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Rival brokerage firms go all out to attract clients of Karvy

Karvy Stock Broking has about 12 lakh clients, out of whom 3 lakh are active clients.

, ET Bureau|
Dec 06, 2019, 07.49 AM IST
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In addition to a free account opening and waiving depository charges, discount brokerages like Samco Securities are offering discount on research or trading products.
The crisis at Karvy Stock Broking has rival firms vying for its client base. As clients worry about the safety of their shares and securities in Karvy in the wake of regulatory restrictions, other brokerages are going all out to lure them with discounts on various services and cheaper fees.

Brokerage officials said these offers are for all potential clients but, in private, agreed that they have been launched to attract clients of Karvy. “We are offering zero account opening charges and free delivery volume of Rs 2.5 lakh to specific set of customers depending upon their size of portfolios,” says Ashish Rathi, director, HDFC Securities.

Rathi said the brokerage house is offering dedicated relationship manager to newly acquired customers, a service usually reserved for high net worth clients with a portfiolio value of at least Rs 50 lakh.

While the Sebi order allows Karvy to service existing clients, there have been concerns over the safety of their shares and whether the firm would honour its commitments.

Karvy Stock Broking has about 12 lakh clients, out of whom 3 lakh are active clients. On an average 20,000-25,000 clients transact on daily basis, out of whom 15,000-18,000 are transacting through its online trading platform, according to the Sebi order.

The rush among brokerages is for a portion of the 3 lakh active clients, said industry officials “We are ready to offer high value clients the same brokerage that they were offered at Karvy provided they can produce a contract note from his erstwhile broker as proof,” said the product head of a bank-based broker. Some brokers, which are not owned by banks, are allowing clients to open accounts in a matter of minutes “Our strength lies in opening an account in 15 minutes and onboarding a customer. This quick transition helps the investor not lose on his broking activites,” Ajit Menon, head (broking), Motilal Oswal Financial services. He said the brokerage house’s strong research support has been a selling point to investors.

In addition to a free account opening and waiving depository charges, discount brokerages like Samco Securities are offering discount on research or trading products.

“We offer a free account opening, first month brokerage cashback and subscription of research and trading products worth Rs 3,000,” says Jimeet Modi, founder, Samco Securities.

ICICI Securities is waiving off opening charges of Rs 975 and waiving off the first year demat charges of Rs 700. It is also offering free brokerage based on the margin clients are bringing in. For a margin of between Rs 1-5 lakh, it will waive off Rs 4,000 worth of brokerage. If an investor transfers stocks with value between Rs 5 lakh and Rs 25 lakh, he is offered free brokerage worth Rs 10,000.
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