BSE Ltd

NSE:BSE

Earnings Call Analysis

BSE Achieves Record Q3 Revenue and Profits

BSE recorded its highest ever quarterly revenue at INR 431.5 crores, a 76% jump from INR 245 crores in the same quarter last year, while net profit doubled to INR 108.2 crores. Growth was driven by Equity, Equity Derivatives, and Mutual Fund Distribution segments, with transaction charges rising by 163%. Major highlights include a surge in Equity Derivatives' performance and the processing capacity for orders increased to INR 800 crores. The Mutual Fund Distribution segment also performed exceptionally, with revenues up by 55% to INR 32.84 crores and transactions increasing by 60%.

BSE's Strategic Focus and Expansion

In the narrative of BSE’s journey, there has been a striking advancement in market share, particularly within the exchange-distributed platforms, where BSE’s dominance exceeds 85%. The narrative is complemented by significant milestones achieved by their StAR MF platform, which handled a record 4.34 crore transactions in January 2024 alone, pushing the average to 3.2 crore transactions in the current fiscal year, substantially up from the 2.2 crores of the preceding year. Diving into its auxiliary businesses, BSE’s engagement spans various domains from international exchanges to insurance, power, and agricultural market platforms, emphasizing a steadfast commitment to growth and innovation in these areas.

Transformational Projects and Investor Commitment

Looking ahead, BSE has a year earmarked for transformation with plans to scale data centers, launch a new mutual fund platform, expand data and index services, enhance regulatory projects and improve clearing and settlement services. This holistic progress is reflective of BSE’s dedication to evolving the financial landscape through strategic partnerships and a focus on scalability and efficiency.

Engagement with Market Participants and Platform Enhancement

On the note of shareholder engagement, BSE recognizes suggestions for improving visibility in the data they publish, as pointed out by individual investors. This feedback is towards enhancing analyst references to SENSEX and Bankex indices compared to more widely cited indices like NIFTY. These considerations play into BSE’s broader approach to accommodating shareholder insights.

Financial Performance Insights

Financially, BSE maintains robust health with a net cash surplus of about INR 2,000 crores. The stand-out performer, investment income, recorded INR 54.57 crores in the consolidated business and INR 41.2 crores in stand-alone treasury income for the current quarter. This supports the assertion that appropriate revenue optimization strategies are in place and measures for increased profitability are under consideration.

Challenges in SGF Prediction

BSE treads cautiously when discussing the Settlement Guarantee Fund (SGF) contributions due to unpredictable market volatility and a complex regulatory framework that defies straightforward forecasting. The SGF’s relevance comes from its foundation on regulatory parameters that include market factors such as open interest and market volatility, which are inherently subject to fluctuation.

Deciphering the Derivative Segments

Investor queries around Equity Derivative segment tariffs and SGF contributions reveal that BSE refrains from specific forward-looking statements but confirms ongoing efforts to enhance stability in open interest and trading activity, particularly through foreign participation. With BSE attracting predominantly domestic equity derivative trades, the growth trajectory is cautiously optimistic depending on institutional engagement.

Derivatives Market Allocation and SGF Trends

A considerable 82% of BSE's volumes are allocated to SENSEX options, with the remaining stake held by Bankex options. Total SGF reserves stand at INR 916 crores, with contributions segmented into INR 381 crores for Equity, INR 100 crores for Equity Derivatives, and a substantial INR 400 crores for Currency Derivatives. The SGF depicts a doubling trend over an unspecified period, encompassing both incremental growth and segment-specific nuances.

Efforts to Broaden Expiry Participation

To enhance market depth and nurture participation across various expiries, strategic initiatives are on their way. BSE is temporarily offering reduced transaction charges on longer-dated SENSEX options, beyond the current week, to invigorate trading interest. Furthermore, proactive engagement with foreign and institutional investors aims to solidify the market's stability and attract more diverse trading activity, promising for BSE’s derivatives platform.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the BSE Limited Q3 FY '24 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Anand Sethuraman. Thank you, and over to you, sir.

[Anand Sethuraman, executive]

Thank you so much, [ Rayo ]. Good evening, everyone. Before I start, apologies from our slide, as our Board meeting went longer than expected. And welcome to BSE's earnings call to discuss the Q3 FY 2024 results. Joining us on this call is the BSE's leadership team consisting of Mr. Sundararaman Ramamurthy, Managing Director and CEO; Mr. Deepak Goel, Chief Financial Officer; Mr. Sameer Patil, Chief Business Officer; Ms. Kamala K., Chief Regulatory Officer; Mr. Girish Joshi, Chief of Listing and Trading Development; and Mr. Subhash Kelkar, Chief Information Officer. Also present here are the members of our business, finance and Investor Relations team.

Do note that this conference is being recorded and the transcript of this call along with the earnings release and the presentation can be found on the Investor Relations section of the BSE India web page.

Before we get started, I once again remind you that our remarks today will include forward-looking statements. Any results -- any actual results may differ materially from those contemplated by these forward-looking statements. And any forward-looking statements that we make today on this call are based on assumptions and BSE assumes no obligation to update these statements as a result of new information or future events.

With this, I now hand over the call to Mr. Sundararaman Ramamurthy, Managing Director and CEO, to give a brief overview of the company's financials and business performance for this Q3 FY 2023, '24.

[Sundararaman Ramamurthy, executive]

Thanks, Anand. Good evening, everybody, and a warm welcome to all of our esteemed stakeholders for joining the call today. It gives me great pleasure as always to address you all today.

I'm happy to say that 2023 has been crucial in laying the foundations for the future growth of BSE. We have successfully initiated a significant milestone by laying the foundation of our Equity Derivatives segment. Our achievements in 2023 paved the way for the next steps to be delivered in 2024. We have a strategic plan with the expansion of our core data center and onboarding new members in our trading business.

These are the critical bricks to complete our presence across the integrated value chain, allowing us to innovate, to share capital markets in line with evolving client needs and making BSE even stronger to deliver future growth. We have actively responded to evolving investor preferences and market dynamics, and the results are evident. The key driver of our growth has been the performance of our Equity Derivatives contract, that is SENSEX and Bankex. As you recall, we relaunched these derivatives in the month of May 2023 with the aim of providing investors with enhanced flexibility and hedging opportunities. This move has proven to be immensely successful exceeding all our expectations.

I am particularly delighted to announce that BSE ranks second among exchanges globally, and our flagship index SENSEX ranks fourth in terms of derivatives contracts traded in 2023, according to the data published by Future Industry Association. It also gives me pleasure to inform you that SENSEX derivatives were still growing and broke its record on 2nd February 2024, and more than INR 49 crore contracts traded representing a notional turnover of INR 356 lakh crores and a premium turnover of [ INR 77,500 ] crores.

Our trading systems also processed more than INR 220 crore orders and INR 9.6 crores streams. Since the relaunch, 375 members have traded BSE derivatives, representing more than 23 lakh UCCs. The Bankex contracts has also generated significant interest expiry date change to Monday on October 16, 2023. Today, in its 17th Monday expiry, the Bankex contracts created a new record with INR 9.7 crore contracts traded, representing a notional turnover of [ INR 75.7 ] lakh crores.

We are constantly monitoring its performance and revised its -- like we did with our SENSEX contracts. One crucial area requiring our immediate focus is further diversification of our participant base. They haven't yet see the full spectrum of market participants actively engaged with our derivatives platform. Expanding our member base is a top priority for us in order to build liquidity on non-expiry dates and longer-dated contracts.

As a part of our commitment to providing the fastest, most reliable and cost-effective trading experience, we are investing in developing a good colocation facility. While this will incur some expenditure in the short term, it is a strategic investment that will deliver benefits in the long run. We are confident that this will solidify BSE's position to drive our continued growth in the years to come. We now have the ability to process around INR 800 crores plus orders across segments, up from INR 110 crores orders about 6 months back. In terms of trades, we have upgraded our capacity to handle INR 18 crore trade from INR 2.25 crore trades about 6 months back.

Let me now start with financial updates. I'm happy to inform that BSE has achieved another milestone breaking our previous quarterly revenue record, achieving revenues of INR 431.5 crores compared to INR 245 crores in Q3 FY '23, a growth of 76%. Similarly, BSE's operational revenues have grown by 82% to INR 371.6 crores, driven by strong volumes in Equity, Equity Derivatives and Mutual Fund Distribution segment. The net profit attributable to shareholders of the company stands at INR 108.2 crores compared to INR 51.6 crores in the corresponding quarter previous year.

I will now share some of the key financial numbers on a consolidated basis for the quarter ended December 31, 2023 as compared to the corresponding quarter previous year. Revenues from transaction charges increased by 163% to INR 166 crores aided by growth in Equity Cash, Equity Derivatives and Mutual Fund segment. The clearing and settlement operational revenues increased by 81% to INR 32.9 crores. Treasury income from clearing and settlement funds have increased by INR 115 crores to INR 46.9 crores. Listing related income increased by 20% to INR 89.4 crores due to contribution by book building income and annual listing income.

Other operating revenues, which included data dissemination fees, training income and software income has increased by 19% to INR 21.4 crores. Investment income increased to INR 54.6 crores from INR 34.8 crores. The operating EBITDA for Q3 FY '24 stands at INR 91.9 crores, up from INR 39 crores and operating EBITDA margin increased to 25% as against 19% in the corresponding quarter last year. Similarly, the net profit margin improved to 25% from 19%.

I also want to apprise you of 2 key factors that impacted our profitability. One is contribution to Core SGF. BSE's clearing arm ICCL had to contribute an amount of INR 91.7 crores for Q3 FY 2024 towards its Equity and Currency Derivatives segment. This is 67% higher compared to the entire previous financial year. Second is clearing and settlement charges. As you know, these charges are a function of the fee levied on the clearing and settlement services provided by Clearing Corporation. BSE has incurred a cost of INR 63.8 crores on a stand-alone basis compared to INR 40.2 crores in the previous quarter.

On the business side, let me start by covering our primary market segment. BSE platforms continue to remain the preferred choice by Indian companies to raise capital by enabling issuers to raise INR 4.12 lakh crores by means of equity and debt bonds, commercial papers, et cetera.

Moving on to our trading segment. For the quarter ended December 21, 2023, the average daily turnover in Equity Cash segment stands INR 6,643 crores compared to INR 4,234 crores in the corresponding quarter last year. Like I mentioned earlier, BSE equity derivatives volumes have picked up with average daily turnover growing up to INR 71.14 lakh crores in terms of notional turnover as of December 2023. The average daily turnover in currency future stands at INR 5,558 crores compared to INR 2,937 -- INR 20,937 crores in the corresponding quarter last year.

Now let's get into our Mutual Fund Distribution segment, which continues to do well. BSE StAR MF delivered yet another quarter of record revenues and performance, up 55% year-on-year, to reach INR 32.84 crores. The total number of transactions processed, a BSE StAR MF grew by 60% to reach 10.99 crores transaction in Q3 FY '24 from 6.86 crores in the corresponding quarter last year. BSE market share stands at greater than 85% among exchange distributed platforms. The BSE StAR MF has been consistently reaching new highs in terms of transactions with the platform processing a new high of INR 4.34 crores transaction in Jan 2024. On an average, the platform processed 3.2 crore transactions in current financial year as compared to 2.2 crores in the previous financial year. We are going to continue focusing on StAR MF and improve it in terms of scalability, functionality and order processing.

The BSE growth directly or by our subsidiaries also had its presence in other related business, including India International Exchange, India INX, BSE's Exchange at GIFT City, BSE-Ebix Insurance Distribution platform with Ebix Inc., The Hindustan Power Exchange, HPX in association with PTC India and ICICI Bank, BSE-E Agricultural Markets, BEAM, the spot platform for trading and commodities and BSE Administration and Services Limited. BSE is committed to these new areas, and it's constantly working with partners for the growth of these businesses. As we move forward, we see that there is a significant opportunity to continue to expand and evolve these businesses.

In closing, I want to say that 2024 will be another transformational year for BSE with the projects we are implementing, the plans we are preparing, which I am confident will shape the future of BSE Group. All of us will be working hard on numerous transformative projects, including expansion of data center, a new mutual fund platform, enhancing our data and index business, numerous regulatory projects and improving our clearing and settlement services. I'm certain that our diversified business model, our hard work and our agile operating culture, combined with our continued cost discipline, will allow us to shape the capital markets for future.

With these updates, I now hand over the call back to Anand.

[Anand Sethuraman, executive]

Thank you so much, sir. With these updates, I would like to open the floor for question and answers.

[Operator]

[Operator Instructions] The first question is from the line of Pranav Thakkar, who is an individual investor.

[Unknown Attendee]

sir, congratulations on receiving outstanding CEO award in Capital Market. Sir, if you can share an update with reference to the merger, it is proposed in GIFT City, where we are, and how long it will take?

[Sundararaman Ramamurthy, executive]

Thank you so much for the congratulatory message. My apologies that my throat is very bad. And in case I cough in between, my apologies for it. GIFT City, as you know, is very, very close to our heart. And it is a national project of national importance. And as you know, that we were the first exchange to be there. And we are doing whatever we need to do that in the most expeditious fashion, the way that we can move around for furthering the cost of GIFT City and therefore, there's a unified approach to the outsiders as far as India is concerned through GIFT City. The work is on. It is very tough at this point of time to put an exact time line to say when it will get completed because whatever work we are pursuing today has lot of requirements to be fulfilled from multiple regulatory agencies. But what we are able to assure at this point of time to our investors is our commitment and steadfast work that we are continuing to do with GIFT City.

[Unknown Attendee]

Right sir. And sir, if you remember, previously, I made a suggestion that some of the data publishing side, like Sensibull, Opstra or you for that matter. Other are not publishing the data with reference to SENSEX and Bankex, which they typically publish NIFTY, Bank NIFTY or [ fin ] NIFTY. So as a shareholder, I request if anybody from the team can approach them because as I see the larger picture, if any analyst appearing in the business news channel, they normally refer to data about call open interest before giving any recommendation. So the frequency of the calls, which are coming on SENSEX and Bankex are comparatively very low or you can say almost negligible. So if we can do on that front...

[Sundararaman Ramamurthy, executive]

No. Thank you so much for your kind suggestion. We value your suggestion, and we will take your advice. We have been continuously putting our efforts to any agency who wants our data to provide it. And we also proactively approach agencies for providing the data wherever it could be of service to the investors. We will -- we totally take your advice, and we will continue our efforts and journey towards making visibility of Bankex and SENSEX to increase. It is -- one reason probably could be is the other products, which are typically covered are 23-year-old or 20-year-old products. Since we are in the initial stages of growth, probably it is taking time. With good people and well-wishers like you and our efforts, I think soon we will be able to get more popularity for SENSEX and Bankex. Thank you so much once again for this.

[Operator]

[Operator Instructions] The next question is from Devesh Agarwal from IIFL Securities.

[Devesh Agarwal, analyst]

Sir, my first question is around the Equity Derivative segment. If you could share the blended tariff for the quarter as well as the payment that we have made to NSE for the clearing and settlement for the third quarter, just for the equity option segment?

[Sundararaman Ramamurthy, executive]

Sure. So the blended numbers and all keep on changing -- is they keep on changing. I think we have put still whatever it is in the presentation. 1 minute, let me refer to the number and tell you. It is -- kindly give me 1 minute. Currently, it shows around [ 2,145 ]. But what I need to tell you is that these numbers can keep on changing because the mix is going to change and therefore this will change. And with regard to what we pay to the clearing corporation at this point of time, it comes to around -- per crore, per crore.

[Anand Sethuraman, executive]

Devesh, if you refer to our investor presentation, right, we have a slide on Equity Derivatives segment. So if you can see, we have the total revenue that we have given, that is INR [ 34.2 ] crores and you can see the premium turnover, that's around INR 4,300 crores -- INR 4,030 crores. So if you can just do a simple division, you'll get a blended rate of our Equity Derivatives. And also, as you now, we have a slab-wise structure for SENSEX Derivatives and which have a flat fee of INR 500 per crore per banking. So this is a blended number coming as of now.

[Unknown Executive]

Slide 14.

[Anand Sethuraman, executive]

Slide 14, you can refer to our investor presentation.

[Devesh Agarwal, analyst]

Right, Anand. I think the tariff part is clear. If you can help me with the cost part as well, the amount that we have paid to NSE?

[Anand Sethuraman, executive]

If you see our -- if you heard our speech, we did mention that the BSE incurred a cost of INR 63.8 crores for Q3 as compared to INR 40.2 crores for Q2. So this was given in -- this was given as an update in the speech as well.

[Devesh Agarwal, analyst]

Right. So it's largely for equity options.

[Anand Sethuraman, executive]

Yes.

[Unknown Executive]

Anand, if I may add, [indiscernible] to NCL and not NSE.

[Anand Sethuraman, executive]

Yes. So just to be clear, we make payments to both NSE Clearing as well as to ICCL.

[Devesh Agarwal, analyst]

Okay. And for the SGF contribution that we made during the quarter, again, you mentioned largely it's for equity options, so my understanding was that because a large part of clearing is done by NSE Clearing Corporation, the obligation of SGF to a large extent would be on them and not on us. So to that extent that this INR 90 crore contribution has surprised. So will this numbers continue...

[Sundararaman Ramamurthy, executive]

Sorry for interruption, one element of clarity. The SGF contribution of 91.2% has not arisen out of the trading volumes or whatever it is from equity options. It has come from our activities in Currency Derivatives segment.

[Devesh Agarwal, analyst]

It is for currency, sir.

[Sundararaman Ramamurthy, executive]

Correct. Correct. Sorry for interrupting you.

[Devesh Agarwal, analyst]

No, no. No issues, sir. So I just wanted to know will this run rate continue? Any sense that you can give for the coming quarters?

[Sundararaman Ramamurthy, executive]

So it's a very good question that you are asking. The SGF continued -- SGF computation, as you know, is based on the regulatory parameters that have been put in place and has multiple parameters, including the open interest, the market volatility, et cetera. So since it is very difficult to predict the volatility part of it and open interest at any point of time, and it certainly fluctuates. So it's very difficult to give a forward-looking number as to how would be the SGF growth. Suddenly, you find in 1 quarter or in 1 month, there is some activity, which as per the [ SEBI ] parameters when you compute, necessitates in a contribution to the SGF. So it is at this point of time, not possible to quantify what will be the future trend of SGF requirement.

[Devesh Agarwal, analyst]

And sir, can you share the [ UCCs ] between SENSEX and Bankex just to know what is the scale up that has happened in Bankex and how much it can more grow?

[Sundararaman Ramamurthy, executive]

So the SENSEX, at this point of time, we find 23 lakh UCCs have traded till now. And on expiry day -- last expiry day, that day, we found around 7 lakh UCCs participating. All the UCCs who are in SENSEX are also part of Bankex. But in trading part of it, around 2 lakh UCCs are participating in Bankex at this point of time last expiry, that is today when we have seen.

[Devesh Agarwal, analyst]

I have further more questions, but I'll come back in the queue.

[Operator]

Next question is from Marshall, who is an individual investor.

[Unknown Attendee]

Yes. First of all, I have a strong suggestion that being an investor of BSE, we always want to stick to BSE and all our reports we want to see in BSE. But there is a very severe problem in the IT portal of your company -- of BSE Exchange. Whenever we see the corporate announcement of any company, it simply gives the message, "the page you are looking for has removed or error 404."

So sir, can you please direct over this your CIO, Chief Information and Technology Services Officer, to fix this problem. If I can get e-mail ID of him, I can send him a screenshot also because it becomes so embarrassing that we never want to open the other exchange website. We always want to go to your website, but then we are forced to just drop your website and then go to the other exchange website to see the result of any company. And it happens even if some announcement has come 3 days ago, today we cannot see because the page will always shows error. Many times it shows the error, sir.

[Sundararaman Ramamurthy, executive]

I'm extremely sorry to hear this. Our sincere apologies that you faced difficulties. My humble request is, if you could send a mail to us so that we can get in touch with you, and we will certainly work on this.

[Unknown Attendee]

On which e-mail ID should I send, sir?

[Anand Sethuraman, executive]

Sir, you can send it on [e-mail], and we will forward to the relevant people in BSE.

[Operator]

The next question is from Prayesh Jain from Motilal Oswal.

[Prayesh Jain, analyst]

Congratulations on a good set of numbers. Sir, I had total 3 questions. Firstly is on the question that Devesh was asking earlier. If I look at the currency volumes, they have been significantly lower than when we compare Y-o-Y and still we have contributed a good INR 90 crores to SGF. So why is that? That was the first question. So second is...

[Sundararaman Ramamurthy, executive]

Sorry, 1 second, 1 second. If you mix too many questions together, I may miss answering your questions. So if it is okay with you, you ask 1 question and I give a reply and then you proceed to the next one, if that is okay with you.

[Prayesh Jain, analyst]

Sure, sir. Sure, sir. Absolutely fine.

[Sundararaman Ramamurthy, executive]

You have asked a very, very valid question. When the volumes in currency have gone down, why are you contributing a significantly higher amount to the SGF is your question. It's absolutely very valid from the perspective of optics. But what happens is the computation of SGF is as per a prescribed the methodology of SEBI. It does not consider volumes in that perspective. It considers the open interest at the individual level and any concentration at any individual level and also the volatility associated with markets apart from various other factors. Even by those parameters, the number comes as an increase of INR 92 crores. Logically, it becomes very difficult to take it, but that is what the current formula is, and we have to abide it with what the regulatory requirements are.

[Prayesh Jain, analyst]

Okay. Okay. The second is on the clearing and settlement cost. So what would be -- how would we bring this down? So one was obviously the longer-dated options volumes and possibly you would need institutional investors to use Bankex and SENSEX for hedging their portfolios, that would be one of the things or the second move could be people changing from NSE Clearing Corporation to our Clearing Corporation. Where are we in both of those elements to bring the clearing and settlement costs down? Because that's kind of taking away the profits for us. Yes, that would be my second question.

[Sundararaman Ramamurthy, executive]

So a very good question that you're asking. Actually, there is another method, apart from the 2 you said. It is the clearing corporation deciding to charge reasonably, but it's the first method actually, to be very honest. We have already requested the clearing corporation. The lion's share of the clearing is done by our members with [ NCL ]. We have written to them. They're telling that it is too much of a cost, and they should relook at it because it is a long time since the interoperability agreement was signed between clearing corporation. And it is time to review that, and we have been requesting for a review. So that we will continue to pursue.

With regard to the institutional volumes, it is more important than even from a clearing and settlement perspective, in order to ensure, first of all, there is a volume growth, there is sustainability, there is scalability, and there is open interest across all expiries. It is very important to increase the institutional presence in the derivatives market. We are working seriously with foreign participants, foreign direct -- [ FPI ] clients. The reason is Indian domestic institutions do not have large scope for trading in equity derivatives. So it should be only through the foreign participants we need to bring in this type of a stability in terms of open interest and trading activity across multiple expiries and the effort is on.

[Prayesh Jain, analyst]

Okay. Sir, lastly, could you mention what kind of investments you would be doing for the colocation services? And when do we see this to be a revenue driver for us? And what could be the size of the revenues that we can look at?

[Sundararaman Ramamurthy, executive]

Yes, good question again. So the investment is ongoing. And as you know, these are all not short-term projects because it is not about bringing up something in a physical manner, so it takes some time. The projects are on. The projects will start delivering racks somewhere in the first quarter onwards of this year, calendar year, not the financial year. And going forward, throughout the year, it will be month-on-month delivering some additional racks. At this point of time, the main focus is to get the facilitation done for the investors and the brokers and the members. And once the volumes pick up, monetization will happen at the appropriate rate and appropriate time.

Monetization happens generally in 2 fashions. One is about the rack rent. That is more of a cost recovery. At this point of time, our rack rents are much lower. So we will bring it to market levels at some point of time, as I said at appropriate times. And about the order message is something which also generally gets charged elsewhere, we will look at it at the appropriate time. So it is a question of more what the market can take and how the market grows. So now the primary focus from our side is to ensure the infrastructure is available for people to participate, deep in the market, bring in greater stability and therefore a good product for the future.

[Operator]

The next question is from the line of Atul Parashar from Integrity Sourcing India. We seem to have lost line from Mr. Parashar. We move to the next question. Next question is from Santosh Keshari from Keshari Finance.

[Santosh Keshari, analyst]

Okay. Great. Sir, I just have 2 questions. One is what is the net cash balance of the BSE as a [ consolidated ] number? That's my first question. And my second question is...

[Sundararaman Ramamurthy, executive]

So I'll ask my CFO to see. I think what you're asking is what is the net cash balance. I don't know whether I understand the question well. I'll ask my CFO.

[Unknown Executive]

So Santosh, at any point in time, we are maintaining a net cash surplus of about INR 2,000 crores.

[Santosh Keshari, analyst]

Okay. Great. Sir, my second question is about the distinction between treasury income and your other income that you are showing in the presentation. If you can just clarify on this point?

[Unknown Executive]

So Santosh, investment income has been shown separately in stand-alone as well as in consolidated financial results for the current quarter and consolidated business, we have under investment income of INR 54.57 crores. And at stand-alone level, we have got a treasure income of INR 41.2 crores.

[Operator]

Next question is from Deepak Ajmera from IGE Family Office.

[Deepak Ajmera, analyst]

Looking over the -- comparing with the NSE profitability, we are already at 15%, 16% of the profitability level, market share level. But the profitability, if I compare with NSE, they're [ relating ] almost INR 10,000 crores of profit from [ options ]. And by when we can expect INR 1,500 crores, INR 1,600 crores of profit at the current market share?

[Sundararaman Ramamurthy, executive]

Honestly, I don't think I have a reply for this because if you would have recalled my previous conversations as well, we are doing it from the perspective of providing a marketplace, which is vibrant, which helps in addressing concentration risk and provides very good complementary product. That is the way we are measuring our success. And incidentally, that reduce -- rise to the profits. So our focus will continue to remain the same, to make BSE vibrant and provide a very good vibrant complementary product, which helps in reduction of concentration risk.

How much it will contribute to profitability? Is the profitability comparable? They will be very difficult questions because of the simple reason. There is a -- if you look at the contribution of profits from the top line to the bottom line with increasing profitability exchange being fixed cost business, the marginal contribution to the bottom line by every rupee added to the top line goes on increasing. So it is a question of how we are able to make the products of BSE relevant and vibrant so that we get into the trail of increasing marginal contribution of the top line to the bottom line. So that will be our continued effort.

[Deepak Ajmera, analyst]

I asked this because lots of scope is there on charges side also and mainly on the charges side. Currently, we are charging much less charges, and it doesn't impact as such the turnover [ related ] charge INR 1,000 or INR 2,000 or INR 500. So that's...

[Sundararaman Ramamurthy, executive]

That's a very, very fair point that you are making. Yes, we do feel that there are a lot of good opportunities for us to increase the revenue of BSE. We look at revenue from 2 perspectives, how we are very careful and conscious about spending, the cost part of it, we are very careful about. And in respect of revenue, as I promised to the shareholders at some point of time in the last year, last quarter at appropriate time, we will start charging for derivatives. We have started charging. We have made a beginning. We very closely watch the market and its behavior based on whatever we are doing and based on market feedback, based on the voice of customer, we will be very much considering whatever appropriate levies to be made from time to time, and that will certainly show up the increased profitably.

[Operator]

The next question is from the line of Jayant Kharote from Jefferies.

[Jayant Kharote, analyst]

Congrats for a good set of numbers. Two questions from my side. One is just digging on the SGF piece a little more. Can -- is there a part of the INR 91 crore, which was towards Currency Derivatives? Or was all of it towards that end? Secondly, what we're seeing are Currency Derivative, ADTV has been sort of consistently or steadily moving down. If you're moving on the same trajectory, it's fair to assume that the [ SGFTs ] will be at least as far as these levels are lower and not more than this?

[Sundararaman Ramamurthy, executive]

Your second part of the question was not audible to me. First part was audible. In the first part you asked whether it is all because of Currency Derivatives? Or part of it towards currency and part of it towards equity? To clarify, it is all because of Currency Derivatives. The second part of the question was not properly audible, if you could please summarize and repeat again, I'll be very happy to answer.

[Jayant Kharote, analyst]

Just to summarize, sir, basically our EBIT -- turnover in currency has been steadily coming down. So if this trend continues, is it fair to assume that the SGF contribution should be similar or lower incrementally?

[Sundararaman Ramamurthy, executive]

If the -- see, as I told, it is just not the volumes that [ decide ] the contribution to SGF. As you have observed, the volumes have come down, but still the contribution has gone up. So it is -- it may not be that fair to assume that if the volumes continue to go down, there will be no SGF contribution to currency segment.

[Jayant Kharote, analyst]

No, sir. I didn't say no. I said similar or lower, but not more than this.

[Sundararaman Ramamurthy, executive]

That is a probable way to look at, but it is very difficult to predict because as I told you, the computation of SGF is based on host of parameters. It is just not a linear model because it is not a linear model, it is very difficult for anybody to predict what it will be.

[Jayant Kharote, analyst]

Yes. And second question, sir, in terms of monetization of our derivative piece, at what levels of premium are we comfortable moving in? Basically, we've seen Bankex also do steady INR 5,000 crores, INR 6,000 crores of premiums on Monday. Is there a number that you have in your mind? How do you think about moving ahead with monetization over there?

[Sundararaman Ramamurthy, executive]

So it's a good question again. So when we -- if you recall last year, last quarter when the same question was asked to me about SENSEX, the point that I made was it is just not the volume on a single day or volume on multiple days that clearly makes us to decide whether it is the right time to charge. We look into a host of factors, including the participants and various other things, which makes us feel comfortable. And we also go to the markets to talk to them about -- understand from them what their plans are, so that we will able to take a conscious call. So it is not possible for me to just say if Bankex volumes touch this many crores, I'll start charging. It's a host of factors, which we look into to find ourselves comfortable that by charging, we are not killing a product, but we are only growing -- making it grow.

[Jayant Kharote, analyst]

That's very fair, sir. And sir, the last question, I could just squeeze in on the clearing piece, slightly longer term. Is there any regulatory tweak or change that you feel is necessary to make the clearing market sort of more level playing?

[Sundararaman Ramamurthy, executive]

See, our country has the benefit of a very proactive regulator who thinks about all aspects. So I'm sure wherever there is a need for any regulatory intervention, they will intervene.

[Jayant Kharote, analyst]

Yes. Anything that you feel is needed right now from BSE's perspective?

[Sundararaman Ramamurthy, executive]

So at this point of time, we are already putting ourselves on multiple areas of work. As I told you, we are talking with the NCL for review of the agreement. We are also talking to large-scale participants to ensure that there is a deeper contract open interest across multiple expiries. That is where we are engaging ourselves at this point of time.

[Operator]

[Operator Instructions] Next question is from the line of Aman, who is an individual Investor.

[Unknown Attendee]

Yes. Within Derivatives segment, what is the contribution of Bankex versus SENSEX?

[Sundararaman Ramamurthy, executive]

You're talking in terms of volumes, or are you talking in terms of revenue?

[Unknown Attendee]

You can tell either. Revenue preferably, but if you can, volume.

[Anand Sethuraman, executive]

So Aman, just to answer your question. Today, almost 80%, 82% of all volumes on our BSE are from SENSEX options and the rest are from Bankex options.

[Unknown Attendee]

Okay. Secondly is, again, on SGF only. Almost INR 150 crores has been spent on the SGF fees. Out of that INR 91 crores you said is for derivatives, and I'm assuming the INR 60-odd crores must be spread between the regular equity and the Equity Derivative. Is it possible that such a dramatic impact, which we have seen for Currency segment can also happen for the Equity Derivative segment at some point in future, depending on whatever calculation methodology, which the regulator has defined?

[Sundararaman Ramamurthy, executive]

First of all, Aman, there is no further INR 60 crores in this. It's only INR 90 crores, and I don't know where you are getting another INR 60 crores to put it up as INR 150 crores, kindly look at it. The contribution to SGF is only INR 92 crores, arising fully out of Currency segment. And I can only repeat the same answer if you ask me to project anything on SGF. It is based on a host of factors as decided by -- the parameters are provided by SEBI. So any projection whatsoever in respect of any segment you ask, any number of times, any number of investors, the answer has to be same. It is not possible to be projected.

[Unknown Attendee]

I got it. So within this INR 90 crores, INR 92 crore number, there is no contribution for the Equity Derivative business?

[Sundararaman Ramamurthy, executive]

I think I have already clarified it 3 times. I'll clarify it for the fourth time. This entire amount is for Currency Derivatives.

[Unknown Attendee]

Okay. And -- but something like this -- the INR 92 crores has happened for Equity Derivative -- Currency. Can it possibly happen for Equity Derivative as well? That is my last question.

[Sundararaman Ramamurthy, executive]

I heard the same question before also from you. And I replied, it is not possible for me to predict whether it will happen for equity options or not because it is a complex algorithm.

[Operator]

Next question is from Amit Chandra from HDFC Securities.

[Amit Chandra, analyst]

My first question is on the pricing. Obviously, you have answered on the pricing part, your thought process on charging for Bankex. But if I see in comparison to what NSE is charging versus what BSE is charging, in all the other segments, we are at par with NSE or even higher. So is there a thought process in place that we can match the pricing with NSE? And also in terms of SGF, obviously, you've answered the question, but if you can provide the total SGF that we have and also the SGF amount in all the various segments or currency versus equity? And if I match...

[Sundararaman Ramamurthy, executive]

No. 1 second, 1 second, 1 second, Amit. If you ask 4 questions together, I may not remember. In fact, now I don't remember the first question that you asked.

[Amit Chandra, analyst]

First on the pricing matching with the NSE.

[Sundararaman Ramamurthy, executive]

Okay. I will reply that to you. As I told you, it is not a question of benchmarking game with NSE. It's a question of the product and what impact it will -- the pricing will have on the bid-ask spread? How much of bid-ask spread increase will happen if there is a cost from the exchange? How much it will impact liquidity, at what level the bid-ask spread increase will not matter from a liquidity perspective? These are the points that we look into before getting into charges. So simply to say that NSE charges are best and BSE charges should be same as that may not work because in the interest of the product, the products liquidity is paramount to ensure.

So I will not, therefore, be able to immediately answer because these everyday go on evolving. The liquidity keeps on evolving. Bid-ask spreads keep on evolving. The depth evolves. So that is what we look for. When we look for all these factors, the debt, the participation spread, the bid-ask that comes, the liquidity available across strikes, all that we bear in mind before deciding the appropriate time, the charges will certainly be levied for Bankex.

[Amit Chandra, analyst]

Second was on the SGF spread between the various segments, and where we are underfunded and where the funding is appropriate? And also if I just compare with the other exchange, they have almost doubled the SGF in the last 1 year. So can we see our SGF also doubling from here on?

[Anand Sethuraman, executive]

Amit, just to answer -- this is Anand, here. Just to answer your question, the contribution to our SGF is available on our clearing corporation website. So the total SGF number we have as of Feb 2024 is INR 916 crores, of which INR 381 crores is for the Equity segment, about INR 100 crores is for the Equity Derivatives and INR 400 crores for the Currency Derivatives segment. So obviously, if you see the trend even for SGF has kind of doubled over the last [indiscernible]. And we are -- and these numbers will continue to evolve as and when -- as the regulatory requirements come up.

[Amit Chandra, analyst]

And sir, my last question is on the premium collection that we have across SENSEX and Bankex. So what are you doing to improve the depth of the contract? So look, maybe the premium collection on the non-expiry days has not seen that significant improvement as we are seeing on the expiry days. Also our premium collection as compared to the notion volume is 1/3 of what we are seeing in NFC. So any thoughts on that, how we can improve that?

[Sundararaman Ramamurthy, executive]

So the first part of it is like this. To increase the participation across expiries, we are doing multiple things. As you know currently, the charges that we levy in respect of SENSEX is only in respect of the current week. The next week and the next, next week and all continue to enjoy the benefit of INR 500 per crore of premium in order to encourage participation, slightly longer-dated options compared to the current week alone. And that is one exercise, which we have already done and which we have put in place.

The second exercise that we are doing is, we are trying to work with all the foreign institutions and other institutional participants to see how much of trading activity and interest they can bring into the market because many of them are into not current week, they are into other weeks as well that will bring in a lot of stability. So one is domestic by way of the transaction charges, which we talked about. Second is institutional participants, which we are trying to make to deepen the other markets. I hope it is clear and answering your question.

[Operator]

The next question is from the line of [indiscernible], who is an individual investor.

[Unknown Attendee]

Sir, so I just have 2 questions. Firstly, if you can provide the Y-o-Y growth in cash and F&O turnover according to the investment -- investor's category.

[Anand Sethuraman, executive]

If you see, we do provide this information on our website. It is available under the heading Investor-Wise Category -- Category-Wise Turnover. So this information is available on the BSE website and is available on a daily basis.

[Unknown Attendee]

Okay. Okay. And secondly, any new products in the pipeline that you're looking to launch?

[Sundararaman Ramamurthy, executive]

Thanks for that question. It's a very important question that you have asked. Any conceptualization of a new product is a long-term exercise, and it is a continuous effort, as you would agree. And it is based on voice of customers and what the market wants. While we continue to engage with market participants in understanding their need for a new product, it is very important for us at this point of time to understand that just October onwards, which is Bankex's trading, which is around 3 to 3.5 months. And SENSEX is not even full year of operations since we instituted the change.

So we want to give them some time for them to stabilize and grow further. Once it is there, based on the continuous exercise that we are doing with the market participant in understanding their needs, we will come up with product propositions, which can add value to the market.

[Operator]

Thank you very much. We'll take that as the last question. I would now like to hand the conference back to Mr. Anand Sethuraman for closing comments.

[Anand Sethuraman, executive]

Thank you, [ Rayo ], and thank you, everyone, for joining us today. We have taken all the feedback that you guys have given us, and we'll try to incorporate in our presentation. If you have any more questions, please feel free to write to us at [e-mail].

[Operator]

Thank you very much. On behalf of BSE Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.