A Deal for Survival ; Indian Brokerages Are Roping in Foreign Partners to Compete in a Market That's Both Booming and Fiercely Competitive.

Summary

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Two years ago, when Dinesh S. Thakker downgraded himself from a broker of the Ahmedabad Stock Exchange to a sub-broker of Angel Broking, he had little choice. Ever since stock trading had moved online at the Bombay Stock Exchange and the National Stock Exchange several years ago, business had been on a steady decline on the small Ahmedabad Stock Exchange. As far as Thakker was concerned, things had come to a head and he knew it was wiser to swallow his pride and become a sub-broker for a larger player than try to eke out business on his own.

As it turns out, that was a smart move. Thakker's average daily transaction has soared from Rs 15 crore to Rs 125-130 crore, and the number of clients from 200-odd to more than 15,000. More importantly, while earlier most of Thakker's clients were people known to him, the ones that fill up his roster come to him because of the Angel Broking brand. "The business is changing. Clients are looking for quality recommendations, research and new products, which a big player can provide," says the 42-year-old.

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Extract

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A Deal for Survival ; Indian Brokerages Are Roping in Foreign Partners to Compete in a Market That's Both Booming and Fiercely Competitive.

Thakker isn't the only one hitching his wagon to a bigger brokerage firm. Consolidation is sweeping through an industry that has long been the domain of mom-n-pop operators. In less than one year, almost 15 brokerages have sold stake in themselves to either private equity investors or foreign institutions (See Snapping...

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