Rating agency ICRA expects revenues of broking houses to moderate next fiscal. “The revenue growth rate is expected to taper to 5-7 per cent in FY23 with an expected total turnover of ₹28,500-29,000 crore,” it said in a release..

FY22 to grow strongly

However, for the current fiscal, the broking industry will post a record performance, supported by the healthy participation of retail investors and favourable systemic liquidity. “As per a recent note, the industry is likely to clock a total revenue of about ₹27,000-28,000 crore in FY22, registering a year-on-year growth of 28-33 per cent,” the rating agency said..

The average daily turnover in the domestic capital markets increased by 126 per cent to ₹63.07 lakh crore in first nine months of FY22 from ₹27.92 lakh crore in FY21 (₹14.39 lakh crore in FY20), according to Samriddhi Chowdhary, Vice-President – Financial Sector Ratings, ICRA Ratings.

Retail broking turns dynamic

The retail broking segment has become more dynamic and has witnessed a significant disruption in the last few years due to the growing prominence of discount brokerages. The competitively-priced offerings of discount brokers and the no-frill basic accounts and services have resulted in the realignment of the pricing strategy across the industry.

Sainath Chandrasekaran, Assistant Vice-President – Financial Sector Ratings, ICRA Ratings, added, “Apart from attracting clients from full-service providers, discount brokerage houses have helped expand the market by bringing on board a large number of first-time young investors.

"While the market share of traditional bank and non-bank brokerages in terms of active clients moderated in FY21, primarily owing to the faster scaling up of the discount brokerage houses, they reported a strong performance as reflected by the healthy operating metrics and surge in earnings." he said.

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