Detailed Rationale

Crisil Ratings has assigned ‘Crisil A1+’ rating to Rs 250 Crore commercial paper of Share India Securities Ltd (SISL; part of the Share India group) and reaffirmed its ‘Crisil A+/Stable/Crisil A1+’ ratings on the bank loan facilities and non convertible debentures.

 

The ratings reflect the comfortable capital position of the Share India group, the extensive experience of the promoters in the capital market business, which has supported the group’s market position, and its sound risk management practices. These strengths are partially offset by limited diversity in earnings with high dependence on proprietary trading income and vulnerability to regulatory changes and volatility inherent in the capital market business.

 

The Share India group has been operating in the capital market for more than 30 years and has a pan-India presence with a network of 275 branches and franchises as on September 30, 2025. The group is primarily engaged in strategy-based proprietary trading and high-frequency trading. The group also provides broking services to high-networth individuals, foreign portfolio investors and high-frequency traders. In recent years, the group has entered into merchant banking, lending, and distribution of financial products, to diversify its earnings. Given its long presence in the capital market, the group has established itself as one of the largest players in the proprietary trading business.

 

On the capitalisation front, consolidated networth and gearing were Rs 2,509 crore and 0.23 time, respectively, as on September 30, 2025, as against Rs 2,334 crore and 0.21 time as on March 31, 2025 (Rs 1,747 crore and 0.22 time as on March 31, 2024). Networth increased significantly over the past three years, supported by healthy cash accretion. The group had gross accretion of Rs 932 crore cumulatively between March 2023 and September 2025.

 

Proprietary trading activities account for 61% of the group’s income. The group reported total income of Rs 1,470 crore in fiscal 2025, as compared with Rs 1,483 crore in fiscal 2024 (Rs 1,099 crore in fiscal 2023).The company has reported a PAT of Rs 178 crore on a total income of Rs 690 crore for H1 of fiscal 2026 as compared to a PAT of Rs 227 crore on a total income of Rs 867 crore of corresponding period of the previous year. The cost to income ratio on gross basis increased to 71% during fiscal 2025, from 63% in fiscal 2024. However, it reduced to 66%, in the first half of fiscal 2026. The group’s ability to diversify the revenue profile while maintaining its cost to income ratio will remain a key rating sensitivity factor

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of SISL and its subsidiaries, collectively referred to as the Share India group, given their highly integrated business, strong operational synergies and common promoters and senior management.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

Extensive experience of the promoters

The promoters of the group --  Mr. Yashpal Gupta, Mr Parveen Gupta, Mr Rajesh Gupta and Mr Sachin Gupta -- have more than three decades of experience in the capital markets. Their strong understanding of market dynamics and healthy relations with customers and suppliers should continue to support the business. Furthermore, senior management personnel -- Mr Kamlesh Shah (managing director) -- has been in the industry for more than 26 years and is associated with the group for over three years. Ability of the promoters to offer solutions while adapting to changes helped the group retain clients and maintain scale of operations even during challenging market environment. Second generation of the promoters are involved in the daily operations of the group. Despite being active in proprietary trading activities, the group has not faced any loss or adverse impact in the past five years.

 

Sound risk management practices

The group has implemented sound risk management systems, which largely offset risks arising from uncertainties inherent in the trading and broking business. The group sets client trading limits upfront and monitors client exposure on a real-time basis. It generally limits trades to liquid scrips so that positions can be squared off quickly and hedges its arbitrage positions immediately. Trading strategies to be adopted by dealers are decided beforehand by the senior management and limits for fund allocation are set for each dealer. The risk department monitors trades on a real-time basis, to ensure dealers adhere to strategies and fund limits. The group adopts only market-neutral strategies and hedging levels are also 100%. Most of the trades are intraday and the group is not exposed to any overnight event risk. Furthermore, stop losses are defined in advance and there are simulation models, which indicate the unhedged risk undertaken by the trader.

 

The group has developed in-house algorithm software, which can perform high-frequency trades seamlessly with minimal human intervention. Moreover, the management has a risk-averse approach to trading and there are no directional trades executed. The management maintains sufficient liquidity for placing margins. The trades are executed through automated algorithmic software, which calculates the hedge ratio considering market volatility and volume and the position is hedged automatically. All these risk measures have supported the financial performance of the group, resulting in nil write-offs and negligible receivables of over six months in the past four years. Furthermore, adequate risk management helped avert losses, as is evident in consistent profits for the past nine years.

 

dequate capitalisation with conservative gearing policy

Consolidated networth and gearing were Rs 2,509 crore and 0.23 times, respectively, as on September 30, 2025, as against Rs 2,334 crore and 0.21 time as on March 31, 2025 (Rs 1,747 crore and 0.22 time as on March 31, 2024). Networth increased significantly over the past three years, supported by healthy cash accretion. The group had gross accretion of Rs 932 crore cumulatively between March 2023 and September 2025. Gearing remained below 1 time during the past six years because debt has been availed largely to fund the margin trading facility of clients. Gearing is not expected to increase materially over the medium term even as the group scales up operations.

Key Rating Drivers - Weaknesses 

Average earnings with high dependence on proprietary income

The Share India group has historically been highly active in proprietary trading activities. Extensive experience of the promoters and top management has helped build a proprietary trading desk. However, high focus on proprietary trading has resulted in a skew in revenue, with proprietary trading accounting for 70-80% of revenue during the past eight years. The group reported total income of Rs 1,470 crore in fiscal 2025, as compared with Rs 1,483 crore in fiscal 2024 (Rs 1,099 crore in fiscal 2023). Most of the revenue growth has come in the recent past and the ability of the group to sustain the same will be monitorable. However, during the second half of fiscal 2025, the overall cost to income ratio saw some correction due to impact on revenue profile owing to multiple regulatory changes in the broking industry. Apart from focusing on expanding the broking business, the group is also looking to diversify revenue by enhancing distribution activities of financial products such as mutual funds and insurance. Income from other distribution products should increase over the medium term. Ability of the group to steadily diversify revenue and generate sufficient earnings from sources other than proprietary trading will be monitorable. 

 

The cost to income ratio on gross basis increased to 71% during fiscal 2025, from 63% in fiscal 2024. However, it reduced to 66%, in the first half of fiscal 2026. Additionally, the capital markets remain inherently cyclical and sharp falls or volatility may result in slowdown in trading activities (particularly by retail investors). As the revenue is highly dependent on capital market activities, with broking and proprietary trading accounting for more than 90%, it is highly susceptible to market risk resulting in significant volatility in earnings. Trading activity in capital markets is driven by economic, political and social factors guiding investor sentiments. Global factors also influence the fortunes of the domestic market. However, the group’s long track record in the proprietary trading segment is a strong mitigant. The group has reported positive income over the past nine years. However, considering this inherent cyclicality, ability of the group to sustain its earnings profile and healthy cost-to-income ratio will remain a key rating sensitivity factor.

 

Exposure to uncertainties inherent in capital-market-related businesses, including regulatory changes

The broking industry has seen constant regulatory revisions in the past couple of years. With the objective of enhancing transparency and limiting the misuse of funds, the Securities and Exchange Board of India (SEBI) introduced a few regulations in the past 3-4 years. Some of these include an upfront margin collection for intraday positions and limiting the use of power of attorney, with the most recent being a revised Equity Index Derivatives Framework that is expected to hit derivatives volumes, ultimately impacting revenue and profitability of brokers. This development comes alongside a revision in the transaction charge structure introduced by market infrastructure institutions on September 27, 2024, which directly impacts profitability of brokers, especially for discount brokers. However, as Share India is largely into proprietary trading, this regulation has not materially impacted the overall operations on an on-going basis. Furthermore, with an aim to increase investor protection and market stability, SEBI has introduced measures to be implemented in a phased manner. These include the upfront collection of margin premium, removal of cross margin benefit on offsetting positions, intraday monitoring of index derivatives position limits, increase in minimum contract size, increase in margin on short options contracts and, lastly, limiting weekly index derivative products to just one benchmark index per exchange. Additionally, securities companies have had to absorb the impact of the increased in long-term capital gains, short-term capital gains and particularly of the securities transaction tax (STT) announced as part of the Union Budget 2024-2025.

 

As far as SISL is concerned, the business is primarily confined to proprietary business as of now, with gradually increasing share in retail broking. However, some of the recent regulations, particularly around higher STT charges, reduction in weekly index expiry derivative products, which affects the high-frequency trading business and lastly any prolonged decline in derivative volumes would have a direct impact on the business. Crisil Ratings believes that these regulations are expected to benefit the industry with increased transparency and de-risk the broking and trading platform for retail customers. Going ahead, the ability to adapt to the dynamic regulatory environment while continuing to grow their business will be monitored on an ongoing basis.

Liquidity Adequate

Liquidity is adequate for the current scale of operations, given the absence of any fund-based borrowing or fixed maturing debt. All the bank facilities are for working capital and are matched against exposure to trade. As on September 30, 2025, the company had sanctioned a bank guarantee limit of around Rs 2,280 crore to manage margin requirement, backed by fixed deposits. The group also has a sanctioned intraday limit of Rs 2,300 crore. Cash and equivalents stood at Rs 392 crore as on September 30, 2025. The proprietary trading book is liquid, which means that the group has the flexibility to square off its position in a short timeframe to meet any liquidity requirement.

Outlook Stable

The Share India group will continue to benefit from the extensive experience of the promoters and its comfortable capital position.

Rating sensitivity factors

Upward factors

• Cost-to-income ratio improving to below 50% on a steady-state basis
• Increase and diversification in revenue while sustaining profitability

 

Downward factors

• Decline in earnings or cost-to-income ratio increasing to more than 95%
• Drop in market share, impacting revenue
• Change in regulatory environment, weakening the business and financial risk profiles

About the Company

Incorporated in 1994, the Share India group provides a wide array of financial services such as stock broking, commodity broking, mutual fund distribution, currency derivatives broking, portfolio management and research analysis to its retail and institutional clients. It is a registered member of the National Stock Exchange (both cash and futures and options segments) and Bombay Stock Exchange, Multi Commodity Exchange of India Ltd, National Commodity & Derivatives Exchange Ltd, Indian Commodity Exchange of India Ltd and depository participant of National Securities Depositories Ltd and Central Securities Depositories Ltd.

 

Since 2019, the group started expanding its business portfolio. Merger with the Total group in 2019 helped expand the business significantly. The Share India group has also diversified its portfolio by entering mutual fund and insurance distribution and lending and merchant banking services. To further scale up and diversify revenue, the group acquired two financial technology entities namely Algo wire Trading Technologies and UTrade solutions. With these acquisitions, the group intends to provide financial analytics, advisory and trading platforms to retail clients. The company is in the process of acquiring Silver Leaf Capital Services Limited., subject to requisite approvals, including that of the  National Company Law Tribunal (NCLT).

Key Financial Indicators:(Consolidated)

As On/For the period ended	Unit	H1 FY 26*	FY 25	FY 24	FY23	FY22
Total income	Rs crore	691	1,470	1,483	1,099	871
Profit after tax	Rs crore	177.6	328	426	330	202
Cost to income	%	66%	71%	63%	61%	61%
Return on networth	%	15%#	16%	31%	45%	56%
Gearing	Times	0.23	0.21	0.22	0.19	0.42

*Provisional figures

#annualized

Status of non cooperation with previous CRA:
SISL has not cooperated with INFOMERICS which have classified the company as non-cooperative through release dated Jun 02 2025. The reason provided by INFOMERICS is lack of availability of adequate information / annual surveillance fee and the resultant uncertainty around its credit risk.

Any other information: Not applicable