India’s broking retail market has seen staggering growth, and the market size has already grown to ₹21,000 crore ($2.5 billion) in 2023. As more Indians have been joining the stock market looking for wealth generation opportunities, becoming a broking franchise is now an alluring business option. Kotak Securities, through its brand leadership and holistic back-end support mechanism, provides aspiring entrepreneurs an opportunity to venture into this high-revenue-generating business by going for its franchise option.
With an investment of ₹10 to ₹15 lakh, franchisees are provided with Kotak’s strong trading platform, brand name, and complete business support system. Kotak offers intensive training, technological support, and marketing support for sure-shot operations and long-term growth.
A Kotak Securities franchise is a viable investment for those wanting to make a presence in the financial services industry. Let’s explore its cost and application process in detail.
About Kotak Securities
- Parent Company: Kotak Mahindra Bank (India’s foremost private sector bank)
- Industry: Financial Services – Stock Broking
- Market Position: Among top 5 stock brokers of India
- Revenue Contribution: Over ₹2,500 crore of annual revenue
- Service Range: Equity broking, derivatives, mutual funds, IPOs, bonds, and research services
- Target Audience: Retail and HNI investors looking for quality broking services
- Business Model: Branch-led and franchise-based distribution model
- Presence: 1400+ franchise outlets in India
- Key Strengths: Brand confidence, innovative technology, research experience, integrated banking operations
- Profit Potential: Targeted 41% profit margin based on location and client base
Kotak Securities, which was set up in 1994, has become one of the top stock broking companies in India. As a subsidiary of Kotak Mahindra Bank, it also enjoys the benefit of the group’s financial prowess and huge customer base. It caters to millions of investors across its widespread network of branches and franchises and provides a full range of investment products and services.
The reason for the success of Kotak Securities is its strong risk management systems, sophisticated trading platforms, and strong research function. The company has remained a top broker in India over the years, processing huge volumes of trade across segments of the market.
Franchise Models Offered by Kotak Securities
Kotak Securities franchise provides various models to meet various business ambitions and investment levels of prospective partners.
Sub-Broker Model:
- Suitable for seasoned financial market professionals
- Low infrastructure requirement of 200-300 sq. ft.
- Investment: ₹3-5 lakhs
- Revenue sharing model with competitive commission structures
- Full access to Kotak’s trading platforms and research
Partner Model:
- Suitable for larger operations in prime locations
- Space requirement of 500-800 sq. ft.
- Investment: ₹10-15 lakhs
- More revenue sharing percentages
- Right to appoint sub-brokers in a given territory
- Brand use and territory rights
Authorized Person Model (Direct Sales Agent):
- Ideal for new entrants to the broking business
- Low space requirement of 150-200 sq. ft.
- Investment: ₹2-3 lakhs
- Direct commission model
- Facility for basic trading platforms and research facilities
Kotak Securities Franchise Cost in India
Kotak Securities offers three franchise models: Sub-Broker, Partner, and Authorized Person, each with different investment requirements and revenue-sharing structures.
- Sub-Broker Model: Requires a ₹3.5 – 5 lakh investment, with 60:40 to 80:20 revenue sharing.
- Partner Model: The highest investment at ₹10 – 15 lakh, but offers 70:30 to 85:15 revenue sharing.
- Authorized Person Model: A more affordable option with ₹2 – 3 lakh investment and 50:50 to 70:30 revenue sharing.
Additional costs include franchise fees, security deposits, store setup, licenses, initial inventory, and working capital. Marketing fees range from 3% to 7% of revenue, depending on the model. Choosing the right model depends on your budget and desired earnings potential.
The detailed and complete cost breakdown of Kotak Securities franchise is provided here:
Benefits of Kotak Securities Franchise
Brand Recognition
Business under the Kotak Securities brand name has instant credibility and trust. The reputation of the company in the financial services industry and the heritage of the Kotak Mahindra Group behind it make it easier for franchisees to win and retain clients. Brand recognition also dramatically cuts down the time and efforts it would take to build market presence.
Technology Support
Kotak Securities offers creative trading platforms and technological infrastructure to all its franchisees. This includes sophisticated trading terminals, mobile trading applications, and back-office support systems. The technology suite is updated on a regular basis so that franchisees can provide their customers with the most advanced trading tools and features.
Research Support
Franchisees are supported in-depth with thorough research assistance from Kotak’s experienced group of analysts. The support is through daily market feedback, technical view, fundamental reports, and industry-specific viewpoints. Such premium-level research allows the franchisees to offer value-added services to clients and offer expert investment suggestions.
Training and Development
The company has extensive training schemes for different securities business aspects. This involves preliminary operating training, routine product knowledge updates, and professional development sessions. Franchisees and employees are trained personally in trading systems, risk, and customer management.
Marketing Support
Kotak Securities franchise offers marketing and promotion assistance to assist franchisees in expanding their business. This encompasses branded promotional materials, local advertising assistance, and exposure to corporate promotional campaigns. Franchisees are also supported at the national level with advertising and brand building efforts.
Revenue Potential
The franchise model generates several sources of revenue such as brokerage sharing, interest on deposits, and different fee-based sources of income. The competitive commission structure and additional income from cross-selling of products generate significant potential for earnings among franchisees.
Revenue and Popularity
The brand gain ₹ 3,918.46 crore in FY 2023-24 with profit of ₹ 1,311.66 crore as against ₹ 839.34 crore for the previous financial year. The revenue and popularity of Kotak Securities for previous fiscal years, the revenue generated, and the growth percentage, have been mentioned year:
- FY22: 2,839.78 with 242 Outlets
- FY23: 3,918.46 with 286 Outlets
Eligibility Criteria of Kotak Securities Franchise
Financial Requirements
Kotak Securities has established clear financial requirements to ensure sustainability of the franchise. Based on the desired model, candidates are required to demonstrate a net worth of ₹5-20 lakhs. Liquid fund requirement is ₹2-15 lakhs based on the franchise format. The company also evaluates the ability of the candidate to handle working capital and operational expenses.
Educational Qualifications
Graduation with at least the minimum qualification in commerce, economics, or business streams is desired. Other professional degrees like CA, MBA, or industry-related certifications are more desired. Required NISM certifications under SEBI norms also need to be cleared by the candidates.
Professional Experience
The organization prefers experienced candidates in financial markets or client servicing. For sub-broker and master franchisee models, experience of 2-3 years in securities markets is preferred. Freshers with good entrepreneurial skills can be taken for the authorized person model.
Infrastructure Requirements
Franchisees must possess proper office space in a commercial area with proper connectivity. The office must be properly organized and be furnished with hardware such as computers, internet connectivity, and power backup. The office must be easily accessible to the target customers and also be as per local business regulations.
Documentation Requirements
The following documents must be submitted by the applicants:
- PAN card and Aadhar card
- Income tax returns of the past three years
- Bank statements for the past six months
- Documents of ownership/lease of property
- Educational certificates
- Registration documents of business (if any)
- NISM certificates
- KYC documents
- Evidence of prior business experience
Regulatory Compliance
Franchisees need to adhere to all the guidelines and regulations of SEBI. This includes obtaining requisite registrations, maintaining records in a proper manner, and adhering to standard operating procedures. Regular compliance audits are conducted to confirm regulatory compliance.
Character and Credit History
Background screening is conducted in depth by Kotak Securities of the potential franchisees. Checks include credit, criminal record, and business referrals. The applicant must have good credit history and practice high morals in conducting their business.
Application and Onboarding Process
The application and onboarding process of Kotak Securities Franchise follows are detailed process and it goes like this:
Initial Application
Joining as a Kotak Securities franchise begins with submitting an official application form from their website or nearest branch office. The initial processing stage would usually be 7-10 working days since the company will assess the candidate’s profile based on their pre-defined parameters.
Documentation and Verification
After the initial screening is cleared, the applicants face a detailed documentation process. Verification takes 15-20 days and includes checking credit history, background verification, and authentication of all documents presented. Kotak Securities has tough verification procedures in place and also achieves a document success rate from about 75% of applications.
Location Assessment
The most critical process step is the evaluation of the proposed business site. The site has to be in a commercial area with an area of not less than 200 square feet for basic franchise models. It normally takes 5-7 working days to carry out this assessment.
Training Program
Successful candidates undergo an intensive 4-week training program covering various aspects of securities trading, market operations, and customer service.
- In the first week trainees learn about financial markets and how to use Kotak’s systems.
- In the second week they focus on trading platforms and technical analysis.
- The third week covers risk management and compliance procedures.
- Finally in the fourth week trainees practice operations and learn how to handle customers.
Final Agreement and Launch
After training candidates sign the Kotak Securities Franchise’s agreement. They also finish setting up their systems. This setup usually takes 2 to 3 weeks. It includes installing systems, putting up branding and getting final training. Overall the process from application to launch takes about 60 to 75 days.
Support and Resources Provided by Kotak Securities
Technical Infrastructure
Kotak Securities offers full-fledged technical assistance of around ₹5-7 lakhs consisting of high-end trading terminals, dedicated servers, and secure network connectivity. The infrastructure offering is comprised of:
- High-end trading terminals (2-4 terminals depending upon franchise model)
- Real-time market data feeds
- Back-up systems with 99.9% guaranteed uptime
- Dedicated IT support staff available for 12 hours a day
Research and Analytics Support
Franchisees get access to Kotak’s research portal worth ₹1.5 lakhs a year, having:
- Daily market analysis reports
- Weekly sector updates
- Monthly investment strategies
- Quarterly economic outlooks
- Special situation reports
Marketing and Branding
Marketing support worth ₹2-3 lakhs in the first year is offered by the company, such as:
- Branded office setup materials
- Local advertising support
- Digital marketing tools
- Client acquisition campaigns
- Regular promotional materials
Operational Support
Round-the-clock operational support guarantees smooth business operations through:
- 24/7 back-office support
- Dedicated relationship manager
- Regular performance reviews
- Business development guidance
- Compliance assistance
Commission and Revenue Model
Brokerage Sharing Model
The brokerage sharing model is based on a tiered model with regard to business volume:
- Basic tier (monthly turnover up to ₹5 lakhs): 60:40 revenue sharing
- Silver tier (monthly turnover between ₹5-15 lakhs): 70:30 revenue sharing
- Gold tier (monthly turnover between ₹15-30 lakhs): 75:25 revenue sharing
- Platinum tier (above ₹30 lakhs monthly turnover): 80:20 revenue sharing
Additional Revenue Streams
Franchisees earn through various avenues:
- Account opening fees (₹500-1000 per account)
- Yearly maintenance fees (15-20% share)
- Margin funding interest (2-3% of interest earned)
- Financial product cross-selling (up to 50% commission)
- Depository participant services (30-40% revenue sharing)
Performance Incentives
Incentive programs recognize high-performing franchises:
- Quarterly business growth bonuses (up to ₹50,000)
- Annual performance incentives (up to ₹2 lakhs)
- Client acquisition incentives (₹200-500 per live client)
- Special campaign incentives (variable depending on campaigns)
Conclusion
Kotak Securities’ franchise model provides a strong business opportunity with full-fledged support systems and lucrative revenue potential. The franchisees are required to invest between ₹2-15 lakhs as an initial investment. Break-even can be achieved in 12-18 months of operation. The success of the model is confirmed by its 90% retention rate of franchisees and 7+ year average franchisee tenure. For those who want to venture into the financial services industry, Kotak Securities franchise offers a sound business opportunity supported by a reputed brand and established business model.
FAQs
What is the minimum investment for a Kotak Securities franchise?
The minimum is ₹2 lakhs for the Authorized Person model, sans working capital needs.
How long does the application-to-launch process take?
The entire process from application to launch usually takes 60-75 days.
What is the general monthly income potential for a franchise?
With active operations, franchises can generate between ₹50,000 to ₹3 lakhs per month, based on the business model and performance in the market.
Is experience in stock markets required previously?
Although previous experience would be ideal, it’s not required. Kotak Securities offers extensive training to all franchisees.
