Dear Sheru,

I hope things are going well for you and your family. The COVID-19 situation changed for the better in the past month. There was an overall decline in the infection rate and a significant pick-up in the recovery rate at the national level. In the Sharekhan family, the recovery rate was the highest in May with 132 Sherus recovering from the viral infection during the month after 83 recoveries in the previous month. Adding to our relief, fewer new cases – about 57 – were reported in May compared with 170 new cases in April. Unfortunately, the recovery has not been without setbacks as we lost two Sherus to the pandemic this year. My deepest condolences to their family members. Currently, about eight Sherus are still down with the virus and I wish them all a speedy recovery.

Lock-down type restrictions are also easing and there are talks of opening up in some states. Heartened by the improving COVID-19 situation and the brilliant performance reported by India Inc for the last quarter of FY2021, the stock market rallied last month, with both the Sensex and the Nifty touching new peaks and yielding returns of 6.5% each during the month. Our business performance for the month reflected the buoyancy in the market as well as our relentless hard work, courage and commitment to work even in face of challenges. I congratulate you and your colleagues for the good monthly performance. Here is a look at the highlights of May 2021.

• In May, the average daily broking revenue grew by 9% month on month.
• Client additions recovered after a steep fall in April and improved by 4% month on month in May.
• Client activity improved by 15% month on month in the same period.
• The trailing 12-month active clients count reached 710.6K in May 2021, making a new high for the metric.
• About 12.2K branch-mapped broking clients were reactivated as part of the FFP in the last month.
• Our MF AUM crossed Rs.5,000 crore in May.
• Sharekhan emerged as the number one distributor of BNP Paribas Aqua Fund by contributing about Rs.30 crore to the new fund.
• Our EMF business grew by 14% month on month in May.
• As many as 27 branches achieved their annual EMF AUM target by the end of May.
• Sharekhan rolled out emergency ambulance service for the staff in May.
• An internal COVID-19 24x7 helpdesk was set up by the HR team for the company staff to assist those who need help with COVID-19 related matters.
• The HR team successfully organised the second edition of Open House in which over 500 Sherus participated last month.

In May, the average daily broking revenue grew by 9% month on month on the back of a growth in the market turnover in the cash and commodity segments. The growth could have been higher, given the buoyancy in the market and a 15% rise in daily client activity. But a loss of market share across segments and lower delivery volume limited the revenue expansion. Another positive aspect of the month’s performance is that after a steep fall of 32% in new client additions in April this year, new client additions recovered and showed a growth of 4% in May. With the market hitting life-time highs, the growth momentum will continue and June is also looking promising in terms of growth.

Sharekhan’s mutual fund (MF) assets under management (AUM) crossed a significant milestone of Rs.5,000 crore in May 2021 to end the month at Rs.5,282 crore. The achievement was possible due to record high net collections in the last two years (since July 2019). The total gross collection in May this year stood at Rs.256 crore and the net inflows were at Rs.115 crore. The Systematic Investment Plan flows rose during the month to Rs.49.19 crore. What’s more, in the recently concluded BNP Paribas Aqua Fund, Sharekhan ranked number one among the distributors, contributing close to Rs.30 crore to the fund whose total collections stood at about Rs.80 crore. I congratulate the entire front-line team as well as the Investment Solutions team for their brilliant efforts.

The Front Foot Programme (FFP) had another positive growth month in May this year. The trend of recording new highs for the trailing 12-month (TTM) active client count continued in May as the count touched 710.6K in the month. The FFP facilitated the reactivation of almost 12.2K branch-mapped clients during the month. What’s more, the efforts of the Business Partners resulted in the reactivation of another 4.3K clients in the same period.

The trend remains that reactivations are also good for revenue growth. Close to 3.6% of the clients who got reactivated in May have also traded in futures & options. Also, a large proportion of the reactivations have continued beyond just one or two transactions. Moreover, almost 41% of the reactivations that took place in May have conducted three or more transactions already. A few big initiatives and projects will be announced over the next couple of months for enhancing reactivations. Hearty congratulations to the entire front-line team as well as our Business Partners for the continued success.

In May, the AUM of our Exchange Margin Funding (EMF) business was stable at Rs.500 crore but the monthly peak funding touched Rs.516 crore for the first time ever. The EMF business registered a growth of about 14% month on month in May. Our Branch Network contributed almost 67% of the total funding while the Business Partner channel contributed the rest. In addition, as many as 27 branches achieved their full-year EMF AUM target by the end of May. That is amazing. I congratulate these branch teams for the excellent performance!

The safety and well-being of Sherus remain our main concern in these challenging times of COVID-19 pandemic. Expanding our list of COVID-19 relief initiatives, the Human Resource (HR) department introduced emergency ambulance services for employees and their dependents in collaboration with Stanplus Technologies Pvt. Ltd. (Stanplus) last month. The facility can be availed by dialling a dedicated toll-free number, 1800 120 03 80, subject to availability of ambulance. The HR department also set up a 24x7 internal COVID-19 support help desk for the staff in May. The help desk, functional 24 hours a day, seven days a week, is the single point of contact for support and coordination for various aspects related to COVID-19. The helpdesk may be reached via phone (08035021701) and e-mail (support@rigvedtech.com).

In addition, the HR team organised the second edition of Open House, an initiative to facilitate communication between the management and the staff, last month. All four directors including yours truly along with the Chief Human Resource Officer of the company updated the participants on the company’s COVID-19 preparedness through the virtual event. I was happy to see that more than 500 Sherus had logged in, many of whom even actively asked questions. I believe Open House is a great virtual platform for interacting with each other freely and staying connected in these work-from-home times.

The second wave of COVID-19 proved to be more devastating, resulting in a massive surge in the count of new positive cases across the country. It affected many Sherus and their families too. Under the circumstances, all members of the HR team, putting their personal difficulties aside, have been selflessly working to give succour to those staff who are affected by the pandemic. At the same time, they are doing everything possible to ensure the safety of the rest. I admire the great empathy, grit and commitment to work shown by the team in these tough times. I am deeply thankful to each and every member of the HR team for rising to the occasion and taking such good care of the Sharekhan family. Keep up the good work, Rajesh Shetty and team!

Sharekhan participated in the sixth APAC Fundraising Campaign that was launched last month. This was the second time that the company participated in the fundraiser that seeks to support three non-government organisations (NGOs) -- Teach for India (children’s education), Wildlife Conservation Trust (environment) and Goonj (COVID-19 relief) – this year. The staff can donate for the cause they believe in and the donation can be made in three ways: You may donate a fixed amount, salary days or leave days. Donations to all three NGOs will be eligible for 50% tax benefit under section 80G of the Income Tax Act. I urge all Sherus to participate in the activity and contribute whatever possible for a noble cause. The campaign is open till July 15, 2021.

With vaccination drive picking up pace, the COVID-19 situation continues to improve. However, as mentioned by the health ministry recently, we are dealing with highly transmissible variants of Coronavirus now; so containment, social distancing needs to be more stringent to limit the scope of transmission and mutation of the virus. I urge you to continue to follow all COVID-19 protocols. At the cost of repeating myself, maintain social distancing; wear a mask; stay indoors as much as possible; wash your hands frequently; keep rooms well-ventilated; and cough away from others into your elbow to stay safe. Continue to take care of yourself and your loved ones, do not let down your guard. Take precautions, stay safe.

Thank you.

Best regards,
Jaideep Arora