In conversation with Sandeep Bhardwaj, CEO, Retail Broking, IIFL Securities

We are well-positioned to grow in our segment, given our superior research and strong distribution capabilities, emphasizes Sandeep Bhardwaj, CEO, Retail Broking, IIFL Securities

What is your outlook on the Indian broking industry (retail & institutional)? What are the emerging trends that you are witnessing among consumers in the post-pandemic world?

The broking industry has seen a paradigm shift in the last two years in terms of customer acquisition and digital transformation backed by ample liquidity, robust primary & secondary markets as well as increased participation of do-it-yourself millennial & Generation Z investors. In the post-pandemic world, we expect the trend to continue especially in India, where affordable data, mobile penetration, and awareness about investing are likely to boost more participation from nooks & corners of the country. Meanwhile, the number of active Demat accounts has jumped 63 per cent in FY22 to 89.7 million and over 2.5 times since the pandemic began but this is nothing in comparison to nearly 450 million PAN cards in India. With more access to mobile apps and easy digital account opening, there could be tremendous growth in the retail segment. The institutional business has also been robust and would likely remain terrific going ahead as India remains a key focus for global institutional investors as well as portfolio managers, which is only likely to grow further as the country is on the path to become a $6 trillion economy and a cradle for Unicorns with 100 unicorns already churned and many getting listed. The private as well as public markets will thrive well for a long time in tandem with the broad economic growth and entrepreneurship.     

For FY22, IIFL Securities recorded a total income of Rs 1,317 crore, up by 52 per cent on a YoY basis. The profit after tax of FY22 stood at Rs 306 crore, up by 38 per cent YoY. What factors have contributed the most to help you outperform?  

IIFL Securities is a key player in both retail and institutional segments of the capital market. All our business segments have performed exceptionally well this year. We have made significant investments in technology and added manpower. We have over 2,500 points of presence across India that provides unparalleled research coverage on 263+companies, which has helped us to deliver the vest service to a wide range of customers. The average daily market turnover (including F&O) for the broking business was Rs 1,11,535 crore (BSE & NSE), up by 153 per cent YoY and 34 per cent QoQ. Similarly, IIFL’s institutional broking segment has over 780+ domestic and foreign clients. It provides comprehensive research coverage, covering over 263 stocks across 20+ sectors accounting for over 78 per cent of India’s market capitalisation. IIFL Securities also offers a wide range of products such as mutual funds, insurance, IPOs, bonds, AIF, and others, targeting retail clients. Financial products AUM stood at Rs 16,963 crore. Mutual fund AUM stood at Rs 7,130 crore, up by 38 per cent YoY. SIP AUM grew by 47 per cent YoY to Rs 1,507 crore.  

Our accelerated digital transformation, led by a team of 200 top technology professionals from IIT and other top institutions, has helped IIFL Securities to innovate as well as create multiple industry-first products. Our experienced business development and relationship management team has the best client management expertise, which helped us to perform the best in the industry.  

IIFL Securities’ investment banking segment posted all-time high revenue of Rs 150 crore for FY22. What is your vision for this segment over the next 2-3 years? What are the opportunities that you are currently focussing on? 

We are well-positioned in the investment banking sector, backed by our customer and market understanding across all segments. We are also able to leverage our strong distribution reach across all segments – retail, HNI, domestic, and foreign institutions. In the previous quarter, our investment banking division completed four deals comprising IPOs, QIPs, and debt transactions. Select transactions completed by us include the IPOs for Vedant Fashions and Equitas Small Finance Bank. Our deal pipeline remains robust and we are running multiple transactions, which are at various stages of execution. We are well-positioned to grow in our segment, given our superior research and strong distribution capabilities. 

Can you throw some colour on the investments that you have made in technology during FY22? Also, what are the major tie-ups that you have done during the year? 

This year, we have not only built and innovated on products, services & platforms but also, stitched partnerships with external fintech to make IIFL Securities as the most-preferred broking and wealth management platform across client segments. Some of the important partnerships we forged include – Stockal (global investment platform for investing in the US and other stocks like Amazon, Netflix, etc.), Smallcase (curated portfolios including that by IIFL’s Sanjiv Bhasin and Jayesh Bhanushali, which have become top portfolios used by investors on the platform), GoldenPi (one of the first integrated platform for bond market), Quicko (India’s top tax planning and tax filing platform compliant with trading and investing tax filings as well), Alphaniti (IIFL Securities customers can access arithmetic equity portfolios by Alphaniti), Algo trading platform Arthalab, GoCharting (professional charting & analytical tool), Anastrat (analyses trading behaviour of clients and helps in taking better decisions).  

What are your growth levers? 

We are well-poised to maintain our leadership and increase our market share through our strong retail broking franchise, institutional broking, and investment banking businesses. In retail broking, we aim to target the mass market tech-savvy customers and offer them brokerage services, mutual funds, insurance and PMS, etc through the open architecture model powered by a robust technology platform. In institutional broking, we are the port of call for most investors, thanks to our extremely strong research credentials. We are one of the leading domestic institutional brokers because of our strong execution and block placement capabilities. In investment banking, we are well-positioned backed by our customer and market understanding across all segments.