Ratan Tata-Backed Upstox Celebrates As It Breaks Even, Crossing Revenue Of 1,000 Crores.

Upstox, the Ratan Tata-backed discount brokerage business, said it had reached break-even for the fiscal year 2022-23. The company’s senior executives stated that sales increased to 1,000 crore during the fiscal year. During 2022-23, Upstox achieved a positive net cash flow of around 130 crores.

Ravi Kumar, co-founder and CEO of Upstox, stated that the firm is aiming for a 10-fold increase in its user base to 10 crores in the next 5 to 6 years. Upstox’s operating income increased by 40% to 1,000 crores.

Ravi Kumar emphasised that they are dedicated to pursuing sustainable and profitable development. Upstox, which has a cash flow of more than 1,000 crores, is seeking both organic and inorganic development options.

What is Upstox?

Upstox, which was founded in 2009, has 11 million customers countrywide. More than 85% of these consumers are from tier II and tier III cities, and 70% are making their first investment. According to Ravi Kumar, customers come from places such as Mumbai, Delhi, Pune, Thane, Bangalore, Jaipur, Hyderabad, Aurangabad, Nashik, and Nagpur.

Despite acquiring USD 100 million in Series C fundraising in January 2022, the firm does not intend to raise more capital. The co-founder stated that the company’s “financial stability” will help it enhance its market position through organic and inorganic means, allowing it to attract 100 million users in the next handful of years. The business emphasised that a small fraction (less than 5%) of the Indian population invests in equities, indicating that the Indian market has considerable untapped potential.

Over the last 1.5 years, Upstox has shifted its attention to the Indian market and paused expansion ambitions in the United States to prioritise commercial growth in India. 

The corporation wanted to concentrate on branding and spent hundreds of crores on sponsorship deals and IPL commercials. The CEO stated that they had a three-year contract with the event organisers. The corporation desired a high level of brand recall. According to an Ipsos report, the brand recall value was 12% previously, but it is currently over 90%. While consumers may not know what Upstox is about, they do remember the brand and logo, according to the CEO. However, the brokerage has had a difficult time.

What is the position of Upstox in client acquisition compared with its competitors?

According to a Motilal Oswal Financial Services study, the business ranks fourth, along with ICICI Securities, in terms of active NSE clients, with 2.2 million in April 2023, trailing leaders Zerodha (6.3 million), Groww (5.3 million), and Angel One (4.3 million). This is a 61.6% decrease from 5.8 million in April 2022 and a 23.1% drop from 2.9 million in March 2023.

Upstox’s position in terms of market share, compared with the competitors.

Similarly, the firm’s market share fell by 839 basis points bps — more than half — from 15.5% in April 2022 to 7.1% in April 2023. It was down 171 basis points from 8.8% month on month. It is ranked fifth, after only Zerodha (20.2%), Groww (17.2%), Angel One (13.3%), and ICICI Securities (7.2%).

How does Upstox need to strategise its efforts?

Today, equity participation in India is just above 6%. It is more than 50% in the United States and more than 20% in China. So, as the Indian market expands, Upstox must play its roles correctly, such as assisting people in managing their savings and directing them towards high-quality equity markets and high-quality equities stocks, which is what the company aim to do. So when they come to work, they essentially focus on every day.

Conclusion.

The tale of Indian economic growth is likely to be much more impressive. As India’s GDP rises and the country becomes one of the top two-top three in the world, it is critical that the people of India and the retail masses benefit from this enormous, huge economic potential and start their investing and trading journey.

Proofread & Published By Naveenika Chauhan