Giving traditional brokers, a run for their money!
What is ‘RKSV’? What Is Their Business Model?
Headquartered in Mumbai – RKSV is a discount brokerage firm that holds memberships with the NSE (National Stock Exchange), BSE (Bombay Stock Exchange), MCX (Multi Commodity Exchange), and MCX-SX (Multi Commodity Exchange Stock Exchange).
Certified by the Securities and Exchange Board of India (SEBI), RKSV helps retail investors and institutional corporations to invest in stocks, options, futures, commodities and currencies at rates comparatively lower than the traditional full-service brokers.
The company was founded in 2012, and as of today it accounts for a Daily Transaction Volume worth Rs. 6,000 crores, which is almost 2-5% of the total turnover on the NSE.
So what’s so different about them?
Well, as we all know, when you trade in the stock markets, it is not for free, there is a commission that you have to pay the broker along with a small amount for the actual transaction.
Now one of their USP’s is that – while, the traditional full-service brokers charge a percentage of the total value of your trade as brokerage commission, RKSV charges flat fees and Zero Brokerage, helping you to significantly cut the costs.
In order to execute this zero brokerage fee idea, RKSV has opted for an online-only business model. Unlike other brokerage firms who have hundreds and thousands of branches spread across the country, RKSV has one central branch in Mumbai, and operates through the internet; thus, keeping their operational costs to a minimum.
Other than that, they have also imbibed advanced charting tools and risk management systems protocols to make sure that their customers get to experience the best trading platform on platforms including – Desktop, Mobile and Tablet.
Unlike other brokers RKSV also develops their trading tools in-house, which helps customers to make more informed trading decisions. These include – Brokerage Calculator, Span Calculator, Options Strategy Builder and Global Data Feeds Plugin (GDFL).
Safety of the funds at all times is the top most priority of RKSV, and they take every measure to ensure that client funds are kept secured and segregated at all times.
RKSV has also introduced their educational arm called – Trade Academy! Trade Academy is a free educational portal initiated with a purpose to educate first time users who want to learn and understand the nuances of trading, more specifically, equity & derivatives markets.
More recently, RKSV has also introduced Upstox to their package. Upstox is a mobile app initiated with a purpose to simplify the world of investing and trading for both professional traders and beginners. Its features include charting indicators, margin trading, margin against shares, and zero brokerage trades on Equity stocks for delivery.
How Does It Work?
RKSV offers 4 different types of accounts: -
- Individual Accounts
- HUF “Hindu United Family” Account
- Partnership Account
- MCX/Commodities Accounts
To begin trading with RKSV one needs to create an account with them, which usually takes somewhere around 1-2 working days. All one needs to do is: -
- Fill and submit their KYC (Know Your Customer) form. According to Securities and Exchange Board of India (SEBI), every broker is required to verify the details of their customers, which also includes conducting an In-person Verification (IPV). RKSV conducts IPV process over the web.
- Provide two cheques
- And lastly, provide three identification proofs
For any clarifications, one can also call their customer support desk as well at +91-22-6130-9999.
What are their Market Segment, Revenue Model & Strategies?
Currently, not more than 1.5 – 2.0 % of the Indian population actively participates in the trading on the capital markets. This is mainly due to difficulties that surround the sector, such as – high brokerage costs, difficult-to-understand trading software, and poor customer support.
With their state-of-the-art technology, industry expertise and zero brokerage business model, RKSV aims to target this pain-point and bridge this huge gap.
To help this market – unlike its peers, RKSV has introduced a Zero Brokerage plan where they charge Flat Fees, along with an easy to understand pricing plan. One can either pay Rs 20 per trade or a monthly fee of just Rs. 1947 (Unlimited Trading Plan), to use their service.
Talking about their Strategies – RKSV’s business model itself is the best strategy adopted by them!
If you look at it; they offer an ‘unlimited trading model’, where traders can transact for as many times that too at a fixed cost. Plus, since RKSV is a completely online algorithm-based business model, they do not require any relationship managers, advisors, or for that matter, multiple office space as well.
Using these basic strategies itself, RKSV saves a lot of costs, which they in turn pass on to the customers, in the form of low fees.
Yes, it is true that clients require advice too, and for that, RKSV has adopted the system that is followed in the US and Europe, where people don’t take advises from the brokers, but instead, they have softwares that are equipped enough to tell you what to do to enable you to trade efficiently.
Additionally, they also offer top notch Customer Support; wherein, whenever customers ask questions through their ticketing system, their queries get resolved promptly.
Basically, all they do is they connect their customers with the right kind of tools that are required to trade, along with good customer support.
Other than that, the company solely relies on ‘Word of mouth referrals’ for their marketing. They believe that it is the best way to grow a business, and also avoids unnecessary marketing costs too.
Who are the Founders?
RKSV was founded by by Raghu Kumar, Ravi Kumar and Shrinivas Viswanath in 2009, who collectively manage a team of approx 100 employees! The full form of company name – RKSV is the initials of the names of the cofounders.
Born in India and brought up in the US, the brother duo – Raghu Kumar & Ravi Kumar have always been intrigued about entrepreneurship.
While, Raghu holds a Bachelors of Science degree with a specialization in Actuarial Science & Finance, Ravi has completed his Bachelor of Science in Information and Computer Science.
Raghu had first gained his passion for trading at the age of 16, when a teacher in his school had organized a competition, wherein all the students were asked to invest in stocks and the best portfolio would get some credit.
The credit for Raghu’s inclination towards trading can also be given to his brother Ravi as well. If it would have been for Ravi’s 2 year stint at ‘Thinkorswim’ in 2004, or if Ravi wouldn’t have begun trading in penny stocks, Raghu wouldn’t have gotten so intrigued.
The decision of Ravi to join a broking firm is said to be the turning point for the brothers. It was only after Ravi joined, that Raghu began taking interest in the Forex Markets.
In 2006, the brothers had started RK Trading to develop trading models for a proprietary trading firm. Raghu wrote Algorithms, while Ravi coded them.
Proprietary trading is something wherein, a particular firm trades for themselves and with their own money, and RK Trading used to make algorithms that traded automatically according to market conditions with an end goal of making more profits.
Post this stint and after the Market Crash of 2008, they came back to India and started RKSV, along with Shrinivas.
Presently at RKSV, Raghu is considered to be the most critical and integral part because of the multiple roles he plays. Mainly, he writes algorithms for proprietary trading, works with the business, customer relations & media communications teams. Due to his analytical mind Raghu is also considered to be a problem solver by many!
Shrinivas is the third cofounder of RKSV.
He completed his Bachelors in Computer Science from the University of Illinois, and began his career in 2005 with Cerner Corporation as a Software Engineer. Post this 3 month stint, he also worked with Morgan Stanley as a Technology Analyst, and then Citi as a Business Intelligence Delivery Manager for 3 months and 9 months, respectively.
While at Citi, he was further promoted to Solutions Architect / Program Manager and then Program Manager as well, after which, he cofounded RKSV in 2009.
What is Their Story? How Has Their Growth Been So Far?
Although, RKSV has managed to attain success in a short span, but their struggles remain unusually timeless.
So before coming to India; Raghu and Ravi had started a proprietary trading firm called RK Trading, and for the next two years, everything that they touched, turned gold. They made a killing of roughly $20 million in the US and the European markets.
But unfortunately, in 2008, Global Markets crashed! While the world was under huge crisis, recession had hit them really hard too. The trading opportunities had dried up & liquidity had shrunk to zero.
It was time for them to change their course of action. So for the next one month, they kept all the options open and rigorously began their search!
At that point; they saw the Indian market and noticed that India was making way for Direct Market Access (DMA), due to which, the institutional investors would be able to gain direct access to the market; in other words, no more broker compulsion!
Since, the Western markets had reached to a saturation point, they along with Shrinivas decided to come back to India.
Soon after the necessary research was complete, they applied for a BSE membership and also shifted their base to Mumbai. Here, they also managed to convince a broker to allow them to trade via his infrastructure through a profit-sharing arrangement, and began trading as well.
Around the same time; they came to know that BSE was keen on enrolling new members and had cut down their membership fees from Rs. 1 crore to Rs. 10lakhs as well. Hence, Raghu met Balasubramaniam V (Chief Business Officer – BSE) and got their BSE membership.
With that in place, in 2009, they launched their first company in India – RKSV!
Initially, they started with proprietary trading; wherein they only traded for themselves and made about Rs. 24 crores in about three years.
While at it, Raghu noticed that realized that brokerage costs were killing the traders and they literally didn’t have any option but to agree to the given terms. Other than that, he also noticed that the retail brokers held multiple offices in just one city; thus, increasing the costs massively.
Hopping on to the presented opportunity, in 2011, RKSV entered the stock broking market with an Online-only Business Model and Zero Brokerage plan.
And since then; their numbers spoke for the company!
In the next two years; even after operating in a dull market, the company with a team of just 80 members was clocking a daily transaction volume of Rs. 4,000 crores from about 20,000 clients, which then was about 1.3% of total turnover of NSE.
Further, they also raised $4 million from Kalaari Capital, GVK Davix and others, and also launched a full suite of products for Upstox as well.
Today, they operate with a team of about 100 employees, are clocking Daily Transaction Volume of Rs. 6000 crores, and would also be touching Rs. 10,000 crores by the end of the year as well. This would make up around 3-5% of the NSE’s turnover.
After RKSV has reached a certain size, they also wish to enter into sports by entering the field of Saber-metrics, the experiential analysis of baseball statistics.