market research report : financial brokerage market in india 2012

Financial Brokerage Market IndiaFinancial Brokerage Market – India

January 2012

Executive Summary

Market Overview

Average daily volumes in equity reached INR XX bn in 20‐‐‐‐‐

Stock market has seen fluctuations in the recent past and so have the earnings in brokerage

Commodities and currency markets are steadily picking up

Drivers &

Drivers Rising income levels

Under penetration of equities

h d l f l

Challenges Rising rate of FD proving to be attractive

Global uncertainties

Challenges

MFs pose less risk when invested for a longerTrading in other platforms

Franchisee model fuel expansion

FIIs show strong return

IPOs showing strong return

Undercutting and consolidation

Trends

MFs pose less risk when invested for a longer tem

Lifetime offers by brokerage houses to lure customers

Tie‐ups between big and small brokers

Trading in other platforms

Advent of foreign and new Indian players

Hard selling of Demat account

Stock Brokers foray into real estate

CompetitionMajor Players in the Market

Pla er 1 Pla er 2 Pla er 3 Pla er 4

Tie‐ups between big and small brokersStock Brokers foray into real estate broking

2

Player 1 Player 2 Player 3 Player 4

FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT

•Introduction•Market Overview•Drivers and ChallengesDrivers and Challenges•Trends•Competition•Competition•Key TakeawaysA di•Appendix

3FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT

Stock markets have been on a downturn due to global cues affecting financial brokerage market negatively

• In the stock market, various equity and shares of thelisted companies are traded

Market Overview – Stocks (1/2) Equity: Average Daily Volumes

INR bn

Type 4Type 3Type 2Type 1

• It is also known as the secondary market

• In India, capital markets, of which secondary marketis a part of, is regulated by SEBI

•On account of higher inflows from FIIs and FDIs, themarket has reacted well in 20XX XX 500

1,000

1,500

INR bn

X

a4%W

a3%Va2%

Ua1%

market has reacted well in 20XX‐XX

Turnover (Cash Segment)

0

500

20‐‐ ‐ ‐‐

d4%c4%b4%

20‐‐ ‐ ‐‐

d3%c3

b3%

20‐‐ ‐ ‐‐

d2%c2%b2%a2%

20‐‐ ‐ ‐‐

d1%c1%

b1%

Geographical Distribution (Cash Segment)

20‐‐ ‐ ‐‐ g1% h1% k1%

City 1 City 2 City 3 City 4 O

20‐‐ ‐ ‐‐l1% m1% p1%

Type 1 Type 2

60 000

80,000

INR bn

r1%r2%

r3%

P

e5%O

N

e3%

Type 1

Type 2

i1% j1%

20‐‐ ‐ ‐‐ g3% h3%

k2%

j3%

k3%

20‐‐ ‐ ‐‐ g2% h2%

i2% j2%

i3%

20‐‐ ‐ ‐‐l3% m3%

n3% o3%

p3%

20‐‐ ‐ ‐‐l2% m2%

n2% o2%

p2%

n1% o1%

20,000

40,000

60,000

f5%

O

f4%

e4%

f3%

e3%

M

f2%

e2%L

f1%

e1%

4

20‐‐ ‐ ‐‐ g4% h4%

i3% j3%

k4%

j20‐‐ ‐ ‐‐

l4% m4%

n4% o4%

p4%


020‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐

Source:

Prevailing Brokerage Structure – Indicative

Type: Equity

Resident Indians Non‐Resident Indians

Delivery Based Trades

a% or min INR B or x% on transaction value ( Both BUY/SELL)

c% or min INR D or e% on transaction value (Both BUY/SELL)

Type: Derivatives

Futures Market f% or min INR G/‐ or ceiling of h% of transaction value (Both Buy & Sell)

Type: Option Market

Option Market Higher of i% of the premium amount or INR J per lot (Both Buy & Sell)

Type: Currency Derivatives

Currency Derivatives

Account opening fees of INR K/‐Brokerage of INR L/‐ per Contract on carry forward trades and INR M/‐ each side on square up of trades (statutory and other charges to be levied separately)

Of the total commission pool of INR Y to INR Z bn, institutional broking contributes to p% of the pool

S5

Source:


SAMPLE

Drivers & Challenges – Summary

Drivers Challenges

Rising rate of FD proving to beRising income levels

Under penetration of equities

Rising rate of FD proving to be attractive

Global uncertainties

Franchisee Model fuels expansion

FIIs showing strong return

Undercutting and consolidation

IPO showing strong return


Trends – Summary

Trading in other platforms

Advent of foreign and new Indian players


`


Key Trends Stock Brokers foray into real estate broking

MFs pose less risk when invested for a longer tem

Lifetime offers by brokerage houses to lure customers

8

Tie‐ups between big and small brokers


Public: Domestic Company – Player 1 (1/3)

Offices and Centres – India Company Information

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporationp

Ticker Symbol

Stock Exchange

Products and Services Regional Office

Head Office

Key People

N D i ti

Products and Services

Category Products/Services

Category 1

Category 2

Regional Office

Name Designation

A

B

C

Category 2

SAMPLE10

Source:

DSAMPLE FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT

i i l S h K i


Financial Snapshot Key Ratios

Total Income

Net Profit / Loss150 15

Total Income Net Profit

Particulars y‐o‐y change (2010‐09)

2010 2009 2008

Profitability RatiosOperating MarginN t M i

0

50

100

‐5

0

5

10

201020092008

Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on AssetsR t Fi d A t

SAMPLEFinancial Summary

• The company incurred a net loss of INR X mn in FY 20XX, as compared to net profit of INR Y mn in FY 20XX

• The company reported total Income of INR A bn in FY 20XX, registering an increase of b per cent over FY 20XX

Return on Fixed Assets

Cost RatiosOperating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

i idi iSAMPLE SAMPLE registering an increase of b per cent over FY 20XX

• The company earned an operating margin of C per cent in FY 20XX a decrease of d percentage points over FY 20XX

• The company reported debt to equity ratio of Z in FY 20XX, an increase of W per cent over FY 20XX

Liquidity RatiosCurrent RatioCash Ratio

Leverage RatiosDebt to Equity RatioDebt to Capital Ratio

Indicators Value (XX/XX/20XX)Market Capitalization (INR)

Total Enterprise Value (INR)

EPS (INR)

Interest Coverage Ratio

Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset TurnoverWorking Capital Turnover

Key Financial Performance Indicators

11

EPS (INR)

PE Ratio (Absolute)

g pCapital Employed Turnover

Improved DeclineSource:



Key Business Segments Key Geographic Segments

100%

Country 1

India is the only geographic

Segment 1 Segment 2

0%

50%

100%

99.9%

0.1%

99.9%

0.1%

100.0%

0.0% 0%

50%

100%

100%

India is the only geographic segment in which Player 1 has been operating for the last X

years

Key Recent Developments

0%

20XX20XX20XX

0.1% 0.1% 0.0% 0%20XX

SAMPLEDescription News

Overview

• Player 1 is a leading stock and commodity broking house with acknowledged industry Leadership in execution and clearing services

• It is a member of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) through which itSAMPLE It is a member of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) through which it handles trading needs through a network of experienced dealers across various locations, and through their comprehensive web enabled services

Services• It facilitates the investment process and also provides value‐added services like research, stock ideas, DEMAT, online trading and others to make the investment experience easy and rewarding

12

Source:

Services• It also provides research and consulting services for taking the right investment decisions


Private: Domestic Company – Player 2 (1/3)

Company Information Offices and Centres – India

Corporate Address

156,117.2Tel No.

Fax No.

Website


Website

Year of Incorporation

Head Office

Key People


N D i ti

Category Products/Services

Category 1

Category 2 Name Designation

A

B

C

Category 2

SAMPLE13

D

Note: The list of products and services is not exhaustiveSource:


SAMPLE


i i l S h K iFinancial Snapshot Key Ratios

Particulars y‐o‐y change (2011‐10)

2011 2010 2009 2008

Profitability RatiosOperating Margin

12001400 250

INR mn INR mn

Total Income Net Profit/Loss

Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets

200400600800

10001200

0

50

100

150

200

Financial Summary

Return on Fixed Assets

Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)


0200

-50

0

2011201020092008

SAMPLE


Liquidity RatiosCurrent RatioCash Ratio

Leverage RatiosDebt to Equity Ratio

b i l i

• The company incurred a net profit of INR X mn in FY 20XX, as compared to net profit of INR Y mn in FY 20XX

• The company reported total Income of INR A bn in FY 20XX, registering an increase of b per cent over FY 20XXSAMPLE Debt to Capital Ratio

Interest Coverage Ratio

Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover

• The company earned an operating margin of C per cent in FY 20XX a decrease of d percentage points over FY 20XX

• The company reported debt to equity ratio of Z in FY 20XX, a decrease of W per cent over FY 20XX

14

Working Capital TurnoverCapital Employed Turnover

Source: Improved Decline



Key Recent Developments

Description News

l l d b k ff d f f l d l h

156,117.2Overview

• Player 2 is a leading investment bank offering a wide range of financial services and wealth management

solutions to institutions, corporations, high–net worth individuals and families

• It has rapidly expanded its footprint to over X locations across India with international presence in Country A, Country B and Country C

Fund Raising• Player 2 has completed the first round of fund‐raising for the realty fund it has set up with Firm B, Y

Portfolio, collecting ~INR C bn

Collaborations• It has tied up with French asset management company, Z, to launch India‐focused quant‐based

alternative investments productsalternative investments products

Awards and Recognitions• It has been voted as the ‘ _' by M in 20XX

• Player 2 has been ranked as ‘ ’ by N in 20XXPlayer 2 has been ranked as _ by N in 20XX

SAMPLE15

Source:


SAMPLE

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