If Paytm wishes to apply for a stockbroker licence, BSE would be delighted to welcome them, says BSE CEO Ashishkumar Chauhan.
Just some Weeks after making debut and big bang entry in the financial products distribution market with mutual funds, Paytm Money needs to offer shares of listed companies directly to customers. The firm is expected to submit its application within two weeks to either of the two exchanges, BSE and the National Stock Exchange (NSE).
Pravin Jadhav, full time director at Paytm Money, declined to remark.
Ashishkumar Chauhan, CEO at BSE, stated: “In the event that they wish to apply for a broking permit, we would be enchanted to welcome them.”
On 4 September, Paytm Money Paytm Money had launched an mobile application to offer mutual fund products to its clients. Close to 1.07 million customers have already registered for the service. At present, more than 10,000 customers a day are allowed access to the app to be able to buy and sell mutual funds safely and securely.
By offering stock broking services to retail investors, Paytm Money aims to attract slightly more sophisticated investors. According to reports if Paytm gets the stockbroking licence, it will be able to offer direct and end to end equities, commodities and derivatives.
As per the official data There are 17.6 million depository accounts with the National Securities Depositories Ltd and 15.8 million depository accounts with the Central Depository Services (India) Ltd as on 31 August. There are close to 20 million mutual fund investors in India. According to NSE, 87,88,790 accounts are active with all stock brokers on the exchange club together.
Paytm’s entrance could possibly shake up the business sectors and get new speculators, given the absence of penetration of household savings in financial instruments, according to market experts. According to the Reserve Bank of India’s annual report, 0.9% of the gross national disposable income went into shares and debentures in 2017-18, up from 0.2% in 2016-17. “Potentially, they could introduce a lot more first-time investors in the stock market than we have ever done. That is mainly because they already have a captive audience,” said Nithin Kamath, CEO of Zerodha, India’s second largest stock brokerage house by number of clients.
Paytm professes to have in excess of 350 million customers base.
“Paytm needs to target not simply apprentices with regards to contributing by offering them common assets, it likewise needs to take into account propelled financial specialists who, it feels, can put specifically in values,” said the second individual said above.
“India requires an investment culture at the moment, not a trading culture. Whoever can build this investment culture will be the winner in the long run. Brokers can go after volumes, but many of them do not go after the quality of these volumes,” said Chauhan of BSE.
One of Paytm Money’s main advantages is that it can offer products at low very cost to attract customers. It already offers direct plans of mutual funds, which do not involve distributor or middleman commissions and thus come at a lower cost which improve their profit margins. Besides, it does not charge any advisory or administration fee. It remains to be seen if it waives off brokerage charges along on the lines of Zerodha securities is doing right now, which does not charge if you take delivery of stocks bought on its platform.