India’s Leading BFSI Companies 2017
IDBI Capital Markets & Securities Limited
Kindly give us a brief of various segments in which IDBI Capital Markets operates. Broadly, IDBI Capital provides services in three major areas – Investment Banking, Institutional & Retail Broking and Portfolio Management Services. In the Investment Banking space, we provide services in Capital Market transactions, M&A and Private Equity (PE), Syndication of Debt and Resolution of Stressed Assets. On the Broking front IDBI Capital is empanelled with leading institutions as a preferred broker. We also service a vast network of retail and HNI customers and have alliances with leading banks to extend the reach of our broking services across India. Brief us about company’s new product launches planned for the current year? To improve our bouquet of services, we are about to launch Portfolio Management Services in Equity for our HNI Clients. The same is in the advanced stages of implementation. Simultaneously, we are also entering into the Currency Derivatives segment to cater to our retail clients. We are increasing the feature list of our existing trading products, and are also developing a digital platform for onboarding of clients to enable paperless account opening within hours of uploading of documents. There is potential in the stressed assets space, clubbed with mergers & acquisitions and backed by PE/buyout deals. We are also exploring the Alternative Investment Funds (AIF) space to increase our range of services. In order to extend quality services to our Investment Banking customers we are moving to the CRM platform. The Indian government is increasingly focusing on adopting digital technologies in thefinancial industry. How, according to you, can broking industry transform their businesses using these technologies? The Indian brokerage industry is already highly technology-oriented with the whole process from trading to settlement of trades being seamlessly electronic. With the exchanges now having allowed transfer/lien marking of stocks & funds on mobile phones, the digital trading mode is already gaining momentum. The digital trading platforms are likely to easily broaden and deepen over the next year
or so. Although the market share of these platforms will improve only gradually, these are clearly the “way forward’ over the next two years. Multiple investment options and more product features will get enabled on these platforms over the next year or so, in turn increasing their market share. With increased focus on digitization and the effects of demonetization, the Tier-II and Tier-III cities should be the areas of focus in order to channelize the rich sources of savings from such cities into the securities market and mutual funds. Kindly share IDBI Capital Markets’ current financial performance. What are your company’s plans for expansion and growth over the next five years? The current year’s financial performance so far is in line with the assigned targets. There has been a quantum leap in the brokerage revenue, both in retail as well as institutional segments. During the year we have extended our presence in some of the Tier-I and Tier-II cities. Going forward, we will continue to leverage corporate relationships of our parent, as well as work with leading public sector banks to scale up M&A, PE & Capital Markets business and Resolution of Stressed Assets. We are also gearing up for our foray in the Middle East region by opening an office in Dubai, and are exploring collaboration with offshore investment banks and advisory firms. In your opinion what additional measures should be undertaken by the regulator to support the growth of Indian broking industry? At present the compliance costs are phenomenally high, leaving brokers with narrow margins. Support from the regulator and centralized KYC rather than multiple agencies (CKYC/KRA) can substantially bring down costs. Further, brokers are constrained to pass on such costs to the investors. Reduced costs will ultimately improve market participation. New initiatives like digitalization of KYC requirements (E-KYC) recently introduced by the Regulator, while laudable need to be looked at in a holistic perspective to provide the intended ease to investors. Issues like acceptance of POA in digital form should also be taken by SEBI with concerned departments.
Nagaraj Garla Managing Director & CEO
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