Share India Securities Ltd
NSE:SHAREINDIA
Share India Securities Ltd
NSE:SHAREINDIA
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Earnings Call Transcript
Transcript
Other Earnings Calls
Ladies and gentlemen, good day, and welcome to Share India Securities Limited Q2 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Savli Mangle from Adfactors PR. Thank you, and over to you, ma'am.
Thank you, Nirav. Good evening, everyone, and wish you all a very Happy Diwali. On behalf of Share India Securities, I thank all the participants present on the call and wish you a very warm welcome to our Q2 and H1 FY '25 earnings conference call.
To guide us through the results today, we have with us the senior management team of Share India Securities represented by Mr. Kamlesh Shah, Managing Director; Mr. Sachin Gupta, CEO and Whole-Time Director; Mr. Rajesh Gupta, Director; and Mr. Abhinav Gupta, President, Capital Markets.
Before we begin, I would like to state that some of the statements made in today's discussion may be forward-looking in nature. The actual results may vary as they are dependent on several external factors. We will now commence the call with Mr. Kamlesh Shah, Managing Director; followed by Mr. Sachin Gupta, CEO and Whole-Time Director, after which we will open the forum for Q&A.
With that said, I would like to now hand it over to Mr. Shah to share his comments. Over to you, sir. Thank you.
Yes. Thank you. Thank you, Savli madam. Good evening. On behalf of Share India management, I would like to wish you all a very happy festive season. At Share India, we are guided by principle of Shubhlakshmi. We shall continue to follow path of doing business with integrity, honesty and self-discipline. We shall also continue our mission of giving back to the society through Share India Smile Foundation.
You will be happy to note that the second quarter of this year ending September '24 is one of the best quarters in the history of Share India despite challenges. Also, next 2 quarters will showcase our ability to adjust to the far-reaching regulatory reforms. Recently, SEBI has announced a slew of measures to protect retail investors. Mr. Sachin Gupta will discuss in detail about the impact and our strategy.
We are in financial service sector where there is only one factor which is constant, that is change. We try to be ready for all the changes and reforms. Ultimately, what is good for the industry and particularly for the investor is good for all the intermediaries and stakeholders. Challenges are uniform for all the intermediaries, and we believe that those who will find better solution would emerge as winner.
We at Share India, have always worked towards creating sustainable business model. And with diversified product portfolio, we may not have any significant impact on our performance. We are pleased to present the numbers for this quarter.
First, I would like to highlight consolidated financials. During quarter 2 financial year '25, our total consolidated revenue from the operations was INR 453 crores, giving an increase of 24% on year-on-year basis and increase of 9% compared to the June quarter.
Consolidated profit after tax grew by 10% on year-on-year basis to INR 124 crores and increase of 21% compared to June quarter. Earnings per share works out to INR 6.03, for INR 2 paid up share. Net worth for the financial year -- for the quarter 2 financial year '25 stood at INR 2,272 crores on a consolidated basis. Net profit margin for the quarter has improved to 27.45% compared with 24.86% in previous quarter. Our debt-equity ratio is just 0.14x and our current ratio stands healthy at 1.91x.
Now I will come to the stand-alone numbers. Total revenue for quarter 2 financial year '25 was INR 366 crores, showing an increase of about 32.68% in comparison with quarter 2 financial year '24, an increase of 13% compared to June quarter. The profit after tax for quarter 2 financial year '25 was INR 98 crores, showing an increase of 22.74% in comparison with quarter 2 financial year '24, an increase of 34% compared to June quarter. Earnings per share on a stand-alone basis works out to INR 4.75 for INR 2 paid up share.
For quarter 2 financial year '25, we have successfully accumulated net worth of INR 1,910 crores. Here, again, the net profit margin has increased to 26.67% from 22.42% in previous quarter. The debt-equity ratio on a stand-alone basis is just 0.11x and current ratio is 1.94x. This gives us comfort on the liquidity front. Board of Directors have approved dividend of INR 0.50 per INR 2 face value shares. Record date for the same is decided as 7th November 2024.
Pursuant to our ongoing business, I aspire to summarize the key updates that have taken place. Streamlining and automating our IBT and uTrade Algos, making the onboarding process for our clients a very pleasant experience. Expanding into new area, I'm happy to inform you that margin trading fund book as of 30th September 2024 stands around INR 200 crores.
Our institutional desk is also doing well. Within a short span of a year, we are able to cater 100-plus institutional clients, harnessing technology, which is core to our each operations, which explains our investment in technology to create a sustainable business model, expanding geographically through more branches and franchisee model to reach out to the next-generation clients.
The way forward. We are focusing on to explore and design a model to maximize cross-selling opportunities. We are focusing on strengthening our wealth management division. We are focusing on international expansion through GIFT City and our subsidiary at Singapore, which is a great asset, and that will help us to achieve the larger profits and the volume.
The other significant development is our engagement with M/s. MSKA & Associates as our auditor, which is an arm of international firm BDO. This will further enhance our ability to follow best practices in the industry and bring transparency with consistent performance and strengthening our network of our company through internal accrual and rights issues.
Our vision of technology as a growth driver and sustainable business model with focus on retail investors will guide our future. I would also like to thank all the stakeholders for their continued support. We shall try our best to protect your interest. Wishing you all a very Happy Diwali and prosperous New Year. Thank you.
Thank you, Kamlesh ji. I now request Mr. Sachin Gupta, CEO and Whole-Time Director, to share his comments. Thank you.
Thank you, Kamlesh sir, for giving in detailed presentation about the Q2 FY '25. So as my comments on this is, as Kamlesh sir already explained, quarter 2 was the best quarter in our history in terms of profitability. And last one year is very challenging in terms of extremely regulatory pressures and new regulations coming in. But we are happy to say that we were able to adopt all these changes and pass through all these challenges and still able to achieve these kind of numbers for the company.
And I would like to inform the investors that like company has ventured into new verticals in the last two years, which are showing very good results like as Kamlesh sir has said, they are doing a fabulous job led by Mr. Kalpesh Parekh. They have enrolled more than 100 institutions in less than one year. So this is quite an achievement.
And in our Merchant Banking division, last year, we did help the 9 companies to get listed on the SME platform. This year, we already helped -- we got 3 companies listed and 6 are filed with the exchanges and many more to come by end of December. So even this division is showing very profitable and very promising numbers. So Abhinav is leading this number.
And on the retail side, we have got great success in terms of MTF, in terms of overall brokerage numbers. So we are very hopeful that all these verticals will help us keep on going and managing the regulatory changes in the trading business, otherwise. So focus is Share India should be a more sustainable company when it comes to the challenges in the overall business environment. And we should be one of the companies who will sail through all these new challenges, new regulations and will show promising results in coming quarters also.
So going detail, so there is a buzz in the industry about the new regulations by the SEBI, and they are actually the game changer point for the lot of many people, and that will also -- we are also strategizing how to manage, where to focus more and how to go ahead with all the changes. I just want to highlight some large points which will impact us, and I want to clarify how we are going to manage it.
So first, they have increased the lot size by broadly 3x, so that -- the overall intent of the SEBI -- we should understand the intent. Intent is that the retailers should stay alive. They should be -- not be the temporary player in the market. They should be able to stay afloat and keep on trading in the market in a mature manner. The people who do not have access to the proper knowledge, proper guidance, they lose a lot of money in the market, and that is also not good for all the intermediaries.
So we all want the retailers and clients, their life in the market should be more and they should earn from the market only then we all will be able to sustain. So the bigger lot size will definitely be a problem for the smaller players, smaller traders. But in overall scenario, if we go the worldwide, worldwide derivative lot sizes are even higher than what SEBI has proposed. And in India, lot sizes were -- value-wise, they were very small.
So I believe it will help the large traders also, but it is not good for the small traders. But ultra small traders who cannot afford to trade at a certain level, they should not trade in the market. That's the whole wish of the SEBI. So -- but it is not going to impact badly to the company, because with the -- like we do not charge on the -- on per lot basis or on per trade basis, we charge on the turnover basis. So this will help us in doing better turnovers by the client, and it will impact us positively in terms of brokerage we charge.
So this is not negative for us. We don't believe that much participation will go away. Only smaller players will find it difficult, but largely, people will adapt. And as I said, universally, in the larger markets, lot sizes are even bigger than this what SEBI has proposed. So this is not a negative sign. We will adopt, and I think this will result into a better revenue for the company.
And the next bigger point is 2 expiries in a week. So weekly expiries have gone now. So people used to trade on 0 DT on every day on all the expiries. And now they have gone. They are on a monthly basis. Only 2 benchmarks, Sensex and Nifty will be on the weekly basis. So I just want to share some data on it. So people are talking that this will hamper the turnover by 50% and this and that. I just want to share some data. So right now, [Technical Difficulty].
Sorry to interrupt you, we are losing your audio. Can you hear us?
Yes, I can hear you. Am I audible?
Yes. Now you're audible.
Yes. Sorry. Sorry, there was some [Technical Difficulty]. I was explaining that right now, we have 20 expiries to trade. So people are get used to, to trade in the 0 DT expiries. But I tell you, I tell you the data is that Mondays are not good days. Mondays volumes are not only even 25% on the other days. So Mondays, we do not count. So practically 16 expiries right now we trade. And our total universe of the traders, clients, traders, everything is based on these 15 days.
And what SEBI has proposed, they are still giving us 10 expiries. So like 4 expiries in the last week and 2 expiries on the rest 3 weeks, 6+4=10. So technically, we are down by 30% expiries only, which will impact us, correct, which will impact the entire trader's life.
But on the contrary, what is going to happen, we believe that this volatility will stabilize. We believe that spikes will go away, concentration will not be there. So market will be far easier to trade than what we are feeling now. So we -- now volatility is at its peak. It's very difficult to trade on 0 DT expiries these days.
So people are losing hell lot of money because of the unnatural volatility we are seeing in the Indian market. So we don't believe that Indian markets are so mature to handle so many 0 DT expiries. That's the primary reason that regulator has proposed this. So yes, there can be a caution, there can be a pause of 2 months -- maybe 1 or 2 months to study the data of the new change that will happen after the end of November.
So people will be cautious for 1 or 2 months. But once the data is in, people will get used to. I believe that the 10 expiries we do have, again, they are 0 DT. But rest of days, because of the less volatility and no spikes era, so we'll be able to generate better profit.
So at Share India, we believe maybe after a pause of 2, 3 months, the trading volume will go up. I'm not saying that trading volume will be like this today, but logical volumes will be there. People's trading margin will go up. So in net, I'm not seeing a negative impact of it. Maybe after 3 years, we guys can see better profit resulting out of this.
As sir has explained, all -- we have seen in last 2, 2.5 decades, all these regulatory changes, they are universal in nature, they result into positive impact rather than a negative impact. So we are not very negative on it. We are rather positive. Yes, because December will be the month. So next quarter, only 1 month may be impacted. And maybe January also, then February, March, things should pick up. So overall, we don't see even on a quarter-on-quarter basis, much hit on the bottom line on the revenue side.
So this is our take on the SEBI side. And if there will be any queries, we're happy to take after -- in the Q&A session. And I want to share one more data. So next is like we are focusing on the different verticals like to give us better sustainability and growth, as I explained earlier, as Kamlesh sir also explained, merchant banking, insurance all these business are starting showing positive results. Merchant banking is starting giving us like we started 2, 2.5 years back. Now they are -- this vertical is very profitable. It's very encouraging for us.
And insurance, this is the first year. So we believe next 2 to 3 years, this business will also give us very good numbers. And I must compliment the insurance team. Not only they have empaneled 100 institutions -- more than 100 institutions, they are also doing at least 2 road shows in a week, in a week.
And they are taking companies to Singapore, they are taking companies to Dubai, they are taking companies to Muscat. So they are -- obviously Mumbai. So they are taking companies to international investors also. And on that side, they are very promising and helping companies to meet with the good institutions for the investment. And if there are in blocks, we are guiding them good. So in that side, insurance is very promising.
And keeping this in mind, focusing more on fee-based business like MTF, MTF sir has explained, we have INR 210 crores book right now. And the annual target was -- given by the team was INR 250 crores, which we have turned INR 210 crores by first half year only. So now we have increased the annual target to INR 300 crores, correct? So this number is not helping us only in garnering interest income, also this is helping us in the increasing overall broking business.
So MTF is an another vertical, which is very promising, high revenues and stable return. This is giving us the stability. So keeping this in mind, yesterday, in Board meeting, Board has approved to form another subsidiary of Share India, which will be called Share India Wealth multiplier. So here, we will propose to get AIS and PMS, and it will be a wealth division of the Share India.
Share India is venturing into the wealth division very soon once the Board has approved, now company formation will be there, then we'll apply for the licenses. So maybe 6 to 8 months once we get the SEBI approvals. So we'll start with the AIS and PMS, which -- these areas we have never touched. Again, these are fee-based areas. So next 2 to 3 years, when we see -- we see all the fee-based businesses will be far better and comfortable and give us better sustainability.
And we have the network of investors of intermediaries who can help us growing this business. So this is another business yesterday, we got the approval from the Board, and we are proposing it and we are informing to the shareholders about this.
So -- and another thing is -- last thing is from my side, Share India is moving for the -- yesterday, we got the Board approval for INR 100 crore NCDs as legal process will over. So we are proposing the INR 100 crores NCD. This will be -- money will be primarily used for the -- to increase the MTF book. It will be secured against the MTF book.
So focus is on MTF, on retail, on wealth. Wealth is a new division we are picking up, like we are done with merchant banking and insurance. So professional teams, they are doing very good job. So now we focus more on wealth and also on international side.
So international side, yes, there were some challenges in the last quarter because there were some large spikes because of the Japanese market. Some of the investors may know that there was extreme volatility in a day in Japanese market, because of which we saw some problems in the international trading side.
But keeping that in mind, we are still hopeful that -- try to get more mature and try to get better strategies to implement. And next 2 to 3 years, we'll focus on international trading, wealth side, MTF and all these verticals. This is it from my side. Thank you very much, investors, and Happy Diwali to everyone. And Savli ma'am, over to you.
[Operator Instructions] The first question is from the line of [indiscernible], individual investor.
Yes, how much active clients we have so far? And as per the plan, we have to acquiring 2 lakh to 3 lakh customers, what's the process for -- in that? And what's the expected gross NPA in the NBFC business?
Abhinav, can you answer the first part, I will answer the second part. Rajesh sir can answer the second part.
[Audio Gap] and in terms of the presentation, sir, you want me to answer or you will take that up in terms of the plan to reach around 2.5 lakh customers that we had for 3 years?
I would like to know the current active customers? And what's the process in acquiring those 2 lakh customers in future.
Sure. So as of right now, the active customer base is around 12,000. And as stated earlier that uTrade Algos as a product was launched to acquire customers. The product is now working beautifully, and we are adding new customers on a daily basis.
Alongside because of the market metrics, we have also launched MTF and other allied retail, allied product. And cumulatively for all of them, we are getting a good traction. As far as we remain consistent on our plan to reach another 2.5 lakh customers for 3 years. It's a long-term trajectory that we are trying to do.
We are mostly focused on our product orientation for this to be achieved rather than just pure-play marketing, but slowly and steadily, our old marketing initiatives will also start reaping benefits. Also, what we have done is we have started adding multiple ancillary businesses in terms of mutual fund and insurance businesses, which will add on to our retail broking business clientele as well.
May I add something, Abhinav?
Sure, sure.
So as far as acquiring new clients, I tell you, MTF is helping us a lot. We are continuously doing small road shows in the Tier 3 cities like we just -- we are going to Bikaner in January. We are doing road shows in all the small cities possible. And we have recently opened a branch -- independent retail branch, full-fledged retail branch in Kolkata, and also in Connaught Place, CP, the core Delhi area and planning to start one small branch in Mumbai also.
So this is the first time we are doing all these off-line things in Share India, because we have enough products to offer to the retailer, like I said, distribution -- we are distributing different products, MTF good research, all the products which retailers are looking at, and unique products, which only we have is uTrade Algos, which is what we are offering on the plate.
So you guys can see that serious effort from our side. We are opening retail branches, which earlier we never did. So maybe next year, we are -- so branches will be opened in the main cities like Ahmedabad, Mumbai, Kolkata, maybe south side some branches, but we'll try to cater the Tier 3 cities from main branch.
So going further, we believe that, as you said, 2 lakhs, so we are targeting in next 2 years, we should be having more than 1 lakh customers. And the speed of acquiring customers has gone up. As Kamlesh sir earlier explained in the presentation, we have made the onboarding system very smooth and comfortable for the investors -- for the clients, sorry.
And keeping all these things in mind, our target is 1 lakh customers in the next 2 years for purely, purely retail purposes, not for the -- only for uTrade Algos. So this is the answer of the first part.
Sachin ji, I would like to add one sentence here. See, here there is a difference between discount brokerage and our business model. We are catering to our plans through strategy and through Algos. So it is not apple-to-apple comparison with the discount brokerages.
The number of clients in our company, you may feel lesser compared to the clients -- active clients of discount brokerages, but those clients use very large volume. And that is how we are also managing a very large volume. So our business model is slightly different from the discount brokerage.
Mr. [indiscernible], do you have any follow-up questions?
Yes. So there is one more question. Sir, in the NBFC business last quarter, we can able to see a high gross NPA. So what we are going to achieve in gross NPA in the upcoming quarters? Because I can able to see a lot of companies are struggling with gross NPA recently. So what is our goal and how we are going to handle it?
Rajesh, sir, may I start and then you can please follow on with that. Rajesh sir, do you want to take that or should I start? So, I tell you. So in NBFC business primarily, we were focusing on the MFI. And on that side, we have seen the entire -- all the NBFCs in the country are feeling some strain, likewise with us. And that's why the book has gone down, and we are seeing some NPA pressures on it.
Secondly, RBI has reduced the 180 days to 150 days, which has also added to some NPA numbers for everyone. And going further keeping this in mind that this business has become very volatile, and a lot of MFIs are giving too much money in one hand in different, different pockets. So we have selected our pockets where we'll be focusing more and try to slow down on the difficult parts like Punjab, Haryana, deep North. UP is good for us and Odisha is doing very good.
So we'll try to focus on the more stable markets and try to just stay in certain limits. We don't want to grow beyond a point in the entire country. We just want to fix to the certain pockets. And secondly, we are more focusing on the collateral-based lending like based on the real estate and business loans based on the real estate. And there are some numbers in the book you guys can see.
And going further, we are also proposing to start loan against shares. So we are raising a small NCDs in NBFC also because our focus is on the collateral-based lending, their net margin is not that high as MFI, but they are stable loans. NPAs are very, very low.
And overall portfolio should look like some numbers in MFI, maybe 50% and 25%, 25% in collateral base. So 50% book will be collateral base, 50% book will be unsecured. So this is how we are overall thinking. And as your question is, what can be the future NPAs, Rajesh sir can take this further.
Good evening, everyone. As we all know, the unsecured business are unsecured loans are under pressure for the last couple of quarters. And due to this the NPA has gone up for our company too. This is happening to all the companies. As Sachin ji has explained, we are going to close these -- close some of our branches where [indiscernible], like some branches in Punjab and Haryana. And we are looking for a more stable business. We have added secured business like loan against property and [indiscernible].
So we are -- in future, we are going to balance our book with secured and unsecured. Moreover, we are -- as across the industry, we can see that most of the companies have stopped or reduced further distribution of unsecured loans. This will ease the pressure on the market and the due course would be, say, a couple of -- 1 or 2 quarters, this will bring down the unsecured loan book in the market. And ultimately, NPA will also come down.
I would just like to add on one more point here that all the stress that you are seeing in NBFC is cyclical in nature. We, as a management, if you see that we have grown significantly in our NPA book, which is also a form of lending. It's just that it happens via the stand-alone entity instead of the NBFC arm. But cumulatively, the group's lending business has grown significantly in terms of secured business as well. And we would have a higher IRR if we combine both for NBFC and the MTF book in the securities business as well.
[indiscernible], do you have any follow-up questions?
Yes, the very last one. I'd like to know a 90-plus revenue we are getting in from broking business. And we have created too many -- close to 10 subsidiaries for the upcoming revenues. So as of now, only one platform is giving most of the revenues. In future, maybe 3 years, 5 years, what would be the revenue split we can expect? As of now, only one is concentrating very high level. Maybe NBFC or any subsidiary, what could be the percentage we can expect or overall [indiscernible] we can expect?
Kamlesh sir, you can start, and I'll then add on the points, sir. Please go ahead, sir.
You see all the subsidiaries that we have are performing very well and some of them...
Sir, sorry to interrupt you. You're sounding a little distant. Can you come a little closer, please?
Yes. See, all these subsidiaries have grown significantly in the last 2, 3 years. And they are more or less breakeven, even the one which we started very recently. So some of them are giving really very good revenue. And going forward, we expect at least 25% of the consolidated revenue to come from the subsidiaries. And in years to come, this may go up to 30%, 35%.
So roughly 1/3 of the revenue should come from the subsidiaries. And apart from the revenue, all these subsidiaries can do a large amount of value unlocking. The business which we have selected for subsidiaries are all specialized business and there the valuation are really going to be commanding say, for example, insurance broking business, where we are going to touch -- last year, we touched premium of around INR 50 crores. This year, we'll be touching INR 75 crores. And a year after, we are targeting INR 100 crores.
Even merchant banking division is doing extremely well. The other specialized Algo trading arm, which is 100% subsidiary of the company and having membership of all the exchanges, Share India Algo Plus is also doing very well. On NBFC, we already discussed a lot of things. Then we have subsidiary at the international places like GIFT City as well as in Singapore. So there also things seem to be very promising.
Recently, we did acquisition of Silverleaf, so that will add our capabilities in terms of HFT trading. So overall, the scenario seems to be really encouraging. And all these businesses not only will give good revenue, but also will create good sustainable business model for the company. You can take it forward. Abhinav.
I want to add some point here. Apart from the subsidiaries, even in the stand-alone company, as I said, MTF comes under stand-alone and the broking business, all these branches and offline even uTrade Algos. So putting all the efforts, like if you see this time, the entire senior management and the core workforce is focusing to act on the noncore, non-trading side.
So in the stand-alone city, so MTF book, we are expanding. So this year, we are targeting INR 300 crores. Next year, we are not targeting less than INR 550-odd crores. So that number is huge. Once if we touch 500 and maybe above 500 numbers, so that will add a lot of revenue based on the clientele business to the Algos. And it's not only MTF investment, a lot of broking business goes up. All these [Technical Difficulty] delivering.
uTrade Algos, they will start delivering. So if you believe -- if you ask me in the next 3 years, as sir has said, 35% from the subsidiaries. In 65% also, I believe, 35% to 40-odd percent should be from the non-trading side. So then if you see cumulatively, trading should not be more than 35%, 40-odd percent in that total revenue in next 3 years, this is our hardcore target, and we all are working strategizing very hard to achieve this target. Abhinav, you can add.
Yes, I would just like to add on, I think -- in terms of number, I would like to reiterate in terms of revenue, the stand-alone constitute around 80% and in terms of profitability, it is around 78%. So what Kamlesh sir said about being 25% of the profitability coming from subsidiaries, the target is almost achieved and it will be done by fiscal year '25 itself.
And as everyone said, as Sachin sir also explained, that was my point that within the stand-alone entity, there are multiple divisions that are working. And we look at subsidiary -- stand-alone business in terms of business divisions. And cumulatively, trading should not constitute more than 40% going 3 years from here?
Next question is from the line of Nikita Mehta from SRS Investments.
So my question is with the AUA at INR 172 crores, what strategies can be employed to stimulate further growth in AUA? And are there any particular products or customer segments that could be prioritized for maximum impact?
Yes. So I'll start with it, and then Kamlesh sir and Sachin sir can add on to it. So that currently...
Sorry, Abhinav, I missed some part of the question. Can you repeat for my sake, please?
Yes, I'll repeat it. So the AUA at INR 172 crores, what strategies can be employed to stimulate further growth in AUA? And are there any particular products or customer segments that should be prioritized for maximum impact?
Sure. So sir, I'll start with it, and then you can add on to it. So the INR 172 crores currently, the business that you see is mostly from the distribution business that comes into the stand-alone entity? As we said that we see great traction in this business and what we want to see is transform into a wealth management business.
And as you can see this time, this quarter, the Board has already approved creation of a subsidiary, which would be used for wealth management purposes. And as Sachin sir gave in his opening remarks, we have great vision for this business, and we want to see that advisory business go forward.
In terms product portfolio, we would be in a better position to discuss that forward once the new subsidiary comes in and we start launching those products. But having said that, we do believe that this entire wealth space and the entire asset management space should do really well. And we would continue to work both on creating or developing products like PMS and AIF and distribution as well, which is currently into the stand-alone entity.
Sir, sorry to interrupt, your voice is breaking.
[Technical Difficulty] same sales team, correct? So we do not have an expert team who are -- who have hands-on experience on distributing all third-party products. So as I said, we are -- Board has approved the creation of the subsidiary. So we are taking a top-down approach. We'll look for the guy who can lead it, probably the CEO, then his team, forming his team, who will be having experience in distributing third-party products.
So then that's the whole goal that this number is nothing, miniscule number. So we want to increase this number, third-party product number. Also, we launch our own products. As you guys know that our products definitely will not be so much easy to offer to the clients. So we'll offer third-party products along with our own products. So whilst the wealth company will be there, they will be taking the charge of distributing this product, then number will be much, much higher, ma'am. So 3 years, distribution business or wealth business, [indiscernible] business will add lots of value to the parent company.
Okay. Okay, sir, that answers my question. And I have one more question. How can the 319 branches promoting mutual funds boost sales and what trading marketing or outreach strategy could enhance mutual fund adoption at these locations?
Sure. So I'll start with it, sir, again, and then you can add on to it. So ma'am, going forward, what we are doing, we are integrating our mutual fund platform with our retail IBT platform. We have already -- Kamlesh sir and Sachin sir have both explained that the account openings are going good, and we are trying to integrate into the cross-sells across our products.
So the first step in that process is the integration of the mutual fund into the same product and the same application and the same web portal that you see for broking business. Once that is available, all these branches that you are there would be cross-selling each other's products. So the mutual fund business would be able to cross-sell retail business directly. And the retail business branches would be able to cross-sell mutual fund directly.
Of course, we are also working on creative incentive structure across our teams as well, different teams so that they will have different KPIs, so as to enable them and incentivize them for all the cross-selling opportunities. And once the bouquet is expanded to include insurance and other portfolio items as well, including the uTrade Algos as well, I think our sales team would be a cohesive unit, which will have multiple products on their shelf and can offer that to clients going forward.
Just to give you an idea, the mutual fund integration into the app should start from this quarter onwards, which is Q3 fiscal year '25.
Next question is from the line of Rohan Shah, individual investor.
So I had a couple of questions on our IB business. So I just wanted to understand like how are we standing in the SME IPO market, like how has our client base been and like how actively are we scouting on opportunities in that space?
Sure. So just to give you an idea, last year, our market share was 3% in terms of number of IPOs that came into the market and in terms of number of -- the amount of fund that was raised. This year, we are expecting that we would maintain our 3% market share in terms of number of issues, but in terms of the total fund raise, we should achieve a higher number of higher single-digit numbers because we are focusing on larger ticket size IPOs.
A lot of tractions will start coming in that quarter 2 because as you know, both at exchanges -- for both the exchanges, there is a quite a bit of backlog. So currently, we have 6 DRHPs already filed, which we are expecting a good turnaround time going forward in the next 2 quarters for this year.
And as far as the marketing is concerned, we are in discussion with a lot of potential clients. Our focus continues to be on larger ticket size IPOs. We are currently focusing on IPO, both for SME and main board only and not on other IP activities, which might include right issue or something like that.
But of course, our institutional team is doing really well and all the QIB business that we can generate from these IPO businesses that we have done are being passed on to the institutional client going forward, and the institutional team is taking those QIB business as well.
I also want to add one point here, as Abhinav said. So Share India is having a unique advantage. I tell you, Share India is the only merchant banker in the whole industry, on the SME space, who got listed on SME. So we have experienced problems of -- benefits of getting listed on SME. And we are also the merchant bank. We have helped 14 companies to get listed.
As Abhinav said, exchanges are taking far lot time in giving the approval. So 6 companies are already been DSP has been filed and 9, we are planning to file by end of November. So it is like 15 and 3 already IPOs have been launched. So 18 number. So the target is that we should be able to do all these IPOs finish before 31st March. That will add a lot of value to the company. And the unique advantage with Share India is we have a very good [indiscernible].
So we have very good rapport with the higher institutions, higher -- large SIs. So merchant banking team placed a company, we got listed. After 2 years, we carry very good relation with the company. Same company comes back to us for QIP, for further fundraising maybe for block placement or whatever. So that value addition is very rare, very few merchant bankers can give that kind of handholding and value addition to the company. So that's why we are able to get very good quality companies in our folio.
Sachin, can I add one point?
Yes. Sure, sir.
See, the unique advantage with Share India is its net worth. Now we'll be standing in net worth in excess of INR 2,000 crores. There are very few merchant bankers who have this kind of net worth and the credibility. The credibility is the most important part for the Merchant Banking division.
Here, whatever IPO we have brought in are all trading at a premium. And investors are benefiting from that. So our conservative approach, our in-depth analysis and to be selective on the IPO along with the high net worth, gives a lot of credibility to our IPO.
Just to follow up on that, what kind of percentage fees do we make on every company that we take public?
Sorry. So these are essentially customized in nature. The revenue number that you see for this quarter essentially is represented in numbers and in terms of segmental data. We did a top line of around INR 13 crores for first half and around INR 10 crores for this quarter. But this includes a lot of consultancy business and ancillary businesses as well.
In terms of the percentage for the IPO, the disclosures for the each and every IPO are done in the DRHP and the RHP of that company, but a lot of customization happens before we do interactions. So it would be very difficult to pinpoint a number in terms of the percentage we make on each IPO.
Okay. Fair enough. Fair enough, sir. Also, just in this space, is there any specific sector we target for these SME companies? Because we see a few sectors like solar or renewables or engineering companies, they are like in the limelight right now. There's a lot of demand for the companies in this sector. So are we targeting any particular sector or are we across the board?
We have been across the board. But yes, we do believe that going forward, a lot of green led initiatives, which might include solar, renewables and everything. So if you see GEM or VVIP, one was in water treatment, the other one was in EPR. So we do believe that the sustainability would be a theme strategically going forward. But having said that, at Share India, we are sector agnostic, and we look at each and every company individually on its own merit.
But I want to add one thing, Abhinav. Yes, we are all over, but we are very conservative, very careful when it comes to valuation and you guys can back check that the kind of valuation we have given to the company is far less than the industry standards. So we believe that our brand's name and our culture should be there, our ethics of working should be there.
So because solar companies and renewables, some of the renewable companies, they expect extremely high valuations because of the demand in the investors. So -- but we go very slow. We don't -- we have our own way of working, so we don't go about certain multiples when it comes to the valuation. So we are very conservative, very careful when it came to the valuation.
Next question is from the line of Rohan Mehta, individual investor.
Congratulations on a good quarter. Sir, just building a little on the previous questions on the SME IPO part of our work, the investment banking. So do you have -- can we expect a sort of target in terms of percentage share in our revenue that we can expect from this line of business?
So currently, yes. So currently, that business constitute around 3% in terms of top line share. Going forward, we do have targets for this business for our own level. But in terms of percentages, we don't measure it in terms of percentage because all the businesses will have their own segment. But yes, given that the stand-alone business and the broking business is also growing along side, we believe that it would be somewhere between mid- to high single digit in terms of revenue share for fiscal year '25 and fiscal year '26.
Sir, may I add something, sir? I'll tell you one thing. So this is how we think. We -- like Abhinav is taking care of this particular division. So there are different vertical heads. Like Abhinav is leading one, Kalpesh bhai is leading one. [Technical Difficulty], So there are different vertical heads who take care of the -- so everyone is acting as a business owner in their own vertical, correct?
So they are more focused -- our strategy is to focus more on one project, let one guy focus. He should run his division as his own company, take ownership of that and focus on its growth. So overall, if you ask us, our way of thinking is growing individual vertical, like Rajesh sir is leading NBFC. His total focus is on NBFC. And our focus is on stand-alone company.
So [indiscernible] of percentages. But our way of thinking is growing every vertical as a separate set of business and with a different owner. This is how we are working. So every vertical is a separate business entity for us. So actually, we do not look at the percentage in the consol numbers. So -- but eventually, when it comes to presentation, then things go like this.
But we are very pushy for SME in the next coming years. It's not SME. Next year, we are also looking to engage into some main board IPOs because we got good hands-on experience on some SME IPOs. So we just want to expand this vertical as in -- in its individual capacity.
Understood. Understood. Fair enough. And speaking of the broking business, it's -- our institutional section of the broking has really grown well. So congrats on that, sir. Is there any particular strategy that we are executing over there? What can be expected from that segment, sir?
I can give you a very, very smart strategy, which people generally don't know. And I should give all thanks to the guys who's waiting. So you all know that getting empanelment to the large mutual funds is very difficult these days. So we just [Technical Difficulty].
Sir, we lost your audio. Can you hear me?
Am I audible?
Yes, sir. Now you are.
So the pain point was they all launched [Technical Difficulty]. So they expect liquidity, they expect good growth. So we have an expert team who provides them the liquidity, who provides them the course in their ETF. And in return, they give us very good flows and good business. So this is how we are getting empanelment in few companies.
But overall, good research. We have extremely good research team. We have more than 8 people in our research, and we are trying to expand it to 15 people by the next 6 months. So very good research, good research team is helping us -- helping them in their strategies is, again, one point where we're getting the empanelment.
And also some foreign clients where they trade heavily on the derivative side and Share India has hands-on experience on the risk management and delivering the large derivative orders. So putting all these things, expertise on derivative side, good research, good -- helping them in their ETF products -- all these things helping us in getting the empanelment and good clients onboarding.
Understood. Understood. Just one last question, sir. So in terms of our mutual fund distribution, we have more than 300 branches already. So is there any -- if you could give some color on what we are looking at in terms of our network of branches or any partnership with any other institution to expand our geographical reach for mutual fund distribution.
Abhinav, you want to answer?
Yes, sir. So I think what you are seeing is mutual fund branches essentially is accumulation of all the franchisee and AP business essentially, right? So that is the business model that essentially works in an off-line independent financial instrument distribution.
Going forward, we -- as I said, we would be a lot more focused on our product because currently, we have different products for mutual fund and broking. These 2 products will be merged eventually. And the process has already started. We would be looking at a pan-India basis.
But as far as having any structural agreement with any third party on a larger size, we look at it on a case-to-case basis. Currently, nothing is there on the table of the Board or on any executive team for such kind of an arrangement with third party.
All right, sir. Fair enough. Sir, our EBITDA margin has dipped slightly. So if you could shed some light on what can be expected in a ballpark range for the second half of this year?
Sir, should I answer that?
Yes, yes. Abhinav, please carry on.
Yes. So if you remember our past commentary as well, we have always maintained that the previous margins were at an all-time high, and we would be only able to maintain those margins. And we have been able to do that. Earlier, our margins were -- in terms of PAT margin, we were at somewhere around 30%. Last quarter, the number dropped to 26%. This quarter, it has stabilized and has seen an upward traction of around 27%.
While we were doing 26%, we list out the reasons, which included a lot of expenses for these ancillary businesses that we are talking about, including the institutional business and including the merchant banking businesses, which are initially cost heavy at the -- when they are in the gestation -- in the initial period.
And going forward, we believe that the similar PAT margins would be sustainable. We are -- so we would be -- in terms of guidance, we would be able to maintain the similar margins that we would expect going forward as well.
Thank you very much. I now hand the conference over to Mr. Kamlesh Shah for closing comments.
Yes. I would like to once again thank all the participants for participating in large numbers. Your trust is important for us. Together, we shall take the company, Share India, to a new high. My special thanks to the entire team for conducting this investor call successfully and seamlessly. I once again wish you all a very happy festive season. Enjoy and God bless us all. Thank you very much.
Thank you very much. On behalf of Share India Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
We just want to say thank you, everyone. Happy Diwali, and stay safe. Thank you.
I wish everyone a Happy Diwali. Thanks a lot for the call. Thank you.
Thank you, everyone.