Daybreak - Angel One is reinventing itself. But just sponsoring IPL and targeting HNIs won't cut it

Episode Date: May 13, 2025

One clear sign that Angel One—India’s third-largest discount broker—is serious about reversing its fortunes is that it bought itself a front-row seat at India’s most expensive distraction: the Indian Premier League.That’s ambitious. Especially for a company that just flunked its latest earnings test. Between fiscal year 2020 and 2024, Angel One proudly nuked its full-service past—no more phone calls, no more reports, no more advisers—and became a pure-play discount broker. Just an app, an order button, and some notifications. When the markets were roaring, that was enough.But now, not quite. Enter Plan B: be a super-app. Tune in. Daybreak is looking for a talented audio journalist with at least two years of experience. Check out the role here. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the Sita Ramancahans, my colleague. secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they managed to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into.

to the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert, as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcast. or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode.

June 5, 2024 was a historic day for the Indian stock markets. It was the day India broke the world record for most orders processed in a single day, 19.7 billion. Naturally, markets were euphoric and retail investors were all in. And of course, no one was happier than the discount brokers. Just take Angel One, India's third largest discount broker, for instance. Like most of its contemporaries, it saw its broking revenue hit a record high on that fateful day. That was a phase when it felt like everyone was trading.

The stonks were stonking, life was good. But cut to present day, and you'll realize that things have not played out quite how Angel 1 would have hoped. It flunked its latest earnings test. In the March quarter, revenues dropped 30% year-on-year, profits have slumped to its lowest in three years, and what's perhaps most concerning is that its biggest cash cow, futures and options trading, the bread and butter of India's young speculators? Well, that's also down by 40%. What changed between June 5th and now?

Well, for starters, just a couple months later, the Sebi stepped in and clipped the wings of the FNO market. Contracts got bigger, expiry's got fewer, margin rules got tighter. And with more and more rules being instituted, casual traders, who are making the most of the 2020-20-24 retail boom, started to lose interest. That's what made platforms like Angel 1 really start to bleed. At the end of the day, this is a company with a pretty straightforward business model. It charges 20 rupees or less per trade and then lends against those trades at high interest rates. A big chunk, and by that I mean more than 90% of its revenue, comes from those two levers alone. So naturally, if people stop trading, Angel 1 is in trouble.

When the markets were roaring, this was enough. In fact, its simplicity was what made Angel 1 stand out at the time. But now that just isn't enough. Of course, Angel 1 is going all out to reverse its fortunes. Why else would it buy itself a front-row seat at India's most expensive distraction? by becoming a title sponsor of the Indian Premier League. That's not all. Another big part of its reinvention plans

is centered around becoming a super app. It's a smart pivot, but a tough time to execute it. Welcome to Daybreak, a business podcast from the Ken. I'm your host Rahal Philippos, and I don't chase the news cycle. Instead, every day of the week, my colleagues, Dikda Sharma and I

will come to you with one business story that is worth understanding and worth your time. Today is Wednesday, the 14th of May. I'm Snigda, the co-host of this podcast. And before we jump back in, I just wanted to share some exciting news with you. Daybreak is growing and we are looking to grow our team too. And if you're a journalist who listens to daybreak and thinks, I wish they'd cover this or I know exactly what would make daybreak even better,

we would love to hear from you. We're looking for somebody who's curious, who's driven and, passionate about business and tech news. If that sounds like you or somebody you know, please check out the details in the show notes. Applications are open now. And back to the episode. It has been a tough year so far for discount brokers.

Angel 1, for instance, lost 1,776,000 clients during the March quarter. On an earnings call, founder and CEO Dinesh Thakar still sounded upbeat. He implied that there was no reason to worry, naturally, in a bull market, there would be more people investing and therefore more customers. And currently, we are in a bear market, which means customers are waiting for the right time to re-enter. But at the same time, he did admit that things would stay somewhat subdued throughout the first half of fiscal 2026. You see, up until not so long ago, discount brokers like this one had an absolute dream run. Back when markets were frothy, all you needed was a functioning website and trades would just pour in.

With that, obviously, came revenue. All these brokers made hay while the sun was blazing. Angel 1, Zerodha and Groh entered the picture and were able to take on legacy brokers and bank-backed platforms at a scale that had never been seen before. But now, with trading volumes down and Seby playing referee, the easy money era is over. And Angel 1 and its peers have realised that just being enthusiastic and present

isn't enough of a business plan. Angel 1 is going down the super app route but an analyst at Aventus Park said that won't make a meaningful contribution to revenue in the near term. After all, its bread and butter is options trading. But you see, Angel 1 wants to be more than a broker now. It wants to be an asset manager

with its own passive funds and exchange traded funds. And it's already rolled out its line-up, a total market index fund, a matching ETF and a one-day rate liquid ETF. You can now buy the whole, market or a super safe slice of it without even leaving the app. But this is India we're talking about, not the West. Incomes are lower and retail investors still overwhelmingly favor active funds.

Even the new age fund houses like Navi and Zarodha have been struggling to substantially increase AUM. For context, Zirodhas jumped 10 times in a year to 5,000 crore rupees, but according to an asset manager at a leading AMC, a fund house would need an AUM of 50,000. thousand crore rupees to make profits of a hundred crore. So basically the approach is simple, scale or die. The bigger point here is that broking alone just won't cut it. Motilal Oswal gets 40% of its revenue from asset management. ICICI securities, 18%. In comparison, less than 3% of Angel 1's revenue directly comes from the distribution vertical, which also houses the asset

and wealth management businesses. But its AUM numbers are nothing special. As of March 2025, Angel 1 had 74 crore rupees in asset management and 3,790 crore rupees in wealth management. Kotak Mahindra Bank's wealth platform manages 8.9 lakh crore rupees in comparison. But still, the move into wealth and asset management does make sense. At the end of the day, broken customers will come and go, but it is the wealthy that stick. They'll stick around regardless of the market. That also means Angel 1's target group has to be. to change dramatically. It's no longer catering solely to 20-something new investors, but

H&I's from cities like Mumbai and Delhi who want quarterly reviews, tax optimization, portfolio commentary, someone to call them personally when the nifty drops 200 points. A push notification just won't cut it anymore. That is a full-blown makeover. And it comes at a cost. It's not like Angel 1 has forgotten its initial demographic, you know, those 20 and 30-something new investors that were trying options trading during their lunch breaks. It wants to hold on to that customer base, but recognises that it can't rely on hobbyists if it wants to make it in the brokerage market.

It's not just the business that's undergone a makeover, even the company's CEO Dinesh Thakkar has. His look was once very old-school finance, with the slick back hair, formal shirts and trousers. But now he dons a much more edgy look, complete with a stylish pair of glasses and the occasional bomber jacket. So while the company, of course, went from Angel Broking to Angel One, the app got a fresh interface.

Thacker got a rebrand to match. Call it founder market fit. But image can only go so far. What Angel 1 really needs is power traders, those high frequency, high ticket size kind who keep trading through cycles and don't vanish at the first side of volatility. Power traders are loyal, noisy and most importantly, profitable. Now, the silver lining and all of this is that Angel Angel 1 has managed to hold on to its 15% share of NSE active clients as of Q4 FI-25.

Together with Zerodha and Grow, the trio controls around 65% of the market. That's the good news. But the bad news is, where do you go from here? Market share doesn't grow on trees, especially in a space that is this crowded. And the reason this matters is because Angel 1 wants to cross-sell. But the issue here is not every user is interested in playing that game. Which is why, to get there, Angel 1 has opened its wallet to IPL's sponsorship. Its ad spend now accounts for 24% of revenue, dramatically higher than grows 14%,

dhung 7%, and Zerodh's negligible 0.2%. The company wants visibility, it wants scale, it wants relevance. But the real challenge isn't those things. It's conversion. Turning impulse traders into patient capital. Turning excitement into engagement into engagement. engagement. And that is a whole other ballgame. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news

platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippo's and edited by Raiyipi. Jeev Sient.