It gives me immense pleasure to address you in the Annual Report of our 25thbusiness anniversary. It has been a glorious quarter century for Inditrade Capital(erstwhile JRG Securities) in serving the Indian consumers through its diverse financialofferings. Starting in 1992 over the years we have acquired a name of trust in theEquity & Commodity Broking businesses. We have undergone several transformations adding new services expanding into new geographies adopting state-of-the-arttechnology strengthening credit and risk management systems creating new products andstrengthening client relationships through a service focus. Over the years the Companythrough its subsidiaries has forayed into lending business (NBFC) currency tradinginsurance broking and micro finance business. The Company is committed to working towardsthe development of the economy while keeping in mind the benefit of all its stakeholders.
And today as we step into the next phase of our journey we are fortunate to be at astage where we can use our expertise in the Indian agri-commodity market which is at thecusp of transformation and is ready for the next big leap; while contributing to theeconomy in a substantial and sustained manner.
Commodity markets have a crucial role in developing agriculture dominated economies.India happens to be amongst the top producer/consumer of almost all agri-commodities. Themarket potential thus is huge and to a great extent untapped. A review of theinstitutional and policy constraints facing this market demands a more focused andpragmatic approach both from the government as well as from private institutionsfor making it a vibrant segment. The Indian experience in commodity futures market can betraced back to thousands of years with references to such markets in India also appearingin Kautilya's Arthashastra. The words Teji Mandi Gali and Pathak have been commonparlance in Indian commodity markets for centuries. However the last decade has seen theIndian commodity market witness a phenomenal growth. The Government of India in 2003-04had initiated major steps towards introduction of futures trading in commodities whichincluded removal of prohibition on futures trading in all the commodities by issue of anotification and setting up the National Level Commodity Exchanges. The momentum gatheredin 2009-10 continued in 2011-12 and manifested itself in increases in volumesparticipation number of commodities traded and various new initiatives taken by theNational Exchanges. These exchanges have introduced various innovations which shouldincrease efficiency of agri-commodity marketing in the country. We can confidently saythat the agri-commodity value chain in India has seen reasonable development in terms oftransparency technology and trading activities. Having said that we believe there arecertain gaps which offer tremendous scope for companies such as ours to make significantcontributions to the economy while enhancing value for our shareholders.
Agri-commodity financing is still highly unorganized with local money lenders andtraders providing bulk of the financing. Banks and financial institutions have verylimited presence in the agri-value chain. We realize that this is a significantopportunity and this business can be exponentially grown in the next couple of decadesgiven our degree of expertise in commodity businessbeing one of the first to startparticipating in the commodity exchanges and commodity trading business. At Inditrade itwill be our endeavour to professionalize and streamline the agri-value chain bypre-dominantly focusing on financing agri-commodities in a professional manner. This willinclude all our companies during different phases of the same. During the harvest seasonneed for financing is paramount and timely availability of funds can create a virtuouseco-system for the entire agri-market.
It is estimated that the entire organized agri-commodity financing market is around Rs4 Lakh Crore out of which anywhere between Rs 50-75 Thousand Crore is taken care by thebanks and financial institutions. Hence the scope for an NBFC such as us to enter andaffectively professionalize this space is significant.
Today we are in a position to offer attractive financing options to the marketparticipants at the appropriate time i.e. when the commodities arrive post-harvest.Secured lending against these commodities is planned to be extended in a manner wherebyprice risk is also minimized through the use of exchange mechanism. This will benefit boththe borrower and Inditrade. With gradual professionalization of warehouse network in thecountry the need for financing should exponentially grow and Inditrade plans to work incollaboration with such professional warehouse service providers.
Having existing expertise in the southern markets of India we realized that to growbusiness rapidly we also need to expand our presence in the western and northern parts ofthe country. In November 2016 we acquired the agri-commodity trading business ofEdelweiss Group. This gave us both expertise and market reach in West and North. Our ideais to significantly scale up business in the current fiscal and get ready for a quantumleap in the next fiscal. Our broking arm is already playing a huge role in securing ourloan book thereby adding to the surety of business that is undertaken.
We have received the required approvals for launching our Micro Finance business in thefirst quarter of 2017-18. We strongly believe that ample opportunities are available inthe semi urban areas of the industrialized states for a focused micro finance player toprovide services in an effective and efficient manner. With the country already movingtowards becoming a digitized economy we plan to leverage technology through a completelyautomated process; thereby fulfilling our aim of reaching our customers and catering totheir requirement for finance in the most effective and convenient manner. This is thefirst time in the industry that a completely digitized loan disbursement and collectionprocess will be implemented including client prospecting e -KYC tracking GPS locationscredit check decision to disburse loan and money transfer to bank accounts. In India thedemand of credit in the unorganized sector is higher compared to the supply. Even afterthe proliferation of Micro Finance institutions over the last couple of decades theinsatiated demand continues to be significant. We want to address this demand and help inorganizing and strengthening the market further.
It is our long term vision to be active participants in nation building by contributingand strengthening Government initiatives at the grass root level be it strengthening theagri-commodity markets financial empowerment through inclusive financing and mentoring orproviding security through the right insurance products.
Lastly on behalf of the Board I wish to express my gratitude to our shareholdersclients business partners financial institutions and regulators for their continuedsupport. I would like to extend my vote of thanks to our human capital' and themanagement team for their efforts and standing by the Company values and making it what itis today a Company based on values and empowered through a joint vision for thefuture.
|Thanking you |
|Brij Gopal Daga |