Sector Other Financial Services - Latest news, views and updates

SECTOR | 10 Jul 2023

Strong volumes and demat account additions reflect capital market players’ positive sentiment

ICICI Securities Limited

Jun’23 has been a strong month for capital markets. Total cash volumes were up 5.8% MoM while NSE derivatives volumes increased 2.4% MoM and traction around MCX options volumes continued.

Other Financial Services

SECTOR | 10 Jul 2023

Growth continues in cards, UPI ecosystem; disbursement trends too remain strong

Other Financial Services

ICICI Securities Limited

Growth in payments remained strong in May’23 as seen from: (1) total CC spends of Rs1.4trn during the month (up 6% MoM) and likely to have remained largely stable in Jun’23; (2) industry receivable per credit card stood at ~Rs23k in May’23 (down marginally by 1% MoM).

Other Financial Services

SECTOR | 01 Jul 2023

Lower payouts linked to CLSS subsidy to ensure higher YoY FY24E AUM growth

Other Financial Services

ICICI Securities Limited

Introduction of the credit-linked subsidy scheme (CLSS) by the government in 2015 improved affordability of home loans for EWS and LIG population groups. This is reflected in CLSS-linked loans to the two groups accounting for 4% each of total home loan disbursements in FY21 and FY22.

Other Financial Services

SECTOR | 30 Jun 2023

Revision in TER cut proposal is positive; establishment of passing of economies of scale is a bigger positive

Other Financial Services

ICICI Securities Limited

The regulator (SEBI) has decided to revisit the proposal for TER revision (Link) and publish another consultation paper soon. Initially, TER revision being a price- sensitive matter, SEBI had to conduct the research purely based on limited data available at that point of time.

Other Financial Services

SECTOR | 22 Jun 2023

Negligible stress pool with adequate provision and focus on customer-led growth to drive profitability in FY24E

Other Financial Services

ICICI Securities Limited

In a decade long eventful journey, microfinance lenders have navigated one of the longest asset quality cycles (FY17-22) – starting from demonetisation in FY17, floods, NBFC crisis in FY18-19, and lastly covid in FY21-22. While the lenders have remained resilient as reflected in 25% AUM CAGR between FY17-21, average credit cost stood elevated at ~2.5% vs <50bps during FY14-16.

Other Financial Services

SECTOR | 21 Jun 2023

Capital market momentum offers more tailwinds to flow-based businesses

Other Financial Services

ICICI Securities Limited

Capital market players typically outperform with improving market sentiment. There are signs of the same with rising NSE cash market volumes post a decline (between Apr’22-Mar’23), increasing SIP flows and rising demat account additions while derivatives continue to reach new highs every month.

Other Financial Services

SECTOR | 16 Jun 2023

Rise in cash volumes, higher MoM demat additions and rising MCX options volume mark strong May for bourses

Other Financial Services

ICICI Securities Limited

May’23 has been an all-round strong month for exchanges with improvement in volumes especially in cash (Rs600bn ADTV after 7 months) and commodities segment while equity derivatives continue to scale new highs since the last nine months.

Other Financial Services

SECTOR | 16 Jun 2023

Scenario analysis of TER cuts on earnings and implied growth rates basis current prices

Other Financial Services

ICICI Securities Limited

Asset management companies’ earnings have structurally faced headwinds on revenue yields due to a combination of (1) lower yield on new equity flows and (2) telescopic pricing of scheme-wise TER eligibility. However, going ahead, there could be some impact from the new TER guidelines.

Other Financial Services

SECTOR | 07 Jun 2023

Growth continues in cards, UPI ecosystem; disbursement trends also remain strong

Other Financial Services

ICICI Securities Limited

Growth in payments remains strong. This is led by (1) expected total CC spends of Rs1.4trn in May’23 (up 4% MoM), (2) increase in receivable per credit card, (3) increase in cards in force (CIF) to 86.5mn, up 1.42% MoM in Apr’23, (4) MoM increase in Paytm GMV of 9% in May’23 and (5) increase in UPI transactions in terms of value/volume by 43/58% YoY to 9.5bn/Rs14.9trn in May’23, respectively.

Other Financial Services

SECTOR | 25 May 2023

Equity options volume continues to grow

Other Financial Services

ICICI Securities Limited

Average daily traded value (ADTV) of NSE equity options continues to scale new highs over past eight months. This is despite lower demat account addition, lower NSE-active client number as well as lower cash volumes – and also despite increase in transaction cost by ~25% in securities transaction tax (STT) on derivative segments.