According to a report, the domestic broking industry is likely to grow at a moderate 5-10 per cent in the current fiscal amid cautious investor sentiments and market volatility.
With a turnover of Rs 18,000-19,000 crore in the previous fiscal, the industry had grown at over 30 per cent.
“The Indian broking industry is estimated to post a moderate growth of 5-10 per cent in FY19 with estimated revenue projected at Rs 19,500-20,000 crore,” says rating agency ICRA.
The report said the domestic capital markets are expected to remain range bound over the near term with a prolonged period of volatility given the weakening of investor sentiment and challenging domestic and global cues.
Going forward, the foreign portfolio investment (FPI) flows are expected to remain muted, with a net outflow of USD 8-10 billion in FY19 compared to inflows of USD 4 billion in FY18, considering the weak macro-economic outlook, the agency noted.
The domestic institutional investor (DII) segment, a net buyer of equities since FY16, is expected to remain steady over the near-term and would provide support to the domestic capital markets.
ICRA’s Vice President and Co-head (financial sector ratings), Samriddhi Chowdhary, said “Going forward, a meaningful revival in corporate earnings and abatement of liquidity and capital availability issues would be a key for further fillip to the capital markets and for boosting FPI equity inflows.”
She, however, said the near-term outlook for the domestic broking industry is stable.
The average daily turnover (ADTO) increased to Rs 9.53 lakh crore from Rs 6.21 lakh crore during the same period and was Rs 7.04 lakh crore in FY18, it said.