| Author |
Message |
luke123
Senior Member
Joined: 02/Sep/2007
Location: India
Online Status: Offline
Posts: 427
|
   Posted: 29/Nov/2007 at 12:30pm |
|
These are all discount brokerages catering to Individual investors. ML, MS etc are brokerages with better USPs as they do everything that Indian brokerages are attempting to do. Institutional brokerages bring in more money than retail ones. How many Indian brokerages succeed is still in future. Long term not all of them will succeed. As WB says, in capitalism, there are few winners.
Traditionally brokerages have been cyclical businesses getting valuations of 10-15 but since India is a potential multi year bull market, the cyclical aspect goes away to an extent. And indian brokerages are very high margin businesses so far. Ibulls brokerage op margins are like 60%.
Etrade attempted mortgages and it has fallen on its head with its existence in danger. They had mcap of 10-12b before its recent fall because of subprime.
Luke
|
 IP Logged |
|
|
|
 |
|
kulman
Senior Member
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
|
Posted: 29/Nov/2007 at 12:30pm |
Think of the devils...............fresh from the press....
Buoyed by the enthusiastic response to the IPOs of leading broking and investment banking firms, more and more industry players are eyeing the capital market route to raise funds.
If market sources are to be believed, about half a dozen players, including established names like Enam Securities, Anand Rathi Securities, Angel Broking and Anagram Stock Broking, are going in for an initial public offering to cash in on the soaring valuations in the stock broking space.
Some of these firms, particularly those which have roped in private equity investors, may want to get listed to provide an exit route to their PE partners, said market sources.
Source:
_to_enter_capital_market/articleshow/2580333.cms
|
|
Life can only be understood backwards—but it must be lived forwards
|
|
IP Logged |
|
|
|
Ajith
Senior Member
Joined: 06/Aug/2006
Location: India
Online Status: Offline
Posts: 1284
|
Posted: 29/Nov/2007 at 1:04pm |
If 1)there is some shift in patern of savings to equity and if 2) definitely there is a trend of more speculators entering the fray as years pass(thats almost certain),
then some brokerages are going to be huge.
Edited by Ajith - 29/Nov/2007 at 1:30pm
|
|
Ajith
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 29/Nov/2007 at 2:19pm |
| Traditionally brokerages have been cyclical businesses getting valuations of 10-15 but since India is a potential multi year bull market, the cyclical aspect goes away to an extent. |
Unfortunately this statement gets used more while valuing brokerage companies independently on TV none of the brokerages talk about multi year etc. They are all talking bubbles and peaks. This is the biggest dichotomy that I see.
If there is a multi year bull market then any non cyclical sector will do well.
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
kulman
Senior Member
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
|
Posted: 10/Mar/2008 at 9:31am |
Dharmesh Mehta , head equities, Enam Securities.
|
definite change from a few years ago when many domestic brokerages did not have the confidence to run it on their own and believed only foreign tie-ups could add value to their outfits.
Second, structurally the business is changing. FIIs and domestic investors have realised the importance of talking to someone with a very strong ground knowledge.
The entry of hedge funds into the market is another factor. Hedge funds tend to be aggressive and only look for absolute returns. They do not have balance sheet or net-worth constraints or restrictions in dealing with local brokers. This was a key turning point.
There were certain things a domestic broking house could not do earlier, which is happening now. With the acceleration in FII registration or slowdown in P Notes, domestic firms are expected to benefit, as all these FIIs will interact with domestic brokerages directly
The introduction of derivatives, which is hugely dominated by domestic brokerages, is another positive.
only the fittest will survive. It is an India Inc story at the end of the day and the financial services industry cannot be ignored. |
Cyclical business which directly depends on the mood of Mr. Market, who is unstable character.
Edited by kulman - 10/Mar/2008 at 9:36am
|
|
Life can only be understood backwards—but it must be lived forwards
|
|
IP Logged |
|
|
|
kulman
Senior Member
Joined: 02/Sep/2006
Location: India
Online Status: Offline
Posts: 9319
|
Posted: 19/Mar/2008 at 12:54pm |
Baring PE acquires 12% in Sharekhan for Rs 240 cr
|
Baring PE has pipped financial services giant Merrill Lynch to acquire a 12% stake in Mumbai-based brokerage firm Sharekhan in a deal worth Rs 240 crore.
This deal values the brokerage company at Rs 2,000 crore. The transaction is through a mix of secondary sale by the largest shareholder of the brokerage firm CVC and additional infusion of funds into the company’s capital.
ET had reported in its edition dated December 24, 2007 that Baring is among the group of investors negotiating to pick a minority stake in Sharekhan. Earlier, Merrill Lynch was believed to be the front-runner to pick this stake.
Last year, CVC along with IDFC had invested around Rs 650 crore to pick 85% stake in Sharekhan. This translates into valuation upside of more than 125% in ten months.
CVC owns 75% in Sharekhan while IDFC holds 10% and the management and employees hold the remaining 15%.
Last year, CVC and IDFC together had acquired 37% equity owned by Sharekhan promoter Shripal Morakhia while 48% was acquired from other shareholders including GE, Intel Capital and some funds advised by HSBC PE India. As reported earlier, CVC was believed to be keen on diluting its stake in Sharekhan due to some regulatory issues. CVC, part of banking major Citigroup, had a significant majority stake in the brokerage firm.
A private equity firm holding substantial equity stake in an unlisted company would be classified as a promoter. If that company goes public, the PE firm’s shares would have a lock-in period and cannot exit for a certain period. This could be one reason why CVC intends to dilute its stake, though it could not be verified independently.
A classification as a promoter also brings other aspects such as disclosure norms into the picture.
According to a source close to the deal, the latest transaction involved additional capital infusion by existing shareholders including IDFC which invested proportionately to maintain its 10% holding in Sharekhan pursuant to Baring investing in the brokerage’s equity capital. However, CVC’s stake has now come down to 63% from 75%. Incidentally, Baring already has an exposure in the sector through JRG Securities. It had picked a 44.8% stake in the Kochi-based brokerage firm for $35 million (Rs 140 crore) about a year ago.
Financial services firms, especially those with brokerage business, have been commanding high valuations in the stock market. While many of them have got corrected substantially by 40-50% in the recent market crash, some of them are still valued in the billion-dollar plus bracket.
Indiabulls Financial, even after spinning off its brokerage business into a separate firm Indiabulls Securities, which is to list soon, is the most valued firm at about $3 billion. It is followed by investment banking-cum-brokerage firm Edelweiss Capital which is valued at $1.25 billion, India Infoline ($1.15 billion) and JM Financial ($1.1 billion).
Sharekhan valued at Rs 2,000 crore is at the same level as that in December 2007. While other listed brokerage outfits have seen their value cut by as much as half in the stock market, Sharekhan, as an unlisted firm, has managed to retain its implicit valuation. Now it is valued ahead of Motilal Oswal which till recently carried a market cap of Rs 4,500 crore.
|
|
|
Life can only be understood backwards—but it must be lived forwards
|
|
IP Logged |
|
|
|
smartcat
Senior Member
Joined: 29/Mar/2007
Location: India
Online Status: Offline
Posts: 4243
|
Posted: 19/Mar/2008 at 1:17pm |
|
I have been using Sharekhan.com since 20001 - and I think it is one of the best online brokerages in India. The interface usability is simply great.
|
|
IP Logged |
|
|
|
basant
Admin Group
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
|
Posted: 19/Mar/2008 at 1:33pm |
| Indiabulls Financial, even after spinning off its brokerage business into a separate firm Indiabulls Securities, which is to list soon |
How soon? Guess they wil not list unless we ahve the mommentum back!
|
|
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
|
|
IP Logged |
|
|
|
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
