Assets of our clients incl. equity demat assets maintained with ICICI Bank and excluding promoter holding
Q3FY21 Performance Highlights
Revenue at Rs 620 crore, up 47% YoY
PAT at Rs 267 crore, up 95% YoY; Cost to income ratio at 42%, down 14 percentage points YoY
Return on Equity (annualized) at 71%, vs 51% in Q3FY20
Equities and allied revenue at Rs 428 crore, up 66% YoY
1.63 million overall active clients, up 17% YoY
Equity market share up 160 bps YoY to 10.5%
Private Wealth Management revenue up 86% YoY to Rs 114 crore; AUM at Rs 1.47L crore#, up 45 % YoY
Total client asset at Rs 3.4 L crore#
Issuer Services & Advisory* revenue up 33% YoY to Rs 23 crore
* Our investment banking business
# Assets of our clients incl. equity demat assets maintained with ICICI Bank and excluding promoter holding
Mumbai, Monday Jan 25, 2021 – ICICI Securities (I-Sec), a part of the ICICI Group and India’s leading retail-led equity franchise, distributor of financial products, and investment bank, today announced the financial results for the quarter ending 31th December 2020 quarter (Q3 FY21).
Q3FY21 Performance
The company reported consolidated revenue of Rs 620 crore in Q3FY21, against Rs 423 crore in Q3FY20, up 47%, aided by strong all round performance in equities & allied business, distribution business, private wealth management business, as well as investment banking business.
Consolidated Profit After Tax (PAT) for Q3FY21 stood at Rs 267 crore, Vs Rs 137 crore in Q3FY20, up 95%, on account of growth in revenue and improvement in margins.
Cost to income ratio stood at 42% in Q3FY21, against 56% in Q3FY20. Return on Equity (annualized) during the period was at robust 71%, vs 51% in Q3FY20.
Business Highlights
I-Sec has a client base of ~5.07 million, of which over 139,000 were added during the quarter, which is highest ever addition in a quarter. Digital sourcing continues to demonstrate strength with ~ 38,000 customers added through this channel during the quarter, vs ~28,000 in Q2 and ~20,000 in Q1. Our open architecture model, where customers from any bank can trade on our platform, is also witnessing encouraging traction with about a third of new accounts being opened by non-ICICI Bank customers.
The company has over 1.63 million active clients (those who have given us revenue/transacted across any of our product categories in the last 12 months) and over 1.29 million NSE active clients (those having traded on the NSE in the last 12 months), up 17% and 34% YoY respectively. In Q3FY2021, I-Sec expanded its equity market share (by volume) by 160 bps YoY to 10.5%.
Total client assets stood at ₹ 3.4L crore# on 31st Dec, 2020, vs 2.5L crore a year ago, up 36%.
During the quarter, the company launched ICICIdirect NEO, a revolutionary and path breaking plan targeted at traders, offering unlimited trading with zero brokerage on all Futures trades, and a flat ₹20 per order for Intraday and Options trades. I-Sec also launched ‘ICICIDirect Money’ mobile app, which provides a vast array or services related to mutual funds like investment, redemption, setting up or cancelation of SIP mandates, reviewing research recommendations etc. It is witnessing healthy download traction and has high user rating.
In Q3FY21, Equities and Allied Business, which comprises retail equity, institutional equity, lending towards ESOP (Employee Stock Option Plans) & MTF (Margin Trade Funding), depository and other charges, and Prime & NEO subscription fees, rose 66% on-year to Rs 428 crore. The Retail Equities and Allied Business reported revenues at Rs 390 crore, up 70% vs Rs 229 crore in Q3FY20. ESOP & MTF interest income rose 69% year-on-year to Rs 44 crore in Q3FY21 and the average book for these businesses stood at ~ Rs1,840 crore as on 31th December 2020, against ~ Rs 950 crore last year. Prime subscription income grew 164% YoY to Rs 15 crore.
# Assets of our clients incl. equity demat assets maintained with ICICI Bank and excluding promoter holding
The company continues to receive encouraging response to Prime, its annual subscription based plan that provides a package of privilege pricing, exclusive research, and higher eATM (payout within 30 mins of selling stocks) limits per day. Currently there are ~ 5.3 lakh Prime subscribers and Prime and Prepaid customers contribute ~64% of retail equities revenue.
Institutional equities revenue during the quarter increased by 34% on-year to Rs 38 crore on the back of established traction with in DII (Domestic Institutional Investors) space and growing traction in the FII (Foreign Institutional Investors) space.
Distribution revenue stood at Rs 108 crore in Q3FY21 up 5% against Q3FY20.
I-Sec is India’s second largest non-bank MF distributor by revenue and assets with a 4.5% revenue market share (based on FY20 AMFI data). In spite of the mutual funds industry witnessing a decline of 7% YoY in gross equity flows along with net outflows in the equity segment, I-Sec MF revenues grew by 9% YoY to Rs 63 crore in Q3FY21. On the back of SIP count rising 5% YoY to 0.68 million in Q3FY21, our market share in SIP flows has expanded to 3.66 % from 3.22% YoY, and in overall gross flows to 28 bps from 15 bps YoY. I-Sec MF AUM is up 2% YoY and is at an all-time high.
I-Sec is also a leading distribution of other financial products like loans, fixed income products, corporate bonds and deposits, insurance, bank Fixed Deposits (FD), Alternate Investment Funds (AIF), Portfolio Management Services (PMS), Sovereign Gold Bonds (SGB), and National Pension Scheme (NPS). This non-MF distribution revenue rose 5% YoY in Q3FY21 to Rs 43 crore. With business environment rapidly improving, this business has made a strong comeback after a few quarters of subdued performance. Home loans disbursed during the quarter increased to Rs 360 cr, which is highest ever.
As digitization of products of services picks up pace, the company has reduced the number of physical branch network to 151 in Q3FY21 vs 178 a year ago. The company has a nationwide network of 15,200+ (up 75% YoY) business partners, consisting of sub-brokers, authorized persons, IFAs & IAs, whose processes too have been digitized.
I-Sec’s Private Wealth Management (PWM) business reported Rs 114 crore of revenue in Q3FY21 up 86% on-year. The PWM business is a home-grown franchise set up to service affluent customers. It serves ~ 42,700 clients, (+6,700 QoQ) with an asset base of Rs 1.47 L crore#, up 45% year-on-year.
I-Sec’s proprietary Portfolio Management Scheme (PMS) AUM stood at ~ Rs 170 crore as on 31th December 2020, against ~Rs 110 crore same period last year.
Our Issuer Services and Advisory business (Investment Banking) revenue stood at Rs 23 crore in Q3FY21, up 33% on-year. I-Sec executed 10 investment banking deals during the quarter, against 7 in the corresponding quarter last year. I-sec is ranked #1 in IPO/ FPO/ InvIT/ ReIT issuance with a 85% market share (9MFY21), and #2 in Merger Market league table (amongst domestic financial advisors) by number of deals. The company has strong IPO pipeline (as per SEBI filling) of 10 deals amounting to over Rs 13,800 crore.
Management Commentary
Mr. Vijay Chandok, Managing Director and Chief Executive Officer, said, “We are happy to report strong financial and operational performance during the quarter with all our businesses performing well.
“Our new customer acquisition during the quarter was highest ever and we are confident of maintaining the momentum on the back of increased traction on digital sourcing channel. Our sourcing funnel remains strong and additionally we have been successful in increasing our client engagement as they are increasingly consuming additional products and services from us. Over a million of our customers enjoy more than one product from our stable and our cross sell ratio has moved to 1.70 from 1.55 YoY. We will continue to drive this a focused approach, keeping the preference and appetite of the customers at the core of this philosophy.
“Our distribution business has also performed well this quarter, with both, the MF and non-MF revenues growing. We have added new product lines and they are witnessing healthy customer traction. Our new MF App – ICICI direct Money – has been receiving encouraging response and feedback from our customers.
“As we lay the foundations for a strong and future-ready business, we are investing in technology, digitisation, and fortifying the talent pool. We aim to remain the digital financial supermarket of choice and a go-to platform for sustainable wealth creation by meeting all the financial lifecycle needs in investments, protection, and borrowing.”
About ICICI Securities
ICICI Securities Limited (I-Sec) is a subsidiary of ICICI Bank Ltd. The company began its operation in May 1995 and continues to grow its operation through expanding its client base and providing different type of services.
I-Sec operates www.icicidirect.com, India’s leading virtual financial supermarket, meeting the three need sets of its clients- investments, protection, and borrowing. Through its four lines of businesses -- broking, distribution of financial products, wealth management and investment banking-- I-Sec serves customers ranging from the retail and institutional investors to corporates to high net-worth individuals to government.
I-Sec is listed on National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). For details, visit: www.icicisecurities.com
Disclaimer
Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', ‘expected to’, etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the actual growth in broking business and other financial services in the countries that we operate or where a material number of our customers reside, our ability to successfully implement our strategy, including our use of the Internet and other technology our exploration of merger and acquisition opportunities, our ability to integrate mergers or acquisitions into our operations and manage the risks associated with such acquisitions to achieve our strategic and financial objectives, our growth and expansion in domestic and overseas markets, technological changes, our ability to market new products, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions we are or become a party to, the future impact of new accounting standards, our ability to implement our dividend policy, the impact of changes in insurance regulations and other regulatory changes in India and other jurisdictions on us. ICICI Securities Limited undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.
