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BSE Ltd
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Ladies and gentlemen, welcome to BSE's FY '18 Earnings Conference Call. My name is Ashwini, 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 to Mr. Yatin Padia, the Chief Investor Relations Officer, BSE Limited. Thank you and over to you, sir.
Hello, everyone, and welcome to BSE's earning call to discuss FY '18 results. This is Yatin, the Chief Investor Relations Officer. Joining us today on this earning call is BSE's leadership team consisting of Mr. Ashish Kumar Chauhan, Managing Director and Chief Executive Officer; Mr. Nayan Mehta, Chief Financial Officer; Mr. Neeraj Kulshrestha, Chief of Business Operations. Do note that the conference is being recorded, and the transcript of the same will be available on our website during the duration of the quarter. The financial results and the investor presentation are also available on our website.I will now request Mr. Ashish Kumar Chauhan to give a brief overview of the company's performance followed by a Q&A session. BSE does not provide any specific revenue earnings guidance. Anything said on this call which will reflect the BSE's outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risk the company faces. With that, I would like to turn the call over to Mr. Ashish Kumar Chauhan.
Thank you, Yatin. Good morning, good afternoon, and good evening to all of you, wherever you are. At the outset, I'm very happy to share that BSE has posted growth of 42% year-on-year to INR 237 crores in terms of profit from continuing operations on consolidated basis for the year ended 31st March 2018, as against INR 179 crores for the previous year. Further, the profit on a consolidated basis attributable to shareholders for the year ended 31st March 2018, rose by 222% to INR 711 crores as against INR 221 crores for the corresponding quarter in previous year. The Board of Directors have recommended a payment of final dividends of [ 250% ] which is 31% -- INR 31 per equity share of face value of INR 2 each. Thus, the total dividend for the financial year 2017 and '18, after considering the interim dividend of 250% paid in the month of February 2018 is 1,800% total, which is INR 36 per equity share of the face value of INR 2 each.Over the past few years, BSE had been receiving suggestions and requests from investors to return a part of the excess cash lying in its books in the form of dividend or buyback of shares. The board of BSE has, in a meeting held on January 15, 2018, approved buyback of shares through open market route, stock market mechanism. The board's decision reflects its confidence in BSE's future and its commitment to deliver value to all stakeholders and strong balance sheet.As allowed on the Companies Act, the board approved buyback of shares to the extent of 10% of equity and free reserves amounting to INR 166 crores. The maximum buyback price of INR 1,100 per equity share was approved by the board after considering various factors, including trends in the market price of the equity share of BSE during 1 month/6 months preceding the date of the board meeting, including average of the weekly high and low of the closing share price of the equity share of the company on the stock exchange, the net worth of the company and the potential impact of the buyback on the earnings per share and other similar ratios of the company.Accordingly, BSE proposed to buy back 15 lakh or more equity shares amounting to 2.8% or more of the paid-up capital of the company at market price subject to a maximum buyback price of INR 1,100 per equity share and maximum buyback amount of INR 166 crores. The buyback commenced from February 1, 2018. The company has bought back 8 lakh, 99,160 number of shares at a total cost of INR 72 crores from open market until 3rd May 2018.India International Exchange, a wholly owned subsidiary of BSE, continues to expand its footprint through various listings, product offerings and growth of turnover. In February 2018, YES BANK, acting through its international financial services banking unit, listed its new notes due to trade currently under USD 600 million medium-term note program under Global Securities Market of India INX. These has been followed by listing of new notes due 2028 issued by the Export-Import Bank of India under USD 1 million medium-term note program, and listing of various notes of NTPC of USD 6 billion under Global Securities Market of India INX. We are in talks with other public sector undertakings to list -- which is subject to regulatory discussions and also choice of the issuer. India INX will be introducing a new facility to enter orders on specialist contracts for straddle and pair options of a common underline for each market where a mock would be conducted on May 5, 2018, onwards.India International Clearing Corporation, a wholly owned subsidiary of BSE and clearing corporations for settlement of trade regulated in the India International Exchange has started examining bank guarantees issued by bank branches located in GIFT City international finance services centered at [indiscernible] from February 2018.Honorable Minister of Finance in his budget speech in February 2018 stated that the government will establish a unified authority for regulating all financial services in IFSC in India. Starting up a unified authority is likely to substantially increase ease of doing business in IFSC. BSE StAR MF, India's largest mutual fund distribution infrastructure, enabled an e-mandate facility on 30 January 2018. The company made paperless framework that will reduce the time taken for mandate approval to 3 days from 10 to 35 days taken for paper-based mandate approval. Various banks have been introduced for participating under the e-mandate facility over the last few months. To further facilitate the paperless framework and reduce process time, we will introduce scan mandates on BSE sign-up platform for mutual fund intermediaries and distributors with the effect from February 15, 2018. For faster resolution of queries pertaining to StAR MF platform, BSE has set up a BSE StAR MF platform service set up in February 2018. BSE launched platform for electronic book mechanism, BSE-Bond, for issuance of debt securities on private placement basis on 1st July 2016. Until March 2018, debt issuance of INR 500 crores mandatorily required to be made through the electronic book platform or stock exchange. SEBI devised a threshold limit downward to debt issuance around INR 200 crores, with effect from April 1, 2018. BSE-Bond for bond issuance has been a preferred choice of companies to raise debts. In the financial year 2017-'18, 84 issuers did -- raised 532 issues of bonds and successfully raised 2.08 lakh crores using BSE-Bond. On February 14, 2018, Greater Hyderabad Municipal Corporation successfully raised INR 200 crores by issuing bonds on a private placement basis using BSE-Bond platform. Earlier in June 2017, Pune Municipal Corporation was the first municipal corporation after several years to successfully raise INR 200 crores on the BSE-Bond platform. In the equity segment, BSE changed the business transaction charges from annual basis to trade count basis in group A, group B and certain other securities with effect from 3rd April 2017 to incentivize higher level of trading volume on BSE's electronic trading platform. In order to further increase liquidity in underlying stocks, BSE developed transaction charges in BSE, NSE and MCX-SX, stocks with effect from March 12, 2018. BSE launched cross currency derivatives and cross rupee options in euro-U.S. dollars, pound-U.S. dollars and Japanese yen-U.S. dollars future and option contract in February 2018. [indiscernible] for the same, but BSE is the market leader in this. SEBI recently made changes in the regulation to facilitate transition to the unified exchange regime from October 2018. Today, SEBI has also announced new market planning for stock derivatives also to be in line with the commodity derivative, which is just coming few months back. In line with preparing ourselves to launch commodity derivatives transactions and also now the equity derivatives, which will trade much longer, BSE has already held a mock trading session for such products. As you are aware, India International Exchange, BSE is already trading 22 hours so it's not new to BSE in terms of the long trading hours. BSE and Soybean Processors Association of India, SOPA, entered into an MOU for the growth and development of commodity markets and its value chain recently. And BSE is in the process of entering into many such MOUs with many participants and participant groups in India for developing commodities markets. India Index Services and Asia Index Private Limited, a joint venture with S&P Dow Jones and BSE Limited, launched S&P BSE Arbitrage Rate Index in April 2018. Now I'll cover the business update for the December quarter. BSE promoted India INX at GIFT City. Gandhinagar, Gujarat achieved the highest turnover of USD 522 million -- USD 529 million, the highest number of contracts traded are 32,689 in April 16, 2018, and April 12, 2018, respectively.India INX had USD 240 million average daily turnover for the quarter ended 31st March. India INX have 30 active members as on date, and over 66 membership applications in various stages of membership process. As on date, 132 products have been introduced on the exchange for trading in commodity index derivatives, equity derivatives and currency derivatives. The average number of contracts traded daily for the quarter ended 31st March 2018 was 14,507.India INX continues to be the market leader in this segment, and the market share for the month of April 2018 was -- stood at 83%. The market share seemed to have improved after that. Our mutual fund segment, which is an electronic online order aggregation platform for investment and redemption of units of mutual fund through our booking numbers as well as also through MFI, MFDs and other aggregators and their authorized representatives, has been showing superlative growth since past few years and continues to be another high-growth area for BSE. The segment has seen growth of 179% during the quarter ended 31st March 2108 on a year-on-year basis. Average monthly number of order processed during the quarter ended 31st March were 21.08 lakhs as compared to 7.56 lakhs during the quarter ended 31st March 2017. BSE continues to be market leader in this segment. The market share for the quarter ended 31st March 2018 stood at 77%. On March 12, 2018, BSE StAR MF processed a record 4.34 lakh transaction on a single day worth [ INR 686 crores ]. I'm glad to inform you that BSE started receiving fees from all the mutual funds on its platform for the services being rendered by StAR MF platform. BSE SME platform has 241 listed companies on its platform as of 31st -- 30th April 2018. 19 companies who have listed on this platform during the quarter ended 31st March 2018, as compared to 13 in the corresponding quarter. BSE has a market share of 64% in the SME segment until end of March 31, 2018.During the quarter ended 31st March 2018, BSE's platform for electronic book mechanism, BSE-Bond, for issuance of debt securities completed 198 issues, raising 70,444 -- INR 70,445 crores. The total number of issues completed in this platform since July 1, 2016, is 2,353.With respect to listing of securities, the number of companies listed with their equity capital on BSE and available for trade are 4,069 as on date. This is the highest number of companies listed on any exchange around the globe.In equity segment, the average daily turnover in the quarter ending 31st March 2018 was INR 4,711 crores. Further, daily average number of trades in the quarter ending 31 March 2018 was 4.5 lakhs. The average daily turnover in our currency derivative segment grew by 77% from INR 12,215 crores in quarter ending March 2017 to INR 21,625 crores in quarter ending 31st March 2018. BSE's market shares in currency derivatives segment for the quarter ended 31st March 2018, was 48% compared to 38% for the quarter ended 31st March 2017.On quarterly financials results, the consolidated total revenue for the Q4 financial year '18 grew by 6% over Q4 financial '17 to INR 195 crores, and consolidated net profit from continuing operations grew by 27% to INR 62 crores. Our operational income has risen by 19% to INR 137 crores in Q4 financial year '18 from INR 115 crores in Q4 financial '17. Our EBITDA increased to INR 85 crores in Q4 FY '18 from INR 69 crores in Q4 FY '17. The EBITDA margin has grown from 37% in Q4 '17 to 44% Q4 '18. Further, our net margin from continuing operation has grown from 26% to 32%.The growth in revenue and profits during Q4 FY '18 has been strongly aided by growth in operational revenues. Revenue from operations have consistently increased over the last few years. Our income from securities services has remained consistent at INR 67 crores in Q4 financial year '18 compared to Q4 financial year '17. Transaction charges income grew by 6% to INR 47 crores. Our income from services to corporates has increased by 51% to INR 62 crores in Q4 FY '18. BSE's net worth on a standalone basis as on 31st March is INR 2,774 crores, of which 766 -- INR 767 crores in the nature of capital reserves. And on 31st March 2018, the total balance lying in settlement guarantee fund maintained by our clearing corporation is INR 258 crores, out of which additional contribution made by BSE in accordance with earlier SEBI regulation is INR 55 crores, which will be offset against minimum required corporates requirements in future.With this introduction, let me welcome you once again, and invite all of you for the question-and-answer session. Thank you.
[Operator Instructions] First question comes from [ Mr. Ayush Kedar ].
Couple of questions, sir. First, can you put some light on the rising impairment and other expenditure in this quarter?
Okay, [ Ayush ]. The main item which has increased in the current quarter is with respect to the present maintenance of building. Our building is more than 40 years old now. And obviously, we did some renovation. And as always, we have to write it up in the year as expense.
Okay. So at fulfillment, how many would be the amount for that, sir?
So for that, basically, the total amount for it is INR 12 crores in this quarter. So this is one major item, and obviously, there are some other contribution to CSR then there'll be contribution to [ premium entity's ] expenses and then [indiscernible] all those things.
So this was a one-time expense during the quarter for repair and maintenance of the building. Okay.
It was a major one, yes.
Yes. And a question to Ashish, sir, wanted to know about your strategy behind level of transaction charge on Sensex 30 stocks. Will this income be settled by other kind of income of like mutual fund? I wanted to know about that.
Basically, mutual fund income will be much larger than what income we would have won from the Sensex 30. Basically, we had a choice to advertise and spend a lot of money. The other way is to sort of do this kind of things so that people get to know what BSE is doing. And this is what, what I call, a very targeted way of advertising yourselves in a different way, right? But we continue to break our results out of that, and we continue to figure out whether we need to change any of our strategies.
Okay. So transaction turnover will be more than our estimated transaction due the setup of the charges.
I didn't get the last one.
Sir, to conclude, behind the strategies that our transaction turnover -- I mean this Sensex 30 stocks will increase. So this is the main motive behind the reverse of transaction charge?
Correct, correct, correct.
Okay, okay. And lastly, sir, a follow-up question on the mutual fund. What will be the charge sheet on mutual fund transaction?
Mutual fund average, we are in the process of charging average because there are SMB transaction, active transaction, all sorts of different charges are there, around INR 5 per transaction average.
Okay. On an average, INR 5 per transaction. That -- so...
There are larger that has been charged smaller, and smaller that has been charged larger. But broadly, I think currently the average had been in the range of INR 5.
Okay. So that is already behind we were charging before that. So the charge sheet is as same as old charge sheet or somebody had changes in the charge sheet?
We did not charge before because people, they're not paying. We were hoping to charge. But from this month -- from March we charge, and then -- but mostly everyone is going to be charged from April.
Okay. So we are following the same old charge sheet from the time that they were not paying, but we have old charge sheet.
No, boss, that charge sheet was basically issued to sort of make people aware that there will be a charge. Actually, there have been an indefinitive negotiation, and now everyone is paying different amounts. That charge sheet, they're around -- average bank rate of INR 9 per transaction. After negotiation and everything, of course, nobody was paying. It was a hope and a prayer that people will pay. Nobody paid for almost more than 1 year and 3 months. After negotiation, it has now come down to around INR 5, that's it.
Okay. Yes. Sir, so what will be the expected income from the mutual fund segment?
Boss, you have to multiply that INR 5 with average monthly rate. When multiplied by 12, then you will get for the year, if you multiply it with quarter, then -- I mean 3, then you'll get for the quarter.
Next question comes from [ Sri Khan ].
Just wanted to get the bottom line figures of INX. How much are we in cash loss today?
The INX presently has spread around INR 34 crores.
That is for the quarter or for the year?
No, the cumulative trade date.
Okay. And how has that performed as compared to the previous year?
No, the fee, INX is paying -- last year only the rates were probably for 2 months, starting from January 1. So this was the first full year of operation. And obviously, this is a very big settled debt. So obviously, we have the benefit of the acquisition cost.
Right. I remember you said that -- in your past conference that you were looking at kind of 3 to 5 years as breakeven point for INX. But given the amount of significant ramp-up in the turnover, do we want to kind of revise the estimate figure? Or do we still continue to believe that it would still take about the same time frame?
Boss, the concept is very simple. We will charge when we have market power to charge, right. Currently, NSE is around 0 cost for next 6 months in the -- there, NSE IFSC, so we have to match it. They're trying to charge $0.20 per contract from April 1. But since the NSE announced it, we have to also match it. So until we -- sort of some reasonable market power comes, so we have to ensure that we continue to be the market leader even without charging. And then we'll continue -- we'll start charging like what we have done in the mutual fund business whereas if we will not start charging, BSE starts charging now.
Sure, sir. And incrementally, how much investments are we looking for into the INX exchange, say, for the next 2, 3 years?
Basically, on a 5-year scale, we'll track for -- there is certainly the regulatory capital which we do not currently use, and then there is the nonregulatory capital, which is what you end up using. And so there tends to be none for the regulatory capital for equities, [indiscernible] part, INR 300 crores for the clearing corporation or INR 400 crores through regulatory capital. And then on top of that is we have our interim, whatever, INR 35 crores or INR 40 crores, what, losses for next 3 or 4 years. And we'll have to add on it INR 150 crores more for that portion, right. So that is what will be numbers unless any changes downward the number is required for the exchange regulatory capital and clearing corporation regulatory capital.
Sir, would this kind of setup be impacted by the ongoing products which are being introduced in SGX? Given whatever has happened post the implementation of laws into the IFSC also, SGX has actually turning out to be a more threat rather than kind of what we were expecting earlier.
We were expecting at the time of starting the INX that SGX will continue trading fee, right. There's also adoption -- at least we have, probably, I don't know whether you had any indication that SGX will be stopped from trading. I mean, so now that this has happened, I take it as a positive. But again, only future will say what will happen.
Sure. But do we foresee any kind of change in the investment strategy in terms of more than our planned investment in any case that becomes a threat, sir? Is that how to...
There is no need for additional investment but until February, SGX was supposed to do a public stock deadline, right. Only in February, this got changed. And what was the outcome of that change, at least potential, is that the IFSC exchange will win, right. And we'll continue to remain -- just because you created a -- what I'll call, a new face product, possible that your face product may become larger-than-normal product, but there is possibility that the face product will not work, right. So it remains to be seen how it works. Particularly, what has happened over last 3 months, 4 months in terms of the -- that product licensing framework from Indian exchanges is merely following for the INX exchanges.
Sure, sir. Sure. And one final question, sir, just on the technology side. You mentioned in the presentation that the technology investments continue to be in the range of 16% of our total revenues. Is that the run rate which we can expect going forward also?
Yes. Yes, I think so. But not exactly, some bounce, up or down, there, too, because of some specific issues we may have. But currently, we don't see any large sort of CapEx going forward except probably one or 2 small little things here and there.
Sure, sir. Sure. And with regards to the commodity exchange soft launch, do we still believe we are on track to launch the exchanges from 1st October, if I'm understanding correctly?
We have been ready for the last 3 years. So as and when we meet the actions the stock exchange are allowed to trade commodities, we'll certainly be there on 1st October or whatever date that they allow us. So today's announcement make the need to allow from October some equities derivatives continues to trade [ INR 55 ] trading in that direction because it tells you that the listing is on October 1, [ making it in your selection as well ], right.
Sure, sir. Sure. A final question from my side is given these kind of initiatives which is being done by BSE to kind of launch new avenues of revenues, but traditionally, we have been lagging behind the equity cash segment. Is there some sort of a strategy by the management to kind of make a thrust to kind of improve the market share in that segment? Because historically, we haven't seen that -- BSE has not made any progress in terms of the market share there.
There are historical reasons, and there are real reasons for not being able to capture market share. In fact, we have been losing market share in equities because if you are trading equity derivatives in exchange, you'll also trade equities there, right. And that's where also algorithm trading, colocation facilities, when they allow colocation within equity and equity derivatives market, it is only happening on that action where equity derivatives is there. Traditionally, BSE missed out on that, but Bangalore allowed it in 2001. And almost -- now the new BSE has not been able to make any debt there. We will continue to try to make amends by having this Sensex 30 stocks value -- I mean, in terms of being valued or anything else. But we've also seen in the past when we were trying to bring derivatives, the government, they ordered it to come. We were paying up for the order flow, and we spent large sums without much result. At the same time, there are a few interesting structural breaks that are coming. One is the derivatives revenues. Second is this new market timings. Third is probably somewhere else, some more things we have been talking about on interoperative clearing corporations and all. So we think there is a possibility that many of these things may result in making a leveled playing field for BSE. But currently, I agree with you that we have not been able to make amends in the equity and equity derivatives markets.
Sure. But is there a specific kind of strategy in this segment? Or is it something which you are letting the market also dictate how the share will -- I mean, how market share will evolve?
Yes. Even in the same year, [indiscernible], being a highly regulated entity as well as being a first line regulator, most of the strategies which commercial organizations add up, we cannot add up. We are not allowed to add up. At that way, all of what is approved, what is allowed, must be done. And we stay within our limits in that. And so our strategies are subject to regulatory guidance available or regulatory approval if the guidance is not available.
Next question comes from [ Sura Deep ].
Actually, this has been answered so I'm out of the queue.
Next question comes from Mr. Nitin Agarwala.
Sir, I just wanted to ask that if you see the transaction charges increased 23% year-on-year in FY'18, so which segment has contributed to this growth? Is it the A and B group stocks will just add on a corporate basis or the other group stocks on which we had increased our transaction charges to 0.1% upon turnover? Hello?[Technical Difficulty]
Hello, can you hear me?
Yes, I can hear you.
Okay. Actually, I think I lost the conversation, so I couldn't hear what you said.
It's basically on both counts, A group, B group, where trade dates [indiscernible] on their exclusive group where on a standalone basis, both sides are seeing good volumes and both have increased because the market was fine.
Okay. And my second question is in core SGX. We have seen an increase of INR 86 crores during the year, and I believe that [indiscernible] we had not contributed anything for FY '18. So what was the reason of this increase? Like what -- from where did we get this contribution increase?
[indiscernible] only have cash contributions and collections and all those things also. So as the [ master ] volume increases, there is a collateral that tends to come into that. So BSE's contribution as well as on the tax side isn't already -- it does not [indiscernible] this year. It does not [indiscernible] of this year. So there is a [indiscernible] of around INR 135 crores, which needs to be offset in the future. And it is when there's a requirement to be funded. So I'll tell you a story without asking a question, okay. So I was in New York last month, and I met a fund manager, fund analyst, and she was adamant that BSE's annual profits will never go above INR 135 crores in around 2018. And I was totally surprised to hear her model reject the thought from some of the analysts which are on this phone. And she was next to me, and I told her, Madam, but reality is we're in 9 months, we make more profit than what your model suggests for the entire year. But she was completely confident of her model that we would not go above this. Whatever happens, probably they might say that we might even make losses for the next quarter to fulfill your expectations. And then she said, many of the analysts are saying that BSE management is not able to answer well and so and so forth. But the truth about this is that probably their models probably are wrong, but the tremendous faith people have in their model regarding the realities actually that BSE comes out with tends to be pretty sort of different. So now that it has come out to be around INR 238 crores -- INR 248 crores on consolidated basis -- on standalone basis, regarding our sort of INR 135 crores expectations, I thought this is a cautionary tale for most of the analysts who seem to be more bothered with the model rather than looking at real numbers.
Next question comes from Mr. Ashish Chopra.
Sir, my first question was maybe, Nayan, could you split the transaction charges between what would be the contribution from the exclusive segment, where you are still charging on ad valorem basis vis-à-vis the nonexclusives that you are charging on a per trade basis?
So Mr. Ashish Chauhan and Mr. Nehal discussed this thing in earlier meetings also. Basically, around 50% to 60% comes from specific and exclusive [indiscernible] basis, and the remaining 40% to 50% comes from the common trade form basis. So this thing is something we established, we have built up over the last few years and just continuing the same trend.
And if my understanding is right, the volume contribution from the exclusive segment would be less than 10%?
Yes. Yes, less than 10%.
Okay. And Nayan, any outlook on what would be the technology expenditure that you would have budgeted for in the next fiscal?
As far as technology budget expense is concerned, [indiscernible] will presume that, okay, it will be 10% more than the previous period because, as you know, we have to retain our AMCs with also the substitution of 6% to 7% minimum in any AMC. So -- and this is our technology business which we are running. So obviously, that goes along with it.
Okay. Fair enough. And it seems you've now started charging for the mutual fund platform, and as you mentioned that NSE is not yet charging, would you have seen any impact of that on the market share in the month of April or it would've stayed in the same range of north of 75%?
Probably, I was only iterating on -- but for me, these are all temporary, nothing to brag about. Currently, we're able to charge this with a greater lease. That has something to do with market share. In other words, nobody gets charged in this thing. Not only that but the other side, if you look at it, we are not charging on few things still, and I think continues to hold market share. So those are I think more to do with getting people on your marketplace first, and then if they're comfortable, they stay there, right?
Fair point. And just lastly from my side, so it seems now you're not being levying any charge on the index scrip. Would that have been a fairly noteworthy contributor to your transactional income in the last fiscal or...
Not much, boss, that's why it was done.
Next question comes from Ms. Dimple Kotak.
Sir, I just wanted some clarification. In Slide #21, where the average value for all -- for mutual funds have gone down to 69% versus 115% Y-o-Y. Sir, is there any reason for that?[Technical Difficulty]
So basically, what it tells you when mutual funds number of -- the value per transaction goes down, more retail investors are coming into the market using BSE StAR MF.
Okay, sir. And sir, what is your average monthly trade on the mutual fund platform?
Currently, it's in the range of 22 lakh to 25 lakh transactions a month.
Next question comes from Mr. [ Ah Leuk ].
Yes, may I have 2 questions? What is the free cash that you have at the end of the year? And if you could give me that number, clearly, there are large dividends and falls around dividend and buyback?
It's a little bit like this. I think you just mentioned in the page back that we have got the total net worth is 2,700 crores on standalone basis, of which 700 is mainly capital reserve. Now after the [ 700, we have now about 2,000 ] of which [indiscernible] was a buyback, so net worth of dividend. So around -- and then you have got alignments to equity, so that is around 300 crores, 400 crores. So you can say already we have 700 crores which came -- which will be within that cash level.
Okay. And that is technically around [indiscernible] recognition?
That is -- I've already [indiscernible]
Technically. Yes, of course. Now on the -- on direct expenses on a year-over-year basis, it's down by about INR 8 crores. What is the reason for that?
The last year we had given some special payments, which are payments to employees because they had completed 2 major projects which is in IT and also INX, catch-up INX, in a really short time frame as do the nonrecurring costs. So because of that, expenses shrink now in the current year.
Okay. Got it. And the admin expenses on a sequential basis side of that, INR 12 crores onetime, they could take it out from this quarter. Sir, the admin expenses on a sequential basis has gone up about 20%. So what's causing that?
Just one second. Basically, the payment to any regulatory cost because it's actually almost ad valorem. Yes, and the other expenses generally come in the last quarter for us and then again, some bad debt which are not in this period. So the cumulation of these parts mainly is we have more or less -- we have to budget this year [indiscernible] building maintenance costs which is nonrecurring.
Next question comes from Sri Karthik.
Between the -- sir, liquidity enhancement program that you executed in GIFT City counting the control numbers, is there any guidance with respect to how much you'd want to spend there?
The last time the leap setting was about 3 months, 4 months only. Now next year even for the full year, so it is by that much.
Full year amount on a strategy basis, and that's 2 crores?
Pretty much, pretty much.
Okay. So that should give you some sense of the last time that we add leaps in our onshore exchange, the peak cash burn was about 50 crores in 2015. Has that give the...
It -- but it was only INR 19-plus crores in near year, but that is not relevant in this case.
;And the timing difference would be STD?
Yes. So STD was a very large cost, which is not here in the GIFT City.
So in that then maybe some expectations per sector with a similar amount of leaps program could relate to that 25%, 30% market share, but we got on to actually the breaker during the earlier period.
Currently, in GIFT City, the India International Exchange is 90% market share.
Yes, sir. But you mean that once we move from SGX platform and then MSC also wants a full-fledged platform, we will see some migration of market share.
Let's -- these are all hopes about sort of many, many things and [Foreign Language] let us wait and watch.
Okay. On another note, if you could talk about what's happening on the currency derivative segment for the regulatory changes. There's been multiple regulatory changes during the past 6 months affecting currency, interest rate, et cetera. If could you tell us what's happening there in terms of NSE, sir?
Last few month straight what -- and understanding that now NSE will become 100% on market and BSE will slowly become 0. And NSE -- and BSE has become now probably more than 50% of the market after those changes happen, right. So in fact, these have been net positive for BSE despite the expectations are contrary for most analysts and with also some of them had written also small notes about the eventual demise of BSE's currency derivatives, which did not come out to be true. And BSE has become now larger in trading volume compared to NSE currency derivatives. In current month contracts, which is the main USD-INR current month contracts, we are like 55%, 60%, 70% of the trading volumes every day, day after day.
Yes. And my question is as we are now allowed to increase the [ minimum ], $100 million, did that have a system level increase to the volume?
Boss, I am giving you the same answer. After that $100 million on aggregate basis earlier that used to be on exchange difference. In the beginning comment, and people wrote an opportunity for BSE's currency derivatives, and we will prove that we can actually beat them hollow, right. That is what has happened in the last quarter. We basically ensure that all the predictions of this, that BSE now will come down to 0, that's actually come to that BSE is now larger than NSE on overall as well as -- but mainly for U.S. dollar, Indian rupee currency futures every day for last 3, 4 months.
Okay. And sir, you'd mentioned that you have a 22-hour trading cycle in our GIFT City exchange. What is the significance of that, sir?
It basically says that when Japan starts, we start. And when California sleeps, we sleep. We cover the entire shipment of all the activities of equities, commodities, currency markets anywhere in the world, we are competing with them.
Okay. But from a technology perspective, is that something which is difficult to replicate?
In a sense, it is not difficult to replicate. But then it is difficult to replicate by human -- even that some humans are required. So I have been told NSE IFSC doesn't trade so long. It's those all sorts of business to every cost we take up including the IFSC.
Next question comes from Mr. [ Angkol Shahar ].
Sir, can I get a bit breakup of the different segments that we hold still, like the company's currency derivatives, and just that StAR MF? Is it possible to get a bit breakup for that?
I think that we had a comment -- it was in the common infrastructure for all our segments, and the tables, these are used for any positive initiative which we do. So it doesn't make any sense for us just to have breakup.
Okay. And sir, one more question. More from, overall, your sense on how these -- I'm seeing in the chart -- the presentation that the BSE has made, and in all the new segments, we have a leading market share, or at least a market share that we can build up something meaningful. So as the size of the opportunity, the size of the business, what is your overall view? How far are we from making many money, meaningful money in any of these segments?
Boss, for us, a small amount of money is meaningful. For a large company, large amount of money may not be meaningful. So currently, we are making some money in currencies, in mutual funds. Bond, currently, we are not making too much money. But SME also, we are starting making sort of some money. So we are, in a sense, making money as if we are holding on to market leadership position. When these things go up, when these segments go up, we'll be the beneficiaries.
Next question comes from Mr. [ Nathan Mehta ].
Sir, I wanted one clarification. In terms of income from investment and deposits, is that in the statement because as against INR 238 crores for FY '17, currently, it is being shown as INR 198 crores for FY '17.
Good. What has happened is that last year, [indiscernible], which is a clearing corporation, they had to sell their bond which they are working in their book because of a regulatory requirement. And because of that, we had to book that profit in that previous year, and obviously, that is a nonrecurring item. And that is the main reason by which we have -- because of this, we are seeing this dip.
So that has been reclassified under the exceptional item or something?
No, it is already reclassified because of course of normal business.
So it will be now part of operational, is it? How should we think of it?
Could be either one. We consider it previous year as income. So the sales income, as you see, is a little down, that compatibility, it is because of that treatment.
Sir, no. What I want to know is that earlier, for FY '17, the amount shown was INR 238 crores income from investment and deposits.
You're right.
And now it is being shown as INR 198 crores for FY '17.
So you should assume that the INR 198 crores or similar will remain in future, plus minus that changes.
Going forward, you're saying.
Yes.
Again, we have Mr. [ Angkol Shahar ].
Just one follow-up question. Sir, on the book building fees, last year, we saw very major bump up from INR 143 crores to INR 331 crores. So sir, can you give a breakup of this segment as in, are these fees only related to IPO book building? Or does it include anything which is more nonmarket related?
You are saying million, not crores.
Yes, yes. Sorry, sorry.
When I was -- where is my income of INR 331 crores?
Sorry. Sorry for that.
Maybe sorry you, but not me. Sir, basically, it's a function of market here. If the market is good, we'll continue to have more companies coming for building and even offer to buy and offer to sell and all those things. We are pretty much in major markets. There are smaller markets, and we have developed a good team and enthusiasm in technology to take this market. But if markets don't do well, then you know these small little things don't happen.
Okay. And in this particular segment, do we have any exclusivity, like let's say for example, a particular buyback which goes only through the BSE exchange? Or do we have any sort of exclusivity? Or it's -- if the growth is over here, then others will return on NSE, is it like that?
Not that. Not that. Basically, if you're a part of TCS buyback, it happens only on BSE. If you are not in [indiscernible] buyback, it happens only on BSE. If you're on any other buyback, it would happen only on BSE.
And there was a buyback which took place on NSE, but because of market demand, eventually they have to -- company has to come to us and request us to also conduct the buyback. To that, they will send it.
There are some areas which are small we are very good at. But as somebody pointed out, we don't yet make too much money there.
At this time, there are no further questions from the participants, so I would like to hand it back, for final remarks, to Mr. Yatin Padia. Over to you, sir.
Thank you. Thank you for joining today the BSE earnings call.
Shall I conclude the call, sir?
Yes, please.
Okay. This concludes the conference for today. Thank you for participating on the last conference. You may all disconnect now. Thank you all.
Thank you.
Thank you.
Thank you also.