Broking industry likely to achieve all-time high revenues and net profits in FY24: ICRA

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₹51,000 crore on December 28, 2023. The participation of retail investors also remained strong in the futures & options segment, driven by the launch of new index options, miniaturization of contracts/lot sizes, and separate weekly expiries for each index option, said ICRA.

Meanwhile, during FY20 to FY23, the number of contracts traded increased by about nine times. Moreover, the number of contracts traded expanded by 2.4 times, on a YoY basis, in H1 FY2024, it added.

While the participation of retail investors can be impacted in the short term by adverse developments, ICRA believes that the modest share of wallet of the equity segment in household savings indicates untapped potential for sustainable growth for the broking industry over the longer term. Providing more insight, Singh added, “Supported by the buoyant market conditions in Q2 FY2024, the annualised average revenue per user of 12 of the 17 leading brokers in H1 FY2024 is estimated to have exceeded the industry’s best-ever performance till date, which was in FY2022." Given the substantial new client additions in the past few fiscals, discount brokerage houses continue to hold a leadership position, in terms of market share of active NSE clients, at 65 percent in November 2023 compared to 18 percent in March 2019.

The market share of non-bank full-service brokers and bank-based brokers stood at 21 percent and 14 percent, respectively, in November 2023, stated the report. Although the borrowings by brokerage entities were historically low, the report noted an increase in financial leverage for brokerage entities in recent fiscals due to the material scale-up of the MTF and increased working capital requirements due to regulatory changes for the securities