Indian Brokerage houses on “Sale”

Indian stock market has grown by about 350%-400% during the last 4 years. Apart from the investors, brokerage houses have also benefited immensely with the Bull Run that India saw. The valuations of brokerages have increased and now foreign financial institutions and banks are looking at this business. There are about 1200 registered brokers with the Bombay Stock Exchange (BSE). The leading Indian and foreign brokers registered with BSE and their products/services are –



While some of them have established their own stand alone brokerage houses, some have entered into joint ventures with existing brokerage houses and some have bought stakes in the brokerages.

The change in ownership structure of few important brokerages during the last 2 years is as follows –

• Goldman Sachs ended its contract with Kotak Securities in 2006 and has decided to go alone in investment banking and securities business.
• J M Financials – ASK Securities – 60% stake – 580 million INR
• Citigroup Venture Capital International – Anand Rathi Securities - 19.9% - undisclosed
• IDFC – SSKI – Increased to 66%
• BNP Paribas – Geojit Securities – 34% - 2070 million INR
• Doha Bank – Select Securities – 49% - undisclosed
• SBI ties up with Motilal Oswal Securities
• Bank of Baroda ties up with India Infoline

We can see clearly see that the time has come for brokerage houses to consolidate else they face the risk of foreign institutions taking control of the business.