SEBI's financials in strong shape on buoyant market and vibrant fund raising activity

For SEBI, the financial year 2023-24 proved to be a lucrative one as fee income registered a strong gain when compared to the previous year.

A buoyant stock market with optimism all around, attracting new companies and investors as well as significant fund-raising activities bodes well not only for all participants but also for SEBI - the capital market watchdog.

The financial year FY24 has turned out to be a lucrative one for the capital market regulator too, with fee income against IPOs and other modes of fund raise seeing a strong gain as compared to the year ago period. A vibrant primary market ensured SEBI earned a little over Rs 270 crore by means of filing fees that entities have to pay the regulator, when they submit offer documents.

This includes a record Rs 100 crore earned only from IPO draft documents that were filed in FY24, which was 30 percent higher as compared to FY23, with fee income pegged around Rs 71 crore.

In FY24, a total of 76 IPOs were launched, with a cumulative fund-raising of nearly Rs 61,923 crore, as per data from Prime Database.

Companies that file the draft document with SEBI have to pay a filing fee that is a typically a percentage of the issue amount, though a minimum base fee is also mentioned in the regulatory framework. This fee is also applicable on buybacks, rights issues and takeover offers.

“During 2023-24, the total amount of fees and other charges received was Rs 1,851.48 crore as against Rs 1,213.22 crore in 2022-23 (audited). The recurring fee was 79.65 per cent in 2023-24 as compared to 72.86 per cent in 2022-23 of the total fee collected,” SEBI's annual report said.

“During the year 2023-24, the largest recurring fee of Rs 1,066.24 crore was collected as regulatory fee from stock exchanges, followed by Rs 137.73 crore collected from registration fee from members (equity derivatives segment) and Rs 103.50 crore from custodian of securities,” the report added.

Further, in the non-recurring fee category, the highest fee was collected through the filing of primary market offer document (Rs 100.25 crore) followed by buyback of shares (Rs 97.58 crore), and takeover fees (Rs 53.20 crore).

Non-recurring fee is received on a one-time basis, and includes fee for offer documents filed or registration. Recurring fees, on the other hand, are those that are received on annual or regular intervals, and include service fee, annual fee, listing and regulatory fee from stock exchanges, among other items.

The largest chunk of fee – Rs 1,066.24 crore -- came in the form of regulatory fee from the stock exchanges, which is directly linked to the turnover – it more than doubled when compared to FY23.

Registration fee also accounts for a major chunk of income for the regulator, as newer market participants across categories, including FPIs and AIFs, keep applying for registration before they can participate in the stock market.

In FY24, SEBI earned nearly Rs 285 crore by way of registration fee and another Rs 192.4 crore by way of interest on investments.

Renewal fee - that registered market participants have to pay while renewing their regulatory licence - also helped SEBI pocket Rs 38.4 crore in FY24.