Dear Sheru,

Trust you and your family are safe and in good health. The pandemic is still very much alive, it has entered a new phase with a potentially dangerous variant, Omicron, spreading rapidly in many countries. Health experts are predicting a third wave of the pandemic in our country by February next year. We continue to monitor the pandemic scene and take all precautions necessary to keep our staff and their families safe. In Sharekhan, as of today, there is one active case, more than 2,264 staff are fully vaccinated and over 1,244 staff have taken the first dose of COVID-19 vaccine. We are going slow on the unlocking right now and will update you as and when the situation changes.

In terms of business performance, there were hits and some misses last month. As the stock market dived in November, our core business of broking slowed down. On the other hand, we did reasonably well in some other areas of our business including mutual fund and exchange margin funding in the same month. I congratulate all Sherus for their continued commitment, hard work and efforts.

• In November, the trailing 12-month active client count reached 760K, a new high for the metric.
• Close to 9.5K branch-mapped broking clients were reactivated as part of FFP in the last month.
• Our net inflow was positive at Rs.22.37 crore against an outflow in the previous month.
• Our EMF business increased by 4% MoM and our EMF AUM reached Rs.900 crore last month.
• Our HR team started the annual performance review exercise for 2021 in November.
• Two Sherus including Satish Nagda and Sumeet Chugh were involved in top-level organisational changes last month.
• Sherus across the country celebrated Conduct Week last month.

The daily average revenue from our broking business declined by 21% month on month (MoM) in November this year as the Sensex and the Nifty dropped by nearly 4% each last month, keeping customers away from the stock market. There was a drop of 14% MoM in the number of daily active customers. The number of new client additions also decreased by 3.8% MoM last month. In the same period, we lost market share in all three segments including cash, futures & options and commodities compared with the previous month. With a significant drop in the stock market, the subdued business performance was not a surprise. But we still have one more month of the year left to make up for the lost ground. Let us do our best to end the year on a high note.

The Front Foot Programme (FFP) had another positive month in November this year. The trend of recording new highs for the trailing 12-month (TTM) active client count continued in November as the count touched 760K in the month. The programme facilitated the reactivation of almost 9.5K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 4.4K clients in the same period.

The trend remains that reactivations are also good for revenue growth. Close to 3.5% of the clients who got reactivated in November have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Almost 42% of the reactivations that took place in November 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.

Sharekhan’s mutual fund (MF) assets under management (AUM) declined only marginally in November ending at Rs.5,968.68 crore in spite of the fall in the equity markets in the same period. Inflows into Systematic Investment Plans (SIPs) were also in the positive and rose marginally to Rs.58.44 crore compared with the October inflows. Our gross collection stood at Rs.165 crore last month. The net inflow was positive at Rs.22.37 crore against an outflow in the previous month. Good work, the front-line team! Investors are likely looking upon every market dip as an opportunity to increase their portfolio’s exposure to equity. Let us continue to do our best to help them realise their financial goals.

Our Exchange Margin Funding (EMF) business grew by 4% MoM in November this year, ending the month with AUM of Rs.900 crore. The peak funding for the month touched Rs.930 crore. Our Branch Network contributed about 65% of the total funding with the rest coming from the Business Partners. I am sure the EMF business will continue on the growth path, what with the front-line team using EMF smartly as a tool to exploit the existing market opportunities.

In November this year, our Loan Against Securities (LAS) book declined by 5% MoM but our employee stock ownership plans (ESOP) business grew by 11% MoM. The total disbursements stood at Rs.198.28 crore. In terms of channels, the Direct Channel, Branch Network, Business Partners, Direct Selling Agent Partners and ESOP accounted for Rs.19.94 crore, Rs.56.15 crore, Rs.3.89 crore, Rs.107.80 crore and Rs.9.79 crore of the total disbursements respectively.

The Human Resources (HR) team started the annual performance review exercise for 2021 last month. This year, Sharekhan has started the exercise a little earlier than usual, in keeping with the practice of the rest of the BNP Paribas Group. All employees (excluding office assistants and electricians) who joined the company on or before September 30, 2021 are eligible for a performance appraisal this year. The annual practice of reviewing staff performance has many benefits. It helps improve staff performance, identify the areas of training, clarify expectations, evaluate goals, reward good performance and create a career growth path. It is very important that all eligible staff participate in this process and complete the needful on time so that the compensation review process can be completed and the increments can be implemented on time. I also urge you to complete all your mandatory trainings as soon as possible if you have not already done so.

Sharekhan effected two important changes in its organisation structure in November. Satish Nagda, formerly the Chief Financial Officer (CFO) of Sharekhan, assumed the role of Chief Transformation Officer of the company with effect from December 1, 2021. He stepped down from the position of CFO to lead the transformation process in Sharekhan on a full time basis and focus on the implementation of the strategic projects adopted by the company under Vision 2025. Sumeet Chugh, previously Deputy Vice President - Finance, succeeded Satish as the leader of the Finance team in the position of Deputy Chief Financial Officer also with effect from December 1, 2021. I congratulate both Sherus and wish them the very best in their new roles.

Sharekhan celebrated Conduct Week 2021 from November 8 to 13 this year along with the rest of BNP Paribas entities across the world. Sherus took out time to participate in a panel discussion on the BNP Paribas Group’s global conduct strategy; refreshed their knowledge of Sharekhan’s Code of Conduct through a short e-mailer series, Living by the Code, and participated in a quiz to test their knowledge of the Code during the week-long celebrations. The Code of Conduct document represents Sharekhan’s values and culture, and it is essential to refresh the knowledge of its contents from time to time to make right decisions in everyday work.

Given that the COVID-19 pandemic is not 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, which has been updated by the Internal Communications team. 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 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