Nithin Kamath, Founder and CEO of Zerodha, recently shared insights on LinkedIn about what makes the brokerage firm stand out, why it remains profitable, and why it has avoided the public markets. His remarks were in response to a Reddit user questioning Zerodha’s approach.
Zerodha’s Success Built Over 25 Years in the Stock Market
Kamath stressed that Zerodha’s achievements cannot be explained by shortcuts.
“Hmmm… so you forget that we have spent 15 years getting here. And maybe another 10 years, before Zerodha, I was involved in the markets in some form. So, 25 years in all,” he wrote.
He added that consistency, passion, and being in the right place at the right time shaped the company’s growth. “Things in business compound over time, especially if you like or love what you are doing and if you are lucky to be in the right place and time,” Kamath explained.
Zerodha’s Low-Cost Startup Model and Middle-Class Roots
Reflecting on its early days, Kamath recalled how Zerodha began as a partnership firm to reduce costs. “When we started Zerodha, we started off as a partnership firm because the exchange deposit requirement was lower, INR 90 lakh compared to INR 1.5 crore,” he said.
The company relied on free and low-cost platforms in its initial phase. NSE’s Now trading platform came at no cost to brokers, while a back-office vendor provided services at almost zero cost in return for testing the product.
Kamath highlighted the frugal approach: “The money we have spent on Zerodha is maybe ~Rs 10 lakh, and that is all the money that has gone into the business till date. Rs 2.5 lakh for our website, Rs 5 lakh for our office interiors, and Rs 2.5 lakh for miscellaneous.”
Coming from a modest background, Kamath added, “We had no rich uncles. Dad was a bank manager, and Mom taught Veena.”
Timing and Luck Behind Zerodha’s Growth
According to Kamath, Zerodha’s rise coincided with India’s broader economic expansion. “Our rise coincides with India’s rise. We were present at the right place and time with the right products and initiatives,” he said.
He stressed the importance of timing in entrepreneurship, drawing parallels with Nvidia’s CEO. “Jensen Huang survived in the business for 30 years until he hit the right place and time. For a long time, people might have questioned what he was doing until very recently,” Kamath noted.
Why Zerodha Has Not Launched an IPO
One of the most debated topics is why Zerodha has avoided going public. Kamath explained that staying private helps the firm focus on customers instead of investors. “Now that there is no pressure to give any exit to any investor, we can continue doing what is right for the customer, sometimes even at the cost of the business,” he said.
He pointed to initiatives such as the company’s “no spam” and “no tracking” policies.
“I believe that the philosophy with which we run Zerodha will be our real moat as a business. It is very tough to stick to it as a public company,” Kamath concluded.
Conclusion
Kamath’s note shows that Zerodha’s success comes from simple beginnings, steady growth, and a focus on customers over investors. By avoiding an IPO and keeping costs low, the company continues to stick to its core values and long-term approach.
Muskaan Kapoor
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