HDFC Securities has entered the low-cost broking arena with the HDFC SKY platform (website and app). This entity will provide access to Indian stocks, exchange-traded funds, mutual funds, futures and options, currencies, commodities, IPOs, and global equities on a single platform. Here is a review.
The Indian broking space has seen a slew of launches, such as the Phonepe Share market and Mirae Asset m.Stock. HDFC SKY is the newest kid on the block, aiming to wrest market share from Zerodha and Groww. It appears HDFC Securities2, through SKY, wants to increase the active derivative traders, targeting tech-savvy, new-age investors. Coming from HDFC Securities, SKY has made a decent debut in terms of product offerings, fees and costs.
Firstly, the platform provides access to major types of investment options, something not many fintech platforms currently do in one place. Government of India bonds and debt securities options shall arrive soon on SKY. Investors can find stock recommendations, target prices as well as detailed explanations of the financial performance of a company. Apart from stocks, mutual fund schemes have also been ranked.
Two, there are no account opening and maintenance charges for the first year. Demat AMC is ₹20/month from second year onwards. The one-price brokerage for equity, derivatives, currency, commodity and others of Rs 20 is simple. US stocks brokerage costs 5 cents a share (payment charge $5 for first-time fund addition and $10 for fund withdrawal). This is essentially a flat-fee brokerage model. The suitability of a flat-fee brokerage model depends on the investor’s trading frequency, portfolio size, and the level of service and advice they require. It may be a good choice for active traders. Players such as ProStocks, Nuvama Wealth and Flattrade offer lower brokerage basis plans.
SKY offers margin trading facility (MTF) at 12 per cent interest ( lower than many peers) and similar interest for margin against collateral for derivatives. Note Mirae Asset m.Stock offers 6.99 per cent for MTF.
One can download the HDFC SKY app from App Store (iOS) and Google Play (android). Regarding user feedback, we came across some Android users highlighting issues about the customer care system, support, and contact us links. There were requests for the option to add one or two secondary banks and a fund transfer option using NEFT from the linked bank accounts.
Current clients of HDFC Securities will have to shift to HDFC Sky if they wish to use the latter. To initiate the switch, you must first close your HDFC Securities account.
Broking has become a crowded and commoditised space, with little entry barrier, thanks to technology. Hence, pricing is no longer a differentiator.
HDFC SKY is offering research along with the execution platform. It provides fundamental and technical calls, which can be a USP if accuracy is high.
SKY has easy-to-use features and an attractive interface. Transparent fees and charges are attractive as well as competitive.
However, investing experience and familiarity (with charts etc.) are very personal parameters especially for active traders. If you are facing consistent issues with a low-cost broker, you can consider trying HDFC SKY.