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Episode 130 · Capital · 61 min

A generation that has never seen a fall

India's bull run has produced ten crore unique PANs and only about three crore people who actually traded last year. In a single financial year retail handed over ₹63,000 crore, roughly $8 billion, in futures and options. The trader's claim is that trading only moves money between two people while investing creates it; the chartered accountant's is that the boom rests on plumbing (GST, governance, a widened tax base) rather than on sentiment.

Savings & wealth India macro Regulation & policy

Saketh R and Pavan Sharma

Founder, Quick Alpha; Partner, BCL, Quick Alpha and BCL · with Vishal Krishna

1:00:58

Said in this episode

▶ 23:06

₹63,000 cr

Retail money lost in F&O in one year

In FY 2023-24, as cited on air: roughly $8 billion transferred out of retail traders' hands, largely to the institutions on the other side of the trade.

▶ 22:17

90% / 99%

F&O traders unprofitable, and beaten by an FD

SEBI's published data as quoted by the trader: 90% of F&O traders have not been profitable, and 99% could not beat a fixed deposit's 6-7%.

▶ 3:57

3 cr

Indians who actually traded in the last year

Against about 10 crore unique PANs, under 3% of the population, which both guests read as headroom rather than froth; 'active' is a deliberately subjective term.

▶ 2:54

₹25,000 cr

Retail money into mutual funds, monthly

SIP flows arriving every month, forcing funds to deploy at whatever price is quoted; the RBI Governor has flagged the matching decline in bank savings.

▶ 6:30

1,700

Global capability centres in India

Expected to double in a few years, and no longer a cost-arbitrage story. Foreign firms are staffing them to build core product.

▶ 36:47

20-21%

Average tax rate Indian companies pay

Under a single central law, with beneficial rates as low as 15% for manufacturing, which the accountant argues is comparable to developed-country levels rather than far above them.

The brief

The argument in sixty seconds

The trader's claim is that India's retail boom is mostly people on the wrong side of an arithmetic nobody made them check: 10 crore unique PANs but only about 3 crore who have traded in the past year, ₹25,000 crore a month pushing into mutual funds so hard that managers must buy at whatever price is quoted, and, on SEBI's own published numbers, 90% of F&O traders unprofitable and 99% unable to beat a fixed deposit. Trading, he argues, is a transfer between two people; investing is the only thing that creates wealth, and charges plus tax make the transfer negative-sum: a ₹100 gain nets about ₹50, a ₹100 loss costs ₹150, so even two right bets out of three leave you behind. The chartered accountant beside him, whose 200-person firm advises about 200 foreign subsidiaries, argues the boom underneath is real but plumbing-dependent: GST is cumbersome and works, technology-linked returns widened the tax base and turned value-chain partners into each other's auditors, and it is that certainty rather than sentiment pulling foreign capital into 1,700 GCCs. Both refuse the easy targets. The Finance Minister is the wrong desk for your potholes; Indian companies pay an average 20-21%; the real grievance is paying twice, in tax and out of pocket, for education and healthcare. And the newcomer who has never waited more than a month to be in profit is precisely the investor a veteran cannot beat, until quality starts to matter. The stakes, they agree, are not valuations at all: syllabi teaching Microsoft Word in the age of AI, communal boycotts as economic self-harm, and a population still growing to 2060 in cities that pump their water 100 kilometres uphill.

Worth your time if you are

Young investors weighing an SIP against an options account

Family offices rotating out of real estate into equities

Foreign subsidiaries and GCCs sizing up India's compliance maze

Retail traders who have never watched the market fall

Policy readers arguing about who India's tax base really is

Episode map

Where the conversation travels

Every block is a chapter, coloured by what it's about. Click any of it to jump straight to that minute on YouTube.

Savings & wealthIndia macroRegulation & policyConsumer IndiaGCCs & servicesEducation & skilling

01Cold open: three seats at the table 0:00 A full-time options trader, a chartered accountant with a 200-person India-and-UAE firm and a journalist set the scene: Nifty from a March 2020 low near 7,500 to about 25,000, ₹25,000 crore of retail money arriving in mutual funds every month, and 10 crore unique PANs against roughly 3 crore who have actually traded in the last year. 02Optimism, regulators and 1,700 GCCs 4:43 The accountant's read on why capital is arriving: infrastructure, skills, available money and, above all, the structural strength built by the RBI and SEBI, with India fifth in the world and closing on Japan and Germany while 1,700 global capability centres build core product rather than arbitrage cost. 03Is India priced for perfection? 6:46 On a standalone basis the Nifty's P/E is back at or above 2007-08 levels, but the trader refuses the crash call. 2008 was cheap credit and 1929 was newly invented margin, while India's yearly gains of roughly 4%, 8%, 20% and 15% are ordinary; the real risk is policy turning against business and the expected growth simply not arriving. 04Talent, China plus one, reforms pending 11:17 Foreign subsidiaries come for exceptional, young, comparatively cheap talent in services, while manufacturing is still a few steps behind a China that nobody expects to out-produce. China-plus-one helps, but land and labour reform is what would convert interest into factories. 05GST, governance and the accountability machine 13:36 GST is complex, cumbersome and far better than what preceded it; corporate law's 2013 overhaul, UPI and a generation willing to spend complete a picture in which technology ties transactions together, plugs leakages, widens the base and forces each link of a value chain to pull the others up. 06Family offices, liquidity and the zero-sum trap 17:35 Family offices are leaving property for markets because equities offer liquidity and transparency without having to deal with people, but large capital stays in equities because derivatives cannot absorb it, and the trader draws the line: trading is a transfer between two parties, investing is the only route that creates wealth. 07Why unemployed graduates pick F&O 23:54 A field trip to a small town in Uttar Pradesh produced a double graduate queueing for a government job, and the diagnosis that F&O attracts the young because education is misaligned to work, jobs need fewer people than they used to, and one daily bet feels like the answer to uncertainty. 08The arithmetic that makes it negative-sum 25:40 Seven or eight separate charges (exchange transaction fees, stamp duty, STT, turnover charges, GST, SEBI charges, brokerage) plus business-income tax mean a ₹100 gain lands as about ₹50 while a ₹100 loss costs ₹150, so being right two times in three still loses money. 09Verified P&L and the course economy 27:48 Verified P&L exposed some of the biggest names, and the trader's account of the machine is unsparing, with unprofitable traders earning crores from courses built on edited screenshots. Yet he stops short of wanting markets restricted, arguing SEBI's RA and IA certifications cannot police education anyway. 10Blame the municipality, not the budget 33:13 The accountant's contrarian tax argument: the Finance Minister is the wrong person to hold accountable for bad roads, Indian companies pay an average 20-21% with manufacturing rates as low as 15%, a lakh a month puts you in the top 5-10%, and the angst is really about paying out of pocket for the education and healthcare your taxes were meant to buy. 11A generation that has never seen a fall 38:10 For eighteen months no month of buying needed more than a few weeks to turn profitable, election and budget shocks reversed the very next day, and the trader explains why a newcomer always beats a veteran in a bull market: the veteran flinches at the dip that keeps being rewarded, until quality finally matters. 12Brahma, Vishnu, Shiva: start, run, shut 42:10 The word 'startup' appeared once in Budget 2013 and about twenty-five times from 2014; exits have created Indians willing to back first-time founders, and across the three phases of company life (incorporation now bundling tax, social security and insurance numbers, running, and a shutdown that takes six months instead of years) the friction left is bureaucratic implementation rather than the law. 13What could actually derail India 45:45 Millions of graduates a year that no government can employ, a computer-science syllabus still teaching Microsoft Word while the world moves to AI, and the trader's real fear, the loss of communal harmony, illustrated by social posts urging people not to buy from a community's businesses. 14Population, water and the last planned city 50:55 A population growing to 2050-60, subsidies that keep people where they are, an ageing and atomising society, and climate change at the equator converge on food and water, with Bengaluru pumping water 100 kilometres, borewells past 1,000 feet into brackish water, and no meaningfully planned new city since Chandigarh, before the closing pitches for Quick Alpha and BCL.

Timeline

The arc, briefly

A bull run dated from the conversation, and the arithmetic sitting underneath it.

1918-30Margin is invented, then the Depression. Saket dates the boom before the crash to the years after the First World War, when women came into the market for the first time and buying shares on margin was introduced. His point is that every crash has a cause you can name.

2007-08Cheap credit takes down the banks. Over-leveraged real estate and low-rated bonds sold on into the market brought the investment banks down with them. On a standalone basis the Nifty's price-earnings ratio today is at or above where it stood then.

2013A new company law, and a market that only went up. Corporate law was rewritten the same year Saket came to the markets, with the world climbing out of the 2008 recession and the index making a fresh high late that year. Through 2013, 2014 and 2015 he never once saw it fall.

2014The budget says startup 25 times. The previous government had used the word once. Pavan reads the jump as an ecosystem that had finally produced Indians with exits and the appetite to back first-time founders.

Mar 2020Lockdown, and the bottom. The Nifty made its low near 7,500 in the week the lockdown was announced. Free time and the wish for a second income pulled a new cohort into options and into SIPs.

2021The NSE changes how it prints the P/E. Until then the published ratio was standalone; from 2021 it went consolidated, which makes the number look smaller than the history it gets compared against.

2023-24Retail loses ₹63,000 crore in F&O. Roughly $8 billion left individual hands in a single financial year. On SEBI's own published numbers, 90% of F&O traders are unprofitable and 99% cannot beat a fixed deposit.

TodayNifty near 25,000, and 1,700 GCCs. About three times the March 2020 low, with ₹25,000 crore a month arriving in mutual funds and 10 crore unique PANs against roughly 3 crore who actually traded last year. The capability centres now build core product, and are expected to double.

2060The population is still growing. Both men put the real constraint here rather than on valuations: food and water, an ageing and atomising society, heat at the equator, and no meaningfully planned new city since Chandigarh.

Takeaways

Ideas to carry out of this hour

Trading transfers money; only investing creates it

The trader's cleanest frame: on any intraday bet, one of you makes exactly what the other loses, and the party with better infrastructure, meaning institutions with thousands of crores in servers and algorithms, holds the higher probability. Investing is structurally different, because an asset that goes from ₹100 to ₹200 to ₹500 leaves earlier sellers with opportunity cost rather than monetary loss, and everyone on the journey benefits. His advice to young viewers is blunt: unless you are building a trading organisation, do not play the algorithmic game.

▶ 20:12 ▶ 21:30 ▶ 22:01

The charges make F&O negative-sum, not zero-sum

Roughly 30 to 40% of gross profit disappears before you see it, across seven or eight line items (exchange transaction charges, stamp duty, STT, turnover charges, GST, SEBI charges and brokerage), with F&O income then taxed as business income. A ₹100 gain reaches you as about ₹50; a ₹100 loss costs about ₹150. That asymmetry is the whole argument: getting two bets right for every one wrong still leaves you at a loss, which is why SEBI's data shows 90% of F&O traders unprofitable and 99% unable to beat a fixed deposit's 6-7%.

▶ 25:40 ▶ 26:33 ▶ 27:19

Retail India is three crore people, not a hundred

There are about 10 crore unique PANs but only around 3 crore who have traded in the last twelve months, under 3% of the population, and 'active' is a slippery word since a portfolio untouched for a year does not count. Meanwhile roughly ₹25,000 crore of retail money arrives in mutual funds every month, and because funds cannot sit in cash it effectively forces buying at whatever price is quoted. The RBI Governor has flagged the same shift the other way: money leaving bank savings for the market.

▶ 2:54 ▶ 3:25 ▶ 3:57

Expensive is not the same as about to crash

On the standalone basis the exchange published before 2021, Nifty's P/E is at or above where it sat in 2007-08, one of the highest readings both historically and globally. But crashes need a trigger, and the historical ones had specific ones: cheap credit and over-leveraged real estate in 2008, the first-ever introduction of stock margin in the 1920s before the Great Depression. India's yearly index gains of roughly 4%, 8%, 20% and 15% are not extraordinary. The genuine risk the trader names is different: capital is priced for a 1970s-America-style growth story, and if policy turns against business or that growth simply fails to show up, the correction is severe.

▶ 7:16 ▶ 8:19 ▶ 10:46

GST's real output is transparency, not revenue

The accountant's case is that GST succeeded in the MSME space precisely because it was implemented through technology: transactions can be tied together, leakages closed, and the base widened so that being inside the tax structure forces you to be transparent. The knock-on effect is peer enforcement: in a three-party value chain, if one participant has weak governance the other two identify the weakness and pull the game up. Corporate governance requirements on listed companies, he argues, are among the most demanding in the world, and that certainty is what foreign capital is actually buying.

▶ 15:40 ▶ 16:41 ▶ 16:57

The tax anger is aimed at the wrong desk

Because the Finance Minister is the visible face at budget time, she absorbs a grievance that belongs to municipal and state government, which is where the answer to why the roads are bad and where the money went actually sits. On the numbers, Indian companies pay an average of about 20-21% under a single central law, with beneficial rates as low as 15% to encourage manufacturing; a US-style dual central-and-state structure is more complex, not less. Direct tax is paid by a small fraction of the country (a lakh a month puts you in the top 5-10%) but everybody pays GST, so everybody has standing to demand services. The real grievance is paying twice: in tax, and then out of pocket for education and healthcare.

▶ 35:17 ▶ 35:47 ▶ 36:47

In a bull market the novice always beats the veteran

For the last eighteen months, money put in during any given month turned profitable within weeks (buy in January, be in profit by March), and even genuine shocks like the election result and a tax increase in the budget were reversed the next day. That teaches a false lesson: markets do not fall. It also makes the veteran structurally worse, because experience makes you hesitate at exactly the dips a bull market keeps rewarding. The reversal only comes when the market turns and quality reasserts itself, which is when the people who never bought good companies find out.

▶ 39:19 ▶ 39:50 ▶ 40:21

The derailers are skills, harmony and water

Neither guest names valuations as the thing to fear. The trader points at a computer-science syllabus still teaching Microsoft Word in the age of AI, and at social posts urging people not to buy from a particular community's businesses, communal fracture as economic self-harm, in a country that has grown through wars, terror attacks, disasters and crises without ever being stopped. The accountant adds population: still rising to 2050-60, concentrated in a handful of congested cities, with climate change amplifying food and water stress near the equator. Bengaluru already pumps its water 100 kilometres and drills past 1,000 feet into brackish water, and India has not meaningfully planned a new city since Chandigarh.

▶ 48:08 ▶ 50:20 ▶ 56:57

The numbers, drawn

What the episode measures

Every figure below was said on air, with timestamps included and caveats kept.

No single year has been extraordinary

% gain

As stated in conversation; the trader mixes financial-year and calendar-year framings and gives 7-8% for 2022-23 (upper bound shown). His point is that the run compounds from ordinary years, not a melt-up.▶ 9:57

Ten crore PANs, three crore who trade

crore people

As stated on air: about 10 crore unique PANs against roughly 3 crore who have traded in the past twelve months, under 3% of the population. The trader cautions that 'active' is a subjective threshold.▶ 3:57

Right two times in three, still down

what a ₹100 gain and a ₹100 loss actually cost

The trader's arithmetic on air. The asymmetry is the whole argument: being right twice for every once you are wrong still leaves you behind, which is the mechanism under SEBI's published finding that 90% of F&O traders are unprofitable and 99% cannot beat a fixed deposit.▶ 25:40

What they actually fear

the three risks they raise, in order

The trader raises the first two, the accountant the third. He frames the boycott posts as economic self-harm rather than politics, and reads population growth to 2050-60 in a handful of congested cities as the thing that turns water into the binding constraint.▶ 48:08

Worth keeping

Lines that stay

Derivative trading as a whole is not wealth-creating — it is just a transfer of money from one person to another. Investing is where you actually create wealth.

— Saket ▶ 20:12

When you're making, you're getting 50; when you're losing, you're losing 150. Just think about the percentage of bets you have to get right to make up.

— Saket ▶ 27:19

I know a lot of traders who aren't profitable but are making crores and crores by selling courses.

— Saket ▶ 28:20

I think the Finance Minister is the wrong person to be held accountable. Look at your municipal level, your state level — why are your roads so bad, where is the money going?

— Pavan ▶ 35:17

You can't be a mother who spoils your children and expect the home to grow in the future.

— Pavan ▶ 51:58

Clips that travel

Short on time? Start here

Young investors tempted by an options account

Trading transfers, investing creates

The cleanest explanation of why F&O is zero-sum, plus SEBI's 90% and the ₹63,000 crore that left retail hands in a single year.

20:12 → 23:54 · 4 min ▶ Watch clip

Anyone already running an options account

The arithmetic nobody made you check

Seven or eight charges, business-income tax, and the asymmetry that makes ₹100 gained worth ₹50 while ₹100 lost costs ₹150.

25:40 → 27:48 · 2 min ▶ Watch clip

Anyone who follows a finance influencer

Verified P&L and the course economy

How edited screenshots fund crores in course sales, why SEBI's RA and IA certifications can't stop it, and the 50,000-to-5-lakh-to-zero loop.

27:48 → 33:13 · 5 min ▶ Watch clip

Founders and salaried Indians who think tax is the problem

Blame the municipality, not the budget

Direct versus indirect tax, an average 20-21% corporate rate, and the argument that the anger belongs at the state and municipal desk.

34:45 → 38:10 · 3 min ▶ Watch clip

Anyone bullish on the India story

What could actually derail India

Jobs no government can create, a syllabus teaching Word in the age of AI, and communal fracture framed as an economic risk rather than a political one.

46:17 → 50:55 · 5 min ▶ Watch clip

Glossary

The jargon, unpacked

F&O (futures and options)

Derivative contracts whose value is tied to an underlying stock or index, used for leveraged bets, and the segment SEBI says leaves 90% of retail traders unprofitable.

SIP

A systematic investment plan, a fixed sum auto-invested into a mutual fund every month; roughly ₹25,000 crore of retail money arrives this way each month.

Standalone vs consolidated P/E

The price-to-earnings ratio computed on the parent company's own accounts versus the group's; the exchange switched to publishing consolidated figures around 2021, which makes today's valuation look cheaper against pre-2021 history.

STT

Securities transaction tax, one of seven or eight separate charges levied on every trade, alongside exchange transaction fees, stamp duty, turnover charges, GST, SEBI charges and brokerage.

RA / IA registration

SEBI's research analyst and investment adviser certifications, which allow a person to formally recommend stocks but do not cover selling 'educational' courses, which anyone may do.

GCC

A global capability centre, a foreign company's own India office, now building core product rather than doing cost-arbitrage support work; about 1,700 exist and the number is expected to double.

China plus one

The strategy of adding a second manufacturing base outside China to reduce concentration risk. It is the opening India is competing for against Southeast Asia, gated on land and labour reform.

Connections

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EP 101 · Impact

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