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Kamlesh Rao, CEO of Kotak Securities, has chalked out a strategy to push up the broking firm’s market share among retail investors in the next 18 months. The former banker has chosen technology and equity research in regional languages as the key drivers for growth in the turning-around market. Kamlesh Rao spoke to BusinessLine at length about his plans. Excerpts :
What is your current outlook for the equity market?
We are conservatively optimistic. The positive process has begun. It has to gain momentum. There is a catch down the line. Crude oil prices cannot remain below $70 a barrel for long. Upward movement in crude can lead to convulsion in the equity market.
What is the trend in retail segment participation?
At the current level of the Sensex — hovering at a multiple of around 16, interest rate at a high, restricted profitability and not more than 68 per cent capacity utilisation by companies, HNIs are in dominance in the market. In the retail segment, small investors’ participation may constitute around 5 per cent.
However, HNIs have changed their tack of late. In the pre-election period, they nibbled at, say around 10 per cent, of the equity market. Now, post-election, HNI activity in equities represents around 35 per cent.
What is your research strategy?
We are planning to extend our equity research to 10 regional languages to reach out to new clients in tier-I, II and III cities. In the next few months, we would roll out research services in Bengali, Gujarati, Marathi, Punjabi, Tamil, Malayalam, Kannada and Telegu.
What are the dimensions of your client acquisition plan?
We are targeting clients, who are focussed on cash transactions. The preference for the reach-out plan is loaded in favour of technology. This model is cheaper and effective for a broking firm for acquiring new clients and keeping them glued through the website, phone and chat.
In the next 18 months, we plan to increase our (retail) market share to 7 per cent from the current 4.5 per cent. This, we want to achieve through our online reach-out strategy.
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