Angel One Limited (ANGELONE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Angel One Limited Q4 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Hitul Gutka from Angel One Limited. Thank you, and over to you, sir.

Good morning, and welcome, everyone. Thank you for joining us today to discuss Angel One's Q4 FY '24 financial and business performance. The recording of today's earnings call and transcript will be uploaded on our website under the Investor Relations section. The financial results, investor presentation and press release are also available on the website. For today's call, Angel One is represented by Dinesh Thakkar, Chairman and Managing Director; Vineet Agrawal, Chief Financial Officer. We also have the senior leadership team of Angel One along with SGA, our IR consultant. The leadership team will give a brief overview of the operational and the financial performance of the quarter gone by, which will be followed by a question-and-answer session. Please note that there may be certain forward-looking statements made during the call which must be viewed in aggregate with the risks that the company faces. With this brief introduction, I now invite Dinesh Thakkar for his opening remarks.

Thank you, Hitul. Good morning, everyone. In the financial technology industry where innovation is the currency of progress, Angel One has stood as a beacon of excellence for 3 decades. Today, as we gather virtually here, I'm filled with gratitude for the journey we have traversed, the milestones we have achieved, the trust we have garnered among our clients. Our legacy is one of relentless pursuit of excellence, innovation and trust. Through this pursuit, we have established ourselves as a formidable player in India's fintech landscape, where our name resonates as a symbol of reliability and innovation. Our digital outreach has enabled clients located beyond metros and Tier 1 cities to access and consume capital market products. This democratization of financial services has been one of our pillars of growth, and we continue to deepen our roots into untapped opportunities. As we have reinvested in expanding our client base and offering them a more robust platform, we have witnessed very strong growth. I'm delighted to share that our average daily order have grown 86% between quarter 1 and quarter 4 of FY '24. In the process, we achieved peak order -- in that process, achieved the peak orders per day of more than 10 million. This growth is testament to the resonance of our vision and the effectiveness of our performance. With strong growth comes the responsibility to ensure a decent capitalization to sustain and fuel our expansion. In this spirit, we recently completed a capital raise of INR 15 billion, which will be primarily used for margin monies with stick exchange and the growth of our MTF book. This effort underscores our commitment to prudently manage our resources. We are extremely thrilled and humbled by overwhelming response our fundraise received from both domestic and foreign investors as a testament to the confidence they have in our vision and strategy. To all our investors, both existing and new, I extend my heartfelt gratitude for your invaluable support and belief in our journey. Turning to our operational performance. I'm delighted to share with you that Angel has once again delivered a historic performance during the quarter. We have experienced our highest-ever quarterly gross acquisition, expanding our client base to a new high of over 22 million. Furthermore, our client executed over 470 million orders during the quarter. This client surge, coupled with robust activity witnessed on our platform -- across our platform -- across our product and service offering, reconfirm the resilience and the scalability of our systems. At the heart of our growth story, live and unwavering commitment to client centricity, these ethos have guided us through our digital transformation journeys, enabling us to build a solid roster of clients, who not only transact with us, but also advocate for us. Each cohort acquired has consistently given us stable revenue every year. Our vintage client too, who had been with us for more than 5 years, continue to contribute very healthy revenues even today. With higher client acquisition year-over-year, their revenue contribution is consistent like the previously acquired cohort. The stability and profitability exhibited by each cohort and the continuous influx of new clients serves as a bedrock for our future growth. Our digital model not only enables us to penetrate deeper into market but also fosters long-term relationship with a younger demography, driving value creation and client longevity. Through this digital engagement, clients from every acquired year tend to become active and transact in one or more segment over time. For instance, about 54% of clients acquired in FY '21 became active over the next 4 years and continue to engage on our platform across multiple segments. It is heartening to note that even in the spirit of clients, who commenced their journey as a trader, an overwhelming majority of them eventually build long-term equity portfolio, thus realizing the virtues of investing in equity as an asset class. This journey of value enhancement from novice trader to mature investor is extremely encouraging and defines client longevity on our platform, thus ensuring sustained growth in lifetime value of the customer. It also motivates us to offer our clients other value-added services and partner with them in their quest for wealth creation. As we chart the course for the future, our focus remains steadfast to enhance client experience on our platform through superior engagement journeys and product enhancement to create value at every touch point. We continued our focus on further fine-tuning our KYC journey, which is the first point of client interaction with our systems. We undertook development on the Super App with the rollout of dedicated sections for option strategies, allowing traders to discover and execute predefined and custom strategies easily. We also released a dedicated option expiry section, which simplifies trading option on expiry days. To encourage creating long-term investing behavior, we enhanced journey for the cash segment as we introduced stock we get featuring a list of popular stocks, most traded stocks on the home page, a predefined watch list segmented to some predefined personas. Dedicated to revitalize client engagement and experience, our assisted business had been building a dynamic array of products. As a part of development, we are transforming the NHP application a universal platform for all our channel partners. Key developments currently being carried out include intuitive and intelligent features, empowering our channel partners for a better lead generation and management with clear call to action button and high degree of personalization, the platform acts as a personalized communication engine for our channel partners. In our mutual fund journey, clients can now customize SIP amount and dates, compare up to 3 mutual funds across all available parameters and track portfolio growth against indices. These innovations are driving significant growth in SIP adoption, reinforcing our position as the second largest player in incremental registered SIP. This underscores the effectiveness of our Super App strategy and the value it delivers to our clients. Last quarter alone, we registered nearly 1.4 million unique SIP, showcasing our commitment to guiding clients on their long-term investing journey and enhancing engagement on our platform. Efforts continued during the quarter to seamlessly integrate credit and fixed income product into our platform, which is currently undergoing beta testing with select clients. Having crafted the MVP for this offering and initiating rigorous testing to ensure reliability and effectiveness, we expect to scale up the operation over the next few quarters. On the AMC front, we have on-boarded the core leadership team, who have been working to get the final approval from the regulator for the swift launch. With respect to our wealth management foray, I'm happy to introduce to you the team led by Srikanth Subramanian as the co-founders of our Wealth Management business. Srikanth has extensive experience at Kotak Mahindra Bank in life insurance, private bank, including global wealth management and investment advisory and more prominently in the wealth-tech initiatives at Kotak Cherry. The co-founders offer decade of combined deep domain expertise across the function of wealth business and demonstrate impeccable skills to scale the wealth business with a sharp focus on debt-led models, while we will target the fast-growing segment of UHNI and HNI, we endure to progressively democratize this offering to the underrepresented segment and retail through differentiated digital offerings. During the quarter, we further solidified our management bandwidth with the on-boarding of Meenal Maheshwari Shah as our Group General Counsel, with a remarkable career spanning over 14 years, Meenal's expertise extends to working on diverse legal transaction, navigating complex legal landscape and providing insightful counsel on legal, policy and regulatory matters. Prior to joining Angel One, Meenal served as a Group Legal Director and Data Protection Officer at Lemmatree Pte Limited, a subsidiary of Temasek; led the legal counsel function at Essar and Times of India. We have secured the associate partner sponsorship for the coveted India Premier League IPL for 5 years starting in 2024. This sponsorship promises us extensive brand visibility through on-ground digital and televised media, allowing us to engage with wider audience, particularly in Tier 2 and Tier 3 cities and beyond. Our investments in quarter 4 FY '24 reflects our proactive stance in expanding our team, client base and technological capabilities to continuously prime our client experience. While these investments may impact short-term margins, they are crucial to our long-term growth and profitability. Let me now take you through some of our operational highlights. We on-boarded about 2.9 million clients within a quarter, staking up the total client base of 22.2 million clients. This serves as a testament to our commitment to operational excellence. Robust client activity grew a 35% sequential increase in total executed orders for the quarter. The ADTO on our platform continued its up trend, growing by 23% quarter-on-quarter to nearly INR 44 trillion. Looking ahead, we anticipate sustained growth requiring increased working capital deployment. Consequently, the Board has decided to defer dividend payout for the next few quarters to conserve resources, optimize our balance sheet and support our growth trajectory. Now Vineet will walk you through our financial performance before we open the floor to your questions.

Thank you, Dinesh. Good morning, everyone. As highlighted by Dinesh, quarter 4 of FY '24 has been a very strong operational quarter for us, as we achieved our historic best performance yet again with average daily orders growing by 32.3% sequentially to 7.73 million, taking our aggregate order count higher by 34.5% sequentially to 471 million in quarter 4 of FY '24. We clocked our highest ever quarterly gross total revenue at INR 13.6 billion, registering a 28% quarter-on-quarter growth. Gross booking revenue grew by 30% quarter-on-quarter to INR 9.2 billion. Gross booking revenues accounted for 68% of our gross total revenues. Within this, F&O continues to drive the gross booking revenue, contributing 85% in quarter 4 of FY '24, while the share of cash and commodity segments remained stable at 11% and 4%, respectively. Since majority of our clients are part of our direct business, their share in the net broking revenue stood at approximately 77%, while the balance, 23%, was contributed by clients acquired through our assisted business. Our volumes in the cash delivery segment continued to improve. Higher activity in this segment is an important lever for growth of our client funding book, which grew by 9.1% sequentially to average at INR 20.3 billion for the quarter. This led to a corresponding growth in the interest we earned on this book. The interest earned on client funding, along with the interest earned on deposits with exchanges, led to a 16.6% sequential growth in our total interest income to INR 2.5 billion, thus accounting for about 18% of the total gross revenues for the quarter. The ancillary transaction income linked to the turnover clients do on our platform grew by 34.7% quarter-on-quarter to approximately INR 1.1 billion, accounting for nearly 8% of our quarter 4 total gross revenues. Finance cost was higher by about 56% quarter-on-quarter to INR 556 million in quarter 4 of FY '24, due to a combination of higher average borrowings and higher cost of funds for the period. Higher borrowings were in line with the growth in client funding book and borrowings availed to fulfill margin obligations with the clearing corporations. The overall finance cost for the year has been within the anticipated increase, as envisaged last year, on account of incremental working capital required to manage the bank guarantee requirements for margin obligations. With every trading day as an expiry date for indices across NSE and BSE and growing volumes, the working capital requirement for broking businesses of our scale and size have increased considerably over the last few quarters. Employee benefit expenses, including cost of granting ESOPs, was at about INR 1.59 billion for the quarter, sequentially higher by 12% due to additional headcount, primarily in the wealth management business, ramp-up of our asset management business, data analytics, technology and product functions. Our other OpEx for the quarter clocked at INR 4.3 billion, being 33% higher sequentially, driven by 17% growth in our client acquisition, leading to an increase in onetime client acquisition cost and on-boarding cost. Other expenses for the quarter also include INR 227 million apportioned towards IPL associate sponsorship and related digital and media advert spends. Operating expenses were also higher on account of higher spends on cloud infrastructure in line with the growth of the business. Here, I would like to inform you that Angel One will continue to invest in scaling up its brand over the next few years. In the ongoing quarter, we intend to spend about INR 1.2 billion towards remainder of the annual sponsorship cost and digital and electronic media adverts throughout the ongoing IPL season. Our brand spend thereafter, for the rest of the year will be in line with earlier trends. However, such spends will help us to significantly amplify the brand across the country, giving us better reach to our target audience. Our consolidated EBDAT margin expanded to 44.8% for the quarter versus 44% in quarter 3 of FY '24. This margin remains within our guided range. The upfront onetime investment in acquiring more clients today helps us to grow the business going forward, thus reaping benefits of better operating leverage. Depreciation and amortization costs increased by 27% to INR 167 million in quarter 4 of FY '24 on account of augmentation of technology assets at our data center and disaster recovery site required to manage the growing client base and order volumes. Our consolidated profit after tax from continuing operations grew by 31% quarter-on-quarter from INR 2.6 billion in quarter 3 to over INR 3.4 billion in quarter 4, making this our highest ever quarterly profit. Our FY '24 total gross revenues and profit after tax grew by 42% year-on-year and 26% year-on-year to INR 42.8 billion and INR 11.3 billion, respectively. Period ending cash and cash equivalents increased to INR 98.4 billion on the back of increase in clients margin and cash generated from the business. Period-end client funding book grew to nearly INR 17.7 billion, compared to INR 11.5 billion as of March 2023. Consolidated net worth of the company grew to INR 30.4 billion. This does not include the recently concluded fundraise of INR 15 billion as the funds came in early April. As we continue to operate the business within our desired margin profile, our FY '24 return on average equity remains healthy at 43.3%. The funds raised via QIP have been deployed as working capital into the business. The current quarter will have some elevated costs on account of IPL, annual increments and new stock grants, which will have an impact on the margin of the business for this quarter. The ROE post the fundraise will also see a decline before gradually growing back with growth benefits of deployment coming in towards the end of the financial year. With this, I conclude the presentation and open the floor for further discussion. Thank you.

We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Swarnabha Mukherjee from B&K Securities.

Congrats on a great set of numbers. 2, 3 questions from my side. First, in terms of your broking business. So the major metrics, which is the number of orders we are doing in a day. If you could give us some idea in terms of this growth, how much of that has come from what you alluded in your initial speech that the number of days when expiries happening has gone up. So that must be one of the factors. What are the other factors which would have taken this number up for the quarter, including maybe client activation or existing clients trading more. If you could give some ballpark quantification of that, that would be very helpful. And going ahead, what would be your aspirations to take this number? Because we have already seen a sizable jump in the number from where it was, say, in FY '23. And should -- can it be -- can we see a similar level of traction going ahead? What would be your aspiration if I were to ask you on that? So yes, so that would be my first question. And also maybe an addendum to that is that if you could also give some color on what proportion of this number of orders that are coming in is coming from your engagement with BSE, that would be very helpful. So that is the first part. The other things of the branding spend that you have mentioned, does this also -- I mean, is it inclusive of the IPL-related costs that would be there in the P&L, if you could give some color on that? And I had -- sir, if you could also explain the pie charts in Slide #10, which you have highlighted. In particular, I wanted to understand that in the 2 cohorts that you have provided, FY '21 and FY '22, you have given a number which is close to around 50%. So 54% for FY '21 set of clients and 49% for FY '22 set of clients who have transacted. So what happens for the other close to 50% clients? So is there a scope of kind of accreting revenue out of them in the future? Or would they remain as inactive customers? And what broader message you'd like to give through this slide, if you could highlight.

Yes, sure. First, I will just answer in terms of increase in orders. If you see, when we started this financial year, we were clocking around 42 lakh order per day, which in quarter 4 was 86 lakhs. Parallelly, if you look, customers that we are acquiring was around 4, 4.2 lakhs per month, which by Jan and Feb we're acquiring around 10 lakhs clients per month. So this new set of customers when they come in, definitely, they are active. And what orders we get from our vintage clients and the new cohorts also are of a similar kind of nature where the -- when they are on-boarded within 10 to 15 days, they are active on our platform. So primarily, it is because we have acquired a huge set of customers much beyond growth that we regularly clock and due to kind of unlike vintage client also being active on our customer, as we've explained in Slide 9 and 10, combined with new set of customers, we saw activity going up. And second, proportion of order of BSE, we don't disclose that. But that is not a significant proportion. It is proportionate to whatever order we clock on NSE and all that. It is not that BSE has contributed in a big way, although we have a decent market share across NSE/BSE and all other segments. On branding spend, yes, what we have shown, it includes IPL. Vineet would be a right person to walk you through this number. And on Slide 10 specifically, Amit or Vineet, you can take this question.

Sure. So Swarnabha, on the IPL spend, as I just spoke in the commentary, we spent about INR 22.7 crores in quarter 4, specifically in the month of March. This includes the proportionate share of the sponsorship as well as the spend towards media and digital adverts. So as you would be aware, we've won the bid for INR 82 crores annual bid for associate sponsorship. This what we are doing is we are spreading it across all the matches. So there are about 74, 75 matches to be held in IPL this season, of which about 13 were held in the month of March. So the proportionate share of that INR 82 crores towards the sponsorship cost has been booked in the month of March, along with the spends towards digital and media adverts. And the balance, plus the spend towards digital and media adverts, would be spent in the month of April, May and June across the entire season. That will be roughly in the range of about INR 1.2 billion or INR 120 crores.

Okay. So the remaining amount would be INR 120 crores, so nothing additional apart from the IPL?

Yes. On the IPL front, this will be the total spend. And thereafter, we will continue to spend on our brand as we do as part of our general spend. .

All right. So sir, just to clarify one. In Slide 9, you have given that for FY '24, branding spend was around INR 88 crores. So that number for FY '25, we can take INR 120 crores. That would be correct understanding?

That would be INR 120 crores only in the first quarter. This is across IPL. And thereafter, so what you can do is you can reduce INR 23 crores from INR 88 crores and spread it over the balance, say, 9 months to 10 months to understand what is the spend every month going forward in the future. .

Okay, sir. Got it. So understandably, sir, on this -- the margin outcome of 1Q would be, I mean, lower compared to your guided ranges. For the full year, are we confident to remain in the guided range?

Yes. So as I said, this elevated cost is going to be in quarter 1. But as we go through the entire year, the margins would be in the range of the guided range. And that's where we always advise our analysts and investors to look at our business from a yearly basis and not on a quarter-on-quarter basis.

Just to add over here, this branding cost and when we are acquiring more customers than what we acquired in previous quarter, it will appear there is an impact. As I always said, this is kind of an upfront cost. So -- and if you refer to Slide #9, we are clearly showing that all vintage customers across 5 years have given us revenue. So best way would be that when -- till the time this phase of growth continues and we are hopeful it will continue for many more years. Whenever in a quarter, we acquire more than what we acquired in previous quarter, there would be -- that will appear there's a suppression of margin. So that's only upfront-ed costs, which you have to, if at all, you want to know, annualize kind of an OPM that will help you to remove for time being. If you are taking it, you divide it by 5 years because your proportion 12.5% of due upfront-ed cost that we have taken because lifetime value of customer as shown in Slide #9, it is 5 years and beyond. So this is all costs that we are taking upfront-ed in terms of acquiring more customers and getting more market share is making our business model more stronger.

Right, sir. Got it. Sir, on the aspiration in terms of number of orders per day, if you could give some color?

No. Like as I said that till this time, we are able to acquire more customers and we are able to get revenue from our existing customers. The number of orders will grow. Now the given number would be like getting into forward-looking statements.

Okay. Understood. And if you could take my last one.

Yes, Swarnabha. So Amit here. I'll perhaps help you understand that slide. So are you able to hear me clearly, Swarnabha?

Very clear, yes. Please go ahead.

Okay. So Swarnabha, we have couple of messages that we are giving out here. One is if you know the NSE headline active client that you usually get to see at the end of the month which NSE publishes, you will see that on an average, Angel is about 27% to 28% active customers who are active on any given day in a rolling 12-month period. So that's the data that you see as a headline number. What we are trying to convey is that, that is not the right way to look at the active customers. The right way to look at is, how many unique customers are active over a longer period of time because not all customers become active in the year in which they are acquired, and they begin to test the market, they begin to test the platform, test the process, the journey and then they slowly begin to get active. So this slide that we are referring to actually shows that for an FY '21 cohort of customers that were acquired, close to 54 customers -- 54% of them became active over the next 4 years. And we looked at that for the subsequent year too, for the subsequent year's cohort customers. In fact, in the subsequent year, close to 50% customers became active in the 3 years that, that cohort existed. This implies that directionally, it can be far more than 50% because all these customers become active over time. And that is the power of the platform that we are trying to convey so far as Angel is concerned. And in that context, too, the other message we wanted to convey is, even for customers who are doing pure futures and options, over time, after having understood the market well begin to carry out long-term equity investment. And therefore, this slide actually shows almost all the F&O customers, and there's a very small portion of an F&O customer who have not gone into equity as an asset class. But an overwhelming majority of them, eventually go into equities, build a portfolio and therefore, stay consistent on the platform. Now imagine these customers, even after doing F&O, because they have built equity portfolio, one is they have tested the fact that when they do long-term investment, monies grow. At the same time, they're now going to remain sticky on our platform when it comes to engaging with that customer. I hope, Swarnabha, that is clear to you.

Yes. Sir, just 1 point. So the data shows that in both the situations that the count for number of customers in only cash is higher than what it is for F&O. So does that mean that people who are coming in a large part will actually only do cash and not F&O? That would be -- am I getting it right, sir?

So customers who -- the journey here is that, well, majority or at least some portion of our customers, when they come on our platform, the first point of engagement could remain an F&O. But eventually, they will also have equity. What this shows is F&O and equity. So the blue portion is actually F&O and equity. So around close to what, about 25% or 30% of them are F&O who are also doing equity. And close to another about 40%, 50% of them -- or 40% of them are actually doing only equity. So the point is not everybody is doing F&O. People who are doing F&O are also doing cash, and people who are in cash are only doing cash.

Okay, sir. Got it. Got it. I'll -- maybe we'll take this offline to understand this in a little bit more...

Sure, Swarnabha.

Yes. I just maybe 1 quick thing. There has been some news flows regarding regulators looking at the F&O space. This has come quite several times in the last 1 year. But any conversations you were having in terms of risk management of customers from the F&O side, if you can give some color?

Currently, if you see there is nothing concrete whatever, like a discussion we are having with regulators that has been implemented, and that is something like does not really concern us because there mostly focus is on not to lure a customer and not to kind of show wrong loss and profit statements and all that. I think that is quite old news now. There's nothing new that I have heard about.

[Operator Instructions] The next question is from the line of Sanketh Godha from Avendus Spark.

Sir, I'm listening to Slide #9 and the cohort analysis, what you have given. See, if I do a simple math there, the revenue earned in that year where you acquired the client and do revenue per client in that particular year, then I see there is a structural decline in the revenue earned per new client what you have acquired. If I do the math, that number is INR 1,860 for FY '20. That number is INR 700 for FY '24. Sir, just wanted to understand that incremental clients, what you are adding, the marginal revenue they are bringing is lean for the lower compared to what you are adding in FY '20. Sir, just wanted to understand that client addition really matters from a revenue growth point of view. Because incrementally, the revenue addition seems to be much lower for every client you add. That's my first question. And the second question that I have is that with respect to QIP INR 1,500 crores you raised, naturally it will result in a reduction in the working capital requirement. So I just wanted to understand how much borrowing costs will further come down in FY '25 going ahead with the fresh capital coming in. And lastly, to Vineet, if I understood it right, INR 120 crores is what you will spend on IPL. And that number will be a recurring number for next 4 years. That's the way I need to look at it, right? These are my questions.

Okay. So let me answer the first one. See, on a relative basis, always when you acquire a new concerned client from new territories or new demographies, always it takes time to optimize it. So what we look at is not that, okay, we want only customers who give like very high revenue. What we look at is what's the cost to acquire new set of customers. And if that fits in our model, where we say that whatever cost we take to acquire this customer would be able to give us an OPM of around 50% to 60%, we would like to go and expand. That is how all digital players have expanded their market share. Traditional brokers were stuck with high ticket size. But we thought that we can go into new territories, acquire those customers. If it is profitable, if the unit-wise economy is favorable, we should go and acquire those customers. So if you look at demographic change, which has happened across the year, we are now acquiring customers from Tier 3 and beyond. We are acquiring customers who are young millennials and Gen Z and all that. So these are new set of customers who are getting exposure to capital market. What we look at, if you look at our margins and all that, this is how we have expanded our market share, and there is a stickiness of customer, whichever year we have acquired, will continue to be on our platform for next year, following years, and we are able to cross-sell many products. So right now, it is too early to say what would be a lifetime value of a customer where we haven't sold all the products to this customer. What we look at, what the cost of acquisition and what would be lifetime value of a customer. With this cohort that we are acquiring also shows that lifetime value of a customer would be around in the region of 7x. In digital model, I feel that up to the level of 5.5x, 6x also, we are profitable and we can maintain these margins. With that approach, every quarter, we see what are the new kinds of areas that we can get into. This process has been going on since last 3, 4 years. So we try to get into new kinds of like channel, new kinds of demography, new pin codes and acquire customers. And what we see across year, they're able to give us a decent OPM. So we would not look at it on relative basis, we look at it absolute basis, what's the cost, what's the revenue.

A follow-up on that, Dinesh, just a small clarification. The number is INR 700 per gross client today. So any number below which you believe that it is unviable to acquire more clients, maybe say INR 400, INR 500.

When I see, INR 700, actually, whenever a year completes, client has not completed 12 months. Some client is acquired in the later quarter or some quarter. We acquired in the previous quarter. If I look at 12-month steady-state concerned revenue, there, we don't see any concern like big deterioration or big concerns.

Got you, sir. Fair. And if you can answer.

On your question on QIP, Vineet, QIP and IPL if you can take?

So Sanketh, on the funds raised from QIP, we've raised about INR 1,500 crores, and this will be deployed across margins with the exchanges and to grow our NPS book. In terms of the finance cost, that is a subjectivity based question because with the growth in the business volumes, the growth in finance cost will be there. But I would tell you that it would be in that same range of what we have spent in the last quarter as a percentage of the gross revenue, it's not going to be very different from that. But again, it depends on how we grow our client funding book and the volumes of the orders growth that we see for the current year. On the IPL cost, we commit...

Just I would like to add over here. Sanketh, this QIP was not to retire debt. It's the growth capital. We can see a huge growth, and we would like to deploy this capital for the growth of the business, be it margin trading book or increasing orders and all that. Yes, Vineet. You can take away.

Yes. On the IPL, the committed cost for the next 4 years is about INR 82.5 crores annual. And beyond that, whatever we are going to spend on digital and media adverts is over and above that. For this year, you are right, we have committed to spend almost like INR 143 crores, INR 145 crores over this entire IPL season, including the media adverts and digital ads.

Okay. Sir, one small clarification. INR 120 crores is excluding INR 22.7 crores you have already spent in fourth quarter, right? So for the full year, the cost will be INR 120 crores?

No. The cost of this entire IPL sponsorship and related advert spend is INR 143 crores as we see it today, of which INR 23 crores has been accounted for in quarter 4 and about INR 120 crores will be accounted for in the current quarter.

The next question is from the line of Prayesh Jain from Motilal Oswal.

Congrats on a good set of numbers. Firstly, sir, like the spend on IPL, now we've already almost in 1 month of IPL, how has been the impact of the spend that we are doing on this? Is it better? Is the experience is better than what we had thought or what we were doing without IPL? How has been the experience so far? That would be my first question. Second, in fact, just following up on Sanketh's question earlier. So if you look at that run rate has come off from INR 1,860 to INR 700. And even in the second year, when we look at it, it's come down from INR 3,400 to INR 1,500. For third year, again, it's down from INR 3,000 to INR 1,600. So that has been the declining trend. Whether is this a phase? Is this something where possibly, this is a number that we should look at? Or is there a scope for this to further go down? So the point that I'm making is the customers that we would have acquired in FY '24, about 8.8 million, they have given around INR 615 crores of revenue, so that's INR 700. So what would be the trade, number of trades that they would have given, whether that is a number that we should -- is kind of achievable or possibly further more downside can be looked at on this number. And lastly, just a clarification if you can give on the presentation Slide #10, what do you mean by when you say realized equity gain of INR 5.5 billion and unrealized equity gain of INR 18 billion. Could you just clarify this for FY '22, those were my questions.

Yes, Jain, thank you for the compliment, first of all. And now coming on IPL spend, although it is 1 month, but like broadly, we are looking at increasing visibility of Angel One across Tier 3 and beyond. And IPL is the best media to really see a jump up in terms of spontaneous recall or maybe people recollecting Angel One as a fintech player. So benefit of this would be a bit long term. I would say this will take some time for this visibility to kick in and result in some good numbers. But what we are seeing is that now, when we are running our digital campaigns and all that, acceptability and brand recognization is very high. And we believe that this will result in some business numbers. And for us, it is important to be visible across all tiers because mostly customers that we are getting is from Tier 3 and beyond. And cricket is a very popular sport across all gender, across all age group. . So initial numbers are showing a tremendous strength like visibility benefit that we have got. So we believe this will boil down to business numbers. So that's the main objective that we went for IPL, to get a good kind of like spontaneous recall and top of the mind recall from audience who was looking at digital stockbroking. So in digital space, what happens, there is space for 3 players. So we want to see when a customer, a prospective customer is thinking about stock broking, does he recall our name on the top? That means we will get a market share of 35% to 40%. He or she has to recall that, I mean in at least top 3. So these are lead indicators, which will help us at, okay, when this population of people who are having PAN account, Internet trading, Internet account and all that, which is around 50 crores to 60 crores, when they think about stock broking, are they thinking about Angel One? If the answer is yes, then we say, of this huge revenue pie that we are going to see in the next 5, 6 years, by default, there's a lead indicator to suggest that 3 -- like from 1 out of 3 is recalling Angel One name. So that is the purpose of this IPL and branding. Okay. Now coming to your FY '24, the way you're calculating we acquired 8.8 million, but revenue of this customer did not come for all 12 months. Okay. So if you see our most of the acquisition has happened in December, Jan and Feb. So they haven't contributed to total 12 months. The way we look at is that these are lead kind of like parameters that our data science team watches, that if you are getting this kind of like revenue in first month, second month, so they extrapolate what kind of a lifetime value or revenues we will get when they complete 12 months, and we have been perfect modeling that to the tune of like error of 1.5%, 2%. So clients that we have acquired clearly shows that they are profitable and they will fall within that bracket of breakeven of 6 to 7 months. They will fall in that bracket where we would be able to get an OPM of around 50%. So that is our main objective, to be very focused on business metrics. As a new pocket opens up and we see there is a huge potential in terms of increasing lifetime value, and our data science is able to extrapolate that trend, so we try to spend early, and we have been doing it since last 3, 4 years. That's the secret sauce that we were able to be successful in the digital modeling. Now we have perfected that modeling to an extent if we acquire a customer, we are able to predict what kind of revenue we'll get in the next 12 months. So then we work on digital. It fits in our OPM and given period and all that. We go aggressive on that market share. On Slide #10, Amit, you would like to take it forward on that?

Yes, I'll do that. So Prayesh, on the Slide #10, what we mean by realized gain is these are customers who have traded in equity or at least bought an equity and then sold in the course of the last 4 years. So customers who were acquired in FY '21, in the 4-year period that they had been in existence on our platform, some of them would have actually sold their portfolio in the course of 4 years and some have continued to hold the portfolio as of March 31, 2024. So the realized equity gain is that part of the gain that was bought and sold in the course of the 4 years. The unrealized gain is those that are getting held, continue to be held as on FY '24, and that value of the portfolio is actually worth INR 66 billion and a gain of INR 24 billion of that INR 66 billion. The INR 66 billion includes the gain of INR 24 billion.

Got it. But sir, when you say INR 7.4 billion, does that include only cash portfolio churn? Or does this also includes F&O? Or these are clients who are doing both F&O and cash, right? So would that mean that they would have also earned some profits on F&O and combine out possible combination of loss in F&O and gains in cash. Is that the right way to think about it?

No, Prayesh. So the purpose of that is to say that there is a realized equity gain. It's not about F&O. It's pure equity gain. The intention here is to say that customers who are doing F&O are also doing equity, and they are experiencing gain. That's the purpose of this slide.

So the reason is that, okay, like there is a concern in the market that people just do F&O. What we want to say is that young population is always attracted towards quick money and now that once they're unable to achieve something successful in F&O, they stop investing. They move towards investment. And once you move towards investment and you see some kind of like profit, would be sticky on our platform because across all that kinds of like life cycle, when this person is thinking about saving instead of going to a bank and putting money at 6%, this person has seen the benefit of equity appreciation. This person will remain and put all kinds of lifetime saving in equity market if they learn how to really deal with mutual fund, equity, portfolios and all that. So we are seeing early signs where we are seeing customer who started the journey as a trader are also moving towards equity and creating a portfolio.

Compliments on the amount of data that you are disclosing, I think this is helping us understand the business more granularly.

The next question is from the line of Nidhesh from Investec.

On the corporate structure changes that we announced in the 1 or 2 quarters back, is there any update on the regulatory approval of the corporate structure changes that we are planning to do?

Vineet, you would like to take this question?

Yes. So no, we are still engaging with the regulator in terms of making them understand the entire structure. So no update as of now.

Sure. Secondly, what is the guidance for EBITDA margin? Are you saying that we will be in the guided range of 45% to 50% for full year FY '25 even accounting for -- even after accounting for IPL cost?

Yes. So now over here, like as we -- as I said that if you look at like increased costs in acquisition and cost that we take in IPL, it has a huge benefit. But if we stagger it for 12 months, we would be within this range of 45% to 50% OPM. And only impact would be other businesses that we are building that can have an impact of around 1.5%, 2%. Vineet, you would like to elaborate that?

Yes. So what we envisage is that we will be in that range of about 45%, 47% for the next year, but there will be an impact of about 1.5% on the new businesses that we are building across AMC and Wealth. So you can take our average margin profile to be in the range of about 45% for the next year, 43% to 45%.

Sure, sir. Lastly, the new businesses that we are incubating, how do we think about from a medium-term perspective, let's say, 3, 5 years? What sort of contribution of all these new -- excluding broking business can contribute to our P&L?

We see huge kinds of synergy and this all businesses that we are building are complements to what we are doing until now. So when we're talking about acquiring customers, as we look at the prospect, if you look at that we should be -- our services should be available across all segments, be it mass affluent, HNI, UHNI and all that. So it will take its own time for us to build all that businesses to a level where we say it will have a contribution in terms of revenue profits and all that. But all said and done, we are seeing a huge opportunity in both the businesses, particularly wealth management, where we have got very senior kind like co-founders who know their business, and we are excellent at in terms of technology and all that, we see a great future. But for this 1 or 2 years, I think broking is doing extremely well and it makes sense for us to invest in future trends.

But any number you want to put like 5 years out X percentage of revenue may come from the new businesses?

As we said that in terms of expenses, this will have an impact of around, say, 1.5% on the OPM margin. But in terms of building a business too early right now, Srikanth, you would like to give a brief on this wealth management?

Yes, sure, Dinesh. Thanks, Nidhesh for that question but as Dinesh mentioned, at very early stage. I think the team has just sort of come on board about 1 month, 1.5 months back. We do have aspirations to create 2 large verticals. One is to cater to the ultra-high net worth. In other words, $5 million plus, which is something that the team has almost 2 decades of experience in sort of catering to. We think that there are huge opportunities available there in terms of cost overheads that can be brought down, using technology, and that is one of the reasons why we are super excited being part of this family, which is very efficiently use technology. And the second, which I think is where a lot of interest also lie for all of us to create, is the affluent or the energy merchandise as we call, where there is a lot of wealth available for us to take all our trade and craft that we have taken so far for the ultra-rich to the next level of emerging rich in India. And I think that reach and width is not possible if we don't marry the right domain and right tech. And that is how we are trying to build. As far as some guidance is concerned, very early days, I think over the course of some of the other calls that we will have and we will interact, we will have a little more guidance. We are also awaiting the necessary regulatory approvals to come in place before we hit the rubber on the road. So we will keep everyone posted.

We'll take the next question from the line of Jayant Kharote from Jefferies.

Two questions. First is on the F&O market, broader market in general, wanted your view sir. We've seen lot of HFTs are sort of increasing and if you track the NSE market for the share of co-location, these trades is now almost 60%, 65% in the equity derivative segment. The other, we had seen low-latency prop traders were making profit, but retail still got to keep some. But with the HFT sort of increasing and the outlook is much, much larger players coming in the market in the next 1 or 2 years. Do you think the retail profit pool can shrink meaningfully and then the spreads on these 5 products can come off meaningfully and that will have, of course, a knock-on effect on overall retail volume? So would love to hear how is your view of these 2 problems, specifically because NSE is also adding a data center in the New Mumbai? So that will open up much more co-location track. There is a regulatory sort of arbitrage between having access to those as per retail business. So just wanted your view on this one, and I'll ask my second question after that.

See, when we look at F&O, there are 2 sides of trade is executed. One side is core retail, and second side is HNI, HFT and FII's, who are putting their trades. So when we are talking about retail, second leg is executed by these players what you're talking about, HFT or co-location or kind of like FII's. So retail is not impacted. You see market share of retail, almost it has become -- remained constant. That does not fluctuate in a big way, would be in the region of 45% to 44%. So we take a part of market share from this segment. We are not into HFT. We are not into co-location business. We are not into kind of like arbitrage desk. So whatever volume you are seeing, it is purely because of retail participation. So what we are seeing is that retail in India is really taking loss of interest. They want to participate in capital market. And when they are participating, that is a segment that we are aiming at, and we are seeing that we are able to increase market share. But if you look at retail, that what is needed to come in this market, we are saying you will need an Internet connection, smartphone or any other device, and you should have a PAN account and reasonable saving where you can start your journey investing in equity markets. It can be as low as INR 500, INR 1,000, INR 2,000, standard SIP mutual fund, slowly as you progress in your life, they try out different, different segments, F&O, cash, commodity and all that. So we are seeing a huge opportunity, but potential is huge. Now when a larger player comes in this market, they enable larger market. They enable wider market to come in and participate. And we, as I said, that being recognized as a fintech player where we have a kind of incremental kind of like market share on this incremental acquisition that we do to the tune of 23%, 24%, we are beneficial because our model is very different. Customer on our platform slowly evolves to higher ticket size and move towards kind of like area where he wants to invest in equity, mutual fund or maybe later on go towards wealth management product. So we feel that introduction of larger players is going to help expand this market. When we have such a big population who have reasonable saving, what's the reason they're not going to the equity market? Because of lack of awareness, so they are concerned about loss of things which must have happened in the past. So we always feel that a new player coming in with a big budget is going to expand this market, and that is going to help us increase market share. And on your first part.

Dinesh, sir, your audio is not...

Yes. Can you hear me?

Yes, I can hear you now. Please proceed.

No, I have completed my answer. Is there anything else?

Actually, my question was more about product profitability. Because we have limited products in the F&O market, right, 5 products. So because I was more worried that the product profitability of the spreads will become so thin that for the retail players basically, does this lead to fatigue?

No. Currently, we are not seeing any kind of like price pressure or any fatigue in terms of product that we are offering. The retail is just playing on like direction of the market. They buy call or sell -- this thing, buy put. Beyond that, their activity is limited. So what we do is that we try to design certain kind of like product journeys, where they are able to understand this better. When it comes to pricing, I don't think there is any price pressure. In fact, there's a concern of like opportunity for us even charge for cash segment. Right now, we are looking at kind of a revenue that we get from customers that are on-boarded. It's quite decent enough for us to justify our cost. We are not charging on cash segment. But if you want, we have a huge volume on the cash segment. If you want, we can charge it also. One of the competition or few of the competition in fact, are charging on cash segment. But we are seeing there's a huge kind of like revenue that is generated to other segments, we are okay keeping that at zero price.

Okay. Sir, second question is, if you could explain the journey on the bank guarantee replacement. How has the -- if you can tell...

I'm unable to hear you.

Sorry. Am I audible, sir?

Yes.

Yes. Sir, if you could explain what is your average daily clearing margin with the clearing corporation? What is the mix of bank guarantees in that? How much has been replaced? And then how is the journey over the next few quarters?

As we said that this QIP was raised for growth. It was not for the replacement of an instrument. But Vineet will be the right person to take this question.

So our current bank guarantee deployment across the clearing corporation is about INR 2,800 crores. And apart from that, we also avail intra-day facilities for the time differences for the settlement with the exchanges.

Sir, INR 2,800 crore is fully own funded now?

Yes. Since September of 2023, all bank guarantees that we have been deploying in the business are own funded.

Okay. Sir, sorry, just squeezing one last thing. This panel that the government is setting up with RBI, SEBI, there is some concern that the bank guarantee limits may be sort of difficult to get from banks. Anything you're hearing or are banks being a little more cautious in extending limit?

No, we've not faced any kind of difficulty in availing bank guarantees.

The next question is from the line of Pallavi Deshpande from Sameeksha Capital.

Yes, sir. Just wanted to understand on the -- we've seen on the AMC side, the peers go ahead. I mean, I understand it's the approval side. Were they faster in filing the approvals, and that's why that I just wanted to understand because we've been leaders so far in everything.

Is Hemen there on our panel right now?

Sorry, Pallavi, can you repeat the question? We will take it. Hemen is here. Hemen, our CEO is here. Pallavi, if you can repeat your question, we couldn't hear you.

Yes. So just on the AMC side, I understand you mentioned about some approvals pending. But we've seen our peers actually launch that ahead of us. So wondering were we late in filing the approvals? Are we behind them in filing them? Or how exactly how it has happened?

Yes. So see, on the AMC front, we are currently undergoing the process of getting the approvals. While there is no regulatory TAT on when we'll get the approval, but I can just say that we are progressing well on that front. With reference to competition. See, I would not like to comment on any particular player. But let me tell you, as compared to the general industry trend of getting the approval, we are very much in line with where we are progressing currently. And so nothing much to disclose on that front.

Right, right. Second was on this -- you mentioned about the unrealized gain slide, where you mentioned about the client making. Is that post brokerage or pre-brokerage? Equity gain of INR 5.5 billion for the F&O client.

Amit, would you like to take this?

Yes, I'll take it, Dinesh. So Pallavi, this is the net realized gain. This is after all expenses for the customer. So the customer has made a net gain on this portfolio. Either he has realized it by selling off and therefore, it is called realized gain. And if he has not sold it and holding it, it is called unrealized gain. So it is the gain to the customer after setting off of the cost of acquisition of those assets.

Right. So after the brokerage expenses?

Yes, these are all post charges.

Right. Okay. Right. And just lastly, this is the last question. So on the advertising spend, we've seen a significant ramp-up even excluding the IPL which is triple right, that spend excluding IPL. So just to be clear, could there be a regulatory backlash given this very high this thing on the IPL side?

Pallavi, we were always below average spending on branding and all that. So if you look at like the last few quarters, it has been almost like been constant, except for we're getting into IPL sponsorship.

Right. Now just given how much concern was there by SEBI. I mean, like you said, there's nothing much they can do but given the concerns that...

There is no restriction like that.

The next question is from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited.

First question is on the Page #9 presentation, where you have given the vintage clients. So you have given the margins, excluding the branding spend, it's more or less flat over last 3 years. Can you give a margin excluding the branding and the client acquisition cost. Just to understand that once the vintage clients revenue comes, the vintage clients margin is how it increases over the years? That's my first question. And secondly, on the wealth management, so you have mentioned that the cost will increase next year. So will our business be similar to the other wealth management companies where we'll be having a large pool of RMs and the physical, is more of an offline business or being a technology player we'll be doing something differently on the wealth management side also and leverage our technology and also our existing 22 million customer base. That's my 2 questions. And just 1 small bookkeeping question. What will be the ESOP cost next year?

So on sales costs, we don't really disclose the sales cost. But I think we have been incurring this high sales cost since many quarters. that will give a great sense in terms of what our OPM has maintained across all these quarters. Maybe there is a component when we ramp up our sales, there is some kind of depression but as revenue kicks in, we have seen that margin will push up. Branding, we get separately because of the new exercise we are doing. So for all analysts to understand that, okay, what is this cost so that you all are aware that how this would be shaping up in maybe 3, 4 quarters. So vintage-wise clients already, we have given kind of like what kind of revenue we generate. So you see there is kind of like very less drop in customers we acquired even pre '20, FY '21 and FY '20 and '21. So if you take the sales cost, as you say, this chart clearly shows that there's a lifetime value of 5 years and beyond. After 5 years already, you can see the data. So whatever sales costs we do, it has to be apportioned for 5 years. But exact numbers, we don't reveal. So I would not be able to help you on that. On wealth management side, I will ask Srikanth to take it over. But ESOP, Vineet can give you more clarity.

Yes, sure. So for the next financial year, our budget for the ESOP cost is about INR 100 crores, of which about INR 50 crores, INR 52 crores is the carryforward cost of the ESOPs that have been granted over the last 2 or 3 years, and about INR 50 crores will be the cost, which will be incurred towards the new grants that we are going to do in this year.

Srikanth, if you can take model and differentiate it.

Yes. In fact, Dixit, thanks a lot for the question. I think it's a fair question. But in terms of your question also alluded to the answer, the answer is yes. We envisage a deep integration between domain and tech. I think at least, we believe the next 5 and 10 years, the right to win in the ever-expanding wealth management landscape will be by people who can invest in technology in a way where you can take technology to much wider space. I think wealth management in India so far has been more about going deep. We at least in India we believe that it will now have to be played both in terms of debt, which is where high quality domain knowledge comes in and in terms of width, which is where technology comes. So example, there would be over the next few years, many products that could be available in a fractional manner. We've already seen white papers and circulars around fractional REITs. We are already seeing similar fractionalization across products. So while the team has a deep insight on what the ultra-high net worth clients require, and we will continue to service them. We will use technology for that space to bring OpEx down. Because one of the things that we see is most of the cost models for current wealth management funds are built keeping in mind revenue models, which are completely changed. So revenue model that over periods of time being dis-intermediated, have moved from upfront to a very back-ended kind of revenue model. So we believe that the usage of right technology can enhance productivity. But we also think that large investors may not be 100% ready to fully consume everything without high-quality RM. So we envisage the right mix of an omnichannel kind of a requirement for a client. And the next customer segment, which is the HNI and the affluent, we will be present in both, or at least that's the plan, in terms of having good quality RM, dispensing good quality wealth services, and also using the technology leverage with the parent partners here in Angel One create interfaces across website, which is able to give customers the right services. So the idea is a right mix of domain intake to be able to capture both depth and width, Dixit.

Next question is from the line of Aditya Sharma from Aditya Birla AMC.

Just wanted to understand the MTF book has declined quarter-on-quarter from INR 1,980-odd crores to INR 1,770 crores, while the market has been buoyant and especially the cash market has been quite buoyant last quarter. If you could just help us understand, I know it's a balance sheet item, probably it was reflecting on the date, 31st March. But I just wanted to understand the reasons for the decline.

Yes, sure. So MTF book was also rising proportionate to our customer base and the volume that we did in terms of number of orders. But as I said we realized that it is going to a point where we need more capital, that is where we have put restrictions on customers who are availing this margin trading. So that's the reason we did QIP and all that so that we are well capitalized to ride this trend of kind of like growth in this MTF book. So we took a pause, now we have restored back to normal, you will see a growth in MTF going forward. .

Okay. Okay. Any aspirations from your side in terms of in next 2 years, can we do around INR 3,000 crores of lending in terms of MTF by the end of FY '26. Is that a reasonable assumption to make?

Yes, it is a reasonable assumption. So like already, as I said, that, that said, we were around INR 2,100 crores, INR 2,200 crores of MTF. So to get to that INR 3,000 crores is like possible. It is not a difficult target, aspirational target will be higher than that.

Sure. And also, sir, in terms of margins, when you have provided the breakup, so there has been significant improvement in terms of the margins from the AP business, so around 62-odd percent. So just wanted to understand if -- what's the reason behind? And is it something structural? Or is it just for the quarter?

No, no. It is structural. I think I would ask Nishant to give brief on this AP business.

Yes. So what has happened is that we were essentially having an omnichannel play, whereby a lot of engagement with our existing sub-brokers was through digital means. And we were also last year, largely not acquiring new sub-brokers. So any expense on account of sales would not have happened. And therefore, what you're seeing is a slightly, I would say, exaggerated version of what the usual margins would look like. Going forward, as we kind of start on-boarding new sub-brokers, and we start incurring some of those costs. Plus, as we unlock new regions, in particular, rest of India, where the existing presence or the existing contribution to the revenue is not that strong. I think some of these costs would also come into play and therefore, the margin that you're referring to would kind of sober down a bit. But yes, overall story is very robust and we would continue to kind of register the similar momentum that you've seen last year going forward.

Got it, sir. Just a follow-up on this. So how are we progressing in terms of the AP addition? If you could share some bit of color on that, that would be helpful.

So there has been a very, very strong interest ever since that we have restarted that process. However, we have been a bit choiceful in terms of the kind of partners that we would like to engage with. We have kind of enhanced some of those screening parameters and ensuring that people who are coming on board are coming on board with a certain persona. And therefore, the idea is that going forward, we would like to onboard higher-quality sub-brokers and who can be kind of contributing meaningfully to the client addition and be a long-term partner along with us.

The next question is from the line of Aravind R from Sundaram Alternates.

I would like to understand like what are our aspirations going so far in terms of client addition maybe for the next few years? And what is our aspiration in terms of improving TAT to make the client act, like just how you mentioned in the call, it was mentioned in the call that like 50% of clients is to become active in 5 years now, like it has come down to 3 years.

Aravind, your voice is bit blurring. So can you just...

Sir, Mr. Aravind, I would request you kindly use your handset in that case, please?

Yes. Okay. Can you hear me now? Is it better?

Yes, sir. Please proceed.

Yes. Sorry for the disturbance. What is our aspiration in terms of client addition? And what is our aspiration in terms of improving TAT to meet the client TAT to like how the client is becoming active, there used to be like 5 years and now they have come to about 3, 4 years. Is there any further improvement possible there? And what are our aspirations in lending and deposits business that we have mentioned either in terms of penetration among existing clients? Are there any aspirations in terms of disbursement by FY '25 or '26? And another question is on considering the IPL acquisition for 5 years, will this expense will recur for the next 5 years?

Yes. So our aspirations on this client addition, as we always say, being the digital player, we would aim to get a market share of around, in new acquisition, to the tune of around 35%. That is where we feel that a digital player should position themselves. So there's an aspiration kind of like we have that whatever client, new client come to market, we should be aspiring to get to that market share. Progressively, we are inching towards higher number every quarter and all that. So that is a positive thing. In terms of offering customer a multiple service, we believe time has come that we have to leverage our like Super App platform, where we offer multiple services to customers to increase their lifetime value and engagement on our platform. So because of that, we will see lots of kind of an active customer. As you refer to Slide #10, we have clearly shown that when we acquire a customer across years, they become more active on our platform. So Amit, if you can take that point, that would be helpful one side. On lending side, Saurabh can take that platform. And I will just complete IPL and then hand it over to Amit and Saurabh. On IPL, it is not about recurring cost. It is about, as I said, that we have an aspiration to acquire -- to get a market share of new acquisition to 35%. And as I said, in digital business, lead indicators are that what kind of recall people have for your brand. So we want to see, we do lots of surveys and exercise to see our spontaneous recall for our brand and top of the mind recall when we are asking them, which is a broking firm you are going to open. So there should be Angel One name in that. That's the lead indicator that we would be able to reach that market share of 35%. So this IPL is more about visibility, about that recall, about that spontaneous recall that people should have. If they are thinking about stock broking, Angel One should come in their mind. So Amit, if you can take over for this activity of customer, then Saurabh can come in.

Aravind, so as I understand, I guess you also want to understand how the customers will evolve over time, right? If that is the question, then this slide actually says that in about 4 years' time, not just -- I mean we are comparing this to -- or we are actually kind of gearing the discussion towards the active customers. And we are seeing that notwithstanding what NSE reports as the total number of customers were active in a given year, what we are seeing is that when we see a certain cohort of customers that we acquire in a certain year, how many of them -- how many unique customers of them actually become active over a period of time. And therefore, this data actually represents that, that in FY '21, whatever customers we acquired in this case, 2.4 million, 54% of them became active over a period of 4 years. And so when we now revisit this data in the following year, I'm sure we will see a larger number there. And similar is the subsequent cohort of customers that we acquired. So I hope that addresses your question, Aravind.

Yes, sir.

Okay. Aravind, I'll give this to Saurabh to address on the lending and deposits aspirations.

Aravind, I think your question on lending is what is our aspiration in the next couple of years, right?

Yes, sir.

Yes, so lending is largely the biggest area in financial services in India. And we also have very high aspirations there. At the moment, we are in beta testing phase of the lending product and the experience for our customers. And as soon as we are out of it, we'll start to aggressively build this vertical. In the next 2 to 3 years, you should see a very large lending player from our side, the lending institution play. And in terms of deposits also, I think most likely this quarter or early next quarter, we should be out with our deposit offerings. There, we'll have tied up with few banks and NBFCs to offer their corporate bonds and FDs.

Sir, any numbers you can give in terms of penetration you would like to see in few years or like the quantum of business you would like to see?

So this question is pertaining to overall penetration, right?

Yes, especially with respect to new business, yes.

New business -- yes, yes. Saurabh, take it.

Mining the existing clients [indiscernible].

Yes. I think as of now, we are still in the early stages of the business, right? The aspiration is quite large, but too early to give out a number right now in terms of the penetration that we would hit.

Yes. Just one clarification like so I understand the IPL is important. I'm just trying to understand will this expense like continue for like FY '26, FY '27 also, that's what I'm trying to understand.

See, Aravind, if you look at IPL spend as our base revenue will increase, so this spend would be a very small amount compared to what we are spending today. So we are spending this so that we are able to gain market share. So when we see our growth rate and if this organization becomes 3x of what we are in 5 years, the IPL spend would be quite small and insignificant.

Ladies and gentlemen, due to time constraints, that would be the last question for today. I would now like to hand the conference over to Mr. Dinesh Thakkar for closing comments. Over to you, sir.

Thank you for joining us on the call today. I hope we were able to answer your queries satisfactorily. Should you require any assistance, please feel free to contact Hitul Gutka, Head of Investor Relations; or SGA, our IR advisers. Good day.

Thank you, members of the management. Ladies and gentlemen, on behalf of Angel One Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.