Sharekhan, full-service equity brokerage owned by French financial services major BNP Paribas, is getting into discount broking with a separate brand, the details of which will be announced at the formal launch shortly.
Sharekhan, founded in 2000 by the Mumbai-based entrepreneur Shripal Morakhia, whose family was into equity broking for decades, was one of the first standalone brokerages in the country and was backed by bulge bracket private equity firms Warburg Pincus and General Atlantic.
BNP Paribas bought out the promoters and these investors in July 2015 and today, it is the third-largest brokerage with over 20 lakh customers.
Discount broking has been gaining ground and the segment is led by players like Zerodha and 5paise, and this segment has about 30 lakh customers.
The country is among the lowest when it comes to retail investors whose number is around 4 crore only while the opportunity is 10 crore.
When asked why the Sharekhan is pulling in different directions by entering discount broking and also continuing to offer full-service brokerage with added focus, Sharekhan Chief Executive Officer Jaideep Arora said the market is growing and there is enough room for both full service and discount broking.
While full-service clients are looking for nice digital tools, human support and guidance, local presence, research, training and coaching, tailor-made solutions for large clients, discount brokers are looking for digital tools and pricing.
"So, we want to be present in both the segments to cover the full-market scope taking into account that both will keep on growing in the future with different clienteles, different offers/approaches, and different companies. There is an addressable market of six crore people. So, there is more than enough market for everyone," he told PTI.
"Having two different companies, two service models, two strategies for two different market segments is the right approach and strategy," he added.
As part of the added focus on full-service Sharekhan business, the company is launching a Sharekhan Roar -- a three-month boarding programme for new clients under which it will offer a slew of value-added services like research insights and investment tips through dedicated relationship managers.
The Roar is 100 per cent free and allows any new clients to discover the tools and services, understand how to use research, how to better invest.
The company is yet to decide on the pricing of discount brokering services which will be announced soon but during the beta testing stage, it will be given free, and top traders will get one-year free service with Rs 5 lakh margin for a year. The new initiative is being run under Project Leapp.
They expect to get at least 50,000 clients for the discount broking services by the end of the year and want to be among the top-three by the fifth year, said Kalyan Raman, who will head the new business.
Sharekhan has over 4,000 employee and 800 are relationship managers across 540 cities.
When asked about the impact of the new coronavirus pandemic on the business, Arora said the lockdown period has been good for the company with both new customers as well as trade volume going up.