A very happy and prosperous new year to you and your loved ones. I also congratulate all Sherus for bravely dealing with the challenges of the COVID-19 pandemic, competently performing their duties from a changed, sub-optimal work environment and showing remarkable resilience throughout the crisis in 2020.

Kudos to the front-line staff and the entire network team for going out of their way to help customers and ensuring it was business as usual even in the uncertain times of the pandemic last year.

My special thanks to the Administration, Business Continuity Plan, Human Resources (HR), IT Infrastructure and IT Security teams for moving swiftly and successfully implementing the Work-from-Home (WFH) policy of Sharekhan in the early days of the pandemic. It was a fine and effective collaboration that enabled almost 90% of the organisation to quickly shift to the WFH mode and maintain business continuity. Their collaborative efforts also ensured that the critical staff who had to work from office could do so from a protected environment.

Thank you, everyone, for making 2020 a memorable year for Sharekhan despite the difficulties. Before we take a look at our 2020 achievements, here are the highlights of the December 2020 performance, which broadly reflect the trend of the entire year.

• The daily average brokerage rose by 9% month on month in December 2020.
• Our market share in the commodities market grew by 3% in December 2020.
• Under the Front Foot Programme, the trailing 12-month active client count reached 632.5K in December 2020, breaking the previous month’s record of 619K.
• About 16K branch-mapped broking clients were reactivated as part of the Front Foot Programme in December 2020.
• The franchisee network reactivated close to 6K clients in December 2020 under the Front Foot Programme.
• In December 2020, the mutual fund distribution business posted record high gross flows since June 2018 with a collection of Rs.281 crore.
• A strong pick-up was also seen in the systematic investment plans (SIPs) as the SIP flow rose to Rs.44 crore in the same month, adding Rs.4 crore during the month.
• We launched Lumpsum Go, a single payment tool, on Sharekhan App for Mutual Funds in December 2020.
• Our Loan Against Securities (LAS) book grew by 25% month on month in December 2020.
• LAS disbursement touched an all-time high of Rs.141 crore in December 2020.

In spite of the challenges of the COVID-19 pandemic, our 2020 business performance was one of the best in the history of the company. The performance of the broking business was spectacular, thanks to the efforts of Sherus and a booming stock market. After crashing by ~40% in March last year the Indian stock market recovered, rallied by ~86% from the lows and ended the year with an increase of 15% over the 2019 returns. As the stock market surged and drew more people – people with more time on their hands due to the lockdown – our daily client activity grew by 46% and turnover in the cash, and futures and options segments increased by 40% each in 2020 compared with 2019. The delivery mix too rose to 21.3% in 2020 from 18.7% in 2019. As a result, the daily average brokerage grew by a good 36% year on year in 2020. We also saw a year-on-year growth of 39% in new client additions last year as the Client Acquisition team bravely faced the challenges of the lockdown and encouraged the common man to participate in the booming stock market to achieve their financial goals.

On a year-on-year basis, the trailing 12-month active client count increased by a good 27% to 632K in December 2020 from 497K in December 2019. The programme facilitated the reactivation of 1.66 lakh clients in the last year. The efforts of the franchisee network resulted in the reactivation of close to 30K clients since the programme was launched for the franchisee network in July 2020. The key success of the programme came from the efforts of the front-line teams to ensure that most of these reactivated clients did not halt at a transaction or two but returned as regular traders or investors. About 6% of the reactivated clients gave us brokerage of Rs.10,000+ per client, thereby making it to the trader segment. This enabled the reactivated client pool to consistently contribute more than 10% of the branch network revenues for most of 2020.

In the mutual fund distribution business, we closed 2020 with a 21% growth in the assets under management (AUM) compared with 2019. Clearly, our mutual fund distribution business too benefited from the strong recovery in the stock market after the March 2020 sell-off. The addition of Rs.790 crore during the year was also possible due to the collective and continued efforts of the branch network, and the Investment Solutions and Digital Assets teams in a year that was one of the most challenging at both personal and professional levels for all. Thus, the Sona Chandi contest and other incentives run by the Investment Solutions team played a key role in not only boosting business but also keeping the front-line motivated throughout the year. On the other hand, the Digital Assets team at the head office improved the digital experience of the mutual fund clients in 2020 by rolling out smart online features like the Auto-Pay mandate to enable automatic SIP payments and LumpSum Go, a single payment tool for convenience.

Last year, revenue from the LAS business increased by a whopping 58% and the LAS book expanded by 15% on a year-on-year basis. The LAS team added ten new direct sales agents who gave us disbursements of Rs.229 crore with a book of Rs.50 crore. In addition, revenue in terms of the processing fee collection grew by 52% on a year-on-year basis.

Our education business underwent a major transformation last year by taking on a new name and logo as well as launching a new website and learning management system. It also started a digital revolution in the space of financial education by launching MoneyFlix, an edutainment platform that seeks to offer education in trading and investing through Bollywood-style financial movies, thereby combining education and entertainment.

The HR team rolled out ShareKonnect, a new Human Resource Management System (HRMS), last year with three key modules going live in the first phase, Attendance, Leave and Employee Information. The timing was most opportune as digitisation was the survival mantra in the post-Corona era and the system made it convenient for the WFH staff to mark attendance, apply for leave and carry out other routine HR tasks remotely from home. The system is being launched in phases and the team went live with the performance management system on ShareKonnect in the last month, allowing us to conduct the annual appraisal exercise in digital mode for the first time in Sharekhan. To ensure that Sherus are familiarised with the module to complete the important exercise in a timely manner the HR team also conducted several orientation sessions.

Last year, as we swiftly implemented the WFH policy, there was one thing that kept us all on the same page at all times even as we worked remotely from different locations of the country and that was internal communications. Distancing meant that communication had to be transparent, more frequent and engaging, and the Internal Communications team stepped up and delivered. Through regular updates and advisories, internal communications kept the staff informed of the COVID-19 situation and Sharekhan’s response to it. It also played a key role in motivating the staff and recognising their achievements in tough times by sharing their stories of courage and resilience through the newsletter, COVID-19 Heroes.

We broke new ground with volunteering last year by going completely virtual. Sherus in large numbers from across the country participated in various virtual volunteering activities organised by the CSR team during the lockdown. The concept of CSR Week was a hit and allowed Sherus to plan their volunteer work well. Even in tough times of the pandemic we did not forget our social responsibility and helped people after taking all precautions. I am proud to share that we were able to not only achieve but also surpass our targets for the #1MillionHours2Help programme of the BNP Paribas Group in spite of the pandemic. We could do this because of our innovative approach to volunteering, of course.

Sharekhan 2.0 is the most important project of 2021. Under the project, we will reposition Sharekhan as a full-service broker this year. The new Sharekhan will aim to keep customers on track of their financial goals with its range of full services. It’s tag line has been finalised as “Discover what full-service broking can do for you.” To market full-service Sharekhan we have developed a complete arsenal of marketing materials including a new pre-login section along with a homepage on sharekhan.com, brochure, flyer, presentation template and video. The front-line and the branch network are going to play a key role in repositioning the tiger as a full-service broker and they have been thoroughly briefed in the full-service benefits of investing and trading with Sharekhan.

The key pillars of this full service positioning that all of you need to further bring alive are: (1) research along with the philosophies for fundamental, technical and mutual fund research; (2) an efficient team of true-value relationship managers guiding customers on their financial goals; (3) a strong physical network of branches and franchisees servicing and imparting knowledge to customers; (4) our digital platforms including TradeTiger, Sharekhan App and the website, and how to use them effectively; (5) professional trading and investing education for all customer types via Sharekhan Classroom; and (6) a wide range of trading and investing solutions.

We need to build on these strengths in 2021 to demonstrate value to our customers, fulfil our new promise to them and realise our vision of becoming the number one full-service broker in the country. Let us start by building the message of full service everywhere, every day.

There is much to expect in the mutual fund distribution business too this year. We will migrate our mutual fund distribution business to a new back-end system called Miles to improve the digital experience of customers and the work experience of the front-end staff. Miles will also make our back-end processes for the business more robust. Ultimately, it will help in building a strong relationship with customers and expanding the business. There will be a greater focus on the digital business to enhance customer journey by improving the UI/UX design of the digital assets and adding new features, such as Lumpsum Go across thematic ideas to enable pre-defined basket orders. We will also relaunch a model portfolio, run new mutual fund contests and roll out new products like third-party portfolio management service and alternative investment funds.

There is a great demand for LAS among our clients for meeting their business investment, working capital or personal needs and we must tap this demand to take the lending business to new heights in 2021.

The focus of Sharekhan Education in the new year will be on leveraging all existing assets and building on the experience gained in the past year to grow in 2021. The education business team will also be creating more edutaining financial movies to simplify the concepts of investing and trading for the common man to help them to participate in the money-making opportunities that the financial markets offer. MoneyFlix is now available free of cost to all Sherus for a period of one year and I recommend you take this opportunity to expand your knowledge of the financial markets.

The Operations team under the sponsorship of Stefan Groening will implement Optimops in 2021. Optimops is a project to evaluate, engineer and transform the operational processes and technologies of Sharekhan to achieve a leaner, more optimised operations department. The project aims to enhance client experience by providing seamless processes and reports at a click with minimal paperwork or support. The project will also realign processes at Sharekhan’s share outlets to provide superior client experience. Optimops will re-evaluate and strengthen the operational processes from the very core to build a faster, leaner and stronger processing engine to supplement the growth of Sharekhan.

The COVID-19 pandemic changed our working life forever by making remote working the new normal. The HR team is working on a remote working policy for the staff of Sharekhan and you will hear more about it in the months ahead. Continuing on its theme of digitisation, the team will roll out the remaining modules of ShareKonnect in this year. The digitisation of various HR activities is optimising the existing HR processes and will eventually lead to a complete digital transformation of HR processes and make the employee experience remarkable in Sharekhan.

A new year calls for new goals. The ongoing annual performance appraisal process will soon be followed by an exercise to identify the business and individual goals for 2021. Last year, in view of the COVID-19 pandemic, the mandatory block leave period had been reduced to five days. The HR team has revised the block leave policy for 2021 to reinstate the duration of block leave to 10 consecutive working days. I expect all eligible staff to avail of block leave in 2021 to balance their work and family lives. However, business will run a lot more smoothly if all block leaves are evenly distributed over the year. The team shall also launch the Diversity and Inclusion (D&I) web page this year which will keep us updated on the D&I initiatives of Sharekhan and the BNP Paribas Group.

This year, we will also launch Vision 2025 to set the agenda of Sharekhan for the next five years. The Vison 2025 plan will talk about our goals and ambitions for clients, staff and society as well as the projects and activities we will undertake to achieve them over the five-year period.

With security being a board-level topic and gaining priority in digital strategies, Sharekhan is trying to disperse security responsibility throughout the organisation and working to transform the IT culture. In 2021, Sharekhan looks to up the game on the cyber front by kick-starting the “Security Transformation Programme” to integrate security into all areas of digital technology. This will result in fundamental changes in how security is architected, deployed and operated in the organisation. The programme will mainly focus on: (1) Identity and Access Management with Zero Trust; (2) Enterprise-wide Data Leakage Protection; (3) Anti-Advanced Persistent Threat technology; (4) Centralised and controlled Internet Browsing for end-user community; and (5) Mobile Device Management. The IT Security management team will also undertake strategic initiatives, viz Insider Threat Management and Ransomware Readiness in this year.

CSR will continue to be a focus area for us in 2021 and we remain committed to the Group’s CSR goals. We will reconstitute the CSR Committee this year to allow other employees a chance to drive the CSR agenda of Sharekhan. The CSR Committee and the CSR team will organise virtual voluntary activities throughout the year and I urge each one of you to avail of your CSR leave this year to give back to society.

As for the working arrangements in 2021, our head office and branches are gradually opening up depending on the local conditions and within the limitations imposed by the authorities. All protocols of the BNP Paribas Group and the government are being followed at the premises that are open. We are also exploring the possibility of allowing more employees to work from office strictly on an as-needed basis and on explicit requests of the managers to increase the efficiency of some processes. Most of us will continue to work from home for now and it is important that we continue to comply with all policies, procedures of the regulators, Sharekhan and the BNP Paribas Group at all times. As most of us continue to work remotely, away from each other, it is absolutely critical to stay connected and a two-way communication is the key to that. So participate in all surveys, contests, webinars and other such employee-engagement activities that may be organised by the HR and Internal Communications teams in 2021.

On the COVID-19 front, vaccination has started across the world. In India, the distribution of vaccine against COVID-19 has begun and we are closely monitoring the safety and effectiveness of the vaccine. We are definitely not out of the woods yet. Our country seems to be gradually recovering from the pandemic given the decrease in the count of new positive cases being reported every day. But then there are also reports of the emergence of new variants of Coronavirus in some countries and the transmissibility of some variants of the virus seems to be increasing, according to the World Health Organisation. Under the circumstances, at the cost of repeating myself, I will advise you all to continue to follow all COVID-19 protocols: Maintain social distancing; wear a mask; wash your hands frequently; keep rooms well-ventilated; and cough away from others into your elbow to stay safe. To know more about COVID-19 protocols refer to the Unlockdown Dos and Don’ts.

As we settle in the new year, I am confident that each one of us has what it takes to push the envelope in all aspects of our functions. Let us together make Sharekhan a better workplace, and the preferred savings and investment partner of more people in 2021. I look forward to your continued support and wish you a successful year ahead.

Thank you.

Best regards,
Jaideep Arora