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), applicable Indian Accounting Standards (Ind AS) prescribed under the Companies (Indian Accounting Standards) Rules, 2015, and 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

The global economy demonstrated notable resilience during calendar year 2025 despite heightened geopolitical tensions, evolving trade dynamics and persistent macroeconomic uncertainties. According to the International Monetary Fund (IMF) World Economic Outlook – April 2026, global real Gross Domestic Product (GDP) grew by 3.4% in 2025, supported by resilient domestic demand, relatively stable labour markets and the swift reorganisation of global supply chains, which helped mitigate the impact of trade disruptions. While tariff measures and protectionist policies introduced by major economies initially raised concerns over global trade, their adverse effects remained contained as businesses adapted through supply chain diversification and front-loading of imports.

The global economic outlook, however, remains subject to significant uncertainties. The IMF projects global GDP growth to moderate to 3.1% in 2026 before improving marginally to 3.2% in 2027. Ongoing geopolitical conflicts, particularly in West Asia, coupled with evolving global power dynamics, continue to exert pressure on commodity prices, inflation and financial conditions. These developments have increased downside risks for both advanced and emerging economies, particularly those with significant dependence on energy flows. Global inflation is projected to increase to 4.4% in 2026, primarily driven by higher energy and food prices, before easing to 3.7% in 2027 as supply conditions improve and inflationary pressures gradually moderate.

Despite these headwinds, continued investments in technology, supply chain diversification and expanding regional trade partnerships are expected to support medium-term global economic activity. Nevertheless, geopolitical uncertainty, trade fragmentation, financial market volatility and elevated public debt levels remain key risks that could influence the pace of global economic recovery and investment sentiment in the coming years.

The Indian Economy

India continued to reinforce its position as the worlds fastest-growing major economy during FY2025–26, supported by robust domestic demand, sustained public capital expenditure, resilient private consumption and a strengthening manufacturing and services sector. According to the National Statistics Office (NSO), Indias real Gross Domestic Product (GDP) is estimated to have grown by 7.4% in FY2025 26, significantly outperforming most major advanced and emerging economies. As per the International Monetary Fund (IMF) World Economic Outlook – April 2026, India is expected to maintain its growth leadership with GDP projected to grow by 6.5% in FY2026–27, compared with 4.2% for China, 2.1% for the United States, 1.3% for the United Kingdom and 1.1% for Japan. This sustained growth is underpinned by favourable demographics, rising domestic consumption, increasing urbanisation and continued government focus on infrastructure development and structural reforms.

Indias macroeconomic fundamentals remained resilient despite heightened global uncertainties. Inflation moderated during FY2025 26, supported by easing food prices and prudent monetary policy, while the Reserveimports andglobaltrade Bank of India (RBI) maintained its focus on preserving price stability within the inflation target band. Strong investment in infrastructure, manufacturing and digital public infrastructure, coupled with the rapid expansion of the digital economy, continued to support economic activity and enhance productivity. Furthermore, Indias diversified relationships helped cushion the impact of global trade disruptions and external shocks, although geopolitical tensions in West Asia exerted pressure on commodity prices and foreign exchange reserves, which stood at approximately US$681 billion as of 22 May 2026.

India also strengthened its global trade integration through strategic bilateral agreements. The India–European Union Free Trade Agreement (FTA), concluded in January 2026, is expected to significantly improve market access for Indian exports by eliminating tariffs on 99.5% of Indian goods over a seven-year period, while the India–New Zealand FTA, signed in April 2026, provides immediate zero-duty access for virtually all Indian exports to New Zealand, benefiting sectors such as textiles, engineering goods, pharmaceuticals, chemicals and marine products. These agreements are expected to diversify export markets, improve global competitiveness and create long-term opportunities for Indian businesses.

Looking ahead, Indias medium-term economic outlook remains positive, supported by healthy domestic demand, favourable demographics, rising formalisation of the economy, increasing digital adoption and continued policy emphasis on infrastructure investment and manufacturing. While global geopolitical developments, commodity price volatility and external demand conditions remain key risks, Indias strong macroeconomic fundamentals, expanding digital ecosystem and ongoing structural reforms position the economy favourably for sustainable long-term growth.

Investment and Consumption Trends

Indias financial markets are witnessing sustained growth, supported by robust economic expansion, favourable regulatory reforms, increasing investor participation, and deepening capital markets. Rising corporate investments, higher domestic savings, and growing financial awareness have strengthened demand for equity, debt, and alternative investment products. Simultaneously, increasing retail participation and institutional capital flows have enhanced market liquidity, creating significant opportunities for merchant across fundraising, advisory, mergers & acquisitions, and capital market transactions.

Investment Trends

1. Rising Corporate Fundraising:

Indian corporates are increasingly relying on capital markets to finance expansion, acquisitions, capacity additions, and infrastructure projects. Companies are raising capital through Initial Public Offerings (IPOs), Follow-on Public Offers (FPOs), Qualified Institutional Placements (QIPs), rights issues, and corporate bond issuances. This growing preference for market-based financing has significantly increased the demand for merchant banking and investment banking services.

2. Strong IPO and Equity Capital Market Activity:

India has emerged as one of the worlds most active equity capital markets, supported by strong retail participation, domestic institutional inflows, and favourable market sentiment. A robust pipeline of mainboard and SME IPOs, along with increasing follow-on equity issuances, continues to create opportunities for issue management, underwriting, due diligence, valuation, and regulatory advisory.

3. Growth in Private Equity, Venture Capital and Alternative Investments:

Private equity (PE), venture capital (VC), and Alternative Investment Funds (AIFs) continue to deploy capital across sectors such as technology, healthcare, financial services, manufacturing, renewable energy, and consumer businesses. These investments have increased demand for transaction advisory, business valuation, financial due diligence, fairness opinions, and exit planning services.

4. Increasing Mergers & Acquisitions Activity:

The Indian M&A market continues to witness healthy deal activity driven by corporate consolidation, cross-border acquisitions, digital transformation, and private equity exits. Companies are pursuing strategic acquisitions to expand market share, acquire technology, and diversify operations, resulting in higher demand for investment banking advisory, transaction structuring, and regulatory compliance services.

5. Rising Institutional and Retail Investor Participation:

Growing participation from domestic mutual funds, insurance companies, pension funds, foreign portfolio investors (FPIs), and retail investors has significantly improved market liquidity and valuation levels. The increasing use of Systematic Investment Plans (SIPs) and digital investment platforms has further broadened the investor base, strengthening Indias capital market ecosystem.

Consumption Trends

1. Increasing Household Financial Savings:

Indian households are gradually shifting their savings from traditional assets such as gold and real estate towards financial instruments including equities, mutual funds, exchange-traded and funds (ETFs), insurance products, and fixed-income securities. investment banks

This structural shift has expanded the domestic investor base and reduced dependence on foreign capital.

2. Growing Consumption of Financial Products and Services:

Higher financial literacy, digital adoption, and increasing disposable incomes have accelerated the consumption of financial products, including mutual funds, portfolio management services (PMS), wealth management, insurance, structured products, and alternative investments. This trend has created new revenue opportunities for investment banks, wealth managers, and financial intermediaries

3. Expansion of Digital Financial Ecosystem:

Rapid adoption of digital platforms, online broking, UPI, fintech applications, and AI-driven investment platforms has simplified access to capital markets. The growing digital ecosystem has encouraged first-time investors and improved transaction volumes across equity, debt, and derivative markets.

4. Growth in Wealth Management and Alternative Investments:

The increasing population of High Net-worth Individuals (HNIs) and Ultra High Net-worth Individuals (UHNIs) has accelerated demand for sophisticated investment products such as Alternative Investment Funds (AIFs), Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), private equity funds, and structured investment solutions. This has expanded advisory opportunities for merchant banks and investment banks.

5. Increasing Participation in Fixed Income Markets:

The corporate bond market, municipal bonds, sovereign green bonds, and debt mutual funds are witnessing gradual growth as investors seek diversified portfolios and initiatives aimed at deepening Indias debt markets are expected to further increase investment activity and broaden financing options for corporates.

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:

On Consolidated basis , the Company has earned the total revenue of Rs. 1288.45 Lakhs as against Rs. 927.89 Lakhs in the previous year. The total expenditure during the year is Rs. 1002.30 Lakhs as against Rs. 780.25 Lakhs in the previous year. The net profit for the year under review was Rs. 197.22 Lakhs as against net Profit of Rs. 105.52 Lakhs in the previous year.

Standalone

On Standalone basis, the Company has earned the total revenue of Rs. 349.55 Lakhs as against Rs. 344.54 Lakhs in the previous year. The total expenditure during the year is Rs. 262.00 Lakhs as against Rs. 244.98 Lakhs in the previous year. The net profit for the year under review was stablereturns.Regulatory Rs. 62.98 Lakhs as against net profit of Rs. 75.63 Lakhs in the previous year.

KEY FINANCIAL RATIOS

Ratios	31.03.26	31.03.25	Reason for Variance
Current ratio	1.77	1.24	The current liabilities have reduced more than current assets during the year
Debt-equity ratio	0.01	0.00	Loan has been decreased
Trade receivables turnover ratio	5.22	7.71	Sales has been decreased
Operating profit ratio	0.13	0.37	Operating profit decreased
Interest coverage ratio	69.94	26.83	-

BUSINESS OUTLOOK:-

As part of its service areas, your Company is striving hard for getting mandates across business verticals which includes Private Placements involving 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 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.

In spite 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, further removal of Trade barriers, increased privatisation of PSUs, etc. 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 operates in a dynamic and highly regulated environment, making it susceptible to various internal and external risks. Factors such as capital market volatility, regulatory changes, macroeconomic conditions, and intense competition can significantly influence transaction volumes, profitability, and overall industry growth.

Understanding these risks is essential to assessing the industrys long-term sustainability and growth prospects.

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. Dependence on Capital Market Conditions:

Merchant banking revenues are closely linked to capital market activity. Market volatility or weak investor sentiment can reduce IPOs, fundraising, and advisory mandates.

2. Regulatory and Compliance Risk:

Changes in SEBI regulations and stringent compliance requirements may increase operational costs and expose firms to regulatory penalties in case of non-compliance.

3. Evolving Regulatory Framework:

SEBI has strengthened the regulatory framework for merchant bankers through amendments to the SEBI (Merchant Bankers) Regulations aimed at enhancing governance, accountability, financial strength, and investor protection. The revised framework includes stricter eligibility norms, enhanced net worth and ring-fencing requirements, revenue-based eligibility criteria, tighter due diligence responsibilities, and stronger compliance obligations. While these measures improve transparency and market integrity, they also increase compliance costs and operational responsibilities, particularly for smaller merchant banking firms.

4. Intense Competition:

The presence of domestic and international investment banks, boutique advisory firms, and financial institutions creates pricing pressure and intensifies competition for mandates.

5. Cyclical Nature of Business:

The industry is highly sensitive to economic cycles, with slower economic growth and higher interest rates often leading to reduced corporate fundraising and M&A activity.

6. Dependence on Corporate Deal Flow:

A slowdown in IPOs, mergers & acquisitions, private equity investments, or debt issuances can significantly impact revenue generation.

7. Reputational Risk:

Any lapse in due diligence, regulatory compliance, or transaction execution may result in legal liabilities, loss of credibility, and reduced client confidence.

8. Technology and Cybersecurity Risks:

Increasing digitalisation exposes merchant bankers to cybersecurity threats, data breaches, and operational disruptions, requiring continuous investment in secure technology infrastructure.

9. Global Macroeconomic Uncertainty:

Inflation, geopolitical tensions, currency fluctuations, and changes in interest rates may adversely affect investor sentiment, foreign capital inflows, and overall capital market activity.

Overall, while the merchant banking industry offers significant growth opportunities, its performance remains closely linked to capital market conditions, regulatory developments, and corporate investment activity. Firms with strong compliance frameworks, diversified service offerings, and robust risk will be better positioned to navigate these challenges and sustain long-term growth.

OPPORTUNITIES AND THREATS:-

For the Merchant Banking Industry

Opportunities:

1. Growing Capital Markets:

Increasing IPOs, QIPs, rights issues, and debt issuances are expected to drive demand for merchant banking services.

2. Rising M&A and Private Equity Activity:

Growing domestic and cross-border mergers, acquisitions, and private capital investments are creating significant advisory and transaction opportunities.

3. Financialisation of Household Savings:

The shift of household savings towards equities, mutual funds, and other financial assets is deepening capital markets and supporting fundraising activity.

4. Regulatory Reforms and Market Development:

SEBIs initiatives to strengthen governance, improve transparency, and deepen capital markets are expected to enhance investor confidence and create long-term growth opportunities.

5. Expansion of SME and Startup Ecosystem:

The growing number of SMEs and startups seeking capital through SME IPOs, private placements, and venture funding is expanding the addressable market for merchant bankers.

6. Digital Transformation of Financial Services:

Increasing adoption of fintech, digital platforms, and AI-driven financial solutions is improving operational efficiency and enabling merchant bankers to reach a wider client base.

Threats

1. Market Volatility:

Uncertainty in equity and debt markets may delay fundraising activities and reduce transaction volumes.

2. Stringent Regulatory Requirements:

Frequent regulatory changes and enhanced compliance obligations may increase operational costs and affect profitability.

3. Intense Industry Competition:

Competition from domestic investment banks, global financial institutions, boutique advisory firms, and consulting firms may exert pressure on fees and margins.

4. Economic and Geopolitical Uncertainty:

Inflation, rising interest rates, geopolitical tensions, and slowing global growth may adversely impact corporate investment decisions and capital market activity.

5. Technology and Cybersecurity Risks:

Growing dependence on digital infrastructure increases exposure to cyber threats, data breaches, and operational disruptions.

6. Dependence on Deal Activity:

A slowdown in IPOs, M&A transactions, or private equity investments can significantly affect the industrys revenue and growth prospects

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 Onboarding experience, investing in training and development as well as creating career development plans or succession plans 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 risks and uncertainties which have been detailed in this report. Several factors as listed in this report could make significant difference to the therefore, are requested to make their own independent judgments and seek professional advice before taking any investment decisions.

Sources:

1. IMF World Economic Outlook – April 2026

2. CRISIL Intelligence

3. RBI, Company reports, Public sources.