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BSE Ltd
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Ladies and gentlemen, welcome to the BSE's Q1 FY '19 Earnings Conference Call. My name is Leslie. I will be the moderator for today's conference. [Operator Instructions] Please note that this conference is being recorded.I would now hand the conference over to Mr. Yatin Padia, the Chief Investor Relation Officer, BSE Limited. Thank you. Over to you, sir.
Hello, everyone, and welcome to BSE's Earnings Call to discuss the Q1 FY '19 results. This is Yatin, the Chief Investor Relation Officer. Joining us today on this earning call is BSE's leadership team consisting of Mr. Ashish Kumar Chauhan, Managing Director and Chief Executive Officer; Mr. Nayan Mehta, Chief Financial Officer; Mr. Neeraj Kulshrestha, Chief of Business Operations. Do note that the conference is being recorded, and transcript of the same will be available on our website. The financial results and investor presentation are also available on our website.I would now request Mr. Ashish Kumar Chauhan to give a brief overview of the company's performance followed by Q&A session.BSE does not provide specific revenue of earnings or earning guidance. Anything said on this call will be -- will reflect BSE's outlook for the future and would be construed as a forward-looking statement, must be reviewed in conjunction with the risk the company faces.With that, I would like to turn the call to Mr. Ashish Kumar Chauhan.
Thank you, Yatin. Good morning, good afternoon, and good evening to all of you, wherever you are.We are happy to inform that BSE successfully completed its buyback program. The buyback program, commenced on February 1, 2018, and completed on July 9, 2018. BSE got back 20.19 lakh equity shares on the average price of INR 822.12 per share, amounting to INR 166 crores. BSE's issued capital stands reduced by 3.7% after the buyback to INR 10.51 crore shares.The BSE StAR MF, India's largest mutual fund distribution system, continues to grow at a brisk pace. We are delighted to inform that the BSE StAR MF distribution reach and network has grown over 10,500 registered distributors and over 200,000 considering the employees and business associate of registered distributors and brokers on the network, spread over 3,000 towns across India. BSE's StAR MF has experienced a growth of over 540% in last 2 years, processing over 25 lakh transactions per month, equivalent to 78% of the annual transactions of financial year '15, '16.On June 11, 2018, BSE processed over 4.72 lakh transactions on a single day, a record high. Again, on 7th of June, 2018, and 16 July, 2018, couple of our mutual fund distributors, Funds Mitra, Providential Advisory, et cetera, reached at 651 and 11 -- 18 SIPs, respectively, individually, on BSE StAR MF platform on a single day. More than 99% of transactions on BSE StAR MF are retail categories. StAR MF now contributes, as estimated, almost 50% of net new inflows in equity schemes under retail category for new customers. And BSE has successfully created a digital demographic that is redefining the mutual fund distribution in India. StAR MF is the most neutral infrastructure for all stakeholders in Indian mutual funds distribution ecosystem, be it investors, distributors, AMCs, RTAs, et cetera, without any conflict of interest.As of the business update, the segment has seen a phenomenal growth of 152% during the quarter ended 30 of June, 2018, on a year-on-year basis. The average monthly number of orders processed during the quarter ending 30 of June, 2018, were 23 lakhs, as compared to 9 lakhs during the quarter ending 30 of June, 2017. Total investment transactions made through StAR MF for the quarter ending 30 of June, 2018, were INR 39,125 crore.BSE continues to be market leader in this segment and the market share for the quarter ending 30 of June stood at 82% in that single segment. BSE started receiving fees from all the mutual funds for its services in StAR MF platform. You know it's a token amount for the time being, but nevertheless, it's an important milestone.The success of this platform has set the base for BSE to focus on more think tank activities, which are in nature of distribution platform. As informed, in our earlier call, BSE and NASDAQ listed Ebix has signed a memorandum of understanding to set up a joint venture, BSE-Ebix Insurance Broking Private Limited, to develop an insurance distribution network in India. Company has applied to register with IRDAI, that's the regulator for insurance distributors, and will commence business operations after getting necessary approvals.BSE launched platform for electronic book mechanism, BSE-Bond, for issuance of debt securities on private placement basis on July 1, 2016. SEBI revised the threshold limit downward to debt issuance or INR 200 crores in private placement basis with effect from 1st April, 2018. Issuers like Reliance Jio Infocomm, Dewan Housing, et cetera, has successfully raised INR 46,411 crores as for the revised guidelines of BSE-Bond platform after the rollout of new circular.During quarter 1 of financial year '19, 44 issuers have done 110 issue of bonds. Any bond issuance is a preferred choice for companies to raise debt capital in India. During the quarter ended June 30, 2018, amount placed on the BSE-Bond platform was INR 46,411 crores, as compared to INR 47,853 for the corresponding quarter in the previous years.BSE SME platform has 256 companies registered on platform as on date. 19 companies that are listed on this platform during the quarter ended 30 of June, 2018, as compared to 9, during the quarter ended the 30 of June, 2017. BSE's market share and listing of companies in the SME segment stood strong at 61% as of 30 of June, 2018. With respect to listing of securities, the number of company listed with their equity capital on our exchange, so available for trade are 4,021 as on date. It is the highest number of companies listed on any exchange in the globe. Market capitalization of companies listed on BSE currently is INR 150 lakh crore. The average daily turnover in our Currency Derivative segment grew by considerable 33% to INR 31,418 crore in quarter ending 30 of June, 2018, from INR 18,148 crore in quarter ending 30 of June, 2017. BSE's market share in Currency Derivative segment for the quarter and the consideration was 52% compared to 49% for the quarter ended June 30, 2017.In the Equity Cash segment, BSE changed on the basis of transaction charges from trade count basis to incremental turnover basis in group A, B and certain group of securities, with effect from July 1, 2018, based on market feedback. In the Equity Cash segment, the average day turnover in the quarter ending 30 of June, 2018, was INR 3,299 crore. The daily average number of trades was 10.67 lakhs.India International Exchange, a wholly owned subsidiary of BSE, continues to expand its footprint through various listings, product offerings and growth of turnover. In June 2018, India INX announced the launch of segregated nominee account structure with a view to further facilitate easier market access for foreign investors in the International Financial Service Centre at this city. Through this mechanism, foreign investors can become end clients of eligible segregated nominee account providers for trading on the India INX products. India INX continues to be a market leader in this segment, and the market share of the quarter ended June 2018, stood at 74%. We are happy to inform you that India INX has achieved highest turnover of more than USD 1 billion, highest volume traded of 58,000 on June 6, 2018, with accumulated turnaround of USD 56 billion. India INX had USD 447 million average daily turnover for the quarter ended June 30, 2018, a considerable 1,100% increase from the corresponding quarter of the previous year.India INX has 39 registered members, out of it, 30 are active. As on that note, 45 membership applications are varying -- in various stages of membership process. As on date, around 23 products have been introduced on the India INX exchange for trading in commodity derivatives index, derivatives -- equity derivatives and currency derivatives. The average daily traded turnover for the quarter ended 30 of June was 28,288 compared to 3,023 in the corresponding quarter of the previous year. India INX plans to launch a platform directly dealing shares of companies listed across the globe. The platform known as India INX Global IFSC will provide connectivity between India INX and foreign forces, and the partner exchange will execute all trades on behalf of India INX. The platform will grow a unique trading opportunity for Indian investors to trade in foreign equities. So we recently made changes in the regulations to facilitate transaction to unified exchange reaching from October 2018. In line with the -- preparing ourselves to launch commodity derivatives submission, BSE's already holding marked tradings ready for such products. Trading in commodity derivatives shall be conducted on the BOLT Plus trading platform, our new generation trading system.BSE and Bombay Metal Exchange entered into an MOU for the growth and systematic development of commodity derivatives markets and nonferrous metals complex. BME, with its domain knowledge and unique stakeholder ranging from importers, traders and corporates, will assist BSE in designing new and innovative deliverable products in commodities like aluminum, copper, zinc, nickel, lead, et cetera. The MOU has been signed between 2 companies as BSE will soon enter the commodities market with relevant industry inputs. Members of BME can take advantage of the expertise of BSE's educational programs, which are vital for any trade. The synergy will help in launching new and innovative products, adding more value to the existing commodities value chain and ecosystem. We are glad to inform you that BSE secured a trademark for its iconic building, Phiroze Jeejeebhoy Towers at Dalal Street. This marks an important milestone in the journey of BSE as the tower has been irreplaceable part of the soul of the city. BSE is honored to be recognized as a symbol of evolution of stock markets in India and its past through the trademark.Moreover, BSE will receive recognition as a designated offshore securities market from United States Securities and Exchange Commission. BSE become the first stock exchange in India to receive DOSM recognition and now joins an elite list of foreign securities exchanges that have been recognized as DOSM by the SEC. The DOSM status allows sale of securities to U.S. investors through the trading venue of BSE without registration of such securities with the U.S. SEC and, thus, eases the trade by U.S. investors in India.Coming to the quarterly financial, the consolidated total revenue for Q1 FY '19 grew by 3% to INR 166 crore from minus INR 161 crore in '18. Our operational income increased by 6% to INR 117 crore in Q1 FY '19 from INR 110 crore in Q1 FY' 18. Our income of service to corporate increased by 17% or INR 56 crore in Q1 FY '19, as compared to INR 48 crore in Q1 FY '18, mainly due to increase in annual listing fees and the listing processing fees. Income from security services decreased by 10% to INR 45 crore in Q1 FY '19, as compared to INR 50 crore in Q1 FY '18, mainly due to lower turnover equity cash segment. The data estimate and fee increased by 18% to INR 7 crore during the quarter.The company has received observations of saving in respect of inspection conducted for period 2005 to '17. The company has been asked to reimburse INR 14.27 crore to investor service fund and INR 13.72 crore to the Stock Exchange Investors Protection Fund Trust, along with interest in respect of certain expenses charged to these funds. The company would be submitting its response to the same -- to SEBI shortly, the same it present -- this considers contingent liability. As on June 30, 2018, the total balance lying in settlement guarantee fund maintained by our Clearing Corporation is INR 365 crore. On the same, additional contribution made by BSE in accordance with the earlier SEBI regulation is INR 20.32 crore, which would be offset against minimum required corporates requirement from time to time.With this overview, let we welcome you, once again, and invite all of you to question and answers. Thank you.
[Operator Instructions] We have the first question from the line of [ Sulivi J. R. ]
I do not understand the logic of investment banker buying the same quantity of shares day after day. There is no surprise element. It seems there is -- it only helps the punters. What is your reading?
I'm not able to understand the question.
Yes. My question is your buyback...
Okay. So this one about buyback? Okay. Basically, this buyback was done through the market, open market, not through the offer route. So in day 2, basically, there is a possibility that the investment banker may be -- sort of may get allegations that they are sort of supporting some days and not supporting other days and their volatility that is induced by this activity. And that's why it was decided that it will be bought, not only for the same amount from the day, but also in the amount -- same amount was bought in every 15 minutes, it was the same amount of bought, so that it doesn't end up creating newer volatility in the market.
But I'm not -- I mean, I don't understand. There's no surprise element. It only helps the punters, who keep buying and selling again, same back to you. Anyhow, that's your...
Yes. So pricing's a problem with regulations, right? So regulations cannot be surprising. That's why we being regulators, we'd like to be consistent.
No. Consistent doesn't mean helping the punters. Anyhow, I leave it to your...
[Operator Instructions] We have the next question from the line of [ Gopal Waig ].
My question to you, sir, is that quarter investment income has come down significantly from INR 46 crores to INR 39 crores. Can you please highlight the reason why that has happened? And also, I have a question regarding the announcement of -- I had a question regarding the currency derivatives in future segments. So how -- what steps is BSE taking in order to make sure that the revenue from the segment is consistently high in terms of total contribution to sales?
So you -- the first question is about investment income coming down, right?
Yes. Yes.
And second question is on the derivatives that bought BSE's plan there, right?
Yes. So how -- what's your strategy in terms of scaling up the currency derivatives and future business?
Currency derivatives, okay. So I think first answer will be given by Nayan.
So listen, investment income going down, it's more of a function of 2 things. One is that in the current year, especially starting from last year, the yields have been dropping very heavily in the Indian bond market, the Indian debt market. So we hope -- means that whatever investments we make, obviously, we renew and replace. That has a lower rate than what we had renewed when they get to matured. Second thing is that we have invested in SMB to ensure that we get a steady lease, but whatever is that -- because of Indian -- India's requirement, the fair value of the same is mark-to-market on a quarter-to-quarter basis. So even while we are going to earn the same return as -- which is in line with the expected for a period of 3 years, but if there is market rate fluctuation due to this, we have to do -- we have to actually downsize the same, and effect of the same is seen in our financials here. And second question was regarding...
Regarding Currency Derivatives and futures segment. What's the -- currently, what's the contribution of that segment to the overall revenue from operations?
So basically, in terms of the Currency Derivatives, we have become the largest, actually, in terms of the trading volumes. And basically on this -- Monday onwards, that is 5 days back, BSE started weekly derivatives in the currency. That includes futures and options bought. And other exchanges have not been yet given the permission to start. So in some sense, BSE's actually going ahead yesterday in the weekly futures options, which started only 4 days back. That business started growing $1 billion transaction volumes, so it's effectively -- currency seems to be something which BSE is now gaining tremendous ground even in the eyes of the regulators, but the market also seems to be welcoming it. And we have a -- kind of an innovative pricing method, where after a particular size of trading volume, we do not basically have additional levy around -- if you trade around INR 20,000 crores of the futures, then above that, we don't charge you additional charges. And that's why most people seem to be preferring BSE, especially the large traders, and that's also bringing the smaller traders. And hopefully, over a period when BSE becomes a dominant sort of exchange in this area, we may be able to create larger revenues out of that.
Okay. And sir, one more follow-up question. In terms of the Clearing Corporation interoperability, I mean, what's the update? Is -- what's the regulatory part? I mean, there was talk of that thing coming through. So what's the update on that piece of new regulation which you expected?
SEBI has still not come out with the regulations. We hope that they come out with it soon. But currently, they seem to be discussing several working groups that were fed up, and they had all submitted their recommendations. And now I think more nitty-grittys are being discussed. It has not yet -- at least to my knowledge, not been approved at the SEBI board level. So whenever they take to the SEBI board, they will also announce all these things. Currently, we do not have much visibility on that part.
Okay. And sir, just last question. Your employee benefit expense and in terms of other admin expense has gone up this quarter substantially. So do you think this leads this substantial growth? I'm talking Y-o-Y here. So I just wanted to know whether this thing will continue in future. Or do you think it's a one-off thing for this quarter?
So the expenses that you are talking of, basically Y-o-Y, they have gone up because of some provisions which we have made with respect to listing receivables, and there have been nominal increases in terms of -- yes. Ends of it, yes. And there was normal increases in other expenses. And so [indiscernible] is certain there are -- there is a normal increment which comes after every appraisal, so every year there is one that we had seen in employee cost. The major reasons for this increase is also that some expenses which you know we used to earlier categorize as cost towards investor service is fine. We have to now -- we are certainly categorizing them as employee cost, the reason being the SEBI query which we referred to in the speech. Yes. So that's the reason.
[Operator Instructions] We have the next question from the line of [ Sundeish Korlay ].
I want to ask the stand-alone operating revenue come down INR 121 crores to INR 98 crores. I want the reason for that. And your outlook on, sir, operating revenue.
So the -- yes. So the operating revenue has come down, basically, because of 2 reasons. That was that our transaction, our overall turnover in BSE has reduced during the current quarter, as compared to previous quarter. And that is because that in the last 6 months, there has been total washout in terms of all mid-caps and small caps. So most -- many of the companies which are listed on BSE, obviously, they're also -- lose some investor interest. That is one big reason. And the second thing is your -- there have been some decrease in our fees, which we're referring towards the book building last year. Book building is as a function of how markets do. So if there are lesser number of new issues, obviously, they're bound to impact our income in the current year. So these are 2 reasons why our operating revenue is down.
Okay. The outlook on operating revenue?
Pardon me? Please, pardon me.
Next quarter, outlook of the operating revenue?
So basically, we don't do outlook, but you would realize that ours is a very simple cost business model. So when markets are down, usually our revenues go down. When markets go up, especially mid and small segments, then our revenues go up substantially. So last -- one month, again, the markets have started going down for those part, and so we're actually [ reading your ] model and figure out.
Okay. Turning towards the foundation charge, the income or listing fees income for this quarter.
Foundation charges income in this current quarter was INR 27.43 crores, and listing fees income was INR 51.16 crores.
[Operator Instructions] We have the next question from the line of [ Arman Suri ].
I have a couple of questions. The first one is in the annual report. You've mentioned that after the introduction of physical settlements in the equity derivatives side, you're planning to increase your market share. So I'd like to know what are the steps you're undertaking to do that. And the second question is regarding the Currency Derivative side. So in that, we are higher in terms of overall volumes in turnover, but in the future side, for example, our closest competitor has twice the amount of open interest as compared to us. For example, today, the closest competitor, they have an open interest in the [ near month ] dollar-rupee contract of, I think, 1.8 million contracts, while we have it somewhere around 900,000 contracts. So what are we doing to reverse that? And another part, follow-up regarding the currency side is that in the cross-currency side, we're basically losing market share to closest competitor and also in the others sterling-rupee and euro-rupee and yen-rupee contracts, so we have minimal market shares, compared to our closest competitors. So what are we doing to reverse that trend?
Okay. So basically, in terms of equity physicals, we have a better technology. The NSE has been opposing physical delivery because their technology is not able to handle that. Okay. Now that it has been imposed, in a sense, by the regulator, nobody has a choice. But given our flexibility, we think we'll be able to give better framework for the users to come deliver things against that, derivatives' positions and so on and so forth, and that would happen also for the -- sort of whenever -- as when commodities coming. Commodities are going to also have the same framework. In fact, whatever we are hearing today for the extended timing, we -- at least what is coming in the newspapers or websites is that the competition is trying to take a break, whereas in the India International Exchange, which is running out of Gandhinagar but running out of our technology, we are trying to do ours the other way. So we have the ability to do sort of a lot of things, which, perhaps, the direction doesn't do. In fact, just to give you perspective, the competition to India International Exchange doesn't work 22 hours. It works only 15 hours a day because they don't have people or don't have technology or they're not interested. Whatever the case, basically we are -- we think, as and when all listings come in, we will have a better chance. Of course, if interoperabilities allowed it, it will be even better. But until that time, we'll have to continue to innovate and hope that the traders like what we have -- going to offer. The other part is on Currency Derivatives. You mentioned about the operation, open interest being larger at the competition vis-à-vis BSE because BSE started around 7, 8 years after the other exchanges. And the trading is where you get the revenues, not in open interest. So it is good to have open interest, but finally, revenues -- or, at least, the size is considered by the trading part of it. The other part of it, the banks, which had started sort of keeping all the interest in one action, they don't see too much benefit of going into another exchange because they don't trade that often. They just keep open interest in, and then after a month, they actually take it into the next month. So once you're very large, then people can't ignore, and that's what is happening. Many of the traders are slowly bringing all their deposits and all to BSE for currencies and that's how we see it. The other part is, the main business of India is traded in U.S. dollar terms, not in sterling, not in euros. Those are, in some ways, very suspect rates. Understand it? And so it is basically -- in some ways, people are trying to show volumes where, probably, they don't exist, right? Today, if you see in today's volume itself, BSE is like INR 29,000 crores and NSE is INR 24,000 crores overall, right? And so you know there is a -- sort of a reasonable traction here, but that sterling and euro and cross-currency and all this. In some ways, it is not there, okay? People are standing up now to show that they are not less than 30%.
Right. And one more question regarding the option side. In the currency option side, we have on the notional side where we have a larger market share compared to our competition, but in terms of the premium turnover, competition's higher than ours. And as we know, in India, a premium turnover, like option, is where all the money's being made presently, at least for our competitor. So what are we doing to actually gain market share in terms of premium turnover? Because the most liquid option -- like which are the most in the money, they're being traded more in NSE as compared to -- so what are we doing to bring that business to our platform?
See, I believe the most liquid is the current month contract, okay? And I can tell you -- I mean, while you may be thinking a point, but our -- in the current month, in the futures...
And option.
And options, the feedback that we have is that you may put as many lot as you want and it just vanishes. On the -- okay. And you may try this. So -- when we are saying, we are saying this with conviction, and it's also reflected in the market share. I mean, on an average, it's not easy now for the last 3, 4 months that we have 60% more than -- within 60% and 70% or between late 50s and mid-60s in percentage and market share on a daily basis. So if...
And even most important, USD-INR current month options and futures. BSE's currently having much larger liquidity on what you want to trade on, not what you trade on. Because people may trade by having, say, negotiated trade, but if you want to basically have liquidity on the screen, BSE's where people come.
Got it. No. I can -- I hope you understand. It's also my concerns because I wouldn't want our competitor, which could be ruthless at times, to steal our thunder because we've been gaining momentum in this, so I'd like it going forward. And another question, not regarding this, is regarding the cash flows. So on the -- if you check the cash flow statement, this time we've had negative operating cash flows, compared to the last year. And I understand it's because of a decrease in our other current liabilities, so I'd like to -- if you could throw some light regarding where all this money been going out and what's been the cause of this outflow.
In every year, we have a STD payment. Every month, we have an STD payment of around INR 100 crores, and we have a TDS liability of around another INR 30-odd crores, limiting the month of March when the tax was -- are good because they'd be paid in advance. The money which has to be paid actually in April. So because we paid it in advance, you would see that our cash flow readings, they are more than INR 100 crores.
Okay. Because last year, there was an inflow of about INR 126 crores -- odd crores in the other financial aggregates and other liabilities...
I tell you what, that -- see, what had happened is that last time, there were a lot of STD transactions. And we had -- with the STD transactions up to 15th of March in that year. Next thing we know, the -- we got a request that we should pay it as less lead as possible, so...
Right. Another question is regarding -- we got the approval from the SEC for trading on the equity side, but there's another part, like NSE got one from CFTC regarding the Part 30 exemptive order. So where are we on that? I had read from news articles that even BSE applied for it, so I'd like more updates regarding that.
Yes. BSE has applied for it. We have still not got the approval. But hopefully, we will also get it some point in time.
Okay. And the last question is regarding the international exchange. If I -- if you could throw some light on the proportion of proprietary turnover vis-à-vis institutional or retail turnover out there. I understand there won't be retail out there, but I'd like to know the breakup of the turnover in that. And...
Currently, 100% is proprietary. Well, it can be a little -- probably less than 1% will be client business.
Okay. So I -- basically, the reason for me asking is so I could basically understand more whether institutions have actually been entering the -- have been coming in and trading on the GIFT City platforms, if that's the reason.
Not at this point. Not at this point.
[Operator Instructions] We have the next question from the line of Amit Chandra.
This is Amit Chandra from HDFC Securities. So my question will -- sort of the transaction charges. So in this quarter, we have seen INR 27.4 crores from transferring charges. And now we have also started getting money from the AMCs from this quarter. So can you please, like, provide the breakup that what amount of money we have received from the StAR MF? And is that gloved in the transaction charges?
Amit, means that mutual fund income comprises of the direct revenue, which we receive, which is in terms of the transaction charges. And there is some cost, which we also recovered. So in terms of direct -- the amount which we have received in mutual fund segment out of direct charges is around INR 3 crores and another INR 2 crores in our charges recovered as a part of our expenses.
On stand-alone basis.
On stand-alone basis.
On the consolidated, I mean, there is one more INR 90 lakhs of cost recovery there.
So it means that there is other charges also with services interest provided by our technology company, so that is another INR 1 crore.
Okay. So now there's INR 3 crores that we have received from StAR MF, so this was not the last quarter, right?
Last year -- last quarter, we had recovered some money. So last quarter, when we did, we had recovered overall INR 5 crores, but it pertained to -- it pertained some earlier dues also. And in terms of negotiated fee, which we had determined within discussions with the mutual funds. So in short, I can say one thing that -- as compared to INR 5 crores which we earned last year, we have earned around INR 6 crores in the full current quarter.
Okay, sir. And sir, like we have been seeing that we have been changing the transaction charges structure very frequently. So when can we see stability there? And also the Currency Derivative segment, I know we have been gaining market share there, but the contribution of that segment to the overall revenues is very small. So as we have gained, I know, significant market share there. So can we expect some hike in charges in the transaction charges for the Currency segment?
Currently, in Currency, we don't have plans to start charging higher. We want to first consolidate our lead and then do things. And in terms of the transaction charges for the equities, we have been experimenting, but it goes there for 15 months, and then we have changed it back to sort of original structures there now. So we'll continue to experiment in terms of what we think we might be able to try. So I don't see stability as to be the cause or the end of doing business.
So sir, like when we're charging on per trade basis, so what was the feedback that we got and why we changed to the original structure? So any input on that would be...
Basically, algorithm guys are finding it costlier.
And difficult to compute.
And for them, it was becoming difficult to compute also because although the softwares of all brokers are connect -- I mean, they are charging like NSE does. So basically we said okay, as far as -- there's no special losses to us, we decided to go back.
And we provided the option also.
But very few people actually stayed back on that.
Stayed back on the earlier option of per trade. So then we realized that it's large majority, with literally 90% -- 95% or more are opting for the per trade -- who are not opting for the per trade business. Then might as well, all of who will want to -- a single trade book.
So right now, it's on the ad valorem basis, like earlier?
Yes. Now -- so we changed this. So from next month onwards, it will be ad valorem basis only.
Okay, sir. And sir, like we have been seeing a lot of volatility in the excluded segments. I don't have the nature of this segment, but as the revenues have fallen significantly from there, so as -- so can we expect some kind of rate high cost, some hiking charges there to offset the loss?
Currently, we don't see that. Our business is very cyclical. When the markets go up, the revenues go up. And basically, [indiscernible] Goes even faster. And when markets go down, the smaller stocks go down faster, and so the revenues out of that also goes down faster. So for us, being -- trying to be too greedy may end up creating some issues later on. So we are currently not seeing the -- too much of a problem. This last 2 months, around July onwards, those companies' prices, which have gone down drastically, are slowly coming back. And so people are now slowly getting interested in them.
Okay, sir. And sir, lastly, on the SEBI change concept that -- that's now being implemented for October. So we know that we are ready to launch the commodity trading. So any update on that? What is the process there? And what are the plans?
We hope to launch it on October 1. We are ready in terms of the trading -- clearing settlement, softwares and training and mock trading and everything. Some inspections are going on currently with the regulators. So as and when things get approved, of course, we can't start before October 1, but we will start. And it will be like a longish transaction, right? Because it goes on till almost 11:55 p.m., from -- I mean, morning till pretty much midnight, right? So we are also ready to operate our markets so long now, going forward, from October. So it's like now, only 2 months left.
Okay. And sir, linked to -- like what shift in the volume that we had seen in the Currency Derivative segment? So what exactly was driving that? And can we see single kind of strategy that can work here also? So any clarity on that would be useful.
You can -- basically, we are, of course, working hard, and we can hope for that, but only it remains to be seen. We will have better [ categories ] all other exchanges combined in terms of commodities, in terms of how the clearing settlement, everything takes place. Even the cost, we'll be very competitive, compared to what people are charging currently. But basically, currency was a -- currency and interests are slightly different vis-à-vis commodities and equities because of the STD being applied. So we will keep our fingers crossed and continue to work on, basically, sort of ensuring that people see value in what we do.
[Operator Instructions] We have the next question from the line of Ashish.
This is Ashish from Motilal Oswal. So I had a couple of questions. Firstly, so while the volumes on Currency Derivatives increased quite significantly, I think the revenues Y-o-Y declined. So have we kind of taken a cut in the pricing as opposed to the earlier trend of we're taking it higher?
No. See, this is actually our framework, to really go by the currency pricing framework that we have. It's remained the same for the last 6, 7 months. There's...
So basically, what we have done is we have done slab-wise and a more particular size of INR 20,000 crore a month plus. People don't pay extra money, right? So in some ways, the extra volumes are not being extra money, but it is showing the input length. And getting other retail guys or the smaller guys to come in because there is more liquidity.
Understood. And the other thing just wanted some more clarity on the StAR MF platform. I think, Nayan, you were saying that you made around INR 3 crores of income from the same. So there was this number mentioned in the presentation with sales around INR 5.2 crores in the first quarter. If you could just elaborate upon the breakup again, as to the difference between INR 5 crores and INR 3 crores.
Yes. It reflects this. That BSE charges from direct charges to the mutual fund for every transaction that takes place. Now these charges are exclusive of the cost that BSE incurs at the back end to process those transactions in terms of the amount, which we incur, or the amount -- the cost -- the expenses we spend on processing the transaction. That is the core interest of [indiscernible] side. So the [indiscernible] side is recording -- it doesn't factor the transaction charges. It shows separately under our operational income breakup. So that -- we don't have the same reason. BSE's actually booked by INR 5.2 crores , but then obviously in transaction charges, this INR 3 crores will come. And I think as -- and I spoke earlier, that there's -- there are some other liquidity charges which are recurring -- also recurring but by our group companies. We just lost 2 charges, so those are recovered by a group company and that also will go from the mutual fund, so that's our total commission. It is about -- total revenue is about INR 6 crores, as compared to INR 5 crores in the entire year last year, with -- after that negotiated fee.
Okay. And so I think you also mentioned the presentation that close to INR 7 crores were the total number of transactions that took place, so against which the revenue currently would be INR 3 crores, right? So that's what, I guess, Ashish was implying by you charging currently a nominal fee, right? It would be roughly less than INR 0.5 of realization per trade. Would that be the right understanding?
No. We are talking about INR 7 crores that are refunds, the INR 7 crores thing. And...
69.5 million total trades that took place on the BSE.
Yes. [ I mean -- with border ].
Your -- mutual fund, I think.
The charge is per transactions, because there are liquid fund transactions, which are very, very large, but they don't mean much to the fund, not to the investor. And then there are retail transactions, which are small in nature. And so we charge per transaction. And currently -- basically, in last quarter, we charged totally around INR 4, right? Although, Nayan has a tendency to differentiate between cost recovery versus the charges. I have a framework that last year I was not recovering cost, so whatever I'm charging is a charge, right? And that is how I would want to look at it.
And it's future index transactions. Index transactions there were INR 6 crores.
Right. Right. And just one more question from my side was, Nayan, could you -- so would the contribution from exclusive stocks to the transaction charges would have declined significantly this quarter?
Yes. Because of total volume in our specific group. Actually, this group decreased. So obviously, there has been a decrease in our -- this income from the -- from those stocks.
Right. Roughly on the ballpark, if you could share, what would have been the contribution from there?
Basically, year-on-year, about INR 4 crores, INR 5 crores that we have taken on account of that.
We have the next question from the line of Rahil Jasani.
Rahil Jasani of -- from ICICI Securities. Sir, my first question is from 1st July, in the Equity Cash segment, we have changed to volume-based transaction fees. So I assume that it will be the same as we were charging earlier at [ INR 2.75 ] a piece? Just wanted to confirm that.
Slightly different. I mean, the slabs are slightly different. Broadly you can -- it's there on our website. We can send an e-mail to you.
Sure, okay, okay. Secondly, in the Mutual Fund segment, actually continuing with what Ashish was asking, INR 3 crore transaction fees from -- I think it's 7 million transactions, so 70 lakh transactions. So the yield comes to around INR 2, but in the last con call, I think you had mentioned that you were charging at around INR 4 or INR 5 average.
Boss, you multiply 7 million by 4, how much comes to that? It comes to 28 million, right?
Okay. INR 4 -- or INR 4 to INR 5.
Around INR 5 average we are realizing on a broad verse basis, but totally we are on INR 6 crores, which is coming to around -- on the 7 million transactions, coming to around INR 8.5.
INR 8.5.
So you accounted the -- the accounting is one aspect that isn't guided by the audit guidelines. As a business, we see that to be what is our total recovery per transaction.
Right. Right. Right. Okay. Okay. And sir, lastly, I wanted to ask what is the cash and investments amount total which is there in our books, which is our own cash and apart from the margin money which is there from that areas?
Well, see -- so totally, it seems like this cash value -- cash is a very -- it's missing the point. So if you say that, okay, what is the cash which is available for dividend declaration, then it's different. If it -- if you say for another buyback, it is different because there are another guidelines for that. So if you have just ignored dividend, then probably INR 1,500 crores will be the amount, which will be lying in our book that can be used for dividend purposes.
INR 1,500 crores?
Yes.
Okay. Okay. And that will be around 30 of June?
Yes.
We have the next question from the line of Saikiran.
This is Saikiran calling from RW Advisors. Just continuing the earlier guidance question. So you mentioned INR 1,500 crores is the cash available for the equity shareholder, right?
That is -- it has to declare everything as dividend, I can declare that much. But provided, I could have raised the commitment.
Yes. That's the free cash available for the equity shareholders?
Yes.
There will be some portion of regulatory capital, so that it won't be, basically, doing.
We have the next question from the line of a [ Akil Malamuto ].
This is [ Akil ]. I'm from Akhil Surya Financial Services. I just wanted to know about MetaQuotes software that is MT5, like how is the response, like number of demo accounts opened and when this will be available for live accounts for traders?
Can you please repeat?
I just wanted to know about MT5 platform.
MT5?
Yes.
The specific purpose with which, I mean, it is used for?
I mean, I've read it in the news that MetaQuotes software is being offered to access...
MetaQuotes. Okay. Yes. Yes. Yes. Okay.
What is the status on -- will it be available anytime soon? Or do you have any data for number of demo accounts we now condone for the BSE, something like that?
Yes. So we are in discussions with them, but let's see how things go, proceeds. And we understand they're important for this new market, commodities market.
Okay. So as of now, there's no new updates?
We already -- we are already in discussions.
[Operator Instructions] As there are no further questions at this time, I'd like to hand the call back to your speakers for any closing remarks.
Thank you for joining the -- in this call.
Thank you, guys. Have a great day.
Thank you. Thank you.
Thank you, sir. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating.