CY23 will be a very topsy-turvy year for equity markets, said R Venkataraman, chairman, IIFL Securities. In an interview with Business Standard, the expert stated that this year will also be excellent for long-term investors looking for sharp market dips to build strong positions.
Talking about the brokerage industry, Venkataraman noted that the brokerage industry is going through a major transformation. For discount brokers, the focus is on technology and reaching out to a maximum number of retail customers while for full-service brokers and advisors, the focus is on providing customised advice and products to diversify investor portfolios, he explained.
He further pointed out that in the broking space, well-capitalised businesses offering diversified products will be resilient as investor focus shifts from direct equity in a volatile market. Goal-oriented financial advisory and planning will be the mainstay of the industry, added the expert.
"Brokers focused on first-time or small-ticket retail customers may see customer numbers come down. Since many investors have stopped trading in a volatile market, cost management will be crucial.
If the global economic situation improves and the US Federal Reserve cuts rates later this year, helping global liquidity, the markets may see encouraging momentum. All this will help retail and first-time customer-focused brokers," he said.
Moreover, commenting on what IIFL is doing differently, Venkataraman noted that IIFL Securities is working towards sharpening its focus on affluent customers in line with the reorganisation scheme approved by the board in December. According to the scheme, IIFL Securities’ online retail trading business has been merged with 5Paisa Capital (part of IIFL Group), he further informed.
After that, about 1.5 million of IIFL Securities’ customers will be hived off to 5Paisa Capital and this will allow IIFL Securities to focus on affluent broking and distribution businesses targeting the mass affluent customer segment, he highlighted.
On the investment banking side, IIFL Securities has been the no. 1 bank for initial public offerings (IPOs) for private sector companies in India for the past five years and has a good pipeline in the next few months, added the expert.