BSE Ltd

NSE:BSE

Earnings Call Transcript 2023-Q4

[Operator]

Ladies and gentlemen, good day, and welcome to BSE Limited Q4 and FY '23 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 date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call. Please signal an operator [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Sethuraman, Head Investor Relations, BSE Limited. Thank you, and over to you, sir.

[Anand Sethuraman, executive]

Thank you so much, Rajan. Good evening, everyone. This is Anand from Investor Relations, and welcome to BSE's earnings call to discuss Q4 and FY 2023 results. Joining us today on this earnings call is BSE's leadership team consisting of Mr. Sundararaman Ramamurthy, Managing Director and CEO; Mr. Nayan Mehta, Chief Financial Officer; Mr. Sameer Patil, Chief Business Officer; Mr. Girish Joshi, Chief of Trading Operations and Listing Sales; Mr. Subhash Kelkar, Chief Technology Officer; and Mr. Kersi Tavadia, Chief Information Officer. Do note that this conference is being recorded and the transcript of this call, along with the earnings release and presentation can be found in the Investor Relations section of the BSE India website. Before we get started, I will have to once again take this opportunity to remind you that our remarks today will include forward-looking statements. 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 BSC assumes no obligation to update these statements as a result of new information or future events. With this, I will now request Mr. Sundararaman Ramamurthy, MD and CEO, to give a brief overview of the company's financial and business performance for FY 2023.

[Sundararaman Ramamurthy, executive]

Thanks, Anand. Good evening, everybody, and thanks a lot for joining the call today. It gives me great pleasure, as always, to address you all today. It's been an interesting journey for me since Jan 4, 2023 when I joined as MD and CEO of BSC. As you may recall in the last quarter call that I have informed that my primary priority is to make BSE a wide brand exchange. I'm glad that we entered the FY 2023, having made progress in this regard. The major priority areas driving our road map are trading segments of equity, currency derivatives and equity derivatives segment. Some of the changes that we have brought in now for sender. In equities cash segment, BSE has reduced the ticket size for strips below 100 to 1.4 from 5.4 . As you know, this is unique for BSE. In currency derivatives, we have introduced another unique feature used drive price intervals of 10 .4 for our USD INR contracts with addition to -- in addition to the existing 25-part prices. The Equity Derivatives segment. I'm happy to inform that we are relaunching SENSEX and Bankex derivative contracts with lower large size and a different expiry, expiry on Friday from the traditional Thursday. We believe that these changes will be low impaction. This relaunch is happening from May 15, 2023. It is early days. Still I'm happy to inform you the changes in equity cash and USD INR options that we have already brought in have been well received by the market. We are seeing some positive traction in this regard. I also want to update you that BSE has distantly need the liquidity enhancement schemes that were ongoing for equity derivatives and commodity derivatives with effect from April 1, 2023. In addition, BSE has discontinued software services and hardware infrastructure services that were being offered under the technology program with effect from May 1, 2023. On the stand-alone level for these schemes and services, BSE had incurred out of about INR 32 crores in FY 2023. The relaunched equity derivatives contract we feel will attract volumes and hence, we have discontinued the LDS. Let me now start with the financial updates. FY 2023 was a challenging year. As I mentioned earlier, we have, however, made good progress on our main priorities and setting ourselves up to deliver better results in the days to come. Surpassing all previous years performance I'm happy to inform that BSE delivered a record year again in terms of revenues to reach a total revenue of INR 954 crores for FY 2023 as compared to INR 864 crores in FY 2022, a growth of 10%. Similarly, BSE's operational revenues have grown by 10% to INR 816 crores from INR 743 crores. The net profit attributable to shareholders of the company stands at INR 221 crores from INR 254 crores in the previous year, which is a decline of 13%. The decline is due to the added contribution to the core settlement guarantee fund. We call it a core SGF to the tune of INR 55 crores at a consolidated level. This is an increase of 89% year-on-year. This is on account of added contribution to the currency derivatives and EGR segments I will now share some of the key financial numbers on a consolidated basis for the year ended March 31, 2023 as compared to the previous year. The clearing and settlement operational revenues increased by 64% from INR 45.3 crores to INR 74.3 crores. Tertiary income from clearing and settlement funds have increased by 51% from INR 55.1 crores to INR 83.2 crores. Other operating revenue, which includes data dissemination fees, training income, software income has increased by INR 32 crores -- sorry, 3% from INR 68 crores to INR 90 crores. Actually, it's a INR 32 crores increase as well, 32% to INR 32 crores increase. Investment income increased by 12% from INR 97.5 crores to INR 19.3 crores. The operating EBITDA for FY 2023 stands at INR 197.4 crores from INR 213.1 crores last year. Operating EBITDA margin reducing to 24% from 29% earlier. The net profit margin stands at 22% as against 28% last year as a result of increased in completed technology-related expenses, an increase in core SGF as stated earlier. On back of these financial results, it's my pleasure to inform you that the Board of Directors of BSC Limited has recommended a final dividend of INR 12 per equity share, having a face value of INR 2 for the financial year 2022/23, subject to the approval of shareholders in the ensuing annual general. The total payoff with the dividend payout ratio of 98.8% of the current year's profit would be INR 165 crores on a stand-alone basis. I'm confident that we enter FY 2024. We are well positioned to meet the customers and create value for our shareholders. On the business side, let me start by covering our primary market segment. Fund raising by India continues to be buoyant. And DST platforms continue to remain as well as the preferred choice by Indian companies to raise capital. In FY 2023, the BSE platform has enabled issuers to raise INR 14.4 lakh crores to issue of equity bonds, commercial papers, municipal bonds, in with, et cetera. The total number of investor accounts registered with BSE now stands at INR 13.05 crores, which was INR 10.15 crores in the previous year, a growth of 29%. As you may be aware, the equity cash segment has experienced a period of subdued performance in FY 2023, likely attributed to challenging market conditions. But Mutual Fund segment at BSE has been showing interesting and sustained growth. For the year ended March 31, 2023, the average daily turnover in equity cash segment times at INR 4.32 crores, down by 22% -- 23% as compared to last year. The average daily turnover in equity derivatives segment stands at INR 1.3 crores, down 48% as compared to the last year. The average daily turnover in currency futures stands at INR 18,559 crores, registering growth of 50% as compared to the last year. Tavis being turnover in currency options stands at INR 7,030 crores. And with the changes that we have brought in, we see there will be growth in this segment. Moving on to our mutual fund business, BSE stAR MF, a comprehensive platform, this continues to generate compounding revenue growth and delivered another year of record revenues and performance, up 56% year-on-year to reach INR 78.6 crores. The strong growth is a testament to the strategic broadening of our business model. This gives us the ability to deliver growth through an area of macroeconomic environment and BSE's continued commitment with the equities market and mutual funds in India. The total number of transactions processed by BSE stAR MF grew by 43% to reach INR 26.5 crores transactions in FY 2023 from INR 18.5 crores the last year. BSE's market share stands at 87% among exchange distributed platforms. The BSP Star MF has been consistently reaching new highs in terms of transactions in the platform, processing a new high of 52.3 lakh transactions in a single day in April 2023. On an average, the platform process over INR 2.2 crores transactions per month in FY 2023 as compared to INR 154 crores in FY 2022. This demonstrates the scalability and reliability of BSE's platform StAR MF. Now I shall follow developments to our subsidiary companies. And India International Exchange ISSC India -- the BSE Promoter International Exchange at Gerrity, -- the other altering turnover stands at USD 13.1 billion. The market share of over 90% for FY 2023. India IMS has about USD 17 billion medium-term notes established and about USD 50 billion of bond listings until late. India INX Global Access platform for investors wanting to invest in global securities has grown to reach a total trading turnover of USD 27.1 billion for FY 2023. On the insurance distribution front, BSE Ebix Insurance Broking where BSE or 14% stake through its subsidiary, BSE Investments is now integrated with 26 insurance companies. The total premium collected is INR 24.3 crores for FY 2023, a growth of 103% compared to the previous year. BSE agricultural markets called being a transparent commodity spot trading platform to facilitate spot commodities transactions across the line chain has now enrolled 1,342 members and executed trades were INR 148 crores in Agri and steel segments on the platform during the year. The company is working very closely with several governments under agencies for direct procurement and disposal of commodities. In closing, I can say FY 2023 was a challenging but pivotal year for BSC. We have made important progress on our priorities, and we have taken significant steps to improve our product profile.As we move forward, we see that there is a significant opportunity to continue to expand and evolve the products and services within our core business. the continued investment in our mutual fund business to the innovations that we bring to our trading systems and market data products, BSE is well positioned for long-term structure and growth, I'm really focused on doing this in a way that helps BSE as well as the market participants, and this will stay our team for the years to come and will make BSE more wide brand. We are set up well to build on this work in 2024 as we continue investing for future growth while remaining focused on delivering strong financial performance. With these updates, I now hand over the call back to Anand. Anand?

[Anand Sethuraman, executive]

Thank you so much, sir, for these updates. With this overview, -- let me now welcome you all once again for the Q&A session. Now handing over the call to Kasan.

[Operator]

Thank you very much. We will now begin the question and answer session. [Operator Instructions] Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prayesh Jain from Motilal Oswal.

[Prayesh Jain, analyst]

And first, let me congratulate on a great set of numbers. So just a question on the financials. So if I look at the revenue or the income line items, there are some like other securities services from INR 25 crores to INR 35 crores. Other operating income has doubled in from INR 18 crores to INR 25 crores. And so as the other income jumps on to play growth. So can you explain these line items as what has caused the jump in these line items?

[Sundararaman Ramamurthy, executive]

Prayesh, which as you said?

[Prayesh Jain, analyst]

Are there security services has gone up from INR 25 crores to INR 35 crores Q-on-Q. So other operating income going up from INR 18 crores to INR 25 crores Okay? And other income going up from INR 6 crores to...

[Sundararaman Ramamurthy, executive]

So Prayesh the other security services income comprises from the revenue which we are designing from other group companies in terms of not only treasury income from clearing and settlement, it is clearing and settlement charges. And it also includes various since restress as your admission as persistent fees and all other fees. So this is a -- because this year, there was an increase in the margins and deposits also which we received and the overall clearing activity, which happened. So there is an increase in the other securities services. Other operating income basically comprises. Other operating income comprises of the income which we have received, which have considered with respect to our subsidiary, MPL, our technology subsidiary, which is the BSE technology and BC Institute. So the -- our technology services firm technologies actually had a better year ended actually its revenue rose significantly during the current period, current year. And that was the reason why you see a big comp from INR 18 crores to INR 55 crores there. And other income, the high which you are seeing, that is arising mainly out of the income tax refund, which we have received, the interest thereon, which is considered as an income for the current year. And there is a minor reversal of about INR 2 crores with respect to certain expenses of pine, which has added to about INR 600 crores of the over increase.

[Prayesh Jain, analyst]

Okay. That's helpful. So the other securities, as I said in other operating income run rate, is this sustainable at this rate? Or should you think about it differently?

[Sundararaman Ramamurthy, executive]

It is a forward-looking statement which we have been asking for. But I think we try to do as much it as we can.

[Prayesh Jain, analyst]

Just reframing this question, forward-looking one. Out of the INR 35 crores in the security services and INR 35 crores of other operating income, is there any one-off items in these line items?

[Sundararaman Ramamurthy, executive]

No, there is there's a one-off item in this one.

[Prayesh Jain, analyst]

Okay. Great. And the other cost -- other question was on expense line items. So if I look at your employee expense run rate has been trending down. We are at INR 42 crores in this quarter. And also technology cost has come off on a sequential basis, but on a Y-o-Y basis is still higher. So how should we think about the line count from FY '24 perspective?

[Sundararaman Ramamurthy, executive]

FY '22 perspective, again, trench employee cost. Obviously, I mean we need to retain talent. We need to have new talent to come up with to manage the new initiatives -- and obviously, there will be an upward pressure, which will be nominal, which can be seen in any of the organizations. Same as technology costs also, while we in do our level best to manage costs to the best of our capabilities. But I mean, there are normal escalates which cannot be avoided year-on-year. And obviously, there are certain improvements which we need to make operations which you need to make year-on-year, which will be there as usual. So obviously, the budget cannot be the same as the previous year in the subsequent year.

[Prayesh Jain, analyst]

Okay, got that. And just one more thing on the tax side. Could you guide us on tax rate for next year? :p id="1816591338" name="Sundararaman Ramamurthy" type="E"

[Operator]

Our next question is from the line of Rishab an individual investor. Richard, your audio is breaking. We can't hear you. We'll move on to the next question from the line of Amit Chandra from HDFC Securities.

[Amit Chandra, analyst]

Sir, my question is on the steps that we are taking to revive the market share and the cash and also the test we are taking on the currency side. And also, we are launching a new amount of derivatives contract. So all these steps obviously are on the positive direction and we are seeing improvement in our numbers and margins also. But how confident are we in terms of gaining that market share in the cash segment which with the initiatives that you are taking? And also, we have spent on the earlier schemes over the last many years, and we have tried that earlier also be 5 years back. on the derivative side. And again, we are again trying on the derivative side to gain some market share. And as of now, we have a good market share there. So what's your thoughts on these 2 segments?

[Sundararaman Ramamurthy, executive]

Thanks for this question, Amit Chandra. My replay may be slightly founding philosophical. The efforts whether we believe it will bring that to market share. Any one effort in itself is not going to bring market share. We just narrated only a few of the efforts that we are making. Market share is a function of how much of market participation happens. And there will be multiple interventions that would be required from a market perspective for this to effectively happen. This not only make -- includes making changes, but also making members aware of the requirements and importance and talking to them and bringing them back and getting attention into the BSE's platform from the larger public aspect. It is all what we are trying to do at this stage and more and more every day new things emerge for us, giving us ideas as to how we can better be out to the marketplace. So if you ask us whether we are confident that we were doing that, of course, yes, we have to feel confident about whatever we are doing and we go into the right direction. At some point of time, all the efforts that we are putting in will 5and we will gain back whatever we have seen already in the past, but it's the feeling. The second question is, well, ALS was there. It was discontinued now. A lot of efforts were made in the past. We are relaunching what is our view about it -- when I think about it, I actually remember a story in the past. I'm not sure you would have heard about the story as all of Robert Bruce, who lost multiple times war against the King of England, and he ran away from one of the battles into a cave when they were sitting, and he was watching a spider. It was trying to climb up the wall of the cave. It was going on falling down. But the spider never gave up, it tried multiple times on the center, it succeeded and in time. That was the big news that was a big inspiration for Robert Bruce. This is actual story of 1,300. I'm sure if Google, you'll be able to see. Then Robert Bruce went back and with rejuvenated energy for back and he won the battle. The method is try, try, try again once you fail, try try again if you succeed try again. And we are doing it with rejuvenated energy is trying changes, which may look very simple, but which may be very material. We have taken market participants into confidence. We have requested them as to what market what changes would bring in. So maybe what did not work in the past, may work and it's the confidence and expectation with which we are proceeding. I hope that has answered your question.

[Amit Chandra, analyst]

So it was a very comprehensive answer. And I also expect bit do well in these segments. But second question would be on the cost side. So historically, we have spent on several initiatives, which are not yielding results. So are you becoming more cognizant on the spending that we're doing on these initiatives, mostly from an ROI perspective? And also if you can throw some more light on what's happening on the INX side, is there some consolidation happening like on exchange there and also expenses that we're doing on INX, can you see some drop there also in terms of expenses?

[Sundararaman Ramamurthy, executive]

Yes. So every decision in respect of listed corporates like us, if you look at it, are taken collectively, considering the facts that are available at that point of time the best interest of the corporate entity. All the expenditures that would have been made prior to me coming and joining here would have been done are there done in that same spirit. And some of them work, some of them did not work. We enhance liquidity. Liquidity enhancement scheme is one of the measures that was tried in retrospect and in hindsight, when we look at it, probably has not delivered as much results. So what is not anything as well should be abandoned, and we should try something new. The same we are now thinking about product differentiation and product interplay, which is what we should highlight to try to garner volumes. That's what we are trying to do now. When you do that, incident deli what happens, there is a better position in the balance sheet and profit and loss and there is a better return on investment. It is just not only the one on investment, which is driving you to cut down expenditures. It is also what is effective, what is not effective, what is the cost, what is the benefit? That type of an analysis is what is driving us to take these type of steps. So just one part. On the IMX part, it's a very, very, very important question that you have asked, it's very close to our heart because it's a national priority, and therefore, we would like to ensure and do anything that is possible that me, as India are able to provide a place where all the partners are able to converge and trade with us with no export of Indian market. This normal thought has made us to start the exchange first and gaining corporation, well capitalize it, and we are running it well. It's a good amount of market share, as you would have seen with 90%. So this is just us starting in my opinion. A lot of changes are happening in that space. And we are going to be present there in whichever way we can to ensure that the national dream of having legit in India materializes, and BSE is, as always, a leading part in this global effort.

[Amit Chandra, analyst]

Yes. And one last question. So this is an answer. So we have seen the operating cash flows being negative for this year. Can you please explain what has led to this and now...

[Sundararaman Ramamurthy, executive]

Alex, as you are aware that this year was the best for capital markets, all exchanges, feeding volumes went down, not only in India, globally also. And there it has a taken effect on all our revenues across the board. So since the operating income has at also affects our operating EBITDA and operating margins. On the other side, our core settlement guarantee fund, we had to make an additional contribution of INR 26 crores over above previous year. So we made INR 56 crores of contribution to core settlement guarantee fund in the current year. which was -- which was one of the main factors exiting in our operating income actually is showing a dip as compared to what you would have expected.

[Operator]

Mr. Chandra may we request to return to the question for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address mentions from all participants in the conference. Please limit your questions to 2 per participant. Should you have a follow-up question, we would request you to question queue -- the next question is from the line of Devesh Agarwal from IIFL Securities.

[Devesh Agarwal, analyst]

Good evening, sir, and thank you for the opportunity and many congratulations on the check-up numbers. Firstly, sir, I would like to know this discontinuation of the 2D enhancement team and the support that we are giving to software and hardware services. The total savings to gather is INR 22 crores or just on the announcement of INR 2 crores in...

[Sundararaman Ramamurthy, executive]

It is close to INR 32 crores, the timing which we expect due to the continuation of these schemes.

[Devesh Agarwal, analyst]

Okay. And sir, the way we have discontinued for FY '24, are you having any target in terms of start charging on some of the segments where we are not charging. So is there any thought process around that?

[Sundararaman Ramamurthy, executive]

So that's a very good point that you are making. There are 2 objectives always for any entity like us. One is improving liquidity in the market segment so that we are serving better the market. That's a very primary objective. That's our commitment to the marketplace. Commitment to the shareholders is making revenue out of it. While both of them run hand in hand, the timing will have to be very apt to manage that both are fulfilled properly. So while we today have some of the services that we are not getting any revenue, which is given free. We are not in any case having any market share. So that is the place where we are trying to sort of increase our presence, and we are trying to get more liquidity there. And once we are able to get some traction, we'll, of course, be charging. So that is both the second interest. There is not the interest which we need to take ahead of the shareholders. So it goes hand in hand.

[Devesh Agarwal, analyst]

Understood, sir. But no numbers that you can share that at probably just level once we have 5% market share or something like that, that we would look to charge. So that we have some indicators which we can try...

[Sundararaman Ramamurthy, executive]

That's a very valid question that you are asking. I wish I'm able to provide you a number. I will -- if it is anything, which BSE as an entity can give us an answer we would have immediately given. It is all purely market driven as you would certainly appreciate your from a securities firm. I'm sure you appreciate what I say. So it's a question of evaluation, right? So we have to see from May 15, how the equity derivatives segment is shaping up. The changes that we brought are all from March when we sit is just 1.5 months that has run away. So we need to do more. We need to wait and watch. So I will not be able to say at what level of market share, I'll be able to start charging more in respect of whatever new segments where I am not charging. -- in equity options, equity derivatives, options already and charging. It's a smaller number. It will be revisited sole. In equity futures, I'm not equity index, which is are not charging anything. Once there is some traction, we will charge. Some of the cases we have already started actually may be knowing what whatever 3 services were there in respect of colocation. Today, they are already charging to defray across the is to start with. And over the silo convert it into a profit center. So it will be big steps. It will be in the right direction. It will not take too much time, but it will take some time to assertain.

[Devesh Agarwal, analyst]

Understood, sir. A big in FY '22 into our OpEx. Based on the exit run rate, do you think that there could be further contributions which would be required under SGX?Or for the time being, we don't see any significant contribution?

[Nayan Mehta, executive]

Contribution to SGX depends on many, many economical. One is your total volumes, concentration of condition of positions, open interest and volatility in the press contract. So frankly, it is in impossible for us to give a-- judge our able project, anything about the next year because means we also don't know.

[Operator]

The next question is from the line of Pankit from Nandan Investments.

[Unknown Analyst]

My first question is, as you mentioned that we have done some changes in the last quarter around the fixed side for the D as well as the commercial on...

[Operator]

Audio is not clear from your line. Please use the handset mode.

[Unknown Analyst]

Okay. Am I clear now? So yes, my first question is, so you mentioned that we did some changes in last quarter around the fixed side, like for equity and for the currency option. So in the last couple of months, have we noticed any traction in the volumes because of this or is too early to waste?

[Sundararaman Ramamurthy, executive]

No, it's a fair question that you are asking. What we have seen is in respect of fixed size -- the market -- there are multiple things which we have seen. The overall impact costs in respect of these securities, we have found that coming down. If you look at it, what was the origin the origin is up to INR 15 whatever securities were there, we had a tax side of one price. We found in respect of these securities, we had a better market share, better delivery percentages. And also we have a better impact costs in respect of these securities. We thought that it's very beneficial to the market. We wanted to mimic it for slightly a higher number of securities. So we went up INR 200, whatever is up to INR 100, the bigsize was changed. We find all the 3 things holding good. We find the impact cost has come down. Our market share in these securities used to be around 9%. Now it is around a 11%, a 2% increase in 2 months, which is sort of, I can say, 20%, we can say, is an increase in the volume in the market share because a 9% to 11% is roughly that way. It is still a long way to go, but certainly, has started showing green shows. And in terms of delivery percentages, we are very happy to tell you around 80% of the total trades in respect of securities up to INR 100 at BSE results in delivery. If you compare it to the national average of 19% in other exchange, I think it's a very big number, I see. So I think the purpose for which we launched this is materializing. But as you also rightly pointed out, it is early days, there will be some more traction happening. In respect of equity currency options, what we found is -- in respect of this stand price has slight price intervals, around 65% of the trading is happening in these trades. So that means we have made some difference. We have started making some meaningful difference in respect of multiple new participants who are entering into this market. So these are some early indicators for us. Currency options change came around March, March yes. It's early days, but I think we are making the dent.

[Unknown Analyst]

Okay. My second question is around the implementation in the secondary market. So what can be the possible impact for our treasury revenue mine secondary market?

[Sundararaman Ramamurthy, executive]

It will be too early to comment. It will be a bit too early to comment from such because we are talking about by implementation where the contours of the regulatory change in itself is not becoming evident. You may like to note that this is not an exercise from Sabis to increase the revenue of MII. It is an exercise from the regulatory side for improving the investor protection. So the angle from the sites looked in itself is very different. And contracts are not here, it will be very difficult to give any comment on this stage.

[Unknown Analyst]

The last question is what is that as an as equivalent around 31 March on cash and cash equity.

[Sundararaman Ramamurthy, executive]

So wanted, as you know, that we distribute let income, which we received during the year. And our CapEx is not very high as compared to many other organizations. So we still have 4 miles we would have told you last year also and all calls we have been telling this. And we continue to have over INR 48 crores of free cash for shareholders in our standalone books.

[Unknown Analyst]

Sorry, if I think last quarter, it was around INR 2,200 crores. That is the number of concept...

[Sundararaman Ramamurthy, executive]

Yes, that is the total cash in our books. But -- when you talk about cash pie, I understand that it is meant to free cash for shareholders, right? Correct.

[Operator]

The next question is from the line of Rishab an Individual Investor.

[Unknown Analyst]

Can you please guide me regarding the fee structure in the Star MF platform?

[Nayan Mehta, executive]

What happens... Vishal, is that that I mean what we recovered from the AMC at towards the services comprising of 2 parts. One is the transaction change for processing the transaction, the orders. And the second is the recovery of the cost which we incur in handling those processing the transactions. So there are refab, which become applicable to different parties depending on different levels of operations. So I can tell you one thing that the oral recovery for us is about 4 bps per transaction.

[Sundararaman Ramamurthy, executive]

Nayan, if I may add, Rishab, if your question is whether there is any cost to the retail investors there is no cost. If you are asking whether there is any cost to the intermediaries, there is no cost. It is what is the recovery, what we made from AMCs for the same we render to the AMCs.

[Unknown Analyst]

I'm saying given consent the core SGF, -- can I know the reason for that?

[Sundararaman Ramamurthy, executive]

As Nayan told sometime back, the SGA competition is based on the complex algorithm that works. This takes into account multiple things like volatility, player volumes, et cetera, et cetera. So that is the reason because of which based on the algorithm, the number changes a number is arrived at. And if we have to contribute, we have to contribute. But this is a dysregulated algorithm and based on which this happens. We'll take the next question from the line of Vikram Kotak from Land Town Investments. Please go ahead.

[Vikram Kotak, analyst]

Thank you. I'm audible. First of all, congratulations for a good sort of numbers, and I can see a lot of sweat in the numbers and a lot of small changes, which you're doing or paying somewhere. So only 2 questions. One is the -- I don't know whether I joined late, so maybe just answer then you can -- sorry for that. So one question which is broad on paisa tick size, how do you see this as kind of helping -- did you look other how it's helping you to kind of get more closer to the investors and the local communities. That's my question number one.

[Sundararaman Ramamurthy, executive]

Can I answer it? See, actually, you missed that, sir, there was a very elaborate answer for it. So it's okay. I will just repeat it in sort of summarized reform. The 3 guiding factors, which -- because of which we thought we should do this is, one is the impact cost, improving delivery percentage. And third is now accessing more investors through market share. All the 3, we are finding some traction. The delivery percentages in respect of these securities, the DSC is 79%, around 80% you can take. The impact cost has significantly reduced in respect of the stocks as we compare it with the other exchange. And our market share, which was hovering around 9% before the change has gone up to around 11% in these securities overall market share. That is a 2% increase over a base of 9% increase.

[Vikram Kotak, analyst]

And a second question for you is that I know you started a few months back, and you have gone through the first 1 full quarter. And where do you see in terms of transition? And where do you see in terms of low hanging fruit or in terms of strategy? Do you see a long way to go? Or you are seeing that things are panning out quite swiftly. And this is a difficult year. So it's not easy to be if you really see the result because the tough year for capital market. Do you see whatever steps you are taking? Is there a year of bull market or good run on the equity market. Do you see the more operating leverage will be playing out to what changes you brought till now? And what are the more changes in offing -- that's my question.

[Sundararaman Ramamurthy, executive]

No, I'm honestly not able to answer your first two parts. If you are asking for what changes in the offing, that is easier to answer I'm sorry, I did not understand the first part of your question. Can you simplify in a single...

[Vikram Kotak, analyst]

I'll simplify that. Whatever changes have taken done in the last 3 months, whether it's a 1 5-star transaction, one is using or putting the currency derivatives to stop bringing more products, right? But it's a tough year. So it's not -- you can't get all benefits in the tough year. So if the as good, you see a huge operating leverage here to play out in all these areas of city block. That's my first question.

[Sundararaman Ramamurthy, executive]

Okay. So the simple answer to it is it was a tough year. And I joined in the last quarter. And the first moment you joined immediately, you don't hit the ground running. It takes some time. notwithstanding that we have tried to bring in in the first quarter in itself or multiple changes. And as you may be a we are launching -- relaunching rather SENSEX and banking derivatives is slightly a modified form with base or market feedback from Monday onwards. I'm sure you would be tracks -- and incidentally, any of you are trading, we would like your full support to BSE and this derivatives contract, we feel that they are wonderful contracts for multiple reasons. Tenet, as you know, is one of the oldest index in India. It represents 30 stocks and trial sectors. And since there are 20 stores like less than 2 sectors less than this, this is quick. This is a sensitive index. That's why it's called a SENSEX. It incorporates the market price into the price information into the index very fast. And that, that, in essence, creates a situation of lead and lag with the other big market index, which is NFT, leavinglots of products interplay possible between Nifty and tentative derivatives as Pat training. Apart from that, because our contract is expiring 1 day late, in respect of people having positions on the options on Thursday, if they feel that they should recover the pizza by waiting one more day, they will be able to transform the position of options to talk options by paying a smaller pit and probably landing up in the money. These are just 2 strategies I'm talking about. There are multiple strategies. This is the reason why we have Cathleen, Transit and bank derivatives banks very akin to bank next. And as you know, both of them enjoy a 9.96% correlation with the other indices or the other exchange, and they have better volatility profile and the return profile of centers is far superior, and the CAGR has been a very high percentage in the last 5 years. All this, you will be aware of. The reason for bringing this is rejoining the market and bringing vibrancy. Whether we have believed that it will change the operational capability. The other answer is yes. As far as what the future plans are, which is the second question that you've asked, multiple changes could be there and multiple products could come. We are only talking about 2 products now and they have both indexed products. Today, if you look at the market, the market is suffering from a very big concentration risk. The entire volumes are concentrated in a single trading venue in a single segment, in a single product with around 2 or 3 indices alone taking care of almost everything in the market. This is a huge concentration risk. We are seeing in order to provide vibrancy is trying to address these risks for the nation and for the investing public by providing in new products, we are starting with index. We are sure that days to come. We'll be having more equity-related products coming in derivatives, more indices, broad-basing the market and providing protection to the market from the concentration risk, which they are occurring today. This is the vision that we have. And it is not going to happen in a day as you would appreciate time in the entire tenure of mine, which is next 4 years, is there for me to contribute whichever way I can to the growth of the nation and BSE.

[Operator]

The next question is from the line of Rahul Kumar from New Media.

[Unknown Analyst]

Sir, my question is what is the future of gold expertise. Are any future we could get some remain in this that?

[Sundararaman Ramamurthy, executive]

Sorry, which gold what you said?

[Unknown Analyst]

Gold exchange and social exchange.

[Sundararaman Ramamurthy, executive]

Social exchange, you will not be able to get any -- that's not a revenue-making exercise. That is a contribution to the society as a corporate citizen what you all need to do. From social stock exchange, at least at this point of time, I'm not expecting any revenue. I am here to sell the larger part of the sections of the society through SSC. Golden Exchange is a separate exchange, which is a shading of multiple other exchanges. So it is a fledgling exchange. Gold has a great potential in India. We are talking about 800 tonnes and whatnot, but shall we are not the price sector. So India is having interest in trying to make India the gold -- the price setters for gold. I'm sure since it's a single exchange with multiple people joining together to come out this exchange. This is just being in Dicty which is very close to our heart and nation's interest. I'm sure in the coming days, it will grow well. I'm not sure that we are tracking our EDR. That is another effort for onshore participants we have put in place. It is early days. There are some piece in trouble in terms of taxation and other areas. We see we will be starting the market better vents some changes if it comes through, through the gold rice as well within India.

[Unknown Analyst]

Sir, my next question is how much revenue we get from power exchange, we have some shareholding in power exchange. Do you have some revenues from that?

[Nayan Mehta, executive]

So right now, we are not running any revenues or share of revenue from experience it is still in the process of -- it's a new exchange, and it will take its own time to grow up and revenues. So it will be very difficult to be very difficult to say what type of revenue share of prefecture can get from them. However, we are providing technology to them to company, VS technologies. And that is a revenue which we don't have against our services to them. So we'll probably have to wait for some time before we get some returns from the investments which we have made in SPA.

[Operator]

Ladies and gentlemen, we'll take the last question from the line of Prayesh Jain from Motilal.

[Prayesh Jain, analyst]

Firstly, on the existing businesses of transaction charges or listing fees, any thoughts on increasing the rates in FY '24?

[Sundararaman Ramamurthy, executive]

See, I probably do not understand the question. Are you talking about transaction charges or listing fees, which when you're talking... What are both?

[Prayesh Jain, analyst]

Both, in fact, both I'm asking that there isn't any thoughts of increasing them in the time to go.

[Sundararaman Ramamurthy, executive]

So the rates are sort of competitive rates as well as listing is concerned. So you need laterally to make a comment that we will increase, it's not possible. It's not any sort of joint effort to increase or decrease, but the market is very competitive. So accordingly, the pricing gets made. So it will be an assumption of multiple things where the tail market is moving towards in terms of capital raising, I was to come into market, buybacks has come into the market and on and on it's not a ulilateral point-of-time decision to say that, yes, indeed, we will be raising the team fee. That is one part. On the transaction charges, I'm not sure whether you missed the point which I was making slightly earlier. We don't charge the subsidized rates in multiple areas, and we don't charge some in some areas. If you look at it, for example, in equity options, our charges are very low. Currency options are -- our charges are almost onetime five years compared to the competitor. And in respect of equity futures, we do not charge anything at all. At this point of time, it is not making a difference because we are not having much of a market share to boost. But we are doing everything to ensure that we will get some market share. So as and when we get market share, will we be revising the charges introducing charters Yes, we'll be introducing. We have already started charging certain services which were not charging before. Like for example, in Coro, when it was all 3 earlier, which was taking some amount of the P&L, right, so which was talked about, the technology scheme, which was talked about. So today, we have started deepening the cost. So like that in currency again to mention, our charges are 1/5 of what the competition charges. So there are scope for us to increase. We are trying to deepen the market. And once we are deepening the market, certainly, we will be working towards increasing the charges and taking care of the shareholders' revenues increase as well.

[Prayesh Jain, analyst]

This helps. On the [indiscernible] you mentioned an answer that it's INR 4, but if I look at FY '23, it's far lower than that. So is that the rand that we should look forward going ahead? Or how do you think on that?

[Nayan Mehta, executive]

It's just that over a period of time the volumes increase, the lowest labs will get applicable. And to that extent, there will be a downward trend with respect to the average charges which we are running a per transaction. But as you'll note that we are able to increase our revenue by almost 55% from INR 50 crores to INR 78 crores in current in this current year. So obviously, with higher transactions coming on us. Obviously, we will have an upward -- that can have an upward thing impact on our revenues.

[Prayesh Jain, analyst]

That Yes, that's it from my end, thank you and all the best.

[Operator]

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Anand for closing comments.

[Anand Sethuraman, executive]

Thank you, Pawan, and thank you, everyone, for joining us today. If you have any further questions, please feel free to reach out to us at bse.ir @bseindia.com. Thank you so much.

[Operator]

Thank you. Ladies and gentlemen, on behalf of BSE that concludes the conference. Thank you for joining us, and you may now disconnect your lines.