Angel One Ltd Management Discussions

ECONOMIC REVIEW

GLOBAL ECONOMIC REVIEW

In 2023, the global economy stabilised with the US leading the recovery and emerging markets showing resilience amid geopolitical tensions, which led to supply chain disruptions and inflationary pressures, prompting coordinated policy responses from global leaders.

As supply-side issues eased out and monetary policies tightened, inflation was successfully moderated. Though balanced risks persisted, the risk of a hard landing diminished. Structural reforms and fiscal consolidation gained importance to enhance productivity and address debt concerns. Policymakers focused on managing inflation while adjusting monetary policy and prioritising multilateral coordination to tackle issues like debt resolution and climate change mitigation, for sustainable economic development. The global economy reported an estimated growth of 3.2% in 2023, exceeding initial projections for the year. Advanced economies reported an estimated growth of 1.6%, driven largely by stronger-than-expected growth in the US.

Outlook

The global economic outlook remains cautiously optimistic, with growth projected to continue at 3.1% in 2024. Headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024, and 4.5% in 2025, signalling a favourable trajectory. While risks persist, proactive policy measures and international cooperation will help navigate uncertainties to drive sustainable economic growth in the years ahead.

Global economic output (%)

	2023	2024
World	3.2	3.2
Advanced economy	1.6	1.9
Emerging and developing economies	4.5	4.3

INDIAN ECONOMIC REVIEW

India showcased resilience amid global challenges, maintaining its position as the worlds 5^th largest economy with an estimated gDP of $3.7 trillion in Fy24. According to the national Statistical office (nSo), Indias real gDP is forecasted to grow by 8.2% in Fy24, propelled by a strong upturn in industrial sectors, notably manufacturing. This growth is fuelled by declining input costs and increasing profitability. Additionally, the construction sector has experienced an uptick due to increased government capital expenditure (capex) and rising demand for office spaces and housing, particularly in urban areas. The governments economic policy focused on Indias growth potential by rejuvenating the financial sector, easing business conditions and augmenting physical and digital infrastructure to enhance connectivity and competitiveness. The government has undertaken reforms to improve the business environment by strengthening the countrys growth pillars, such as the recapitalisation and merger of Public Sector Banks (PSBs), amendment of the SARFAESI Act and enactment of the Insolvency and Bankruptcy code (IBc). Indias global standing was elevated with its g20 Presidency, highlighting its increasing economic significance. Moreover, notable achievements in space exploration and the rapid deployment of 5g services underscore progress across various sectors. consistent efforts of the central Bank yielded positive results in controlling inflation during Fy24, although it remained higher than the tolerance limits. While inflation moderated and gDP growth outlook remains robust, the apex bank continued to focus on aligning inflation to the target on a durable basis, hence opting for a prolonged pause in raising benchmark interest rates.

Indias GDP growth trend (%)

FY22 FY23 FY24

9.1 7.0 7.6

Source: Ministry of Statistics and Programme Implementation (MoSPI)

Outlook

Indias economic outlook for Fy25 remains robust, with a projected growth rate of 7% and a gradual decline in inflation. The Reserve Bank of Indias inflation expectation survey highlights that both near term and longer-term median inflation could remain soft. Domestic economic activity is expected to be healthy, supported by improving investment cycle, higher capacity utilisation, resilient services sector, strong credit growth and healthier corporate and bank balance sheets. The ongoing digital revolution, transforming regulatory environment and diversification of export portfolios are some of the catalysts to growth. The reforms instituted and implemented by thegovernment over the past decade have laid a solid foundation for sustained long-term economic expansion. In parallel, the state level and other initiatives are aimed at unlocking the potential of MSMEs and addressing infrastructure requirements to further accelerate economic growth.

INDIAS DIGITAL

INFRASTRUCTURE: DRIVING INNOVATION AND FINANCIAL INCLUSION

India is in an era of rapid technological advancement and digital transformation and is poised to become amongst the largest digital markets, globally. The financial services sector will be one of the largest beneficiaries of this, as it stands at the intersection of disruptive innovations. Fintech players are leading this convergence of finance and technology, redefining the way business is conducted. Indias entrepreneurial zest coupled with its technology prowess open up remarkable growth prospects for the country.

Persistent efforts by every contributor to build such an ecosystem had elevated Indias fintech adoption rate to 87%, significantly higher than the global average of 64%. The fintech industrys total addressable market is estimated to be at $1.3 trillion by 2025, and AUM and revenue at $1 trillion and $200 billion by 2030, respectively. Key drivers of this growth will be digital payments, lending, Insurtech and Wealthtech.

Emerging needs of the youth, as well as individual aspirations of those in Tier 2, 3 and beyond cities, lays the pitch for an expansive opportunity of growth for each of these sub-segments in fintech. Efforts to manage risks better, offer superior service delivery models, create and build wealth, leverage AI and Ml to develop customised product segments in insurance will lead to widespread adoption and improved financial inclusion.

During the recently concludedg20 Presidency, India was credited as the leader of digital public infrastructure (DPI) , demonstrating the nations commitment to technological advancement and opportunity in delivering services to a broad base of clients. comprising shared digital building blocks like systems, platforms and applications, the India Stack encompasses unique identity solutions such as Aadhaar, seamless payment systems like UPI and Aadhaar Payments Bridge and data exchange platforms like Digilocker and Account Aggregator. Together, these components offer online, paperless, cashless and privacy-respecting digital access to a wide array of public and private services, enhancing efficiency and expanding coverage.

Indias rapidly growing digital footprint

1.2 Bn

Wireless telecom subscribers as of March 2024

24.1 GB

Average mobile data usage per subscriber per month in 2023

131 Bn

UPI transactions executed in Fy24

#2

In number of generative AI projects on gitHub

[Sources: TRAI, MBiT Index 2024, BT]

Driving Efficiency and Inclusion

While DPI is an evolving concept, it has been premised on the fundamentals of interoperability, modularity, scalability, security and privacy. The enforcement of digital identity through Aadhar led to considerable benefits while delivering welfare schemes to the last mile. During the recent budget speech, the finance minister announced savings of J2.7 trillion when disbursing benefits of J 34 trillion, demonstrating a high pedigree of efficiency. By embracing innovation, expanding markets, driving financial inclusion, and optimising government revenue collection and expenditure, the India Stack has been instrumental in formalising the economy and streamlining government services.

Revolutionising Financial Services

The Account Aggregators (AA) ecosystem, operating in the consent layer of the India Stack, promises to revolutionise investing and credit by providing secure and efficient digital access and exchange of financial data. Managed by RBI-regulated entities, AAs have facilitated expansion and consumption of financial services digitally. Between 2022 and 2023, the number of financial information providers increased from 29 to 146,

from 128 to 363, number of accounts linked grew from 3.2 million to nearly 39.0 million, and number of successful data sharing instances rose from 3.3 million to 40.1 million.

EQUITY MARKETS OVERVIEW

Indias stock market achieved a historic milestone, surpassing the $4 trillion market value for the first time, thereby solidifying its position as the worlds 5^th-largest equity market. over the past three years, the market capitalisation of listed companies on Indian Exchanges has grown by $1 trillion, showcasing robust growth. notably, the nifty50 and BSE Sensex reached all-time highs in Fy24, recording an increase of 28.6% and 24.9% respectively, over Fy23.

Foreign investors demonstrated strong interest in Indias stocks, injecting over $15 billion into the market, while domestic funds contributed more than $20 billion . This surge in investment reflects bolster its economic growth.

43 Mn

new SIP accounts opened in Fy24

K1.9 Trn in

Total SIP contribution in Fy24

Furthermore, the IPo market experienced more than 65 companies being listed on the bourse in Fy24. This surge underscores the growing investor Indiaseffortsto confidence in Indias growth prospects.

The resurgence of Foreign Portfolio Investors (FPIs) has been notable, influenced by various factors including portfolio rebalancing, increased weightage of India compared to other Asian peers and easing US bond yields in the latter half of the financial year.optimism surrounding softer interest rates in the future has also played a role. This resurgence has significantly contributed to the robust returns witnessed by the indices. Data from nSDl highlights a substantial turnaround in FPI activity, with significant investments recorded in December 2023. This trend further strengthens Indias capital market outlook.

COLLABORATIVE EFFORTS ACROSS THE FINANCIAL ECOSYSTEM

Across the financial ecosystem, there is a commitment to meet the needs of the underserved segments, aiming to raise awareness, improve accessibility and enhance affordability of financial services.government initiatives, like the Prime Minister Jan Dhan yojana, have been instrumental in extending financial inclusion to rural and semi-urban areas, with over 67% of beneficiaries originating from these regions. Major incumbents have also expanded their reach, with 56% of bank branches now in rural and semi-urban geographies. In the past three years, over 40% of new branches have been established in these areas, indicating a concerted effort to bridge the gap.

However, despite these efforts, a substantial portion of Indias population still lacks access to suitable financial products that enable them to build long-term wealth. The rise of fintech companies is helping bridge this gap by bringing in innovation and dynamism into the sector. This has led to the development of collaborative and competitive initiatives tailored to meet the specific needs of the Indian market.

Digital Banking Units To be launched by the Prime Minister to amplify financial inclusion The fintech sector is catalysing Indias growth story among the unbanked population India Post Payments Bank partners with Koo to promote financial literacy in

Tier 2, 3 and beyond cities

OVERCOMING BARRIERS

Enhancing financial accessibility by addressing 6 key friction points:

DESIRE TO SAVE AMID CHALLENGES

In India, consumers express a strong desire to save but they encounter several challenges in this process. These challenges include irregular incomes, unexpected expenses, and a lack of financial knowledge, all of which make accumulating savings difficult. To make a tangible difference, it is imperative to develop comprehensive solutions that extend beyond the mere provision of financial products. These solutions should focus on inculcating positive saving habits and offering incentives for improved financial behavior.

PRIORITISING LIQUIDITY OVER LONG-TERM SECURITY

Indian consumers commonly prioritise liquidity and meeting immediate needs over long-term financial security, often opting for cash or easily accessible savings rather than being insured. Simplified insurance processes and transparent terms are crucial growth drivers. leveraging digital mediums to educate clients can help them to understand the benefits of insurance, thus improve adoption rates of the product.

ACCESSIBILITY AND AFFORDABILITY

Accessibility and affordability are crucial factors in enabling financial inclusion. Traditional services offered often come with various barriers such as high banking charges, geographical constraints and extensive documentation, which can prevent access to basic financial services. To address these challenges, fintech players are increasingly offering digital financial products in a convenient and cost-effective manner.

LIMITED AWARENESS OF GOVERNMENT SCHEMES

limited awareness and understanding, and hidden costs hinder consumers access to government schemes . Effective communication through various channels, engagement with influencers and streamlined processes are crucial. Simplifying application procedures, providing transparent information to ensure easy access will empower clients to benefit from these schemes.

CHALLENGES IN ACCESSING FORMAL LOANS

Accessing formal loans is a significant challenge for many Indian consumers due to factors like lack of credit history and fluctuating credit requirements. To overcome these obstacles, tailored lending solutions are essential. These can be designed to address specific needs, incorporating alternative data-driven, decision-making processes, enabling lenders to access their creditworthiness. Flexible interest rates and adaptable repayment schedules can make loans more accessible and manageable. Digital platforms offer better accessibility for loan application and management, thus promoting financial inclusion.

PREFERENCE FOR TRUST AND SERVICE

When choosing their preferred partner, consumers prioritise trust and service. local influencers play a pivotal role in gaining access to customers, emphasising the significance of building trust and meeting the diverse needs of consumers.

THE RISE OF RETAIL INVESTORS

In the dynamic realm of finance, 2024 emerges as a pivotal year for the Indian capital Markets, witnessing an unprecedented surge in retail investors. Indias total Demat accounts surpassed 151 million as of March 2024, fuelled by a record-breaking addition of 36.9 million new accounts during the year, making this the best-ever annual performance. correspondingly the national Stock Exchange (nSE) reported a remarkable 26.0% y-o-y growth in its unique investor base, reaching an astounding 92 million as of March 2024. Beyond the impressive numbers, this trend signifies a profound shift in investing behaviour and wealth creation across India, reflecting the increasing participation of retail investors in shaping their financial well-being. A closer examination of the geographical distribution of the nSE-registered investors reveals a rising share of states beyond the Top 5, accounting for 51.7% in Fy24 compared to 47.2% in Fy19. notably, four states Rajasthan,

Madhya Pradesh, Bihar and Assam contributed to 16.8% of Fy24s investor base on nSE, witnessing a remarkable growth between 4.5x 11.1x over Fy19-2024, collectively adding 12 million investors during this period. This widespread dispersion of investors from across the country is attributed to the emergence of fintech platforms, which have democratised access to investment opportunities and empowered individuals nationwide to participate in wealth creation.

Source: nSE Market Pulse, April 2024. note: East India includes Mizoram, odisha, West Bengal, Assam, Manipur, Arunachal Pradesh, Tripura, nagaland, Meghalaya, Sikkim, chhattisgarh; West India includes Maharashtra, gujarat, Madhya Pradesh, Daman & Diu, goa, Dadra & nagar Haveli; north India includes Bihar, Jharkhand, Uttar Pradesh, Uttarakhand, Haryana, Delhi, Punjab, Jammu & Kashmir, Himachal Pradesh, chandigarh And Rajasthan; South India includes Telangana, Kerala, Andhra Pradesh, Tamil nadu, Karnataka, Pondicherry, lakshadweep and Andaman & nicobar.

DEMOCRATISATION OF STOCK TRADING

Stock trading is no longer restricted to a section of investors. Technology has ushered in a new era of inclusivity, empowering retail investors to actively participate in the market. With smartphones being handy, individuals now have unprecedented access to trading platforms, democratising equity culture.

DIGITAL INVESTMENT ERA

The surge in retail investors can be largely attributed to the proliferation of digital investment platforms. Today, investors have a plethora of options at their fingertips, ranging from traditional stocks to innovative avenues like Infrastructure Investment Trusts (Invits), Sovereign gold Bonds (SgBs) and Real Estate Investment Trusts (REITs). This diversification of investment opportunities is reshaping the market landscape, catering to a wide spectrum of investor preferences.

GENERATIONAL SHIFT

The influx ofgeneration Z and X investors is leaving an indelible mark on the stock market. The younger generation prefers innovative and credible investments, injecting dynamism into the traditional investment landscape. Their entry into the market underscores a growing appetite for financial literacy and a proactive approach to wealth creation.

DIY INVESTING TAKES

ENTRE STAGE

The abundance of online resources has given a boost to DIy (Do-It-yourself) investing among tech-savvy investors. With access to vast information and sophisticated analytical tools, individuals are increasingly taking charge of their financial destiny. Seeking both independence and a deeper understanding of market dynamics, they are leveraging online platforms to research, analyse and seamlessly execute investment decisions.

MOVING BEYOND

TRADITIONAL INVESTMENTS

With increased awareness among Indias middle class, investors are increasingly exploring unconventional investment avenues. Aided by technology, consumers get real-time market access and options for comprehensive trade execution. With the help of digital platforms, investors can venture beyond traditional options with confidence, accessing a wide range of investment opportunities and diversifying their portfolios.

ELIMINATION OF

GEOGRAPHICAL BARRIERS

Technological advancements have transcended geographical constraints, enabling individuals from remote areas to have unprecedented access to Indias capital Market. This newfound accessibility has not only broadened the investment opportunities but also significantly expanded the investor base leading to the development of a more inclusive financial ecosystem.

THE SIP REVOLUTION

Systematic Investment Plans (SIPs) have emerged as a popular choice, reflecting a disciplined approach to investment among retail investors. This strategy not only instils financial discipline but also allows investors to average out their cost of holdings, over time.

REFLECTING ON MARKET DYNAMICS

The Fy24 market data showcases the vibrancy and scale of the Indian stock market. The nSE recorded cash segment turnover of I201.0 trillion (+51.1% y-o-y) across 6.8 billion trades (+43.9% y-o-y) highlighting robust activity and investor participation. Moreover the market capitalisation surged to I 384.2 trilllion, underscoring the substantial growth and dynamism of Indias financial marketplace. The rise of retail investors in Indias capital Market underscores the transformative power of technology in democratising investing. As the landscape continues to evolve, the role of technology in fostering inclusivity and catering to the evolving needs of a new generation of investors becomes increasingly paramount. With digital advancements paving the way for greater accessibility and innovation, the future of the Indian stock market promises to be even more dynamic and inclusive.

REGULATORY DEVELOPMENTS

Regulatory authorities have remained steadfast in their commitment to encourage transparency, protecting investor interests and facilitating technological advancements within the industry. In Fy24, there were some notable regulatory developments, such as:

Bank Guarantees (BGs) created out of clients funds

SEBI restricted stock brokers to create Bank guarantees from client funds, thus curbing any possible misuse of client money.

Trading Supported by Blocked Amount in Secondary Market

A supplementary, non-mandatory, process introduced for trading in secondary market, under which funds will be blocked in clients bank account instead of transferring it upfront to the trading member, thus providing enhanced protection of cash collateral. currently this facility is offered in the cash segment.

Risk disclosure with respect to trading by individual traders in Equity Futures & Options Segment

Stock brokers to display risk disclosure with respect to trading in equity Futures & options (F&o) segment, whenever a client logs in, facilitating them to take informed decisions while trading in the derivatives segment.

Risk Management and Inter-Bank

Dealings Hedging of foreign exchange risk

As per RBI directive, clients will not be allowed to undertake positions without existence of valid underlying exposure in the currency derivative w.e.f. May 05, 2024

Upstreaming of clients funds by Stock Brokers (SBs)/Clearing Members (CMs) to Clearing Corporations (CCs)

In furtherance to securing clients money, SEBI directed all brokers to upstream client funds to the clearing corporations, on End of Day basis. The clients funds shall be upstreamed only in the form of either cash, lien on fixed deposits receipts or pledge of units of Mutual Funds overnight Schemes.

Introduction of Beta version of T+0 rolling settlement cycle on optional basis in addition to the existing T+1 settlement cycle in

Equity Cash Markets

A framework for T+0 rolling settlement cycle for a few securities, alongside the existing T+1 cycle, aims to improve cost and time efficiency, transparency and risk management in Indias securities market.

COMPANY OVERVIEW

Angel one limited is one of Indias foremost technology-led financial services business. It is also the largest publicly listed broking company in India, with a client base exceeding 22.2 million, and over 6.1 million active clients on the nSE as of March 2024. leveraging the power of data and technology to empower clients, the company witnessed exponential growth in its client base, market share and turnover over the past five years. over this period, the client base grew 17.2x to over 22.2 million in Fy24 from about 1.3 million as of Fy19, thus expanding the Demat market share to 14.7% in Fy24 from 3.0% in Fy19. This growth propelled the overall retail equity turnover market share to an impressive 17.1% in Fy24. The company presently offers a flat fee broking plan of J 0/20, where all equity delivery orders are zero brokerage, and a nominal flat brokerage fee of J20 per order is charged for Intraday, F&o, currency and commodity orders. Maintaining such growth and leadership position necessitates continuous innovation, staying abreast of technological advancements and providing excellent customer service to build trust among clients, thus well positioned to attain its ambitious goal of becoming Indias largest and most trusted fintech brand.

BUSINESS SEGMENTS

Broking and Depository Operations

Angel one limiteds comprehensive broking services covering equity, commodity and currency segments, coupled with depository operations, indicate a holistic approach to meeting clients diverse investment needs. The seamless delivery of these services across multiple platforms including mobile apps, web platforms and tablets, underscores the companys commitment to accessibility and convenience for its clients. Staying at the forefront of technological innovation, by leveraging artificial intelligence, machine learning and data science, Angel one ensures a superior digital experience to the young digital natives. The emphasis on client feedback and continuous of digital products and engagement tools, demonstrates a customer-centric approach aimed at enhancing satisfaction. This approach led to a significant scale-up in the average monthly client acquisition run rate, to over 732,000 in Fy24 from over 392,000 in Fy23, leading to a 62.7% year-on-year growth in our client base to over 22.2 million in Fy24. offering research and investment advisory services digitally, not only adds value to clients, by providing investment recommendations and educational content, but also aligns with the companys goal of continually enhancing the client experience through technological advancements. overall, Angel ones strategic focus on leveraging technology to enhance client acquisition, engagement and communication positions it as a leading fintech company.

Angel Ones Equity Trading and Support Services

RESEARCH SERVICES

offers fundamental and technical research in equity, derivatives, mutual funds, commodities and currencies

INVESTOR EDUCATION

The companys digital content, including blogs, podcasts and videos, aims to educate clients on trading and investment in financial product

RULE-BASED RECOMMENDATION

Angel ones flagship digital rule-based recommendation engine, ARQ provides investment recommendations based on predefined rules, assisting clients to make informed investment decisions

OPEN ARCHITECTURE

operating an open architecture, the company adopts third-party products such as Vested, Smallcase, Streak, Sensibull, Quicko and MarketsMojo, improving product offerings and efficiency in investing and trading for the growing clientele

Client Funding

Angel one extends funding of up to 80% of the purchase value in the cash delivery segment of equities to clients. By offering such funding, the company enables clients to optimise their trading strategies and take advantage of market opportunities.

The adherence to regulatory guidelines in determining the maximum margin available for each stock ensures compliance. Through the robust automated risk management system, real time mark-to-market monitoring of funded stocks vis-a-vis the required margins thus significantly reducing the risk of any delinquencies. The risk management system sends out real time margin calls basis dynamic pre-defined margin thresholds to enable clients replenish any shortfall in margins. This coupled with low exposure per client, secured by the clients Demat holdings, underscore the effectiveness of Angel ones robust risk management practices. During Fy24, the average client funding book stood at J16.0 billion.

Third-Party Distribution

Angel one has adopted a comprehensive approach to meet its clients financial needs through a diverse offerings including distribution of mutual funds, IPos and bonds. Through its subsidiary, Angel Financial Advisors Pvt. ltd. (AFAPl), Angel one distributes insurance products, tapping into an essential aspect of financial planning for clients. By distributing these third-party products, the company not only expands its revenue stream, but also enhances the value proposition offered to clients, thereby strengthening relationships. overall, Angel ones strategy of offering a diverse range of financial products, including the distribution of third-party financial products, is integral to its Super App strategy, underscoring its commitment to address the comprehensive financial requirements of clients.

Mutual Funds

Angel ones Mutual Fund platform leverages the integration of ARQ, a rule-based recommendation engine, and third-party rating services to offer clients personalised and informed investment advice. As of Fy24, the Assets Under Management (AUM) of mutual funds distributed by the company amounted to H49.4 billion. The simplified investment experience on the Super App facilitates greater client engagement.

Insurance

AFAPl, a wholly owned subsidiary and an IRDAI registered corporate agent, distributes a range of life and general insurance products. In Fy24, the business operated at a premium of H989.4 million in the life and non-life insurance space.

IPOs

Angel one provides clients with details about upcoming IPos, enabling them to view relevant research and apply for IPos through the platform.

Bonds

Angel one distributes Sovereign gold Bonds issued periodically by the Reserve Bank of India (RBI) on its digital platforms.

Future Vision - Asset Management

Angel ones endeavour to sponsor a mutual fund, backed by a passive investment ideology, reflects a strategic move to broaden its client offerings and tap into the growing potential of passive investment and ETF (Exchange-Traded Fund) business within the mutual fund industry. Passive investment strategies have gained popularity due to their lower costs and simplicity. By introducing mutual funds based on passive investment ideology, Angel one aims to attract and retain low ticket size clients and provide them access to diversified investment options that align with their investment preferences and risk profile. The company has received the in-principal approval from SEBI and has applied for the final approval, which is currently awaited. Through this approach, Angel ones aims to establish itself as a holistic player in the growing financial services industry.

Wealth Management

The company recently on-boarded an experienced team as co-founders, who bring along with them decades of deep domain expertise and impeccable skills to scale the wealth business with a sharp focus on tech-led models. While the company will target the fast-growing segment of UHnI and HnI, it endures to progressively democratise this offering to the under-represented segment in retail through differentiated digital offerings.

OUR DIGITAL PLATFORM – SUPER APP

The Super App by Angel one stands as a testament to our commitment to innovation and client-centricity. Throughout the year, we have relentlessly enhanced and expanded its feature set to provide our clients with a seamless and intuitive experience.

STOCK DISCOVERY

Simplifying the first investment experience, this feature provides screeners hosting different collections of stocks, making it easier for clients to explore investment opportunities

NOTIFICATION CENTRE

We have made the notification centre more intuitive, ensuring enhanced engagement and timely updates for our clients

NEW CLIENT ONBOARDING

new features have been implemented to guide newly acquired clients through their journey, reducing friction and ensuring a smooth onboarding experience

INSTANT ORDERS

FROM CHARTS

Facilitating efficient trading, clients can now place orders directly from charts, eliminating screen hopping and saving crucial time in decision making

REVAMPED WATCHLISTS

We have revamped options and equity watchlists, empowering clients with more comprehensive insights into their investments

BASKET ORDERS

clients can now place multiple orders with a single click, view overall margins, and clone baskets effortlessly, streamlining their trading experience

OPEN INTEREST ANALYTICS

clients can now analyse open interest, put-call ratio, and visualise multi-strike oI charts, assisting them in making informed decisions

TRADEONE

Introduced to simplify and streamline trading experience, Tradeone enables clients to find assets, place orders and track them, all on a single page

PORTFOLIO SNAPSHOT

The introduction of the super portfolio dashboard offers clients a unique snapshot of their entire investment portfolio, facilitating informed decision-making

STOCK SIP FUNCTIONALITY

Introduction of stock SIPs enables clients to set up regular investment plans in the equity market, fostering systematic wealth-building over time

BUSINESS REVIEW

SCOT ANALYSIS

STRENGTHS

1. Integration of Technology

Technology lies at the core of Angel ones operations, driving innovation and building efficiency across its diverse range of financial services. By harnessing the power of artificial intelligence, machine learning and data science, Angel one ensures the delivery of superior digital experiences to its clients, while enabling seamless access to advanced trading platforms. Through the Super App, Angel one has demonstrated its technology prowess which encapsulates a comprehensive suite of products that remain valid for the lifetime of its clients. By offering seamless digital solutions under a trusted brand, Angel one upholds the fundamental principles essential for a multi-generational product suite.

CHALLENGES

1. Navigating Regulatory

Evolution

Angel one operates in a very strong regulatory environment. To effectively navigate the ever-changing regulatory environment, manage growth, and cater to the unique needs of our diverse client base, the company has cultivated a culture of agility, foresight, and governance. This has helped anticipate and overcome challenges, better equipping Angel one to drive future success. The company firmly believes that regulatory interventions provide a solid foundation for retail client participation in the capital markets, further aiding in navigating regulatory complexities.

2. Legacy Leadership

With a legacy dating back to 1996, the company has stayed committed to its objective of revolutionising the broking landscape. over the years, it has consistently invested in pioneering client-centric best practices, with the aim to solidify its reputation as a trusted name in the industry. With a client base exceeding 22 million, Angel one has become synonymous with trust, reliability and innovation. Today, Angel one stands tall among the industry leaders, boasting remarkable brand recall that exemplifies its outreach effortlessly. Its digital acquisition strategies have resulted in a strong and potent capability, thus retaining its leadership position in the industry.

2. Dispelling Market Volatility

Misconceptions contrary to popular belief, market volatility does not necessarily lead to reduced retail segment participation. Angel one contends that with the right product offerings and enhanced engagement strategies, perceived market volatility can be effectively managed and countered.

3. Super App Transformation

Angel one stands out as a distinctive entity in the industry, having effectively launched a pioneering Super App platform centred around broking services. This innovative platform has redefined the scope of accessibility and the consumption of financial services by individuals across the country. The companys ability to identify opportunities and anticipate shifts in the socio-economic landscape has driven its evolution since its inception, leading to multiple transformative initiatives.

3. Addressing Increased Working

Capital Requirements

Despite the growing working capital demands in response to regulatory changes, Angel one has successfully secured adequate capital to sustain business growth and meet regulatory obligations, maintaining strong profitability and net worth. The company views these requirements, as opportunities for further growth and development.

OPPORTUNITIES

1. Untapped Market Potential

With a large population and low median age, India remains a largely underserved market, presenting ample room for growth. Majority of the population, residing in cities beyond metros and Tier 1, continue to have limited access to banking, investing, wealth building, credit and protection products. Recognising this untapped potential, Angel one through its seamless digital solutions and unmatched digital acquisition capabilities is positioned to capitalise on the opportunities present in Indias underpenetrated market. The consistent growth achieved over the past three years underscores its promising trajectory. The cost-effective digital model enables profitable expansion, providing the company with a solid competitive edge.

2. Diversifying Product Offerings

Angel one has a diversified product suite to cater to the needs and preferences, in the equity and allied steams, of its clients. Its planned expansion those into the Asset Management and Wealth Management businesses are strategically imperative for Angel one to enhance its value proposition and strengthen its position as a comprehensive financial services provider.

3. Increasing Equity Awareness growing financial literacy is driving individuals to diversify their savings beyond traditional asset classes, incorporating equities and related products into their investment portfolios. This trend is particularly prominent among younger demographics, who are increasingly engaging in equity investments throughout their working careers.

THREATS

1. Addressing Technology

Advancement

As technology continues to evolve rapidly, it is imperative to prioritise innovation and implement cutting-edge solutions. our dedicated team of 874 digitally adept professionals, keeping Angel one at the forefront of technological advancement. The companys top-tier team comprises experts from various sectors, hailing from renowned global digital retail giants such as Walmart, Flipkart, Amazon, and Apple, bring valuable experience and insights to drive success.

2. Navigating Global Economic

Challenges

A potential global economic slowdown poses a significant challenge to the macroeconomic environment. This could result in decreased liquidity and a subsequent decline in orders, potentially impacting the growth trajectory of the industry.

PERFORMANCE REVIEW

CONSOLIDATED FINANCIAL STATEMENTS

A) Results of operations Extract of Profit and Loss Statement

(J in Mn)

	For the year ended 31 March, 2024	For the year ended 31 March, 2023
Revenue from operations
(a) Interest Income	7,858.83	5,195.05
(b) Fees and commission Income	34,791.89	24,760.16
(c) net gain/loss on fair value changes	66.12	60.64
Total Revenue from operations (I)	42,716.84	30,015.85
(d) other Income (II)	81.04	195.33
Total Income (I+II=III)	42,797.88	30,211.18
Expenses
(a) Finance costs	1,359.45	902.76
(b) Fees and commission expense	8,107.00	6,406.70
cial finan instruments (c) Impairmenton	88.61	36.11
(d) Employee Benefits Expenses	5,564.62	3,979.02
(e) Depreciation, amortisation and impairment	499.30	302.64
(f) others expenses	12,041.60	6,665.77
Total Expenses (IV)	27,660.58	18,293.00
Profit	15,137.30	11,918.18
Tax Expense:
(a) current Tax	3,760.54	2,955.95
(b) Deferred Tax	127.63	62.99
(c) Taxes for earlier years	(6.76)	(2.68)
Total Income tax expense (VI)	3,881.41	3,016.26
Profit for the year from continuing operations (V-VI=VII)	11,255.89	8,901.92
loss before tax from discontinued operations (before tax) (VIII)	(0.51)	(2.81)
Tax expense on discontinued operations (IX)	0.10	(0.43)
Loss after tax from discontinued operations (VIII-IX=X)	(0.61)	(2.38)
Profit for the period (VII+X=XI)	11,255.28	8,899.54
other comprehensive Income (XII)	(20.08)	(14.66)
Total Comprehensive Income for the period (XI+XII)	11,235.20	8,884.88

Interest Income

Interest income accounts for 18.4% of the companys consolidated total income. Interest income grew by 51.3% y-o-y to H 7.9 billion in Fy24 from H5.2 billion in Fy23. The companys average client funding book grew by 7.9% y-o-y to approximately H16.0 billion in Fy24 from H14.8 billion in Fy23. The companys average deposits with banks increased to H72.9 billion in Fy24 from H48.9 billion in Fy23. During the year interest earned on fixed deposits with banks increased to H5.0 billion against H2.6 billion in Fy23. of the H 5.0 billion interest income earned on fixed deposits with banks, about 77% is attributable to client funds.

Fees and Commission Income Brokerage Income gross broking income accounted for 68.2% of the consolidated total income in Fy24, marginally lower than 68.9% in Fy23. gross broking income increased by 40.2% y-o-y to H 29.2 billion in Fy24 from H20.8 billion in Fy23. This growth was driven by strong client additions, coupled with robust client activity. Higher client activity is witnessed from 52.2% y-o-y growth in the number of orders to 1.4 billion in Fy24 and 143.5% y-o-y growth in overall average daily turnover to approximately H33.2 trillion.

Depository Income

Depository income comprising of depository transaction charges, pledge-unpledge charges and annual maintenance charges stood at H1.6 billion in Fy24, accounting for 3.7% of the consolidated total income. This income grew by 56.4% y-o-y due to robust client activities in cash delivery segment. During the year, the company also witnessed a robust 42.6% y-o-y growth in annual maintenance charges.

Distribution Income

Distribution income which forms 1.0% of the consolidated total income in Fy24, grew by 32.2% y-o-y to H414 million in Fy24 primarily due to robust IPo market and higher commission income earned from distribution of insurance products. Mutual Fund AUM grew to H49.4 billion as on 31 March, 2024.

Other operating Income Ancillary Transaction Income

Ancillary transaction income forms a part of the other operating income under the fees and commission income head. This contributed 8.3% of the consolidated total income in Fy24. Ancillary transaction income is the net income received after payout of charges to the exchanges. This income grew by 39.1% y-o-y to H 3.5 billion in Fy24 driven by a strong growth in average daily turnover, done by clients on the platform, against H2.5 billion in Fy23.

Other operating Income

The companys other operating income, excluding ancillary transaction income mentioned above, stood at approximately H102 million in Fy24 against over H96 million in Fy23.

Net gain on fair value changes net gain on fair value changes stood at H 66 million in Fy24. This was primarily on account of income earned on investments in short term fixed income products, as part of the overall funds managed by the company.

Other Income

The companys other income declined by 58.5% y-o-y to H81 million in Fy24. In Fy23, a one-time profit of H105 million upon sale of unused commercial property was booked, which was not part of the current financial year.

Expenses Finance cost

Finance cost for the company grew by 50.6% y-o-y to H1.4 billion, due to higher working capital requirements, on account of regulatory changes, rising client funding book and increase in cost of borrowings linked to central bank benchmark rates. Significant growth in ADTo also envisaged higher requirement of bank guarantees as margins, which resulted in increase of H 73 million towards bank guarantee commission and other charges, as against the previous financial year.

Fees and commission expenses

The company has a network of Authorised Persons and Digital Referral Associates (DRAs), with whom it has a sharing arrangement for revenue generated from clients acquired through them. With a robust growth in client base from these channels along with higher client activity, witnessed from rising average daily turnover, the pay-out to these channel partners increased by 26.5% over the previous year to H 8.1 billion in Fy24.

Impairment on financial instruments

The costs for impairment on financial instruments attributable to unrealisable dues from clients and provisioning for estimated credit loss, increased to H 89 million in Fy24. The DIy digital model and significant improvements in the products, along-with intensified efforts on the risk-management and regulatory changes, kept this at 0.2% of the Fy24 total revenues from operations.

Employee benefits expenses

Angel ones employee benefits expenses forFy24 increased to H5.6 billion (up by 39.8% from the previous year) due to the rise in salaries, expanded headcount, and strategic hires in the Asset Management and Wealth Management businesses, increments, variable pay and fresh grant of stock options at higher cost. As on 31 March, 2024, the overall headcount was up by 18.0% y-o-y to 3,767, which was primarily due to additions to the technology, data science, revenue functions and contact centre operations. During Fy24, the company granted 1,715,262 options to 404 employees as against 1,718,499 options granted to 221 employees in Fy23, thus expanding the overall employee coverage significantly.

Depreciation and amortisation expense

Depreciation and amortisation expense increased to H499 million in Fy24, as the company capitalised its investments in augmenting the technology infrastructure and commissioning of the data centre and disaster recovery sites.

Other expenses

The companys other expenses increased by 80.6% over the previous year, to H12.0 billion in Fy24. This was driven by higher gross client acquisition and number of orders at 8.8 million and 1.4 billion in Fy24 as compared to 4.7 million and 926 million in Fy23, respectively. As a result, the spend on advertisement and publicity grew to H 7.4 billion, including H227 million of apportioned cost towards spends on Indian Premier league sponsorship and associated advertisement spends. Significantly higher client base and orders, along with augmentation of technology and product capabilities and corresponding cloud expenses, resulted in 75.0% y-o-y increase of software connectivity license/ maintenance expenses to H 2.2 billion.

Higher client activity in the cash delivery segment led to a rise in outflow towards Demat charges to the depository, which increased by 7.1% y-o-y to H333 million in Fy24. During the year, the companys spend on legal and professional charges increased by 89.0% y-o-y to H 422 million. With growing profit pool, the spend oncSR activities increased to H162 million, higher by 78.2%, over the previous year.

Profit After Tax from continuing operations

Healthy growth in the business, led by robust client activities were partially offset by cost build up on account of onboarding talent for both existing, and new businesses and higher cost due to accelerated client acquisitions leading to a 645 basis points y-o-y contraction in the operating profit margin to 46.9% in Fy24 from 53.4% achieved in Fy23. This culminated into a 27.0% y-o-y growth in the companys profit before tax from continuing operations to H 15.1 billion, in Fy24. correspondingly, profit after tax from continuing operations increased by 26.4% y-o-y to H11.3 billion in Fy24 from H8.9 billion in Fy23.

Expenses towards maintenance and depreciation of assets, attributable to discontinued operations of the health and allied segment were H1 million for the year, post which the profit for the year stood at H 11.3 billion.

B) Balance sheet position

(H in Mn)

Particulars	As on	As on
	31 March, 2024	31 March, 2023
ASSETS
Financial assets
(a) cash and cash equivalents	10,429.85	1,330.61
(b) Bank balance other than cash and cash equivalents	88,013.09	53,580.22
(c) Trade receivables	4,869.47	3,741.84
(d) loans	14,841.23	10,051.94
(e) Investments	0.00	1,094.74
(f) other financial assets	8,509.59	1,861.99
Non-financial assets
(a) current tax assets (net)	72.75	16.76
(b) Investment property	32.20	32.78
(c) Property, plant, and equipment	3,507.31	1,463.47
(d) Right of use assets	55.54	37.87
(e) capital work-in-progress	-	615.23
(f) Intangible assets under development	6.03	1.08
(g) Intangible assets	492.70	331.21
(h) other non-financial assets	1,707.57	616.97
Total assets	1,32,537.33	74,776.71
LIABILITIES AND EQUITY
LIABILITIES
Financial liabilities
(a) Trade payables
(i) total outstanding dues of micro-enterprises and small enterprises	45.98	23.09
(ii) total outstanding dues of creditors other than micro-enterprises and small enterprises	71,923.82	40,691.98
(b) Debt securities	1,330.56	278.28
(c) Borrowings (other than debt securities)	24,022.83	7,561.24
(d) lease liabilities	57.83	39.00
(e) other financial liabilities	4,005.35	3,872.04

(H in Mn)

	As on	As on
Particulars	31 March, 2024	31 March, 2023
Non-Financial liabilities
(a) current tax liabilities (net)	1.92	76.28
(b) Provisions	225.88	163.39
(c) Deferred tax liabilities (net)	160.10	39.13
(d) other non-financial liabilities	377.03	416.70
EQUITY
(a) Equity share capital	840.08	834.20
(b) other Equity	29,545.95	20,781.38
Total liabilities and equity	1,32,537.33	74,776.71

Angel ones balance sheet expanded to H132.5 billion as on 31 March, 2024, from H74.8 billion as on 31 March, 2023. cash, cash equivalents and bank balance grew by 79.3% to H98.4 billion as on 31 March, 2024, from H54.9 billion as on 31 March, 2023, on account of robust growth in operations, client balances and corresponding margins placed with the exchanges.

Improved client activity in the cash delivery segment, led to a 54.1% growth in the period ending client funding book to H17.8 billion as on 31 March, 2024, as against H11.5 billion as on 31 March, 2023.

During the year, the company unwound its investments in liquid funds. Deposits with stock exchanges which are part of other financial assets, increased to H8.1 billion as on 31 March, 2024 as against H1.5 billion as on 31 March, 2023. During the year, it commissioned the data centre and disaster recovery sites in addition to the investments in augmenting its technology infrastructure. This resulted in 139.7% y-o-y growth of assets to H3.5 billion, as on 31 March, 2024.

With the investments in augmenting and refining the Super App, capitalised intangible assets grew to H493 million as on 31 March, 2024.

The increase in other non-financial assets toH 1.7 billion was due to higher prepaid expenses, advances to vendors and balances with government authorities.

Financial and non-Financial liabilities of the company in aggregate grew by 92.2% to H102.2 billion as on 31 March, 2024 from H 53.2 billion as on 31 March, 2023. Trade payables, which represent the ledger balance of clients funds maintained as margins with clearing corporations, to execute their future trades, grew by 76.8% to approximately H72.0 billion as on 31 March, 2024.

Total borrowings increased by 223.4% to H25.4 billion as on 31 March, 2024 against H7.8 billion as on 31 March, 2023. Higher borrowings were partly on account of higher client funding book and towards margin obligations with clearing corporation. other financial liabilities, including lease liabilities, remained stable at H4.1 billion as on 31 March, 2024. Higher accrued expenses were offset by nIl liabilities towards dividend payout as the company decided not to announce any dividend in the fourth quarter of Fy24 and plough back the capital back into the business.

Increase in the net worth of the company to H 30.4 billion as on 31 March, 2024 was a result of the robust growth in retained earnings by H8.0 billion, share premium by H529 million and equity-settled, share-based payment reserve by H 230 million. The latter two being attributable towards exercise and grant of employee stock options, respectively.

C) Cash flow position

( H in Mn)

	As on	As on
Particulars	31 March, 2024	31 March, 2023
net cash (used in)/generated from operating activities	(3,299.04)	8,042.00
net cash (used in)/generated from investing activities	(910.48)	(1,851.13)
net cash (used in)/generated from financing activities	13,308.76	(9,081.33)

Cash used in operating activities net cash (used in)/generated from operating activities changed to H(3.3) billion for the year ended 31 March, 2024 from H 8.0 billion for the year ended 31 March, 2023. The company generated healthy H17.4 billion of operating cash profit before working capital changes. During the year, the company witnessed increase in its working capital requirements owing to higher client funding book and deployment towards other financial and non-financial assets. Higher bank balance on account of increase in client margin money (trade payables) also impacted working capital change, while higher profit led to increased tax outgo during the year.

Cash generated from investing activities net cash (used in)/generated from investing activities changed to H (0.9) billion for the year ended 31 March, 2024 from H (1.9) billion for the year ended 31 March, 2023. net cash used in investing activities was on account of commissioning of data centre and disaster recovery sites and investments in augmenting the technology infrastructure. This was partly offset as the company liquidated its investments in liquid mutual funds during the year.

Cash generated from financing activities net cash (used in)/generated from financing activities changed to H13.3 billion for the year ended 31 March, 2024 from H (9.1) billion for the year ended 31 March, 2023. This change was primarily due to higher net borrowings and proceeds from issue of equity shares on account of exercise of stock options by eligible employees. Elevated borrowings also led to higher interest outgo H 1.1 billion in Fy24 against H679 million in Fy23. In Fy24, the company paid dividends of H3.2 billion (for three quarters), marginally lower than H 3.8 billion paid in Fy23 (for four quarters).

D) Key Financial Ratios

Particulars	As on	As on	Variance (%)
	31 March, 2024	31 March, 2023
Debt Equity Ratio	0.83 Times	0.36 Times	130.6%
net worth	H30,386.03 Million	H21,615.58 Million	40.6%
net Profit after tax	H11,255.89 Million	H8,901.92 Million	26.4%
Earnings per share (Basic)	H134.21	H106.88	25.6%
Earnings per share (Diluted)	H131.81	H105.09	25.4%
Total Debt to Total Assets	0.19 Times	0.11 Times	72.7%

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:

Debt Equity Ratio

Angel ones debt equity ratio increased to 0.83 times as on 31 March, 2024 from 0.36 times as on 31 March, 2023, due to higher borrowings on account of higher client funding book and higher margin obligations with clearing corporation.

Net Worth

The companys net worth, calculated as sum of equity and other equity, grew to H 30.4 billion as on 31 March, 2024 from H21.6 billion as on 31 March, 2023. This was due to growth in retained earnings on account of robust growth in profit after tax, increase in securities premium as employees exercised vested shares and higher equity settled share-based payment reserve as the company granted options to eligible employees.

Net Profit after tax

Healthy growth in business, driven by robust client acquisitions and client activity, culminated into a 26.4% y-o-y growth in Angel ones net profit after tax to H11.3 billion in Fy24, from H8.9 billion in Fy23.

Earnings Per Share (Basic and Diluted)

Significantly higher profit after tax inFy24 resulted into 25.6% y-o-y increase of the earnings per share (basic) to I134.2. Further, with 1,786,367 number of options granted and yet to be vested/exercised, the earnings per share on diluted basis stood at I 131.8, an increase of 25.4% over the previous year.

Total Debt to Total Assets

The companys total debt to total assets ratio of 0.19 times as on 31 March, 2024, was higher by 0.11 times as on 31 March, 2023. This is a due to increased borrowings towards financing a higher client funding book and higher margin obligations with the clearing corporation.

RISK MANAGEMENT

RISK	DESCRIPTION	MITIGATION MEASURES
Regulatory Risk	Regulatory risk pertains to the possibility of adverse outcomes stemming from alterations in regulations or failure to adhere to relevant laws.	The company remains abreast of regulatory changes and diligently adheres to all pertinent laws and regulations. Additionally, it actively engages with regulators on a regular basis to foster strong relationships.
Operational Risk	operational risk considers the possibility of financial losses and harm to reputation stemming from internal failures in processes, systems and human elements.	The company enforces stringent internal controls, conducts frequent risk evaluations and allocates resources towards technological advancements to enhance cybersecurity, mitigate fraud and thwart cyber-attacks.
Technology Risk	Technology risk involves the potential for adverse outcomes resulting from challenges with technology infrastructure, data security and cyber threats. These issues may result in financial losses and damage to reputation.	The company prioritises investments in technology and cybersecurity measures, regularly assesses risks, and upholds business continuity plans. Angel one has also recently expanded its management bandwidth with the onboarding of group chief Information Security officer.
People Risk	People risk involves potential negative impacts stemming from factors related to the workforce, such as talent shortages and ineffective workforce management.	The company invests in its employees through comprehensive training and development programmes, implements efficient talent retention strategies and cultivates a motivated work culture.
Liquidity Risk	liquidity risk pertains to the potential challenges the company may face in fulfilling its financial obligations or capitalising on business opportunities.	The company ensures sufficient liquidity reserves, diversifies funding channels and monitors cash flow patterns.
Third Party Risk	Third-party risk refers to the potential negative impacts stemming from the actions or shortcomings of external entities upon which the company depends for its business operations.	The company conducts comprehensive due diligence on prospective partners, implements robust contractual safeguards and continuously monitors the performance and compliance of third-party entities.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

Angel ones internal control system is tailored to accommodate the intricacies of its business operations. The company has implemented and upheld internal financial controls to bolster the reliability of financial reporting and the robustness of financial statement preparation. These internal control mechanisms are enforced through a combination of policies, procedures and financial certifications. A dedicated internal committee conducts periodic reviews of processes and controls, promptly addressing any deviations identified by reporting them to the Board and implementing corrective measures as necessary. Stringent adherence to all relevant statutes and regulations governing business operations is ensured by the internal control system. The internal financial controls, as reporting. designedandexecuted,aredeemed sufficient. They effectively safeguard assets, prevent and detect frauds and errors, maintain the accuracy and completeness of accounting records and ensure the timely preparation of dependable financial information. Additionally, the statutory auditors have conducted thorough verification of systems and processes, confirming the adequacy and effective operation of the internal financial controls over