ICICI Securities Ltd Management Discussions.

Operating Environment

Global Economy

Global economy went into recession during 2020 as COVID-19 severely impacted economic activities and human mobility. International Monitory Fund (IMF) in its latest forecast has estimated that the contraction in global growth for 2020 stood at 3.3%. Global central banks embarked on record monetary stimulus while governments across the globe adopted a counter-cyclical fiscal policy by embarking on fiscal spending to pull their respective economies out of the once-in-a-century crisis recession. Growth recovery in the second half of Calendar Year (CY) 2020 has been better than expected, resulting in upgrades to global Gross Domestic Product (GDP) for CY2021 and CY2022 which have been revised to 6% and 4.4% respectively by the IMF. Further fiscal measures by countries like the United States (US) which announced additional US$1.9 Trillion fiscal stimulus in March 2021 and is also working on a US$ 2 Trillion infrastructure programme which will help accelerate the global growth momentum going ahead.

Reflecting faster than expected economic growth, US bond yields started rising towards the end of FY2021 on fears of rising inflation and reflation trade, resulting in heavy losses for bond portfolios and some volatility in equity markets as well. However, the US Federal Reserve continued to maintain an accommodative stance by keeping the interest rates low as employment levels remain weak and core inflation is subdued. The central banks of other advanced economies also followed the same dovish approach.

Approvals for various vaccines globally and their rapid administration is providing hope for an end to the pandemic in 2021. High frequency economic indicators such as global Purchasing Managers Index (PMI) are showing that the momentum in economic recovery continues.

Indian Economy

COVID-19 pandemic spread rapidly throughout the world from the beginning of FY2021. Most governments imposed restrictions on movement in their respective countries to control the spread of the virus. In India, the ‘lockdown restrictions were stringent and took a toll on the economy. In Q1 FY2021, the Indian economy contracted by a record 24.4% YoY. Contact-intensive sectors such as trade, construction, manufacturing activities, travel & tourism, films, hospitality etc. were among the worst affected.

Gradually, as the government eased the restrictions on mobility, economic activity started limping back to normalcy. In Q2 of FY2021, the economy contracted by 7.4% YoY, primarily aided by stronger-than-expected performance by the manufacturing sector and gradual resumption in construction and trade sectors. As the year progressed further, growth returned to the economy in small measure (+0.5% in Q3 FY2021) on the back of festive season and pent-up demand entering the market. Expectedly, Q4 FY2021 was the strongest quarter of the year with real GDP growth of 1.6% YoY, taking full year growth to -7.3%. Better-than-expected performance by manufacturing and construction sectors drove the growth in Q4 FY2021 while contact-intensive services such as trade and public admin continued to languish.

Consumer Price Index (CPI) inflation remaining high during Apr-Nov 2020 as lockdown restrictions and supply-side constraints kept food prices elevated. Inflation during the first eight months of the fiscal year averaged 6.9%, almost one percentage point higher than the Monetary Policy Committees (MPC) comfort level. During this period, the wedge between wholesale and retail inflation also widened sharply, reflecting difficulties faced in transporting goods during the lockdown. However, recognising that monetary policy cannot tackle supply-constraint driven inflation, the committee looked through the high headline retail inflation and kept the monetary stance facilitative. Inflation eased towards the end of the year and fell within the MPCs target band of 2-6%.

Towards the end of FY2021, there has been a resurgence of COVID-19 cases in India, and a surge in crude oil prices which are emerging as key risks to the nascent economic recovery. However, given the availability of vaccines and their administration drive, there is a higher confidence in tackling the rising cases of COVID-19 as compared to the scenario in 2020. Also, crude oil price surge has been exacerbated by temporary supply issues which will abate in FY2022.

Outlook of Global and Indian Economy

As per the International Monetary Forum (IMF), the global economy is expected to post a V shaped recovery in CY2021 on the back of normalcy returning post vaccination drives across countries. The global GDP expected to grow by 6% after contracting by 3.3% in CY2020. Emerging economies are expected to grow faster than Advanced economies at 6.7% and 5.1% respectively.

With the economic activity gaining momentum post COVID-19 lockdown, and rollout of coronavirus vaccines, the Indian economy is likely to do better. However, the second wave of COVID-19 currently sweeping the country, rising input prices, stress in the Micro, Small and Medium-sized Enterprises sector, and a weak labour market are some of the headwinds facing the Indias economic revival. Monetary and fiscal support will remain crucial.

As per IMF, India is expected to be the fastest growing economy in the world for CY2021 at 12.5%. Structural reforms and pro-growth policies of the Government have the potential to extend the growth momentum for India beyond CY2021.

Inflation in advanced economies, although rising on the back of improving aggregate demand and firming commodity prices, remains well below the target range of central banks including that of Monetary Policy Committee (MPC) in India. This is expected to allow central banks including Reserve Bank of India (RBI) to remain accommodative at least for the medium term which will further augment global liquidity.

Equity Markets

Most global equity markets rallied in FY2021 as central banks across the world embarked on record monetary stimulus while governments adopted a counter-cyclical fiscal policy by embarking on fiscal spending to pull their respective economies out of recession.

Indian equities entered a bull market environment in FY2021 after first dipping into bear market towards the end of FY2020 on COVID-19 fears. In one of the most spectacular rallies since FY2010 post the GFC (Global Financial Crisis), Indian benchmark index (NIFTY50) rallied 71% during FY2021. Unlike the pre-COVID period, the rally was broad-based with small and midcaps outperforming headline indices like the NIFTY50. Also there were signs of a return to value investing from growth investing after several years of underperformance by the former class of stocks.

Bullish sentiment for Indian equities was further fueled by the expansionary FY2022 Union Budget. It provided for a counter-cyclical fiscal policy with focus on reviving growth, while ensuring adequate resources for tackling the pandemic, by expanding the fiscal deficit to a higher than expected level of 9.5% for FY2021 and 6.8% for FY2022.

Strong growth in retail investors entering equity markets and trading volumes

FY2021 was a landmark year for the Indian capital markets with record number of demat accounts being opened and significant surge in equity and derivatives volume growth. This was led by historic volatility arising out of the pandemic, lower interest rate regime in the market and aided by work-from-home environment.

The number of National Securities Depository Ltd. (NSDL) and Central Depository Services Ltd. (CDSL) demat accounts opened increased from 5.0 Million in FY2020 to 14.3 Million in FY2021, a growth of 188% making this the year with highest number of demat accounts opened in any financial year till date.

14.3 Million Up~3X

Demat accounts opened in FY2021

The gross industry Average Daily Turnover or ADTO was up by 94% YoY. Within this, the equity ADTO increased by 69% and derivatives ADTO grew by 95%, primarily driven by weekly Options contracts. In the Futures segment, volumes were up 24%.


Industry average daily turnover YoY growth

Notable trends this year were an increase in retail and others contribution. The retail and others contribution increased in equity from 55% in FY2020 to 58% in FY2021, resulting in retail and others ADTO growing by 80%. Secondly, delivery ADTO increased by ~44% in FY2021 as compared to FY2020. The institutional ADTO also registered impressive increase of 24% and 27% in equity and derivative segments respectively (Source: SEBI bulletin).

Strong flows from Foreign Portfolio Investors (FPIs) although muted domestic flows into equity capital markets

The Indian capital markets over the past few years have witnessed net buying by Foreign Portfolio Investors (FPIs) and Domestic Institutional Investors (DIIs) on a combined basis, accounting for the bulk of investments. These institutional investors facilitate adequate liquidity to both the cash equities and the equity derivatives markets.

FPIs were net buyers across FY2021 totalling Rs 2,761 Billion. While unprecedented monetary expansion by most central banks of developed economies such as the US FED, European Central Bank, and Bank of Japan along with record low interest rates augurs well for FPI flows towards Emerging Markets (EM) like India going forward, dollar strengthening remains a risk.

This swing in market movement was also reflected in FPI flows. FPIs pulled out Rs 689 Billion equity between March 2020 and April 2020. The trend however reversed in May with FPI becoming net buyers for the remainder of the year (Rs 2,809 Billion equity).

On the other hand, DIIs investments countered FPI flows, with aggregate outflows of Rs 1,340 Billion for the year. The mutual fund industry has witnessed net outflows of approximately Rs 407 Billion in FY2021 in Equity and related schemes. SIPs continued to remain resilient despite the market volatility with cumulative SIP flows of Rs 961 Billion in FY2021 vis--vis Rs 1,001 Billion in FY2020.

Another trend that is relevant in the institutional client base is that Domestic Alternative Investment Funds (AIFs) and passive Exchange Traded Funds (ETFs) have gained momentum in the past few years as evidenced by the domestic ETF Asset Under Management (AUM) – equity and debt ETFs-- reaching Rs 2.8 Billion by March 2021 (up 88% YoY). As institutional investors become more sophisticated, their requirements are rising in terms of proprietary fundamental research and differentiated product offerings.

Rs 2,761 Billion

Demand for Retail Financial Products picked up in the second half

While direct equity investments gained popularity, as indicated by number of demat accounts opened, the managed products saw muted investor interest with preference being towards passive investment options like Exchange traded funds, which as a category saw growth in FY2021 over FY2020.

Distribution of other products like loans, fixed income, corporate bonds, deposits, insurance, Alternate Investment Funds (AIF), Portfolio Management Scheme (PMS), etc., were impacted as a significant portion of these businesses are contact based and the COVID-19 related environment effected fulfilment of their sales in the first half with business improving only in the second half as economic activities started resuming.

Investment Products

Mutual Funds

Mutual Fund Investor accounts (folio count including Exchange Traded Funds - ETF) registered a growth of 10% (similar to that of last year) to reach 99 Million accounts in FY2021. Growing digitisation of the processes right from account opening to managing investments across the distribution channels aided the Mutual Fund (MF) industry during the lockdown.

Mutual Funds (Equity) witnessed 6% increase in Average Assets under Management (AAUM) in FY2021, attributed to lower base (March 2020 lows), mark-to-market gains led by broad-based market rally, steady Systematic Investment Plan (SIP) inflows and NFOs. When the Nifty crossed the previous highs in July 2020, investors started booking profits as the uncertain environment still prevailed. The average monthly equity net inflows turned negative, amounting to outflows of Rs 62 Billion for the next three quarters (i.e. Q2 FY2021 to Q4 FY2021). Direct Plan contribution to equity assets increased marginally to 20% in FY2021 (exit) compared to ~19% in FY2020 (exit).

Average monthly SIP inflows saw a dip of 4% from

Rs 83.4 Billion in FY2020 to Rs 80 Billion in FY2021. New SIP (Systematic Investment Plan) registrations were higher by 20% in FY2021, to average ~1.2 Million per month indicating staggering of investments. The period also saw growth in small ticket size SIPs from tier II and III towns


New SIP registrations YoY growth

During FY2021, passive investing gained rhythm with ETFs (excluding gold) seeing net inflows through the year. There was 129% rise in the Exchange Traded Funds (ETF) folios in FY2021. Debt ETFs also contributed to the increasing ETF flows. Net ETF folio added increased by 160%YoY.

The year also witnessed growing popularity of categories and themes like Environment, Social & Governance (ESG), International investment, Multi Assets & Dynamic asset allocation funds. Fund-of-Fund investing Overseas also saw good traction with average monthly net inflows ~ Rs 6.6 Billion for the year FY2021 compared to negligible flows in the previous years. Buoyant domestic as well international markets led to flurry of New Fund Offerings (NFO). The 82 New fund offerings across categories mobilised ~ Rs 409 Billion of assets in FY2021.

Fixed Income

Heightened uncertainty in economic activity due to COVID-19 led disruptions, coupled with volatility in capital markets forced investors to divert attention to fixed income instruments for their investments. In an attempt to de-stress the financial ecosystem & revive growth, RBI resorted to a cumulative reduction of 115bps in repo rate, from 5.15% in March 2020 to 4.00% in March 2021 thereby bringing down interest rates to decadal low. Monetary policy Committee (MPC) action lead to a decline in G-Sec yields. Average yield on 3-year AAA corporate bond reduced from 8.47% on 26th March 2020 to 5.40% on 31st March 2021 making them less attractive for fresh investments. Muted economic activity and lower demand affected fund raising by corporates throughout the year. In FY2021 fund raising by NBFCs through NCD issuances dropped to ~Rs 105 Billion compared to issuances of Rs 150 Billion in FY2020.

In uncertain economic environment, gold as an asset class garnered interest amongst investors. Gold price rose from a low of Rs 40,200 in March 2020 to a high of Rs 55,400 in August 2020 before correcting to low of Rs 43,980 in March 2021. Digital gold investments like Government of Indias Sovereign Gold Bond (SGB) saw increased demand from investors. Subscription to SGB tranches increased to Rs 160.48 Billion in FY2021 compared to Rs 23.16 Billion in FY2020 registering a growth of 593% YoY.


The search for better inflation-adjusted and uncorrelated returns has led to the shift towards alternates, as an asset class. The increasing pool of wealthy Indians and their need for customized solutions will continue to fuel growth of this segment in the years to come. With other investment avenues getting increasingly commoditized, the alternates space offers flexibility and scope for alpha generation to asset managers well within the regulatory boundaries set by SEBI.

The Alternate Investment Fund (AIF) industry crossed another milestone in FY2021 with total fund raise topping Rs 2.3 trillion, a growth of 23% over FY2020 and a CAGR of 39% in the last three years. Of this, Category 2 AIFs, which comprises of Private Equity, Real Estate, Venture Debt, etc., and is the largest (~Rs 1.6 trillion), grew almost 30% YoY in FY2021. This bodes well for the healthy development of a strong ecosystem for start-up funding in the country.

Portfolio Management Scheme (PMS), being a more matured product segment, its AUM has also seen a healthy growth of more than 7% CAGR over 5 years ended Mar-2020. Since then, it has grown another 9% until Oct-2020 (last published data by SEBI) to cross Rs 4.6 trillion (excluding EPFO/PFs).

Protection Products

Life insurance

The Life Insurance Industry had a muted start to FY2021, amidst the outbreak of the pandemic which prevented any contact and hence fulfilment, registering a decline of 7% on H1 exit. Second half of the year saw a recovery as lockdown restrictions started easing. FY2021 For New Business premiums* grew by 3% with Rs 756.58 Billion premium collection. While Life Insurance Corporation of India (LIC) posted a decline of 3%, private sector players registered a growth of 8%. The private players market share in retail new business premium stood at 60% in FY2021. While Term & Protection plans continued to see increased interests from customers, positive traction was seen in Non-Participating (Guaranteed return plans) registering growth of 25% & Annuity growth of 39% in FY2021.

*Retail Life insurance premium accounted for new business premium above are only for retail business (excluding group business) of regular premium and single premium plans (Single premium & Annuity plans considered with 10% weightage) Source: IRDA

General insurance

General Insurance business had a growth of 5.2% in FY2021 with premiums at Rs 1.98 Trillion up from Rs 1.88 Trillion in FY2020. The 4 Segments (Fire, Health, Motor & Crop Insurance) contributed approximately 90% of total Industry business. While Fire Insurance & Health insurance saw annual growth of 28% & 13.4% respectively, the dominant Motor Insurance & Crop Insurance shrank due to lockdowns and saw de-growth of 1.7% & 3.3% respectively.

Health insurance

In the health insurance space, SAHI (Stand-alone Health Insurance companies) continued the growth trajectory with premiums growing by 11.08% YoY at Rs 157.20 Billion in FY2021. The SAHI players put together hold 7.9% market share.

Looking ahead, structural drivers like a young working population, rising affluence, digitisation, financialisation of savings, under penetration of insurance across categories and increasing share of Insurance in financial savings are expected to be the growth drivers in the sector.

Loans & Mortgages

Bank credit growth remained subdued as demand languished and risk aversion continued to grip the banking system. Scheduled commercial bank credit growth slowed to 5.6% YoY in FY2021 compared to 6.1% in FY2020.

Slowdown in credit growth has been broad based across all major sectors except agriculture and medium enterprise. Credit to medium enterprises registered a growth of 2.8% in March 2021 compared to 0.7% year ago. Retail loan growth softened to 10% YoY from 15% a year ago while Housing loans grew by 9.1% YoY in March 2021. The industry witnessed a pent-up demand in Q2 to Q4 of FY2021, seeing a robust housing sales across the top cities aided largely by offers and discount being doled out by developers all across and limited stamp duty cut in states by the governments. The outstanding book of Home loan market is ~ Rs 24 Trillion. The outlook for home loans market continues to be promising and is backed by increasing urbanisation and affordable mortgages rate. Housing-for-All by 2022 and PMAY have pushed the supply side of affordable housing which would be a key driver for real estate in FY2021-FY2022.

Strong growth in primary capital market activity

Q1 FY2021 was subdued for primary capital market activities on back of a weak Nifty till about late May 2020 but then witnessed a recovery. The 20%+ rally in Nifty from mid May 2020 to late July 2020 built the foundation for capital market activity for the remainder of the year.

Initial Public Offering (IPO) market saw a revival in Q2 FY2021 with nine IPOs in that quarter. The second half of the year witnessed healthy IPO activity with 21 companies going public. The year also saw 31 Qualified Institutional Placements (QIP) take place. Other products like rights, Offer For Sale (OFS), InvIT, ReIT, buybacks etc. also saw robust activity. The total equity fund raising eventually turned out to be strong to hit an all-time high of Rs 2,505 Billion (vis--vis Rs 1,472 Billion in FY2020).

Private Equity (PE) investments during FY2021 amounted to $42.1 Billion (including two large ticket Reliance Group deals cumulatively worth $16.3 Billion) vis--vis $29.4 Billion in FY2020. Merger & Acquisition (M&A) activity during FY2021 remained flat at $38.2 Billion (vis--vis $38.4 Billion in FY20) . The deal activity on the advisory side was subdued in the first quarter of the fiscal as deal making was significantly impacted due to COVID-19.

Key Highlights (Source: Prime Database and SEBI Filings):

• 34 IPOs (including FPOs, InvITs, ReITs) aggregated Rs 798 Billion in FY2021 as compared to 14 IPOs (including FPOs, InvITs & ReITs) which aggregated Rs 227 Billion in FY2020, representing an increase of 143% and 252% in count and mobilisation terms respectively

• 31 QIPs aggregated Rs 780 Billion in FY2021 as compared to 13 QIPs which aggregated Rs 512 Billion in FY2020, representing an increase of 138% and 52% in count and mobilisation terms respectively

• 20 Rights Issues aggregated Rs 643 Billion in FY2021 as compared to 13 Rights Issue which aggregating Rs 560 Billion in FY2020, representing an increase of 54% and 15% in count and mobilisation terms respectively

• 38 Offer-for-Sale aggregated Rs 284 Billion in FY2021 as compared to 26 Offer-for-Sale which aggregated Rs 173

Billion in FY2020, representing an increase of 46% and 64% in count and mobilisation terms respectively

• 46 open offers aggregating to offer amount of

Rs 250 Billion in FY2021 as compared to 61 open offers aggregating to Rs 215 Billion in FY2020, representing a decline of 25% and increase of 17% in count and mobilisation terms respectively

• 61 Buybacks aggregating to total offer amount of Rs 393 Billion in FY21 as compared to 52 Buybacks aggregating to Rs 200 Billion in FY20, representing an increase of 17% and 97% in count and mobilisation terms respectively

• 180 PE investments (greater than $20 Million) aggregating to deal size of $42.1 Billion in FY2021 as compared to 234 PE investments aggregating to $29.4 Billion in FY2020, representing a decline of 23% and increase of 43% in volume and value terms respectively

• 103 M&A deals (greater than $20 Million) aggregating to deal size of $38.2 Billion in FY2021 as compared to 152 M&A deals aggregating to $38.4 Billion in FY2020, representing a decline of 32% and 1% in volume and value terms respectively

Equity Markets Activity (Source: Prime Database and SEBI Filings):

Issuances Amount (in Billion)

Particulars FY2017 FY2018 FY2019 FY2020 FY2021
IPO/FPO/InvIT/REIT 282 889 227 227 798
QIP/IPP 137 622 105 512 780
Rights Issue 33 214 20 560 643
OFS 84 174 217 173 284
Open Offer 59 26 280 215 250
Buy Back 345 533 556 200 393
Total 940 2,458 1,405 1,886 3,148
Deal count
Particulars FY2017 FY2018 FY2019 FY2020 FY2021
IPO/FPO/InvIT/REIT 25 47 17 14 34
QIP/IPP 22 53 13 13 31
Rights Issue 12 20 8 13 20
OFS 28 37 28 26 38
Open Offer 57 58 67 61 46
Buy Back 49 59 63 52 61
Total 193 274 196 179 230

Regulatory Direction

Regulatory Authorities have taken a slew of measures to ensure smooth conduct of business during the COVID pandemic and continue to work in the direction of enhancing transparency, protecting investor interests, and also enabling the industry to serve the customer by adopting technology. Some of the notable regulatory developments that were articulated or enacted in the current fiscal include:

In light of disruptions caused by the pandemic, SEBI announced several measures which provided relaxations to issuers as well as intermediaries.

1. For issuers

• SEBI gave relaxation from compliance with certain provisions of the Listing Obligations and Disclosure Requirements (LODR). For FY2020, the top 100 companies by market capitalisation were allowed to hold their Annual General Meetings (AGM) within nine months from close of the financial year. The listed companies were given an extension to file the fourth quarter financial results and one-month extension to file results for FY2020.

• Listed companies were allowed to conduct their AGM through video conferencing while banks and insurance companies were given the option of submitting only the standalone numbers instead of consolidated financials. Further, norms related to sending physical copies of annual reports or publishing certain statutory advertisements were also relaxed.

• The 25% minimum public shareholding norm was relaxed and exchanges were advised not to take penal action.

• Listed entities were asked to evaluate the impact of COVID-19 pandemic on their business, performance and financials, both qualitatively and quantitatively, to the extent possible and disseminate the same to investors.

2. For Market Intermediaries

• In view of the prevailing situation due to COVID-19 pandemic and representations received from various market intermediaries, timelines for compliance with the regulatory requirements by the

 1 Equity fund raising includes IPO/FPO, InvIT, REIT QIP, OFS & Right issue

 2 M&A activity excludes PE control deals as they are getting captured in PE investments. Both M&A and PE investment values are for deals greater than $20 Million trading members / clearing members/ depository participants were further extended.

Protecting investor interest

Equity Business: New Margin Norms

SEBI had introduced new uniform margin norms for the equity broking industry that require standardised margins to be collected for all products from the customer upfront before entering a trade. The regulations are to be implemented in four phases starting December 1, 2020 followed by March 1, 2021, June 1, 2021 and September 1, 2021.

Equity Business: Treatment of client securities

SEBI has also issued certain guidelines regarding the method of margin finance with regards to pledging/ re-pledging of securities. Securities as margin to be collected only in the form of a pledge to ensure safe guards for investors securities.

Distribution of Financial Products: Segregation of Distribution and Advisory

Norms of segregation of distribution and advisory customers have also been issued by SEBI during the year.

Distribution of Financial Products: Portfolio Management Services (PMS)

SEBI dis-continued upfront commissions for distributors of PMS. Secondly minimum investment in PMS amount was increased from Rs 25 Lakh to Rs 50 Lakh under the new regulations.

Distribution of Financial Products: Mutual Funds (MFs)

Implementation of regulatory changes with respect to valuations of debt securities, changes in Mutual Fund exposure limits to single issuer, new rule regarding applicability of Net Asset Value (NAV) on realisation of funds and portfolio based risk classification with introduction of a new risk-o-meter having a "Very high risk category". Based on the new regulation many of the equity schemes got reclassified to very high-risk category from high risk

Our Strategy

We endeavour to emerge as full stack open architecture digital platform for life cycle investment, protection and borrowing needs of a retail Indian. Our strategy is intended to help us broad base our business model and diversify and granularise revenue streams. We have also articulated our approach of achieving this by strengthening the core aspects of business while building for the future for focusing on five key strategic anchors:

• Ramping up scale and quality of customers by expanding customer acquisition channels augmented by our distinct product and service propositions

• Monetising client value expanding revenue streams to build non-cyclical revenue streams and also mark our presence in the entire financial planning journey of our customers lifecycle

• Enhancing customer experience by using analytics to provide hyper personalized experience to increase loyalty and penetration of existing client base

• Achieve digital agility by investing in next gen technological capabilities to remain cutting edge

• Continued focus on operating leverage along with investments in area which provide amplification of revenue.

Operating Performance of Business Verticals

The Company reported strong growth in number of equity revenue generating clients (i.e. NSE active clients) from 1.08 Million in FY2020 to 1.58 Million for FY2021. Our strategy of ramping up scale helped us acquire new clients at a substantially faster pace with 0.69 Million new clients added in the year, up from 0.39 Million in FY2020. Additionally, our innovative propositions like Prime, Neo, One Click equity investments etc. helped us attract quality clients and in enhance vibrancy of transacting clients on our platform.

Retail Equity

The Retail equity and allied income grew strongly by 70% from Rs 9,409 Million in FY2020 to 15,983 Million in FY2021 led by growth in our retail brokerage revenue from Rs 8,187 Million in FY2020 to Rs 13,447 Million in FY2021, growth of 64%. Our allied income grew by 108% in Rs 1,222 Million FY2020 to Rs 2,537 Million in FY2021.

The strong growth in allied revenues was led by growth in interest income earned on our MTF and ESOP books as well as increase in subscription fees and other charges earned on our various product propositions including Prime, Neo etc. The interest income registered a strong growth of 76% from Rs 970 Million for FY2020 to Rs 1,707 Million for FY2021 because of growth of our daily average MTF and ESOP funding books from Rs 8.3 Billion for FY2020 to Rs 17.9 Billion for FY2021

Institutional Equity

The revenue from our institutional equity business increased by 24% from Rs 1,289 Million in FY2020 to Rs 1,599 Million in FY2021 on the back of traction with clients across India, Asia Pacific, UK and US. The growth in revenue was driven by increased flow business, gain in market shares and traction in marquee block deals. We gained market shares on account of better rankings with highly active clients, significant performance in block deals/ block crossing and increased wallet share from existing clients.

During FY2021, the Company continued to focus on enhanced engagement in a digital format. By way of plethora of investor calls, across sectors, with industry stalwarts and domain experts, that furnished timely insights and helped clients understand the ground reality and navigate the COVID-19 related crisis better. During the year, we organised three virtual conferences, including our flagship BFSI Conference, which was highly appreciated and well received by the institutional investor fraternity. The event was inaugurated by Shri Anurag Thakur, Honourable Minister of State for Finance and Corporate Affairs with participation from about 50 banks and financial institutions, (both listed and unlisted), as well as 15 sessions with industry stalwarts. We also consolidated our position with investors in the US and UK by organising virtual interactions with senior management of relevant companies for these geographies during times that were convenient to the investors based on their time zones.

Improved traction in both retail and institutional client base helped us improve our blended equity market share to 10.4% in FY2021 from 8.7% in FY2020, an improvement of 170 bps.

Distribution of Financial Products

In FY2021, our distribution revenues increased marginally from Rs 4,229 Million to Rs 4,279 Million. Due to the pandemic related restrictions, most of the first half of the year remained muted and growth returned only in the second half with the last quarter registering robust growth of 22%.

Within distribution revenues, MF revenues grew 5% YoY to Rs 2,385 Million in FY2021 compared to Rs 2,263 Million in FY2020. We continued to strengthen our position amongst the largest distributors of MFs with our MF AUM reaching an all-time high of Rs 455 Billion by March 2021. The growth in AUM was aided by marginal growth of 2% in equity inflows compared to a decline of 7% for the industry and higher SIP net flows.

We continued to promote regular and disciplined saving habit through the Systematic Investment Plan (SIP) amongst our investors through digital and customer engagement initiatives as well as through our innovative, simplified and customer-centric "iDirect One-Click" mutual fund baskets to help address concerns of investors who usually struggle selecting the right funds to invest. As a result, our SIP flow increased by 6% YoY in FY2021, growing faster than Industry growth of (4)% YoY leading to an increase in our market share on SIP book from 3.3% in FY2020 to 3.6% in FY2021.

Volume of loan distributed in Q4FY21

Rs 5.3 Billion

144% YoY


Largest SIP book in the industry.

Revenues from distribution of non-MF financial products increased by 1 % led by increase in revenues from insurance and also growth in revenues from distribution of fixed income products, loan products and other financial products.

In the uncertain economic environment, customers preferred to choose investments with fixed returns and low volatility. Customers also favoured ETFs, as majority indices delivered double-digit returns. Considering customers preference, company during the year has expanded its offerings in alternative investments like ETF, Sovereign Gold Bonds (SGBs), RBI bonds, Corporate Fixed Deposits (CFD), REITs (Real Estate Investment Trusts) etc. Companys market share in SGB has now expanded to ~10% and share in non-institutional ETF assets stands at 13% in March 2021.

Loan distribution and Insurance business both started with a weak first half of the year but recovered in the second half registering robust growth in the last quarter of the year.

Life Insurance business registered a decline of 40% in new premium collection in H1 FY2021, however recovered in H2 FY2021 with a 30% YoY growth which helped us close the year with positive growth of 2% for FY2021. This resulted in our commission from distribution of life insurance growing marginally from Rs 490 Million to Rs 509 Million. General Insurance though in nascent stage registered growth in premium and policies.

During the year, we curated 12 loans product like Home Loans, Loan against Property (LAP), Lease Rental Discounting (LRD), Business Loans, SME Loans, Personal Loans, Credit Cards, Auto Loans, Two wheeler loans, Loans against Securities (LAS), Remittances and Forex services for our customers. Loans distributed by us grew by 42% for the year however grew by 144% in the last quarter with Rs 5.3 Billion of loans being distributed, our ever highest in a quarter.

Private Wealth Management

Our Private Wealth Management business, which comprises revenues and assets across equity products and third party financial products from clients with individual assets of more Rs 10 Million, registered strong growth in revenues, assets and client base. As at March 2021, there were ~47,400 clients, up from ~32,000 clients, as at March 2020 with an asset under management of Rs 1.68 Trillion, which was up by 102% from Rs 0.83 Trillion at FY2020. Revenues were up 74% from Rs 2.59 Billion in FY2020 to ~ Rs 4.50 Billion in FY2021.

As at March 31, 2021, out of the total assets, 84% were transactional revenue generating assets (where revenue is earned when a transaction is initiated by a customer e.g. equity assets) and 16% were recurring revenue generating assets (where recurring revenue is earned e.g. Mutual funds, MTF etc.). However, 50% of the revenue was transactional and 50% was recurring in nature. The assets had a blended annualised yield of 0.36% in FY2021 up from 0.28% in FY2020.

Our client base is sticky, with 52% of assets coming from clients who are with us for over 10 years. We continue to focus on acquiring profitable clients - clients acquired during preceding 5 years have higher average AUM and better Average Revenue Per User (ARPU) than the ones on boarded during 2000-2015. Our key strategies for FY2021 were improving the yield on transactional assets and increasing recurring assets.

ICICI Securities launched proprietary Portfolio Management Service (PMS) last year in March, offering a wide range of PMS strategies across market capitalisation and investment styles. It an ideal investment avenue for high net worth investors (HNI) with benefits like regular reviews, risk management and flexibility and convenience. ICICI Securities currently has three distinguished offerings – an actively managed ACE Equity portfolio, a smart beta strategy - Active Index, and a Multi asset PMS which invests in three asset classes – Equity, Fixed income and Gold. It also assists on customised portfolios in non-discretionary PMS with major focus on higher risk adjusted returns. The total assets under management in our PMS grew from Rs 1.1 Billion as at March 31, 2020 to Rs 2.20 Billion as at March 31, 2021.

Rs 1.68 Trillion

Private Wealth AUM

Issuer & advisory services

The revenue from our issuer and advisory services business increased by 111% from Rs 764 Million in FY2020 to Rs 1,613 Million in FY2021 with both our issuer services as well as advisory revenues growing over last year. The increase in revenue was driven by a sharp increase in deal activity in the market as well as gains in market share across products. During the year, we successfully managed 56 deals compared to 30 deals for FY2020. There was increased traction across IPOs, QIPs, Rights issues, advisory transactions, Buybacks etc. across BFSI, Telecom, diversified, consumer retail and other sectors.

The Company managed 17 IPOs (including FPO, InvIT, REIT) in FY2021 with a market share of 78% (in terms of issue size) (Source: Prime Database). The amount raised through such issuances managed by the Company during FY2021 was Rs 622 Billion, which included the IPOs of Rossari Biotech Ltd., Happiest Minds Technologies Ltd., Route Mobile Ltd., Computer Age Management Services Ltd., Angel Broking Ltd., UTI Asset Management Co. Ltd., Mrs Bectors Food Specialities Ltd, Indian Railway Finance Corp. Ltd., Indigo Paints Ltd., Home First Finance Co. India Ltd., Railtel Corp. of India Ltd., Kalyan Jewellers India Ltd., Nazara Technologies Ltd., Suryoday Small Finance Bank Ltd.; FPO of Yes Bank Ltd.; InvIT of Tower Infrastructure Trust and REIT of Mindspace Business Parks.

The Company successfully completed 13 QIPs in FY2021 cumulatively amounting to Rs 533 Billion with a market share of 68% (in terms of issue size) for JM Financial Ltd., Axis Bank Ltd., Housing Development Finance Corp. Ltd., ICICI Bank Ltd., Credit Access Grameen Ltd, Inox Leisure Ltd., Canara Bank, IDBI Bank Ltd., Punjab National Bank, Poly Medicure Ltd., Indiamart Intermesh Ltd., Bank of Baroda and IDFC First Bank Ltd.

In FY2021, the Company successfully completed 7 rights issues cumulatively amounting to Rs 619 Billion with a market share of 96% (in terms of issue size) for Reliance Industries Ltd., Aditya Birla Fashion and Retail Ltd., Shriram Transport Finance Co. Ltd., Mahindra and Mahindra Financial Services Ltd., Gateway Distriparks Ltd., Spencers Retail Ltd. and L&T Finance Holdings Ltd.

Offer for Sale (OFS) managed by the Company in FY2021 for an amount of Rs 128 Billion was completed with a market share of 45% (in terms of offer size), which included the OFS of ICICI Securities Ltd., Indian Railway Catering & Tourism Corp. Ltd., Steel Authority of India Ltd. and Tata Communications Ltd.

The Company acted as an advisor for open offers amounting to Rs 24 Billion in FY2021 with a market share of 10% (basis offer size), including the Open Offer of ABB Power Products & Systems India Ltd. and J.B. Chemicals & Pharmaceuticals Ltd. The Company also acted as advisor for delisting offer of Ineos Styrolution India Ltd. of Rs 2 Billion in FY2021.

The Company successfully completed the buybacks of Kalpataru Power Transmission Ltd., Hindustan Petroleum Corp. Ltd. and VRL Logistics Ltd. amounting to Rs 28 Billion in FY2021.

Select advisory deals done during FY2021 include –

• Advisor to Future Group in the Reliance Retail-Future Group deal (reorganisation of Future Groups businesses involving the merger of key group companies including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks into Future Enterprises Limited (FEL) and Slump Sale of Retail & Wholesale Business to Reliance Retail and Fashion Lifestyle Limited (RRFLL) and Logistics & Warehouse Business to Reliance Retail Ventures Limited (RRVL))

• Buy side advisor to TA Associates for their stake purchase in NSE

• Sell side advisor to True North for its stake sale in SeedWorks International

• Sell side advisor to Tata Capital and Shriji Polymer for their stake sale / fund raise in Shriji Polymer

• Sell side advisor to Inventia for their fund raise from InvAscent

• Sell side Advisor to Samara Capital and promoter of Cogencis Information Services for their stake sale in Cogencis Information Services

• Sell side advisor to Dodla Dairy for their fund raise from IFC

• Sell side Advisor to Citizen Industries for its strategic sale to Daikin (Sources: Prime Database, Venture Intelligence)

Opportunities and Business Outlook

Our businesses are expected to benefit from the structural shift in the financial savings environment as well as improving technology infrastructure of India. Some of the broad trends which underline the opportunities facing our businesses are:

Macro economic construct is favourable to financial services business

• Despite the short-term impact of COVID-19, India is expected to be a relatively high growth economy in the medium to longer term and augurs well for the capital markets in India.

• India has been, and is expected to continue to be a high savings economy. The young working population is expected to increasingly channelise a higher share of a growing pie of their savings into financial assets. Increasingly, the preference of retail investors to participate in equity as an asset class coupled with the relative under penetration in terms of both market capitalisation to GDP ratio or ratio of investments in shares and debentures to GDP signify a positive outlook for equity-based businesses in India.

• Increase in overall economic activity, scaling up of domestic corporate institutions and professionalisation of promoter driven set-up would continue to fuel demand for capital raising and advisory services.

Demographic factors are creating new and large pools of prospective clients

• There is growing section of Gen Z who are beginning their economic life and its expected to that approx. 15 Million young Indians would be entering earning age every year. These are digital natives and more inclined towards financial assets thereby building strong investment asset pools.

• As the baby boomer generation is approaching retirement, it has become a prime segment for wealth managers looking at preservation and eventually intergenerational transfer.

• The cities beyond the top 15 cities are also increasingly witnessing strong demand for financial products (like mutual fund) as awareness and access improves leading to expansion of distribution footprint, more so for digital businesses.

• Growing affluence is a structural trend as Indians move up the wealth pyramid.

As per industry reports, the count of adults with over a Million $ wealth in India has grown from 0.76 Million in 2019 to 0.91 Million in 2020. While for adults with more than US$100,000 wealth, the count has increased from 15 Million in 2019 to over 20 Million in 2020. This underscores the growth and opportunity size of wealth management in India. (Source: Credit Suisse Global wealth report 2020, 2019)

• India continues to outpace global High Networth Individuals (HNIs) growth, mirroring the economic growth in the country. With the incremental allocation of wealth being higher in financial assets as compared to physical assets, the wealth management industry is emerging as a big beneficiary.

Consumer preferences are evolving including rapid adoption of digital, accelerated by COVID

• Advances in technology, increasing smartphone penetration, and increasing digitisation at systemic level are expected to propel more retail consumers to adopt and consume financial services through electronic media

• Technology is playing a key role in enhancing customer experiences, engaging them digitally, and in providing personalised solutions at scale.

• With evolved platforms, customers are also becoming digitally savvy. With an enhanced proposition and a platform, they are comfortable to do business in Do-It-Yourself (DIY) mode.

• The personal finance space is going through a digital transformation worldwide. The rise of evolved platforms has given an impetus to this trend. At the same time, there is a conscious shift from product based to solution based, and more holistic approach of client engagement.

• Passive investing is gaining prominence in India. Products like ETF, index funds and factor based portfolios will emerge as a new category. ESG investment opportunities are also gaining popularity. These trends are conducive to digital platform businesses garnering scale.

Implications for our businesses

Our retail equity, distribution and wealth management businesses are expected to benefit from rising income levels of our target customer segment, being young working class and self-employed professionals, entrepreneurs and increasing financialisation and equitisation of savings.

Online retail equity business is expected to benefit from rising retail participation and also the trend of consolidation in the industry. Amidst tightening regulatory framework and competition, industry over the years, has consolidated in favour of larger and digital players. As a result, the market-share of the top ten brokers increased from 26% of the trading turnover in the NSE cash equities market in FY2015 to 44% in FY2021. Top 5 brokers accounted for over 65% of the incremental NSE active clients in FY2021 and all of them were digital players.

Our distribution and wealth management business would benefit from growing democratisation of wealth management in a hyper personalised manner, delivered digitally. For the higher end of the client spectrum, where there is a need for relationship support, a omni channel model of RM and digital engagement is emerging. Execution is moving to digital first delivery mode. With the COVID-19 impetus, the traditional offline model is fast changing to digital across products.

We expect our strong digital platform and associated technical capabilities, knowledge capital including domain expertise in developing products and solutions in-house, experienced relationship managers, research capabilities and our trusted brand would continue to help us in attracting customers.

Our institutional equity business would benefit from expected inflows from FPIs as well as increasing flows into DIIs, pre-dominantly mutual fund, insurance, etc. Our research, corporate access and deep-rooted relationships with institutional investors particularly DIIs will help us expand our institutional equity businesses.

Our Issuer services and advisory business is expected to benefit from the positive momentum for IPOs which is likely to continue in FY2022. Our IPO pipeline Sec remains strong, having filed 12 DRHPs with SEBI (as on 9 April 2021). We are expecting the market to move towards larger sized IPOs and we are also expecting several tech companies to go public.

QIPs are expected to continue to be in vogue driven by BFSI companies seeking growth capital and companies seeking capital to tide over the pandemic etc. Other capital market products like rights, OFS, REIT, InvIT, blocks etc. are expected to witness robust activity as well. On the advisory front, we expect to see strong activity driven by consolidation, platform plays, deployment by PE funds, etc.

Our sector expertise and relationships with corporates and financial sponsors are expected to hold us in good stead to maintain our leadership position in capital market transactions and to grow our advisory business.

Financial Performance


The Company registered consolidated revenue of Rs 25,861.7 Million for FY2021 as compared to Rs 17,249.4 Million for FY2020, an increase of 49.9%. Consolidated Profit after tax (PAT) for FY2021 was Rs 10,677.2 Million compared to

Rs 5,420.0 Million for FY2020, an increase of 97.0%. Our total cost increased from Rs 9,720.1 Million in FY2020 to Rs 11,553.9 Million in FY2021, an increase of 18.9% on account of increasing business activities implying net margin of 41% in FY2021 compared to 31% in FY2020.

Analysis of Consolidated financial statements a. Results of Operations Extract of Consolidated Statement of Profit and Loss

( Rs in Million)

March 31, 2021 March 31, 2020
Revenue from operations
(i) Interest income 3,448.7 2,350.0
(ii) Dividend income 0.2 0.4
(iii) Fees and commission income
- Brokerage income 15,045.2 9,475.6
- Income from services 6,960.7 5,217.5
(iv) Net gain on fair value changes 386.4 -
(v) Net gain on derecognition of financial instruments under amortised cost category - 3.0
(vi) Others 20.5 15.7
(I) Total Revenue from operations 25,861.7 17,062.2
(II) Other income - 187.2
(III) Total Income (I+II) 25,861.7 17,249.4
(i) Finance costs 1,072.8 863.9
(ii) Fees and commission expense 1,221.6 437.0
(iii) Net loss on fair value changes - 36.1
(iii) Impairment on financial instruments (41.0) 106.7
(iv) Operating expense 769.0 586.8
(v) Employee benefits expenses 5,879.6 5,337.7
(vi) Depreciation, amortization and impairment 541.8 614.0
(vii) Others expenses 2,110.1 1,737.9
(IV) Total Expenses (IV) 11,553.9 9,720.1
(V) Profit/(loss) before tax (III -IV ) 14,307.8 7,529.3
(VI) Tax expense:
(1) Current tax 3,604.2 1,961.0
(2) Deferred tax 26.4 148.3
3,630.6 2,109.3
(VII) Profit/(loss) for the period (V-VI) 10,677.2 5,420.0
(VIII)Other comprehensive income (net of taxes) 25.1 (59.1)
(IX) Total comprehensive income for the period (VII+VIII) (comprising profit/(loss) and other comprehensive income for the period) 10,702.3 5,360.9

Interest income

Interest income increased from Rs 2,350.0 Million for the year ended March 31, 2020, to Rs 3,448.7 Million in the year ended March 31, 2021, an increase of 46.8%. This was primarily due to two reasons. First, an increase in interest on retail fund-based products like ESOP and MTF. The Companys combined daily average ESOP and MT book increased from Rs 8.3 Billion in FY2020 to Rs 17.9 Billion in FY2021. Second, interest earned on bank fixed deposits held with exchanges as margin for its brokerage business. The Companys daily average fixed deposits book increased from Rs 14.5 Billion in FY2020 to Rs 27.9 Billion in FY2021.

Fees and commission income

Brokerage Income

Our brokerage income increased from Rs 9,475.6 Million for the year ended March 31, 2020 to Rs 15,045.2 Million for the year ended March 31, 2021, an increase of 58.8% driven by an increase in retail brokerage revenue from Rs 8,187.1 Million in FY2020 to Rs 13,446.5 Million in FY2021 and growth in revenue from our institutional equity business from Rs 1,288.5 Million in FY2020 to Rs 1,598.7 Million in FY2021.

Income from services

Income from services Increased from Rs 5,217.5 Million for the year ended March 31, 2020 to Rs 6,960.7 Million for the year ended March 31, 2021, an increase of 33.4%. This was primarily due to an increase in issuer services & advisory fee income by 111.1% from Rs 763.9 Million in FY2020 to Rs 1,612.7 Million in FY2021. Our distribution business income marginally increased from Rs 4,229.3 Million to Rs 4,279.2 Million despite contact based business remaining muted during large part of the year and lower AUM.

Net gain on fair value changes

Net gain on fair value changes was Rs 386.4 Million for the year ended March 31, 2021, primarily due to fair value changes in our treasury segment and other investment portfolio held as our stock in trade, as against net loss on fair value changes in FY2020.

Other Income

Other income of Rs 187.2 Million for the year ended March 31, 2020 includes Rs 147.5 Million Interest on income tax refund.

Finance costs

Finance costs increased from Rs 863.9 Million for the year ended March 31, 2020 to Rs 1,072.8 Million for the year ended March 31, 2021, an increase of 24.2%. This was primarily due to an increase in borrowings from Rs 15.0 Billion in March 2020 to Rs 35.2 Billion in March 2021, following an increase in retail fund-based assets and, hence the interest expense thereon, offset in part by a decline in cost of borrowing.

Fees and commission expense

Fees and commission expense increased from Rs 437.0 Million for the year ended March 31, 2020 to Rs 1,221.6 Million for the year ended March 31, 2021, an increase of 179.5%. This increase was primarily due to increases in revenue linked payout to business partners including ICICI Bank and variable payouts related to issuer and advisory services business.

Net loss on fair value changes

Net loss on fair value changes was Rs 36.1 Million in FY2020 compared to FY2021 where, being a gain, it was classified under income. It was mainly because of loss on trading activity due to market environment and increased volatility in the second half of the Q4 FY2020 due to outbreak of COVID-19 pandemic.

Impairment on financial instruments

Company creates a provision on loans and receivables based on ageing criteria, which gets reversed on subsequent realisation of receivables. Impairment on financial instruments decreased to (41.0) Million on account of the reversal of certain old receivables that were provided for earlier now being accounted under operating expenses subsequent to their write off following an ageing criteria. The impairment on financial instruments of FY2020 of Rs 106.7 million was primarily on account of a one time contingency provision of Rs 90.8 Million created on clients position to allow for any scenario of extreme volatility that may arise in future due to COVID-19.

Operating expenses

Operating expenses increased from Rs 586.8 Million for FY2020 to Rs 769.0 Million in FY2021, increased of 31.0% mainly due to increase in operating expenses linked to volumes and on account of certain old receivables that were provided for earlier now being accounted under operating expenses subsequent to their write off following an ageing criteria partly offset by reduction of acquisition cost due to digitisation of account opening process.

Employee benefits expenses

Employee benefits expenses increased from Rs 5,337.7 Million for the year ended March 31, 2020 to Rs 5,879.6 Million for the year ended March 31, 2021, an increase of 10.2%. This was primarily due to increase in variable pay pursuant to strong growth in revenues.

Depreciation and amortisation expense

Depreciation and amortisation expense decreased from

Rs 614.0 Million for FY2020 to Rs 541.8 Million in FY2021, primarily on account of decrease in depreciation on right of use asset due to consolidation of branches.

Other expenses

Other expenses increased from Rs 1,737.9 Million for the year ended March 31, 2020 to Rs 2,110.1 Million for the year ended March 31, 2021, an increase of 21.4%. This increase was primarily on account of digital marketing initiatives taken during the year partly offset by reduction in travelling and conveyance expenses.


As a result of the above, profit before tax increased from Rs 7,529.3 Million for the year ended March 31, 2020 to Rs 14,307.8 Million for the year ended March 31, 2021, an increase of 90.0%.

Our total tax expense increased from Rs 2,109.3 Million for the year ended March 31, 2020 to Rs 3,630.6 Million for the year ended March 31, 2021, an increase of 72.1%.

The effective income tax rate for the year ended March 31, 2021 is 25.4% (March 31, 2020 is 28.0%)

Profit after tax increased from Rs 5,420.0 Million for the year ended March 31, 2020 to Rs 10,677.2 Million for the year ended March 31, 2021, an increase of 97.0%.

b. Segment-wise performance

( Rs in Million)

For the year ended
Segments March 31, 2021 March 31, 2020
Segment Revenue Segment Results Segment Revenue Segment Results
Broking & distribution 23,584.6 13,124.0 15,939.5 7,354.8
Issuer services & advisory 1,612.7 811.9 763.9 176.6
Treasury 664.4 371.9 398.5 (149.6)
Total* 25,861.7 14,307.8 17,249.4 7,529.3

* Note: Unallocated amount of Rs 147.5 Million for FY2020 is included in total revenue and results and pertains to interest on income tax refund.

Revenue from our Broking & distribution segment increased from Rs 15,939.5 Million for the year ended March 31, 2020 to Rs 23,584.6 Million for the year ended March 31, 2021, an increase of 48.0%. This increase was primarily due to increase in brokerage revenue. During the same time period, our result from the broking and commission segments increased by 78.4%, primarily due to the increase in revenue in this segment partly offset by increase in expenses.

Revenue from our Issuer services & advisory segment increased from Rs 763.9 Million for the year ended March 31, 2020 to Rs 1,612.7 Million for the year ended March 31, 2021, an increase of 111.1%. This increase on account of unprecedented level of activities in equity capital market during FY2021, our results from the Issuer services & advisory segment increased by 359.7%, primarily due to increase in revenue in this segment partly offset by increase in expenses.

Revenue from our Treasury segment increased from Rs 398.5 Million for the year ended March 31, 2020 to Rs 664.4 Million for the year ended March 31, 2021, an increase of 66.7%. This increase was primarily due to increase in income from trading activities during the year and gain on fair value changes on securities as against loss in FY2020. Loss in FY2020 was primarily on account of loss booked on DHFL NCD, market environment, and increased volatility in the second half of March 2020 on account of COVID-19 pandemic.

c. Financial Position

The following table sets forth, at the dates indicated, our summary balance sheet:

( Rs in Million)

Particulars As at March 31, 2021 As at March 31, 2020
1 Financial assets
(a) Cash and cash equivalents 3,093.5 5,420.0
(b) Bank balance other than (a) above 35,699.2 18,694.0
(c) Securities for trade 4,661.7 8,351.1
(d) Receivables
(I) Trade receivables 4,586.1 887.9
(II) Other receivables - -
(e) Loans 29,014.5 5,708.7
(f) Investments 28.8 24.7
(g) Other financial assets 767.3 774.9
77,851.1 39,861.3
2 Non-financial assets
(a) Current tax assets (net) 1,189.3 1,502.8
(b) Deferred tax assets (net) 560.1 595.5
(c) Property, plant and equipment 420.0 295.2
(d) Right-of-use assets 962.0 1,529.1
(e) Capital work-in-progress 39.4 32.9
(f) Intangible assets under development 39.3 48.4
(g) Other intangible assets 227.4 155.4
(h) Other non-financial assets 520.5 407.6
3,958.0 4,566.9
Total Assets 81,809.1 44,428.2
( Rs in Million)
Particulars As at March 31, 2021 As at March 31, 2020
1 Financial liabilities
(a) Derivative financial instruments 4.5
(b) Payables
(I) Trade payables
(i) total outstanding dues of micro enterprises and small enterprises - -
(ii) total outstanding dues of creditors other than micro enterprises and small enterprises 10,264.6 6,926.4
(c) Debt securities 35,209.6 14,975.3
(d) Borrowings (Other than debt securities) - -
(e) Deposits 28.7 22.3
(f) Lease liabilities 1,060.8 1,574.4
(g) Other financial liabilities 10,440.5 2,694.6
57,008.7 26,193.0
2 Non-financial liabilities
(a) Current tax liabilities (net) 5.7 -
(b) Provisions 606.1 828.7
(c) Other non-financial liabilities 5,967.5 5,311.1
6,579.3 6,139.8
(a) Equity share capital 1,611.1 1,610.7
(b) Other equity 16,610.0 10,484.7
18,221.1 12,095.4
Total Liabilities and Equity 81,809.1 44,428.2

Total assets increased from Rs 44.4 Billion as at March 31, 2020 to Rs 81.8 Billion as at March 31, 2021, an increase of 84%. This increase was primarily due to increase in bank balances, trade receivables, loans partially offset by decrease in cash and cash equivalent and stock in trade.

Total liabilities increased from Rs 32.3 Billion as at March 31, 2020 to Rs 63.6 Billion as at March 31, 2021, an increase of 97%. This increase was primarily due to increase in trade payables, debt securities and other financial liabilities.

d. Cash Flows

The following table sets forth, for the periods indicated, a summary of cash flows:

Particulars For the year ended March 31, 2021 For the year ended March 31, 2020
Cash flow (used in) / generated from operating activities (16,095.0) (18,783.4)
Cash flow used in investing activities (401.7) (225.9)
Cash flow generated from / (used in) financing activities 14,170.2 5,588.2

Cash used in operating activities

Net cash generated from/(used in) operating activities changed from (18,783.4) Million for the year ended March 31, 2020 to (16,095.0) Million for the year ended March 31, 2021. This change was primarily due to deployment of funds in loans Rs 23,301.7 Million offset by trade payables and other financial liabilities by Rs 11,084.1 Million.

Cash used in investing activities

Net cash used in investing activities changed from (225.9) Million for the year ended March 31, 2020 to (401.7) Million for the year ended March 31, 2021. Net cash usage in investing activity primarily represents capital expenditure towards technology and non technology spends during the year.

Cash generated from financing activities

Net cash generated from financing activities changed from Rs 5,588.2 Million for the year ended March 31, 2020 to Rs 14,170.2 Million for the year ended March 31, 2021. This change was primarily due to an increase in borrowings from Rs 14,975.3 Million to Rs 35,209.6 Million, resulting in net generation of Rs 20,234.3 Million during the year offset by higher dividend pay-out in the year ended March 31, 2021, as compared to the previous year.

Contingent Liabilities

As at March 31, 2021, we have Rs 1487.6 Million as claims against the Company not acknowledged as debt (March 31, 2020 Rs 1,286.5).


As at March 31, 2021, we have short-term borrowings of Rs 35,209.6 Million and total equity of Rs 18,221.1 Million.

Our short-term borrowings primarily consist of commercial papers and have received a domestic rating of A1+ by CRISIL and ICRA.

We have received a domestic rating of AAA for long-term debt from CRISIL and ICRA which primarily consist of non-convertible debentures.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof

Particulars FY2021 FY2020 Change %
1. Debt Equity Ratio 1.93 1.24 55.6%
2. Return on Net Worth 70% 48% 45.8%
3. Debtors Turnover 8.04 5.19 54.9%
4. Interest Coverage 15.67 11.42 37.2%
Ratio (Times)
5. Net Profit Margin (%) 41% 31% 31.4%


1. Debt Equity Ratio increased from 1.24 in FY2020 to 1.93 in FY2021 primarily due to an increase in short term borrowings from Rs 14,975.3 Million in FY 2020 to Rs 35,209.6 million in FY2021 and increase in shareholders equity (share capital and other equity) from Rs 12,095.4 Million in FY2020 to Rs 18,221.1 Million in FY2021 due to retention of profits earned during the year.

2. Return on Net Worth calculated as "PAT divided by Average networth excluding other comprehensive income and translation reserve" increased from 48% in FY 2020 to 70% in FY2021 primarily due to an increase in average net worth by 34.4% from Rs 11,321.2 Million in FY2020 to Rs 15,212.4 Million in FY2021 and increase in profits by 97.0% from Rs 5,420.0 Million in FY2020 to Rs 10,677.2 Million in FY2021.

3. Debtors Turnover increased from 5.19 in FY2020 to 8.04 in FY2021 primarily due to an increase in fee and commission income from Rs 14,693.1 Million for the year ended March 31, 2020 to Rs 22,005.9 Million for the year ended March 31, 2021.

4. Interest Coverage Ratio increased from 11.42 in FY2020 to 15.67 in FY2021 primarily due to an increase in profit before interest and tax from Rs 8,252.0 Million for the year ended March 31, 2020 to Rs 15,283.3 Million for the year ended March 31, 2021.

5. Net Profit Margin increased from 31% in FY2020 to 41% to FY2021 primarily due to an increase in profit after tax from Rs 5,420.0 Million for the year ended March 31, 2020 to Rs 10,677.2 Million for the year ended March 31, 2021.

Subsidiary Performance


The Company has a 100% owned subsidiary ICICI Securities Holdings, Inc. and a step-down subsidiary ICICI Securities Inc. ICICI Securities Holding, Inc. is the holding company of our indirect subsidiary ICICI Securities Inc., which through its offices in US and Singapore, is engaged in referring foreign institutional clients to us for transactions on the Indian stock exchanges.

Financial performance

• This decrease in PAT is mainly due to decline in foreign exchange rates used for conversion of subsidiary financials into the Companys reporting currency as well as decrease in cost which is the base for revenue as per cost plus model. The total assets increased from Rs 349.0 Million at March 31, 2020 to Rs 364.6 Million at March 31, 2021.

• Financial assets increased from Rs 327.2 Million at March 31, 2020 to Rs 343.9 Million at March 31, 2021 primarily due to increase in cash and cash equivalents and bank balances.

• Non - Financial assets has remained flat from Rs 21.8 Million at March 31, 2020 to Rs 20.7 Million at March 31, 2021.

• Financial liabilities increased from Rs 14.8 Million at March 31, 2020 to Rs 24.0 Million at March 31, 2021 primarily on account of increase in trade payables.

Risks, Concerns and Threats

As the Companys performance is dependent on the health of capital markets, it faces the risk of downturn in the event of slowing down of economic growth and/or worsening macro-economic environment. Any events which impact the broader economy like rising crude oil prices, depreciating currency, worsening current account deficit, rising inflation, a bad monsoon, slowdown in corporate earnings, rising NPAs, slowdown in foreign investment inflows etc. impact the capital market, thereby posing risks to the Company. Other challenges which may drive away the DIIs include rising real estate and gold prices, which may provide other attractive investment options.

Global events may also pose challenges to the growth of the Company as it directly impacts foreign inflows and indirectly will have a bearing on the Indian economy. Risks from geo-political tensions, global financial market volatility and the threat of trade protectionism all pose significant risks to the operations of the Company.

The Company faces significant competition from companies seeking to attract its customers/clients financial assets. In particular, it competes with other Indian and foreign brokerage houses, discount brokerage companies, fin-tech companies, specialist wealth management firms and M&A advisory firms, investment banks, public and private sector commercial banks and asset managers, among others, operating in the markets in which it is present. The Company competes on the basis of a number of factors, including execution, depth of product and service offerings, innovation, reputation, price and convenience.

The Company also faces threats from the tightening and the ever-evolving regulatory framework and any unfavourable policy changes. Internal threat to the Company arises from failure of compliance or overlooking of any misrepresentations/fraud in the operations of the Company. The Company is also exposed to information technology risks such as software / hardware defects and bugs as well as cyber risk arising out of events such as ransom-ware attacks, data theft and malware injection.

During the year, economies worldwide were impacted significantly by the onset of the COVID-19 pandemic resulting in a downturn in economic growth across most countries. This had also resulted in a significant increase in volatility in capital markets. The measures taken by governments to control the spread of the pandemic included country-wide lockdowns which had significantly impacted economic activity. The Company has focussed on proactive and real-time risk management in wake of high volatility in the capital markets. The Company has also taken measures to manage operational challenges arising out of limited mobility of staff.

Cautionary Statements

In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral - that we periodically make contain forward-looking statements that set out anticipated results based on the managements plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate, ‘estimate, ‘expects, ‘projects, ‘intends, ‘plans, ‘believes and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions.

The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.