Ratan Tata Partially Exits Upstox With 10X Returns

Startup Ecosystem Mourns The Demise Of Industry Titan Ratan Tata

SUMMARY

Upstox said it brought back 5% of Ratan Tata’s stake in the broking platform

The startup said that Tata has registered a “23,000% return on the original investment” made in it 2016, based on the startup’s last valuation of $3.5 Bn

Earlier this year, Upstox said that it turned profitable in FY23 and posted a consolidated profit of INR 25 Cr

Tata Sons’ chairman emeritus Ratan Tata has partially exited broking platform Upstox with 10X returns after the startup concluded a buyback of 5% of Tata’s stake in it.

Without disclosing the specifics of the transaction, Upstox, in a statement, said that Tata has registered a “23,000% return on the original investment” made in 2016, based on the startup’s last valuation of $3.5 Bn.

Tata acquired a 1.33% stake in Upstox when he invested in the startup in 2016.

It is pertinent to mention that Tata has been a prominent investor in Indian startups. Besides Upstox, he counts the likes of Ola, CarDekho, Lenskart, among others, in his portfolio.

After Tata’s investment, Upstox raised $50 Mn in two more funding rounds from Tiger Global in 2019 and 2021.

Commenting on the development, Upstox cofounder Kavitha Subramanian said, “We believe that everyone deserves the opportunity to grow their wealth, not just the privileged few. Our mission is to deliver strong returns for all our investors, and we’re proud to say that today we’re able to return part of Mr. Tata’s investment.”

Upstox’s parent company RKSV Securities was founded by Shrini Viswanath, Raghu Kumar, and Ravi Kumar in 2008. It started off as a proprietary trading firm but subsequently ventured into retail brokerage with the launch of the Upstox platform in 2012. It currently claims to have a customer base of over 1 Cr Indians.

Earlier this year, Upstox said it turned profitable in the financial year 2022-23 (FY23). The startup posted a consolidated profit of INR 25 Cr in FY23. Operating revenue jumped 44% to cross the INR 1,000 Cr mark from INR 765.6 Cr in FY22.

In May, Upstox also entered the insurance distribution business. It now offers term, motor, health and personal accident insurance through its platform.

Upstox competes with the likes of Groww and Zerodha in the country’s burgeoning invest tech space. Both of its aforementioned rivals recently reported their financial numbers for FY24.

While Groww’s operating revenue jumped 123% year-on-year (YoY) to INR 2,899 Cr, Zerodha clocked a revenue of INR 8,320 Cr during the year under review. While Groww reported a 4X YoY jump in its net profit to INR 297.8 Cr in FY24, Zerodha’s profit zoomed 61% to INR 4,700 Cr.

Upstox is yet to report its financial numbers for the last fiscal year.