Nikko, Prudential plan retail broking debut

To enter domain by picking up strategic stakes in brokerage firms.

Japan's Nikko Securities, US-based Prudential Securities, France's Societe Genarale andthe ING group plan to enter retail broking in India by acquiring strategic stakes in brokerage firms.

In fact, Standard Chartered, Citibank, Australia's Macquarie Securities and Deutsche Securities, too are planning a foray into retail broking.

Nikko Securities, which has $ 1 billion worth investments in the Indian markets managed by Fidelity in Mumbai, has already approached couple of retail broking houses for buying stakes, said industry sources. Prudential Securities, sources said, was looking at acquisitions or strategic stakes.

Sources said ING and Societe Generale are fine tuning their retail broking strategy and they are likely to announce the plans early next year.

In recent times, US-based broking major E*Trade has taken controlling stake in domestic brokerage house IL&FS Investsmart while BNP Paribas bought 33 per cent stake in Geojit Financial Services.

The expected entry of more global players in the broking sector comes at a time when the markets have shown phenomenal growth in the last 2-3 years. The benchmark Sensex has gone up by about 50 per cent during this calendar as most corporates showed robust growth in earnings in the last 3-4 quarters.

"Household investments in stock markets are still very low at less than 5 per cent of their total savings. Global broking firms are eyeing this as a great opportunity as worldover household investments in stock markets range between 10 and 20 per cent of savings," explained head of a brokerage house, which is in talks with global players for strategic stake sale.

Standard Chartered, which has earlier bid unsuccessfully for acquiring UTI Securities, is exploring opportunities with other domestic players for entering the equities broking space.

"Most global players will be looking at high networth individuals (HNIs) in retail broking. They may not be interested in catering to the lower end of the retail segment," said another player.

Names of Indiabulls, India Infoline, Anagram Stock Broking and Angel Broking have been floating around as prospective candidates for strategic stake sale for sometime now.