Digital brokers win big as momentum of retail participation in market continues
The broking stocks in the Indian equity markets have been a big winners on the backs of a massive retail-investor-driven rally. The benchmark indices, Sensex and Nifty are scaling new highs in almost every session from the past week even as the momentum in global markets remains fairly mixed.
The broking stocks in the Indian equity markets have been a big winners on the backs of a massive retail-investor-driven rally. The benchmark indices, Sensex and Nifty are scaling new highs in almost every session from the past week even as the momentum in global markets remains fairly mixed.
A truly aatmanirbhar rally, one can say, as a huge bedrock of support for this market has been the immense amount of retail participation.
Retail investors' interest in the market has grown sharply, as the market regulator, SEBI opened an average of 2.45 million Demat accounts during April-June. The number of total Demat accounts increased from 41 million at the beginning of FY21 to 55 million by the end of FY21—an increase of 34.7 percent.
The prevailing low interest rates and easy availability of liquidity are major factors for the increased investors' interest in the securities market, Ajay Tyagi, SEBI Chief had said late in July.
This massive participation resulted in brokers seeing a continued surge of investors signing up on their portals.
Client additions in July
The top brokers in the country have seen an increase in the addition of active clients in India. An active client is a retail investor who has traded at least once in 12 months.
The numbers in July have been quite strong. Upstoxx has taken lead in this category. It has added 2.8 lakh active clients, a big 9 percent jump month-on-month (MoM). Whereas Zerodha has witnessed a 6 percent jump.
Platforms like Groww have seen a surge as well, adding 16 percent rise MoM. Angel Broking has added 1.7 lakh clients, almost a 9 percent MoM jump. ICICI Securities is also catching up nicely as it saw a 6 percent growth in active client additions.
Many listed and older, legacy brokers like HDFC Securities, Kotak Securities, Sharekhan, Motilal Oswal have also witnessed a surge, but not as much as the new-age brokers.
Broking share of the market
The market share across the board has tilted firmly in favour of new-age, digital brokers like Zerodha and Upstoxx.
Zerodha commands 20 percent of the market share, with Upstoxx climbing the ladder quite quickly with 14 percent market share. Angel Broking is at the third place with a market share of 9 percent, followed by ICICI Securities. Groww commands a 6.5 percent market share.
The top 10 brokers in the country command a market share of 75 percent, in which the bottom five players command a share of 18 percent.
The broking revolution: New vs Old
The new-age, digital brokers have seen a fantastic growth in the past four years, as compared to the older broking firms.
Zerodha has drawn clients at a compounded rate of 71 percent over the last 4 years, for Upstoxx this number is 200 percent for Upstoxx.
The legacy brokers like ICICI Securities have drawn clients at the rate of 25 percent in the last four years, whereas for HDFC Securities, this number is 13 percent.
Watch the accompanying video of CNBC-TV18’s Prashant Nair to decode this trend and to take a quick look at the latest numbers in terms of client additions.
(Edited by : Yashi Gupta)
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