Arihant Capital Markets is a financial services firm that has spent over three decades turning the business of investing into something a retail customer in a small Indian city can actually use - it was founded in 1992 by Ashok Kumar Jain with exactly that mission, to make investing understandable and accessible to all. From a single stock-broking office in Central India, it has grown into an integrated platform that now serves over 2.5 lakh clients across more than 300 cities, combining a network of 1,000-plus business partners with a fast-growing digital app. The recurring approach that explains everything else is a “client first” culture built on physical trust in underserved markets, which the company is now wiring into a technology-led super-app - it wins by being the local expert that also happens to have a 4.5-star digital storefront. # Business segments Three engines power the business - a retail broking and wealth-distribution network that is the dominant cash generator, a small but active merchant-banking practice for corporate clients, and a margin-funding book that oils the whole machine - all soon to be streamlined under a group restructuring. ## 1. Retail broking and digital platforms: the main engine in tier-2 and tier-3 India **A high-touch network of relationship managers in smaller cities feeds clients into a flat-fee digital app, so the company earns brokerage whether the customer walks into an investment centre or trades on a phone.** - **Physical reach where trust is won in person** - the company operates through 1,000-plus business partners and 700-900 investment centres spread across over 200 cities, with 56% of revenue and 70% of its client base coming from tier-2 and tier-3 towns. Experienced relationship managers in these centres deliver personalised advice backed by in-house research, which is how the firm converts first-time investors into long-term clients. - **A digital storefront for the self-directed investor** - the Arihant Plus mobile app, launched in late 2022, lets customers trade equities, derivatives, commodities, currencies, and IPOs on a flat-fee plan, with a 4.5-star rating on the Play Store. The app packs advanced order types - basket, bracket, cover, and SIP orders alongside a margin trading facility - so a do-it-yourself trader gets institutional-grade tools without picking up the phone. - **Onboarding built for speed, not paperwork** - an in-house digital KYC platform called Arihant EKYC pulls identity from Aadhaar, PAN, and DigiLocker APIs to open an account in minutes, with data encrypted both in transit and at rest. That frictionless start is critical because the company’s growth strategy explicitly targets new-to-market investors who would walk away from a cumbersome process. - **The technology stack is becoming a moat** - the company runs a modular, microservices-based architecture on Apache Kafka, Spring Boot, and Redis, built partly by an in-house engineering team to cut vendor dependency and speed up feature releases. It is now constructing an AI-powered “Super App” that will unify all services - broking, mutual funds, portfolio management - under one predictive, personalised interface. ## 2. Distribution of financial products: the wallet-share multiplier **The same branch network and app that execute trades also sell third-party mutual funds, bonds, and portfolio management services, earning commissions without taking inventory risk.** - **One client, many products** - the company distributes mutual funds, fixed-income securities, NPS (National Pension System) accounts, PMS (Portfolio Management Services), and alternative investment funds, all sourced from external asset managers. Because the relationship manager already knows the client’s risk profile from their broking activity, cross-selling a mutual fund or a bond becomes a natural conversation rather than a cold call. - **A dedicated mutual-fund app was the first digital step** - as early as FY20, the company launched a mobile application called Wealth4Me for mutual-fund investing and goal planning, signalling that product distribution would eventually move beyond the branch counter. - **Commission income with no balance-sheet burden** - the company earns distribution commissions that are recognised when the securities are allotted, so revenue arrives upfront without the credit exposure that comes with lending. This business is being transferred to Arihant Money Marvel Wealth Management Limited under the 2025 group restructuring, which suggests management sees it as a distinct, scalable unit. ## 3. Margin funding and NBFC lending: the fuel for trading activity **The company lends money against shares and securities so its broking clients can take larger positions, earning a steady interest spread on a secured loan book.** - **Lending is tied to the brokerage ecosystem** - clients receive exposure limits based on the collateral of securities they hold with the company, which means the loan book is secured and the borrower is already a known broking customer. Interest income accrues on these funded amounts and on delayed client payments, turning the natural settlement cycle of the broking business into an interest-earning opportunity. - **Funded by private debt, not just equity** - the company has raised money through secured, unlisted non-convertible debentures placed privately, with aggregate NCD issuance reaching ₹43.25 crore in FY24, giving it a dedicated funding line for the margin book. The loans are primarily at fixed interest rates, so the company is not significantly exposed to swings in market interest rates. - **Credit risk is managed with old-fashioned limits** - the company sets caps on individual counterparties and monitors exposures actively, while also maintaining fixed deposits pledged with exchanges and banks to meet margin requirements. Under the 2025 composite scheme, the NBFC business is first being amalgamated into ACML, and then the combined entity's non-retail broking businesses (including NBFC) are demerged into a separate listed entity, which will specialise in NBFC - a structural move that isolates the credit book from the broking franchise. ## 4. Merchant banking and advisory: the corporate fee engine **A small Category I merchant-banking practice earns advisory fees by taking companies public and executing rights issues, with a pipeline of mandates that converts sporadically into lumpy revenue.** - **IPO and rights-issue execution** - the division completed one SME IPO, two rights issues (including a ₹550-crore issue for Jyoti Structures), and two open offers during FY25, alongside several advisory assignments. In the prior year, it successfully launched a main-board IPO for RBZ Jewellers, demonstrating that the team can handle both small and main-board listings. - **Fees tied to milestones** - advisory fees are recognised over the service tenure, but success-linked fees are booked only when the milestone is achieved, so revenue arrives in chunks rather than as a smooth stream. The division has signed several mandates for SME and main-board IPOs that are in advanced stages, creating a visible - if uncertain - future revenue pipeline. - **Being separated to stand alone** - under the restructuring approved in August 2025, the merchant-banking business is being demerged and transferred to a wholly owned subsidiary of the seller for cash consideration of ₹5.98 crore, which will let it operate with its own capital and management focus. # Group structure and partners **The company is simplifying a historically complex web of subsidiaries into two listed entities - one for retail broking, one for lending - while the founding Jain family retains tight control with nearly 70% ownership.** - The promoters and promoter group held 69.81% of the shares as of March 2024, with Ashok Kumar Jain as Chairman and Managing Director and his son Arpit Jain as Joint Managing Director and CEO (w.e.f. November 07, 2024). - A composite scheme of arrangement approved by the board in August 2025, but still subject to shareholder, creditor, NCLT, and regulatory approvals, will amalgamate the NBFC subsidiary Arihant Financial Services into the parent, then demerge all non-broking businesses into a new listed entity called Arihant Elite Financial Solutions, with shareholders receiving one share in the new entity for every share they hold in Arihant Capital. - The group has actively pruned non-core subsidiaries - it sold its insurance-broking unit to Lockton Overseas in FY25, its investment-advisory unit in FY24, and its asset-management and real-estate subsidiaries in FY22 - leaving a cleaner structure focused on broking, lending, and advisory. - **The company holds a 27.23% stake in Electrum Capital Private Limited, an associate entity, and during the quarter ended September 30, 2024 issued 50 lakh convertible warrants to promoter-group HUFs at ₹68.50 per warrant, reinforcing family control while bringing in growth capital.**