Discount Broker SAMCO Forays Into Margin Funding

Mumbai, India, February 23, 2016 (Newswire.com) - SAMCO Securities, the country’s fastest-growing discount broking house, has launched a new product ‘Cashplus’ to provide margin funding for its customers looking to buy equities in the cash market.

For temporary, long-term

This company will set aside Rs. 100 crore for this product, Jimeet Modi, Chief Executive Officer, told BusinessLine here.

“With Cashplus you can get temporary and long-term funding for your cash market purchases. It allows consumers to get margin funding for their stock purchases and that too by paying for it separately. You only pay for the number of days for which credit is extended,” Modi said.

This margin funding business in India today is a $1-billion industry, he said, adding that it is entirely owned by traditional brokerage houses.

Modi said SAMCO would leverage on the Rs. 100-crore fund size with borrowings from banks and NBFCs. “We are targeting Rs. 300 crore book size by March 2017, which should give us 4-5 per cent market share in the $1-billion margin funding market,” he added.

Customer-centric

The launch of ‘Cashplus’ will, in a way, complete the service offering from SAMCO. “With a discount broker and Cashplus, we now have perfect combination of two unbundled services that customers can pick and choose. Customer now will end up being the king,” he said. Buying on margin is basically borrowing money from a broker to purchase shares. Simply put, margin funding could be considered as a loan from your brokerage. It would allow you to buy more shares than you would otherwise be able to do normally. SAMCO Securities is a wholly-owned subsidiary of SAMCO Ventures, a company in which cricketing legend Kapil Dev holds 10 per cent stake.

The Kapil Dev-invested company launches ‘Cashplus’; plans to set aside Rs. 100 crore for this new product.