Retail investors who till a few years back were largely dependent on dealers and relationship managers to trade in the stock market are increasingly using their mobile phones to trade, as the share of mobile trading has more than doubled in the last two years.
The trend is largely attributed to the increased focus on technology by brokerages and the deep penetration level of smart phones and affordable data plans.
Interestingly, trading applications of leading brokerages feature among the popular finance apps in both, Android and iOS platforms.
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In October, the share of such trades on the National Stock Exchange was more than 8%, a significant rise from the 3.40% share in October 2016. Similarly, mobile trading share has risen from 2.40% to 5.69% on BSE in the last two years.
Mode matters
While the share might appear minuscule in the context of overall volume of the bourses, it is still the mode that is witnessing the highest rate of growth. Five years back, the share of mobile trading was less than 1% of the total volume.
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According to Vishal Gulecha, Head – Equity, ICICI Securities, the share of his clients trading through mobile phones rose from 11% in 2013-14 to 43% in 2017-18 with the volume of such transactions rising from 5% to 25% of the total volume in the same period.
“The usage of mobile devices for stock trading has been increasing month on month. During the current fiscal, nearly half of our active clients trade through mobile. So there is a very healthy uptick in mobile adoption,” said Mr. Gulecha.
“Mobile trading has been a real game changer due to the increased penetration level of smartphones,” said Vinay Agrawal, chief executive officer, Angel Broking.
While the Securities and Exchange Board of India (SEBI) approved trading through mobile phones way back in 2010, traction was hardly visible in the initial years as investors still preferred to trade through their dealers or relationship managers.
IIFL Securities, which launched its trading app about three years back, now sees 44% of its clients trading through the app, which in turn contributes more than 48% of the total broking revenue. Further, 45% of its app users are from Tier II, Tier III and other towns.
“Our online client acquisition has more than doubled in the last few years as clients increasingly prefer the DIY (do it yourself) environment,” said Arindam Chanda, chief executive officer, IIFL Securities. “Trading apps are no more limited to just buying and selling of shares. There is access to a lot of educational material and research that aids client stickiness as well,” added Mr Chanda.
Trading apps of brokerages like Zerodha, HDFC Securities, ICICI Direct, Angel Broking, IIFL, Sharekhan and Kotak Securities among others feature among the top downloaded finance applications in the Android Play Store and iOS App Store.