Kfin Technologies Limited analyst Q&A

Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Pankaj Tibrewal from IKIGAI Asset Managers. Please go ahead.

Yes, good morning. Thanks for the opportunity. Am I audible?

Yes. So congratulations on a great set of results and a lot of client wins. And clearly, we are users of your platform, so we can really vouch the digital onboarding is just fantastic. What I wanted to understand from you is that can you talk about the execution capabilities? You spoke about all the deal wins, how you are building capacity to execute all these deals and how do you make sure that the overall execution goes as per the track? What are the headcounts? How are you looking to add past strength on the execution side? And also on the yield side, do you think the pressure is there on the yield side? How do you circumvent that over the period of time? These two are the broad questions, both from domestic and international perspective. Thank you.

Thank you so much, Pankaj for the questions. I'll take one by one. The first one on the execution, I had briefly alluded and so had my CFO Mr. Mathur about the expansion of the cost on the back of both payroll and on technology solutions. So let me take bo th of them. We believe that the business solutions, we largely split it into the more mature businesses of mutual funds and the issuer solutions. Obviously, these were the areas we've been there for the past three decades. And the new asset class and businesses, whether it is alternatives, PMS, wealth, and international pension system, private retirement schemes and the whole nine yards into the second category which are growing, not yet mature, a lot of bespokeness in the m arket and the industry, unlike in the case of mutual funds. It presents itself both a challenge and an opportunity. So for our core business, the volume expansion had been quite tremendous. It had grown almost 75%. Revenues, obviously, have not grown in that same commensurate manner. And with the advent of a low-ticket size, investments in the form of INR100, SIP so on and so forth. This presents the opportunity that AUM can further grow as the financialization gets driven into B30 and maybe a C30 if it comes through tomorrow, but it must be noted that for a player like us, it comes with additional costs because the AUM is how we charge, not based on the number of transactions. So clearly, this can be addressed only and only through technology. And the scale of volumes and the amount of data grows disproportionately higher in relation to the revenue. So our frugal technological engineering and our journey that we have started almost four and a half years back to move everything into cloud, move a way from enterprise architecture into open-source architecture, to focus more on straight through automation as against adding more people for quality control mechanisms. All of that have definitely given us an advantage over the past X number of years whe re we have managed to deliver despite the volume expansion. But the spike that we have seen in the last 6 months to 9 months meant that the transformation that we've done in the past was no longer sufficient or is not going to be sufficient in the coming years. So the next wave of technological transformation is what is underway at this point in time. And hence, there has been an expansion of both payroll which is basically the engineering talent we were hiring across the country, as well as the associated costs pertaining to licensing, pertaining to the cloud, so on and so forth. We have also moved away from our sourcing of talent strategy from a centralized, okay, come to Hyderabad and deliver to we will go to any and every location where there is a talent which is fit for purpose. For example, we have moved to Bhubaneswar. We set up our center of excellence for data and analytics. We have just created a center for mobility solutions in Vijayawada. We have centers created in Chennai, in Gujarat. We're starting hopefully something soon in Madhya Pradesh, so on and so forth. So the talent expansion, both in terms of quality and quantity in partnership with the universities and affiliates. And our technological partnerships, whether it is with Microsoft, whether it is with AWS, combined with a tech talent pool, which is almost 1,350 today for KFin Tech. I believe we are rightly positioned to take care of both the volume expansion in the mature business, as well as the customization and the bespoke -ness that is required for the new age asset classes, such as alternatives and wealth. And also happy to inform in terms of the overall commentary from the industry bodies, the market regulators, have been overwhelmingly positive in terms of how we've been able to service in a much better fashion as against in the past, as well as a few quantitative metrics, such as typical wastage that happens in our industries. Wrong payouts, susceptibility to fraud, etcetera, all of which we have controlled quite significantly over the past 24 months, resulting in leakage to be completely capped. So to assure you, Pankaj, our delivery capabilities we are creating not just for today but keeping in mind the next three to five years, the capacities we are creating will easily take care of the needs for the future. On the yield compression, well, as the industry expands and as the volumes expand, there had always been an expectation from our clients in terms of discounts, in the form of partaking in certain amount of windfall gains that we may have secured. And we have always been respectful of the asks and our growth had been in spite and despite of such yield compression. That said, I am quite confident the industry understands that the AUM growth, if it is a factor of X, the quantum of data and the engineering growth that is required by the RT A and market intermediaries is nearly a factor of three times. And that means that our costs continue to expand quite largely in spite of the AUM to be grown. And hence, there hadn't been an inordinate amount of pressure because at the end of the day, the services should speak. Today, there is no industry in the world which operates with the core operating business being operated at less than about INR3, INR3.5 paise. You compare that to even within India, any KRA or depository participants any other industry which runs into several tens of rupees, the RTA operations run at few paise. And hence, I think there is a mutual respect which is helping us to kind of keep the cap at the current blended yield.

Fantastic. I think quite reassuring and wish you and the team the best of luck for the future. Thank you.

Thank you so much, Pankaj.

Thank you. The next question is from the line of Supratim Datta from Ambit Capital. Please go ahead.

Thanks for the opportunity. My first question is on the international business. I do understand that you are now trying to build a larger base in Thailand. Now, if I see Thailand's AUM size is around one-fifth out of India currently. So, could you tell us what would be the opportunity size for KFin in this market? You currently have one partner, but how do you plan to expand in this market if you could give some color on that? The other question on the international business is also if you could split the 11% quarter-over- quarter growth into inflows versus mark -to-market gains. That would be very helpful. My second question is on the value -added services. I understand that it's contributing around 7.9% of your revenues in this quarter. But if I look at your annual report, you plan to expand this to 15%. Now, could you tell us again, you know, what are your plans? How do you plan to expand this from 7.9 to 15? What are products you are looking at or market segments are you looking at -- to expand this? My third question was on the cost front. I understand that you have laid out, which all areas as you are investing. But just wanted to understand that already in FY24, if I see your number of IT employees expanded to around 940 from 750. So, how much further, how much more manpower do you need to add here? And is this going to be a journey over the next two to three years? Or do you see that manpower addition coming to an end at the end of this year? If you could give some color on that, that would be helpful. Thank you.

Sure. Thank you. So, on Thailand, it is. So, today, let's just draw a quick analogy to Malaysia. Okay. We started Malaysia in 2019. And I think after one and a half years by which time we took; we built our entire platform meeting the needs of the local regulator and the clients. And we started winning near about three asset managers a quarter. And that level of win rate was unheard of in this industry. And unfortunately for us, we soon hit COVID. We lost two years in the process, no travel, and they were not keen to have offshoring as a conversation. And post COVID, we started again, we started winning near about two to three mandates a quarter. The previous quarter, we won six. Right. And the journey along the way has taught us one thing, which is that as we move into new geography, it is not going to happen that the biggest of the clients are going to give you the mandate because it is too much of business risk for them. And commensurately, the wins we've had were many of the small to medium tiered AMCs back in the day. And hence, despite having a number of clients, revenue is obviously not commensurate to, for example, the amount of revenue we derive from the equivalent number of AMCs in India. Right. But that has started to change. The last few wins are all large mandates, as I was talking about. And the trajectory, we believe, is something that will continue to play out in many a country with the notable difference that in Asia, majority of the asset management companies operate in a hub and spoke model, meaning if any of the AMCs probably are headquartered in Singapore, but they have presence in Malaysia and Philippines and Thailand and so on and so forth. Ergo, winning a client in any of these locations and delivering good quality outcomes helps us to move faster into the other geographies. And it is also noteworthy that just because one asset management company is small in a particular country doesn't mean that they're small in every other country. They could be materially large in another country. It happens even here in India as well. So that particular analogy, if you see, in the case of Thailand, we are not starting with the smallest client, but we won one of the largest asset management companies out there. And we already went live on phase one to the client satisfaction phase, which is expected to go live in the coming two months in December. And this has already yielded a significant positive brand and reputational value for us in that entire country. Even at one fifth of the assets under management, there are two notable differences I will call out. Right. So one is in India, we do only transfer agency. We don't necessarily do fund accounting for mutual fund clients. That is something that we do in alternatives. But in Thailand, our first contract with Krungsri is actually for fund accounting. Ergo, our ability to do, should we do both TA and FA together, is something where our yield can be materially high, because both of these are two different sets of solutions. And hence, if I'm deriving about four to five basis points from TA, I will generate another three to four basis points on FA. So that means for the same AUM, your yield can be at least 70 % to 80% higher. Point number one. Number two, in the form of at one fifth of India's AUM, for K Fin Tech, it is still 100% of the target addressable market, because I do not have a competitor there. Our competition is largely in-house, which means that effectively we have to orchestrate the exact same mechanism what we've done in Malaysia which is to add value to our clients. And as they see, they will start moving it out. So hence, at even one-fifth of the AUM, that pretty much could be similar amount of AUM that are managing in India today, given our market share is about 32%, 33% here in India. So those are the reasons why we are very excited about Thailand. And. of course, that is the AUM today. But as we expand into the coming 2 years, 3 years to 4 years we expect to see the overall AUM in Thailand also to expand. What we have seen in India over the last 2.5 years post-COVID is a very sharp mark-to-market gains as well as mutual fund financialization. Neither of these two trends have played out in any Asian country and we started to see green shoots of that happening in the last two quarters. And hence, we hope that in the coming few years many of these Southeast Asian economies will also see a mark -to-market gains a bit like India a nd along with that, a financialization moving more AUM expansion into each of the asset classes. So that's broadly about Thailand. And this is still only the story about mutual funds, not talking about alternatives. We are launching our XAlt platform in Thailand and in Singapore into the coming quarters, as I have already called out back in the day. Currently, XAlt is live in India for Indian funds and Gift City, but we're taking it to Asia. So that means our addressable market will go beyond just mutual funds and into the alternatives as well. I'll quickly move to the second question in terms of the value -added solutions. At 7.9% of the total revenue pool, which was zero about 5 years back, hopefully gives you the confidence about what our commitment had been to take certain components of our business into our own hands which is not dependent on how the market functions and hence a controllable income. So that zero to near about 8% in five years is heartening enough, but yes, our target is 15%. Our target, in fact is to de -risk our overall business by reducing the dependency on Indian mutual funds to well below 50% in time to come. And that is not by limiting the growth of our largest business line, but by expanding our other business lines much faster as we have been seeing over a period of time. The fact that we have been signing several data lake contracts, both with our clients and with asset management companies who are not our clients, should tell us about the efficiency and effectiveness of the engineering platforms we have created, and the m obility solutions and the analytical solutions that we are creating for our clients as well as for our competitors' clients. And this is something that we are able to reduce the TCO the total cost of operation for our clients whilst adding and increasing the share of wallet for us. The buyout of Webile Technologies, which we have done about 18 months back was wholly and solely intended for this very purpose which is to drive pure technological solutions. And that business that we have acquired, I am happy to inform you that it has grown nearly two and a half times in a very short period of time and has earned cash profit as well. So, we believe that slowly we will expand our solutioning beyond the capital markets into the broader BFSI sector, because many of our technological solutions transcend beyond capital markets and have a larger relevance in the form of the BFSI, for example, an AML, PML, unified KYC solutions beyond. I may have already called out; we are also venturing into a K RA business, and which was approved by our board for investment the previous evening. So, that's broadly on the value -added solutions and services. Our target continues to be to get to a 15% profile. Now, you would obviously imagine that this is going to happen over a period of time, by which time our overall revenue itself will continue to grow, which means that in absolute number, the value-added solutions will have to grow materially faster to get t o that 15% on the expanded overall revenue base, if I may. I'll quickly move to the third one, that's on the IT manpower and the costs related. You have seen expansion from 750 to 950 people, that is on the core KFintech. Webile technologies, which is our subsidiaries, purely a tech shop again. You add that headcount, we are close to 1200 plus people. Do we see a further expansion of IT headcount? The answer is yes. If you see KFin tech's total tech spend as a per centage of revenue in just 3 years back, it used to be 9%. Today, it has tripled to over 27 %, 28%. We believe it is the right direction as we create tech -first solutions for the industry. And I always believed that our business which is RTA we are basically the extended operations arm for any asset manager. But counter-intuitively, I always felt that this should be a tech company more than an operations company. And we work with a goal that we used to have about 5000 operations people and 300 tech people 5 years, 6 years back in this company. Today, our IT team has gone up by five times, whilst my operations team continue to remain similar inside and that's largely the amount of straight-through automation we brought into it and helping us to manage a manifold increase in volumes with the same operations staff. In an ideal scenario, I would like to see a day when my tech team probably nearly even doubles from where it is today, and the operation team comes down by two-thirds of the current strength. That is the true tech version of a business like this which can scale up to any amount of volume, which can do straight -through automation, which basically deploys and employs large -scale machine learning and cloud technologies to be able to serve our clients' growing needs.

That's very helpful. Just one follow-up question. So, you talked about the value -added services and the products that you're looking at. I just wanted to understand the pricing here is proj ect- based, right, rather than AUM based. And hence, would it be fair to say that the profitability here could be better than overall the AUM linked business?

So, the commercial model for the VaaS varies based on the actual service itself. So, for example, we have services rendered in the form of API infrastructure which is more ping -based unit pricing. We build certain data engineering solutions more as a proje ct, as you rightly said and that would be a one-time project followed by an AMC sort of a mechanism. Third could be a SaaS model. Many of our mobility solutions when we create our websites and mobile platforms what have you for many of the Fintechs and the clients, not many companies in today's world want to have an upfront capex. They prefer pay-as-you-go subscription model, and hence, a SaaS model comes to play. So, each of these three and many more models that may come into play will have a different profile of both revenue, the way it hits the P&L, as well as the margin. But it's fair to say that, yes, these are as profitable as our core mutual fund business it self, given there are practically – I wouldn't put anyone at all who can do the kind of work we do, because there are pure tech companies who understand tech very well, but probably not the nuances of the asset management industry. And you may have fund managers and asset managers who understand the domain very well, but probably not necessarily technologists. So, we bring to bear both of them together, and hence, we are able to deliver solutions better for our clients. While it is reducing their TCO, it continues to be a highly profitable business for us.

Thank you.

Thank you. The next question comes from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead.

Hi. Good morning. Congrats on the numbers, and it's good to see the progress and delivery since the IPO days. Sreekanth, I have a question on the international side again. How competitive are these markets, the deals that you're picking up, especially when you're seeing that these deals are starting to get bigger in size as well? So, s ome flavor on that. And then, secondly, on the same point, how do we see the growth outlook given the current pipeline and what you're able to see in terms of new acquisitions?

Hi, Abhijeet. Very good morning, and good to be talking to you again. So, the competition, as I've maintained, largely continues to be with captive and in-house solutions, which the majority of the fund managers in Asia tend to leverage, with the notable exception of a player like HSBC, who is largely a bank and a custodian, but also render some amount of transfer agency services. But by and large, it is a market which is heavily skewed towards captive and in -house. Our competitive advantage had been on three facets. One was a fit-for-purpose platform for each of the countries, a standardized one, which the regulator also has been appreciating us a lot for, which they do not have today. Second, commercially, there is always a plus and minus when you deal with in -house. For me to be able to demonstrate that I am 30%, 40%, 50% cheaper than in -house calculations, it is tough at times for me to explain to them as to all the costs that they need to bake into their current cost structure and compare with my pricing, and then hence realize what is actual savings. For example, it's not very easy to add the overhead layers of management, the infrastructure, and the data centers and all of that. So typically, people tend to just add up the people who are working in RTA in their company and then they say, okay, this is my cost and what is your price, and that is truly not the cost. So we have created templates and estimator models and have been ex plaining to them quite successfully. So in the past 1 year or so, and hence the number of new wins we've seen, almost 10 new clients in the last 6 months alone, 6 being in the previous quarter, is our ability to explain to them as to the genuine benefit they are getting and not necessarily the perceived benefit, which is significantly undervalued by them. So we are hence not seeing any pressure for me to reduce my price. It's just that we are able to better navigate and maneuver and explain to them the true benefit they are able to get to us. We continue to drive a much higher yield profile in international as compared to India, as is evident from the published yields, a little about 35% more than Indian fund structure at this po int in time. And that is only for RTA. And as I said, unlike in India, we have the ability to do both TA and FA in the international space. And you add to that 4.5, 5 basis points, another 3 basis points for FA, you're really talking about two times the yield that we derive in India, a little over 2 times. That's the potential I'm talking about. There are a few clients where we are doing, for example, one of the large clients we signed up, Berjaya, Interpac , in its earlier avtar, we are doing transfer agency , fund accounting administration, digital, everything for all the private mandates and for the mutual funds. So obviously your yield and your revenue correspondingly grows, though it is just one client, so to speak. So no yield pressure in international. And as I've already explained back in the day, we do not have telescopic pricing. In fact, we have price escalation. We learned our mistakes from Indian market, and we have only price escalation clauses in most of our international markets. In terms of the deal sizes, yes, I think there's a bunch of deals that I spoke about that we signed are worth over $2.5 million. And today, if you see and compare it to the international, the GFS revenue that marks 70% to 80% increase just based on these deals, not talking about the organic growth of AUM for the existing asset management companies. Our pipeline continues to expand and swell. Again, I think each successful delivery opens up doors into multiple clients. We are now talking to several of the top five AMCs in Malaysia and in Philippines. And now with the in-principle approval that we received from Thailand; we hope to accelerate our process. It is important to note that in spite and despite of our reputation in the Asian markets, the local asset managers would always want to see at least a physical setup of an office and see and touch and feel a few human be ings that are actually working there. Some of this becomes geo-politics as well. And these approvals help us to provide that level of confidence, though we won the first contract without it all. But I think some of the others, I'm sure, will come to roost very soon as we start setting up our physical offices and have people domiciled in Thailand and other countries. Hopefully, I answered your question, Abhijeet.

Yes, very good. Thank you so much.

Thank you. The next question is from the line of Pranuj from JP Morgan. Please go ahead.

Yes, thanks a lot for the opportunity. Just on the yields part, I think domestic yields have expanded 6 basis points, quarter-on-quarter, at least in my calculation. So what has driven this? I remember you saying that the volumes are pretty high. So is it tra nsaction-based, mixed-led, or what led to this?

So it's a combination of two factors. One, the asset mix. As we all know, equity derives a higher quantum of basis points. And the asset mix plays into, has played, right? I mean, the market-to- market expansion of both the equity as well as the NFOs, large ly brought equity by us. And hence the basis points was higher. Second, the demographics of our clients, if you see, we have barring a few large asset management companies, majority of the clients we service are medium-to-large asset management companies. And hence, they are not at a very high tiered AUM, which means the yield compression typically happens. So I guess the point I'm trying to make is, it matters not just your AUM growing, but as to which AMC is growing to contribute to that, right? That has a material impact on the overall yield. So combination of these two factors, right, has helped us to have a yield expansion in the previous quarter.

And second one, just, issue r solutions are starting to do really well. So could you just quantify what is the proportion of folio -based revenues and that particular annuity -based revenue? Like how often do you have contract renegotiations and what could be the growth on a per folio basis revenue we could see over there?

A total folio-based revenue for issuer solutions for us is near about 75% of the total revenue pool coming from issuers.

That's in this quarter?

No, that's typically the range. I'm just giving the share of the pie of the issuer services. 75% comes from the annuity services in the form of folio, 15% in the form of corporate actions, which are basically the dividend declarations and buybacks and mergers and demergers, rights issues, so on and so forth. And another 10% through corporate events, basically conducting Annual General Meetings, e - voting, resolution processes, so on and so forth. That's the profile of this. 10.5, roughly about 11 point sorry about 1.15 crores investors or rather folios have been added in the previous quarter. Now, all of that is pure annuity revenue model, right? And those are all folio -based conversations. And obviously, they are all on the back of a series of clients. And those series of clients, should they go on to have more corporate actions, obviously, it will impact the other 15% and 10% of the revenue pie as well. Our contracts in issuer solutions are a bit like our international contracts. These are not telescopic pricing, so on and so forth. They usually have a COLA clause, three-year contracts, and we usually tend to have a price escalation. You know, we are successful in about 20% to 25% of the cases we pursue. Not every case, you know, we do. And hence, there is no compression at a folio price as against an expansion at a per unit folio price and the number of folios expanding and the number of companies expanding that A into B into C math is one of the reasons why that corporate solutions, co -issuer solutions has been growing. I've also mentioned that it was a bit of a neglected business, maybe about seven, eight years back and too much focus on mutual funds. And as we've started creating compelling value propositions, it helped us to drive significant value-added solutions. Our VAS revenue also as part of the coming from issuer solutions. We launched country's first insider trading platform directly latching onto the depository ecosystem. And we created ESOP administration service. So there's a lot of work we are doing beyond just the folio-based servicing in this space. So yes, so broadly, expansion of number of folios, number of companies and the unit price, all possible in this business and has been happening for a fair bit of time.

Thank you. The next question is from the line of Dipanjan Ghosh from Citi Bank. Please go ahead.

Hi, good morning, sir. So just a few questions. First, the data keeping question, if you can break your investor, international and other investor solutions business between core international and domestic AIF and alternates. And second is on the data keeping question would be on the GBS side, you had earlier mentioned that your revenues would probably stabilize at the current level, but we see a dip. So if you can explain that? So those are the two data keeping questions. One or two small questions, which is in the alternate business, whenever you add any new client, is there a sort of a one -off income that you book? I mean, the yields have been kind of the realizations have been going up. So just wanted to get some sense on what is really driving that. And finally, on the international if you can break it up between flows and mark to market, even for 1H or FY’2024.

Could you repeat your questions? The questions were not very clear. I'll answer the ones that were clear to me, and I'll probably request you to ask the others. Right. I mean, so I think there was a question on alternatives. And if there is a one -time episodical revenue that comes that helps us in terms of a rise in the yield or revenue that you see in alternatives . The answer is no. It's in fact the opposite. We know when a new alternative investment fund is set up, we have set up costs, both in terms of instance creation for which we'll have to pay monies to AWS and other licenses. And till such time, the fund is not live, and the capital has been drawn. Our revenue actually does not even kick in. So on the contrary, we actually have more cost than revenue with every new fund for some period of time, as is the case even with mutual funds. So it's not different. And however, if you're seeing the rise in revenue and the yields, that's largely because of a very purposeful orchestration we've been doing, which is to move away from a fixed cost per scheme per month, which is what used to be the operating model, which is quite a regressive model, actually. And we have changed many of our contracts from that model into a basis points model. So what you're seeing actually is an expansion because of actually the nature of existing contract conversion, even as all new contracts are entirely based on the basis po ints, right, So that's for the alternatives.

Okay.

A question on the global business solutions. Mortgage, as we all know, that business stands as an outlier to what otherwise is an asset management business. And that is more a liability of mortgage management business in the form of business process outsourcing. U.S. mortgages have been under significant stress and will continue to be so for a certain period of time. So we see this fluctuation because this is a manpower -based business, right, as the number of bodies required tend to fluctuate based on the businesses they secure. It goes up and down. At this moment in time, there has been a sharp decline in U.S. numbers, even as we have seen a sharp increase in Australia side of the same business, right? So we expect to see these numbers to fluctuate. And at some point, in time as an organization, we will be taking again a cautious and a purposeful decision in terms of our intent to stay put in a non-core business such as this. For now, it generates, some amount of cash as well as gives us some protection in the form of, you know, U.S. dollar, in the form of currency hedge, so on and so forth. So that's broadly on the GB S business, a business which we continue to sustain, but is not a focus area for the management to grow. So these two questions I've got, I have to, I'm afraid...

Okay, I'll just go forward with just two data -giving questions. One is on the international area and if you can break it up between flows and mark to market, that's a for 1H. And second was on the international and other investor solutions, if you can break it up between international/other investor solutions for 2Q and 1H.

Okay, on the flows versus the mark -to-market gains in Asia, it's nearly 100% thanks to flows. Okay, mark-to-market gains had been tepid to negative. And in fact, the flows too were not very large. The revenue growth was on the back of new clients going live, right So I guess what I'm trying to say is that the tailwinds that we had in India, we've been having, which is both an increase in the net flows and a mark -to-market. We didn't have that luxury in both of those metrics in Asia . Right, for a bunch of quarters in the recent past simply because the markets haven't grown and neither had the AUMs. But we started seeing that trend turn, late August, early September onwards, and we are clocking both net flow increases, which we are witnessing both in the form of AUM growth and the transaction volume growth, as well as mark-to-market gains. For example, we've seen how Hong Kong, Hang Seng has increased. Same is the case with the exchanges of Thailand and Malaysia, which do have been clocking an impressive mark -to- market gains in the recent months. So much of that advantage we hope to gain into the coming quarters. The breakup for... Just give me a moment, please. Yes Amit, could you take that?

Yes. So, I mean, the international business , is close to INR23 odd crores for the first half. My AIF business would also be close to around INR23 odd crores. And then NPS is close to around INR5 odd crores, and the balance is another INR6 odd crores, which is, you know, the Webile.

Got it. Okay, sure. Thank you and all the best.

Thank you. The last question is from the line of Uday Pai from Invester Capital Services. Please go ahead.

Yes. Thank you for the opportunity. Just wanted your thought process on starting the KRA business and what are the rights to win in that business, given that two large depository and our competitor is already in that business. So, some color on that.

Yes, great question. Thank you. So, it stems from the fact that today the capital markets has about roughly 9 crores odd, investors in the secondary market and about 3.8 in mutual funds. And we believe that this number will easily quadruple in the next 8 to 10 years. So, getting to about 40 to 50 crores, which, means that there is a lot of addressable market that still needs to be served every single year, near about a crores Indian youngsters turn minor to major. And as all of that happens, they become investment ready and they need KYC solutions or rather identity solutions, so to speak. So, there is a lot of market that needs to begin. And of course, given that we have 62% plus of asset management companies as our clients and near about 50% of primary and secondary market investors because we are the only RTA who operates both in the equity bond and in the mutual funds and the alternatives market. Our target investor base is substantively higher than all others. And we also believe that from a solutioning standpoint, I think KYC end of the day is broadly taking care of your proof of address and identity. But as with every business that we have moved in, whether it is alternatives or wealth or international, we put tech and transformation first and we have firm reasons to believe that the current solutions are continuing to be suboptimal in terms of address ing the needs of both the distributor asset manager and the investor. So, our bent of mind as we, hope to secure the approvals from the regulator and we are all building the platform as we speak is that we will be launching a materially different KYC solution in the industry. And hence, so we are looking at both addressable market, which is still very, very large and that can be tapped into , two, a significant amount of client base who are already KFintech’s client, both in the form of alternatives, mutual funds and in the primary markets and the security markets will be a definitive advantage to us. Remember that the other KRAs are not in both of them simultaneously. And three, as I said, our solution, I can't speak more about it at this point in time but will be materially different and a significant cornerstone in the identity management of the industry.

Thank you. In the interest of time, this was the last question for today's conference call. I would now like to hand the conference over to Mr. Devesh Agarwal from IFL Securities.

I thank the KFin management for giving us an opportunity to host today’s call. Before we conclude, may I ask Vivek to add any closing remarks?

Thank you, Devesh. I think we have covered it all. We continue to maintain focus in terms of our growth trajectory, both in India and overseas market and trying to de -risk the domestic business by expansion in the international market. Again the in-principle approval given by RBI for setting up subsidiary in Thailand is a step in that direction. And we will look forward to expanding beyond Thailand as we look upon the international business more closely. We'll continue to maintain traction in terms of growth in the domestic mutual fund business in parallel. And we are cognizant of the mark -to-market gains that we are having while the core inflows remain intact. There are always five or six AMCs who underperform in terms of net inflows in the large set of AMCs that we service. So, as a cycle, it makes up over a period of time. And we therefore remain buoyant that the core businesses of issuer solutions, domestic mutual fund business will continue to grow in the mid -teens on a sustainable basis, while international operations, AIF, fund accounting will continue to outgrow this growth. And overall, you know, we'll be able to manage our cost in terms of nimbleness to the need of the market. Thank you so much for joining today. And we look forward to engagement in future.

Thank you Vivek. Thank you, everyone, for joining the call today and wish everyone a very Happy Diwali. Shlok, you may now conclude the call.

Thank you, everyone. On behalf of I IFL Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.