Multi Commodity Exchange of India Limited (MCX) Earnings Call Transcript & Summary

Hi [ Charanjeet ], good afternoon.

Yes, Hi, [ Raveena ] good afternoon.

Hi, good afternoon. So Charanjeet, I hope you are aware that all our meetings are recorded. So this is going to be recorded. It will be available on our website subsequently. I'll just take a quick moment to introduce our management here. Mr. Manoj Jain, he's our COO, Chief...

Hi Charanjeet.

Hi Manoj. Good afternoon.

I have Mr. Satyajeet Bolar, who's our CFO.

Hi, good afternoon.

Good afternoon, Satyajeet.

And I have Mr. DG. Praveen, who is our Chief Risk Officer.

Hello, Mr...

Hi Praveen.

So you can begin.

Okay. Great. So thanks, everyone, for taking out time for this call. And the main purpose was that while we've been tracking this company for a long time, the growth on the future side was one thing which was not coming through. And now we have seen some growth in the -- coming in the option side. So in terms of the business outlook perspective when we see growth in the options and different commodities, how things are looking like on the first aspect, you can touch on that? And then, sir, I'll follow up with further questions.

Yes. So if you look at futures, maybe there could be -- you could see some marginal drop that has happened. But what we could see is a substantial increase in the performance of options contract. So that way, what happened for the exchange point of view, in fact, it is leading to greater diversification of products, like instead of having the volume distributed in 1 or 2 products, now it is like you have a wider set of products. And interestingly, it is between now 2 instruments like futures as well as options. So even if you take the equity market, you know that the options play is still playing a very greater role as compared to the futures contract. So here also, given the trend and other thing, it is like we see that this performance, robust performance, what we could be able to witness an options. This is good for the company with a greater diversification. And in fact, we could see that significant growth also is happening in terms of the participants -- so participants are also trading both in options as well as futures and some -- there are some set of participants who are trading exclusively in the options. So that way it is like we could see greater participation and a greater product diversification. So that is what -- how we look at it, this particular growth. And prior to -- at the time of peak margining, peak margin introduction, it was like a focus was more on the crude oil. But now, in fact, apart from crude oil, the options on natural gas also started doing pretty good. And the contract that we have recently launched, one more contract option on future contract in case of Gold Mini, that also started doing pretty good. So that rate is like we could be able to see the bullion option products as well as the energy option product, both are doing pretty good at this point of time.

Okay. So sir, now this is another thing where these contract sizes were changed, and I think that has also impacted the business. So if you can just touch upon these contract sizes, whereas we have seen the biggest changes. And some of the places where we have seen increase in the size also which made some of the arbitrages for them, the size increasing becoming a difficult scenario to participate in the market. So if you can touch upon from the bullion perspective? And also on the LNG side and the gas side, how you're seeing that market evolving going forward?

See, in terms of size of the contract, there is no change. It happened in case of bullion contract because we still have the same set of [ variants ] like 1 gram contract, 10 gram contract and -- sorry, 8 gram contract, and you also have 100 grams and 1 kg contract. That is what the contract variants that we have in case of gold contract. And again, in silver, we have 3 variants, mini and we have a micro contracts and the major main contract is. So that way when it comes to the bullion contract, there are no contract variation. That means because in commodities, unlike in equity, the loss size cannot be changed very often because it also has to be linked to that delivery. So deliveries can happen in a particular quantity. So that is the very reason you will not see that the contract changes will happen quite often in case of commodity contracts. But what we have witnessed in case of metals happen to be different because that time, the SEBI has come out, I think it has happened in '19, 2019. One SEBI has come out with a particular specified guidelines saying that your trading unit and the delivery unit of the contracts should come, it should be the same. So because of that one, we had to change the trading unit of the copper as well as the nickel. So earlier, we were having a copper of 1 metric ton contract was there. And also we were having a mini contract also was there in case of copper. And in nickel, again, there were 2 variants were there. But because of this particular specific regulatory guidelines, we had to restrict that means we have to come out with only one contract because the other regulation also says that you cannot have multiple variants. You need to have only a single variant in one commodity other than in bullion contracts. So we had to restrict ourselves to only one variant in a particular material contract, and we had to discontinue many of the mini contracts, which earlier use it together. We choose to supplement or complement the main contract. And also since we had to link it with the delivery base mechanism, we had to increase a lot size of nickel from 250 grams to about 1.5 metric tons. And in case of copper, it was about from 1, we had to increase it to 2.5 metric tons. So that is how there has been an increase in the trading unit of both copper and nickel. That is how it happened. But in case of other contracts, there is no change. Absolutely, there is no change. It's more depending upon the contract value could have changed based on the price movement that has happened in the underlying commodity. But in terms of lot size in quantitative terms, they remain constant.

Okay, sir. Sir, as you talk about the futures volumes have seen the dip in the FY '23 YTD, if I see overall Y-o-Y, there has been a 23% dip on the total futures volumes. So how do you see now this going forward? Is there a way to get -- and I think the major dip has come in the base metals futures where the dip has been almost more than 40%. And Agri also has seen a dip but metal actually impacts significantly. So if you can touch upon from the overall futures growth perspective, how we should look at it in the second half and going forward in the next financial year, how these volumes can – average daily turnover can grow?

See year-to-year, I don't see the dip has been sub that kind of steep dip that has happened -- for example, if you take the '22-'23 year-to-date. That means for the first 2 quarters, the average daily turnover in futures happened to be around INR 24,500 crores compared with the YTD of the last year, the previous year FY '21, '22 of [ 26,800 ] around that much. That means it is roughly about -- maybe you can say that 8% fall. So it is not substantial. At the same time, if you look at the growth that we have, we could be able to see in options, that is phenomenal. What we have to keep it in mind in commodities, option contracts are all option on futures contract. That means you would be requiring a parallel supplementing [ for ] futures contract whenever you wanted to see growth in the option contract. So whenever you see the growth in options, definitely at one point of time, it will definitely will complement the performance of the futures contracts because the drop in futures is not substantial. In fact, we could see that it is more or less at the same level, it is oscillating around the same level. So at the same time, we could be able to take the merit of that increased volatility that we could witness in some of these [ energy ] products.

Okay. So sir, I think that's the important point that you highlighted there. So if I had to look at the combined volume growth for the company, because definitely from a lower base options are showing a very high growth rate, futures have a high base. So from there, they are showing this kind of a number. So on a combined basis, then what's the kind of volume growth we should look at for the company?

So while I won't be able to project what is going to happen, but I can give you the picture year-to-date, what we have witnessed during the first 6 months, like the quarter 1 and quarter 2, we could see a combined average daily turnover of INR 50,000 crores, vis-à-vis INR 30,000 crores, the corresponding period the last year. So a substantial growth that we could see at the combined level, futures and options level. And going forward, we will be happy because for an exchange point of view, we will not be mindful of from where we are getting -- whether it is from the options or futures, as long as we could be able to see that more participants are getting into the system and more products could be able to deliver the volume. So we'll be neutral and we'll be happy to see that from wherever the volumes are coming from.

Got it, sir. Sir, the other aspect which you have seen is that in terms of the energy basket contributing almost around 40% of the futures volumes and within the options also the concentration is very high on the energy. So in terms of this, are there any steps how we want to mitigate this dependence on energy because this could impact our overall performance. So how do we see this getting more in terms of reducing the risk of this kind of issue in terms of higher concentration, sir?

Generally, if you take any exchange, given the global year also, there are certain amount of concentration that happens across only 1 product, 1 or 2 products. You take even the equity products you have most of the volumes are concentrated in Bank Nifty another 1 or 2 index products. Index options happened to contribute a significant portion to the overall derivatives on turnover on the [ NSE ] also. So that way, it is like concentration is not an issue. And interestingly, on our exchange, you have a diversified basket, like you have bullion metals, energy and agri. That way it is like compared to the -- even the global exchanges, whereas global exchanges are generally specialized in one segment or other, like, for example, if you take the London Metal Exchange, they are specialized only mainly metals. CME, again, the focus is maybe on -- the Nymex is on crude oil and Comex is on the bullion contract. So there are certain amount of concentration is there. But in our exchange, the products are very diversified. That means you have different segments like I said, bullion, energy, metals and other things. That means they all have different cycles that means commodity life cycles. So because of that one, if one is not performing well, the other things like whenever you feel that inflation is very high, then definitely, the one people really wanted to go for hedging using the bullion contracts. And whenever economy is going at a bullish that the economy is on a bull run, then metals are going to drive and energy is going to drive. That means different economic cycles will impact the commodity cycles of commodities. As a result of that one, you having a diversified product basket, you always can have the volume in one or other, like, for example, if you take [ last ] to last year, we were doing very fantastically well in [ bullion ]. Prior to that one, sometimes we were doing metals. So the diversified basket is always putting us in giving us a very good opportunity wherein we've been able to capitalize the volatility or the life cycle trends, whatever is happening in any of these commodity segments. So that way we are happy in having a very diversified product baskets. And we are not really concerned about volumes coming from 1 or 2 in this particular year or something because as volatility goes out more to the other commodity, definitely, we can expect that volumes are going to be upbeat in that particular commodities.

Got it, sir. Sir, from the yield perspective, how we should see that number because definitely, if I look at last 2 years, ADT has got impacted, it has been a decline in the future side. So from yield, do we see it going down further or stabilizing at the current level of -- or how do you see the trajectory, sir? The per thousand [ ton] turnover?

Okay. You were talking of the realization rate -- so the realization rate, we remained at even this year, we happen to be 2.07. -- compared to even the last year last quarter also, we happen to be at the same level, INR 2.07 per lakh rupee transaction. So it remains constant. Okay. And options, in fact, whatever we have projected what we thought happened to be around 1/3 of future realization. But in fact, the realization that we could be able to witness in options were higher as compared to what we expected.

Okay. So what are our expectations in options? And how do you see now that going forward? You think that, [ okay, that is ] surprises positively. So going forward, do you see that the realization will remain at a similar level or improve further? How we should look at that trajectory sir.

There are various factors that can have an impact on the net realization, what we get it. Like, for example, I'll give the [ practice ] that can influence these things like [ what ] the contract, which contract is getting traded. Like whether at the money contract is getting actively traded or in the money or a deep out of the money contractor whether it is a new options contract or if it is of a suppose if we come out with the new commodity option, if volumes are going to be driven by that particular commodity options. That can also have a different impact on the realization. So it is very difficult to say which factor will have an impact on this one. But what we could see is the trend that we can say that most of the people are trading around ATM contract at the money contract and also the ITM contract or the people are ready to pay the good premiums. That is the way the market is currently have shown. So is fine. So whatever is happening and whatever is the realization rate. And interestingly, if you look at the currency derivative market, it is a different realization rate. And again, equity derivatives market, you will get a different realization rate. As the market progress and the market trend changes, it is very difficult to say that what kind of realization you will get it.

But sir, from in terms of these, we always thought that as the volatility increases, it should help us in the volume. And MCX should be the best play to benefit from this huge volatility in energy or from the oil perspective. But we didn't see that happening so much because there are a lot of regulatory issues also which came in between, I think all these issues are going on. So if I look at from an investor perspective, then how do you see -- how do you help us understand from the growth perspective? And does the volatility in the underlying commodities is actually only the largest factor, which is going to impact the volumes? Or are there any other factors which can help us get the volumes. And from the regulatory regime also perspective, do you think any major changes because like the peak margins will [ come in ] that impacted significantly our overall business. So those are the struggles which we go through, while it's a fantastic platform, a lot of solid business points in terms of cash flow generation and everything. But I think this is a concern which we are still not able to sort out in terms of how we can get a more sustainable growth from this platform, sir?

See, apart from volatility, volatility, you all know that it is independent and we don't have any influence over the volatility. But there are other factors really can play a greater role. For example, we continuously put our efforts on integration with the physical market. Maybe like the recent development happened to be like we [indiscernible] some of the refiners who can able to know you can able to come and deliver that brand of metal in case of bullion and lead contracts. So this is one major. So by doing that, we want ourselves to get integrated at a greater level. That is one part that we are looking at it. Besides that, there are -- there could be many other regulatory enablements that can really can contribute to the growth of this market. Like the take GST issue, which has been for a long period, which has been impacting us because when you have multiple delivery centers, GST could pose certain challenges. So that [indiscernible] any regulatory enablement happens there, then I think definitely that can act very positively to this market that is on the GST part. Besides GST, you can also see that we have made our request to the SEBI for keeping the [ SGXF ] in case of like as and when needed, we can be able to infuse the SGF into the SGF and also we can -- if we can be able to take it out of the SGF, If SEBI agrees to that fertile thing, definitely, I think we can be able to cut down on the margins, especially in case of the crude oil and other energy products that should really should help the company as well as the market in its growth. That is one part. And recent development, [ barring part ] portfolio investors is another recent development that is really a big policy enablement from the regulators' side. And we are expecting that soon, I think these people will also will start participating in the Indian commodity derivatives market. This should diversify and also will make our the further month contracts also more liquid. So like that, there are certain policy enablements out there. And from our side, we are working on products wherein we wanted to always look forward to come out with the new products like electricity and other products and also look for the participation. Our always saying is to add more and more participants, maybe the physical market participants [ or ] from the financial market side to get themselves to this particular market. So by looking at that, the product participants and the other aspects, regulatory aspects, definitely, we could see that the growth can come from all these areas for this market.

So thanks a lot of other very elaborate answer. And these points only excite us about MCX quite a lot. But my issue has been my earlier interactions also, I have been getting what this GST issue getting resolved about FPIs coming in. But these have been a very long driving issue, some of them. So is there a time line which we can understand in terms of, okay, this is the time line maybe or any kind of comfort in terms of when the GST issue can get resolved? And when you're seeing around -- FPIs but FPIs are not finding enough liquidity on the platform to go ahead and participate in the market. So that is one thing which we have been also hearing. And on this margin part, so I think that's another exciting point, which you've highlighted. But here, when we can see some of these things getting actually implemented, sir?

So, coming to the foreign participation, recently, SEBI has followed the foreign portfolio investors. It's a very recent development, okay? So soon, I think they have come out with the guidelines also. So we can expect that we also will be issuing relevant surplus and that will pave the way for the foreign participants to come on trade in this market. So earlier, maybe we had come out with only eligible foreign entities where they were supposed to show our exposure to the Indian market, the Indian commodity market. So now the all restrictions have gone off. Now SEBI has come out with a clear direction and they have come out with the guidelines. Now all the all the [indiscernible] contracts, the foreign participants can able to trade. So that way, it is like very clear, and we expect that soon it will -- we can expect some foreign participation to come and trade in this market. And they will be interested in various aspects. They also look for arbitrage opportunities. And when the market is also opened up for the other commodities other than the [indiscernible] products, then I think we can also look them for participating in contracts where they look for cash and carry arbitrage kind of strategies also. That way, we'll see that we definitely can see some traction soon to come from foreign participants sites. Coming to the margin related aspect SGF and other things, we are still awaiting for that RMRC to happen at the SEBI and as and when the matter is taken up, we don't know because it's always very difficult to see that when it will happen or what kind of decision will be taken up by the SEBI. But we are positive, all the exchanges have recommended for this kind of dynamic SGF rather than one side that means only one way kind of approach that -- so I think we are positive and we expect that soon, that should come up. That is what is our expectation is. I think that all should contribute to this market.

Got it, sir. Sir, the other aspect is like just negative parties of peak margin rule came in. Any other regulatory side, any decisions which you think could have a negative [ billing ] on our business, if you can touch upon maybe in the talks, could get implemented maybe next 1 year or 2 years' timeframe?

On the negative side, you are saying?

Yes, sir. On the negative side, yes.

When even before prior to the peak margin reporting, we have never thought that, that kind of thing would come up -- so it was a surprise, but anyway, we had to all have to abide by that one. But in fact, I can say that it has end up in contributing to the growth of our options contract. So in other way, it has really has helped us this particular regulatory thing. So as of now, we would not be able to foresee anything, what kind of negative things that can really can come unless if something has come as a surprise to us, okay? And what the positive development already you know that at least some of the areas, regulatory side and from the government side, we are looking for certain policy enablements on the positive side.

Got it, sir. Sir, and any other products and commodity derivatives, which you will be targeting which have the potential they can pick up a big? Any specific products which [indiscernible]?

While we are looking for electricity derivatives, that is one thing that is on commodities that really we are very serious about. And apart from that one, we are also looking for aluminum alloy and a variant of steel contract. So generally, exchanges will not come out with too many products in one go. They come out, roll the products in a [indiscernible] manner, so that they can able to market it well. And at the same time, they can be able to make the product a stable one, a sustainable one. That is what is more important for exchange. So while in the last 2, 3 years, we have come out with many variants and also we had to change the contracts like from a [indiscernible] contract, we had to change it in a compulsory delivery contract, and we had to discontinue the Mini contracts, and we also have gone for a single variant contract. But I think we are positive that I think another discussion that is happening is also introduction of mini contracts again, we are very keen. I think some discussion is happening at a regulatory level also. I think if regulator allows, we can be able to come out with some mini contracts also in the metal contracts.

Okay, sir. But this electricity derivatives, there was this issue with [ CRC ], which was going on. All those issues have been resolved. So then there's a time line by -- any process when we should be able to launch?

That they have come to a resolution. But more importantly, recently, [ CRC ] has come out with a cap on the pricing of electricity. So that is one thing that is what they are looking at because when there is a capping how the derivatives can get traded in that kind of environment. So that capping is still, if I'm not wrong, maybe until January or next quarter, it is there. I think maybe then I think the regulators pantothenthey can consider how they can able to roll out this kind of electricity derivatives.

Okay. Yes, like you're saying that capping could be a very temporary thing and it couldn't get removed [indiscernible]. So then I think from next year, we can expect some of this launch to happen in electricity derivatives.

Yes. We are prepared ourselves. We are just waiting from the -- nod from the regulatory side.

Okay. Got it sir. And sir, this -- any thoughts like how big this electricity derivatives market would be where we look at on the current [ base ] of our turnover, how we should see this incremental business because this -- how this [ exchange at ] market has been evolving from maybe IEX perspective, what we have seen and government push also to have a short-term market and have more of the exchanges participating. So from electricity derivatives market, any thoughts how we should look at maybe 2 to 3 years perspective as the launch happens, what could be the incremental volumes, which you can see or maybe what you would have seen in the international markets, how that can be comparable?

So while I won't be able to give any numbers to it, growth and other things, but what you can do is maybe you can look at generally the derivatives market happen to be multiple of the spot market. So there are developer markets are there where it is trading at a different multiples, maybe in the European market and other things. In Indian market, also, you have to see that what is the size of the near month that short-term market is? And what is the size of the -- because given the short-term market, whatever is currently in India, it's a very small percentage to the whole market size, physical market size. So there is a big potential there also is there. So the overall [ pie ] itself can go increase, it can increase in a big way. So there are various parameters which can have an impact on -- which can decide what could be the size of this particular market is?

And sir, in this, you will see more of -- who could be the participants in this market? It could be the discoms? Or how we should look at to that or...

On the entire value chain, like you said, the discoms and even the generators all distributors and all those people definitely can be participating in this market. And besides them, the other financial market players, they can also be party to this.

Okay. And sir, the other aspect is on BSE has also introduced this gold spot exchange. Are there any thoughts when we want to start that kind of a [ product ].

So currently, our focus, like I think in the investor call also, we have said, our focus is mainly on CDP now. And also, there are like GST challenges are there in case of spot gold because how that GST will be recovered like how the seller can be able to get his GST back. And all those challenges are there. So once that clarity that means still that clarity comes out in case of EGRs, we see that little progression that can happen in EGRs market. Other than that, our -- so our focus is anyway, we are remote focused now on CDP. I think at the same time, we are monitoring the situation.

Got it, sir. Sir, the other aspect is around this entire transition to this new TCS trading platform. If you can just give an update in terms of this delay in the transition, what are the kind of issues? And by when do we see this entire transition getting completed? And are we also in the process of implementing any kind of then penalties on the companies who are providing us these services.

Manoj, you want to answer [indiscernible].

[indiscernible] so as you know, TCS is developing our new commodity development commodity derivatives platform. So as per the earlier published information, we were planning to go live by September. So definitely, it has been delayed, and that is what we have informed all our investors also. And hopefully, I mean, everyone is committed TCS as well as our management to really go live with it at the earliest. So we are planning more parallel runs, all and I think yesterday itself, there today, there is a circular which has mentioned about the [ mock ] trading also -- so that's the plan. On the penalty yes, those are commercial areas which the agreements would definitely take care of it. But yes, beyond that, I can't tell you that how much penalty or what action being taken because first priority is obviously to go live with the project.

Sir, in terms of the time line or by December end, this transition should get completed?

So it's a joint effort. Obviously, TCS, and we both are looking at if the system becomes stable, it is as per the expected features, which members would be testing. And if everything goes fine, yes, there is no doubt about our intention to go live by that time.

Okay. And so sir, in terms of our contract with 63 Moons, so is there a clause in terms of the new -- the transition takes time, we can extend the services from their side? And how much we'll have to pay if that has to happen?

So obviously, again, there are no such numbers being commercial arrangements. So payments and costing and all would not be available like that. But that's an alternate option. I mean the whole premise that we have extended the agreement post September. So that's an alternate option which got exercised at that point in time. And again, we can't really predict the outcome end of this quarter or subsequent quarters. So those are options which management board, all our stakeholders' interest would be kept to really look at the next way forward. But just to repeat, best option is CDP, and we are hopeful of pursuing that option.

Okay. And sir, this cost, which we are incurring on developing with TCS, what's the overall cost and over what time frame this will get depreciated? How we should factor that in our numbers?

The cost node that include the 2, 3 factors. One is a platform that would be developed by TCS. Other one is the ecosystem, the servers and the networking switches and the other operating softwares. So the entire amount would be capitalized. And I know it would be amortized over the life of each of the assets. So in the range of maybe 6 to 8 years, right? So -- and the arrangement with TCS is that after we go live, first year would be under warranty. And after 1 year, the AMC will start kicking in. the AMCs in single digits, as we have mentioned in earlier investor call, AMCs are a reasonable amount. And the amortization would take place over the life of the intangibles as well as the servers.

Sir, sorry, if you can just tell me the total cost?

Won't be able to mention the cost. I think we have -- this has been discussed in various investor calls also. So you'll have to excuse me on that.

Okay, sir, no problem sir. Yes, I got it. And sir, in terms of the cash on the books, what's the level of cash [ is ] right now? And in terms of the -- after we are excluding all the regulatory requirements, what's the kind of cash?

The present cash is around INR 900 crores. And as per our dividend policy, so we pay out 75% of what we earn every year. And in the last call also, we had mentioned that some cash would still retain cash because they would be colocation if SEBI allows us to go in for colocation or any other developments in the ecosystem, you need cash. And if we are to set up a subsidiary company and minimum net worth requirements have to be taken care of. So we need some cash, you would need cash.

Okay. Sir, the subsidiary company, this is especially for which purpose [indiscernible].

[indiscernible] in future, [ there are ] subsidiary companies, then we'll have to take care of net worth requirement. So we need some cash. That's what I meant.

Okay. Got it, sir. And yes. And so this overall in terms of when the technology migration is complete. So our requirement for cash will not be that high. So as that cash gets accumulated, could there be a special dividend of thing, which we would think about?

At the moment, we are not thought about it because the other thing also they have to factor in. They're saying that if this SGF kicks in, right? And it's a 2-way traffic [indiscernible] to the clearing corporation and it can come back. So I mean, you would also need cash to transfer isn't it? The members are not contributing margin, so then the exchange has to contribute. Exchange as well as a clearing house will have to contribute towards the SGF. The SGF would also increase, right? So you need cash for that. I mean it so there will be various needs of cash. Of course, special dividend or interim dividend is something that will cross the bridge when we come to it.

Got it, sir. And sir, lastly, there was also a lot of push in terms of financial institutions, increasing their participation. Even mutual funds for that matter. We were talking about launching new products, which had maybe 10% commodity component and all that. So if you can touch upon that aspect, bringing in these financial institutions in the market, there are also not picked up in the way which we are earlier expecting. What have been the issues there, sir?

There are -- I think they have to, like in case of silver ETFs, for example, I'll give you some examples. They said that the delivery unit should be exactly like 30 kgs. But when you make a delivery on the exchange, it can be in the range of 25 to 35 kg delivery. So 13 challenges there, which we brought it to the notice of the regulator. And also, it is like our relator also wanted to go in a very gradual manner rather than allowing the markets to go it on your full force. So that way, it is like now they have allowed other foreign parts institutional participation. So we are expecting all to happen in a very progressive manner. And interestingly, I think given the [ Amphi ], we are in touch with [ Amphi ] and also they are also planning to come out with a separate body for commodities market, which is exclusively look into the commodities market side. So that will be created, and I think they will be able to aggressively push the regulatory enablements that can really can help the institutions to participate more actively. So that should happen.

Okay. Got it, sir. Sir, if I look at overall, just to sum it up. So from the options perspective, definitely, I think MCX management is very positive from the growth perspective and some of these challenges, which have been waiting for a quite a long time, I think there could be some resolution in the near term, and you are also very positive from the [ FPA ] perspective in terms of when they can come in and increase the participation on the overall volume. And there could not be any major negative regulatory surprises that is definitely behind us. Is that correct understanding, sir?

Yes. Like I said, regulatory as of now, today, as we stand, we do not see any major regulatory enablement, but you don't know what if something comes as a surprise, okay? Other than that, already, we said like we are positive about the performance of the options and also because for writing options, you require the futures. So we feel both markets should complement each other and we should -- I think the growth in option also should literally should contribute to the growth of the futures also.

Go, sir. Go ahead. So sir, that's one from my side. [ Devesh ], if you have any questions?

Yes. Sir, just a couple of clarifications on our technology part. So you do mention that there are 3 parts to it. There's a platform development, which is taken care by TCS. There's an ecosystem which will be developed, which includes server and all. And then there are post migration part, which will be largely maintenance. So of this, is the ecosystem cost will be directly funding from [Foreign Language] are we directly spending that? Or that is also through TCS?

That is directly. It's our cause. So we have procured it.

Okay. So the cost that we have seen over the last 1.5 year, INR 125 crores from the cash flow statements and the balance sheet. Is it largely to do with that, the servers that you...

That's right.

Okay. So the payment to TCS is still pending [Foreign Language] more or less?

What we had to pay to TCS, they have paid and there will be milestones, which we will pay when we cross this milestones.

And sir, the server cost will be -- will you broadly [Foreign Language] would this be like a big component as the payment to TCS? Or this is a smaller component of the overall technology expense?

If you look at the ecosystem, the ecosystem also plays an important role, along with the platform.

Okay. So more or less, there should be a substantial cost -- both the item. And this maintenance, when you say single digit, do you mean as a percentage of what we pay to the TCS.

[ By ] absolute terms.

In rupees, crores?

In crores.

Crores, I understand. Perfect, sir. That is what I wanted to clarify. Thank you so much for your time, sir. [indiscernible], I think that will be all from my side.

Yes. So I'm also done. Sir, thanks a lot for patiently answering our questions, and it was really very insightful to understand how the company is taking forward all these aspects. Thanks a lot again for everybody's time.

Thank you, Praveenji, for your time. Thank you, Satyajeet sir. Thank you, Manoj sir. Okay, bye-bye sir. Thank you.

Bye. Take care.