Mumbai: A clutch of foreign majors are mulling an entry into the Indian retail brokerage, attracted by the tremendous potential and phenomenal growth achieved by Indian firms in recent times.
Players such as the Citigroup, Societe Generale (SocGen), BNP Paribas, Standard & Chartered Bank and Australia-based Macquarie Bank are understood to be contemplating picking up equity stakes in Indian brokerages as an easy route to enter the market.
The potential of the Indian market was higlighted recently when nearly 19 suitors stepped forward to claim a stake in Sharekhan. The Citigroup is understood to have emerged as the frontrunner, which analysts say could have a valuation of Rs650 crore.
“The retail equity brokerage space has been an area of special focus for major players, given the huge growth in the business in recent times and its future potential,” said Alok Jain, a broker.
ABN Amro has already launched its retail equity brokerage business while French counterpart, BNP Paribas, has acquired a 33% stake in Geojit Securities. Anand Rathi Securities has sold 19.9% stake to Citigroup Venture Capital International.
Total trading volume of brokerage firms expanding from $1,239 billion (Rs50.8 lakh crore) in 2004 to $1,500 billion (Rs61.5 lakh crore) in 2006. This is expected to cross $6,500-billion by 2015.