IndiaNivesh Ltd Management Discussions

OVERVIEW:

During the financial year 2025-26, the non-banking financial company (NBFC) sector experienced dynamic performance and significant developments. Across the industry, NBFCs continued to play a crucial role in the financial ecosystem by facilitating investment and trading in shares and securities.

The industry saw trends towards digitization and adoption of technology-driven solutions to enhance operational efficiencies and customer experience.

Overall, the NBFC sector in 2025-26 demonstrated resilience and adaptability amidst changing economic conditions, contributing significantly to the broader financial services sector.

Our worry regarding inflation persists. Despite the recent easing of prices, core prices have not moderated yet. Besides, the risk and a below-normal monsoon can bring back the pressure on food prices. We expect the fall in prices to be short-lived as demand picks up along with food prices and the uncertainties around prices remain high (hence, the broad range for forecasts over the next 1.5 years). However, the supply side will probably improve and may help the rebounding economy keep prices under check in the long run (with greater certainties). In any case, we expect inflation to remain in the upper range of the RBIs inflation target band over the entire forecast period.

The Company has maintained an adequate system of Internal Controls. The assets are safeguarded and protected against loss from unauthorized use and disposition. The transactions are authorized, recorded and reported diligently. The management regularly reviews the findings of these internal auditors and takes appropriate steps to implement the suggestions and observations made by them.

The global economic outlook remains resilient but is subject to heightened geopolitical, energy and trade-related uncertainties. According to the International Monetary Funds July 2026 World Economic Outlook Update, global economic growth is projected at 3.0% in 2026 and 3.4% in 2027. The outlook reflects a combination of continued technology-led investment, including developments in artificial intelligence, and the adverse impact of geopolitical tensions and higher energy prices. Global headline inflation is projected to increase from 4.1% in 2025 to 4.7% in 2026, before moderating to 3.9% in 2027.

The global economy continues to face risks arising from geopolitical conflicts, energy-price volatility, trade fragmentation, financial-market repricing and uncertainty surrounding technology-driven investment. At the same time, technological advancement, structural reforms, improved productivity and resilient domestic demand could provide support to global economic activity. Policymakers are expected to remain focused on maintaining price stability, rebuilding fiscal buffers and strengthening the resilience of financial systems.

The Indian economy continued to demonstrate strong and resilient growth during FY 2025-26. As per the latest provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI), Indias real GDP grew by 7.7% during FY 2025-26, compared with 7.1% in FY 2024-25. The growth was supported by resilient domestic demand, manufacturing activity and continued momentum in the services sector. Real GVA also recorded strong growth during the year, reflecting broad-based economic activity.

Indias external sector also remained robust. Total exports of merchandise and services during FY 2025- 26 are estimated at US$860.09 billion, compared with US$825.26 billion in FY 2024-25, representing an estimated growth of 4.22%. The continued expansion in exports reflects the increasing competitiveness and diversification of Indias goods and services sectors.

The Governments focus on infrastructure development, manufacturing, digitalisation, employment generation and private investment is expected to continue supporting economic activity. The Union Budget 2026-27 has provided for capital expenditure of approximately Rs. 12.22 lakh crore, equivalent to around 3.1% of GDP, while effective capital expenditure is estimated at approximately Rs. 17.15 lakh crore, or 4.4% of GDP. These investments are expected to strengthen infrastructure capacity and support long-term economic growth.

Inflationary conditions, while remaining subject to food and energy-price movements, continue to be an important factor influencing the economic outlook. Indias headline CPI inflation stood at 4.45% on a provisional basis in July 2026, while food inflation stood at 5.52%. The inflation trajectory will remain dependent on food supply conditions, commodity prices, global energy markets and geopolitical developments.

The Indian financial and capital markets continue to benefit from the countrys strong economic fundamentals, increasing financialisation of household savings, digital adoption and wider participation of retail and institutional investors. Continued regulatory initiatives by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) are expected to further strengthen market transparency, investor protection and financial stability.

The Indian financial services sector continues to play an important role in supporting economic growth, credit expansion and financial inclusion. Non-Banking Financial Companies (NBFCs) remain an important component of the financial ecosystem by complementing the banking sector and catering to credit requirements across retail, vehicle finance, microfinance, housing, MSME and other specialised segments.

The sector has undergone significant regulatory and structural changes in recent years, with the Reserve Bank of India continuing to strengthen the regulatory framework applicable to NBFCs based on their size, activities and risk profile. These measures are aimed at enhancing governance, risk management, capital adequacy and overall resilience of the sector.

Going forward, the financial services sector is expected to benefit from sustained economic growth, improving credit demand, increasing formalisation of the economy, greater digital penetration and continued financial inclusion. At the same time, asset quality, funding costs, liquidity conditions, interest- rate movements, regulatory developments and evolving global economic conditions will remain key factors influencing the performance of NBFCs and other financial-services businesses.

Overall, the Company remains cautiously optimistic about the medium- to long-term outlook for the Indian economy and financial services sector. The Companys focus will continue to be on strengthening its business operations, maintaining prudent risk management practices, improving operational efficiency and capitalising on emerging opportunities while remaining responsive to changes in the regulatory and economic environment.

Investment activity is the major segment in which your Company operates. The company invests in quoted as well as unquoted equity shares and in units of Mutual Funds. This segment has been influenced by the overall economic, regulatory and other global as well as domestic factors. As such we expect long term benefits from the investment in the stressed assets.

The Company was carrying on the business of stock broking, research analysts, investment banking, depository services, IPOs and mutual fund distribution, advisory (Business Undertaking). Pursuant to the approval of the Scheme of Arrangement (Demerger) between IndiaNivesh Securities Limited and IndiaNivesh Shares & Securities Private Limited by the Honble National Company law Tribunal, Mumbai Bench on June 7, 2017, the said business undertaking was transferred to IndiaNivesh Shares and Securities Private Limited.

The remaining business of the Company is investments in shares of listed and / or unlisted companies / entities and shares and other securities of group companies / limited liability partnership firm from where investments are being carried out.

INCPL is a trading cum clearing member of Multi-Commodities Exchange and National Commodities & Derivatives Exchange of India. INCPL has been providing commodities trading facilities to both corporate and retail clients since 2005. As SEBI has allowed stock brokers to commence Commodities Broking in order to facilitate the Clients, the Company had shifted all its commodities clients open positions to IndiaNivesh Shares and Securities Private Limited w.e.f. February 2020.

Pursuant to the approval of the Scheme of Arrangement (Demerger) between IndiaNivesh Securities Limited and IndiaNivesh Shares & Securities Private Limited by the Honble National Company law Tribunal, Mumbai Bench on June 7, 2017 the proposed business of the Company shall be to carry out the business of stock broking, research analysts, investment banking, depository services, IPOs and mutual fund distribution, advisory.

It shall also include business of (i) equity capital markets (ii) futures and options market (iii) currency derivative broking (iv) stock broking (retail, HNI as well as institutional), (v) distribution of third party products (including equity IPOs, capital gain bonds, fixed deposits, mutual funds, and other financial products), (vi) advisory services in relation to (i) to (v) and research activities. Also it will undertake the investment business that includes investments in shares of listed and / or unlisted companies / entities and shares and other securities of group companies / limited liability partnership.

Human Resources: There have been very cordial relations between the employees and the management.

Research Base: Develop highly informative research reports on equity and commodity market for its clients.

The information and opinion expressed in this section of the Annual Report may contain certain statements, which the management believes are true to the best of its knowledge at the time of its preparation. The Company and the Management shall not be held liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein.