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Central Depository Services (India) Ltd
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Ladies and gentlemen, Good day, and welcome to the Q4 and FY '19 Earnings Conference Call of CDSL hosted by Axis Capital Limited. [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, Mr. Bagul.
Thank you, Stephen. Good evening, ladies and gentlemen, to the Q4 and FY '19 earnings call of CDSL India Limited. We have the management of CDSL today with us represented by Mr. Bharat Sheth, Chief Financial Officer; Mr. Gaurang Shah, Vice President; and Mr. Nilesh Kittur, Assistant Vice President. I request Mr. Bharat Sheth to give us a brief overview of the results, post which we will open the floor for a Q&A session. Over to you, sir. Hello?
To discuss the results of Q4 and FY 2019. I'm Bharat Sheth, CFO of the company, from Mumbai joining with my colleagues, Mr. Gaurang Shah; Nilesh Kittur; then Chief Operating Officer, Mr. Sunil Alvares from CDSL Venture Limited; Mr. Nitin Ambure from operations side. Selection of Managing Director is under process. It is under process, so the management team available for you to discuss about the Q4 earnings.At the CDSL stand-alone perspective, at BO incremental level, we are maintaining a lead of 62% to 63% incremental BO. At present, we are having 1 crore, 73 lakhs BO account against 1.48 crores in March '18. That is 25 lakhs new accounts we opened during the FY '18, '19, compared to other depository, they opened around 14 lakhs new accounts. So we are maintaining a lead of around 62% on BO incremental level. Though this year compared to March '18 is flat because of subdued market condition, transactions didn't come down as well as -- but because of more number of folios generated -- more number of folios generated that, what you call, that issuer income has increased. Issuer income has increased and online data charges, that is KYC income has also increased, e-Voting charges also increased, but overall is a flat year, but due to other income, that is, income from investment, we have around overall growth of -- overall increase in income of 8%. That is operational income increased on a consolidated basis by 4%. Other income increased by 29% on a year-on-year basis. So net profit after minority comes to around 10%.So other income mainly depends on capital market. If market is down, our income is also down, but due to last year -- March '18 was an exceptional year, this year it has been compensated by issuer income. That is more number of folios generated, my issuer income increased by around 21%. That is issuer -- that is custodial charges.And during this year, unlisted company also, there are around 1,400 new unlisted companies admitted in our fold, and it gave us around INR 3 crore more income. Otherwise, expenses are, we have kept under control. Because of that, we are maintaining our profit, and we have crores -- we are maintaining INR 100-plus crores net profit also.Regarding other projects, there is other subsidiary, CDSL Venture Limited. This is KYC income. First is the -- compared to last year is -- we have increased operational income as well as profit after tax also. We are maintaining -- first time we have crossed INR 25 crores profit also. We are maintaining it. Other subsidiaries like [ CRL ] and CVL also, other projects that is National Academic Repositories are there. They have 520 universities, that means academic institutions have joined and around 105 crores records also updated -- 1 crore, 5 lakhs records also updated in the system, but still income has not started because after September only verifier is due or we can charge to the institution also income. So after September 2019 only, some income will flow. Whereas CDSL Insurance Repository, hardly any income is there. That is INR 35 lakhs, INR 40 lakhs income we have earned. CDSL Commodity Repository, around 712 service providers have joined. Out of 1,885 providers, repository participants around 150 have also joined and total -- so hardly any changes there, but last quarter, we earned around INR 67 lakhs from CCRL projects also. So now I will call this phase open for question and answer.
[Operator Instructions] The first question is from the line of Prakash Kapadia from Anived Portfolio Management Services.
Unfortunately, my line was disconnected, Bharat, while you were mentioning about the new MD and the line got disconnected. So by when will you give...
So that selection process is under process as such.
Okay. And by when would this like...
That is by quarter end at least, 30th June, everything will be in place.
Okay. Okay. Fine. If you could share the revenue breakup for the quarter versus last quarter of key items, transaction, annual issuer, IPO?
Yes, yes. I can start now. That is on consolidated result. Q2 March '19 versus Q3 December '18. The consolidated...
Q4 will be better no, sir, we have...
You want...
Q4 -- '18 Q4 versus Q4. Transaction charges, annual issuer charges.
I think you want Q4 versus Q3 only no that is.
And Q4 versus Q4 of last year. Q3 though you have given last time. Current quarter versus Q4 of last year, sir. Q4 versus Q4.
Okay. So annual issuer charges from INR 14,64,00,000, it went up to INR 17.92 lakhs (sic) [ INR 17.92 crores ]. That is increase by...
[indiscernible]
Yes, 22%. Transaction charges from INR 11.88 crores to INR 9.83 crores, down by 17%, whereas eCAS facilities hardly any changes are there. I'm giving figures wherever major changes are there. IPO corporate expense charges 7 60 -- INR 7.6 crores. It is down to INR 4.16 crores. That is 45% down. Online data charges from 8 43, means, INR 8,43,00,000 to INR 7.52 crores, that is 11% down. This year, one -- document verification charges, onetime charges are there. That is around INR 2,85,00,000 we have earned in CVL. These are the major. So overall, quarter ended March '18 versus March '19, from INR 49.93 crores to INR 50.54 crores, that is 1% increase is there.
And do you have the consolidated eCAS charge with you handy?
Consolidated e-Voting charges or CAS charges?
CAS charges.
eCAS charges, 1 66 to 1 89. That is, INR 1,68,00,000 to INR 1,89,00,000.
Okay. That is fine. If I look at the other income, there has been a sharp jump, so is there some onetime gain due to FMP maturity or what is this which has led to this jump?
This is due to appreciation in the value of FMP, mark-to-market around INR 21 crores is there altogether. And on the quarter-to-quarter basis, from INR 12 crores to INR 18 crores is there.
So from -- if I read it rightly, INR 99 million to INR 177 million, that's an 80% jump. So out of this, how much would be mark-to-market?
Around INR 21 crores, that is. Since all the investments are in fixed income security, they have -- as per the contracted rate, the accrual will always be there. Because of movement in bond prices, either positive or negative side, there will be appreciation or depreciation. So that incremental appreciation because of movement in bond price is around INR 2 crores.
Okay. INR 2 crores for the quarter. And do you have it for the full year?
That INR 2 crores is for the year. That is the incremental. Because at contracted rate, accrual will always be there as it is a fixed income, hopefully.
Right, right. And this year, at least we have seen the tax rate being lower than last year. So what would that be on account of? I see effective tax rate is around 23%.
23% around. No because of this capital gain and tax rate only, nothing -- because last year also, 25-plus percent taxes are there. And this year also same. So tax rates are same, but more appreciator was there compared to last year, so more exempt income.
Okay, because it is mark-to-market and this has a larger contribution, so the effective rate was much lower.
Yes.
Got it. Okay. And on the KYC business, I think last year, we were around 17 million accounts. If you could share some of the progress in terms of market share, how is the new system. Was Aadhaar working? Is the QR code set? What are we seeing? And where are we in terms of number of accounts under KYC business?
Mr. Sunil Alvares is here. He's the Chief Operating Officer of CDSL Venture Limited. He will throw some light on it.
In terms of KYC business, we are close to about 1.9 crore accounts. Exactly it is 1.88 crore accounts. And the second question, where are we going with regard to Aadhaar. After the Supreme Court verdict on the Aadhaar-based KYC, there were only direct benefit schemes allowed to do eKYC. Subsequently, they have the modifications in the ordinance, okay, amendment to the ordinance. So banks and telecom companies have been permitted to do eKYC. In the meanwhile, UIDAI has also introduced off-line eKYC using QR code and we are in the process of integrating those into our systems, where we will be offering that as a service to customers.
Okay. So the way it will work is, they'll have to give a consent, then based on that, you will retrieve the data and put it into the system?
Either online or off-line, the customer has to give his consent to fetch his KYC from Aadhaar. Online through an AUA or KUA, anyway he has to give a consent. Off-line when he goes to UIDAI site, he has to give the consent on UIDAI site. Either way, his consent is mandatory.
Okay. Okay. Be it online or off-line. Okay. And any sense, Sunil, on market share or competitive side because a few quarters ago, we had seen some challenges and some competitive...
See, approximately our share is about 60% because the other KRAs don't publish their figures anywhere. So this is what we know when we speak to each other that our market share is about 60%.
Sure, that was helpful. And lastly, anything on pricing of NAD, how will that with this model work? Is government given some kind of indication of what kind of pricing the universities will pay, will it...
Yes. We are looking at 2 methods of pricing. One is to charge for record uploaded by the university and the second charge would be on the verifier whenever he verifies the record. Now what that amount exactly would be, that would be decided by MHRD in September 2019.
Okay. Okay. So before the actual monetization, then only we'll have some clarity.
That's right.
The next question is from the line of Pritesh Chheda from Lucky Investment Managers.
Sir, in your breakup, if you could give what is the e-Voting and KYC for quarter 4 of '19 and quarter 4 of '18, the revenue?
The e-Voting breakup, INR 76 lakhs in quarter '18, that is for Q4 '18, versus INR 71 lakhs in quarter 4 '19.
Okay. And KYC?
KYC from INR 844 lakhs to INR 753 lakhs.
So INR 7.53 crores versus INR 8.44 crores last year?
Correct.
Great. The same breakup if you could give us for full year FY '19 over FY '18, transaction issuer, e-Voting, IPO corporate action, KYC?
Yes, yes, 1 minute. For e-Voting, it was INR 4,09,00,000 in Q4 '18 versus INR 5,06,00,000 in Q4 '19 -- full year, sorry, full year, sorry, this is full year.
e-Voting charges just now Sunil...
That is the whole year. That is the point you asked.
Sorry. Sir, I got confused. You said INR 4.8 crores versus?
INR 5.06 crores.
Okay. And you gave for the full year, full breakup. So transaction issuer, e-Voting, IPO contract, KYC all the big units.
Yes. So all top what I'm giving you, that annual issuer charges are from INR 55.6 crores to INR 67.16 crores.
INR 55.6 crores to INR 67.2 crores. Okay.
INR 67.16 crores. Transaction charges from INR 44 crores to INR 39.27 crores.
INR 39.27 crores. Okay.
e-Voting charges just now given, INR 4.9 crores to -- INR 4.09 crores to INR 5.06 crores. Then consolidated account statement...
INR 5.06 crores is for this year.
INR 5.06 crores for this year.
This year, yes.
Okay. INR 4.9 crores for last year?
INR 4.09 crores.
INR 4.09 crores, sorry. Okay.
Okay? Then CAS charges, consolidated account charges, statement charges. That is INR 6.43 crores to INR 7.96 crores.
INR 7.96 crores and versus?
INR 6.42 crores versus INR 7.96 crores.
INR 6.43 crores versus INR 7.96 crores.
Okay. This year, it is INR 6.43 crores.
No, no. I am giving you for fourth quarter '18, means year ended FY '18 versus FY '19 I'm giving you. For year ended '18 -- FY '18, INR 6.43 crores versus INR 7.96 crores. FY '18 for corporate expense charges IPO INR 29.49 crores against INR 19.88 crores. Then KYC, that is online data charges, CVL income, INR 29.18 crores to INR 31.68 crores. These are the majors.
Okay. So is it fair to assume that what is linked to market activity, transaction charges and IPO corporate action charges is down? That is -- so that is linked to market activity. Others are not linked so much, so that is issuer charges, e-Voting and KYC?
Correct, correct.
Right. And your subsidiary of KYC in this KYC number, right? You have a subsidiary of...
Yes, CDSL Insurance INR 29 crores versus INR 32 crores, that is...
It is reflected here?
That is already reflected.
Okay, so again, I'm repeating, what depends on market activity is transaction and issuer -- transaction and IPO corporate.
Correct.
In a large extent -- to a large extent, I mean, KYC.
Even KYC. So KYC will be linked to your mutual fund KYC and all those, right?
Correct.
Okay, now issuer charges will be purely linked to the number of companies listed on the exchange. As number of companies listed on the exchange keeps on growing, the issuer charges keeps on growing.
Correct.
E-Voting charges keeps on growing.
Correct.
Those are all linked to your number of companies listed into the system?
That's right. Executives are repositories. Now one listed company also come into unlisted company.
So that INR 3 crores of unlisted company income that you generated for full year, that would get reflected in the issuer charges and the e-Voting charges?
Issuer charges only. Unlisted companies don't...
Don't have e-Voting, sorry, so it will get reflected in issuer charges?
Absolutely.
So if that's the analysis, if you have to hazard a guess on growth rate next year, what should be your revenue growth rate in your best guess assessment?
See, we can't give you forward-looking statements, but even if you see last 4 years, my operational income on a consolidated basis, we are working at a 17% CAGR of last 4 years' operational income, whereas my total expenses increased by 10% for 4-year CAGR. And profit after tax on a consolidated basis for 4-year CAGR is 17%. So this is growth. This has been the growth rate [indiscernible].
And what is the cash in the balance sheet?
Cash in the balance sheet around -- on consolidated basis, around INR 670 crores [indiscernible].
And what is the regulatory requirement in this?
Around INR 300 crores.
So regulatory is INR 300 crores. And lastly, on your new ventures, so you mentioned the updates on new venture, which is CDSL Insurance, you maintained -- mentioned INR 50 lakhs of revenues is what you recorded in FY '19.
Yes, [indiscernible]
CDSL Commodity, you recorded INR 60 lakhs of revenue for FY '19.
[indiscernible], yes, operational income that is...
Yes, yes, revenue. Any revenue you recorded on the education side, those certificate...
No, no, it's very negligible.
Negligible. And any revenue recorded on your GST side?
Yes, about INR 60 lakhs.
INR 60 lakhs. And all these 3 was first year of operation, right?
That's right.
All these 3 ventures, insurance repository...
No. Academic depository is there in -- has been -- we are doing pro bono work right now till September '19, okay? It has been in operation for almost...
2 years.
7 to 8 years [ business ], which was officially launched about 2 years back.
Which one, academic?
That's right.
No. But GST, commodity and insurance, these are all first year, right?
GST is under CDSL Venture, that is one of the project under CDSL Venture as such.
Okay. But I'm just saying it was first year of operations?
No. That is second year.
This was second year, okay. And these 3 operations, what will be the scaleup possible in FY '20 and '21, if you could just give that?
No, no. That we can't give anything about it. No forward-looking statements.
The next question is from the line of Giriraj Daga from KM Visaria Family Trust.
Sir, you mentioned in the initial remark that there is INR 2.85 crores on onetime verification charge, I believe, recorded in CVL. What was the nature of this transaction? And is it only onetime or next time also -- next year also we could have at some point of time to start?
Next time -- also one of the government project is there, in which onetime job there given to us that the verification of the document and online for that year.
Okay. And should we assume that the entire last part of that money has been thrown to EBITDA also because the root cause associated with the project must be very low?
Yes, not very high. We assume, yes, about cost would be not more than 50%.
50%. Because, sir, when I look at the -- okay. So [indiscernible] charge is INR 7.53 crores and INR 2.85 crores, so this makes it about INR 10.4 crores, while your CVL revenue was about INR 12.7 crores. Because EBITDA has also gone up in a similar fashion and [indiscernible] CVL EBITDA.
Yes.
Okay. Second, in terms of your aid, so what should be that normally as you mentioned that large part of that are tax-free instruments. So what should the yield be [indiscernible] here on the cash?
Yes, yes. Well, listen, around 7.75%.
7%?
7.5% to 7.75%.
Okay. 7.5% to 7.75%. And what's -- like we must be also hearing lot of things in terms of like the FMP exposure. Do we also have to like make -- as an investor, we need to worry about that? Is there any instrument where we might have to see any mark-to-market? Or all our instruments are in a very AAA kind of rated instrument there?
Yes, we have a AAA rated portfolio and as of now, there are no such issues.
And you haven't fear also there might be something in future?
We don't think. It is clean -- in most of the cases, it is a clean portfolio.
[Operator Instructions] The next question is from the line of [ Harish Yar ], an individual investor.
I have one suggestion to you, sir. A lot of participants have been asking a lot of data point information detailing about your income and all those things. It's my small suggestion, if you can give on category basis along with the result some type of presentation or the press release where all those detailing are given, that will be more clear to everybody's understanding. While in oral communication, some of the information may not be directly digested and understood by the investors, I'll appreciate if you can give some -- all those data points by presentation or a sales release along with the results.
The next question is from the line of Manish Bhandari from Vallum Capital.
You said that your regulatory requirement is INR 300 crores. Can you define which all areas and what capital you require?
See, INR 100 crores for CDSL we require, CVL around INR 75 crores we require, then CCRL INR 50 crores we require, then CRL 30 crores we require and some of the government projects also we have to keep bank guarantee and all for the consent we require and INR 27 crores for DP deposits that we recommend.
So this takes care of your business requirement for next 3 or 4 years. So would this change with the...
No, no. If new projects will come, then definitely we require further.
Sir, which projects you are talking about?
All government projects are there. Their requirements are there, no, net worth requirement.
Sir, can you define the government projects? Which projects are we talking about?
No, like this National Academic Repository.
Yes. Sir, how much...
I will say, in future also you come, we have to keep something.
Sir, I fail to understand that there is a huge disservice to the shareholders by keeping the INR 670 crores worth of cash on the books, which is yielding 7%. So I fail to understand that why we need to have a INR 670 crores and which would depress the return on capital employed of our business substantially. So is there a motivation? And what would be motivation if you could explain us detail? That assuming after INR 300 crores, you have a cash generation of INR 100 crores each year. So I believe, you pay some dividend also. But apart from that, that cash keeps on piling up which depresses the return ratios for our company. So what is the motivation of keeping that future in mind that there'll be some project which come? So we generate enough cash, so why we should not resort to a very special onetime dividend or for a buyback?
See, if you see our dividend policy, it's a consistent dividend policy. This year also, we have declared it. Last year, it was 35%. This year, 40%. It comes to 60% payout ratio of stand-alone profit as such. And if you see, my income depends on a market. If market is not good, my income is down. Even then, we are maintaining that consistent dividend policy. About your special dividend and -- as well as buyback of shares, it is under consideration by the management, by the Board of Directors at an appropriate time. Okay?
Sir, how -- I mean to say, are we waiting for some catalysts for this because there is a clear merit in terms of what the kind of ROC, which is getting depressed because of the excess cash in the books? So I appreciate that what all you require for the new ventures and for the -- unless and until we take some other growth kind of initiative in this process.
Yes, yes, definitely. We'll look into it.
The next question is from the line of Rahil Jasani from ICICI Securities Limited.
In terms of other segment information, we classify the segments into depository activity and also data entry and storage. So I wanted to know what is the exact nature of data entry and storage because this quarter, I see that it has increased sequentially -- away substantially from around 85 -- sorry, INR 8.5 crores last year to around INR 12 crores this year -- this quarter. So what has been the catalyst for this increase and what is the exact nature of this?
That is the data entry -- there are 2 main major segments, one is depository services. There is CDSL and other is KYC and document verification charges. It comes under CDSL Ventures. In this quarter, because of this document, onetime charges that what you'll receive, around INR 2.85 crores. Because of that, it has come under document verification charges, that is KYC.
Okay. Got it. So onetime charges are included. And you expect -- how long do you expect these charges to continue, the onetime job, which you have been given?
No. In current quarter -- in June quarter, it would be [ there ]. That is onetime job as such.
And not after that?
Yes, that is okay.
The next question from is the line of [ Sriram Srinivasan ] from [ SIMA ] Wealth Management.
Deal in projects, the question is all about that there are symptoms of annual listing basis. Okay? Actually, we are trending on numbers about -- they're talking about companies, which is available for dematerialization. Yes, once in -- as of March 31, 2019, it was almost 12,000 wholly-owned companies. Now the project, which has been updated, almost 13,000 companies. And even I heard about that the ROC listed companies have been mandated that the public unlisted companies, who are all going for any kind of transactions, they have to be dematerialized. Right?
Correct, correct.
Yes. In terms that -- it shows that the 1,000 companies in a month, you did mention, what will be the total number of companies that we can expect to be add-on in a particular year?
No, no, see, as mandated by this ROC also unlisted public companies, there are around 65,000 to 68,000 companies out there.
Yes, 65,000 companies out there.
Companies out there, not mandatory for them to admit and get -- unless and until there will be a new issue or any transfer or any corporate action they need to mention, bonus or something they received, then they have to do it compulsorily in the late form. Again, wholly-owned subsidiaries are not required for demat.
Okay. So far now we have covered 1,000 companies in a month, we can expect same trend likely to be called in the third year?
See. As on 31st March, around 1,400 odd companies we have added unlisted public company. And now on an average, around 200-250 comes every month. So...
Okay. So 200 to 250 companies we are expecting by under month basis, right?
Yes, yes. That is okay, correct.
Yes, fine, sir. Sir, I want to -- one more thing is that we are speaking about that they got one project of NAD, in that we are getting -- projecting to kick a revenue by 2 things, one is by through verifying our sellers from -- through the depository tool. They've been done so, right?
Correct.
Yes, yes. Also what will be the actual registration that we can expect from this kind of thing? Is there any guidance you have been given to that?
No, we cannot right now because it all depends on what charges MHRD decides in September 2019.
Okay. Sir, and one more thing, sir. Actually the inculcating officials are likely coming from June of 2019, right?
Sorry, come again.
The inculcating official settlements that you mentioned. [indiscernible] that is in one settlement charges will be likely to happen, right?
That's right, yes.
Yes. For that actually -- has to be mandated to get done with the demat account over there with CDSL, not [indiscernible] I am expecting.
The settlement will happen within the brokers actually. So he will have to -- the way he will open his accounts will undergo a slight change, or the way he will handle his accounts.
Okay. So it will impact our growth in the beneficiary accounts?
It will impact to the extent of bearing number account because he longer needs to have an account with both the exchanges now. Have the account with only one exchange. Transactions will remain with both the accounts, in that account. There will be some impact, but we don't know right now how much would be that because he may decide to keep that account in CDSL or NSDL.
Yes. So one more thing that CERSAI will likely to come up with a KYC model. So KYC model talks are going on.
Yes, that's right.
Yes, yes. But, sir, how long it will take for them to come with a solution. Whether if they will come with -- what will be the impact that we can expect from our side because that segment itself we are getting nearly [indiscernible], right?
Correct. See, they have started operation, if I'm not mistaken, for the last 5 years. And for the last 5 years, they are in some talks that they will be going -- it will be mandatory to upload your KYC over there, but right now we cannot say anything else ideally.
Okay. So they are already doing this for the past 5 years and the thing is that...
We are already doing it. All the banks and insurance companies already have started uploading their [indiscernible] tool.
Okay. So now they are requesting us to do the things with them, right?
Yes. They are requesting intermediaries to do it through them, yes that's it.
The next question is from the line of Pooja Doshi from Motilal Oswal Securities Limited.
Sir, I have a question related to annual issuer charges. So for every financial, you will be charged this particular charge in the month of April or based on the average number of folios in the previous financial year, right?
Yes, correct.
Yes. So for FY '18, we charge -- in the month of April for FY '19, you charged based on the folios that was generated in FY '18. So that's why we had the 21% of growth. But going ahead for FY '20, do you expect a similar growth given the headwinds that works in the markets? Or do you expect like a long-term growth rate of 7% or 8% that will be growing historically?
Historically, if you see last 10 years also, at a CAGR of 12% we are growing on that.
Okay. Sir, do you expect something similar in FY '20 given that FY '19 -- was it a very good year for that?
We are expecting it.
Okay. All right. And so in terms of effective tax rate, do you expect similar to FY '18 tax rate of 26%?
Yes.
The next question is from the line of [ Rama Krishna ] from [ Zen Wealth ].
Can you hear me?
Yes, yes.
Look, I've been just trying to understand the details in terms of new government projects and all which you have been mentioning during the course of this call. So just wanted to understand in terms of who all could actually participate in such tenders and how technology intensive these projects are? So we [indiscernible] some understanding on that part?
Yes. Typically as depositories we are invited to participate in such projects, if one of them is the academic depository, then again for the GSTN, they had certain criteria where you could apply for a GSP service provider. So we have become a GSP service provider. And the third one was on the eKYC part. But there, I think -- there was more thing of network requirement and you could become an AUA/KUA based on that. And CDSL is an ASA/KSA. So there is some license fee to be paid every year for both ASA/KSA as well as AUA. So right now, these are the 3 projects which we are doing for the government.
The next question is from the line of Amit Chandra from HDFC Securities Limited.
So as you've mentioned that in FY '19, you have added 1,400 new unlisted companies to the annual issuer charges that gave an additional income of INR 3 crores, right? And you're adding around 200-250 companies every month. So based on this if we do the math, then the average relation per company comes to around INR 25,000. And you have mentioned earlier that the revenue opportunity from the unlisted companies is around INR 9,000 to anywhere around INR 6,000 to INR 9,000. So am I missing something here? Or like INR 25,000 is the realization that we should take for the...
See, we can charge to unlisted company onetime additional fee, that is INR 15,000, which is onetime only. And for unlisted company, first leg is of INR 5,000, so having a share capital of INR 2.5 crores paid-up share capital. So on an average, we are getting INR 5,000 only. In most of the companies, we are getting INR 5,000 per company.
So for these 1,400 companies, next year you will get INR 5,000, right?
That's right, sir. Correct, sir.
And onetime will be...
Not all 14,000 (sic) [ 1,400 ] companies. Only to the extent of the companies whose cap rate are in the lower slab.
And it's [indiscernible] at least INR 5,000.
Yes, at least INR 5,000 though. We charge at least INR 5,000 though. That's [indiscernible].
So INR 15,000 plus INR 5,000, so...
There will be [indiscernible] onetime. We charge INR 15,000 in the first year; second year, INR 15,000 and noncharge.
So if you did like 200-250 companies, which is coming every month. So it comes around 3,000 companies for the year FY '20.
Yes, those companies, we charge INR 15,000.
Yes. So those companies, INR 15,000 plus INR 5,000, right?
It depends on INR 5,000 to INR 10,000, which quarter they are joining, accordingly proportionately will be charged.
Okay. And, sir, in terms of the opportunities, so the opportunity here, so are we approaching these companies or it's an open thing that these companies approach the -- either CDSL or NSDL about these companies?
We wish we will get business sitting in the office.
No, no. So that's what. So you have a team, which is searching for companies who want to demat. So are you investing in that or any kind of investment that you have or what kind of team they have...
That is your normal investment into the marketing team, right?
Okay. In the same period, how much the company should have added? Any idea about that and how we are approaching that?
That again is not public information.
Okay. So is it fair to assume that out of the 65,000 unlisted companies approximately that we have, the next 2 years at least, we will have around 50% market share there, at least?
See, first of all, this number of 65,000, the compliant is slow. So it is not that all 65,000 companies are exactly going to join the depositories because the way to look at it to understand is only if have to make fresh issuance or they have -- they want to transfer their shares, then they have to admit their shares into depositories. It is not that 65,000 companies, all will come at one go in either of the depositories. And so far also, not a compliance has been -- like you are seeing companies slowly, slowly, like in 6 months, if you can see the numbers, 1,600...
1,400.
I think there is a cost to the company. They are very selective in joining.
The next question is from the line of [ Sriram Srinivasan ] from [ SIMA ] Wealth Management.
Actually in the annual issuer charges, there is a recurring [indiscernible] depositing fee of onetime, right? That varies on the share capital.
That's right, yes.
Yes. And above the INR 25,000, you have been charging maybe INR 75,000, right?
INR 75,000, that's right.
Yes. Sir, modeling question is that once the amount is for 65,000 companies, it would be rather we are expecting 200-250 companies on a monthly basis, it was roughly around -- almost 1,400 to 1,500 companies on a yearly basis. How much of these companies comes well under or above 20,000 or above 10,000.
If you are asking me a forward-looking statement, nobody will be able to predict how many...
No, no, no, not about the forward-looking. For the past details, that's what I'm asking.
No. I mean, you can -- I mean, typically, these are very unlisted companies where the capital is like, say, INR 5 crores, INR 10 crores, most of the companies which are [indiscernible] in the highest level. I would like to...
Okay, okay. So they [indiscernible] December, right?
Correct.
Yes. Sir, actually, what is actual [indiscernible] for the debit transaction you have been charging? So, sir, it has been started [indiscernible] from INR 5.4 to INR 5.3, INR 5.3 to again INR 5.1. Now what is the charge that we are looking forward? And do you have any kind of premium amongst them?
On an average -- we are charging INR 5 on an average.
No. For this financial year, we are charging INR 5, right?
Yes. On an average, it comes to INR 5. From INR 4.25 to INR 5.50 we are charging. So on an average, we are charging INR 5 per transaction.
Okay. And, sir, we can expect any kind of increase in this slab, from INR 5.50 to INR 6 or something else?
No. Right now, no, because the competition is charging INR 5.
Okay. Coming to the answer like you charge INR 5, right? So we are in the same category?
We can increase from INR 4.50 to INR 5, so that's the [indiscernible].
As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you very much for joining earnings call of CDSL and I forgot to tell investors that we have declared 40% dividend, that it comes to 60% of payout ratio. And our consistent policies are there to declare dividend even in adverse market condition, so stick to it. Thank you very much for joining us.
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.