In the first nine months of FY21, the broking industry added 5.2 million new clients – more than what they added during the preceding four years, cumulatively.
As on December 2020, the total active client base to stood at 160 million
The sharp rally in the equity markets
coupled with the new client additions also saw average daily trading turnover soar to record highs.
The agency, however, says the new client additions are not translating into higher revenues for the industry. During the December quarter, the broking revenue de-grew by 1-8 per cent on a sequential basis
"Performance in the December quarter shows signs of fatigue creeping in, with most broking entities registering on-quarter de-growth in revenue , despite continued record client additions," said Krishnan Sitaraman, Senior Director, CRISIL Ratings.
The regulatory changes could be weighing on trading volumes.
The two regulatory changes are - upfront margin requirement in cash segment trading, effective September 1, 2020, and full margin requirement for intraday position to be implemented in phases starting with 25 per cent peak margin from December 1, 2020, to 100 per cent September 1, 2021.
Discount brokers grabbed a significant market share of active clients. But they still lag bank-led brokers in terms of revenue market share, said Crisil.
Crisil Ratings estimates that the average revenue per user for bank-led brokerages
was Rs 10,000-12,000 during the first half of fiscal 2021, while that for discount brokers was Rs 4,000-8,000.
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