Rationale

While assigning/reaffirming the rating, ICRA has taken a consolidated view of the business and financial profiles of Share India Securities Limited (SISL or the company), its seven subsidiaries and one associate company, together called the Share India Group (SIG or the Group). The assigned rating favourably factors in the long track record of the promoters in capital market related businesses and the Group's adequate profitability indicators and capitalisation profile for its current scale of operations. The rating is, however, constrained by the limited diversification in the business with high dependence on proprietary trading and exposure to the inherent volatilities in capital markets. The Group's track record of profitable operations provides comfort. Furthermore, SISL has been focusing on diversifying the Group's business and revenue profile in recent years by foraying into other businesses like lending and distribution. Going forward, SISL's ability to meaningfully diversify its revenue stream and maintain healthy earnings while managing the portfolio and market risk would be a key rating consideration.