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BSE Ltd
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Ladies and gentlemen, good day, and welcome to BSE Limited Q3 FY '21 Investor Conference Call. My name is Nirav, and I will be the moderator for today's conference. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Yogesh Joshi, Head Investor Relations, BSE Limited. Thank you, and over to you, sir.
Thank you, Nirav. And hello, everyone, and welcome to BSE's Earnings Call to discuss Q3 FY '21 results. This is Yogesh, Head Investor Relations. Joining us today on this earnings 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. Sameer Patil, Chief Business Officer; Mr. Girish Joshi, Chief Trading Operations and Listing Sales; Mr. Neeraj Kulshrestha, Chief Regulatory Officer; and Mr. Kersi Tavadia, Chief Information Officer. Please do note that the conference is being recorded and the 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 a question-and-answer session. Please note that BSE does not provide any specific revenue or earnings guidance. Anything said on this call will -- which reflect BSE's outlook for the future or which could be considered a forward-looking statement must be reviewed in connection with the risk that the company faces. With that, I would like to turn the call over to Mr. Ashish Kumar Chauhan.
Thank you, Yogesh. Good morning, good afternoon and good evening to all of you, wherever you are. It is 10.5 month since India went into a lockdown due to COVID-19 pandemic. Many of us are back to work at office partly or fully. BSE, as expected, has been operating without any interruption and has also been able to undertake new initiatives as well as improve its operational performance during this period. Let me start by providing you with certain updates on our business and operations. Continuing its stellar performance, BSE StAR MF, India's largest mutual fund distributor platform is moving consistently towards transforming itself and the entire industry into a unique end-to-end value-based platform. It achieved a new milestone of processing 92.98 lakh transactions, which is the highest ever in a month, including 4.77 lakhs new SIP registration in January 2021. The total value of orders processed in the Mutual Fund segment increased by 37% to INR 2.05 lakh crore for the 9 months ended December 31, 2020 from INR 1.49 lakh crore for the 9 months ended December 31, 2019. In spite of a pandemic year, BSE StAR MF platform has seen growth in the total number of orders processed by 64% to 643 lakhs during the 9 months ended December 31, 2020, as compared to 393 lakh during the 9 months ended December 31, 2019. The total number of X-SIPs registered under this segment increased by 256% to 11.18 lakhs during the 9 months ended 31st December 2020 from 3.4 lakh -- 3.14 lakh for the 9 months ended December 31, 2019. The total number of X-SIPs registered under this segment increased by 2% from -- to 16.72 lakhs during the 9 months ended 31st December 2020 from 16.35 lakhs for the 9 months ended December 31, 2019. The platform continues to scale new peaks of transactions in a single day. The platform processed a record of 14.69 lakh transactions on a single day on January 11, 2021, surpassing the previous best record of 12.88 lakh transactions on October 12, 2020. BSE had launched BSE StAR MF app in mid-2019 to enable Mutual Fund Distributors process transactions on the go. The app has been well received by the community and has purchased over 15.3 lakh transactions till January 31, 2021. It may be noted that BSE StAR MF platform witnessed a consistent net equity inflow of investment over all the past 10 months when the industry was seeing net outflow in the equity-based schemes. StAR MF platform witnessed a consistent net equity inflow of INR 15,809 crore as against the total net equity outflow in mutual fund industry of INR 30,546 crore during the period. The total turnover on StAR MF platform for the 10 months period from April 2020 to January 2021 exceeded INR 2,73,000 crore. BSE has continued with its strategy of expansion of its Mutual Fund Distributors and IFA network. BSE appointed 12,383 IFAs or members over the last 10 months, taking the total to 69,039 on total on January 31, 2021. This network is over and above, BSE's 1,400 members, backed by over 200,000 authorized representatives covering length and width of our country. BSE's market share in this segment for 9 months ended December 31, 2020, stands at 79%. You may recall that BSE Mutual Funds doing negotiation with respect to the rate chargeable by BSE to them via a fee for processing of transactions through BSE StAR MF app platform. All network origins with respect to this segment we have made in the previous quarter based on the agreement reached is [ empty ]. This is the first quarter reflecting the revised rates applicable to mutual funds. The total revenue on in this segment during the quarter is INR 7.61 crore after provisioning. BSE has been leading the way in adopting newer technologies and launching new innovative products. On November 14, 2020, BSE launched StAR MF Corporate Direct, a direct investment portal for corporates with more features which will further simplify toward end-to-end value-based services to the AMCs, distributors, investors and MF industry participants. Now corporates can similarly transact with all AMCs and schemes at one go using Corp Direct instead of switching within multiple platform, which is cumbersome. Corp Direct simplifies the MF investment process and significantly reduces time and increase efficiency for corporates. The StAR MF Corp Direct portal is loaded with salient new features and is currently live for corporates. This will be available for non-individuals -- for other non-individuals, like HUF partnerships firms, societies, et cetera. In order to continuously upgrade its services through innovation and development, BSE launched StAR MF Plus, a premium platform with key features for distributors and their clients on January 18, 2021. StAR MF Plus offers complete front office order management, analytics, back office, business support solutions for distributors to enable client onboarding as well as e-KYC and towards customer portfolio management, along with CRM. Further, all these features can be accessed through web, Android and iOS. As informed earlier, to unlock the value and realize the full potential of the business, the BSE has appointed ICICI Securities to advise on various options to unlock the value ON BSE StAR MF platform. ICICI Securities has approached potential investors in this regard. However, BSE has not received any acceptable bid for the same until date, and therefore, no further decision has been taken with respect to the scheme.BSE-Ebix Insurance Broking Private Limited, a joint venture of BSE and Ebix Fincorp Exchange Private Limited, has beta launched its operations in February 7, 2020, with offering of private car and 2-wheelers auto insurance. Currently, there are 7 general insurance companies, 2 stand-alone health insurance and 3 life insurance companies available on the BSE platform. As of January 31, 2021, BSE Ebix registered 3,907 point of sale persons and 2,370 certification. BSE Ebix has beta launched term Insurance of ICICI Prudential Life Insurance on its state-of-the-art, high-tech platform on December 15, 2020. With this launch, BSE Ebix now has the ability to handle insurance sales across both term and endowment policy in life insurance segment, using its omnichannel digital presence supplemented by the Phygital pan India physical presence of BSE Ebix' thousands of point of sales persons.The launch of life insurance product by BSE Ebix is a major development for the company's perspective since life insurance is traditionally one of the fastest growing insurance segments in the country. BSE Ebix' strategies is to have unrivaled Phygital pan India reach by combining the physical presence of tens of thousands of POSPs with omnichannel digital, thereby allowing its POSPs to have access to extensive real-time quotes from insurance companies and to complete the entire transaction online on behalf of their customers. Through its technology, BSE Ebix empowers POSPs to deliver best of the insurance products and provide comfort to the end customer by transacting physically at the speed of digital technology. This presents a huge opportunity for BSE Ebix to build its life insurance portfolio. In order to offer a bouquet of insurance products to meet the diverse needs of the end customer, BSE Ebix also plans to offer other insurance products for commercial vehicles like trucks, tractors, auto, taxi, commercial products like fire, liability, shopkeeper insurance and other personal lines of business like home, personal accident, travel insurance, et cetera. BSE Ebix also plans to add many more insurance companies in each insurance vertical in coming days and months while ensuring that their integration with BSE Ebix is state of the art for each vertical. Till January 31, 2021, the company intermediated issues of 7,912 policies, premium amounting to INR 2.35 crore. BSE holds equity stake of 40% through its subsidiary BSE Investments Limited in this company. BSE launched an electronic spot platform for agriculture commodity, known as BSE E-Agricultural Markets, B-E-A-M, BEAM, through its wholly owned subsidiary BSE Investments Limited on December 11, 2020. This platform functions as a national level institutionalized electronic transport commodity spot trading platform in line with the Prime Minister's vision to create a single market. The platform facilitates spot agriculture commodities transactions across value chain, consisting of producers, intermediaries and ancillary services and consumers. BEAM has leveraged state-of-the-art technology to offer customized solutions to farmers, traders and stakeholders to facilitate risk-free and hassle-free purchase and sale of various agri commodities. This platform ensures reduced cost of intermediation, improved procurement efficiency, enhance producers' realization and more competitive consumer price. The platform also helps eliminate bottlenecks associated with procurement and trading. The platform witnessed trading of 2 tons of imported almond in shell worth value of more than 6 lakh on the launch day of electronic spot platform for agriculture commodities. The average daily turnover during the 9 months ended 31st December 2020, increased the Equity segment to INR 3,675 crore as compared to INR 2,554 crore during the 9 months ended December 31, 2019, and INR 3,132 crore during the 9 months ended December 31, 2018. The same is also reflected in the company's strong operational performance in the current period. The pickup in the average daily turnover Equity segment in the current financial year to levels higher than previous 2 financial years is a positive development and towards encourage -- and provide encouragement to look forward to better operational performance going forward. I'm glad to inform you that certain working businesses, business houses, have started covering to shop, trade at best execution prices which benefit the investors in line with the mandate of the regulator scheme. A part of the inclusion in every trader can be attributed to the scheme. As more and more booking houses provide such facilities for the benefit of the market and investors, and as more and more investors insist for the scheme, it is felt that the scheme would further have a positive impact on the turnover on BSE. I also wish to inform you that the BSE has decided to increase transaction charges in the Equity segment in effect from March 1, 2021, to bring it in line with the competing exchange. The scheme is likely to result in increase in transaction fees and trading of commonly listed securities. BSE changed the weekly expiry of contracts to Monday in Equity Derivatives segment from first day in security segment from Equity Derivative segment from June 29, 2020. Since the change in weekly expiry of equity derivatives contracts from Thursday to Monday, the average daily turnover in Equity Derivatives segment has grown from INR 78,442 crore for September 2020 quarter to INR 2,01,162 crore for December 2020 quarter. The average daily turnover in this segment is INR 2,46,650 crore for the month of January 2021. Over time, the growth in turnover of Equity Derivatives contract can significantly complement growth in turnover in equity segment to improve BSE's turnover and market share in these Red Ocean business on BSE. India International Exchange and IFSC, India's first exchange -- international exchange based in the GIFT City. IFSC introduced rupee dollar derivatives contract on 8th May 2020. Average daily turnover on India INX platform for the 9 months ended 31st December was USD 4.1 billion including significant contribution from Equity Derivative segment. Equity Derivative segment contributed to 94% of average daily turnover and other segment has contributed to 6% of average daily turnover for the 9 months ended December 31, 2020. India INX is dominant IFSC exchange in GIFT City with the market share of over 80% in derivatives trading and 99% in bond listing for the 9 months ended December 31, 2020. During the 9 months ended December 31, 2020, almost all the Indian issuers of debt securities in the international markets over the last 3 years have listed on India INX' global securities market. It has witnessed an all-time high turnover of listing of USD 24.13 billion on January 2021. The previous all-time high turnover was USD 23.06 billion on February 3, 2021. The constitution of the IFSC authority at Gandhinagar is a big step towards development of IFSC as a major financial hub and growth of exchange therein. On January 25, 2021, among many firsts of -- within this calendar year 2021, supernational institution, Asian Development Bank listed the re-tap of 10-year INR 3 billion masala bonds on Global Securities Market of INX at GIFT City. The 6.15% bonds due in 2030 are rated AAA by S&P and Moody's. On December 22, 2020, Adani International Container Terminal Private Limited issue -- listed USD 300 million foreign currency bond on Global Securities Market of IMX at GIFT City. This is the first issuance by the corporate on the Global Securities Market. This issue -- the issuer raised the funds at a very competitive rate of 3% for the senior secured notes, maturing in 2031. The Currency Derivative segment of BSE continues to provide a very liquid platform for trading in currencies. Average daily turnover of Currency Futures segment for the 9 months ended December 31 was INR 8,145 crore. And the average daily turnover in the Options segment for the 9 months ended 31st December was INR 11,698 crore. BSE's market share for the said period was 29%. BSE is the second largest commodity derivative in India now and the only exchange in India to witness delivery in options on goods contract. BSE facilities trading in derivatives of a bouquet of bullion, energy, metal and agri products, which include gold, silver, Oman crude oil, Brent crude oil, aluminum, zinc, copper, guar seed, guar gum, cotton, turmeric, castor seed, chana, soya bean and almond. BSE created history on November 3, 2020, by becoming India's first exchange to complete deliveries of gold under BSE-BIS India Gold -- India Good Delivery Standard on its commodity platform, supporting the Prime Minister's vision of Make in India and Atmanirbhar Bharat. The exchange executed delivery of gold to the tune of INR 1.5 crores in the options in good framework, marking the fifth consecutive month of deliveries at the exchange designated vault in Ahmedabad, Gujarat. BSE's seamless trading platform integrated with a robust delivery framework for options in goods contracts has proved extremely beneficial and cost efficient for jewelers, bullion dealers, other physical market participants. It empowers them to not only hedge their price risk, but also avail delivery on the expiry of the contract. The total number of members admitted in Commodity Derivative segment is 290. The turnover in Commodity Derivative segment for the 9 months ended December 31, 2020, was INR 4.11 lakh crore and highest turnover was INR 5,118 crore recorded in August 11, 2020. BSE along with PTC India and ICICI Bank had earlier filed a petition with the power market regulator, central bank -- Central Electricity Regulatory Commission, CERC, on September 7, 2018, for grant of license for setting up of a new power exchange. BSE has stake of 22.62% as on December 31, 2020, in the proposed power exchange through its wholly owned subsidiary, BSE Investment Limited. CERC has issued a new order in this regard today, and we hope to get the final license and launch operations soon. The number of companies listed on BSE SME platform grew by 5% as of December 31, 2020, to 331 companies as compared to 314 from December 31, 2019. Of the total number of companies listed in the BSE SME platform, 93 companies have migrated to the BSE Mainboard as on December 31, 2020. Total market capitalization of companies listed on SME platform as on February 5, 2021, was INR 21,490 crores, and total funds raised for these companies was INR 3,381 crore. Companies listed on SME segment have shown outstanding growth over the last 7 years. SME index, which was launched on December 14, 2012, has increased by 86% to 1,386 as of December 31, 2020. BSE's market share in listing of SME companies on the SME segment stood strong at 61% as on December 31. BSE launched the BSE BOND platform on July 1, 2016. This platform facilitates issuance of debt securities on private placement basis issued as well as public basis. Issuers in this segment include the non-corporates from public as well as private sector in India. During the quarter ended December 31, 2020, 179 issues have successfully raised over INR 0.9 lakh crore through this platform. BSE's market share for the same period stands at 55%. BSE continues to be an institutional for capital formation in India. The total debt raised under this platform crossed INR 14.08 lakh crore as on December 31, 2020. On November 13, 2020, Lucknow Municipal Corporation successfully raised INR 200 crores by issuing municipal bonds on private placement basis using BSE BOND perform. Lucknow Municipal Corporation received 21 bids on BSE BOND platform for INR 450 crores, 4.5x of the issue size. However, total 11 municipal bonds issues aggregating to INR 369 crore, INR 3,175 crore have been exclusively raised on BSE BOND platform, scaling its market share to 86%. In the current financial year till November 13, 2020, BSE BOND platform has enabled corporate India to raise at least to INR 45,968 crore by issue of debt capital. With respect to listing of securities, the number of companies listed with their equity capital on our exchange which are available for trade are 3,913 as of February 5, 2021. BSE have the highest number of companies listed on any exchange around the globe. Market capitalization of companies listed on BSE has now reached more than INR 200 lakh crore. The total number of registered investors registered on BSE now exceeds INR 6.1 crore. Further, under BSE's framework for listing of commercial paper for listing of -- issued on or after November 27, 2019, 165 issuers have done 2,903 issuances of commercial paper and successfully listed CPs of INR 12.63 lakh crore on BSE. On a consolidated basis, the profit attributable to shareholders of the company, excluding exceptional items for the quarter ended December 31, 2020, has increased by 139%, INR 32.37 crore as against INR 13.53 crore for the corresponding quarter of the previous year. The total revenue for the quarter ended December 31, 2020, increased by 9% to INR 162.16 crores as against INR 148.6 crore for the corresponding quarter of previous year. Operating expenses have decreased by 8% to INR 108.66 crore. The operating EBITDA increased by INR 20.11 crores to INR 11.91 crore for the quarter ended December 31, 2020, as against operating loss of INR 8.2 crore for the corresponding quarter previous year. Operating EBITDA margin stands at 10% for the quarter ended December 31, 2020, as against negative 7% for the corresponding quarter previous year. We noted that during the corresponding quarter of previous year, profit after tax includes onetime profit of INR 32.04 crore at consolidated level on account on gain on partial equity stake sale of CDSL, Central Depository Services Limited. On a consolidated basis, the profit attributable to shareholder of the company, excluding exceptional items for the 9 months ended December 31, was increased by 19% to INR 108.74 crore as against INR 91.54 crores for the corresponding 9 months previous year. Total revenue for the 9 months ended December 31, 2020, has increased by 2% to INR 484.64 crore as against INR 474.21 crore for the corresponding 9 months previous year. Operating expenses have decreased by 6% to INR 322.77 crore. Operating EBITDA has increased by INR 37.53 crore to INR [ 26.42 ] crores for the 9 months ended December 31, 2020 as against operating loss of INR 11.11 crores for the corresponding 9 months for the year. The operating EBITDA margin stands at 8% for the 9 months ended December 31, 2020 as against negative 3% for the corresponding 9 months previous year. Interoperability. Our settlements amongst clearing corporations was implemented from June 2019. After implementation of interoperability, the members have the option to select the clearing cooperation to clear their trades. Based on their selection, the trades of BSE are cleared by respective clearing corporations. As per regulatory requirements, BSE to contribute to Core SGF of all the clearing operations till its trades are cleared. BSE already contributed INR [ 16.770 ] lakhs to Indian Clearing Corporation, which is in excess by INR [ 130.94 ] lakhs as compared to the requirements relating to the contribution to lead by -- lead by [indiscernible] for Core SGF as of December 31, 2020, based on the foundation executing BSE, which are there by [indiscernible], which is another clearing corporation. The requirement to contribute Core SGF to other clearing corporation of INR 1,183 lakhs as of December 31, 2020. This is the representation made by the company, to now allowed transfer of excess contribution line by the [indiscernible] exchange from Core SGF or one clearing operation to the Core SGF to another clearing operation in interoperability listing. And BSE shall not have to take charge in profit and loss account Core SGF contribution to clearing corporations so long as there is excess in other clearing operation. As on January 31, 2021, the total balance lying in Settlement Guarantee Fund maintained by Indian trading operation of INR 457 crore, of which, as mentioned, about INR 158 crore has been contributed to BSE. BSE's consolidated net worth as on December 31, 2020, stands at INR 2,458 crore and standalone network stands at INR 2,172 crore. The free cash in BSE stand-alone books as on December 31, 2020, is INR 1,393 crore. Before I conclude I wish everyone in this call to a stay -- wish them stay safe and near and dear ones. With this overview, let me welcome you all once again and invite all of you for question and answer. Thank you.
[Operator Instructions] First question is from the line of [ Saket Kapoor ] from [ Kapoor Family ].
Sir, firstly, sir, if we take our operating income and our operating expenses or the administrative expenses, they are not in commensurate to each other. So sir, what steps, as an organization, are we taking or are in the anvil that will further improve, as you have told that the operating expenses have gone down in commensurate to the income? So what more steps are we taking? And what is our road map going ahead, so far? Say, 1 or 2 years down the line with the type of initiatives, which you have spoken in, in your opening remarks, wherein you have articulated various segments in which we would be present going forward. So what's your take on that, sir?
Basically, I think on several other occasions during this call, I have mentioned that exchange business is about fixed cost business.So the cost pretty much remains consistent and goes up over a period because of the new regulations that are coming as well as the cost of back-launching employees that go up over due to inflation. Having said that, the only way the operating margins can go up because of that is that our revenues go up. And as and when the revenues go up, you are seeing an upsell in the profitability of BSE, and that would have been seen even in this quarter. So our -- all the items are basically to increase our revenues. Of course, that would depend on our investors and our brokers who would push in more business through BSE through which we can earn more money. And that would be basically our strategy for times to come, increase our revenue, control our costs. So that would increase our operating margins and other margins.
Sir, looking at the business proposition going forward, sir, correct me if I'm wrong, maybe a decade earlier, sir, when you were not at the helm, sir, you were a person who were advocating or even you were presenting an option of CFS, known as cash future spread. Wherein you were at that time contemplating with JB to introduce this mechanism in the cash segment, wherein, at the end of the day, the trading position, investors can have an option of so-called modified [ gage ] type of option. So in today's realm of things, sir, how relevant is that proposition? And how good business-making opportunity could we see if you -- if I'm not wrong, sir, then correct me.
Basically, it's still a good proposition. Those days, although I was not CEO, I was Deputy CEO. And on a similar framework was offered by another exchange, of course, in common [ risk with ] NFPL. And unfortunately, NFPL had other issues because of which people are [ asking still ] at regulatory level. Here we have got some apprehensions about allowing such products where both the settlement get merged. We'll continue to ask the regulators for providing these facilities to the investors. And if they allow, then BSE would be willing to launch.
Correct, sir. And 2 more short points.
[indiscernible], I would request you to come in the queue again. So that others can...
Yes, sir. I will be. Yes, yes, yes.
No, not at all. So let's try to be disciplined. Maximum 2 questions per person.
I will come in the queue, sir, and obey the rule.
[Operator Instructions] Your next question is from the line of Rohith from Marshmallow Capital.
[indiscernible]
Sorry to interrupt you. Your voice is coming very muffled. May I request you to speak over the handset.
Sir, is it better?
Yes.
Hello?
Yes, we can hear you. Please go ahead.
Okay. Great. So I missed the first 10, 15 minutes of the call. So just curious if there's any update on terms value [indiscernible] that you had disclosed a few months back?
Yes, we -- I need to update. It will be there in the transcript, just for your information. Not much progress has been made in that because the bridge we received were not acceptable to us.
Okay. Understood. And what about StAR MF? We were planning to launch a few other products, which will allow us to increase the monetization potential there. So any update there as well?
Yes, please. We have received many -- we have also mentioned it in our speech, probably you might like to look at our transcript, but I think your 2 questions are over. So I think let allow third person. If you want to ask third question, come in the queue again.
Okay, great. So I mean, should I ask or should I get back in the queue, sir?
Please, get on the queue.
Our next question is from the line of [indiscernible] Kapoor from Kapoor Family.
Yes, yes, sir. My first question is regarding IR union budget. There has been a recommendation from the income tax department wherein there would be a procedure for pre-filling of IT returns, wherein the capital gains will also be listed. And so going forward, sir, what kind of positive services can be offered from the funds offered on the exchange in collaboration with the DP? And how good business proposition can be made out of it with just prefiling of income per return? That's my first question.
Yes. It's a good proposition. We will explore that. But naturally, BSE on its own cannot provide the full end-to-end all the details because there are many RPAs and many depositories who will not be allowed to jointly provide their services because of the security, information security and privacy situations. So based on whatever the information is available to us, of course, we can provide the -- thanks to our -- we have the other database to the investor specifically, not their data, we cannot sell it to anyone. And SEBI has also set up some groups and committees to figure out the private related things because there are apprehensions and complaints about the information getting misused or other things as per the new sort of privacy information security kind of act and so those are a little more fast rachet. But clearly, the government and exchanges and the [indiscernible] and RPAs are working together to give you end-to-end data in your income tax returns as a part of the overall process of honorable finances to mention.
Right, sir. And one more point was regarding this part. Even the RBI has now opened the first time in our country the window for retail participation in the [ reset ] market. So I think for the -- this also could be a good business proposition and the settlement of the sale could be accomplished with the RBI through the exchange. And we also said we also give an understanding to the RBI regarding the business proposition, what it makes sense, how the client goes and everything can be merged and a system pool of data can be created so that as we participate in the StAR MF platforms to buy Mutual Funds, the same could be carry forward even to the [ V ] tech market through the RBI platform. So that's another business proposition that can be looked into. And the first number advantage as these could be in the offering.
It's a welcome announcement by RBI. Of course, it would be even better if they would allow holding of shares and interoperability among depositories that government want also can be held in depositories and also traded through that. That would ease the life of many investors rather than having multiple accounts with multiple agencies. And so those are the issues being discussed as we go. But clearly, BSE is one of the larger distributors of sovereign gold bond, which is also RBI issued bonds, as you might be aware. We are in touch. We are discussing a variety of modalities and metrologies to attract more and more investors to government securities in whichever way it is possible. And the early indications, even for corporate bonds, that our volumes even in those corporate brand area seems to have improved over the last 1 year. And so we would -- of course, we would want to build on that and become a dominant marketplace for investments in India, as I said in my speech also.
Next question is from the line of Amit Chandra from HDFC Securities.
Sir, my first question is, so we have seen a significant show in volumes. But if you see the pricing, so it has been coming down consistently. So I know there were, let's see, renegotiations with MCN also from INR 10, it went to INR 8, now at INR 5. So it seems that we don't have any pricing power here. So how do we ascertain that it will not come further down from INR 5 as volumes increase? So that is regarding start enough.And also the second question would be on the incremental investment that is required for all the new initiatives that we are planning in terms of the power exchange and because we still are having a lot of new initiatives, which are still not yielding results like the INX and all we're spending a lot on that. But yes, the volume has increased, but there's still not running anything from that exchange as of now. So when we'll start charging on the INX and -- and like what are the incremental expense required for all the initiatives that we have made?
So there are still volumes on the StAR MF have gone up 65%, 70% despite the MF industry losing a lot of equity value in terms of almost INR 30,000 crores, INR 40,000 crores in last 11 months. So effectively, we are trying to compensate in terms of the revenues because of the reduction in charges, as you rightly mentioned, and it remains to be seen going forward how we are able to increase our value per transaction. But clearly, the value due to increase in volumes is now much visible. And you will see that even going forward. In terms of the incremental investments other than INX, the numbers have been very small, whether it is in power exchange or the agricultural markets or Ebix joint venture. The numbers are somewhere between INR 10 crores and INR 20 crores max for event. And we are not past purging money to do anything else. On the IMX, as in many of the local businesses, whenever we are successful, IFSC and their subsidiaries tend to reduce their prices close to 0. And that ensures that even despite our success, we are not able to actually charge well and that's very anti-competitive. We have taken up this issue even in StAR MF area as well as in bonds area and many other areas in local proportion as well as in IFS area with the IFSC new authority. And we have complained, and let's see how the level came through to what I call a new competitor is being provided, who is not able to cross subsidize the immense -- due to the immense profitability at NSCS. And so we have taken up, I don't know whenever -- when level [indiscernible] will be provided by the regulators. But till the time, we will continue to invest our time and efforts into creating newer business lines for IFSC. And if we are successful in a few of them, our volumes -- I mean our value also go up like, for example, in mutual funds also, for 10 years almost we couldn't charge much and now MP has also accepted our ability to charge. And that's the heartening news. And as and when we are able to charge, we'll certainly charge. So for me, like any other high FX activities where plant and machines we are sort of invested in. And as and when the market share comes or the production happens, the industrial companies are able to basically make profit a little bit and it looks like a loss. We don't try to capitalize most of our expenses into mutual funds or bonds or anything. Instead, we try to expand them in that year. And that's why, except new companies, which we start up like IMX, you might see, at the same time, our consolidated losses or profits are shown there. And so for me, the investments are being shown in current -- in days, as if they are losses in terms of the capital expenditure. But so we have wisely invested and we are now within rewards in terms of the new business lines, which are actually generating as good amount of revenue and good market share and good traction going forward. So which you've seen StAR MF, and you might see a little areas. For example, in IMX, as you rightly said, we are now domination by, I think, probably this month, we might be 90% to 95% market share. And that tells you how good we are there. And as and when the old playing field is available and the market is right, we will be able to charge.
Yes, sir. So just a follow-up on INX, sir. Sir, earlier that you mentioned that when the trades in INX are like per day trades will cross 1 lakh trade, then maybe we will think of charging. And the charge on the INX is based on the per trade business, right? So now we are currently 2.5x off what we were targeting earlier. But still we don't have charity on the INX because that is the one portion where we can charge and you can improve our margins on there. Because already, the cost is there like in the CNS. So that,we are looking forward to. And any clarity on that front would be very helpful for us.
So basically, the explanation I gave an earlier answer also. Again, let me give you one more. The NFE is primarily competing us in IFC and many of the segments in India, in domestic area also by just bringing the charge to 0 in an anti competitive way. Until the time they charge 0, we don't have much of a choice but to continue to charge 0. So as and when the regulators provide us fair and level playing feed, we'll be able to charge them.
The next question is from the line of Varun from Forrester [ Research ].
My question was with regards to the merchant fund revenue. So as you mentioned in the presentation, the 9 months revenue is $293 million. So if you could give me the quarter-wise break up Q1, Q2, Q3? Q3, I heard in the initial part of the speech, it was INR 7.16 crore. So rest of the other 2 quarters, if you could give me, then it would be helpful for me.
So the mutual fund revenue has been INR 7.61 crore in the third quarter. Last quarter, it was INR 3.66 crore, and that is because we had made some revisions after negotiations. And in the first quarter, I believe it was INR 11.97 crore.
Okay. Okay. And sir, with regards to the rate to follow-up on the previous participant's question. The current average rate would be around INR 5 per transaction. Is that what the data has come down to?
Yes. If we just divide our total income in the mature segment divided by the number of transactions processed, it's about INR 5.
But its lab wise. So it wouldn't remain exactly the FA.
Then we [indiscernible] some additions from time to time.
Okay. Okay. Okay. So we are seeing volumes go up 65%, 70%. So I think revenue should follow in coming quarters. Is it -- is it a correct assessment?
Yes. And despite the fact that the rest of the industry is losing clientele and becoming negative, we are the positive part of the industry, even despite COVID and all.
The next question is from the line of Krishna from Capital -- from Capita Mine.
Am I audible?
Yes, sir, go ahead.
Congratulations for good set of numbers. Excluding the one-off stakes in last year, these are actually good numbers from both stand-alone revenue and operations perspective. So sir, I just have 2 questions. One is what are the current margins of StAR MF platform? The second one is that what are the valuations you are looking at, rough valuations for StAR MF and INX? Because as for the recent stake sale to ICICI Bank, the IMEX is valued at INR 200 crores. So can you please confirm if that is a far calculation is right off. So only these 2 questions, sir.
We are not exactly trying to value anything because this may become, what I call, forward-looking on our expectations. So as in mind, any proposal which is acceptable to the Board comes for the mutual fund platform, we'll take it for the Board and they may accept or reject or they may want us to negotiate for Gerin, stuff like it. So on mutual fund, currently, we don't want to say anything beyond this. But on the IMX, look at the numbers and see whatever the valuation comes out for the ICC [ bank ] part. I think it's probably a year-old number. But I wouldn't say it would be very way off the mark given the fact that IMX is also making losses.
Got it, sir, got it. And operations -- operating margins for StAR MF platform, sir?
So basically, if you will see net loans, it can be around 35% and -- 35%.
Okay. So about, I mean [ Pat ] margins of 35%.
Yes. This is a roughly figure because what happens is that we have a consolidated account. This is the estimate.
Yes. I mean since we are looking for the stake sale and all. So just stays [indiscernible]. So that's it.
The next question is from the line of Devesh Agarwal from IIFL Capital.
Just one question. On this account with [ DSL ], you did mention that there is some regulatory order today. So I understand there are some regulatory delays for starting that exchange. But in terms of technology, where do we stand? And once we've had the regulatory approval, how fast will we be able to start that exchange?
As of now, we have the technology we believe is going to work. It's under testing and getting feedback from the potential members. And so some of the potential members have also become shareholders of [indiscernible], yes, as a part of the process which CSE took us through. And so it remains to be seen how our technology is accepted by the market participants in the coming term, but we are pretty much advanced. And so it is possible that after getting the final license registration, it may take a few months to launch it. And we'll continue to explore potentially the best technology in the world in case we need to bring from anywhere in the world. But currently, we do have the first technology available with us.
Ladies and gentlemen, we'll take the last 2 questions. The next question is from the line of [ SK Keshi ] from [ Keshi and Company ].
Mr. Chauhan, I would like to congratulate you for such a good set of numbers. It's really heartening to see that basis performing well. I just had one question. The investment income that is happening in the comparative finances is INR 37 crore vis-à-vis in the last quarter of September '20, INR 24 crores and year-on-year of INR 34 crore. So if you can just give some color to it that what could be the reason behind this increase? Is this on to NTM be improved or it is the realized gains on certain investments we had?
Yes. So Mr. [ Keshi ], what happened is that we have made certain investments which are subject to mark-to-market. And in the current quarter, there has been a significant jump up in the mark-to-market valuation and that is one of the main reasons why -- and that is the main reason why you see this type of occasions happening.
Perhaps you will see this kind of fluctuations in companies with large investable [indiscernible] across the country because of India, the way it takes financial instruments.
The next question is from the line of Rohit from Marshmallow Capital.
Can you give the [indiscernible] again? Are we on already, sir?
Yes, please.
Yes. I was curious about the Ebix platform. It's been a year since we launched it. And the premium collection is still only up a couple of crores or so. So how do you see that scaling up? And are you happy with the way it's cleared so far?
Participants, please stay connected. The line for the management is disconnected. Participants, please stay connected while we rejoin the management back to the call.
Yes. So we are on call here. Can you repeat your question, sir?
Yes, sure. So I was talking about the Ebix platform. It's been a year since we have launched the platform. And the policy premium collected so far seems to be around INR 2.3 crore. And when we began, we were -- I mean you mentioned -- if we can agree with that, insurance is a much larger market, probably and more inefficient market than mutual fund and the potentially [ mine field ]. So in the context over the last year, how happy are you with the scaling up? And how do you see this going forward?
In a way, basically, we started pretty much at the start of the COVID period, right? And so this is a physical-cum-digital channel. It's not pure digital. And that's where, basically, last 1 year has just, in a way, we have in beta stage, we have taken time to connect to many insurance companies. And so now we are more comfortable offering almost all types of products with many companies. We'll continue to add more companies. We'll continue to add more POSP, as it is called. It's a new type of channel that the regulators allowed. And so it's early days. Good thing is that our competition, whether they are pure digital or physical like us, are earning at least like 50x or 30x, 40x more money per rupee of premium collected. And that is basically what is giving us that confidence that we are basically being very frugal. We are adding more and more POSPs. In fact, recently, we also started with the government of Jammu Kashmir a framework to -- we train their people in Mutual Fund distribution as well as in insurance to bring them on our platform, and we are trying to do it for many other states and things like that. So it's a part of our skill development in those states as well as making them operable to become their own masters and become kind of agents of these 2 platforms. And so there are many, many such initiatives on manual. But last 1 year, due to COVID, we couldn't do as much as we thought we would be able to do, but then that is same framework with many of our competition. And in some ways, our approval to work, we continue to back on, to get maximum amount of benefits with lowest cost going forward.
Okay. That is helpful. And coming back to StAR MF, let's see, over the next 3, 4 years, and we see the trajectory of volumes being this strong or comparable. Isn't Board and the management open to a demerger or spin-off of the StAR MF platform once we have a larger bouquet of products and a larger profit base?
Again, the Board will take its call, what it wants to do. But any investor is able to give submission to the Broad and Board easily takes this up from time to time based on that position. Only this monetization framework was approved by the person who was approved by the Board. And any other consideration, [indiscernible], the Board will take seriously.
Okay. As of now, this was not considered to discuss seriously, given the scale, is it? Am I right in thinking that?
Not that. The position was to find a strategic partner and do the same thing as you suggested or in some other ways set out 100% of in some variable part of it. And the Board, that way, is pretty open in creating value. And so it will be no problem at all.
Ladies and gentlemen, that was the last question for today. I will now hand the conference over to the management for closing comments.
So thank you, friends. And I hope this give you some idea of what we are doing and what has happened to us over the last quarter or last 9 months. And it has been a tough journey of those 9, 10 months, where we had to keep the markets open continuously without even a single day's break despite all the risks that everyone was taking, including all of our members, all our regions, all of our staff across the country. And I think BSE has, in a way, come out at least operationally with flying colors in terms of not having a single second delay or not having any other technical issues in the past 10.5 months. That tells you the frugal ways in which we work, but also in a very solid way we work, and we hope to continue that performance. We continue to work on newer businesses, newer areas [ that are ] unknown to us. And hopefully, some of those businesses areas we will be able to charge on, get you more values going forward. So thank you.
Thank you very much. On behalf of BSE Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.