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Online broker Upstox, backed by Ratan Tata and Tiger Global, weighs US SPAC listing

The fast-growing Upstox, which recently joined the Indian Premier League as an official partner, competes with the likes of Zerodha, Groww and Paytm Money.

March 30, 2021 / 06:41 PM IST

Digital brokerage firm Upstox, which is backed by veteran industrialist Ratan Tata and marquee US venture capital firm Tiger Global, is exploring options for a public listing in the US market via the increasingly popular SPAC (special purpose acquisition company) route, industry sources with knowledge of the matter told Moneycontrol.

A SPAC is a blank cheque firm set up by investors with no commercial operations which is aimed solely at raising money via an initial public offering to eventually acquire an existing private company. SPAC IPOs have become a craze on Wall Street and raised more than $80 billion in the US markets in 2020 as they are considered a faster, cheaper and less riskier mechanism to get listed on the bourses when compared to the traditional IPO route.

“Upstox believes it will get richer valuations in the US market. It considers itself as a full-fledged tech company,” said one of the persons familiar with the firm’s plans for a proposed SPAC listing.

The fast-growing online player, which recently joined the Indian Premier League (IPL) as an official partner, competes with the likes of Zerodha, Groww and Paytm Money and is riding a record wave of new age, millennial investors who opened trading accounts for the first time during the pandemic.

“Upstox has global ambitions and does not consider itself as merely a brokerage firm. As per ongoing negotiations, its underlying business is being valued at around $1billion,” a second person told Moneycontrol.

The firm which currently has over 2.8 million customers provides online investments in stocks, mutual funds, digital gold, derivatives, and ETFs for both investors and traders.  According to reports, it is eyeing a customer base of 6-8 million by the end of 2021 and is keen to get into content curation, content discovery and wants to curate experiences for smartphone-friendly traders.

A third person confirmed the SPAC plans adding discussions on structuring of the proposed deal are underway.

All the three individuals spoke to Moneycontrol on condition of anonymity.

Moneycontrol is awaiting the response to an email query from Upstox and has sent multiple reminders. This article will be updated when we hear from the firm.

On February 25, 2021, clean energy firm Renew Power announced an $8 billion transaction - the first major overseas listing of an Indian company via the SPAC route. Videocon d2h and online travel agency Yatra have earlier sealed SPAC deals worth $375 million and $218 million, respectively. On  February 11, 2021, Bloomberg reported that Softbank-backed online grocer Grofers was weighing a listing via a US SPAC deal.

Read More: ReNew Power takes SPAC route, first such major deal by an Indian company, to list on Nasdaq

According to reports, in FY20, the total standalone income of Upstox doubled to around Rs 155 crore from Rs 77.5 crore, a year earlier. On the other hand, the firm reported a loss of around Rs 38 crore as compared to post-tax profits of Rs 13.06 crore in FY19.

On the trend of SPAC listings, Vivek Gupta, Partner & National Head (M&A & PE Tax), KPMG says, “Clearly, the market interest in SPACs is at a peak. That said, SPACs are not for every Indian business, given our regulatory and tax environment. We at KPMG have developed a six-point predictive model to evaluate which company is a genuine SPAC candidate.  The higher-rated companies on our model would be the ones which should be spending time trying to commercially negotiate a SPAC transaction.”

“We use a number of parameters for this analysis including founder ownership and ease of swap for the same, investor structure analysis, impact of any investment from China, potential tax costs on a deSPAC transaction, readiness and governance analysis, etc," Gupta added.


Formerly called RKSV Securities, Upstox was founded in 2008 as a proprietary trading firm and entered the retail brokerage space in 2012. The firm’s website lists Ravi Kumar, Kavitha Subramanian and Shrini Viswanath as the co-founders who had “the vision of making financial investing easy, equitable, and affordable to all Indian investors.”

Kumar holds a Bachelor of Science degree in Computer Science from the University of California, Irvine and works on product and investor relations at Upstox. Prior to Upstox, he worked on trading his own capital alongside his brother Raghu, where they devised various automated trading strategies to trade on foreign exchange markets worldwide.

Subramanian leads growth, strategy, finance, and customer experience at Upstox. She holds B.Tech and M.Tech degrees in Electrical Engineering from the Indian Institute of Technology, Bombay as well as an MBA from the University of Pennsylvania’s Wharton School. Prior to Upstox, Subramanian was a private equity investor at Leapfrog Investments and Actis Investments, where she specialised in healthcare deals. She was a management consultant with McKinsey and Co. and also worked in microfinance at SKS Microfinance.

Viswanath leads technology at Upstox. He holds a Bachelor of Science degree from the University of Illinois, Urbana Champaign. An expert in high-frequency trading, he has spent considerable time building low latency highly scalable systems in the field of automated trading. Prior to Upstox/RKSV, he worked at Citibank in various management roles.

Ashwin Mohan
first published: Mar 30, 2021 06:36 pm