dear Fellow Shareholders
It gives me immense pleasure to share with you our first Annual Report post oursuccessful Initial Public Offering. This becomes all the more special as your company iscelebrating its Silver Jubilee year. I express my heartfelt gratitude to all investors foryour continued faith in us which has always encouraged us to move forward and achievenewer milestones in our journey.
The onset of COVID-19 pandemic unleashed unprecedented challenges for major globaleconomies during the year. India too was impacted as the nation undertook stringentlockdown measures during H1 FY 2020-
21. The momentary reaction of the stock markets to this initial period of lockdownquickly turned euphoric with strong and decisive measures implemented by the Government torevive the economy from the initial shock.
As a result the benchmark indices posted their best ever annual performance in adecade. The Nifty delivered almost 71% return in FY 2020-21 the best since FY 2009-10while the Sensex gained 68% - highest in over 10 years. This clearly is in stark contrastto the gradual revival in the benchmark indices seen in the past.
During this period we also experienced an increasing adoption of digitalisation acrossvarious industries from education to entertainment food delivery to e-commerce gamingto BFSI as client behaviour changed rapidly.
DiGiTAL DriVeS GrowTh stoCk Broking at an infleCtion Point
FY 2020-21 has been momentous for the stock broking industry in particular with manymilestones being achieved across various parameters. Whilst over the years Indiawitnessed a considerable change in its investor profile with the share of individualinvestors on NSE steadily rising FY 2020-21 witnessed the highest increase. Share ofindividual investors in
NSE cash segment increased by
~600 bps in FY 2020-21 which was similar to the increase experienced over the entireperiod of FY 2016-20. This sharp increase for the year by individual investors offset thedecline in share of institutional investors. One of the drivers of this massive shift isthe consistently diminishing returns from various risk-free asset classes. Investment inequities has emerged as a viable solution amongst young investors who are tech-savvy andthus are able to gather substantial knowledge of this emerging asset class with aplethora of information available on various digital platforms.
This buoyancy is driven by accelerated digitalisation of the industry over the pastcouple of years. It is due to these digitalisation efforts of new age brokers that we sawmore and more first time clients entering the markets with majority of them coming fromTier II III and beyond cities. Fintech players like Angel Broking will be betterpositioned to garner a lion's share of the market in incremental Demat accounts whilealso expanding the overall market pie as they scale up their technological edge. Ibelieve digitally powered businesses will continue to be a formidable force in growingthe market by making the entire journey of the clients extremely simple and seamless.
India home to one of the youngest and largest pool of tech-savvy millennials and Gen-Zpopulation has just begun to realise its digitalisation dividend. Brokers catering tothese digital-first clients will witness hyper growth for years to come as they disruptthe way business was being done.
Both the channels Direct to
Client and B2B will thrive as digitalisation accelerates resulting in deeperpenetration into Tier II III and beyond cities thus expanding the overall market size.As a result digital brokers will experience benefits of scale and operating leveragefacilitating them to right price their products and services vis-a-vis their counterpartswho continue to operate under the physical model.
Accessibility to a network of high-speed internet even in remote parts of the countryalong with low-cost data packages and affordable smartphones are some of the key leversbenefiting digital brokers to penetrate deeper into the country. In FY 2020-21 Indiaopened 14.3 million new
Demat accounts thus taking the total Demat count to 55.1 million as of March 2021.Despite such strong addition and increasing participation of Tier II III and beyondcities equity penetration in the country continues to remain at just over 4%. Whencompared to USA with 32% Demat account penetration as on 2018 and China with 11.4%penetration as on December 2019 my belief in India's sustainable growth opportunitiesespecially for Capital Markets strengthens further. This is further reinforced with risingdisposable income and financial awareness amongst the younger generations.
digital Brokers lead overall growth in aCtive Clients
With a substantial rise in first-time investors and those originating from Tier II IIIand beyond cities the number of active clients on NSE increased to 18.9 million in FY2020-21 from 4.3 million in FY 2013-14 recording a 23.6% CAGR over this period. Asdigital brokers consistently penetrated into different geographies and upgraded theirproduct offerings their share in NSE active clients also increased significantly. In FY2020-21 ~73% of incremental NSE active clients were added by Top 5 digital brokers. Shareof these Top 5 digital brokers in overall NSE active client base steadily increased tojust over 47% in FY 2020-21 from low single digits in FY 2014-15. I am confident thattheir share will continue to increase over the foreseeable future to gain a dominantmarket position and your company will spearhead this growth.
Higher active client base led to 75.3% growth in overall retail equity average dailyturnover to ~ 12.0 trillion in FY 2020-21 from ~ 6.8 trillion in FY 2019-20 for theindustry. I am confident that with our far-reaching ability covering 97%+ of India'spincodes your company is well positioned to benefit from this huge untapped sea ofopportunity.
Moreover my experience of the last couple of decades has been that the proactive stepstaken by the regulator have only protected investor interest and propelled theirconfidence in the markets further. I express my gratitude to all the Capital Marketregulators for such initiatives.
remarkaBle year for angel Broking
With a dynamic technology driven client shift across global markets there is a risingdemand for more convenient and DIY digital platforms. As a result even global brokingbehemoths have increasingly adapted to advanced technology and created disruptive digitalbusiness models. Indian broking firms too have embraced rapid digitalisation to cater tothe changing client needs for faster and secure digital platforms.
FY 2020-21 built an exciting opportunity for Fintech brokers like us! Improving digitalpayment options have played a pivotal role in widening the net for financial serviceproviders who can easily reach out to clients of Tier II III and beyond cities.
At Angel Broking we leveraged our technology by extensively using Artificial andMachine Learning and expanded our market share by targeting the right client. Todayapproximately three out of every four incremental NSE active clients are owned by top fivedigital brokers in the country. I am happy to share that
Angel Broking is positioned in the top quartile among digital brokers in India and iswell-placed to expand its reach and strengthen market share backed by our world-classdigital presence.
Our position as the 4th largest broking house on NSE in terms of active clients and 3rdlargest in incremental NSE active clients as of March 2021 is a testament to our effortsto provide seamless digital experience to our clients.
Our share in incremental NSE active clients increased to 12.2% during FY 2020-21 whilethe market share for NSE active client base expanded to 8.3% during the same period.~38.0% of our overall client base was active as on March 2021 against 34.3% average forthe industry.
nurturing a Culture of sustainaBility & develoPment
As a responsible organisation we abide by a robust governance framework with properinternal control and effective stakeholder engagement. Aligned with global SustainableDevelopment Goals as well as India's
Organization for Economic
Co-operation and Development-
National Institute for Financial
Education (OECD-NIFE) we support financial literacy programmes to educate youth andenable them to take informed investment decisions.
We continuously nurture our human capital through technology-integrated training anddevelopment programmes and by providing progressive work environment.
Pioneering a growth & nnovation-Centri C future
As one of the leading digital broking houses we aim to play a significant role inpromoting financial inclusion reaching to millennials across the country by offeringinnovative and accessible products.
We also look forward to strengthen our share in diverse financial products such asinsurance mutual funds loan products and cross sell it to our existing clients. With ourextensive domain knowledge and digital prowess we are well-placed to capitalise on theexisting opportunities in the economy.
Investment in has become essential to achieve one's financial goals and aspirations. Webelieve the current generation which is mobile phone and technology savvy will continuethe growth story from here. Our role in this growth opportunity will be in facilitatingthem to invest in the most appropriate manner.
Correct product suite at a simplified pricing places us competitively in the industry.
We continue to penetrate deeper into Tier II III and beyond cities where we believethere is ample opportunity to grow.
Recently we lost a very able leader and a very dear colleague Vinay Agrawal. Vinay'stwo decades of contribution with us has been invaluable. He has played a very importantrole in scaling up the organisation to where we are today. Vinay's sudden demise is a bigloss for all of us. We have all lost a friend and a great human being. May Vinay's soulrest in peace. I wish to thank the regulatory authorities all Board Members themanagement team colleagues & their families and the larger stakeholder fraternity fortheir continued guidance and support throughout our growth journey.
Yours Sincerely products
Dinesh D. Thakkar
Chairman & Managing Director