Kantilal Chhaganlal, established in 1954, is one of India's oldest and most trusted companies offering end-to-end wealth management solutions. Kantilal Chhaganlal offers its 1,00,000 plus clientele a basket of customized, end-to-end solutions at more than 500 locations across India. They offer services like Wealth Management, Institutional Broking, Private Client Broking both online as well as offline.
The companies under Kantilal Chhaganlal are-
Kantilal Chhaganlal Securities Pvt. Ltd.
Kaycee Commodity Services Pvt. Ltd.
Kaycee Advisory Services Pvt. Ltd.
Kaycee Insurance Agency & Consultancy Service Pvt. Ltd.
Kaycee Finstock Pvt. Ltd.
Fig. 1 - Kantilal Chhaganlal Homepage
Products and Services
Wealth Management
KC provides financial planning, investment portfolio management and a number of aggregated financial services. High Net Worth Individuals (HNWI), small businesses and families who need assistance with managing their investments are catered to by the company.
Commodity
The company provides commodity trading services through Kaycee Commodity Services Pvt. Ltd. which is a Clearing cum Trading member of MCX and NCDEX. They provide research and reports to its clients on a daily and weekly basis about the possible investment options. The research is delivered to the clients and Business Partners via Email, Chat and SMS services.
Institutional Broking
KC specializes in security trades for institutions such as banks and pension funds.
Private Client Group
Broking
Equities, Derivatives & Commodities
Internet Trading
Depository Participant
PMS & Structured Products
Mutual Funds
Alternate Investment
Life Insurance
Margin Funding
Internet Trading
Kantilal Chhaganlal provides online trading services to its clients wherein the clients register with the online trading portal of the company. Clients can sell and purchase stocks online and at their own will. All the payment and banking transactions also take place online giving the client a hassle free experience.
Business Model
The online services of the company are aimed at catering to the clients in terms of their convenience. The clients get the option of avoiding the hassles of regular paper work, delays in processing of their transactions, taking care of the payment related activities, etc. Since the company is offering these services and the final clients are the recipients of the service, it falls in the Business-to-Consumer (B2C) Model.
The service that forms the major part of the company's online services is the trading portal. The company provides both online as well as offline trading services to its clients.
Offline Trading: Clients open a trading account and demat account [1] with the company through a registered sub-broker of the company. Buying and selling of stocks and monetary transactions are done through the sub-broker. The sub-broker transacts the stocks and handles the payment with the company on behalf of the client and the company charges brokerage in return for these services. Even though this system is called an offline trading system, the transactions done by the sub-broker on behalf of the client are carried out through the online trading portal of the company, the access to which is provided to the sub-broker.
Fig. 2 - Offline Trading Process
Online Trading: Clients register themselves with the company and open an online trading account and a demat account. The clients receive a separate trading account for transacting with the company directly without a sub-broker. The clients can buy and sell stocks at will and carry out the monetary transactions of paying and receiving the proceeds of the trades directly with the company.
Fig. 3 - Online Trading - Customer Activities
Revenue Model
The online and offline trading services provided by KC have a revenue model based on the transaction fees and brokerage system. KC earns its revenue from brokerage fees collected from clients based on the value of the transactions that the clients make. The clients pay various charges like brokerage, service charge, demat charges, etc. Of these, KC gets its revenue only from the brokerage collected from the clients. All the other charges are collected by the either the government or the various other regulatory bodies.
The charges for offline trading through sub-brokers are fixed as:
Trading Type
Charges
Intra-day Trading
0.1% of the trade value
Delivery Trading
0.5% of the trade value
Fig. 4 - Brokerage Charges
For online trading, the clients have to register themselves with the company and should have an account with the bank that the company has a tie up with for carrying out all the monetary transactions. KC has a tie up with HDFC Bank for carrying out monetary transactions with its customers.
The customers must deposit a certain amount of money in their trading account with the bank to be able to carry out transactions. The trading account in the bank is registered with KC. All the transactions carried out by the customers are paid for through this trading account and the transacted amount for the stocks bought is debited from this account. Money to be received from the company by a client on account of stocks sold is also transferred into the clients trading account.
Trading Portals
KC provides to portal options for its customers. One is for regular investors and the other for active traders.
SHAREGURU - Web Version - for investors
Product Feature:
Browser based platform for investors, user friendly software
Trading becomes as simple as internet surfing
Live streaming quotes.
Time Tested Research- Delivery, Intraday , Commodity , FNO
Centralized Phone Trade through Toll free number.
User defined market watches
Fig. 5 - Shareguru Screenshot
Product Benefits
View market information
Creating investors own portfolio
Enter orders
Edit or cancel orders
Receive online trade confirmations
View order and trade status
View portfolio and cash balance
View transaction history
Receive orders and trade confirmations via e-mails
Provide hyperlinks to other services such as market historical information, exchange websites, news, charting, back office.
INSTATRADE - For Active Traders
Product Features:
World class, user friendly application based platform
The speed of broker's terminal on your desk top
Streaming quotes for continuous rates refresh
Single screen experience - All exchanges can be viewed on single screen
Online fund transfer facility
Live charting facility.
Centralized Phone Trade through Toll free number.
Fig. 6 - Instatrade Screenshot
Product Benefits:
Multi-exchange internet based trading application
Compact easy to deploy self-installing kit
Streaming quotes for continuous rates refresh
Real-time market data for multiple exchanges with Integrated Market
Watch for Multiple Exchange and Exchange Segments
Order entry screens for quick order entry on multiple exchanges
Provision to create multiple portfolios
Facilitates Order and Trade book functions with fully customizable views at all levels
Integrated Net Positions View with Multiple Filters
Customer Value Proposition
The trading services provided by KC offer a lot of advantage to the customers. The features and advantages can be listed down as:
Live Order Status
High Speed Trading
Paperless Transactions
Intra-day Calls & News Flashes
Phone Trade
24 x 7 Web Enabled Back Office
Integrated Back Office
For the advantage of the customers and for providing more benefits and value to their transactions, broking companies provide various schemes.
Reward Points: Customers earn reward points for the value of every transaction that they make through the company. These reward points are earned on trading transactions, IPO's filled by the customers, etc. These reward points are accumulated over time and can be redeemed with various partners that the company has tie-ups with. The reward points can be exchanged for gift vouchers for shopping, food outlets and other entertainment offers.
Interest: Customers are required to deposit money for trading, with the company. If this amount is not utilized by the customers for some time, the customers earn interest on the deposited amount.
End-to-End Services: The company not only provides trading services, but also the overhead services and monetary transactions are taken care of. The customer gets timely bills and reports of all the transactions of the customers.
Trade Limits: Customers are provided lee way if their transactions cross the credit limit of their account. They are provided with various extra credit limits proportional to their stock holdings or cash margin in their trading accounts.
User Friendly Trading Portals: The trading portals provided by the company are highly user-friendly. Users can buy/sell stocks, view their current holdings, receive tips and intra-day messages, etc., all on their trading portals.
Research: The company provides research documents, both extensive long-term and immediate real-time to their customers. These research works provide the customers with information related to various options that the customers could invest in.
While these schemes may be a good value proposition for the customers, from the company's point of view, these are strategies aimed at increasing business and revenue.
Since brokerage is the main source of revenue for the company, increasing the brokerage is the major source of increasing the revenue. The only way to increase the revenue is by attracting more customers and by convincing the existing customers to trade more. For this very reason, various strategies are employed by the company.
The above mentioned schemes like reward points and extra trade limits are aimed at encouraging the customers to trade more and trade with higher volumes. This would increase the company's revenue generated from brokerage.
Competitors
There are many companies providing online trading services to customers across India. A few of the competitors are listed down-
ICICIDirect
Sharekhan
Indiabulls
5Paisa
Motilal Oswal Securities
HDFC Securities
Reliance Money
IDBIPaisaBuilder
Religare
Kotak Securities
Comparative Advantages
Experience: This is one of the biggest advantages of the company. KC has an experience of over 5 decades and is one of the oldest wealth management solutions providers in India. Most of the other players in this industry have risen very recently and do not enjoy the same experience and trust as KC does.
Technology: KC uses the latest technologies and systems for providing services to its clients and carrying out its operations. The online and offline trading portals that the company uses for trading are one of the best and make trading very easy.
Research: With years of experience KC has a very strong research & operations base and provides its customers with the latest developments in the market.
Conclusion and Inferences
The entire analysis of the services model adopted by Kantilal Chhaganlal gives a lot of insight into the B2C model. The company is the service provider and the services are used by the final customer. The revenue model of the company is based on the brokerage and transaction fees in return for these services.
There are a few inferences that we can decipher from the online trading business of the company:
Online trading service is a direct transaction between the main broking company and the customer. It removes the sub-broker from the chain and hence reduces the charges that the customer has to pay for the service.
It gives the customer direct and live access to the accounts anytime and anywhere, thus increasing the customers mobility.
The customer is completely responsible for his trades and accounts and is spared from errors made by the sub-broker (even though there are very few instances of such errors) as the system is automated and the customer himself carries out all the transactions.
Since the system is online, security is a very important aspect that the company has to take care to protect the sensitive details of the customers.
Appendix
Trading Account: A trading account is similar to a bank account and contains all the financials of the share transactions that a customer carries out with a broker. A trading account is generally opened with the broker company.
Demat Account: Demat account means a dematerialized account. For individuals to trade, a demat account has to be maintained by the investor. All the shares and securities are held in the demat account in an electronic form instead of maintaining physical shares certificates of the shares.
Instatrade Snapshots:
Market Watch
Place Buy Orders
Place Sell Orders
Stock Watch
Fund Transfer
Fund Transfer
Intraday Chart
