Discount broking is the future: HDFC Sec MD

HDFC Securities, which entered the discount-broking space a little over a year ago, expects its low-cost broking arm HDFC Sky to turn profitable in the next fiscal.

This is on the back of the runaway success it notched up in the past 13 months in terms of customer acquisition (over 1.1 million as of December) and the rising trading volume on the platform. The company is not planning any share sale, citing strong financial performance.

The full-service brokerage and its discount broking arm have added 1.2 million new customers this fiscal so far, taking the total to 6.1 million.

However, the number of active clients remains at 1.4 million. Of this, total additions - as much as 1.1 million - have been onboarded through the new platform.

“Discount broking is the future of broking in our country and full-service brokerages will get limited to just HNIs (high-net-worth individuals), going forward. This is because a large majority of investors coming to the market now are all choosing only discount platforms,” Dhiraj Relli, MD & chief executive of HDFC Securities, told TNIE.

“The message that customers are choosing discount brokers is clear from the huge number of customers we’ve added in just about 13 months alone—1.1 million, and this is also underlined by the much faster growth of similar other platforms,” he said.

On the profitability part, Relli said, “Next fiscal we should be making cash profit and in FY27 we should break-even.” This is despite the fact that he has no plans to increase the charges for retail customers on the Sky platform. Currently it charges R20 per order for buying and selling.