Reliance in Stock Broking

With the Indian Stock market making new highs and making records for turnover in the past few years new people are entering their money in the market to take the advantage of the opportunity. With the large retail and HNI investors in India new companies are eyeing to start broking business in India. Many companies have launched their business and many are in line to start the fight for brokerage but the biggest name is Reliance. Reliance is entering in stock brokership business under the flagship of Anil Ambani with the company named as R-TRADE. Reliance as a stock broker has aggressive plans in stock brokership business with a aim of providing discount broking all across the country. With this news in the market established broking houses are in a problem to face competition with the Reliance stock broking company . Present big brokers are charging heavy brokerage with their clients (in relationship to the turnover given by the client) but with this news of Reliance entering stock brokership business present big brokers are reducing their brokerage drastically. In reference to a survery present brokers have just halfed their brokerage and there are chances of further reduction. If we talk on average basis today brokers are charging .03 paise for intraday trade and .20-.25 paise for delivery based trades. But now all borkers are reducing their brokerage as they have to fight the competition with Reliance stock broking firm R-TRADE in the near future and with Foreign firm which are also eyeing Indian retail and HNI brokerage market. International brokerage outfits like Australia's Macquarie Securities, Deutsche Securities, BNP Paribas and Citigroup are making plans or we can say are ready to enter Indian stock broking industry. Some of them are planning to open their own houses and few are having plans to pick up minority stakes in established retail stock broking outfits. Several domestic retail broking houses including Anagram Securities, Geojit Financial Services, Angel Broking and Sharekan are interested in selling minority stakes as they are in need of funds and expertise for expansion which can be ful-filled by the foreign partners.
The only benefit in this fight will be of the investors and the traders because if what is heared is true than Reliance as a stock broker is planning to offer .005 paise brokerage for intraday trades. But if this is true that means small sub-brokers will be in a problem of elimination or we can say that their commission will be reduced heavily.


Blogger kunpar said...

Good post. R-trade will become huge in the next few years. Do you find yourself willing to join r-trade, or is it to early to do so?

Saturday, August 26, 2006 2:44:00 PM  

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