Dear Sheru,

A very happy Diwali and prosperous new Samvat to you and your family. Hope you all continue to be safe and well. You will be happy to know that we currently do not have a single COVID case in Sharekhan. The company 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. Last week, we even celebrated Diwali at office and branch locations again after two long years. It was really great to see all Sherus celebrating festivals together once again. 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.

• Our daily average revenue grew by 5% MoM in September 2022.
• Our daily client activity increased by 4% MoM in September 2022.
• We saw a growth of 8% MoM in new client additions in September after three months of contraction.
• The trailing 12-month active clients count reached 7,77,362 by the end of September this year. This is a new record for this metric in Sharekhan.
• Close to 12.8K branch-mapped broking clients were reactivated as part of the MRP in the last month.
• Inflows into SIPs recovered during the month to Rs.49.90 crore in the last month from Rs.39.90 crore in the previous month.
• Our EMF business expanded by 16% MoM in September this year, returning to double-digit growth path after three months of lacklustre business.
• Our LAS and ESOP books grew by 4% and 8% MoM respectively in the last month.
• Espresso celebrated its second anniversary on September 22, 2022.

The Indian equity market declined in September this year as foreign portfolio investors turned net sellers again and withdrew $903 million from the market. The Nifty and the Sensex fell by more than 3% each month on month (MoM) after rising by 8% MoM in July and by 3.5% MoM in August this year. Even as the domestic equity market tanked, our daily average revenue grew by 5% MoM during the month with the daily client activity growing by 4% MoM. Though not so impressive when compared with the 22% month-on-month (M-o-M) growth in the daily average revenue and the 18% M-o-M growth in the daily client activity seen in August this year, the numbers are positive and were achieved in a declining market. The good performance extended to client acquisition too as after contracting for three months in a row, new client additions increased by a good 8% MoM in September this year. However, our performance on the market share front remained dull – our market share remained flat in futures & options; fell by 3% and 1% in the cash and commodity segments respectively; and grew by 1% in the currency segment last month. Hope to see some market share gains soon. Meanwhile, let us continue to help customers create wealth and handhold them whenever the market turns choppy.

The Mission Reconnect Programme (MRP) had another positive growth month in September this year. The trailing 12-month (TTM) active client count stood at 7,77,362 at the end of the month. This is an all-time high for Sharekhan for this metric. The MRP facilitated the reactivation of almost 12.8K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 5K clients in the same period. The trend remains that reactivations are also good for revenue growth. Close to 4.2% of the clients who got reactivated in September have also traded in futures and 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 the last month 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.

Our mutual fund (MF) assets under management (AUM) remained flat -- dipped by 0.88% MoM to Rs.6,311 crore -- in September this year. This was despite an over 3.5% fall in the broader equity market (Nifty was down 3.74% MoM during the month) compared with the previous month. The gross inflow for the month stood at Rs.186.37 crore and the net collection was positive at Rs.50.68 crore led by the front-line team’s participation in a new fund offering (NFO) drive during the month and a pick-up in the systematic investment plan (SIP) inflows. The inflows into SIPs recovered during the month to Rs.49.90 crore from Rs.39.90 crore in the previous month, reflecting the resilience of our front-line team, which bounced back following the issues related to regulatory changes and the migration of our MF operations to the BSE StAR MF platform. We also successfully concluded the Collect High Fly High 2.0 contest with the Branch Network collecting Rs.156 crore in the recent NFOs.

Our business of Exchange Margin Funding (EMF) recorded a growth of about 16% MoM in September this year. After three months of dull business, the EMF business is back on track with a double-digit growth. We closed the month with EMF AUM of Rs.1,054 crore. Our Branch Network’s contribution stood at 67% of the total funding and the rest was shared by the Business Partner channel.

In the Loan Against Securities (LAS) business, our LAS book grew by 4% MoM and Employee Stock Ownership Plan (ESOP) book grew by 8% MoM in September 2022. We achieved total disbursements of Rs.154.29 crore, which is an increase of 15% compared with the previous month’s disbursal of Rs.113.83 crore.

Channelwise break-up of LAS disbursements in September 2022

Espresso turned two on September 22, 2022. To commemorate the occasion a birthday party had been organised by the Internal Communications team in collaboration with the Human Resources, Brand & Communication, Administration and Procurement teams at our Empire Plaza office in Mumbai. Espressouls, as the staff of Espresso call themselves, turned out in large numbers and were joined by the Sherus who provide support service to the discount broking company of the Sharekhan Group. Danny Nathani, Head -- Brand & Communication, hosted the event which started with Espresso’s chief, R Kalyanaraman, followed by me, Stefan Groening and Jean-Christophe Gougeon from Sharekhan making brief speeches in praise of Espresso and reminiscing about its unique launch amid the pandemic. A delicious cake designed in-house was cut by the leaders along with the members of the founding team. Among the other highlights of the event were a quiz on Espresso hosted by Danny in his own inimitable style; a talent show wherein the staff of Espresso and Sharekhan performed to loud applause; and a finger-licking dinner. You will catch the photos in the next edition of the Sharekhan Times, I am sure.

The face of Empire Plaza office had lit up with bright yellow balloons and posters of birthday messages in Espresso’s brand colour. The mood was very festive and rightly so. In two years of its existence, Espresso has achieved many a milestone. Its monthly brokerage crossed Rs.50 lakh in July this year when it reached Rs.60 lakh. The customer base of the company touched 2 lakh customers on August 10 this year and the company’s mobile application (app) already enjoys the highest app rating of 4.7 in the industry. I will like to take this opportunity to congratulate the entire Espresso team and all Sherus who are supporting Espresso for the success. Espresso has miles to go but like they say, well begun is half done. Here, I will also like to mention that at the time of launching the discount broking business, there were apprehensions that an overlap of customers might lead to cannibalisation. But as we can see, a growing Espresso has had no adverse impact on Sharekhan’s business – our client base touched 25 lakh this year. On the contrary, two service models and openness to change have made the Sharekhan Group stronger with a larger customer base and a bigger market share.

Follow the basic precautions especially in the festival season. 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 HR 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.

Once again I wish you and your family a joyous Diwali. May the new Samvat be propitious for everyone.

Thank you.

Best regards,
Jaideep Arora
Director and Chief Executive Officer
Sharekhan