Distribution biz augmenting brokerage operations’

Young investors should adopt a long-term investment mindset to build sustainable wealth, CJ George, chairman and managing director at listed-brokerage Geojit Financial Services, tells

- NESIL STANEY

Nesil Staney in an interview. He also speaks about the surge in margin trading facility (MTF) books, the sharp rise of discount brokerages, regulatory trends, and the industry’s reliance on product distribution as a hedge. Excepts:

Is distribution business a hedge for brokerages?

In FY21, we heavily relied on equity and equity-related business, which accounted for 75% of our total income. In the second quarter of this fiscal, this business contributed only 47% of our total income. The shift has been towards financial products and portfolio management services (PMS), which now contribute a substantial 41% to our total income. Over the past five years, we have strategically transitioned from transaction-based assets to recurring revenue-based assets. Our distribution business has been a significant contributor to augmenting our brokerage operations. It acts as a cushion whenever capital markets cycle hits us.

What has led to the surge in MTF activity across brokerage industry?