Dear Sheru,

Trust you and your family are safe and in good health. The third wave of the COVID pandemic appears to have blown over and according to experts, COVID is moving towards the endemic stage. There has been a huge decline in the number of new Coronoavirus cases and the recovery rate stands at a reassuring 97%. All signposts are now pointing to the end of the woods. However, let us not let down our guards yet. We will continue our cautious approach of monitoring the situation closely and updating you as and when we feel it is safe to open up fully.

We did good business last month and also achieved a significant milestone. We appear to have begun 2022 on a good note. This could be a sign of things to come in the year ahead. We are all set to achieve greater heights of success in 2022. For now, let us take a look at the last month’s performance.

• Our net brokerage rose by a good 9% MoM in January this year.
• Our daily average revenue grew by 25% MoM last month.
• In the same period, we saw a 23% increase in the number of daily active clients compared with the previous month.
• The trailing 12-month active client count reached 769K in January 2022, recording a new high for the metric.
• Close to 10.3K branch-mapped broking clients were reactivated as part of FFP in the last month.
• Our EMF book crossed Rs.1,000 crore in January 2022, creating a record in the history of the business.
• Our LAS book grew by 3% MoM in January 2022.

The Indian equity market has been quite volatile for the last few months and ended in red in January 2022. In spite of that, we performed well in the broking business, with our net brokerage rising by 9% and daily average revenue showing a growth of 25% month on month (MoM) in the last month. We also expanded our market share in the cash and commodity markets from 2.43% and 1.03% to 2.49% and 1.05% respectively during the month. At the same time, our market share in the futures and options (F&O) and currency segments also stabilised at 0.71% and 0.05%. We recorded a healthy growth of 23% in the count of daily active clients in January this year. The overall performance was good except that new client additions declined by 2% MoM during the month. Congratulations to all for the good performance. I am sure, the client acquisition number will also pick up going ahead.

The Front Foot Programme (FFP) had another positive growth month in January this year. The trend of recording new highs for the trailing 12-month (TTM) active client count continued in January as the count touched 769K in the month. The FFP facilitated the reactivation of almost 10.3K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 4.3K clients in the same period. The trend remains that reactivations are also good for revenue growth. Close to 4.1% of the clients who got reactivated in January have also traded in futures & options already. Moreover, a large proportion of the reactivations have continued beyond just one or two transactions. Almost 45% of the reactivations that took place in January have conducted three or more transactions already. My best wishes to the entire front-line team as well as our Business Partners for the continued success. Let’s aim and plan to take this programme to newer heights this year.

Sharekhan’s mutual fund (MF) assets under management (AUM) declined marginally in January (by 0.26%) and ended the month at Rs.6,064 crore, reflecting the trend in equity markets during the same period (Nifty 50 Index was down 0.08% during the month). Inflows into Systematic Investment Plans (SIPs), however, rose by 1% during the month at Rs.59.07 crore compared with Rs.58.37 crore in December 2021 and it was in line with the industry trend. The gross collections stood at Rs.178 crore in January and we saw a net positive inflow during the month when we added Rs.14 crore. This is the last quarter of FY2021-22 and we are focusing our campaigns and e-mailers on equity linked saving schemes (ELSS; tax-saving funds). We also launched a third-party portfolio management service (PMS) offering in January as part of our efforts to expand our product offerings. Three PMS portfolios from Equirus, White Oak and Purnartha PMS were added last month and the front-line already mobilised two deals during the month.

Our Exchange Margin Funding (EMF) business achieved a significant milestone in January this year when the EMF book crossed Rs.1,000 crore for the first time in the history of the business. Our Branch Network contributed 64% (Rs.642 crore) and our Business Partners contributed 36% (Rs.362 crore) to the achievement. Just about a year ago, in February 2021, our EMF book was at around Rs.300 crore. In 12 months, we have managed to grow it by over 230%, thanks to the efforts of the entire front-line team. Congratulations to all Sherus! Amazing work, the entire Branch Network, our Business Partners and the teams at the Head Office. Keep it up and let us create new records in the year ahead.

In January this year, our Loan Against Securities (LAS) book expanded by 3% MoM. The total disbursements stood at Rs.168.50 crore in the same period. In terms of channels, the Direct Channel, Branch Network, Business Partners, Direct Selling Agent Partners, Sales Network and Employee Stock Ownership Plans accounted for Rs.13.51 crore, Rs.38.18 crore, Rs.1.69 crore, Rs.109.77 crore, Rs.0.82 crore and Rs.4.49 crore of the total disbursements respectively. Good work!

Given that the COVID-19 pandemic is not officially over yet, we advise you to continue to follow all COVID protocols, ie 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 Unlockdown 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. Besides, some state governments have already mandated that only fully vaccinated staff should be allowed to work from office and that each staff must submit his/her final COVID-19 vaccination certificate to his/her employer. Get in touch with the Human Resources 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