Dear Sheru,

I trust you and your family are doing well and have received your COVID-19 shots. Though the COVID situation remains under control across the country, there has been a sudden surge in the number of daily new COVID-19 cases, indicating the third wave of the pandemic could be around the corner. Consequently, after announcing the unlocking of our head office (HO) we deferred our plans to open up. We have also maintained the status quo of having a minimum number of employees working from office. You have already received the communication on our plan to postpone the HO unlocking from our Chief Human Resource Officer, Rajesh Shetty.

In this column, I just want to assure you that we continue to closely monitor and evaluate the situation, and take decisions in the interest of our staff, clients and business. Even as I write this, we are taking stock of the crisis and planning the next course of action. You will hear from us on this soon.

In terms of performance, there have been ups and downs in the last two months. Let us take a look at the highlights of the two months.

• New client additions grew by 26% MoM in July this year.
• Sharekhan gained 2% market share in the F&O segment in August this year.
• The trailing 12-month active client count reached 734.6K and 742K in July and August 2021 respectively.
• Close to 12.4K and 10K branch-mapped broking clients were reactivated in July and August respectively as part of FFP this year.
• FFP completed two years on September 18 this year with a score of over 3 lakh reactivations since the launch of the programme.
• Our MF AUM has grown by 26% MoM since December 2020 vs a 14% growth in the industry in the same period.
• Our SIP inflows reached Rs.55.1 crore in July and Rs.55.74 crore in August, the highest level since January 2021.
• A total of 155 employees qualified for the Sona Chandi contest of which 81 RMs achieved more than 100% of their contest targets and 36 Sales team contestants achieved more than 100% of their contest targets for SIP flow.
• The Sona Chandi contest contributed Rs.856.3 crore to the MF AUM and Rs.2.6 crore to the SIP flows during the contest period.
• The EMF business grew by about 11% MoM in July this year.
• Our LAS book grew by 9% MoM in July this year.
• Sharekhan crossed 40,000 followers on LinkedIn in July this year.
• Two new modules, Employee Separation and Survey, were introduced on ShareKonnect in the course of the last two months.
• Sharekhan has zero COVID-19 positive cases at present.
• Over 550 people got vaccinated against COVID-19 at the vaccination camps organised by Sharekhan in July this year.

The performance of the broking business has been lacking lustre of late. For the last two months, the daily average revenue has been declining: it fell 6% and 4% month on month (MoM) in July and August respectively. The downtrend in the daily revenue is in spite of the buoyancy in the stock market, which continued its upward journey in August and gained 9% during the month after a positive close in July. The drop in the daily brokerage can be attributed to a dip in the delivery volume, market share loss across segments and lower customer pricing.

After a surge of 26% in new client additions in July the number of new clients acquired also fell by 14% last month. In July, the new client additions had seen a healthy growth on the back of a slew of public issues which had resulted in higher acquisitions by both the Sales team and the Business Partners. However, in August, in the absence of any public issues the number of new clients added by both the Sales team and the Business Partners dipped. Plus, there was significant attrition from the Sales team while many new recruits also joined the salesforce in the same month which affected the productivity.

In order to increase our market share, let us engage with our customers better to understand their needs and innovate new products and features to answer their needs. Focus on customer, the broking business will grow automatically.

The Front Foot Programme (FFP) did well in both July and August this year. The trend of recording new highs for the trailing 12-month (TTM) active client count continued as the count touched 734.6K and 742K in July and August respectively. FFP facilitated the reactivation of almost 12.4K and 10K branch-mapped clients in July and August respectively. What’s more, the efforts of the Business Partners resulted in the reactivation of another 6K clients and 5K clients in the two months respectively.

The trend remains that reactivations are also assisting revenue growth. Close to 3% and 4.2% of the clients who got reactivated in July and August respectively have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. More than 40% of the reactivations that took place in both July and August have conducted three or more transactions already.

On September 18, FFP completed two years. All FFP participants together have helped cross the milestone of 3 lakh reactivations since the launch of the programme. Congratulations to all! My best wishes to the entire front-line team as well as our Business Partners for the continued success of FFP. Let’s aim and plan to take this programme to greater heights in its third year.

Taking its cues from the rallying stock markets, our mutual fund (MF) business continues to scale new heights. In July, our MF assets under management (AUM) touched Rs.5,619 crore. The inflows into Systematic Investment Plans (SIPs) touched Rs.55.1 crore in the same month. The pace of gross collections increased in July with the addition of Rs.135.5 crore equalised amount. The net equalised lump sum collection was also positive with the addition of Rs.38.8 crore in equalised assets. This was the second highest collection in 2021 after the success of ICICI Prudential Flexi Cap New Fund Offering in May.

In August, the MF AUM rose by Rs.261 crore to Rs.5,880 crore on the back of a strong equity market performance (Nifty was up by 8.7% last month). In terms of total collection, we received gross inflows of Rs.237 crore during August and the gross inflows were net positive by Rs.55 crore on an overall basis. The monthly SIP flow also increased by Rs.64 lakh to close at a high of Rs.55.74 crore in August, the highest since January 2021. Sharekhan’s SIP flow has grown by about 26% MoM in the period December 2020 to August 2021 compared with the average industry monthly growth rate of 14% in the same period.

I congratulate the entire front-line team for the continued good performance. I also take this opportunity to congratulate the winners of the Sona Chandi contest that was organised from July 1 to December 31, 2020 to boost our MF distribution business. The contest resulted in the mobilisation of AUM to the tune of Rs.856.3 crore and SIP inflow of Rs.2.6 crore during the contest period. In total, 155 Sherus qualified for the contest; of these 81 were Relationship Managers (RMs) all of whom achieved 100% of their respective contest targets. In addition, 16 Branch Managers and about 36 Sales Executives achieved more than 100% of their contest SIP flow targets. For the first time in the company’s history, we are rewarding the winners with physical gold and silver, we hope you enjoy your prizes.

The stock markets remain buoyant, giving us hope that the growth momentum in our MF business will continue to pick up, allowing us to achieve our annual targets easily. A pat on the back of the entire front-line team for their efforts and good performance.

The Exchange Margin Funding (EMF) business grew by about 11% MoM in July this year, growing in double digits for three months in a row. The EMF AUM reached Rs.640 crore by July end, with the peak funding touching Rs.645 crore. Our Branch Network contributed almost 68% of the total funding with the rest coming from the Business Partners. The business remained flat last month. With the stock market at a lifetime high and active participation from the front-line team, we are looking at even a bigger book size going forward.

The Loan Against Securities (LAS) book grew by 9% MoM with total disbursements of Rs.265.49 crore in July this year. In terms of channels, the Direct Channel, Branch Network, Business Partners and Employee Stock Ownership Plans accounted for Rs.128.05 crore, Rs.80.86 crore, Rs.7.49 crore and Rs.32.08 crore of the total disbursements respectively. After consistently growing for several months, our LAS book took a breather last month, dipping by 3%. The disbursement figure, however, remained consistent at Rs.150 crore in this period. I am sure the book growth will recover going ahead.

Taking our efforts to digitalise all human resource processes one step further, the Human Resources (HR) team rolled out two new modules on ShareKonnect recently. It introduced the Employee Separation module on the human resource management system in July this year. Employee separation is a common occurrence in any business, it may take place for many reasons including resignation, retirement, permanent incapacity, dismissal, discharge or death. By launching the Employee Separation module on ShareKonnect, the HR team has made it easy and simple for the employees exiting and the line managers handling such exits.

This was followed by the launch of the Survey module on ShareKonnect in August with the COVID-19 Vaccination Status Survey. Survey is a powerful tool that allows you to share your views with the management. At the same time, it helps the management to take right decisions in the interest of the staff. Sharekhan and the BNP Paribas Group conduct staff surveys from time to time and you must participate in them all.

The India Territory team has just rolled out a pulse survey to understand the staff’s comfort with return to office after working from home for 18 months and smart working arrangements among other things. The survey is anonymous, so please do not hesitate to share your feedback. Your responses will help us understand the efficacy of our recent initiatives in response to the COVID-19 pandemic and enable us to continue to make Sharekhan a better workplace. Do not wait for the last day, take the survey today. You may participate in the survey by clicking the link you have received in your inbox from Willis Towers Watson on September 24, 2021 with the subject line: India Pulse Survey. Meanwhile I congratulate the HR team for the progress made in the digitalisation exercise.

Sharekhan achieved another social media milestone recently when it crossed 40,000 followers on LinkedIn in July this year. LinkedIn is one of the most popular social media platforms globally. Sharekhan’s followers have grown organically on the platform, with the number of followers on a consistent upswing over the last few months. Sharekhan continues to build its strong presence on the professional network platform. The mix of thought leadership posts, market news and some topical content has worked considerably well for us on the site. I congratulate all Sherus for the milestone. A pat on the back of our Social Media team and all those Sherus who made the milestone possible.

In July, 560 people got vaccinated against COVID-19 at the vaccination camps organised by Sharekhan for its staff, and their dependents and guests in five cities across the country. Vaccination camps were set up in Mumbai, Bengaluru, Kolkata, Chennai and New Delhi over the month. In all, 310 employees, 207 dependents and 30 guests along with 13 vendor staff were vaccinated at these camps.

You may be aware that Sharekhan started a vaccination programme for its staff and their dependents and guests in tie-up with local hospitals some months back. Under the programme, vaccination is free for the staff. The HR, Administration and Procurement teams are jointly working on this project and so far have organised 12 camps in five cities across the country. In all, 670 staff have participated in these camps and 1,158 people have been vaccinated against COVID-19.

As per the findings of a staff survey conducted by the HR team recently and taken by about 60% of the staff, 86% of the staff in the head office who took the survey have taken their first dose or both the doses. In the Branch Network, 91% of the staff who participated in the survey have been either fully vaccinated or taken their first dose. The good news is that for the first time in many months, Sharekhan does not have a single COVID-19 positive case.

Get yourself and your loved ones vaccinated if there is a camp in your city next. If not, get vaccinated privately and the company will reimburse you for the expenses, read the details here. I appreciate the efforts of the HR, Administration and Procurement teams, who have worked hard to organise the vaccination camps. Good work.

Sherus participated in a paper bag-making activity in July to commemorate Paper Bag Day, which is celebrated across the globe on July 22. Good that we are at chasing targets, Sherus participated in good numbers in the Corporate Social Responsibility (CSR) activity and ended up making more than 49,000 paper bags out of newspapers till August 2021 against the targetted 20,000 paper bags. These paper bags, biodegradable and recyclable, were distributed to the local hawkers and vendors. Well done, Sherus.

Meanwhile, you must be aware that the BNP Paribas Group's flagship global programme for corporate giving, Help2Help, is now open for applications. The programme offers a great opportunity for you as employee to nominate a charity you are actively involved with and receive grants of up to €4,000 each from BNP Paribas. These funds target both social and environmental causes that can help you support your local communities. Given the Group’s commitment to encourage staff volunteering, we particularly welcome any chance to assist charities that also need volunteers. I am happy to inform you that the deadline for submitting applications for the Help2Help programme has been extended to November 30, 2021 to allow more Sherus to participate in the programme. Click the following link to download the application form:
https://www.sharekhan.com/MediaGalary/Newsletter/H2H-2022-Application-Form.docx.

Learn more about how Help2Help works and has made a difference to both staff and the charities they support by clicking the following link:
https://www.sharekhan.com/MediaGalary/Newsletter/H2H-2022-Programme-Leaflet.pdf.

The COVID-19 pandemic has not ended yet. In view of the recent spike in the fresh cases, we advise you to continue to follow all COVID-19 protocols. 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. Get your COVID-19 shots as vaccination can help greatly in minimising the spread of the disease. Continue to take care of yourself and your loved ones, stay safe.

Thank you.

Best regards,
Jaideep Arora