Dear Sheru,

Trust you and your family are safe and in good health. Though the COVID-19 pandemic scene remains stable, new COVID-19 cases are still being reported from across the country with some states like Delhi and Uttar Pradesh even reporting an uptick in the number of active cases. Under the circumstances, we continue to advise caution. That being said, the recovery rate remains above 98% in the country. We also do not have any positive case in Sharekhan currently. 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 locations in the Branch Network are open and there is no restriction on attendance. We continue to monitor the situation closely and will keep you updated about any new developments.

Thanks to the improving COVID-19 scene, I was recently able to meet many leaders of Sharekhan face to face for the first time since the pandemic started in 2020 and it was an absolute pleasure to see them all in flesh and blood. It was a momentous occasion. All Business Execom members, Department Heads, Business Heads and Segment Heads had gathered in Mumbai for a two-day workshop on Vision 2025 on April 11 and 12, and we had a very fruitful discussion on various aspects of the business strategy. The principal points that emerged from our talks are:

• To achieve our long-term vision of becoming the most-loved financial service partner in India our mission must be to build a stronger Sharekhan by 2025 with segmentation, diversification, digitisation and innovation.
• The key to achieving the vision will be to build a strong customer advocacy. Net Promoter Score (NPS) is a powerful tool to monitor the same. However, the key to winning customer hearts will be to sharpen focus on their needs and exceed their expectations at every step.
• “Har customer ka dil jeet kar, Sharekhan kar” will be the war cry of Sherus as they charge ahead in their quest to regain their lost glory.

Our business performance in the last month was mixed. The broking and Exchange Margin Funding (EMF) businesses continued to reel under the impact of geo-political developments while our MF distribution business reflected the uptrend in the stock market. Come let us take a look.

• New client additions increased by 7% MoM in March 2022.
• Close to 8.3K branch-mapped broking clients were reactivated as part of FFP in the last month.
• Our MF AUM grew by 4% MoM in March this year.
• Our March lump sum inflows were the highest in the last seven months at Rs.51 crore.
• Our LAS book grew by 7% MoM in March this year.
• We celebrated womanhood through a range of activities in March this year.

The Indian stock market regained the lost ground in March this year. On the back of increased inflows from domestic institutions both Sensex and Nifty closed up 4% month on month (MoM) in March after losing over 3% each during January-February 2022. However, a global market sell-off due to the ongoing Russia-Ukraine crisis, higher level of inflation owing to high fuel and food prices, and unfavourable corporate numbers affected retail investor sentiment which capped the market performance and dampened client activity during the month. Our daily average revenue remained flat and daily client activity fell by 6% MoM during the month. In terms of market share, our cash market share remained flat, futures and options market share increased by 1% MoM and commodity market share contracted by 8% MoM during the month. Compared with the 34% month-on-month growth in the turnover of the commodity market in March this year, our commodity turnover increased by only 24% MoM in the same period, which resulted in a loss of commodity market share by about 7 basis points during the month. On the brighter side, client addition in the month was nearly at par with the target for the month which led to a decent growth of 7%.

The Front Foot Programme (FFP) had another positive growth month in March this year. The trailing 12-month (TTM) active client count was 764.2K in March. The FFP facilitated the reactivation of almost 8.3K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 3.4K clients in the same period. The trend remains that reactivations are also good for revenue growth. Close to 5.1% of the clients who got reactivated in March have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Almost 43% of the reactivations that took place in March have conducted three or more transactions already.

Our MF assets under management (AUM) rose by 4% MoM in March this year to Rs.6,086 crore, reflecting the performance of the broader equity market (Nifty was up 4% in March 2022). Our performance on the lump sum front was the best in the last seven months with a net inflow of Rs.51 crore versus Rs.36 crore in the previous month. The inflow into Systematic Investment Plans (SIPs) rose by 1% MoM during March to Rs.61 crore. The growth was, however, low compared with the MF industry, which witnessed an exceptional growth of 7% MoM in SIP inflows during the month.

Our EMF business remained flat MoM in March 2022 mainly due to uncertainty in the stock market caused by continued geo-political tensions which kept investor sentiment subdued. The EMF book stood at Rs.906 crore at the end of the month. 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 once the geo-political situation improves and market sentiment recovers.

Our Loan Against Securities (LAS) book grew by a good 58% in March this year. We achieved total disbursements of Rs.183.05 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.7.61 crore, Rs.66.22 crore, Rs.8.13 crore, Rs.94.25 crore and Rs.6.83 crore of the total disbursements respectively. Good work, everyone involved!

March 8 is celebrated as Women’s Day the world over. At Sharekhan, this year we took the opportunity to celebrate women within the organisation and planned events throughout the month of March wherein we engaged with the staff virtually through various talk shows, experience-sharing sessions, networking opportunities and educational webinars. Sharekhan remains committed to the cause of gender equity, which is a core value of the BNP Paribas Group too. The Group has set specific targets to raise the number of women leaders to 40%. BNP Paribas has also joined the Generation Equality Forum, a major global effort to bring together governments, corporations and change makers from around the world with a shared commitment to accelerate equality, leadership and opportunity for women and girls worldwide. A great workplace is one of the key pillars of Vision 2025 and we are actively working toward building a more gender equitable organisation.

The COVID-19 pandemic is not officially over yet, 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. So get your shots at the earliest. 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