Stock broking firms in expansion

Following the Securities and Exchange Board of India's (Sebi) decision to nullify the role of sub-brokers in the capital market, broking firms are planning big on Gujarat for expansion.

Take the case of Prashant Kulkarni, a newly-appointed manager at Apollo Sindhoori Capital Investments, and Nehal Pandya, a manager at India Infoline Securities Ltd, at Vadodara.

Apart from putting things in place at their newly launched branches, both Kulkarni and Pandya are busy searching for new franchisees or sites to expand their operations in the state.

Apollo Sindhoori is planning new branches at Vapi, Bharuch, Anand, Nadiad and Rajkot in the next three months.

At India Infoline, better known as 5paisa.com, Pandya and his team have the responsibility to finalise sites for its upcoming branches in Bharuch, Nadiad, Gandhinagar, Mehsana, Rajkot, Jamnagar and Bhuj before March 2005.

The scenario is almost same at all stock broking firms offering transactions on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) across the state. Sebi has banned routing of payments and delivery of shares through sub-brokers.

The regulator plans direct dealings between a broker and the client, and the sub-broker will receive his commission from the broker for which a tripartite agreement has to be signed between the broker, sub-broker and the client.

"All big and small stock broking firms are eyeing Gujarat as a great opportunity in the coming days as the state has probably the largest share in capital market through investments. We have already selected sites for a couple of new branches. We are looking for five more sites across the state," said Pandya.

Broking firms are either opening their own branches or opting for the franchisee model in smaller centers like Anand, Nadidad and Bharuch.

About 15 new stock broking firms have set up shop in Anand in the last six months and many more are searching for franchisee or sites. According to market buzz, Motilal Oswal Securities is planning offices in at least five towns. Motilal Oswal and IL&FS Investsmart had launched their operations in Vadodara two months before.

Recently, broking firm Sharekhan shifted its office to a bigger space and planning to launch its services in three new towns.

"Gujarati investors will have a greater opportunity to interact with and trade through major players on the BSE and NSE in the coming days. The rise in number of stock broking firms can be estimated from the increasing salaries of experienced people in this field," said Kulkarni at Apollo Sindhoori.