Broking houses located in the north are gearing up to consolidate their presence in the existing market and cross state borders to reach the potential investors.
The sub-brokers have also joined the league of the national players by acquiring direct membership of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The reduction in membership fee by the BSE from Rs 1 crore to Rs 10 lakh stimulated this development.
Although the brokers have to invest Rs 25 lakh over and above the membership fee of Rs 10 lakh in form of trade guarantee fund and bank guarantee so that the actual investment goes upto Rs 5 lakh, but the drop is substantial.
Another factor that can help proliferation of broking houses around Union Territory of Chandigarh, is the rate of stamp duty on delivery business per crore in Chandigarh is Rs 60 as compared to Rs 1,000 per crore in other cities.
The region comprising of Punjab, Haryana and Himachal Pradesh has over 700,000 active demat account holders, and also considered as one of the region having immense potential. According to experts the northern market is no longer the same, there is huge activity going on even in the small cities and town.
Chandigarh-based Vikson Securities Pvt Limited and Vikson Commodities Private Limited were earlier a sub broker with 25,000 demat accounts. The broking house is now direct member of all leading stock exchanges and commodity exchanges and has operations in all states in north including Uttar Pradesh. The promoters of the company Joshi and Kumar told that they perceive to increase the business four times in the next five years.
Confirming the enthusiasm of brokers, a senior BSE official from Mumbai told that they got 450 applications for memberships in the last few months and about 1,200 were in the various stages of scrutiny. He added that in the 135 years history of BSE it could have 900 members of which 600 were active. The current trend has surpassed the previous records.
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He said the equity culture that was predominantly concentrated in the west earlier has now started picking up in other parts of India.
Speaking to Business Standard, Gurmeet Chawla, director, Ludhiana-based Master Trust Ltd another regional broking house said, “ Our bottomline was hit due to uncertainty in the stock market in 2008, as investors were shying away from the market. We are a diversified group, so the impact was not to that extent. But now the situation is changing as the serious investors are back in the equity market including the first time investors.
He also mentioned participation in commodity market and futures is gaining momentum with improved market sentiments. Master Trust Ltd has 100 branches in northern region and plans to add about 25 more branches.