Dear Sheru,

I do hope you and your family are safe and in good health. There has been a rise in the number of new COVID-19 cases in various states around the country. After zero cases for a few weeks, Sharekhan also has a COVID-19 positive case and I wish the Sheru a speedy recovery. Whether this portends the fourth wave of the pandemic remains to be seen. Suffice it to say, we have not seen the back of COVID-19 yet and that calls for continued caution. Under the circumstances, we continue to work in hybrid mode in the Head Office with the staff being allowed to work from office subject to approvals. All our branches are open and there is no restriction on attendance. All staff who are working from office are following all COVID-19 protocols. We continue to monitor the situation closely and will keep you updated about any new developments.

Vision 2025 has been implemented and you will see a lot of action in the coming months. Coming to the last month’s business performance, it reflects resilience in the face of downward pressure in the stock market owing to concerns over the continued Russia-Ukraine war, Chinese lockdown, rising inflation and hardening interest rates globally. Talking of performance, I will take this opportunity to congratulate all Sherus for doing an excellent job in helping customers subscribe to the public issue of Life Insurance Corporation of India. It was a great team effort that helped us achieve a new milestone in the IPO distribution business this month, but more on this in the next month’s edition. Let us look at the last month’s performance now.

• Our daily average revenue increased by 6% MoM in April 2022.
• Our daily client activity grew by 7% MoM in the same month.
• Close to 7.2K branch-mapped broking clients were reactivated as part of FFP in April this year.
• Our MF AUM stayed above Rs.6,000 crore in spite of market volatility last month.
• Our EMF business expanded by 16% MoM in the last month.
• Sherus clocked 1,612 hours of volunteering work last month.
• Sharekhan joined the APAC Fundraising Campaign launched on April 27, 2022 by pledging donations to six NGOs.

After recouping in March its previous losses, the Indian stock market dived again in April. The Nifty kept getting sold on rises, investor sentiment remained down and the foreign institutional investors continued to withdraw from the Indian market on multiple concerns. The fall in Sharekhan’s volumes was greater than the decline in the market. This resulted in a loss of market share, which remained flat in the cash segment, dipped by 3% in the futures & options segment and fell by 11% in the commodity segment month on month (MoM). Our new client additions also contracted by 10% MoM during the month. In spite of all that, our daily client activity increased by 7% and daily average revenue grew by 6% in April 2022 compared with the previous month as market volatility presented numerous trading opportunities. In view of the raging volatility in the markets, we must handhold the customers who are panicking and allay their concerns.

The Front Foot Programme (FFP) had another positive growth month in April this year. The trailing 12-month (TTM) active client count stood at 754K in April. The FFP facilitated the reactivation of almost 7.2K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 3.1K clients in the same period. The trend remains that reactivations are also good for revenue growth. Close to 5% of the clients who got reactivated in April have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Almost 41% of the reactivations that took place in April 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.

Our mutual fund (MF) assets under management (AUM) fell by 0.43% MoM in April this year to Rs.6,060 crore, reflecting the volatility in the broader equity market (Nifty was down 2.07% in April 2022). The gross inflow for the month stood at Rs.168 crore and the net collection was positive at Rs.43.81 crore. The inflows into Systematic Investment Plans (SIP) fell by 3.5% MoM during April to Rs.59 crore. The decline was, however, in line with the performance of the MF industry, which witnessed a fall of 3.77% MoM in SIP inflows during the month. March was also a month of important regulatory roll-outs which created some operational disruptions in terms of transaction failures and account activation for the MF distribution business. These are minor hiccups, very much part and parcel of our business. The Information Technology and Operations teams are working hard to ensure a smooth roll-out of the regulatory changes and you will hear about them soon. Meanwhile, to take the business to new heights, the front-line teams are putting in their best efforts to bring in new SIP accounts and qualify for the SIP ka Sher contest. I wish all participants the very best. Here’s looking forward to a big final score and many winners!

Our Exchange Margin Funding (EMF) business grew by a good 16% MoM in April 2022. After witnessing two straight months of flat but steady business, EMF funding came back on track with a double-digit rise. The EMF book stood at Rs.1,050 crore at the end of April this year. Our Branch Network contributed almost 65% of the total funding, with the Business Partners accounting for the remaining 35%. We expect the performance to recover further once the geo-political situation improves and market sentiment recovers.

Our Loan Against Securities (LAS) book contracted by 7% MoM to Rs.804 crore in the last month. We achieved total disbursements of Rs.174.89 crore during the month. In terms of channels, the direct channel, Branch Network, Business Partners, direct selling agents and Employee Stock Ownership Plans accounted for Rs.8.60 crore, Rs.56.92 crore, Rs.2.17 crore, Rs.77.85 crore and Rs.29.35 crore of the total disbursements respectively.

It is nice to see Sherus making time for corporate social responsibility (CSR) alongside their work and home responsibilities. Last month the company clocked about 1,612 hours of volunteering work as Sherus across the country volunteered virtually as well as physically. Sharekhan is slowly returning to physical CSR activities. While physical volunteering has its advantages (it promotes team bonding and collaboration, for instance), virtual volunteering is also here to stay since it encourages participation by allowing Sherus to volunteer at their convenience. The CSR team will no doubt come up with a balanced CSR calendar of physical and virtual activities for the months ahead. I urge all Sherus to avail of their CSR leave to utilise these opportunities to volunteer for the causes that they resonate with.

There are more than one way of fulfilling one’s social duty. Sharekhan has always been at the forefront of philanthropy and donated generously for the causes close to its heart. I invite you to join the ongoing APAC Fundraising Campaign 2022 by making a donation to any of the six non-government organisations (NGOs) supported by the fundraiser. You have time till the end of June but, as I always say, don’t wait for the last day to participate in any activity. Pledge your donation today by clicking the following link: https://www.surveymonkey.com/r/8FTHCM5. You have the power to change lives, use it to make a difference. Know more about the fundraiser by clicking this link: https://www.sharekhan.com/MediaGalary/Newsletter/
APAC-FundRaising-020522-web.html

The COVID-19 pandemic continues to linger, so maintain social distancing, wear a mask when in crowd, wash your hands frequently, keep rooms well-ventilated and cough away from others into your elbow to stay safe. 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 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. Whether one is working from office or home, each staff must, therefore, upload his/her final certificate on ShareKonnect, our Human Resource Management System. The Human Resources team has already communicated to all staff how to do it. Don’t wait, upload your final COVID-19 vaccination certificate today. Please continue to take care of yourself and your loved ones, stay safe.

Thank you.

Best regards,
Jaideep Arora
Director and Chief Executive Officer,
Sharekhan