Let us quickly recapitulate the ingredients of a thriving industry and hence the economy. High demand? Check. Driven by innovation? Check. Revenue Growth? Check. High margins? Check. That’s all right? Did we miss anything? Yes. For any industry to constantly push out better products and customer service, a key requirement is: competition. When giants have constantly locked horns for a higher market share, the customers are benefitted. But why are we discussing this? Because I recently talked about Zerodha. How the entry of Zerodha gave other brokers a run for their money. How it caused disruption across the industry and forced everyone else to slash their brokerage rates.
However, fundamentally, Zerodha’s model wasn’t inimitable. Therefore many other brokers tried to replicate it. Some of them were actually quite successful as well. One such broker is Upstox. Our hero for this blogpost. This Rattan Tata backed fintech platform is quite successful in the discount brokerage model and is currently the second largest player in the industry with a market share of roughly 11%. That is against 19% of Zerodha.
Features and Key Facts about Upstox:
Upstox is a part of RKSV technologies. This company is a SEBI registered provider of financial services. Upstox provides low cost trading services. The equity delivery segment i.e. where you buy and hold the stock for more than 2 days, is free of cost on this platform. For all other trading segments like intraday, futures and options etc., Upstox charges a flat Rs. 20 per trade brokerage.
Some key facts about Upstox are:
- Over 1 Lakh customer and Rs 15 Cr daily turnover as of Nov 2018.
- Offering low-cost brokerage services since 2009. Trusted and reliable services.
- Registered member of SEBI, BSE, NSE, MCX, NSDL and CDSL.
- Offer simple flat rate trading plan (Rs 20 per executed order).
- In-house build trading platform available for free to all customers.
- Paperless instant account opening in less than 1 hour.
Let’s quickly evaluate the products of Upstox vis-à-vis their counterpart, Zerodha:
1. Upstox Pro:
Upstox pro is a trading platform developed by RKSV technologies. It can be used by investors or traders to buy and sell stocks on the exchange like NSE, BSE etc. This platform is available both on web as PRO web and mobile as PRO Mobile. This is in line with Zerodha’s suite of products where both platforms for trading are available on web and phone as the KITE.
As a matter of fact, there are a couple of features that are available in Kite, but not in Upstox Pro. Kite has integrated the application with web platform and allows you to invest in IPOs from the app itself. This is missing in Upstox. Secondly, you cant see the portfolio summary from their application which is again possible in Kite.
2. Upstox Mutual Funds:
Upstox also helps the investors to invest in direct mutual funds of their choice. These direct mutual funds are much more cost effective than regular funds as the expense ratio is significantly lower in these funds. Once again, a Zerodha parlance of this product would be COIN by Zerodha, which has a similar offering.
3. Upstox DEV:
Upstox DEV is a platform meant for developers where they can build trading strategies using real-time data from APIs exposed by Upstox. Think of it this way: If a startup plans to develop their own trading platform with ability to execute orders in real time, manage portfolio, stream data. In that case, they don’t have to go through the dirty work of developing the platform from scratch. They would simply use these APIs to get the job done.
While you might think that this would definitely be a unique proposition of Upstox, Zerodha also has a similar offering under the name Kite Connect.
Kite Vs Upstox:
I have been using Kite for over an year now and have never felt the requirement of switching. Although offerings and cost involved in Upstox is hardly any different, I would recommend that if someone is starting off, it is better to start with the market leaders. There is no actual merit in starting off from Upstox apart from the fact that account opening in Upstox is absolutely free. Zerodha charges you a one time fee of Rs. 200 for the same. Also, annual account maintenance charges for both the companies are exactly same (Rs. 300 per year).
Conclusion:
We always complain that India has a very limited presence in the tech space. I am not talking about the likes of TCS, Accenture, Infosys etc. These companies are making their money from consulting primarily. I am talking about companies like Facebook, Amazon, Twitter that deal in tech products. These new age companies like Cred, Zerodha are challenging the status quo.
Will these break out to become India’s first global tech product?
Got questions? Want to take it to the next level? Reach out to me using your preferred platform from the links below
Until next time..
This blogpost is in association with Blogchatter’s #BlogchatterA2ZChallenge
very informative post!