According to sources in Sharekhan, the initial incentives to investors is part of a strategy for pilot testing of its trading systems for one month when feedback from participating investors would be used to make the product more investor-friendly and remove bugs, if any, from the system.

The Sharekhan scheme has attracted investor response of over 3,000 in Mumbai, Ahmedabad, Bangalore and other cities, which have a widely spread equity cult. Bombay alone, accounts for nearly 40 per cent of the applications, sources added.

About 500 investors would be shortlisted after a detailed investor-profiling is undertaken based on investment habits, Internet usage and other attributes like ability to accept innovative products. The objective of the test was to "identify Sharekhan users who were most likely to take to online trading immediately and also constructive feedback on the product". During the test phase of one month, only the 500 investors will have access to the online trading facility. A commercial offer will be thrown open only on successful completion of the test phase, said sources. Commenting on the Sharekhan offer, a competitor pointed out that investors should bear in mind that nothing is free and there is a price to pay for every service rendered. "Everybody in the business is striving to build a critical mass. The means adopted by businesses may be different," he said. However, its business potential was beyond doubt, he added.

Contrast this with firms like Investsmart India, the stockbroking arm of IL&FS, which launched its online trading product way back in February this year to give a "kickstart" to the online trading product of NSE although the legal system is still not in place, sources maintained.

According to Investsmart sources, the company has not yet adopted an aggressive marketing strategy and is content to keep a low profile. It already has existing customers (about 10,000) doing offline trading from its 14 branches all over the country who are potential users of its online product.

Investsmart has payments routed through the HDFC Bank and Citibank and has tieups with IL&FS for depository linkages and is looking at partnerships with other major DPs also. An Investsmart source pointed out that while the payment and settlement of trades were still being streamlined there were no problems with the trade component of their product.