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Meridian Exchange: reading a transaction-charge business

Exchange revenue scales with turnover at almost no incremental cost. We walk through what that means for the margin profile and where the fee-cap risk actually sits.

Vikram Rao

Senior Analyst — Financial Infrastructure

4 Sep 202611 min read

The revenue mix

Reported

Transaction charges contributed 62% of FY2026 consolidated revenue of ₹4,820 crore. Listing fees, market data and co-location made up the balance. Operating costs rose 18% against revenue growth of 22%, which is what produced the margin expansion in the year.

The business carries no long-term borrowings and held ₹4,120 crore in cash and investments at the year end.

Where the risk sits

Reported

Fee caps are set by the regulator and have been revised downward twice in the last decade. A revision applies to the whole industry at once, so it is not a competitive risk — it is a policy risk that lands on the margin line directly.

What we think it is worth

Our view

Our view is that the annuity portion of revenue deserves a materially higher multiple than the turnover-linked portion, and that a single blended multiple flatters the business in strong markets and penalises it in weak ones. Readers should treat the numbers in this section as our judgement rather than as reported fact.

Sources

  • Annual Report FY2026Segment revenue and cost disclosures, pages 84–97.
  • Regulatory circularsFee structure notifications issued during FY2025 and FY2026.

This note is published for information only. It is not investment advice, not a recommendation, and not a solicitation to buy or sell any security. Figures were current at the date of publication and are not updated afterwards.