Dear Sheru,

A very happy, healthy and successful 2022 to you. With the new year, the third wave of the COVID-19 pandemic has also arrived. The virus and its variants, specially Omicron, are spreading at an alarming rate not only in our country but also across the rest of the globe. I trust you and your family are safe and taking appropriate precautions to reduce the risks of infection to yourself and others.

Given the sudden surge in the new COVID-19 positive cases, we have put our unlockdown plan on hold. Instead, we are again shifting to the work-from-home mode with only very critical staff being allowed to work from office. The details of the plan have already been shared by our Chief Human Resources Officer Rajesh Shetty in a separate communication. In this column, I would like to assure you that staff safety remains our top priority, and we are closely watching the developments and adapting our work strategy in response to the changing pandemic situation.

I also want to take this opportunity to congratulate you for the last year’s performance. Twenty twenty-one proved to be a brilliant year for Sharekhan in terms of business in spite of the continuing challenges of the pandemic. The company delivered a strong performance in almost all its business segments. This would not have been possible without your commitment to work, continued trust in the management and overwhelming support. Thank you for making 2021 a memorable year for Sharekhan despite the difficulties. Before we take a look at our 2021 achievements, here are the highlights of our December 2021 performance.

• Our cash market turnover was constant at 2.43% of the total market turnover in December 2021.
• We added over 1,000 more new clients in December compared with November in 2021.
• The count of daily active clients stood at 81.33K in December 2021.
• The trailing 12-month (TTM) active client count reached 765K in December 2021. This was a new high for the TTM metric.
• Close to 9.3K branch-mapped broking clients were reactivated as part of the Front Foot Programme (FFP) in the last month.
• The efforts of the Business Partners resulted in the reactivation of another 4.5K clients under FFP in the same period.
• Close to 4% of the clients who got reactivated in December 2021 have also traded in futures & options already.
• Almost 38% of the reactivations that took place in December have conducted three or more transactions already.
• We achieved our annual mutual fund assets under management (AUM) target of Rs.6,000+ crore in December 2021.
• Our gross mutual fund collections grew by a good 27% month on month (MoM) in December 2021.
• Our Loan Against Securities (LAS) book grew by 8% MoM in December 2021.
• Our total LAS disbursements saw an enormous growth of 52% MoM with total disbursements of Rs.300.69 crore in the same month.
• Last December, our EMF business grew by 3% MoM with the AUM growing to Rs.927 crore, which was also the peak funding for the month.
• In the same period, our Branch Network contributed almost 65% of the total EMF funding with the Business Partners accounting for the rest.

The stock market boomed in 2021, with the Nifty and Sensex gaining 24% and 22% year on year (YoY) respectively. As a result, our broking business also delivered a respectable performance last year. Our market share in the cash market was maintained at 2.61% throughout the year after it hit a peak of 3.33% in February 2021. Our brokerage grew by 19% YoY driven mainly by a 117% surge in our turnover in the futures & options (F&O) segment brought about by a reduction in the lot size for Nifty contracts. Our cash market turnover grew by 3% last year. Though intraday trading reduced due to new margin rules implemented in 2020-21, our turnover from delivery-based trading increased by a good 52% last year. We recorded a 14% year-on-year (Y-o-Y) growth in new client additions as Sherus continued to brave the challenges of the pandemic and brought more of our countryfolks into the wonderful world of investing and trading to help them achieve their financial goals. To recognise our Sales force, we rolled out Sales Tigers, a monthly recognition plan, last year. I congratulate the entire front-line team and all support teams for the good performance. Hope to see an even better performance in 2022!

On a Y-o-Y basis, the TTM active client count increased by a good 21% to 765K in December 2021 from 632K in December 2020. Over the last few years, the TTM active client count has shown a steady growth for Sharekhan. In fact, this metric has doubled over the last 4.5 years from ~375K in April 2017 to 765K in December 2021.

FFP facilitated the reactivation of 1.39 lakh branch-mapped clients in 2021. The efforts of the Business Partners resulted in the reactivation of close to 60K clients in the same year. Much of the success of the programme came from the efforts of the front-line teams to ensure that most of these reactivated clients did not halt at a transaction or two but returned as regular traders or investors. About 3.7% of the reactivated clients gave us brokerage of greater than 10K in last year, thereby making it to the trader segment. Close to 6.3% of the clients who got reactivated in 2021 have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Not only that, almost 63% of the reactivations in 2021 have conducted three or more transactions already. These are brilliant numbers and I congratulate the Branch Network and the teams at the head office for the performance. Let us achieve more success in 2022.

The last year was significant for Sharekhan as we crossed the prestigious Rs.6,000-crore mark in mutual fund AUM. We ended the year with MF AUM of Rs.6,080 crore, up 31% compared with December 2020. The growth can be attributed to the bull run witnessed in the equity markets throughout the year. The Nifty 50 Index grew by 24% during the year, enabling many investors to participate in the rally. The Systematic Investment Plan (SIP) method of investing in mutual funds was the driving force, as investors preferred entering the markets at intervals due to volatility. Our SIP book grew by nearly 33% YoY in 2021 and the ENACH facility was a significant enabler in driving this growth. We began the year with a SIP flow of Rs.44.05 crore, which significantly increased to Rs.58.37 crore by the end of the year. The lump sum collections also saw a decent growth on the back of Sharekhan’s participation in various new fund offerings (NFOs) during the year. We were among the top contributors to the NFOs of BNP Paribas Aqua Fund and ICICI Prudential Flexi Cap Fund with collections of Rs.30.51 crore and Rs.33.54 crore respectively. Keep up the good work, the front-line team and the mutual fund business team at the head office! Let us take our mutual fund distribution business to greater heights in 2022.

We did exceptionally well in our Exchange Margin Funding (EMF) business in 2021 with a sharp growth of over 240% registered on an average utilisation basis compared with 2020. The average actual utilisation of EMF by our Branch Network and Franchise Network grew by 262% and 207% YoY respectively in the same period. On the other hand, as on December 31, 2021, the total EMF AUM grew by 266% YoY, with the EMF AUM of our Branch Network and Business Partners increasing by 276% and 250% YoY respectively. Based on the actual average use, the clusters led by Devang Kamdar and Channaraj achieved their funding targets last year. At the branch level, Mumbai - Sharekhan One, Mumbai - Churchgate and Mumbai - BKC, and at the Business Partner level, Devadasu Puttagunta, Bhadra Services Pvt. Ltd and Nirmaan Wealth, occupied the top three positions (in the given order) in the EMF business in 2021. I thank the entire front-line team as well as the EMF team at the head office for the brilliant performance. EMF is a useful leverage tool that allows our clients to earn more profits with less funds and you all did a marvelous job of pitching EMF to them. I wish you more success in 2022.

On a year-over-year basis, the income from our LAS business surged by 192% while the LAS book grew by 140% in 2021. Twelve additional direct sales agents were also added by the LAS team, resulting in disbursements of Rs.108 crore in the last year. In addition, revenue from processing fees increased by 31% YoY. Well done, the Sherus on the front line and the LAS team at the head office!

Last year was also a good year for our sovereign gold bond (SGB) distribution business. More than 10,800 customers bought 161 kilogram of gold subscription units worth Rs.76.3 crore in 2021. BSE recognised Sharekhan as the top performer in the SGB category last year and awarded it a certificate of achievement. Take a bow, Sherus! Congratulations on your golden performance, the front-line team and the SGB business team at the head office!

Twenty twenty-one was one busy year for the Human Resources (HR) team. The continuing crisis of COVID kept them on their toes and they managed to balance their BAUs and COVID responsibilities well. By constantly monitoring the COVID situation of the 4,000-strong staff and maintaining their daily COVID impact report, HR helped the company provide the right support to its people in emergency situations. The HR team also organised 16 free vaccination camps in five cities, including Bengaluru, Chennai, Delhi, Kolkata and Mumbai, with the support of the Administration team. About 1,245 people including non-staff were vaccinated under the vaccination programme. Through various pulse surveys, HR continuously gained the staff’s views on important topics like the company’s response to the health crisis and the staff’s vaccination status, thereby helping the management develop useful staff-support policies.

HR initiatives such as 24x7 COVID Helpline, Doctor-on-Call, emergency ambulance service, insurance cover for both employees and contractual staff, special COVID leaves, virtual training on various healthcare topics and employee assistance programmes helped Sherus cope with the challenges of the health crisis better. At the same time, employee engagement initiatives like virtual contests and Sharekhan Talent Show (a first in Sharekhan’s history) helped keep the staff morale up. Amid all this, the HR team also managed to achieve 100% block leave score and introduce new HR modules, including Internal Job Postings, BNP Paribas India Vacancies, Employee Separation and Investment Declaration, on ShareKonnect last year. At a time when most of the staff are working remotely, the digitalisation of more and more HR activities continues to improve the staff experience. I appreciate all the efforts put in by the HR team and thank them for taking such good care of the most valuable resource of Sharekhan even in such challenging times.

Last year, regular mailers, e-mailer series, handbooks and newsletters kept all staff of Sharekhan up to date on not only the company’s plans, policies, goals, performances, contests, achievements, milestones et al but also all COVID-19 developments, initiatives and advisories. Besides keeping all Sherus connected, the Internal Communications team helped the Diversity & Inclusion (D&I) team put all information related to our D&I programme online by designing and developing Sharekhan’s own D&I webpage. What’s more, the November 2021 edition of the Sharekhan Times published a deep study of Sharekhan’s workforce diversity which made available some never-before-published statistics on our D&I culture. Keep up the good work, team.

Overcoming the setback of the pandemic, Sherus participated in large numbers in corporate social responsibility (CSR) activities in 2021, helping Sharekhan clock 11,998 volunteering hours in total for the year against a target of 11,200 hours. About 2,131 Sherus participated in the CSR activities organised during the year. We also re-elected our CSR Committee last year with 10 new members to allow fresh blood to come in and try their hands at promoting the CSR culture in Sharekhan.

I must thank the CSR Committee, the CSR team and the Human Resource Business Partners (HRBPs) for organising interesting virtual and physical volunteering activities that Sherus could participate in safely. I also appreciate their efforts to keep CSR on top of the mind of Sherus through regular communications. The launch of the CSR Leadership Board was a brilliant idea and may have contributed to the increased volunteering hours last year. Having a monthly leaderboard definitely kept the CSR scores at department and cluster levels in our face the entire time, creating a sense of competition, driving motivation and offering a sense of achievement. It is important that we continue to lend a helping hand to the underprivileged and I hope to see a lot more participation from Sherus in CSR activities in 2022.

Experts predict the third wave of the pandemic will end in India by April 2022. Sharekhan is well prepared to handle the third wave of the outbreak. Business continuity will be maintained and staff safety will remain a top priority of the management in 2022. Only the most critical staff will be allowed to work from office until the situation improves, the rest can thus expect to work from home for another few months. The return to work plan will be reviewed when the time is right and all staff will be updated.

Twenty twenty-two is the first year of our second four-year growth plan, Vision 2025, which promises to prepare Sharekhan for greater glory. Work has already begun on the transformation project under the leadership of Satish Nagda, our Chief Transformation Officer. Our goals and ambitions for clients, staff and society along with the projects that are needed to realise them will shortly be announced to all the relevant stakeholders and the company at large.

Implementing the transformation project is likely to be a long haul and will require a lot of sweat, determination and hard work. Every Sheru will participate in the transformation process in some way or the other. We have already restructured the organisation to support our aspirations. The new structure has created four market segments and a lot of our activities will revolve around those in this year. From understanding the need for the new market segments and learning all about the new segments to devising appropriate marketing strategies and promotional schemes to meet the needs of the individuals of each market segment, we will do it all. There will be no short cuts or easy options. Yes, it will be hard work all the way but the results of our labour will be sweeter for it.

The Transformation, HR and Internal Communications teams will work closely with the other teams to prepare the staff for the transformation ahead. Expect plenty of digital communications, virtual town halls and meetings, physical meetings (as and when the COVID situation improves), Open Houses and other virtual/physical events in the months ahead as part of the change management plan. There would also be educational and informative mailers and videos along with numerous training sessions to educate the staff in the what, why, how, when and where of the transformation.

For now, in view of the spike in new cases, we advise you to continue to follow all COVID protocols until we are out of the woods. So maintain social distancing; wear a mask; stay indoors as much as possible; wash your hands frequently; keep rooms well-ventilated; and cough away from others into your elbow to stay safe. For more details, refer to the COVID-19 Dos and Don’ts handbook. If you still have not vaccinated yourself against COVID-19, we encourage you to get yourself vaccinated as soon as possible, as vaccination can help protect you from getting the disease. Get in touch with the HR team in case you need any help in obtaining the vaccine or claiming reimbursement for the vaccine cost for you and your eligible dependants. Please continue to take care of yourself and your loved ones, stay safe.

Thank you.

Best regards,
Jaideep Arora