Most of the country?s brokers may be busy downsizing their operations but a few are choosing to go against the trend. Despite depressed market conditions, Destimoney, Future Capital Securities (FCSL), a subsidiary of Future Capital Holding, and BMA Wealth Creators are scaling up their business.
Destimoney, which began the year with 200 employees, 12 branches and 68 franchisees, has ramped up its scale to 800 employees, 40 branches and 814 franchisees. During this time it has managed to increase its average daily turnover from about R100 crore to R900 crore, according to the company. The firm plans to add another 200 employees and set up 10 more branches by the end of the year.
?We are small and want to scale up quickly,? said Sudip Bandyopadhyay, managing director and CEO, Destimoney Securities, who took charge of the firm in January this year. ?Our business has been growing rapidly over the last six months and one of our strategies is to move into tier 2 and tier 3 cities where competition is not that intense and there?s considerable scope for penetration.?
BMA Wealth Creators, too, has been expanding furiously, primarily targetting tier 2 and tier 3 cities. It has added 100 branches and recruited more than 1,000 employees this year. The firm plans to hire 2,000 more by the end of this fiscal. Additionally, the firm has about 3,000 remote outlets of under 500 sq ft to cater to smaller towns. ?It is difficult to get the right talent during bull markets. This is a good time to recruit,? said Anubhav Bhatter, managing director & CEO, BMA Wealth Creators. The company also went on an advertising blitzkrieg this year with its ad featuring Bollywood actress Kareena Kapoor.
FCSL, though, is adopting a more cautious approach. The firm wants to expand through a hub and spoke model, mostly through sub brokers and remisors. It has 20 of its own broking branches and another 20 store-in-stores within Future Group outlets that provide broking services.
The firm?s strategy is to cater to retail clients through its broking branches and store-in-stores and source high net worth clients through its wealth division. The firm wants to triple the number of sub-brokers from the existing 35 by the year end and add another 20 relationship managers to its current tally of 60.
?We plan to scale up to 100 stores in another six months. Setting up branches within existing Future Group stores will help us reduce the cost of customer acquisition,? said Vivek Kanwar, head ? broking, wealth management & property services, FCSL. All three players want to focus on retail and HNI clients. ?It?s not easy to build an institutional business; getting empanelled and building institutional relationships takes time,? said Kanwar.
However, most brokers have been downsizing their operations in the past few months owing to falling yields and declining profit margins. Many are currently on a cost cutting drive, shuttering branches and reducing employee strength. The second quarter results too have not been encouraging with top brokers seeing a margin decline of anywhere between 18% and 75%.