Cost Analysis of Legal Vendor
Guys there is a lot of hue and cry as to exchanges NSE/MCX are charging high for data fees. I tend to agree but lets do some basic calculation.
Lets take a single segment FNO the most popular
For tick by tick data for NFO segment NSE charges 38.50 lakh per year to the vendor .(for software devlopment segment)
Also per user they charge Rs900 pm.
If I am data vendor I will do the pricing in such a way that the NSE cost and my own cost are separate and transparent to end customer.
Lets say the data vendor charges 2100 pm(own cost) + 900 (NSE cost)
i.e 3000 pm to the end user.
If they acquire 1000 customers which is a very conservative figure.
their income 2100 * 1000 = 21 lakh per month
Annually 21*12 = 252 lakh per Annum
Heck I am not even considering that NSE gives discount for the first 300 customers i.e the 900 pm is not charged. So that is a additional benefit of 300*900*12 = 32.40 lakh per year to the broker.
So what is the cost to the datavendor
= One time Initial cost of setting up the business , setting of server etc and integrating the datafeed to its own platform blah blah ( put any figure say 50 lakh/75 lakh) With the advancement of new tech this cost will reduce IMO, mind you this is one time cost
+
Recurring cost of NSE fees i.e 40 lakh per Annum
+ Recurring cost of Data Servers and Maintenance (Put some figure here)
+
Recurring cost of Service /Support (Put some figure here)
WoW Looks to me if somebody seriously get into this business he will be profitable in 6 months let alone 12 months
If you think 1000 is huge number lets do the calculation for 500 customers and talk.
Instead what we are getting now!! Level 1 data which is cost wise 20 lakh per year+ 360 pm per user and then vendors are giving symbol limitation 1 symbol at a time and 5 symbol at a time and 200 symbol at a time and what not non sense.
Charging generally from 900 pm to 3000 pm ....
Ok enough rant. you be the judge.