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

Ladies and gentlemen, good day, and welcome to the CDSL Q4 FY '25 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 risk that the company faces. I would now like to hand the conference over to Mr. Amit Chandra from HDFC Securities. Thank you, and over to you.

Yes. Thank you, operator. Good afternoon, everyone. On behalf of HDFC Securities, we welcome you all to the CDSL quarter 4 FY '25 earnings call. Today, we have with us the management team of CDSL represented by Mr. Nehal Vora, MD and CEO; Mr. Girish Amesara, the Chief Financial Officer; and other senior leaders. We will start with a brief overview of the quarter by Mr. Nehal Vora, and then we will open up the floor for the Q&A session. Thank you, and over to you, sir.

So first of all, I'd like to thank Amit and the HDFC Securities team. A very, very good afternoon, and welcome to everyone. I hope each of you and your loved ones are safe and healthy. Thank you for joining us today to discuss CDSL's financial results for the final quarter and the year ending March 31, 2025. We posted a detailed investor presentation on our website for your reference. I'm joined by the CDSL Group's leadership team, including the CEOs of all the subsidiaries. Let me start with the industry highlights and then take you through to some of the key aspects of our performance. Financial '25 -- financial year '25 has been a record year for CDSL with our revenues reaching an all-time high of INR 1,199 crores, approximately INR 1,200 crores and a profit of -- annual profit of INR 526 crores with a year-on-year growth of about 25% on the consolidated profits. The Indian capital markets have experienced some amount of movement, volatility in the wake of circumstances. However, despite these fluctuations, the markets had achieved a historic milestone of crossing the highest-ever market capitalization of $5.7 trillion in September 2024. The average daily turnover has surged by about 37% in FY '25, reaching about INR 1,20,000 crores. This growth is reflected in the growth of demat accounts in this year. India has added about 4.1 crore demat accounts in the year, taking the total to about 19.24 crores as on 31st March 2025. CDSL has experienced a 32% growth in the number of demat accounts reaching a total of 15.29 crores and enjoying a market share of about 79%. To further enhance our offerings for investors, CDSL introduced the unified features in the investor app, MyEasi, earlier in the year. The significant update allows investors to access their information across market infrastructure institutions in one place. I'm also pleased to announce that electronic consolidated account statement has been successfully integrated in various apps also as on 1st April. CDSL also successfully executed the second edition of the CDSL Annual Symposium in February where the theme is Reimagine CapTech and the Future of Capital Markets. We were honored to have the late ISRO Chairperson, Dr. Kasturirangan, as our chief guest. It was his last public event. I would like to reaffirm that CDSL's focus remains on enhancing the capital market ecosystem by enhancing efficiency, trust and transparency. We are focusing on #Atmanirbhar investor focused approach while striving for innovation resulting in consistent and sustainable financial and business performance. Before I hand it over to our CFO, I'd just like to say that the growth of the Indian securities market of the past year has been extremely encouraging, and it showcases India's potential and a journey towards Viksit Bharat. The market with its ebbs and flows has shown incredible strength even in this quarter as we owe it to a strong ecosystem who put their constant faith on us. My appreciation and gratitude to all our stakeholders, our regulators, depository participants, issuers, investors, all other market participants, market infrastructure institutions and all employees. Thank you, and over to you, Girish.

Thank you, Nehal. Good morning and good afternoon to all of you...

I'm sorry to interrupt, sir. You're sounding a little distant. Can you come closer to the microphone, please?

So I'll start speaking on consolidated numbers first. So speaking on the consolidated quarterly performance, the total income for the quarter ended March 2025 is at INR 256 crores as against INR 267 crores for the corresponding quarter of the previous year. The net profit for the quarter ended March '25 is at INR 100 crores as against INR 129 crores for the corresponding quarter of the previous year. Speaking on consolidated yearly numbers for the year ended March 2025, the total income has increased by 32% to INR 1,199 crores as against INR 907 crores for the previous financial year. The consolidated net profit has increased by 25% to INR 526 crores as against INR 420 crores during the previous financial year. Now I'll speak on stand-alone numbers. On a standalone basis, the total income for the quarter ended March 2025 is at INR 205 crores, which is at a similar level compared to previous -- corresponding quarter of the previous year. The net profit for the quarter ended March 2025 is at INR 81 crores as against INR 97 crores for the corresponding quarter during the previous year. Speaking on our stand-alone yearly numbers for the year ended March 2025. The total income has increased by 33% to INR 985 crores as against INR 743 crores during the previous financial year. The net profit has also increased by 27% to INR 462 crores as against INR 363 crores during the previous financial year. Now I will request Mr. Sunil Alvares, MD and CEO of CDSL Ventures Limited, to take us through the CVL's performance. Over to you, Sunil. Thank you.

Thank you, Girish. Good afternoon, everyone. So far as CVL's performance for 31st March 2025 is concerned is there was an increase in income by 35% from INR 188 crores to INR 254 crores. The expenditure increased by 42% from 76% -- from INR 76 crores to INR 108 crores. And the profit for the year was increased by 28% from INR 86 crores to INR 109 crores. With this, I'll open the floor for question-and-answers.

[Operator Instructions]. We'll take our first question from the line of Supratim Datta from AMBIT.

My first question is on the cost side. So the technology cost for FY '25 in the fourth quarter was similar to what you had spent on an annual basis in FY '23. So could you help us understand where is this technology spend really going towards? What proportion of this would be recurring versus what proportion of this would be onetime? That would be very helpful. I understand you have talked about technology costs previously as well, but given the magnitude of increase here, some kind of granularity would be very helpful for investors. The second question would be on the KRA business. Now recently, the SEBI Chief had indicated that a centralized KYC system is being implemented and it could be in practice pretty soon. In that scenario, what is the benefit of a KRA system? Or would the KRA system get consumed within this CKYC, which gets implemented across the board? And hence, how would that impact our -- CDSL's pricing ability? If you could give some color on that, that also will be very helpful. And lastly, on the dividend payout. Now the dividend payout ratio was around 50% versus 55%, 60%. Any reason for a reduction there, given you are not using that much of cash? Those were my 3 questions.

Okay. Thank you, Supratim. First, on the technology spend, I have been saying that we are in the process of building and consolidation. It's all -- on all the core aspects: It's the hardware, the infra, the applications, the securities and the connectivity. And that's a process which we are going through to obviously bring in newer tools and techniques so that the market can really benefit from better tools and technology, speed would go up, et cetera. But the intent being is that we are an infrastructure -- market infrastructure company, and technology is one of the key building blocks. And it would need a continuous assessment of newer tools and newer techniques so that the market will benefit from that. I don't think we gave out in the public domain as to what is a onetime versus a recurring expense. But we have kind of maintained a steady percentage as part of the revenue on the technology costs. And basically, the regulators' expectations also have been to ensure that the newest technology is being deployed. Whilst this is a policy nudge, but from our end we continuously assess and improve upon our technology infrastructure on a very, very serious note. As regards to the second question on KRA, it's a process, which is the same interview of the SEBI Chair also talks about the efficiency of the existing system. We will have to wait and watch how that really pans out because it's yet not come out. It is all work in progress. So we will see how it goes. But I'm sure that all the aspects will be taken into consideration before we move forward. And the third one on the dividend payout, I think there has been a calculation error at your end. We are about 61.3% payout. So we've continued to maintain our policy guidance on dividend payout at 60% of our operating profits. In fact, it is slightly more than that this year.

Okay. So just one follow-up on the technology bit, I do understand you don't give out the recurring and nonrecurring. But can you give us the split of hardware? How much of the spend would be on hardware versus application?

We don't give that because, see, there is -- I'll tell you why we don't give it, Supratim, because it's a combination of fusion costs. So you cannot segregate what is infra versus application. There is some, which is mixed cost. So it will -- it would not create a right differentiation, and it is not right to even differentiate. The important thing is to ensure that the systems remain strong and the system remain modern. Whatever it takes to do that and that has been our intent whether it is at the hardware end, network end, security end or the application end, whatever it takes to ensure that intent is...

Okay, okay. So maybe let me ask it in this way that where are you in this journey of modernization? Is the modernization complete or you are 60%, 70%? Where are you in this modernization journey, Nehal?

I think you can ask any company, nobody will say they are completely there in the modernization process because it's a process of continuous change. The larger companies also are continuously changing. Techniques evolve, methodologies evolve, products evolve and tools evolve. So I think it is in a constant state of work in progress because intent is to ensure that the modern infrastructure is provided to our clients and to the market.

Got it. Got it. In the dividend payout ratio that you're saying, is that on the stand-alone or is it on the consol?

Standalone.

It is on stand-alone.

We'll take our next question from the line of Prayesh Jain from Motilal Oswal.

Just extending the question of the previous participant on technology. So how much of it is going towards capacity buildup and how much of it is towards efficiency buildup? So generally, the reason I am asking that is the capacity buildup spend would be probably be like a onetime spend or a spend that would get added and then probably will come again once you have reached those thresholds. So is there a spend towards capacity buildup or it's purely based purely efficiency buildup?

So Prayesh, the way I look at it is that there's a popular Hindi saying that [Foreign Language]. The intent is efficiency. Whether that is due to capacity buildup because efficiency is also a function of ensuring adequate capacity. But it's not only capacity, it's about ensuring how the application works. It's how the security works. So it's a combination. The intent is ensuring efficiency and intent is ensuring modern infrastructure, intent is ensuring the modern tools so that the market and the stakeholders are always subject to the newest form of technology. And it's a process of really evolution. If I look back at our journey also 5 years, 6 years ago, technologies used there have completely changed as we have moved, but the market participants have not known that the change which has happened. So it's a continuous process of change, which has happened to ensure that the market is subject to the newest and the most modern tools and products.

So is it fair to assume that as a percentage of revenue, this would sustain? I know you don't give forward-looking guidance. But for us, it becomes very important to understand whether we should model it as a percentage of revenue? Or how should we look at it?

So you should look at our past and then take a call. I'm sorry, I will -- I actually would not be able to give you the future because we don't give future guidance, apologies.

The other question is on the online KYC business. Could you explain it to me how much of it is coming from demat accounts and how much is coming from non-demat accounts or it's purely demat accounts?

See, if you really look at the KYC business, for us, it is very difficult to say what pertains to the demat or say to a mutual fund account because when an entity fetches, he could be a broker who's also having demat, who's also a DP for demat services. So whether he's opening it for mutual fund or whether he's opening for securities, I don't know because the investor may be taking delivery of the mutual fund in the physical form. So it's very difficult to give you that answer.

And also Prayesh, in addition to what Sunil answered, I think the intent is again that CVL is being built to stand on its own 2 feet. So whether it is demat account or non-demat account, the intent is it should be able -- it should be independent enough to stand on its 2 feet. And that is how we have really progressed. If you see the way both these -- despite being a 100% subsidiary, we gave it a requisite freedom, flexibility to grow to ensure that the shareholders of CDSL are benefited by both the growth, not only of CDSL, but of CVL also.

Right. Any other adjacencies that you're looking at to kind of get into on the BFSI space where you can get more KYC revenues?

So that's, again, a process of future. It's all really regulation-driven. And I think as the journey of India is really embarking on public infrastructure, moving to a technology base, I think the process is something, which we are all basically hopeful in the future. But how much that will impact, what products, all that is all futuristic. It is all regulation-driven. It is how the regulation policymakers will kind of create that framework in which it will pan out. But I think the overall theme and the trend is that more and more people are joining into this fold, and that is what we all have to hope for and pray for.

Last question on the charges for both transaction and the issuer charges. Any representation to the regulator, especially for the issuer charges, to increase the prices or anything that you can let us know?

We will -- it is all, again, between us and the regulator. We don't generally reveal that in the public domain. But as and when a final call would be taken, that would be kind of announced to the market. So we will all have to wait till then.

We'll take our next question from the line of Amit Chandra from HDFC Securities.

So first question is on the KYC revenue. Obviously, there has been a fall in the last 2 quarters and it is because of the market slowdown and slowdown of the account charges. But if you see our account numbers, it has been increasing over the last 2 quarters. So in the KYC charges, if you can provide some color in terms of what has led to that steep fall? Is it the fetches have come down considerably or is it because of any other being -- in terms of discounts being given to the brokers in this? Or if you can provide some breakup of this, fetch versus account opening in the online data charges?

So before I ask Sunil to answer, I think, Amit, overall, the market volumes, delivery volumes, growth in demat account has all seen a muted response we've seen in the fourth quarter. And I think that is kind of the overall impact on CVL also, but I'll ask Sunil to take that question.

Yes. So like what Nehal just said, that the number of accounts anyway has dropped not only in the last quarter, but in the last 2 quarters we've seen a drop in account opening as also with mutual fund investments and also with IPOs, which have come in, in the last 2 quarters. So typically, even if the account openings would have gone up, it could be more because of some fetch records, et cetera. But overall, we've seen the number of records itself, which are created, have fallen down as well as the number of fetch records also have fallen significantly. So that's what has led to the drop in income.

Okay. So in terms of the fall, like what I was trying to understand is, is it more from the fetch activity that -- because as far as my understanding goes, fetch was 70%, 80% of the overall revenue. So has that come down significantly in terms of the mix?

It's more or less in line with what is the creation. So in terms of percentage, it's almost the same, you can say.

Okay. And also in terms of the IPO and corporate action, obviously, it is market linked and there has been a sharp fall. But still in terms of the mix between the IPO and the corporate action revenue, what explains the sharp fall, is it only IPO or is it the combination of both? And is there any component in this revenue stream, which is recurring kind of?

No, if that question is directed towards CDSL, I think we don't look at it as a corporate action, we look at it more as a -- everything has a corporate action in CDSL. So maybe Nehal would like to answer that.

Yes, yes. So could you repeat that very last part? I couldn't hear your last sentence.

So I was just trying to understand that the mix between the IPO and the corporate action in this piece. And what has led to the fall maybe in the last 2 quarters? Is it a combination of both or any one part has gone down significantly?

So it's overall market impact, the impact is across both those teams. We don't give that different categories in the public domain. But to answer your question [indiscernible] it is overall impact of the market.

Okay. And sir, in the annual issuer charges, obviously, you don't give forward-looking guidance, but what has been in terms of the number of folios in -- like in this year till March? And also you'll see the impact of this in like next year? And also has there been any increase in the unlisted revenue? And what unlisted revenue we booked for the full year in FY '25?

I'll ask CFO to answer that. Girish?

See, we had disclosed that in the first quarter. Throughout the 4 quarters, it almost remained the same. We have disclosed that 2,276 crore (sic) [ 22.76 crores ] folios that we had built.

So for the -- revenue for unlisted for the full year I want.

Unlisted revenue for the full year is at INR 35.95 crores, so almost INR 36 crores.

Okay. And obviously, lastly, on the insurance piece, we have finally tied up with LIC. Any progress on that? If you can throw some more color on that?

So I'll ask Latesh to answer.

Yes. Latesh in here. So basically, it's just a sign-up, which has happened. Integration work is in progress. So we are expecting that...

I'm sorry, sir, you're sounding very distant.

Yes. LIC sign-up has just happened between basically us and the integration work is in progress. We are expecting LIC to provide us the resources to do the integration there as of now.

We'll take our next question from the line of Madhukar Ladha from Nuvama Wealth Management.

Just on that number that you just said, 2,276 crores (sic) [ 22.76 crores ]. Is that number correct?

Of course, yes. Why?

No, no. I'm just -- no, I was not clear on the numbers. So that is the number of demat -- that is the number of folios, which is basically a number of scripts into the demat accounts. Like I wanted to understand context of that number.

See, as per SEBI circular, we have to raise the bill based on either flat basis or on the folio basis. Now this folio, how it has to be worked out, it is an average of the prices last full year, which is held in any demat account for any company.

Understood, understood. Okay, okay. Got it, got it. And then I'm not sure whether you gave the unlisted revenue number for FY '25?

I just gave. I just said unlisted revenue from issuer is INR 36 crores -- around INR 36 crores for the full financial year.

Got it, got it. And this quarter, we saw a little bit of jump in that number from -- like you were doing about INR 81 crores, but we did about INR 87 crores. Is there any onetime sort of processing fee, et cetera, in this quarter or on an overall sort of basis because a lot of unlisted companies have also come into demat in this year, so is there any onetime processing fee in the annual issuer charges, if you could share that number?

So for unlisted companies, we charge a onetime processing fee of INR 15,000 per company.

Okay. So what would that total number be?

To answer your question, it's again a combination of both more companies coming on and it's actually that, that more companies are coming into the field. So that continues as our journey as we...

We'll take our next question from the line of Santosh Keshri from SKK Huf.

Yes. I have been a shareholder since 2015, and I have been really looking at the performance of the company for a long time. So I have 2 questions. One is about insurance repository business where we can see that our nearest competitor is enjoying a market share of more than 40% now and they are having additions of something like 1 crore policies with eIA accounts close to 10 million-or-so eIA accounts. So somehow, we do not see the same kind of performance and same kind of genes in CDSL repository. And also, our PowerPoint presentation about insurance repository didn't cover much of the details. It just gives a little bit of numbers. It didn't say that what is the revenue that we are earning, how many general insurance companies we have tied up. Like last quarter, we said that we have tied up with 48 companies. This quarter, we are saying the number is reduced. So my point is that we are sort of not giving extra numbers for us to assess the business or maybe the business is not being given full attention in terms of better performance and the kind of action that we are seeing in the market. That's not seemed to be happening here. So I'm concerned from the point of view of being a long-time shareholder. That's my first question.

Sure. You want to finish both questions then I can answer that?

Sir, second question is a little longer. So let's discuss this and then I'll come to the second question.

So the first question is maybe Latesh Shetty is here, who's the MD of the insurance repository. But before I hand it over to him to answer, our intent is, like any infrastructure business, we spend a lot of time in ensuring that the platform, the technology, et cetera, becomes robust. It links up well with the relevant stakeholders and that takes time on both sides to ensure it needs to be planned, tested, et cetera. And therefore, that time is taken before it. Because we believe in a philosophy that once you are in it, you try to give the best product, take time in kind of planning. But once you're in it, so that the confidence and trust of the stakeholders. I'll just hand it over to Latesh to take that.

Okay. See, if you look at the past performance, we are in this business for almost 14 years. And again, the insurance business is also -- the repository business is also regulatory driven. The initial 10 to 12 years, we were hoping that the repository as a product would be made mandatory by the respective regulators, and we still await and are hopeful that in future that guidelines may come in. But yes, since this is not a mandatory subject, we have been limiting our investments on this business. But last year, there has been a lot of changes, which has happened. Apart from 3 revenue streams from which the business comes, we have now opened up the direct portal for the end policyholders to come and directly open their accounts and there has been some traction. We have not yet started the marketing -- digital marketing there. But yes, the voluntary growth has started coming in. And just to give you some flavor, you mentioned briefly about the competitors as well. Just to give a context of the insurance business, it's all in public domain. Annually, the country churns out some 30 crore policy and all the IRs put together, we have just crossed 2 crores. So 90% of the market is still up for grabs and that's what we are strategizing on, and you'll see the positive outcomes in the times to come.

That's right. But then we haven't got an app also, something like a digital app, which can be -- like our competitors have already launched an app. And the thing with this kind of thing is with app and connectivity and the network effect that you get by getting the new customers and the more new customers you have, the better acceptability is there for the newer customers to come and get into our platform. So all I'm saying is that we are missing a lot of action here. Maybe something can be done and better details can be given in the PowerPoint presentation for the quarterly update. That would be really helpful.

Coming to my recent website, we are under production, I think you haven't seen of late. So it has been a complete revamp from what was there last year. And we have a web-responsive application. So yes, you are right, we do not have a mobile app per se, but our portals are web-responsive and it is visible on the mobile as well. But I take your point. So that's for us to [indiscernible].

Okay. Now my second question is about the direction that the company is going towards, Nehal. One is that, see, like we do not charge anything for the demat account and we say that we have 15 crore-odd demat accounts. Then we have a huge amount of cash in our books, INR 1,500 crores, for which there didn't seem to be obvious usage that what you usage is going to be put to. And the analyst community and investor community have been talking about this in almost every call, but it looks like that there is no clarity in terms of annual report or the presentation that comes out after the quarter result. Every time we get to hear that the Board of Directors would decide and we do not make futuristic statements so that we get to hear. And then we also get to hear that the extra amount of technology expenses that we have for a stable infra institution, something like the technology expenses went up by almost 70% compared to the last year, and our operational metrics also had been going down. Like this year, our PBT margin is something like 50% and last year it was 61%. Quarter-on-quarter, it is even worse. So are we settling -- my question is that are we settling into some kind of happy infrastructure institution and nothing beyond? We don't want to go further beyond this because a lot of action is happening on the digital side, a lot of action is happening on the market side. Our associate, BSE, is doing so well in terms of not only share price, but in terms of a lot of regulatory forbearance they've got, a lot of marketing action that's happening. Mr. -- the new CEO over there, he has really changed the company. The same kind of thing I'm not seeing in CDSL. So I'm not trying to express any kind of disappointment in the company, I'm just trying to express my feeling that we are lacking certain direction here or maybe we are -- we need more better communication. If you can clarify, Nehal, it would be really...

Yes, so maybe Santosh, you need to see that various communications. I think it is your opinion, I don't think that opinion of people who I meet and certainly not the opinion of what is in the mind of CDSL as a management and also the Board. We have a very specific focus. Otherwise, in the last 5 years, we would not have grown from 1.8 crores demat accounts to 15.5 crores. These numbers cannot just happen out of thin air. It needs a lot of planning and there's a lot of behind-the-scenes planning. Second is the revenue, profits if you see for the last 5 years has gone through a significant uptick. And that can only happen when you are focused on what you want to do and how you want to do it. Third is the number of shareholders who have been there for the last 5 years who were there -- total number of shareholders who were invested in CDSL has grown by multiple times over the last 5 years. This also would not have been there if the shareholder interest and maximization principle focus was not a part of CDSL's core activity. Now these numbers show a different picture than the conclusion, which you are trying to draw. And I think you need to look at it from that perspective. Number of employees have grown in CDSL. The importance and the brand of CDSL has grown very stronger. All these are clear indicators that if there was no focus, there was no thing on how we are taking it forward, we would have continued to remain at the same levels as in 2019, which is not too far away. It is just about 5 years away. And the fact that quarter-on-quarter, despite markets going through its ups and downs, we continued to grow in terms of number of demat accounts, number of people wanting to become a part of the CDSL ecosystem clearly showcases that this is with a customer-centric focus. Otherwise, this would not have happened. So I would really like you to urge you to rethink on your conclusion because these metrics don't show the conclusion, which you are trying to draw.

But the thing is that though we are being customer-centric, are you also being shareholder friendly? If that is also being taken into account, it would be really helpful. I do not want to go beyond this, but that is something I wanted to highlight.

So shareholders, you will see, again, metrics on shareholders, 1:1 bonus, highest dividends year-on-year. This year also we had the highest dividend. If you see -- if you factor in the 1:1 bonus at INR 25 share, if you want to compare it to previous year. So it's INR 10.50, you have to multiply it by 2 to compare it with the previous years. And it is an all-time high dividend, which has been given. Despite last year, we had given INR 19, which was a 60% profit plus a 3-year special dividend because of 25 years. This was taking into consideration the shareholder interest. And we have beaten that also this year because it's INR 22, which was last year with a 3-year special dividend for 25 years. This year, we're giving INR 25 dividend to shareholders. Had we not been shareholder-centric also, these numbers would not have come in.

We'll take our next question from the line of Siddharth S. from Vittae Money.

The main thing as a concern would be that the Q2 of your company last year did really well and there has been a dip in terms of both Y-o-Y and Q-o-Q quarter. Can you just highlight what led to it and what the trajectory going forward would be? And like on an approximate number-wise math, what growth rate can we expect from CDSL's overall management as a whole?

So one is, Siddharth, we don't give future guidance. I won't be able to answer what is the future. It is for each shareholder to assess for themselves. But to your question on why Q2 was higher than Q3, Q4 is because the overall market volumes have dropped, the delivery base volumes have dropped. An important metrics, which one needs to look at is the delivery-based volumes on the stock exchanges, which shows the market participation, which culminates into delivery and that's what is important from a depository standpoint. Our business is in long-term products that people take more and more shares into delivery, and that's how we are promoting a culture of also people staying long term in markets. And also as an infrastructure institution, it's important to understand that we are building the right building blocks so that when we saw the spurt in volumes post COVID -- during COVID and post COVID, CDSL was able to withstand that higher volume and continue to work seamlessly. So I think that is where our focus and intent is, that under all circumstances we have to keep on ensuring the value proposition to the markets. And when the market volumes spurt, the infrastructure should be equipped to handle that excess volume. So that's where our focus is.

Got it, sir. And the delivery-based volume has led to the entire dip as such. Do you have any idea on how going forward it might be? If you would be willing to share any, I mean, insights or any idea on that?

No, Siddharth, we don't give future guidance. But had I even known I -- actually, you and I would not need to work any longer because if we all can predict what the volumes are going to be. It's cumulative thing of the entire market participation. So that's something for us to wait and watch.

We'll take our next question from the line of Sanketh Godha from Avendus Spark.

Sir, initially, a few data-keeping points. Can you spell out cash income, e-voting income and pledge income in the current quarter and also the impairment costs?

Yes, I'll ask the CFO to answer that.

So the cash statement was around INR 11 crores in the quarter. E-voting was around INR 6 crores. You also wanted the debtors provision, right?

Yes. Provision cost, impairment costs and the pledge income.

Sure. So impairment was INR 88 lakhs in this quarter, and pledge income was INR 5.40 crores.

INR 5.40 crores. Okay. And sir, the second question was, yes, sir, you alluded to the point that a number of folios at the start of the year was 2,276 crores (sic) [ 22.76 crores ]. So just if you can tell me how it grew compared to the previous year? I just wanted to reconfirm the point that this 2,276 crores (sic) [ 22.76 crores ] was based on number of average folios of '24, which got reflected in '25. So given the number of IPOs were so strong in '25, is it fair to say that the number of folios [ sharely ] would have gone up because of more listing and that will get more reflected in '26 as a growth in the annual issuer charges?

So Sanketh, previous year, what we had disclosed was is it was at 19.50 crores; and current year, it is 22.76 crores.

Okay, okay. Yes. So the point, what I'm trying to make that given the 22.76 crores was reflected to last -- number of folios, which naturally would have grown because of number of IPOs. So the benefit will be more reflected in the next year, sir?

Yes. Possibly.

Okay, okay. And the third thing, sir, just if I look at cash ADTO, quarter-on-quarter, it declined by 18% -- 8 percentage for the country, BSE, NSE put together, cash ADTO. But if I look at our transaction income, it has dipped by 17 percentage Q-o-Q. So there seems to be a little divergence typically is not there. So just wanted to understand what led to more fall in transaction income compared to the fall in cash ADTO?

See, Sanketh, when we closely monitor the delivery volumes of exchanges vis-a-vis our billable transactions and we don't see that kind of slowdown or decrease compared to what it is based on the -- see, what we see is the delivery volume and the billable transaction moves hands-in-hand. That's what we see from the historical data that we have.

No, so the reason why I was asking this question was that, sir, have you seen any market share loss with respect to transaction income because our decline seems to be a little more compared to cash ADTO, what we can see from the public information?

So we don't know the billable transactions of our competition. We only track what is there at our end. And you have to compare it with the overall volumes out [indiscernible].

We'll take our next question from the line of Parimal Mithani from Credential Investments.

Sir, I just wanted to know a couple of quarters back you had mentioned about account aggregator thing. Can you give a highlight on where are we and what is the progress in terms of that? And secondly, sir, in your CDSL Venture, you do eSign and eKYC. Is there a further scope expanding that services, if you could...

Could you just repeat that final part, that was not too clear.

So in your -- in the CDSL Ventures, you do eSign and eKYC, and I think there are significant traction in both of that. If you can explain how do you plan to go ahead with that?

Yes, we don't give future guidance, but I'll ask Sunil to answer the second question. But before that, on the first question on the account aggregator, we are part of the Account Aggregator Framework. We are -- there is something called an FIP or Financial Information Provider. CDSL was first amongst the kind of the ecosystem, at least in securities market, one of the first, which has become a part of this FIP, and we have been continuously giving that. So that is what our role is. So whatever account -- wherever data is requested by a investor through the FIU or a Financial Information User, it gets routed through the Account Aggregator and comes to us and we provide that information after ensuring that relevant security checks, et cetera. So that's what our role is. I'll ask Sunil to answer the second...

Any revenue stream from them, if you can -- if there is anything or is it just an add-on, value-added service, sir?

Yes. Revenue as of now is not yet been there. It is in the process of getting formulated because these are early days. But I think there is some discussion, which is going on, but how much it will fructify and all, that is yet to be seen.

[Operator Instructions].

No, I think the second part of his question is left. Sunil, if you can answer that.

Yes. On the second part, with regard to the traction, what you're seeing on the eSign and the eKYC business, is that so far as eKYC is concerned, the intermediary like the DPs, et cetera, need to be registered as a subcarrier. Currently, they are using DigiLocker for these services, but we are seeing some intermediaries who have registered recently. And once they start off in this financial year, we will see more revenues coming from there. On the eSign business, the way it functions is that we do not tie up with the end customer who is a participant or a broker, but there is a third-party service provider, who gives the entire onboarding solution to the end client and eSign is just a part of it. So basically, we have tied up with a couple of such third-party service providers and we are looking at adding more such service providers. So when we add some more, definitely we'll see an increase in income out there as well.

We'll take our next question from the line of Sanketh Godha from Avendus Spark.

Sir, one small clarification. You said 22.76 folios. If I multiply by INR 11, the revenue comes at INR 250 crores. But what we reported is INR 326 crores. So the difference between INR 250 crores and INR 326 crores is predominantly explained by what, sir?

See, Sanketh, you have to look at the SEBI circular. We have to bill the company based on folio and the capital both. And apart from that, we have unlisted companies also. So everything put together is a final number, which is there as an annual issuer income. What you are limited -- what you had asked was only the folios.

Right. Okay, okay. So sir, basically, where you charge the fixed fees and basically what you charge for the listed companies, which could be much higher compared to number of folios what they have explains the difference between 2 numbers, right, sir?

It's a combination of both.

[Operator Instructions]. We'll take our next question from the line of Mohit Surana from HDFC AMC.

Can you also -- the way you gave 22.76 crore number for the last year, could you give the number for this year?

That would be possible only in next quarter.

We'll take the next question from the line of Swarnabha Mukherjee from B&K Securities. I'm sorry, Mr. Swarnabha's line is disconnected. [Operator Instructions]. We'll take a question from the line of Prayesh Jain from Motilal Oswal.

Just a bookkeeping question on the other income. What drove the sequential improvement in other income so much? And could you give us a breakdown of your investment in terms of where all the money is parked?

So other income is largely constituting of cash charges, e-voting income, eSign income and investment income. The investment income is largely based on investment in fixed deposits, investment in mutual funds, debt scheme and investment in bonds. These are all based on an investment policy approved by the Board.

Okay. So the large part of the jump in the other income in the quarter is mainly because from the mark-to-market, is that a fair way to assume on the debt side?

Yes.

We'll take our next question from the line of Swarnabha Mukherjee from B&K Securities.

Yes. So sir, I just wanted to understand on the IPO corporate action part. So the INR 25 crores we have reported this quarter, this would be mainly from corporate action, right? So -- I mean, I just wanted to know that this INR 25-odd crores, is this -- how much would be seasonality across the quarter? Is the second, third quarter much more heavier? If you can give some indication based on the trends seen in last 2, 3 years.

I'll ask the CFO to answer.

IPO corporate action income is largely based on the IPO that comes in the market. So it is directly linked with market activity in terms of the IPO that gets listed during the quarter. So if you ask us a seasonality, it is directly related to the market.

Yes. And also...

Yes, sir, please go ahead.

We have to look at the past to see which quarter has more, but I don't think there's any specific trend in that. It depends on market activity.

Right, sir. I'm just trying to understand that since in fourth quarter, since you don't give the breakup of IPO and corporate action in this fourth quarter, I think the contribution of IPO income would be quite negligible, so just to understand only the revenue from the corporate action. So this is the INR 25 crore number is a good number to work with? So I just wanted to understand that if I were to think about the same head only from the corporate action in second and third quarter, for example, where there were a lot of IPOs, but additionally was there also a higher seasonality of corporate action? So the corporate action number in second and third quarter will be more than -- significantly more than INR 25 crores or would that be near abouts?

See, again, what kind of -- there are lots of corporate action like share split, the bonuses there. Now there is no seasonality on that also. It depends all on each company and I don't think that can be predicted. But if somebody is willing to do the past research and come out with some finding, that's a different matter, but we don't see it that way. We see it again -- again, our intent is that platform should be robust and stable. And so that people, whenever they want to come, they can come. It is like a road, like the road has to ensure its value proposition, it has to ensure security, so that cars as and when, whether it comes in the middle of the day, middle of the night, whether they come more in January or they come more in March, that is not the focus on how a company who makes roads is going to focus. So we have a similar kind of a focus on how we really structure and plan ourselves.

Right, sir. Understood. And also, sir, so if I were to think between the demats in your custody, so just as a conceptual clarification. So if there is shift of folios, say, from a retail participant towards more institutional participant, then how would that impact our, say, annual issuer charges, if you could give some color?

So the rules are there in the public domain. Number of folios, it's a combination of various factors on how issuer charges are getting charged. So it is the fulfillment of those conditions. It's not only folios, it's a combination of various other factors also. So that will have to be assessed. We cannot give a simplistic answer as to if there is a trend, a change in trend, et cetera. It all depends on all those conditions to ensure what would be the impact on the issuer fees, which we would receive.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Nehal Vora for closing comments. Over to you, sir.

I would sincerely like to thank all the callers for their questions and also their keen interest. Continue partnering with us as we embark on this journey of this phenomenon called India, which is growing at a great rate. Thank you so much, and stay safe.

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