Money & Banking

Incremental inflow in capital market to be from tier 2, 3 towns: ICICI Securities

Our Bureau | | Updated on: Mar 19, 2018

A majority of the incremental inflows into capital market will come from tier II and III towns, said Ajay Saraf, Executive Director, at the ICICI Securities IPO roadshow on Monday | Photo Credit: Ajay Saraf Executive Director ICICI Securities Ltd

The Indian capital market is likely to witness steady inflows in the medium to long term following formalisation of economy post demonetisation.

According to Ajay Saraf, Executive Director, ICICI Securities, a majority of the incremental inflows into capital market will come from tier II and III towns.

“Formalisation (of economy), which has happened post demonetisation, has helped channelise inflows into capital market. In medium to long term we see steady inflows into capital market,” Saraf told newspersons at the company’s IPO roadshow here on Monday.

The net inflows into equity mutual fund in February 2018 was close to ₹16,200 crore.

According to Ketan Karkhanis, Head, Retail Sales, ICICI Securities, while the top 30 cities accounted for a major share of the total assets under management in equity mutual fund, incremental growth in inflows was coming from tier II and III towns.

ICICI Securities would look to tap this growth coming from smaller towns by expanding its reach, either by way of direct branches or through its network of independent financial advisors (IFA) and sub broker model.

The company also plans to focus on distribution of financial products like mutual funds in order to diversify its revenue mix and reduce volatility.

“Our brokerage income as a proportion to total revenue has come down to 64 per cent from about 70 per cent four years ago and the share of other income sources, including distribution and investment banking, has increased to around 36 per cent (up from 29 per cent),” Saraf said.

The price band for the company’s IPO, which is set to open on March 22, has been fixed from ₹519-520 per equity share. The proceeds from the offer will be headed to the bank.

Published on March 19, 2018
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