The Top Brokerages In India

What are Brokerages?

A company that buys or sells goods or assets for clients is a brokerage. Share brokers execute trades on behalf of clients at the stock exchange.

Stockbrokers are categorized into two primary types:

  1. Full-Service Brokers: They offer a wide range of services including stock trading, research, advisory and local support. They help the clients with their portfolio selections and provide investment advice.
  1. Discount Service Brokers: They are online brokers that specialize only in stock and commodity trading services. They do not offer add-ons like research advisory and branch support.

Qualities that strengthen a stock market broker:

  1. Research, Advisory and Stock tips: It is every client’s dream to find a broker with the best Research & Advisory team who can predict the performance of stocks perfectly. Advisory in the stock market is like a gamble and only a few brokers are able to predict with a 30-40% precision.
  1. Brokerage Charges and Margin Fees: There are a lot of clients who choose brokers with less brokerage charges as they don’t want to shell money on brokerage. Hence, it becomes an extremely important trait. This led to a huge reduction in the brokerage fee to almost 1/5th of the fee that traders had to pay before.
  1. Products and Services: Clients need to manage their investments and that's why all major service brokers provide them with products and services.
  1. Trading Platforms: Another important aspect to look for, while choosing a stockbroker, is a trading platform. There can be a lot of lost opportunities due to error or low speed because of a poor trading platform. Some critical features that need to be present in the trading platforms are analytical tools, charts, real-time data streaming, speed, stock recommendations, a watch-list and more.
  1. Experience: Every investor in the stock market must keep their heads up for the broking house they are choosing and it must have great experience in the field. An experienced stock market broker will not only be able to predict the market strongly but will also have strong risk management skills.

The question now arises: which one to choose? What are the pros and cons? Well, don’t worry, we got it covered.

Full-Service BrokersDiscount Brokers
BrokerageThey charge commission in terms
of the percentage of each trade executed.
They offer a flat fee on each trade executed.
Brokerage RatesTypically, between 0.3 – 0.7%Generally, ₹20 per trade
Primary ServiceThey provide trading platforms along with investment advisory.They only provide a trading platform.
Research DepartmentThey have their own research department.No such department.
NetworkThey have a large number of branches in different cities.They do not have many branches.
Customer ServiceFace to face customer service availableOnline service
Other facilitiesForex, mutual funds, IPOs, FDs and moreOnly Stock and Commodities Trading.
Add-On ServicesResearch Reports, Recommendations, Funding, Extended Margin and moreFocuses mainly on Trading
ExamplesICICI Direct, HDFC Securities, Sharekhan, Motilal Oswal, Angel Broking, Axis DirectZerodha, Pro-Stocks, SAS Online

Here is a list of the top 10 brokerage firms in India:

  1. Zerodha
  2. ICICI Securities
  3. HDFC Securities
  4. Sharekhan
  5. Axis Securities
  6. Kotak Securities
  7. Angel Broking
  8. Motilal Oswal
  9. SAS Online
  10. Upstox

Which one should you choose?

The answer depends entirely on your knowledge, preference and time.

If you want a stock advisory for your investment, then a full-time broker is your go-to company. On the other hand, if you want to do research on your own or if you have a financial advisor, then you should go for a discount broker company.

Mark Twain once divided the world into two kinds of people: those who have seen the Taj Mahal and those who haven’t. The same could be said about investors. The ones who know about the investment opportunities in India and those who don’t. Less than 5% of the total Indian population invest in the stock market. Compared to other nations, we have a long way to go. This number is slowly increasing as people have bigger dreams and bigger goals.

This led to increased competition in the brokerage companies. Discount brokerage firms boomed recently because of their low charges. No matter how big the lot you buy, be it 20 stocks or 2000 stocks, the charges remain the same, whereas full-time brokerage firms charge a percentage of the lot, which basically leads to reduced income from the stocks. According to a study from NSE, the discount brokerage company Zerodha has seen an increase of 50% in the number of active clients since 2018 and at present, it is at the top of the list with the highest numbers.

In the end, if you want to be the next Rakesh Jhunjhunwala or simply want to grow your wealth, you need to buff up your skills and understand the market. The stock market is very unpredictable and it becomes very difficult to guess the ups and downs in the stocks. As the size of your portfolio increases, the quality of your brokerage becomes paramount, so it is better you go for the best ones for you from the very beginning.

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