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Central Depository Services (India) Ltd
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Ladies and gentlemen, good day, and welcome to the CDS Limited Q3 FY '22 Earnings Call, hosted by Axis Capital Limited.[Operator Instructions] Please note that this conference is being recorded. 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 constructed as forward-looking statement must be reviewed in conjunction with the risks that the company faces.I now hand the conference over to Mr. Anshuman Singh. Thank you.And over to you.
Thank you, Mike. Good morning, everyone. On behalf of Axis Capital, a very warm welcome to the Q3 FY '22 Conference Call of CDSL India Limited.We have the management team of CDSL, represented by Mr. Nehal Vora, MD and CEO; Mr. Girish Amesara, the CFO; Ms. Nayana Ovalekar, Chief Regulatory Officer; Mr. Ramkumar, Chief of Business Operations; Mr. Vinay Madan, Chief Risk Officer; Mr. Sunil Alvares, MD and CEO, CDSL Ventures; and Mr. Nilesh Kittur, AVP.Without further ado, I would like to hand over the conference to the management for their opening remarks, post which we can open the floor for Q&A. Thank you.And over to you, Nehal, sir.
Yes. Thank you so much, Anshuman. I would like to wish everybody a good morning. And I will welcome you all to CDSL's third quarter conference call for the financial year 2021, '22. And I hope each of you and your loved ones are safe and healthy.I'm joined by the management team of CDSL group. As in the previous quarters, we posted a detailed financial presentation on our website for your reference.Our strong performance in the December 2021 quarter is a direct result of deliberate steps we've taken towards strengthening our role in our financial ecosystem. A revised strategy of empowering the registered investors and providing services that are convenient and easy enables us to do more and [ retain our existing plans ]. We are happy to report that India has strengthened its overall participation in the Indian securities market, as the overall number of registered investors or, as we call it, the Atmanirbhar Niveshak, as on 8 February 2022 was 9.6 crore unique client codes on the stock exchanges, which is a 57% increase from the same time of the previous year. Further, the total number of demat accounts across all the depositories in India as on January 31, 2022, stood at 8.4 crores, while CDSL enjoys a 70% market share at 5.85 crores. We are harnessing the benefits of our digital innovation and the presence carved out across years, especially in the Tier 2 and Tier 3 cities. We have invented and invested in our business to build a truly diversified organization that performs across market regulations and with a commitment to serving the investors, all market infrastructure institutions, regulators, shareholders and employees.Speaking further on our business performance during the last 3 months. The number of new active beneficial owner accounts with CDSL has increased by about 91 lakhs. The comparative number of new beneficial owners for the quarter ended December 31, 2020, was approximately 28 lakhs. And approximately 68 lakhs [ was had increase ] in the quarter ended [ September 30, 2021 ]. The number of access companies as on December 31, 2021, was 17,748, which is an 11% year-on-year increase from 15,992. The number -- 15,992. For the same period, in comparison, the value of securities in demat custody increased by 47% to 37 lakh crores at CDSL as on 31 December 2021 from 25 lakh crores as on December 31, 2020.We continue to provide services in line with transformation and requirements of the current time to promote digital initiatives as promoted by the central government. Further towards our efforts to make investors self-sufficient to make informed decisions, the CDSL Investor Protection Fund conducts -- has conducted [ 80 ] investor awareness programs in association with SEBI, other MIIs and depository participants. Before I hand it over to our CFO, Shri Girish Amesara, I'd just like to say that the growth of the Indian securities market is in an extremely encouraging sign, showing and is expected to show its true potential. I also want to take a brief moment to place our appreciation and gratitude to all our stakeholders, the regulators, depository participants, investors, issuers and other market participants as well as the employees, for their constant faith in us.Now I'll request our CFO, Shri Girish, to take out -- through our financial performance.Over to you, Girish.
Thank you, Nehal. Good morning, everyone.So speaking on our financials. We have seen healthy growth in this quarter within year-on-year performance with respect to net profit in terms of 55% increase. The total consolidated income for the December '21 quarter has increased by INR 59.73 crores, which is 58% compared to December 2020 quarter. In absolute value terms, we have achieved INR 162.93 crores total income compared to [ INR 103.29 crores ] during the previous year same quarter. The consolidated net profit after tax for the December '21 quarter has increased by INR 29.60 crores, which is 55% growth over previous year same quarter. The absolute amount in value terms, it is INR 83.63 crore compared to INR 54.03 crore previous quarter.On a stand-alone basis, the total income for the December quarter has increased by INR 40.30 crore, which is 50% over previous year's same quarter. The absolute value is achieved at INR 121.55 crore compared to INR 81.25 crore for December 2020 quarter. The stand-alone net profit after tax for the December '21 quarter has increased by roughly INR 20.74 crore, which is a 48% increase. And in terms of absolute value numbers, the amount is -- it stood at INR 63.77 crore during December '21 quarter compared to 43.02 quarter -- INR 43.02 crore for December 2020 quarter.Now I will hand over next to Sunil Alvares to take you through our operations of our wholly owned subsidiary CDSL Ventures Limited.Over to you, Sunil. Thank you.
Good morning, everyone.CVL had a very healthy performance in the last quarter. And on the back of buoyant markets, we had the KYC creation increase by 160% to 111 crores. The KYC fetch of -- in CVL [ increased by ] 165% to [ 2.5 crores ]. The CKYC business increased by 83% to 15.1 lakh -- 15.19 lakh records. In terms of RTAs, we have about 802 companies registered as of 30th -- 31st December. On the GSP, there was a slight drop in the number of records process, as compared to the previous year.And on the operational income side. For the period April to December 2021, we had income of 99.35 crores, as against 48.69 crores during the period of April to December '20. The total income including other income was 109 crores, as compared to [ 58.90 crores ] in the same period last year. With regard to expenses, it was at 36 crores this year, as compared to 21.17 crores last year.Based on that, the profit before tax was 70.54 crores this year, as compared to 37.74 crores [ last year ], which is an increase of about 87%. On the profit after tax, the total profit after tax for this year was 53.60 crores, as against [ 29.3 crores ], which is a jump of 83%.With this, I'll hand over the -- back to Axis Capital to take over the questions.
[Operator Instructions] We have the first question from the line of Mr. Prakash Kapadia from A. Portfolio Managers.
Congrats on a good set of numbers. A couple of questions from my end. Sir, I was just trying to understand more from Sunil. He mentioned about the KYC business doing well. So if I look at 9 months performance of CVL, as per segment revenues are -- revenues are up 104%. Could you give some more understanding? Is there some reduction in discounts? Has pricing improved as contribution of new folios increase, as compared to the fetches? And what will be, say, the contribution from newer initiatives? If you could give some more insights, that will be helpful.
Yes. So far as pricing is concerned, there is pressure on the creation. [ There we -- currently CVL levies 2 ] charges. One is on the creation and one is on the fetch. There has been [ pressure on the creation ] charges with the increase in volumes, but the fetch charges have more or less remained the same. And with the increase in volumes of fetch, okay, that is added to the performance of CVL. I hope that answers your question.
Okay, okay. So it's the core business of fetch and new records which is driving the growth.
Yes. Like one of -- records get added, at the end of the day, at some point [ or the other in the fetch ] [indiscernible] market. The number of fetches were obviously [ reduced ], so that would help the income grow at that point in time.
Any number of client records or folios you can share?
Yes. [indiscernible] [ December ], we had 3.9 crores -- sorry, [ 3.29 crore ] KYC records in CVL.
[ 3.29 ] [indiscernible], understood. That's helpful. Secondly, if I look at our other expenditure for the 9 months, could Girish comment on what [ heads ] are we seeing? Because there has been a 77%, 78% increase in other expenditure ex of employee and the system maintenance costs. So because last year, there were some one-offs due to COVID, so what I am trying to understand on the OpEx side, rent, business development, repairs, what are some of these which have seen a higher increase as compared to revenues?
So just to give a color of the expenditures. Largely our expenditures are coming through operation-related expenditure, employee cost, technology cost and contribution to Investor Protection Fund which is an -- basically a regulatory cost. So operation-related costs largely covered the inter-KRA charge that we are required to pay in CVL, okay? So that is one of the costs. Then we also have a cost on the SMS charges that -- SMS and other alerts that we are supposed to send to the investors. That is one of the major contributor. And rest are our normal contributor. Now regulatory cost is a function of the operating profit that we achieve. So higher the operating costs, our [ charge ] towards regulated cost will also increase because it is directly proportionate to our operating income. So it specifies 5% of our operating income has to be contributed to IPF. So roughly this is the structure of our expenditure.
Right, sir. And can you just share the breakup of larger revenue streams for the quarter?
Sure. I will do that. So [ transaction ] charge is achieved at 52.70 crore, as against 30.95 crore. Our online data charge, which is CVL's income, is contributing 33.62 crore compared to 13.09 crore. I'm giving the comparison of this quarter and December quarter last year.
Yes, absolutely, year-on-year, right.
Yes. IPO, corporate action income have contributed 23.41 crore compared to 6.95 crore. And annual issuer charge income is contributing 28.98 crore compared to 21.69 crore. Then we have cash statement charges, which is contributing 4.42 crore compared to 4.44 crore. And see, basically this covers almost [ 88% to 98% ] of our operating income. Rest are contributing less than 1% or 1% with the settlement charges, inter-KRA charges, eKYC, CKYC, document storage charges, account maintenance charges. So I'm not repeating those things, but what I told is covering almost [ 88% to 90% ] of our operating income.
And what will be the debtor provisioning number as on debt? Would you have that handy?
Debtor provision number, just a moment. We have a provision for the 9 months amounting to 8 crore compared to 7.34 crore during 9 months previous year, so it...
And last quarter, we had seen a jump in e-voting. So is that continuing? Do you have that e-voting number?
No. e-voting -- see, basically e-voting, this year, the extension was not provided. So whatever income that we had recorded till 6 months, apart from that, we had an income of roughly 95 lakhs in this quarter. So majority income has been covered during -- so as far as companies are concerned, those income has been covered in first 2 quarters. So it was -- it is around [ 6.5 crore ] on a 9-month basis, of which 5 crore was already considered in up to second...
Was [indiscernible] first half [indiscernible], yes, yes, yes, absolutely.
In the first -- yes.
[Operator Instructions] We have the next question from the line of Devansh Nigotia from SIMPL.
Congratulations on good numbers. Sir, just wanted to know if you can just elaborate on the investor behavior, especially [ Jan month ] when the IPO market was not as active as it was in the second quarter and the secondary markets were also [ big ]. But when we look at the month-on-month addition of the accounts, they continued to be really robust of around 29 lakh, 30 lakh absolute addition; and 5%, 5.5% [indiscernible]. So if you can just throw some soft points, where are the investors heading? Are these for mutual fund investments or for secondary market or IPO markets? Just some direction on the customer behavior, yes, if you can just elaborate...
So basically a demat account is -- say, for mutual fund, demat account is not mandated. It's optional. And demat account that is used for secondary markets, for IPOs, it is compulsory. So it has multiple end use cases. And therefore also there have been news in the market about the LIC IPO, so people, in anticipation, also will be kind of wanting to open a demat account because that's a mandatory thing to do before you can apply in an IPO. So I think it's a [ culmination ] of a variety of factors, that whilst overall the market has been kind of [ range bound ], but -- the participation has gone up both in terms of unique client code of the stock exchanges as well as on the demat accounts that are being opened and the [indiscernible] depository. So I think [ we can line ] with that as we are having more and more participation coming from Tier 2, Tier 3 towns; people wanting to be able to invest in the mainstream market. [ So it is ] difficult to point out whether it is IPO-driven or it is secondary market-driven or mutual fund-driven, [ though ] mutual fund is [ small compared ] [indiscernible].
Okay, okay. So direction, it looks like more from the LIC IPO that is -- I mean directionally that looks like a direction of the addition [indiscernible].
I am not talking only about the LIC IPO; also the other PSU IPOs, large other IPOs which are expected to hit the market. So people is -- use that -- so that is one reason. Second is obviously the participation in the secondary market has also gone up. And demat account is the mandatory thing [ for India ] to participate in the secondary market. So it's a combination of both these factors mainly. And mutual funds, whenever people opt for mutual -- or for the demat accounts, that also [indiscernible] contributors [ of that ].
And sir, if you can just throw some light on how is this behavior very different from what we have seen historically, [ that even there are corrections ], participations actually go down, but -- since you're highlighting in recent months it has actually increased. So what do you think has caused this change structurally or [ exemplary ] or...
So I think the principal driver has been COVID. Most of, I think, securities market was continuing on without any kind of, [ we can say ], disruption. And people have their savings which they could access without physically going to their [ brokerage offices. There'll be online mode ], et cetera. [ So definitely the ] digital platforms, et cetera have contributed to this growth. And I -- kind of an end-to-end process, like from account opening to transactions, [ situation of orders ] through the settlement process, is timely done from the comfort of your home. And that's the ease of doing business is kind of encouraging more and more [ players ]. It's more and more investors, [ I mean ], will come into the market.
We have the next question from the line of Pranav Mehta from ValueQuest.
Congrats on very good results. So firstly, I just wanted to [ rewind ] a little bit more detail in this question [indiscernible] that somebody else has asked earlier. So considering that we are a platform company, we would have thought that, as volume [ respond ], our expenses should grow at a much slower pace than our revenue growth, but at least in the last couple of years, as volumes have really grown, our expenses have also gone up in sync with the revenue growth. So a bit confused as to why there is not enough operating leverage in this line item, so if you can just explain a bit more on that front. And secondly, if you reach back, there was an exchange filing from CDSL that we are divesting our stake in our subsidiary CDSL IFSC Limited. And so I just wanted to understand our thought process behind that decision. Why would we, [ most of all ], sort of divest our stake and give up any potential upside that can come through future developments [ in the subsidiary ]? Yes, these are 2 of my questions, yes.
Okay, the first question is that, whilst there is [indiscernible] financial infrastructure company. And there has to be investment in the technological platforms to ensure that more sophisticated platforms are put in place, but there are also certain [indiscernible] contribution to IPFs, pending the SMSes, which are connected to the number of transactions [indiscernible]. [ That is ] directly connected with the growth of volumes, which has happened. So if you see the extent of the income growth is not -- is higher -- in terms of percentage is higher than the growth on the expenses because the expenses comprises of both certain fixed costs as well as certain variable costs which are connected directly to the volumes, which I have just explained.[indiscernible] second question, about the IFSC. The regulator out there, the IFSCA, [ explained that ] we should not -- there should be a single kind of basically depository. And there is a -- basically a [ group on ] to invest into the entire ecosystem of gold and bullion, including basically depositories. So that comprises [indiscernible] CDSL, NSDL [indiscernible] as well as MCL. And so far, it was said that rather than having competition, this group should be holding this entire shareholding of this particular [ thing ]. They only wanted one single kind of basically depository so that we can compete [ in the world ]. And it's not that we are going to lose out because now we also have exposure into the spot exchange for basically the gold and the clearing [ corporation. So as one could say ], we have exposure across the entire kind of ecosystem. And since there is no competition, whatever volume comes will come and into this one kind of entity. [ So that's the story ].
We have the next question from the line of Prayesh Jain from Motilal Oswal.
Just a couple of questions. Firstly, do you have anything to quantify in terms of how many accounts can be opened during -- via the LIC IPO [ with a ] policyholder? So some understanding, if you have. And secondly, can you give some understanding of -- with regards to penetration of demat accounts across mega cities and Tier 2, Tier 3 cities? Actually what is the level of penetration of demat accounts? The country level, we know, is around [ 5%, 6% ], but how the [ interest is ] with regards to Tier 1, Tier 2, Tier 3 and beyond, that will be helpful.
Yes, the first question, I can't hear it, partly. Could you repeat the first question?
Yes. [ I think ] LIC IPO's [ revenue and ] we have some -- a separate allocation for policyholders. And do you expect [ that the large policyholders ] [indiscernible] because of that?
Yes. So that is a futuristic question. It is difficult for us to assess how many policyholders will actually convert into opening up demat accounts. We'll have to only wait and watch as, as you know, the [ RFC ] gets filed and the [ issue ] is launched, but how many actually will translate into demat accounts -- so I'll not be able to comment on that. As regards Tier 2, Tier 3, we don't give out these numbers out in -- this is a public domain. It's kind of given as a holistic number, which has been done, but I can tell you that there is a general trend that there has been a higher participation also, as compared to the previous year, with some -- in Tier 3, tier -- some Tier 2, Tier 3 [indiscernible], as compared to the previous [indiscernible].
We have the next question from the line of [ Mayur Limin from Profitmart Security ].
I just want to...
[ Mr. Limin ], your voice is not very clear in the call. Could you come closer to the mic?
Okay, okay. Now it's audible.
Yes. This is clear.
Okay. I just want to ask. Can you share your thoughts on demand forecast? And how do you see quarter 4 now? And that's it from my side.
We don't give any futuristic outlook, future outlook, so I'm sorry, I'll -- I am not able to answer that.
We have the next question from the line of Pavan Kumar from Shree RatnaTraya Capital.
Sir, I wanted to just check. The IPO income, you said, for the quarter was around 36 crores, right?
IPO. I said IPO income was 23...
[indiscernible]...
Yes, yes. IPO is 23.41 crore in this quarter.
And KYC charges are 36.
33.62 crore.
How much, sir, 23.62?
Not 23. 33.62 crores.
Okay. If I wanted to split this between, say, to the fetches, what is the -- new charges, what will the split be broadly?
Normally the fetches constitute to about 80% of [indiscernible].
Okay. And can you just give us an idea of how the charges have been -- how the charges are varied for the fetches maybe on a year-on-year basis?
The fetches, [ we charge INR 35 for ] fetch since inception. That is since 2011. There's no changes since then.
Okay. And for the new ones, how have the charges have been -- have varied for like over the last year-on-year basis, sir?
[indiscernible].
[indiscernible] -- basically we charge [indiscernible] for a new record. And over a period of time as the volumes have increased, there have been certain volume discounts given to intermediaries.
Okay. So overall that has come down from [ INR 3.20 ], is it?
Sorry...
I didn't get that number clearly, sir. How much was it originally [indiscernible]...
It's our [ actual rates ] are INR 20 [ per eKYC ] created, okay? And there are volume [indiscernible] last year based on the volumes created.
[Operator Instructions] We have the next question from the line of Prakash Kapadia from Aniv (sic) [ Anived ] Portfolio Managers.
Yes. We've seen a record account opening on the demat side, so what I was trying to understand: If I look at the [ IT ] return data, there are around 6 crore returns filed. And there are already [ 8.4 ] demat accounts. So is PAN compulsory to open a demat account, or is [ Aadhaar ] enough?
PAN is compulsory.
PAN is compulsory. And as a trend, have we seen same PAN number opening more incremental accounts? Is that a trend? Or these are newer demat accounts which we've witnessed over the last year or 2.
No. Overall the trend is the newer demat accounts setting up, [ newer people ] overall.
Okay, okay. And recently, [ IT ] department has automated financial transactions to improve compliance. So is it the depository's responsibility to share data to the [ IT ] department? Or is it at the broker and which they have to report these transactions?
I think this has nothing to do with the financial performance of the company. This is not of a compliance issue, so I think I don't see the link between the two on this question.
Mainly I was trying to understand because we've seen a spurt and increase. Government has automated [ AIs ] and returns, so does the transaction get reported from our end? Or is it the...
Yes. So this is all the MIIs have to report...
Okay. It's the entire market participants which...
Yes, yes.
Yes. That's what I was trying to get. And lastly, the -- there has been some newer initiative as [ accreditation ] agency. So any sense on the business model? Or how will it work? Or the road ahead.
I'll ask Sunil to answer that.
Yes.
Yes. Basically we are looking at a lot of wealth managers getting India investors to be registered as accredited investors. So we've just started and we just started sending out feelers to the market. And basically, since we cannot make any forward-looking statements, I mean, [ we are trying to really ] figure out how it's going to work out.
Okay. So [indiscernible] would -- will target guys who are registered as wealth managers or who are professionals and who can service others. I was just trying to understand the intricacy, not the pricing or...
No. See, we will be working out on a detailed marketing plan, whom to target, et cetera, right? So I will not be able to...
Sure, sure. Once it's launched...
That's because -- yes. Because it's more a strategy thing for us.
We have the next question from the line of Amit Chandra from HDFC Securities.
Sir, my question is on the revenue that we earn from a demat account. So roughly if I see -- the revenue for demat account is around INR 100, INR 103, INR 105. And that has been declining over the years, but in the last 2 years, it has been stable at INR 105 per demat, okay? But if I see for FY '22, it has declined to INR 95 on -- per demat that you're earning, so is it an indication that the people are opening accounts but the activity [ for ] demat is actually coming down? So that is one thing, if you can throw some light that -- how do you actually see that trend -- I mean, is moving. And what exactly is causing that? And also, secondly, on the exclusivity that we have with the online brokers. So still we are in that kind of exclusivity. Or are we seeing the other, the competition also catching up and opening accounts for the online brokers? Yes.
On the first question, Amit. It's the overall activity, the delivery [ base ] percentage has gone up significantly, you'll see, over -- year-on-year in the last 2 years on the exchanges. [ And direct result is to do ] with the activities which have been done. It -- so I don't see reduction in the activity. People may be opening accounts and may not be doing that activity for some of the accounts, so you have taken an absolute number of an average, but I think overall, if you see the core and delivery percentages, the core margin pledge percentages and margins [ of new line ] of business -- all these have significantly increased. And that's why the quantum has clearly gone up over the last 1 or 2 years -- and sorry. What was your second question?
Yes, sir. Second question was on the exclusivity that we have with the online brokers...
I think that I would not like to comment whether it's exclusive or nonexclusive, but important thing, I -- the company and as a management, we are focused on ensuring the best technology platforms [ that you shall win ] business. And then leave it for the market to figure out which sort of platform is good for them or not good for them and just focus on that, yes. Our intent is not to have any kind of exclusivity or, I mean, nonexclusivity. An important thing and our focus is to give the best products and to ensure that the platforms continue to remain extremely friendly to the [ final day-to-day ], I mean, investor. And then leave it to the market to figure out where they would like to...
Okay. And sir, the second question is what is the pledge income that we have generated in this quarter. So -- and are we seeing that increased activity there? And also as we mentioned, that the -- some part of the other expenses is mostly communication. So if you can quantify what is the communication charges because it has been increasing strictly because everything has to be authenticated via SMS. So the SMS costs have been -- has gone up [indiscernible] significantly. So if you can quantify that [indiscernible].
Yes. I'll ask our CFO, Girish, to answer that. Can you answer that, Girish?
Mr. Girish has got disconnected. We are trying to reconnect him back again.
Okay. So can you take on the next question? And then he can answer once he is connected.
Okay, sir.
We have Mr. Girish back online.
Yes.
So...
Amit, can you repeat your question...
So I will -- I'd heard the question. I will answer this question on the pledge income. So in this quarter, we have earned a pledge income of 4.11 crore. And on 9 months basis, we've earned a pledge income of -- margin pledge income of 10.93 crores.
Okay. And sir, on the communication charges, how -- so whether the increase in the other expenses is a function of that or the regulatory expenses, the -- so what is driving that, if you can [indiscernible]?
Sure. So in value -- absolute value terms, our SMS charges is roughly 2.2 crore in the quarter compared to 66 lakhs in the previous year same quarter. And yes, the contribution is slightly increased compared to previous year same quarter because our operating income has increased. So contribution to IPF is around 3.84 crore compared to 2.20 crore in previous quarter.
We have the next question from the line of Miraj Shah from Dalal & Broacha Stock Broking Pvt. Ltd.
I just had one question here regarding the annual issuer charges. The revision in annual issuer charges, that was supposed to happen, I think, in 2020, which happens every 5 years. Is there any update on when this will take place going ahead? Any update on that?
We will have to see that because that's a joint proposal which -- signed by both the depositories [indiscernible] and SEBI. And SEBI will approve it post COVID. However, COVID has not completely [ weathered out ], so we'll kind of see an opportune time and then we'll be sending [ it ]. We have been in informal talks advising that it would not be worthwhile talking about at this stage. We'll see it at an appropriate time. That will be best.
Okay. So any chances that it could be done in this or in the coming financial year?
It will be difficult to answer. It's a futuristic question. We'll have to see how this is; what, I mean, SEBI will have to approve. And I mean I could not -- I cannot really comment on the time lines as to when anything happens.
Okay, understood. And sir, what would be the factor that SEBI would look at while [ deciding ] the charges in this?
That will be difficult for me to answer, but SEBI -- I cannot [indiscernible], but they will look at whatever it costs and how much increase should be done. So it is difficult to comment on this also.
We have the next question from the line of [ Paresh from Club Millionaire ].
Nehal, congratulations to your -- to you and your team for the fantastic performance yet again. A couple of questions, Nehal: One is on the insurance repository. With the LIC IPO likely to happen and the regulator already mentioning before the pandemic that they will kind of review this process of having [ reinsurance ] accounts post pandemic, any update or any catalyst in terms of kind of the [ traction ] on the insurance, [ reinsurance ] accounts?
It remains voluntary. [ Nothing is not just -- not mandatory. And when it is made ] mandatory, that's the time when traction will [ take place ]. However, we'll have to wait and watch in terms of how the [ entire space gets ] done or what could be the forward part of IRB in terms of how they will be taking this forward, but as of now, what remains is it's on a voluntary basis.
Okay, fair enough. And the similar line, on the commodity repository, right? We currently only have -- I mean basically only the agri warehousing receipts on electronic mode. Any focus, as far as the non-agri is concerned? I mean, again, what will be the catalyst for this to eventually happen? Any talks or any progress on that?
There have been certain policy [ decisions ] that all warehouses will now have to be basically done with commodities repositories. They have to [ basically actually be ] registered. And I think both the WDRA also is looking at expanding the scope beyond the agri, but that is again futuristic. We'll have to wait and watch as and when it happens. And agri is also extended to basically non-agri.
Okay. And then finally, this is regarding the national academic, the project that we have, right, which we had to kind of share with and which we are trying to kind of start all over again. So how has that been progressing given that now the pandemic seems to be moving out and, schools, they are basically reopening? Any progress or any update on that as well, Nehal?
Sunil, if you can answer that...
Yes. So as far as the academic depository project was concerned, the MHRD had appointed DigiLocker after our contract [ expired ]. And [ we were offering ] this service as a private service provider, but because of the pandemic, most of the universities, et cetera [ have been open ]. So it was -- it has been difficult to add numbers really on that particular [ product ].
We have the next question from the line of Aalok Shah from MNCL Group.
Congratulations on great set of numbers, [ Nehal and the team ]. I had a few questions, more to do with I'm trying to understand. And I look at number of live companies, which is now at close to 17,700-odd, and try and map that to the annual issuer charges. The growth numbers and so-called ratio of income per corporate since then have gone a bit higher. Is there -- I'm reading too much into it? Or we are able to get an increased issuer charges...
No. The issuer charges as concerned, that is dependent on the participation and number of folios also. So as the participation goes up, the folios also will go up. And it's in the overall space of listed companies and [ although we view that ] issuer charges is connected to that. The charges have not been changed.
Yes. So it's basically the number of folios that's gone up.
Yes.
And additionally, [ listed ] corporates which are part -- which [ you're putting ] into IPO also get added into this bucket of 17,748.
Yes. These are the -- basically the total number. I'll ask CFO Girish to answer that, but from my understanding, this is a total set, both listed [indiscernible].
Yes. I think [indiscernible].
Yes, yes, sure, okay. That's my first question. Girish, I'll have to check with you. You spoke about cumulative debtor provisions at close to 8 crores YTD.
Okay.
No, I'm just trying to [ end it ]. Is that the right number?
For 9 months or for December quarter, you said?
I'm okay with anything. 9 months, I think you said [ 80 crores ].
Okay. 9 months volume was 8.19 crore in the current financial year and 7.34 crores in the previous financial year 9 months.
7...
7.34 [indiscernible].
Okay, sure. And a quick check here: I was trying to understand the stand-alone numbers. And quarter after quarter, we've seen significant improvement in the EBITDA margin profile there. And this also translates into improvement in margin profile on a consolidated basis. I mean, how do we look at these numbers? Is it that, now that subsidiaries are there, there is [indiscernible] scope of further ramp-up? Or we need to really look into [ auxiliary wealth ] businesses.
There is also an operating efficiency angle, which I have mentioned earlier in one of the questions, that there is certain variable costs. There are also fixed costs. We have to implement operating efficiencies. So that cumulatively contributes to the improvement in -- if you look at the EBITDA margins as you move forward.
Sure, okay, [ second ] -- yes. And then -- my question...
Mr. Shah, sorry to interrupt. We'll request you to kindly join the queue back again, as we have other participants also.We have the next question from the line of [ Mr. Mehul Parta ], who is an individual investor.
Congratulations on a good set of numbers. And over the last 2, 3 years, we have started generating a large amount of cash. And the company's policy today is to distribute that cash through a final dividend at the end of the year. And the money comes to us once a year; and that [ will be ] next year, in August, September. Now if you see, good companies, they try to keep only that -- the amount of cash that generates future growth and then keep some amount of contingency funds. Now what is our driving philosophy in terms of how much cash you should retain? Question number one. Question number two, what exactly is the policy in terms of interim dividends?And three, I have noticed that companies that are growing and distribute dividends and thereby increase their return-on-capital ratios are generally rewarded by the market a lot better than companies that retain cash and earn single-digit returns. These are my 3 questions, so...
So first of all, we have an overall dividend policy. About 60% of the operating profits get distributed as dividend. We are a financial infrastructure company, so the strength of the balance sheet is extremely critical as we take on basically large projects also. And as the number of demat accounts grow and -- there are certain [ operated ] institutions [ which want to pitch ]. So they look at the financial strength of the company. And the minimum regulatory capital is [ basically 100 crores ]. So you need to have a significant [indiscernible] multiple of that so that the company will seem to be extremely financially strong to weather any such conditions. That's number one. Number two, there are new asset classes which are coming in which require a kind of investment, be it the [ spot coals ] that SEBI is planning to have issued the circular. And it will be -- it should be [ operationalized ]. And also basically, IFSC space, where we will be continuing to invest there to increase our number of -- [ basically the exchange of sources of ] revenue. Third is -- so it is also typical.So your third question was the policy on interim dividend. There is no policy on interim dividend. There's a policy on the total dividend. Dividend should be kind of declared at about 60% of the operating profits. And the important thing is that we have a set kind of standard operating procedures so it becomes predictable. And a person will be able to kind of assess how much should be the dividend [ as you move forward ]. Once we reach a significant portion of our financial strength balance sheet [ side ], then we will see how -- whether this number needs to be further addressed, increased or decreased, [indiscernible].
Sir, I am not entirely convinced with your answer because I think you have more cash than what you need for all the needs that you have raised, so...
[ How would you use ] -- yes, okay. We will take your feedback [indiscernible], but...
[ Mr. Parta ], we will move on to the next question, as we have [ other ] participants also in line.
Sure.
We have the next question from the line of [ Pratik ], who is an individual shareholder.
Congratulations, team, for a great set of numbers. I have 2 questions. The first one is, in this quarter, the other income part was showing some kind of a dip compared to the last quarter. So any reason behind this drop? And the second question is regarding [ also ] if you can throw some lights on like what are the new revenue streams which might move the top line growth in next couple of quarters. Yes, that's it...
So I'll take the second question, first. And I'll ask the CFO, Girish, to answer the first question. Future revenue streams is something which is again a futuristic answer, so we'll be able to difficult -- it will be difficult for me to give you that specific answer, but we are basically in a space where basically a regulator, whatever, is -- kind of approves your products in the securities market and which is linked to basically depositories linked [ to some sort on the fixed source ] of basically revenue. As and when the changes happen in basically regulations, we'll see how the new revenue streams will come. It will be difficult for me to give you a specific answer on this. The second question asked -- the first question asked, CFO Girish to answer.
Sure. So basically our other income consists of investment income and other income of [ regular records ]. Now in other income, in the last quarter, in September quarter, we had an income which was recorded, onetime income, around -- of around 2.5 crores, so which is not there in December quarter. And in -- with respect to investment income, our [ own ] investments are largely made in fixed deposits and the scheme of mutual funds, so basically the reduction which you see on a quarter-to-quarter basis is due to the mark-to-market valuation of mutual funds based on the NAV.
Thank you. As there are no further questions, I would now like to hand over the call to the management for closing comments.
So I'd like to wish all of you a very safe and secure time. Take care during these unprecedented times. And thank you all for your questions. Wish you all a very [indiscernible]. Thank you.
Thank you.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.