ICICI group rejigs broking business

The ICICI group is restructuring its brokerage subsidiaries by bringing its retail and institutional broking units under one roof, ahead of retail broking forays by a number of foreign players.

ICICI Web Trade Ltd (IWTL), the retail broking arm of the ICICI group, has been merged with institutional broking unit ICICI Brokerage Services Ltd (IBSL), a wholly-owned subsidiary of ICICI Bank's investment banking arm ICICI Securities (I-Sec).

Before the merger, ICICI Web Trade was part of ICICI Ventures, another wholly-owned subsidiary of ICICI Bank. ICICI Web Trade would cease to exist following the merger, but the company is retaining the popular retail broking brand, ICICI Direct.

Both retail and institutional businesses would operate as separate divisions within IBSL, top officials said. "The merger came into effect from October 1," said S Mukherji, managing director and CEO of I-Sec.

The move is part of the company's strategy to bring all its broking businesses under one roof, before launching an aggressive push in its retail business.

ICICI Direct has the biggest share of the internet-based stock investors at 1 million customers out of a total of 1.5 million internet investors in the country, said Kedar Deshpande, deputy general manager at ICICI Web Trade.

"Our retail strategy would continue to be aimed at online investors," he said, ruling out offline retail broking services, as it is both costly and riskier.

However, I-Sec "" which has a pan-India presence "" will continue to open more outlets in a move to increase its customer base. "Our offices will act as our interface with clients," Deshpande said.

With several leading global players eyeing the growing retail broking business, analysts anticipate the consolidation and restructuring among local players to gather pace in the coming months.

Citigroup, ABN-AMRO, Morgan Stanley, Macquarie Securities, BNP Paribas and Prudential are among the global players that have been planning to enter the retail broking business in a big way in the country.

Several domestic brokerage houses, including Indiabulls, Motilal Oswal Securities, SSKI, and a clutch of others have seen the entry of private equity investors in recent times, as the brokerage houses look for expansion and retain their clientele.

"We conduct about 140-odd investor programmes every week across the country," Deshpande said. A key feature of the programme is to educate investors on how to do transactions over the ICICI Direct's internet platform.

He said ICICI Direct, which is among the top-five brokerage houses in the country, sees about 3.5 lakh transactions a day, during peak days.