"As a player in the stock market industry, we've seen how equity participation can boost personal wealth and aid businesses in raising capital. While an IPO is on our agenda, our immediate focus is on empowering more Indians to engage confidently in the markets—our strategy centres on product innovation and extensive investor education initiatives," says Kavitha Subramanian, Co-Founder, Upstox, in an exclusive interaction with Zee Business' Swati Verma.

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Ms Kavitha holds B.Tech and M.Tech degrees in Electrical Engineering from the Indian Institute of Technology, Bombay, and an MBA from the University of Pennsylvania’s Wharton School, USA. Before Upstox, Kavitha was a private equity investor at Leapfrog Investments and Actis Investments. She was a management consultant at McKinsey and Co. and also worked at SKS Microfinance.

Edited excerpts:

Please tell us about Upstox's growth since its launch in 2009. How do you describe the journey?

Post our inception in 2009 as RKSV Securities, we entered the retail trading business and became the first Indian brand to launch unlimited monthly trading plans. Our initiatives bore fruit and resulted in a Rs 4,000 crore plus turnover by 2014, thanks to a loyal user base.

We then went the extra mile and rebranded RKSV Securities to Upstox; we were one of the first in the industry to launch a paperless and efficient account opening service. By 2020, Upstox's customer base exceeded 10 lakh, and shortly thereafter, in 2021, Upstox achieved unicorn status as the highest-valued broker in India at $3.5 billion (nearly Rs 30,000 crore).

Recognising cricket's immense popularity in India, Upstox strategically partnered with major cricket organisations like the BCCI, ICC, and TNPL from 2021 to 2023. Across this period, we’ve introduced various landmark products and initiatives, such as a dedicated, jargon-free, and simplified section for new investors to ensure they ‘Invest Right, Invest Now’.

Today, we serve over 1.3 crore customers, predominantly millennials, with substantial engagement and active participation from tier 2 and 3 cities. As we go forward from here, we will continue to hold our investor, Mr. Ratan Tata's visionary philosophy, and our vision at the core: right access, right knowledge, and the right tools to equip investors with all they need for financial success and prosperity.

There are a number of investment platforms offering great features and promising zero hassles to investors and traders. What is unique about you?

Our commitment to customer-centric innovation drives us at Upstox. We focus on understanding and addressing customer needs, empowering them to invest and trade with confidence. Our approach includes distinct, innovative initiatives such as:

  • ‘Upstox for investors’ and ‘Upstox Pro for traders’ modes: Recognising that traders and investors have diverse needs, we’re one of the only brokers to have two separate modes on one app. The Invest Mode is dedicated to help investors invest right across various assets, and the Pro Mode assists traders in reducing their losses, improving their success rates, and helping them recognise trading opportunities with ease.
  • Invest Right, Invest Now: Recognising that new investors often grapple with fundamental questions such as where, how, why, and what to invest in, we undertook the substantial task of analysing over 10,000 mutual fund schemes and shortlisting the top-performing ones based on risk and return metrics. We went one step further and outlined the basic truths of investing to help individuals get started. Through our campaign, 'Invest Right, Invest Now', we encouraged users to invest regularly via SIPs in index funds and spread awareness on the power of passive investing.
  • Ready-made Option Strategies: By providing pre-curated hedged strategies, we are helping traders improve their success rates and reduce their risks in option trading.
  • Option Chain: Our Option Chain comes with 10+ data points like Greeks, PCR, India VIX, Max Pain, and other metrics. By providing these metrics, we aim to help traders analyse trends and make informed decisions without wasting any time switching between platforms.
  • Tick-by-Tick Charting Data: We are India’s first broker to provide this, ensuring that the analysis done by retail traders is on par with that of high-frequency institutional traders. Since Tick-by-Tick captures every transaction executed at the exchange, it ensures that no data point is missed, and hence, analysis, indicator mapping, and price triggers are accurate.

Additionally, as a customer-centric business, data security is paramount to us. We invest in cutting-edge technology to enhance the user experience and to keep customer data safe and secure. Our systems are designed not only to ensure zero downtime but also to make Upstox the most stable, reliable, and fast platform of choice for our customers.

What is your plan for the next five years? Is there any plan to launch an IPO?

Our five-year plan is both promising and exciting. Our foremost goal is to expand our customer base to 10 crore in the next five-six years. As a player in the stock market industry, we've seen how equity participation can boost personal wealth and aid businesses in raising capital. While the future might hold different possibilities, our immediate focus is on empowering more Indians to engage confidently in the markets—our strategy centres on product innovation and extensive investor education initiatives.

Tell us about the trends in equity and commodity trading. Any striking changes/developments over the past 4–5 years?

Over the past few years, equity trading has undergone significant changes. A surge in first-time investors, reflecting increased financial literacy, has led to higher trading volumes. Smaller towns and tier 2–3 cities have joined rapidly, indicating a more inclusive reach, facilitated by user-friendly online platforms. At Upstox, over 85 per cent of our user base comes from Tier 2 and Tier 3 cities in India.

Investors are favouring small and mid-cap stocks, signalling a shift towards higher-growth opportunities. Small and medium-sized enterprise (SME) IPOs have surged, reflecting this change. Systematic Investment Plans (SIPs) are on the rise, not just in mutual funds but also in direct stock investments, showcasing a disciplined approach to investing and a shift in investor behaviour towards regular and periodic investments.

Also, commodity trading value pools have surged, nearly doubling from $27 billion (nearly Rs 2.025 lakh crore) in 2018 to an estimated $52 billion (nearly Rs 3.9 lakh crore) in 2021. Amid industry cycles, the sector remains robust, particularly amid the ongoing energy transition. This transition is reshaping global systems, introducing structural volatility, and fundamentally altering commercial relationships.

What change do you see in retail investors as regards investing in stocks and MFs? Tell us in detail, please.

At Upstox, we are witnessing a growing community of investors. Almost 70 per cent of our customers are first-time investors, with 75 per cent of our total customers falling within the millennial demographic, aligning with the preferences and habits of the tech-savvy generation.

Our recent revamped Mutual Funds experience has garnered significant interest, particularly from the millennial generation and tier 2 and tier 3 cities. Active participation is evident, as users are increasingly open to diversifying their investment portfolios. Notably, many of them are incorporating systematic investment plans (SIPs) as a key instrument in their investment portfolio. On our platform, we have seen a majority of mutual fund investors opting for SIPs in the past year.

Interestingly, in the overall market, inflows into equity mutual funds rose 41.63 per cent month-on-month (MoM) to Rs 19,957 lakh crore in October, according to AMFI. Even at Upstox, we witnessed a similar trajectory, with a significant jump in equity mutual fund inflows for October (as compared to January ‘23).

What should a layman know about the fintech industry in India?

With technology leading the charge, the fintech industry in India has practically re-invented the financial services landscape over the last few years. With over 9,000 fintech companies, by 2030, India plans to generate $400 billion (nearly Rs 300 lakh crores) in value. Until at least 2028, the fintech sector is expected to expand at a CAGR of above 10 per cent.

Fintech encompasses a spectrum of services, including banking, insurance, investments, and payments. India has witnessed a notable shift towards a cashless economy, with mobile wallets gaining widespread adoption. The introduction of UPI has simplified real-time fund transfers between bank accounts, making it an integral part of many fintech platforms.

The regulatory environment, overseen by organisations like the RBI and SEBI, is also evolving to accommodate fintech growth. Fintech has played a pivotal role in promoting financial inclusion by providing services to those previously underserved. This is because this segment has been pushing hard on innovation and collaboration, with companies often partnering with traditional financial institutions to offer diverse services, ultimately making financial transactions more accessible and efficient for the general population.

Tell us about the growth of demat accounts since COVID-19.

The COVID-19 pandemic catalysed significant growth in India's stock broking ecosystem. Lockdowns prompted people to reevaluate their financial portfolios, leading to a 2.7x increase in demat accounts from FY20 to FY21 and a 25.83 per cent surge from 2022 to 2023, resulting in 12.66 crore demat accounts. A stable Indian economy and a thriving IPO market boosted trading due to the remote working model, even among new investors.

Technology facilitated direct equity investing. Many families, especially those in tier 2 and tier 3 cities, with women taking care of their finances, turned to stock trading as a source of income during COVID-19. Paperless and digitised investing alternatives, like Upstox, empowered them to do more with their restricted environment.

Women's participation surged during the pandemic, and at Upstox too, we observed a major rise in women opening accounts, largely first-time investors. Government initiatives like the 'Digital India Campaign' and 'Investor Education and Protection Fund' also played a role, as did user-friendly services like e-KYC and mobile trading, which encouraged customers to start their investing journey.

Have you undertaken any investment awareness programmes? Tell us about its mission and objectives.

“Financial education” has been at the core of our customer-first orientation. The Upstox mission is to help all Indians get the right resources to invest and feel confident in doing so. We seek to play an active role in shaping up a nation with equal access to markets and enough opportunities to grow so that ‘wealth’ becomes a given.

In 2020, we embarked on a transformative journey by launching our first brand campaign, “Start Karke Dekho,” followed by “Own Your Future” in 2021. The overarching goal was to empower and encourage individuals to take their first step towards investing. We wanted to nudge our users to start their journey towards financial independence by proactively managing and taking control of their finances.

We not only want our users to make the right financial choices but also to learn about the various aspects that impact their financial journey. As part of our recent “Invest Right” campaign, we launched the "7 truths of investing,"- crisp, contextual learning material that investors will find as soon as they log in to the Mutual Funds platform.

We have also launched our flagship learning programme called “UpLearn,” where we are spanning the length and breadth of India to drive financial literacy masterclasses in corporates and educational institutes like IITs, IIMs, and premiere B-schools and tech institutes.