Groww to hike minimum brokerage, DP and MTF charges from June 21

Groww will raise minimum brokerage to ₹5 and revise DP and MTF charges starting June 21 citing rising costs and regulatory impact on brokerages' revenue streams

Groww India, the largest brokerage in terms of active clients, is planning to raise its minimum brokerage from late next month.

 

In an email to its clients, the broking firm said that from 21 June onwards, it will raise its minimum broking charges from ₹2 to ₹5. Currently, the firm charges a brokerage of ₹20 or 0.1 per cent of the executed order, whichever is lower, but with a minimum charge of ₹2. The minimum charge will be raised to ₹5 from 21 June.

 

The company also revised the interest rate it charges for the margin trading facility (MTF) to 14.95 per cent per annum for the funded amount. Groww charges 15.75 per cent per annum as MTF interest for funding amounts less than ₹25 lakh and 9.75 per cent for ₹25 lakh and above. MTF is a product that allows brokers' clients to buy stocks by paying only part of the total value. The broker funds the remaining amount and charges interest on this loan.

 

Depository Participant (DP) charges for clients will also go up—from ₹18.5 per day per stock regardless of the number of sale transactions—to ₹20 per sale transaction. DP charges are mandatory fees applicable to every sale transaction. These charges are only applied when an investor sells stocks and are levied by the depository. They also include additional fees charged by the broker for facilitating the transaction.

 

“While the depository charged Groww for every sell transaction, Groww covered those charges for you. With the revised pricing, DP charges for each sell transaction will now be applicable to you,” the brokerage said in the email.

 

Prakarsh Gagdani, CEO of Torus Financial Market, said the cost of doing broking business is forcing brokerages to hike rates.

 

“Technology is a big cost. Secondly, because of the regulatory changes, the revenues that came earlier are being reduced. The changes in referrals, true to label norm, in funds being parked with brokers, and the interest brokers used to get, as well as an increase in the lot size of derivatives, impacted revenue. On one hand, the cost is increasing, and because of the changes, revenues are getting hit. The only way in front of brokers is to increase the charges,” Gagdani said.   

	Current	From June 21
Brokerage	Rs.20 or 0.1% (Minimum Rs.2)	Rs.20 or 0.1% (Minimum Rs.5)
DP charges	Rs.18.5  Charged per day per ISIN	Rs.20 Charged per sell transaction
MTF interest charges	15.75% p.a. for funded amount below Rs 25 lakh and 9.75% p.a. for funded amount of Rs 25 lakh or more	14.95% p.a for any amount
Source- Groww