ICICI FY 2018-19

In this year, the market was low and there was a narrow participation in delivery based trade
and the due to risk averse behaviour of investors, the investments in small and mid-cap stocks
were low.

Regulatory changes resulted in reduction of TER and shifting from upfront commission to
trail based commission.

Client base for NSE increased to 8.4 lakhs in FY 2019 as compared to 8 lakhs in FY 2018.

In FY2019, PAT was Rs. 4907 million and revenue from Retail Brokerage Business
decreased (by 11% as compared to FY2018) to Rs. 8154 million. It was due to decline in
equity volumes.

The distribution business consists of the distribution of financial products and services
offered by third-parties to its customers. These products include mutual funds, life and
general insurance, corporate fixed deposits, loans, tax services and pension products. As on
March 31, 2019, the Company distributed over 2,400 mutual fund schemes. The earning is in
the form of commission.

It introduced ‘Any Date’ SIP in Mutual Funds where clients can invest using UPI.

The Company also introduced investment in Initial Public Offers (IPO) through ASBA on
UPI for non-ICICIdirect clients.

There was a 5% decline in Distribution Revenue in FY2019. The MF Revenue also declined
to Rs. 2695 million in FY2019 from Rs 2847 million in FY2018.

The MF Average AUM increased by 15% compared to market average AUM growth of 12%.
Due to regulatory changes during the year, the yield and revenue from mutual fund
distribution registered a decline.

During the period, SIP count grew from 6.3 lakhs as at March 31, 2018 to 6.7 lakhs in March
31, 2019.

Life insurance premium and revenue registered a marginal decline of 2%.

However, the revenue from other distribution products mainly corporate bonds, NCD, etc.
increased by 10%.

In institutional brokerage, it provides block deal solutions between institutional players. It

also works with trade aggregators.

The revenue from our institutional brokerage business increased by 10% from Rs. 1,069
million in FY2018 to Rs. 1,174 million in FY2019.

In corporate finance, ICICI Securities offers Investment Banking services. It offers financial
advisory services and equity capital market services to corporate clients.

It managed 4 IPOs in FY2019 with a market share of 38.4% (in terms of issue size) as
compared to market share of 33.6% (in terms of issue size) in FY2018.
The amount raised through equity public issuances managed by the Company during FY2019
was Rs. 87.17 billion, which included the IPOs of HDFC Asset Management Company,
Credit Access Grameen Limited, Aavas Financiers Limited and InvIT of Indinfravit Trust
(L&T).

It successfully completed the rights issue of Hindustan Construction Company Limited

amounting to Rs. 4.98 billion.

The amount raised through public debt issuance managed by the Company in FY2019 was `
142.50 billion, which included the issues of Dewan Housing Finance Corporation Limited,
Mahindra & Mahindra Financial Services Limited and India Infoline Finance Limited.

The Company managed 12 deals in FY2019 as compared to 5 deals in FY2018.

The revenue from our investment banking business decreased by over 30% from Rs. 1,440
million in FY2018 to Rs. 991 million in FY2019 due to decline in ECM mobilisation.

In Private Wealth Management, ICICI Securities distributes products like AIFs (Alternative
Investment Fund), Portfolio Management Services, market-linked debentures, and offers
services like investment banking, Investment Advisory Services, etc. to its private wealth
clients.

How they tackled lower brokerage fees

1. This was possible because business reduced in the low-yield intraday segment but
continued to do well in the high yield cash delivery segment.
2. Its client base increased significantly and resulted in higher retail participation which
compensated for lower brokerage fees.
3. They focus on delivering highly personalised and relevant products and solutions to
their customers.
ICICI FY 2019-20
The beginning of third quarter of FY2020 saw a pick-up in Emerging Market (EM) equities
including that of India. The rising risk appetite resulted in a pick-up in broader markets in the
form of mid and small caps. The NIFTY 50 index hit an all-time high in January 2020, only
to plunge in March 2020 due to fears of the COVID-19 impact on economy. The slide
resulted in large-cap ending FY2020 with a decline of 26% (NIFTY 50) while the NIFTY
midcap 100 and NIFTY small-cap 100 Indices fell by 36% and 46%, respectively.
Delivery ADTO contribution decreased to 24%. Equity derivatives ADTO grew by 46%,
primarily driven by weekly Options contracts. In Futures Segment, volumes were flat year-
on-year.
There was a substantial growth in the number of new retail investors entering the equity
market.
Apart from advisory services, focus on fund-based activities like margin funding and loan
against shares is on the rise, enabling brokers to build sustainable earnings.
The widespread panic over COVID-19 has led to three kinds of damages in the Indian stock
market. First, at the index level, there was a correction of ~23% in March 2020. Second, the
leverage positions have taken a large hit, as positions had to be unwound. Third, there was an
overall impact on investor sentiment due to the sharp slide.
ICICIdirect Prime, a subscription-based service for all its customers that offers instant payout
of funds, reduced brokerage.
rates, and exclusive research. At the end of FY2020, the Company had more than 0.31
million customers who opted for ICICIdirect Prime.
In FY2020, the Company’s ESOP funding business scaled up and provided gateway to HNI
customers.
The growth in the products and features have helped diversify the revenue base in the
Equities business. Revenues from interest income and Prime subscription fees contributed to
over 12% of FY2020 equity business revenues, growing from ~9% in FY2019.
In FY2020, there was a high client activation due to sourcing of clients from ICICI Bank
which resulted in increase in client base.
The Company is scaling up the distribution of ‘Digital Loans’ for its pre-approved customers.
It is offering Personal Loans, Credit Cards, Top-up on Home loans, and Auto Loans top-up
through icicidirect.com. Over 0.9 million ICICI Securities customers are already pre-
approved and credit-cleared for availing of a Personal Loan without any documentation. This
would help ICICI Securities establish itself as a “one-stop shop” for all financial needs from
Investments to protection to borrowing.
Revenue from Prime subscription fees, which was non-existent in FY2019, stood at ` 196
million in FY2020.
Activation rate for bank-sourced clients is now at 58% in FY2020, up from 32% in FY2019,
showing a shift in the quality of customers towards the more affluent and relevant segments.
The Company’s monthly run rate for FY2020 was over 11,500 tab-based accounts.
The third engine of growing scale is the business partner network, which witnessed a strong
growth of 32% year-on-year and was at 9,400+ in FY2020. This is expected to help the
Company grow its customer franchise further, not only in certain pockets of Tier I cities but
also in Tier II and III markets. The new clients acquired through this network grew by 43% in
FY2020.
Broking Revenue generating NCA increased by 43% from 0.15 million customers for
FY2019 to 0.22 million customers for the same period in FY2020.
The Company’s market share, based on NSE active client, has improved from 9.6% to 10%,
implying it has been able to increase active clients at a rate faster than market.
By FY2020, it had 4.8 million customers which is distinctively highest amongst other retail
brokers. Client activation (NSE active) witnessed ~27% increase in FY2020 to 1.08 million
as compared to 0.84 million in FY2019.
Retail brokerage revenue grew marginally from Rs. 8,154.2 million in FY2019 to ` 8,187.1
million in FY2020. The Company’s distribution revenues witnessed a decline, primarily on
account of the decline in mutual fund revenues by 16% from Rs. 2,695.0 million in FY2019
to Rs. 2,263.2 million in FY2020.
SIP count fell slightly from 0.67 million as on March 31, 2019, to 0.66 million in March 31,
2020.
Life insurance premium declined by 10% and revenue registered an increase of 3% from `
474 million in FY2019 to ` 490 million in FY2020 due to increased focus on protection
(term) and traditional products amid higher volatility.
In Private Wealth Management, the customers generally are clients with over than Rs. 10
million of assets. As of FY2020, there were ~32,000 such clients, creating an asset base of
Rs. 832 billion. The Company generated Rs. 2.59 billion in revenue from these clients in
FY2020, up by 19% from Rs. 2.18 billion in FY2019.
Their client base is sticky, with 54% revenue coming from clients who are with us for over 10
years which shows their client’s loyalty towards them.
It entered risk-off mode in March 2020 and systematically reduced its exposure to loan
products like MTF and ESOP. Its combined loan book now stands at Rs. 5.8 billion down
from Rs. 11.5 billion as on December 31, 2019.
Although the consolidated revenue was of Rs. 17,249.4 million for FY2020 as compared to
Rs. 17,270.2 million for FY2019, the Consolidated Profit after Tax (PAT) for FY2020 was
Rs. 5,420.0 million compared to Rs. 4,907.3 million for FY2019.
Interest and other operating income increased from Rs. 1,792.0 million for the year ended
March 31, 2019, to Rs. 2,350.0 million in the year ended March 31, 2020, an increase of
31%.
The Company’s brokerage income increased from Rs. 9,328.3 million for the year ended
March 31, 2019, to Rs. 9,475.6
million for the year ended March 31, 2020, an increase of 2%. The retail brokerage revenue
grew marginally from Rs. 8,154.2 million in FY2019 to 8,187.1 million in FY2020.
The revenue from its institutional equity business increased by 10% from Rs. 1,174.1 million
in FY2019 to Rs. 1,288.5 million in FY2020.
Income from services decreased from Rs. 5,732.8 million for the year ended March 31, 2019,
to Rs. 5,217.5 million for the year ended March 31, 2020, a decrease of 9%.
Income from services decreased from Rs. 5,732.8 million for the year ended March 31, 2019,
to Rs. 5,217.5 million for the year ended March 31, 2020, a decrease of 9%. This was
primarily due to a decrease in commissions from the distribution of third-party mutual funds
from Rs. 2,695.0 million to Rs. 2,263.2 million, a decrease of 16%.
Fees and commission expense increased from Rs. 375.0 million for the year ended March 31,
2019, to Rs. 437.0 million for the year ended March 31, 2020, an increase of 17%. This
increase was primarily due to an increase in payout to ICICI Bank in relation to a new
sourcing arrangement.

Q4 2020-2021
As digitization of products of services picks up pace, the company has reduced the number of
physical branch network to 148 in Q4FY21 vs 172 a year ago.