In a welcome turn of the status-quo in India’s stockbroking industry, traditional brokerage firms are now cutting costs and offering retail investors low-cost brokerage. It began with the brokerage firm Sharekhan that launched a separate entity named ‘Espresso’to venture into discount broking. Later, Kotak securities Ltd. announced its Trade Free Plan last week. The recent influx of new-age investors and traders propelled further by lock-down, prompted a re-imagining.
Both Sharekhan and Kotak securities seemed to have taken note of the disruption caused by new-age stockbrokers such as Zerodha, 5paisa, and Up stock has caused. Both the traditional brokers have either tweaked their business or started a whole new venture for competitive offerings.
The offerings are like the US-based stockbroking platform called ‘Robinhood’. This platform attracted a lot of attention earlier this year when many small investors joined up for its commission-free trading platform for stocks, ETFs, and options.
Kotak securities ltd. (KSL) said that its research denoted that there is a decent need for a competitive brokerage plan from a well-capitalized and reputed stockbroker in the Indian Capital market.
KSL’s plan offers zero brokerage on intra-day trades and Rs. 20 per order for all other F&O trades. KSL is also offering a refund of fee and brokerage no questions asked if the customer is not satisfied within one month, and it also gives customers the option to give stock instead of cash for margin of trading!
Meanwhile, Sharekhan’s Espresso has zero brokerage for cash-and-carry order while has a Rs 20 charge for intraday trade. Espresso charges zero brokerage on square-off orders in case of loss. For F&O, commodity, and currency orders to it charges merely Rs. 20 per order.
Time to rethink the stock-trading strategy!
