Online broking platform Fyers to enter lending biz via Margin Trading by early 2024

Tejas Khoday, co-founder and CEO, Fyers

Online discount brokerage platform Fyers is looking to enter the lending business with Margin Trading Facility as well as enter the Portfolio Management Service (PMS) business in 2024 focussing on managing assets for High Networth Individuals (HNIs) in India and abroad, the firm’s co-founder and CEO Tejas Khoday told Moneycontrol.

Margin Trading Facility (MTF) is similar to a Buy Now Pay Later (BNPL) arrangement where the service allows stock market traders to borrow funds from their brokers to purchase financial assets.

“We are planning to enter into lending with Margin Trading Facility (MTF), this is more like a bridge financing or short-term financing for trading which we will start in early 2024,” Khoday said.

The firm has applied for the PMS license with the Securities and Exchange Board of India.

“We have applied for the license and it is in SEBI’s hands now. PMS is very interesting for us, that is the path that we will be entering soon. Managing High Networth Individuals’ money under PMS is a growing business and we are very keen,” Khoday said.

“The reason we even started this business is because some of our existing users approached us to ask whether they will  manage their portfolios. But as we were doing it we saw the use-case especially for NRIs and the market here in south India can be addressed with this,” Khoday added.

Founded in 2015 by Tejas Khoday and his brothers Shreyas Khoday and Yashas Khoday, Fyers is a bootstrapped online discount broking firm with around 500,000 active users. In FY23, Fyers reported a revenue of Rs 200 crore.

“We have been growing organically, we are growing at a minimum rate of 100% year-on-year in terms of revenues, we are a profitable bootstrapped startup and we are now among the qualified stock brokers,” Said Khoday.

The company competes with the likes of Zerodha, Groww, and AngelOne.

“We did try to raise funds initially but we were unsuccessful, however in the last five years our focus area has shifted. We are on the right path, we are more of long-term players, we don’t really have hard targets, we optimize our performance and people for more than three years. This may or may not be aligned with the marquee investors in this space,” Khoday added.

Roadmap for 2024

Fyers is looking to double its revenue in 2024 and will focus on clocking 1 million active users on its platform. “Lot of innovations within our trading business, extended services for NRIs and PMS is our key focus area for 2024. We are venturing into institutional broking as well. This is another big area for us, we want to be a very serious player in Asset Management and that is where things are leading up to,” Khoday said.

The firm is also bracing up for a slowdown in activity and Khoday is also expecting the regulators to extend trading hours.

“Markets ought to be extended till midnight, if not 24 hours, if India wants to become a global destination for investments and trading,” he added.

The National Stock Exchange has proposed an extension of trading hours in the derivatives segment to 9 pm. The proposal is to have a three-hour extended session from 6 pm to 9 pm after the closure of normal trading hours at 3:30 pm.