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Multi Commodity Exchange of India Ltd
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Ladies and gentlemen, good day, and welcome to Multi Commodity Exchange of India Limited Q3 FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. P.S. Reddy, MD and CEO of the company. Thank you, and over to you, sir.
Thank you. Good afternoon, everybody, or good evening, everybody, for attending the Q3 conference call. The numbers this quarter may be more or less flat in my view. And in terms of ADT, we had, this year, about INR 31,374 crore ADT in this quarter, as against -- not -- I'm sorry, not in this quarter, for year-to-date, INR 31,374 crores as against INR 31,148 crores ADT for the entire 9 months that we have been through. Of course, the number of full trading days, the last year were 183. Whereas this year, so far, it's 175. So there is an 8-day loss in terms of number of full trading days, okay? And off-trading days are -- this full year is more, but as against the last year, of course. Having said this, the way that we went by is in terms of marketing and other new product introduction, I think it has yielded good results. In terms of the UCCs, we have really done well in these 9 months, INR 3, 87,480 total UCCs have newly -- new UCCs -- not new UCCs. Unique clients' codes have traded in these 9 months as against the corresponding period, 3.34 lakhs. So that's one good number that I can leave with you. Similarly, we have an ADT of new products that we have launched at BULLDEX and METLDEX, almost all INR 270 crores. Yes, INR 270 crores for the current financial year. And METLDEX has clocked about INR 56 crores. Together, INR 302 crores, index features ADT in this so far we have clocked it. As you are all aware, we are not charging them. But come post April, we will be charging the transaction fees. So we are not giving out any kind of concessions on this. The third element, which I would like to speak is the -- with respect to the crude oil margin reduction. Very recently, SEBI has permitted us to reduce crude oil margin from 130% to almost 50%. We have done it. There's still room for reduction in margins and we will be doing that. We will be making a representation for the -- to SEBI, seek their consent to further reduction. Because internationally, I was -- we were informed that it's almost 10% to 12% -- 10% to 15% is the margin as against current margin of 50%. Even if we are able to come down to 20%, 25%, it is a much greater relief to market participants, especially when the volatility is not so much. So that is one representation. We'll be making it. But even with this reduction from 130% to 50%, still the crude oil contract had not seen activity as much as we anticipated or expected. Probably, come in the month of February, we will be able to see some kind of activity in this contract also. That is one dampener for us at this point in time. The kind of ADT we had last year is almost INR 13,000 crores. As against that, today, we have -- the current financial year, we had about INR 2,600 crores. Yes, INR 2,600 crores in crude oil as against INR 12,400 crores in the corresponding period last year for the 9 months. Of course, partly, this crude oil role, maybe some of the investors have moved over to natural gas. So the corresponding period last year, about INR 1,500 crores is the natural gas and this -- the current 9 months, we had about INR 4,123 crores natural gas ADT, so partly compensated. But overall, it is INR 6,768 crores, is the energy segment is giving us, the ADT. Come back to the other -- come to the other initiatives that we have taken with respect to admitting the Indian bullion refiners into the -- into our -- the exchange [ goodwill relist ]. The -- we have completed the process. Of course, there are still some more applications. It is going to be a continuous process. But the first 2 bullion refiners have been identified, shortlisted and approved by the internal committees, all that. We have made application to SEBI -- or rather, informed SEBI. And we are yet to hear their clearance. Once we get it, those 2 bullion refiners will be notified. And that bullion will also be delivered -- deliverable on the exchange platform. This -- the other part of it is the lead, is the base metal contract where there also we wanted to allow domestic refiners to deliver metal on the exchange platform. There also, the part of the process is complete because there are 2 rounds of testers that is actually the consumers of the lead metal, how to satisfy themselves that the metal produced by these refiners is good enough for them to use in their production. So one round of testing is done. Maybe after a month's cycle, the second round of metal will be dispatched to those produce -- to those consumers. And once the certificates are good to go, probably, again, we will be doing this. Subject to, again, a new condition that this particular lead grade has to be approved by the BIS. They're not currently the part of the BIS standard. The BIS standard was made about 30 years ago -- 25, 30 years ago. So we have applied to that. They are also doing their best to expedite the new lead grade to be introduced by the exchange. So are the -- some of the initiatives that we have got. The other one is the electricity derivatives contract. We have already filed with the exchange -- I'm sorry, we filed with the regulator, our contract specifications in the approval, and they are examining it. Once it is done, probably, we will be able to get the -- we will be able to lodge the contract. So these are the -- for now, the updates. As we go along, probably some more updates will come through. And I will ask Mr. Bolar to give few numbers, if you so wish and...
Thank you, Mr. Reddy. Good afternoon, everyone. I'll just talk of our consolidated figures. For the quarter ended December, as you have seen from our press release and the upload on the exchange, total income was INR 125 crores. As compared to September, there's a margin -- there's a fall of 9%, which, basically, as Mr. Reddy said, transaction charges, our average daily turnover has fallen from INR 38,000 to INR 31,000 in this quarter as compared to September. September, if you recall, was a great quarter because of the volumes in bullion. Unfortunately, we have not been able to maintain those volumes in bullion. But still, as compared, Mr. Reddy said, there was 9 month ended as compared to last year, we're at par with the ADT. Our total -- our profit before tax is INR 67 crores as compared to INR 78 crores. There were certain additional expenses that were booked in this quarter, mainly because of CSR activities and also some expenses that were incurred by our subsidiary, as you are aware, and members of the European Monetary Union. So there are certain membership fee that they had to pay, so that was booked in this quarter. And we had tax credit this time because the -- as compared to the last quarter, because this -- the quarterly tax provisions are made on the company's budgetary estimates. And in October, there was a revision in our budget. And based on that, the tax provisions are made. And we had -- we realized that there would be a marked utilization in the quarter. So because there was a marked utilization in the quarter, we have a negative tax figure, unlike the previous quarter, where we actually had an outflow of INR 19 crores. Yes, 16 -- yes, INR 19 crores. So with this, I'll leave it open to the question and answer, and then we'll take it forward. Thank you.
[Operator Instructions] First question is from the line of Sujit Jain from ASK Investment Managers.
Yes. Sir, one question is on volumes and options. Can the player level gross margin benefit? At what stage you'll start charging for them? You spoke about electricity derivatives. What will the revenue sharing arrangement with IEX? What is the progress of gold spot exchange? And one last question is, what is the progress in bank brokerage distribution, such as ICICI Securities?
Okay. The first question with related to the...
Option volumes.
Option volumes. As I said, it's supposed to be a retail product. But in terms of 1-kilogram gold options, we are doing really well. If you see the open interest, it's almost all 5.5 tonnes. We have it open interest in the 1 kilogram gold. In the Gold Mini, we had introduced LES for about a 1.5 months, because other exchanges also have started. They are continuing it, but we have withdrawn it because we didn't see great merit in continuing LES, and still the contract is not gaining any ground. And we have not seen any great progress also in other exchanges where LES is still on. So having said this, we thought we will focus on the existing market, existing products that we have it. If necessary, we may be launching the Gold Mini contract -- a Gold Mini options contract on futures rather than the noncommodities, okay -- underlying commodity. This is one...
What is the ADT figure in options?
Yes. ADT -- one minute. ADT, in options, for the -- one minute. INR 866 crores in the current 9 months period. INR 866 crores, as against last year, INR 888 crores for the corresponding period.
At what level you will start charging?
No. As I said, we have seen this -- as I said earlier also, we look at about INR 5,000 crores volume is needed, and without which it may not sustain. And it doesn't yield any much this one, except that it is a sore pain point for the traders in this product. So only when we are able to sustain a good amount of ADT, the exchange will look at charging it. So this is one part of it, okay? On the gold exchange, we have -- on the gold spot exchange. I think in the GIFT City, the thought process is they -- instead of domestic exchanges setting up each one, 1 exchange, and then fighting among themselves, it is better that we pool our resources and fight with international giants in this -- compete. Instead of using the word fight, compete with international exchanges. So that is the understanding of all of us, including the regulators. So we will be going along with other exchanges and depositories, and maybe collectively setting up as and when the things are in place. Already, GIFT City authorities, or IFSCA, has organized a working group. We're all part of that, and we will be quickly working out the details of rolling out this. And then once that's all get approved, maybe respective boards also will approve, and then we'll move on in that direction. So that's another initiative. On the electricity features, what is the revenue sharing with IEX? Probably this is not open as yet. We will not be able to disclose that. It is an exclusive contract at this point in time. And let us see when we launch it and as and when it is needed, I will disclose that.
And bank brokerages distribution, progress there?
Yes. Banks are collective -- currently, it's about -- contributing about INR 250 crores ADT and -- one minute. Yes, that's right. No, I'm sorry.
How many around gold?
About INR 300 crores ADT. Currently, it is -- in this current financial year, entire financial year, we have got it, the ADT for the 9 months. But quarter-on-quarter, it is improving it. There are 6 of them who are currently active on the exchange platform, okay?
One last question was on gross margin benefits. Any progress on that so that the index volume goes up?
Yes. On the gross margin benefit, the -- as I said, SEBI asked us to come back after 6 months, notwithstanding that we made an application after 3 months. And SEBI said, please wait for some more time. You come back, as we have told you after 6 months. That's what the response has been. And we will wait for maybe another month or 2 and then we'll go back to them. But definitely, by March, we should be able to get it because we launched it in the month of August. So we should be able to get that anyway.
Operator Instructions] The next question is from the line of [ Chirag Patel ] from [ Arena Chairs ].
Hello? I'm audible?
Yes. Go ahead, [ Mr. Chirag ].
Yes. Sir, I have a few questions. Like in last 1 year, in calendar year '20, we have seen a lot of new traders coming to market.
Sir, your voice is breaking slightly.
Now it's clear?
Better than before. Yes, sir.
Yes. I have a few questions. Like in last 1 year, many new traders entered into market through discount brokerage and even from traditional channel as well. So from next 3 to 5 years point of view, how do we see the trend to catch up in commodity in market segment? Because if we look at the globally, other than India scenario, the new traders, most of, prefer commodity [ scooped ] trade and do speculation versus equity. So how do we see this kind of momentum going forward? And what strategies we put in place so we can garner the volume on our exchange from this emerging budding community of traders?
Well, see, it is difficult to identify whether it is -- I don't -- I will not be able to give that figure. But the new clients, new UCCs that are joining, they're almost contributing about 28%, they have contributed in Q3. So that's a very good number. That's what I'm very happy about to report. So the more the UCCS, the more they're trading. In fact, mobile trading has contributed almost all 28% to the total ADT. So that means -- I'm sure all those who contribute through this mobile trading, et cetera, these kind of devices, is by and large the new generation of investors. Whether they are speculators or whether they are having any other interest in this product, I will not be able to say anything. But yes. So we on the -- on track. That's the way I can tell you.
The next question is from the line of [ Megan ] from [ Piker Investments ].
Yes, my question is on the crude oil margins. As you said that you are required to reduce the margins going forward. So how much impact would that have on our overall profitability? And second is, what's our tax rate? Like how -- what would be the usual tax rate that will be charged going forward after the MAT credit and everything is over?
See, what is the -- what you call, response of ADT in crude oil to the reduction in margins, I will not be able to say at this point in time because at this point in time, we have about INR 900 crores of ADT, as against, we had INR 13,000 crores ADT last year, okay? Now how am I to match that? Probably, reduction of the margin may bring back some of the investors who have left. As I already said in the beginning, a part of them have already taken the natural gas, another product, we have it. Earlier, we had about INR 1,500 crores natural gas ADT. Now it is INR 4,500 crores that what we have currently, okay? That's what the -- it has become, about INR 4,100 crores. Yes, that's right, INR 4,100 crores. And so let's see how we will move forward in this product. On MAT credit...
So I'll just take your query with regard to the MAT. We have presently, as I mentioned in earlier press meets also. Presently, after all those entries that we have passed for December, we have INR 16 crores left of MAT credit. So hopefully, in the next couple of years, we should be able to exhaust it. And then we go back to the -- we'll be able to take advantage of the new tax rate that the government has announced, yes. But our effective tax is around 19%.
The next question is from the line of Kunal Thanvi from Banyan Tree Advisors.
I had just one question. So last year around, we used to talk about the fact that we'll be disclosing the volume mix in terms of speculators and the real participants. Any update on the same?
I think it's on the website. It's being disclosed. On the website, it is getting disclosed. Do you see that?
Okay, sure. I'll just...
Value participants -- value chain participants. It's there.
[Operator Instructions] The next question is from the line of [ Utkarsh ] from Damos Capital.
Sir, can you give what was the margin percentage on crude oil last year, in Q3?
Yes. You see, there are 2 things. One is the initial margin. Other one is the volatility margin. Volatility margin keeps on varying and depending on the intraday volatility. But we had margins, as I has, even 30%, 40%, 50% also, okay? But again, it is -- as the volatility goes down, they used to get reduced. But this kind of thing has not happened in this particular time because it is an ad hoc margin. And considering the value when the crude oil value goes down to INR 10, INR 1,000, INR 100, whatever it is, the -- there is a tendency to greater participation to have it. But then in terms of risk, that is thanks to this negative pricing, the risk has substantially increased. That is why there is a minimum margin of 1.5 lakh that has been fixed in respect to the contract size. Now that is the reason why this contract got badly affected. Until we fix the, what you call, system for allowing the negative prices to be handled, and also the impact on negative pricing on the SGF. So SEBI's circular was out. I'm sure some of you must have seen it, how they have dealt with this particular situation. And yes, coming back to your question, the margin. It was as low as 10%, 15%, and it went to as high as 60% also. It hovers around. But it never got stuck at 60%. That's what the point is.
Yes. So have you incorporated the negative pricing in your core technology?
Of course. We have announced the last quarter itself, September quarter.
The next question is from the line of Pranav Mehta from Valuequest Investment Advisors.
Sir, any update on the RFP for our new trading software?
Yes. See, the RFP, we have already gone through the process. It's in the final stages of closure in terms of agreement, vetting and other things is happening. Once that is done, I'm sure we will sign it off and announce to the market anyway. We will do that. It's in final stages.
Okay. Sir, just one -- so last time in the call, you said that the Board will decide whether it's -- I mean do we want to like up-front buyout the software or something of that sort? So has that decision been taken at the Board level? This -- regarding this?
Look, we went with the RFP process. And as I said, the 63 Moons and everybody was allowed to -- are eligible to participate, there is no problem. So whatever the bids that we received, we have evaluated. Accordingly with the phase, a transparent process through, we have arrived at pricing. And also selection will happen accordingly. The Board is yet to take a call. Once it is done, then obviously, we will announce. But it is -- as I said, we want to close all lose ends, including the -- some of the clauses of the agreement, then only we can go ahead. If we award the contract and thereafter we'll sit and -- across the table to settle the agreement issues, probably that may never get closed.
The next question is from the line of Mohit Kumar from DAM Capital.
Hello?
Yes?
Sir, I missed the initial part of the conversation. Sir, my question is on the crude volume. When do you expect it to come back to the normal? And when do you expect the margins to reduce to the normal level? And what is the normal level of margin, which is -- which was there pre-COVID? I'm sorry, but -- if I'm repeating, yes.
Yes, no problem. As I said, currently, the -- just last December month, we had INR 922 crores ADT in crude oil, okay? But you see the lost corresponding December month, INR 13,000 crores. Or if you'll see, the corresponding quarter last year, INR 12,400 crores. And this quarter, we had INR 2,600 crores, okay? Now the volumes have shrunk drastically. And prior -- thanks to this negative pricing or black swan event, our crude oil margins were as high as 130%. Now got reduced to -- now just maybe a fortnight or a 3 weeks ago, to 50%. Now even 50% also, we need to nudge it and bring it down. Because even with 50%, it obviously -- there's no volatility which justifies such kind of margining. So we are looking -- we are working on alternative models how we can reduce further margin. At the same time, secure the system. More importantly, securing and effective risk management than hurriedly reducing the margin, and that's being worked out. Whether we will be able to restore the trading back into this -- the volumes will come back or not, I do not know. But we will make every attempt at this point in time to bring back the margins to the level of maybe 20%, 25%. That's what we are looking at it. As I answered earlier, just 2 minutes ago, the margins last year was varying from 15% to even 60%, 65%. And that is essentially kicked in because of the volatility margins. So higher the volatility, greater will be the margin. And once the volatility is reduced, maybe within a 15-day or to 1 month's period, the margins also get settled down to the lower base. So that's how it happened.
And sir, on the options segment, I believe, we are not priced -- we are not charging consumer, right, at this point of time?
Yes.
So when do we expect the -- to charge from the -- charge on the option segment? And how is it doing -- how it has done in Q3 compared to last year?
Yes. See, as I said, options is about INR 800-odd crores, which I said, ADT. And it remained by and large the same figure even in the corresponding period last year also. And what is more important is -- and since every time earliest [indiscernible] we will start charging. But that would not yield any income, but it will be a sore point in the -- for the traders and other participants in this. I can tell you, it's hardly any money that we will get it because it's not on the ADT we will charge it. The -- when it comes to options, we have to charge on the premium. So what we are seeing is the underlying value of the contract also. That is not the charge -- like, you -- we will not had INR 200 per crore in this case. That will be on the option premium. The option premium is usually 4% to 5% of the total ADT. So on that, again, it will be much smaller, this one. So let's understand that is the way it works, and probably we will wait for about INR 5,000 crores of ADT even for us to think of charging something on that. Thank you.
And sir, lastly, on the bullion exchange, sir, where are we right now? Has there been any progress in the -- in last quarter, in terms of regulation?
Yes. The GIFT City authorities, IFSCA, have already released the regulations. And the thought process is that we should only set up 1 exchange. All of us come together and set up 1 exchange, which will be competing with other international bullion exchanges. And the government will help us whichever way we have to do it, so that we will be able to compete with international exchanges. But if it is multiple exchanges, then obviously we'll be fighting among ourselves or competing among ourselves, and it is nobody's interest. So we are all working, and the working group has been constituted. All exchanges and deposits will come together. And then after the working group finalize its results -- its report, then implementation process will start.
Sir, the last one is, there was -- we have -- the refiners and testers you are trying to -- in panel. And the target date we had said in the last con call was December for lead. And for gold, it was supposed to be November. So where are we in there? Can you comment on that?
See, we have already -- the gold refinance process has been completed. We are just waiting for SEBI to say go ahead. Then the moment they say, we will be announcing it. In the case of lead, we already have completed 1 round of tester process where the consumers of the lead will be giving their certificate. So 1 round is done. The second round will be started after 1 month of gap, and then the -- then thereafter the -- whatever the refinery producers after 1 month of gap, the -- from that batch, again, few tons will be picked up and sent to another set of consumers, and usually, the battery manufacturers. Again, they will see the application -- in their application, the use of lead. And then if they also certify, then the refining -- the -- those refiners will be impaneled. So here, the -- it has been delayed because the SEBI has suggested that we should get this lead specifications impaneled by the -- or rather accredited by BIS also. So we have filed an application with BIS. BIS is also actively pursuing it. And so once the BIS grade is designated, then our lead, instead of calling it as an exchange grade, it will be a BIS lead grade, whatever, 1, 2, 3 number that they give it. It's like that. It's -- that is the reason why it is -- was delayed.
[Operator Instructions] The next question is from the line of [ Anuj Kumar ] from B&K Securities.
Congratulations on reasonably good set of numbers. My question is on the other income in the financial, whether it is a sustainable one -- will it be in coming quarters?
Can you repeat your question? I couldn't hear it.
Is it sustainable?
Yes, sustainable, is it? I mean is that your question?
Hello?
Yes, I -- could you repeat your question, please?
Hello?
There is a spike in -- hello? Am I audible?
Yes. Please, go ahead.
My question is on the spike in other income sequentially. And whether the -- this other income is a sustainable one in the few coming quarters?
See -- I mean as I -- as we mentioned in earlier discussion, other income mainly consists of our treasury income. So the...
Other income?
Yes. That's what I'm mentioning. Other income mainly consists of the -- our treasury income. So as you refer, we have a reasonably good portfolio. And based on our portfolio, way the bond markets have moved from -- in June as well as September and December, they have been able to book good gain. But going forward, it all depends on the bond market, how the bond market goes. And I don't think it's really...
Bond market?
Yes. That's right. Yes? I hope I answered your question. Thank you.
The next question is from the line of Aksh Vora from Praj Financial.
Yes. Sir, I just wanted to know what would be the revenue sharing in the GIFT City, if we tend to put up a 1 exchange combined with BSE or NSE? So how the things would progress in...
Well, at this point in time, our desire is that we all will be equal shareholders in the company.
Okay. And currently, what is the turnover in bullions by, say, BSE arm? Or what is the turnover generated -- or ADT generated in GIFT City?
No, no. There's no bullion exchange in -- spot exchange, we are talking about. Bullion spot exchange in...
Yes, yes, yes, sir.
In -- there's no exchange as of now.
Okay. I think, sir, BSE had a subsidiary, and it's operating from GIFT City...
That is IEX. It's a derivatives exchange, okay? That -- India exchange or something like that, we call it. But the -- that's not the bullion exchange. It will be different [ way ]. And it will be a spot exchange, bullion spot exchange it will be. International Bullion Exchange, IBE, it's called, under the regulations.
Right. Sir, do we also tend to put up derivative products in GIFT City or...
There is no plan as of now.
Okay. And slightly going forward, do we think the mix between what it used to be earlier, like the mix in -- between bullion, silver, like the base metals, energy and crude oil, and -- would be back to normal? Or it will be still more of volatility going ahead?
No. As you know this market, each product is driven by its volatility. And that -- nobody changes, that is the underlining -- or the bedrock of this -- functioning of this exchange. So which particular combination, generally, this will work, I will not be able to say. Depending on the volatility it will be. But broadly speaking, the product mix will continue to dominate the way it is currently for the next few years. But we expect the BULLDEX and METLDEX to lead as we go along, probably once we get the gross margin benefit.
[Operator Instructions] The next question is from the line of [ Kunal Agarwal ], an individual investor.
I have 2 quick questions. One is what kind of volume would you expect from the refiners in the bullion segment once they actually join? And the second is, will the exchange in GIFT City, in any way, cannibalize the bullion volumes that we currently have on our exchange? Will that -- will the exchange in Gift city impact our current bullion volumes at all?
Well, first question with regard to the bullion refiners and parliament, whether it will bring in more volumes. It's not a direct link relationship between the two. But what will happen is the metals that they are currently producing is directly getting traded in the spot market. Once they are also permitted to deliver on the exchange platform, some of the customers may come and then take deliveries on the exchange platform. So the more and more integration happens with the physical market, more and more see MCX as a -- as the platform for trading in bullion, okay? This is one major part of the goal that we wanted to achieve. So greater integration will take place with the industry. And this is very important to understand. Coming back to the other -- whether IBE, International Bullion Exchange, will eat away any of the volumes on the exchange platform, my answer is no, because that was just spot exchange and this is a derivatives exchange. The contract is a 2 months tenure. What IBE can do and may do, and there are -- the working group is working out what kind of business model that we should be pursuing it, and what kind of concessions -- or what kind of regulatory facilitation that we should seek is being worked out. Essentially, the imports that are currently -- have coming into the country, if they come through this exchange, that to that extent, the volumes on the International Bullion Exchange will increase. Probably, that will also bring in more and more liquidity. And some of the players in the international market who are maybe trading in other exchanges, they come to the GIFT City International Bullion Exchange for their requirements. Now one important thing you must bear in mind is almost -- India is a 25% consumer of gold, that is, being gold overproduced. If that is the case, at least we must have so much say in the price determination, and that should happen in our GIFT City. That's the way our thinking is.
And sir, we recently read that -- this is public information because it was disclosed that even Titan had a subsidiary exiting the gold trading business, which has recently been impaneled into MCX.
That's fine.
And Titan has disclosed this. If you could just help us understand, sir, what would be the nature of -- exact nature of business that it would be undertaking on MCX?
No. They are working as a client through some broker. And so they thought it is good to have their own subsidiary. And through that subsidiary, they undertake the transactions on the exchange platform, their own consumption. Maybe going forward, they may. They may, we don't know, to extend their services to other clients also. So at this point in time, maybe they will be -- they have taken only a membership of the exchange. And I think if I'm not mistaken, they have activated it also. That's the way it is. So earlier, they were hedging through the member brokers -- of other member brokers. Now they can do it themselves, that's the way it is. It doesn't change. It will shift from 1 member to the Titan-owned subsidiaries.
[Operator Instructions] The next question is from the line of Sujit Jain from ASK Investment Managers.
So you spoke about INR 300 crores of ADT with 6 bank operations. Typically, their market share is in cash volumes in equity exchanges are very high. So here on MCX, in commodities, how much time and business development do you think it would take for them to be meaningful players?
See, as I said, there were 6 of them currently operating on the exchange platform. And each one have their own technology requirements as well as the other operational requirements. They are -- they have been in equity markets for more than maybe 3 decades, but that's not the case with the commodity markets. And in fact, they were permitted very recently. So 3 decades of experience worth is 1 or 2 years, it should fall in mind. Similarly, the commodity market products are not suited for anybody and everybody, as the landscape available for the equity retail investors is totally different from the one that is available for commodities. So keeping that in view, probably the growth will be slow, but it will be a very determined growth in the sense they have access to a lot of corporate who -- the corporate client base, who must be having exposure to commodities. Now if those -- that exposure to commodities, if they are able to hedge on the exchange platform, to that extent, they can mitigate the risk. This is where I have been telling in the last 2, 3 conferences or investor calls that this is something which they are taking it. It takes time for them to convince the client to hedge on the exchange platform. But once it is done, I think that's it, the client knows the advantage of doing hedging on the exchange platform. Yes, if we expect a growth like the one which is happening on the equities, it may not happen. But it definitely -- they are going to be a major player in the next maybe 2, 3 years' time.
What business development role we can play here to accelerate this process?
As I said, we will -- it's a one-to-one engagement for most of the corporate clients. So in terms of business development, we do engage with these corporates and bring them to the -- see that who are their bankers and then do a matchmaking, wherever we have got such kind of relationship. Similarly, these firms, if we are able to convince them to expedite their IT developments, which we are doing it, of course, and then expedite their IT development, they will be able to launch the products faster. If they are ready, then thereafter, we can convince some of the clients who are -- especially some of the hedges. They are not -- they're averse to going through some of the brokers, [indiscernible] I would say, brokers in a sense, noninstitutional brokers. So they prefer to go to institutions like banks. Probably, we will be able to establish that relationship, so much we can do.
And just one last question is to understand the role of these new refiners that you are enlisting on the exchange, where their certified deliveries can happen. In the ecosystem, how important this is? Earlier, whose certification was being used as a refiner? And does that save some cost for the customer or for the exchange and then, therefore, volumes can go up?
Well, see, there is a much -- everything cannot be converted into a kind of number of cost savings for you or me. You means the exchange or a customer. What we -- as I've already explained, we need to promote the domestic industry to use this exchange platform. That is the larger goal and the objective. How do we do that? Unless their metal is acceptable, in the case on the exchange platform. In the existing ecosystem, we say only LBMA refiners gold is approved. In India, we have 30-odd refiners in India. Only maybe 2 or 3 are impaneled, okay, by LBMA. Rest are all from international markets. So LBMA is just -- not that LBMA guaranteeing us anything, okay? So we thought we should be promoting our domestic industry. We should be helping the domestic refiners have a platform, a recognition. Looking at their processes, looking at their technical compliance requirements that they are -- that they have adopted, and looking at the certifications and the quality audit that they are going through. We are planning to impanel them. What will happen? The customers of those refiners will also look at the exchange platform, and they will not be losing money because MCX price may command a premium of the delivery on the exchange, may command a premium over other metal brands which are not impaneled on the exchange platform. At least those refiners will be benefited to that extent.
[Operator Instructions] The next question is from the line of Sandeep Jain from Birla Sun Life Insurance.
Yes. Just one question. As a company, do we have any defined dividend policy? Or if not, are we trying to make any defined dividend payout policy?
We have it on our website, the dividend policy document.
Okay. As a percentage, have we -- I'll check that, but if you can...
It is about 75% of the maximum payout at this point in time, currently we have it.
Thank you very much. Ladies and gentlemen, that was the last question for today. I will now hand the conference over to Mr. Reddy for closing remarks.
Yes. Thanks. Thanks to one and all for being present for 1 hour. Otherwise also, I have been taking questions in otherwise on a one-to-one calls. Thank you so much. Thank you for being present. Thank you, [ Mr. Neerav ], for organizing this.
Thank you very much.
Thank you, everyone.
Thank you.
Thank you. On behalf of Multi Commodity Exchange of India Limited, that conclude this conference. Thank you for joining us. You may now disconnect your lines. Thank you.