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Do we bid adieu to small brokering firms?
As more Indians log on to the net to place their bids on the bourses, can those all-knowing brokers be far behind? Already flooded with big names such as ICICIdirect, Indiabulls et al, the rat race to scale up and expand via respective online operations has acquired an almost feverish momentum in this space.
If the Reliance Money foray through web-enabled retail kiosks was not enough to create ripples, now it’s the turn of Ranbaxy group – Religare to pump up more adrenalin in the online investment space. On May 2, Religare launched a 360- degree web portal that will allow customers to invest in equity, mutual funds and commodities via a single platform. What’s more the company promises to give consum ers a chance to earn redeemable trade rewards each time they invest online – a first of its kind initiative in the industry. Shachindra Nath, Group COO, Religare Enterprises told 4Ps B&M, “The product portfolio is supported by a host of features such as 0% brokerage plans, interest on cash margins, so that customers’ money does not lie idle.” Nath is confident that exposure of upto 20 times on cash margin for intra-day trading, coupled with trade rewards, will change the way people invest online. That’s enough to get the consumer keyboards busy.
Already broking commissions have gone down by 40 basis points in India (according to Elkins/Mcsherry), and e-broking will only cut sub-broking intermediaries, making commissions come under further pressure. Also, the sustainability of small broking houses will come under question with the investment biz shifting to bigger players with an online presence. For now, it’s unclear as to who will be the Indian Charles Schwab of this cost game, but rest assured that with these changes in the rule of the game, retail investors have a gala time ahead.
Edit Bureau: Manish K. Pandey
Source : IIPM Editorial, 2007
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