Navigant Corporate Advisors Ltd Management Discussions

Macro-Economic Environment-Indian Economy at large

Indias economic journey over the past few years has been marked by remarkable growth and a steady rise in its position on the global stage. After overtaking the United Kingdom (UK) to become the fifth largest economy in Q1 FY23, India has continued this upward trajectory to surpass Japan in June 2025 to become the fourth largest economy in the world. With a nominal Gross Domestic Product (GDP) of Rs. 3,31,03,000 crore (US$ 3.78 trillion), Indias growth reflects a combination of strong domestic demand and policy reforms positioning the country as a key destination for global capital.

Further, India is projected to reach a GDP of Rs. 4,26,45,000 crore (US$ 5 trillion) by 2027 and is on course to surpass Germany by 2028. Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

Source: https://www.ibef.org/economy/indian-economy-overview

Industry Structure and developments:

Our Company is SEBI registered Category I Merchant Banker. Company mainly participates into SME Segment of Primary market issues, Valuation Advisory besides handling various assignments on Rights Issue, Delisting, Open Offers, for Companies on Disseminations Board and various valuation exercise including ESOP advisory.

SME Platform offers an entrepreneur and investor friendly environment, which enables the listing of SMEs from the unorganized sector scattered throughout India, into a regulated and organized sector. The platform provides opportunity to SME entrepreneurs to raise equity capital for growth and expansion. It also provides immense opportunity for investors to identity and invests in good SMEs at an early stage.

SEBI adopts the principle of consultative approach for making rules & regulations best suited for capital market with objective of developing & regulating the Indian securities market as well as protecting the interest of the investors. India Macro fundamentals continued to fare well as against its emerging market peer; and with regard its medium-term potential, steady progress is being made.

In addition to that as per Rule 11UA (2) (b) of Income Tax Rules, 1962 whenever an Indian Unquoted Company issues equity shares other than book value it has to obtain certification from Merchant Bankers on fair value of unquoted equity shares on discounted cash flow basis. Your company has identified this opportunity and providing services to companies across India including large corporates. However, as per Finance (No. 2) Bill 2024 presented on 23 rd July, 2024, the Secton 56 (2)(viib) of the Income Tax Act, 1961 is now not applicable. Accordingly, valuation of shares and securities may no longer be required for issuance of shares and securities. Therefore, there may be substantial adverse effect on total revenue of our Company due to non- applicability of Section 56 (2)(viib) of the Income Tax Act, 1961.

OPPORTUNITIES AND THREATS

?‚? Opportunities:

?‚? Revival from Indian Equity market pushing demand of merchant bankers.

?‚? Growth in investments in to companies and equity investment culture will push demand of merchant bankers for valuation assignments.

?‚? Various funding transactions push demand of merchant bankers.

?‚? Threats:

Despite opportunities, there are significant factors presenting threats to our business viz:

?‚? Uncertainty and low business confidence due to inflationary concerns will adversely impact the business.

?‚? Capital Market gets affected by events such as interest rate hikes, monsoon performance, tax concerns, other global events & domestic political events such as interim & state elections.

?‚? Continuous downward pressure on the fees and commissions caused by heightened competition and willingness of most players to deliver services at very low fees.

?‚? The effect of any of the adverse events on the capital market would pose a threat for the process of capital formation and resource raising.

?‚? Change in Regulatory Policy

Internal Control Systems and Their Adequacy:

The Company has an Internal Control System commensurate with its requirement and size of business to ensure that the assets and interest of the Company assets are safeguarded. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid down system and policies are comprehensively and frequently monitored by your Companys management at all the levels of the originations. The Company has established well defined policies and process across the originations covering all major activities including authority for approvals in all cases where monetary decisions are involved, various limits and authorities are in place.

The Audit Committee of the Board of Directors review the existing audit procedures and internal systems of control on an ongoing basis keeping in mind the organizations requirements, growth prospects and ever evolving business environment.

They also review the internal audit findings and recommendations and ensure that corrective measures are implemented.

Outlook:

India is today one of the most vibrant global economies on the back of robust banking and insurance sectors.

The Indian equity market is expanding in terms of listed companies and market capitalization, widening the playing field for brokerage firms. Sophisticated products segment is growing rapidly, reflected in the steep rise in growth of derivatives trading.

With the increasing retail penetration, there is an immense potential to tap the untapped market. Growing financial awareness is expected to increase the fraction of population participating in this market.

Risks And Concern:

Risk is an integral part of the business and we aim at delivering superior shareholder value by achieving an appropriate balance between risks and returns. Our senior management identifies and monitors the risks on an ongoing basis and evolves process/ systems to monitor and control the same to contain the risks to minimum levels. Ongoing monitoring by our officials help in identifying risks early. The financial services industry is subject industry is subject to continuously evolving legislative and regulatory environment due to increasing stringent regulatory framework.

Human Resources:

Navigant Corporate Advisors Limited is part of dynamic and progressive group that actively fosters a challenging work environment and encourages Entrepreneurship. With trust being the critical part of our business belief, we lay a strong emphasis on integrity, teamwork. Our Professional staff with diverse backgrounds brings varied talent, knowledge and experience to the Group, helping our business to remain competitive, achieve greater success and newer millstone.

Review Of Operations:

During this year Company has carried out various other assignments such as Open Offers, Rights Issues, Preferential Issue and valuation exercise including ESOP advisory. The total Revenue from operations during the year has increased to Rs. 779.51 Lacs as compared to Rs. 744.05 Lacs witnessed in 2023-24. Company has also been able to provide valuation services to few large corporates. The overall financial performance of the Company was improved with strategy of focusing on valuation services.

Investor Relations:

We consider investor relations to be an important aspect of our business as we believe in building transparent and open relationship with our stakeholders. As a listed Company, we are now laying even greater emphasis on our investor relations program to provide our investors, analysts and other stakeholders with a complete and accurate picture of the Companys past and current performance and the prospects and strategies for the future.