KJMC Corporate Advisors (India) Ltd Management Discussions

OVERVIEW

The financial statements for the year have been prepared in compliance with the requirements of the Companies Act, 2013 and rules made thereunder, guidelines issued by the Securities and Exchange Board of India (SEBI), the Accounting Standards prescribed by the Institute of Chartered Accountants of India and the Generally Accepted Accounting Principles in India and Secretarial Standard issued by the Institute of Company Secretaries of India. Management accepts responsibility for the integrity and objectivity of these financial reported statements. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner and reasonably present our state of affairs, profits and cash flows for the year.

Global Economic Performance

After being buffeted by a series of adverse shocks over 2020-24, the global economy is facing another significant headwind this year, with increased trade barriers and heightened policy uncertainty leading to a notable deterioration of the outlook relative to January. In particular, global output is expected to grow at its weakest pace since 2008, aside from outright global recessions. The sharp increase in tariffs and the ensuing uncertainty are contributing to a broad-based growth slowdown and deteriorating prospects in most of the worlds economies. Subdued global growth prospects are unlikely to improve materially without policy actions to address increasing trade restrictions, geopolitical tensions, heightened uncertainty, and limited fiscal space.

The global outlook is predicated on tariff rates close to those of late May prevailing throughout the forecast horizon. Accordingly, pauses to previously announced tariff hikes between the United States and its trading partners are assumed to persist. This baseline nonetheless entails the highest U.S. average effective tariff rate in nearly a century. In addition, in view of recent rapid shifts in trade policies and the potential for a return to even higher tariffs, consumers and businesses continue to grapple with unusually elevated uncertainty. In this context, a prospective recovery in global trade and investment—two important drivers of long-term development that have been relatively subdued in recent years—has been disrupted.

Global headline inflation generally remains elevated relative to central bank targets and prepandemic averages and has even risen in some advanced economies since late last year. Slower disinflation globally over the last six months has largely reflected continuing inflationary pressures from services prices. The recent rise in consumer inflation expectations has been influenced by the implementation of trade restrictions. In addition, core inflation in some economies is expected to remain high due to persistent services price increases. In all, GDP-weighted global inflation is projected to average 2.9 percent in 2025 and 2026—still a little above the average inflation target—but with notable heterogeneity across economies.

The Indian Economy

India is expected to remain one of the fastest growing economies in the world despite challenges posed by geopolitical instability. In May 2025, the National Statistical Office (NSO), in its first revised estimates of national income, estimated the countrys real gross domestic product (GDP) to have expanded 6.5% year-on-year in Fiscal 2025. The Indian economy was among the fastest-growing even before the Covid-19 pandemic. In the years leading to the global health crisis, which disrupted economic activities, the countrys economic indicators improved gradually owing to strong local consumption and lower reliance on global demand. The Trump Administration in the US announced a host of tariffs on products such as automobile, automobile parts, steel and aluminium in the first three months of CY 2025. On April 5, 2025, the US announced an additional tariff of 10% on nearly all countries in addition to the existing tariffs. China and the European Union announced retaliatory tariffs on the US. On April 9, 2025, the US government paused differential tariffs for most countries for 90 days, excluding China, which faced a higher tariff of 125 percent. The introduction of tariffs on major global economies is expected to increase downside risks on global growth. India is expected to remain one of the fastest growing economies in the world. Going forward, the expectation of slower global growth, along with anticipated reciprocal tariffs on India after three months, is likely to exert downside risks to CRISILs 6.5% growth forecast for Fiscal 2026. Uncertainty about the duration and frequent changes in tariffs could also hinder domestic investments. Interest rate cuts, income tax relief and easing inflation are expected to provide tailwinds to domestic consumption in Fiscal 2026, while the expected normal monsoon will support agricultural incomes. Moreover, the anticipated decline in global crude oil prices, resulting from a potential global slowdown, is expected to provide additional support to domestic growth.

Over the past three fiscals (Fiscals 2022 to 2024), the Indian economy has outperformed its global counterparts by witnessing a faster growth. In the IMFs April 2025 update, it raised the GDP growth forecast for India highlighting Indias improved prospect for private consumption particularly in rural areas. Going forward as well, IMF projects that Indian economy will remain strong and would continue to be one of the fastest growing economies.

Investment and Consumption Trends

Indias capital markets are undergoing significant transformation as the country progresses toward becoming an economic powerhouse. The government and regulatory bodies like SEBI have made steady progress in developing both the corporate bond and equity markets. Companies are increasingly turning to IPOs to finance their growth, with more expected to follow as Indias economy expands and businesses scale. Retail participation, index-linked funds, and enhanced liquidity mechanisms will drive demand in the coming years.

Investment Trends:

Rising Corporate Financing: As companies seek capital to fund growth, there is a noticeable shift towards capital markets for both equity and debt issuances.

Retail and Institutional Participation: Retail investors are becoming more involved, while institutional investors are also increasing their stakes, drawn by strong economic growth, corporate earnings, and favorable government policies.

Equity Market Growth: Indias expanding consumer base, digitalization, and financial sector reforms have made equities an attractive investment opportunity, contributing to significant inflows from both domestic and global investors.

M&A Market Surge: The mergers and acquisitions (M&A) market is growing due to economic optimism, abundant capital, and companies streamlining structures. Buyers are seeking disruptive business models to stay competitive, expand portfolios, and innovate offerings.

Consumption Trends:

Economic Growth Drives Demand for Capital & Financial Services: The strong growth of Indias economy has driven a rise in demand for capital, fueling financial services, corporate growth, and infrastructure development.

Government Reforms Supporting Confidence: Initiatives like GST, IBC, and liberalized foreign investment norms have increased market efficiency and investor confidence, further boosting consumption of financial products and services.

Sectoral Expansion: As sectors like digitalization and infrastructure develop, there is growing consumption of related goods and services,

Overall, Indias capital market is seeing a surge in both investment and consumption, driven by strong economic growth, regulatory reforms, and increasing participation from diverse investor segments.

COMPANYS BUSINESS AND SERVICES OFFERED

KJMC Corporate Advisors (India) Limited is the entity which is listed on the Stock Exchange. Your Company is a Category-I Merchant Banker registered with the Securities & Exchange Board of India (SEBI). The Company offers following Services to the Corporate Sector:

1. Merchant Banking Services:

a) Syndication of Funds through Equity Capital Market – Initial Public Offers (IPOs), Offer For Sale, Rights Issue, Qualified Institutional Placements (QIPs).

b) Other Merchant Banking Services – Alternative Investment Funds (AIF) Certifications, Buyback, Takeover, Delisting, Fairness Opinion, etc.

2. Mergers and Acquisition Advisory services.

3. Syndication of Funds through Seed Funding, Venture Capital, Angel Investors, Family Offices, Private Equity Funds, etc.

4. Syndication of Debt through Banks, Financial Institutions, Non-Banking Finance Company, etc.

5. Advisory on Project Financing, Debt Restructuring, Debt Refinancing and One Time Settlement (OTS), Channel Financing, etc.

6. Valuation services for:

• Overseas Direct Investment transactions

• Foreign Direct Investment transactions

• Transactions coming under the purview of Income Tax Rules

• Requirements under Companies Act

• Requirements under SEBI Regulations

7. ESOP Advisory services including Fair Market Value Certification

8. Corporate Advisory Services

9. Arrangers for shares of Unlisted / Pre-IPO companies

FINANCIAL REVIEW:

Consolidated

Your Company earned the total consolidated revenue of Rs. 927.89 Lakhs as against Rs. 1046.38 Lakhs in the previous year. The total expenditure during the year is Rs. 780.26 Lakhs as against Rs. 727.04 Lakhs in the previous year. The net profit for the year under review was Rs. 104.11

Lakhs as against net profit of Rs. 230.27 Lakhs in the previous year.

Standalone

During the year under review, the total standalone revenue was Rs. 344.54 Lakhs as against Rs. 471.31 Lakhs in the previous year. The total expenditure during the year is Rs. 244.98 Lakhs as against Rs. 254.44 Lakhs in the previous year. The net profit for the year under review was Rs. 75.63 Lakhs as against net profit of Rs. 158.41 Lakhs in the previous year.

KEY FINANCIAL RATIOS

Ratios	31.03.25	31.03.24	Reason for Variance
Current ratio	1.38	31.28	The current assets have incresed during the year.
Debt-equity ratio	-	0.0005	Loan has been decreased to nil during the year.
Trade receivables turnover ratio	7.71	17.52	Average debtors has been increase and decreased in sales.
Operating profit ratio	0.37	0.38	There is a decrease in total revenue compared to the previous year.
Interest coverage ratio	26.83	28.28	-

BUSINESS OUTLOOK:-

As part of its service areas, your Company is striving hard for getting mandates across business verticals which includes Private Placements to2 PE/VC Funds, managing Initial Public Offers, Rights Issues, Follow on Offers, Qualified Institutional Placements and Preferential Placements to institutional and strategic investors, Valuation Services and Corporate Advisory Services. Our expertise in due diligence, structuring, pricing and distribution combined with independent, unbiased and objective recommendation as corporate advisors has enabled us to face competition and to provide a wide range of investment banking services to a rich pipeline of marquee clients.

Your Company is also actively involved in providing Valuation Services under various statutory regulations, Certification for Schemes of AIFs, and acting as arranger for shares of Unlisted/ Pre-IPO Companies besides raising growth capital to MSME clients.

Inspite of the continuous effects of the disruptions caused by the geopolitical tensions in Europe and West Asia, your Company foresees immense growth opportunities due to the increased economic activity, increased preference for India as an investment destination, and increasing role of the private sector, All these factors will usher in a period of sustained growth, opening vast opportunities for your Company in its core areas of business.

The companys wholly owned subsidiary, M/s KJMC Capital Market Services Limited is also expanding its business of stock broking across leading Stock Exchanges like NSE, BSE, and even new exchanges like MSEI. The company is also evaluating activating the commodity segment.

RISKS AND CONCERNS:-

The Merchant banking industry and institutional equities industry has been materially and adversely affected in the past by significant declines in the values of nearly all asset classes, by a serious lack of liquidity and by high levels of borrower defaults. Major global and Indian stock indices, including the S&P 500 and Dow Jones Industrial Average, Sensex and NIFTY plummeted, erasing trillions in market value and eroding investor wealth. The crisis caused a deep recession, leading to significant job losses, reduced consumer spending, and prolonged economic instability.

Following are some of the key risks which may have negative impact on capital markets and therefore broking industry, Merchant banking and mutual fund industry.

1) Geopolitical Tensions: Geo - Politich and conflictscreate global economic uncertainty, disrupt supply chains, cause volatility in markets, and increase energy prices.

2) Rising Interest Rates and Debt Market Attraction: Central banks interest rate hikes to fight inflation raise borrowing costs, reduce corporate profits and consumer spending, and make debt instruments more attractive than equities, potentially diverting investments away from stock markets.

3) Equity Market Flows and Volatility: Global interest rate rises and geopolitical risks may cause capital flight, reducing foreign investment inflows. Changes in domestic policies and economic conditions affect investment strategies by Domestic Institutional Investors (DIIs), impacting market liquidity. Economic downturns and market volatility can deter retail investors, lowering participation and liquidity.

4) Global Economic Slowdown: Slowdowns in major economies like the US, China, and Eurozone reduce global demand, adversely affecting Indian exports, trade balance, and corporate profitability due to fluctuating commodity prices.

5) Technological Disruptions and Cybersecurity Risks: Rapid technological changes disrupt traditional sectors and impact earnings and stock valuations. Cyber threats create financial and reputational risks for companies, including those in Indian financial services.

6) Speculative Trading Risks: Around 70% of investors lose significant household savings through speculative and short-term trading. In response, SEBI has imposed stricter norms on which companies can offer futures and options (F&O) contracts—only top 500 by market cap and liquidity qualify—and may introduce rules to curb frequent trading.

7) Regulatory and Taxation Changes: Evolving regulations, compliance demands, and changes in tax structures (such as higher capital gains tax on short-term trading) affect investment decisions and market behavior, potentially encouraging long-term investment over frequent trading.

8) Algorithmic Trading Regulations: Increased use of high-frequency algorithmic trading by retail investors has led to greater volatility and decreased liquidity. SEBI has tightened regulations to prevent market manipulation and ensure fairness.

9) Higher Transaction Costs and Margin Requirements: New SEBI rules require upfront margin payments for equity and derivatives trades, increasing transaction costs and discouraging small investors and traders. This could reduce trading volumes and market liquidity.

Overall, these factors highlight the interconnected global and domestic risks that influence capital market dynamics, impacting merchant banking, institutional equities, broking, and mutual fund industries by causing volatility, reducing liquidity, and changing investor behaviour.

OPPORTUNITIES AND THREATS:-For the Merchant Banking Industry Opportunities:

1. Rising Capital Market Activity

• Increased IPOs, FPOs, and QIPs: Strong demand from retail and institutional investors has led to a surge in primary market deals.

• SME listings: Growing number of startups and small enterprises seeking public market access.

2. M&A Advisory Growth

• Growing cross-border and domestic M&A transactions due to consolidation trends across sectors (e.g., fintech, EV, healthcare).

• Need for valuation, due diligence, structuring, and negotiation support creates ongoing demand for merchant banking services.

3. Start-up & Private Capital Advisory

• Explosion of venture capital and private equity activity.

• Need for merchant banks to advise on early-stage funding, convertible instruments, and exit planning (IPOs, secondary sales, etc.).

4. Regulatory Support & Reforms

• SEBI and RBI reforms have simplified fundraising and disclosure norms, encouraging more companies to go public.

• Initiatives like PLI schemes and Make in India are driving capex needs, boosting demand for capital advisory.

5. Debt Syndication & Restructuring

• MSMEs and mid-sized firms increasingly need structured debt advisory.

• Rising NPAs and stressed assets create opportunities for restructuring and resolution services.

Threats:

1. Market Volatility & Economic Uncertainty

• Sudden changes in interest rates, inflation, or global economic conditions can delay IPOs, M&A deals, and investment flows.

• Risk-averse investor sentiment impacts deal-making and underwriting volumes.

2. Regulatory Risks

• Frequent changes in SEBI, RBI, or taxation regulations can increase compliance burden and reduce deal attractiveness.

• Stricter norms for disclosure, conflict of interest, and client onboarding can raise operational costs.

3. Intensifying Competition

• Entry of investment banks, fintechs, boutique advisors, and global players is eroding margins.

• Fee compression is common, especially in standard services like IPO handling or valuation.

4. Technology Disruption

• Automation of core services (valuation, issue management, data room services) reduces reliance on traditional merchant bankers.

• Platforms offering digital IPOs and direct investment bypass intermediaries.

5. Low Barriers to Entry for Boutique Firms

• Many small advisory firms operate with lean models and undercut established players on pricing.

• Quality of service can suffer, affecting industry reputation and client trust.

For the Broking Industry

Opportunities:

1. Rising Retail Participation

• Surge in Demat account openings, especially among millennials and Tier 2/3 city investors.

• Greater financial awareness and shift from traditional assets (e.g., gold, real estate) to equities and mutual funds.

2. Digital Transformation

• Widespread adoption of mobile trading platforms, AI-powered advisory, and robo-advisors.

• Opportunity to scale rapidly with low customer acquisition costs and high transaction volume.

3. Product Diversification

• Broking firms can expand into: o Mutual funds distribution o Insurance broking o SIPs, ETFs, NPS, bonds o International equities

• Cross-selling increases customer stickiness and boosts fee income.

4. Derivatives & Options Trading Boom

• Significant rise in retail options and futures trading creates fee-generating opportunities.

• Scope to offer advanced tools and education to support active traders.

5. Increased Market Volatility

• Volatile markets attract short-term traders, increasing trade volumes and commissions.

• Opportunity to offer hedging tools, market research, and premium insights.

Threats

1. Regulatory Changes and Fee Caps

• SEBIs frequent regulatory updates (e.g. ban on ‘free intraday leverage, tighter margin rules, cap on broker commissions) have directly impacted brokerage revenue.

• Regulatory tightening on advisory services and algorithmic trading could limit product offerings.

2 . Fee Compression and Zero Brokerage Models

• Intense competition from discount brokers (e.g., Zerodha, Groww, Upstox) offering zero or very low brokerage is squeezing margins.

• Traditional brokers face pressure to match pricing, hurting profitability.

3. High Dependence on Volumes

• A large portion of income is tied to transaction volume, which is sensitive to market volatility and investor sentiment.

• In bearish or stable markets, trade volumes (especially retail F&O) tend to decline, reducing revenues.

4. Cybersecurity Risks

• Handling large volumes of sensitive financial and personal data makes brokers a prime target for cyberattacks.

• Data breaches can lead to regulatory penalties, reputational damage, and legal liabilities.

5. Technology Disruption

• Constant need to upgrade platforms, improve user experience, and integrate AI and analytics increases cost pressure.

• Fintech startups with advanced tech stacks could outpace traditional brokers.

Talent Management:

We believe that investing in our employees is critical to our long-term success and we will continue to prioritize talent management in years to come focusing on creating a highly engaged and motivated employee base.

We aim at improving the recruitment process, enhancing the boarding experience, investing in training and development as well as creating career development plans or succession plan higher growth.

At KJMC, we promote an atmosphere of inclusion, by encouraging the next level of employees to take higher responsibilities. Managers along with Human Resources formulate a customized grooming and orientation of high potentials, by carefully planning their work experiences. Their skills and capabilities are developed through further training and mentoring.

CAUTIONARY STATEMENT

Management discussion and analysis report contains statements which are forward looking based on assumptions. Actual results may differ from those expressed or implied due to risk and uncertainties which have been detailed in this report. Several factors as listed in this report could make significant difference to the Companys operations. Investors, therefore,

are requested to make their own independent judgments and seek professional advice before taking any investment decisions.

Sources:

1. World Bank Group (World Bank Group Flagship Report)

2. CRISIL Intelligence

3. RBI, Company reports, CRISIL MI&A.