Kotak offers flat fee model for share deals

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Our Bureau

Mumbai, Aug. 7

Kotak Securities is offering investors the privilege of a flat fee for shares purchased by them, the company said here on Monday. Labelled `Kotak Flat', the fixed fee-based brokerage model is offered for its Internet-based traders and customers.

"Internet-based trading has enormous potential in the country and it has grown to 12 per cent of the total trade as compared to just 2 per cent a couple of years ago. With an easy brokerage structure, we will be able to acquire a million customers online by the end of this year," said Mr S.A. Narayan, Managing Director, Kotak Securities, on the occasion of the launch of their new product.

For all deliveries up to Rs 5,000 and non-deliveries up to Rs 50,000, the brokerage would be Rs 9 per deal (statutory charges extra). For deliveries exceeding Rs 5,000, investors will have to pay an additional Rs 9 for every transaction amounting to Rs 5,000.

"This is the best bargain available for retail investors in India. The brokerage scheme will be three times cheaper than normal market brokerage norms. Moreover, `Kotak Flat' is applicable on all trades delivery, square off and options/futures and invests on both the NSE and BSE,'' said Mr Prasanth Prabhakaran, senior Vice-President, Kotak Securities.

HDFC Securities has declined to comment, stating, "The company will have to see the product before making a comment.'' However, majority of the brokers see the launch as a pre-emptive measure to other stock broking firms offering a flat fee structure and thereby erode Kotak's market presence.

"Many other firms are in the process of coming out with fixed brokerage models," said a senior market analyst of a leading brokerage.

Brokers are of the opinion that `Kotak Flat' will cater only to a small class of investors.

(This article was published in the Business Line print edition dated August 8, 2006)
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