ICICI Securities Limited

Sahej Mittal

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Dipanjan Ghosh

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Aejas Lakhani

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Aejas Lakhani

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Pujan Shah

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Sanketh Godha

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Vijay Chandok

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Sanketh Godha

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Sanketh Godha

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So, these are the important parameters and then of course, market plays a very important role in the entry and exit given, the volatility also plays a very important role because that decides the premium, that the number of lots is again a derivative of the premium which is charged in a volatile time the premium goes up and that is where customer will be able to buy less and the stable period the premium goes more and more number of lots can be bought.

— Sahej Mittal

I will just try to rephrase that, that will this cash segment income that we are sort of receiving given that ADTO remains the same is there any more migration because of which we may see a decline in this or is this the base from which you expect cash segment level income to keep going up?

— Aejas Lakhani

But the MTF income has come off a bit, maybe because of the decline but just wanted to understand the trajectory how things are moving over last few quarters?

— Sanketh Godha

So, whether this market share gain came at the expense of little margin compression?

— Sanketh Godha

Dharmavenkatesan: My question is that if there is a pressure on brokerage it will indirectly benefit us and we should be able to gain much higher market when there is pressure on the brokerage.

— Vishal Chandok

No, certainly if there is an as per what you just said, Yes, I also went saw that Tweet, if there is an upward pressure and there is indeed an actual translation of that upward pressure in terms of discount brokers increasing brokerage, it certainly makes us more competitive in the marketplace.

— Vishal Chandok

But we don’t feel the cost pressure right now because of this again.

— Vishal Chandok

Now, if something like that comes that will have a meaningful impact on the float opportunity for discount brokers and that could be a very material I would say that would be a more significant pressure point on discount brokers, than the current regulations.

— Vishal Chandok

Q

So, a couple of questions from my side. Sir firstly, what is your outlook on the option volumes, given the pace of growth in the industry how sustainable do you think are these volumes, that would be my first question and maybe then I’ll follow up.

Vijay Chandok

Thank you, Sahej. Well, if you look at past as an indicator of what’s happened to volumes, it’s been a secular good growth trend not just quarter-on-quarter, but for several years now. Having said that, we do not want to double guess the movement of how options will happen from here onwards, we are very clear it is one of the important line items, it’s an area of importance and focus cannot be ignored. We have been a late starter in this space, we have started investing through tools, apps, experiences, product and plans. And we continue to press the lever very, very hard to gain market share

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Just one last question quick question, so sir on the penalty charges under the peak margin regulation. So, have you provided for it or have you paid, there were some regulation from the NSE? Harvinder Jaspal: No, so Sahej actually in our kind of model what we do is we collect any kind of upfront penalty prior whatever penalties, whatever margin is required to be collected, before placing order is collected, only then an order can be placed. So, we have very strong processes in place. So, therefore, that may not be relevant for us in terms of getting a penalty on upfront margin. Yes, I understa

Sahej Mittal

So, we haven’t collected any penalty charges from the customer, is that the right answer? Harvinder Jaspal: As I explained, in our case if you’re talking about a circular which says that no upfront penalty can be passed on. In our kind of a model, we collect the margin before the client places an order, we do not have a scenario where a client can place order without giving the margin prior to placing the order. So, we do not have that scenario.

Q

Sir the question is on wealth subscribe, so when the customer crosses 1 crores AUM with us how the life for the customer and how our approach to the customer changes, that is first question. And second is how many of the customers that we have added on the web franchise of 1500, has come existing to ISEC customers and how much are the new customers to ISEC?

Anupam Guha

Hi, this is Anupam here, I head the wealth practice. So, the moment a customer crosses one crore obviously, we have as you’re aware that private wealth we have close to 500 odd team members. And we have a very seasoned relationship team as well. Our entire model of engagement is an omni channel model, where while we have the ICICI brick platform being available, but we have a relationship manager who handhold the customer, and the way we look at our entire practices that we focus on getting more clients into our ecosystem, and really engage on an asset allocation model. The way we approach is

Q

So, my first question I was asking, if I look at your SIP flows, that seems to have dipped to Q-o-Q, if you can give some color on that, because for the industry from what I understand it increased. Second on your other distribution revenues, that has also seen some amount of moderation during the quarter and lastly, if I look at your insurance yields, that seems to have gone down, so is it like the overall increase in volumes is led by more of non-life or sachet sort of products out there. So, these are the three questions. Harvinder Jaspal: Yes, so let me take one by one, so on SIP, our flow

Management

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Just extending the previous question. On the SIP we had a run rate of 13.2 billion in 4Q, and we are down to 11.9 billion now in this quarter, so there seem to be a sharp fall against that and this is completely against the industry trend wherein we are possibly much higher from what we were there in Q4 for the industry, but could you explain that as to what really is different happening with ISEC as compared to the rest of the industry. Secondly, on the Prime income fee we’ve possibly seen for the first time a sequentially dip, any thoughts there as to what’s the trajectory and why is the dip

Vishal Gulechha

So, the second question was that why there is a dip in Prime fee in this quarter. So, as you know that we have made Prime plans, lifetime plans, so there are less renewals because all the plans above 999 now carries a lifetime value. But the focus clearly is on getting more number of customers using this kind of proposition. So, we have increased our sourcing in 999 and above plan, and as you know that when we get a Prime customer, Prime fee is only one small component, the overall ARPU which we generate. So, our last focus is on to get the complete wallet share, which includes the brokerage p

Q

Congratulation on the numbers, and your efforts are reflecting in market share gains and thank you for extra disclosures. My first question is that, in the journey of migrating the customer through Prime where he’s paying a lower brokerage and thereby still being retained and that has impacted of course the absolute cash brokerage revenues, where are we in that journey so, has that migration that you wanted from Prime already taken place or still there is scope and the reason I asked this is because your absolute cash revenues are down say from 180 crores second quarter last year to 108 crores

Vishal Gulechha

So, see as far as Prime is concerned, all the plans are open for the entire set of customers. So, there is no selective selling which is happening, we do market Prime plans across all sets of customers. And the objective is not to look at one quarter in particular, the entire purpose of the Prime is to get customer for lifetime. And, we can help us managing the attrition better, getting the revenue better, making him take many other products which we sell and also if it can help us in acquiring more customers from market, activate our non-traders and stock traders, overall things are working w

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One question, what value we have paid to multipie for acquiring the whole team and stuff for that? Harvinder Jaspal: We have not put that out over here. It’s a principal to principal transaction that we did a bilateral transaction, but it’s nothing very material is a guidance I can give.

Management

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Sir, I just have one question with respect to how the NIM with respect to MTF and ESOP book is playing out. We see that in the current quarter despite MTF book increasing. Just wanted to understand because capital investment yield interest yield on MTF book, it comes to closer to 9%. But the MTF income has come off a bit, maybe because of the decline but just wanted to understand the trajectory how things are moving over last few quarters? Harvinder Jaspal: Yes, so two things over here Sanketh. One on a quarter-on-quarter basis the average book is actually slightly lower from Q1 to Q2, the exi

Sanketh Godha

But that range did it get compressed Harvinder, because I just wanted understand given we have gained so much of market share in last two years by 350 basis points. So, whether this market share gain came at the expense of little margin compression? Harvinder Jaspal: So, Sanketh marginally because obviously there is always a lag where you make pricing adjustments, we have increased recently our pricing where we have gone from let’s say the best plan that we had used to offer a pricing of 7.9%. Now the best plan offers a pricing of about 8.7%. So, those are some changes that we have done recent

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Yes, so what is your question? Dharmavenkatesan: My question is that if there is a pressure on brokerage it will indirectly benefit us and we should be able to gain much higher market when there is pressure on the brokerage.

Vishal Chandok

No, certainly if there is an as per what you just said, Yes, I also went saw that Tweet, if there is an upward pressure and there is indeed an actual translation of that upward pressure in terms of discount brokers increasing brokerage, it certainly makes us more competitive in the marketplace. So, that should be a plus for us. So, we have nothing to lose with an increasing, and everything to gain in an increasing brokerage scenario from the discount broker side. Dharmavenkatesan: Okay, sir. But we don’t feel the cost pressure right now because of this again. We also may feel a little… No, so

Q

So, thank you very much for hearing our narrative patiently and also the questions that you’ve asked. In case there are any follow up questions or unanswered questions in your mind, please do not hesitate to get in touch with us. We’ll be happy to address any questions that pop up in your mind. You know whom to contact, all of us are available, the IR team, myself so look forward to hearing from you and keeping in touch and wish you all a very, very Happy Diwali. Take care and stay safe. Thank you very much, and good night.

Management