Eureka Group acquires four stock broking firms, in talks with 2-3 entities

Financial services company Eureka Group has acquired four stockbroking firms and is in discussions with two to three more firms, as the brokerage industry goes through a period of consolidation due to increasing compliance costs and shrinking profits.

An official from Eureka Group told PTI that any broker with fewer than 5,000 to 7,000 active clients will struggle to sustain their business. The brokerage industry is currently facing several challenges, such as diminishing profits and rising compliance costs, which make it difficult for discount brokers and small firms to survive.

Eureka Group's Executive Director, Rakesh Somani, mentioned that they have already merged with four brokers and are in the process of merging with two to three more. Smaller firms often struggle to generate enough revenue to cover their expenses, while larger brokers have the necessary resources to comply with regulations and invest in technology.

Rakesh Somani made these statements during the Financial Conclave 2023, where several industry leaders were present. A promoter of a broking firm, who chose to remain anonymous, stated that firms that have not made significant investments in technology and failed to offer a range of financial services under one roof to attract clients have faced significant challenges.

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