Market Research Report : Financial Brokerage Market in India 2012
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Transcript of 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%
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
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:
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
SAMPLE
•Introduction•Market Overview•Drivers and ChallengesDrivers and Challenges•Trends•Competition•Competition•Key TakeawaysA di•Appendix
6FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
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
7FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
Trends – Summary
Trading in other platforms
Advent of foreign and new Indian players
Hard selling of Demat account
`
Hard selling of Demat account
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
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
•Introduction•Market Overview•Drivers and ChallengesDrivers and Challenges•Trends•Competition•Competition•Key TakeawaysA di•Appendix
9FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
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
Public: Domestic Company – Player 1 (2/3)
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:
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
Public: Domestic Company – Player 1 (3/3)
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
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
Private: Domestic Company – Player 2 (1/3)
Company Information Offices and Centres – India
Corporate Address
156,117.2Tel No.
Fax No.
Website
Products and Services
Website
Year of Incorporation
Head Office
Key People
Products and Services
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:
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
SAMPLE
Private: Domestic Company – Player 2 (2/3)
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)
Interest costs (% of Sales)
0200
-50
0
2011201020092008
SAMPLE
Interest costs (% of Sales)
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
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
Private: Domestic Company – Player 2 (3/3)
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:
FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT
SAMPLE
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FINANCIAL BROKERAGE MARKET IN INDIA 2012.PPT