HDFC Securities to enter discount broking with a new product

Mumbai: HDFC Securities, backed by India's largest private sector lender HDFC Bank, will soon launch a discount broking platform to compete with new-age firms like Zerodha, Groww, and Upstox, which are gaining market share at the cost of full-service broking firms.

Dhiraj Relli, chief executive of HDFC Securities, told ET that a large and growing customer base is looking for a different set of product offerings and services. "To cater to this segment of customers, we are launching an entirely new product," he added.

Currently, four discount broking firms - Zerodha, Upstox, Groww, and Angel One - have a 53% market share in terms of the number of active clients.

In contrast, HDFC Securities' market share is just 3.7%. While HDFC Securities has maintained its share since April this year, several full-service broking firms have lost market share.

Relli said the new platform will focus exclusively on customer delight and value proposition. "As of now, we are playing our cards very close to the chest, but I am confident that our market share will have its own story to narrate," he said.

In the past few years, India has seen a tremendous shift in consumer behaviour and expectations from an investment platform.

According to NSE data, the number of active investors jumped nearly 240% between April 2020 and October 2022.

Leading discount broking firm Zerodha's client base has increased by 5.2 million in two and half years, from 1.4 million in March 2020 to 6.67 million in October 2022. The client base of Upstox has jumped from 619,000 to 4.42 million during the same period while a new startup, Groww has become the number two broking firm now with 4.98 million clients.

Traditional broking firms like ICICIdirect, HDFC Securities, Kotak Securities, and Axis Securities have seen marginal growth during this period.

Last year, a full-service brokerage, Sharekhan ventured into the discount brokerage business by launching a new platform called 'Espresso' through a separate company that has added more than 100,000 clients.

Relli said the latest technologies will be at the core of HDFC Securities' new offering, and it will have very competitive and transparent pricing. "There will be multiple value-add services like research, option strategies, portfolio optimiser and basket investing," he said. "This would be a fintech super app offering capital market instruments and multiple other products like loans, insurance, and global investing."