hdfc asset management company ltd Management discussions
A. Economic environment
A.1.Global
The global economy and capital markets experienced a volatile FY 22-23. The global growth on the upside came as a surprise at the start of the year, supported by a rebound in services consumption and a lower-than-anticipated moderation in goods demand. However, broad based inflationary pressures and sharp rise in energy prices following the outbreak of the
Ukraine Russia conflict impacted economic activity. To rein in inflation, the central banks of major economies aggressively raised policy rates and commenced quantitative tightening.
Most governments also scaled back fiscal stimulus as economic activities normalised. Resilient demand, tight labour markets across major Advanced Economies (AEs), the Ukraine-Russia situation and the dynamic Zero COVID policy of China kept commodity prices and inflationary pressures elevated in the first half. However, as the year progressed, commodity prices corrected in view of a softening growth outlook, synchronised tight monetary policy response and scaling back of fiscal stimulus, thereby easing the inflation momentum. However, resilient demand conditions kept the inflation relatively elevated.
Global commodity prices
Commodity prices saw a broad-based increase as a fallout of the
Russia Ukraine conflict, which intensified further due to growth momentum. However, accelerated monetary tightening, weakness in Chinas growth and expectations of a global growth slowdown led to a sharp price correction in the latter half. Most industrial commodities ended FY 22-23 lower year-on-year, and significantly below the peak witnessed during the year. Gold prices, which were range-bound for most part of the year, saw an increase in the last quarter due to a decline in the US yields, and uncertainty after the failure of a few banks in the US and Europe.
| % Change (YoY) | Price ($)* | FY 21-22 | FY 22-23 |
| Brent Crude (per barrel) | 79.8 | 69.8 | (26.1) |
| Gold (per ounce) | 1,969 | 13.5 | 1.6 |
| Steel (per tonne) | 655 | 9.9 | (21.6) |
| Zinc (per tonne) | 2,907 | 52.4 | (31.8) |
| Copper (per tonne) | 8,935 | 16.8 | (13.6) |
| Aluminium (per tonne) | 2,377 | 59.1 | (31.7) |
| Lead (per tonne) | 2,145 | 24.4 | (11.8) |
Source: Bloomberg. *Market prices as on March 31, 2023.
Both equity and debt markets delivered negative returns in most major economies on account of the uncertainty about the inflation trajectory, falling global liquidity, slowing growth and the growing prospects of central banks keeping interest rates higher for longer. The United States relative robust growth and tight monetary policy, along with its safe haven status, resulted in the US dollar strengthening against most other currencies during the year.
Key capital market developments in FY 22-23
• Imposition of sanctions on Russia by the US, EU and allied economies in response to the Ukraine-Russia conflict; Russia reduces supply of natural gas to EU.
• Bond index providers do not include Indian sovereign debt in the global bond indices.
• UK pension funds faced turbulent times as yields rose sharply on announcement of unfunded fiscal stimulus; situation resolved as the measures were rolled back and Bank of England stepped in to calm the market.
• Organisation of Petroleum Exporting Countries (OPEC) announced production cut of two Million barrel per day (mbpd) in October 2022, and another cut of 1.2 mbpd in April 2023.
• China eases COVID-19 restrictions at a fast pace since December 2022.
• Bank of Japan (BoJ) relaxes the band of Yield Curve Control (YCC) from (+/-) 25 bps to (+/-) 50 bps with unchanged target at 0%.
• Global banking experiences turmoil, following a series of bank collapses in the US and Europe.
• In India, capital gains from the sale of debt mutual fund units to be taxed as Short Term Capital Gain (STCG); indexation benefit removed.
• Income from non-ULIP insurance policy with a aggregate premium over H 5 Lakh p.a. made taxable as STCG.
A.2. India
Growth: Indias Gross Domestic Product (GDP) growth normalised in 9MFY23, owing to a broad-based, post-pandemic recovery led by private consumption and investment activity. Government consumption fell marginally (9MFY22: 4.4%) due to benign spending by both central and state governments. Resilient domestic demand and a slowdown in global trade resulted in import growth outpacing exports. On the Gross Value Added (GVA) side, agriculture continued to grow at a steady pace, while pick up in hospitality and trade services supported growth in services. Manufacturing activity decelerated sharply partly due to high base and softening trade exports, while growth in construction activities normalised.
| YoY Growth (%) | 9MFY22 | 9MFY23 |
| Real GDP | 11.1 | 7.7 |
| Private Consumption | 13.8 | 9.5 |
| Government Final Consumption | 4.4 | -0.9 |
| Gross Capital formation | 25.1 | 10.5 |
| Gross Fixed Capital Formation | 19.1 | 12.6 |
| Exports | 32.0 | 14.3 |
| Imports | 28.7 | 22.8 |
| GDP Growth Ex GFCE | 11.9 | 8.7 |
| Rs (in Crore) | ||
| YoY Growth (%) | 9MFY22 | 9MFY23 |
| Real GVA | 10.7 | 7.2 |
| Agriculture, Forestry and Fishing | 3.3 | 3.0 |
| Industry | 15.8 | 3.8 |
| Manufacturing | 15.6 | 0.4 |
| Construction | 20.0 | 10.0 |
| Services | 10.3 | 10.4 |
| Trade, Hotels, Communication, etc. | 18.0 | 16.1 |
| Core GVA (GVA ex agriculture and PADO) | 12.4 | 7.9 |
Source: CMIE. PADO Public administration, defence and other services; GVA Gross Value Added, GDP Gross Domestic Product.
Going forward, Indias growth is likely to be supported by resilience in private consumption along with a pick up in private capex. Government spending is likely to be directed towards capex, while growth in revenue expenditure is expected to stay benign. In view of the expected slowdown in AEs and steady domestic demand, merchandise exports could weaken more than imports, thereby acting as a drag on growth. However, services exports, which has recorded a substantial improvement in the past year (driven by robust growth in IT as well as professional, business and management consulting services), are likely to grow at a reasonable pace, thereby supporting the current account. Overall, Indias growth is likely to be moderate but should continue to be better than that of most other major economies.
External sector: Indias Current Account Deficit (CAD) widened significantly in 9MFY23 as higher oil and Non Oil Non Gold (NONG) imports negatively impacted trade deficit, partially offset by a significant improvement in invisible exports. Higher crude volumes due to normalisation in economic activities along with elevated oil prices pushed net oil imports higher. NONG deficit increased, primarily driven by resilient domestic demand together with higher imports of coal, engineering goods and fertilisers, as well as increased commodity prices. Invisible exports registered a strong growth, driven by an improvement in IT services and business, management and professional consulting services, along with increase in remittances. Capital flows declined on the back of lower loans (External Commercial
Borrowings (ECB) and trade credit) as interest rates hardened globally. Further, the one off receipt of Special Drawing Rights (SDRs) from the IMF (~$18 Billion) which boosted capital flows in FY 21-22 was also missing in the current year. This was partially offset by an increase in banking capital.
| IndiasExternal Balance Situation | 9MFY22 | 9MFY23 |
| ($ Billio n) | ||
| Trade (Deficit)/Surplus | (135.0) | (214.0) |
| Net Oil Imports | (66.4) | (94.9) |
| Net Gold Imports* | (33.2) | (28.0) |
| Trade Deficit Ex Oil and Gold | (35.4) | (91.0) |
| (NONG) | ||
| Net Invisible Exports Surplus/ (Deficit) | 109.7 | 147.0 |
| Deficit CurrentAccount | (25.3) | (67.0) |
| % of GDP | -1.1 | -2.7 |
| Capital Account Surplus / (Deficit) | 88.8 | 52.3 |
| FDI | 24.8 | 21.7 |
| FII | (1.6) | (3.5) |
| Deposits, External Borrowings, etc. | 10.5 | 3.6 |
| Trade Credit | 13.3 | 8.1 |
| Banking Capital | 9.4 | 20.3 |
| Others | 32.4 | 2.1 |
| Balance of Payments | 63.5 | (14.7) |
Source: CMIE. * Includes net imports of gold, silver and precious stones adjusted for gems and jewellery exports.
*FDI – Foreign Direct Investment, FII – Foreign Institutional Investor
In view of correction in commodity prices, especially coal and oil and fertilisers, trade deficit is likely to improve in the coming year. Further, cooling off in domestic demand, along with resilient services exports (including IT, tourism, professional and business management consulting services) bode well for the current account. Outlook on capital flows remain uncertain in view of ensuing global liquidity tightening. Overall, Indias balance of payments is likely to improve sequentially in FY 23-24. Further, comfortable foreign exchange reserves with the RBI should keep the Indian rupee stable. Fiscal Deficit: For FY 22-23, the central government remains on track to achieve the revised estimate (RE) target of 6.4% of fiscal deficit. Revenue growth remained robust, driven by buoyant direct tax and GST collections, partially offset by higher state transfers. The strong recovery in economic activities, robust corporate profitability, stabilisation of the GST regime and improved compliance boosted tax revenues. While non-tax revenues were on course to cross the revised estimates, driven by higher-than-estimated dividend payments by Public Sector Units (PSUs), capital receipts are likely to undershoot revised estimates. Meanwhile, capital expenditure registered strong growth, given the central governments thrust on public capex-led spending to ‘crowd in private capex. Revenue expenditure increased mainly due to higher interest and subsidy outgo.
| FYTD Ending | Feb-21 | Feb-22 | Feb-23 | Change (YoY) | 2-YR CAGR | 3-YR CAGR |
| Gross Tax Revenue | 16,653 | 22,748 | 25,473 | 12.0% | 23.7% | 14.9% |
| Total Direct Tax | 7,226 | 11,077 | 12,874 | 16.2% | 33.5% | 16.9% |
| Total Indirect Tax | 9,427 | 11,671 | 12,599 | 8.0% | 15.6% | 13.1% |
| Less: Share of States and Others | 4,492 | 7,939 | 8,151 | 2.7% | 34.7% | 13.1% |
| Net Tax Collection | 12,161 | 14,809 | 17,322 | 17.0% | 19.3% | 15.8% |
| Non- Tax Revenue | 1,542 | 3,101 | 2,486 | -19.8% | 27.0% | -1.9% |
| Total Revenue Receipts | 13,703 | 17,910 | 19,808 | 10.6% | 20.2% | 12.9% |
| Total Capital Receipts | 428 | 363 | 589 | 62.4% | 17.3% | 4.9% |
| Total Receipts | 14,131 | 18,273 | 20,397 | 11.6% | 20.1% | 12.6% |
| Total Revenue Expenditures | 24,134 | 26,587 | 29,034 | 9.2% | 9.7% | 10.3% |
| Total Capital Expenditures | 4,053 | 4,852 | 5,902 | 21.7% | 20.7% | 24.7% |
| Total Expenditures | 28,186 | 31,439 | 34,936 | 11.1% | 11.3% | 12.3% |
| Gross Fiscal Deficit | -14,055 | -13,166 | -14,539 | 10.4% | 1.7% | 11.9% |
| Fiscal Deficit as % of GDP | -7.1% | -5.6% | -5.4% |
Source: CMIE
For FY 23 24, the fiscal deficit target of 5.9% appears achievable, unless economic growth surprises significantly on the downside
Inflation: In FY22-23, the Average Consumer Price Index
(CPI) inflation increased by ~120 bps to 6.7% YoY, primarily driven by higher prices for food items such as cereals, milk, spices and vegetables. Fuel & Light inflation remained elevated as prices of LPG, firewood, kerosene, etc. continued to rise Transportation & Communication inflation saw a decline as the government reduced taxes on auto fuels and kept their retail prices unchanged, despite higher crude oil prices. Core inflation inched higher by the pass-through of increased input costs and with robust demand. The key contributors of higher core CPI were clothing and footwear, education services, and personal care items.
| Average, YoY (%) | FY 21-22 | FY 22-23 | Change in % |
| CPI | 5.5 | 6.7 | 1.2 |
| Food & Beverages | 4.3 | 6.7 | 2.4 |
| Fuel & Light | 11.3 | 10.4 | -0.9 |
| Housing | 3.7 | 4.3 | 0.6 |
| Transportation & Communication | 10.1 | 5.9 | -4.2 |
| Core CPI@ | 5.7 | 6.7 | 1.0 |
Source: CMIE. @Core CPI – CPI ex. of Food and beverages, fuel and light, transportation and housing.
Given the favourable base, correction in commodity prices, softness in domestic growth, and tighter monetary conditions, inflation is expected to decelerate in FY 23 24. Moreover, input pricing pressures are abating. However, food inflation is unpredictable, and is subject to disruptions due to weather conditions.
Summary and conclusion
. The financial year gone by turned out to be quite different from expectations. On one hand, global economic growth sustained reasonably well as the pent-up demand, strong household balance sheets and low unemployment kept consumption steady. On the other, the world experienced events of scale unprecedented events such as wars, persistent inflation, sharper and faster rate hikes, bank failures in the US and Europe, pension fund crisis in the UK, among others. Going forward, global growth is expected to slow down, as the world reels under sustained high interest rates and demand normalises, partially offset by the reopening of China, which could unleash pent-up spending. In India, growth is likely to be moderate, weighed down by slowing global trade, lower fiscal impulse and demand normalisation. The external sector remains modestly vulnerable to the continued global liquidity tightening, but remains well-cushioned by foreign exchange reserves. The key risks to our view are escalation of geopolitical tensions, excessive tightening by central banks, sharp rise in energy prices, persistent inflation, significantly below-normal monsoon.
Equity market
IndianequitiesendedFY22 23flat YoY, caught between two conflicting forces. Relatively strong domestic growth, robust corporate earnings, optimistic growth outlook, large inflows into domestic institutional investors supported equities. However, accelerated monetary tightening by major central banks, volatility in commodity prices, large Foreign Portfolio Investment (FPI) selling, etc. weighed it down. Midcaps performed largely in line with large caps, but small caps underperformed. Among the key sectors, Capital goods, FMCG, Auto, and Banking outperformed while IT, Metals, Power, Healthcare, and Oil & Gas underperformed. The performance of major global equity indices was mixed with European equities performing better than the US and Asian markets.
Performance of key domestic and global indices
| % Change in Indices | FY 21-22 | FY 22-23 |
| S&P BSE India Auto | 8.1 | 17.5 |
| S&P BSE India Bankex | 11.2 | 10.2 |
| S&P BSE India Capital Goods | 30.4 | 25.0 |
| S&P BSE India FMCG | 3.6 | 23.6 |
| S&P BSE India Healthcare | 14.0 | (10.0) |
| S&P BSE India Metal | 55.9 | (14.2) |
| S&P BSE India Power | 63.4 | (10.8) |
| S&P BSE India Oil & Gas | 26.5 | (7.2) |
| S&P BSE India IT | 37.1 | (21.8) |
| S&P BSE SENSEX | 18.3 | 0.7 |
| NIFTY 50 | 18.9 | (0.6) |
| NIFTY Midcap 100 | 25.3 | 1.2 |
| NIFTY Small Cap | 28.6 | (13.8) |
| % Change in Indices | FY 21-22 | FY 22-23 |
| S&P 500 | 14.0 | (9.3) |
| Nasdaq | 7.4 | (14.1) |
| FTSE | 11.9 | 1.5 |
| DAX | (4.0) | 8.4 |
| CAC | 9.8 | 9.9 |
| Nikkei | (4.7) | 0.8 |
| Hang Seng | (22.5) | (7.3) |
| KOSPI | (9.9) | (10.2) |
| Shanghai | (5.5) | 0.6 |
| MSCI Emerging Market Index | (13.3) | (13.3) |
Source: Bloomberg
Foreign Portfolio Investors (FPIs) and Domestic Institutional
Investors (DIIs) flows:
FPIs sold equities worth $6.3 Billion in FY 22-23, compared to net selling of $17.1 Billion in FY 21 22. This was more than offset by
DII buying (mainly insurance and mutual funds). DIIs bought equities of $32.2 Billion, compared with the $29.5 Billion bought in FY 21-22.
Valuation divergences has narrowed: The valuations for major sectors are close to or higher than long-term averages as shown in the table below:
| 12-Month Forward Price To Earnings | |||
| FY 22-23# | LTA | Discount / Premium (%) ^ | |
| Cement | 33.0 | 20.7 | 59.5 |
| Consumer Staples* | 51.1 | 38.1 | 34.2 |
| Consumer Discretionary | 54.2 | 41.0 | 32.4 |
| IT Services | 21.2 | 18.5 | 14.7 |
| Auto | 18.6 | 16.4 | 13.3 |
| Oil & Gas $ | 12.3 | 11.5 | 7.6 |
| Pharma | 21.7 | 21.5 | 0.9 |
| Tobacco | 22.8 | 22.8 | 0.2 |
| Private Banks@ | 2.4 | 2.4 | (1.9) |
| PSU Banks@ | 1.1 | 1.2 | (8.2) |
| Metals& | 8.7 | 9.9 | (12.2) |
| Electric Utilities | 10.2 | 12.6 | (19.1) |
Source: Kotak Institutional Equities. Stocks are part of Kotak Institutional Equities universe. LTA – 15-Year average.
Cells in green are sectors which are trading at premium while in red are ones which are trading at discount relative to long term average. All figures are calculated based on 12 months forward estimates. # as on March 31, 2023. *ex tobacco; ^to Long term (LT) average, @ Price to Book value. & P/E is a misleading indicator as earnings reflect cyclical peak and hence the sector appears at a discount to LTA. $ Oil & Gas sector PE is high mainly due to one company. Excluding that, the multiple is 5.7x vs 15-year average multiple of 8.8x.
Outlook
As on March 31, 2023, the NIFTY 50 was trading at ~18.9x FY24E and ~16.3x FY25E earnings. The valuation multiples have moderated from their recent peak and are now close to their historical averages. Indias market cap-to-GDP (CY23E) stood at ~85%, off its peak and within the historical range of past decade (70-100%). The gap between 10Y G-sec yield and 1Y-Forward NIFTY 50 earnings yield* has also narrowed from its peak [*Earnings yield = 1/ (one year forward P/E)]. Thus, market valuations are still above historical average but have corrected from their peak. Further, one should view the same in the context of structurally attractive nominal GDP growth, a robust economic recovery, a healthy corporate earnings outlook and strong de-levered corporate balance sheets.
We remain positive on equities over the medium-to-long term considering the resilient domestic growth outlook, robust corporate profitability, growth supportive policies, etc.
Accelerated monetary policy tightening, a sharp slowdown in global growth, persistent inflation, a slowdown in earnings growth, a delay in recovery in the rural sector, etc. are key near-term risks.
Fixed income market
Indian as well as global fixed income markets faced a challenging
FY 22-23. Amid the synchronised tightening by major central banks (including RBI) and rising yields globally, Indias G-sec yield curve shifted up, especially post the Union Budget FY23-24, as the government announced borrowings exceeding market expectations. The rise in yields was further accentuated by the RBIs repo rate hike and Cash Reserve Ratio (CRR) increase announced in an unscheduled meeting in May 2022. To curb volatility in the Indian rupee and drain out excess liquidity, the
25 RBI sold US dollar. The yields at the short end rose at a much faster pace than the yields at the long end, thereby flattening
20 the yield curve. The 10Y benchmark G-sec yield ended the year 48 bps higher at 7.31%, while the 1Y G-sec yield rose 247 bps.
15 Corporate bond spreads over G-sec yields widened, driven by a sharp increase in the supply of bonds, especially in the second 10 half of the year.
5 G-sec and corporate bond yields
| 0 Average, YoY (%) | FY 21-22 | FY 22-23 | Change in % |
| MIBOR Overnight Rate (%) | 3.90 | 7.79 | 3.89 |
| 3M G-sec yield (%) | 3.84 | 6.74 | 2.90 |
| 1Y G-sec Yield (%) | 4.67 | 7.14 | 2.47 |
| 10Y Benchmark G-sec Yield^ (%) | 6.83 | 7.31 | 0.48 |
| AAA 10Year Corporate Bond Yield# (%) | 7.17 | 7.81 | 0.64 |
| AAA 10Y Corporate Bond Spread vs. 10Y Benchmark@ (bps) | 34 | 50 | 0.16 |
| Average net liquidity absorbed by RBI* (H Billion) | 6,498 | 1,597 | (75.4) |
Source: Bloomberg, RBI. ^ bi annual yield; # annualised yield; @
Spreads calculated by subtracting non-annualised G-sec yields from annualised corporate bond yields. *Average net daily liquidity infused/ absorbed through Liquidity Adjustment Facility, exports refinance, marginal standing facility and term repos/reverse repos.
Average interbank liquidity fell considerably, as the RBI sold the US Dollar and currency in circulation increased. Further, robust credit growth vis- -vis deposit growth resulted in lower interbank liquidity. FPIs turned net sellers in FY 22-23 with $0.3 Billion of debt, from being net buyers of $2.2 Billion in FY 21-22. Credit markets were largely stable; credit spreads normalised as the supply of corporate bonds picked up during the second half.
During the year, the RBI raised its policy rate cumulatively by 250 bps to 6.5%, and also introduced the Standard Deposit Facility (SDF) at a rate 25 bps lower than the repo rate. The Monetary Policy Committee (MPC) in its April 2023 meeting kept the repo rate unchanged at 6.5% while maintaining its focus on withdrawal of accommodation.
Outlook
FY 22 23 witnessed inflation and rate hikes at a pace not seen in four decades globally. Consequently, central banks resorted to aggressive monetary tightening and resolved to continue until there were visible signs of inflation slowing. However, in March 2023, the failure of a few mid-sized US banks and the distressed merger of a large Swiss bank with another raised concerns over financial stability. Going forward, the pace of rate hikes is expected to slow and uncertainty regarding the overall impact of banking turmoil is likely to keep central banks data dependent. Post the pandemic easing and the widening of corridor between the repo and reverse repo rate, the effective policy rate during most part of FY21-22 was 3.35% (as against the policy rate of 4%). Since April 2022, the RBI shifted its focus to inflation from growth, and introduced the SDF at a rate 25 bps lower than the repo rate. This, along with the cumulative rate hikes of 250 bps and draining out of excess liquidity, pushed the operating rate close to ~6.50%, thereby resulting in an effective tightening of 315 bps. Post the recent pause, the RBI is likely to remain data-dependent and will continue monitoring the impact of already done rate hikes and rise in financial stability risks in coming months. Going forward, several factors seem favourably placed for the fixed income markets. CPI has eased from the peak and is likely ease further in view of softening momentum, lowering input price pressure,aided by the correction in global commodity prices. Further, growth is also likely to moderate, on the back of exports slowing, fiscal impulse declining and private consumption normalising. Although the external sector is a risk, it is likely to improve sequentially as the net oil imports decline due to lower oil prices. Further, the easing of the US dollar from the peak and adequate foreign exchange reserves should take pressure off Indian rupee to a large extent, although the outlook for capital flows remains uncertain. On the fiscal side, budgeted market borrowings for FY 23-24 were in line with market expectations and alleviated G-sec supply concerns. Also, in our opinion, most major central banks, including the RBI, seem to be close to the end of their rate hiking cycle. Moreover, the bar set for future rate hike(s) is high, and therefore, an extended pause seems probable at this stage. The aforesaid factors are likely to bode well for the fixed income outlook. Key risks to the outlook are elevated Core CPI, resilient domestic growth, robust credit demand and continued global monetary tightening. Heightened geopolitical risks, elevated oil prices, tight liquidity and increase in issuance of state development loans (SDLs) in FY 23-24 are other important factors, which could keep the yields elevated. Overall, yields are likely to be range-bound with a downward bias.
A3. Industry environment
Assets Under Management (AUM)
Assets Under Management as on March 31, 2023 increased by 5% to Rs 39.42 Lakh Crore as against Rs 37.57 Lakh Crore on March 31, 2022. Equity-oriented AUM witnessed a growth of 11% to H 20.0 Lakh Crore, driven by increased net flows, while non equity-oriented AUM came in at H 19.42 Lakh Crore, almost flat as compared to last year.
During FY 22 23, the industry saw net inflows to the tune of H1.8 Lakh Crore in equity-oriented funds out of which Rs 0.18 Lakh Crore came into equity-oriented index funds, while debt funds including debt oriented index funds recorded H 0.8 Lakh Crore, liquid funds saw outflows of H 0.51 Lakh Crore and Others (including arbitrage funds, Exchange Traded Funds (ETFs) and Fund of Funds (FoF)) saw net inflows ofH 0.27 Lakh Crore. Annual Average AUM (AAAUM) for FY 2022-23 grew by 10% to H 40 Lakh Crore from H 36.5 Lakh Crore in FY 2021-22.
Mutual fund folios
The MF industry recorded a 13% increase in the number of folios to 14.57 Crore as on March 31, 2023 from 12.95 Crore as on March 31, 2022. Of the total, 14.49 Crore were folios from individual investors, up 13% YoY. Unique investors identified on PAN and PEKRN increased by 12% to 3.77 Crore as on March 31, 2023. The industry has added 7.4 Crore net new folios in last five years.
SIP flows
SIP flows remained robust despite global uncertainties. The industry witnessed 2.51 Crore new SIP registrations and annual SIP flows ofH1,55,972 Crore in FY 22-23, up 25% from FY 21-22.
Demographics
Individual investors contributed H 23.3 Lakh Crore (58%) to the industry monthly average AUM (MAAUM), while institutional investors contributed Rs 16.8 Lakh Crore (42%) for the month of March 2023.
MAAUM was split in the ratio of 83:17 between the top 30 cities (T30) and beyond the top 30 cities (B30). Although B-30 accounts for 17% of total MAAUM, contribution to equity MAAUM is 26%.
MAAUM by cities
(Rs in Lakh Crore)
Indian MF industry trends
Mutual fund AUM in India has recorded a CAGR of 13.0% over the past five years. The growth of the mutual fund industry showcases its ability to adapt to evolving investor preferences and market dynamics. The industrys continuous efforts to educate and create awareness about the benefits of mutual funds have played a pivotal role in driving investor participation. The MAAUM of individual investors reached H 23.3 Lakh Crore in March 2023, registering a CAGR of 14.8% since March 2018.
Net inflows over the past five fiscal years have been Rs 7.34 Lakh Crore, of which Rs 4.98 Lakh Crore have flowed in active equity oriented schemes.
Monthly SIP flows more than doubled from Rs 7,119 Crore for the month of March 2018 to Rs 14,276 Crore in March 2023. SIP accounts as on March 31, 2023 were 6.36 Crore, up from 2.11 Crore on March 31, 2018. SIPs are typically sticky long-term inflows and lend visibility and predictability to AUM growth. The popularity of SIPs continues to soar and provide investors with benefits like regular investing, rupee cost averaging.
Healthy growth of mutual fund AUM in India (Rs in Lakh Crore)
| % Change in Indices | 2018 | 2019 | 2020 | 2021 | 2022* | 2023* |
| Equity AUM | 9.22 | 10.21 | 8.26 | 13.00 | 18.08 | 19.98 |
| Debt AUM | 7.99 | 7.30 | 7.76 | 10.58 | 9.51 | 9.19 |
| Liquid AUM | 3.36 | 4.36 | 4.15 | 4.08 | 4.48 | 4.28 |
| Other AUM | 0.79 | 1.93 | 2.09 | 3.77 | 5.48 | 5.97 |
| Total | 21.36 | 23.80 | 22.26 | 31.43 | 37.57 | 39.42 |
Source: AMFI. Data as of March 31 each year.
* Equity AUM data from FY 2022 includes equity-oriented index funds and Debt AUM includes debt-oriented index funds.
Review of Business
B1. Business overview
HDFC AMC is the investment manager to HDFC Mutual Fund with a closing AUM of Rs 4.37 Lakh Crore and total AAAUM of Rs 4.36 Lakh Crore, as of March 31, 2023. Equity-oriented closing AUM accounted for Rs 2.46 Lakh Crore, with non-equity-oriented AUM contributing the rest. During the year, we made significant advancements in strengthening our brand as one-stop shop for investment needs by launching a sleuth of new fund offers (NFO) across both active as well as passive categories.
Wealsoprovideportfoliomanagementandseparatelymanaged account services to HNIs, family offices, domestic corporates, trusts, provident funds, and domestic and global institutions. As ofMarch31,2023,aggregateassetsundertheseserviceswereat Rs 1,825 Crore. Recognising the potential of Indias private markets, we embarked on an exciting journey by launching the HDFC Alternatives brand. We announced first close of our HDFC AMC Select AIF FOF I on March 31, 2023 with commitments adding up to Rs 400 Crore.
B2. Operational performance review
Assets under management
Our closing AUM, as of March 31, 2023, rose 7% to Rs 4.37 Lakh Crore from Rs 4.08 Lakh Crore as of March 31, 2022. Equity-oriented AUM rose 18% to Rs 2.46 Lakh Crore from H 2.09 Lakh Crore as of March 31, 2022. Total AAAUM was at Rs 4.36 Lakh Crore as of March 31, 2023 versus Rs 4.34 Lakh Crore as of March 31, 2022. AAAUM for actively managed equity-oriented schemes increased by 15% to H 2.17 Lakh Crore, from Rs 1.89 Lakh Crore.
Unique investors and live accounts
We proudly served a customer base of 66 Lakh unique investors, with 114 Lakh live accounts. We also retained our position as one of the most preferred choices for individual investors, with a monthly average AUM market share of 12.9% for March 2023. Our market share in total closing AUM and actively managed equity-oriented funds stood at 11.1% and 11.9%, respectively. Equity-oriented assets formed 56% of our total AUM as of March 31, 2023. HDFC AMC processed 4.76 Crore systematic transactions between April 2022 and March 2023, amounting to Rs 17,383 Crore. About 86% of all systematic transactions at the time of signing up are for a period of over five years and about 77% for over 10 years.
B3. Financial Performance
Standalone financial performance review
• Our Companys total income has increased by 2.03% to Rs 2,482.57 Crore in FY 22-23
• The Profit After Tax (PAT) stood at Rs1,423.92 Crore and grew by 2.21% over FY 21-22
• The Operating Profit (Profit Before Tax less Other income) increased by 1.13% to Rs1,554.85 Crore in FY 22 23
• PAT as a percentage of Annual Average AUM increased from 0.32% in FY 21-22 to 0.33% in FY 22-23
• The Companys average net worth increased by 12.93% to Rs5,819.23 Crore in FY 22-23
Financial performance with respect to our operations
The financial statements have been prepared and presented on going concern basis and in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian
Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (the Act) and other relevant provisions of the Act, as amended from time to time.
Indian Accounting Standards (Ind AS)–IFRS Converged Standards
Our Company adopted Ind AS with effect from April 01, 2018. Significant accounting policies used for the preparation of the financial statements are disclosed in note 3 to the financial statements.
The following table sets forth selected financial information from our Statement of Profit and Loss for FY 22 23 and FY 21 22.
| ( Rs in Crore) | |||
| Particulars | For the year ended March 31, 2023 | For the year ended March 31, 2022 | % Change |
| Revenue from Operations | 2,166.81 | 2,115.36 | 2.43 |
| Other Income | 315.76 | 317.84 | (0.65) |
| Total Income | 2,482.57 | 2,433.20 | 2.03 |
| Finance Costs | 9.69 | 8.64 | 12.15 |
| Fees and Commission Expenses | 3.68 | 5.41 | (31.98) |
| Employee Benefits Expenses | 312.67 | 312.20 | 0.15 |
| Depreciation, Amortisation and Impairment | 53.34 | 53.85 | (0.95) |
| Other Expenses | 232.58 | 197.81 | 17.58 |
| Total Expenses | 611.96 | 577.91 | 5.89 |
| Profit before Tax | 1,870.61 | 1,855.29 | 0.83 |
| Current Tax | 421.26 | 418.96 | 0.55 |
| Deferred Tax Charge / | 25.43 | 43.20 | (41.13) |
| (Credit) | |||
| Tax Expense | 446.69 | 462.16 | (3.35) |
| Profit after Tax | 1,423.92 | 1,393.13 | 2.21 |
Revenue from operations
Revenue from operations comprises investment management fees from the mutual fund and portfolio management services (PMS) and other advisory services.
Investment management fees from the MF consists of fees from various schemes that invest in different categories of securities like Equity, Debt, etc. In general, fees per unit of AUM from schemes investing in equity securities are substantially higher than schemes investing in debt securities. Within these categories of funds, there are variations in the fees per unit of AUM based on factors like fund composition, fund size, and others. Hence, the quantum of fees is dependent on the size and composition of the AUM, and if there are any changes therein, it leads to higher or lower fees on an overall basis.
The increase in Revenue from Operations from Rs2,115.36 Crore in FY 21-22 to Rs2,166.81 Crore in FY 22-23, was largely due to increase in investment management fee by 2.74% from Rs2,103.24 Crore in FY 21-22 to Rs2,160.79 Crore in FY 22-23. The said increase was a result of higher component of Equity oriented schemes in the overall Annual Average AUM as well as marginally higher total Annual Average AUM in FY 22-23 as compared to FY 21-22.
PMS and other advisory services fee has declined from Rs12.12 Crore in FY 21-22 to Rs6.02 Crore in FY 22-23.
Other income
Our other income is largely earned from our own investments, which are generated from retained surpluses. Other income shows a minor decrease by 0.65% from Rs317.84 Crore in FY 21-22 to Rs315.76 Crore in FY 22-23. However, it could have been higher by 3.81% but was not realised due to the details explained herein. As on April 01, 2020, the Company held certain Non-Convertible Debentures (NCDs) that were secured by a pledge of listed equity shares. These NCDs were classified as financial assets at fair value through profit and loss. Hence, any realised gain on their sale/changes in fair value was reflected under ‘Other Income. During FY 20-21, the Company had invoked and sold a majority of the pledged shares. The balance pledged shares were sold during FY 21-22 resulting in a net gain amounting to Rs13.67 Crore.
Finance costs
Finance costs are on account of accounting treatment prescribed under IND AS 116-Leases, where the future lease payments are discounted to its present value and are un-wound subsequently, resulting in finance cost.
Fees and commission expenses
Fees and commission comprises primarily of commissions paid to distributors on sale of our MF schemes, PMS and advisory mandates. In accordance with SEBI guidelines, no commission on fresh sales of MF schemes was charged to our Company. However, certain amounts paid in the past are still being amortised. The residual unamortised amount of such commissions is minuscule. Our fees and commission expenses decreased from Rs5.41 Crore in FY 21-22 to Rs3.68 Crore in FY 22-23.
Employee benefits expenses
Our employee benefits expenses increased marginally due to the following reasons:
• An increase in salaries and allowances of employees which was led by increase in certain emoluments for employees in FY 22-23.
• Under Employees Stock Option Scheme-2020 (ESOS - 2020), apart from stock options granted in the past year(s), the Nomination and Remuneration Committee (NRC) of the Board of Directors of the Company at its meeting held on July 21, 2022 had approved a further grant of 50,000 stock options representing 50,000 equity shares of Rs 5 each, at a grant price of Rs1,921.70 per equity share (being the market price as defined in the applicable SEBI Regulations), to its eligible employees.
In terms of ESOS-2020, the options shall vest in three tranches. Each of these tranches consisting of 1/3 of the options granted shall vest on the completion of the 1st, 2nd and 3rd year from the date of the grant, respectively. The total charge towards the outstanding stock options has decreased from Rs63.32 Crore in FY 21-22 to Rs40.11 Crore in the FY 22-23 and the same is appearing as Share-Based Payments to Employees.
Accounting for equity settled share based payment transaction (employee stock options) at fair value increases the non-cash component of Employee Benefits Expenses and is also reflected in Share Options Outstanding Account under Other Equity. This balance of Share Options Outstanding Account is transferred to Securities Premium as and when the stock options are exercised by the employees and subsequent allotment of shares to them. Hence, this charge is neutral to the Equity of our Company.
• Accordingly, the employee benefit expenses marginally increased by 0.15% from Rs312.20 Crore in FY 21-22 to Rs312.67 Crore in FY 22-23. However, excluding the above mentioned non cash charge towards employee stock options, the employee benefit expenses has increased by Rs 23.68 Crore i.e. 9.51%.
Depreciation, amortisation and impairment
Our Depreciation, Amortisation and Impairment decreased from Rs53.85 Crore in FY 21-22 to Rs53.34 Crore in FY 22-23, primarily due to lower amortisation charge on computer software. However, the depreciation charge on Right of Use Asset has increased to a similar extent which offsets the fall in amortisation charge on computer software.
Other Expenses
Our other expenses increased by 17.58% from Rs 197.81 Crore in FY 21-22 to Rs 232.58 Crore in FY 22-23 primarily due to increase in Advertisement, Publicity and Business Promotion expenses, Travel and Conveyance, Subscription and Membership Fees, Outsourced Services Cost, Corporate Social Responsibility Expense, and Software Expenses and Allied Services. This rise in expenditure was due to a combined effect of pick up in business activities in the current year as compared to the previous year coupled with other business & digital initiatives taken by the Company.
• Our New Fund offer and Mutual Fund Expenses decreased from Rs15.42 Crore in FY 21-22 to Rs8.33 Crore in FY 22-23.
• Our Advertisement, Publicity and Business Promotion expenses increased from Rs27.59 Crore in FY 21-22 to Rs 38.04 Crore in FY 22-23. This incremental spend was in pursuit of continuous engagement with various stakeholders of the business.
• Our Travel and Conveyance expenses increased from Rs4.83 Crore in FY 21-22 (a lower spend due to travel restrictions), to Rs8.00 Crore in FY 22-23.
• Our Subscription and Membership Fees increased from Rs9.58 Crore in FY 21-22 to Rs 12.91 Crore in FY 22-23 as a result of subscription to various business-related services.
• Our Outsourced Services Cost increased from Rs 21.72 Crore in FY 21-22 to Rs 26.13 Crore in FY 22-23 mainly due rise in support staff cost.
• In accordance with the requirement of the Companies Act 2013, our Corporate Social Responsibility expenses increased from Rs30.10 Crore in FY 21-22 to Rs31.68 Crore in FY 22-23.
• Our Software Expenses and Allied Services cost increased from Rs21.18 Crore in FY 21-22 to Rs30.50 Crore in FY 22-23 due to continuing enhancements on the technology front and digitisation initiatives during the current year.
The amount of Other Expenses incurred in FY 19-20 (pre-COVID level) was Rs195.43 Crore. The increase from the pre-pandemic level (FY 19-20) is at the rate of 5.98% (three -year Compounded Annual Growth Rate). We shall continue to invest further in technology and digital infrastructure to be future ready. However, these expenses would be incurred in a calibrated manner.
Profit Before Tax
As a result of the factors outlined above, our Profit Before
Tax increased by 0.83% to Rs1,870.61 Crore in FY 22-23 from Rs1,855.29 Crore in FY 21-22.
Tax expenses
Our total tax expenses declined by 3.35% to Rs446.69 Crore in FY 22-23 from Rs462.16 Crore in FY 21-22. Our current tax charge increased to Rs421.26 Crore in FY 22-23 from Rs418.96 Crore in FY 21-22. Our deferred tax charge decreased to Rs25.43 Crore in FY 22-23 from Rs43.20 Crore in FY 21-22, mainly on account of movement in fair value gains/losses and impairment on investments. Our effective tax rate, including deferred tax was at 23.88% and 24.91% for FY 22-23 and FY 21-22, respectively. Our Company had elected to exercise the option of a lower tax rate provided under Section 115BAA of the Income-tax Act, 1961.
Profit After Tax
As a result of the factors outlined above, our Profit After Tax increased by 2.21% to Rs 1,423.92 Crore in FY 22-23 from Rs 1,393.13 Crore in FY 21-22.
Dividend
Your Directors have recommended a final dividend of Rs48 per equity share of Face Value of Rs 5 each for FY 22-23 as compared to Rs42 per equity share for FY 21-22. Accordingly, the Dividend payout ratio for FY 22-23 would stand at 71.95%, up from 64.30% for FY 21-22.
Statement of Assets and Liabilities
The following table details the selected financial information from our Balance Sheet as on March 31, 2023 and March 31, 2022
| Rs | ||
| Particulars | As at March 31, 2023 | As at March 31, 2022 |
| Assets | ||
| Financial Assets | 6,310.68 | 5,684.02 |
| Non Financial Assets | 225.85 | 196.35 |
| Total Assets | 6,536.53 | 5,880.37 |
| Liabilities and Equity | ||
| Financial Liabilities | 241.86 | 218.88 |
| Non Financial Liabilities | 186.26 | 131.45 |
| Total Liabilities | 428.12 | 350.33 |
| Total Equity | 6,108.41 | 5,530.04 |
| Total Liabilities and Equity | 6,536.53 | 5,880.37 |
Financial Assets
Investments
Our Companys investment grew from Rs 5,570.23 Crore in FY 21-22 to Rs 6,079.16 Crore in FY 22-23
• The increase in investments carried at fair value throughargin (%) Profit & Loss from Rs5,107.30 Crore in FY 21-22 to Rs 5,658.22 Crore in FY 22-23 is due to net investment in mutual fund schemes and fair value changes.
• The investments carried at amortised cost have decreased from Rs462.93 Crore in FY 21-22 to Rs 417.94 Crore in FY 22-23 primarily due to maturity of certain tax-free bonds.
• A Wholly Owned Subsidiary (WOS) of our Company namely HDFC AMC International (IFSC) Limited, with its principal place of business in Gujarat International Finance Tec-City (GIFT City), Gandhinagar, India, had been incorporated on May 27, 2022. An amount of Rs 3.00 Crore was invested in the WOS during the reporting period.
Non Financial Assets
Non Financial Assets have increased from Rs196.35 Crore in FY 21-22 to Rs225.85 Crore in FY 22-23. This increase is primarily due to:
• Increase in net book value of Property, Plant and Equipment from Rs122.18 Crore in FY 21-22 to Rs 137.59 Crore in FY 22-23.
• Increase in Other Non Financial Assets from Rs 30.16 Crore in FY 21-22 to Rs42.78 Crore in FY 22-23.
Financial liabilities
Financial Liabilities have increased from Rs 218.88 Crore in FY 21-22 to Rs241.86 Crore in FY 22-23. This increase is primarily due to increase in Lease Liability balances.
Non-financial liabilities
Non Financial Liabilities have increased to Rs186.26 Crore in FY 22-23 from Rs131.45 Crore in FY 21-22. This is largely due to to movement in net Deferred tax balances and Other Non financial liabilities.
Total equity
Total Equity has increased mainly due to higher retained earnings. Retained earnings represents the surplus profits after payment of dividend.
Key financial ratios
| Particulars | For the year ended March 31, 2023 | For the year ended March 31, 2022 | % Change |
| Annual Average AUM (Rs in Crore) | 4,36,126.02 | 4,33,859.34 | 0.52 |
| Profit After Tax as a % of Annual Average AUM | 0.33 | 0.32 | 1.68 |
| Debtors Turnover (times)^ | 16.78 | 27.39 | (38.74) |
| Current Ratio (times)* | 6.15 | 8.13 | (24.35) |
| Operating Profit Margin (%) | 71.76 | 72.68 | (1.27) |
| NetProfit | 57.36 | 57.26 | 0.17 |
Note: Inventory Turnover Ratio is not applicable to the Company. Further, Interest Coverage Ratio and Debt Equity Ratio have not been presented as the Company is debt free as at March 31, 2023 and as at March 31, 2022.
The finance costs appearing in the Statement of Profit and Loss is a result of accounting treatment under Ind AS 116 – Leases and accordingly, there is no obligation on the Company to service any interest cost.
^ Reason for decrease in Debtors Turnover:
This ratio has changed as a result of higher amount of average debtors (trade receivable) outstanding due to a change in the collection period. * Reason for decrease in Current Ratio:
(i) Current asset balances and specifically, investments which are maturing within 12 months from the reporting date including new purchases, have changed;
(ii) Within current asset balances, trade receivables have increased as explained earlier and;
(iii) Current liabilities have increased largely due to a rise in trade payables, other financial liabilities, current tax liabilities and other non financial liabilities.
Return on net worth (Computed on average net worth)
| ( Rs in Crore) | |||
| Particulars | For the year ended March 31, 2023 | For the year ended March 31, 2022 | % Change |
| Networth at the | 5,530.04 | 4,776.18 | 15.78 |
| Beginning of the Year | |||
| Networth at the End of the Year | 6,108.41 | 5,530.04 | 10.46 |
| Average Networth | 5,819.23 | 5,153.11 | 12.93 |
| Profit After Tax | 1,423.92 | 1,393.13 | 2.21 |
| Return on Average Networth (%) | 24.47 | 27.03 | (9.47) |
Return on Average Net Worth decreased from 27.03% in FY 21-22 to 24.47% in FY 22-23. This is due to a higher % change in
Average Net Worth as compared to % change in Profit After
Tax. Average Net Worth has increased mainly due to growth in retained earnings.
Incorporation of a wholly owned Subsidiary
A Wholly-Owned Subsidiary (WOS) of our Company namely HDFC AMC International (IFSC) Limited, located in Gujarat International Finance Tec-City (GIFT City), Gandhinagar, India, had been incorporated effective May 27, 2022, and was capitalised during the financial year 2022 23. Accordingly, consolidated financial statements of our Company have been prepared from the current financial year. The WOS is in the business of providing
Investment Manager Services, act as a sponsor/settler for the GIFT AIF Funds and providing discretionary/non-discretionary portfolio management services to clients (PMS). As of the end of the reporting period, the WOS is in the process of setting up its business operations. The consolidated financial statements are also available in this Annual Report.
B4. Outlook
While the assets under management for mutual funds have almost doubled in five years, the industry will experience tailwinds that are expected to propel future growth.
Growth drivers
• The growing financial literacy among Indian investors, coupled with the need for long-term wealth creation, is expected to drive higher participation in mutual funds.
• As investors move away from traditional investment avenues, mutual funds offer a convenient and professionally managed alternative.
• Growing popularity of SIPs, with large-scale campaigns improving outreach.
• Indias burgeoning middle-class segment, characterised by rising disposable incomes and aspirations, presents a significant growth opportunity.
• Emergence and growth of fintech platforms to bring in a large pool of new investors.
• Strong distribution platform and ease of transactions through digitisation will be the key drivers in reaching out to the bottom of the pyramid investor base.
Strategic priorities
• Endeavour to be a one-stop shop for all investment needs, ranging from a diverse selection of mutual funds, including both actively managed and passive options, to portfolio management services and alternative investment opportunities. We will continuously assess market opportunities, identify gaps in the product offering, and develop investment solutions to meet the changing needs of investors.
• Set industry benchmarks around performance along with building an inclusive ecosystem of information, knowledge and platforms.
• Customers are at the core of everything that we do and we want to keep progressing in our journey from client service to client delight.
• Enhance our distribution footprint and leverage technology to boost accessibility and attract new investors. We will continue our investments in advanced digital platforms, data analytics and automation.
• Adopt best-in-class corporate governance practices and risk management process.
• Focus on attracting and retaining top talent, providing ongoing training and development opportunities, and foster a culture of innovation and collaboration.
• Demonstrate our commitment to including environmental, social and governance (ESG) factors in decision-making and ownership.
C. Internal control systems and their adequacy
Our Company has instituted adequate internal control systems commensurate with the nature of our business and size of operations. This delivers a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls and compliance with applicable laws and regulations.
The Audit Committee and Risk Management Committee are responsible for overseeing the risk management framework, reviewing the key risks and mitigation strategies, and ensuring the effectiveness of risk management policies and procedures.
The Management is also responsible for ensuring that the risk management framework is effectively implemented within all areas of operations.
Deloitte Touche Tohmatsu India LLP carried out an internal audit of our Companys activities for FY 22-23. It carries out internal control reviews and provides an independent report to the Audit Committee on the adequacy and effectiveness of risk management and internal controls of the organisation. All significant audit observations and follow up actions thereon are periodically reported to the Audit Committee and closely monitored for effective implementation.
B S R & Co. LLP, the statutory auditors of our Company audited the standalone and consolidated financial statements included in this Report and has issued, as a part of Auditors Report, an attestation report on our internal financial controls reference to the financial statements (as defined in Section 143 of the Companies Act, 2013).
Based on its evaluation, the Audit Committee has concluded that, as of March 31, 2023, our internal financial controls adequate and operating effectively.
D. Information Technology (IT)
In the business of asset management, data and analytics play a vital role in enhancing efficiency and effectiveness. Collection, analyses, and interpretation of large data sets, from both organic and inorganic sources, are pivotal in driving informed and objective decision making. A future-ready Enterprise Data Warehouse solution encompasses multiple source systems for distribution, performance, and industry data.
Data visualisation helps the process owners identify critical levers for improving business outcomes while focusing on risk controls. The interactive dashboards empower users to seamlessly view performance metrics and track progress against goals. The updation of dashboards is tailored as per specific business needs. This provides time critical, reliable data to facilitate informed decision-making.
Implementing data warehouse offers a substantial benefit of delivery of a single source of truth. The warehouse provides a centralised repository for all transaction data and derived attributes ensuring that the entire dataset is consistent, accurate, up-to-date, and reliable. It eliminates need of multiple data sources, with varied levels of quality attributed to considerations such as ease of access, recency, and authenticity. The data warehouse has empowered teams to independently analyse sales data thus reducing reliance on technology experts. The business teams can leverage self-service tools to get insights into behaviours, preferences, and specific transaction patterns of target cohorts. The centralised data store automates regular report generation eliminating the need for manual data collection, organisation, quality checks, and processing. This modernised centralised data processing has replaced heavy, complex and expensive computations. Additionally, the data warehouse offers immense potential to harness durable value from ecosystem play. With such a scalable and flexible platform ,standardised interfaces can be implemented to collaborate and co-create with strategic business partners.
A modern and flexible solution has been implemented to gear infrastructure provisioning, monitoring, and management to scale technology in alignment with business growth demands, ensuring efficiency and effectiveness. Comprehensive cyber security platforms and solutions, including threat protection, enhanced network isolation, and confidential computing, have been cohesively incorporated. The adoption of modern, secure and elastic cloud platforms and services have allowed us to adjust computing resources swiftly based on varying demands.
This ensures operational efficiency and cost effectiveness, regardless of workload fluctuations. Our internal systems have seen significant performance enhancements, thanks to access to state-of-the-art technologies and superior computing resources. Modern infrastructure has bolstered the resilience of our operations. Distributed architecture ensures that failure in one area of the system does not impact overall performance, giving the assurance of constant availability and system stability. Our shift to modern infrastructure has facilitated rapid innovation, and the new environment allows us to experiment and deploy new solutions at a much faster pace. The single pane of glass for overall infrastructure health monitoring has been attributing to efficient technology operations.
E. Compliance
Our Compliance function monitors compliance with regulatory requirements laid down by the Securities and Exchange Board of India (SEBI) with respect to mutual fund, portfolio management services and alternative investment funds activities and other business activities permitted under Regulation 24(b) of SEBI (Mutual Funds) Regulations. The Compliance function is an interface between us and various regulators/industry bodies, such as SEBI, the RBI, the Association of Mutual Funds in India, the Association of Portfolio Managers in India, depositories and stock exchanges. The Chief Compliance Officer updates our
Board and Audit Committee on various compliance matters. Various internal policies and procedures ensure compliance with the regulatory requirements in relation to above businesses. Our Compliance Manual also lists the regulatory requirements, timelines and the functions responsible for compliance. Employees Securities Dealing Codes regulate personal investment transactions of employees, including that of their dependants. Set guidelines are in place for personal dealings for AMC and Trustee Directors as well. Policies such as Conflict of Interest Policy, Outsourcing Policy, Policies under Risk Management Framework, Code of Conduct for Prevention of Circulation of Unauthenticated News, Anti-Money Laundering (AML) and KYC policy, and a Social Media Policy also ensure compliance with regulations relevant to our businesses.
Each function ensures compliance with applicable regulations pertaining to its areas of operation. Accordingly, we have established procedures, policies, codes and manuals, such as the Investment and Risk Manual, Operations Manual, Client Services Manual, Valuation Policy, Voting Policy, Polling Policy, Stress Test Policy, Cyber Security Policy, Cyber Crisis Management & Resiliency Policy, Stewardship Code and Code of Conduct for Fund Managers and Dealers. These are reviewed and updated periodically. An established certification process is followed by each function to periodically confirm compliance with the regulatory requirements.
Our compliance team stays updated on all new regulatory requirements and communicates the requirements to the relevant functions with meaningful inputs for implementation. The team also reviews the implementation status by coordinating with the respective functions.
We have also appointed independent internal auditors to review the activities of each department and function, including the compliance function. They review some of the compliance reports before submission to the Board and the regulators concerned. Periodical SEBI inspections and statutory audits are also conducted to review and assess the compliance status.
The compliance team also drafts and issues product offer documents, issues notices/addenda related to product documents, reviews marketing materials before dissemination, and ensures timely filing of various reports with the Board and regulators and agencies concerned. It is also responsible for the redressal of customer grievances. As part of its periodic training initiatives, the compliance team engages with the employee(s) to educate, sensitise and create awareness about their obligations under our Companys codes/policies.
F. Operations
Our Operations are bifurcated into Mutual Fund Operations (MFO) and Portfolio Management Services Operations (PMSO). The MFO team is responsible for servicing customers of the Mutual Fund and Segregated accounts u/r 24(b) of the SEBI (MF) Regulations. The responsibilities, inter alia, include investment administration, cash management, treasury support and settlement, fund accounting, asset valuation and unit pricing, coordination with the RTA / Custodians / Bankers / other Service Providers and MIS.
The PMSO team is responsible for managing all clients under the SEBI (PMS) regulations. Its functions include post-trade investment support, cash management, treasury and settlement functions, recording of transactions in the books of accounts of the respective clients, valuation of securities in clients portfolios, providing various reports to the management, and liaising with bankers and custodians.
The functions of the PMSO and MFO are stand-alone, and they have their own discrete teams and systems.
All operational activities are subject to independent audits. Internal auditors perform transactional and risk-based audit, apart from undertaking process reviews on a regular basis. Independent auditors carry out the statutory audit as required under the applicable regulations for our schemes, portfolio management and segregated accounts. All applications used in operations are regularly subjected to system reviews/audits. The Audit Committee reviews all the Auditors Reports with respect to the entire operations.
Mature, robust and scalable systems and processes form the backbone of our operations. There is a keen focus on accuracy, internal controls, minimising operational risks, and efficiency.
All systems are regularly upgraded and all processes are re-engineered periodically to ensure a high standard of regulatory compliance and governance. We have a comprehensive BCP and Disaster Recovery Plan (DRP) for our operations, and it is reviewed in consultation with the Board of Directors. Both these were tested during the pandemic, and our transitions to work from home (WFH) and back to office were seamless. We regularly review the adherence of our service providers to acceptable standards of governance & compliance, as well as their IT/BCP/ DRP preparedness.
G. Risk management
Our Company has developed a comprehensive Risk Management Framework (RMF) to effectively manage key risks. This framework aligns with our business needs and relevant legal and regulatory requirements. The RMF provides guidance with respect to management for all risks relevant for the AMC and the schemes of HDFC Mutual Fund. To ensure an effective and integrated RMF, the AMC has defined three lines of defence model, viz. First Line of Defence comprises the CXOs; Second Line of Defence comprises oversight functions viz. Risk Management and Compliance; and the ThirdLine of Defence is the Internal Auditor. The Board-approved Risk Management Framework details out our approach to risk management and the roles and responsibilities of all stakeholders.
The Audit Committee and Risk Management Committee are responsible for overseeing the risk management framework, reviewing the key risks and mitigation strategies, and ensuring the effectiveness of risk management policies and procedures.
The Management also ensures the risk management framework is effectively implemented within all areas of respective functions.
Risk Management Process is a logical and systematic process of identifying, analysing, evaluating, treating, monitoring and communicating risks associated with activities, functions or process, in a way that enables an organisation to minimise losses and maximise opportunities. The objective of risk management is not to eliminate risk, but to understand it so that we can take measures to prevent its occurrence and minimise the downside and take advantage of the upside. Risk assessment and mitigation strategies are an integral part of the risk framework within each function. The key risks covered are Investment Risk, Credit Risk, Liquidity Risk, Operational Risk, Compliance Risk and Business Continuity and Disaster Recovery Management.
Risk Management is integrated with major business processes such as strategic planning, operational management, and investment decisions to ensure consistent consideration of risks in all decision-making. Our Company will continuously adapt to international best practices that address regulatory changes, organisational structure, emerging technologies, dynamic market conditions, and business growth.
We have a formal programme for risk and control self-assessment (RSCA), whereby risk owners are involved in the ongoing assessment and improvement of risk management and controls. Additionally, internal audit carries out internal control reviews and provides an independent report to the Audit Committee on the adequacy and effectiveness of risk management and internal controls of the organisation. Our statutory auditor carries out a review of our internal controls over financial reporting to the extent of the scope laid out in their audit plans. All significant audit observations and follow-up actions thereon are periodically reported to the Audit Committee and closely monitored for effective implementation.
Given the rapid technological and digital advancement in the securities market, cyber risks are inevitable. Hence, a strong Cyber Risk Management framework is essential. Our Companys Cyber Risk Management framework is one wherein the cyber risk and its mitigation are monitored by the Information Technology Security Committee and Risk Management Committee. Key areas covered under the cyber risk management include strong adherence to the Board-approved Information and Cyber Security Policies, compliance with SEBI guidelines and ISO 27001 standardstoensurethatweareinlinewithindustrybestpractices. Our Company maintains a robust cyber-security architecture and has in place a cyber resilience framework to protect the integrity of data and guard against breaches of privacy.
Overall, risk management is a collective responsibility, from the Board to individual employees. Risks is primarily managed by the business function transacting the business. All employees are actively engaged in risk management within their own areas of responsibility and are expected to manage those risks.
H. Insurance
Our insurance policies cover the entire gamut of our operations and protects the company from unexpected exigencies in the future. We have specialised policy insuring the schemes of HDFC Mutual Fund, HDFC Asset Management Company Limited, including PMS, AIF and advisory/ management services to permitted categories of FPIs under Regulation 24(b) of SEBI (Mutual Funds) Regulations, which, in addition to our Company, also includes our employees, directors and the trustee company of HDFC Mutual Fund. Our insurance policy covers any liability arising out of operations of Registrar and Transfer Agent and Custodians associated with our Mutual Fund business. Furthermore, we have specialised cyber-security insurance coverage as well.
I. Intellectual property
Our Company uses, among others, the name, registered trademark and brand name of ‘HDFC and associated logos in the ordinary course of business and including ‘HDFC Asset Management Company, ‘HDFC Mutual Fund, and HDFC AMC AIF-II. The trademark ‘HDFC is the registered property of HDFC. HDFC has granted a non-exclusive license to use its trademark and brand name ‘HDFC to our Company, subject to applicable terms and conditions.
J. Digital platforms
We provide a diverse range of comprehensive digital solutions that cater to the needs of our investors and partners. Our digital offerings include a user friendly portal, mobile app, WhatsApp based engagements and a responsive chatbot. We have been actively promoting digital adoption across all engagements.
This year, we introduced a custom link feature that offers greater investing flexibility and convenience for all stakeholders, including our employees.
As part of our commitment to deliver excellence to our investors, we have upgraded our services, and revamped our website design and investor app. Investors now have access to additional information and tools at their fingertips, helping them make informed decisions in real time. Enhancements include goal- based planning and risk assessment features to help investors shortlist investment options that align with their interests and preferences.
Our focus on a state-of-the art lead generation tool-kit has allowed us to engage more effectively with potential investors, resulting in engaged relationships and good conversions. The Customer Data Platform (CDP) solution seamlessly generated more channels and campaigns through an improved investor-view and a better understanding of investor preferences and needs. The CDPs data-driven approach has enabled us to offer personalised and targeted marketing campaigns. The campaigns have been instrumental in driving engagement and conversion rates. As we continue to expand our digital offerings and engage with investors in innovative ways, the
CDP application will continue to play an increasingly crucial role in helping us stay ahead of the curve as we provide our investors with the best-in-class experience.
Our partner network is critical to our success. We are deeply committed to providing our partners with the support and resources they need to grow and serve their investor base. To this end, along with OneClick, we strengthened the support extended to our partners digital marketing initiatives. Our support inputs include customised marketing materials, transaction links, and online training.
We recently upgraded our platform microservices offering and updated the supporting software suite to align with higher levels of security and performance. Our cloud-only approach allows us to experiment and deliver new solutions at scale,, and provide our users with a more secure and robust solution.
We offer a range of support channels to our users, including phone, email, co-browsing, and callback. Investors and partners choose any of these offerings based on their preference and needs. We have an unwavering commitment to achieve rapid turnaround times for all support requests, and have developed processes and technologies to ensure prompt and productive responses.
One of the biggest outcomes of our digital adoption thrust is a capacity boost. We have been deploying RPA across our development and testing, but, this year, we extended it to automate the scheme information document disclosure (SID) process. This eliminated the manual burden faced by compliance teams. From conception to implementation, we are the first mutual fund house in India to automate SIDs, a significant milestone in Indias RegTech space.
Key initiatives during FY 22-23
We have taken various measures in FY23 to strengthen our digital platforms to support the scale of our mission:
• Introduced custom OneClick for Partners, Investors and Employees. Additionally, we launched variety of experience enhancing services like eKYC, biometrics, multiple payment gateways, etc. to prioritise journey of new investor and simplify onboarding process.
• Refreshed website design and experience through thoughtful user journey.
• Launched New Investor App launched with a new design, experience and many more features. The app now has an improved dashboard for investors to better view their
Asset Overview, Investment Baskets, Risk Profiling and
Goal Planning.
• We started WhatsApp notifications for digital transactions done by our investors. We will continue to expand our interaction with clients on the popular messaging app, making it easier for our investors to receive account updates.
• Implemented and added personalisation capabilities with Adobe Target.
• Improved engagement and lead generation across Digital Assets. A combination of user journey interventions and optimisations.
• We have made HDFCMF ConneKt app available even for MFD aspirants, with a fully featured NISM training module and preparatory quizzes. This will not only help expand our distribution network, but also bring fresh minds into our industry and to the countless unserved/underserved investors over time, with the added benefit of a ‘Digital First approach.
• We built a foundation layer for our analytics programme. We continue to see year-on-year higher conversions in our analytics based campaigns. We aim to use technology to our advantage to make our industry, and especially our organisation, future-ready for scale. This also enables us to do our part in helping India meet its goal of becoming a paperless economy.
K. Human Resource
Our employees are our brand ambassadors who enable us to reach out to and serve our customers and stakeholders. A strong organisational culture and value system girds our business and our interaction with our customers, partners and clients. Our people help us accomplish our vision and mission of being the most respected asset management company in the world and the wealth creator for every Indian.
We strive to provide our people an open, inclusive and enabling work environment while creating for them opportunities to upskill or reskill in order to adapt to a fast-changing world. We ensure that our people gain the ability and competence necessary to remain future-ready. To retain our record of providing high-quality advisory to our partners and clients, we ensure that our employees undergo the completion of high-quality and relevant certifications. We are fully compliant with all statutory provisions and applicable laws and regulations related to employment.
We continue to invest in employee welfare, learning and development, driving inclusion and enhancing workplace diversity. Our Human Resources function is manned by professionals who implement and drive changes that enhance our reputation as an employer of choice.
Our policy of reward and recognition, proactive promotion of a collaborative and humane work culture, have ensured our ability to attract and retain top talent. We have a robust succession framework, and continue to undertake programmes to ensure uninterrupted availability of talent from premier institutes across India. Our focus on gender diversity continues through various programmes that encourage greater participation of women in our workforce, while ensuring we drive efforts to enhance employee experience, physical and mental well-being.
Our approach and efforts are reviewed regularly at the apex to ensure that we remain an employer of choice.
L. Marketing initiatives
#AbSirfBachatKyun: An Investor Awareness Campaign on ELSS Mutual Funds
The campaign highlighted the two key aspects of these funds –the growth potential of investing in equity and a three-year lock-in period. The campaign was promoted across digital and social media.
#WhyPauseYourDreams: HDFC TaxSaver
This was a product-led campaign around HDFC TaxSaver. The campaign was promoted on digital and social media.
Republic Day
We celebrated how our countrys growth over the years through a film,Yeh Growth Hai Mutual. The film showcased how mutual fund investments help you grow your wealth, and also build the nation.
International Womens Day
We released a film, Break the Bias, which was in the form of a social experiment to highlight the subconscious biases in peoples minds with regards to women in finance.
11 Years of Cancer Care
We created a film to recognise and honour all those involved the cause of cancer care.
Investverse – An Investor Awareness Podcast
We launched a podcast, Investverse, in collaboration with a major player in the podcast category. It educated listeners on the various facets of mutual funds and aimed to inspire them to start their own investment journeys.
#BarniSeAzadi
This campaign was specially curated for women and highlighted the social stereotypes we have been conditioned to accept. In quite a few families, even today, women do not have a significant say in matters pertaining to personal finance and investments.
We continued our campaign in FY 22-23 as well. We released a film on digital media celebrating the progress made in the year.
We also conducted a series of events across the country to raise financial awareness among women.
#NurtureNature 2.0
We continued our #NurtureNature campaign that was launched last year to mark World Environment Day. #NurtureNature is a socially responsible campaign that also advances our sustainability ambition and environmental stewardship. We planted a tree on behalf of each investor who registered a Systematic Investment Plan (SIP) digitally.
Person of the Year 2022
At the beginning of the calendar year, we released "The Person of the Year 2022", an article by Mr. Navneet Munot, which was an interesting look back at the year gone by.
HDFC MF Yearbook 2023
The yearbook titled Indian economy: An oasis in the desert, covers our views on the global and Indian economy, as well as details key emerging trends.
M. Customer service
As a customer-centric organisation, we continue to raise the bar in service to deliver excellence so that we remain a brand of choice when it comes to matters of financial planning.
We are aware that customers today are increasingly conscious of their choices and are much better informed than before. It is thus imperative that we ensure that our front-line service team remains sharp, agile, smart and responsive to the needs of customers. To this end, we relentlessly educate and train our staff. Our service teams at our branches across the country are supported by an experienced staff at the corporate office.
Regional Service Managers, who supervise service delivery in the regional offices, visit branches regularly to ensure the staff are aligned to our business purpose. While engaging with the staff to understand their perspective, the Regional Manager also manages mutual fund distributor requirements and augments support at the branches. The Corporate Client Services team, on its part, takes into account the feedback from the branches and trains the managers routinely to create last-mile impact. We have a well-structured framework to manage service delivery and ensure that we work in tandem to enhance customer experience. Crucial to this framework is the Registrar and Transfer Agent (RTA), Computer Age Management Services (CAMS), which forms the backbone of our service delivery. We work closely with CAMS to ensure the smooth execution of work and provide support to our distribution partners. We also regularly review our business operations in detail so that we remain prepared to deal with the dynamic business environment. We service our customers through a network of 229 branches, 267 CAMS service centres, call centres, our website and mobile app that provide digital solutions, and a centralised email address. We have also tied up and support various other avenues where our customers may choose to transact such as our distributor mobile app, stock exchanges, channel partners, MF Utility, MF Central, and websites/mobile apps of mutual fund distributors and advisors. Our efforts to enable, support encourage digital transactions have resulted in a substantial increase in digital transactions, which now dominate our business transactions.
We measure our service delivery and quality based on multiple parameters such as turnaround time, repeat complaints, escalations, which are evaluated periodically to provide and improve the seamless service we offer our customers and business partners.
We engage with customers for feedback and also communicate with them to comply with changing regulatory requirements. Customer complaints/grievances are reviewed for a root cause analysis, giving us an opportunity to improve.
We also connect with distributors to share information on regulatory and process changes through the service relationship managers. We have also gathered their feedback on service delivery this year through an IVR CSAT (Interactive Voice Response Customer Satisfaction) feature. The survey is conducted by call centres to record the experience of the investor in real time. Once the query is resolved, the customer can rate their experience on the call via a short IVR survey. As a follow-up activity, those who have provided low ratings are contacted to seek feedback on improvement areas.
Customer delight can only be delivered if we work in cohesion, and our collective endeavour is to place the customer at the heart of our business.
Our digital team has undertaken multiple initiatives to ensure our website and mobile apps provide best-in-class services to our stakeholders. The pandemic has accelerated our digital footprint and the ensuing year will see us invest more in enhancing customer convenience and experience.
One of the key measures of customer satisfaction is how our focus on continuously improving our processes based on issues faced by customers have led to a progressive decline in complaints.
| Year | Complaints as a % of transactions |
| FY 17-18 | 0.014 |
| FY 18-19 | 0.012 |
| FY 19-20 | 0.009 |
| FY 20-21 | 0.006 |
| FY 21-22 | 0.006 |
| FY 22-23 | 0.003 |
N. Training
HDFC LEAP, our proprietary learning and development enterprise has always prioritised the education and training for our investors and distributors as we believe that learning is a continuous process and we need to empower our stakeholders through knowledge-sharing. We undertook various training initiatives during the year to affirm this belief.
Our prime focus is to promote investor education and awareness and helping our distributors in skill enhancement.
We have taken a comprehensive approach this year by blending technical programmes with experiential learning. We have also used a lot of game / activity-based simulations, as these methods are known to improve engagement and retention amongst learners.
During FY 22-23, we conducted 967 distributor training/ awareness sessions (200 soft-skills and 767 technical programmes) with over 100 + speakers covering a wide range of topics that attracted over 1 Lakh participants. We have widened our reach to various investor and distributor segments. We have introduced a few unique programmes. These include: Soft-Skills workshops/Experiential Workshops– To develop interpersonal, communication and presentation skills and helping harness emotional intelligence that help survivorship of investors and distributors in volatile markets.
• The Selling Secret of Getting a Yes: The workshop helped explore factors that affect the decisions that people make, and use them to their advantage when trying to persuade prospective clients to take a specific buying decision.
• Script Your Sales Success Story: This workshop deals with several crucial elements of communication that are involved in the sales process.
• Fire walk: This workshop is ideal for those who want to break through barriers and take their performance to the next level.
• Go Beyond: A unique programme where the learning happens through game-based simulations.
• You are a Hero: This programme is designed to help people experience a source of high energy and encourage them to break their limiting beliefs.
Technical Workshops: To develop market knowledge and give overall market perspective to our investors and distributors.
• Mission to Mars: Spreading financial literacy among school students aged between 9-16 years. We successfully executed this module among school children, of whom many were the children of our distributors and clients.
• Fem-power: An investor education initiative that focuses on women investors and their specific financial needs and goals.
• War, Interest Rate and Beyond: This programme talks about the Russia–Ukraine war and its impact on the global market and Indian markets and interest rates as a whole.
• Market, Economy and Asset Allocation: The focus of this programme is on educating our investors and distributors on various asset classes.
Skill-enhancement workshops: Focused on providing opportunity to our distributors to strengthen their skills and domain knowledge. Some of these were:
• NISM workshops: 50+ workshops have been conducted in the financial year covering over 2,000 distributors.
• Masterclass certification programmes with leading industry experts.
• HDFC AMC Certification: Workshops and certification programmes were conducted for various distributors.
O. Social initiatives
Read more onpage 29 of this report
P. Risks and threats
One of the key risks to business is disruptions in the technology infrastructure due to technology advancements or cyber-attacks. As majority of the transactions today are processed digitally, any interruption is likely to adversely impact business. We continue to channel substantial investments into bolstering our technological infrastructure to enable it to handle interruptions. Our Company maintains a robust cyber security architecture and has in place a cyber resilience framework to protect the integrity of data and guard against privacy breaches.
The schemes and other investment products are subject to various market related risk such as Investment Risk, Credit Risk, Liquidity Risk and Governance and Compliance Risk. In case the schemes and other investment products underperform, the existing customers may redeem or withdraw their investments and shift to some other products. The growth of the business is contingent not only on our performance but also on the overall economy, the growth rate of the country, household savings rates and consumer attitude towards financial savings. Any adverse market rate fluctuations and/or adverse economic conditions could affect the business in many ways, including by reducing the value of our AUM, leading to a decline in revenue. To manage various market-related risks, our Company has a well-documented Investment manual covering Investment Philosophy, Investment and Research Process, Credit Limit and Credit Monitoring Procedure. The Risk Management closely monitors the portfolio for adequacy of portfolio liquidity, stress and credit events and to generate early warning signal. The Investment Committee reviews the performance of the schemes and also monitors all scheme-related risks. Instance of breaches or early warning signals generated are flagged to the Investment Committee and Risk Management Committee on a regular basis. However, regardless of how risks are managed, schemes and other investment products carry their own risks.
Our reputation is linked to the strength of the HDFC brand and reputation. While our brand is well-recognised, we may be vulnerable to adverse market and customer perception, particularly in an industry where integrity, trust and customer confidence are paramount. Again, the regulatory environment in which we operate is also prone to changes, and any violation/ breach in the regulation can adversely impact the reputation of our Company. This could have a negative effect on revenue and margins. In order to mitigate the compliance and reputation risks, we have a well defined process of identifying the actionable/ impact of the change in the regulation and the status around the same is also reported to the Board. In case of any material ambiguity in the interpretation of the law, the same is also discussed with regulator or obtains an opinion from external lawyers to confirm the understanding. Internal auditors have been appointed to review activities and report their findings to the Board. They also periodically audit/review statutory compliance reports as per the mandate. However, we ensure that we comply with all applicable laws, any failure in detecting errors in our statutory records or errors or omissions in our business operations could expose us to potential losses.
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
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2024, IIFL Securities Ltd. All Rights Reserved
Follow us on
ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.