Indbank Merchant Banking Services Ltd Management Discussions

Areas of Business Operations

Your company is engaged in Stock Broking, Depository Participant operations, Distribution of Mutual Fund & other investment products and Merchant Banking. Your company is a member of NSE & BSE (Equity & Derivatives segments), registered with NSDL and CDSL as a Depository Participant and registered with SEBI as a Merchant Banker. Your company is also registered with Association of Mutual Funds of India (AMFI) for distribution of Mutual Fund products.

Operations during the year

During the year your company has earned a gross income of Rs.2515.29 lakhs as against Rs.2680.88 lakhs in the previous year. Under Stock Broking your company has a mix of institutional and individual clients and has achieved a turnover of Rs.15771.07 crores during the year as against Rs.15709.18 crores in the previous financial year. Your company also provides Depository services to institutions and retail customers and has 93633 accounts under DP operations and 53883 accounts under broking operations. Under the distribution of mutual fund and other investments products, the Company has earned a brokerage of Rs.56.21 lakhs as against Rs.25.37 lakhs in the previous year. The Companys Mutual Fund AUM which was Rs.47 crore in as on 31.03.2025 has reached to Rs.63 crore as on 31.03.2026

Opportunities and Threats

Opportunities

Indian economy is fast growing and amongst top growing economies in the world. Seeing the recent trends of money inflow into various mutual funds it is evident that there is a significant shift from physical assets to financial assets. We are seeing large number of corporates both SMEs and large companies prefer raising funds from the capital markets. There has been robust retail participation in good quality IPOs. Going forward there lies a huge potential and unmatched opportunities for stock broking firms given the steady increase in institutional and public activity in the financial markets.

Threats

Industry as a whole is seeing significant shift and usage of latest and modern technology such as Artificial Intelligence (AI), Data Analytics and various other applications in broking business irrespective of their costs. Online Zero/discount brokerages pose a serious threat and disruption for the industry as a whole.

Segment-wise or product-wise performance.

Total income has decreased by 6.18% to Rs.2515.29 lakhs from Rs.2680.88 lakhs for the previous year ended 31.03.2025 mainly due to decrease in the fee-based income from stock broking operations to Rs.1410.89 lakhs for FY 2025-26 from Rs.1656.66 lakhs for the previous FY 2024-25 registering a decrease of 14.84% due to slump in the volume of business in stock broking activities, Income from DP operations has increased by 4.46% to Rs.337.39 lakhs from Rs.322.97 lakhs for the previous year ended 31.03.2025 due to increase in off market transactions. Income under Merchant Banking has increased by 156.23% to Rs.14.40 lakhs for FY 2025-26 from Rs.5.62 lakhs for the previous year ended 31.03.2025. Income from distribution of Mutual Funds has increased by 121.56% to Rs.56.21 lakhs from Rs.25.37 lakhs for the previous year ended 31.03.2025. Other income has increased by 3.90% to Rs.696.40 lakhs from Rs.670.26 lakhs for the previous year ended 31.03.2025 mainly due to increase in interest income.

Risk Management & Internal Control Systems

The major risks among others that your company manages include credit risk, liquidity risk, interest rate risk and operational risk. In view of the discontinuance of fund-based activities the credit risks on appraisal and disbursement do not arise. The company has put in place an aggressive recovery mechanism for realization of existing fund-based exposures.

Your company has detailed operating manuals and well laid down delegation of powers to ensure that operational controls are maintained on the business. The policies and procedures are continuously reviewed through interaction between office heads and other support functional heads. Your company also has an adequate internal audit system to ensure feedback on adherence to the defined policies and procedures and regulatory guidelines.

Human Resources

Human Resources of your company comprise a mix of 3 Officers on deputation from Indian Bank and 92 employees on direct rolls. The employees are well qualified and experienced in their field of operations.

Financial Performance

Balance Sheet

Share Capital

The Share Capital of your company comprises 44378200 number of Equity shares of Rs.10/- each. Your companys shares are listed in BSE and NSE. There is no change in share capital of the company during the year.

Reserves & Surplus

The accumulated profits of the previous years have been carried over to the reserves and the Reserves & surplus stands at Rs.5436.27 lakhs as on 31.03.2026.

Current Liabilities

The current liabilities have decreased to Rs.2439.84 lakhs from Rs.2623.78 lakhs mainly in view of decrease in credit balances available in clients accounts under Stock Broking compared to previous year The provision for leave encashment has decreased to Rs.158.59 lakhs from Rs.164.78 lakhs on account of reversal of provisions made for encashment of leave on actuarial valuation as at the end of the year.

Fixed Assets

Property plant and equipment and Investment property have decreased by Rs.7.65 lakhs due to provision of depreciation and impairment.

Investments

Other Investments at FTPL of your company comprise of quoted shares and unquoted investments. Net investments have increased to Rs.301.96 Lakhs as on 31.03.2026 as against Rs.182.86 lakhs in the previous year in view of increase in investments as on 31.03.2026.

Non-current Other Financial Assets

Non-current Other Financial Assets have increased from Rs.649.09 lakhs to Rs.1210.90 lakhs due to increase in Investments and margin money held with the stock exchanges.

Deferred Tax Assets

During the year the company has created a provision to the extent of Rs.6.68 lakhs towards deferred tax asset in the profit and loss account. Accordingly, the net deferred tax assets have decreased from Rs.163.80 lakhs in the previous year to Rs.157.12 lakhs in the current year.

Current Assets

The current assets have increased to Rs.10420.63 lakhs as on 31.03.2026 from Rs.10401.88 lakhs as on 31.03.2025 due to increase in trade receivables and cash & cash equivalents as on 31.03.2026.

Profit and Loss account

Revenue from Operations

The fee-based income from stock broking operations has decreased to Rs.1410.89 lakhs for FY 2025-26 from Rs.1656.66 lakhs for the previous FY 2024-25 registering a decrease of 14.84% due to decrease in the volume of business in stock broking activities. Income from DP operations has increased by 4.46% to Rs.337.39 lakhs from Rs.322.97 lakhs for the previous year ended 31.03.2025 due to increase in off market transactions. Income under Merchant Banking has increased by 156.23% to Rs.14.40 lakhs from Rs.5.62 lakhs for the previous year ended 31.03.2025. Income from distribution of Mutual Funds has increased by 121.56% to Rs.56.21 lakhs from Rs.25.37 lakhs for the previous year ended 31.03.2025. Other income has increased by 3.90% to Rs.696.40 lakhs from Rs.670.26 lakhs for the previous year ended 31.03.2025 mainly due to increase in interest income.

Expenses

Direct costs has decreased from Rs.157.49 lakhs to Rs.132.54 lakhs due to decrease in volume of transactions as compared to the previous year.

Employee benefit expenses have increased from Rs.897.50 lakhs in the previous year to Rs.928.45 lakhs in the current year mainly due to increase in Salaries and contribution to Provident Fund to the extent of Rs.12.15 Lakhs and increase in provision for Gratuity by Rs.8.24 lakhs and increase in staff welfare expenses by Rs.6.33 lakhs.

Finance Cost has increased from Rs.18.73 lakhs to Rs.12.18 lakhs due to increase in overdraft interest charged by bank for more utilization of OD limit in the current year.

Other expenses have increase from Rs.440.60 lakhs to Rs.394.86 lakhs mainly due to increase in Computer and software maintenance charges by Rs.22.61 lakhs and increase in professional charges to the extent of Rs. 25.93 lakhs.