D-Street bull run brings windfall gains for Sebi too
Aug 21, 2024
Synopsis
Indian stock markets have seen a strong performance, resulting in increased earnings for the Securities and Exchange Board of India (Sebi). In FY24, Sebi's fee collection from market intermediaries rose 53% to ₹1,851 crore. Major contributors included higher regulatory fees from stock exchanges and increased turnover in both cash and derivatives markets.
It's not just the market participants who are raking in money on account of the recent bull run in Indian equities. The coffers of even the country's capital market regulator are growing, thanks to the buzz in the stock market. According to the Securities and Exchange Board of India's annual report of 2023-24, fee collection from various market intermediaries surged by 53% in FY24 to ₹1,851 crore.
The regulator generates revenue in the form of a fee it levies on market participants. It collects fees from stock exchanges, brokers and custodians among others. Sebi uses this to run its operations.
Regulatory fees from stock exchanges surged by 128% to ₹1,066 crore in FY24, up from ₹468 crore in FY23. This increase is tied to the mandatory fees stock exchanges must pay based on their annual turnover. Sebi charges 0.0001% of the turnover for both buy and sell transactions in stock market.
The cash market turnover on the NSE jumped 51% in FY24 to ₹201 lakh crore, while the BSE saw a 58% rise to ₹16.29 lakh crore. Additionally, the premium turnover in NSE's derivatives segment increased from ₹405 lakh crore in FY23 to ₹482 lakh crore in FY24.
Registration fees from members, including annual fees and turnover fees for brokers and sub-brokers, rose by 12% to ₹138 crore in FY24.
Another significant revenue stream for the regulator was from IPO document filings, through which Sebi collected ₹100 crore in FY24, compared to ₹71 crore in FY23. This fee is based on the size of the issue.
Sebi Windfall
Fundraising through public issues increased by 15% in 2023-24 compared to the previous year.
The number of newly-listed companies rose to 272 in 2023-24, up from 164 in 2022-23. SME listings reached an all-time high in 2023-24, and the number of mainboard IPOs nearly doubled to 76, the highest in 16 years.
Sebi posted a profit of ₹553 crore in FY23 and revenue of ₹1,404 crore. Sebi's general fund has a closing balance of ₹4,508 crore as of March 30, 2023. The regulator is yet to announce the FY24 revenue and profits. For the year ended March 31, 2024, the National Stock Exchange posted a revenue of ₹16,434 crore, a 29% jump over ₹12,765 crore the previous year. BSE’s revenue jumped 72% in FY24 to ₹1,592 crore.
[The Economic Times]
