Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Industry News

| More

Not just top 5 cities, now Tier III cities also contributing to retail participation in stock markets

Posted On: 2018-10-31 09:17:20

While on one hand where there is a record growth in the number of overall demat accounts on the other business for traditional brokers seems to be on a decline. This is clearly suggestive of the fact that discount broking firms like Upstox are fuelling investor participation in stock markets. During FY 2017-18 about 3.76 million fresh demat accounts were opened. This was far above the previous record of 3 million in 2007-08 at the peak of the previous bull market.

However, these millions of new investors entering into the stock market are not being facilitated by full-service brokerages, but by discount brokers.Discount brokers are also the biggest volume contributors on NSE and BSE. Take for instance Upstox;it reported a three-fold growth in participation numbers over the last 15 months, and a remarkable 33% of its participation and revenues comes from Tier III cities and around 42% from Tier I cities. "More than 70% of our orders are placed via the Upstox Pro mobile: our mobile trading platform clearly indicating that the volumes from Tier 3 cities are via the mobile platform" says Ravi Kumar, CEO of Upstox - a trend indicating the increasing participation from tier 3 cities in stock markets via mobile platforms.

98.5% of the total orders placed on Upstox during the FY 2017-18 were placed online, while only 1.5% were placed using the Call-and-Trade facility. Contribution of Upstox to daily notional turnover of exchanges increased by 3X -- to a range of Rs. 14,000 to Rs. 18,000 crore per day during FY18 from around Rs. 5,000 to Rs. 6,000 crore per day during the preceding year. Upstox operates through a partner model, which enables it to save on overhead costs.

The growing interest from Tier III cities towards equity investing has encouraged Upstox to have a greater focus on these cities. It currently has 384 partners spread across 125 cities in India. Ahmednagar is a Tier III city that is leading in terms of the percentage of partners. Upstox shares a percentage of the revenue with its partners in return for the clients whom they cater to. The percentage depends on the level of expertise and type of services that the partner provides to his/her clients.

A low-cost brokerage model breaks the barrier to entry and allows people with limited means to invest wisely. Online trading platforms such as Upstox give traders and investors access to live market data. Charting tools are easily accessible with just a click of a button and thus traders are able to act on price changes in real time making real time stock market trading a reality.

Upstox has been able to maintain and sustain its low-cost brokerage model because it does not have any physical branches. The business is based on a partner model wherein its partners are spread across the country. The partner model helps the company lower its overhead costs and divert funds to the technology stack. The technology is robust enough to give its partners a platform wherein they can track their performance and make sure that their customers get the support they need. The company has a light-weight mobile trading platform which downloads on any smartphone--even a 2G phone and can operate even in a low bandwidth environment.

That's not all at which the tech-enabled promoters have stopped at. The developers have put all the required charting and analysis tools right in the palm of an investors hand, reducing the dependence on heavy gear trading terminals on the desktop. The Upstox Pro mobile trading app is one of the highest rated apps on the Playstore.

The biggest advantage that comes with discount brokers is that of the cost of trading which matters a lot in a market where profits matter right from the first tick that the stocks click. Upstox charges Rs. 20 per intraday order or 0.01% (whichever is lower) for all segments irrespective of the order size. Thus, with a traditional broker where one might end up paying Rs. 10,000 in brokerage for an investment of Rs. 1 lakh, with Upstox he'd just be paying Rs. 20 per intraday order. Moreover, investors can trade with better leverage in the derivatives segment as well.

The technical work force of the company has built and maintains a robust trading suite of platforms which helps it reach customers across the country. "We are able to reach even remote customers without having to rely on the traditional brick and mortar model. A team of developers and engineers has helped us build that tech infrastructure. Thus, reducing our overhead costs." adds Ravi Kumar. Moreover, the seamless onboarding process also enables it to cut down on the costs. So, the benefits that the costs bring in are far higher than the costs themselves.

Aadhaar-based account opening has opened the doors of the stock markets to anyone with an Aadhaar and PAN card.The Upstox Aadhaar-based account opening process provides an intuitive and seamless experience to the end user with minimal human intervention. This enables fast and paperless account opening with better assessment of received documents.

The future is technology and companies like Upstox are likely to be drivers of vital engines of the economy going forward thanks to the investments in technology being made by them making participation in the capital market affordable and easy for all.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com





Other Headlines:

Square Capital Emerges as the Largest Integrated Mortgage Marketplace in India

Fresh impetus to the MSME sector - Acuité Ratings

GoAir's 13th Anniversary Offer: Up to 13 Lakh seats on sale at an all-inclusive price of Rs 1,313

India's plastics export jump 31.6% in H1 2018-19 to USD 4.59 bn

Homes worth Rs 1200 crore sold during Housing.com's Home Ustav 2018

Lighthouse invests 160 Crore in mattress company Duroflex

Kreditech licensed by Reserve Bank of India to operate as NBFC

Next Education partners with Capgemini as Edu-tech enabler

Co-origination lending: A potential solution to NBFCs' funding challenges

Honda 2Wheelers India expands its global footprint ahead of 2020

'All Weather Investing' - asset allocation with ETFs launched on smallcase.com

NPCI organises digital training workshops at 50 plus educational institutes on teacher's day

AVIVA launches Online Will Writing Service to Promote Financial Literacy

Chrysalis raises funding from Social Impact Investors Menterra and Artha

ICAI invites comments on Valuation Standards

Maharashtra New DP plan 2034 notification - Mr. Niranjan Hiranandani, President NAREDCO

Sterlite Power's OPGW facility receives 17025:2005 accreditation by NABL

Amazon.in adds 6 new fulfilment centers for Large Appliances and Furniture

Asset Management Firm Samvitti Capital launches new Alternative Investment Fund

ICAI committed to conclude the disciplinary process against those found involved in the PNB scam

Fintech startup BuyForexOnline looks to raise $2m for its next phase of growth

Wipro Consumer Care and Lighting forays into home automation space

Catholic Syrian Bank announces proposed investment by Fairfax India

KIFS Tade capital launches interactive Chatbot service #AskSubbu

Moneycontrol becomes India's first financial platform to launch a dedicated section on Cryptocurrency

DBS Group Chairman Peter Seah conferred Institute of Directors (IOD), India Distinguished Fellowship

Essar concludes sale of Aegis to Capital Square Partners for US $ 300 Million (Approximately Rs.2,000 crore)

ESAF Small Finance Bank kicks off operations in Mumbai

2.0 Audio Launch Sets Benchmark for International Film Events in Dubai

BSE and Ebix Sign MOU to Launch Joint Venture Company

Comments on on 'Pradhan Mantri Sahaj Bijli Har Ghar Yojana' - Power for All

SVC Bank launches hassle-free ASBA facility for IPOs

Flipkart's Big Billion Days To Kick In From September 20

Genpact Acquires Digital Customer Experience Consulting Firm TandemSeven

PAYBACK India Announces Appointment of new CEO

IndiaFirst Life acknowledged with Social Inclusion Award 2017 by Fintelekt

Apollo Munich Launches India's First Travel Insurance Chatbot - 'Travel Ninja'

On its run up to an IPO, ShopClues appoints Deepak Sharma as CFO

Cognizant Opens New Digital Business Collaboratory in London

Morphy Richards appoints J Walter Thompson as their creative agency

edX partners with IL&FS / IFIN to launch learning academy

PAYBACK India wins the Best Loyalty Program 2017 award at CMO Asia 'National Awards for Marketing Excellence'

Hyundai Launches the Most Unique & Global 'Online Buying Experience'- 'HyBuy'

Myntra launches The Game of Thrones collection ahead of the much awaited season 7

DBS Bank Strengthens India franchise on 24% growth in advances and 15% in deposits during FY 2016-17

Apollo Munich Health Insurance ranked as top 'Great place to Work' in Indian Insurance Sector

92.7 BIG FM's New and Refreshed Stationality in Bengaluru, Celebrates Music With 'Sandalwood Jothe Bollywood Blast'

Omega Healthcare inaugurates 4th facility in Trichy

Broadridge Opens Fourth Office in India in Bangalore

Myntra targets 25x sales; 4 lakh new customers during the 6th edition of its flagship - 'End of Reason Sale'!







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018