"We have a digital-first business model wherein everything, from client acquisition to onboarding and servicing, is done online", highlights Prabhakar Tiwari, Chief Growth Officer, Angel Broking in an exclusive interview with Geyatee Deshpande, Senior Research Associate, Dalal Street Investment Journal.
What are your growth drivers?
Our primary growth driver is our full-stack, tech-driven suite of services that we extend to our customers. It includes dedicated products & services for both traders and investors. Some of them include Angel SpeedPro, SmartAPI, Angel Broking mobile app, investment engine ARQ Prime, Smart Money, and our third-party tie-ups with US-based investment platform, Vested and bundled stocks smallcase, to name a few. All such services add to the productivity of our customers and empower them to generate superior returns as compared to the respective industry benchmarks.
Another critical factor is our flat pricing structure. The delivery trades on our platform are free of cost whereas F&O, intraday, currency, and commodity trades involve a flat fee of Rs 20 per order, irrespective of the order size.
Lastly, the majority of our customers are millennial, first-time investors. For them, we have further ensured seamless investor education using an all-encompassing approach. While we drive advisories and investor training programmes via our digital channels, we have also developed special platforms such as Smart Money, wherein we train customers, different levels of expertise to invest & trade. They can learn using such platforms while simultaneously generate returns via touch-of-a-button investments with ARQ Prime and smallcase. ARQ Prime is one of the longest-running, proven Smart Beta strategies in India. It analyses more than 1 billion data points before making a recommendation. Smallcase, on the other hand, is a basket of curated stocks and ETFs based on an idea, theme, or strategy.
This tech-intensive, customer-centric approach is what is driving the footfall here at Angel Broking. In March 2021, we onboarded a total of 3,79,233 customers. Our total client base has also increased to 4.1 million.
How is digitisation helping you reach out to your clients more effectively?
We have a digital-first business model wherein everything, from client acquisition to onboarding and servicing, is done online. Our technological prowess can be gauged by the fact that it takes less than 5 minutes for a customer to register and start trading with us. Furthermore, our services are available via web-based, desktop-based, and app-based platforms, something that adds to the convenience of our customers.
We have made considerable inroads into tier 2 and tier 3 cities using this digital approach. For instance, tier 2 and tier 3 cities together contributed to approximately 92 per cent of gross client addition at Angel Broking in Q3FY21. The client addition from tier 3 cities in Q3FY21 increased 9.3 times over Q1FY20 when we began our digital-first journey. It has also climbed 6.7 times in the case of tier 2 cities during the same period.
What is your outlook on the broking industry in India?
The Indian broking industry can be said to still be in its embryonic stage. Retail participation in India is about 4 per cent as of December 2020. As compared to this, China had 11.4 per cent penetration in December 2019 while the USA has 32 per cent penetration.
At present, what we are also observing in India is that more people are adopting a new, digital lifestyle. This is opening up the broking segment to all kinds of possibilities wherein, the sky is the limit for innovative products & services. It will be interesting to see how the new FinTech-based approach will transform the broking segment in the coming few years.
At what rate are you adding new clients?
The gross client acquisition in Q4FY2021 was approximately 9.56 lakh at Angel Broking. This is approximately 87 per cent higher sequentially and about 14.1 times higher than Q1FY2020. Our share of active client base at NSE has simultaneously risen from 4.8 per cent in Q1FY2020 to 7.6 per cent in Q3FY2021, which indicates a 1.6x expansion in the market share.
What are your top strategic priorities?
Our top strategic priorities are as follows:
To strengthen our leadership position in order to become the largest retail broking house in India.
Establish a substantial client base in investment advisory business to support growth.
Augment investment in the mobile platform, artificial intelligence, machine-learning capabilities & newer technologies.
Capitalise on the growing investible wealth in India.
Leverage technology to penetrate new customers in tier 2, 3 cities & beyond.
How do you think your tie-up with smallcase will help grow your business?
While investing, customers need ease and comfort, coupled with peace of mind. We believe that smallcase brings tangible value to the table on this front by perfectly complementing our investment engine, ARQ Prime. While ARQ Prime empowers our customers to engage in touch-of-a-button investments; for individual stocks or all of them taken at large, smallcase does the same for a basket of stocks and ETFs based on ideas, themes, or strategies. They don’t have to meticulously analyse their fundamentals, technicals, and the prevalent undercurrents in the market. It considerably improves their comfort, satisfaction, and returns in general.