Ant-backed Paytm Money looks to tap India’s stock trading mania

A sign for PayTM online payment method, operated by One97 Communications Ltd., is displayed at a store selling mobile phones in Bengaluru, India, on Saturday, Feb. 4, 2017. Photographer: Dhiraj Singh/Bloomberg

India’s highly competitive stock broking industry has a fierce new challenger.

Paytm Money, a unit of the nation’s largest digital-payments startup Paytm which is backed by Chinese billionaire Jack Ma’s Ant Group, is aiming to build a top stock broker by helping local retail investors avoid the biggest investing hazard — getting burned during a down cycle and quitting for good.

The app made zero-fee stock trading available to its millions of users last month. It plans to put algorithms to work so India’s young, smartphone-savvy newbie investors can be nudged to exit loss-making trades and book profits at the right opportunity.

The newcomer is stoking competition among Indian brokerages rushing to give hungry traders the perfect platform. Nimble, technology-focused online brokers are pulling ahead of older established rivals by offering easy-to-use platforms with minimal charges. Unable to keep up with falling prices and fast-paced online services, smaller players have been rapidly closing their doors, with about three quarters of brokers shutting shop in the last six years.

“There is a big debate about who will survive in the Indian broking industry because there is a lot of disruption,” said Kranthi Bathini, a director at Mumbai-based WealthMills Securities Pvt. “Paytm is very well known, their brand has reach. They could create big awareness about stock investing in India.”

The launch of the app could hardly be better timed. Like the Robinhood craze in the U.S., Indians have been drawn to the stock market this year. Four and a half million individuals had opened trading accounts in the first seven months of this year, compared with less than three million in all of last year, according to data compiled by Central Depository Services Ltd.

Paytm, whose parent One97 Communications is valued at $16 billion, has become a fintech leader in India. It was founded a decade ago by Vijay Shekhar Sharma to offer digital payments in a market that Credit Suisse Group AG forecast to reach $1 trillion by 2023. The Ant Group has a 30.33% stake in One97.

‘Would Be Massive’

Paytm has a user base of about 80 million for its payment services, according to Vivek Bajaj, co-founder of StockEdge, an education and research platform for retail investors. “If they bring 10 million of those users into the stock market, it would be massive.”

While concerns are growing on the increasingly speculative nature of retail stock wagers, the surge in demand for online and mobile-based broking services has sparked innovation in India. Brokers are racing to offer new features such as access to U.S. markets to stay ahead, while keeping fees rock bottom.

“Pricing has become commoditized, so whichever broker adds more value will prevail,” said Bajaj.

Some of the ways in which Paytm Money hopes to stand out include features that could allow users to automate the entry, exit and monitoring of investments in various securities, Varun Sridhar, chief executive officer, said in an interview. Another planned innovation to lure users is to add resources for investor education. The app currently has the ability to set up scheduled monthly investments in individual stocks — which has proved popular in mutual funds.

“In three years time, we would like to be either number one or two with a 10-15% market share,” said Sridhar.

–With assistance from Sanjit Das.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.