Dalal Street has come a long way; known for capital market business had started under a banyan tree way back in 1875 where people used to gather to do business through Open Outcry. Buyer and seller would call out their offer and bid rates verbally, each trades were written on paper and settled after the day was over.
From then till today speed of trade has gone so fast that trades happen in nanoseconds, it's all about speed today. Formation of NSE has certainly paved way towards a new era in stock market. Demat, electronic and online trading has added wings to business, today person sitting in one part of globe can sell it to person on other part without having to worry of bad delivery (trades not resulting into actual delivery of shares) as for every trade exchange is the counterparty. Stock Broking in India is no less advanced than western world.
Today you walk into any brokerage house you would feel a different world out there, everything happening online, today investors, traders prefer to confine themselves to their place and trade online through their platform provided by brokerage houses, though there are still some old school traders who like to go to brokers office sit and trade everyday like any other business, for them online trading has still not changed their place of work from brokers office to elsewhere.
Online trading caught up very well and some of the early mover who took advantage to the revolution of online trading included players like IIFL who had launched their online portal 5paisa.com way ahead to beat competition, they offered brokerage as low as 5 paise which those days was as high as 1 rupee per stock or 1 percent of the value of stock whichever higher.
Today they enjoy their nationwide presence and earn significant revenue through brokerages.
Stock broking is also inflicted by disruptions happening in almost every industry today, in fact Stock brokers take lot of pride for their business moved online much ahead of any dotcom/ecommerce/startup boom. These are all matured players who have moved way ahead from offering low brokerage to offering great services, in depth research and fully online model.
Trading through broker is not risky anymore as SEBI and exchanges have brought in such a stricter framework that almost everything goes reported on regular basis. It's a highly regulated industry today, biggest concern for brokers today is their rising compliance cost as regulators keep coming out with new requirement as they want.
One side it brought credibility to business other side made it more difficult to do business. Many small brokers have now started to diversify into other areas and reduced their focus on broking as the world is getting more and more competitive with clients getting more and more demanding, other side regulators have kept on raising their requirements. Several players have also quit the industry and paved way for large and organized players.
According to Megha, Research Analyst at ATS (Aditya Trading Solutions) from their Bangalore office, "We provide end to end solution in investment space, we don't restrict ourselves only to capital market solutions but also provide debt and commodity market insight, we work on several financial models, in fact we have many strategies that are proprietary to us.
We help clients not only in terms of low brokerage but with complete handholding through their journey of investment."
She also added how their business is not affected by disruption done by several other broking houses who claim to offer lowest brokerages on one hand but other side have several hidden charges right from picking up a call of client, "We have seen enough of all that, our client base is intact, number of clients trading through us for more than a decade is always on rise for us and we always keep a check on this barometer. We provide customized, need and relationship based business."
ATS also spoke to many traditional and institutional brokerage houses in Mumbai and Delhi who took them through their journey in capital markets and how it has evolved over period of time and found complains on higher compliance cost common but none of them felt any kind of major disruption or threat to the business be it from brokers offering low brokerages or from institutional brokers, they all seem to have their own plan and strategies for their businesses.
Launch of GIFT city has also opened new avenues for brokers to launch themselves at Global scale; GIFTY city offers several advantages to traders such as tax free zone, Zero Security Transaction Tax and access to global markets. Traders can invest globally at the click of a button from Gift City and also attract Global investors willing to trade or invest in India without any limitation on movement of funds, GIFT will also attract business happening through SGX Nifty.
Indian broking business is poised to go Global and consolidation in this sector is one thing that can certainly be not ruled out for wider presence. Almost everybody in the market seemed optimistic with the new government; they expect more investor participation in stock market will result in more clients and more business to them. Better days ahead!
About ATS: Incorporated in the year 2003, ATS stand with an objective to help its clients on money matters. It is a Member of NSE, BSE, NCDEX, CDSL and Batch 1 Member of MCX. ATS has impeccable track record in Capital Markets and Commodities business and been one of the biggest broking house in South India. ATS employs over 300 employees and has deep presence across South India.
Visit http://www.adityatrading.in for more details.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)