On October 1, shares of Angel One gained over 7% following an announcement regarding revisions in its brokerage charges for cash and equity delivery transactions. This comes as the discount broking firm introduced a flat fee of ₹20 or 0.1%, plus GST, per executed order, whichever is lower. The revision will apply to all cash and equity delivery transactions, giving investors a more consistent fee structure.
This new structure is expected to affect the company’s revenue, but it is seen as a strategic move to maintain competitiveness in the market. For those looking to invest in stocks, these changes could potentially impact transaction costs.
Key changes in brokerage charges
Angel One has set a minimum brokerage fee of ₹2 per transaction. Prior to this change, the firm was already offering the lowest brokerage rates compared to other discount brokers. One positive aspect of the revision is that there will be no brokerage fee for cash delivery transactions, which is a notable benefit for long-term investors.
The firm’s management highlighted that the shift to this new structure was prompted by changes at the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), which moved to a true-to-label fee system effective from October 1.
Breakdown of additional charges
Several other changes have been introduced across various transaction types. For instance, the Securities Transaction Tax (STT) for the sale of futures in securities has risen to 0.02%, up from 0.0125%, while the sale of options now incurs a charge of 0.1% of the premium, increased from 0.0625%. Additionally, Exchange Transaction Charges have also been revised.
For example, the Multi Commodity Exchange (MCX) will now charge 0.00210% for futures and 0.0418% for options. Other markets such as NSE and NCDEX have similarly adjusted their fees.
Moreover, new depository participant (DP) charges will apply, with Angel One customers incurring a cost of ₹20 plus GST. Further, the firm has updated its Pledge/Unpledge Charges, which now stand at ₹20 plus GST per transaction. Annual maintenance fees for non-BSDA accounts have been set at ₹60 per quarter from the second year onwards.
Impact on Angel One's revenue
Despite the increase in some transaction charges, Angel One’s management estimates that the shift to a flat brokerage fee will reduce its overall revenue by 8%. However, they hope the ₹20 per order fee will mitigate this reduction. Speaking to CNBC-TV18, the company's executives expressed optimism that the new structure will not only keep the firm competitive but also attract more investors looking to invest in stocks.
Share performance following the announcement
At 10:45 a.m. on October 1, Angel One’s shares were trading 3% higher at ₹2,643.50 on the National Stock Exchange. Despite this recent surge, the stock has seen a decline of approximately 26% this year, significantly underperforming compared to the Nifty, which has risen 18% during the same period. However, in the past 12 months, Angel One shares have shown a stronger performance, rising over 43%, while the Nifty increased by 32%.
Angel One’s revisions in brokerage charges come at a time when the firm is looking to align its fees with industry standards while maintaining a competitive edge in the market. These changes are expected to have a mixed impact on both the firm’s revenue and the costs incurred by investors.
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