Markets Are Rising But What's In Store For Brokerages?
Despite this momentum, traction across domestic brokerages remained muted says Motilal Oswal Financial Services.
Market sentiment has been upbeat in November, with the Nifty and the Sensex hitting record highs. However, brokerage houses have underperformed the benchmark indices.
Traction across domestic brokerages remained muted despite the momentum in local indices, according to Motilal Oswal Financial Services monthly report. India witnessed a decline in NSE active accounts, albeit at a lower pace, the brokerage said.
Active user clients in the industry 20% annually but fell 1% sequentially to 3.6 crore in November. This was the fifth consecutive month of decline. The intensity of fall on sequential basis was by 6.88 lakh clients in October and November 2022.
The total number of demat accounts in India has now increased to 10.6 crore in November, 37% higher than a year earlier. In November, India added 18 lakh new demat accounts. In the last two months, incremental additions to demat accounts have remained flat, compared to 34 lakh in November 2021, according to Motilal Oswal.
At present, the top five discount brokers account for 59.1% of overall NSE active clients, up from 58.9% in October 2022.
Zerodha remained the top broker with a 24 basis point rise in market share to 18.3%. However, it reported a 0.5% month-on-month decline in its client count to 66 lakh.
Central Depository Services (India) Ltd. retained its overall market share of 72% with incremental demat account additions. National Securities Depository Ltd’s market share improved to 21% from 17% in October, while CDSL lost market share.
Overall average daily turnover jumped 89% on annualised basis but rose just 2% sequentially to Rs 1.46 lakh crore on the back of a flattish trajectory in F&O average daily turnover.
Cash average daily turnover jumped 17% month-on-month but declined 18% annually to Rs 61,600 crore, the brokerage said. Within the retail segment, cash average daily turnover increased 23% month-on-month to Rs 29,600 crore, while F&O average daily turnover was flat at Rs 58 Lakh crore, it said.
During November, Rs 10,200 crore was raised via eight IPOs.