Central Depository Services (India) Limited (CDSL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the CDSL Q4 FY '24 Conference Call hosted by HDFC Securities. [Operator Instructions] Please note that this conference is being recorded. Ladies and gentlemen, please note that CDSL does not provide specific revenue or earnings guidance. Anything said on this call, which reflects CDSL's outlook for the future or which could be constituted as forward-looking statements must be reviewed in conjunction with the risks that company faces. I'll now hand the conference over to Mr. Amit Chandra from HDFC. Thank you, and over to you, sir.

Yes. Thank you, operator. So good morning, everyone. On behalf of HDFC Securities, we welcome you all to the CDSL Quarter 4 FY '24 Earnings Call. Today, we have with us the management team of CDSL represented by Mr. Nehal Vora, MD and CEO; Mr. Girish Amesara, CFO; and other senior leaders. We will start with a brief overview of the quarter by Mr. Nehal Vora, and then we will open up for the question-and-answer session. Thank you, and over to you, Nehal, sir.

Thank you, Amit, for the introduction. A very, very good morning to everyone and thank you for joining us today to discuss CDSL's financial results for the full year and fourth quarter of the financial year '23-'24. We've provided a comprehensive investor presentation on our website for your convenience. I'm joined by the CDSL Group's leadership team today, and we're happy to share our achievements with you. But before we dive into our company's performance, let's take a look at some key aspects of the securities market. Starting with a broad capital market landscape, the equity turnover has seen a significant increase of more than 50%. Particularly noteworthy is the fourth quarter, which experienced a 126% growth on the year-on-year equity turnover marking it as an exceptional quarter for the entire securities market. As for CDSL, this has been a special year for us as we celebrated our 25th year of existence. In line with this celebration and as for the momentum of growth in the capital markets, we have also seen an increase in the number of demat accounts opened, about 1 crore plus demat accounts have been opened in the fourth quarter of '23-'24, which is the highest in any quarter since our inception. These kind of achievements are a testament of the growing trust in the Indian capital markets. Our financial performance reflects the trust and efficiency in the capital markets. As a part of our performance, the Board of CDSL has recommended a final dividend of INR 19 per equity share, and a special dividend on account of our 25th-year anniversary celebration of INR 3 per equity share, totaling to INR 22 per equity share. All this is subject to shareholder approvals. Coming back to the trust in the Indian capital markets to further enhance this trust and market efficiency, we've introduced several initiatives in the past year. These include the optional T+0 settlements, easier with registrations for basically alternative investment funds and the foreign portfolio investors, the facilitation of ASBA in secondary market, the electronic consolidated account statement in 23 languages and multilingual services on our website at -- which is all free to the market. These initiatives are aimed at promoting the inclusivity and accessibility of all investors. As we transition from our 25th year and move to the next phase, we remain steadfast to our commitment towards our efforts towards enhancing trust in the financial ecosystem and empowering the Atmanirbharta. I would like to express our gratitude to all our stakeholders, basically SEBI, and all the other regulators, the issuers, the depository participants, the beneficial owners, the employees and all other market participants for their support towards CDSL. I would also like to extend my heartfelt appreciation to our investors whose trust continues to drive us forward. Our unwavering focus remains on creating value for all our stakeholders and enhancing the Indian securities market to the next level. Thank you for your continued support and trust in us. I will now hand it over to Chief Finance Officer.

Thank you, Nehal. Good morning to everyone. Speaking on quarterly performance on the consolidated basis, total income for the quarter ended March 2024 has increased by 86% to INR 267 crores as against INR 144 crores during the same quarter during the previous year. The net profit for the quarter ended March 2024 has increased by 105% at INR 129 crores as against INR 63 crores for the same quarter during previous year. For the full financial year, on a consolidated basis, as on 31st March 2024, the total income has increased by 46%. [Technical Difficulty]

Ladies and gentlemen, management line has been dropped. Stay connected. We are connecting with the management. Ladies and gentlemen, management's line has been connected.

Okay. So I will restart the financial number once again. Speaking on quarterly performance on a consolidated basis, the total income for the quarter ended March 2024 has increased by 86% to INR 267 crores as against INR 144 crores for the same quarter during the previous year. The net profit for the quarter ended March 2024 has increased by 105% at INR 129 crores as against INR 63 crores for the same quarter during the previous year. For full financial year '23-'24, on a consolidated basis, the total income has increased by 46% at INR 907 crores as against INR 621 crores for the previous financial year. The consolidated net profit has increased by 52% to INR 420 crores as against INR 276 crores during the previous financial year. On a stand-alone quarterly basis, the total income has increased by 82% to INR 205 crores as against INR 113 crores for the same quarter during previous year. The net profit on a stand-alone basis for the quarter ended March 2024 has increased by 89% to INR 97 crores as against INR 52 crores for the same quarter during the previous year. Speaking on the stand-alone financial year '23-'24 numbers, the total income has increased by 37% to INR 743 crores as against INR 544 crores during the previous financial year. The net profit on a stand-alone basis has increased by 34% to INR 363 crore as against INR 272 crores during the previous financial year. Now I shall request Sunil Alvares to give an update about the operation of the wholly-owned subsidiary, CDSL Ventures Limited. Over to you, Sunil.

Good morning, everyone. I'm pleased to report the figures for CDSL Ventures Limited. The total operational income increased by 65% for FY '24, okay, as compared to FY '23. That is -- it was at INR 169 crores as compared to INR 102 crores for the previous year. The other income increased by 62% from INR 11 crores to INR 19 crores. As a result, the total income increased by 65% from INR 114 crores to INR 188 crores. As far as expenses are concerned, there was an increase of 54% in the expenses in FY '24 from INR 49 crores to INR 76 crores. As a result, the profit before tax increased by 72% from INR 65 crores to INR 112 crores and the profit after tax increased by 76% from INR 48 crores to INR 86 crores. With this, now I'd like to open the floor for question and answers.

[Operator Instructions] First question is from the line of Swarnabha Mukherjee from B&K Securities.

Congratulations for a good set of numbers. I have three questions. First one on the number of folios. So I just wanted to understand from you that the number of folios -- billable folios, how it has moved between FY '23 and FY '24? If you could give some color so that we can understand how the annual issuer changes can be from first quarter onwards. That is the first question. Second is, in terms of the 2 opportunities, which might give us some incremental traction on the top line front, just wanted to understand on the unlisted companies, the recent regulation if you had been -- if you could give us some idea about what opportunity sizes we were looking at, what could be the number of -- potential number of companies that you can target for this financial year and overall opportunity side. I understand that it's a moving target, but at the current standpoint if some idea you can give. And thirdly, on the insurance -- e-insurance side with the new regulation, how do you look at the landscape? And what could be our potential opportunity size?

So the first question is a forward-looking statement. So we'll not -- we don't give forward guidance. So I would not be able to give an answer. The point in question is relative on the folios, which have happened in the previous financial year, which are get billed to the companies in the first quarter. So once the first quarter results, whatever would be announced, you will have some perspective at that stage. On the second question on the unlisted company. As I have said in my last investor call also, the deadline is September 2024. And it has conditions of private companies, which have a turnover of INR 40 crores or share capital of INR 4 crores. But only when these companies would like to either raise capital or transfer any capital that's the time the demat will be required to be done on a compulsory basis. So it will have to be wait-and-watch because there are these conditions only when they get triggered, that's the time the demat opportunity will come into play. It is not kind of a simple rule. It has certain ifs and buts, so only when they -- all of them get satisfied it will move. So it is difficult to predict what will be the population at this stage. We'll have to wait and watch as the further quarters move forward. On the insurance side, there has been a few amount of changes, but it's kind of really work in progress. We have a full team now looking at our insurance repository. I've spoken about it about 2 or 3 quarters before. So we have now a team in place. And we have basically the right building blocks to ensure that this kind of opportunity would translate into business as we move forward.

The next question is from the line of [ Prakash Kapadia ] from Spark PMS.

I have two questions. If we could get a sense of what is the mark-to-market gain in the other income for the whole year? And secondly, what is the employee base as on date versus last year at a group level? And the impact of salary hikes and annual fee will be felt in Q1, right? Is that the right understanding? Those are my questions.

I'll ask the CFO to answer that.

I'll answer you on account of employees. This year, we have closed at 335 head count at CDSL. And last year, it was 279 employees. In terms of...

Okay. 335 is at the group level, right?

No, this is CDSL account. And mark-to-mark gain on investment is INR 37 crores as on 31st March '24. And the increment would be obviously factored in the next quarter for the next financial year.

In the Q1?

Yes.

The next question is from the line of Amit Chandra from HDFC Securities.

First question is on the insurance opportunity. So obviously, you mentioned that still not clear, but as in the regulation it mentioned that from 1st of April, all policies will have to be issued in the written format. So is it fair to assume that still there is ambiguity in terms of what digital format means? Or are we seeing traction in terms of the e-IA accounts being created? And also the market share that we have in terms of the e-IA account is still very low. So what's the strategy out there in terms of are we planning to be aggressive on the insurance side? Or it's too early as of now? And second would be on the cost side. Obviously, we have seen now a fairly strong jump in the revenues. But correspondingly, the cost also has been on the higher side and especially technology cost has been inching up especially in the last 1, 1.5 years. So from here on, is it all the investments in technology over or still we have to expand our technology capability in terms of handling the higher volumes?

So on the insurance side, it's the -- regulation is yet getting evolved. I think companies -- insurance companies are required to issue the certificates, other insurance policies in digital format, but what happens about the old? And so these are all things which are kind of evolving, and we will see. In terms of our strategy, it's the entire tech stack, which is -- which we are contributing to and hence, the entire move towards an online technological impact or footprint on the insurance side is where we propose suppose that we should be able to. But these are -- will take some time because kind of building on this will take the market has to really understand what are hidden nuances, et cetera. So it's basically an infrastructure company. So it takes time for it to build up. But we are very, very hopeful, and we have put in our people there, our technology there. So we'll see how it goes forward. On the cost, technology and people are the 2 main costs for CDSL. And this will continue to -- we will continue to invest in that because we have to ensure that the value proposition remains both in terms of infrastructure as well as the applications, which are being used. And to ensure that -- and these are all kind of going to -- it's in the process of change. So we'll have to continue to remain being invested. Though it's -- future questions, I will not be able to give too many details. But in terms of -- our focus remains on investing in technology and people as we go further.

And sir, one last question. So how do you see the regulatory environment because we have seen some regulatory tightening on the exchanges side. So in terms of the regulatory risk, do you see any kind of risk in terms of pricing because we have been doing so well on volumes? So is there any kind of risk that you see on the pricing side?

I will not able to give a definite answer here because I think this is, again, in the future. It's also contingent on what the regulators think. But I think the cost -- the pricing is approved by SEBI in case of depositories. So it's taken on record and then it's taken forward from there. So I think we'll see how it goes forward.

The next question is from the line of Rushabh Shah, RBSA Investment Manager.

Sir, talks of single demat for all types of investments have been going on since long. But based on, say, your discussion with various authorities, what level of discussions are going on, sir? Can you see any light in the next, say, near future, sir? Just wanted to understand your thoughts, sir.

So I think it's a process of regulatory change, everything happens. I think the account aggregator model has -- is in the process, is getting picked up. So we'll see how it goes forward, how that will get linked to a single demat. This is a very long-term kind of proposition. We'll have to be seen on how and in which framework format it will come in. Obviously, the ease of doing business is a focus of all the central government as well as all with the regulator. So it will move towards that kind of framework is what we all hope, but it will be difficult to really predict at this stage as to how and what framework format, et cetera.

And sir, how much incremental cost for stake we have to do if, say, this comes in the next 2, 3 years? Is there any ballpark range or any percentage of current investment that you have made? How big investments do we have to make for this to handle such volumes that may come?

It will be difficult to predict because we don't know in what format framework -- new framework, if at all, it will come. So first, we'll have to really observe what the framework, if at all it comes. And then we'll only able to really assess. Anyway, we don't give any forward-looking on future statements. So I would not be able to give you a specific answer on this.

The next question is from the line of Supratim Datta from AMBIT Capital.

I have three questions. One, on the cost front, have you had a significant jump in both employee and tech costs in the depository business, the standalone business? And if I look at the subsidiaries, there you may see jump in the tech cost in the fourth quarter again. So, if you could just explain to us what are the areas you are investing at the stand-alone level in terms of employee and tech and in the subsidiary that has the tech investment cost that would be very helpful. The second question is on the full year. I understand you don't give the folio numbers, but could you give us, what has been the growth in folios, this year FY '24 versus last year? And lastly, if you could give us a breakdown of the other income between CAS, e-voting and others that could be very helpful?

The first cost -- technology has been all around on infra, on application, on security, network. So it's an all round because with the increased volumes, number of demat accounts growing fast that needs to kind of keep a pace with that. But more importantly, we are an infrastructure company. So we will have to kind of preempt also the potential de-growth. So to ensure that the technology, but it takes time to build technology. And therefore, it has been all around. Similarly, there has been a similar kind of technology growth, which is seen in subsidiaries. CDSL has also seen a good growth. So we need to really invest in technology out there also. So people and technology is something, which will continue. And these things don't happen very fast. It takes time for you to invest in both these. So you need to really preplan in future -- in kind of really in advance as to how you will be investing in this. So that is reply to your first question. Your second question was...

The second question was on the breakup of other income. So other income largely consists of eCAS charges of INR 9.37 crores, e-voting charges of INR 4.42 crores and miscellaneous income in terms of user facility charges, account maintenance and like of such income heads.

Sir e-voting was INR 4.42 crores, right?

INR 4.42 crores, yes.

And my second -- I had another question on the folio growth. If you could give us that...

We don't give those numbers out in the big domain. So I'm sorry, we will not be able to give that.

Okay. And just one follow-up question. So you said you have made investments on the tech side, in infra, architecture, security and similarly corresponding employee investments have been made. So if I could understand that the current infrastructure in place, how many folios or demat accounts would you be able to service?

See, it is not just folios and demat accounts. There are a lot of new products. For example, T+0 has come in. That will need new processes and new -- and AIF processing has come in. So it's not just a simplistic answer that how many folios you can do or et cetera. It's a combination of various factors, which come into play. Also new kind of value propositions, which are being put into the system to make it easier for people to trade, et cetera. For example, eCAS is now in multiple languages. So these are some of the things. So therefore, it is not linked to the folios. It's linked to the overall processing with the system is expected to do with a lot of features, which are coming in, in addition to the load which has increased.

The next question is from the line of Prateek Shah, an individual investor.

Am I audible?

Yes, please.

Firstly, congratulations CDSL team for putting great set of numbers and also I would like to congratulate Nehal sir for this CEO [indiscernible]. I have a couple of questions from my side. Firstly, I mean some of them has already asked question on insurance repository, so is there any pricing structure which has been finalized for the CDSL that how the individual policy is clear in accounting, how CDSL would charge for the account creation or maybe for a maintenance of those accounts? And secondly, just wanted to understand that we are in the 25th year of cooperation and having enough cash in consideration for you..

Prateek, can you repeat the second question? Line is a little unclear. I cannot follow your question clearly. Can you come closer to the mic?

Sure. Is that okay now?

Yes, it's better.

I just wanted to understand that as you mentioned in that investor presentation that CDSL completed almost 25 years of Silver Jubilee and as I understood that a lot of cash on the balance sheet as well and adequate cash also. Is there any plan for any kind of corporate like buyback or bonus or any special dividend going forward?

So we have given a special dividend, which is obviously subject to approval of shareholders for 25 years. So it's INR 19 plus INR 3, INR 22. The remaining part will have to be seen and assessed as we move forward. So I will not be able to give any specific answer on that.

And on the first question, that is the repricing structure for insurance repository?

For the insurance repository, you said?

Yes, yes.

So the insurance repository, the pricing structure is as I think it should be there. Yes.

So for the insurance sector, pricing structure is divided into 2 parts: Creation of eIA and annual maintenance, so maintenance is INR 25, which is charged to the insurance company and not to the holder of the folio. For creation, onetime charge of INR 20 is levied on the insurance company. So these are the 2 recurring charges which are charged to the insurance companies and not to the policyholders.

And I think you'll find this on the insurance website, CIRL website.

The next question is from the line of Miraj from Arihant Capital.

Congratulations on a very good set of results. I had two sets of questions. And one thing I -- one of the points I missed out. I just wanted you to clarify that. The clarification part is that one of the earlier participants had asked you regarding the insurance -- evolution in the insurance segment, the recent announcement for electronic issuance. And you had mentioned something that it is still evolving. Can you just repeat that part? I missed that part.

Yes. So the point is that the law is out. How this will pan out between what the insurance companies will do, what the insurance repositories will do, how will the value chain work, all this is kind of in the process of early evolution. That's what I said.

Understood. But based on the timeline, the electronic issuance would have started already, right?

Yes. They could have started, so the insurance companies can do it themselves also or they can kind of outsource it when insurance repository, so both those models are there. So how it will finally pan out, what is good for the market, what is the value proposition to the market is something which we'll have to evolve.

Understood. I just want to understand the point you mentioned that insurance companies can do it by themselves. I believe, sir, that they have to go through a repository only for this to maintain it in electronic form. Is it possible?

I don't think so it is only through repository. It could be themselves or it could be -- but I will need to check this with my insurance team. Unfortunately, he is not there today, the CEO of the insurance repository. But if you want, you can send us an e-mail, and we will have it replied.

Understood. Okay. My question regarding this insurance repository part, is that as of our annual report, FY '23 for the insurance repository business. LIC is not -- we are not tied up with LIC. So in the current financial year, have we tied up with LIC because they are one the largest insurance issuing agency?

So the process and effort is all going on. Again, it's all futuristic. Whenever we will have that, we will kind of immediately disclose that. But we generally don't talk about specific insurance companies on this call.

Understood. Okay. I'll connect with you offline for that. And then my second question, is that regarding the T+0 settlement and instant settlement. We had started with 25 scrips only. So I just wanted to understand the progress on that part. Are we moving ahead with increasing the scrips over there? Or what kind of progress are we making over there?

So if you see the SEBI press release, it clearly talks about this is regular beta phase. And they will see how many people have participated. Has there been any issues, et cetera? And based on that, we said we will take that call whether it has to be increased in what framework, through how many stocks, et cetera. So those are all the nuances you should just pay attention to the press release, if any, which will get issued by SEBI in this regard.

Understood. Perfect. But based on our technological developments, there are no hiccups in the process as of yet, right?

We have been part of the ecosystem. So we have seen it go fairly smoothly till now. There have been no issues at least from the CDSL. I can only mainly talk about myself. But I think overall, I don't see there has been any issues.

The next question is from the line of Madhukar from Nuvama Wealth.

Congratulations on a great set of numbers. Just a couple of questions from my side. First one is insurance repository thing. So INR 20 per new account creation and INR 25, is it per account maintenance or is it per policy? And second -- so -- but one account can have policies from many different insurance companies. So who will pay that INR 25?

I think I would request you can send us an e-mail. We don't have our insurance colleague in the room. I'll have that specificity replied to so that it is -- actually, if you can send across this query on e-mail, we will have it replied.

Okay. I'll do that. And the other thing is also, in your annual report FY '23, I think the insurance repository revenue is about INR 5 million. But obviously, the number of policies is a lot more. So are you actually making that amount? That's the other question, if you can answer that.

Making that amount mean? I didn't understand.

On a per-policy basis, how much are you making? Or I mean, is -- are the exact rates accounted?

I would recommend just send across your query. Again, see, it's a process of some policies are already there, which have to be taken from the insurance company. Some is getting newly opened. So there are various -- variant nuances to that. I would again request you just send us your questions on the insurance repository, and we will have them replied.

All right, sir. And a couple of other questions on the online data charges moved up quite sharply. So I wanted to know, is it majority, is it new account openings? Or is it more with [ stretch ]? And I believe the total record created should be around 7 million right now. Can you sort of clarify on that also? That will be helpful. And finally, your other charges, what portion of it is regulatory charges? And they seem to be on the higher side. So I wanted to understand what is the driver of that.

I'll ask Sunil to answer this.

So in the last financial year, both the number of records created and a number of records fetched have gone up substantially, which added to the overall KYC income. What was the second question? Sorry, I didn't get that.

So the number of records that we have right now, if you can give that number?

We actually don't give off that number. We don't give that number right now.

Okay. And the other charges, how much is the regulatory costs? The expenses are higher. So what are -- what is guiding that actually?

So the regulatory cost, for the full financial year is almost INR 38 crores in this financial year. And this is directly linked as a percentage of the operating revenue. So higher operating revenue, this charge would be on a higher side.

Okay. And what is the formula? Is it...

Regulation prescribe that 5% of your operating profit needs to be contributed to the investor protection fund. So majority charge is on account of this number.

But it seems INR 38 crores would be much more than that 5% number, right?

I don't think so. You have to look at operating profit and then arrive at this number. And this number is inclusive of that expenses. So it works -- we have to assume that this expenditure is already there and then work out 5% of the operating profit. That's how it is calculated.

So like your FY '24 EBIT is about INR 462 crores.

No, you have to work out operating profits. It cannot be on EBIT.

The point is we're trying to make it as a formula, which has to be put in place to arrive at this 5%, which needs to be debited. It's not a straight application on the profit numbers.

Understood. I'll take some more details with you offline. And apart -- so that, I think is the main driver of the other expenses? Or are there other big drivers as well? What was this number last year? Last year, this number was -- how much was the regulatory number last quarter?

Last year, the regulatory cost was INR 26 crores. This year, it is INR 38 crores.

The next question is from the line of Nikhil Agarwal from VT Capital.

My question was on your transaction charges. They have increased significantly year-on-year as well as quarter-on-quarter. But the revenue per demat, if you calculate it in that manner, it's been quite volatile. I suppose the only component of that is other delivery charges that are deducted when a trade takes place in the delivery segment. Is that right? Or is there any other component to that as well?

No, there is also very big pledge charges, margin pledge charges. There is maybe the debit charges. So it's a combination of various other transactions which are happening.

Okay. So the debit charges, like it depends on -- I mean, could you explain the reason for this volatility? I mean, one quarter, it was INR 11 per demat, then it comes now towards -- I think it's INR 6 per demat. If you could -- can you explain this volatility?

See, you are taking a wrong number. Number of demat will not really work because people will open whether they transact in that demat or not will have to be seen. The number of transactions which are occurring, which cost, so opening of demat can be opened at any point of time. CDSL does not earn any money out of that. It's the number of transactions which happened or the pledge transactions happened or the debit transaction happened, which contributes to the -- this particular income.

So can you like give some metrics year-on-year, what has exactly changed? If you could give us the percentage of delivery turnover as a percentage of market turnover?

If you see basically the delivery-based volumes on the exchanges, there is -- there will be some amount of linkage to that because it's how much delivery is happening on the stock exchange platforms. [indiscernible] how many we will have to have.

Can you quantify, I mean, last year, what was it? And what is it currently in FY '24 on an average and FY '23 on an average, what does it looks.

In terms of revenue number?

Yes. I mean in terms of the delivery turnover percentage and that you are mentioning.

You will get from exchange website. You will get from the exchange website. You asked me how it should be computed but it's a combination. Again, you cannot have one number. It's a multitude of transactions, which are happening. How many pledging is happening? How many repledging is happening? How many revocations happening? How many sales are happening? So you asked for some number, so I gave you that number. You will have to look at how much is -- but that will not give you a 1:1 correlation. It will be depending on the volume in the market, how many is translating into delivery, how many will margin pledges, et cetera, has been created. So it's something which cannot be -- that has 1:1. That is all I'm trying to say.

The next question is from the line of Sanketh Godha from Avendus Spark.

Girish sir, I have few data-keeping questions, which you usually disclose. Can you share the unlisted income in the annual issuer charges, pledge income in the transaction charges and impairment costs for the fourth quarter and the full year? That's the question number one. And if you can repeat CAS income for the fourth quarter, it will be useful. I missed that number. That's my first question.

So total unlisted income for the quarter ended March is INR 1,85,00,000. For full year, it is INR 5.45 crores. Margin net income for the quarter is INR 5.95 crores.

Perfect. For the full year, sir? Sorry, if you can give the pledge income for the full year, too?

Full year is INR 17.5 crores.

Okay. And if you can give impairment costs?

Sorry?

Impairment costs.

I am on that. See, impairment, there is a cost of INR 8 crores for the full financial year on impairment. And for the quarter, we have a reversal of INR 1.11 crores.

Okay. Okay. INR 1.1 crore reversal. And then if you can tell me CAS income, if you can repeat that to be....

CAS income for the quarter is INR 9.37 crores.

Great. Okay. Just one data-keeping. Next question I had was largely with the tech cost. I understand that you need to increase in the tech and all those things, but from INR 38 crores, it's going to INR 63 crores is a meaningful jump in the current year. So the INR 63 crores also included repository tech -- insurance repository tech costs because you wanted to scale it up given the regulations are coming. And if that is the case, do we expect this number to tone down a bit going ahead, given we have already done 65% year-on increase in the tech cost in the current year? I just wanted to understand how should we look at this number going ahead.

See again, as I'm telling you, reforms are going to continue. There are going to be changes in the rules, the regulatory rules, there are going to be changes in newer products coming in. There is potential of growth, which is possible. So it will be difficult. One is we don't give any future outlook. It is very difficult to really predict at this stage. We have to ensure that this is basically the bread and butter of CDSL. Technology and people are its bread and butter. So we have to not only ensure that the current state of volume is continuing, but even the potential future, which could potentially come in is kind of planned and factored in because building a technology platform, it takes its own time. And therefore, this is a process, which is continuously going to evolve as we are going to move forward. And we're going to get more and more sophisticated to ensure that the value proposition remains.

Sir, but the INR 63.3 crores for the full year, does it include something related to insurance, which you might have done as a one-off in the current year, but might not be repeated in the next year?

The insurance is some part of it, a small part of it. Again, we'll have to see how it pans out. It will be difficult for me to give you a specific answer whether this will repeat again or not repeat again. It will have to be seen as to how the policy -- because the entire framework, as I told earlier, is getting evolved and we have to ensure that the technology is really up to speed to ensure that the value proposition remains.

Sir, the reason I'm asking this question is that given insurance will be a new opportunity and it's a big onetime -- big opportunity which will suddenly come in FY '25, then are we required to do more than expected additional tech cost in FY '25 to fulfill the requirement of insurance? Or we are up to the mark with respect to that requirement?

Again, as I'm telling you is that the insurance sector framework is evolving. It is not that it has evolved and we are trying to build it. So you are trying to repeat the same question again in different words. I'm trying to again and again tell you that we'll have to wait and watch. We will have to ensure. And as you have seen that we have kept the pace with what the volume is there to ensure that the technology is in sync with that. That's all I'm going to say.

Got it, sir. And next question is on insurance charges. You said INR 25 is AMC and INR 20 is eIA creation cost. But I believe these charges are very competitive. These are at cost, but actual cost when you onboard an insurance company, might be meaningfully lower or you strictly follow the rack charges when you open the annual issuance charges or AMC charges?

See, again, these are some things we don't put out in public domain. These are all things, which remains within our system. But however, if you have any specific question to the extent we put it out in the public domain, you send us an email, we will have it replied.

Got it. Got it, sir. And on insurance, one more thing, compared to last year, if you're aware of that, how many number of companies AIF increased for us? Because we were predominantly in the past, a life insurance company -- tie-up company, we had very limited exposure to general and health. And honestly, the bigger opportunity in the new norms is sitting in general insurance. Just wanted to understand whether we have...

The numbers, specific customers, type of customers, et cetera, we don't give out in the public domain. I would really request you that what we can, we can, what we cannot, we cannot.

Got it, sir. And lastly, on capital market records, I think you published that number in the annual report. It would be great -- I think last time also you said that number is 6.5 crores, number of capital market records with -- in KYC business. If you can spell out that number for the full year, it will be useful, sir.

Yes, we will see as part of the annual report, it will come out very shortly.

[Operator Instructions] The next question is from the line of Supratim Datta from AMBIT Capital.

This is a follow-up question. Just wanted to understand on the management transition. So I currently understand that a shortlist has been submitted to SEBI. Just wanted to understand what are the timelines. And do you expect SEBI to get back? And could you disclose who are on that shortlist as well? That would be very helpful.

So the process is on. It's a confidential list. And whenever there is a SEBI kind of a standard operating procedure at the time when it is required to be announced, CDSL would promptly announce that. So at this stage, it will not be possible to reveal because that is -- basically, the SOP would not require us to do.

Okay. But how much time would this process typically takes?

It will be difficult for me to answer that question. That is on SEBI.

The next question is from the line of Miraj from Arihant Capital.

I just want to understand that the technological costs that we've taken for the T+0 settlement, do we have to spend any more for the instant settlement part? Or have we already incurred that because that will be the next stage of development?

It's a constant process of evolution. So T+0, tomorrow, there is instant -- probably after some time there will be some other reform. So that will be a continuous process because the framework will have to be spelled out. And based on that, what is the cost on infra applications? All that will have to be assessed under that. So it will not be possible to specifically answer whether the costs have been incurred or not because it's a process of really evolution at this stage in terms of [indiscernible], in terms of how the framework will work, et cetera.

As there are no further questions, I would now like to hand the conference over to Mr. Nehal Vora for closing comments. Over to you, sir.

Yes, I would like to thank you for all your questions. I wish you all remain safe and secure. Thank you so much. Take care.

Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.