Top Listed Stock Brokers in India: While many sectors witnessed the worst period during the Covid-19 pandemic, the broking industry saw significant growth during the period.
The growth in the industry was driven by increased retail participation, robust corporate earnings and favourable liquidity in both international and domestic markets.
In this article, we will look at the Top Listed Stock Brokers in India and also analyse the industry as a whole. Keep reading to find out.
Increased financial awareness has led to a 130% growth in the Demat accounts openings when the pandemic resulted in a significant meltdown in the stock market.
Another significant driver for increasing participation in the equity market is technological innovations. Smartphones and affordable data have pushed trading and investing into the digital sphere.
Also, thanks to the implementation of eKYC and Aadhaar eSign, opening a Demat account has become a paperless and simple process.
In the financial year 2020, an average of 4 lakh Demat accounts were opened every month which has greatly benefited the broking companies. This number further increased to 11.9 lakh in the financial year 2021 and is currently at 28.33 lakh for the current financial year.
The industry is anticipated to generate total revenue of Rs 27,000–28,000 crore in FY22, representing a year-over-year rise of 28–33%, according to rating agency Icra. However, it is anticipated that the pace of revenue growth will slow to 5-7% in FY23 with an anticipated total industry turnover of Rs 28,500-29,000 crore.
What do Broking Companies Do?
The financial brokers give business or individual clients financial assistance. The brokerage sector in India is shifting from a transaction-based to a fee-based one, providing services like wealth management and investment consulting.
In addition to advising services, a greater emphasis is being placed on fund-based operations, such as margin finance and lending against shares, which enables brokers to generate stable profits.
To assist clients in reaching their goals, financial brokers have improved their marketing skills. They provide a variety of goods and services that improve their rapport with customers.
Top Listed Stock Brokers in India
Listed Stock Brokers in India #1 – ICICI Securities
ICICI Securities is a subsidiary of ICICI Bank Ltd, which began its operation in May 1995 and continues to grow its operation through expanding its client base and providing different types of services.
With a market capitalisation of Rs 14,396 Cr, it is the largest listed broking stock of 2022. The company is diversified into the business of Retail and Institutional Broking, Distribution of financial products, Wealth management and investment banking.
The company has a client base of 7.56 million customers with a CAGR of 16% from FY17-FY22. For the financial year 2022, they had a client acquisition of 2.27 million customers which is the highest ever recorded in a year.
If we take a look at the financials of the company, it has shown a consistent increase in revenue from Rs 1,861 Cr in FY18 to Rs 3,435 in FY22. Along with the revenue, the company’s profits have also increased from Rs 553 to Rs 1,383 in the same period.
The company has a ROCE of 27% and an ROE of 65% which is really a positive attribute of the company. It also has a PE of 10.4 compared to the industry PE of 25.4 which indicates that the company is undervalued when compared to the industry.
The company’s debt has heavily increased in the last five years. In FY22, its debt stood at Rs 7,846 Cr with a debt to equity ratio of 3.23 which is a major drawback of the company.
In the last two years, the stake of the promoters has been reduced by 4% and currently stands at 74.87%.
Listed Stock Brokers in India #2 – Motilal Oswal Financial Service Ltd
Motilal Oswal Financial Service Ltd was founded as a small broking sub-unit in 1987. With excellent business practices and the implementation of cutting-edge technology, the company has blossomed into a 9000+ member team.
With a market capitalisation of Rs 11,411 Cr, it is the second largest listed broking stock of 2022. The company has diversified its business portfolio into broking, asset management, wealth management, private equity and real estate segment.
The company is headquartered in Mumbai and has spread across 550 cities and has acquired a customer base of 4.8 million customers as of FY22.
When we take a look at the financial statements of the company we can see that the company’s revenue has increased from Rs 2,751 Cr in FY18 to Rs 4,298 in FY22. The profitability of the company has also increased from Rs 829 Cr in FY18 to Rs 1,616 Cr in the same period
The valuation of the company is undervalued compared to the industry with a PE of 8.71 which is a positive prospect for the company. Although the company’s debt has been increasing, it has maintained a debt to equity ratio of 1.08 which is relatively good for the company.
A slight drawback for the company might be the promoters reducing their stake by 1.16% over the past year. The promoter’s stake currently stands at 69.50%.
Listed Stock Brokers in India #3 – Angel One Ltd
Angel One Limited, formerly known as Angel Broking Limited was incorporated on 8 August 1996 as a private limited company. As of December 31, 2021, it has become the largest listed retail broking house in India in terms of active clients on NSE.
With a market capitalisation of Rs 10,686 Cr, it is the third largest listed broking stock of 2022. It has a diverse range of financial products and service offerings which include broking services, investment advisory, margin trading facility, loan against shares, distribution of third-party financial products and investor education.
The company has achieved a client base of 9.2 million customers in India, which is the largest client base among the listed retail broking houses. it has also acquired a 21.3% market share in the overall equity turnover
If we take a look at the financials of the company, we can notice that the company has noticed significant growth after 2020. The company’s revenue grew from Rs 748 Cr in 2020 to Rs 2,292 Cr in 2022. The net profits of the company have also increased significantly from Rs 114 Cr to Rs 625 Cr in the same period.
Another positive thing about the company is, that it has a ROCE of 35.5% which is the highest among the top companies and an ROE of 46%. The PE of the company stands at 15.6 which means the company is undervalued when compared to the industry.
Though the company has a debt of Rs 1,258 Cr, its debt to equity ratio stands at 0.79 which is a reasonable amount for the company.
Listed Stock Brokers in India #4 – Multi Commodity Exchange of India Ltd
MCX India started its operations in November 2003 under the regulatory framework of the Securities and Exchange Board of India (SEBI). It is the first listed exchange in India.
With a market capitalisation of Rs 6,914 Cr, it is the 7th largest commodity exchange in the world. It is also the first exchange to offer commodity options contracts, bullion index futures and base metals index futures contracts in India.
As of FY22, the company has attained 93.6% market share and has gained a monopoly in its segment. It is spread across 1,018 cities and towns across the country.
If we take a look at the financials of the company, we can see the company’s revenue has dropped from Rs 398 Cr in FY20 to Rs 367 Cr in FY22. The company’s profits have also reduced from Rs 265 Cr to Rs 184 Cr in the same period.
The PE of the company is overvalued at 43.4 when compared to the industry PE of 23. The ROCE and ROE of the company stand at 14.4% and 11.2% which is comparatively low when compared to its peers. Another major drawback is that promoters do not hold any stake in the company.
A significant aspect of the company is that it is almost debt free with a debt-to-equity ratio of 0 and the company has a dividend payout of 61.9%.
list of the 15 top listed stock brokers in India:
|Company||CMP||Market Cap (in Cr)|
Without a doubt, the industry has tremendous growth potential due to the vast number of consumers in the country. This is a result of the nation’s sizable 1.3 billion population.
The broking industry has a high potential for growth in the country. But, the investors must also be aware of the challenges the sector may face. These include the seasonality of the stock and the major portion of the market share taken by unlisted players like Upstox and Zerodha.
Let us know what you think about this sector and also your top broking stocks in India picks in the comments below. Happy Investing!
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