Online stock-broking company Upstox’s net loss widened twofold for 2020-21 (FY21) as the company’s employee benefit costs and other expenses soared during the year, regulatory filings show.
Upstox, managed and operated by RKSV Securities India Pvt Ltd, reported a net loss of ₹71.67 crore for FY21 against ₹37.98 crore a year earlier, the company’s filings with the ministry of corporate affairs show. While the company’s operating revenue surged over 200% to ₹385.64 crore for the year from ₹124.90 crore in 2019-20 (FY20), its operating expenses jumped nearly 170% to ₹497.32 crore, weighing on the company’s bottom line.
Upstox’s employee benefit expenses and other expenses, which include after-sale service expenses, advertising promotional expenses, legal and professional charges and commission paid to sole selling agents, among other heads, soared during the year, the filings show.
While employee benefit costs doubled to ₹65.10 crore, other expenses nearly tripled to ₹426 crore. The company reported numbers on a standalone basis. Upstox also has a subsidiary for commodities trading called RKSV Commodities India Pvt Ltd.
The surge in demand for online broking in the pandemic-battered year helped Upstox report a strong growth in its operating revenue. According to the data from the National Securities Depository and Central Depository Services, 14.2 million new demat accounts were opened in FY21, a near three-fold increase from FY20’s 4.9 million.
Upstox’s closest competitors Groww, operated by NextBillion Technology Pvt Ltd, and Zerodha Broking Ltd, too, reported a sharp rise in their revenues for FY21. Zerodha, India’s largest broking firm, reported a profit of ₹1,122 crore, while Groww turned profitable for the first time with a ₹2.73 crore net profit.
Upstox joined the unicorn club in November last year after it raised $25 million as a part of its Series C funding round led by Tiger Global Management. Unicorns are companies with over $1 billion in valuation. Prior to that, the company had raised $25 million from Tiger Global Management’s affiliate Scott Shleifer in 2019. The company had also raised $4 million in 2016 in a Series A funding round led by Kalaari Capital.
Upstox is a discount stockbroking platform, founded in 2009 by co-founders Ravi Kumar and Shrini Viswanath, and onboarded Kavitha Subramanian as its third co-founder in 2016. The startup provides products and tools such as web-, desktop- and mobile-based trading platforms, and application programming interfaces (APIs) for developers. The company offers free delivery trades and charges for advanced methods such as intraday trades and futures and options.