Bonanza Portfolio Ltd, a stock broking firm made sub-brokers their partners and rolled out branches across India at a time when stock market touched an all time low post 9/11 in 2001.
YourStory catches up with Shiv Kumar Goel and S.P Goel, co-founders, and finds out more about the journey of one of India's biggest stock broking firm
How did your entrepreneurial journey started?
Shiv Kumar- We are five partners and come from three business families from New Delhi. Four of us have CA background whereas one is from real-estate business. Our families were into stock-broking before we started Bonanza. I had a broking firm listed on Delhi Stock Exchange since 1990 and we had 50-60 sub-brokers working for us. My focus was always on retail broking. In 1994, we joined our hands together to form Bonanza Portfolio Ltd.
What were the challenges and obstacles you faced in initial years?
S.P- Our challenges are intertwined with the fate of the market. The market fluctuations caused problem for us too, but we braved the oddities together. In fact, whenever market crashed, we invested in manpower and resources to expand the business further as other stock-broking firms downsized their employee strength and market was flooded with experienced manpower.
Turning points in business
Shiv Kumar- That was after September 2001, when capital market crashed. As a stock broking house, we brought a new concept called propagation of partnership, where sub-brokers and associates were treated as partners to Bonanza Portfolio. We did it to instill trust and faith among our sub-brokers in the business when other broking houses were shutting shop and investors were withdrawing money from the capital market. The retail network helped grow our business eventually and now we reach out to more than 300 cities in the country. We also practiced the listing of clients with the brokers much before it was made compulsory by SEBI in 2002-03.
What are the differentiators of your business?
S.P- I would say it's the retail broking and strong sub-broker network, which has helped us develop an arbitrage and hedge against market ups and downs. In an era, when other broking firms stick to franchise route with tried and tested partners, we propagated partnership with sub-brokers and gave them terminals, which saved time in auto-processing.Apart from this the major differentiators are: pan India network of branches, in- house research facility, personal attention to all business associates, higher client satisfaction, prudent fund management, skilled manpower, full time engagement of highly qualified top management, uninterrupted trading facility.
Shiv Kumar- The plans in pipeline are:
To promote recently launched on line broking service, online mutual fund investment service.
To launch trading and investment facility through mobile phone
To capture a large market share in distribution of financial products
To expand largely in Insurance distribution segment for which we have already created infrastructure
To expand in institutional broking segment
S.P- We are positioning ourselves as full-fledged financial services firm, which will provide research based market survey, institutional broking, services to NRI clients, distribution of financial services, and market -neutral arbitrage. We are targeting 5% share of capital market by March 2009
Key requirements for scaling-up the business
Funds and qualified manpower