Ladies and gentlemen, good day and welcome to the CDSL Limited Q1 FY 2021 results conference call hosted by Axis Capital Limited. Please note that CDSL does not provide specific revenue or earnings guidance. Anything said on this call which reflects CDSL's outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. 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 and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aditya Bagul of Axis Capital. Thank you, and over to you, sir.
Thank you, Aisha. Hi, good morning, everyone. On behalf of Axis Capital, a very warm welcome to the Q1 FY 2021 conference call of CDSL India Limited. Before we begin, we really hope that you and your family are safe and well in this time of pandemic. We have the management of CDSL. It is represented by Mr. Nehal Vora, Managing Director and CEO, Mr. Girish Amesara, Chief Financial Officer, Ms. Nayana Ovalekar, COO, Mr. Sunil Alvares, Chief Operating Officer, CDSL Ventures Limited, Mr. Swaroop Gothi, VP, Mr. Nilesh Kittur, AVP. Before we begin, let me just take this opportunity to congratulate the entire team of CDSL for a superb Q1 performance. Now without a further ado, Nehal, sir, over to you.
I would like to wish everybody a very good morning, and thank you so much, Aditya, for the warm welcome and your compliments. First of all, I would just like to hope that all of you are safe and secure in these times. I welcome you all to CDSL's quarterly conference call for the quarter ended June 30th, 2020, and I trust each one of you and your loved ones are safe in these hard times. I am joined on this call by other members of our management team who will also address the questions later that you may have. Before we get into the details, I want to take a brief moment to place our appreciation and gratitude to all our employees and stakeholders.
In these times, we have all kind of remained one and ensured that CDSL, as part of the depository services, was designated as an essential service. We are proud to inform that our operations have been running seamlessly across this entire time without any compromise on the health of our employees. In response to the COVID-19 situation, we have also created and launched various initiatives to promote Atmanirbhar in terms of basically the ultimate customer being able to perform its functions on its own. We have various platforms like easi, easiest, and I would urge all of you, as well as all your well-wishers, family members, as well as people who you know, to use these platforms of CDSL so you can start doing things on your own.
In terms of the business highlights, in the last quarter, CDSL has observed a buoyant increase in the number of new demat accounts being opened, and we would like to welcome the new investors into the capital market ecosystem. During the last three months, the number of new active beneficial owner accounts with CDSL has increased by about 20 lakh, taking the total number of active beneficial accounts as on June 30th, 2020, at 2.32 crore, indicating a growth of around 7%-8%. The comparative number of beneficial owner accounts for the quarter ended June 30th, 2019, was approximately 6 lakh, and 15 lakh for the quarter ended March 31st, 2020.
As on June 30th, 2020, CDSL has 597 depository participants offering depository participant services from about 20,000 locations across the country, representing around 94.5%-95% of the PIN codes of the country. These depository participants comprise of clearing members, banks, custodians, and non-banking finance companies. CDSL has experienced a substantial growth in the number of companies/issuers admitted in demat from 541 in the FY 1999/2000 when we started our operations to 14,018, around 14,000 companies in the FY 2019/2020, which has seen a very healthy growth. We have also initiated new services in line with the transformation requirements and the requirements of the current time to promote the digital initiatives of the Government of India.
In addition to our e-voting services, we also offer services to hold annual general meetings through video conference facilities to make AGMs basically a hassle-free event for the shareholders and the company. We also provide email updation services to companies to update their shareholder database to ensure that the dissemination of communication to shareholders is valid and sufficient. In terms of the financial performance, we have seen a healthy growth in the quarter with a year-on-year increase of 82% of our net profits. Total income on consolidated basis for the quarter ended June 30th increased by about INR 12.58 crore, about 17% increase to basically INR 86 crore from INR 73 crore earlier. The net profit on tax on a consolidated basis for the quarter ended June 30th is at about INR 46.72 crore compared to about INR 27.9 crore in June 30, 2019.
The total income on a standalone basis for the quarter ended June 30th, 2020 increased by INR 15 crore, which is standing at around INR 67 crores from INR 52 crore earlier. The net profit after tax on a standalone basis for the quarter ended June 30th, 2020 is at about INR 37 crore compared to INR 20.3 crore for the quarter ended June 30th, 2019. The growth is a result of the strong growth in our depository and the other businesses, and also a decline in the overall costs as compared to last year, especially the employee costs as well as the other expenses. I'll request Mr. Sunil Alvares to give an update about our operations in our wholly-owned subsidiary, CDSL Ventures Limited. With this, over to you, Sunil.
Good morning. I am Sunil Alvares here, Chief Operating Officer of CDSL Ventures Limited. I welcome you all to this call on CDSL's quarterly results for the quarter ended June 30, 2020. During the lockdown, we had some impact in the verification processing initially, you will be happy to note that the operations have since been normalized once the lockdown has been lifted partially. In terms of the business highlights, CDSL has had a very robust performance in line with CDSL's robust account opening performance, what we have seen. KYC generation is concerned, in the quarter ended June 2020, we added 9.95 lakh KYC as compared to 4.68 lakh in the same quarter last year, which was a growth of 112%. We also processing C-KYC records and for entities who want to submit their KYCs on the said file.
In this quarter, the quarter ended June 2020, we processed 3.58 lakh records as compared to 1.9 lakh records last year, which was a growth of 87.79%. As far as the RTA business is concerned, there was a slight dip there in the sense, though we had about 433 companies as of March 31st, 2020. During this quarter, we could add only about 20 companies, primarily because many of the companies did not want to demat their securities. Finally, we are also doing this for government de-dupe of records, where we were able to process again, about 31,000 records as compared to 11,000 records in the same period last year, which again, was a growth of 182%.
Coming to the results, so far as the revenue from operations are concerned, we did INR 12.9 crore as compared to INR 17.7 crore in the same period last year. This was a dip of about INR 4.16 crore or 24%. This dip was slightly due to a one-time income which we received from the processing of PACL application forms last year of about INR 7 crores. That is INR 6.93 crore, which was a one-time income, and it didn't come in this year. Effectively, if you take out the PACL income, obviously the results would look different. The other income also jumped to INR 4.16 crore from INR 2.53 crore last year, which is a jump of 64.44%. Overall, the total income for this year's quarter ended June was INR 17.07 crore as against INR 19.60 crore of last year. There is a slight dip of around 13%.
The total expenses this year was INR 6.41 crore as against INR 10.75 crore of last year, which was a dip of almost 41% this year. The profit after tax for this year was INR 10.65 crore as against INR 8.85 crore from the previous year. That is a jump of almost 21%. The post-tax profits, the profit after tax for this financial year was INR 8.5 crore as against INR 6.53 crore for the previous year, which was a jump of 30%. I'll now hand it over back to Aditya, so that if there are any questions you'd like to take it. Thank you.
Yeah. Operator, can we start the Q&A session, please?
Sure. 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 your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hand-raise while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is handled. The first question is from the line of [audio distortion] from Ratna Securities. Please go ahead.
Yeah, sir. Just a question on the cost base now. If you could give some color on the cost base, because last year there were a lot of one-offs, and this quarter, also because of COVID, we see some lower costs as well. This about INR 26 odd crore of quarterly cost that we see extra of depreciation. What should be a better number that we should consider as a cost base? I have one more question. If you could just help us with the absolute revenue breakup of this INR 65 crore of revenue for the quarter versus the INR 60 crore of revenue for the quarter last year. These two questions.
Sure. We will provide you the details of cost and the revenue breakup. Basically, the cost on a YOY basis compared to June 2020 compared to June 2019, the cost has decreased by almost INR 877 crores.
Lakh.
Sorry, lakh. This has largely decreased because of what Sunil has mentioned of PACL project, which was there during last year. Basically, there was a cost of INR 561 lakh during last quarter, which is not there this quarter. That is the saving. On account of salaries, the earlier year bonus provisions which are made on higher side have been reversed during this quarter, which has resulted into reversal of roughly INR 2 crore. The increase which was given to the employees last year, it has impacted the overall actuarial valuation, which was on higher side during last quarter, which is not there during this quarter. However, having said this, due to the reversal, the current quarter cost has been suppressed. This cost will be recurring on quarterly basis. Now, giving you the details of absolute numbers of the income portion.
Total annual issuer income is closed as roughly INR 21 crore compared to last quarter's INR 19 crore. Transaction charge income has been closed at around INR 20.55 crore against last quarter's income of INR 9.87 crore. Online data charges has closed at around INR 9.85 crore against last quarter's income of INR 7.63 crore. IPO corporate action has closed at INR 5.06 crore compared to INR 5.31 crore. The CAS statement that we issue is closed at around INR 2.95 crore against INR 2.37 crore. Roughly, the income that I described right now covers almost 90% of our total operating income. I hope I have answered your question.
Yeah. Girish, a clarification. Transaction you said INR 20.5 crore, what?
INR 20.55 crore against INR 9.87 crore.
Okay. This cost now that we see at about whatever, INR 25 crore, INR 26 crore, INR 27 crore quarterly, is it safe to annualize this cost?
As I already told, in case of employee cost, we have certain reversals of earlier years. A couple of INR crore would be higher compared to what cost we have reported this year. This quarter, cost has impacted due to that reversal.
Okay. There will be no cost related to the project business which was there last year, at least. Last year, the project business cost and write-offs all put together was a fairly significant number. Is it safe to assume that?
Yes, currently that project is not on. If there are any new project comes up during the future quarters, that we will impact.
Thank you. Audio distorted] , we would request you to please come back in the question queue for any follow-up questions. Also, we would request the participants to please limit your questions to one per participant. The next question is from the line of Ashutosh Somani from JM Financial. Please go ahead.
My questions have been answered, but I have a request to make to the management. Sir, if you could include this revenue breakup as a part of your exchange filing, it will be a great thing to do because I believe this was a practice that was continued sometime in the past, and it is a good way to understand the result. This number is regularly shared in the con call, but after two days. It takes that much time to understand the result. If it is not too much of a hassle, can you please include it in your exchange filing?
We will surely take your feedback on record. We will have it examined, and we will take appropriate action as the impact on this.
Thank you so much. Thanks.
Thank you. The next question is from the line of Siddhant Kant from Goodwill. Please go ahead.
Yeah, hi. I had a question. According to the new SEBI rules, there'll be a lot of pledging revenue that we can see?
This is a new system. I think it will be difficult to predict and give any guidance on the future. We generally would like to restrict our queries and our replies to numbers which are as on March 31st, 2020. This is a new system. We have to wait and watch how that will kind of pan out in future.
Okay. All right. Thank you.
Thank you. The next question is from the line of Siddharth Rajpurohit from JHP Securities. Please go ahead. Siddharth, your line is on talk mode. You can go ahead, please.
Hello, am I audible?
Yes, sir.
Good morning, sir. Thank you for the opportunity. I'll ask two questions and then come back in the queue, sir. Sir, my first question is that the current income tax filing in India is close to 5.5 crore. We have reached more than 4 crore of demat accounts. Do you see any glass ceiling in coming few years for the new demat accounts?
Okay. First, I would request you to first ask both the questions so that it can be combined if it can be combined.
Yes, sir. Do you see any hindrance in terms of maintaining our good margins, operating margins that we have maintained over the years in the long run?
Take a WhatsApp call. Okay. The reply to your first question is that in terms of the growth of the PAN as India's population grows and especially the working population, we have a young population. More and more people are going to be added to the income tax fold as we go forward. That will obviously, people are looking at market-driven instruments, more and more people are wanting to invest their money through the financial markets, be it mutual funds or the securities market on their phone. I think the number of bank PANs are far higher at around INR 75 crore. I think technically, as more and more awareness is growing, we would see that at least they'll expect it to be a higher number of people who are expected to grow.
The people who are in the system are going to trade more. This is something which is a function of what will happen in future. I think what is important to note, they are building their requisite building blocks to ensure that more number of people can safely come into the financial markets and trade seamlessly. I think that's our entire intent. In terms of the margins is a futuristic question. It's dependent on lot of factors. We'll have to see how it pans out. Our effort and endeavor is to ensure that our platforms remain safe, secure, and convenient. Our focus is going to be more and more of the final people who are trading should be able to do it by themselves. I think more and more people are going to do that.
The safety and the security is something which we hope that they would be using the platform frequently as we go forward.
Thank you, sir. Congratulations for good set of numbers. I'll come back in the queue, sir, for more question.
Thank you so much.
Thank you. The next question is from the line of Kunal Thanvi from Banyan Tree Advisors. Please go ahead.
Hi, sir. Thanks for the opportunity and congratulations on the set of numbers. I had a couple of questions talking about the platforms, CDSL. I was just going through the platform that you are working with SEBI for this flag creation. I understand that it won't be easy for you to give me the features in the guidelines. What I was expecting was how that platform would work and what would be the role of, say, a depository, and how would those charges, if any, will be charged by the depository? Any flavor in terms of how that platform would work and what would be the role of the depository? That is the first one. Second is, what kind of traction we are seeing in the CAGR and what would be our market share there and what would be average realization?
Any color on that, if you can provide.
Your second question, I'll answer first, and the first question, I'll request the COO, Ms. Nayana, to answer that. First I'll answer your second question. I think, again, that's a futuristic question. Our endeavor is to provide safe, secure, and convenient platforms. Our endeavor is to have more and more distribution points within the country. We had around 94% to 95% of the PIN codes where the CDSL system is available. I think the safety security of the platforms will really encourage more and more people to come onto our platform seamlessly. That is our focus. Our focus is not to drive in terms of the numbers. Our focus is to create a platform which remains safe and secure for the long period of time.
Whatever people come in, have a good user feel as a user, and they continue to trade more and more onto our platforms. As regard the first question, I request the COO, Ms. Nayana, to answer the question on pledge report.
Hello. I understand that the question was with respect to the agents being handled by CDSL through.
No.
-network.
No. Nayana's question was about the pledge and repledge system as to what will be the role of the depository. What is the role of CDSL in the pledge repledge system?
Okay. In this new system of pledge repledge, the depositories play a vital role because the change is that whenever a client is setting up a request for a margin pledge, at that time, an OTP will be sent by the depository to the client, and unless the client authenticates, the pledge will not go through. Now the authentication is being done by depository and an opportunity is being given wherein, after the client pledges the share for margin purpose with the clearing member, the clearing member can repledge it in favor of clearing corporation. Earlier, the transfer used to happen from the client account to the clearing member account, and after that, only those unencumbered shares could be pledged by the clearing member in favor of CC.
Instead of that, the client will be in a position to pledge in favor of clearing member, and then the clearing member will be able to repledge it. The client will have visibility of his pledge and how it has been repledged, and what is the status of that repledge. The depository system will provide all this information to the client as well as to the clearing member. Now the transparency will be brought in the entire system by using the depository system.
In terms of creating the pledge, depository would be charging something to the clearing member or the client?
It will be a charging per se.
You could see the circular which we issued on the charges. We would not like to waste too much time on the operational details. You can go onto our website. We have issued the circular to that effect.
Thank you. Sir, I'll be requesting please come back in the question queue for any follow-up questions. The next question is from the line of Sanjay Singh from PineBridge Investments. Please go ahead.
Yeah. Hi. I got dropped off in between. You had mentioned the transaction revenues of INR 20.55 crore from INR 9.86 crore. Can you please mention the other key revenue line items also? I was just getting the call dropped off.
I would just request the CFO, Mr. Girish Amesara, to answer that question.
Yeah. I will go through once again. See, annual issuer charges has increased close to INR 20.76 crore compared to INR 19.23 crore. Transaction charge has closed at INR 20.55 crores compared to INR 9.87 crore. Online data charges has closed at INR 9.85 crores compared to INR 7.64 crore. IPO corporate action income has closed at INR 5.06 crore compared to INR 5.31 crore. The cash statement charges has closed at INR 2.96 crore compared to INR 2.37 crore. Basically, this all income covers 90% of our total operating income.
The online data charges is INR 9.85 crore versus?
INR 7.63 crore.
Okay. Sir, you also mentioned that there were some one-off charges in the employee cost.
Basically, in employee cost, last year, we had made certain bonus provisions. Those has been reversed in this quarter because the payment was less compared to what we had provided for. During last year same quarter, due to revision in the salaries, the actuarial valuation cost was higher compared to this year's actuarial valuation cost. These are two, one of the cost which was there during last year and which are not featuring in this quarter. Having said this, the reversal has impacted the current year cost by INR 2 crore.
Current quarter cost, right?
Yes.
Okay. That will be higher by INR 2 crore.
Yes.
run rate basis.
Yes.
Okay. This online data charges is essentially the KYC charges.
KYC, yes. That is CDSL Ventures income.
What was the IPO revenue?
IPO was INR 5.06 crore compared to INR 5.31 crore.
Okay. Thank you very much. I'll come back if I have any questions.
Yeah.
Just before you go to the next question, just wanted to clarify. I did a lot of clarification from Nayana that charges are subject to getting approved by SEBI, so it has yet not been issued onto our website. As soon as the approval comes, that shall be issued on the website on the pledge repledge. Thank you.
Thank you. The next question is from the line of Prakash Kapadia from Anived Portfolio Managers Private Limited. Please go ahead.
I had two questions. Congrats to the team for doing a wonderful job on the continuous gaining market share for demat accounts. If you could give some color, these demat accounts are being done in metros, tier 2 and tier 3, if I look at the cumulative base around 2.31 crore demat accounts that are, how do we internally track these demat accounts in terms of activity. We call these active accounts if there is a debit transaction once a year, once a quarter. How do we ensure more and more people are active with us? What initiatives we take? Secondly, on other income, what is the mark-to-market gain on the INR 20.7 crore total other income? What are the current yields versus last quarter? These are my two questions.
On the first question, it will be difficult to give a complete picture on what would be the demographic profile, because this is through the Depository Participants which have offices. They do not have offices only in one location. It's in multiple locations. From wherever they get. The important thing is that it's a fairly healthy mix of accounts being opened in tier 1, tier 2, tier 3, and tier 4 cities also. This is something which we see, and what we have observed is around 70%-72% of our transactions are coming from tier 2, tier 3, and tier 4 cities. That is something. Again, this is not really indicative of any future growth. This is what has happened in the past.
The hope and wish is that as more and more people are going to transact, the building blocks have been created for people to do that. With regard to your second question, I'll request the CFO, Mr. Girish, to answer that.
The income that has increased during this quarter is largely on account of mark-to-market gain, which is roughly around INR 6-6.5 crore. If you recall, the RBI has reduced repo rates during this quarter up to a tune of 115 basis points, which has overall increased the closing NAV of majority of the schemes. Roughly our yield this quarter is around 12% compared to last year's yields of around 8.5%. I hope we answered the question.
I'll join back with you. Thank you.
Thank you. The next question is from the line of Dipen Shankar from Trustline PMS. Please go ahead.
Thanks a lot for the opportunity and congratulations for good set of numbers. What are the key reasons for this data entry business de-growth of 24%? Any breakup for that?
I will just request Sunil Alvares from CVL to answer that question.
Yeah. Hi. You have to understand one thing, is that it was a one-time business, okay? As far as the data entry was concerned, where we were appointed to process refunds for a particular company by the regulator. That one-time collection of data happened last year, okay? For which we raised the bills and the expenditure also, we had booked it last year. All of that happened last year. That is why it is not reflected in this year's balance sheet.
How much of that constitutes for the last year business?
Sorry?
In the Q1 FY 2020, how much of this was related to that business?
Q1 FY 2020, the income was almost INR 6.93 crore. Okay.
Okay.
Okay. That was on INR 17.07 crore.
Okay. Got it. Thank you. All the best.
Thank you. The next question is from the line of Sudheer Guntupalli from ICICI Securities. Please go ahead.
Hello. Yeah, my questions have been answered but just wanted to iterate on employee cost. When you say about reversal of bonus, so does it mean that no bonuses will be paid now?
when
Yeah, you can go ahead, Girish.
Okay. What I had explained earlier that the bonus provision that was made last year, against that, we have made reduced payment. Whatever was the excess provision made during last year has been reversed in this quarter. There would be bonus payments, but not to the tune of what we had paid during last year.
It's just like an installment which will be paid. It will be paid in installments?
No. What I explained, I think you didn't understand. Suppose we make a certain amount of provision during last year, and out of that, if we say consider to make payment of 50%, the balance remaining 50% would not be paid and it would be reversed. On a continuous basis, the balance 50% may continue to be paid. I just giving a hypothetical example to make you understand.
Sure. The employee cost in the next quarter will be in the tune of INR 12 crore-INR 13 crore?
Yes, possibly.
Okay. No problem, sir. Got it. Thank you.
Thank you. The next question is from the line of Hiten Jain from Invesco. Please go ahead. Hiten, your line is unblocked now. You can go ahead, please.
Yeah. Am I audible? Hello.
Yeah.
Okay. My first question is on the annual issuer charges. What would be the revenue contribution from the unlisted opportunity? My second question was pertaining to this quarter. While you have clearly explained the year-on-year drop in expenses, if you could also explain the sequential movement in expenses. Employee benefit expense is up sequentially by 9% and other expenses is down sequentially by 31%. If you could also explain the reasons for that for this quarter, it will be useful. Thank you.
I would maybe request CFO Girish to answer that.
In case of employee cost, I have already explained a couple of times. You want me to again explain it?
No, I'm saying sequential. While you have explained year-on-year drop, I'm saying sequentially it has gone up by 9%. I'm not sure if you explained it as well.
When you say sequentially, you are trying to compare March quarter with June 2020 quarter.
That's right.
We had also factored in the increment of roughly around 8%-9% during this quarter.
You are saying that you have given wage hike this quarter to all the employees?
Yes.
Okay. That explains that. Other expenses is down Q/Q. I mean, Yeah.
In last quarter, when you compare March to June, in March we had considered CSR contribution of last year and all the previous years, put together, which was roughly around INR 6 crore. We had taken one time legal provision of around INR 1.79 crore during March. These two put together is the main reason of reduction in March to June comparison.
Understood. My other question was revenue contribution from unlisted market.
Nilesh, can you give the response, please? Nilesh?
Hello, can you hear me?
Yes, go ahead.
Yeah. For unlisted companies, the contribution in this quarter is around 2% of annual issuer charges as compared to approximately 10% last year for the corresponding quarter of previous year.
You're saying 10% of INR 19.23 crore in H1 2020 was from unlisted and this quarter it is only 2%?
Yes. Because of lockdown, there have been fewer number of unlisted companies admitted into the system.
Okay. Understood.
Thank you. The next question is from the line of Amit Chandra from HDFC Securities. Please go ahead.
Thanks for the opportunity. My first question is related to transaction charges. As we are seeing that most of the growth is being led by the surge in the transaction charges, which is being up for the third consecutive quarter. I would like to understand a bit more in detail whether the transaction charges contribution has been coming from the existing or the old accounts, or from the newer accounts that you have added in, say, the last six months. Because the last six months, the account additions have also surged significantly, and you have gained market share versus NSDL also. If you can provide some color between existing and the newer accounts, so that would be helpful to understand the profiling of the growth. The second question would be on the KYC revenue. As we have enabled the Aadhaar-based e-KYC system.
What added advantage we can have versus competition because of this and we were actually waiting for some approvals to be done until this goes live. What is the update there and what kind of competitive advantage we can have and what it can add value to the existing DPs. That is the second question. Third question is on the annual issuer charges, wherein you said that the market share is 30% ours and 70% for the competition. How do you see that panning out? It is going to remain the same way or we are seeing some traction there in terms of gaining market share there also. Thank you.
I'll answer your first and third question. Second question I'll ask Sunil to answer. The first question is about the mix between the new accounts and the existing accounts. It will not be easy to segregate that way between that. What is an important data point to keep in mind is the cash market volumes on the exchanges has gone up significantly over the last year. The delivery-based volume in terms of the absolute value has also gone up, and that is what tantamounts to increase in transaction charges basically on the CDSL, because that is what it creates in terms of how many transactions are coming through. It's a function of both. One is that there is a renewed participation from the existing, and that is also really encouraging the newer investors to come in a very rapid pace.
I think in terms of the contribution, we are more concerned with our overall income going up rather than whether it is coming from new or old. Our endeavor is also that it makes it easy for more and more people to enter into our fold and have a convenient, secure platform to trade on them. I think that is our real focus out here. In terms of your third question, in terms of basically the unlisted companies, our hope and endeavor is, and we are putting in place our renewed effort to improve our share in terms of how many companies come onto the CDSL fold.
It's again, a futuristic question whether that will succeed or not, but basically the effort of the management is going to be to ensure that more and more companies come in, making the platform easy for the companies also to come on board. With that hope, with more and more companies seeing the success, I think our share also should increase. As regard your second question, I'll ask Sunil to answer that.
Thanks, Nehal. I'd also like to add on the transaction charges when you talk about old and new accounts. Typically, when a new account is opened, it does take some time to start transacting. Like Nehal rightly said, it's a mix of both the old and the new accounts. You cannot really attribute it to the new accounts only or to the old accounts. If you also see that the number of transactions also are at a record high. It has been a mix of both accounts. Typically, each of these accounts takes some time, cooling time before they actually start transacting. Prior to the lockdown, this used to be about six months. With people at home and opening accounts, I think maybe this period would have come down.
Net-net, the fact remains that it is a mix of both the old and the new accounts. Coming to your second question on the KYC revenue, would Aadhaar-based e-KYC have a positive impact? It will have a positive impact because it would improve the way people actually do KYC today. Today we have offline Aadhaar-based e-KYC, or you have to scan and upload your documents to do e-KYC, which is a very cumbersome way of doing KYC. Once Aadhaar-based e-KYC done either through an OTP or a biometric, you can do your KYC. Depending on what model you follow. If you're following an assisted model as a DP, then you can actually take a tab to the investor, take his biometrics, and do your KYC there itself. Alternatively, you can host the e-KYC on your website and do it on the website itself.
The current status is that the approvals are pending with UIDAI. None of the MIIs has got any approval as yet. Once that approval is received, it will definitely boost the account opening even more because SEBI has issued a circular on 24th of April for online KYC. As well as another point I'd like to make there, they've also received an e-sign registration from the CCA. As per the SEBI circular, all online applications have to be e-signed. Further, we have also applied to UIDAI to allow us to do online Aadhaar-based e-sign. That approval too has been given by UIDAI. I think we are well set that once all the approvals are in place, online account opening will definitely help.
We have also developed a product which will help both the midsize as well as the smaller DPs to open online accounts in case they are unable to invest in the software for whatever reason. We will be giving them that piece which they can plug into their website and facilitate them to open online accounts. I hope that answers your question.
Thank you. Amit, we would request you to please come back in the question queue for any follow-up questions. The next question is from the line of Aalok Shah from Monarch Networth Capital. Please go ahead.
Yeah, thanks for the opportunity and good afternoon all for a very strong set of numbers. Sir, I have a few questions, some of which are data-keeping. Maybe I'll just take them separately. When I look at your employee expenses line item on a standalone basis, and again, then compare that to a consolidated basis, on a standalone basis, these numbers are up something like 20% QoQ. You've talked about 8% to 9% wage hike, which kind of keeps closing each of those line items. What explains the difference here? That's my first question. When I again look at employee expenses on a consolidated basis and adjust them for the one-off that you talked about, the INR 2 crore of bonus reversals and actual valuation-related line item, it shows a 16% drop on a YoY basis or on a QoQ. What is it?
Is it that we have had some element of employee count reduction or something where there have been some element of salary reduction in salary? How do we read this number, sir?
Before I ask Girish to answer on the absolute numbers, on a conceptual basis, you need to understand that CDSL now have a full management team, including the MD and CEO, as regards because of the previous MD's term coming to an end, and two senior employees, their terms coming to an end, the CTO and the CFO. That is something which has really panned out what you are talking about.
In terms of the numbers, I'm requesting Girish to answer that.
Sure. As you rightly said, on a standalone basis, the employee cost has increased by 23% when June is compared to March. If you compare June to June, the cost has reduced by 34% for the reasons I had explained earlier. Our MD has already explained you the reasons. Do you want me to again repeat those things? Hello? Hello?
Hello. Hello.
Huh?
Yes, sir. No, not the reason for why decrease. Q2 change.
Hello.
Sir, is my voice audible?
Yeah, now it is audible.
Okay. No, I was just trying to understand the arguments which you are trying to put across, maybe where the reasoning for the YoY change.
I think it is basically the similar reasons, in terms of what you have said and the new management team, which I have already replied to.
Thank you. Aalok, we would request you to please come back in the question queue for any follow-up questions. The next question is on the line of Ramakrishnan V from Equity Intelligence. Please go ahead.
Good afternoon, sir. Good set of numbers. Congratulations on the good set of numbers. Sir, what is the incremental market share on the incremental DP account opening, and top five DPs will be contributing what percentage?
The incremental numbers is basically during the quarter is about 85%, where we have got the new numbers, so that's that. As regards the top five DPs, I think that particular information we don't put out yet in the public domain as to what is their contribution. That is something which you will have to see it as a consolidated basis. I don't think we will be able to give you that number.
Okay. Thank you.
Thank you. The next question is from the line of [audio distortion] from Axia. Please go ahead.
Hello, sir. I have two questions. The first question is on capital allocation. Sir, we have more than 84% of cash and investments of total assets on our book. What is your policy regarding dividend payout? That is first question. The second question is regarding what is our market share in e-AGMs that we started recently?
On the first we have answered that we have a dividend policy. I will ask actually the CFO to answer this question on the dividend policy. Can you answer that, Girish?
Yeah. See, basically we have a dividend policy of making payout of, in earlier regime it was around 40%, including the dividend distribution tax. Considering this year there is no dividend distribution tax, we will continue to make those kind of payments to the shareholders as a dividend.
Okay. Sir, do you have any regulatory requirements regarding the certain cash percentage that you should have on your balance sheet or something like that?
There is a minimum requirement which SEBI has prescribed on how the depository is supposed to have. We are well over that. In these times, it's important to have the strength of the balance sheet to continue. While we, as Girish mentioned, we have a robust policy of dividend payout of the operating profit. At the same time, it's important to build the balance sheet of CDSL because as it grows, it shows the financial strength of the company to ensure that basically our volumes, et cetera, continue to grow.
Thank you. [audio distortion], we would request you to please come back in the question queue for any follow-up questions. The next question is on the line of Viraaj from Dalal Street Advisors. Please go ahead. Viraaj, your line is on talk mode. You can go ahead, please. The next question is from the line of [audio distortion ]. Please go ahead.
Yeah. Hi. Thanks for the thoughtful agenda. Sir, my question was now in the cost structure. Post-COVID, are we looking at any new cost reduction measures? The reason I ask this question is, across the board, we are seeing a lot of companies talking about getting rationalized in terms of costs and taking this time out to improve their profitability. Are we looking at the same? Second question was on our philosophy as management team in terms of new projects. At what extent do you expect to put money behind a new project? Last few years around, right, we lost the NAD project. Wanted to understand, on an indicative basis, what kind of investment we did in that project, and it didn't fructify. Do we have any benchmarks in terms of going for a new project?
These are the two questions that I wanted to understand.
I think I can answer both the questions together. I think the philosophy is that we are a Market Infrastructure Institution. Whilst we remain a listed company, it's also a Market Infrastructure Institution. It's a very regulation-driven business. Right from the areas which we can go into to the charges which we can charge is all driven by rules and regulations prescribed.
There are few players, but I think the important thing is that whilst a normal company can reduce the cost significantly, we also create a market infrastructure platform, and therefore certain expenses are required to be incurred under whatever circumstances to ensure that the linkage to all the relevant market participants continue to remain under. Our intent, as you can see from here, has been that even during these three months when there was a national lockdown, the important thing is that our platforms continued to run without any kind of issue. That is, in my opinion, the success and basically the expectation which SEBI as well as the ministry, et cetera, have from us, because we're creating the infrastructure for the market. As regards the new projects is something which we will be again be driven by what the rules permit to the extent they permit.
Whilst what is permission-driven, we also then seeing whether it is financially viable or not. There are various kinds of. Whenever we explore a new project, we look at the potential, what will be the financial things. More importantly, it's a permission-driven business. Whatever the regulator permits us or the ministry permits us, those are typically the areas we go into.
It's clear, sir.
Yeah.
Thank you. The next question is from the line of Sanjay Singh from PineBridge Investments. Please go ahead.
Hi. Sir, can you talk about any way the insurance repository business? The revenues or what is the treatment there?
The insurance depository, we have created a framework, and obviously during the lockdown, it is not compulsory as of now to have a demat insurance policy. I think with the lockdown, lot more insurance companies are feeling the need of moving towards that. We are hopeful we continue to basically remain creating the platforms. We are creating the requisite linkages with the insurance companies, and with the hope that things would change for the better. We are seeing some amount of basically the inquiries coming from the insurance companies about what is the platform, and they are seeing what our systems are. Hopefully all of that would translate into a new business for us.
As of now, there is not any meaningful delivery, right?
Yeah. As of now, it is not a meaningful revenue.
That's right. What was the revenue this quarter from all this e-CAS and e-AGM and all this e-voting new businesses which you have?
I would just request the CFO, Girish, to answer that question.
e-voting business, we have income of roughly INR 17 lakh compared to INR 45 lakh of last year.
Hello.
Thank you. Sanjay, we would request you to please come back in the question queue. The last question is from the line of Utkarsh Solapurwala from DAMOS Capital. Please go ahead.
Hello. Good afternoon, sir.
Good afternoon.
Sir, can you provide the performance update of last three months of commodity repository?
Yeah. I would just request the CFO, Girish, to just give a brief outline of the commodity. CCRL.
In commodity repository, the income that was earned in June quarter was roughly around INR 10 lakh compared to last quarter income of around INR 77 lakh.
What led to this downfall year-over-year?
It is not year on year, it is quarter on.
It is quarter-on-quarter. Basically, the charges were revised with respect to the custody charges.
Okay. Thank you.
Yeah.
Thank you. I would now like to hand the conference over to Mr. Aditya Bagul for closing comments. Aditya, we would request you to please unmute yourself if you could from the handset.
Sorry. Yeah. I just want to thank everyone for taking the time out and attending this call. A special thanks to the entire team of CDSL for patiently answering our questions. Nehal, sir, I'll hand the floor back to you, just in case you have some closing remarks.
I think, first of all, I'd like to thank really Axis for creating, and I want to thank basically all the people who have come in large numbers for the investor call. Our endeavor and effort is to ensure that our systems run seamlessly, and it creates a convenient and secure platform for the entire securities markets, and more important, the financial markets. We are working very hard to ensure that it becomes a technology-based depository. Our focus is also going to be, as I stated in my opening remarks, is to creating the final customer or the investor should be able to transact on its own without the help of anyone else. We want to start creating more and more such systems where people can start doing things on their own without the help of others. With that, I would like to just conclude.
Thank you.
Thank you. On behalf of Axis Capital, that concludes today's conference call. Thank you for joining us, and you may now disconnect your lines.