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India has a $1.3 billion high-frequency trading firm competing on a global scale with the likes of Jane Street and Citadel, Bloomberg reported. It’s called Graviton, not to be confused with the “Gravitron” rides at the state fair or Amazon’s AI chips of the same name.
The 11-year-old company quickly grabbed the majority of market share in block trades involving more than 0.5% of a company’s equity, maintaining its dominance on India’s NSE through last year. Graviton was primed and ready to execute trades faster than its competitors when retail traders flooded onto its platform during the pandemic. And in 2024, Graviton had a role in a quarter of large cash transactions on the NSE.
But the startup attracted competition from Wall Street stalwarts that saw the massive revenue opportunity Graviton was grabbing in India.
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India’s Rising Unicorn Population
India is Asia’s third-largest economy and home to 120 startups with valuations exceeding $1 billion each. The Confederation of Indian Industry recently called India the world’s third-largest startup scene, with funding of more than $118 billion pouring into it. FinTech’s a key area of growth for the nation. Graviton, for instance, leverages customizable chips to speed up the processing and sending of each order by precious nanoseconds, fast enough to beat the humans with quick keystrokes that previously led the industry.
But as the financial scene grows in India, regulators are sharply eyeing the piles of money pouring in:
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India upped taxes on equity derivatives last month, and the central bank plans to further turn the screw with new rules. Together, Jefferies Financial Group expects the changes could slash options volume as much as 17%. Firms in India also have to meet new compliance requirements.
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The changes could make Indian markets less attractive for foreign investors who’ve pulled out of public markets in droves amid the Iran War.
Growing Pains: There’s a balance between enough regulation and too much. India’s regulators risk slowing the startup scene’s growth to a crawl that could push the companies to seek out opportunities elsewhere. Graviton, which had its offices raided by tax authorities in October along with other firms, is doing just that by diversifying its biz globally.
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