Discount brokers have been forging ahead in the Indian stock market. The percentage share of pure-play discount brokers on the total active NSE clients jumped from a little over 25 per cent in FY20 to 47 per cent as of FY21. As of FY23, their share in active NSE clients was as high as 60 per cent.   

“As a first-time investor with no financial knowledge, I was looking for an easy onboarding and simple-to-use investing platform,” says Ishita S, a Mumbai-based communication professional. She opened a demat account with Zerodha recently. “I did a lot of research, liked both Groww and Zerodha but finally settled for the latter,” she said.  

Discount brokers offer trading options at a discounted brokerage or flat fee like ₹20 per trade. Full service brokers charge a percentage commission on every buy and sell transaction besides charging an annual maintenance fee for offering value-added services like research reports, recommendations, portfolio management services, etc. Some hybrid brokers offer both full-service and discount broking services.  

Easy onboarding process, user-friendly interface and gamification of the whole investment process have helped discount broking firms to attract a lot of millennials, Gen-Z and new-to-market investors.  

Zerodha, Groww lead 

Zerodha’s share of active NSE clients went up 13 per cent in FY20 to 20 per cent in FY23, while Angel One saw its market share more than double from 5 to 13 per cent in this period. But the fastest growth has been from Next Billion Technology, which operates under the brand name Groww. Its market share on active NSE clients went up from 4 per cent in FY21 to 16 per cent at the end of FY23. Groww’s data for FY20 was unavailable. 

Groww co-founder and COO, Harsh Jain, attributes the rapid increase in new clients to the company’s investment in customer education across online and offline channels and “its simple-to-use investing platform”. Groww’s blog consistently ranks for most investing-focused keywords on Google. Its newsletter is read by millions of people every day; video content in eight languages and social media channels regularly post infographics and reels which also are very popular among Gen Zs. 

While discount brokers have been increasing their market share year-after-year, full-service brokers have been ceding their space. ICICI Securities’ market share in active NSE clients fell from 10 per cent as of FY20 to 7 per cent at the end of FY23. HDFC Securities, Kotak Securities, Sharekhan, Axis Securities have all seen their market share erode during this period.  

Post-Covid lull 

The total number of active clients on NSE, the country’s largest bourse, itself jumped from 1.08 crore in FY20 to 3.6 crore in FY22 as the shift to work-from-home in the Covid pandemic and the availability of time for trading, flush of new public issues (IPOs) and the bull run have all attracted many people to equity market.  

While the number of active clients on NSE tapered slightly in FY23 to 3.27 crore, it is still way above the pre-pandemic level.  

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