Vivek Bajaj said that a B2C business now necessitates a social-media presence. (Illustration: Suneesh Kalarickal)
As the market regulator tries to set rules for influencers active in the financial world, businessman and social media personality Vivek Bajaj says the Business-To-Consumer (B2C) has changed and an entrepreneur cannot afford to stay away from social media.
A licensed research analyst who came on social media to promote his businesses Elearnmarkets and StockEdge and their products—financial education and a research and analytics app --- Bajaj spoke in an interview about building an online presence, the challenges imposters pose and why the regulator has all the rules it needs to stop unlicensed stock-market gurus. Edited excerpts:
What is your view on the Securities and Exchange Board of India (SEBI) trying to regulate finfluencers?
Any move by the regulator is welcome, but regulations have rarely met their objective.
For example, the one for research analysts. How many people are actually following it (in spirit)? Many take advantage of loopholes present in it. So why should there be a new regulation for the influencers? If influencers don’t have a licence, then the regulator should penalise them (under the existing law for research analysts) for using a public platform to talk about stocks.
So are you saying the regulator-issued licence should be the deciding factor, between who can talk about stocks and who can’t?
Yes, that is precisely it. The (law regulating) research analysts clearly defines the do’s and don’ts.
As of now, the influencers say that they talk about a stock to educate their audience. That makes no sense. To educate an audience, you can talk about a concept and not a particular stock.
Which is the regulation you are specifically referring to?
SEBI (research anaysts) Regulation 2014, which clearly states that no one can give stock ideas in a public forum without taking the relevant RA (research analyst) licence.
In India, around 900 people have taken this licence, while this regulation has been around for a few years. So Sebi should ask why only this many people have taken this licence, why not 9,000.
Why do you think there are so few people with the licence?
Because the regulation itself is faulty. The regulation says that the research analyst should not deal or trade in a stock 30 days before or five days after talking about the stock. That is faulty because if I am convinced about a stock, then I would want my money in it. I should have skin in the game. So, this 30 days is too long, maybe they can reduce it to 10 to 15 days.
They should rationalise these clauses, which are bottlenecks (dampeners) for people to take these licences.
With such a huge following, do you have to deal with imposters?
Yeah, all the time. Every week we have to deal with at least two or three imposters. They claim that they are me and offer advice. But that isn’t SEBI’s problem. That’s a problem with our Information Technology Act, that the verification process followed by social media platforms are cumbersome. In fact, I get calls from people who offer to get me Twitter-verified if I give them Rs 1 lakh. There are middlemen for everything.
I have been trying to get verified on Instagram for months now. They reject (me) every time (I make an an attempt) but I get a call from someone saying that if I pay some money, my (Instagram) verification will be done.
Also how did they come to know that you are looking for verification?
Yes (laughs) exactly. Anyway, SEBI can’t do anything about it.
What advice do these imposters try to sell?
Now it is crypto. The imposters add a zero or or a 1 to my ID, then download my photo and posts, imitate me, and then start asking my followers to invest or trade in crypto.
Many, many people have fallen prey to this and I had to pursue that at the local police station. The cyber police has been very efficient. They take about 15 to 20 days to take down a fraud account but money repayment (to the defrauded) is a tough exercise.
Is a lot of time wasted on this?
Nearly 50 percent of our lawyer’s time is spent on identifying the imposters, going to the police station and then getting the accounts blocked.
Could you share a little bit about how you started building your online presence?
I am an entrepreneur. I have been in the market for 17 years and have founded multiple businesses (related to capital markets). Over the years, I have realized that social media isn’t something we can’t neglect. The whole structure of the B2C business has changed. If you don’t use social media to highlight your product or talk about the strength of your product, then people will not buy it. Then, you have two options – either you pay a social media influencer (and get the word) or you become something of a social-media influencer, although I don’t call myself that.
What was the inflexion point?
In 2020, I became active or regular on social media and our organisation got a dedicated team to scale up that segment. Till 2019, I was posting whenever I felt like it.
I started with Twitter. I love the platform because it allows you to reach out to anyone and everyone. Then I moved to YouTube because it allows you to connect with Bharat.
Now I have to be on every platform because each has a unique audience.
How did you transition from a businessman to a social-media person?
It was quite a task because I am an introvert. But there was a business requirement to be online; also I felt a moral responsibility because I felt that people who have been in the market and know what is happening to come and talk (to the interested audience).
My first videos were more impromptu, more of dil se batein, where you are trying to be more comfortable with the camera. Now, there is a process, with a team that decides what the topic should be and that writes out a rough outline of the content, and finally I improvise on that.
What would be your advice to a businessperson who wants to try this out?
First, be very clear about your objective—whether it is to sell your product or make money from social media or to contribute to the society. This will define your content framework. Second, start with only one platform. Once you are reasonably big in that, then you add another one. Thirdly, get a 25 year old mentor for yourself.
What are the tips you have for other introverts?
One has to transition from being an introvert to an ambivert (a person who has features of both an extrovert and introvert). You can’t become an extrovert, but you can add a layer of extroversion and become an ambivert. Secondly, choose a format you are comfortable with. If you aren’t comfortable being in front of the camera, then try expressing yourself in text form. Thirdly, be consistent. Make posting a habit.
What were the big mistakes you have made while building this following?
One of the biggest was that I wasn’t structured initially. If I had started my structured approach much earlier than 2020, then the scale of my following would have been very different. So, start early so that you don’t miss on the power of compounding.
I don’t think I have made any other big mistakes.
What is your view on the market?
US (interest) rates going up to 5% is out of the ordinary. They (the US population) have such a high debt. If they have to pay such a high level of interest to service their debt, how will that economy generate that level of income? So the (important) question is: are we looking at high levels of interest rate in the US, if that happens are we headed for a major recession there?
India is obviously in a sweet spot. We all know about the demographic advantage and we know that we are outperforming the global market. But, kab tak? (For how long?) Frankly speaking, the answer to that would be a guess. Therefore, the best strategy at this point is to look at the sectors that have tailwinds from structural changes, and pick stocks from them.
Which are the sectors you are looking at?
Banking, we have been talking about this for a while now. If India has to become a $5-trillion economy, then banking has to fire on all cylinders. Then, real estate, capex and manufacturing because of China-plus one and Europe-plus are working in favour of India.
What is shifting from Europe to India?
Auto ancillaries. Since Europe is facing an energy crisis, a significant amount of work is shifting to India.
On the whole, I will buying India, not selling for sure.
What about the expensive valuations?
The current PE ratio (of Nifty) is around 22, which is slightly more expensive than the long-term median of around 20.5. When the market was overheated, then the PE ratio had gone up to 35. If that exuberance for India remains, which I believe it will till the run up to the 2024 elections, then I would be long.
