Dear Sheru,

Hope you continue to be safe and well, and had a very enjoyable festive season. We are nearing the end of 2022, it is now time for introspection. We did a lot of things this year including segmentation, cluster realignment, InvesTiger launch and workshops to take Sharekhan’s Vision 2025 to the last mile. Some of our initiatives were successful, some not so. As we start preparing for the new year, it is important that we mull over what we did right and what we could have done better and approach 2023 with a clear understanding of what to avoid and what to do more of. As we do all that, here is a look at our last month’s performance.

• In the broking business, our market share in the cash and commodity segments grew by 5% and 7% MoM respectively in October 2022.
• The trailing 12-month active clients count was 7,68,586 at October 2022 end. Though lower than our September score, the performance on this metric (in percentage terms) was relatively better than that of both the overall industry and the full-service broking category market leader in the same period.
• Close to 9.4K branch-mapped broking clients were reactivated as part of MRP in the last month.
• Our MF AUM grew by nearly 3% MoM in October this year.
• In October, our SIP inflows recovered to Rs.51.10 crore from Rs.49.90 crore in September this year.
• More than 800 Sherus volunteered for Seva Chef activity organised at various locations on the occasion of Gandhi Jayanti last month as part of a CSR initiative.

The Indian equity market rallied in October this year with the Nifty and the Sensex gaining more than 5% each during the month. In spite of the market rally, the trading volumes declined for the first time in the last three months. The average daily trading volume for the cash segment dropped nearly 20% month on month (MoM) while that for the futures and options (F&O) segment dropped by 4% MoM. One possible reason could be that October had fewer trading days due to festive holidays. Well, mirroring the industry trend, our daily average revenue dropped by 13% MoM during the month, daily client activity declined by 18% MoM and new client additions plunged by 33% MoM in October this year. Our market share in the F&O and currency segments decreased by 8% MoM and 11% MoM respectively in the same period. The good news is our market share in the cash and commodity segments increased by 5% MoM and 7% MoM respectively in the same month. Let us put in our best efforts in the last two months of the year to end 2022 with a bang.

The Mission Reconnect Programme (MRP) delivered a robust performance for another month as the trailing 12-month (TTM) active client count reached 7,68,586 by the end of October this year. Though lower than our September score this year, the performance on this metric (in percentage terms) was relatively better than that of both the overall industry and the full-service broking category market leader. The MRP facilitated the reactivation of almost 9.4K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 4.3K clients in the same period. The trend remains that reactivations are also good for revenue growth. Close to 3.9% of the clients who got reactivated in October have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Almost 28.6% of the reactivations that took place in October 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 and end the year with a good score.

Our mutual fund (MF) assets under management (AUM) rose by 2.99% MoM to Rs.6,500 crore in October this year. This was slower than the month-on-month gains recorded by the broader equity market (Nifty was up by more than 5% MoM) during the month. The gross inflow for the month stood at Rs.95.15 crore and the net collection was negative at Rs.3.31 crore. The inflows into Systematic Investment Plans (SIPs) recovered marginally during the month to Rs.51.10 crore from Rs.49.90 crore in the previous month. The performance of our MF distribution business was better than that of our broking business last month, demonstrating the benefit of diversification, a key pillar of Vision 2025.

Our business of Exchange Margin Funding (EMF) contracted by about 3.5% MoM in October this year. We closed the month with EMF AUM of Rs.1,017 crore. Our Branch Network’s contribution to the business stood at almost 65% of the total funding with the Business Partner channel sharing the rest.

Our Loan Against Securities (LAS) book contracted by 3% MoM whereas our ESOP book grew by 5% MoM in October 2022. We achieved total disbursements of Rs.75.37 crore, that is a contraction of 51% compared with the previous month’s disbursal of Rs.154.29 crore. The disbursals declined due to a rise in the interest rate to some extent.

Channelwise break-up of LAS disbursements in October 2022

More than 800 Sherus participated with enthusiasm in the second edition of Seva Chef activity organised last month on the occasion of Gandhi Jayanti. The corporate social responsibility (CSR) activity was organised by the CSR team and the CSR Committee in 45 locations and over 42,500 sandwiches were collected in all for the underprivileged as part of the campaign. The sandwiches were picked up by our CSR partner, Robin Hood Army (a non-government organisation), from each location and distributed to the needy in the nearby areas. It is good to know more and more Sherus are volunteering for such noble causes. Keep it up.

The Coronavirus situation has eased and as we bounce back to our normal ways of living, let us continue to follow some of the good practices of the pandemic era to stay safe, like washing hands with soap; coughing away from others into our elbow or a tissue; throwing used tissues in trash; and maintaining our overall health.

Take care of yourself and your loved ones, and stay safe.

Thank you.

Best regards,
Jaideep Arora
Director and Chief Executive Officer
Sharekhan