The com­pany’s fo­cus on us­ing tech­nol­ogy ef­fi­ciently, client ac­qui­si­tion and in­creas­ing busi­ness part­ner net­work au­gurs well for the stock

Dalal Street Investment Journal - - EQUITY ANALYSIS -

Aditya Birla Money (ABM) is one of those stocks that have de­liv­ered spec­tac­u­lar re­turns to their share­hold­ers. So, while Sen­sex and Nifty were touch­ing new highs, ABM was qui­etly out­per­form­ing the broader mar­kets.

ABM is in the busi­ness of of­fer­ing in­vest­ments and trad­ing in stocks and se­cu­ri­ties through its var­i­ous af­fil­i­a­tions with stock ex­changes. It of­fers port­fo­lio man­age­ment ser­vices to HNI and cor­po­rate in­vestors. ABM also caters to in­vest­ments in debt in­stru­ments and mu­tual funds through it dig­i­tal plat­form to di­ver­sify as­set al­lo­ca­tion. As a de­pos­i­tory par­tic­i­pant, ABM has eq­uity as­sets un­der cus­tody worth around ₹25,000 crore, cater­ing to over three lakh in­vestors who hold stocks and se­cu­ri­ties, mu­tual funds and In­sur­ance poli­cies in elec­tronic form.

Apart from the in­vestors who have been the big­gest ben­e­fi­cia­ries of a dream run in the stock mar­ket, the stock bro­kers and mu­tual fund dis­trib­u­tors also stand to ben­e­fit from the bullish mo­men­tum in eq­uity mar­kets.

The un­der­ly­ing bullish tone of the mar­kets has re­vived the IPO mar­kets in India and the IPO launches are al­ready touch­ing multi-year highs, which au­gurs well for com­pa­nies such as ABM. The re­tail par­tic­i­pa­tion is on the rise through mu­tual funds, even as the to­tal fo­lio count stands at 5.82 crore in May 2017. The data re­leased by AMFI said that the gross com­mis­sion earned by mu­tual fund dis­trib­u­tors nearly dou­bled in the past three years, ris­ing from ₹2,603 crore in FY14 to ₹4,987 crore in FY17.


Dur­ing FY17, av­er­age daily cash mar­ket vol­umes in­creased to ₹24,000 crore, as com­pared to ₹20,000 crore in the pre­vi­ous year, as the do­mes­tic eco­nomic re­cov­ery (along with global eco­nomic re­cov­ery) gained ground and eq­uity emerged as the preferred as­set class.

The daily de­riv­a­tives turnover in­creased sharply from ₹280,000 crore to ₹380,000 crore. The same can be at­trib­uted to the

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