India's Top Broking Houses

The first-ever comprehensive research of Indian equity broking houses saw Angel Broking (5,081 trading terminals), Motilal Oswal Securities (4,179 terminals), SMC Global Securities (3,231 terminals), Indiabulls Securities (2,700) and Geojit Portfolio Management Services (2,410) topping the list of broking outfits in India, in terms of the number of terminals.

“The findings help in knowing the reach and the spread of brokerage houses in India,” said Kaushal Sampat, chief operating officer of Dun & Bradstreet Information Services India, which did the survey. “We have not looked at their revenues.”

It was found that 52% of the 200 brokerages that participated in the survey – it constituted more than 90% of the total broking outfits in India – are based in Western India, followed by North (25%), South (13%) and East (10%).

In terms of cities, Mumbai (40%) has the most number of trading terminals, followed by Delhi (12%), Ahmedabad (8%), Kolkota (7%), Chennai (4%) and remaining cities (29%).

Another interesting feature of the survey is the finding is that 25% of the brokerages wanted to go public by coming out with an initial public offering (IPO) while another 40% were looking for a tie-up or a joint venture with overseas brokerages.

The survey comes at a time when the Indian stock broking industry is witnessing a slew of mergers and acquisitions (M&As). France’s BNP Paribas bought 33% stake in Geojit Financial Services, Citigroup Venture took controlling stake in Sharekhan and Standard Chartered Bank bought 49% stake in UTI Securities.

Bandi Ram Prasad, consultant, D&B Information Services India said 68% of the firms surveyed preferred expansion of business by targeting institutional and foreign institutional investors. “During the past couple of years, India, along with Korea and Taiwan, has been one of the preferred destinations for the FIIs. With corporate restructuring, rising market capitalization and sector-friendly policies, helping the FIIs, more than two thirds of the firms are interested in increasing their FII client base,” says the survey.

Another significant finding is the brokerages expand through branch network in North while they use the sub-broking route to extend their network in South India. Not surprisingly, 40 per cent of branches of brokerages are based in North India while 55% of sub-brokers are based in South India.

In terms of different segments of business, the D&B survey found that 27% of the brokerage outfits concentrate only in the cash market, whereas 35% are into cash and derivatives. Almost 20% of the firms trade in cash, derivatives and commodities market