In conversation with CA Arun Poddar, Executive Director and CEO of Choice International Limited

Our focus is to play a more significant role in India's growth and development, contributing to the betterment of the country and its citizens through reform initiatives CA Arun Poddar, Executive Director and Chief Executive Officer of Choice International Limited.

In Q2FY24, the company’s top line surged by 147 per cent from Q2FY23, while the net profit zoomed by 264 per cent from last year’s same quarter. What were the contributing factors to the company’s performance?

Our organization has experienced significant growth. We've been dedicated to broadening our presence, with a particular focus on reaching underserved areas, including Tier II cities and those further down the hierarchy. This strategic expansion aligns with the growing awareness of financial products in these regions. As the market witnesses a surge in participation from an increasing number of individuals, our Stock Broking AUM has seen an impressive 89 per cent year-on-year increase, reflecting the confidence and trust our clients place in our services.

Our Advisory Vertical has also gone through substantial growth, securing major projects that not only contribute to our success but also play a vital role in advancing the country's development journey. These projects underscore our commitment to making a meaningful impact on the economic landscape.

In addition to our core operations, we embarked on the journey of Retail Lending through our NBFC arm in June last year. Today, our Retail Lending Book has surpassed Rs 200 Crore, reflecting our success in this segment and our ability to serve the financial needs of a wider customer base. This diversification contributes to our overall growth and stability.

Is the increase in insurance premium density primarily attributed to the contributions of insurance brokers? How does this growth compare to the global average and leading economies, and what opportunities does it reveal for the insurance sector in India?

The Government of India has played a pivotal role in fostering this growth. These initiatives, including the introduction of schemes and financial inclusion measures, have spurred the adoption and penetration of insurance across diverse segments of the population. Other contributing factors include favourable demographic trends, heightened awareness, a robust distribution network, and the incorporation of international best practices. These elements collectively support the growth of India's insurance sector.

India's insurance density lags behind the global average and leading economies, indicating a significant untapped potential for growth. With growing awareness of insurance products, it is likely that India's per capita insurance expenditure will continue to rise, contributing positively to the country's economic development.

Can you provide insights into the performance of your advisory services during Q2FY24, and what is your outlook for this segment in the upcoming quarters?

Our advisory segment's order book experienced a substantial 79 per cent growth this quarter compared to the same period last year. In Q2, we secured various contracts including System Integrator for computerizing Primary Agricultural Credit Societies in Bihar, aiming to enhance efficiency, transparency, and profitability while expanding services. Another project involves partnering with the Rajasthan state government to boost economic growth and inclusivity by strengthening the state's investment ecosystem through regulatory improvements and business-friendly measures. We will work closely with government entities and stakeholders to attract diverse investments and employment opportunities.

Our focus for the upcoming quarters is to play a more significant role in India's growth and development, contributing to the betterment of the country and its citizens through reform initiatives.

What are the key factors that have led to the notable outperformance of NBFC when compared to traditional banks?

NBFCs possess greater flexibility in their lending criteria, expedited processing, and ability to serve individuals with varying credit profiles.  We provide accessible financial solutions, making us the preferred choice for borrowers. With technology advancements and active regulatory involvement in overseeing business practices, the sector is poised for significant progress in the near future. Our focus has been on serving Micro, Small, and Medium Enterprises (MSMEs) in Tier II cities and below, with the goal of addressing the industry gap by offering innovative products and advancing credit through a 100 per cent digital facility.

At the moment, what are your top 3 strategic priorities?

Our focus is on the growth of all three verticals. As part of our mission to make financial services accessible to all, we are actively increasing our presence in newer locations, and reaching the underserved areas and expanding into Tier-2 to Tier-6 cities.

Simultaneously, we are dedicated to enhancing user engagement and streamlining user experiences. Our primary goal is to simplify the user journey and offer a wider range of investment options that are customized to the specific needs of the client segments we cater to.

We are also focusing on growing our retail loan portfolio in our NBFC Choice Finserv. We have been able to do retail lending profitably and more importantly with lower delinquencies and are keen to grow this business exponentially in the coming years.