Online Trading and Retail Brokerages in India: Dial E for E-Trading

by Anshuman Jaswal, PhD,  Sreekrishna Sankar, October 23, 2009
Industry Trends
Asia-Pacific

Abstract

India's online retail brokerage industry is a rapidly growing market with a number of opportunities for both retail brokerages and technology vendors. The share of e-trading is expected to rise from around 20% at present to 30% by 2012.

In a new report, Online Trading and Retail Brokerages in India: Dial E for E-Trading, Celent analyzes opportunities for the retail equity market in India. There has been 101% growth in per capita income between 2002-2003 and 2008-2009. Hosuehold savings have grown at an annual rate of 16.4% during this period. However, only 3% of the household savings is currently directed toward financial services. This number is expected to increase to 5% by 2015, representing a major opportunity for the retail brokerage market. Simultaneously, the stock market is becoming more popular, with the number of demat accounts (mandatory for trading in stocks) at an all-time high of 15.7 million.

"The Indian retail brokerage sector is highly fragmented, with the top 10 leading brokerage houses accounting for only 15% of the market," says Anshuman Jaswal, Celent analyst and coauthor of the report. "As the market matures, we will see increasing concentration of trading volume. Along with this fierce competition, technology, geographical reach, and customer services will be essential for winning market players."

"Leading brokerages are offering more sophisticated products," adds Sreekrishna Sankar, Celent analyst and coauthor of the report. "The number of online users as well as internet trading volume on the leading Indian exchanges, NSE and BSE, has been growing steadily."

This report looks at the retail equity market in India and the increasingly important role of online brokerages. It includes a ranking of the leading online brokerages based on a number of parameters, including customer base, geographical reach, product range, cost of trading, level of customer service, technology, and latency.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary

3

Introduction

6

Market Overview

8

 

Demographics

8

 

Economic and Financial Drivers

9

 

Equity Markets and Related Investment

13

Retail E-Trading in India

16

 

Development of Online Trading

16

 

Trends in Online Retail Brokerage

19

 

Banks and E-Trading

23

Comparison of Leading Brokerages

25

 

Indian Brokerage House Landscape

25

 

Online Retail Brokerage Rankings

28

Conclusion

34

Appendix 1: Profile of Leading Brokerages

38

 

Anand Rathi Securities

38

 

Angel Broking

39

 

Geojit BNP Paribas

41

 

HDFC Securities

43

 

ICICI Securities

44

 

Indiabulls Securities

46

 

India Infoline

48

 

Kotak Securities

49

 

Motilal Oswal

51

 

Reliance Money

53

 

Religare

55

 

SBI Cap Securities

57

 

Sharekhan

58

 

SMC Global

60

Appendix 2: IT Providers and Their Clients

62

Leveraging Celent’s Expertise

63

 

Support for Carriers

63

 

Support for Vendors

63

Related Celent Research

64

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