Anand Rathi Share & Stock Brokers Ltd Management Discussions

Global Economic Overview

The global economy enters 2026 in a state of guarded resilience. Growth has held up better than anticipated through 2025, supported by strong labour markets in advanced economies, continued technology-led capital expenditure, and a gradual easing of financial conditions. However, the underlying momentum remains uneven and increasingly sensitive to policy shifts and geopolitical developments.

According to the IMFs April 2026 update, global growth is expected to be at around 3.1% in 2026 and 3.2% in 2027, revising its 2026 forecast downward by 0.2 percentage points from the January 2026 update, primarily reflecting the impact of the Middle East conflict on commodity markets, inflation expectations and financial conditions. In contrast, the World Bank presents a more cautious assessment, projecting growth at 2.6% in 2026 with only a modest improvement thereafter. The divergence reflects differing assumptions on trade normalisation, fiscal support, and the durability of private investment. What is clear, however, is that the post-pandemic recovery remains incomplete, particularly across several emerging and developing economies where income levels have yet to fully recover.

Global inflation remains on a disinflationary path, although the pace of moderation has become uneven across regions. The easing in price pressures continues to be supported by the lagged impact of past monetary tightening, normalisation of supply chains and softer labour-market conditions in several economies. However, renewed geopolitical risks and the impact of the Middle East conflict on commodity markets have complicated the inflation outlook. In its April 2026, the IMF projected global headline inflation at 4.4% in 2026, before easing to 3.7% in 2027, noting that inflation is expected to rise modestly in 2026 before resuming its decline in 2027.

Monetary policy is gradually transitioning from a phase of synchronised tightening to cautious easing. While policy rates in major advanced economies remain elevated relative to pre-pandemic norms, central banks have begun to signal a shift towards supporting growth as inflation risks recede. Fiscal policy, however, remains constrained by elevated debt levels, limiting the scope for broad-based stimulus.

Geopolitics has re-emerged as a central macro variable. The escalation of tensions in West Asia, particularly disruptions around the Strait of Hormuz, has reintroduced volatility in energy markets and global trade routes. A sustained disruption could materially alter inflation dynamics and weaken global growth through higher input costs and reduced trade flows. In aggregate, the global economy appears stable but fragile-supported by cyclical tailwinds, yet exposed to structural and geopolitical fault lines.

Table 1: Global Macroeconomic Snapshot

Indicator	2024	2025E	2026E	2027E
Global GDP Growth (%)	3.2	3.2	3.3 (IMF) / 2.6 (WB)	3.2 (IMF) / 2.7 (WB)
Advanced Economies Growth (%)	1.6	1.7	1.8	1.8
Emerging Markets Growth (%)	4.3	4.2	4.2	4.3
Global Inflation (%)	5.7	4.1	3.8	3.5
US CPI Inflation (%)	4.1	3.2	2.6-2.8	2.3
Euro Area Inflation (%)	5.4	2.5	2.2	2.0
US Policy Rate (%)	5.25-5.50	4.75-5.00	4.00-4.25	3.50-3.75
ECB Deposit Rate (%)	4.00	3.25	2.50-2.75	2.00-2.25
Global Trade Growth (%)	2.4	3.0	2.8	3.0

Source: IMF WEO (Jan 2026), World Bank Global Economic Prospects (Jan 2026

Indian Economy: Performance and Outlook

Indias economic performance through FY2025-26 stands out in an otherwise uneven global landscape, underscoring the strength of its domestic growth drivers and improving macroeconomic fundamentals. Real GDP growth is estimated at 7.6% for FY2025-26, up from 7.1% in the previous year, reaffirming Indias position as the fastest-growing major economy. The expansion has been broad-based, with real Gross Value Added (GVA) rising by 7.7%, supported by a balanced contribution from manufacturing and services. Nominal GDP growth, at 8.6%, reflects both real expansion and a low inflation environment.

A defining feature of Indias growth trajectory has been its domestic orientation. Unlike earlier cycles that relied significantly on external demand-supply in critical areas, the current phase is anchored in resilient consumption, sustained government capital expenditure, and a gradual revival in private investment. Household balance sheets have strengthened over the past few years, aided by lower leverage, stable employment conditions, and improving income visibility. Corporate India, in parallel, has deleveraged meaningfully, with healthier profitability and balance sheets enabling renewed capital expenditure. The banking sector has also emerged stronger, with improved asset quality, higher capital adequacy, and a willingness to support credit growth. This alignment across households, corporates, and financial institutions has created a more durable investment cycle.

On the supply side, manufacturing has emerged as an increasingly important driver under the revised national accounts framework. Policy initiatives such as production-linked incentives, infrastructure expansion, and efforts to integrate India into global supply chains have begun to yield tangible outcomes. Capacity utilisation levels have improved, and sectors such as electronics, automobiles, and capital goods have seen sustained momentum. Services, however, continue to remain the backbone of the economy, with strong performance across trade, hospitality, transport, financial services, and professional services. The continued strength of services exports, particularly in IT and business services, has provided a steady source of external earnings.

Macroeconomic stability has further reinforced the growth narrative. Inflation moderated sharply through FY2025-26, with CPI inflation averaging significantly below the medium-term target for much of the year. The combination of favourable food supply conditions, improved agricultural output, adequate buffer stocks, and calibrated policy responses contributed to this benign inflation environment. During the March 2026 policy meeting, the Reserve Bank of India maintained the policy repo rate at 5.25% while retaining a neutral stance, reflecting a balanced approach between supporting growth and ensuring price stability. The low inflation regime has supported real incomes and consumption, thereby reinforcing domestic demand.

Indias external sector remained resilient, although not without areas of pressure. The current account deficit widened modestly to around 1.3% of GDP in Q3 FY2025-26, primarily due to a higher merchandise trade deficit. This was partly offset by strong net services exports and steady remittance inflows, both of which continue to provide structural support to the balance of payments. Foreign exchange reserves remain at comfortable levels, providing a significant buffer against episodes of global financial volatility.

The exchange rate has become an increasingly important transmission channel for global shocks. A weaker rupee raises the domestic cost of imports-particularly crude oil, LNG, fertilisers, electronics, and capital goods-thereby exerting upward pressure on inflation, corporate margins, and the fiscal position. While currency depreciation can enhance export competitiveness and increase the rupee value of remittances, for an energy-import-dependent economy such as India, the near-term macroeconomic impact is more likely to be inflationary, especially if accompanied by elevated global commodity prices.

Looking ahead to FY2026-27, the outlook remains constructive, though somewhat more sensitive to external developments than in the recent past. Growth is expected to remain in the range of 6.8-7.2%, supported by continued strength in domestic demand, ongoing infrastructure investment, and a gradual improvement in private capital expenditure. However, key risks stem from global factors-particularly the trajectory of crude oil prices, geopolitical developments in West Asia, exchange rate movements, and the potential pass-through of imported inflation.

At the same time, structural drivers remain firmly in place. Indias ongoing infrastructure push, rapid digitalisation, formalisation of economic activity, and expanding trade linkages through bilateral and multilateral agreements are likely to sustain medium-term growth. Increasing financialisation of household savings and deeper capital markets are also contributing to a more stable and diversified funding base for the economy.

In summary, the Indian economy enters FY2026-27 from a position of relative strength, characterised by robust domestic fundamentals, improving macroeconomic stability, and a gradually strengthening investment cycle. While external risks have become more pronounced, Indias policy framework, institutional resilience, and diversified growth drivers provide confidence that growth can be sustained at relatively high levels.

Table 2: India Macroeconomic Snapshot

Indicator	FY2024	FY2025	FY2026E	FY2027E
Real GDP Growth (%)	8.2	7.1	7.6	7.0
GVA Growth (%)	7.2	6.8	7.7	7.0
Nominal GDP Growth (%)	9.6	8.9	8.6	9.0
CPI Inflation (%)	5.4	3.5	2.1	4.0
Policy Repo Rate (%)	6.50	5.50	5.25	5.00
Fiscal Deficit (% of GDP)	5.8	5.6	5.1	4.8
Current Account Deficit (% of GDP)	1.0	1.1	1.3	1.5
Forex Reserves (US$ bn)	620	640	650	650
INR/USD (Avg)	82.5	83.5	84.0	85.0

Source: MoSPI, RBI, Economic Survey 2025-26, IMF estimates

Industry Overview: Indian Capital Market

Indias capital market has, over the past few years, transitioned from a liquidity-driven expansion to a structurally deepening financial ecosystem. The evolution is no longer defined solely by index performance or episodic inflows, but by a sustained broadening of participation, increasing institutionalisation of savings, and a widening array of capital formation channels. FY2025-26 reflects this transition with greater clarity: market activity remained elevated, but more importantly, the underlying drivers-household financialisation, domestic institutional flows, and diversified product penetration-continued to strengthen.

At the aggregate level, India remains among the largest equity markets globally by market capitalisation, supported by sustained economic growth, improving corporate balance sheets, and rising investor participation. Secondary market liquidity has remained robust even through phases of volatility, indicating that trading depth is now underpinned by structural domestic flows rather than transient global liquidity cycles. This marks a distinct shift from earlier periods when market direction and liquidity were disproportionately influenced by foreign portfolio investors.

Financialisation of Savings: The Structural Anchor

The most significant long-term driver of Indias capital market is the steady financialisation of household savings. Traditionally concentrated in physical assets such as real estate and gold, incremental household savings are increasingly being channelled into financial instruments-particularly equities, mutual funds, and other managed products. This shift is being enabled by rising per capita incomes, digital access to markets, simplified onboarding processes, and increasing awareness of long-term wealth creation through market-linked assets.

The expansion in demat accounts provides a tangible indicator of this behavioural change. The investor base has grown consistently across market cycles, suggesting that participation is no longer purely sentiment-driven. Importantly, Indias penetration levels remain significantly below those of developed markets, implying a long runway for further expansion as financial literacy improves and savings patterns evolve.

Table 3: Growth in Investor Base

Year / Period	Demat Accounts (crore)	Incremental Additions (crore)
FY2022	8.96	2.20
FY2023	11.45	2.49
FY2024	15.14	3.69
FY2025	19.24	4.10
FY2026	22.45	3.21

Source: CDSL, NSDL

This sustained growth, even during periods of market consolidation, indicates that investor onboarding is becoming structurally embedded rather than episodic. As income levels rise and capital markets play a larger role in household wealth creation, participation is expected to deepen further.

Primary Markets: Scale with Selectivity

Indias primary market has evolved into a robust and diversified platform for capital raising. After the post-pandemic surge and subsequent correction, the IPO market has demonstrated an ability to revive on a stronger footing, supported by domestic institutional flows and a deeper retail base.

FY2025 marked a significant rebound, with fundraising reaching approximately H 1.72 lakh crore. This momentum continued into FY2026, where mobilisation surpassed the previous years total within the first ten months, despite intermittent volatility and valuation recalibration. The issuance mix has also broadened, with strong participation from both mainboard and SME segments.

Table 4: IPO Market Trends

Year / Period	Number of IPOs	Funds Raised ( J lakh crore)
FY2022	120	1.12
FY2023	164	0.55
FY2024	243	0.62
FY2025	320	1.72
FY2026	366	1.90

Source: SEBI

The increasing diversity of issuers and sustained investor appetite indicate that the IPO market is becoming less dependent on favourable market cycles and more aligned with underlying economic and corporate growth trends. Going forward, issuance is expected to remain strong but more selective, with greater emphasis on valuations, earnings visibility, and governance standards.

Secondary Markets: Liquidity and Market Depth

Secondary market activity during FY2025-26 reflects both resilience and maturity. Equity cash market turnover remained stable across most of the year, even during phases of foreign outflows and heightened volatility. This stability highlights the growing role of domestic investors in sustaining market liquidity.

In parallel, derivatives activity has expanded significantly, with notional turnover consistently exceeding cash market volumes. The increasing use of derivatives for hedging and portfolio management suggests a shift towards more sophisticated market participation.

Table 5: Market Turnover Trends (FY2026)

Month	Equity Cash ADT ( J lakh crore)	F&O ADNT ( J lakh crore)
Apr 2025	1.09	460
Jul 2025	1.02	410
Oct 2025	1.06	480
March 2026	1.10	516
Source: SEBI

The divergence between stable cash-market turnover and elevated derivatives activity reflects a more layered market structure, where liquidity is complemented by active risk management and tactical positioning.

Institutional Flows: Domestic Capital as a Stabiliser

A defining structural shift in recent years has been the increasing dominance of domestic institutional investors (DIIs) in market flows. While foreign portfolio investors (FPIs) continue to influence short-term market movements, their role as the primary driver of liquidity has diminished.

During FY2026, FPIs remained net sellers for extended periods, reflecting global macro uncertainty, currency volatility, and shifting interest rate expectations. In contrast, DIIs provided consistent support, absorbing these outflows and stabilising market conditions.

Table 6: Equity Flows - FPI vs DII (FY2026 YTD)

Period	Net FPI Flow ( J crore)	Net DII Flow J ( crore)
FY 2025	(1,27,041)	6,08,035
FY 2026	(1,80,831)	8,49,758

Source: NSE

This rebalancing towards domestic capital enhances market resilience, reduces dependence on external liquidity cycles, and contributes to more stable price discovery over time.

Mutual Funds: The Core Transmission Channel

The mutual fund industry has emerged as the primary conduit for channelising household savings into capital markets. Growth in AUM has been accompanied by a sharp increase in investor participation, reflecting both market performance and sustained inflows.

Table 7: Mutual Fund Industry Snapshot

Indicator	Mar 2025	Mar 2026
Net AUM (H lakh crore)	65.74	73.73
Total Folios (crore)	23.45	27.39
Equity-oriented Folios (crore)	16.38	18.27
AUM to GDP (%)	19.9

Source: AMFI

Systematic Investment Plans (SIPs) have played a central role in this expansion, providing a steady and disciplined flow of capital into equities. Beyond scale, mutual funds have contributed to a qualitative shift in investor behaviour-from opportunistic trading to long-term, goal-oriented investing. Despite strong growth, penetration levels remain modest relative to global benchmarks, suggesting substantial scope for further expansion.

Alternative and Managed Capital

The capital market ecosystem has expanded meaningfully beyond traditional products, with strong growth in AIFs and PMS. These segments cater to more sophisticated investors and provide diversified investment strategies across private equity, credit, infrastructure, and hedge-fund-like approaches.

Table 8: Alternative and Managed Investments

Segment	Latest Data	Amount
AIF Category I	Dec 2025	H 0.98 lakh crore
AIF Category II	Dec 2025	H 11.64 lakh crore
AIF Category III	Dec 2025	H 3.12 lakh crore
PMS AUM	March 2026	H 41.41 lakh crore

Source: SEBI

The growth of these segments reflects increasing sophistication in capital allocation, particularly among high-net-worth investors, and adds depth to the broader market ecosystem.

Outlook: Towards a More Mature Market Structure

The trajectory of Indias capital market is increasingly shaped by structural rather than cyclical factors. Financialisation of savings, expansion of domestic institutional capital, and diversification of investment products are likely to remain the dominant themes over the medium term.

At the same time, the market is entering a phase of greater maturity. Valuations are likely to be more closely linked to earnings visibility and return metrics, while regulatory oversight and investor awareness are expected to curb excesses. The growing presence of long-term domestic capital should reduce volatility, but also impose greater discipline on both issuers and intermediaries.

Importantly, Indias capital market still operates below its full potential. Household participation remains low relative to population and income levels, mutual fund penetration lags global benchmarks, and alternative investment pools are still evolving. These gaps, however, represent opportunities rather than constraints. Overall, Indias capital market is transitioning into a more balanced and resilient system-where scale is complemented by depth, participation by discipline, and growth by sustainability.

Business Overview and Strategic Evolution

Anand Rathi Share and Stock Brokers Limited (ARSSBL) operates as a full-service, research-led brokerage franchise within the broader Anand Rathi financial services platform. Over time, the Company has evolved from a predominantly transaction-oriented intermediary into a more diversified financial services provider, with a business model that integrates broking, financing and distribution capabilities.

This evolution is not incidental. It reflects a deliberate strategic response to the inherent cyclicality of the broking business. Brokerage income, by its nature, is closely linked to market conditions-volumes, volatility, investor sentiment and asset prices. Periods of buoyant markets tend to drive elevated trading activity and brokerage revenues, while phases of consolidation or risk aversion typically result in moderation. Recognising this structural characteristic, ARSSBL has progressively recalibrated its operating model to reduce reliance on purely transaction-driven income and build a more stable, diversified and scalable revenue base.

At the core of this strategy is a three-pillar business architecture: (i) Broking Services, (ii) Margin Trading Facility (MTF), and (iii) Distribution of Investment Products. While broking continues to anchor client acquisition and engagement, the increasing contribution of non-broking segments reflects a conscious shift towards improving revenue stability and enhancing structural growth.

Revenue Mix: From Cyclicality to Balance

The transformation of ARSSBLs business model is most clearly visible in the evolution of its revenue composition. Over the past five years, the relative contribution of broking income has declined, while non-broking income streams have grown steadily in both absolute and relative terms.

Table 9: Revenue Mix Evolution

Particulars ( J Mn.)	FY2022	%	FY2023	%	FY2024	%	FY2025	%	FY2026	%
Broking Segment	3,061	72.3	3,173	67.8	4,578	67.1	5,103	60.3	4,755	51.0
Non-Broking Segment	720	17.0	1,050	22.4	1,323	19.4	1,926	22.8	2,644	28.4
Other Income	452	10.7	456	9.8	917	13.5	1,428	16.9	1,923	20.6
Total Income	4,234	100	4,678	100	6,818	100	8,457	100	9,322	100

Source: Company Data

Note: Differences in totals, if any, are on account of rounding off.

Two clear trends emerge from this trajectory. First, broking income, while still the largest contributor, has declined from over 72% of total income in FY2022 to approximately 51% in FY2026. Second, non-broking income and other operating income have expanded meaningfully, together accounting for nearly half of total income. This shift is strategically significant. It reflects a gradual decoupling of overall revenue performance from short-term market cycles and a movement towards a more balanced and resilient income profile. The Companys stated objective of bringing broking contribution closer to 50% over time underscores this direction.

Broking Services: Scale with Cyclicality

Broking remains the foundational business of ARSSBL, serving as the primary interface for client acquisition, engagement and transaction execution. The Company offers access across equity cash, derivatives, commodities and currency markets through an integrated platform, supported by research and advisory capabilities.

Table 10: Distribution and Operating Scale

Metric	FY2025	FY2026
Owned Branches	90	98
Authorised Persons	1,125	1,085
Cities Covered	300	307
Employees	2,082	2,214
Sales/Non-Sales Mix	62:38	61:39

Source: Company Data

Broking income during FY2026 contracted by 6.8% to stand at H 4,755 million, as compared to H 5,103 million in the previous year, as the Indian capital markets experienced a period of moderation after several years of strong performance. Within the Broking segment, the equity cash segment continued to remain dominant, contributing over 50% of brokerage income, underscoring the strength of the delivery-led franchise.

However, the more important insight lies not in absolute growth, but in relative contribution. The moderation in brokings share of total income is aligned with the Companys strategy of diversifying revenue streams. This indicates that growth in other segments is outpacing broking, thereby reducing overall earnings volatility. Operationally, the broking business is supported by a hybrid distribution architecture combining physical presence, authorised persons (APs) and digital platforms.

This multi-channel model allows ARSSBL to combine relationship-led engagement with scalability and geographic reach. The AP network, in particular, continues to be a critical driver of client acquisition and engagement, contributing over 62% of brokerage revenue.

Digital platforms have also gained traction, contributing approximately 37.3% of brokerage income in FY2026, as compared to 36.6% in FY2025. While this represents only a marginal increase in share, it indicates a steady shift towards digital engagement without displacing the relationship-led model. The coexistence of digital and relationship channels reflects a nuanced approach: scalability through technology, complemented by advisory depth through human engagement.

Table 11: Channel Mix in Broking Revenue

	FY2025	FY2026
Channel	Contribution	Contribution
Authorised Persons	63.4%	62.7%
Digital Platforms	36.6%	37.3%

Source: Company Data

Another key strength of the broking business lies in its research capability. The Company produced 1,075 fundamental research reports and 1,928 technical calls during FY2026, supported by an expanded research team of 72 professionals. This reinforces its positioning as an advisory-led franchise rather than a purely transactional intermediary. Importantly, client asset growth remains strong. Assets under custody increased by 16.0% year-on-year to H 944.16 billion, indicating continued client trust and deeper engagement.

Table 12: Client Asset Growth

Metric	FY2025	FY2026	Growth (%)
Assets Under Custody	813,685	944,155	16.0%
(H Mn.)

Source: Company Data

While broking remains cyclical, these structural strengths-scale, distribution, research capability and client asset growth-provide a strong foundation. However, the Companys strategy clearly recognises that broking alone cannot deliver stable, long-term earnings visibility.

Margin Trading Facility: Enhancing Monetisation and Stability

The Margin Trading Facility (MTF) represents a critical bridge between transactional and annuity-like income streams. By enabling clients to leverage their positions in the equity cash segment, ARSSBL moves beyond execution into financing, thereby deepening client relationships and enhancing revenue visibility.

The MTF business has scaled rapidly, with the loan book growing by over 60% year-on-year. This growth reflects both increased client adoption and the strategic relevance of the product. Unlike broking, which is volume-dependent, MTF generates interest income linked to outstanding exposures, thereby introducing a more stable and predictable revenue stream.

From a strategic perspective, MTF serves multiple purposes:

Enhances client stickiness by integrating financing with trading

Increases wallet share from active clients

Improves monetisation of existing relationships

Reduces dependence on pure transaction volumes

As market participation deepens, particularly in the equity cash segment, MTF is likely to remain a key lever for both growth and stability.

Table 13: Margin Trading Facility Growth

Metric	FY2025	FY2026	Growth (%)
MTF Book (H Mn.)	6,855	11,019	60.7%

Source: Company Data

Distribution Business: Structural Growth Engine

The distribution of investment products represents the third pillar of ARSSBLs diversification strategy and is arguably the most structurally significant from a long-term perspective. Through this segment, the Company offers a wide range of third-party products-including mutual funds, AIFs, PMS, bonds, structured products and insurance-enabling clients to access diversified investment solutions beyond direct market participation. The scale of this business has expanded meaningfully, with assets under management growing by over 20% year-on-year.

Table 14: Distribution Business Growth

Metric	FY2025	FY2026	Growth (%)
AUM (H Mn.)	64,598	77,876	20.6%
Source: Company Data

This growth is significant not just in magnitude, but in its implications. Unlike broking, distribution revenues are less sensitive to market volumes and more aligned with client assets and long-term investment behaviour. This introduces a structural element of stability into the revenue mix.

Additionally, the distribution business enables:

Deeper client engagement across life-cycle needs

Diversification of revenue streams

Cross-selling opportunities across product categories

Higher client retention and stickiness

The inclusion of insurance and other non-market-linked products further enhances this stability, as it introduces elements of protection and long-term planning into the client relationship.

Strategic Synthesis: Towards a More Resilient Model

The evolution of ARSSBLs business model reflects a clear strategic intent: to transition from a predominantly cyclical, transaction-driven brokerage model to a more balanced, diversified and structurally resilient financial services platform. Three interlinked shifts define this transition:

1. From Transaction to Relationship: The emphasis is increasingly on deepening client relationships through advisory, research and multi-product engagement rather than relying solely on transaction volumes.

2. From Broking to Integrated Services: The expansion into MTF and distribution businesses enables participation across a larger share of the client wallet, enhancing both revenue potential and stability.

3. From Cyclical to Structural Growth: While broking remains inherently cyclical, the growing contribution of financing and distribution businesses introduces more predictable income streams and reduces overall volatility.

The narrowing gap between broking and non-broking income is not merely a statistical shift; it is a reflection of this broader strategic realignment.

Balancing Scale with Stability

ARSSBLs operating trajectory illustrates a thoughtful response to the structural realities of the broking industry. Rather than attempting to mitigate cyclicality within broking alone, the Company has expanded its business architecture to include complementary segments that provide both stability and growth. Broking continues to deliver scale, client acquisition and engagement. MTF enhances monetisation and introduces financing-led stability. Distribution builds long-term relationships and drives structural growth. In combination, these elements create a more balanced and resilient operating model-one that is better positioned to navigate market cycles while participating in the long-term expansion of Indias capital markets and financial savings ecosystem.

Credit Rating

ARSSBLs credit profile was independently assessed by CARE Ratings Limited, which assigned a rating of CARE A; Stable for the Companys long-term bank loan facilities aggregating H 1,400 crore and upgraded the rating to CARE A1+ for its H 200 crore commercial paper programme.

The rating rationale reflects ARSSBLs strong operational and financial linkages with Anand Rathi Financial Services Ltd., the established track record and presence of the broader Anand Rathi Group in capital market businesses, its diversified business risk profile, sound risk management systems and experienced senior management. The rating agency has also taken into consideration the Companys adequate capital position for its current and planned operations, supported by the strengthening of the capital base following the IPO and the resultant improvement in net worth.

ARSSBL believes that the assigned and reaffirmed ratings reflect the strength of the Companys business franchise, the prudence of its risk management framework and the adequacy of its capitalisation to support our growth strategy in a disciplined manner.

Risk Management

ARSSBL operates in a dynamic and highly-regulated capital markets environment, where effective risk management remains integral to long-term sustainability, financial discipline and stakeholder confidence. Accordingly, the Companys risk management framework is designed to support business resilience, safeguard client interests, preserve capital efficiency and enable disciplined growth across our core and adjacent business verticals. The Companys diversified operating model, strengthened capital base, multi-channel distribution network and established risk management systems together provide an important foundation for identifying, assessing and managing risks across the business.

RISK	DESCRIPTION	MITIGATION STRATEGY
Macroeconomic and Capital Market Risk	ARSSBLs performance remains intrinsically linked to capital market activity, investor participation, trading volumes and the broader macroeconomic environment. Periods of market volatility, weak sentiment or lower investor activity may affect transaction intensity, client engagement and revenue visibility across the business.	The Company seeks to mitigate this risk through a diversified operating platform spanning broking, margin funding and distribution of investment products, supported by a relatively mature client base and a multi asset product suite. This diversification helps reduce dependence on any single revenue stream and supports greater operating resilience across market cycles.
Funding and Liquidity Risk	Balance sheet led businesses, particularly the Margin Trading Facility, require continued access to liquidity and prudent capital deployment. Any tightening in funding conditions, increase in borrowing costs or pressure on liquidity may affect the pace of expansion in such businesses.	ARSSBL follows a prudent approach to capital and liquidity management. The strengthening of the capital base following the IPO in September 2025, together with the proposed deployment of funds towards long term working capital requirements, enhances financial flexibility and supports calibrated growth in funding backed businesses.
Regulatory and Compliance Risk	The Company operates under a comprehensive regulatory framework governing broking, research, margin funding and product distribution. Changes in regulations, intensification of supervisory oversight or compliance related lapses may affect operating flexibility, cost structures and business continuity.	ARSSBLs operating framework is supported by established risk management systems, an experienced management team and a compliance oriented control environment designed to ensure adherence to applicable regulatory requirements and enable timely responses to regulatory changes.
Technology and Cyber Risk	Client acquisition, execution and servicing are increasingly supported by digital platforms and technology infrastructure. Any system disruption, cyber incident or technology failure may affect client experience, business continuity and reputation.	The Company continues to strengthen its digital and operational infrastructure as part of its broader business architecture. Ongoing investment in technology is intended to enhance resilience, scalability, security and service delivery across systems.
Competition Risk	ARSSBL operates in a highly competitive and fragmented broking industry, facing competition from both traditional full service players and low cost digital brokers, which may impact pricing, acquisition costs, retention dynamics and brokerage yields.	Competitive positioning is supported through a relationship led servicing approach backed by research driven engagement, a diversified product suite and a broad distribution footprint. Long standing client relationships and an established brand remain key differentiators.
Operational Risk	The business is delivered through an extensive operating architecture comprising branches, authorised persons, relationship managers and digital platforms. Operational risks may arise from process gaps, human error, control failures or service disruptions.	Risk management systems, management oversight and a diversified delivery model support disciplined execution. The presence of both physical and digital channels provides operational redundancy and supports continuity in client servicing.
Client and Reputation Risk	As a financial intermediary, the business is built on trust,servicequalityandsustainedclientrelationships. Any deterioration in customer confidence, service standards or external perception may affect franchise strength and growth momentum.	An established brand, advisory led service model, long standing relationships and diversified product offerings support deeper engagement and retention. Emphasis remains on service quality, research support and product breadth.
Business Concentration Risk	While progress has been made in expanding non broking businesses, broking has historically been the core business and continues to account for a significant share of operating revenue, exposing performance to overall market conditions.	Adjacent businesses such as Margin Trading Facility and financial product distribution are being strengthened to diversify the revenue mix and enhance overall resilience.

ARSSBL believes that a disciplined and forward-looking approach to risk management is central to preserving business resilience and creating sustainable long-term value. As the Company continues to scale its franchise across broking, margin funding and financial product distribution, it remains focused on maintaining prudent controls, sound capital deployment, regulatory discipline and a strong client-centric operating framework. The diversified business model, strengthened capital position and established risk management systems provide a sound foundation to navigate an evolving market and regulatory environment.

Internal Control Systems and their Accuracy

ARSSBL believes that a robust internal control framework remains fundamental to preserving stakeholder trust, supporting sustainable growth and maintaining operational and financial

discipline. Accordingly, the Company has established internal

control systems that are commensurate with the scale, nature

and complexity of our operations.

As a diversified financial services platform engaged in broking,

margin trading facility and distribution of investment products,

the Companys control environment is designed to support

the orderly conduct of business, safeguard assets, ensure the

integrity of financial reporting, facilitate operational efficiency

and strengthen compliance with the applicable regulatory

framework. ARSSBLs operating architecture spans branches,

authorised persons and digital platforms, and accordingly, its

internal control framework is oriented towards maintaining

disciplined execution across distributed service channels and

business lines. This control environment is supported by sound

risk management systems, an experienced senior management

team and an established governance orientation.

The Company continues to strengthen its operating resilience through the use of digital platforms and technology-enabled service infrastructure. The client engagement and service delivery model is supported by proprietary digital interfaces such as TradeMobi, AR Invest, AR MF and TradeXpress, alongside ARSSBLs physical network. This integrated physical and digital - phygital - architecture supports scalability while also necessitating a strong focus on process discipline, technology governance and operational continuity.

As its businesses continue to grow, ARSSBL will continue to further strengthen its internal control environment in line with the evolving scale of operations, regulatory requirements and technology-led business processes.

Human Resources

Human capital remains a critical enabler of ARSSBLs relationship-led, research-backed and technology-enabled business model. The operating platform is built on client engagement, advisory support, execution capability and service quality, all of which depend substantially on the quality, experience and commitment of its people. Accordingly, talent is regarded as a strategic asset in sustaining business growth and franchise strength, and the Company is committed to fostering an enriching and growth-oriented work environment.

The Companys people strategy is aligned to the requirements of a full-service financial services franchise, requiring a balanced mix of relationship management skills, product knowledge, market insight, research capability, execution discipline and digital adaptability. Attracting and retaining relationship managers continues to be a strategic priority, reflecting their central role in strengthening client relationships, enhancing wallet share and driving long-term growth.

A strong entrepreneurial spirit and a close-knit family culture have remained the core foundations of ARSSBLs continued success. Employees are empowered with tools and operational autonomy to realise their potential, supporting growth at both individual as well as organisational levels. Sustained efforts to enhance the workplace environment have earned the Company the Great Place to Work accolade for 5 consecutive years, underscoring its commitment to a positive and productive culture.

As of March 31, 2026, ARSSBL had 2,214 permanent employees in our workforce. As operations continue to scale, the Company plans to further invest in talent, strengthen execution capabilities and align its people agenda with evolving business needs.

Business Outlook

ARSSBL remains confident in the long-term potential of Indias capital markets. Its position as an established full-service broking house, supported by a diversified operating model across broking, margin funding and financial product distribution, provides a broader and more resilient foundation compared to a purely transaction-led intermediary.

With a pan-India presence across branches, authorised persons and digital platforms, ARSSBL is well positioned to serve clients across geographies and investor segments. The research-led, relationship-oriented service model continues to differentiate the Company in an increasingly competitive landscape. The maturity of the client base and emphasis on advisory-led engagement provide scope for deeper wallet share, better monetisation and improved operating stability over time.

The Company remains committed to investing in its reach, talent, technology capabilities and brand strength to deliver sustained value to all stakeholders.