Startup Deep Dive : Upstox — profit is up while its user base and core trading revenue are not

Upstox spent 2025 losing ground to rivals such as Groww and Angel One, dropping to fifth place among India’s stockbrokers by active clients. In that same year, its net profit rose 21.5% to ₹214.9 crore (~$126 million at $1 ≈ ₹96.0, 18 September 2026, Trading Economics) even as its core brokerage revenue barely moved.

That contradiction is the story of Upstox: a discount broker built to win the price war on trading fees, which is now discovering that its profit growth has less to do with trading than with the interest it earns parking client and company cash. The company that once spent ₹45 crore a year sponsoring the Indian Premier League to buy market share is now preparing for a public listing at a moment when the regulator has made its core product less profitable to sell.

Quick facts

What they do

Upstox is a discount stockbroker. It lets retail investors in India buy and sell equities, futures and options, currency and commodity derivatives, mutual funds and IPO applications through an app and a web platform, and it holds those securities on their behalf through its depository arm. There are no branches and no relationship managers pitching stocks over the phone; everything from account opening to trade execution to customer support runs through the app, which is the entire point. The customer is a self-directed trader or investor, usually young, usually mobile-first, who wants to place an order without paying the 0.3-0.5% commissions that full-service brokers such as ICICI Securities or HDFC Securities have historically charged. Upstox’s pitch is a flat fee, or none at all, in exchange for a bare-bones but functional platform.

The origin

The founding insight was simple and, in 2009, still unusual in India: brokerage should be a fixed, tiny fee per order, not a percentage of the trade’s value, and the entire account-opening and trading experience should happen on a screen rather than through a broker’s branch office. Brothers Ravi and Raghu Kumar, who had returned to India after building trading and technology careers in the United States, including Ravi’s stint working on automated foreign-exchange trading systems, teamed up with Shrini Viswanath to start RKSV Securities in Mumbai. The name was literally their initials. For its first few years RKSV operated as a fairly conventional full-service brokerage, competing on the same percentage-commission terms as the banks and established broking houses it was up against, without the branch network or brand recognition that gave those incumbents their pricing power. It took until 2012, and the arrival of Kavitha Subramanian to run growth, strategy and finance, for the company to relaunch as Upstox and commit fully to the flat-fee, app-first model that discount brokers now use across the industry.

The struggle years

The pivot from full-service to discount broking bought Upstox a business model, but not immunity from crises. In April 2021, hackers linked to the group ShinyHunters breached a third-party data warehouse Upstox used and exposed KYC records, bank details and identity documents belonging to roughly 2.5 million users, according to Inc42’s reporting at the time, with cybersecurity researchers separately estimating that tens of millions of KYC files were compromised. The company reset user passwords, ring-fenced its network and hired an external security firm, but the episode landed at a moment when Upstox was trying to convert a wave of pandemic-era first-time traders into long-term customers on the strength of trust in a no-branch, app-only broker.

The bigger near-death moment was financial rather than reputational. Upstox spent aggressively to win share in a three-way ad war with Zerodha and, later, Groww, most visibly by paying an annual premium of roughly ₹45 crore for Indian Premier League sponsorship rights starting in 2022. Advertising and business promotion spending more than doubled to ₹400.7 crore in FY22 from ₹150.6 crore the year before, according to Entrackr’s analysis of Upstox’s FY22 filings, while legal and professional costs also surged. Revenue grew a healthy 77.4% to ₹765.6 crore that year, but total expenses ran ahead of it at ₹1,221 crore, and the company’s net loss ballooned nearly sixfold to ₹444.6 crore from ₹71.7 crore in FY21. For a company that was simultaneously trying to build a case for an eventual public listing, a loss equivalent to 58% of that year’s revenue was not a sustainable trajectory, and it forced a visible change in spending discipline the following year.

The turning point

That change showed up in FY23. Operating revenue crossed ₹1,000 crore, roughly 40% higher than FY22, and Upstox reported it had reached breakeven, swinging from a ₹444.6 crore loss to essentially nil, as reported by Business Standard and BusinessToday in May 2023. Co-founder Ravi Kumar has publicly credited the IPL sponsorship with lifting brand recall, but the numbers suggest the more decisive move was reining in the spending that came with it once the client base had been built. Breakeven in FY23 was followed by a ₹177 crore profit in FY24 and a ₹214.9 crore profit in FY25, on revenue that has been essentially flat since FY23. In other words, the turning point was not a single funding round or product launch; it was the moment Upstox stopped trying to buy growth and started managing for margin instead.

The money behind it

Upstox has raised about $220 million across six funding rounds, as reported by BusinessToday and Outlook Business in August 2026 coverage of its IPO plans. Tiger Global has been the most consequential outside backer: it first invested $25 million in 2019 and returned as lead investor in the November 2021 round that valued the company at $3.5 billion and made it a unicorn, a valuation both Business Standard and CB Insights have separately reported. That round is the last confirmed primary valuation; there is no publicly reported markdown or markup since. Ratan Tata was an early, smaller backer, putting in about $200,000 in 2016 for roughly a 1.33% stake; he sold that holding in 2024 at a value BusinessToday reported as $46.55 million, a return of about 23,000%, before his death later that year. Kalaari Capital came in as an early institutional venture investor, and Stride Ventures has provided venture debt rather than equity, a financing mix common among brokers that need working capital to fund client margins rather than pure growth capital. Each backer changed something different: Tiger Global’s cheques funded the advertising war chest that built Upstox’s user base; Tata’s investment added credibility with retail customers who recognised his name; and the debt financing let the company avoid diluting further to cover short-term liquidity needs.

How it makes money

Upstox charges a flat brokerage fee, commonly ₹20 or 0.05% of turnover, whichever is lower, on intraday equity, F&O, currency and commodity trades, while equity delivery trades are typically free, the standard discount-broker structure. Brokerage income was ₹767 crore in FY25, or about 81% of operating income, according to Entrackr’s review of the company’s FY25 filings; depository operations added ₹65 crore and management services and other operating income contributed the remaining ₹113 crore. The part of the model people consistently misjudge is where the profit actually comes from. Because a flat fee per order compresses the margin on any single trade to almost nothing, brokers make their money on volume, and volume is disproportionately driven by high-frequency options and futures trading rather than by long-term equity investors, which is also what makes the business so exposed to a change in how derivatives are taxed or regulated. On top of that, brokers earn a less-discussed layer of income from parking client margin money and their own cash reserves in interest-bearing instruments: Upstox reported ₹263 crore of non-operating income in FY25, up ₹103 crore year-on-year, against cash and bank balances of ₹2,744 crore, and that swing did more to lift FY25 profit than the underlying brokerage business did.

The numbers

Read across the four years, the pattern is a company that traded a loss-making sprint for growth (FY22) for two years of essentially flat top line (FY24 and FY25) while profit kept climbing, first through cost discipline and then, more recently, through treasury income rather than core broking growth.

Where the money comes from

Upstox’s revenue is concentrated almost entirely in one product and one geography: derivatives trading by retail Indian customers. Industry-wide, derivatives have historically generated somewhere between 70% and 90% of a discount broker’s income, according to Inc42’s October 2025 analysis of the sector, and Upstox’s own FY25 filings show brokerage as 81% of operating income, most of it earned on intraday and F&O turnover rather than delivery-based equity investing. There is no meaningful international business; Upstox operates only for Indian residents trading Indian exchanges. The surprise, given how derivatives-heavy the model is, is how much of the recent profit line has instead come from a segment that barely gets discussed in the company’s own marketing: the ₹263 crore of non-operating income in FY25, largely interest earned on the company’s own cash pile and client float, which grew faster than the core brokerage business did. A broker that markets itself on trading can end up being, in a given year, more of a treasury operation than a trading platform.

The risks

The first and most immediate risk is regulatory concentration. The Securities and Exchange Board of India tightened derivatives trading rules through 2024 and 2025, including a roughly 60% increase in securities transaction tax on F&O trades from July 2024 (futures sell-side STT rose from ₹625 to ₹1,000 per crore of turnover, and options sell-side STT from ₹3,125 to ₹5,000 per crore, per Wright Research’s October 2025 analysis), alongside fewer weekly expiries and stricter margin and eligibility norms. Because derivatives generate the bulk of a discount broker’s revenue, these changes hit Upstox’s core income stream directly rather than at the margin. Second is client attrition in an increasingly crowded field: Upstox has slipped to fifth place among Indian brokers by active clients, with roughly 18.6 million to 19.6 million active accounts across July and August 2026 and a market share of around 4.1%, behind Groww, Zerodha, Angel One and ICICI Securities, according to data compiled by Pocketful and Exchanges.broker. Groww, Zerodha, Angel One and Upstox together shed close to 2 million active clients industry-wide in the first half of 2025 as the new F&O rules discouraged casual traders, per 5paisa’s August 2025 reporting, and Upstox has no obvious lever to reverse that beyond spending on marketing again, which is what caused its FY22 losses in the first place. Third, the business remains dependent on the security and reliability of a single digital platform: the 2021 data breach showed how a lapse at even a third-party vendor can expose the sensitive financial and identity data that a KYC-heavy brokerage necessarily holds, and any repeat would land at a company now trying to build public-market credibility.

The takeaway

The lesson in Upstox’s numbers is not about stockbroking specifically; it is about what “winning” a price war actually buys you. Upstox won meaningful market share by cutting fees to near zero and spending heavily on brand, but the fee-cutting also meant that once it had the customers, the business had almost no room left to make money on the transaction itself. Its profit recovery came not from the product it built its name on, but from disciplined cost-cutting first and then from treasury income that has little to do with trading at all. A company can win the customer-acquisition fight and still find that the real question, whether the underlying unit economics can survive a change in regulation or interest rates it does not control, remains unanswered.

Frequently asked questions

What does Upstox do?

Upstox is an Indian discount stockbroker that lets retail customers trade equities, F&O, currency and commodity derivatives, mutual funds and IPOs through an app, charging flat or near-zero fees instead of the percentage-based commissions full-service brokers charge.

Who owns Upstox and who are its founders?

Upstox was founded as RKSV Securities in 2009 by Ravi Kumar and Shrini Viswanath, with Kavitha Subramanian joining as a co-founder before the 2012 relaunch as Upstox; Ravi’s brother Raghu Kumar is credited in early press coverage as a founding partner. Its largest institutional shareholder is Tiger Global, which first invested in 2019 and led the 2021 round that valued the company at $3.5 billion.

Is Upstox profitable?

Yes, currently. Upstox reported a net profit of ₹214.9 crore in FY25 (year to March 2025), up from ₹177 crore in FY24, after reaching breakeven in FY23 following a ₹444.6 crore loss in FY22.

Is Upstox planning an IPO?

Upstox is privately held and began preliminary talks with investment banks in August 2026 about a roughly $400 million initial public offering that would combine new shares with a sale by existing investors, according to Bloomberg-sourced reporting; the timing and size were not finalised as of that reporting.

How has SEBI’s F&O crackdown affected Upstox?

Because derivatives trading generates the majority of a discount broker’s revenue, SEBI’s 2024-2025 measures, including a roughly 60% increase in securities transaction tax on F&O trades and tighter margin and expiry rules, have squeezed the trading volumes Upstox and its peers depend on, contributing to industry-wide active-client losses through 2025 and 2026.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, “Upstox posts Rs 1,208 Cr income and Rs 215 Cr profit in FY25,” January 2026
• Entrackr, “Upstox revenue grows 77% in FY22 while losses balloon 6X,” April 2023
• BusinessToday (Business Standard reporting), “Ratan Tata, Tiger Global backed Upstox breaks even in FY23; revenue touches Rs 1,000 crore,” May 2023
• BusinessToday, “Upstox IPO: Tiger Global backed brokerage begins talks with bankers for $400 million issue,” August 2026
• Outlook Business, “Tiger Global-Backed Upstox Weighs $400 Mn Public Listing,” August 2026
• Bloomberg, “Tiger Global-Backed Broking Firm Upstox Said to Plan India IPO,” August 2026
• BusinessToday, “Ratan Tata sells stake in Upstox after earning 23,000% return,” October 2024
• Business Standard, “Upstox turns unicorn with funding from Tiger Global at over $3 bn valuation,” November 2021
• CB Insights, RKSV/Upstox company financials profile, accessed September 2026
• Inc42, “Upstox Tiptoes Around Data Breach Impacting 2.5 Mn Users, But Upgrades Security System,” April 2021
• Medianama, “Upstox suffers hack, data of 25 lakh users for sale on dark web,” April 2021
• Pocketful, “Top 50 Stock Brokers in India by Active Clients (July 2026),” July 2026
• Exchanges.broker, NSE active client and market share tracker, August 2026 data, accessed September 2026
• Inc42, “Zerodha, Angel One, Groww Feel The Squeeze From SEBI Crackdown,” October 2025
• 5paisa, “India’s leading brokers shed 6 lakh clients in July amid tightening F&O rules,” August 2025
• Wright Research, “The Real Story of Zerodha’s Volume Crash and F&O’s New Reality,” October 2025
• Upstox company “About Us” page, accessed September 2026

Found an error? Write to us and we’ll correct it in the open, dated, on the piece.