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HDFC Securities Limited Unlisted Shares

Annual Report: 2024

Year: 2024

Annual Report Summary

Innovating and Adapting for Success: HDFC Securities Annual Report 2024

Overview: HDFC Securities, a subsidiary of HDFC Bank, emphasizes innovation and technology in India’s stock broking sector. Since its establishment in 2000, it has aimed to meet the diverse needs of retail and institutional investors.

Key Highlights:

  • Market Growth: India is projected to become the third-largest economy by 2027. The number of demat accounts reached 151 million in March 2024, with an average of 3.1 million new accounts opened monthly.
  • HDFC SKY Launch: HDFC Securities launched HDFC SKY, a mobile trading app designed to support investors with various trading instruments and real-time market data. The app features caution nudges, customizable watchlists, and a flat pricing model.
  • InvestRight: The InvestRight app offers tools for making informed investment decisions, featuring real-time event updates and research-backed information.

Financial Performance:

  • Brokerage and Fee Income: Increased to ₹1,597 crore in FY24.
  • Profit After Tax (PAT): Increased to ₹951 crore in FY24.
  • Earnings Per Share (EPS): Increased to ₹597 in FY24.
  • Total Active Clients: Reached 1.21 million.
  • Dividend Per Share: ₹510 in FY24.
  • CSR Spend: ₹22.06 crore.

Business Highlights for FY 23-24:

  • Digital Brokerage: 84% of brokerage attributed to digital sources.
  • Customer Base: 53,82,198.
  • Experienced Employees: Over 700 employees with 5+ years at HDFC Securities.
  • Trading Clients: 12,14,713 transacting clients.
  • MTF Book Size: ₹4,855 Cr.
  • Book Size at Year-End: ₹6,033 Cr.
  • Revenue per Employee: ₹84.54 lacs.
  • Active Transacting Clients: 1.09 million.
  • IPO Volume: ₹1,19,790.84 Cr.
  • Total Number of RMs: 1,400+.
  • Average Daily Turnover Increase: 113.42%.

Strategic Direction and Initiatives:

  • Technology Investment: HDFC Securities focuses on technology to enhance trading platforms and features, aiming to provide a comprehensive experience to investors.
  • Expansion to GIFT City: The company is setting up a subsidiary in Gujarat International Finance Tec-City.
  • Customer-Centric Solutions: The firm offers tailored products and services to meet diverse customer needs, including those of millennials, professionals, and senior citizens.

Regulatory Compliance:

  • The company geared up systems and processes according to SEBI's regulatory guidelines.
  • Regulatory changes are leveraged for strategic advantage, including T+0 settlement implementation.

Growth & Future Outlook:

  • The company reported a 2.5-fold growth in profitability over the past 4 years. The number of customers has crossed the 5 million mark.
  • The finance ministry expects the country’s GDP to more than double from $3.5 trillion to $7.3 trillion by 2030.

Third-Party Investment Success:

  • Mutual Fund: Established as one of the highest contributors among NDs in NFO business and doubled the SIP registration numbers.
  • SGB: Strengthened distributor position with BSE.

B2B Synergy:

  • Leveraged technology to enhance partner onboarding and provide high-tech upgrades to AP model.

Social Responsibility:

  • HDFC Securities engages in Corporate Social Responsibility (CSR) projects, focusing on education, healthcare, and environmental concerns.

Board and Management:

  • The report includes profiles of the Board members, including Neeraj Swaroop (Chairman), Dhiraj Relli (Managing Director & CEO), and independent directors such as Samir Bhatia and Malay Patel.
  • It also lists the senior management team.

Financial Statements & Audit:

  • The report includes audited financial statements as per IND AS, highlighting Total Income, Profit After Tax, and key financial positions.
  • Auditor's report by S.R. Batliboi & Co. LLP emphasizes compliance with accounting standards and internal financial controls. A Qualified Opinion regarding internal financial controls.

Additional Points:

  • Details of board meetings, composition of committees, and compliance with regulatory requirements are provided.
  • Detailed information on CSR activities, including project details and expenditure, is included.
  • The report also covers details of remuneration policies, employee stock options, and material related-party transactions.

The Indian economy is expected to grow strongly, supported by favorable conditions and government initiatives. HDFC Securities is committed to supporting financial inclusion and delivering value to its stakeholders.

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FAQ's

What are unlisted shares?

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Unlisted shares are stocks of companies that are not listed on any stock exchange, meaning they are not publicly traded. These shares are typically available for trade in the private market through brokers, and can offer unique investment opportunities.

How can I buy unlisted shares?

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You can buy unlisted shares through a broker or platform that specializes in unlisted share transactions. We provide a secure and easy way to purchase unlisted shares from top companies, ensuring a smooth transaction process.

What is the share price of unlisted companies?

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The share prices of unlisted companies can fluctuate based on various factors like market demand, company performance, and private transactions. You can check the latest share prices for unlisted companies on our website for real-time updates.

Are unlisted shares a good investment?

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Unlisted shares can offer higher growth potential, as they are typically not subject to the same market volatility as listed shares. However, they come with higher risk due to limited liquidity and availability of information. It's important to research thoroughly and consult experts before investing.

How can I sell unlisted shares?

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To sell unlisted shares, you can connect with a broker or platform that facilitates the sale of private stocks. We help investors buy and sell unlisted shares with ease, ensuring that your transaction is handled professionally and securely.

What are the risks of investing in unlisted shares?

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Yes, unlisted shares can eventually be listed on a stock exchange through an Initial Public Offering (IPO). This process allows the company to offer its shares publicly and be traded on major exchanges, potentially increasing liquidity and visibility.

What is the share price of unlisted companies?

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Gains from unlisted shares are subject to capital gains tax in India. Short-term capital gains (if held for less than 24 months) are taxed at your applicable income tax rate, while long-term capital gains (if held for more than 24 months) are taxed at 20% with indexation benefits. Always consult a tax advisor for precise tax implications.

How do I know the current value of unlisted shares?

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The value of unlisted shares is typically determined by private transactions, financial reports, and market demand. We provide the latest updates on share prices of unlisted companies, giving you the most accurate valuation available.

Is there a minimum investment amount for unlisted shares?

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The minimum investment for unlisted shares can vary depending on the company and broker. Generally, the minimum investment is higher than for listed stocks, but we provide detailed information to help you make the best investment decisions.

Can I get a dividend from unlisted shares?

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Yes, unlisted shares may pay dividends if the company has declared them. However, since these companies may be in their growth stage, dividend payments are not always guaranteed. It's important to check the company's financial health before investing.

How do I know which unlisted shares are worth investing in?

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It's important to conduct thorough research on the company's financials, management, market potential, and overall business model. You can also seek professional advice from experts to help you choose unlisted shares with strong growth prospects.

Are unlisted shares taxed?

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Gains from unlisted shares are subject to capital gains tax in India. Short-term capital gains (if held for less than 24 months) are taxed at your applicable income tax rate, while long-term capital gains (if held for more than 24 months) are taxed at 20% with indexation benefits. Always consult a tax advisor for precise tax implications.

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