Best time for broking industry in 30 years – Angel Broking MD Dinesh Thakkar

Angel Broking’s MD Dinesh Thakkar

The last quarter was good for the company. Will you see the same kind of client acquisition growth in April and May? Is it the best time for Broking houses?

We saw the highest client acquisition in the last quarter to the tune of approximately 9.6 lakh. This trend of new retail client participation in capital markets is here to stay. In fact, the monthly run rate from the last quarter is maintained as we continued to acquire over 310,000 clients in April 2021. The reason is also clear: Awareness among people has increased a lot; they have realised that the capital market is the best asset class to create wealth; growth in client acquisition in last eight quarters by high participation of tier-2 or tier-3 cities which was never the case in past. Client acquisition has also become easy with the help of digitalisation, which was a lengthy process, with the non-availability of broker or banks branch. Tier 2-3 people were never able to access the market which is mainly dominated by metro or tier -1 cities investors.

Secondly, India has a young population that is ready to invest in the capital market. I can say, I have never seen such a good time in the last 30 years of my career.

Most of brokerage associations and brokers are opposing the move for upfront margin? What is your view on this issue?
Look at this, over-leveraging is not good for our market. Lots of new entering into market which is new in the system. SEBI always looks to safeguarding THE investor who is entering the market. Earlier this market was dominated by communities who were dealing with this market for ages. Now, new investors are entering. If they have wiped out their investment due to this overleveraging, it is difficult to get back.

Such moves are helpful in expanding the market. There is a lot of hue and cry by those who are not understanding what is right for the investors. SEBI can’t allow overleveraging and this will help to investor to understand the market. More understanding and awareness will be helpful to the market. In my opinion, SEBI has taken the best step for stopping overleveraging and this good for investors.

When do you expect improvement in the market, which has been impacted by the second wave of COVID-19?

In the second half of the year, we will see improvement in the economy. Investors are ready to grapple with the opportunity for investing. We have seen last year also when the national lockdown was imposed and the market crashed but bounced back swiftly. This time also market will revive as COVID-19 starts flattening, which has started already.

Large broking houses are moving into technology-based broking. Do you think the traditional broker will survive?

It depends how do you see it. More products which are for the masses do not require human intervention. There we can use technology like machine learning and artificial intelligence as human intervention is costly affair. If we talk about wealth manager or portfolio manager whose ticket size is Rs 25-50 crores and similar kind of efficiency can be created by using machine learning and artificial intelligence which is far more cheaper and effective. For implementing this, initially technology cost is high, and high cost of compliance any way forced small brokers to shut down their shops.

How is Angel Broking creating disruption in the full-service broking landscape?

We have developed an entire suite of services that cater to the end-to-end needs of our customers. Our primary target group comprises generation Z, millennial, first-time investors. Since millennials are tech-savvy, having technology at the heart of our operations becomes critical for us. So, it is also what has become our prime differentiator. To begin with, Angel Broking’s services are available across all digital channels including web, trading software, and mobile applications. Secondly, it takes less than 5 minutes for a person to register and start trading with Angel Broking. Thirdly, we support our customers with advanced solutions such as ARQ Prime and smallcase so that they can make informed investment decisions even as first-time investors. On top of it, we drive concerted investor-training programs including webinars, podcasts, and so forth to educate our customers. We have also developed platforms such as Smart Money that train investors and traders of varying proficiency in a fun-learning format. At the same time, we issue advisories and reports and have a full-fledged knowledge house as well. Leveraging our FinTech-driven approach, we are further developing more properties that will add tangible value to the lives of investors. In other words, Angel Broking is leaving no stone unturned to disrupt the broking space and increasing the retail participation of India.

What is the growth plan for next 5 years?

We are working towards becoming a tech-based platform company, more like a Super App which will incorporate most of the financial products to suit the needs of our retail community, ranging from MF, insurance, loan products, debt instruments etc. Besides we also plan to build our own AI/ML based AMC business which will provide an additional avenue for our retail clients to invest.

The company’s board has approved foray into AMC, will this AMC be like tech-based AMC?

That's right, we are expanding our product suite towards our vision of becoming a tech-based platform for investment needs of the retail population. We are working on the lines of providing more affordable alternatives to this large client set and will build algorithm-based products. The AMC that we plan to build will also be on similar lines of extensively using AI / ML and create products for passive investments, ETF’s or smart-beta funds. These options will help retail clients to diversify their portfolio according to their financial goals.