• Market share in the commodity segment increased by 7% MoM in July this year
• New client additions rose by 5% in the same month over June 2020
• Monthly active clients increased by 8% compared with the previous month
• Mutual fund assets under management climbed back to the December 2019 levels in July this year
• Assets under management in the Exchange Margin Funding business crossed Rs.200 crore again with a 34% month-on-month growth in July
• More than 12,000 customers were reactivated under the Front Foot Programme last month
• Front Foot Programme was also rolled out for business partners in July
• Trailing-12 month active clients touched a new high of 5.75 lakh last month
• Disbursements in the Employee Stock Option funding business surged by 96% month on month in July
• Our first Open House, a virtual question-and-answer session, was kicked off in July with a session on HR topics

We are in the eighth month of 2020 and have spent half of it in a lockdown. We have adapted well to the new normal of working remotely after the initial period of adjustment. Business has picked up momentum in the last two months, allowing us to even follow up the 2019 annual performance appraisal exercise with a salary raise for you and your colleagues to reward you for your performance in the last year. This year, COVID-19 has presented some challenges, making our jobs tougher. But I am happy to see that the COVID-19 challenges are now paving the way for new ways of working and doing business. To borrow a phrase from Michael Crichton and tweak it a little, Business will find a way.

In the broking business, the concerted effort of the Sales, Customer Relationship Executive (CRE) and Relationship Manager (RM) teams resulted in a 5% month-on-month growth in client additions last month. The RM and CRE channel did especially well by acquiring 1,828 new accounts in July, improving their June 2020 record of 1,532 new accounts. The number of active clients also increased by a good 8% month on month (MoM) on the back of the higher account additions in the last two months and increased customer participation in the financial markets. Interestingly, the digital account opening channel is also picking up fast and 2,240 new clients were added through the Do-It-Yourself (DIY) account opening process last month against 670 accounts in June. Obviously, the fully digital DIY system is finding more and more takers in the lockdown and I expect the channel’s contribution to grow in the months ahead. The future is DIY, after all.

Meanwhile, a drop in the market share in the cash and the futures & options (F&O) segments combined with lower customer pricing and a reduced delivery mix resulted in a 6% month-on-month drop in the daily average brokerage in July this year. Thankfully, the monthly brokerage dipped by only 2% MoM owing to an additional trading day in the month. Our F&O turnover grew at a slower rate of 14% compared to the market turnover, which grew by 20% in the same period. Though our market share in the cash and F&O segments dropped last month, the same increased by 7% MoM in the commodity business and led by silver, the turnover in the commodity segment also grew by a handsome 33% against a 24% month-on-month growth in the turnover of the entire commodity market.

The last month’s performance was a mixed bag and I hope to see more upward movement and less downward movement in the broking business going ahead.

In July 2020, the mutual fund assets under management (AUM) recovered to the December 2019 levels at Rs.3,784 crore after a 22% drop in March 2020. The AUM had taken a hit in March when the stock market had fallen by 30% on announcement of a lockdown triggered by COVID-19. In the lockdown, due to the collective efforts of the Branch Network, CRE and Investment Solutions teams, the recovery has been quicker than the pace of the industry growth. The net sales in the equity funds was negative for the industry but Sharekhan achieved a positive inflow in the category. Additionally, the mutual fund Systematic Investment Plan (SIP) flow also increased for Sharekhan and declined for the industry last month. Sharekhan SIP flow now accounts for 0.53% of the industry SIP flow. Well done, Sherus!

The AUM of our Exchange Margin Funding (EMF) business grew by a healthy 34% MoM in July, crossing the Rs.200-crore mark once again after plummeting owing to the stock market crash in March and April this year. The bounce in the AUM can be attributed to a recovery in the stock market, a special incentive scheme for the front-line staff and a lot of digital promotion done by the EMF team. I am happy that the EMF team is exploring all kinds of digital channels to create awareness about the product. A video produced in-house showing how EMF works was released on the website and social media last month and it has generated a lot of interest in the product. The EMF team is also conducting webinars to explain the product to the branch staff and the business partners so that they can answer customer queries with confidence. Through another webinar the Classroom team has been given a lowdown on the product so that they can now train customers. A promotional e-mail campaign has been rolled out and notifications are also being sent regularly on the registered mobile numbers of clients, informing them of the benefits of the product. Congratulations to the front-end, Mehul Koradia, Pranay Shah and the rest of the EMF team for regaining the milestone! Again I see great team work here. Good show, the EMF, Branch Network, Brand & Communications, Video Communications and Operations teams!

Another business team that has been using the digital channels to their advantage is the Sovereign Gold Bond (SGB) team led by Pravin Darji. Through consistent digital marketing and e-mail campaigns targeting the staff, business partners and customers, they have created great awareness about the product in the last one year, thereby reviving the gold bond business. The business had been languishing ever since the stock exchanges introduced SGBs in 2016 but now the numbers shine and tell their own story. In the four months of FY2021 alone we have sold 4.24 times more SGBs compared with what we sold in the whole of FY2020. Similarly, the number of SGB customers has also increased by nearly three times in FY2021 compared with FY2020. This is impressive. Good work, Amit Arora, Pravin, the rest of the SGB team, and Brand & Communications, CRM & Data Analytics and Internal Communications teams. You have not only revived the business but also helped customers by presenting them one more investment option.

We reactivated more than 12,000 customers under the Front Foot Programme (FFP) in July this year. In the same period, the trailing 12-month active clients count reached 574.4K, which is a new high for us, 11K more than the June 2020 count. Our efforts under FFP to reactivate clients have always been supported by digital outreaches to them in the form of e-mails. In July, we took a few steps forward to personalise the e-mail communications by adding the name, mobile and e-mail contact co-ordinates of the Relationship Manager or Business Partner mapped to a client, thereby enhancing the call to action. We also rolled out the programme for our Business Partners with a view to reactivating clients mapped to them. I congratulate the entire Branch Network and the teams in the head office on the success of FFP.

In July this year, our disbursements in the Employee Stock Option (ESOP) funding business grew by a whopping 96% MoM to Rs.54.21 crore. Our ESOP funding book grew by a healthy 49% in the same month compared with June 2020. Together with disbursements of about Rs.18.8 crore under Loan Against Securities (LAS), the LAS team led by Maryam Bangera created a new record of total disbursements at Rs.73.05 crore in the last month, breaking the June 2019 record of Rs.61.09 crore. When the demand for LAS dipped in the wake of the volatility in the stock market in March this year, the LAS team started promoting the ESOP funding business more using technology and digital channels. They sent promotional e-mailers to the employees of HDFC Ltd and HDFC Bank, and called them to pitch the product. This helped us gain good visibility among the corporate employees. What’s more, impressed with our services our clients as well as the ESOP desk managers at the two companies gave us several references. The milestone was also another example of great team work. The Branch Network gave full support for the documentation process, especially in Chennai, the National Capital Region, Indore, Jamshedpur and Lucknow -- where the LAS team could not travel to all locations due to lockdown restrictions; the Account Opening team helped by opening accounts without delay; and the Operations team supported by disbursing funds quickly. Good work, all! Keep it up.

Communication is the biggest challenge of working remotely and we are finding new ways of overcoming it too. Video-conferences, virtual team meetings, webinars etc are fast becoming part of our culture now. Our first Open House, an online question-and-answer session, took place on July 22, 2020 in which Rajesh Shetty answered questions on HR topics. The participants asked a wide range of questions and the session overshot by nearly an hour, indicating the enthusiasm of the participants. Open House is a virtual platform that seeks to facilitate two-way communication between the management and the staff. Going forward, I expect more such communication events will be used by all leaders of Sharekhan. With working from home becoming the new normal, it is important that we make the best use of the technology and digital platforms available to communicate and stay connected. Err on the side of over-communication, I say.

Talking of communications, we also conducted the first annual Sharekhan Internal Communications Survey last month to gauge the impact of internal communications on the staff and I hope you participated in the survey to tell us what you want to read. Survey is a powerful tool that allows you to share your views with the management. At the same time, it allows the management to take right decisions in the interest of the staff, so use this tool to your advantage.

That’s it for now. Continue to practise social distancing and take all precautions to protect yourself and your loved ones from COVID-19, we are not out of the woods yet.

Take care and stay safe.

Best regards,
Jaideep Arora