At least four top executives of Kotak Cherry, the digital wealth management app run by Kotak Mahindra Bank, including its chief executive Srikanth Subramanian, are set to jump ship to join rival broking firm AngelOne, people aware of the development told ET.
Besides Subramanian, Kotak Wealth Management’s investment products head Dharmendra Jain and senior product heads Shobhit Mathur and Mayank Rathi are all moving out, the sources said.
ET has learnt that all the four are set to join AngelOne.
Emailed queries to both Kotak Mahindra Bank and AngelOne remained unanswered at press time Sunday.
The development could be reminiscent of Karan Bhagat, then head of Kotak’s wealth management division based out of Mumbai leaving along with a team of executives around 2008. He had then gone on to launch IIFL Wealth, now called 360, and emerged as the country’s top wealth manager.
This new round of senior level exodus comes at a crucial time when Uday Kotak, founder of Kotak group, has moved on to a non-executive role and Ashok Vaswani has become the new CEO of the bank.
It could be a setback for the bank that had launched Cherry in 2022 with the aim of making it a one-stop shop for all wealth management needs of its customers.
While Subramanian has spent more than two decades at Kotak group running its wealth management business, Mathur joined Kotak a decade back. Jain, a qualified chartered accountant, had joined the group in 2018 from wealth management and investment advisory firm Ask group.
Rathi, again a chartered accountant by profession, had worked with Credit Suisse, Deutsche Bank before joining Kotak Mahindra Bank in April 2019. He had left Kotak in 2021 to start Multipie, but left the company after it was acquired by ICICI Direct in 2022.
Their move also assumes significance in the context of AngelOne emerging as one of the largest stockbrokers in the country, competing with the likes of Bengaluru-based Groww and Zerodha.
AngelOne has 17 million customers overall with almost 5 million active trading clients, according to data shared by the company in its September quarter earnings. The company added around 725,000 unique SIPs in the second quarter of the current fiscal.
Over the last three years, AngelOne transformed itself from a traditional stockbroker to a tech-first one, which has helped the company scale up its business exponentially. Its total income for the September quarter stood at Rs 1,049 crore, up 40.8% from Rs 745 crore a year earlier. Its net profit shot up 42% to Rs 304 crore from Rs 213 crore during the same time period.
ET wrote recently how AngelOne is also adding new systematic investment plans (SIPs) for mutual funds at one of the fastest clips after Groww.
Kotak Mahindra Bank, itself has been on a digital transformation journey. Along with selling more than 90% of its credit cards, personal loans online, in its September quarter filings, the bank had said it opened 96% of its new investment accounts digitally.
Kotak Investments, the bank’s private wealth arm, and Kotak Securities, its stock trading arm, are two crucial wealth management arms of the bank’s overall business. Kotak Securities reported a net profit of Rs 324 crore in the second quarter of FY2024, up 44% from Rs 224 crore a year earlier.
It reported total income of Rs 962 crore for the quarter, up 19% from Rs 805 crore a year earlier. Kotak Investments reported a net profit of Rs 126 crore for the September quarter, up 61% from Rs 78 crore a year earlier.
Kotak Cherry is available to both group customers and non-group customers, but the initial idea was to leverage the existing customer base of the bank to scale up the platform.
Overall, the industry is seeing a major re-alignment. Banks that used to be one of the largest distributors of wealth products are facing increased competition from tech-first discount brokers like Groww, Zerodha, and AngelOne.
According to data from the NSE, in September last year, Kotak Securities had around one million active traders, compared to 4.8 million for AngelOne.
Last year, AngelOne had lost its then chief executive Narayan Gangadhar to rival stockbroker 5Paisa. Since then, Dinesh Thakkar, founder of AngelOne, has been leading the company.
