HSBC to return to India stock broking business after 13 years amid IPO boom

HSBC is returning to India's stock broking business after a 13-year hiatus, aiming to capitalize on a booming pipeline of share sales and the growing demand from affluent clients for equity market products, according to sources familiar with the matter. This move reverses HSBC's decision to exit the domestic retail brokerage and depository business in 2013, highlighting the significant role India's capital markets and wealth management industry play in global banking.

The bank is currently establishing its equities platform in India, recruiting senior executives for cash equities and institutional broking roles. HSBC's decision to re-enter the market is driven by increased phone penetration, direct capital market access, and the rise in interest for trading in international markets due to the establishment of India's tax-neutral hub, GIFT City.

The bank anticipates launching retail broking services in the coming months, having already obtained a broking license through HSBC InvestDirect Securities (India) Private Limited. HSBC, now India's largest foreign bank by balance sheet, aims to strengthen its presence among affluent and wealthy customers, as it is one of the few foreign banks still maintaining a substantial consumer business in the country.

The re-entry aligns with the surging interest in India's equity markets, fueled by record retail investor participation and a strong pipeline of initial public offerings. As global and local financial firms expand their capital markets and broking capabilities in response to a growing number of IPOs, HSBC's return to the Indian broking scene underscores its commitment to Asia and wealth management, with HSBC Group CEO Georges Elhedery emphasizing the bank's intention to increase investments in India, focusing on affluent customers.