Ratan Tata-backed Upstox, a new-age online discount-broking firm, has tied up with Mumbai-based robo-advisory firm Tavaga Advisory Services to provide investment advisory services via low-cost exchange-traded funds (ETFs) in the country where penetration of financial products is still very low. According to reports, while there are approximately 75 crore bank accounts, the number of demat accounts are less than three crore.
Ravi Kumar, Co-Founder and CEO, Upstox said, “As India becomes a $5-trillion economy in the next five years, stock market participation can only increase from current levels. We have already seen a huge interest from rural India to participate in the India growth story. However, costs and complexities while investing have been big deterrents.”
Through the partnership, both companies plan to bring more consumers into the investing universe who had, till now, explored only the traditional methods of investing by tapping tech-savvy youngsters and consumers in Tier 2 and Tier 3 cities. While Upstox aspires to bring more retail participation in the share market and promote cost-effective ETFs, Tavaga aims to empower investors by helping them save more and achieve user-defined goals, through investments in ETFs.
Upstox, funded by Kalaari Capital, and GVK Davix, has been revolutionising the concept of discount broking in India with the use of technology and affordable pricing.
It was among the first in its category to introduce commission-free trading ensuring full transparency in pricing by offering ‘zero’ brokerage on equity delivery trades and a flat rate of ₹20 per intra-day order for all other segments.
Kumar added that retail investors, especially in rural India, don’t have access to the same advice, execution technology and processes in investment products as available to professional funds, and as a result, a large chunk of the population is left out of financial inclusion, resulting in more socio-economic problems.
Nitin Mathur, Co-Founder and CEO, Tavaga, told BusinessLine, “While retail investors at the top end of the wealth pyramid have access to quality advice, the incentive of wealth advisers to serve the larger pool of the population is absent. Tavaga’s vision is to democratise investment advisory and cater to investors’ goals and needs through more transparent and efficient investing.”