Ladies and gentlemen, good day and welcome to Central Depository Services (India) Limited conference call. As a reminder, all participant lines will be in the listen only mode, and there'll 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. I now hand the conference over to Mr. Nilesh Kittur. Thank you, and over to you, sir. Good morning. Welcome to CDSL conference call. Today from CDSL management side, we have Mr. Nehal Vora, who's MD & CEO of CDSL. Mr. Ramkumar K, who is Head of Business Development and Operations. Mr. Sunil- Hello? Yeah. Hi. This is Jigar, yeah? Yes, Jigar. Hi, hi. Sorry, who is this? This is Nilesh here. Hi, Nilesh. Yeah. Yeah. Hi. I think Aditya should just be joining in. Aditya, you are there already? Yes, I'm here. Hello? Yeah. I'm here. Okay. Yeah. Hi. Yeah, Aditya. Hi. Yeah. Nilesh, so, Nehal sir is also joining already? Yeah, yeah. He's already there. I'm here. I'm joined by my team. I'm Nehal here. Hi. Hi, sir. Good morning to all of you. Yeah. Good morning, sir. Yeah. Yeah. Aditya, anybody else also joining us, or we can start? Aditya, can you speak up a little bit? Your voice is very faint. Hello. Yes, Aditya, your voice is very faint. Can you come closer to the microphone? Sure. Yeah. Aditya Agarwal, sorry to interrupt you, but your voice is breaking. May I request you to rejoin the call? That is, we could not hear your voice properly. It was coming very low. Aditya, can you hear us? May I request you to rejoin the call once again? I think, probably he might be joining. Aditya Agarwal's line reconnected. Hello. Can you hear me now, guys? Yes. We can hear you now clearly, Aditya. Hi, Aditya. Very good morning. Very good morning, guys. Thank you for taking time out and speaking to us. Jigar, can you hear me as well? Yeah. Yeah. I can hear you. Yeah, sure. Okay. Yeah. Hopefully the line stays good, yeah. Yeah. Now it's fine, I guess. Yeah. Aditya, we can start, right? Nobody else join, yeah? Yeah. Yeah. Yeah. Okay. Perfect. Yeah. Sir, Nehal sir and Nilesh, yeah. We'll hand it over to you guys and Aditya to take it forward. Aditya, we'll exit for now. Yeah. Yeah. Thank you. Yeah. Thank you. Thank you. Hi, Aditya. Nilesh, hi guys. Hi. I have my team here. I'm Nehal Vora, I'm the MD & CEO of CDSL. I'm joined by my head of business, Ramk umar, Head of Finance, Girish. Sunil is the Head of our Material Subsidiary. He's the MD & CEO of CDSL Ventures. Nilesh and Swaroop are from the finance team. That's all from our side. Aditya? Hello. Yes. You can hear me, Aditya? I can hear you very clearly, actually. Yeah. Can you hear me? Yeah. Now I can hear you. Okay. Earlier I couldn't hear you. What different I can do? Yeah, yeah. Can you hear me? Yeah, now I can hear you. We can go ahead. Thank you. Okay. Perfect. Yeah. I'm the portfolio manager for the IEI portfolio. This is about a $5 billion pool of capital from GIC. Right. You know, we've been a long-time admirer of CDSL. Frankly, I think there are lots of things that you guys are doing right. Right. I thought it was a good time to now use the market correction to invest in companies that are rock solid, will stay around for the next five, 10 years of market leadership, et cetera. Absolutely. I thought that, you know, CDSL is a good candidate for that. You know, we're not at all interested in the next quarter after next year earnings or, you know, anything like that. Right. That's not our objective. Right. What we are really just interested in is understanding your fundamental market position. Uh- Which is, you know, how do you see the underlying market evolving over a period of time? CDSL has been dramatic in gaining market share away from competition. Right Which is quite surprising given the structure of your parents. Right. The parentage almost tells a very different story. I'd be very curious to know the history. Yeah How it speaks to the future. Perfect. Perfect, Aditya. I think that sets the tone. So I'll first give you my brief background so that, you know, you'll know from where I come from. I've got about 26 years of experience in the securities market. I started my career, believe it or not, in SEBI for 10 years. I have gone through a lot of the regulatory reforms in the market, been part of that. I left SEBI in 2006, then I was with DSP Merrill Lynch for three years. I was heading their legal and compliance for India. Went through the merger of Merrill with Bank of America, and then I decided to move on. I joined the Bombay Stock Exchange, BSE, which was going through a management revamp in 2009. I headed the regulation for the entire BSE and BSE group. It comprises about eight subsidiaries. We made BSE come out with an IPO. We got it listed. I was part of as a nominee on the CDSL board as a BSE nominee for about five years. Kind of a part of the board when CDSL got listed also. It was primarily to divest the stake of BSE, which was at about 54%-24% as required under the SEBI regulations. Currently, the new SEBI regulations require BSE to divest it further to 15%. It's currently at about 20%. In terms of our current structure is about the only listed depository in Asia-Pac Rim and only the second in the world. [PERU] is the other one, which is very small depository. We are the only meaningful depository listed in the world. In terms of our shareholding structure, we are about 60% institutional holding, comprising of banks mainly. BSE is at about 20%, that's the largest shareholder. It no longer is a promoter. It's a company without any kind of identifiable promoter. We have other banks like basically HDFC Bank, Standard Chartered Bank. We have the LIC. We have about 1.5-2 lakh shareholders comprising of non-institutional to about 40%. CDSL got set up, the depository regulations came in in 1996 through an act of parliament. The Depositories Act, 1996 got moved in 1996, and the NSDL got set up in 1996 as a first depository. India always believes in the number of two, so having two critical institutions running critical services to create competition. India is a large country, size of, it's basically a subcontinent. We need to be able to ensure that there is no too big to fail syndrome. CDSL got set up in about 1998, but it became operational in about 2002. Interestingly, the inter-depository framework got set up in 1998, 1999. Right from inception, this was conceptualized to be interoperable amongst both the depositories. CDSL because it had a late start of about six years, I think NSDL had got a bulk of the basically the institutional volume. They continue to have that, obviously because of, you know, that basically the institutions, once they are in a particular place, they need a real push to be moved on to another kind of framework. There has been a credible change which has happened in the last two years. I joined CDSL as CEO in 2019, September, just before COVID. I have a five year term. That's the maximum permissible under the SEBI regulations. We revamped the entire. Today, as we stand, the entire ethos has been to ensure that it becomes a sustainable system-driven depository. We've invested a lot into the technology. CDSL has been at the forefront of investing in its technology. It kind of automated the entire account opening process to the transfers to the off-market being completely automated. The proof of the pudding is in the eating, and can be seen during a pandemic which hit us in March 2020, when everything was kind of locked down. The securities market continued. While we were all working from home, the depository participants as well as CDSL continued to run seamlessly. Not only run seamlessly, but grow seamlessly, and rather, basically, by a huge amount. Just to give you a sense, it took about 15 years for CDSL to gain its first crore of demat accounts. The first 10 million demat accounts came in 15 years. The next 10 million came in about five years. The third 10 million came in a year, and the next 30 million came in one year. Currently we are at about 6.75 crore plus demat accounts. NSDL is at about 2.7 crore demat accounts. We are about at 70% market share right now. In terms of number of depository participants, we are about 500, 600, about 600 depository. 588. 588 depository participants versus NSDL having about 200- 278. 278 participants. There are a large number of depository participants which are exclusively on CDSL. We pride ourselves in two basic things. One is our technology is a centralized kind of an architecture. It's a push which kind of all the depository participants get connected to us. It's a centralized architecture, so from a security standpoint, it kind of the superior kind of technology. Our competition has basically a hub-and-spoke model, which kind of partially implemented at the DP's end, partially at their end. Reforms, et cetera, take a little longer when you have a hub-and-spoke model. Conceptually, from an architectural standpoint, this is kind of the one of the key differences where CDSL has. Second is the cost of infra is a lot lower when it's a centralized model because there is basically the economies of scale which come into play. The DPs have to just basically plug and play whenever they have to link up with CDSL. Third is obviously our electronic interface for the transfer of securities. That has been extremely seamless. SEBI has been kind of promoted these reforms to enable people to basically authenticate. We moved into a very interesting framework where the authentication directly happens with the depository. There is an application protocol interface which connects the broker to the investor. When he has to authenticate his transfer, that API is called through the back office of the broker and authenticates directly with the CDSL. The investor doesn't have to share his one-time password, et cetera, with the broker, but is directly authenticated by the system. There's a system protocol handshake which happens between CDSL and the broker's back office, and that kind of goes through. This all is extremely seamless, and it happens in a fraction of a second. That kind of ensures that has seen a lot of growth, which CDSL has seen in terms of number of demat accounts which I've just mentioned. This is kind of a brief historical connect into where we are today, and we continue to invest in technology to ensure that we are give that kind of ease of doing business. At the same time, put in place the right controls in place to ensure that the system grows in a proper manner. Aditya is there? Can you hear me? Yeah. This is a fascinating overview, frankly. Sorry, Aditya, I can't hear you. Sorry. Yeah. Hi. Can you hear me? Yeah, yeah. Hello? Can you hear me? Yeah, now I can hear you. Yeah. Yes. Hello, [Sehvoz]? Aditya, sorry to interrupt you, but one second, we are losing your audio. Sure. May I request you to come in at a better reception area, please. Can you hear me now? Yeah, we can hear you now. Yeah. Okay. Always. Just give me a second. Let me try to find something a little better than this. Is this any better? No, your voice is not clear. It's, we can hear you, but it's not clear. Okay. Yeah, now it's better. Now it's better. Okay. I'm basically not gonna move from this spot. Okay. I had a basic question that, you know, it's quite interesting what you've achieved at CDSL. Right. Especially starting out from a weaker starting point. Yeah. In your assessment, obviously you have a superior product with, you know, with significant technology, digital interface, et cetera. What allows people to sort of choose between what is perceived as the market leader and yourself? Obviously today, you know, obviously your market share is far larger, but five years out, ten years out. Yeah. No, not five years. About two and a half years when I joined, we were lower than that of our competition. We were at about 1.8 crore demat accounts in September of 2019. Exactly. Even more so. Is that the choice of has helped you indirectly or increase- Aditya, sorry, but your voice is- Yeah, voice is yet breaking, Aditya. Can you join from, let's say, a landline or something? Do you have a landline from where you can join? Hello? Yeah, Aditya, voice is not coming through. Can you join from, let's say, a landline? Okay. Let me try. Okay. Because I think the voice is coming on in intermittently. Can't hear you clearly. Aditya, are you joining in? Sir, his line is dropped. He's calling back. Okay. [Just] can you check if he's planning to join in or he's not joining? Sir, he's not dialed in yet. Oh, can you call him and ask him offline? Sure, sir. Shall I check with Jigar? Yeah, whoever, but just get it done because if it's not happening then I would rather. Correct. He's got things going on, so rather than finish that off then. Okay, one moment. Sir, I will be away from the call while I- Sure. Connect with him. Okay. Okay. Sir, Nirav here. Yeah. Nirav. Sir, I spoke with Aditya, sir, and he said that he's not able to dial in. There is some issue at his end. He spoke to Jigar and he has apologized that today's session didn't go through because of the, you know, the issue that he's facing about dialing in. He said to reschedule and he said that Jigar will coordinate with Nilesh, sir, and- Okay. Will reschedule this meeting.