Exclusive: Tata Neu set to take on Zerodha, Groww with stock broking services

Diversifying its fintech offerings, Tata Group’s super app Tata Neu is likely to start offering competition to  Zerodha, Upstox and Groww kind of stock broking services soon, according to two Entrackr sources.

Tata Fintech, which appears to be a backend entity for the stock broking service, has also sought approval from the market regulator Securities and Exchange Board of India (SEBI). The entity applied for the stock broking license in the last week of June and currently shows “under process”.

Tata Fintech is a financial entity set up by Tata Digital in November 2021 and is being tasked with developing a digital financial services platform. Its board of directors consists of CureFit co-founder Mukesh Bansal, former i-banker Ankur Verma, and Tata Digital financial services chief executive Modan Saha.

Tata Digital invested $75 million in fitness startup Curefit in June 2021 and appointed Bansal as president of the company.

As the pandemic raged during 2020 and 2021, many people with disposable income and limited investment opportunities turned to platforms such as Zerodha, Upstox, IndMoney, Groww, Smallcase et al to make and manage their investments. This change gave a huge push to growth for these companies.  For Tata Neu,  existing users who are already on the Neu app will be the first target obviously.

Interestingly, Upstox is backed by Ratan Tata, who has backed over a dozen startups such as Snapdeal, Urban Company, Lenskart and CashKaro among others.

Tata Neu was launched in April amid much fanfare and provides groceries (via BigBasket), luxury goods, travel, health diagnosis and medicine delivery (through Tata 1mg). It’s worth noting that the app already offers financial offerings such as UPI, bill payments, loans, and insurance.

The addition of a stock broking service will make Tata Neu a  more attractive proposition for users. The super app has been downloaded nearly 16 million times on Google’s Play Store, according to Sensor Tower’s data.

However, challenges remain. Tata Neu has failed to impress users for several reasons such as poor user experience which includes longer load time and lack of unified cart (order pages) among others. The super app’s chief technology officer (CTO) Sauvik Banerjjee quit in July after a six-year-long stint at the group.

Online broking, which demands a higher level of delivery in terms of uptime, predictability, research quality and more, can prove to be a massive distraction with its demands if the app is already struggling to keep up.  Dropping satisfaction numbers can never be a good thing for the perception of a group built around its technology firm/s like TCS and more. And competition here might surprise the Tatas, with a mix of institutional, startup and well funded broking apps all vying for a super competitive market.