The Investment Trust of India Ltd Management Discussions.


For the global economy, the year 2018 was difficult, with the world output growth falling from 3.8 per cent in 2017 to 3.6 per cent in 2018. Growth rate of world output is projected to fall further to 3.3 per cent in 2019 as growth of both advanced economies and emerging & developing economies are expected to decline. Growth of the Indian economy moderated in 2018-19 with a growth of 6.8 per cent, slightly lower than 7.2 per cent in 2017-18. India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships.

Growth in investment, which had slowed down for many years, has bottomed out and has started to recover since 2017-18. In fact, growth in fixed investment picked up from 8.3 per cent in 2016-17 to 9.3 per cent in 2017-18 and further to 10.0 per cent in 2018-19. Net FDI inflows grew by 14.2 per cent in 2018-19. Capital expenditure of Central Government grew by 15.1 per cent in 2018-19 leading to increase in share of capital expenditure in total expenditure. Given the macroeconomic situation and the structural reforms being undertaken by the government, the economy is projected to grow at 7 per cent in 2019-20.

India continues to remain the fastest growing major economy in the world in 2018-19, despite a slight moderation in its GDP growth from 7.2 per cent in 2017-18 to 6.8 per cent in 2018-19. On the other hand, the world output growth declined from 3.8 per cent in 2017 to 3.6 per cent in 2018. The slowdown in the world economy and Emerging Market and Developing Economies (EMDEs) in 2018 followed the escalation of US China trade tensions, tighter credit policies in China, and financial tightening alongside the normalization of monetary policy in the larger advanced economies. In 2019, when the world economy and EMDEs are projected to slow down by 0.3 and 0.1 percentage points respectively, growth of Indian economy is forecast to increase. Crucially, India forms part of 30 per cent of the global economy, whose growth is not projected to decline in 2019.

(Source: Economic Survey Document 2019-20)

Market size

Indias GDP is estimated to have increased 7.2 per cent in 2017-18 and 7 per cent in 2018-19. India has retained its position as the third largest startup base in the world with over 4,750 technology start-ups.

Indias labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute. Indias foreign exchange reserves were US$ 405.64 billion in the week up to March 15, 2019, according to data from the RBI.


With the improvement in the economic scenario, there have been various investments in various sectors of the economy. The M&A activity in India reached record US$ 129.4 billion in 2018 while private equity (PE) and venture capital (VC) investments reached US$ 20.5 billion. Some of the important recent developments in Indian economy are as follows: a. During 2018-19 (up to February 2019), merchandise exports from India have increased 8.85 per cent year-on-year to US$ 298.47 billion, while services exports have grown 8.54 per cent year-on-year to US$ 185.51 billion. b. Nikkei India Manufacturing Purchasing Managers Index (PMI) reached a 14-month high in February 2019 and stood at 54.3. c. Net direct tax collection for 2018-19 had crossed Rs 10 trillion (US$ 144.57 billion) by March 16, 2019, while goods and services tax (GST) collection stood at Rs 10.70 trillion (US$ 154.69 billion) as of February 2019. d. Proceeds through Initial Public O_ers (IPO) in India reached US$ 5.5 billion in 2018 and US$ 0.9 billion in Q1 2018-19. e. Indias Foreign Direct Investment (FDI) equity inflows reached US$ 409.15 billion between April 2000 and December 2018, with maximum contribution from services, computer software and hardware, telecommunications, construction, trading and automobiles. f. Indias Index of Industrial Production (IIP) rose 4.4 per cent year-on-year in 2018-19 (up to January 2019). g. Consumer Price Index (CPI) inflation stood at 2.57 per cent in February 2019. h. Net employment generation in the country reached a 17-month high in January 2019.

(Source: )

First Advance Estimates of GVA at Basic Price by Economic Activity

(At Current Prices)
( in crore)
Industry 2018-19 ( Ist AE) 2017-18 (PE) 2016-17

Percentage change over previous year

2017-18 2018-19
Agriculture, Forestry &Fishing 26,92,433 25,94,729 24,84,005 4.50 3.80
Mining &Quarrying 4,57,301 3,74,689 3,32,947 12.50 22.00
Manufacturing 28,53,986 25,30,311 23,29,220 8.60 12.80
Electricity, Gas, Water Supply& other Utility Services 4,52,683 3,87,694 3,63,482 6.70 16.80
Construction 12,78,617 11,18,946 10,28,463 8.80 14.30
Trade, Hotels, Transport, Communication and Services related 31,57,709 28,09,748 25,21,813 11.40 12.40
to Broadcasting
Financial, Real Estate & Professional Services 35,55,780 31,64,547 28,57,322 10.80 12.40
Public Administration, Defence and other Services 25,12,857 22,01,707 19,24,339 14.40 14.10
GVAfiat_Basic Price 1,69,61,365 1,51,82,371 1,38,41,591 9.70 11.70

*PE: Provisional Estimates; AE: Advance Estimates


Indias gross domestic product for 2018 – 19 (at constant prices) is estimated to be 1,40,776 billion (1,31,799 billion for 2017 – 18). The rate of economic growth slowed to 6.8 per cent for 2018 – 19 from 7.2 per cent for 2017 – 18. Indian economy, the fastest growing major economy, grew by 8.0 per cent in the first quarter of 2018 – 19, while registering a moderation in the rate of growth in the quarters thereafter. While agriculture and allied activities slowed down in the second quarter and third quarter, growth in industry sharply increased on the back of strong manufacturing, construction and utilities. The growth in the services sector during 2018 – 19 was the lowest in the last seven years. The details are presented in Table 1.2.

Table 1.1: Key Statistics on the Indian Economy

2018-2019 2017-2018
Rate of Growth of GDP (Per cent) 6.8 7.2
Infiation (Per cent) 2.9 4.3
Gross Saving (र billion) NA 52,160
Gross Saving (Per cent of GNDI) NA 30.1
Gross Capital Formation (र billion) NA 55,269
Gross Capital Formation (Per cent of GDP) NA 32.3
Fiscal De_cit (Per cent of GDP) 3.4 3.5
Current Account De_cit (Per cent of GDP) 2.6 1.9
Exchange Rate (Indian Rupees Per US Dollar 69.2 65.0
Foreign Exchange Reserves (USD billion) 412 424

(Source: MoF, MoSPI, RBI, FBIL)


Overall, the primary market activity was lower in 2018 compared to 2017. Both the number of IPOs and the resources raised through IPOs declined in 2018. The number of IPOs fell by 14.50 per cent to 1,610, while the resources raised through IPOs declined by 12.10 per cent to USD 182 billion. In both instances, the Asia-Pacific and the EMEA regions witnessed declines, while the Americas region reported robust growth. The global financial markets remained significantly volatile in 2018. The global stock market capitalization stood at USD 74,432 billion as at end 2018. 2018 marked the first year since 2014 when the global stock market capitalization registered an annual decline (a fall of 14.90 per cent compared to USD 87,446 billion as at end-2017) on account of declines across all the regions – the Americas (6.30 per cent), the Asia-Pacific (23.8 per cent) and the EMEA (16.50 per cent) regions.


In 2018 also, India continued its rally among the global community of stock exchanges as is evident from various global rankings and a growing share in the global activities. A brief analysis of the performance of the Indian stock market in 2018, against the global and regional perspective described above, confirms this.

Indias stock market capitalization as at end- March, 2019 stood at 1,51,087 billion or USD 2,184 billion. As on December 31, 2018, India‘s stock market capitalization amounted to 2.8 per cent of the total global stock market capitalization and 8.7 per cent of the stock market capitalization of the Asia- Pacific region.

The resources mobilized from the primary market in India amounted to र 549 billion or nearly USD eight billion. India accounted for 6.0 per cent of the total number of IPOs made globally during 2018 and 9.9 per cent of the total number of IPOs made in the Asia-Pacific region. The capital raised through IPOs in India during 2018 amounted to 2.7 per cent of the resources raised through IPOs globally during 2018 and 5.2 per cent of the resources raised through IPOs in the Asia-Pacific region. The details are presented in Table 1.2.

Table 1.2 : Share of the Indian Securities Market in the Asia-Pacific and the World

2018-2019 2017-2018
Indias Share in Number of IPOs % %
Asia-Pacific 9.9 9.0
World 6.0 6.1
Indias Share in Resources Raised through IPOs
Asia-Pacific 5.2 11.1
World 2.7 5.7
Indias Share in Stock Market Capitalisation
Asia-Pacific 8.7 7.6
World 2.8 2.7
Indias Share in Stock Market Turnover
Asia-Pacific 4.4 3.9
World 1.3 1.4
Indias Share in AUM of Regulated Open-end Funds
Asia-Pacific 4.6 4.7
World 0.6 0.6
Indias Share in Number of Regulated Open-end Funds
Asia-Pacific 2.5 2.7
World 0.7 0.7

Note: The data for 2017 and 2018 pertains to calendar year i.e. Jan-Dec.


The primary market is the avenue for resource mobilization and capital formation in the country as it brings together investors seeking investment opportunities and issuers seeking to mobilize resources to finance their investments. A well developed primary market is fundamental for an economy to prosper. In order to further refine the primary market design and boost investor confidence, various measures have been undertaken by SEBI in 2018-19.

The Initial Public O_ering (IPO) market witnessed reduced activity during the 2018-19. Fundraising through IPOs plunged as companies turned cautious due to market volatility. The liquidity crisis at the NBFCs, escalating trade war fears, higher crude prices, a weaker Rupee and several macro-economic factors led to volatility in equities that kept the primary market dull during the year.


The Secondary market witnessed volatility amidst global and domestic factors, but the financial year 2018-19 punctuated by spells of sell off drew to a close when BSE benchmark Sensex managed to achieve its best annual gain of 17.30 per cent since 2014-15. NSEs Nifty rose by 14.90 per cent during the year. The secondary markets are often referred to as the barometer to a nations health and as a result they require continuous technological advancements accompanied by a review of the existing guidelines so as to maintain a competitive edge.


During 2018-19, Government of India raised the Minimum Support Price (MSP) to provide 50 per cent return over the cost of production. To support the agricultural sector, Government also launched PM-KISAN scheme during the year, which aims to provide direct monetary support to farmers. At regulatory front, SEBI permitted eligible foreign entities having actual exposure to Indian commodity markets to hedge their price risk by participating in commodity derivatives trading. Market was further broadened by permitting mutual funds to participate in commodity derivatives market. Further, in a move towards recalibration of fee charged to various intermediaries, the broker turnover fees for agri-commodity derivatives was reduced by 93.3 per cent to Rupee One per crore turnover from 15 per crore turnover. The reduced cost of trading is expected to boost the participation in agri-commodity derivatives in India.

During the year, the universal exchange principle was operationalized when BSE and NSE commenced their commodity derivatives trading platform. On the other hand, NMCE which had a presence in agricultural space was merged with ICEX on September 24, 2018. Another notable development was introduction of new products, viz., Steel long (ICEX) and Oman Crude Oil (BSE).

A. Resource Mobilization through Public Issues

During 2018-19, the resource mobilisation through public issue of debt witnessed a tremendous growth. The amount raised through public issuance rose by more than six times from 5,173 crore (through eight issues) in 2017-18 to 36,679 crore in 2018-19 (through 25 issues). The details are presented in Table 1.3.

Table 1.3: Resource Mobilization through Public Issues

Particulars 2018-19 2017-18
No. of Issues Amount (crore) No. of Issues Amount (crore)
Public Issues (Bond / NCD) 25 36,679 8 5,173

Note: Data for debt issues have been taken on the basis of their closing date

B. Resource Mobilisation through Private Placement of Corporate Debt

The private placement route continues to dominate issuance of the corporate debt in India during 2018-19 as well. Companies listed on recognised stock exchanges in India raised 6,10,318 crore in 2018-19 through private placement of corporate debt, 1.9 per cent higher than 5,99,147 crore raised in the previous year (Table 1.4). In terms of the number of issues, 2,358 issuances were made in 2018-19, as compared to 2,706 issues in 2017-18. The details are presented in Table 1.4.

Table 1.4: Private Placement of Corporate Bonds Reported to BSE and NSE

Year NSE BSE Common Total
>No. of Issues Amount (crore) No. of Issues Amount (crore) No. of Issues Amount (crore) No. of Issues Amount (crore)
2018-19 479 1,77,593 1,703 2,47,451 176 1,85,274 2,358 6,10,318
2017-18 721 1,70,835 1,812 2,34,615 173 1,93,698 2,706 5,99,147

Source: BSE and NSE


The strength of an economy can be gauged from the performance of a good financial market, which helps to channelize the savings of the people into diverse investment opportunities. In India, the mutual funds are playing a major role by bringing stability to the financial markets and through efficient resource mobilisation from various sectors. In the last two decades, the mutual fund industry is growing in a notable way by an increase in number of folios and Asset under Management (AUM). As compared to the previous year, the AUM of the mutual funds have witnessed a growth of 11.4 percent in 2018-19. The details are presented in Table 1.5

Table 1.5: Sector-wise Resource Mobilisation by Mutual Funds (crore)

Private Sector MFs Public Sector MFs
Year Open -ended Close -ended Interval Total Open -ended Close -ended Interval Total Grand Total
Mobilisation of Funds
2017-18 1,73,28,249 51,896 2,043 1,73,82,189 35,94,129 22,067 266 36,16,463 2,09,98,652
2018-19 1,95,92,552 57,319 3,117 1,96,52,989 47,21,384 19,059 931 47,41,374 2,43,94,362
Repurchases / Redemption
2017-18 1,70,95,484 55,597 2,636 1,71,53,718 35,56,776 16,275 86 35,73,137 2,07,26,855
2018-19 1,95,34,209 52,203 5,072 1,95,91,483 46,78,460 13,508 1,210 46,93,178 2,42,84,661
Net Inflow / Outflow of Funds
2017-18 2,32,765 -3,701 -593 2,28,471 37,353 5,792 181 43,326 2,71,797
2018-19 58,343 5,116 -1,955 61,505 42,924 5,551 -279 48,196 1,09,701


A_merchant banking is an institution that deals mostly in international finance,_business loans_for companies and underwriting. These_banks_are experts in international trade, which makes them specialists in dealing with multinational corporations. As of now there are 135 Merchant bankers who are registered with SEBI in India. It includes Public Sector, Private Sector and foreign players.

Market Size

The Mutual Fund (MF) industry in India has seen rapid growth in Assets Under Management (AUM). Total AUM of the industry stood at Rs 23.80 trillion (US$ 340.48 billion) between April 2018-February 2019. At the same time the number of Mutual fund (MF) equity portfolios reached a high of 74.6 million as of June 2018.

Another crucial component of Indias financial industry is the insurance industry. The insurance industry has been expanding at a fast pace. The total first year premium of life insurance companies reached Rs. 214,673 crore (US$ 30.72 billion) during FY19.

Along with the secondary market, the market for Initial Public O_ers (IPOs) has also witnessed rapid expansion. The total amount of Initial Public O_erings (IPO) increased to US$ 1.2 billion raised from 37 between April – June 2018.

Over the past few years India has witnessed a huge increase in Mergers and Acquisition (M&A) activity. In H12018, 74 deals of acquisition took place in financial sector. The total value of such transactions was US$ 4.166 billion.

Furthermore, Indias leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with Ebix Inc to build a robust insurance distribution network in the country through a new distribution exchange platform.


NBFCs have been playing a very important role both from the macroeconomic perspective and the structure of the Indian Financial System. NBFCs have also played a role in providing seamless hassle free credit to various lenders for meeting their financial requirements. Of late, the banking regulator i.e. the Reserve Bank of India (RBI) has been bringing regulations which are tightening the operating environment and the regulatory framework in which these NBFCs operate. As a result some of the smaller NBFCs have opted for closure and some larger ones converting into Non deposit taking NBFCs.

NBFCs can be classified into two categories:

NBFCs accepting public deposits (NBFCs D) and NBFCs not accepting public deposits (NBFCs ND) and

NBFCs can also be of these types: Asset financing company (company conducting the business of equipment leasing or hire purchase finance), company providing loans, investment companies and residuary non-banking companies.

The NBFC sector in India has undergone a significant transformation over the past few years and has come to be recognised as systemically important components of the financial system and it is growing quite consistently year-on-year. NBFCs are playing a critical role for development of core infrastructure, transport, employment generation, wealth creation, economic development, to finance economically weaker sections, and considerable contribution to the stateflexchequer.

The ITI group has three NBFCs functioning in different fields of lending business. These NBFCs offer various types of products to suit the requirement of the borrowers.

Loans against shares Education loans Vehicle finance Gold loans Medical loans SME finance

Vehicle Financing

Automobile Domestic Sales Trends

Domestic Sales trends (Nos.) 2018-19 2017-2018 2016-2017 2015-2016 2014-2015
Passenger Vehicles 33,77,436 32,88,581 30,47,582 27,89,208 26,01,236
Commercial Vehicles 10,07,319 8,56,916 7,14,082 6,85,704 6,14,948
Three wheelers 7,01,011 6,35,698 5,11,879 5,38,208 5,32,626
Two Wheelers 2,11,81,390 201,92,672 175,89,738 164,55,851 159,75,561
Quadricycle* 627 0 0 0 0
Grand Total 2,62,67,783 249,72,788 218,63,281 204,68,971 197,24,371

*Data for eight month of the year 2018-19

(Source: Society of Indian Automobile Manufacturers Data 2018-19)

The sale of Passenger Vehicles grew by 2.70 percent in April-March 2019 over the same period last year. Within the Passenger Vehicles, the sales of Passenger Cars, Utility Vehicle & Vans grew by 2.05 percent, 2.08 percent & 13.10 percent respectively in April-March 2019 over the same period last year.

The overall Commercial Vehicles segment registered a growth of 17.55 percent in April - March 2019 as compared to the same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) increased by 14.66 percent and Light Commercial Vehicles grew by 19.46 percent in April - March 2019 over the same period last year.

Three Wheelers sales increased by 10.27 percent in April - March 2019 over the same period last year. Within the Three Wheelers, Passenger Carrier sales registered a growth of 10.62 percent and Goods Carrier grew by 8.75 percent in April-March 2019 over April - March 2018. Two Wheelers sales registered a growth at 4.86 percent in April-March 2019 over April-March 2018. Within the Two Wheelers segment, Scooters declined by (-) 0.27 percent, whereas Motorcycles and Mopeds grew by 7.76 percent and 2.41 percent respectively in April-March 2019 over April-March 2018.

Gold loans

The gold loan, also referred as a loan against gold, is a secured loan that a borrower takes from a lender in lieu of gold ornaments such as gold jewellery. The loan amount sanctioned to borrowers by lenders is generally a certain percentage of the golds value. Borrowers can repay it through monthly instalment after which the borrowers get your gold articles back. Unlike other secured loans such as a home loan or car loan, there are no restrictions on the end use of gold loans. So whether borrowers need to fund a wedding, family vacation or your childs education, it is a great way to meet your sudden money requirement. Moreover,_a lot of private and_nationalised banks along with NBFCs offer gold loans at a_ordable interest rates. he entire process of gold loan is quite similar to other secured loans. In this, borrowers take their gold articles to a lender along with the required set of documents. The lender evaluates the gold articles and verifies the submitted documents. As per the evaluations, the lender sanctions the loan amount. As per the loan agreement, the borrowers pay off the principal amount along with the interest amount and get the pledged gold articles back.


The sector of life insurance has witnessed immense growth in the past few years. Today, it is second only to banks for mobilized savings and forms a formidable part of the capital market.

The life insurance sector controls:

* More than Rs. 37,116 crore of deployed capital * Over Rs. 36,65,743 crore of managed assets

* Investments in infrastructure exceeding Rs 3,84,262 crore

Another indication of the sectors growth is its infrastructural strength. Today the life insurance sector comprises of: * Over 11,280 branches * More than 21.95 lakh agents * 2.85 lakh direct employees and growing significantly * 33.17 crore In-force policies.

The above figures are provisional as of 31st_March, 2019. Source: Life Insurance Council.


At ‘ITI Group we had our eyes focused on our enterprising theme to INNOVATE & INNITIATE. We devoted a great share of our energies and resources to thoroughly revamp every vertical of our business by innovating numerous concepts, plans, strategies & tactics and simultaneously initiating the same into action. This translated into a better future and our businesses grew by leaps and bounds. ‘ITI Group has delivered superior performance by way of increased revenues, enhanced profits, heightened new clients empanelment, spreading geographical presence and maturing product range with improvements across all key parameters as compared to the last fiscal.

During the year under review the consolidated revenue increased by 87.18% from Rs.35,137.99 lakhs to Rs.62,9156.63 lakhs. The Company reported consolidated profit after tax and other comprehensive of Rs. 4,058.21 lakhs as against Rs. 8,098.60 lakhs during the previous year. More important amongst our primary objectives with immediate focus are:

Create and sustain industry leadership by continually driving the frontiers of operational excellence; Enhance customer experience and solution delivery; Improve resource utilization; Upgrade support processes.


Risk is inevitable in business and risk management is all about risk reduction and avoidance. There are various risks associated with the Company - portfolio risk, industry risk, credit risk, internal control risk, technology risk, regulatory risk, human resources risk, competition risk and perception risk. The Company has established systems and procedures for risk management associated with the business while simultaneously creating an environment conducive for its growth. It has comprehensive integrated risk management framework that comprise of clear understanding of companys strategy, policies, initiatives, norms, reporting and control at various level. The Company believes that the risk management process would strengthen the decision-making, planning and implementation process.


The Company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The Company being a service industry, it has in place clear processes and well-defined roles and responsibilities for its employees at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place. Also the Management evaluates these reports, internal controls and ensures that its employees adhere not only to internal processes and procedures set by the Company from time to time but also to the various statutory compliances. These have been designed to provide reasonable assurance with regard to maintaining proper accounting controls, monitoring economy and efficiency of operations, protecting assets from unauthorized use or losses, and ensuring reliability of financial and operational information published from time to time. As Audit Committee of the Board of Directors, comprising of independent directors, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with Accounting Standards as well as reasons for changes in accounting policies and practices, if any.


This financial was a challenging year for the industry, more so for the HR departments across organisations. The economic turbulences & their social consequences dominated the HR landscape for quite some time. However despite all the limitations posed by the macroeconomic transformations, we managed to differentiate ourselves with the rest by leveraging upon the inherent strengths of the talent pool and improvising the same to suit the new circumstances.

Thus, this year was a time for rationalizing the structures and streamlining the processes not only ‘of the people, but also ‘for the people and their functioning. Enterprise wise success was facilitated by virtue of our firm belief in the principles of ‘empowerment of the capable and the deserving.

Not resting upon our tremendous successes, we decided to enhance our faculties by further challenging ourselves. Our efforts have been uncompromisingly successful. The result has been the launch of a series of programs and processes never before experienced in the company, all being met with thundering applause from all and sundry.

We take pride in the commitment, competence and dedication of its employees in all the areas of the business. The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organization development. We aim to continue on the continual path of pursuing excellence through unorthodox means and orthodox theology. The coming year will see us harnessing the maximum benefits from these initiatives, unleashing the power of human capital that ITI Group represents.

The total number of employees in the Parent Company: 19


Statements in this Management Discussion and Analysis report describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied.

The Company is not under any obligation to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.