HDFC Securities to enter discount broking to win market share

PTI Mumbai | Updated on July 19, 2021

In Q1, its net profit was up 94.9 per cent to ₹260.6 crore.

HDFC Securities is creating its discount broking architecture to compete with new-age firms like Zerodha, which are eating into market shares of entrenched players in the business, its parent HDFC Bank's managing director Shashidhar Jagdishan has said.

Over the next two-three years, the company targets to gain the market, Jagdishan said, making it clear that the largest private sector lender does not have any plans to sell stakes in the brokerage.

It can be noted that over the last few years, discount brokerages that help an investor transact by paying a fraction of commissions and fees have become popular with investors, forcing many of the entrenched players to offer similar offerings.

"I'm happy to say that our own HDFC Securities also has a plan, and you will see that countering the threats from discount brokerages with its own neo architecture or discount kind of an architecture as well,” Jagdishan told the bank's shareholders at its annual general meeting on Saturday.

He added that HDFC Securities would be responsible and exuded confidence that it would gain market share in 2-3 years.

Q1 performance

The company, which registered a 94.9 per cent growth in its June quarter net profit to ₹260.6 crore, is doing extremely well, Jagdishan said.

As per filings, HDFC Securities' total income grew by 67.3 per cent to ₹457.8 crore in the June quarter as against ₹273.7 crore in the year-ago period. It had 215 branches across 147 cities/ towns in the country.

Technology adoption

Meanwhile, speaking at the bank's AGM, its non-executive chairman Atanu Chakraborty said the largest lender in the private space is on its way to scale technology adoption and transformation agenda through scaling infrastructure, disaster recovery resilience, information security enhancements and having a monitoring mechanism.

He said the bank had taken the regulatory actions arising out of challenges faced on technology in the right spirit, and the management has displayed grace and humility.

Published on July 18, 2021

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