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Central Depository Services (India) Ltd
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Good day, ladies and gentlemen, and a very warm welcome to the CDSL Limited Q3 FY '19 investor conference call hosted by Axis Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Aditya Bagul from Axis Capital. Thank you, and over to you, Aditya.
Thank you, Ely. Good afternoon, ladies and gentlemen, and a warm welcome to the 3Q FY '19 earnings conference call of CDSL India Limited. We have the management of CDSL represented by Mr. P.S. Reddy, Managing Director and CEO; Mr. Bharat Sheth, CFO; Mr. Gaurang Shah, Vice President; and Mr. Nilesh Kittur, Assistant Vice President. I request Mr. Reddy to give us a brief overview of the results, post which we will open the floor for Q&A. Over to you, sir.
Thank you, Mr. Aditya. Welcome to you all to this Q3 con call. Well, it must have disappointed some of you. The results are not all that's expected. It's primarily due to a very weak market and the number of IPOs have been substantially lower. You see the kind of revenue that we had in the corresponding quarter in the last year as in this quarter. And this year is not all that good in terms of markets. As you know, 60% of our income is almost all market related. So it had impacted our performance as well. And although we are all very much well known in the industry as to the numbers of IPOs, et cetera, in the -- in the FY 2018, you have IPOs, about INR 33,000 crores, over the -- as it was 2017, INR 68,000 crores. But it's certainly more than half in the file in the IPO market. And that has substantially impacted because IPO revenues were driving our business. In fact, last year was exceptionally a good year for us. That being so, even the transactional revenues have also come down because volumes, delivery of these volumes are lower. In this quarter, we had about 27% -- 28% fall in the billable transactions. That will be kind of for all we have. Even in the eKYC, thanks to the other order, it can impact the FY '18 in terms of using the eSign and then Aadhaar-based accounts. And so we are trying to find out where we are introducing their off-line eKYC module. In fact, we have soft-launched it. Maybe we will be rolling out to other market participants at the earliest or once the feedback is relayed from the market participants. So eKYC is another one, which has impacted us. Of course, National Academic Depository, we are doing well there, almost 500-plus universities we have signed up and that's a good number. And also, we have -- we -- the government has also taken a keen interest in populating the backup dates with the more and more economic records. And a lot of conference calls and VCs are happening with the Ministry officials and the university officials. We are in between to facilitate that activity. So that's now picking up. That's good fortune for us. And coming back to the other business. In the [ figures ] in itself, that is our listed companies. There also, we have seen a very good traction. Almost about 500-plus companies we have been able to add in that in quarter-end and another 500 maybe is being done. That is a good development that is taking place on this front. And our commodity repository, as I have been saying, you have 3 verticals. One is the eNAM vertical, where the integration is still happening. It's not a not done kind of case. And the other one is the pledge by the banks in the eNWR. There, we have seen some kind of growth and some banks have become repository participants. So there, we are looking at our business to pick up. And commodity exceeded [ and soon are done ] on the settlements and MCX were done in MCX settlement of mentha. And we have done mentha and cardamon is another one which we have done it. Yes, we have done cotton oil, we have done it. And for ICEX, we have done [ 2 other ] settlements as late as in December 2018. So these are the developments that are taking place. And so there, again, it's a very small transaction as of now. The eNWRs [ demanded ] mandatory by RTA. Probably once settlement is mandated by RTA, many banks will start lending new business to eNWRs. And some of it is anywhere immediate mandatory for registration of all warehouses, which are under their -- where the stocks of -- stocks to be deliverable on exchanges are being kept. So all this commodity warehouse are registered. Of course, we are now looking at some incidence of [ quality ] also being well. We seen good traction at this [ triangulum ], okay? Not withstanding our opportunities pursuant to the ministry for a single demat account, which is again, let me tell you, happening, interesting and may be sooner than later, the guidelines will be issued for permitting depositories. Our 2 depository LBU, it will be permitted to do aggregation of other asset classes in the demat form. So this is what -- we are looking at it at this point in time.I will ask Bharat to explain some of the numbers, which you are all keen to look at. And later, you can ask questions.
Good afternoon to everybody. I'm wishing you a happy new year and prosperous -- happy and prosperous new year to all of you. Now on consolidated basis, Q-on-Q, that is quarter ended December '18 versus quarter ended September '18, the total consolidated income is marginally down by 1%. That is INR 6,289 lakhs in September '18 as compared to INR 6,222 lakhs in December '18, mainly on account of overall market conditions. However, the other income increased by around 65% from INR 974 lakhs to INR 1,605 lakhs on the current quarter. So the PAT is marginally down by 6%. That is from INR 3,015 lakhs to INR 2,845 lakhs, which was mainly due to increasing some of the expenditure. What is year-on-year basis, quarter ended December '18 versus quarter ended December '17, the consolidated total income increased by 9%. That is INR 6,222 lakhs in December '18 as compared to INR 5,726 lakhs in December '17. The operational income decreased by 10% from INR 5,134 lakhs to INR 4,616 lakhs, mainly due to subdued market conditions. Other income has increased by 171% from INR 592 lakhs to INR 1,605 lakhs in the current quarter, mainly due to mark-to-market gains on investment. Further, the PAT is up by 12%. That is from INR 2,540 lakh to INR 2,846 lakhs. The expenditure was higher by 18% on year-on-year basis. That is INR 2,195 lakh to INR 2,595 lakhs. Whereas a stand-alone front, quarter ended December '18 to quarter ended September '18, that is Q-on-Q, stand-alone total income is up by 1%. That is from INR 4,821 lakhs in September '18 to INR 4,887 lakhs in December '18, mainly on account of improvement in other income. Around 59% other income from INR 718 lakhs to INR 1,139 lakhs in the current quarter. The PAT was impacted by 3%, that is from INR 2,209 lakhs to INR 2,152 lakhs, mainly on account of increasing expenditure.Whereas quarter ended December '18 to quarter ended December '17 that is year-over-year basis, the total income up by 18% -- 8% from INR 4,541 lakhs in December '17 to INR 4,887 lakhs in December '18. The operational income decreased by 9% from INR 4,096 lakh to INR 3,748 lakhs. However, the other income increased by 156% to INR 445 lakhs in December '17 to INR 1,139 lakhs in December '18. The increase in PAT is 18%. That is from INR 1,828 lakhs to INR 2,152 lakhs, was mainly on account of increasing the [indiscernible] impacts. The expenditure was higher by 13% on year-on-year basis. That is INR 1,897 lakhs to INR 2,145 lakhs. So now I request you to open forum for question-and-answer.
[Operator Instructions] The first question is from the line of Prakash Kapadia from Anived Portfolio Management.
If you could give us the revenue breakup about our major heads in the transaction charges annual, which was otherwise [ we are confident ] quarter versus last quarter?
Yes. See, quarter 3 versus quarter 2 of '18, any additional of quarter 3, INR 1,761 lakhs. Transaction charge is [ INR 950.46 lakhs ], mainly around [indiscernible]. E-voting charge is [ INR 56.76 lakhs ]. IPO corporate action charge is INR 400 lakhs. Whereas KYC, online data charge is INR 713 lakhs. These are the major header. Against quarter 2, that is September, any additional charges was -- excuse me?
Last December, if you can give?
December '17?
Yes, yes. Q3 versus Q3, yes, exactly.
Q3 versus Q3, that is any additional transaction charges was INR 1,388 crores. Transaction charge is INR 1,271 crores. E-voting charge is [ INR 30.84 crores ]. IPO corporate action charge is INR 834 lakhs. And online data charge is showing INR 777 lakhs. These are the major components. So against INR 51 crores of December '17, [ INR 46 crores ] as of December '18.
Sir, in your opening remarks, we mentioned about unlisted companies, around [ 505 ]. Sir, what is that kind of -- the conversion we are targeting? What is the onetime and then the recurring revenues, if you could highlight during the quarter? And how is the pipeline looking?
So in this quarter, around INR 549 lakhs -- 549 companies added as unlisted company. And we have growth revenue of around INR 70 lakhs. And out of which, 50% or below, that is less than INR 5,000 crore per annum, what we are getting.
Okay. And this INR 70 lakhs would include the recurring annual as onetime revenue?
No, no, that is the -- that is only annual if you have the recurring one.
Okay. And what is the onetime revenue for this?
INR 82 lakhs, onetime revenue. That is [ 15,000 per company ].
Okay. And when do we get clarity on the university kind of pricing? Because I think after 6, 12 months, revenue monetized. Sir, will we start anything from the government as yet on that or...
Nothing, nothing. Because government told us to start with charging them from September '19 onwards, so nothing on that front.
So nothing as yet. Right. And lastly, you mentioned about the Aadhaar ruling and we are trying to develop a physical verification of a system moving forward. So where are we on that? And what are the intermediaries? And can you kind of feedback when does that normalize?
Well, we already launched it, off-line KYC platform, and people are testing it, testing in a sense they are actually using it live, okay? We are not formally rolled out to everyone. And maybe in the next 2 to 3 weeks, we will be able to do that.
Okay, okay. Next 2 to 3 weeks. And that should cleanse some of the revenue kind of a decline and speed up the corporate number?
Yes. Accounts open will increase, and then KYCs will increase, et cetera, et cetera, all that we have.
The next question is from the line of Harit Shah from Reliance Securities.
Sir, wanted some -- the data as far as your incremental market share is concerned, as far as your beneficial owner account expense on this quarter.
Incremental market share is about 65%.
Incremental market share for the quarter is 63%, and for 9 months, it is 65%.
Okay. So 63% for the quarter, 65% for the -- for 9 months.
Overall market share for beneficial owner account is 48%.
Right, sure. And secondly -- yes, okay. So my second question, as you had mentioned that, obviously, because of the weak markets, your transaction revenue, obviously, around the -- of around about 28% following the new transactions. So that was year-on-year, is that right?
Yes. For the quarter ended -- this is overall companies, I mean, over the quarter ended December 30.
Right, sure. All right. And finally, as far as the unlisted companies is concerned, of course, you had mentioned about the INR 70 lakh. Also, there will be recurring revenue. So that is annuity or is that quarterly?
Annual issuer charges on annuity basis.
Yes. So this is the annual recurring revenue basically?
Yes.
The next question is from the line of Harshil Shethia from AUM Advisors.
Sir, can you give me the [ send off ] income and other income, which [ you quantify as ] INR 15 crores of top line in the current year?
Other income, it was investment income, income from...
Only the subsidiaries of commodities and repositories?
Yes, yes. Altogether, CDSL and all subsidiaries.
Okay. Okay. And one more thing, which subsidiaries will be the major contributor to CDSL's other income as of now?
CVL, CDSL Ventures Limited.
The next question is from the line of Amit Chandra from HDFC Securities.
Sir, the annual issuer charges that you mentioned, 17.6% in the quarter, how much of that incrementally is from the unlisted opportunities in this quarter?
Unlisted, it's INR 70 lakhs, what I have told you, INR 70 lakhs. And [ 82 ], so INR 1 crore, 50 lakhs, which is from unlisted companies.
Okay. And sir, like, in this quarter, we have seen a sharp jump in the other expenses, which is like from INR 8.5 crores jumped to INR 12.6 crores so in this quarter. So can you please, like, provide a breakup of this?
During third and fourth quarter, we are providing for doubtful debts or bad debts. So majority comes from the -- for retirement of financial equities, provision for doubtful receivables. Majority are from issuers formally as such.
Okay. So INR 12.6 crores or so jump is around INR 4 crores. So the INR 4 crores incremental is around...
Around INR 3 crores is from provisional for doubtful debts and bad debts.
Okay. Okay, sir. So we are also going to provide for the next quarter or we have taken into account all the defaults in this quarter?
That is next quarter and so some debt. We will see how much we are -- [ we have around ]. Based on it, we will provide. There is only 9 months as such.
Okay. And sir, in the online, if you could touch also the CVL KYC business. In the last call, you mentioned that as for the change in India regulation, that the online OTP-based KYC is not allowed. So that has benefited us and like people are coming to CVL KYC. So as per my understanding, that similar relation was beneficial for us. But now, again -- now you're saying that this has impacted us in this quarter. So what has changed?
I'm sorry, I'm not able to understand online OTP based is beneficial to us. I didn't understand. What's the...
The last quarter, you -- last quarter, like you had mentioned that they're not changing the Aadhaar. Earlier, it was a risk to us. That...
No, no. Obviously, Aadhaar was a theme which was happening. So accounts growth was good, okay? And the accounts growth has topped because they said you can't use the Aadhaar-based overall online accounts. Now offline KYC is coming. So off-line KYC is better than -- not better than online but it will not be -- it is better than not having any KYC of Aadhaar.
So earlier in your presentation, off-line only right? For off-line has increased. So have you seen...
No, no, off-line KYC is increased in the sense that once people who are going to the broker and submitting the KYC details, and then they are approving. But then, we are increasing it, okay? But it is the online brokerages [indiscernible] who are using the Aadhaar-based KYC. They're opening good amount of accounts. All of a sudden, that [ pipe has dried ], okay, because of the Aadhaar supreme court order. Now we want to revive that. That's where we are at this point in time.
Okay. So right, now we are only doing -- listing physical...
No, no. Off-line also we have introduced now. Off-line business, QR code-based to Aadhaar authentication, okay? So people have to go to the Aadhaar. The Aadhaar is detail refining it and then pushing the QR code-based, this one. So our system reads back and then opens the account online. That's the way we have developed the system, okay? But there is a 2-leg process involved. It's not so similar it has -- it used to be when there is a direct fetching of the data from Aadhaar, okay?
Okay. So how do you know -- how do you see this revenue line, like, from the year onwards? Do you see it, like, dropping further? Or do you expect it to pick up in the next few quarters?
See, if I -- I only look at how I am doing decent competition, given the market conditions, given these problems. And so we are doing better than the competition, and we'll continue to do better than competition. That's what I would like you to [ know ].
Okay, then. Also, one last question for you. In this KYC market, what is our market share and how we are gaining there or [ loss ] there?
Well, you know what, about 60% we have. We have continued to have that.
Okay. So you're not seeing any increase in competition?
No, competitions -- yes, we are not seeing it. At least we've remained stable in that sense, yes.
The next question is from the line of [ Pavan Kumar ] from [ Repatria ] Capital.
Yes. In the other income part of your 16 -- a little bit of INR 16 crore, how much is the mark-to-market gain?
So mark-to-market gain is INR 7 crore for the quarter.
INR 7 crores for the quarter.
Okay. And secondly, the other income part of it, I am not referring to the other income part -- the part in the financial results, but the things that are not covered by annual issuer charges, online data KYC or on contracts and charges. Now that has -- that particular part of revenue seems to have come down to INR 8.46 crores. So what does it comprise of exactly? INR 8.46 crores for this INR 10.55 crores last quarter.
You are talking about other income or expenses?
No, no, other expenses.
Other operational income, yes.
Yes, other operational income is comprised of [indiscernible] charges [ PAT ].
eKYC.
And then eKYC is there.
Okay. And that portion is INR 6.6 crores, so just INR 10.5 crores, is it, sir?
Yes, one minute, one minute. Total operational income, from INR 51 crore, it has gone down to INR 46 crores. So eKYC, from INR 115 lakhs, it is down to INR 79 lakhs. We'll that would mean that 30 to 56, that is a major delay. Otherwise, we are -- online data charges from INR 777 lakhs to INR 713 lakhs. [indiscernible]. From INR 51 crores to INR 46 crores, it gives you 3 major items or the -- okay. Okay?
Okay. And Q3 '18 to Q3 '17, you're comparing?
Yes, sir. Yes, sir.
See, what I'm asking is because contract charges -- because -- which you have mentioned is INR 9.5 crores. IPO charges, as you have mentioned, is INR 4 crores. Online data KYC charges, you have given us INR 8.46 crores.
INR 713 crores
How much, sir?
Online data charges, INR 713 crores.
Okay. And the annual issuer charges is INR 17.61 crores?
Correct.
Okay. So if I paid these all off, there is another part of the income, right, which is around INR 7 crores to INR 8 crores.
So that is user facility charges, INR 83 lakhs; settlement charges, INR 40 lakhs; account maintenance charges, INR 78 lakhs; while continuity [ account settlement ] charges, INR 323 lakhs.
Right. So I am asking you, that particular part of the income has come down from INR 10.55 crores to INR 7 crores around. So is there any particular reason for this?
Yes, it has come down.
Debt has increased. There is not -- debt has come down. If you see, from INR 51 crores, December '17, to INR 46 crore, overall impact [ around ] of INR 5 crores.
Okay. So secondly, regarding the bad debts. So how do we account for -- I mean, immediately account for these bad debts in Q3 and Q4 or...
Q3 and Q4.
Okay. So every year, Q3 and Q4, these are -- the particular bad debts might be there.
Correct, correct.
Okay. And in Q4, is there any other major impact as we have taken around INR 4 crores in this particular quarter?
That we have to see because now as per the index, we expect that credit loss formula is there. We have less than 6 months old [indiscernible] provided for it. So we work it out, and we will continue to know about it.
But are they recoverable?
Yes, yes.
As per your view?
Yes, we have been recovering also. It is not that they are not being recovered. Okay. The problem is that the [ new change ] of your accounting side, if we'll be able to provide for it, you have to do [indiscernible]. So unilateral when you recover it and you're adding to the other income.
So Last year, we recovered for INR 4.5 crores for the full year. I thought we'd be able to recover around INR 1 crore or INR 70 lakhs during current year.
The next question is from the line of Manish Bhandari from Vallum Capital.
Sir, this is regarding this provision. And why does bad debt occur in the business like ours? What is the modus operandi? And do we need to file some legal cases against these people?
The annual issuer charges are the ones, which we raise [ 1 billion ] the month of April, May. And then we give them a month's time. And then thereafter, we keep collecting it. And year-on-year, our -- about 92%, 93% is the recovery rate, okay? In some years, it would be as it is even 96%, okay? And this year, it's [indiscernible] 92% or so, okay? And some companies say that, no, we are under IBC, so we can't pay. Some big companies also say that we are under IBC, we don't pay? So we are filing it, whatever the IBC provisions are currently needed, lack of [indiscernible], we will send it. But yes, this is a recurring issue for us. And what we do is we stop the BenPOS, [ when POS ] that is beneficial owner position. Another fine is we don't give them the insurance shares, the ones the beneficial owner position, what you call your shareholder [ registry update ]. We don't give them any service. So when they come back to us, we tell them, "You better pay" than only we'll give it. That's the way we do it.
Sure. I appreciate it. So my second question is regarding the cash on the books. And I'm a shareholder. I am so concerned about -- that there is no special provision for either dividend or maybe a buyback. So I think, to understand that why we should keep a cash on the books and which is the rightful owner of the shareholder and why should not be distributed as official dividend or maybe as a buyback or what will be the process? Maybe you are from this suitable position to do quarterly dividends to the shareholders. So -- [ they will let the ] capital -- what you require is not more than INR 250 crore. And even if you extend it to INR 300 crore, and the cash, once we accrue each year, is significantly big enough for us to generate back -- give back to the shareholder. So what is holding the board back or maybe our sponsors back to give this back shareholder -- rightful money back to the shareholders?
Well, out of INR 600 crores, surplus is there. INR 300 crores requirement is this, that the network criteria is there, but we have to maintain it. Further, every year, on a standalone basis, around 57% to 60% payout ratio is there. And on a consolidated basis, 42% to 44% is there. And every year, if you've seen us, [ 10 years ], every year, we are increasing the dividend payout ratio.
We need to sustain the [indiscernible].
So -- and if you see our income depends on the market. Market is weak, the time also we have -- yes, ensuring dividend and if it's the same level or more. So for that purpose only, we require. And if we are to give it to you, then my other income is going to reduce, my profit is going to...
Sir, by -- the dividend side are very inefficient on the taxation front because you have to pay a dividend distribution tax, and as an owner, we have to pay taxation on the other hand. So a buyback is far more a tender approach. A buyback is far more suitable. The return on capital of the business can change dramatically. So if I have to extrapolate this the next 3, 4 years, are the -- the return on equity of the business would remain at close to 20% or, at max, it can go to down or maybe 21%, settle there. And once a better use of cash is returned, then the return on equity can go back to 28% to 30%. I'd like to send in my calculation in detail. So I'm just wondering that what is there in the board and why they're not -- discuss this issue and why it has been so long for so now. So I'm just wondering if there's any answer you can -- and you are the custodian of the shareholder. You are better placed to answer this.
No. But we are informally describing the board, but then the board is of the view that we will discuss it -- we will take it up in the corporate shares that probably the board is of the view. And now we feel that it is not the right time to discuss dividend shares. But have listed now. And then now let's wait for some time and then do that. We will look at that. And then -- that's what they are seeing.
Maybe, sir, I would definitely write to the board and ask for their explanation in detail, like, what is it they are waiting for and the cash is filing on the books. So, definitely, I'll do that.
The next question is from the line of Aditya Bagul from Axis Capital.
Sir, I have just one question. We have 4 new ventures that we're seeking out. You have the GST and maybe insurance in the warehouse [ this season ]. How do we see this scaling up? Which amongst them do you think is the most promising? And as we stand today, what is the kind of revenue that we are getting from this? And let's say, 2020, 2021 what are the numbers that we can be looking at?
Well, I will not be able to give any numbers as to the -- what will be the [indiscernible] '20, '22, '23 or whatever it is. But the most promising of all the 4, if I have to rank them, the warehouse depository -- repository is going to be #1. That's what my view, okay? The second thing is the National Academic Depository. And the third one is single demat account for all financial assets where this [ incidents ], and other products will also go into that, okay? And that's the kind of [ father ]. GST, as you are saying, going day by day, the government is reducing the number of filings that are required to be made. And I don't think that will be a very big driver at this point in time. But, yes, the other 3 are really good ones. They are good ones.
Surely, sir. If I ask it conversely, can you share what is the revenue generation from these 3 revenue streams in the first 9 months?
Well, as I said, the National Academic Depository we are not allowed to charge since September 2019. So obviously, there's nothing that we share, okay? In the case of, CCRL, okay, it's [indiscernible] and then a few lakhs, not even INR 5 lakhs. You know that already. It's very, very, very insignificant. But my bet is, substantially, the CCRL depends on the national -- Electronic National Agriculture Market, which is a stock market, which is going to grow much bigger than what it is, what commodity exchange has been. And that's where we would like to play a much bigger role. And that will take time. As I said, that we are discussing systems integrations with E-NAM. So once that is done, probably that's going to be a big, big, big one.
The next question is from the line of Pritesh Chheda from Lucky Investment Managers.
Sorry, just 2 clarifications. We have the e-Voting charges revenue you gave at INR 5.6 crore for the quarter. What was it for the corresponding quarter last year?
Not INR 5.6 crores. INR 56 lakhs only.
Okay, what is...
[indiscernible] at INR 30 lakhs.
Okay. And the other question, when you gave the bad debts write-off number, you said that incremental, it is about INR 3 crore more. So just wanted to know, what was the bad debt number this year? And what is the bad debt provision number last year?
Last year, we provided INR 450 lakhs. This year, it will be around INR 87 crores.
Okay, so basically, the whole incremental expense number is because of the bad debt provision?
Yes. Exactly.
Okay. And third clarification, on the eKYC side, you mentioned about Aadhaar and some changes there. So if you could highlight what is the changes in the business that has come in on account of this Aadhaar, eKYC and what our strategy -- changes or strategies.
I will not be able to exactly say how much eKYC generated based on Aadhaar now that she's -- other than Aadhaar, okay? But when Aadhaar was there, a lot of online and brokerage firms were opening a very good number of accounts. I don't mention that number against -- it's quite sensitive. It's competition sensitive in that sense. And some of the -- some of them have reduced their account opening because eKYC is no longer there. So the off-line KYC that we have introduced, trying to restore our numbers back to what we had started. But I will not be able to disclose the numbers as to the -- how much is the eKYC market.
Okay. And lastly, on the unlisted company side, the revenue has started flowing from this quarter or revenue started -- was flowing since the last 2, 3 quarters. You gave a number of 1 point...
There are 2 things. Even -- for the last, maybe, a decade, that unlisted companies are also listing with -- I mean, it would need some big depositors. But that is a voluntary activity. Now because it's from 1st October 2018, the regulation has come. And under that regulation, companies cannot issue additional security unless they are in demat. So that [ compensation ] of -- going for demat has come only in October. Because this is from the -- the numbers have substantially gone up.
Okay. So these 500 companies is what you say we converted in the quarter. They generated revenue of about INR 1.5 crores, INR 1.7 crores. What is the full potential here? And what is the timeline given to these companies to get their securities registered with the depository?
Well, the regulation is not to sell. At this point in time, any [ auto ] timeline for them to distribute it. And -- but we expect to -- we are giving [ MIS ] to the MCA every now and then. Probably they will look at it what [ development ] the companies are showing any urgency to get it done or not. If they are not, then probably they will impose. But otherwise, they are satisfied with this growth. Probably they may not contain a timeline, okay? But the total unlisted public inter-companies are almost 65,000 to 75,000 that day. And some are [ anyways decayed ], and some -- many are still to be admitted. That's the view.
Okay. As of now, the only regulation change is that if anyone has to issue new shares, it has to get compulsory [indiscernible]?
Yes, that's right. That's right.
That's the only regulation enforced?
If any transfer is to be done, that will be done in only demat.
[Operator Instructions] The next question is from the line of [indiscernible] from [indiscernible] Trust.
I've got a few questions. First one is the bad debt side, [indiscernible]. What are the connection activities you are seeing on the recovery side? And normally, we end up recurring 13%, 14%, 15%?
What? I'm sorry. Please repeat your question?
On the bad debt side, the [indiscernible] how much do you think are we improving of recovering near the last year number? And are we reaching 13%, 14%, 15% or higher than that?
Yes, around that time, 25% to 30% [indiscernible].
25% to 30%. Okay. [indiscernible] unlisted [indiscernible] last quarter [indiscernible]. [indiscernible] the addition of this.
These are the additional companies, new company in the last quarter after the [indiscernible].
And the INR 70 lahks also only from the big companies [indiscernible].
1.5, not 70. INR 70 lahks for any...
Recurring income and [indiscernible].
[ 1 20 ].
On recurring income? Okay. And what -- and the transition head [indiscernible] crore?
Yes.
And [indiscernible]?
Yes.
And charges of [ 3.23 ], you mentioned [ INR 3.08 lakhs ] inside the numbers.
What charges?
Consolidation accounting.
Against [ 1 80 ]? [ 2 23 ].
The next question is from the line of Gautam Gupta from Nine Rivers Capital.
My question was on AIC charges. I understand that AIC is linked way substantially to the number of full year because that's -- full year, these charges are the biggest share on that. But given that this year we've had weak market, are you seeing any reduction in the number of full year, which, therefore, may impact AIC for us in the next financial year? Any color that you could give us on that?
See, I don't think the AIC has had some impacts immediately. As of 31st of March the last year, whatever is the annual shareholder charges for that is the full -- number of full year charges, that will be the basis for charging for this entire year...
So this year, no impact?
This year, it is much lower than it will be the next year. But I don't -- I am not seeing that kind of result but even if that new accounts are coming in, there, some credits are coming. So to that extent, some compensation is there. Some full years are going out, some new full years are getting in.
The next question is from the line of [ Shiv Kumar ] from [indiscernible] Capital.
Yes. Sir, can you shed more light on this eKYC venture? Because in the last call, you said that because of the Supreme Court order on the Aadhaar issuance, Aadhaar-based issuance, we'd be moving to a QR code-based system. So what is the purpose in that? And how is the general industry coping with the recent changes in the whole Aadhaar-based signing-up system?
Yes, as I said, we are all waiting for CVL also to launch a new product, which will be seamlessly integrated with the QR code. And -- which we have now done. And the QR code relates -- the QR code base debuted months ago or so. So immediately, we started development, and then we launched it. How we end up supporting it? Probably, they are looking at alternative methods of using it with scan for the, what you call, the in-person verification, okay? And they are also seeing that we will ask them to show -- understand the -- on the net, they will open the -- on the site, they will open the account. And they will confirm it, and they take the print-out and sign it and then send it to them. And pending that, they may open a demat account, and then what are the accounts and open it. But then they don't tell [indiscernible] take in the account until the original documents are reached, okay? So that -- there's no risk in that sense. They only retrieve the second page into the demat account, but nothing will be moved out unless the original documents are sent. Any [indiscernible] at this point in time, these are requirements for most of the players in the market. So for a time, it has to be collected. So we take data for about 7 days. They are expected to complete this process.
All right. How does this QR code system work? How easy is it compared to the other base system?
No, this is also affecting off-line essentially. Now what we are [indiscernible] without you knowing that you are moving to Aadhaar, we are simply -- you enter your Aadhaar number, and then we send that to the -- our system sends it to the Aadhaar, and then Aadhaar gives you the, what you call, an OTP. You enter that, and again, our system talks to the Aadhaar. And then you get the [indiscernible] download it. That's what the online system is looking. Now there will be no linking between our system and Aadhaar, okay? Once you exit it, you -- our system will take you to the Aadhaar site and leave you there. Then you enter your things on the Aadhaar site, whatever number and all that stuff. You get OTP, and then they will send you where -- your QR code [ base is going ] to be sent. And then you download it once it is made available. Do the same. Then you need to give it -- log into our system, and again, you upload that QR code. That's the nice thing. It's not so convenient to the investors. But yes, you can agree with that. You need to exit and then enter. That's the way it is.
Sounds a little bit complicated.
It is complicated, yes.
Thank you. As there are no further questions, I now hand the conference call over to the management for their closing comments.
Thanks to all of you, and we hope that we will be able to do better the next quarter, okay? If markets improve, definitely, we will do better. Thank you. Thanks to all of you. Thanks to Mr. Aditya.
Ladies and gentlemen, on behalf of Axis Capital, that concludes this conference call for today. Thank you for joining us, and you may now disconnect your lines.