title in font 36...mf sip count in million mf revenue ` million 0.12 0.20 0.25 0.38 0.63 0.70 fy 14...

Business presentation

December 4, 2018

2

2nd largest non - bank mutual fund distributor2

Largest equity broker in India1

powered by ICICIdirect

Garnering scale in wealth management business

Strong online presence aided by pan India distribution

Leading investment bank in equity capital market

1. By brokerage revenue and active customers on the NSE

2. Source: AMFI (in terms of revenue), period: FY18

ISEC Today

3

Agenda

Industry overview and our performance

Strategy

4

India: Financialisation and equitisation of savings

1.8% 1.6% 1.6% 1.6%

3.0%2.6%

8.0%

FY12 FY13 FY14 FY15 FY16 FY17 FY18

Include investment in shares and debentures of credit / non-credit societies and investment in mutual funds

(other than Specified Undertaking of the UTI) (Source: RBI, MOSPI)

Growing Incremental investments in shares & debentures High growth Across financial asset Classes#

100 100 100

165

131

95

149 149

116

200 213

146

348

259

162

Equity + Derivative

ADTO

MF AUM Insurance Premium

(FY)

FY14 FY15 FY16 FY17 FY18

1% 1%

4%

6%

9%

19%

24%

9%

South

Africa

Russia Japan Brazil USA India China World

India Household saving highest among growing economies

as % of GDP 2016

Source: RBI, IRDA, AMFI, NSE, BSE, EIU; ADTO: Average daily turnover; # Indexed to 100 in FY 14

In ` trillion

6.47.3

8.3 8.8

11.310.3

31.1%32.8%

36.4% 36.1%

46.1%

41.5%

0%

10%

20%

30%

40%

50%

0

2

4

6

8

10

12

FY12 FY13 FY14 FY15 FY16 FY17

Financial Savings Financial Savings as a % of Household Savings

Rising Financial Savings

5

Market witnessing short term headwinds

Apr-17 Jul-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18

Nifty Index

9,238

11,130

9,998

11,739

10,153 10,930

Apr-17 Jul-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18

Midcap Index

19,920

17,333

21,732

18,474

17,154

20,290

19,098

Secondary market witness higher volatility

Subdued primary market, fund raising through equity slowed down

All amounts in ` Billion; Source: Prime Database

84 28 145

282

888

155

3 8

24 25

47

11

0

50

-

200

400

600

800

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

I P O/F P O/ InvIt

Issue Amount No. of IPO

139 288

144 137 622 56

17

45

20 22

53

9

-

50

100

-

200

400

600

800

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Q I P/I P P

Issue Amount No. of QIP

6

Agenda


Strategy

Retail: Broking

Institutional

Financial Performance

7

• Providing seamless experience

• Mutual beneficial relationship with

ICICI Bank

• Presence in 3,000+ ICICI Bank

branches

• Visibility - consolidated portfolio view across asset classes

• Analytics – ability to track multiple portfolio parameters; in-depth

portfolio analysis reports and tax implications

• Accessibility - In-house designed mobile application providing device

agnostic access

• Three tier disaster recovery system with built-in redundancy

• High speed switching between principal and backup

systems

• Fully integrated risk management systems

• Real time tracking of trigger prices

• Enables dynamic changes in margin requirements

3-in-1 Platform

70%

Average daily

utilization limit to

increase capacity

>95%

brokerage

transactions

performed online(1)

>2.1 mn orders and trades

processed per day at

peak usage

>29% cash equity

transactions

through

mobile devices(2)

Amongst the Pioneers in E-Brokerage Business in India

Comprehensive Portfolio Management Tools Robust Real-Time Risk Management

Retail focused technology platform: ICICI direct

Plug-and-play architecture facilitates easy integrations enabling quick product launches

Integrated platform providing seamless trading facilities through ‘single login’

(1) By notional value in H1-19; (2) Compared to 8% of cash equity transactions on NSE Mobile in H1-19 (Source: SEBI and NSE)7

Broking: Growing retail participation

8 Source: NSE, BSE, SEBI, NSDL, CDSL; ADTO – Average daily turnover

52% 54% 52%

58% 58% 56%

34%30%

37%

44% 46% 47%

FY14 FY15 FY16 FY17 FY18 H1-19

Equity Derivative

22 2325

28

3234

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Increased retail participationRise in demat accounts

In million

32% 32% 32% 34% 31% 27%

68% 68% 68% 66% 69% 73%

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Delivery ADTO Non-delivery ADTO ADTO

11% 12% 11% 8% 7% 5%

89% 88% 89% 92% 93% 95%

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Equity Derivative

Growing share of trading volume Secondary market volume growth led by derivative volume

In ` billionIn ` billion

131 212 200 241 336 350970 1,368 1,525 2,409 4,143 5,735

Broking: Regulatory and business environment

9

• Compliance: Protecting client interest, raising compliance standard

• Broadening market: Allowing new products and variants

• e-infrastructure: Enabling regulatory, payments and increasingly digital

ecosystem

Regulatory

developments

• Competition: Diverse access of competition

• Consolidation of market share with organised players

• Diversifying away from pure brokerage business model

Business

environment

More digital and democratised ecosystem

ISEC: Leading equity broker in India

10 #Source: NSE, Trailing 12 month

2.52.8

3.2

3.6

4.04.2

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Consistently growing operational clients base

In million

Active client in thousand#

Retail Brokerage (In ` million)

501

595560

618

798 844

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

4,621

7,027

6,070

7,019

9,174

4,218

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

44 65

101

187

372

510

FY14 FY15 FY16 FY17 FY18 H1-19

4.7% 6.6% 7.8% 9.0%4.5% 8.9%

Market Share

ADTO ` in billion

11

Agenda


Strategy

Retail: Investment products

Institutional


12

Digital one stop shop supported by physical

• Mutual Fund

• IPOs, OFS, public bond

offerings

• 3rd party corporate fixed

deposits

• National Pension System

• Life Insurance : ICICI Prudential

Life Insurance

• General Insurance : ICICI

Lombard General Insurance

• Loan products referrals

• Portfolio management services

• Alternate investment funds

Multiple 3rd party products supporting “one-stop shop” proposition

• Presence over 75+ cities with

~200 branches

• 1,450+ relationship managers

and product specialists

• Wealth management solutions

for HNIs/Family offices 350+

member team

• Over 600 cities with 6,200+

sub-brokers, authorized

persons, IFAs and IAs

• Significant presence in the

Tier-II and Tier-III cities

Nationwide Distribution Network

Investment Protection Assets/Wealth creation

As on 30th

Sep 18

Saving landscape: Increasing managed equity

13 Source: AMFI; Data Compass by CAMS, ~90-96% of Industry

8.310.8

12.3

17.5

21.4 22.1

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Mutual Fund AUM Growing share of B15 cities in MF AUM

439672

445

FY 17 FY 18 H1-19

More systematic retail participation through SIP

180399 560 956 1,477 1,520

9.0%

11.0%

13.6%

15.4%16.4%

16.0%

0%

5%

10%

15%

20%

0

500

1,000

1,500

2,000

Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18

Direct Plan Equity AUM % Share of Industry

Direct plan gaining market share

SIP flow in ` billion

(Exit AUM) in ` trillion

` billion

92 92 91 91 82 81

8 8 9 9 18 19

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Top 45 Others

Investment and protection witnessing traction

14 Source: IRDA, Prime Database, RBI, NHB, Industry estimates

774 884 1,0051,180

3,1433,281

3,669

4,185

FY 14 FY 15 FY 16 FY 17

Pvt Total

295348

410506

1,1961,131

1,387

1,750

FY 14 FY 15 FY 16 FY 17

Pvt Total

Life insurance industry growth led by private insurers Private players continue rapid penetration in individual

business segment

424

94

338295

51

272

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Retail debt mobilisation (` in billion) Housing Loan book Size ` trillion

8.9

10.7

12.4

14.4

16.8

FY14 FY15 FY16 FY17 FY18

First year premium `billion

Total premium ` billion

Wealth Management: Rapid growth

15 Source: SEBI

1.2

0.7 0.81.1

1.6 1.5

0.4 0.5 0.60.8 0.9 1.0

1.4

1.8 1.71.9

2.3

1.8

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Discretionary Non-discretionary Advisory

43 41 46

71

114128

5 3 4 5 5 6103 2 1 2 2

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Discretionary Non-discretionary Advisory

PMS (Exit AUM) in ` trillion PMS clients in thousand

131 226389

843

1,6511,796

40 95227

410

853 976

32 74 182351

614749

FY 14 FY 15 FY 16 FY 17 FY 18 Q1-19

Commitments raised Funds raised Investments made

Activities of AIF in ` billion

Investments: Regulatory and business environment

16

• Reducing cost to customer: Reduction of TER for mutual funds and decline

in first year life insurance commissions

• Right selling focus: Trail based commission structure for MF

Regulatory

developments

• Backward/Forward integration by manufacturers/ partners

• Fintech, new entrants

• Broadening market: Increasing penetration in B30 (from B15); awareness

campaigns

Business

environment

Focus on simpler, cheaper, client focused growth

ISEC: 2nd largest non - bank mutual fund distributor

17

76

120

160

212

302

347

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

43

75

108

143

218

258

FY14 FY15 FY16 FY17 FY18 H1-19

MF Average AUM in ` billion Average Equity AUM in ` billion

MF SIP Count in million MF Revenue ` million

0.12

0.20

0.25

0.38

0.63

0.70

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

789

1,540

1,117

1,657

2,847

1,504

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

SIP Count: Triggered as on last month of period

18

ISEC: Life Insurance

Revenues for FY 18 & H1-19 on Ind AS & before FY 18 on Indian GAAP, CAGR: FY18 vs FY14

Life Insurance Revenue in ` million Life Insurance Premium in ` million

371

465

586

713

483

210

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

4,129

5,625

6,816

8,390

9,038

3,821

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Premium growth of CAGR 22%

High persistency

19

ISEC: Distribution Business helping diversify revenues…

Revenues for FY 18 & H1-19 on Ind AS & before FY 18 on Indian GAAP, CAGR: FY18 vs FY14

1,867

2,669 2,541

3,497

4,665

2,440

FY14 FY15 FY16 FY17 FY18 H1-19

Distribution

Distribution revenue ` million

Distribution revenue CAGR 26%

Revenue contribution increased to 27% from 23%

… leveraging retail franchise

20

735

830 830

983

1,237

1,105

FY-14 FY-15 FY-16 FY-17 FY-18 H1-19

Active client (All products) in thousands

Active client CAGR of 14%

CAGR: FY18 vs FY14

21

Agenda


Strategy

Retail


Institutional: Broking

Institutional broking: DIIs becoming more relevant

22

10%

12%

14%

16%

18%

20%

22%

Sep

-15

Dec-15

Mar-1

6

Ju

n-16

Sep

-16

Dec-16

Mar-1

7

Ju

n-17

Sep

-17

Dec-17

Mar-1

8

Ju

n-18

Sep

-18

FPIs Domestic institutional

Source: NSDL, SEBI, Bloomberg, I-Sec research

Holding % of market capitsalistion Equity Flow in USD billion

13.7

18.1

-1.5

8.4

3.4

-4.1

-9.0

-3.6

12.3

4.5

17.7

8.3

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

FPI DII

Equity ADTO in ` billion Derivative ADTO in ` billion

28

44 4347

54 53

610 11

15

27 28

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

FII DII

232 259 319523

767

1,131

2 6 12 15 31 39

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

FII DII

23

ISEC: Growing scale of Institutional broking business

339

527 537

740

1,069

553

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

CAGR: FY14 vs. FY18; Revenues for FY 18 & H1-19 on Ind AS & before FY 18 on Indian GAAP

• Significant India coverage

supplemented by Asia Pacific

and USA

• Growing Direct market access

business

• Research coverage of 230+

Indian stocks across sectors

• Macro and thematic coverage

• ~40 member research team

• Leading procurement in IPOs,

QIPs, OFSs and Block deal

• Strong Corporate Access

to compliment research

• Strength in execution

CAGR: 33%

Servicing large cross-section of institutional clients

Institutional Brokerage (in ` million)

24

Agenda


Strategy

Retail


Institutional: Corporate Finance

113

97

74

87

157

29

FY14 FY15 FY16 FY17 FY18 H1-19

337

643 579

536

1,899

259

FY14 FY15 FY16 FY17 FY18 H1-19

25

ECM issuance mobilisation CAGR 54%

CAGR: FY14 vs FY18; ECM : Includes IPO/FPO/InvIT, QIP/IPP, Rights Issue, Offer for Sale; Source: Prime database

No. of ECM issuance CAGR 9%

Surge in ECM markets in 5 years

ECM Issuance mobilized (` in billion) ECM Issuance

26

ISEC: Leading Investment Bank in India

Revenue crossed ` 1.4 billion in FY18,

CAGR 25%

Increased traction in advisory business

Robust deal pipeline

593638

834

1,198

1,440

606

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

CAGR: FY14 vs. FY18; Revenues for FY 18 & H1-19 on Ind AS & before FY 18 on Indian GAAP

Corporate Finance revenue (in ` million)

10083

182202

540

99

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

19

1615

16

27

5

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

ECM Issuance mobilized (` in billion) ECM issuance

Source: Prime database; ECM : Includes IPO/FPO/InvIT, QIP/IPP, Rights Issue, Offer for Sale

27

Agenda


Strategy

Retail


Institutional

Consistent financial performance

28

8,123

12,095 11,246

14,042

18,610

8,940

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Revenues & PAT for FY 18 & H1-19 on Ind AS & before FY 18 on Indian GAAP

Revenue ` In million

908

2,939

2,387

3,386

5,535

2,680

FY 14 FY 15 FY 16 FY 17 FY 18 H1-19

Profit After Tax ` In million

Financial performance: Other key parameters

29 Revenues & PAT for FY 18 & H1-19 on Ind AS & before FY 18 on Indian GAAP

Diversification: Increasing non broking revenues share

Return on equity

38%

100%

65%

77%82%

59%

FY14 FY15 FY16 FY17 FY18 H1-19

Equity Dividend ` million

61% 62% 59% 55% 55% 53%

39% 38% 41% 45% 45% 47%

FY14 FY15 FY16 FY17 FY18 H1-19

Brokerage (excluding interest & others) Others

Cost To Income Ratio: Operating leverage

82%

63%67%

63%

54% 54%

FY14 FY15 FY16 FY17 FY18 H1-19

Equity Dividend ` million

400

1,611 1,611 2,050 3,028 1,192

47%55%

67%61% 55%

44%

0%

10%

20%

30%

40%

50%

60%

70%

80%

-

700

1,400

2,100

2,800

3,500

FY14 FY15 FY16 FY17 FY18 H1-19

Dividend (excl DDT) Dividend payout ratio (excl DDT)

30

Agenda


Strategy

31

Agenda


Strategy

Institutional

Retail

32

Key trends

Demographics

Socio economic changes

Affluence

Digitization

More savers, Young savers , Bharat savers

Long term orientation: Life cycle mindset

Stable Inflation: Diversified asset choices

Rising Affluence: Return & cost focused,

Knowledgeable: Research & information

Adoption, Infrastructure, Speed/Pace of change

Partnering wealth creation across customer lifecycle

33

Customer First : Building a partnership of trust

Life cycle basedAcross market

verticals

Across

investment,

protection and

wealth creation

Systematic and

knowledge

based

Client Acquisition

34

Increase reach by strengthening on successful

partnership with Bank:

• Increasing bank branch coverage

• Integrating with bank for tab based account

opening

• Digital integration

Reach

New age customer:

• Invest in Brand

• Create digital pull and delivery using

e-infrastructure

Brand and digital pull

Focused on self employed across the country:

• Delivery through select branch network

• Greater focus on Business Partner channel

Bharat focused

Improving reach:

• Targeted geographical presence of Wealth &

premier location

• Reaching NRI customers online and offline

Affluence

Client Engagement

35

• Complete suite across market verticals

• Enhance current range

• Enhance choice: adding partners on

different products

• Advisory based solution for UHNI

Product choice

• eATM: Balance pricing with value proposition

• Make tangible liquidity/brokerage benefit by

offering alternate product and features

Price

• Personalized user experience

• Personalized offerings

• Managing wealth holistically including tax and

portfolio management

Personalization

• Reward Programme to strengthen relationship

with loyal customer base

Loyalty

Digital Openness

36

Acquisition and

Engagement

Distribution

Risk and Operations

Technology

Readiness

Employee Outlook

Marketing and customized

delivery

Device agnostic online

trading & investment

platform

Multiple payment

methods (UPI)

CRM SolutionsImproving personalization

using analytical tools

Integrated risk

management platformMid and back office

Seamless integration with

partner systems

Building partnership for

future development

Broadening appeal for

new age workforceImproving productivity

Technology in Support for

Customer Lifecycle and Trust Manager

37

Guiding Principle

Customer Lifecycle and Trust

Customer

Acquisition

Customer

Engagement

Enabler

Digital Openness

38

Agenda


Strategy

Institutional

Retail

Key Trend : Corporatisation of entrepreneurship

39

Changing Corporate structures Life-cycle approach

• Maturing business models

• Insurance, Asset Management Companies, Small Finance Banks, Health care

• Family ownership giving way to professional management

• P/E ownership going up

• Government ownership declining

Intermediation of savings Greater role for domestic institutions

Capital Market and Advisory Strategy

40

Private Equity /

Promoter Financing

Mergers and

Acquisitions Advisory

Equity Capital Markets

Strengthening the IPO Pipeline &

delivering high quality IPOs

Focus on Block Deals for

investors in our IPOs

New Products: Real Estate

Investment Trust (ReITs) and

Infrastructure Investment Trusts

(InvITs)

De-Leveraging, Asset

Monetisation, Non-Core assets,

Structure Finance

Domestic corporates keen on

inorganic growth / Sector

Consolidation

Strengthen international IB

network for Cross Border

opportunities

Focus on strengthening

relationships with PEs

Facilitating promoter financing

and PE exits

Leverage relationship of ICICI group

Institutional broking strategy

41

• Differentiated, high value

and timely access

• Access to policy makers

• Breadth: 250 cos. under

coverage compared to 200

in FY17

• Depth: High quality hiring

• Expand FII business

• Alliance with Global players

to tap FIIs business

• Strengthening of in-house

algorithmic capabilities and

product customizations

Leverage strength in DII for expanding FII business

Gain market share Research Enhanced Corporate Access

• Differentiated, high value

and timely access

• Access to policy makers

• Breadth: 250 cos. under

coverage compared to 200

in FY17

• Depth: High quality hiring

• Expand FII business

• Alliance with Global players

to tap FIIs business

• Strengthening of in-house

algorithmic capabilities and

product customizations

In summary

India

Growth story robust

Maturing economy and savings

Increasing corporatisation

Retail business

Life cycle & trust based approach to

drive customer acquisition and

activation

Digital openness

Drive synergies across all business

verticals

Institutional business

Grow on existing strength in ECM

and with DIIs; focus on advisory

business and FII sectors

ICICI Securities

42

Way forward

Client engagement

2 mn overall active client base

Diversification

Majority revenues from non equity

broking businesses

Operating leverage

Cost to income ratio below 50%

Shareholder value

ROE over 40%

Mission FY2022

43

44

Thank you

title in font 36...mf sip count in million mf revenue ` million 0.12 0.20 0.25 0.38 0.63 0.70 fy 14...

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