Mumbai has 40% of terminals: D&B

The first-ever comprehensive research on Indian equity broking houses has shown that Mumbai has the maximum number (40 percent) of trading terminals in the country.

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) top 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,” he added.

It was found that 52 per cent of the 200 brokerages that participated in the survey – it constituted more than 90 per cent of the total broking outfits in India – are based in western India, followed by the north (25 per cent), the south (13 per cent) and the east (10 per cent).

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

Another interesting result of the survey is that 25 per cent of the brokerages wanted to go public by coming out with an initial public offering (IPO) while another 40 per cent 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 per cent stake in Geojit Financial Services, Citigroup Venture took controlling stake in Sharekhan and Standard Chartered Bank bought 49 per cent stake in UTI Securities.

Bandi Ram Prasad, consultant, D&B Information Services India, said 68 per cent 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 that brokerages expand through the branch network in the north while they use the sub-broking route to extend their network in south India. Not surprisingly, 40 per cent of the branches of brokerages are based in north India while 55 per cent of sub-brokers are based in south India.

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