Angel Broking Says Record Client Addition Blitz Will Last 5-7 Years
Angel Broking Ltd. now ranks among India’s top five brokerages by clients as it added third-highest new accounts during the pandemic-hit fiscal.
Indian brokerages in all added more than 1 crore new client accounts in the year ended March as retail investors piled into equities to ride the rebound. Angel Broking accounted for 24 lakh, including 9.6 lakh in the fourth quarter alone. That’s the biggest jump for Angel Broking, and the most after market leader Zerodha Broking Ltd. and Upstox, operated by RKSV Securities Ltd., in a year.
Dinesh Thakkar, founder, Angel Broking, is confident to maintain the run rate not just in the ongoing fiscal 2021-22 but in the next five to seven years. The optimism, he said in an interview with BloombergQuint, stems from the fact that India is an underpenetrated market. Fresh clients from tier II and III cities will help company meet that goal, he said.
Growth Over Profit
Angel Broking will prioritise growth over profitability, aided by digital expansion that will allow it to expand in tier II and III cities. There’s potential as 4% of people invest in equities compared to China’s 11.4% and U.S.’s 32%, Thakkar said.
The last two years, according to Thakkar, have shown that the industry will be driven by digital brokers. For Angel Broking millennials account for a big share of clients—with the median age reducing to 30 years as of March from 34 years a year earlier.
The company plans to increase market share across segments in broking in the next two to three years to become a full-fledged fintech company, Thakkar said. It plans to rollout out an app for customers to trade in shares and plan finances and investment, targeting tech-savvy millennial clients, he said. The app will also distribute mutual funds and insurance.
A Mutual Fund On Cards
Angel Broking plans to foray into asset management business by floating a mutual fund focused on tech-based passive investment products. It will take two years for approval, he said.
The company is confident of generating cash flow given its asset-light business model. It plans pay a minimum of 35% of the profit each year as dividend spread over four quarters to reward shareholders.