You believe the momentum is continuing the way you see the trend in the last few months?
We believe the coming year will be a strong year. Exactly how each quarter will play out, of course, we'll wait and see how the numbers are.
On product pipeline — new metal contracts, index options scaling, weekly contracts being considered for index?
On the newspaper article, we've put out our own response on X, that misleading media information is really getting published. So I will not really comment on that. On product pipeline, we do have a strong pipeline. We are prepared with our next lot of products. We will look at the suitable requirements in energy, in metals, as well as other segments. While we did talk a lot about the BULLDEX options, we found that this created a lot of interest in the future segment. We are taking the feedback from the market in focusing our attention on futures on indices as well along with options. We will also be looking at moving further on METALDEX this year.
How have been the trends in the participation in the month of April and May so far?
Mitesh, I don't think we are commenting on this quarter. I think we'll have to take your question in the next call. But there's no dramatic cause for concern.
RBI launching new lending norms for prop traders — analysis on volumes impacted?
The RBI lending norms, the way we see it could have a potential impact. RBI has given further extension allowing the market to plan their mitigating factors. There will be a certain segment of members, across all segments of the trading markets who will have some of their credit lines impacted from this.
April numbers seem to have dipped down quite a bit. Will sequential momentum continue?
We do believe that we will have a strong year. Will every year - every quarter be a big jump over the previous quarter, perhaps not. We do see cyclicity in our business. There will be macro factors that will play out. There will be cyclicity that plays out. In the broader context, we are in a strong and good place.
In this win-all kind of scenario, what can go wrong if something has to go wrong? What can unravel the great velocity?
Operating risk is number 1. The ability to operate and deliver to that opportunity is really not something one takes for granted. Whether it is the platform, surveillance, risk management, operations of CCL when it comes to margins and collateral, each and every element of this gets challenged when there is a high degree of uncertainty in the market. The second is certainly the competition risk. We have not had a strong competition really and have been a majority market share player, how to continue to be agile, to challenge ourselves and really be our own competitor. I would say the examples that you gave (IEX market coupling, BSE options) are in the realm of uncontrollables. So I think we will be unable to really comment or really react to that question. We are not worried about anything specific.
What incremental do new commodity Exchanges have to offer to gain market share? And on regulations relaxed for agri commodities?
Competition is critical to watch out for. As equity Exchanges enter into the commodity space, there could be some natural sort of synergies they have there. However, the biggest moat really is the liquidity we have in our contracts. The real benefit for any participant arises from the fact that they are there in a liquid Exchange. On agri — we are in discussions and working groups with the industry and the regulator to look at various kind of policies. Agriculture is one of them. I wouldn't be in a position to share more than this at this point. These are uncontrollables that we will not really be commenting on. At this stage, the commodity market is at a fairly nascent to high-growth stage.
On SGF — how comfortable are we with the SGF position right now? Continuing policy on percentage of transaction charges?
On SGF right now, we are in a comfortable position. We have a very good cushion on SGF. We have not put out any percentage or anything of transaction charges for SGF. It's just not a function of numbers. It's also a function of volatility and the margin levels. So as volatility would increase or volumes would increase simultaneously and OI would increase, then only with the SGF requirement increase. We are in a very comfortable position regarding SGF.
Strong profit and cash accretion this year but payouts have gone down. Plans for the cash being conserved?
It's important for us to have the sort of funding chest that is required as we look at our growth. This is not just from more of the same standpoint, there would be both organic, inorganic opportunities that we will continue to be looking at, new product segments, ancillary spaces. There are certain strategies that are at very early stage, but we do have strong plans for the capital on hand.
On the structural growth claim — what factors are helping you say that? Bullion is driving most of the volumes and bullion volatility too.
Our two big drivers of volume are energy and bullion. We've seen growth across both of these. While bullion has had a much higher growth, the energy growth has also been good and strong over a very high base. Globally and in India, we see there are certain points in time when the requirement around bullion will be stronger, and there will be times when the requirements around energy will be stronger. We do see that they both create that sort of balancing with and alongside each other. There's still a lot more opportunity when it comes to what can be done regulatory-wise, policy-wise. There is a cyclical component, but there is a deep structural component also.
On the consultation paper for FPIs in gold and silver contracts — update? And FPI contribution in energy products?
Having FPIs to participate broadly in the commodity space going beyond the cash-settled segment is certainly critical on the agenda. There has been a fair amount of debate and consultation. We will wait for the results of this paper to come out. The FPI contribution is primarily in the energy segment because it's the cash-settled segment. Our onboarding of FPIs has been strong. The contribution currently stands at about 2% to 3% of ADT. Within the Energy segment, they are in the double-digit contribution while at the broader MCX level, they will be at about 2% to 3%. We see this number growing.
If regulator allows colocation in commodities, how soon can we roll out? Competition already offers colocation in equities.
If this were to get permitted by the regulator, we'll be able to take this to market fairly soon within the kind of market requirements required. We do have our plans in place, and we'll be able to activate them at short notice.
UCC up 64% for full year — what's driving this? Is this base for further retail expansion?
We would want to see a sort of democratic increase in participation without being overly aggressive in any one space. I'm quite happy with where we stand on the retail side. We don't believe that everyone who is an equity investor will end up becoming a commodity investor. We are seeing the numbers ramp up steadily and evenly. A lot of actions that have been taken with the market, with digital members, digital brokers, looking at things like the consolidated ledger, looking at user experience. There is a lot more flexibility and opportunity that mutual funds will see in the coming months, when it comes to increasing the kind of commodity exposure in their portfolios. We think retail will participate in all these ways.
Competitor launching multiple bullion and energy products. What are we doing to protect market share?
We are watching the space very closely. It is a large competitor. Our bullion numbers remain untouched when it comes to market share over the last 2 years. Some recent activity on changing expiry dates and so on, in the energy segment is leading to some kind of shallow, 1-day-in-a-month activity. So I think it's also quite misaligned with the sort of global structuring on which our contracts are based. At this stage, I think we don't want to be reacting and making any moves, which are not cognizant with the way commodity products should operate. We will stay focused on continuing to drive participation in the existing portfolio.
On margin expansion — product license fees and other expenses grew faster than revenue. Any one-off?
We are in growth phase, and we are looking at actions to keep the market very relevant. We have to keep our technology expense, our expense on our investments on people. If you are asking whether our focus is going to be on margins in the coming months, our focus will be on efficiency. The focus is not going to be on spending less. We have to continue to spend smart and do the right thing to be prepared for the future.
Software support charges and SGF contribution trend ahead?
The SGF spend is more to keep our reserve fund in a healthy position. We always maintain the SGF at a healthy level, and we'll continue to do that. It is in line with what we see the business going up. Also, SGF is a requirement of SEBI, and it is computed based on the formula and calculation methodology given by SEBI. We are into growth phase, and we will keep investing in the business as and when what is required. The only thing is that it will be done very efficiently.
Interest income on margin money for Q4 and FY26? Other expenses sharp jump in Q4 — key driver?
This quarter, we have seen some increase in the margin money in terms of cash with the subsidiary, and that has helped in some increase in the income from that - INR59 crores in this quarter as against INR22 crores of previous year. The expenses are incurred to meet our market development activities and business-related professional charges.
Transaction charges for the quarter split between options and futures?
Futures revenue for Q4 is INR242 crores and options revenue is INR569 crores.
Revenue from electricity derivative contract? And Coal Exchange license — road map and addressable market size?
Electricity contracts are still in early stage. Rather than tracking revenue, we look at the membership, onboarding, trading, throughput. We are happy. We've got about 50 participants from the commercial participant side and a large number of members who contribute and trade. When it comes to coal, the coal Exchange is an independent entity. It will not be part of MCX as a company. It will operate as a subsidiary. We required the SEBI approval to go forward in this line of business. We are in the early stage of establishing that entity and taking it forward.
On electricity derivative — initiatives to develop this market?
We are very excited about the electricity contract. We do work with the regulators, both the SEBI and CERC, but more importantly, a lot of work with the state regulators. Converting a few DISCOMs is a very important part of the plan. We are at a point where some of that is going to come in as well. We are starting to see some of the members and participants in the power space starting to participate regularly there.
On interoperability and impact of RBI BG/FD regulation on clearing corporation funding?
For FDs it wouldn't impact as it is fully funded. In terms of BGs, I think your numbers are wrong. BGs contribute a much lower percentage than FDs. So while there may be an impact, but the numbers may not impact as much as you are saying. On interoperability — liquidity does not just go away due to interoperability. Matter of liquidity we get liquidity. We have sticky liquidity. Interoperability is only possible when there is a 100% similar product. For example, in equity, the ISI Number security is the same, that is why interoperability can be possible. In commodities may be different.