IndiaNivesh Ltd Management Discussions

OVERVIEW:

During the financial year 2024-25, the non-banking financial company (NBFC) sector experienced dynamic performance and significant developments. 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 2024-25 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 of El Ni?o 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.

According to the IMFs World Economic Outlook (WEO) released in January 2025, global economic growth is projected at 3.2% for 2025 (and 3.1% for 2024), slightly below the historical average of 3.7%

(2000 2019). It is then expected to edge up slightly in the medium term.

Emerging markets, particularly in Asia, show resilience, with India projected at 6.5% for 2025 and China projected at 4.1% for 2025 (4.6% for 2024).

Global inflation is expected to decline to 4.4% in 2025 (and 5.8% in 2024) and 4.2% in 2026, with advanced economies reaching central bank targets sooner. The IMF emphasizes the need for a balanced policy mix to ensure price stability and rebuild fiscal buffers, while structural reforms are critical to address demographic shifts and boost medium-term growth.

Indiaseconomydemonstratedstrongmomentum,withtheprovisionalestimateforfull-yearGDPgrowth for FY25 standing at 6.5%, supported by easing monetary policy and lower tax burdens. Over the past five years, growth has remained robust, rising from 6.1% in FY19 to 8.2% in FY24. Export performance has surged, with total exports reaching an all-time high of US$ 824.9 billion in FY25, marking a 6.01% growth over the previous years figure of US$ 778.11 billion in FY24. Indias global export ranking improved from 20th to 17th. The Union Budget 2025 26 emphasizes balanced regional development, prioritizing agriculture, MSMEs, infrastructure, and manufacturing, with an 11.1% increase in capital expenditure.

Inflation based on the CPI has eased to a provisional 2.10% in June 2025. This marks the lowest retail inflation rate since January 2019, primarily driven by a decline in food prices. Financial indicators such as GST collections, UPI transactions, FDI inflows, and forex reserves reflect positive economic health. As global conditions stabilize, India is poised for continued economic expansion, building toward its long-term goal of becoming a middle-income economy. The Indian capital market mirrored this economic strength. Equity indices remained buoyant, backed by healthy corporate earnings and expanding retail participation. The debt market too remained vibrant, with active issuances by both institutional and retail investors. Regulatory enhancements from SEBI and RBI further reinforced market integrity and investor confidence.

The Indian financial sector has undergone a major transformation, with NBFCs emerging as key drivers of credit growth and financial inclusion. By addressing gaps left by banks, they have expanded retail lending across personal, vehicle, SME, and microfinance segments. As of 2025, NBFC advances stood at nearly 25% of scheduled commercial banks credit, with retail loans forming a significant share.

While near-term growth will be supported by falling interest rates and improved liquidity, banks are expected to benefit more in the medium term as margins and deposit repricing normalize.

Stressed Asset Management business is one of the key focus areas of the Company and INL being an NBFC has a pre-eminent position among the few players present in this industry.

INL purchases stressed assets and portfolios from banks and financial intermediaries and assist in resolution of such no performing loans. INL has made significant investments in buying stressed asset portfolios, the economic benefits of which will accrue over the next few years.

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. Till the time requisite approvals are in place, INSL is carrying on the activities of Business Undertaking as trustee for 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.

The Company had w.e.f. December 02, 2019 shifted all broking operations (except for Depository Operations) in the Company.

As on March 31, 2025, the Company had one (1) employees on its rolls. 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.

Stressed Asset Portfolio: To enhance its Stressed Assets Portfolio by buying value assets from banks and financial institutions.

Branch Network: Expand presence of the Company by opening of branches at various destinations across the country including Tier II cities.