Dear Sheru,

There has been a series of encouraging statistics on the COVID-19 crisis lately. The daily rise in COVID-19 cases is at the lowest since March this year, there has been a drop in the number of active cases, the national recovery rate stands above 98% and the daily positivity rate, ie the number of positive cases identified per 100 people, stands at little above 1%. Encouraged by the improving scenario, we cautiously reopened our head office (HO) on October 18, 2021. The HO unlocking plan, to be implemented in a phased manner, has been shared with you already. Even as we slowly return to working from office (WFO), I want to assure you that all care will be taken to provide a safe work environment to all Sherus who will be called back to work from office over the course of the next few weeks. On your part, do continue to follow all social distancing protocols and maintain COVID-19 appropriate behaviour at workplace at all times to remain safe and keep your colleagues also safe. Let us now take a look at the highlights of the last month’s performance, which was overall very good.

• Our daily brokerage revenue rose by 8% MoM in September this year.
• The trailing 12-month active client count reached a new high of 747K in September 2021.
• Close to 9K branch-mapped broking clients were reactivated as part of the FFP in the last month.
• Our MF AUM crossed the Rs.6,000-crore mark in September 2021.
• Sharekhan was among the top ten national distributors (non-banks) in terms of the amount collected for the new Kotak Multicap Fund.
• Our EMF business grew sharply by 20% MoM in September this year.
• Our LAS book grew up 9% MoM in September 2021.
• The total LAS disbursements increased 14% MoM in September 2021.
• Nearly 450 Sherus participated in the sixth APAC Fundraising Campaign, which mobilised a record-breaking amount of $2,16,000 in all from the BNP Paribas Group staff across the Asia-Pacific region.

The Indian stock market remained buoyant in September this year. In spite of a fall in the last week of the month after scaling new highs in the previous four weeks of the month, Sensex and Nifty closed up about 2.8% each. What’s more, the performance of the broader market was better than that of the benchmark indices. On the back of a market share gain in the cash segment, increased market turnover, pricing change and decrease in delivery volume, our daily brokerage revenue recovered after the pause in August and grew by 8% month on month (MoM) last month. Market share loss in futures & option as well as commodity segments and a drop in new client additions limited the growth. I hope to see even better numbers in the remaining months of the year.

The Front Foot Programme (FFP) had another positive growth month in September this year. The trend of recording new highs for the trailing 12-month (TTM) active client count continued in September as the count touched a new high of 747K in the month. The programme facilitated the reactivation of almost 9,000 branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 4,000 clients in the same period.

Reactivations continue to boost revenue growth. Close to 3.7% of the clients who got reactivated in September 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 September have conducted three or more transactions already.

Another milestone is expected this month as FFP players are aiming to take the TTM active client count beyond 750K for the first time ever. I wish the entire front-line team and our Business Partners my very best. I also congratulate them all for the continued success under FFP. Let’s aim and plan to take this programme to greater heights in the months ahead.

Sharekhan’s mutual fund (MF) assets under management (AUM) crossed the Rs.6,000-crore mark in September 2021, ending the month at Rs.6,029 crore. This was a big milestone for the business as we have more than doubled our AUM in the last three years. My heartiest congratulations to all Sherus! The inflows into systematic investment plans (SIPs) also rose to Rs.58.7 crore during the month, reflecting the stock market trend. Additionally, strong investor sentiment supported by the robust performance of the equity market resulted in gross collection of Rs.223 crore and net collection of Rs.26 crore during the month. We were also among the top 10 national distributors (non-banks) in terms of the amount mopped up for the new fund offering, Kotak Multicap Fund, which witnessed a total industry collection of over Rs.3,500 crore.

The Exchange Margin Funding (EMF) business registered a strong growth of about 20% MoM in September this year, resuming its double-digit growth trend after a flat performance in the previous month. We ended September with EMF AUM of Rs.765 crore, which was also the peak funding for the month. Our Branch Network contributed almost 70% of the total funding with the rest coming from the Business Partners. After a breather in August, the AUM book rebounded strongly in September and I am confident we will end the year with a much bigger EMF book compared with our target.

The Loan Against Securities (LAS) book grew by 9% MoM in September this year, with a 14% month-on-month rise in total disbursements, which stood at Rs.188.09 crore at the end of the month. In terms of channels, the Direct Channel, Branch Network, Business Partners and Employee Stock Ownership Plans accounted for Rs.97.11 crore, Rs.62.12 crore, Rs.3.35 crore and Rs.7.10 crore of the total disbursements respectively. After taking a pause in August, our LAS book is back on growth path, as was expected.

Last month the total collection through the sixth APAC Fundraising Campaign was announced and it was a record-breaking amount of $2,16,000 donated by the BNP Paribas Group staff across the Asia-Pacific region. About 449 of Sharekhan employees participated in the fundraiser. More than the donation, it is participation in such activities that is important. It is good to see that quite a few Sherus participated in the fundraiser to support the cause of educating underprivileged children across the 13 markets in which the group operates. Having said that, we are a family of nearly 4,000 people and only about 12% of the employees donated for the cause. Next time, I expect to see a bigger participation from you all. It is important that we lend a helping hand to the underprivileged. I thank the Human Resource (HR) and Internal Communications teams for making the campaign very visible among the staff, thereby contributing to its success.

It has been observed that many Sherus are not wearing masks in office. If you are working from office, wearing a mask is compulsory for your safety and that of your colleagues. Violation of the rule will be treated as a serious misconduct and be strictly dealt with. Please understand that though the pandemic scene is improving, new cases are still being reported, meaning the crisis is not over yet. Hence, it is important that you continue to follow all COVID-19 protocols whether you work from office or home. So continue to 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. If you still have not received your COVID-19 shots, we encourage you to get yourself vaccinated as soon as possible, as vaccination can help protect you from getting the disease. Get in touch with the HR department in case you need any help in obtaining the vaccine or claiming reimbursement for the vaccine cost for you and your eligible dependants. Continue to take care of yourself and your loved ones, stay safe.

Thank you.

Best regards,
Jaideep Arora