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Central Depository Services (India) Ltd
Earnings Call Analysis
Q1-2025 Analysis
Central Depository Services (India) Ltd
In the first quarter (Q1) of FY 2024-25, CDSL reported substantial growth, with consolidated total income climbing by 65% year-over-year to INR 287 crores from INR 174 crores. The company’s net profit showed an even more impressive increase of 82%, rising to INR 134 crores compared to INR 74 crores in the same period last year. On a standalone basis, total income rose 30% to INR 221 crores, and net profit increased 14% to INR 105 crores.
During this quarter, the Indian capital market surpassed a significant milestone with total market capitalization exceeding USD 5 trillion. Daily trading volume averaged around INR 131,000 crores, more than double the INR 65,500 crores recorded during the same quarter of the previous year. Notably, CDSL strongly benefitted from this surge, with the total number of dematerialized accounts increasing by 42% to 12.55 crore.
In June, CDSL implemented a reduction in transaction charges as part of its strategy to enhance market participation. Although the full impact of this reduction was not captured in Q1 results, this proactive move is aimed at solidifying CDSL's position in the market. The rationale behind this reduction is to pass on the benefits of economies of scale to customers, encouraging more trading activity. The lower slabs have been beneficial for higher-volume traders.
CDSL has significantly increased its technology spending, reportedly doubling year-over-year, driven by the need to enhance its infrastructure. This investment is viewed not just as a response to earlier cyber threats but as a necessary step to remain competitive by adopting best-in-class technology solutions. Management emphasized that these ongoing enhancements will continue, establishing a robust platform capable of handling increased trading volumes as they grow.
Other income categories showed positive trends with an increase to INR 26 crores, influenced by investment income, e-voting charges, and CAS charges. The income recognized from eCAS statements was INR 11 crores, while e-voting contributed INR 5.6 crores. Furthermore, the new insurance repository services indicate potential growth, although significant regulatory developments are awaited from IRDA regarding its mandatory implementation, which could further expand CDSL's market services.
To mark its 25th anniversary, the Board proposed a 1:1 bonus share issuance, pending shareholder approval. This initiative reflects the company’s confidence in sustained growth and aims to reward shareholders while also enhancing market liquidity. The management's overall strategy is focused on promoting long-term shareholder value and encouraging more participation in capital markets.
While no specific revenue guidance was provided for the upcoming periods, the management's outlook combines an understanding of market dynamics and regulatory adjustments that could further impact transaction fees and operational strategies. The implementation of compulsory dematerialization for private companies later in the year is also on the horizon, which could provide an uptick in business transactions, pressuring CDSL to finely tune its operational capabilities.
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Ladies and gentlemen, good day, and welcome to the CDSL Q1 FY '25 Earnings Conference Call hosted by HDFC Securities. [Operator Instructions] Please note that this conference is being recorded.
Ladies and gentlemen, please note that CDSL does not provide specific revenue or earnings guidance. Anything said on this call, which reflects CDSL's outlook for the future or which could be constituted as forward-looking statements must be reviewed in conjunction with the risks that the company faces.
I would now like to hand the conference over to Mr. Amit Chandra from HDFC Securities. Thank you, and over to you, sir.
Yes. Thank you, operator. So good afternoon, everyone. On behalf of HDFC Securities, we welcome you all to the CDSL Quarter 1 FY '25 earnings call. Today, we have with us the management team of CDSL represented by Mr. Nehal Vora, MD and CEO; Mr. Girish Amesara, CFO; and other senior leaders. We'll start with a brief overview of the quarter by Mr. Nehal Vora, and then we will open up the floor for questions.
Thank you, and over to you, sir.
Thank you, Amit. A very good afternoon, and welcome to everyone. I hope each of you and your loved ones are safe and healthy. Thank you for joining us today to discuss CDSL's financial results for the first quarter of the new financial year FY '24-'25.
We have posted a detailed investor presentation on our website for your reference. I'm joined by the CDSL Group's leadership team, including the MDs of the subsidiaries.
So let me start with the industry highlights. So during the first quarter '24-'25, the Indian capital markets reached a significant milestone with our total market capitalization surpassing USD 5 trillion. The average daily turnover surged by about more than 110% quarter-on-quarter and reached about INR 131,000 crores, compared to INR 65,500 crores in the same quarter last year.
The overall activity in the Indian securities market saw a notable quick -- sorry -- a notable increase compared to the previous quarter. This quarter, India further strengthened its retail participation in the capital markets. The total number of demat accounts [indiscernible] in June 2024 with over 77% open with CDSL.
As on June 30, '24, CDSL had 12.55 crore registered accounts compared to 8.83 crores on June -- in the June quarter last year, marking a 42% increase. We have leveraged growth of technology and extensive presence, especially in Tier 3 and Tier 4 cities to achieve this growth. Further enhancing value to the shareholders and to mark the celebration of CDSL's 25th anniversary, the Board during its meeting on July 2 approved and recommended the issuance of bonus shares in the ratio of 1:1, subject to shareholders' approval.
While the CFO will cover the financial performance, I want to highlight that CDSL's performance, result and culmination of the market dynamics and underscores our role as a trusted custodian of investor wealth.
The presence of our services and ease of business due to quicker settlements and services and other services like eAGM, eDIS, the margin pledge [indiscernible] system, e-voting, online account opening, et cetera, has had an important impact on the growth. As we celebrate our 25 years of operations, our focus remains on enhancing the capital market ecosystem by enhancing efficiency trust and maybe transparency.
We prioritize and focus on the Atmanirbhar investor, a lot of videos you would have seen on our social, by striving for innovation and leading to consistent and sustainable financial and business performance.
Before I hand it over to the CFO, I'd just like to say that the growth of the Indian securities market is an extremely encouraging step in India's potential. I also want to place our appreciation and gratitude to all our stakeholders, regulators, depository participants, investors, issuers and all other market participants and employees for the constant faith in us.
With this, I will hand it over to the CFO for the financial performance. So over to you, Girish.
Thank you, Nehal. Good afternoon to everyone. Speaking on the quarterly performance on a consolidated basis, the total income for the quarter ended June 2024 has increased by 65% to INR 287 crores as against INR 174 crores for the same quarter during the previous year. Net profit for the quarter ended June 2024 has increased by 82% at INR 134 crores as against INR 74 crores for the same quarter during the previous year.
On a standalone basis, total income for the quarter ended June 2024 has increased by 30% to INR 221 crores as against INR 170 crores for the same quarter during the previous year. The net profit for the quarter ended June 2024 has increased by 14% to INR 105 crores as against INR 92 crores for the same quarter during the previous year.
Now I'll hand it over to Sunil. Thank you. Over to you, Sunil.
Thanks, Girish. So as far as CVL is concerned, we had a decent quarter over the June quarter ending 2024. The total income was up 109% to INR 64 crores from INR 32 crores in the same period of 2023. With regard to the total expenses, the total expenses increased by 62% to INR 26 crores from INR 16 crores for the quarter ending June 2023.
The total -- the profit before tax was up by 141% to INR 37 crores for the quarter ending June 2024 as compared to the profit before tax of INR 15.63 crores for the quarter ending June 2023. The profit after tax increased by 140% to 28. 55% (sic) [ INR 28.55 crores ] as compared to INR 11.90 crores for the quarter ending June 2023.
With this, I would like to open the floor for the question and answer. Thank you.
[Operator Instructions] The first question comes from the line of Supratim Datta from AMBIT Capital.
My first question is...
Sorry to interrupt you, sir. May I request you to please use your handset.
Yes. Is this better now?
Yes, sir.
My first question is on the cost side. Just wanted to understand what is driving the technology cost growth? It has been fairly steep Y-o-Y, it's gone up by -- it's nearly doubled. So just wanted to understand what are the key building blocks here?
Two is in the second half of this year, the compulsory dematerialization of private company shares, that is supposed to kick in. Now just wanted to understand what sense of the market do you have at this point because now it's more like 3 months out. So just wanted to understand, do you have a sense of the market? Have you made any investments already on this front? Or would you make the investments be it on technology side once this opportunity starts to come through? That's the second question.
And lastly, on the KRA business, the business has grown fairly strongly. Just wanted to understand what would be the split of the business that you received from brokers versus mutual funds within this KRA segment. If you could give us some sense of where the revenue is coming from, that would be very helpful.
So yes. So the first point, we are like an infrastructure company, as I've said many times before on the investor call. Technology and human resources are two building blocks for building this infrastructure. And there has to be -- technology doesn't build fast enough. We need to plan it well. And as the growth happens, we need to plan for our hardware [ application ] security and all components of technology. This is more of a proactive investment, which will continue to happen to ensure that we continue to have the best type of technology platforms for the market, which are best-in-class in terms of the leading practices and technology, as you know, evolves also a lot. So we need to ensure that best-in-class products are used on all our platforms. So that's on the first question.
On the second question, as I said earlier, it's compulsory not for all private limited companies, there are certain conditions under which it will be made compulsory, there are certain thresholds for sales and share capital. And only those companies will be required to be [indiscernible] if they transfer the shares or they raise any share capital. So it's not -- it will have to be seen how it pans out. And however, we have built [indiscernible] our resources, both from the technology and human resource standpoint to ensure that we are able to process the load, which will come in, and we are fully prepared for it.
For the third question, I'll ask Sunil to answer.
See, the same question has been clarified earlier also, as a KRA, I do not clearly know how many mutual funds are actually using I mean, are -- the split between the mutual fund and the brokers because today, currently, most of the transactions are happening on the exchange platform. And the exchange platform, the opening a demat from broking account and then the transactions are getting credited into the investor's account. I hope that answers your question.
Just one follow-up on the technology question. I understand your point that you will continue to invest in the side of the business. I just wanted to understand that from the 1Q piece, should we see further acceleration over the next few quarters? Or this is the run rate that you plan for the coming quarters as well?
We don't give any forward-looking statements, but the overall ethos is to build a robust, resilient platform. And whatever it takes, we will have to continue to build in terms of [ costs ]. But I will not be able to comment specifically whether the same run rate will continue or not because we don't give any forward-looking statements.
The next question is from the line of Amit Chandra from HDFC Securities.
My first question is on the transaction charges. So obviously we had the impact of the rate cut that we had. So I just wanted to clarify whether we had the full quarter impact in the first quarter? Or there is a spillover in the quarter 2 as well?
And also in terms of the revenue from Others, which excludes the online data, IPO corporate action, transaction and issuer, there is a significant jump. So if you can clarify, is there any revenue from insurance also that we have booked in that? And how do you see the insurance opportunity coming up?
Yes. So on the first question, Amit, 1st June is from when the transaction charges or reduction has come into play. So it has not had the full quarter, it's one month of the quarter, which has ended.
On the second one, I'll ask the CFO, Girish, to answer on the IPO and other revenue stream, and I'll ask Latesh Shetty who is the CEO of the Insurance Repository to answer on the insurance opportunity.
So Amit, any issuer charge is solely pertaining to the CDSL, and not have any component of [indiscernible]. In terms of -- your next question was in terms of IPO corporate action, right?
No, no, sir, I was asking the revenue excluding all these...
Other income is largely consisting of investment income, e-voting charges, CAS charges. These are the main 3 heads under the other income.
Okay. The other income has increased to INR 26 crores. If I exclude the interest income, so from INR 20 crores to INR 26 crores, that has seen a jump...
Largely, it is contributed by CAS and followed by e-voting, eCAS statement income.
Okay. Okay. So if you can quantify the eCAS and the e-voting in this quarter because we have been giving that.
So we have -- in terms of eCAS statement income, we have recorded an income of INR 11 crores in this quarter. And in terms of e-voting, we have recorded income of INR 5.6 crores in this quarter.
Okay. And so in terms of the technology cost, you mentioned that, obviously, it is being done for the [ tech-enabled ] system. But post the cyber attack that we had, there has been the significant jump in the technology cost. So just want to understand is this the compulsory investment that we're doing? Or is this based on the regulatory guidelines or based on the growth that we're having investing upfront? Or is it the compulsory investment that has to be done? And how do you see that maybe till how long will this kind of elevated investments will be required?
So the malware, which was found by our own systems, which was detected and switched off happened way back in November '22. So it's been about 1.5 years, nearly 2 years. So I don't think that has anything to do. This has got to do with ensuring that the platform becomes more in-tuned with the latest technology products. We want to give the best kind of offerings to the market and to [ bulk ] of the investors.
Also, as the volumes grow, we need to plan for our capacity, et cetera. And requisite applications have to be upgraded [indiscernible]. So this is really the road map to ensure that CDSL as a depository is able to cater to the requiring demands of the market. At the same time, giving the best kind of offerings to the securities market so that people can continue to have the keys as they move forward.
The next question is from the line of [ Mohit from Tara Capital ].
Congratulations for good set of numbers. My first question is on the employee cost. So I think we were to have some salary increments in this quarter as we had mentioned in the previous earnings call. So I just want to understand what explains the sequential dip in employee cost?
I'm sorry, could you repeat that last sentence, I couldn't hear that.
I was saying the employee cost has seen a dip sequentially. I think the impact of increments were to come in this quarter, as mentioned in the previous earnings call, so I was saying what explains the sequential drop in employee cost?
Sequential drop in employee cost. I don't think there has been any drop in the employee cost. It is part of variable pay and the increments get factored in after going through the appraisal process, and that has factored in.
Previous quarter was INR 276 crores, and this quarter it was INR 267 crores. So that's the reason I saw dip so that's the reason for the question.
To give you the perspective, normally, we consider the increments and [ growth on cost ] in the first quarter of new financial year. Now what happens is that whatever excess or whatever adjustment needs to be made are done in the month of March by closing the financial statement. So it might happen in some quarters that the March and the June quarter are quite similar.
Okay. Okay. Got it. Got it. And for the quarter, what was the regulatory charges for the quarter, I think that we shared -- you do share that, right? Regulatory charges for the quarter, if you can share.
Yes, I can ask [ Girish ].
That is INR 11 crores. I think it is mentioned in the investor PPT, we are giving detailed breakup of all the expense heads and income heads in the investor PPT.
The next question is from the line of Madhukar Ladha from Nuvama Wealth Management.
Congratulations on a good set of numbers. Quick one question. From October, the SEBI circular on True to Label will also come into effect. So how are you planning to approach that? I believe you'll probably have to revise your charges -- transaction charges, especially as a result of that. So I wanted to understand how that maybe will work?
Second, also wanted to understand how would real-time settlement really impacts transaction charges? Have we -- has there been any thought process around that or any developments around that. So these two would be my questions.
Sure. So on the first question, it is work in progress. We are working out. They will have to be approved by the Board and then sent to SEBI for its approval. The depository charges get approved by SEBI before it is done. That's work in process. You can see how that will factor that in. I will not be able to reveal too many details at this stage because it's work in progress.
As regards to your second question was -- I'm sorry could you repeat your second question?
On the real-time settlement.
Yes, yes. Real-time settlement. So real-time settlement is yet some time away, I think that has nothing to do with the charges at this stage. I think charges is on debits, which we charge irrespective of what is the frequency of [ real-time ] settlements, whether it's T+1, T+0. And any way, instantaneous or T+0, all are going to be on an optional basis, they are not on a compulsory basis as of now as prescribed by the regulator.
So I think the charges are going to be kind of identical whether it is to the T+0 or a T+1 side, get charged them on basically the debits which happen.
The next question is from the line of Prateek Shah, who is an Individual Investor.
Am I audible?
Yes, sir. Mr. Prateek, you're audible. We have lost the connection of the current participant. We will move on to the next participant. [Operator Instructions]
The next question is from the line of Prayesh Jain from Motilal Oswal Financial Services.
Sir, firstly, could you spell out the rationale for cutting the transaction charges?
So the rationale of cutting the transaction charges is basically the economies of scale, which has happened. And therefore, we are -- the intent was to pass on that economies of scale to directly the market at large. And as you will be able to see a full quarter impact from the next quarter onwards. But if you take on a pro rata basis on an average between June from where the reduction has happened on a simple average of 3 months.
I don't think there has been any value-wise impact, which -- in fact, it has been a positive impact, which has happened. The intent is that more and more people would be encouraged to join the ecosystem and we are passing out that part of that economies of scale to the market.
Just trying to get this again, but I'm extrapolating what you have done right now to the True to Label charges. And this -- I think this cut was announced after the True to Label charges announcement?
No, it was prior.
Okay. So do you think that you will be at the lower end of the transaction charges in the True to Label?
As I said, that is work in progress. I'm not able to state more of it till it goes through its process.
Got that. Got that. With respect to insurance repository, how many companies are you engaged with today, life insurance companies and health insurance companies?
I'll ask Latesh to answer. He is MD & CEO of Insurance Repository.
Including life, health and general insurance companies, we are signed up with 44 companies.
44 companies. And what would be the scale that we would have achieved today in terms of number of policies and the revenue?
So quarter ending June, we have completed 1.4 million policies, predominantly it is under life insurance.
Okay. Okay. Any numbers on revenue for the quarter?
Quarter ending -- I mean we don't give breakup of operational and total. The total number of revenue that we have [ touched ] for the June quarter is -- total income is INR 99 lakhs.
The next question is from the line of [ Sanketh Godha ], who is an individual investor.
Sir, my just a simple question was that given we have taken a price cut in the transaction charges, and the lower end of the slab is 3.25, which is effective from 1st June. So if you can give you a ballpark indicative number, average realization for the quarter per debit instruction. So just wanted to understand how much is the difference within lower end and the average realization?
We don't give that breakup as part of [ earning ], but you can take kind of [indiscernible] by seeing what is -- basically the revenue is seen as a total culmination of all that, but we don't give breakup as per each slab wise.
Okay. No, because the reason being asked is very simple that given we will have only one price going ahead from 1st October, so most likely management will decide closer to the average realization or it will be closer at the lower end of the slab, that's the reason I was trying to check the number, sir?
So as I told you earlier, this goes to multiple levels of approval or there is a depository, SEBI also formally approves it as part of the operating instructions. So it goes through the approval of the Board, and then it goes to SEBI for its approval of the operating instructions. So it will be difficult to kind of indicate. You will see as soon as the approval is got, we will be announcing it.
Got it, sir. And some data keeping questions. Sir, if you typically give this data, impairment cost, income from unlisted companies, pledge income and number of KYC records.
So we don't give a number of KYC records, but the other income -- other data, I will ask Girish.
In terms of unlisted company for the quarter is INR 4.5 crores. And with respect to the impairment cost, it is roughly around INR 3 crores.
INR 3 crores. And sir, pledge income?
Pledge is around INR 6.25 crores in this quarter.
Okay. And if I came out with a circular that so many stocks are not eligible for pledge anymore. So with that regulation, just wanted to understand, do we see any impact on this line item because -- or indicated the companies which have been withdrawn from pledge, do they materially contribute to our revenue in pledge income or not?
See, I think we'll have to see how it goes. We don't give any future guidance. But principally, if you see, our charges are same whether it is a permitted stock or a non-permitted stock, it has to be pledged. We generally want to use the noncash component, which is allowed up to 50% of the total margin exposure to be used as noncash. We don't lose any interest on it.
So I think whether it is x number of stocks or y number of stocks or within x, certain part, not [indiscernible]. I think the quantum should not typically be really impacted because people will substitute one stock for another stock to get it pledged.
[Operator Instructions] The next question is from the line of Amit Chandra from HDFC Securities.
So in terms of the annual issuer charges, obviously, in the first quarter results, we now see a jump. But if you can just give some more color in terms of how it has been driven in terms of number of folio growth? And also in terms of how the mix has been in terms of slab based and folio based? And also, if you can give some color on -- in terms of the annual issuer charges, how much is from [ MF ] folio units and how much is from stock folios?
So Amit, we don't give these details out in the public domain. It is based on the overall steady circular [indiscernible], which you are aware of that slab versus folio, but this is not [indiscernible] part of us.
Okay. In terms of the growth that we have been seeing over the last 2, 3 years, is it -- obviously, it has been driven by the number of folios. So if you can give the growth rate in terms of how the folios have grown over the years?
We don't give the number of folios, but overall the trend is as a number of participants, demat accounts grow, people are going to own that many more stocks and therefore [indiscernible].
And sir, in terms of the transaction charges, obviously, we have taken a cut, but have you seen any similar kind of cut from the competition as well? And as you said that there is no impact in terms of value. So is it fair to consider that lower transaction charges will attract some more volume for us?
So there has not been any specific cut which we have seen. They had done some time ago. We had obviously very scientifically driven the process. So based on that, we wanted to pass on the economies of scale to the market.
So are the charges pretty similar as of now? Or is there any kind of...
Yes, lower. They are lower depending on which slab you are, but we have a lower slab people who trade more on CDSL.
Okay. Are there any other opportunity that you see from the recent announcement in terms of budgets, maybe in terms of land records and any other opportunity that you want us to know and what is exciting as a team CDSL, any of the opportunity?
So there are -- it always depends on how that budget proposals will pan out into actual action in what manner, what format, et cetera, [ which way to go ] so that is wait and watch at this stage. It will be difficult to predict at this stage. Anyway, we don't give any future -- but even then on a policy front, also it is difficult to really predict because we will have to wait and watch how that will pan out into actual actions.
The next question is from the line of [ Viraj Mithani from Jupiter Financial ]
Congratulations on outstanding numbers. Sir, my question is if you can give some color on insurance repository in terms of growth prospect for the whole industry. And what kind of opportunity it could be for us?
Sure. I'll ask to Latesh to answer.
Currently, we do not give any future growth prospects. As of now, IRDA is yet to make the repository services mandatory to the insurers. So we will wait for the decision from IRDA. And accordingly, as of now, the status quo remains, and we are optimistic that IRDA will take decision on the [ drafts ] that have come out [indiscernible].
What would be the industry size for us, you can give -- I understand you can't give a forward-looking guidance, but if you can tell us the industry size and the rate of growth if the IRDA comes out with [indiscernible]?
So currently, all IRs put together are not even 10% of the overall yearly annual policy, so the IRDA annual published numbers of [indiscernible] shows that it is just [Technical Difficulty]. Probably that can give you some insight.
Sorry, or it is just under -- your voice broke.
The number of policies under demat mode is just under [indiscernible] as per the IRDA numbers.
The next question is from the line of Dhaval Shah from Fort Capital.
Sir, regarding the technology charges, I understand you cannot make your prediction, but at least can you tell us as a percentage of revenue, what should we expect? Because if I see there's been varying from 5.5% to 6% to now almost 10% in the last quarter, has it been a [ guidance ] in terms of percentage of revenue?
So that will be -- it will be difficult to predict a percentage in the future. But if you go by the past trend, they have been ranging in around that range about 10% to 12%, but I think the important thing is from an intent point of view. We would like to ensure that the platforms of CDSL has the best-in-class technology. And whatever it takes to -- for us to ensure that. And that has been viewed also very positively by the market participants by more and more wanting to trade.
So I think it's like saying that like a road, we are building a road. Now the quality of your road, if it is good, you would have more and more cars wanting to come on that road. Now why is building the road or maintaining the quality, you are not going to assess that if these many cars come, then only I will build a good quality road. My intent is to build a good quality road, and therefore, the intent is to build a good quality road without having a cognizance of how many cars are going to come on it.
Similarly, our intent is to build the world-class technology platforms and continue to ensure that and that has been viewed till now fortunately very positively by the market that more and more people are wanting to come in and participate.
Sir, one more clarification that -- we are investing into hardware and software. So we are not capitalizing this because of a conservative approach or the accounting standard doesn't allow us to capitalize this cost?
No. We do capitalize assets which can be capitalized as per the Ind AS. What cannot be capitalized has to be taken as a revenue [ aspect]. Again, everything is driven by the Indian accounting standards.
The next question is from the line of Bhargav from Asian Market Securities.
My question is on the IPO and corporate action charges. This grew by 170% year-on-year. Usually, Q1 has been the weakest quarter for this segment. I just want to know what led to this significant growth in the segment?
I'll ask Latesh to answer.
The growth in IPO corporate action charges is largely related to the IPO that comes in the market. So higher number of IPO, higher number of revenue will be generated from this particular revenue stream.
May I know the split between IPO and the corporate action in the segment?
We are not maintaining that kind of a split. It is in one head of income.
Or if you can just give me a ballpark number like I guess IPO charges will be much lower than compared to the corporate action charges. Right?
Sorry?
The revenue which is coming from the IPO, which I'm guessing that it will be much lower when we compare it with the corporate action charges revenue, right?
As I said, we do not internally track that kind of parameter between IPO and corporate action. So for us, it is a one head of revenue because everything comes under the corporate action group whether it's IPO or a corporate action.
The reason why I'm asking is because if you see on a sequential basis, the revenue is stable, but if you see the history, Q1 will be the one of the weakest quarter over the year. So that's what I'm trying to understand.
For the market dynamics, the larger number of IPOs will help this kind of [indiscernible] only IPOs, also a number of corporate actions. Again, that is driven by how much consolidation is happening, how much corporate actions other companies are wanting to do. So it is completely driven by the market dynamics.
The next question is from the line of Parimal Mithani from Credential Investments.
So I just wanted to know your update about the account aggregator. What is the status and where are we in that?
So we are -- we have been mandated to be a financial information provider, which we have been there for last many quarters. In fact, we are one of the first in the securities market ecosystem, we come in and we can....
Sir, can you quantify the benefit in terms of market size and how we're going to benefit from this?
I'm sorry, your voice is not clear.
Can you hear me now, sir?
Yes.
Can you -- how would we benefit in terms of going ahead in the market size being the first mover advantage?
Market size is difficult to predict at this stage because how many people -- as many people come to [Technical Difficulty] want to access that information by giving a consent to a financial information user to reuse the information and data in the format which investor wants it. That will be difficult to predict at this stage how that it's all on [indiscernible] at this stage, it is in the preliminary stages of the entire system. We have to wait and watch over the next few quarters how it really pans out.
The next question is from the line of Miraj from Arihant Capital.
Congratulations on a good set of numbers. Just a couple of questions. I wanted to understand that has there been any discussion if we will be revising any other charges since we are going to revise the charges based on True to Label? So -- because for a long time, I think we were supposed to have some revision in the annual issuer charges as well. I know that you can't comment if there has been -- if they are going to or not going to, but I just wanted to know if there has been any discussion on that.
So the True to Label is what is under consideration at this stage. And obviously, we'll have to wait and watch as to how the market reacts to it. But that's a continuous process of review. And -- for the issuer charges as well as the transaction charges. And as and when the scale grows, our intent is to encourage more and more people to join the securities market. And to the extent whatever role we can play. [Technical Difficulty]
I think there's some disturbance. So I was not able to hear you, sir. Could you be come again?
No, the point I was trying to make was that basically...
Sorry to interrupt you, sir. Can you come near to the mic and speak please?
Yes, I am [Technical Difficulty]
No, sir, there's a disturbance from your end, sir. Ladies and gentlemen, we have lost the management connection. Stay connected while we reconnect them.
Ladies and gentlemen, we have the management connection back on call.
Yes. So you can hear me now?
Yes.
Yes, sir.
Yes. So the point is that the economies of scale is something which will be continuously assessed. And our intent is to get more and more people to join the securities market. And therefore, to the extent we can extend it over a periodic basis is going to be a continuous assessment. Also, the cost of the platform, including technology, employees, et cetera, would be taken into consideration for any upward or downward for the division which is required. So on one hand, you have the economies of scale. On the other hand, you have the cost to maintaining a platform on a good basis. Is a kind of a [ combination ] of this, which will lead to how much the charges should go down or go up.
Okay. So the cost that be there will also be a factor in -- will also be considered as a factor in the charges.
Absolutely.
Perfect. Perfect. And just my final question that since our last discussion since the last con call, has there been any other discussions on the T+0, T+1 instant settlements with the government. Just wanted to understand the progress on that front.
T+0 has already been implemented on an option basis, continues to remain on an option basis. And there have been continuous feedback from the market on what can be improved upon and that's a continuous process. And once there is a significant time which [indiscernible] and SEBI feel there is a need to move [ will be very ] instantaneous. They will think about that. But as of now T+0 and T+1 are both working.
Sir, T+0 is with all the depository participants or only selective?
No. See, from a depository participant there are a few brokers which have done on basically [ beta ] phase. So they can transact on those as there are fewer stocks and few brokers. And obviously, SEBI is kind of continuously assessing this. But from a depository standpoint, we have to make it available if any kind of investor within those brokers want to opt for it. So from our standpoint, depository standpoint, both the systems are on.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. Nehal Vora for closing comments.
I wish you everybody all the very best, and thank you so much for your questions, and thank you for all your compliments. It actually means a lot for us as a management team. Thank you.
On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.