Dear Sheru,

Hope you and your family continue to be safe and well. We are in the ninth month of the year 2022. COVID is still around though the number of new cases have been declining for the last few weeks. In Sharekhan we have currently a single COVID active case and I wish the Sheru a speedy recovery. Sharekhan continues to work in hybrid mode in the Head Office with the staff being allowed to work from office subject to approvals. All our branches remain open and there is no restriction on attendance. All staff who are working from office are following all COVID protocols. We continue to monitor the situation closely and keep you updated about any new developments.

• The equity market has closed up for two months in a row, with the Nifty and Sensex gaining about 3.5% MoM each in August this year.
• Our daily average revenue grew by a good 22% MoM in August 2022.
• Our daily client activity increased by a respectable 18% MoM in August 2022.
• The trailing 12-month active clients count reached 7,71,090 by the end of August 2022. This was a new all-time high for Sharekhan in this metric.
• Close to 11.3K branch-mapped broking clients were reactivated as part of the Mission Reconnect Programme in August this year.
• Our MF AUM increased by 3.57% MoM in August 2022 despite a sharp drop in SIPs.
• Our EMF business was back on track after two months and grew by 7% MoM in August this year.

After a good run in July, the Indian equity market gained momentum in August this year and closed up for the second consecutive month. During August, the Nifty and the Sensex rose by about 3.5% each month on month (MoM) to close at 17,759.30 and 59,537.07 respectively, the highest monthly close in the history of both the benchmark indices. As the domestic equity market gained momentum, our daily average revenue jumped by 22% MoM during the month with the daily client activity rising by a good 18% MoM in the same period. Positive sentiment over the past few months has attracted an increasing number of daily traders to the market, resulting in more number of trades and increased brokerage.

Though the turnover in the equity and commodity markets increased in August, we lost market share in all segments – our market share in the cash, futures & options and commodity segments dropped by 5%, 9% and 6% MoM respectively last month. New client additions contracted for the third consecutive month but thankfully, the contraction was less compared with the previous month: a 3% drop MoM in August vs a 6% decline MoM in July of 2022.

Foreign portfolio investors are buying Indian equities again – they were net buyers in August too when they pumped in $7,107 million into Indian equities, the highest since December 2020, when they had invested $9,647 million. The business climate remains satisfactory. The festival season is good for consumption-driven companies, so let us help our customers create wealth by recommending companies that typically do well in this season.

The Mission Reconnect Programme (MRP) had another positive growth month in August this year. The trailing 12-month (TTM) active client count stood at 7,71,090 at the end of August. This was a new all-time high for this metric in Sharekhan. The MRP facilitated the reactivation of almost 11.3K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 4.2K clients in the same period. The trend remains that reactivations are also good for revenue growth. Close to 3.4% of the clients who got reactivated in August have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Almost 32% of the reactivations that took place in August have conducted three or more transactions already. I congratulate the entire front-line team and 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) rose by 3.57% MoM in August this year to Rs.6,368 crore, reflecting the gains in the broader equity market (Nifty was up 3.50% in August 2022). The gross inflow for the month stood at Rs.188 crore and the net collection was positive at Rs.14.67 crore led by participation in a new fund offerings drive during the month. The inflows into Systematic Investment Plans (SIPs) fell sharply by 18% MoM during the same period to Rs.39.09 crore (close to the November 2020 levels) on account of operational issues following the migration of our back-office processes to the BSE platform, BSE StAR MF.

Our business of Exchange Margin Funding (EMF) registered a growth of about 7% MoM in August this year. After witnessing two straight months of dull business, the EMF business was back on track as the stock market, especially the mid-cap stocks, gained momentum last month. Our Branch Network’s contribution stood at almost 65% of the total funding and the rest was shared by the Business Partner channel.

In the Loan Against Securities (LAS) business, we saw a surge of 40% MoM in total disbursements, which rose to Rs.133.83 crore last month as more existing and new customers availed of the facility compared with the previous month when our disbursals had stood at Rs.95.7 crore. However, during the same period many existing customers also repaid their loan partially or fully, especially corporates, and the repayments outweighed the disbursals resulting in a 1% contraction MoM in our LAS book in August this year.

Channelwise break-up of LAS disbursements in August 2022

Given that COVID-19 cases are still being reported in the country, you must continue to follow the basic precautions. 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.

For many it is time to take the booster dose and Sharekhan is reimbursing all staff for expenses incurred in receiving the booster dose of COVID-19 vaccine. The facility is available to all active staff of Sharekhan, including those on roll, expats, retainers and third-party staff on Quess Corp and Randstad India Pvt Ltd, who have received a booster dose of COVID-19 vaccine privately by paying for the vaccine themselves. The staff can also apply for reimbursement of the expenses incurred by them on account of the vaccination of their spouse, parents and children (up to three dependents). The reimbursements can be obtained after submitting relevant documents via e-mail. For more information please connect with your Human Resources Business Partner.

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