Mumbai-based discount broking firm Samco Ventures, promoter and holding company of SAMCO Securities that had launched the capital market league Indian Trading League (ITL) recently, already has over 100,000 registered traders on the platform from across 400 cities, and by the end of the year, expects the number of active traders on its platform to touch 200,000 to 250,000. The firm is also planning to open its first office outside Mumbai in Ahmedabad that houses several active traders.
In fact, at present 15 per cent of all traders on Samco are from Gujarat, says Jimit Modi, chief executive officer of Samco Ventures. Mumbai and Delhi currently contribute to nearly 10 per cent each as far as traders are concerned on the Samco platform, while Maharashtra on the whole has a 15 per cent share.
The company plans to setup a service center in Gujarat to facilitate quicker account opening and customer response. The company also plans to start a Gujarat – specific regional leader board. This will enable traders and investors to rank themselves against fellow participants from Gujarat.
Modi explained that globally, the flat fee brokerage model accounts for nearly 80-85 per cent of the business, while in India it is around 10 per cent of the overall business. "In the next two to two and half years, we expect this share to double," Modi said.
He added that discount broking can encourage retail traders to come back to the market, as it reduces the entry barriers. "The average retail trader gives away 8-14 per cent of his capital in annual brokerage, and this makes the entry barrier high in terms of when he starts making money," Modi explained. The discount broking model brings in benefits to the investors as it only charges a flat fee of Rs 20 per transaction irrespective of the order size, resulting in savings of over 90 per cent in brokerage costs.
Another trend picking up is use of online platform for trading. According to Modi, mobile trading which accounted for around 0.1 per cent of the business last year has swelled to 1.5 per cent this year, and for internet based trading, the number has grown from a 3 per cent share a couple of years back to 11 per cent now.
The ITL has proved to be a hit for the company which has seen its trader base to increase from an earlier 10,000 to 100,000 registered users now. Around 7-8 per cent of these people are active.
Modi said, "In the first month of the Launch, we have seen a tremendous response from across the country. In a volatile month for the markets, the participants winning with upwards of 50-100 per cent returns in a month have demonstrated that the correct trading and investing strategies can yield good returns irrespective of the market scenario."
ITL was launched by former Indian cricketer Kapil Dev and the annual championship is open to investors, intra-day traders, positional traders, commodity traders, system traders and women. The winner would be the one who generates the highest percentage net return or what is also called the Absolute Return on Net Funds (ARONF), which has been termed by Deloitte as a fair method of determination of winners.
The first edition of the league will begin on May 19 and will conclude on March 31, 2016.