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

Yes. So the recording for the meeting has started. So I would request -- this is a small group meeting, I would request participants to keep it as interactive as possible.

[Operator Instructions] So maybe, sir, to start with, I would ask on the question on how do you see on the software shift and what's the timeline and the progress as of now? Any comments there would be really helpful.

Sure. On the technology shift or the migration, we are all working towards that. I think we've taken time, in fact, the shareholders were patient. And I think we were to go-live in the month of September. We may [indiscernible] now I think we got what we call a 6-month extension from Jan to June. But this time, we are determined to go with all the functionalities which are needed for going live. Having said this, I also said in the meeting that we had achieved a very good, what you call, success rate in terms of number of test cases, which we have passed through. And all that has happened. We have also already alerted the member brokers that we are going to go live this month. Exact date maybe -- it could be only on a weekend. Weekend or the week -- beginning of the week. So obviously, weekend, we will be transferring all the online trading data and then transactions data, then we will go live. So mocks are available and many members are participating in these mocks that are happening, especially on Saturdays they are happening because that is from the DC. On other days, it takes place from DR and full data has been transferred. Of course, the [ OLTP ] data will be late, late in the sense little older, maybe 15 days to 1 month data, but otherwise, we are exposing full data set to the member brokers. And we are very keen to go live. That's what all our endeavor is unless some last minute glitches come and which holds us back from going forward.

Got it. Got it, sir. So this is really helpful. So maybe just taking ahead with the last part which you have mentioned, like if we have or if you face any glitches, so what is the -- like this next option or how are we planning to handle it, maybe I would put it that way? Like if there are any glitches, how much grace period do we have to handle those glitches at this point of time?

Yes. You see, that is the reason why we are currently doing the mocks throughout this month. I mean up to maybe last week before the last week, we will be doing it and maybe we will be planning or we may be releasing circular in the middle of the month when we'll be going live so that by the time we will get a complete hands on in the sense of the term that we would have run glitch-free systems. And we will say now we are going ahead on such and such date, this month only. That's the way it is. What is the plan B? I think plan B will be nothing but going back to the [ 63 moons ], that's the way the plan B is. There is no other way that we can manage it, which, again, has been eroding the shareholders' wealth or whatever the reserves that we have. So that is what we are least interested in doing it, but God forbid if that is the only way to happen, that is the only way to happen. There's no other way. We want -- but we are making all our efforts to -- we're leaving no stone unturned to make this go live this month.

Got it. So if we are going to 63 moons, we don't have any price or negotiation yet, like would it be continuing at the current rate that you are paying...

I will not be able to disclose anything on...

Okay. Okay. Got it. Got it. [Operator Instructions] Yes, [ Shalin ], please go ahead.

Yes. We you hear me? Hello?

We can hear you.

Okay. Sir, what's been determined that we are ready...

Please introduce yourself.

Sir, [indiscernible] from UBS. I work with Lavanya. Sir, the question is that what could be the determining factor here that we can go ahead or we have to go back to 63 Moons? Is this the audit report we are waiting for or is there some test results, right? So what is the detrimental factor? Like because we are in the June, right, so maybe in next 1, 2 weeks, we are thinking of going. So is there any decision-maker, Board, who will determine this that it's going to be our decision?

Well, definitely, we will take into confidence the Board and the [ SCT ] into account. And see, what will be the determining? Obviously, when we are running these mock runs and members participate and they should get whatever transactions they do, the output right. And the members have to actually participate and then confirm to us, yes, we are all there. So that's what we are looking forward to. And we did give the files to the members and they have to verify and confirm that, yes, this is all happening correct. That's what the issue is. And we are working on it. And these are all parallel that's happening, including the, what you call, mock runs, the audits, et cetera. So they're all parallelly happening.

Right, sir. So the mock runs are happening parallelly and audits are happening, but you -- do you need to go back to the Board for that again and then get approval or is it...

We will take them into confidence with all it's -- if there are any risks we will definitely place before the Board.

Right, right. And sir, is there any -- there is no regulatory hurdle here, right, that in terms of the qualification of the software or the error, et cetera, that we need to [ look at ]...

Regulators expects us to run the systems glitch free and make sure that investors are not inconvenience, et cetera, et cetera, and that's what their ask would be.

Yes, yes. Obviously, that's obvious. But in terms of pre -- there's so pre-requirement, that that's just like -- there's certain parameters that are required? That's nothing like...

I will not [indiscernible] any pre-requirement or anything like that. Yes, that's right, to my knowledge.

So we have a question from [ Bhavesh ]. Introduce yourself before going ahead.

Sure. Sir, this is [ Bhavesh ] from [indiscernible]. Sir, once we transition to the new platform, [indiscernible] we are paying to 63 Moons right now will go away and what will come is a component of amortization costs as well as some annual maintenance costs that we'll be paying to TCS. Now again, from all the comments, et cetera, that I've attended your calls in the past, the number that I'm getting, and again, you're looking at the CapEx that you've done, which is visible in your annual accounts, I'm getting an approximate number of 6% to 7% of your top line at AMC plus amortization costs. Now I'm aware that AMC will not be applicable on year 1, but from year 2, when AMC cost kicks in and assuming amortization cost of whatever you amortized over 6, 7 years I'm getting a number of approximately 7% of top line. So my first question is that, is this understanding correct?

Well, see, the top line keeps changing and if we are doing better than that will come down also. So these are more or less a kind of a fixed cost in that sense for me year-on-year recurring, but then they are all fixed. It will not vary. So it all depends on how better we perform. That's why incrementally, there won't be any additional cost if we do better. But maybe you are right, whatever the numbers you've got, but I'm not done in that back-of-the-envelope calculations. Maybe CFO may clarify.

So I mean, just remember that there will also be some operating costs that we have been incurring for our application software, okay? So that would be an additional, not considered.

Okay, okay. But in general, there will be a kind of savings that, clearly, if you look at -- I mean, FY '23 was purely a very exceptional year where we are paying excess payments to 63 Moons. But if we see a little more in the history, what we get is approximately 13% to 14% to 15% kind of top line spend on technology costs, this should directionally come down as we successfully transition the new platform. So this understanding is broadly correct?

Yes. This should directionally come down. Yes, that is understanding is correct.

Okay. Okay. Sir, secondly, on the mini contracts, which SEBI had banned in FY '19-'20, they now allowed back in Jan-Feb. So what is the status now? And to start with how big of this mini-contracts work for us in terms of overall trading volume then? And how do you expect traders and participants to come back? And what is the initial feedback, if you can share some thoughts?

Yes. On the mini contracts, we have introduced crude and LNG as well as aluminum, led and zinc. And at one time, they were contributing depending on the kind of product that we had in the range of 20% to 27%, 30% kind of thing. And although we have introduced them, they are slow to pick it up -- pick up, and as of now, it's not as much as we expected. Because we just it's about 7, 8 months old, all these contracts have been introduced. Still, there are 2 other big contracts which we have not introduced that is the copper and nickel because it's not only the mini contracts, even the trading and delivery units will be different if we have to go for these 2 contracts. In fact, the volumes in those 2 contracts were also very large in the past. So we could not do that because of the regulatory requirements. We have made an application Hopefully, we should be able to get that. But once the whole set of players who were there earlier, the mini participants come back, again, we should see about 20% to 25% contribution by these mini contracts to the respective total contract -- total product contract, product size.

Okay. Okay. And sir, what was the reason of regulator banning these contracts in the past, first? I mean what's the reason for that and why they've allowed again today?

There was a perception that liquidity was getting fragmented because mini contracts were introduced. But then our view was, no, it was not getting fragmented. The smaller players trade in these mini contracts because unlike in equities, where you buy 1 lot means 1 share kind of thing. Here, 1 lot means it is as good as 1 tonne of aluminum or whatever that is. And that itself is a big one. Now in the mini contract, 1 lot means 5 tonnes. 5 tonnes is very big, maybe INR 5 lakh on which INR 50,000 even if you take 10% margin is a INR 50,000 margin. So it's all -- it's expensive for them to participate. That was the reason why they have quit -- but the kind of suspicion that they had was unfounded. So we went back to the CDAC and made a presentation what is what then I think it was restored now.

Okay. Okay. So the earlier perception was that these mini contracts are fragmenting the liquidity or it's not -- it's basically -- it's not helping the liquidity and hence, it has been banned?

That's right.

Okay. So my third question is around FII participation. Now I'm aware that SEBI has allowed FII participation. But I'm just little curious that why would a typical FII would like to hedge through MCX when they already have options and they're already pretty well registered in most of the global exchanges. So why would an FII would be interested to take an exposure through MCX or just -- or any other new exchange to put it in that context?

Okay. See, the spread benefits are unique to the exchange where they are getting traded, okay? The interest gap between the near month and then far month will not be the same in every exchanges identical, isn't it? So if they want to play in that particular region, then they will play there. So that means they buy the near month and then sell the far month and then if that benefit is about 12%, 13% or even 15%, they take advantage of it. That's 1 major this one. And that's happening, by the way. So that is 1 part of it. Second part of it is, maybe some of them have got an international exposure. And then at the same time, they will take the opposite leg maybe position in this market. And that's another reason why they may be -- they want to participate in this. So it's not necessarily they are all speculators and then there's 1 vibrant markets are there elsewhere for speculation, so why should they come to India and speculate, okay? That may hold good if they are all speculators, but that's not the case.

Okay. Okay. Clear, sir. Sir. And on the domestic mutual fund [indiscernible] what is the kind of response you are seeing? Are they coming -- because I believe there were some issues around the GST registration, et cetera, which something has to be and also, where are we in that journey?

Yes. I think, by and large, they are all there. And mostly, they are active in the gold contracts, and maybe some of them have participated in some agri contract, especially the cotton. But yes, there are issues centered around the GST and there's a big challenge out there. But if they don't want to take delivery, then definitely, they will be able to trade, and that's not an issue. Not necessarily, they should take delivery by the way. That is the way it is. But if they want to go for a spread margin benefit, then they have to necessarily take delivery in the near month and then sell it in far month, so for which they have to take delivery.

Okay. But do you expect all these operational hurdles to smoothen out as the volume picks up or maybe your engagement with the regulator. So where does it require -- I mean, how do we smoothen out these operational hurdles that the participants are facing?

Yes. On the GST front, I think we have engaged quite long enough with the government. I think in this present structure of GST, where is SGST, CGST, there are IGST, there are 3 separate [ laws ], maybe they challenge to make it. If it happens, there's nothing like it. But pending that, we have also given an alternative proposal where the warehouses for some of these products could be kept in a free trade warehousing zones where certain laws are not applicable, certain things are not applicable unless you move the material into a domestic tariff area. And I think that is under active examination of the government and other regulatory authorities. If that happens also again, our problems to a great extent are mitigated.

Okay, sir. Sir, last question from my side. Some of the other new business segments that historically, you've spoken about so as I had gone through some of the past recordings as well as all the transcripts I've seen currency exchange we talked about coal spot exchange talked about, even electricity derivatives, there's something which you have alluded in the last con call. But in general, what are the more avenues that MCX can explore over the medium to long-term, which can add more growth drivers to the business?

Okay. I think to put things in perspective, what we said currency, when somebody asked me what is the next logical progression for exchange then I said that after trading platform stabilizes, maybe step in that direction is not any equities or anything, but then the step in right direct towards the currency because we are trading in international commodities, probably the people who are currently doing 2-leg hedging, 1 on currency, 1 on the metal price, I think they don't need to go to 2 different exchanges. Probably they can do it on the same exchange. That's a logical progression is what I have hinted, if I'm not mistaken. I think that is the way it holds good. So let us know, let us migrate to a new platform, then we will think of all those things. On the electricity derivatives contract, yes, it's still pending with the government regulators. We have been, as I said, [ zinc ] contract, and we have been waiting for the approval for a long time. We have not bought as yet. On the issue of coal spot exchange, coal spot exchange government has put up -- the coal ministry has put up what is their roadmap for the next -- the current financial year for '23-'24. One of the thing is to put in place the regulatory framework for launching coal spot exchange. So that's the way it is. So we are also very keen to pursue that matter with metal then [indiscernible] which we have an agreement or MoU with them. Then another product, which we've got already the is the steel TMT bars. And I think a month or 2 ago we had got the approval, and we propose to launch once our platform is inaugurated. That's how it is.

Okay. Okay, sir. Sir, and what are we doing in the coal spot? I believe we have some international -- we have a JV in Gujarat GIFT City. So I mean, if you can just share some thoughts, there's something which we are doing in gold spot where through GIFT City -- Gujarat GIFT City?

Yes. See, there is a spot exchange set up international and bullion exchange in the GIFT City where 5 of the, I mean, 3 leading exchanges in MCX, [indiscernible], NSE -- BSE, NSE and MCX and CDSL and NSDL have taken equal stake and then set up that exchange. And that exchange is yet to start full-fledged operations. While the regulatory framework is falling in place, maybe slower than we expected it to. And some of the, what you call, expectations are met slowly. But that is something there's no competition out there. And the management of those respective exchanges are the -- exchange and depositors are working to make it profitable. So hopefully, we should be able to see some light in the next financial year. But just -- they started in the month of July last year. And I think we should give them some time to come out with flying colors.

Okay. And MCX has 20% share?

That's right. All -- everybody has got 20% equal share.

We have a question from Sanjay Singh from PineBridge.

Just one understanding regarding the testing for the new software, have we reached out to all brokers or it's only select set of larger brokers which is doing this testing -- mock testing?

Well, there's no select to reach out. We issue a circular and everybody's data is uploaded, so anybody can participate. But obviously, those who are active and then who have skin in the game, they always want to be testing their software working. So that's how it is. So it is open to everybody.

Okay. But do you have anything or how many percentage of the active members are trading with you in mock testing?

Well, more than 90% have already -- those who have who are trading, they all have tested it. I mean who have already traded in mock or participating in mock.

Okay. And any kind of hardware, et cetera, whatever needs to be installed has already been done with all the active members?

Everything. It's a full-fledged system is in place. Full-fledged system is in place.

Okay. Okay. And on the -- if I look at your Q4 number -- annual number, there's a CWIP now of intangibles for around [ INR 117 crores ], which is, I assume, would be largely because of the new software. Now is it a large portion or 80%, 90% of the cost is there in CWIP or there is -- I mean, much more needs to come in the CWIP once the software has been installed?

Well, I think any number of percentage will reveal what the full amount is. So it's not fair to tell anything about that part of it, but it's a good amount of hardware component has already been put in place.

[Operator Instructions] So in the meanwhile, sir, I just wanted to go back on the question earlier and try to understand if -- did you get any feedback from your consumers or the ones who have used traders in terms of the new platform versus the earlier one, any feedback, how they're -- the ease of use or the UI, any sense there?

Well, see, we have already informed the member brokers. We are not changing the APIs, file formats, et cetera. So those members who are using their own front-end software, which are serviced by the various vendors or who have their own thing. For them, there's no problem. For them, the experience is going to be as usual in that sense, okay? Now incidentally, you know that this is already there in the BSE, this T7 platform, which is the front end. So they have no problem about at all. So all that is only that members who are using TWS, traders work stations, which is a very miniscule part of our volume and they may be having some differences they will see. So that's fine. But there are some exchanges who have completely done away with the trader work station concept. They say that we'll give you only APIs and you please customize your own front-end. So that's fine where we can -- we have to go with what we can offer at this point in time given the time constraints.

Got it. So in terms of even the latency or the speed at which the things happens in the mock test, is it in terms of their feedback, is it similar to the existing platform? Any...

Latency, there's no problem, but -- latency there's no problem. It should be very, very...

Okay. Got it. So we have a question from Manish Gupta.

This is Manish from PAG. Sir, my question was regarding the mock tests that you are running. What is the rate of bugs or incidents that you're experiencing there, what kind of failures and so on, if you could give any color on that?

See, when the members -- most of them, in fact, 90% related to initial log in, okay? So many have -- now we have a 2-factor authentication, et cetera, et cetera. So they find it difficult to log in into the system. And some of them are using the -- although we have clarified substantially what they should do. And we have sent to them what kind of their login is, what is the password first time, et cetera, et cetera. But they still find it difficult. Similarly, some members get logged out are going to the spare off mode because we have uploaded the data related to the members, collaterals sometime in the month of May, okay, middle of May or earlier than that. Now some of those instruments may have expired. So if they have expect then collateral will automatically brought down. So the exposure that they have and the collateral that they have system will put them in a spare off mode. So these are the issues. Maybe current collateral, if I take it, they may not have been out of the system. But because our -- I can't expose the latest data at this point in time, that's why we are working with the old data. And these are the issues that are faced. And some members who are participating using their DR connection, which is a, what you call, 1 MB connection. So they will say that my, what you call, broadcast is slow, but somebody who is usually using leased line, they say your broadcast is very good. So when we go live at the trading takes place from the DC that is the data center -- primary data center where everybody is at a leased line. That's why Saturdays we are conducting to give a good experience primary data center. So there, I don't think anybody says that my broadcast is slow, that is slow, all that kind of thing. Thank you.

So sir, do you think that by the time we go live on the new system, these issues will be resolved and maybe say, 95 for some percentage around that kind of traders will be on board and ready to trade?

We should be. We should be. Otherwise, what is the purpose of migrating it. I think we should be able to. That's why all our efforts are -- that's why our BD team is only doing this, approaching member brokers asking them to test the system, join and giving them handholding them, all that is happening.

Okay. And is there any quantifiable metrics that you're tracking that if we achieve that number in the mock test, we are good to go?

There's no number. We are using the trade generator also to give an experience of high volume for the member brokers there all goes to run depending on the -- what we call the speed at which orders are getting pumped. So I think all that is happening. We are in touch with the main I mean the member brokers of the BD team pitch with all their representatives and getting them the feedback, the day mock is over that immediately on the end of the day, we take a review of what these observations are, whether specific to members are generic in nature. Accordingly, we keep addressing them.

Got it, sir. Okay. And during migration from the old system to the new one, do you expect everything to go smooth or -- and have you...

We've already migrated the legacy data. I think it's more than 20 years data or 10 years data -- definitely more than 10 years data we've already migrated. And it's only that OLTP data is to be migrated, which we'll be doing it. That is online transaction processing data, which can only happen on the last day, which is the small set of data. Yes.

Okay. [ Bhavesh ], you had a question?

Yes, sure. Sir, this is [ Bhavesh ] again from [indiscernible]. Sir, on Settlement Guarantee Fund, I believe management was under discussion with the regulator to allow withdrawal of excess SGF or maybe fungibility of SGF, so that can help to -- you can reduce a portion of your margin and have excess reserve and you can take out the excess reserve and which is not really required. So where are we this discussion? Was it -- does this discussion move forward? What is allowed? So where are we in this journey?

See, the ask was -- once that -- we should be able to contribute additional and we should be able to with whenever we don't need it [indiscernible] point of thing. And that has not been decided as yet is still with the risk management committee of the SEBI. And I think that's one ask that we have. All exchanges put together also submitted a proposal, and that is being examined. So once that comes through, then only we will be able to comment on it.

Sure. But my -- just on the current until perspective, if the regulator permits you to withdraw excess SGF you'll be in a position to reduce the margin that you are charging to the participants right now on various contracts. And that will, in a way, even [ aid ] the volumes. And then when, of course, when you need to -- I mean you don't -- I mean, don't take back SGF you can take it back and then accordingly increase the margin. So this will help you to get more trading volumes. Is this understanding correct?

That's right.

Okay. And sir, on -- as we transition from old to new software, there are very clear tangible benefits that MCX will get. During your engagement with the regulators at any point of time, have you got any sense at what should be the ROE or the margin threshold that a regulator would be comfortable that MCX would be getting? Or is it something that you would like to pass on some of the pricing -- some of the margin benefits that we get in terms of lower rates [indiscernible] charge with the participants. So any thoughts around this that do you think that there could be relook at the pricing that we charge to participants?

See, the regulators don't get into the commercials of the exchanges. And as far as possible, they will stay away from that. They want a robust trading system. They want a system to run 24/7 and resilient and meet the expectations of the stakeholders period. Now whether it will save some money or increase puts more money, whatever it is cost you more, it's up to us. Now whatever the benefit that we get, it is not immediate. I think we have to wait for some time and recover the cost that we have incurred in the development of this project which only thereafter, we can look at what is the tangible benefit that comes to us. Of course, pending at this point in time, we have, in fact, in 2, 3 calls also, I have made it, at this point of the time, it is a kind of a no gain, no loss kind of things. Volumes increase, obviously, there's no incremental expense out here that we will only gain, that's what I said.

Okay. And sir, when we look at your revenue breakup, components from -- I mean, research services is very small. I believe within co-location, I couldn't really see a very large component. So do you think these other forms of revenue streams will start [ ticking ] over a period of time? Or this is something you would expect to remain very small?

Sorry, I didn't get your question. Sorry, I didn't hear.

Sure. When you look at your revenue breakup, bulk of the revenue is driven by transaction revenues. Other components like research services or like maybe co-location services, all these components are very small for MCX today. So do you expect these revenue streams to grow faster as we move ahead or do you expect these to remain small?

Okay. Currently, there's no co-location facility, so there's no personal co-location revenue coming in because the regulators don't permit anything of that kind. As regards to the research, there's hardly any research, but there is a data service that we said we give what we call shared data with the vendors so that income is about INR 8 crores, INR 7 crores something like that.

It has increased substantially over the year. And also during this year, we also have provided consultancy to [indiscernible].

It's a onetime -- yes.

All beginning [indiscernible].

Okay. Sir, just to clarify, SEBI doesn't allow co-location for MCX. But I believe they do allow for equity exchanges like NSE and BSE, right? So this is maybe just a matter of time that they will allow in MCX as well?

Yes. In commodity markets, it's not permitted. In equity markets, yes, it is permitted.

Okay. Okay. And are you in discussion with the regulator to permit this at some point of time or you don't expect this to come?

No. Yes, I mean that discussion will take place, but provide -- let me first cross this bridge of migration of platform.

We have a question from Sanjay Singh, again.

Yes. Just wanted to understand on the index option -- index trading the product. I understand the base metals didn't do well because of the nickel issue. But even the energy and the bullion stuff, the [ bullion ] volumes are very miniscule. I think energy is almost topped and bullion is mainly bullion. So -- I mean, why is it so when equity and because here there is a major issue because I think any other products, the expiry technically happens 2 days before the actual expiry because of logical reasons. But in Index, it can be carried till last day, if I'm not wrong. So why are the index here as a product is not working despite almost 95%, 90% of volumes are in Nifty just BankNifty and Nifty?

See, currently, if you look at the equity markets, index options are the most popular ones. And like options are most popular, but out of options, again, if you look at it, it is index options. And index options are also mostly the ones which are more liquid -- shorter duration contracts like a weekly options. Coming to the commodities market, the time when we have launched it, that time, it was almost like the time coincide with the peak margin reporting. So that time -- but subsequently, the volumes all have shifted to the options. Today, we don't have the index options because there also, we are looking at once this technology migration happens post that, we wanted to introduce some of the [ week ] -- shorter duration index option because there has been -- consistently there has been a demand for shorter duration index products. So that is the reason we've been waiting. Once we get that means we make this tech migration, definitely, we'll be in a position to introduce some of the contracts in index also.

No, but currently, it's a 1-month option, right?

Yes, it is currently 1 month option.

Yes. But even in the 1 month, there's hardly any volume...

No, sorry, options are not allowed. Options are not allowed. What we have only monthly futures right now.

Okay. Okay.

So we are waiting for the first to introduce options, okay? Subsequently, we can look for some shorter duration contracts also, so that it will increase the market interest.

[Operator Instructions] So maybe, sir, just going ahead with an earlier question. As you were mentioning that you plan to introduce index options, do we have that kind of enough volumes to introduce options because we have the criteria to the underlying futures to have certain amount of volume before the launch options, right?

Yes. Currently, there is no criteria for index options. That kind of criteria is only applicable to commodity options that too, if it is commodity, options or futures, not on commodity and goods, options and goods.

Okay. Got it.

So there is no criteria.

So there is no criteria, but the underlying will still be the index futures, right, which is not liquid?

No, no, it won't be. It won't be option and futures. It will get settled directly [indiscernible].

Okay. Okay. Got it. And just going back on the mini contracts part. So earlier, we have -- I mean, as compared to whatever products we had earlier in 2019 and now the key products are not yet launched because of operational issues. So what is the contribution of those 1 or 2 mini contracts yet to be launched? And what are the main operational concerns that we are seeing to launch those products?

Currently, we have introduced the mini contracts in all the commodities, except all the in the sense where we were having earlier, we were having the mini contracts. The exception is copper and nickel contract. Because in both the cases, we had to increase the trading unit itself to match with the delivery units. So earlier, they were very smaller, both the trading unit was -- because we were having your main and mini, but both were of smaller trading units, okay? But subsequently, we had to increase it. In case of copper, we have increased from 1 metric tonne to 2.5 metric tonne. And there was also some 250 kg mini version was also there at that time. But we had to discontinue those things, and we had to come out with only 1 single contract. So we have to introduce the 2.5 metric tonne contract. In case of nickel also, we were having 2 contracts at that time. One was of 250 kgs and other was from 100 kg nickel contract was there. But now we have introduced 1.5 metric tonne nickel contract because of that kind of constraint we cannot have. But now we have requested the SEBI to look for considering a differential trading unit and the delivery unit, considering the kind of deliveries that happens in the domestic physical market because the lot delivery generally in Indian market, given because it is nickel completely is imported from global markets. So if that is the case, the lot size and everything is different. But if you want to trade in that kind of big lot size, like even if you today you consider our 1.5 metric tonne contract, it comes very high. It is close to [ INR 30 lakhs to INR 40 lakhs ] worth of contract, which is not that much enticing, interesting for the market participants. So there has been a demand for reducing the trading size, but for that one, I think some amount of concession has to be given by the regulator like the differential trading unit and...

Sir, now our delivery as a percentage of overall trading volume is lower, but even for that part of delivery, we'll need the differential things so to introduce the mini contracts?

Deliveries -- whether it is mini or main, deliveries are always happen to be a fraction of total traded volume in any markets internationally also. Because these platforms are meant for price discovery, and you can say that it is hedging purpose.

Got it. Got it. So we have a question from Bhavesh, again.

Sure. Sir, this is Bhavesh again from [indiscernible]. Sir, any thoughts on resignation of who is CTO who is handling that role now within the organization? Or if you have hired somebody then are we looking for somebody, so any thoughts around that?

I think the previous CTO resigned for personal regions, and we are looking out for a new one, although we have 1 more as our Chief Digital Officer, who has been given an additional charge. And yes, if he himself is good to have, then we will designate him, but we have to go by a competitive search process. That's why we are doing this.

Okay. So currently, we have somebody internally who is -- who's taken up the role...

Yes. We've already issued that communication to BSE, Mr. R. Rajendran has been given additional charge of CTO who was former CTO of NPCI.

Sir, and in future, how do we manage such critical risk because I was just going through the LinkedIn profile of the earlier CTO and I did see he had jumped quite a good jobs before getting into MCX. So I mean, 2 years, 3 years is what we typically see. So frankly, looking at his history in the past and then having an exit within 2 years was not very surprising. So how do we fix this thing? And how do we retain the right talent, how do we identify the right talent? So if you can share some thoughts around that? Because this is a very critical point the CTO has quit -- that what exactly happened?

That's right. Especially when the project was on, I think we had 3 CTOs to put it that way. And -- but then because the markets, especially the technology markets are volatile and with irrespective of the age of the technician, whether he's fresh graduate or a seasoned one. I think even they are preferring to or moving to [indiscernible]. So how do we retain? I think it's a challenge for us -- and I do not have a definite answer on this. But I think as the time goes by, I think they will also see that what MCX kind of platforms are more stable platforms and maybe it is better to stick around. That's the way I think some sense will prevail. That's the only thing I can say. But then how much salary we offer that doesn't meet the -- doesn't satisfy the people.

Okay, sir. And do we plan -- I mean, is there anything in discussions phase also that we might think of having so plan at some point of time? Or is this something which is not on the cards at all right now?

I think KMPs and CEOs and others, I mean, all KMPs are excluded from getting any ESOPs. Maybe if at all we introduce, we have to introduce for only other people, that's why it is.

Okay. And is there any regulation around this or this is something which...

That's right. It's a regulation. It's a regulation.

[Operator Instructions] Okay. I'll take this, sir. I just wanted to understand on the -- our internal tech capabilities. So post the transition, do we have or already built up our internal tech capabilities in terms of handling the whole tech transition? And even after TCS will be there to support, but how we have built our tech capabilities, I would like to understand?

Well, the TCS platform being a new platform, and then we have entered into a contract, including a 5-year AMC, 1-year warranty period, so I think there is enough time for us to replace the TCS services with our own services. But in the transition period also, we have built a good amount of in-house talent. I think they should be able to what we call manage the operations. And as we go along also, we will be taking additional people to meet the requirement. But it's not one fine morning, I can say, yes, it's there.

Got it. So is my understanding right that over the next 5 years as TCS gave us support, we'll be also building our internal tech capabilities to support everything by ourselves, right?

That's right. That's right. That's right.

Got it. Got it. So if we don't have any questions from the participants, maybe I think we can take that as the last question. Thank you. Thank you so much, sir, for your time.

Thank you, madam. Thank you so much. All the best.

All the best with the transition, sir.