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Aug 31 – The number of stock market participants in India hasn’t increased much in recent years, but the number of organisations offering stock trading services has skyrocketed.
With the launch of the Share.Market app, PhonePe has become the newest entrant into the stock brokerage market. Users will be able to open trading accounts and invest in stocks, mutual funds, and ETFs through the app. Share.Market will also provide WealthBaskets, which are collections of thematic equities or ETFs.
“We launched lending, insurance, and payment gateway businesses recently. We started mutual fund distribution four years back and now we are entering the stock broking business under its subsidiary PhonePe Wealth,” said Sameer Nigam, founder and chief executive officer (CEO) of PhonePe.
There are numerous companies that provide comparable services. Zerodha is the industry leader, although players like as Groww, Upstox, and Dhan are attempting to eat into its market share. Other brokers include 5paisa, Angel Broking, and ShareKhan, and all major banks, including ICICI, HDFC, Kotak, SBI, and others, provide broking services.
PhonePe’s Share.Market is a discount broker that does not appear to compete on pricing with others in its cohort. Share.Market will charge Rs. 199 for account opening and Rs. 20 or 0.05% each order, which is currently industry standard. It appears that it will try to distinguish itself by its tools, insights, and counsel, which it claims will assist people make better investing decisions. Share.Market will also profit from PhonePe’s widespread distribution – PhonePe is India’s most popular UPI app, and it can cross-promote Share.Market to a big number of people. And PhonePe has a very cool name — Share.Market as a share market trading app might have instant brand awareness.
However, India’s investment market may not be large enough for PhonePe to make a dent. Only about 7 crore people in India submit income tax returns, and an estimated 6 crore people have demat accounts, thus there may not be enough runway for PhonePe to expand into. Also, Paytm sought to launch Paytm Money as its stock broking app, but despite its distribution clout, it failed to make a meaningful impact in the industry. However, large players such as PhonePe and Paytm have the advantage of time — even if India’s market isn’t quite large enough yet, they can hope that stock market participation in India reaches the level of developed economies in the coming decades, and they’ll be well-positioned to capitalise on the investments they’re making now.