has certain allocation of their capital towards this. So if it is [indiscernible] that becomes very kind of a different number. What we are discussing, what we are talking would not have a significant impact. And whatever little impact it will have, I think we have enough elasticity in price to offset and take care of that.
Okay. So Okay, I guess we'll have to wait for the numbers to come in.
Yes, exactly. So we have to wait for all this announcement, then will be the right time for us to comment on that.
The next question is from the line of Sanketh Godha from Avendus Spark.
Last quarter, when we announced the results, we said that our EBITDA margin will be somewhere between 33 to 44 percentage for FY '25. Today, it is around 37. Means if I adjust for the IPL cost, it is closer to 48. So is it fair to assume that in subsequent 3 quarters, maybe in fourth quarter, we will still have an IP impact again, but we will operate in that 47%, 48% EBITDA margin and end up with the year at 43.5% or 4% kind of number. How do I look at the EBITDA margin story to play out?
As we mentioned that we have to wait for CV announcement, there can be impact for 1 or 2 quarters until the time we adjust to new announcement and all that. But overall, if you look at status come to IPL first.
I still would have a long-term control benefit. So it is not right to say that, okay, with IPL, I believe that may impact or benefit of IPL we see in the block of 5 years. So if I portion that is, I don't think -- at is going to impact that growth in a big way, but when we are spending in that quarter, the impact is seen -- now coming to like OPM across FY '25. We believe, as I said, that when we evaluate this announcement, which is to come, already, we know about this true to label and all that. For that, we are very confident that lessons can be used to maintain our OPM. We do wait for SEBI announcement. And then it's the right time for us to tell about FY '25 OPM because these announcements are expected to come, say, in a month or two.
So it will take some time for us to reach in a way we do evaluate in terms of what changes we have to do in our business model, what levers would use to offset any impact if that is there. So a bit early to say. But overall, I can say, as a business model, we would be maintaining this OPM of 47%, 48%.
Sir, comment on that. Yes, got it. But the need is safe to safely assume that any lot size change or any regulation with respect to options, which will come, you are in admitting to the point that it will have an impact on the growth and therefore, predictability of the profit margin will be difficult to tell at the current venture.
No, in some case, what I'm trying to say in the announcement comes, we have to evaluate it properly that exactly what would be our can like strategy for that. So that any time it takes 15 days, 20 days or a month, quarter is the 3 months. So we would not be very impulsive in terms of reacting. We have to evaluate each and every.
We are more of a company believes and data. We look at 5-year data, we check what would be an impact on customer behavior. If it is temporary short term or medium term, so I'm commenting on that quarter when announcement will come, that quarter may not reflect our right OPM picture.
But if I look at overall, what we can achieve in terms of business model, if I take 2 quarters here and there, we would be able to restore back or come back to 47%, 48%. That is my point. It's a big announcement that we had to wait to evaluate. We cannot be impulsive we. Can prepare or what we don't know.
Got it. Got it. And on margin trade funding book, you said the industry size is INR 75,000 crores. So we are brought back to 5% market share. If I do the divestment, I think the largest player is somewhere around 20% plus. So just wanted to understand, means it needs to drive the margin trade funding book. Means you will we keep on focusing on cash market and cash [indiscernible] market. So is it fair to assume that when you say tweaking of the charges, you might not touch the cash delivery because it got its kind of an indirect support for margin trade funding book, which is more profitable. So can one make that conclusion? Or do you think both are independent and margin [indiscernible] and cash delivery targets will not more hand in hand?
Something I can tell you one thing that okay, whichever segment was subsidized and all that, that will not remain. And customers are okay to pay for a cash market, they never said no. We felt that we have in a pen, we continue to kind of like location.
The reason I'm asking this is that last September only, we took that call of reducing meaningfully lower compared to the industry competition. so now we are coming back and increasing the charges.
We are getting confused. That was intraday. This is delayed. So in internal charges, we realized while going digital, we distorted that portion of somebody is trading in a low current ticket size. We need to give a coming like brokerage, which that person would be able to kind of like trade. And as we charge too much on that contract, we will lose the customer to traditional brokers see, by definition, discount working on people like us using a technology platform has to be lower than traditional brokers. That segment, that pricing, that ticket size, we were higher. They we realized we reduced that price to INR 20 or 0.03, whichever is lower.
So that is not connected to the care segment what I'm discussing right now. And this charging on delivery will have an impact on margin funding, we don't believe when a customer is kind of taking delivery, they are okay to pay charges. But only on our own, we are cutting 0.
Got it. And this MTF book, I just wanted to understand which customer segment is driving. It is direct or assisted sales people, customers are predominantly driving our MTF book.
Growth, we are getting growth from both the segments, as Devender and Mishan told you that both those books are growing at an equal rate and there's a good potential. So right now, like already we have seen a good growth. So kind of an adoption and customer like liking, margin trading platform on our -- margin trading service on our platform is really like they appreciate it and they use it also. So what I think many times, I suppose I have seen in my life that if option goes higher, many of those customers move to cast the platform, the leverage by the margin.
Got it. Perfect. And lastly, sir, on the offline business, using your authorized person and getting into distribution, I think I did not touch upon on that point. Can you just tell us the progress -- and when we can see revenue metalization happening in that plan?
When you're saying assisted [indiscernible], right?
Yes, assisted business.
Authorized a tale distribution in terms of mutual other products, we are seeing.
Yes, right, right.
Okay. Nishant, do you want to take this question? Yes.
So as Denis had mentioned during his initial opening remarks, we have recently taken live the journey for DIY on-boarding for mutual fund distributors. And the whole idea is to create a disruption of sorts and provide these plays a very potent platform, which they can use to one, attract their own clients and also grow their business into different other revenues, which we already offer.
So I think with this going like, we are very confident that we would be able to attract a very decent size of mutual fund distributors and eventually panning out into a decent growth as far as our AUM and mutual fund clients are concerned. And the approach also is once those kind of customers come by who may have a mutual fund first approach, we would like to use that funnel to also cross-sell multiple other products, including broking and our internal data is suggestive of this trend.
Got it. And have you finalized what will we be sharing between you and MFD, I mean, 70, 30, 60 to 40. Anything concrete is metallized now?
No, we don't disclose that.
The next question is from the line of Yashodhan Nerurkar from Edelweiss Mutual Fund.
So firstly, I wanted to understand since you have a plan to incorporate a wealth management division, I wanted to understand how are you looking to scale that up Because, I mean, I'm asking because I mean, most of the client base is somewhere below 30% on an average. And the opportunity to cross-sell the product also is taken out because of the planned age. So how exactly are you planning to scale that business?
Yes. First of all, we have formed the company. It is not we are planning. Already, we have formed teams in place. And I would ask wealth management team to reply on this.
Yes. So the plan here is basically to build solutions for emerging HMI is and antagonizes I mentioned earlier, we already have got the team scaling up. We already, basically, 3 broad directions in which are getting built. There is an investment team that is going to be looking at all kinds of investment solutions, which cater to the requirements of the S&I customers in genre. There is a technology team additionally, which is setting up the technology platform because the requirements of customers are different than the required of customers that currently are offered on the Angel One platform. So there is a certain technology team, which has already got set up.
And thirdly, there is -- as I mentioned earlier, there is an omnichannel approach. We are also going to have relationship leaders, who are going to be approaching many of these HMI clients because HMI clients do you like to have interactions with individual relationship managers because the discussions can go beyond pure execution of financial investments or questions around various other aspects related to their wealth management needs.
So it is a comprehensive platform, which is getting built we already have got registration with AMC for distribution of mutual funds. So to that extent, the building blocks are starting to come in shape or we have a plan where the old business will continue to keep adding up and the teams will continue to keep getting built to address various kinds of requirements and needs of wealth management customers.
Sudan, if I may add on your point about our customer base at Angel and if there's a potential to cross-sell. And the point is that we have seen our customers also evolve. The number that you mentioned in terms of the age is actual median age, but there are a set of customers who are on the higher side of the median age and basis our data analytics, they also fulfill some of the parameters that the well team is currently exploiting.
And therefore, to that extent, we will be enabling the more as a tech well tech kind of offering to those set of customers because we believe they are far more digitally savvy at the same time at the right age and the right value bucket. And do you see that over the next few years, 5 years to a 10-year bucket, a lot of our existing customers will eventually evolve there. And this is the beauty of our model because even in any other product, we believe in setting it up at the right time so that we are not too ahead of the curve. At the same time, we have the platform ready, so that whenever there is any change in the business strategy, then we have already will take care of it. So that's the point to answer about your existing customer base of Angel One.
All right, right, that's very helpful. And secondly, I just wanted to understand, I mean, do you guys keep a data as to the number of people who are trading the derivatives. They're trading on daily options or monthly or the weekly options. So do you bifurcate these sort of figures? And the revenue contribution from each of them, do you categorize them in different buckets as such?
See internally, we do lots of content marketing, but this being very competition-sensitive data, we don't disclose all this.
Okay. Okay. .
I'm just doing all this job.
Okay. Okay. Sir, just 1 last question. Since earlier participant asked you about your -- the margins. So I understand there are certain expenses which are not in your control and are dependent upon the multiple regulation that may be coming out. But in costs, which are in your hands, I mean, in terms of scaling up the certain initiatives which we have been planning. So in terms of moderation of those expenses, do we see them moderating in Europe or they'll continue to be on that elevated front because of the investments you are making in different new initiatives.
Investment in new initiatives is come from like long-term cost. So definitely, there is no slowdown in that. In fact, we are seeing quite positive kind of like signals we can from all new businesses, including wealth management and AMC. So that investment will continue.
Now for information already, we have taken that cost, and we're yet to see revenue from all those vertical. But looking at this initial response actor in terms of affecting truck and on talent and all that, I think we will continue to be fully invested in that on scaling up as we always see cost of acquisition to lifetime value. I believe lifetime value, with all the changes, is not going to change. Hence, our strategy in terms of scaling up also will remain as it is.
The next question is from the line of Chinmay Nema from [indiscernible] Capital.
I just have 2 general industry-level questions. So firstly, active NSE clients is a metric reported by all the companies to represent their market share and for market sizing. Just want to understand what percentage of active NSE clients is usually the ones operating in the F&O segment. So basically, how representative it is of the majority of our business. That's the first question.
And secondly, could you provide some sense around the value and volume growth of the industry? Basically, is it that more people are entering into Sorting that is what is driving the growth? Or is it that the same people are putting in more money into it, some sense around the [indiscernible]?
First question on active customer base, that does not represent our volume on [indiscernible] because these are the customer base who are just traded once in a year. Our experience is that any customer when we acquire, they may not be active in the first year, but they later on become active on other segment. So that way, there is no straight correlation between active customer base and active customers on F&O segment.
Second, on your question was on value and volume growth. See what I have seen, the customer has a certain kind of like appetite for trading in the market. So what is important for us that, okay, whatever a customer has a capital in terms of trading or investment that has remained almost constant. I don't see much of a change in that ticket size.
So exposure for customers, if that take even after this volume has increased on [indiscernible]. If I take customers like 2-year, their ticket size or exposure in F&O market was a volume that we are seeing growth in premium or F&O., it is because of more number of customers coming to the market. So overall ticket size of a customer remains same. I think this whole sales that's involved, it is because people across India because of access to capital market -- they all are teammate. We look at growth in console premium market and growth in customer rates almost goes hand in hand.
Got it. Got it. And lastly, you've been in this industry for a long time. Behaviorally -- so typically, what's the behavior of this customer segment? During times of market downturns, I mean, clearly, the last 4 years markets have been a major upswing. But in your experience, objectively, what happens during periods of downturns?
We have seen during downturn previously because market was shallow, mostly retail were participated through kind of like urban and d[indiscernible] the same metro population. We were unable to even control like selling from FIS, even small selling in a year like INR 50,000, INR 1 lakh crores, we had a big disaster in market.
So what I am seeing is once [indiscernible] before digitization and after digitization. After digitization, a new set of customers, young, where social media savvy. They understood virtue of equity. So what I'm saying if you look at downturn, there is not the downturn has not opened. If you look at COVID, there is a big downturn. There are loss of content pockets where market has collected a lot.
That correction, what we saw retail bear was different than what it used to be in every downturn, they have really bought shares. I'm not talking about just trailing they've bought, they have really acquired their created AUM at every downturn. So right now, appetite of people who want to build AUM is so large, and they are so kind of unlike tell me in terms of that wealth can be created only through investing in equity or anything about SIC, mutual fund [indiscernible]. So we sell on the view as they are very kind of like aggressive. They just want to trade in F&O.
But if you look at buckets of investors who are investing Its cash market in the same profile. So I believe in downtrend, they're going to buy because they have an appetite to build their if the market is available at the right valuation because this generation gets information or cancel exit from social media and they're ready to put that saving on they usually used to put in bank in equity market.
And sorry, [indiscernible], I have to also help you see some attention to Slide #37 of our Q1 FY '25, where we have given some representation around what happens to retail participation when the market falls by 5% or more. That's a very useful slide. You will see it over a longer period of time, it doesn't impact. So that kind of addresses your question, too.
The next question is from the line of Aravind from Marigold Wealth.
My question regarding the ships that are being registered on your mobile app or the platform. as Mr. Thakkar said that 0.5 million ships got registered in June and almost close to 1.5 million for the quarter. So first question is that what is the average size of this? And second one is, what is your current AUM on the mutual fund side? That's it from my side.
First of all, we are seeing a good traction on SIP, both from direct business and B2B. I would like Saurabh and Nishant to take this question. .
So far, we don't disclose the AUM on the entire book because the idea is to get more and more customers used to investing in SIP and start getting retained on the platform. In terms of the average set value, we have seen a consistent increase in the state over the last 1 year since when we started the journey. And we will be in the range of roughly INR 100 per SIM, per new SIM that is registered.
The next question is from the line of Satya from [indiscernible] assets.
So first question is on the side of the NPL. So we are seeing that Pat and regulators continuously heading on the revenue side of the entire market. So do we see any changes in terms of our MTF book as per the new norms because many of the stocks will be out of the list now?
Bhavin, you would like to take this?
Yes. See, this stock is not related to MTS. MTS there is actually a regulation any stock which forms part of Group 1 securities, MTF can be done. What has taken away by MSE is the collateral that can be repledged to -- that is a clearing corporation, that they will not give any exposure towards the margin of December.
But as far as MDF is concerned, this has nothing to do with that circular. So MDF would continue with risk. And as per regulation, as I said, Group 1 -- all Group 1 securities are allowed to be funded through MTF groups. I hope that answers.
Yes. So do we see any impact on our due to this? That was actually INR 100 crores. .
No, no, nothing. And the question on how the regulators are seeing this space. So this NPA that we are referring to is actually a regulated product, and it is done in the books of broking itself. So far as this particular segment of the business is concerned, we don't see any challenge there because this is a rightful way to borrow money on the back of securities with a certain percentage of margin and all of that from a risk management perspective is a very well institutionalized product in the segment.
What is also important here to note from our point of view is for us, we are the only digital player who has this product enablement on our digital platform. So to that extent, it gives us an edge when it comes to any pricing change that we need to introduce and if there is any leverage impact on a customer, the customer want to actually use the equity cash market as a leverage, then we will be the ones who will be benefiting from it because we have a well institutionalized digital journey already on the platform.
And therefore, the only other player that we compete with here is the bank-led brokers, who have a significant amount of capital. I wouldn't say infinite, but significant amount of capital. So it's a function of capital. But from a digital enablement, we are very much there because we have been in this business for very long.
Secondly, on the lending business. Can we -- can I get an overview on what kind of lending business are we looking into foray into? And what kind of RBI approvals have we taken or other regulatory approvals we have taken?
Saurabh, if you can take this.
Sure. So in terms of the lending business, we are looking at being a distributor for secured, unsecured products, credit cards over time, right? As of now, we are in EBITDA for unsecured PL lending right now. In terms of RBI approval since we are acting as a distributor, we don't need too many approvals. Having said that, we act as for the lenders we distribute for. And we are compliant with respect to TV regulation on what we can do and what we can do with respect to the distribution business. So that is in the regulations.
In terms of the business thought process, the idea is to enable more and more lenders to participate on the platform and to give the best price and the best offers to our customers. both on the unsecured and the secured side. Over time, we are heavy on the unsecured side for now and gradually also build a secured book.
Okay. So we are not -- like are we covered in terms of exposure to regulatory rates from RBI in this front? So right now, our business would be small. So as we explained, are we working continuously to ensure that we don't face any regulatory kind of headwinds in terms of this lending that's going ahead?
Yes, since you're acting as a distributor, there is no real regulatory headwinds at our end. Having said that, we are more than 100% compliant in whatever we do or attempt to do on the distribution side.
Okay. And lastly, on the Slide #12. So there, we mentioned that how -- which clients require as for the year-end, how many clients have transacted. I think last we mentioned was FY '22, and I think we are in FY '25. So don't we think that FY '23 number would be good to portray like how many clients have transacted to last FY 12 months?
Amit, if you can take this 12 months?
Yes. So here, the whole objective was to show that when a certain cohort of customers is longer time on the platform, how does those customers behave over a longer period of time. So that's really the objective.
And therefore, with FY '25 going by, finally, when the year goes by, we will essentially be updating both for FY '21 and FY '22 to only demonstrate for those cohorts of customers is another year goes by then how will that customer behave on the platform.
I think -- and more importantly, the objective here was to say that whether it is an ethanol customer or not, eventually, all customers begin to build equity wells over time. So that's the objective of this slide.
Updating it for FY '25 means that we are -- I mean we are going to opt only for the existing customers. When I go to see it as a new customer cohort and what that impact will be in a year or 2. So please look at it with that context in mind, if I've answered your question.
No, I totally agree. I just wanted to ask. So FY '21, '22, okay, fine. Now what about FY '23? The clients that we acquired in FY '23 is ranging to around INR 47 million, right? So what about that? How many percentage of their clients have transacted till FY '24? Or maybe if we get the real number for Q1 FY '25? That would be really [indiscernible] in terms of value.
We will evaluate this at the end of the financial year and take a call on of what needs to be presented then. Again, the point still remains sacrosanct. The objective is to see the customers maturing on a longer period of time. So even if we look at in FY '23, as of the end of FY '25, it will be less than 1.5 year old. Because remember, a customer is acquired throughout the financial year. So not all customers become active in the second year any which way.
So that is never the objective. So that's the point I was wanting to make. Any which way, we will revisit this data at the end of the financial year.
And if I can ask you a last question. So on the LTV, lifetime value of a customer, do we see any changes on that front because now the essential part could be -- the revenues from the essential part could really change and we might be looking into getting from equity exposure of the client. So equity exposure totally depends on the kind of capital that the client can bring in. So do we see any changes on the LTV of existing client base and the new client base that we have?
No, I don't see any change in LTV. In fact, if at all, I go with my past experience, if a client is creating less and investing more, LTE will increase. But then what happens is that when they lose less capital, dedicate more capital to capital market. Because when they are burning it fast, they are unable to understand market. So a lot is of their wallet share towards this capital market takes time to come in.
So my ability is there would not be any change in LTE, but this may get extended because now they are taking less. We look at like cost of equation and what can be a TV we can generate from customers with whatever kind of like experience we have and what data suggests, it appears there would not be any impact on LTE.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Dinesh Thakkar for closing comments.
Thank you for joining us on the call today. I hope we have answered your queries satisfactory. Should we require any assistance, please feel free to contact Hitul Gutka, Head of Investor Relationship; or SGA, our IR advisers. Have a good day. Thank you.
On behalf of Angel One Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.