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Central Depository Services (India) Ltd
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Ladies and gentlemen, good day, and welcome to CDSL India Limited Q4 FY '20 Investor Conference Call hosted by Axis Capital Limited. 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 construed as forward-looking statement has been reviewed in conjunction with the risk that the company faces. [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, sir.
Thank you, Nirav. Good morning, everyone, and thank you for standing by. On behalf of Axis Capital, a warm welcome to the Q4 and Financial Year 2020 Earnings Call of CDSL India Limited. These are challenging times, and during these crisis, we hope that you, your families and colleagues are well and healthy.On the call today, we have the management of CDSL represented by Mr. Nehal Vora, Managing Director and CEO; Mr. Girish Amesara, CFO; Mr. Sunil Alvares, Chief Operating Officer, CDSL Ventures Limited; Mr. [ Swaroop Gothi ], VP; and Mr. Nilesh Kittur, Assistant Vice President.I shall now hand over the floor to Nehal sir, for his opening remarks, post which we'll open the floor for Q&A. Thank you, and over to you, sir.
So first of all, I would really like to thank really Axis Capital for this call. I'm wishing -- I would directly like to wish everybody a very -- basically, a very good morning and a good afternoon, wherever you are. I welcome you all to the quarterly conference call for the year ending and the fourth quarter ended March 31, 2020. And I trust each -- and I trust really basically each of you and your loved ones are safe in these extremely difficult times.The depository services was categorized as an essential service and these testing times, CDSL and its employees have represented strong resiliency and ability to adopt to the changing circumstances. The health and the well-being of our employees, investors and all our stakeholders is of utmost importance to us along with the business continuity, and CDSL has continued to perform all its operations under these very, very difficult circumstances. Basically, our efforts in these challenging times has to grow and strengthen our business. We request all our investors to move to a digital mode, where the transactions can go through even in these times. And CDSL's eASIEST continues to operate without compromising on the health or security of the DP operations.Basically, in our effort to support the country in its battle against this novel pandemic, CDSL has contributed a sum of INR 6.8 crores towards the ongoing relief efforts by the central government and the state government.On the business side, during the last financial year, the number of active beneficial owner accounts with CDSL has increased to 2.12 crore as on March 31, 2020, from 1.74 crore as on March 31, 2019, which indicates a growth of around 22%. During the quarter ended March 31, 2020, the active beneficial owner accounts of 14.96 lakhs were added as compared to 9.2 lakhs for the quarter ended December 31, 2019, and 6.61 lakhs for the quarter ended March 31, 2019. Basically, as on March 31, 2020, CDSL has 599 depository participants offering depository participant services from over 20,000 locations across the country, representing about 94% of the PIN codes. These depository participants comprise of clearing members, banks, custodians and nonbanking finance companies. The securities of almost all listed companies have been admitted with CDSL for demat. Further, a large number of private limited and unlisted companies are also admitted with CDSL. As on March 31, 2020, the securities of 14,762 companies have been admitted for demat with CDSL.During the last 12 months, the volume of securities under custody has increased by about 26%.I now hand over the call to the Chief Financial Officer, Shri Girish Amesara, to take you through our financial performance. Thank you.
Good morning, everyone. Good evening, wherever you are. I will just brief through the financial performance that we have concluded for the year ended March 2020 and quarter ended March 2020. The total income on a consolidated basis for the year ended March 31, 2020, has increased by INR 38.80 crores, which is representing 16% to INR 284.25 crores from the previous year income of INR 245.45 crores. The net profit after tax on a consolidated basis for the year ended March 31, 2020, is INR 106.72 crores compared to INR 114.83 crores for the year ended March 31, 2019. Total income on a stand-alone basis for the year ended March 31, 2020, has increased by INR 22.92 crores, representing 12% increase to INR 211.39 crores from the previous year income of INR 188.47 crores. The net profit after tax on a stand-alone basis for the year ended March 31, 2020, is at INR 77.32 crores compared to INR 84.38 crores for the year ended March 31, 2019. It may be noted that the consolidated and stand-alone profits have decreased mainly on account of provision for a nonrecurring previous year's anticipated statutory liability of INR 10.56 crores, contribution towards CSR expenditure of INR 6.80 crores, which includes INR 4.17 crores of unspent amount of previous years and a little provision of INR 1.79 crores pertaining to an outcome of previous year's legal matters. The consistent income growth is a reward for the core values that the company believes in of being convenient, secure and dependable. The dip in the net profit is a result of nonrecurring expenses arising out of legacy issues. We want to send out a very clear message that we are strongly committed to the core principle of transparency and good governance as per the framework prescribed by the government and the regulators.Now I request Shri Sunil Alvares to give an update of our operation of our wholly owned subsidiary, CDSL Ventures Limited. Over to you, Sunil.
Hello. Good morning, everybody. So far as CDSL Ventures is concerned, the total income was INR 68.81 crores as against INR 51.58 crores. That is an increase of 30% of INR 15.22 crores in the result. However, the overall expenses increased from [ 15.5% ] [Technical Difficulty] an increase of almost INR 13 crores, that is of up to 90%. Based on this, the profit after tax actually worked out to INR 36.42 crores as against INR 35.72 crores. The increase in expenses were mostly related to the increase in the KYCs processed, so the charges towards that. Secondly is the inter-KRA charges, that is whatever we fetch from other KRAs, the expenses towards that. And third is the expenses towards the PACL Project. So the PACL Project, there was a provision worth INR 6.5 crores. We would also like to mention so far as the KYC registrations are concerned, in this financial year, it had -- as of March 31, it was 2.16 crores as against 1.88 crores. That was a growth of 29 lakh KYCs in this calendar year, which is a growth of 15%. We are also doing the CKYC processing for other companies, so that they can submit their KYCs [Technical Difficulty] where this year, we had processed 11.42 lakh KYCs as against 2.29 lakh KYCs last year, which was a growth of 291%. So far as the RTA business is concerned, we have been registered with 402 RTAs as of March 31 as against 121 companies as of March 31, 2019, which is a growth of 281 companies or 230%.So far as the GSP, that is the GSP Suvidha service provider is concerned, we have processed 277 lakh transactions as against 259 lakh transactions, which is a growth 7%. And finally, coming to the NAD project, we have registered 619 academic institutions as against 527 academic institutions as of March 31, 2019.Also, we had a good number of awards, which have uploaded about INR 2.83 crore awards uploaded into the system as against INR 1.04 crores awards uploaded last year. And 3 -- 13.2 -- a total of -- as of March 31, 2020, 13.27 lakh students were registered as against 2.7 lakh students, which were registered at March 31, 2019.One adverse news is that the NAD project has been handed over to Digilocker, and both the depositories will no longer be handling it going forward.So that is all from my side. If there are question, we'd like to take them.
[Operator Instructions] First question is from the line of Prakash Kapadia from Anived Portfolio Management Service.
Yes. Couple of questions. If I look at our financial performance for FY '20, this is the second year in a row where EBITDA growth is negative, even if I adjust for some of the expenses which Girish mentioned in terms of increased CSR contribution, legal provision. So -- and we've seen a decent revenue growth this year. So going forward, for FY '21, will revenue and EBITDA both be positive for us? What is our sense and what will drive this? And on the unlisted space, if you could give us some insights into what were onetime activation fees, recurring revenues and the revenue breakup for Q4 in terms of our major heads? That will be helpful.
So let's see. Can I take your question? And I'll hand it over to Girish.
Yes, sure.
So in terms of -- as we are aware, we have a new management team, which has joined around the half year mark so on a October. We have a new Board. So the entire structure has -- the management structure has changed. If you kind of add back the legacy items through the expenses, it kind of has a twofold impact that had those been incurred in those years, the profits comparison would have been lower. And if you do a what if, the profits for the current year would be higher than the previous year. That's number one.Number two, I think the important metrics which should be seen is the number of accounts which are getting enrolled. This year has been a landmark year for CDSL on 2 counts. One is that basically we have crossed our competition in number of demat accounts opened. And there seems -- there continues to be a robust growth there. And second is basically the -- we are the only depository in the International Finance Centre, which has been permitted to start a branch. So there is definitely growth and as this pandemic is basically come in, there is going to be new paradigm of doing business. So the online digital mode is going to be the way forward. And that's where we see a lot of our core business, which will continue to -- which is basically expected to grow. The other important thing is that we have 599 depository participants. So in terms of the distribution reach, we are at 94% of the PIN codes. Our competition has around 280 depository participants. So I think that distribution reach is also going to be extremely critical. We have a lot of connectivity and volumes coming from tier 2, tier 3, tier 4 towns where there's expected to be more of growth. And therefore, in these times, we would really hope and expect that growth will continue. However, this is based on lot of extraneous factors also on how the pandemic really ends out in the country. But at least from the way things have been going on that the securities market has continued even despite the pandemic, and it's considered to be an essential service. We expect this growth to continue.And the second part of the question, I'll request our CFO, Shri Girish to answer that.
Nehal, what -- when you're referring to some of the management changes, it is the employee structure and revision is what you are hinting at, which is also a big contributor to cost in this year?
Yes, that had happened prior to me joining. This was in the 1st of April, it was in effect from 1st of April 2020. I joined in September end. What I was referring is to we've a new CFO, CTO, and a MD and CEO. So 3 core management team members have changed in this year -- in the second half of this year. And the entire Board composition has also changed. So there has been a significant management change, which has happened at the CDSL's end.
And to the point of which, obviously, you've been the leaders in terms of the account opening, and we've overtaken NSDL also. So when do some of these changes translate into more steady state revenue? What I'm trying to understand is the activation cycle, what will kick start some of these accounts? Because we've been very aggressive and kudos to the management team for adding so many accounts in such a time period. So will it be some kind of an IPO? Because what we read is volumes are going up in capital markets. So when the typical activation cycle would be, what 6 months, 1 year? And when do some of these initiatives lead to more steady-state higher revenues for us?
See, I think this will be dependent on the market on how they are going to use it. Our expectation is as more and more people are going to enroll themselves into the demat mode. Also, there are more and more assets, which are expected to move into the demat mode. That is obviously going to translate into more amount of transactions being done through the demat. But how that will transfer is a futuristic statement, and I would really not like to comment on it at this point of time. Our core is to present the facts the way they are and the hope in which we really expect this to grow going forward. Whether this will translate or not is something which you and I we both will have to see as the situation unfolds.
Sure.
Girish here. Just to answer your question on the EBITDA margin. If we were to add that gross, earlier year expenses, which are debited to this profit and loss account this year, I think then you will see a positive EBITDA.
If I adjust that INR 68 million and the legal provision, it still comes to negative, obviously the...
So we -- so I will just give a breakup. We -- I -- if you remember, in December quarter, we had charged off INR 10.56 crores towards earlier year service tax payment, right? And we have paid earlier year CSR expenditure of a tune of around INR 4 crores and legal provision of around -- roughly around INR 2 crores. So you add up all this expenditure and add back to the EBITDA, you will see a positive EBITDA. These are all nonrecurring expenditure, which has to be incurred during this year to sort out all issues.
Okay. Understood. And if you could give us the revenue breakup of the major heads for this quarter?
Sure, sure, sure, I will. You want a quarter or you want a...
Whatever is available readily.
Okay. Okay. Okay. I will just -- I will give you a quarter-wise revenue breakup for March quarter on a consolidated basis. So our annual issuer charge income is 33% of our total operating income. Our transaction charge is 21% of total operating income. Online data charges, which are largely from our subsidiary is around 19%. IPO corporate action charges is around 12% of our operating income. Statement that we deliver to the investor dues is around 4% of our total income. Document storage and eKYC each contribute 2%. So if you add up all these things, it will constitute to around 94% of our total operating income. So this is the constituent of our main operating income. I hope I have answered your query.
Sure. And the last question from my side is the NAD, which is being transferred to Digilocker, were we paid any onetime revenue by the government on this? And what is our government business contribution to these revenues on an annual basis? And are we still continuing with the government project or not? That's the last question from my side.
On NAD, I doubt government had not paid any revenue to us. And on that operation question, I will ask Sunil to answer those questions.
Yes. Just a minute. Yes. So far as the NAD is concerned, the government, we had to provide the services free of cost up to November level in the contract and post that they had reviewed the contract and then awarded to Digilocker. They will -- I do not see government will be paying us anything for the -- for educating the project. And so far as the government project is concerned, if you consider the current projects which we are doing for the regulator for processing of [ mutual fund handling ], then that is about INR 9.5 crores and that was income in that project in this particular year, as against the expenses of INR 6.5 crores.
Sorry, your voice was cracking, Sunil. INR 9.5 crores, you said is the contribution for the whole year?
Yes, yes.
Yes, yes.
INR 9.5 crores. And you incurred an expense of around INR 6.5 crores.
INR 6.5 crores. Yes, that's true. That's true.
Next question is from the line of Mr. Varun Goenka from Reliance Infra Mutual Fund.
Yes. I have 3 questions. So first, on the NAD project, could you help us understand under what circumstances or what decision backdrop was it transferred from the depository? And is there any other projects, which are under consideration, to receive or to be transferred?
So basically, could you ask all the 3 questions, so it will be easier to answer them.
Okay, okay. And secondly, on the eKYC that we have received, how does that change our business? Or how does that impact us? And third, I think every 5 years, we receive some kind of a issuer charge hike, and we have to go to SEBI. If you could help us with where does that lie today? What's the status of that?
So I think first question, Sunil, could you answer? And maybe, say, I'll take the third question.
Yes. The -- so far as the NAD is concerned, we had a contract for 3 years from the government. And post the contract, the government is supposed to -- rather, the MHRD was supposed to review the performance of that [ bond period ] and then give an extension of the contract. After which they -- the -- they did a review of the depositories it was done by an IAT processor based on which they just asked us to -- 2 subcommittees appointed by the [ HR ] and both these committees [ HR ] appointed in the depository, they continue the...
Sorry to interrupt you. Sir, sorry, your voice is breaking. Just a minute, sir. [Operator Instructions]
Hello? Am I audible now?
Yes, sir.
See as far as [Technical Difficulty] by 2 subcommittees they knew that they can. So recommended that Digilocker should come in as the third depository and when the final statement were given to us we found that Digilocker will be the only depository. So far as the eKYC business is concerned, we were already providing the services prior to the Supreme Court verdict [Technical Difficulty] were extended. We had almost 250-odd intermediaries who were availing of the eKYC services. So far as the eKYC business is concerned, we are one of the intermediaries who have been permitted to take up the AUA/KUA license. And we have, at the same time, also received an eKY -- eSign license from the eCAS. So both of these put together is definitely correlated to the online account opening as well as the add to the number of KYC we will this year. So both the eKYC and eSign will definitely facilitate online accounting opening and add to the number of accounts in CDSL as well as the KYCs in CVL.
So as regards the third question about the issuer fees being increased every 5 years. Yes, 5 years have lapsed. But given the pandemic, I don't know what's going to be -- because the charges have to be approved by the SEBI. And given that there are a general mode of reducing charges all over, I don't know how that's going to pan out in terms of the increase of charges. So that is something, which we'll have to wait and watch. It will be a joint application made by both the NSDL and CDSL to SEBI. And based on that, they will take a call whether it should be increased or not.So we can go onto the next question, please.
Yes, yes. So this -- the question on NAD project, the voice was not clear. Just to circle back once more on that. Are there any other projects also where the government feels that the output or delivery is probably suboptimal that we need to increase any kind of volumes there? If you could help us on the same measurement.
See, I think basically, the government's push is to move towards a digital mode. And basically, the depository is the best equipped to kind of take forward this particular thought of the central government. And there are various areas, which they are looking at, but it's all at the planning stage. It's not yet been firmed up. But given this particular issue about the virus, which has happened, it's only businesses which have been able to move to an online mode have continued to grow and continued to have their business going on while the virus is on. So I think that's a clear-cut indication that the push is going to be to move more -- to move really more and more into this kind of a mode. And no tie-ups...
Okay. And any major CapEx plans or investment plans for us, sir, that is on the board?
So basically, the software technology is one area which we would continue to grow because the backbone of CDSL is its technology. Cybersecurity is -- also continues to remain an area of focus for us. And so we will continue to basically invest in technology as we go forward. So basically, we'll see how it pans out, but this is going to be a focus area.
Any quantification of how much amount are we looking to invest the next 2 years ahead?
We have not yet firmed up. That is yet under being discussed and deliberated at the level of the Board. So we have not firmed that up. As soon as we firm that up, we will be making -- whenever it is due, we will surely be informing people.
Next question is from the line of Pritesh Chheda from Lucky Investment Managers.
Sir, on that one-off charge -- or one-off expenses which have flowed in, in FY '20 and quarter 4, I just want to clarify a couple of things. So we have mentioned that for FY '20, there is INR 10.5 crore on service settlement, INR 7 crore on CSR and a legal provision of INR 1.7 crore. Until quarter 3, there was a bad debt provision also, which was taken and was classified as one-off. So just want to clarify, is that number and whatever that number is, is it a one-off or it is no more a relevant one-off for FY '20? And what is the one-off in quarter 4 expense because the number for your other expense shoots up from INR 10 crores to 20 INR crores?
So I would just request the CFO, Girish, to answer that.
What we have informed in the presentation is that the service tax and CSR of -- unspent amount of CSR of previous year are one of the items, which we had to spend during this financial year. On provision for bad and doubtful debt, now that is a function of collection mechanism and based -- and it is also depending upon the market scenario at the customer end level. So during this pandemic situation, the overall collection is not that fast as what every -- each and every company must have desired. You must be also experiencing that payments are coming with a delayed time frame. So...
Sir, I just want to intervene here bad debt -- sir, I just want to intervene here.
I'm answering your question. I'm coming to that only. So when we say bad debts, bad debts would be required to be provided for based on the criteria specified in the accounting standard based on the collection history. Now if there is an overlapping collection, suppose the -- our collection is delayed, then there will be provision prescribed under the accounting standard. That's how it works. So yes, on an average, our provision will work out to around 8% to 9% of our total invoicing that we do for any financial year because that's what -- it is based on our recovery ratio that we have right now. So bad debt -- provision for bad debts will continue to happen on a quarter-to-quarter basis. That's the reason we have not said that it is a nonrecurring expenditure. I hope I have answered your question.
Okay. So is it possible to just mention then, what was the bad debt number, provisioning number for FY '20? And what is it for FY '19 if you have the 2 numbers ready?
You want financial year wise, right?
Full year, I'm asking about full year number.
Yes, so let me give you that number.
And for quarter 4, what is the specific one-off? So that CSR spend number flows in, in quarter 4, the entire one-off number in quarter 4 because your...
Yes, yes, yes. One-off is -- CSR is totally in quarter 4. So...
That's about INR 7 crore, right or -- it's about INR 7 crore you mentioned?
Yes, yes, roughly INR 7 crores. So to answer your provision -- question on provision. The provision for bad debts is around INR 7.5 crores in the financial year 2020, ending March 2020. And correspondingly, the provision made during last year was roughly around INR 3 crores.
It explains one thing. And is there any other one-off in quarter 4 barring the INR 7 crore CSR?
So in -- you are asking for quarter or full year?
Quarter 4.
So quarter -- in the March quarter, the one-off is CSR spend and the provision made towards the legal matter of earlier year.
Okay. Okay. Even that flows in, in quarter 4. Okay. This explains one part. And another question I want to know the FY '20 absolute revenue mix if you could give, which is your transaction charge, issuer charge, corporate action KYCs for full year.
Okay, okay. So full financial year, the annual issuer charge...
Consolidated -- full financial year consolidated.
Sure, sure, sure. I'll give. I'll give. So annual issuer charge income for the full financial year March 2020, is INR 77 crores, INR 77.5 crores. Transaction charge is around INR 43 crores. Online data charges is around INR 37 crores. IPO and corporate action charges is around INR 23 crores.
Sorry, sir, just a minute. Online data, and then you mentioned?
IPO, corporate action charges.
That is how much?
INR 23 crores. SEBI project on PACL is around INR 9.5 crore. Statement that we deliver, cash charges is around INR 9 crores. eKYC, CKYC charges is around INR 4 crore. Document storage charges is around INR 5 crore. E-Voting charges is around INR 3.5 crore. And I think this covers almost 94% of our income.
Perfect, sir. And the additional here, the corporate action is the only revenue item, which gets influenced for FY '21 as of now?
Yes.
Right? Because that is into your IPO? And also...
IPOs and -- yes, yes, yes.
So will this be largely IPO corporate action or it will be IPO splits and also some...
It would be -- yes, it would be a mixture of all the active corporate action that a company does.
Okay. So as of now, what gets affected as a line item is basically the corporate action, right? Because transaction charge is linked to market volume, issuer charges is linked to the number of companies that you probably add in the system as well? KYC is linked to your financial instruments, the mutual funds and insurance and all those, right?
Yes. Yes.
Okay. Okay. Yes, this explains -- do you have any outlook on how much reduction the corporate action might take in FY '21 if there is a possibility?
No, we don't give any futuristic numbers. So this will be again dependent on the market. So it will be difficult to predict.
But in the market year like this, does it go down by half and almost...
See, again, I'm telling you, you're asking the same question in a different form. The point is that it's a -- basically a futuristic question. It will be difficult to answer that.
[Operator Instructions] Next question is from the line of Yash Nerurkar from PPFAS.
I hope everyone's well and safe. So I just had couple of questions. So firstly, just wanted to get like proper sense about the NAD Project. So we spend like almost a year spending like the expenditure and doing everything, building up that whole network of execution, registering the students and then the entire project moves on to Digilocker. So that was -- it was expecting that, that will generate some revenue, it will open additional lines of revenues for the company. But since that entire project, and that it has moved to Digilocker, so that revenue chunk will just be gone. So is there anything else on your mind which going forward, which would open the revenue lines, any other product, any other strategy, which is in the pipeline?
Yes, so we are expecting...
1 minute, Sunil. Just, Sunil, 1 minute. Just can you finish all your questions, so that as the person said, you'll like to restrict it to 1 question per person. So basically, everybody has a fair chance.
Sure. Sure. Sure. So secondly, I just wanted to get a clear sense about the KYC thing. I just missed it in your opening remarks. Like what was it about the CKYC you were talking about that they are processing for other companies? So these are the only 2 questions I had.
Can you come again on your second question?
It's about the -- yes, go ahead.
So in the opening remarks, you mentioned something about the CKYC or the eKYC. So just had to clear out whatever the numbers were.
Okay. Okay. So as far as -- so far NAD anyway, there was no income generated by -- booked by NAD last year, okay? And we were expecting some income to come in from the NAD Project this year till the project went to Digilocker. To compensate for that, we are looking at the project from eKYC where we'll be registered as an AUA/KUA with UIDAI where we will enable investors through online KYC. The second project we are looking at is becoming a eSign service provider. As you are aware that the SEBI has made it mandatory for all investors to eSign their documents when they make an online application for either booking or demat. And the third part is we also have an online account opening service, which we would be providing. So we hope that once licenses are in place, that it will make up for the income, what we would have got from the NAD Project.
Okay. So any expenditure done so I think that will just be kind of a sum cost on the NADP?
So far as NAD project is concerned, yes, there is -- it is already -- there is already a sum cost coming for a period of 10 years, so maybe our CFO would be able to handle that question better. And most of the expenses have come over the last 3 years.
So...
So to answer your question head on, it's just that all the costs have been done and for sum cost, it was the revenue which was expected. And now that would win. So I think that has been answered by Sunil in terms of how we are proposing to go forward.
Next question is from the line of Kunal Sanghavi from Binder Dijker Investment -- sorry, Binder Dijker Advisors.
So in terms of that the price hike with -- from the SEBI Board depositories were expected to apply this year. Just wanted to have a historical background on previous increases. I understand that last increase that we took was in 2015. Can you quantify for me like what kind of increase were taken, say, in 2005 and '10? That would be my first question. And second question would be on the opportunity in the unlisted security side. I understand that -- I have 2 questions there. One is what is the opportunity left in terms of unlisted public companies? What is the target market left? And second is, I understand there was some incentive structure where NSDL was better than CDSL and that resulted into NSDL gaining market share. Now how we are pleased with R&TAs in terms of the incentives structure? And what we think about it like how we plan to gain market share there?
So basically, the first one, I'll answer. Second one, I'll request Yogesh to answer that question. The first question on when -- on 2005, '10, '15 is where this price increase has happened. I think there is no particular trend in which that increases. So I don't think that's going to really matter in terms of going forward. What SEBI sees is the current market conditions before they approve on any kind of a increase in the charges. And as I've stated before, the virus conditions is something, which we'll have to see how it pans out. Whether SEBI will be agreeable for that price increase to happen. So it is not a trend, which can be put in at every 5 years that so much percent increase has happened. It depends on the facts and circumstances which have been presented. And therefore, it is also not put down that every 5 years, the increase would happen, it could happen in 3 years, it could happen in more than 5 years. It is basically on the facts and circumstances, which are there at that point of time than the particular thing is stood up to SEBI.Now the second part of the question, Yogesh, if you could answer those.
Just -- Yogesh, here. Yes, Yogesh, here. See, there are close to about 80,000 companies in the unlisted space. Out of that, approximately 11,000 have been admitted till now. The balance are to be admitted. But what MCA guideline says is that if there is corporate action or any transfer, then it is mandatory to do it in the demat form. That is first part. The second part, which you asked was of the incentive or the referral fee structure. So we have actually matched the referral fee structure of the other depository. And now we are also offering the same referral fee to RTAs as well as to the practicing company secretaries also. And so that is what is -- I hope I've answered your question.
Next question is from the line of Sushrut from JM Financial.
Yes. This is Ashutosh. Just wanted to know how has the business been during the lockdown, both in terms of revenues and whether we have taken any special cost line items also during the lockdown, especially in terms of IT spends?
So I think I will have to restrict it to up to March 31 because the lockdown has continued after that. The purpose of our call is to discuss the results up to March 31. Up to March 31, the business has really been the way it has been going on, on so many months. There has been no major impact seen in the month of March as can be seen from our quarterly results also for the fourth -- for the Q4.And in terms of the technology cost, it continues to remain within our standards. There is nothing which is coming really basically out of tune. It is in line and in sync with what we normally spend.
[Operator Instructions] Next question is from the line of Amit Chandra from ICICI Securities (sic) [ HDFC Securities ].
Yes. This is Amit Chandra from HDFC securities. And sir, my question was related to the annual issuer charges. So in FY '20, roughly, we had the rate of around 170 companies per month, so which is half of what the competition was guiding. So as you have explained that we have the incentive structure and so maybe we can increase there. So my question is related to what has been this rate in the last 2 months during the lockdown period? Have you seen significant drop in this number? And also, for FY '20, if you can state the contribution from the unlisted companies in the annual issuer charges and the break up between onetime execution charges and the annuity part, it will be very useful. And the second question is on the approval that we got from SEBI for the Aadhaar-based eKYC. So what's the changed in the process post this for onboarding of a client? And to what extent it could boost the KYC volumes?
So on the first one, we'll have to restrict it again up to March 31. So I'll ask Yogesh to just give a sense. And second part in terms of the transaction charges make up, to the extent, I'll ask CFO, Girish, to reply to that. And on the third one, Sunil, if you could answer on the eKYC.So basically, Yogesh, could you answer the first question up to March 31?
Yes, yes, yes, correct. Up to March 31, we -- as I answered the previous participant's query also. Last year, also, we have also started the referral fee structure and due to the registrar and transfer agents as well as the practicing company secretary. So we have been also gradually gaining market share, so it's close to about 30%, that companies we have also admitted, that is still 31st of March. What was your other question, please?
Sir, the contribution from the unlisted companies to annual issuer charges for FY '20?
Yes, so that regards to the CFO.
Yes.
Yes. Amit, roughly around INR 16 lakhs has been contributed by the unlisted company during the quarter ended March '20?
For the full year, I'm asking FY '20?
Let me come back on this, Amit?
Okay. And sir, this contribution would also include the onetime registration charges and the annuity part also, right?
Yes.
Yes. So okay, sir I will get back to you. And for the Aadhaar-based eKYC?
Yes, Sunil, if you could answer that?
Yes. So far as the Aadhaar-based eKYC is concerned, we are fairly bullish on that because in the last couple of months, what we are seeing is the most -- some processing opened all right. And once the Aadhaar-based eKYC is in place, it will make it much more easier for an investor to open an account. And we are fairly bullish that it will add to a substantial number of accounts through this vertical, especially when we have eSign as well as our own online account opening product in place. Does that answer?
Okay, sir.
Amit, Amit, Amit, for the full year, the income is around INR 2.24 crores.
INR 2.24 crores?
Yes, yes.
Next question is from the line of Jatin Damania from Kotak Securities.
Sir, just wanted to carry on with the question the earlier participant asked in regarding the number of companies. So if you can help us in understanding what were the number of companies that has been added in the unlisted space in entire FY '20? And what the total count stands as of now for us?
Okay. So I think the CFO, you would -- do you have that number, Girish? Can you just give that number, company that have been added in the financial year.
So during the financial year ended March 2020, the number of companies added is around 2,120 companies. And total, I need to get back on the total companies.
Okay, sir. And during -- sir, during the financial, what will be the annuity charges that has been recovered or the onetime registered entries that have -- that could have been recurred from this 2,000-odd companies that you added?
So I had -- okay. I had answered that to earlier question, it is around INR 2.24 crores.
Okay. It's INR 2.24 crores. Sir, just needed that total number of companies that has been admitted. That's all from my side.
Next question is from the line of Gautam Gupta by NRC.
First, let me thank you also for the investor presentation. I think we've been asking for it, and this is the first time it's come up. A lot of useful data that gets answered. I hope we can see this maybe every quarter. So I think that also saves time on the call. So thanks for that. And the question that I had was, one, on the commodity repository side, if you could give us any color in terms of progress, how that is panning out? And two, on whether that government project, whether we are seeing a phase 2 happening or not? That's it.
So on the commodity repository, it's currently and basically, the agri-based commodities is where it has been permitted. I think there are discussions the government to move with the nonagri-based also. So that's something we have to wait and watch how it moves forward. And there, we feel we can really contribute a lot more than what we had been contributing So you have to wait and watch how the rules change.On the second query, I'm sorry, your voice broke off, so what is the second question?
We had the government project that PACL one. So whether we are going to see a phase 2 of that project or not? Do we have some clarity now? Or...
See, that is something which continues in terms of an ongoing basis. So there are a lot of circumstances. It's difficult to give you a firm answer on that. Because there are a lot of conditions, ifs and buts, et cetera. So I don't want to give a firm when...
So you don't have a direction essentially yet, I mean, a clear direction in that sense. But it's a ongoing process till year-by-year, I guess.
Yes, yes, yes.
Next question is from the line of Sriram Srinivasan from KSEMA.
Sir, this is Sriram Srinivasan. First of all, congratulations for your numbers, almost posted 16% of growth in this very tough times. My heartly congratulations to you. My queries will be on the annual issuer charges side, sir. Actually, we have added almost 2,100 companies during this fiscal. The average run rate will be around 150 to 180 companies that we have been keep on adding every month, right? So is this the trend can -- we can expect to continue along for FY '21?
So again, it's a futuristic question. But if I can just answer in a broad basis, that as Yogesh had mentioned earlier, that there is a significant portion of companies, which are yet to be enrolled under demat mode. So whenever the transfers are required to be done all then to raise capital, they will have to come into the demat mode. So the way I would look at it is that there is a significant opportunity of growth and difficult to predict how FY '21 is going to pan out because of the virus issue. But looking at the core numbers the way they are, I would see that the -- really, we should see some growth coming in, whether that will be more or less in this financial year or it will turn up in the next financial it is something that we'll have to see how that goes.
Okay. Almost 60,000 unlisted companies are likely to -- are they right?
Yes, there are around 73,000 companies.
73,000 companies, so it's these opportunities that we are looking forward, right?
Yes. Yes. Yes.
Now in terms of National Academic certificate that we have been get a approval to get charging for that. We have been expected in September, but we have got in the end of March, actually. Sir, is that -- can you give me the revenue idea -- revenue breakup idea, for this how we are going to charge and we are -- how we are going to record the revenue for this? Can you brief about that?
Yes, Sunil, can you answer that?
Yes. The latest update on this project is that the government has taken the project from the depositories and given it to the Digilocker. So the depository Digilocker will be handling this project.
Okay. Okay. For every login that we have been charging? Or is there any recurring revenue?
No, no, I'm sorry. What I mean to say is the depository will not be handling this project going forward as per the MHRD.
Okay. Going forward, we are not going to handle the same, National Academic certificate charges?
That's right. That's right.
Next question is from the line of [ Niraj Khanvilkar ] from [ Prosperity ].
Sir, currently, PAN is not compulsory for CKYC, but the security markets require PAN number, and therefore, broker and mutual fund use KYC data stored by CVL KRA. However, if CKYC makes PAN number mandatory in their data, then who will use CVL KRA? That is my first question. Second, other than securities market intermediaries, who will use CVL KRA? And last question is how much CVL KRA charge for onetime fetching data?
So Sunil, can you answer that?
Yes. Yes. Yes. So far as CVL KRA is concerned, it's only the securities market intermediaries who can use the CVL KRA. Point number two, what you mentioned is if PAN number is made mandatory in the sell-side database, who will use the CVL KRA. The point is that it is not only the PAN number which matters here, it also matters on the quality of the data. Today, what is happening the intermediaries are able to fetch data, but they are not confident with the type of data they are getting from sell-side because there is no verification done at the sell-side, okay? So because of that, many of the intermediaries depend on the KRA data itself. Okay. And what was your third question, sir?
CVL KRA will charge for onetime fetching data?
Yes, we charge INR 35 for fetching a record. Does that answer all your questions?
Yes. Okay, fine.
Next question is from the line of Ashish Sood from Vishuddha Capital.
Sir, I want to ask question regarding outlook on your insurance business because we are seeing that around INR 43 crore insurance policy are currently with Digilocker. And is the reason that there is a pricing difference between the price charged by you, from the insurance companies or the price charged by the Digilocker? And in the forward, can the same thing happen that government can make Digilocker mandatory as a onetime entity for all storing the all insurance policy record, so outlook on this business going forward?
So basically the insurance repository as of now is not a mandatory. I'll ask Mr. Ramkumar to just give a reply to your answers.
Yes, Ramkumar here, as I may take forward the answer. The first part of the question was the Digilocker is having x number of policies. As per the present IRDA regulations, only an insurance repository is allowed to hold electronic policies through electronic insurance account. That is one part of the answer. Second part is that in the Digilocker, what generally people do is they store their policies. So it is not known whether it is really true or not. In case of some companies, Digilocker has got a back-to-back arrangement, but not in case of all the insurance companies, that is part 2 of the first question. Part -- the second question that you asked was whether government will in future, say that everything will be through Digilocker, that is only time will tell, we'll not be able to comment on that as of now. So hope this answers the question.
Okay. Okay. And is the pricing difference between the price charged by Digilocker from insurance company and price charged by you or the pricing is same?
My understanding is -- sir, if I may, Mr. MD, if I may just continue with answering.
Yes, yes. Yes.
Yes. So my understanding is Digilocker doesn't charge anybody for anything and they can well afford to do so. But we are a commercial organization. To that extent, we'll not able to give anything free, point number one. Point number two is, if you compare our cost with the cost of printing a policy and dispatching it or handing it over to the policyholder, ours is much less than that. That, I hope answers your question.
Ladies and gentlemen, due to time constraint, that was the last question for today. I will now hand the conference over to Mr. Aditya Bagul for closing comments.
Yes. So thank you, everyone, for taking out the time and attending this call. Special thanks to Nehal sir and the entire team at CDSL for patiently answering our questions. Nehal sir, I'll hand it over to you for any closing remarks.
So I would sincerely thank all of you for your questions. One comment, which -- or rather compliment which we got that we have put in our numbers in the form of a presentation. We shall be doing that going forward in basically every such quarter. So you all can look forward to that. And we are basically hopeful that with these current tough times, our business continues to grow. And basically, our effort is there of all the stakeholders to ensure that the business of CDSL continues to grow going forward.
Thank you, sir.
Thank you very much. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Thank you.
Thank you.
Thank you.
Thank you.