• The daily average brokerage of Sharekhan rose by 10% in February 2021.
• The company’s market share grew by 6%, 15% and 10% in the cash, futures & options and currency markets respectively last month.
• The daily activity of clients improved by 6% month on month.
• Under the Front Foot Programme, the trailing 12-month active client count reached 676.6K in February 2021, breaking the previous month’s record of 656.5K.
• About 16.5K branch-mapped broking clients were reactivated as part of the Front Foot Programme in the last month.
• The mutual fund assets under management grew by nearly 6% last month.
• The assets under management of EMF business crossed Rs.400 crore last month.
• The EMF business grew by about 29% month on month and 88% year on year in February.
• The LAS book grew by 9% month on month in February 2021.
• The count of Sharekhan’s followers crossed 50,000 on Twitter.

Our broking business performed well in February as the stock market delivered strong returns for the month. Factors like a big-bang Union Budget, good results of India Inc for the December 2020 quarter and the news of India’s gross domestic product returning to growth path in Q3FY2021 after two quarters kept the stock market buoyant. Though there was a steep fall in the market in the last week of the month as the USA launched an airstrike in Syria and this resulted in increased volatility. Our daily average brokerage rose by 10% month on month, thanks to a 5% growth in the overall market turnover driven by 16% and 15% growth in the futures & options (F&O) and commodity segments respectively during the month. Our market shares in the cash, F&O and currency segments rose by 6%, 15% and 10% respectively which also contributed to the growth in the daily brokerage. The average daily brokerage would have been higher but for the 19% drop in new client additions due to a less number of working days and decreased spending on digital lead generation during the month compared with January 2021.

The Front Foot Programme remains on a solid footing. It continued the trend of recording new highs for the trailing 12-month (TTM) active client count, which touched 676.6K by February-end. The count was almost 20K higher compared with the January 2021 close of 656.5K. Thanks to the programme, about 16.5K branch-mapped clients were reactivated during the month. Additionally, the efforts of the franchisee network resulted in the reactivation of 7.3K clients in the same period. I congratulate the entire front-line team as well as our business partners for the continued success. Well done!

Our mutual fund (MF) assets under management (AUM) increased by 5.65% to Rs.4,778 crore in February, reflecting the gains of the broader equity market. The Nifty 50 Index was up 6.56% during the month. Our gross collections for the month stood at Rs.218 crore. At Rs.43.77 crore the Systematic Investment Plan (SIP) flows for the month were lower compared with the previous month, affected most likely by the regulatory change that came into effect from February 1, 2021 and that requires SIPs due on the last day of a month to be rolled over to the following month. The point to note is that our SIP inflows were down by 3% month on month as against the industry SIP inflows, which were lower by 6% month on month.

Our Exchange Margin Funding (EMF) business also benefited from the buoyancy in the stock market, which touched an all-time high in February. As the AUM reached Rs.403 crore by the end of the month, the highest funding in any month since we launched the product, the EMF business registered a monthly growth of about 29%. On a year-on-year comparison, the growth was even more pronounced at 88%. Last month, the rallying stock market offered many opportunities, especially in the large-cap and mid-cap stocks, and clients with limited resourced could leverage their funds using the EMF facility to capitalise on these opportunities. Also, increased focus on the funding business combined with continuous training of and follow-up with the front-line is yielding results. I am happy to see the momentum in the EMF business and congratulate the front-line and EMF teams for the good performance. Keep it up!

The Loan Against Securities (LAS) book grew by 9% month on month in February with total disbursements of Rs.129.74 crore. In terms of channels, direct sales agents, the Branch Network, Business Partners and ESOPs accounted for Rs.75.59 crore, Rs.43.81 crore, Rs.1.79 crore and Rs.8.55 crore of the total disbursements respectively. I am happy to see that LAS is being promoted well by the entire Branch Network. Keep it up.

Sharekhan is a leader when it comes to digital marketing and social media in the Indian banking, financial services and insurance industry. We were one of the first brands to start digital marketing. We were also among the first players to go on social media and we have been generating a good level of engagement through innovative posts, new content and useful information for the past few years. As a result of all this, we have crossed 50,000 followers on yet another platform – Twitter. The microblogging and social networking platform is commonly used to find the latest or updated information on economy, stocks etc.

We use the platform effectively to keep our followers updated: the Research team uses it to announce Sharekhan’s stock views and market developments on a daily basis while the Social Media team posts topical and event-based content related to the stock market on it. As more and more non-client users read our updates and calls, and benefit from the same, they would want to open an account with us in the hope of gaining more information. In other words, our activities on social media platforms like Twitter have the potential to bring in more clients. Therefore, the growing number of followers on Twitter is a very good sign. I appreciate the efforts of the Social Media and Research teams and congratulate all Sherus for the milestone.

India appears to be witnessing a resurgence of the COVID-19 pandemic with a rise in the new cases. Notably, Maharashtra, Punjab, Karnataka, Gujarat and Tamil Nadu continue to report a surge in COVID-19 daily cases, accounting for 78.41% of the daily new cases in the country. Maharashtra remains the worst-affected state, reporting the highest daily new cases. Therefore, all our offices (head offices and branch offices) in Maharashtra have less than 50% of the staff working from office locations. In the other states, only very critical staff are being allowed to work from office at this point. No new requests for working from office are being entertained as of now. Needless to say, continue to follow all COVID-19 rules and the norms of personal safety and social distancing, whether you are working from home or office locations. Stay safe and continue to take care of your loved ones.

Thank you.

Best regards,
Jaideep Arora