HDFC Sec takes on Zerodha, Groww with new platform 'Sky', bets big on margin trading facility

At the launch event, Dhiraj Relli, managing director and chief executive officer at HDFC Securities, said that the all-in-one platform is what makes it different from its peers.

HDFC Securities on September 25 announced the launch of HDFC SKY, a  discount broking all-in-one app for investing and trading at one-price slab of Rs 20. This fee is similar to that of online broking platforms Groww, 5Paisa and Zerodha.

The app will provide access to Indian stocks, exchange traded funds, mutual funds, futures and options, currencies, commodities, IPOs, and global equities on a single fintech platform, stated the press release.

At the launch event, Dhiraj Relli, managing director and chief executive officer at HDFC Securities, said that the all-in-one platform is what makes it different from its peers. "No other fintech in India has all the features in one place," he claimed.

With HDFC Sky, the company is targeting the Gen-Z, millennials and new-age investors. Furthermore, HDFC Sky is open to all unlike HDFC Securities which allows only HDFC Bank customers to open demat account and invest/trade.

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"We are also working on getting Government of India bonds and debt securities on the platform soon. BSE's future and options segment will also be live in the next one month," said Relli.

However, the management did not share any market share targets.  Currently, HDFC Securities has a little over 3 percent market share in NSE active clients. While the company is aware that HDFC Sky will cannibalize some users from HDFC Securities exiting app, it believes that in the longer-term the market size will only grow as more and more Indians will invest in equities.

On the other hand, Zerodha has 19.4 percent market share while Groww has 19 percent.

The unique selling propositions

According to Relli, HDFC Securities' in-house research is a USP of the HDFC Sky app. Investors can find stock recommendations, target prices as well as detailed explanation of financial performance of a company. "Apart from stocks, mutual fund schemes have also been ranked according to performance to help investors make an informed choice," said Relli.

Another USP is margin trading facility. MTF allows an investor to buy shares by paying just a fraction of the total transaction value, while the balance is funded by the broker.

"First, not many new-age brokers have the MTF facility. Second, the interest rate we charge on MTF is 12 percent, while competitors charge 18-21 percent. Third, investors can monitor their MTF holdings as a separate ledger," said the management.

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The launch comes at a time when market regulator Securities and Exchange Board of India (SEBI) has been cautioning investors about the losses in F&O segment. Nine out of 10 traders lose money in F&O, as per a Sebi study. Keeping that mind, Relli said that the app has various 'caution nudges' for traders.

On the other hand, National Stock Exchange is planning to extend F&O trading hours. NSE is considering an evening trading session from 6 pm to 9 pm where market participants can trade futures and options contracts after regular trading hours of 9:15 am to 3:30 pm.