Ladies and gentlemen, good day, and welcome to Angel One Limited's Q1 FY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Hitul Gutka from Angel One Limited. Thank you, and over to you, sir.
Thank you. Good morning, and welcome, everyone. Thank you for joining us today to discuss Angel One's Q1 FY25 financial and business performance. The recording of today's earnings call and transcript will be uploaded on our website under the Investor Relations section. The financial results, investor presentation, and press release are also available on the website. For today's call, Angel One is represented by Dinesh Thakkar, Chairman and Managing Director, Vineet Agrawal, Chief Financial Officer. We also have the senior leadership team of Angel One, along with SGA, our IR consultants. The leadership team will give us a brief overview of the operational and the financial performance of the quarter gone by, which will be followed by a question and answer session.
Please note that there may be certain forward-looking statements during the course of the call, which must be viewed in aggregate with the risks that the company faces. With this brief introduction, I now invite Mr. Dinesh Thakkar for his opening remarks.
Thank you, Hitul. Good morning, everyone. India's fintech industry has witnessed robust growth over the past few years, and platforms that help build wealth for young Indians have seen significantly adopted across country. Digital enablement of products and services and internet penetration ensures that an average Indian citizen now has multiple options that were previously unavailable. Seeing the rate of adoption on our platform indicates that future growth should be unprecedented. Angel One continues to remain at the forefront of this evolution by continuously working on deepening adoption and closely observing customer behavior, shaping favorable outcomes for both the consumer and the platform. Encouraged by this deeper penetration of our digital platform across the country, we felt it prudent to associate ourselves with IPL, a household sporting brand with powerful regional loyalty, innovative marketing, a broad reach, and more importantly, high youth engagement.
This effort will not only help build a lasting brand, but will also deepen the category as a whole. An independent third-party study recognized Angel One as one of its top three most visible and recalled brands during IPL 2024 season. Such investments yield long-term benefit, enhance visibility and recall, and support our growth strategy as we diversify our product offering to include distribution of lending, fixed income products, along with launch of asset and wealth management business. We remain committed to excellence with a client-centric approach, constantly exploring breakthrough strategies to capitalize on future trends and opportunities. We have implemented initiatives like offering a guest user experience for those who have yet to register a valid account, simplifying journey for SIPs in ETFs and single stocks, and innovating in area like stock discoverability.
I'm happy to share that Angel One is the only major broker offering a fully digital process for opening joint demat accounts. It is equally worthwhile to note the nature of new clients on our platform. They are young, new to market, Gen Z, with unique needs and aspirations. Recognizing this need, we have invested in social media community initiatives to entertain, engage, empower Indian youth with high-quality financial content. This youth coming from cities from tier two, three, and beyond, need help in learning about stock market, personal finance, business case studies, and much more in the language they understand and on the platform they engage with. In Q1 FY25, we witnessed healthy trading volume, with the peak orders growing by 31% sequentially. During the quarter, the platform executed over 13 million orders in a single trading session, thus establishing a new benchmark.
To maintain our high standards of reliability and uptime, we have continuously evaluated and reinvested in our infrastructure. In quarter one, FY 25, we moved our process to new data centers and conducted regular disaster recovery drills to enhance reliability and preparedness. We also instituted innovative monitoring tools to track and improve our system performance in real time. Our assisted business have seen multiple product aimed at enhancing the NXT platform, offering our channel partners a superior digital experience. Some of the key initiatives include streamlining and automating the onboarding process for mutual fund distributors.... creating journeys to empower our partners to effectively cross-sell and upsell to their clients. Leveraging our strong data analytical capabilities, we expanded into new areas while protecting our margin profiles for the segment. Additionally, experiments with differentiated MTF pricing have yielded positive results, with blended yield ranging between 15%-16%.
At Angel One, we harness the power of data science and analytics to drive informed business decisions and validate strategies for sustainable growth and efficient operations. By leveraging advanced techniques, we are able to devise accurate growth models, target the right cohort with precise campaigns, and enhance client retention. Our focus on personalizing the platform experience and improving overall client satisfaction ensures a tailored journey for each user. We have automated customer service tasks with large language models, allowing us to effectively provide accurate and prompt response to clients' email query, thus freeing our team to handle more complex issues. Our commitment to building a secure, cutting-edge data platform that offers a comprehensive 360-degree view of our customer enables us to provide appropriate margins, make strategic decision about cost, enhance customer lifetime value, and improve resources allocation.
This data-driven approach not only fosters business growth, but also improves customer satisfaction. Thus, continuous investment in technology, product, and data science are essential to curating a better client experience and deepening the market while also giving us an edge over our peers. We have achieved new milestone in mutual fund distribution, reflecting the excellence of our mutual fund journeys. We reported our best quarter with over 500,000 unique SIP registration in June 2024 alone, and nearly 1.5 million in a quarter overall. We also commissioned journey that to view and manage their mutual fund investments seamlessly across different platforms. These innovations reinforce our position as the second largest player in incremental registered SIPs. Efforts are underway to integrate credit and fixed income product into our platform.
We are making the necessary efforts to ensure reliability and effectiveness as we integrate our system with manufacturers' ecosystem. We are expanding our wealth management team and have instituted an advisory council and think tank with renowned industry experts. In wealth management, we aim to focus on product innovation across diversified verticals to cater to a wide spectrum of client by leveraging technology. Our AMC business awaits final regulatory approval, and we will provide updates in due course. Operationally, Angel One continued to deliver healthy performance and acquire about 2.6 million client in the quarter, with 90% from cities, from Tier 2, Tier 3, and beyond, expanding our client base to over 24 million. Consistent investment in expanding the client base have increased our share in India's Demat account to 15.2% as of June 2024.
Our clients executed over 416 million orders during the quarter, translating into an ADTO of nearly INR 44 trillion, with an 18.9% share in overall retail equity turnover. We continue to witness sustained improvement in our cash segment market share, which expanded to 16.6%. Funds raised via the QIP in April 2024 have been deployed to grow the business, as evidenced by our healthy order, order volumes and robust growth in our client funding book, which averaged at over INR 26 billion in Quarter 1 FY25. That is 29% higher sequentially. I would like to allay any concerns about the potential impact on company's revenue and margin from recent regulatory guidelines on True to Label recovery of exchange turnover charges or any other intervention that can potentially affect our streams of revenue.
At Angel One, we are extremely sensitive to the overall experience we offer to our clients, while ensuring appropriate safeguard of the interest for all the stakeholders. I assure you that our business has inbuilt safeguards and provides adequate business levers, including transaction, thus ensuring continuity of our growth and profitability. Just like any other business, we are subject to an evolving regulatory environment. Regulatory interventions lend long-term clarity to business operations, making them predictable and resilient. We support regulation that protect investor and their long-term value, enhance transparency and disclosure, help manage risk, provide fair access to market, and enhance market integrity. We are also actively engaging with regulators on all aspects that only fosters higher confidence, given the long runway that the sector has yet to exploit in terms of penetration and growth.
The board has decided to defer dividend payout for the next few quarters to conserve reserves, optimize our balance sheet, and support our growth trajectory. I will now ask Vineet to take you through our financial performance before we open the floor for any questions you may have.
... Thank you, Dinesh Thakkar. Good morning to everyone. We continue to deliver a healthy operational and financial performance in quarter 1 of financial year 2025, with our average daily orders sustaining at 7.7 billion, taking our aggregate order count to 462 million during the quarter. We clocked our highest ever quarterly total gross revenue at INR 14.1 billion, registering a 4% quarter-on-quarter growth. Our gross broking revenue remained at par with quarter 4 of FY 2024 at INR 29.2 billion. Gross broking revenues accounted for 65% of our total gross revenues, with F&O contributing about 84% in quarter 1. Cash segment contributed 11% of our gross broking revenue, which optically appears low since we do not charge on cash delivery orders for clients under the flat fee plan.
Share of the commodity segment increased to 5% in quarter 1 of FY 2025. Since majority of our clients are part of our direct business, their share in our net broking revenues stood at approximately 78%, while the balance 22% was contributed by clients acquired through our assisted business. While our cash delivery order volumes continued to remain strong in quarter 1, momentum in cash ADTO was in an upward trajectory. Higher activity in this segment, coupled with availability of capital from the recently concluded QIP, led to 29% sequential growth in our average client funding book to INR 26.3 billion for the quarter. Our period-ending client funding book stood even higher at INR 34.1 billion. This led to a corresponding growth in the interest we earned on this book.
The interest earned on client funding, along with the interest earned on deposits with exchanges, grew by 18.9% sequentially to INR 2.9 billion. That's accounting for about 21% of the total gross revenues for the quarter. The ancillary transaction income linked to the value of the orders executed by our clients on our platform remained stable at INR 1.1 billion, and accounted for nearly 8% of our quarter one total gross revenues. It is these charges being referred to in the recent true to label SEBI circular of July 1, 2024. The net income from these charges for the last financial year was INR 3.5 billion. In quarter one, FY 2025, we fully utilized the proceeds from our recently concluded QIP in funding our margin obligation with the clearing corporation and growing our client funding book.
This limited the utilization of borrowed capital for the business despite a 29% growth in our average client funding book and healthy turnover volumes, leading to stable finance cost at INR 556 million. Employee benefit expenses, including cost of granting ESOPs, was at INR 2 billion for the quarter, sequentially higher by 27%. This was primarily on account of headcount increase in our broking and wealth management businesses, increments and apportionment of variable pay for the current financial year. Our operating expenses for the quarter grew by 15.5% sequentially to INR 4.9 billion. This includes over INR 1.1 billion on account of proportionate cost towards IPL associate partnership sponsorship and related digital and media advert spends. The entire cost of IPL season 2024 has now been accounted for.
Net of this brand spend for both Q1, FY25 and Q4, FY24, our other OpEx declined by 6.4% sequentially. The decline reflects over 10% lower gross client acquisition, partly offset by higher spends on cloud infrastructure, Demat charges and CSR related spends. Here, I would like to inform you that Angel One will continue to invest in scaling up its brand over the next few years. Our brand spend for the rest of the year will be in line with our pre-IPL quarter trend. Such spends help us significantly amplify our brand across the country, giving us better reach to our target audience. Our reported consolidated EBITDA margin declined to 37.7% for the quarter, primarily on account of higher IPL associate sponsorship related spends.
Normalizing both quarter one and quarter four for the aforesaid spend on IPL, our EBITDA margin expanded to 48% in quarter one of FY 2025 from 47% in quarter four of FY 2024. This normalized margin also subsumes the expenses of incubating our new businesses of asset management and wealth management. Depreciation and amortization costs increased by 35% sequentially to INR 226 million in quarter one of FY 2025, as this was the first full quarter post capitalization of our data center and disaster recovery sites in quarter four of FY 2024, in addition to incremental assets capitalized in quarter one. Our reported consolidated profit after tax from continuing operations declined by 14% quarter-over-quarter to INR 2.9 billion, against a very strong quarter four PAT of INR 3.4 billion.
Netting out the impact of IPL related costs from both these quarters, the normalized profit after tax grew by 5.7% sequentially to INR 3.8 billion in quarter one, as against INR 3.6 billion in quarter four of FY 2024. Year-ending cash and cash equivalent increased to INR 110.8 billion on the back of increase in client margins and cash generated from the business. Period ending client funding book nearly doubled to INR 34.1 billion as of June 2024, as compared to INR 17.7 billion as of March 2024. Consolidated net worth of the company grew to INR 48.3 billion, which includes INR 15 billion raised via the QIP in April 2024, and profit for the recently concluded quarter.
In quarter 1 of FY 2025, annualized return on average equity stood at 29.8%, which was impacted with a higher net worth on account of the fundraise and softer margin due to the higher IPL-related spends. The leveraging of funds raised via the QIP, coupled with us revisiting the tariff profile, should further strengthen the margin profile for the forthcoming quarters. We also expect the ROE to come back to closer to our historic levels over the next few quarters. With this, I conclude the presentation and open the floor for further discussion. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.
Yeah. Good morning, everyone. Congratulations on good set of numbers. So firstly, Di nesh, on the regulations, you know, there's just too much being spoken about. Firstly, it was the True to Label charges. Then second, there was a change in the way the pledge, the stocks qualifying for pledge would kind of change. And Angel One is one rare broker who offers 100% pledge allowance to the customers, that is second. And third is obviously all the aspects of the media article which came in spoken, speaking about number of expiries declining as well as the lot size increasing.
Could you give some granularity on our businesses, particularly from the fact that, you know, what pricing actions or what other levers we have to offset the impact of True to Label element? And secondly, also on the aspect of, you know, what is the average lot size trading of customers. In the past, you've mentioned about 20% customers accounting for 80% of the volumes or revenues. So, you know, how should we look about this if all these changes were to be implemented in total, then how would our, you know, volume get hit? That would be my first question, actually.
Yeah. Right. Thank you. Let me take one by one. First, True to Label. So as you have seen this quarter, we have around INR 112 crore. And what we believe that, okay, like, we have enough levers to offset this impact, not ruling out change in pricing and all that. That includes even charging for collateral that we accept for F&O segment and all that. So that way, we feel that our business has enough levers which we can play to offset this True to Label. Okay. Second, on expiry, that SEBI has not come out, what would be their approach and what kind of like... All said and done, what I understand, there will be few indices which will expire weekly, and rest of this will be having a monthly expiry.
So there'll be trading options across the month. So for that customer, it's important that whatever option he likes, we would like to trade on that. That is available across the month. So I do not think that, okay, there will be a big impact because ultimately what happens, customer have a certain wallet share for trading. So if there is a kind of like weekly expiry or there's a monthly expiry which is available across the month, they would trade in that. There can be a small impact in volume, but if you look at kind of like number of trades they will do in a year, we believe that is not going to decrease in a substantial way.
And whatever small kind of reduction or changes we can see, collectively, we will work out what are the kind of like levers we have to offset that kind of like impact on our revenue, margins or growth. As I said, that there are few levers that we would like to use, including pricing on certain services and pricing on certain kind of like areas that we are not charging. We have to relook based on what impact we'll have, but definitely we'll have a relook after all the announcements are in place. And on average trading lot, I think, Devender or Bhavin, if you can take that question, or Amit?
The average trading lot, the lot size increase is still under discussion, and we are awaiting the final say from the SEBI. But we presume there won't be any impact, because recently only the lot size had been decreased in Nifty, and we, we did not see major difference in terms of how the customer behavior is towards that. So, we wait for the regulator to announce on this particular part. And, and regarding the pledge question that you had, yes, recently there was a circular from NSE where some thousand scrips have been removed from the collateral, and in a staggered manner, it would be removed in October.
We are evaluating internally, and as Dinesh said, we have internal levers, and if it means that, we have to pass on this particular thing to the customer, we'll take an appropriate call on that as well. Thank you.
So, Prayesh, overall, we think that we have enough levers and there is enough elasticity in our pricing, so that will take care of this announcement that we have heard till now. Because this is more competition-sensitive information, we would not like to reveal and allow our competition to have some insight on what we are thinking about.
Mm-hmm. Yeah. So, you know, just on this lot size, you know, when in the past, when you mentioned that 20% of the customers account for 80% of the volumes, or, yeah, would you say that it would be 20% accounting for 80% of the revenues? And would it mean that this still would not get hit if the lot size increases to, say, 3x or 4x? Would that be a fair assumption, that at least this 80% of the revenues or volumes will not get impacted if the lot size is increased by 3x or 4x?
My belief is that it's not that impacted. As I said, that client agrees with that, has some allocation towards trading, trading investment and all that. And if you look across, kind of like different, different cycles, this is my experience-
Mm-hmm.
Our customers find a way how to trade. If they want to trade, they will choose their kind of like contract size or all that. Unless it becomes like, like, banning of options, okay? But this is a leverage product, what they are used to.
Mm.
Increasing, decreasing lot size, like, that decrease of lot size, that did not mean that our volume went up 100%.
Mm.
It has a small impact, and it gets utilized within some time. So we believe that this change in lot size, if it is substantially higher, then it can have some impact. But what will happen, these people who, like client who want to do trading, they will find out some other instrument to trade. What we believe is that people who are trading, they have certain allocation towards speculation risk. They have some risk capital. So that is going to stay in this market. Which instrument they are going to use, what expiry they are going to use, that all depends based on changes that regulator will announce.
Okay. But-
What I'm trying to say, I don't see any kind of like volume moving out from this market.
Okay. Got it. So last question on the AMC license. You know, it's been the final approval is pending for a very long period now. Now, this time gap is possibly the longest for any of the applicants, what we've seen. So is there any? So what's the challenge out there that we are not getting the final approval?
I think Hemant is the right person to take this question. Hemant, please.
Yeah. So this, there's a process for seeking the AMC MF license. So we, I could say that we are in the final stages, and as a part of the process, there are different things, from filling an application to getting in-principle approval to getting the inspection done. So most of our things are in place, and as of now, we do not have any further comments from anybody to address. We are waiting the license. As a general trend, I think during the time of elections, the overall process, approval process, little bit slows down. Okay, so given that we are done with the election process, et cetera, I think things should now pick up pace, and we should have our final approvals very soon.
Got that. I'll come back to you for more questions. Thank you.
Yeah. Thank you.
Thank you. The next question is from the line of Ajok Frederick from Sundaram Mutual Fund. Please go ahead.
Hi, sir, thanks for the opportunity. Sir, you mentioned that the dates of expiry decreasing will not have a major impact. I'm just trying to understand that, sir. Can you please elaborate on that?
See, as I said, that if you look at customers who are coming to the market, they have some allocation of capital for trading, for investment and all that. I do not think that allocation is going to change. Even if, like, there's a weekly instrument or a monthly instrument, it is traded on daily basis. So we believe these customers, instead of trading expiry contract, which was available daily, they will take contracts which may expire after a month, but for them, what is important to take a position on the day basis or two-day basis or three-day basis, that options are available. So in that sense, whatever kind of wallet share they have, for trading purpose, that will remain in this market.
You're saying that instead of the last day, it will shift to T minus one, T minus two expiry, we'll be spreading?
Yeah. Yeah, yeah, exactly. And we have seen my-- our experience is, that when a customer trades, like, one day or two day prior to expiry-... they in fact, lose lesser amount. So what I believe is that, that extends their life in the market.
Mm-hmm. Understood, sir. And the second question, you also mentioned about pricing elasticity. But if you look at the market, right, we're all around one large player's pricing, and therefore, you think the large player moving will directionally indicate where we will end up with?
See, all large players we say, this market right now is driven and expanded by large four or five players. So unit economics of every player is same. In fact, we are far more efficient, we have taken every efficiency of this industry. If we are impacted by certain percentage, and we try to use that lever or price, everybody will be impacted in terms of unit-wise pricing. So that way, I feel when it's elasticity, customer does not mind paying few rupees extra per order or paying for cash segment and all that. What is important for them? They should get best service on this platform. When they are trading in any kind of like contract, they take a calculated call for them. In fact, they don't mind paying more, but what is important is that are they getting service?
Are they able to associate with a particular brand for trading investment purpose? So that way, Angel One is fortunate in terms of great efficiency and great brand value for people who want to come to capital market.
Understood, sir. Very helpful. Thanks.
Thank you.
Thank you. The next question is from the line of Nidhesh from Investec. Please go ahead.
Thanks for the opportunity. The first, on the timelines for the launch of trade product as well as fixed income product, what are the timelines when we should start seeing some pickup in that?
Yeah. Great question, Nidhesh. I would ask, Saurabh to, answer this. Because just to brief you that we are seeing a very positive trend on that. We have completed our integration with our platform. I think, Saurabh would be the right person to give you more information on this.
Hi, we are currently in a beta. On the trade product side, we have integrated with the lender. We should be integrating with 3, 4 more lenders in this quarter, and we should largely be out of our beta by the end of the quarter. In terms of traction that we are seeing on the product on the platform, even though we have opened it up for a very insignificant base of our overall KYC customers, we are seeing great positive traction on the trade product side. Again, on the fixed income side, we are in beta. We have made it live to a select audience base. By the end of the quarter, we should have rolled out to our entire audience base.
Okay. So by the end of this quarter Q2, both these products should be live for all customers?
Yeah. Yeah.
Secondly, what is your strategy in wealth management? Because I see that we are targeting all customers across income levels, but our captive customer base is becoming more in the mass category of customers. So why are we targeting the UHNIs customer segment, which is very different, and the entire investments required will be quite different and have very low synergies with the existing platform and existing customers that we have?
In wealth, our strategy is that we, we believe that we have to serve all the individual needs when it comes to capital market. And there is a segment of investors, which we feel that can benefit by combining technology and people with domain knowledge. And we have got a great team of co-founders, whom we believe that they, first of all, have a domain knowledge, and they understand importance of technology. So I would like Shobhit to answer you on this wealth management, which area they are targeting. And just to give you a brief, that we have seen a great response in terms of attracting talent, so we are very optimistic in terms of achieving great consumer-like business through this vertical. Shobhit, over to you.
Yeah. Thank you, Dinesh. The thought process is that, we are seeing a very, very strong tailwind, both in terms of the emerging HNIs and HNIs that the country see. Some of us who have joined the team have had large number of years of experience in, managing the, money for HNI and ultra HNI clients, and, that's the domain, skill that we think we will be able to bring to the table very strongly. As Dinesh rightly answered, I think, in order to reach out to a large number of, growing emerging HNIs and HNIs across the country, I think, the need of having a very strong technology platform in place to be able to, reach out to, those many customers, is going to be essential.
I think that's the synergy that one is really strongly looking at. No doubt, the market itself is providing great opportunities where Indian investors interest in terms of taking risk and deploying money into financial products is also growing. I think it is a combination of all three pillars: a strong domain skill and a strong technology platform. Of course, ours is meant to be an omni-channel platform, where there will be additional relationship managers who will also be reaching out to those set of customers. I think those are the three strong pillars on which we think that the HNI needs can be fulfilled the best, and that's what we are going to capitalize on.
... just a clarification, are we also targeting UHNIs segment, individuals with INR 25 crore+ of wealth or, or that segment in?
Yes, we will be.
Because, the skill set and the platform requirement will be very, very different across all three categories, three, four categories within this segment. So and, and what is the investments that we have already made in this business or, in terms of, team building?
No, like, you want to know investments that we have done? Okay,
I want to understand the operating cost that is increasing on the employee cost, which is increasing, how the trajectory will be. Are we fully invested in wealth management, asset management, or we will see further increase in the operating costs from these businesses?
At holdco level, Vineet, if you can just take this question.
Sure. So as I'd communicated in our last earnings call, the impact of the new businesses, the incubation of the new businesses in the overall operating margin of the consolidated entity will be about between 1 and 1.5%. So this is going to be there. This quarter also, the expenses that we've incurred towards the new businesses have contributed to about 0.6% of the overall operating margin of the business. Okay. Look, 60 basis point of revenue is being, is the investment in these businesses, in the cost of these businesses as of now. I was unable to get your question. If you can just repeat last one.
Yeah. Just a clarification. So 60 basis points of the revenue is the operating cost of these businesses in this quarter?
No. 0.6% of the operating margin of the broking business is the impact of the new businesses. So the new businesses have won about 0.6% of the overall operating margin.
Okay. Sure, sure. Thank you. That's it from my side.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Ankit Babel from Subhkam Ventures. Please go ahead.
Yeah, good morning, sir. Most part of my question has been answered, but just a clarification. Sir, you mentioned that your ROE will go back to previous highs in the next few quarters. Now, we understand that there would be a big impact from first October due to this SEBI regulation on turnover charges. At the same time, you also mentioned that there are enough levers available to compensate that. But just wanted to understand, are those levers enough to fully compensate this loss without impacting your, you know, overall growth and client experience?
Ankit, as I mentioned, that there are enough levers to offset this increase or maybe benefit that will be withdrawn. But what we are looking at is that, as I said, that size that we have in this industry, our efficiency is better than average of all. If I take an average of all four, five digital players. So whatever impact we see in terms of unit-wise costs, that can be easily offset with using all that levers.
Okay. But to compensate this current loss and any future losses which might come due to change in regulations, is increasing the brokerage rate option available? Will you consider that?
Yes, definitely. That is what I am saying, that we are waiting for announcement on other things. We'll evaluate what kind of an impact it can have on volume. If we see certain impact, which needs some correction in pricing also, we would definitely do that.
Okay. Lastly, as investors should... Is it fair to assume that, going forward, you'll maintain this 47%-48% kind of operating margins in the coming years without impacting your growth?
After capital raise, Vineet, if you can just, like, answer this. Because after capital raise, ROE will be different, no?
No, not ROE, EBITDA margins.
Yeah, EBITDA margin, definitely we would bounce back. If you see today also, at sales, our margins are quite decent enough. So there are lots of levers which we can play in terms of looking at new regulation, what kinds of like improves we see in customer, coming new to market and all that. So it's too early to say, but as I said, there are lots of levers, including, looking at, increasing our price, which are available. If you look at, variable cost, that chart that we give, there are lots of things that we can use to, get this OPM, back. So we are very confident that we'll be able to, in few quarters, we'll be able to come back to this OPM.
Okay. That's it. Thank you so much, sir.
Thank you. The next question is from the line of Gautam Trivedi from Nepean Capital LLP. Please go ahead.
Yeah, hi, this is for Dinesh Thakkar. You know, the figure that stood out for me is-
May I request you to use your handset, sir? You're not clearly audible.
Yeah, I'm using my AirPods. Can you hear me now? Is it better?
Uh, yes.
Yeah, I can hear. Continue, Gautam, continue.
Okay. Thank you. So, one of the things that stood out for me was that your client funding book is up 200%, as you mentioned, to INR 34 billion year-on-year, and then your exposure per client is also up 80% to INR 1.8 lakh. So both these numbers obviously are much, quite bigger on a year-on-year basis, quite staggering. My question is, do you think that the market at this point is overrated?
... It is very difficult to say when market is overheated.
Yeah.
I think best of expert would not be able to say when market is oversold and all that things we have been tracking market, including you all, in 30 years, never we have predicted peak all at the bottom. So I think looking at fundamentals, definitely everything is bullish. We don't feel that it is overheated. Lots of concerned value there is still in the market, and we are expecting lots of concern inflows, retail as well as from and all that. They are not an analyst tracking the market, but my gut feeling says the best phase of market is yet to come.
Fair enough. One last question from my side. On slide 25, on the extreme right, you've got the client funding book segmentation, and there it says 84% of your client funding book is blue. So the blue color says INR 0.1 million. So what is that INR 0.1 million? Is that the average contract size, AUM of the customer? What exactly is that? How do I read that?
Vineet, if you can take this question.
The line for, Mr. Vineet has dropped, sir. I'll just reconnect.
Okay. Yeah, yeah. Anybody, like, Amit or somebody can really inform, we need to take this question. Slide number 25. Vineet, do you want this question to be repeated?
Yeah, Vineet, I'm happy to repeat the question if you're back on.
No, one second. He's not back on.
He's not back on. Okay.
I think we have lost the connection with the board. One second, please hold on.
Sure, sure.
Ladies and gentlemen, please stay connected while we reconnect the line, please. Ladies and gentlemen, we have the line for Mr. Vineet reconnected, so you can go ahead.
Sure.
Yeah. Vineet, do you want me to repeat the question?
No, I understood your question. So,
Yeah.
What this bar, which is deep blue, it denotes is that 84% of our total book comprises of clients having exposure of less than INR 100,000.
Okay. So that equates to the low per client exposure of INR 1.79 lakhs. Is that?
Yeah, that's the average. The average across the entire book is about INR 1.8 lakh or INR 180,000 . 84% of this book is about less than INR 1 lakh . And then 9.6% is between INR 100,000-INR 500,000 , and about 6.4% of the book is more than INR 500,000 .
Understood. Okay. Thank you very much. Just one question for Mr. Thakkar. You mentioned that you are postponing on the dividend you don't want to declare for the next few quarters to conserve capital. What are you where is that coming from? What's the concern or why are you doing that?
If you see that we have skipped dividend, we have raised the amount to QIP, because we feel looking at the growth of this industry, lots of capital is required to support this growth.
Okay.
So we would like to watch the trend for a few quarters and then again, start coming back to giving dividends.
Got it. Okay. Thank you. Thank you so much.
Thank you. The next question is from the line of Abhijeet Shahare from Kotak Securities. Please go ahead.
Yeah. Hi, good morning, everyone. Sir, I have a couple of questions again on the MTF book. One is that, you know, how should we see this book growing now that, you know, with fresh capital, you're already seeing the impact on growth, but, you know, what's the untapped potential with our current customer base, and where can we take it to the next, you know, 6 to 12 months?
So we are seeing good traction on MTF in direct business as well as assisted business. So, if we like, we feel that growth in this segment will continue at a decent rate. Devendra and Nishant, if you can take this question in terms of-
... Hi, this is Devender Kumar. So on the MTF front, now, there are two, three big changes which have come in. Obviously, the funds coming in has allowed us to expand, you know, our base of users who we were restricting in terms of usage because of the same thing. So that expanded, which has allowed large customers or large people also to come in. Secondly, there are major innovations, you know, changes that we have done on the product front, where now we have introduced now MTF product page, so people can actually have a complete experience of an MTF product that was not available earlier.
As well as now we have introduced some journeys where, you know, clients who are creating or buying investments, we have come up with journeys where if they are short on funds, we are giving them an option of, you know, using MTF, which we were not doing earlier. Which has now obviously allowed a lot of people to know generally people who are investing in the market to come ahead and, you know, use these funds for their, you know, investment purposes or short-term purposes. So combining all these key activities has resulted in the overall increase in MTF that you're looking at, and now which has got us to our place today. So we continue to look at, you know, going ahead as well.
This will continue as we are bringing more innovations and more simplified products for our customers to use this in a much more higher customer experience-oriented day, which is what is now driving this growth at this point of time.
Yeah. Further to add, Nishant this side. Further to add what Devendra mentioned, the market remains to be highly robust. The overall book at the industry level is at about INR 73,000 crore, and we believe that from here on, we would definitely be seeing a 50% upside in the next 6-12 months, if that was the question that you had.
Got that. Useful. And just qualitatively, I guess, you know, the customer profile of MTF clients would be somewhat different from the rest of the client base. So if you could give us some color in terms of, you know, what are the average positions that they hold with us or, you know, age profile, vintage?
We don't look at the data, but generally, when we have looked at data, we have found that they are very similar to our investor category and trading, and we don't see much difference in terms of, you know, their profile and general trading clients or investing clients. We don't see that difference in terms of age and other places.
Okay. Got that. And one last data question is that, what's the revenue share for the AP clients who are borrowing through MTF? What share of interest income is getting shared with the APs?
I don't think we share that data. Vineet, do we share this data?
No, we don't.
We don't share that data.
Okay, no problem. Thank you so much.
Thank you. The next question is from the line of Ashish Goel from InvestS avvy Portfolio Management LLP. Please go ahead.
Yeah, so, good afternoon , I'd like to ask that while I understand that, there was not much of an impact when the lot size was reduced, but if the lot size is significantly increased, which seems to be what SEBI is trying to do, an indicator number given in one of the articles indicated lot size going to as much as INR 20 lakh-INR 30 lakh even. Now, clearly, I understand, investors have a certain amount of capital which they want to use for trading, but if the lot size goes to that amount, then how do you mitigate that risk, and what is the kind of impact you would see on your business?
Ashish, it's very difficult to say that what SEBI is going to introduce. What we understand would be certain measures which I think that we have seen lot size from, say, like INR 6 lakh to even like INR 15, 16 lakh, and we did not see much of an impact on revenue. I'm not saying it was 8, 10 years. Lot size has been changing time and again. So unless and until it is very kind of like different than what we are thinking, we cannot comment on what SEBI would come out as in final figure. But whatever discussion we are having and what we are understanding does not seem to be very substantially high. But even if it is like in your range, what you are saying, I don't think it is going to impact in a big way.
Because we have seen that, okay, when lot size increases, then to retail make trade less. But what we have seen is that capital allocation towards trading does not change across lifestyle. I have seen this industry since last 25 years. Whatever leverage product is available, customer has certain allocations of their capital towards this. So if it is-
Yeah.
Within that range, unless and until the amount is very kind of a different number. What we are discussing, what we are talking would not have a significant impact. And whatever little impact it will have, I think we have enough elasticity in price to offset and take care of that.
Okay. So... okay, I guess we'll have to wait for the numbers to come in.
Yeah, exactly. So we have to wait for all the announcement, then it will be the right time for us to comment on that.
Okay. Thank you.
Thank you. The next question is from the line of Sanketh Godha from Avendus Spark. Please go ahead.
Yeah, thank you for the opportunity. Last quarter, when we announced the result, we said that our EBITDA margin will be somewhere between 53%-44% for FY 2025. Today, it is around from 37%. Means if I adjust for the IPL cost, it is closer to 48%. So is it fair to assume that in subsequent three quarters, maybe in fourth quarter, you'll still have an IPL impact again, but you will operate in that 47%-48% EBITDA margin and end up with the year at 43.5 or 44 kind of a number? How do I look at the EBITDA margin story to play out?
... Okay, as you mentioned that we have to wait for SEBI announcement, there can be impact for one or two quarters till the time we adjust to new announcement and all that.
Mm-hmm.
Overall, if you look at. Now, let us come to IPL first. IPL would have a long-term consumer like benefit, so it is not right to say that, okay, with IPL, I believe that main impact or benefit of IPL will be seen in this block of five years. So if I portion that five years, I don't think IPL is going to impact that block in a big way, but when we are spending in that quarter, impact is seen. Now, coming to, like, OPM, across FY 25, we believe, as I said, that when we evaluate this announcement which are going to come, already we know about this True to Label and all that. For that, we are very confident that lots of levers can be used to maintain our OPM.
We have to wait for SEBI announcement, and then it will be right time for us to tell about FY 25 OPM, because these announcements are expected to come, say, in a month or two. So it will take some time for us to react. In a way, we have to evaluate in terms of what changes we have to do in our business model, what levers we have to use to offset any impact if that is there. So a bit early to say, but overall, I can say as a business model, we would be maintaining this OPM of 47%-48%.
So, sir, we are not comment on that quarter. Yeah, yeah, I got it. So, but, then it is safe to safely assume that any lot size change or any regulation with respect to options which will come, you are indirectly admitting to the point that it will have an impact on the growth, and therefore predictability of the profit margin will be difficult to tell at the current juncture.
No, Sanketh, what I'm trying to say, when announcement comes, we have to evaluate it properly that exactly what would be our kind of like strategy for that. So that many times takes 15 days, 20 days or a month. Quarter is just 3 months.
Right.
So we would not be very impulsive in terms of reacting. We have to evaluate each and every consideration. See, we are more of a company who believes in data. We look at five-year data. We check what will be an impact on customer behavior, if it is temporary, short term or medium term. So I'm commenting on that quarter when announcement will come. That quarter may not reflect a right OPM picture. But if I look at overall, what we can achieve in terms of business model, if I take even two quarters here and there, we would be able to, restore back or come back to OPM of 47%-48%. That is my point. But there are big announcement that we have to wait, we have to evaluate. We cannot be impulsive. We cannot be prepared for what we don't know.
Got it. Got it. And on margin trade funding book, see, we said industry size is INR 75,000 crore. So we are broadly at 5% market share. If I do the reverse math, I think the largest player is somewhere around 20% plus, which... So just wanted to understand, means, yeah, it means to drive the margin trade funding book, means you will keep on focusing on cash market and cash delivery market. So is it fair to assume that even when you say tweaking of the charges, you might not touch the cash delivery because it's kind of an indirect support for margin trade funding book, which is more profitable?
Should one make that conclusion? Or you think both are independent and margin trade funding book and cash delivery charges will not move hand in hand?
Sanketh, I can tell you one thing that, okay, whichever segment was subsidized and all that, that will not remain.
Okay.
Customers are okay to pay for a cash market; they never said no. But we felt that we have enough OPM. We continue to kind of like keep a zero brokerage.
Sir, the reason I'm asking, sir, is that last September only, we took that call of reducing meaningfully lower compared to the industry competition. So, now we are coming back and increasing the charges and-
You are getting confused. That was intraday.
Yeah, intraday. Yeah, yeah.
Charges. This is delivery. So intraday charges, we realized that while going digital, we missed out that portion of somebody's trading in a low kind of like ticket size.
Mm-hmm.
We need to give a kind of like brokerage, which that person will be able to kind of like trade and earn. Because if we charge too much on that contract, we will lose that customer to traditional brokers. See, by definition, discount broking or people like us using technology platform, has to be lower than traditional brokers. So in that segment, that size, in that ticket size, we were higher. They will realize we reduced that price to INR 20 or 0.03, whichever is lower. So that is not connected to this case segment, what I am discussing right now. And this charging on delivery will have an impact on margin funding, we don't believe. Even a customer is coming, taking delivery, they are okay to pay charges, but only on our own, we are cutting zero.
Got it. Got it. And this MTF book, we just wanted to understand which customer segment is driving. It is direct or assisted salespeople customers are predominantly driving our MTF book?
No, growth, we are getting growth from both the segments. As Devender and Nishant told you, that both these books are growing at an equal rate, and there's a good potential. So right now, like already, we have seen a good growth, so kind of an adoption and customer, like, liking. Margin trading platform on our, margin trading service on our platform is really, like, they appreciate it and they use it also.
... So what I feel many times, suppose I have seen in my life that if option ticket size goes higher, many of those customers move to cash trading platform. They leverage by taking margin trading.
Got it. Perfect. And lastly, sir, on this offline business, using our authorized person and getting into distribution, I think we did not touch upon that point. Can you just tell us the progress, and when we can see revenue materialization happening in that plan?
When you're saying assisted business, right?
Yeah, assisted business.
When we authorize our people distribution in terms of mutual and other products, you are saying?
Yeah, yeah. Right, right.
Okay. Nishant is going to take this question.
Yeah. So as Dinesh Bhai had mentioned during his initial opening remarks, we have recently taken live the journey for DIY onboarding for mutual fund distributors. And the whole idea is to create a disruption of sorts and provide these players a very potent platform which they can use to, one, attract their own clients, and also grow their business into different other revenues, which we already offer. So I think, with this going live, we are very confident that we would be able to attract a very decent size of mutual fund distributors, and eventually panning out into a decent growth as far as our AUM and mutual fund clients are concerned.
The approach also is once those kind of customers come by who may have a mutual fund first approach, we would like to use that funnel to also cross-sell multiple other products, including broking, and our internal data is suggestive of this trend.
Got it. Have you finalized what will you be sharing between you and MFD? 70/30, 60/40. Anything concrete is materialized now?
No, we don't disclose that.
Okay, that's it from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Yashodhan Nerurkar from Edelweiss Mutual Fund. Please go ahead.
Yeah, hi. Thanks for the opportunity. So firstly, I wanted to understand, since you have a plan to incorporate a wealth management division, I wanted to understand how are you looking to scale that up? Because, I mean, I'm asking because, I mean, most of your client base is somewhere below 30 on an average, and, you know, the opportunity to cross-sell the product also, you know, is taken out because of the client age. So how exactly are you planning to scale that business?
So first of all, we have formed a company. It is not we are planning. Already we have formed, team is in place. And, I would ask, wealth management team to reply you on this.
Yeah, hi. So, the plan here is basically to build solutions for emerging HNI, HNIs and ultra HNIs, as I mentioned earlier. We already have got the team scaling up. We already basically three broad directions in which the teams are getting built. There is a investments team, which is going to be looking at all kinds of investment solutions which cater to the requirements of the HNI customers in general. There is a technology team additionally, which is setting up the technology platform because the requirements of HNI customers are different than the requirements of customers that currently are offered on the Angel One platform. So there is a separate technology team, which is already got set up.
And thirdly, there is, as I mentioned earlier, there is an omni-channel approach. We are also going to have relationship managers who are going to be approaching, many of these HNI clients, because HNI clients, do like to, have interactions with individual relationship managers, because the discussions can go beyond, pure execution of, financial investments. There are discussions around, various other aspects, related to their wealth management needs. So it is a comprehensive, platform which is, getting built. We already have got our registration, with AMFI for distribution of mutual funds. So to that extent, the building blocks are starting to, come in shape.
We have a plan where this whole business will continue to keep adding up, and the teams will continue to keep getting built to address various kinds of requirements and needs of wealth management customers.
Okay. Okay,
Yashodhan, if I may add, on your point about our customer base at Angel, and if there is a potential to cross-sell. The point here is that we have seen our customers also evolve. The number that you mentioned in terms of the age is actually the median age, but there are a set of customers who are on the higher side of the median age, and based on our data analytics, they also fulfill some of the parameters that the wealth team is currently exploiting. And therefore, to that extent, we will be enabling the journey more as a tech, wealth tech kind of offering to those set of customers, because we believe they are far more digitally savvy. At the same time, at the right age and the right, you know, value bucket.
We see that over the next 2 years, 5 years to a 10-year bucket, a lot of our existing customers will eventually evolve there. And this is the beauty of our model, because even in any other product, we believe in setting it up at the right time so that we are not too ahead of the curve. At the same time, we have the platform ready, so that whenever there is any change in the business strategy, then we have a process already to take care of it. So that's the point to answer about your existing customer base of Angel One.
All right. All right. That's very helpful. And secondly, I just wanted to understand, I mean, do you guys keep a data as to, you know, the number of people who are trading with derivatives? You know, they're trading on daily options or monthly or, you know, the weekly options. So do you bifurcate these sort of traders, and the revenue contribution from each of them? Do you categorize them in different buckets as such?
See, internally, we do lots of kinds of bucketing, but this being very competition-sensitive data-
Okay.
We don't disclose all this.
Okay, okay. No worries, no worries.
This one is data entry, just doing all the job.
Okay, okay. So just one last question. Since earlier participant asked you about your, you know, the margins. So I understand there are certain expenses which are not in your control and are dependent upon the multiple regulations that may be coming out, but there are certain costs which are in your hands, I mean, in terms of scaling up the certain initiatives which you have been planning. So in terms of moderation of those expenses, do we see them moderating in a year or two? Or, you know, they, they will continue to be on that elevated front because of the investments you are making in different, new initiatives.
So Yashodhan, the same investment in new initiatives is come from, like, long-term core, so definitely there is no slowdown in that. In fact, we are seeing quite positive kind of like signals we are getting from all new businesses, including wealth management and AMC. So that investment will continue. Now, for information only, we have taken that cost, and we're yet to see revenue from all those vertical. But looking at all initial kind of responses we are getting in terms of attracting right kind of talent and all that, I think we will continue to be fully invested in that. On scaling up, as we always see cost of acquisition to lifetime value, I believe lifetime value with all these changes is not going to change, so hence our strategy in terms of scaling up also will remain as it is.
Okay, okay, fair enough. Thank you so much, that's it from my side, and good luck to you.
Thank you.
Thank you. The next question is from the line of Chinmay Nema from Prescient Capital. Please go ahead.
Hi, sir. Thank you for taking my question. I just have two general industry-level questions. So firstly, active NSE clients is a metric reported by, you know, all the companies to represent their market share and for market sizing. I just want to understand what percentage of active NSE clients is usually the ones operating in the F&O segment. So basically, how representative it is of the majority of our business. That's the first question. And secondly, could you provide some sense around the value and volume growth of the industry? Basically, is it that more people are entering into F&O trading, that is what is driving the growth? Or, is it that the same people are putting in more money into it? Some, some sense around these things.
The first question on active customer base, that does not represent our volume on F&O, because these are the customer base who have just traded once in a year. Our experience is that any customer, when we acquire, they may not be active in that first year, but they later on become active in F&O another segment. So that way, there is no straight correlation between active customer base and active customer on F&O segment. Second, on your question was on value and volume growth. See, what I have seen, the customer has a certain kind of, like, appetite for trading in the market. So what is important for us is that, okay, whatever customer has attracted in terms of trading or investment, that has remained almost constant. I don't see much of a change in that ticket size.
So exposure per customer, if I take even after this volume has increased on F&O, if I take customer like two years back, their ticket size or exposure in F&O market was same. This volume that we are seeing growth in premium or F&O, it is because of more number of customer coming to the market. So overall ticket size of the customer remains same. I think this whole surge that we saw in volume, it is because people across India, because of access to capital market, they all have become active. If you look at growth in something like premium market and growth in customer base, almost goes hand in hand.
Got it, sir. Got it. And lastly, you've been in this industry for a, for a long time. Behaviorally, so typically, what's the behavior of this, this customer segment, you know, during the, during times of market downturns? I mean, clearly, the last four years, markets have been in major upswing. But in your experience, subjectively, what happens during, you know, periods of downturns?
We have seen during downturn previously, because market was shallow, mostly retail were participated through kind of like urban and tier, the same metro population. We were unable to even counter like selling from FIIs, even small selling in a year, like 50, 50 thousand, INR 100,000 crore used to create a big disaster in market. So what I'm seeing, see, one scenario is before digitization and after digitization. After digitization, what happened? A new set of customer, young, who were social media savvy, they understood the virtue of equity. So what I'm saying, to look at downturn, it's not downturn has not happened. If you look at COVID, there is a big downturn. There are lots of kind of pockets where market has corrected a lot. But with that correction, what we saw, retail behavior was different than what it used to be.
In every downturn, they have really bought shares. I'm not talking about just trading in FNO, they have bought. They have really acquired, they've created AUM at every downfall. So right now, appetite of people who want to build AUM is so large, and they are so kind of in like savvy in terms of that wealth can be created only through investing in equity. They know everything about SIP, mutual fund, FNO. So we cannot just view it as they are very kind of like, they just want to trade in FNO. But if you look at buckets of investors who have invested in SIP, investing in cash market, is the same profile. So I believe in downtrend, they are going to buy because they have an appetite to build their AUM, if they see market is available at the right valuation.
Because this generation gets information or kind of like wisdom from social media, and they're ready to put their saving, what they usually used to put in bank, in equity market.
Got it, sir. That's very helpful.
I'm sorry, Chinmay, I have to also help you seek some attention to slide number 37 of our Q1 FY25, where we have given some representation around what happens to retail participation when the market falls by 5% or more. That's a very useful slide. You will see it over a longer period of time, it doesn't impact. So that kind of addresses your question, too.
Got it, sir. Got it. Thank you so much.
Thank you. The next question is from the line of Arvind Datta from Marigold Wealth. Please go ahead.
Yeah, hi. Good afternoon to you. My question is regarding the SIPs that are being registered on your mobile app or the platform. As Mr. Thakkar said, 500,000 SIPs got registered in June and almost close to 1.5 million for the quarter. So first question is that, what is the average ticket size of this SIP? And second one is, what is your current AUM on the mutual fund side? That's it from my side.
First of all, we are seeing a good traction on SIP, both from direct business and B2B. I would like Saurabh and Nishant to take this question.
So far, we don't disclose the AUM on the entire book because the idea is to get more and more customers used to investing in SIPs and start getting retained on the platform. In terms of the average SIP value, we have seen a consistent increase in the SIP value over the last one year since when we started the journey, and we would be in the range of roughly INR 1,500 per SIP, per new SIP that is registered.
All right. Thanks a lot. That's from my side. Thank you.
Thank you. The next question is from the line of Sanidhya from Unicorn Assets. Please go ahead.
Hi, sir. Am I audible?
Yeah, yeah, you're audible.
Okay. So first question is on the side of the MTF. So we are seeing that SEBI and regulators continuously hitting on the equity side of the entire market. So do we see any changes in terms of our MTF book as per the new norms? Because many of the stocks will be out of the list now.
Naveen, you'd like to take this?
Yes, sir. See, this stock is not related to MTF. MTF, there is actually, as per regulation, any stock which forms part of Group One securities, MTF can be done. What, what is taken away by NSE is the collateral that can be re-pledged to NSE, that is the clearing corporation, that they will not give an exposure towards the margin of the FNO. But as far as MTF is concerned, this has nothing to do with that circular. So MTF would continue to be as is, and, as per regulation, as I said, Group One, all Group One securities are allowed to be funded through MTF routes. I hope that answers.
Yeah. So do we see any impact on our internal costs due to this? That's what actually I wanted to ask.
No, no, no, nothing.
Okay, nothing said. Okay.
And the second question on,
Yeah.
-how the regulators are seeing this, space. So this MTF that you're referring to is actually a regulated product, and it is, done in the books of broking itself. And, so far as this particular segment of the business is concerned, we don't see any challenge there because this is a, a rightful way to borrow money on the back of securities with a certain percentage of margin. And all of that from a risk management perspective, is a very well institutionalized product, in the segment. What is also important here to note from our point of view is, perhaps we are the only digital player who has this product enablement on our digital platform. So to that extent, it gives us an edge when it comes to any pricing change that we need to introduce.
If there is any leverage impact on a customer, and the customer were to actually use the equity cash market as a leverage, then we will be the ones who will be benefiting from it, because we have a well institutionalized digital journey already on the platform. Therefore, the only other player that we compete with here is the bank-led brokers who have significant amount of capital. I wouldn't say infinite, but significant amount of capital. It's a function of capital, but from a digital enablement, we are very much there because we have been in this business for very long.
Did that answers? Secondly, on the lending business, can we, can I get an overview on what kind of lending business are we looking into for into, and what kind of RBI approvals have we taken or other regulatory approvals we have taken for that?
Saurabh can take this.
Sure. So in terms of the lending business, we are looking at being a distributor for secured, unsecured products, credit cards over time, right? As of now, we are in a beta for unsecured PL lending right now. In terms of RBI approval, since we are acting as a distributor, we don't need too many approvals. Having said that, we act as a LSP for the lenders who we distribute for. And we are compliant with respect to SEBI regulations on what we can do and what we can't do with respect to the distribution business. So that is in terms of the regulations.
In terms of the, the business thought process, the idea is to enable more and more lenders to participate on the platform and to give the best price and the best offers to our customers, both on the unsecured and the secured side. Over time, we are heavy on the unsecured side for now and gradually also build the secured book.
Okay. Are we covered in terms of exposure to regulatory risk from RBI in this front, when, like... So right now, our business would be small. So as we expand, are we working continuously to ensure that we don't face any regulatory kind of headwinds in terms of this lending business going ahead?
Yeah. Yeah, since we are acting as a distributor, honestly, there is no real regulatory headwinds at our end. Having said that, we are more than 100% compliant in whatever we do or attempt to do on the distribution side.
Okay, thank you. And lastly, on the slide number 12, so where there we mentioned that how which clients acquired as per the year and how many clients have transacted. I think we last we mentioned was FY 2022, and I think we are in FY 2025. So don't we think that FY 2023 number would be good number to portray it right now, like how many clients have transacted in last two FY, you know, almost?
Amit, you can take this one.
Yes. So here, the whole objective was to show that when a certain cohort of customers spend longer time on the platform, how does those customers behave over a longer period of time? So that's, that's the really the objective. And therefore, with FY 25 going by, finally, when the year goes by, we will essentially be updating both for FY 21 and FY 22 to only demonstrate for those cohort of customers, if another year goes by, then how will that customers behave on, on the platform? I think the... And but more importantly, the objective here was to say that whether he is an F&O customer or not, eventually all customers begin to build equity wealth over time. So that's the objective of this slide.
Updating it for FY 25 means that we are, I mean, we are going to update it only for the existing customers. We are not going to see it as a new customer cohort and what that impact will be in a year or two. So please look at it with that context in mind. If I've answered your question.
No. Yeah, I totally agree. I just wanted to ask, so FY 2021, 2022, okay, fine. Now, what about FY 2023? The number of clients that we acquired in FY 2023, ranging to around 4.7 million, right? So, what about that? What percentage of their clients have transacted till FY 2024? Or maybe if we can get the real number for Q1 FY 2025, that would be really helpful. So in terms of-
We will evaluate, we will evaluate this at the end of the financial year and take a call on, on what needs to be presented then. Again, the point still remains, sacrosanct. The objective is to see the customers maturing on a longer period of time. So even if we look at an FY 2023, as of the end of FY 2025, it will be less than 1.5 years old, because remember, a customer is acquired throughout the financial year, so not all customers become active in the second year any which way. So that is never the objective. So that's the point I was wanting to make. Any which way, we will revisit this data at the end of the financial year.
Okay, thank you. If I can ask you last question. So on the LTV, lifetime value of a customer, do we see any changes on that front? Because now the FNO part could be revenues from the FNO part could really change, and we might be looking into gaining from equity equity exposure of the client. So equity exposure totally depends on the kind of capital that the client can bring in. So do we see any changes on the LTV of existing client base and the new client base that we have?
No, I don't see any change in LTV. In fact, if I tell, I go with my past experience, if a client is clearing less and investing more, LTV will increase. Because then, what happens is that when they lose less capital, they dedicate more capital to capital market. Otherwise, when they are burning it fast, they are unable to understand market, so allocation of their wallet share towards this capital market takes time to come in. So my belief is there would not be any change in LTV, but this may get extended because now, they are trading less. We look at, like, cost of acquisition and what kind of an LTV we can generate from customer. With whatever kind of, like, experience we have and what data suggests, it appears there would not be any impact on LTV.
Okay, thank you so much. Congratulations and all the best.
Thank you. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Dinesh Thakkar for closing comments.
Thank you for joining us on the call today. We, I hope we have answered your queries satisfactorily. Should you require any assistance, please feel free to contact Hitul Gutka, Head of Investor Relations, or SGA, our IR advisors. Have a good day. Thank you.
Thank you. On behalf of Angel One Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.