Gone are days when your broker's number was on the speed dial as more and more investors are taking to online trading. Most brokerage firms that have enabled mobile trade have witnessed a surge in volumes as investors transacting from the mobile platform has almost doubled.
Brokerages and exchanges attribute the trend to the increasing penetration levels of smartphones and the rising comfort level of retail investors with these devices.
In a release, Edelweiss stated that it has recorded a 65 percent YoY increase in its user base in India for its mobile trading application – Edelweiss Mobile Trader (EMT).
A similar trend was witnessed by other brokerage firms as well. With smartphones and internet access becoming ever so increasingly accessible, it’s natural that customers have taken to mobile phones for almost every activity.
“When it comes to trading, there has been a visible increase in usage of our mobile app activity. If we compare this year’s online trading activity from Jan to July against the same time period last year, there is a 47 percent increase in the number of customers and a 91 percent jump in the number of orders placed via the Sharekhan app,” Jaideep Arora, CEO, Sharekhan by BNP Paribas told Moneycontrol.
“While mobile and desktop have both grown for us, mobile revenue has seen significantly higher growth. When we compare Jan–July 2020 vs Jan-July 2019, the growth in revenue generated by mobile trading stood at 85 percent as compared to 68 percent for the website,” he said.
Motilal Oswal has seen a 100 percent growth in mobile trading clients in 2020, and an 82 percent increase seen in mobile turnover in the last six months.
With a growing community of new-age investors in India coupled with the new normal of working from home, investors seem to have taken a keen interest in self-analysis and choosing the right stock online.
Also, trading gives an opportunity for investors to work out a separate income stream at a time when most companies are either firing people or have initiated salary cuts to deal with the slump in business due to COVID-19.
“Since our launch in June, we have seen 10o percent week over week growth in transacting users till date. In 2 months of launch we have over 1.5 lakh active investors. The reasons for this rise in investor base are plenty. The pandemic induced lockdowns have given more time to people to research deeply about the stocks,” Harsh Jain, Co-founder and COO, Groww told Moneycontrol.
“There is a segment of people whose earnings have remained unaffected yet savings have increased as spending on travel, restaurants, cinema, luxury purchases etc. have gone down. This segment is likely to invest a lot more than they were doing earlier,” he said.
Jain further added that of all the users that made their first investment on the web, about 42 percent of the users have shifted to investing on the app, based on their last transaction.
Tier II or Tier III:
The newer tech-savvy generation has taken a keen interest in trading online giving this sector a huge boost. India is among the fastest-growing markets for both online and mobile-based trading.
With high internet penetration, the trend is not just relevant for metros but has spread across Tier II and III cities as well, suggest brokerage houses.
“Mobile trading is comparatively new to the Indian financial ecosystem as compared to web-based trading. India launched mobile trading in 2010 while online trading has been around for decades, around the advent of the internet in early 2000, Jashan Arora, Director Master Capital Services told Moneycontrol.
“One of the greatest benefits of mobile-based trading is that now the stock market has become accessible to investors from tier 2, 3, and 4 cities as well. Even if people who do not have access to computers and high-speed internet, a smartphone makes it easier and highly user friendly for them to trade,” he said.
Arora further added that internet-based online trading constitutes to grow at a rate of 16.82 percent as compared to all the modes of trading in the cash market, while in the derivatives segment it amounts to 16.04 percent of the total.
"While clients from metro cities continue to contribute more in terms of revenues, we have seen a higher growth rate in new customers' additions form non-metro cities such as Vizag, Bhopal, Agra and Dehradun," said Rajeev Srivastava, Chief Business Officer at Reliance Securities.
Chaudhary of MOFSL said that 52 percent of clients traded using mobile in the current year, and they have a pan India presence with a well-spread base of clients across Tier 1,2 & 3 cities.
Jain of Groww said that they are seeing a steady increase in the number of users from tier 2 cities such as Jaipur, Patna, Ahmadabad, etc. as well. Most Active Users are from the following cities: Pune, New Delhi, Hyderabad, Bengaluru, and Mumbai.
Edelweiss Mobile Trader (EMT) also saw over 58 percent of the active user base has been witnessed from non-metro cities, pointing out to an increase of tech-savvy investors in Tier II and Tier III cities.