Dear Sheru,

I trust you and your family are safe and keeping good health. COVID-19 remains a concern as the daily caseload is on the rise again and a new super contagious omicron mutant called BA2.75 has popped up and seems to be spreading faster than the other variants. In Sharekhan we have four active cases at present and I wish these Sherus a speedy recovery. As you can see, even in Sharekhan the count of COVID cases is on the rise. Therefore, we still need to be careful and follow the COVID protocols as much as possible. 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 will keep you updated about any new developments.

Work on projects to achieve Vision 2025 is going on in full swing, here is an update.

Coming to the last month’s performance, it was affected by the performance of the equity market, which swung like a pendulum last month and closed down for the third consecutive month. Hard times are here but our report card shows resilience.

• Our cash market share grew by 9% in June 2022.
• Our futures & options market share grew by 5% in June 2022.
• The trailing 12-month active client count reached 766.8K by the end of June 2022.
• Close to 15.6K branch-mapped broking clients were reactivated as part of the Mission Reconnect Programme in the last month. This is the highest monthly count of reactivations in the past one year.
• In June, the net inflows in the MF distribution business were higher at Rs.39.40 crore compared with Rs.23.48 crore in May this year.
• Our EMF AUM reached Rs.915 crore by the end of June this year.
• A series of fundraising events across Sharekhan mobilised more than Rs.7.6 lakh from Sherus for Goonj as part of the ongoing APAC Fundraising Campaign 2022 by the end of June 2022.

The Nifty and the Sensex declined by 4.8% and 4.6% respectively in June 2022 this year as the domestic equity market continued its downward journey owing to persistent selling by the foreign portfolio investors (FPIs). The benchmark indices closed down in all months of this financial year and FPIs have now been net sellers for the ninth consecutive month since October 2021. Consequently, our daily average revenue dropped by 13% month on month (MoM) last month as daily client activity fell by 15% in the same period. There was an 8% drop in new client additions too during the month. On the positive side, the fall in the company’s cash market turnover was less steep than the fall in the cash market turnover during the month. As a result, our market share in the cash and futures & options segments grew by 9% and 5% MoM respectively in June 2022. As we all know, ups and downs are part of the equity market journey and one must not panic when stock prices tumble because in the long term only equities tend to give higher returns compared with the other asset classes. Well, we must remind customers of this fact and handhold them now, especially the ones who put their hard earned money in the public issue of Life Insurance Corporation of India and are now feeling scared and worried. Perseverance, hard work and focus on customers will help through the difficult times.

The Mission Reconnect Programme (MRP) had a great start with a positive growth month in June this year. The trailing 12-month (TTM) active client count reached 766.8K by June end. The programme facilitated the reactivation of almost 15.6K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 3.1K clients in the same period. The trend remains that reactivations are also good for revenue growth. Close to 2.5% of the clients who got reactivated in June have also traded in futures & options already. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Almost 24% of the reactivations that took place in June have conducted three or more transactions already.

Mission Reconnect was launched on June 1, 2022 with an aim to have 10 lakh active (TTM) clients by the end of 2022. My best wishes to the entire front-line team as well as our Business Partners for the continued success of MRP. Let’s aim and plan to take this programme to newer heights.

Our mutual fund (MF) assets under management (AUM) declined by 3% MoM in June this year to end at Rs.5,708 crore, reflecting the 4.85% month-on-month fall in the equity market (the Nifty 50 index) during the month. Our gross collection during the month was in line with that in the previous month at Rs.150 crore. Additionally, at Rs.39.40 crore the net inflows in June were slightly better than Rs.23.48 crore recorded in May this year. The inflows into systematic investment plans (SIPs) were marginally down by 0.22% MoM to Rs.59.70 crore. This was due to the suspension of the eNACH services in the last 10 days of June to migrate the back-office operations of our MF business to the BSE MF platform. The fall in the SIP flows was, however, capped by the SIP Ka Sher contest drive supported by the front-line.

Our Exchange Margin Funding (EMF) business remained flat MoM in June this year due to continued uncertainty, and high volatility in stock prices and equity market volumes. We closed the month with EMF AUM of Rs.915 crore. Our Branch Network contributed almost 66% of the total funding that took place last month. Our Business Partners accounted for the balance.

Our Loan Against Securities (LAS) book contracted by 8% MoM in June 2022. We achieved total disbursements of Rs.192.60 crore during the month.

Channelwise break-up of LAS disbursements in June 2022

In a first for 2022, Sharekhan organised fundraising events across locations in June this year to raise funds for its non-government organisation (NGO) partner, Goonj. The events were part of the ongoing APAC Fundraising Campaign 2022. The CSR team organised Khushiyon ka Mela in the Empire Plaza office in Mumbai. Multiple activities including live performances by Sherus, tarot card reading, handwriting analysis, caricature drawing, food stalls and a “Green by Goonj” stall had been organised at the event. More than 150 Sherus from the Ruby, Lodha and Empire offices attended the fundraiser. The visitors had to pay a nominal amount as entry fee and were also allowed to choose an option which included food coupons. The visitors could also pay to partake in any of the other activities being offered. A total amount of Rs.1,58,070 was collected from the event.

In Vadodara, the cluster led by Anahita Vora organised an Antakshari contest. About 94 Sherus took part in this musical game after which they made a donation to Goonj. In Delhi, the cluster led by Hemendra Agarwal distributed 300 saplings for personal use to employees who had donated to the APAC Fundraising Campaign.

Till June 30, 2022 about 24% of Sharekhan’s staff had donated to the APAC Fundraising Campaign 2022. The CSR team’s collections at the end of the month stood at Rs.7,62,477. I thank all Sherus who participated in the fundraiser and appreciate the efforts of all those who boosted the collections by organising fundraising events. A novel concept that is here to stay.

If you still have not had the opportunity to participate in the ongoing fundraising campaign yet, I invite you join it now by making a donation to Goonj. The campaign ends on July 31, 2022, so only a few days left. Don’t wait for the last day. Pledge your donation today by clicking the following link: https://www.surveymonkey.com/r/8FTHCM5. Know more about the fundraiser by clicking this link: https://www.sharekhan.com/MediaGalary/Newsletter/
APAC-FundRaising-020522-web.html.

Given that the Coronavirus is constantly mutating, we have not seen the end of the pandemic yet. So 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. 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