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.
Nithin Kamath, the founder and CEO of Zerodha, shared some eye-opening thoughts on where investing and trading are headed in his recent LinkedIn post. According to him, we are just at the start of a huge change powered by artificial intelligence (AI).
He believes that soon, investing, trading, banking, and payments will all be done through AI apps. These apps won’t be built by big companies but by the users themselves, simply by giving natural language commands. Imagine telling an app what you want in plain English, and it does the rest.
AI Isn’t ‘If’ – It’s ‘When’
Kamath points out that tools like ChatGPT and Claude show us that AI’s impact on finance is no longer a question of “if” but “when”. It might take a few years or even a decade, but AI will reshape the entire industry.
Human advisors will still play a role, mainly to keep people disciplined and help them follow AI’s advice. But much of the trading and investing work will be automated.
The Future Is Uncertain, But Zerodha Is Ready
No one knows exactly how things will turn out. Kamath calls the future “grey” — full of unknowns. His advice? Stay curious, watch the trends carefully, and act wisely.
For example, Zerodha has deliberately held back from letting AI place orders automatically. Trust and a solid infrastructure will be the main competitive advantages in the future.
Final Word: Trust and Tech Will Win
In a world where automation rules, the real strength lies in being trustworthy and having a rock-solid system behind the scenes. Nithin Kamath rightly points out that being a fast, invisible pipe is the only way brokers can stay relevant. This aligns with a broader trend: today’s users want platforms that “just work,” without crashes, delays, or security concerns.
Big players like Mastercard are already building AI-secure payment systems, and regulators like the RBI are pushing for zero-trust cybersecurity to avoid breakdowns in digital finance. Even the World Economic Forum highlights how digital trust is key to long-term innovation. As AI tools like ChatGPT become part of everyday finance, people won’t just look for smart features, they’ll stick with platforms that feel safe, stable, and built to last.
Nikhil and Nithin Kamath, co-founders of Zerodha, have paid INR 250 crore to purchase a minority interest in InCred Holdings Limited, which is the parent company of InCred Financial Services Ltd (IFSL).
This is in advance of InCred’s anticipated first public offering later this year. IFSL is a tech-enabled NBFC that specialises in financing for SMEs, consumers, and educational institutions.
Since its establishment in 2016, the business has served clients throughout India by utilising data science, risk analytics, and digital-first operations. According to investor and entrepreneur Nikhil Kamath, the credit ecosystem in India is rapidly evolving, becoming more formal, digitised, and easily accessible.
He went on to say that it appears that InCred Group was aware of this fluctuating pulse rate. They have a solid staff, prioritise technology, and have a clear idea of the market’s future. Supporting them is an investment in that larger change—and the conviction that responsible lending can grow without sacrificing its core values.
InCred’s IPO and Funding Till Now
InCred is reportedly aiming for an IPO valuation between INR 15,000 crore and INR 22,500 crore. Through the IPO, it hopes to raise between INR 4,000 and 5,000 crore.
In 2023, the business joined the unicorn club with a $1.04 billion valuation. Manipal Education and Medical Group, owned by Ranjan Pai, is one of its investors.
An additional INR 1,000 crore was allotted to start-up funding by Rainmatter Capital, an investment arm supported by Zerodha, according to Nithin Kamath’s 2023 announcement.
In order to assist financial startups, Rainmatter was founded in 2016. Nithin Kamath stated, “We have invested INR 400 crore in 80 start-ups so far.”
Yet to Finalise Bank for the IPO
Despite worldwide market turbulence that has affected fundraising plans and caused a media agency to speculate last week that InCred Financial’s IPO may be delayed, the company is still exploring selling its shares.
Despite such market fluctuations, UBS Group AG is becoming more optimistic about Indian stocks, moving the market from underweight to neutral due to its defensive appeal.
In an interview with a media outlet earlier this month, the chief investment officer of InCred Financial’s credit division, InCred Alternative Investments, stated that the company intends to raise 15 billion rupees through a new fund in order to meet the demand for private lending.
Bhupinder Singh launched InCred Financial in 2016, and it specialises in financing for small businesses, retail customers, and educational institutions. In 2022, the company announced a cooperation with KKR India Financial Services Ltd.
Zerodha’s Founder and CEO, Nithin Kamath, has issued a candid reflection on India’s broking industry, questioning the sustainability and perceived attractiveness of the business. In a recent LinkedIn post, Kamath highlighted how a majority of brokerage revenue today is concentrated in just two contracts, Nifty and Sensex Futures & Options (F&O), posing a significant risk to the industry’s future stability.
Concentration Risk Still Looms, Just in a New Form
Kamath recalled a conversation with a private equity veteran who had evaluated a broking firm back in 2008 but chose not to invest. The key reason? The firm’s revenues were heavily dependent on a small number of active clients.
“As I’ve mentioned numerous times, a small number of active traders contribute to most of the exchange turnover. This was a lot worse back then,” Kamath noted.
Fast forward to 2025, and while the broking landscape has evolved, the core risk still remains, only now it’s the products, not the clients. Kamath revealed that for Zerodha, over 80% of revenue is generated from just two instruments: Nifty and Sensex F&O contracts.
“That’s a massive concentration risk. One change can wipe out a big chunk of our revenues,” he warned.
He further added that this scenario is not unique to Zerodha, but is common across most Indian brokerages. Kamath questioned whether this risk is properly accounted for when brokerage businesses are valued, especially as investor interest in the sector continues to grow.
No PFOF, No Crypto, Forced Settlements
Apart from the heavy reliance on just two contracts—Nifty and Sensex F&O—Kamath also pointed out other major challenges Indian brokers face. He noted that, unlike in the US and other markets, there is no payment for order flow (PFOF) in India, a controversial yet lucrative revenue stream for brokers overseas. However, Kamath clarified that Zerodha does not support this model regardless.
Further complicating matters, the Indian regulatory framework restricts brokers from offering cryptocurrency trading. On top of that, they are required to return idle funds to customer bank accounts every quarter, as part of the quarterly settlement process.
“It’s like a forced bank run,” Kamath wrote, describing the stress this causes for brokerages managing large client bases.
While these rules are designed with investor safety in mind, they also make it harder for brokers to maintain steady cash flows and offer competitive services, especially in the absence of alternate monetisation avenues.
Kamath on the Illusion of Glamour in Broking
Kamath ended his post with a thought-provoking comment that summed up the contradiction:
“I wonder why the brokerage business looks so sexy from the outside.”
His remark highlights how broking may look attractive from the outside—with flashy apps, high trading volumes, and growing retail interest, but the underlying business model is fragile and exposed to multiple risks, both regulatory and structural.
Bottomline
As Indian equity markets continue to expand and attract global attention, Kamath’s perspective acts as a timely reminder for entrepreneurs, investors, and regulators to look beyond surface-level growth metrics. For the broking industry to remain sustainable, it must focus on diversification, smarter regulation, and reducing its heavy reliance on just a few trading instruments.
The way we save, invest, and exchange money is changing as a result of technological advancements in today’s lightning-fast financial industry. The pioneering force behind this transformation is fintech, an abbreviation for financial technology. When it comes to the stock market and online broking, Zerodha is what comes to the mind of an Indian. Zerodha is the most prominent and the leading discount brokerage company, founded in 2010. The company is the first-ever stock brokerage company that gave rise to discount brokerage options for investors as well as traders.
Today, Zerodha is the biggest brokerage company in India with a client count above 5 million. It is also known as the Robinhood of India.
The company contributes over 15% to every retail order volume in India on a daily basis through trading and investing in various stocks, Commodities, F&O, IPOs, and others. In this article, we have briefly discussed the business model and revenue model of Zerodha. Let’s get started!
About Zerodha
Zerodha is an Indian fintech startup that has been shaking up the conventional brokerage sector since its founding in 2010 by brothers Nithin Kamath and Nikhil Kamath. The company’s name represents its objective to remove hurdles and democratize finance. It is a mix of “Zero” and “Rodha,” the Sanskrit words for obstacles.
The largest online brokerage firm in India, Zerodha is widely famous for its discount brokerage option. Zerodha offers financial services with the main motive of providing low-cost services to customers. Zerodha is a significant member of BSE, MCX-SX, and NSE, which provides broking services to the traders of the stock market.
Zerodha is headquartered in Bengaluru and has a huge customer base. Zerodha is the first discount broker in India because of this, it gained huge support from the audience.
An essential part of Zerodha’s success has been its dedication to offering traders and investors products that are affordable, easy to use, and driven by technology. Belief in creating a world without brokers is Zerodha’s motto. The financial market players will benefit greatly from this ideology. In addition to meeting the unique demands of each client, the organization strives to offer cheap trade services and first-rate customer service. Using cutting-edge innovation, innovative ideas, and unparalleled customer service, Zerodha aims to build a world without brokerages.
Besides, the most intriguing thing about Zerodha is that it always comes up with brilliantly innovative ideas supported by several strategic and definite efforts. Zerodha runs with the tagline of “The Free Trade Zone“.
Moreover, Zerodha offers tons of open online education and community programs that uphold retail traders as well as investors.
Fintech platforms like Smallcase, Streak, Sensibull, Quicko
Technology service providers
Regulatory bodies like SEBI
Key Activities
Running trading platforms (Kite, Console)
Brokerage and margin trading operations
Developing fintech tools and APIs
Educating users through Varsity
Value Propositions
Zero brokerage on equity delivery trades
Flat ₹20 fee for intraday and F&O trades
Transparent and simple pricing
User-friendly tech tools and mobile platforms
Free mutual fund investment via Zerodha Coin
Customer Relationships
Self-service platform with online tutorials and support
Transparent reports and statements
Community building via social media and Varsity
Quick issue resolution through online support
Customer Segments
Young salaried professionals (below 30 years)
First-time investors
Active intraday and F&O traders
Tech-savvy developers and fintech enthusiasts
Key Resources
Trading and account management platforms (Kite, Console)
Kite Connect API
Skilled technology and support teams
Regulatory licenses and compliance systems
Channels
Zerodha website and mobile app
Social media platforms like Instagram, Twitter
Referrals and financial influencers
Educational platform Varsity
Cost Structure
Technology development and maintenance
Employee salaries and operations
Compliance and legal costs
Customer acquisition and marketing
Revenue Streams
Brokerage fees on intraday and F&O trades (up to ₹20/order)
Interest income from margin trading
Demat account DP charges
Subscription fees from partner tools (e.g., Streak, Smallcase)
Float income from idle client funds
Annual account maintenance charges (₹300/year)
Where does Zerodha operate?
Zerodha is a financial service company that offers various retail and institutional-based brokerage, bonds, mutual funds, and currency & commodities trades. Zerodha operates in various states of India, including Hyderabad, Bengaluru, and Pune.
Key Products and Services of Zerodha
The broking limited company, Zerodha, offers tons of key products to its customers. These products include Console for account management, Kite for trading platforms, Varsity for financial education, Quicko for the traders in Tax stems, Coin for Free Mutual Fund, Kite Connect API for the developers, Kill Switch for the risk management for retail traders, and Sentinel for the cloud-based market alert tool.
Zerodha majorly targets its potential audience in Pune, Bengaluru, and Hyderabad based on the average age group of people below 30 years. It focuses on those below 30 people who are new to their jobs and have already started saving from their salaries and are searching for better saving and investing methods to increase their money effectively. With its incredible services and products, it has gained over a million active users.
Zerodha Business Model
The most significant thing about the business model of Zerodha is the success and popularity it gained among the audience. Zerodha offers a very convenient service to its customers, because of which it gained absolute success in the strenuous market as well.
Zero Brokerage Model
When it comes to equity delivery deals, Zerodha stands out due to its zero brokerage strategy. This is a great alternative for long-term investors since it allows investors to purchase and hold equities without paying brokerage fees. They make money from many categories, including intraday trading, futures, and options, and others, by collecting a flat fee on each deal.
Transparent Pricing
Another important part of Zerodha’s business model is transparency. Importantly, being a fintech company they offer a straightforward pricing system. To prevent unpleasant unexpected events, traders can determine their trading costs in advance. Customers trust them more because of this openness, and they distinguish themselves from more conventional brokerages that have convoluted pricing structures.
Zerodha USP
The entire business model of Zerodha is very transparent and has no hidden costs later on. It lets you know all your transactions and also provides a quick tutorial on online trading.
It keeps all the information transparent and open to the customers. These facets help the company more vibrantly and gain more significant clients for trading.
The USP of Zerodha is its zero brokerage concept. Traders don’t need to pay to trade stocks if they plan to keep them for longer than a day. There is no brokerage fee; all the trader has to do is pay their taxes. Brokerage fees from intraday and derivatives trading are Zerodha’s main source of revenue. For FNO trading, Zerodha has a fixed brokerage fee of INR 20 per order.
Zerodha is the biggest trading network with the highest number of active users in India. People across India use Zerodha for investing and trading. Zerodha revenue sources include brokerage fees, interest on margin funding, and income from partner platforms and technology services. The company charges only Rs. 20 (or 0.03%) for every F&O and intraday capital trade.
Although its charge is pretty low, as a huge number of transactions take place, the company gains enough profit. Besides the account maintenance, it charges Rs. 300 annually.
From the records of the past few years, Zerodha experienced rapid growth. This results in the 2% contribution of investors in the stock exchange. This, later on, boosts the revenue of the company. With this revenue source, Zerodha raised its valuation worth $1 billion. The valuation of Zerodha is around $3.6 billion (2023).
Along with stock trading, Zerodha also provides a platform called Zerodha Coin where users may invest in mutual funds without paying a commission. Numerous clients seeking an easy method to put their money into mutual funds have taken advantage of this service. The larger movement towards digital wealth management and the use of the term “hire a fintech developer” to describe the process of creating and managing such systems is congruent with this.
Zerodha Financials
Particulars
FY24
FY23
FY22
FY21
Revenue
INR 9,994.5 Cr
INR 6,877.1 Cr
INR 4,964 Cr
INR 2,729.6 Cr
Expenses
INR 3,119.3 Cr
INR 2,992.7 Cr
INR 2,165.1 Cr
INR 1,260.2 Cr
Profit after Tax
INR 1,122 Cr
INR 2,094 Cr
INR 2,907 Cr
INR 4,700 Cr
Revenue Model of Zerodha
Zerodha has shown consistent growth in revenue and profit over the last few years. In FY24, the company saw significant growth in revenue and profit, continuing its upward trajectory from FY23.
Zerodha Revenue Breakdown:
Particulars
FY24
FY23
Revenue from operations
INR 9,372.2 crore
INR 6,832.8 crore
Other income
INR 622.3 crore
INR 44.3 crore
Total revenue
INR 9,994.5 crore
INR 6,877.1 crore
Zerodha’s revenue has consistently increased over the last few years, with a notable spike in FY24. Revenue from operations saw substantial growth, and other income showed a significant rise in FY24 compared to FY23.
Zerodha SWOT Analysis
Swot Analysis of Zerodha
Zerodha Strengths
Zerodha has shaken up India’s traditional brokerage market with its novel approach to trading, providing clients with commission-free trading.
Customers can rely on quick and dependable trading because of Zerodha’s powerful technological infrastructure.
To meet the demands of traders with varying skill sets, the firm has created several trading platforms and tools.
Thanks to its user-centric strategy and great customer service, Zerodha has a high customer satisfaction rating.
To meet the varied investing needs of its clients, Zerodha provides a comprehensive suite of financial products, including stocks, bonds, mutual funds, and derivatives.
Zerodha Weakness
The potential for growth and expansion is limited for Zerodha because its operations are limited to India.
Zerodha is at risk of cyber threats and system breakdowns because its business model is highly reliant on technology.
Brokerage fees and commissions are Zerodha’s only sources of income, which may lead to difficulties for the company down the road.
Zerodha Opportunities
Zerodha has a great chance for growth due to the continuously expanding population of retail investors and traders in India.
Zerodha has a golden opportunity to grow its business by taking advantage of the growing popularity of online shopping in India.
If Zerodha wants to diversify its revenue streams and access new markets, it might look into foreign expansion prospects.
Zerodha Threats
There is a lot of competition for Zerodha’s products and services from both well-established brokerage businesses and emerging startups.
Business operations and profitability at Zerodha are susceptible to changes in regulatory policies and guidelines.
Investor sentiment and trade volumes are influenced by economic uncertainty and market volatility, which in turn affect Zerodha’s revenue sources.
Even after this huge customer base, Zerodha is still working on expanding the company on a broad scale with a more significant client base. Nithin Kamath, the CEO of Zerodha, mentioned in an interview that he is aiming to take the company to a client base of 5-10 million in the upcoming years.
Zerodha believes in promoting its services, as the company hardly spends any money on advertising channels. The company holds a great reputation in the market because of its incredible services and customer interactions. This has resulted in the comprehensive and impeccable growth of the company.
Within the context of the Indian brokerage industry, Zerodha’s commission-free trading business model is characterized by an effective technological infrastructure, a high level of customer satisfaction, and diversified product offerings that offer significant value. These offerings are relatively uncommon and difficult to imitate, and a robust organizational culture supports them. This helps the company maintain its significant competitive advantage.
In the upcoming years, Zerodha is expected to grow even more and expand more promptly. Stay tuned for more updates!
FAQ
What does Zerodha do?
Zerodha Broking Ltd. is an Indian stock broker and financial services company. The company provides institutional and retail brokerage services, as well as currency and commodity trading. Additionally, Zerodha offers investment options in mutual funds and bonds.
Is Zerodha free?
Traders don’t need to pay to trade stocks if they plan to keep them for longer than a day. There is no brokerage fee; all the trader has to do is pay his taxes. For FNO trading, Zerodha has a fixed brokerage fee of INR 20 per order.
What are the strengths of Zerodha?
The strengths of Zerodha include commission-free trading, its technological infrastructure, versatile trading platform, high customer satisfaction, and its comprehensive financial products.
What is Zerodha business model?
Zerodha follows a discount brokerage business model, offering low-cost trading services in stocks, commodities, and currencies. It charges zero brokerage on equity delivery trades and a flat fee of ₹20 per order for intraday and F&O trades. The company earns revenue from brokerage fees, interest on margin funding, and its tech platforms like Kite and Coin. By focusing on technology and low costs, Zerodha has attracted a large base of retail investors.
How Zerodha earns money?
Zerodha earns money through brokerage fees on intraday and F&O trades, charging up to INR 20 per order. It also makes money from interest on margin funding, DP charges when clients sell shares, and subscription fees for premium tools like smallcase and Streak. Additionally, it earns float income from idle client funds.
When Nithin Kamath started Zerodha, not many believed a bootstrapped broking firm could take on the giants. But he did. And he changed the game. No flashy offices. No outside funding. Just a clear mission, to simplify investing for Indians.
But Nithin did not stop there. As Zerodha grew, so did his interest in backing others with bold ideas. Startups that were not afraid to question the norm. Ideas that were raw, risky, and real. He was not chasing trends. He was betting on passion.
From health tech to climate solutions, his investments show a pattern, real problems, real impact. Nithin is clearly not just writing cheques. He is supporting change.
Curious to know where India’s most grounded fintech founder is putting his money? Let’s take a look at Nithin Kamath’s investment journey.
Nithin Kamath is the Founder and CEO of Zerodha, a leading stock brokerage firm in India known for revolutionising retail trading with its zero-brokerage model.
Nithin Kamath did not take the usual route to success. In fact, he was already trading in the stock markets long before he graduated. While studying Electronics and Telecommunications at Bangalore Institute of Technology, he was also busy learning the real lessons on how markets move and how people invest.
His early years were all about hustle. By day, he traded. By night, he worked in a call center making telesales calls to the US. No shortcuts, just grit. He ran Kamath Associates for a few years, offering trading and advisory services, before the big idea struck.
In 2010, along with his brother Nikhil, Nithin launched Zerodha, a bold move that would shake up India’s broking industry. No big investors, no buzzwords. Just a simple promise: make investing cheaper and easier for everyone. Today, Zerodha is India’s largest brokerage firm.
But Nithin did not stop there. In 2015, he launched Rainmatter, an initiative to support Indian fintech startups. Later, Rainmatter Foundation was born, funding organisations working on climate change and sustainability.
From trader to founder to investor, Nithin Kamath’s journey is all about building quietly, but boldly.
Here is a comprehensive list of all the Nithin Kamath invested companies:
Nithin Kamath Invested Companies
Founded Year
Headquarters
Sector & Sub-Sector
Ultrahuman
2019
Bengaluru, India
HealthTech > Fitness & Wellness Tech
Licious
2015
Bengaluru, India
Food and Agriculture Tech > Online Grocery
AssetPlus
2016
Chennai, India
FinTech > Investment Tech
The Whole Truth Foods
2019
Mumbai, India
Food and Agriculture > Food & Beverage Products
AgniKul
2017
Chennai, India
Aerospace, Maritime and Defense Tech > NewSpace
Even
2020
Bengaluru, India
HealthTech > Healthcare Payer Tech
GalaxEye
2021
Bengaluru, India
Aerospace, Maritime and Defense Tech > NewSpace
PeeSafe
2013
Gurugram, India
Consumer Goods > Beauty & Personal Care Products
BankSathi
1999
Bengaluru, India
FinTech > Alternative Lending
Kalvium
2021
Bengaluru, India
Education > Higher Education Institutions
Kredily
2017
Bengaluru, India
Enterprise Applications > HRTech
Climes
2021
Delhi, India
Environment Tech > Air Pollution Management Tech
Gytree
2014
Mumbai, India
Life Sciences > Nutraceuticals Tech
Sparkl Edventure
2024
Delhi, India
EdTech > K-12 EdTech
Invact
2021
Bengaluru, India
EdTech > Continued Learning
SuperYou
2024
Mumbai, India
Food and Agriculture > Food & Beverage Products
ImStrong
2015
Bengaluru, India
HealthTech > Fitness & Wellness Tech
SatSure
2017
Bengaluru, India
Business Intelligence > Big Data Analytics
🧠 What Guides Nithin Kamath’s Investments?
Nithin Kamath does not just invest money, he invests in ideas he believes in. His thoughts on health, money, tech, and life, shared through blogs and posts, often match the kinds of startups he supports.
He cares a lot about health and well-being. After going through his own health issues, he now supports companies that focus on fitness, better healthcare, and wellness, like Ultrahuman, Even, and Gytree.
He also likes apps and products that are easy to use. He often talks about how apps today are too complex. That is why many of the startups he backs, like AssetPlus and Kredily, are known for their simple and clean designs.
He’s also big on the environment. Through Rainmatter, Nithin supports a variety of companies, including Climes, that are working to tackle climate change and promote sustainability.
And he believes people should keep learning new things. Startups like Kalvium and Invact match his goal of helping people grow through new ways of learning.
In short, Nithin invests in ideas that make life simpler, healthier, and better for everyone.
What companies are a part of Nithin Kamath’s investments?
Nithin Kamath’s investments range across various sectors, including healthtech, fintech, edtech, and more. He has invested in companies including Ultrahuman, Licious, AssetPlus, Even, Gytree, Kalvium, and more.
Does Nithin Kamath invest through Zerodha or personally?
He invests both personally and through Rainmatter, Zerodha’s fintech-focused initiative. Rainmatter also backs climate startups through its foundation.
What type of startups does Nithin Kamath prefer to invest in?
He supports startups that focus on health, finance, learning, climate, and simple tech. His choices often reflect his personal interests and values.
Is Rainmatter only for fintech startups?
While Rainmatter initially focused on fintech, it has since expanded to support startups in sectors such as health, education, and sustainability, especially through the Rainmatter Foundation. The Rainmatter Foundation primarily focuses on climate and environmental sustainability, funding startups and projects that address climate change and promote sustainable solutions.
If you have a little bit of interest in the equity or stock market, you must have come across the name Zerodha. It is one of the dominant brokerage platforms that facilitates five million+ orders daily.
To be very honest, after the 2008 financial crisis, many big corporate houses have faced colossal losses. The stock market was at its worst, and many people lost their faith in investment.
The 2008 market collapse was the most significant single-day decrease in modern history. The fallout from this disastrous financial catastrophe washed away large portions of retirement savings and had a long-term impact on business, even after the share market had stabilized.
The recession was the black phase for every country, but then in 2009, the Kamath brothers came up with the idea of Zerodha, which is an online brokerage platform. At that instant, there were many share marketing platforms like Sharekhan and ICICI available in the market, and launching Zerodha seemed to be a foolish move. Because how can you beat the legends but with hope in their heart, they launched Zerodha in 2010 with a small budget of INR 10 lakhs.
Let’s know all about Zerodha and its marketing strategy in detail.
Zerodha is a brokerage company situated in Bengaluru, Karnataka. Nitin Kamath created it on August 15, 2010. It is India’s first cheap broker, ushering in a new era in the brokerage sector. In India, Zerodha is the biggest and one of the finest stock brokers. The ultimate aim was to make investing barrier-free, which is why they came up with the name Zerodha.
The name “Zerodha” is an English-Sanskrit portmanteau word consisting of “Zero” in English and “Rodha” (Barriers or Obstructions) in Sanskrit, to sum up as “No Obstructions.” The name of the company directly signifies the birth of the challenge-free online stock-broking platform that Zerodha is!
The Zerodha logo features the numeral ‘0’ in a block format, cropped stylishly to form an upward-pointing arrow. This represents the successful path traders can expect when using Zerodha’s platform.
Do you know that both brothers are listed in the Forbes list of India’s 100 most prosperous 2020? You might be aware of that, but what makes us awe is how they became the most substantial brokerage company in India, with around 10 million users.
Before founding Zerodha, the company’s co-founder, “Nithin Kamath,” worked in customer service at night and traded during the day. He was exposed to the financial markets by a companion when he was 17 years old, and he has been investing ever since.
After working full-time for over ten years, he chose to be a broker because he felt the moment had come to offer a distinct type of structured finance service that he had never encountered throughout his trading career. When he initially considered creating Zerodha, he believed that digitalization and a user-friendly platform were highly required. Nithin Kamath further noted that the hefty brokerage costs imposed on trades are one of the reasons why young people are hesitant to begin trading. His goal was to be an internet broker who prioritized people before profits by utilizing cutting-edge technology. That’s the incarnation of Zerodha.
Coming to our next section, where we will shed light on how Zerodha became so popular among people and what their marketing strategy is. Zerodha was launched to give consumers technology-efficient and cost-effective services. Many young users were afraid to try stock investments because of the brokerage charges. Furthermore, the technology used was old and could be a bummer for many of us. Kamath’s brother knew that it was time to change and allure young minds with a service that didn’t require any technological expertise.
Not only this, he knew that to attract youthful consumers, he had to offer something out of the box. Many of the young customers were put off by hefty commission fees when it came to trading. He took advantage of it, and hence he introduced a zero brokerage strategy. The owners of the company believed that there was no better marketing than word of mouth. They didn’t spend huge chunks of money on the advertisement. Instead, they started focusing on building brand credibility. The next thing they started was educating millennials about trading.
Zerodha’s Unique and Innovative Customer Acquistion Approach
While many stockbrokers still use cold calls and ads to get clients, Zerodha took a different route. It focused on making trading easy, rewarding referrals, and educating users, leading to massive word-of-mouth growth.
India’s First Zero Brokerage Plan
Back when all brokers charged a fixed commission, Zerodha broke the norm. It became the first in India to offer zero brokerage on equity delivery trades. This bold move helped them stand out and quickly attract customers.
Growth Through Referrals
Instead of spending heavily on ads, Zerodha chose to reward its users. Through its referral program, existing clients earn bonuses for every new person they bring in. Today, more than 60% of Zerodha’s users have joined through referrals, saving the company a lot on marketing.
Educating Investor Communities
Zerodha created Varsity, a free learning platform that teaches everything from basic finance to advanced trading strategies. It’s become a trusted resource for anyone looking to learn, helping Zerodha build trust and credibility in the market.
Zerodha Marketing Success Factors
The critical factors involved in the success of Zerodha are mentioned below.
Zerodha Marketing Success Factors
Standard Proposition
The very first marketing strategy was to be crystal clear about everything. Most users don’t trust brokerage services because they involve money. So they considered that thing by being clear about everything. When the company entered the market, many stockbrokers offered irrational prices and non-transparent pricing to clients. Then Zerodha came up with a standard proposition with zero commitments. This worked out well for the company. If you take a look at the FAQ section of the company, you will see the direct response and clear answers admired by most of their users. The company doesn’t believe in confusing its clients.
Concentrate on New Account Opening
The second reason for their vast success was putting their minds to bringing in more customers. They didn’t have any relationship managers or dealers. They started focusing on getting a new client. Today, the company has more than 2.3 million clients.
Number of Active Clients With Zerodha From Financial Year 2014 to 2022
Referral Program and Business Affiliates
The strongest pillar of Zerodha marketing is the referral and affiliate programs. Rather than investing in an advertisement, they came up with the idea of giving a commission to their referrals. Many bloggers and YouTubers promote the services through affiliate programs on their platforms, and in return, they earn a commission on every purchase. The referral program helped Zerodha discover thousands of leads that too without any upfront cost.
Innovation and Technology
The company understands the importance of change and evolution for growth. They knew how important it is to take advantage of technology and offer something innovative to their client base—that’s why they keep launching applications like Kite, Pi, and much more. The platform was fundamental in the earlier days with minimal features, but then they added advanced features like API integrations, third-party applications, and much more. They keep adding new features so that their consumers won’t lose interest.
Zerodha Kite
Online Engagement and Digital Marketing
Every business knows how important it is to gain an online presence and engagement. This is why they kept their users engaged on the platform by offering to educate them about blogs and much more. Varsity offers content that educates users, and it brings a chunk of traffic. The importance of digital marketing is that it provides a subscriber base and improves the authority of the domain in the eyes of Google. Also, clients find the service genuine when they gain something in return, such as learning about the stock market or trading.
The reason for the same is that most users don’t make impulse purchases when it comes to stock marketing. Trading involves investment and the risk of losing money, so the users try to be very cautious and attentive. The following reason why most people prefer to invest in the stock market is because of greed. The greed to double their money. Zerodha analyzed their customer mentality, and they knew if stock marketing became an impulse, it wouldn’t benefit them. So they started shifting their focus to word-of-mouth marketing. Most of the users on Zerodha are recommended by others. Such users won’t lose interest in trading because they want to make the best out of it.
So, rather than focusing on an advertisement, they start investing in customers.
The reason why Zerodha is distinct from its users is its approach to educating its users first. Zerodha does not provide stock recommendations, unlike a full-fledged brokerage platform. When new traders enter the site, they first must learn the ropes of the trade. An engaged customer base would be driven by traders’ capacity to comprehend why they are going bankrupt or trade sensibly. In 2015, Zerodha Varsity was developed with the same goal in mind and a blog connection to build interest in the website. In 2019, the Varsity App was released, as well as material in Hindi.
Later, there were Finception and LearnApp. Finception concentrates on making financial material easy for its users, whereas LearnApp sells finance information to consumers for a fee, including videos handpicked by top fund institution specialists. They’ve been extending their educational goal by using current collaborations.
Furthermore, unlike the other companies, the Kamath siblings do not impose charges for distribution or trading. Instead, they retain a 10% portion of the earnings from the investment.
That’s all! Here we have mentioned all about the Zerodha marketing strategy. The business model of a company is promising. Their user base is young. The reason behind their success is exceptional products with transparent pricing. However, most of the users were not satisfied with the company’s uptime, and it has been news for the server down issue, but the brothers promised to make the platform more friendly each passing day. Not just this, there has also been news that soon the company will enter the advisory sector too. It would be fun to watch how well this would work out for Zerodha.
That’s all we have for now. In case we have missed something, please feel free to reach out to us in the comments section.
FAQs
Is Zerodha a unicorn?
Zerodha entered the unicorn club in June 2020 with a valuation of $1 billion.
Who is the owner of Zerodha?
Nithin Kamath and Nikhil Kamath are the owners of Zerodha.
How much does it cost to open a Zerodha account?
Zerodha charges Rs 200 for online accounts and Rs 400 for offline account opening.
What is Zerodha Pricing?
Zerodha Pricing are listed below:
All equity delivery investments (NSE, BSE), are absolutely free.
Flat Rs. 20 or 0.03% (whichever is lower) per executed order on intraday trades across equity, currency, and commodity trades.
All direct mutual fund investments are absolutely free.
What is the number of active customers of Zerodha?
Zerodha has over 62.77 lakh active customers as of 2022.
In a recent LinkedIn post, Nithin Kamath, the founder and CEO of Zerodha, issued a stark warning about a rising investment fraud that has trapped thousands of unsuspecting investors across India, the WhatsApp investment scam. According to Kamath, this scam is now the most widespread and damaging among stock market cons, preying on the trust and aspirations of retail investors.
How the Scam Unfolds
Kamath detailed how the scam operates in a structured, deceptive manner, often impersonating credible financial institutions and figures.
Step 1: Fake WhatsApp Groups Mimicking Real Brands
Scammers first add individuals to WhatsApp groups with names that sound reputable, examples include “Zerodha Elite Traders” or “Premium Investors Club.” To make the group appear genuine, they use logos, colour schemes, and even SEBI registration numbers resembling official ones. What makes the deception worse is the impersonation of known figures. The group admins pretend to be Nithin himself, his brother Nikhil Kamath, COO Venu Madhav, or other Zerodha staff members.
Step 2: Flooding the Group with False Testimonials
Within hours, the chat is filled with screenshots showing extraordinarily high intraday returns, typically 100–200%. Testimonials from other supposed members reinforce the illusion. Kamath emphasised that these are completely fake, designed to establish credibility and lure victims deeper into the trap.
Step 3: Linking to Fake Apps and Platforms
Victims are then introduced to a so-called “premium signals” service. The scammers often share a link to a fake trading app that mimics Zerodha’s Kite platform. Once the user deposits money, the dashboard shows imaginary profits, with the app looking almost identical to the real one.
Step 4: Extraction of More Funds Under False Pretences
As soon as victims attempt to withdraw their earnings, the scammers introduce new hurdles. They claim that “processing fees”, “taxes”, or “account verification charges” must be paid first. These added payments are simply another ploy to extract more money. Once the scammers receive the funds, they disappear without a trace.
Zerodha’s Official Stand
Zerodha does not offer stock tips, investment advice, or operate any trading signal groups on platforms like WhatsApp or Telegram. Kamath stressed that all official communication is conducted solely through Zerodha’s verified channels.
How to Stay Safe
Be sceptical of unsolicited investment groups. If you are added to a WhatsApp or Telegram group offering stock tips, assume it’s a scam unless verified.
Check the source of apps and websites. Always download trading apps from official app stores and verify URLs from trusted sources.
Do not transfer money based on screenshots or testimonials. Genuine investment platforms do not guarantee returns, and certainly not triple-digit intraday profits.
Verify any SEBI registration claims directly via the SEBI website.
Report suspicious activity to cybercrime authorities or SEBI.
Final Thoughts
Kamath’s message is not merely a cautionary note but a call to action. Investors must remain vigilant and take ownership of their digital safety. The illusion of easy money remains one of the oldest tricks in the book, and in this digital age, it comes with a glossy interface and a familiar name.
As fraudsters grow bolder, it is imperative for all investors, seasoned or new, to cross-verify information, rely only on trusted sources, and avoid engagement with any platform or individual promising guaranteed returns.
Kamath urged people to share the warning with friends and family to help raise awareness and stop the spread of these scams.
In light of the increased volatility in the Indian stock market as a result of uncertainties surrounding international trade, Nithin Kamath, co-founder and CEO of Zerodha, has offered some nuanced guidance for D-Street investors. “It won’t be a bad idea” for investors to “take a break from trading and recharge,” according to Kamath. “You’re going to need it, based on what’s happening,” he stated. The head of the discount broking stated on the microblogging site “X” that there will only be four trading days in the next ten days due to the Indian stock market’s scheduled closures for the forthcoming festivals. Investors should therefore refrain from trading in “potentially crippling conditions” due to low trade volumes and worries about a worldwide recession. The leader of India Inc. asserts that in order to trade profitably, investors must keep an eye on both the market and their own emotional states. According to Kamath, “It’s best to stand aside and wait for the situation to change” when neither is favourable for trade. Kamath’s statements coincide with the growing international trade conflict brought on by US President Donald Trump’s tariff increases.
Staying Out for More Profitable Trade in Future
According to Kamath, investors can survive to trade another day when they are in the best possible frame of mind and the market is at its best. Currently, all they need to do is to avoid the markets. The majority of market analysts predict that volatility will persist until trade war worries fade and economic growth stabilises. “Now is a good time to heed this advice,” the CEO of Zerodha wrote in a post on “X”. There are just four trade days in the next ten days. Taking a break from trading to refuel is not a terrible idea. Based on the current situation, you will require it. According to Kamath’s post, in order to trade well, you must keep an eye on both your psychological and market moods. It’s advisable to take a back seat and wait for things to improve if one of them makes trading difficult. Don’t make the mistake of believing that you should trade despite these potentially crippling circumstances, he added. By avoiding the markets, you can live to trade another day when the market is at its best and you’re in the best possible frame of mind.
Why to Avoid the Market Now?
It is often necessary for even seasoned professionals to take a step back and reconsider their approaches. Recognise your limitations, take a break, and then, when you’re ready, enter the markets. On certain days, one feels worn out, depressed, or simply not in their best mood. Traders could find it difficult to keep the optimistic, unbiased attitude they require for trading during these periods. Because their psychological reserves are exhausted, they could behave impulsively or emotionally. According to seasoned pros, investors perform best when their previous approach begins to fail and they need to come up with a new one. They see the situation as a puzzle that they need to figure out. They observe the techniques closely while removing themselves from the market. They seek the reason why the strategy didn’t work and anticipate making adjustments till it does.
The boom of the stock market has been skyrocketing since the 2000s. Imagine a player coming in and letting the traders trade barrier-free. Yes! That has been a reality with Zerodha since 2010 when it was founded by brothers Nithin and Nikhil Kamath.
Headquartered in Bangalore, Zerodha is a financial service company that is registered with the Securities & Exchange Board of India (SEBI) and a member of NSE, BSE, and MCX-SX, built to provide brokerage facilities to the stock market traders. All in all, Zerodha is an online discount broking company that aims to lower the costs for their clients, something that is crucial in deciding the long-term profitability of the trader trading in the stock markets of the country. Zerodha’s journey is a story of revolutionizing India’s stockbroking industry through innovation and accessibility.
Read about Zerodha’s Story, its History, Journey, Business Model, Revenue Model, Founders, Growth, Competitors, and more in the article ahead.
A Bangalore-based fintech/financial services company, Zerodha offers retail stock brokerage facilities at discounted rates along with other opportunities for currency and commodity trading, mutual funds, and bonds.
Zerodha – How it Works?
The company works on the idea of discount broking, which means that it charges a reduced commission or low brokerage on the transactions to ideally attract investors to use this platform. This makes Zerodha famous amongst the traders and is the main reason behind Zerodha having an active client base of 6.3 million.
Zerodha has the first-mover advantage as it was the first discount broker in the country. “Zerodha was incorporated to make trading barrier-free; so is its name, Zerodha, i.e., No Obstructions,” says Nithin Kamath. Another important reason for the highly surging growth of Zerodha is that it puts in constant effort and keeps coming up with innovative ideas and unique strategies, all of which have helped Zerodha get an edge over its rivals.
Zerodha – Founders and Team
The founders of Zerodha are two brothers, namely Nithin Kamath and Nikhil Kamath.
Nithin Kamath
Nithin Kamath Zerodha Founder and CEO
Nithin Kamath, Founder and CEO of Zerodha and Rainmatter Foundation, a non-profit initiative by Zerodha with an aim to improve environmental sustainability, is the older of the two founder brothers of Zerodha. Nithin is an alumnus of the Bangalore Institute of Technology.
After completing his studies, he was initially self-employed as a Proprietary Trader and later served as a Senior Telesales Executive at Manipal Infocom and as a Partner at Kamath Associates. Nithin eventually collaborated with his younger brother, Nikhil Kamath, to find Zerodha.
Nikhil is the younger Kamath brother, who is the Co-Founder of Zerodha along with being the Co-Founder of True Beacon, an asset management firm dedicated to the service of the ultra-rich. Nikhil dropped out of school when he was only 16, after Class 10.
Always keen on trading, Nikhil started with the used cellphone business first when he started selling old cell phones while in the 10th grade. He soon joined a call center after dropping out of school at 17 and started equity trading at the same time in his leisure. Nikhil eventually started managing some money from his friends and colleagues as well, which helped him gain his initial experience in asset management.
He then quit his call center job and started auto trading with his brother, and they eventually founded Zerodha together. Nikhil is known as a brilliant trader. At Zerodha, he manages the prop trading desk, risk management, and everything related to trading.
The company has 501–1,000 employees, as per LinkedIn.
The founder and CEO of Zerodha, Nithin, has been trading in the Indian stock market since the age of 17. Nithin attended an engineering college and then went on to become an entrepreneur. During his college years, he spent considerable time trading in the stock market, and that forced him to take up a job at the call center. Hence, he worked at the call center during the night and saved the daytime for trading.
“I did this, working-trading, for almost 3 years during 2004-5, post which, I quit my job when I got my first client who asked me to manage money for him after looking at the positive returns on my trading account,” says Nithin Kamath.
Though Nithin managed to make quite a fortune by trading in stocks, he lost a significant amount of money in the stock market crash of 2001-02. However, he eventually landed a cheque from a foreign HNI to manage his money, which he did along with landing a job at Reliance Money, where he served as a sub-broker.
Within a very short span, Nitin managed to get many big clients for Reliance Money. At Reliance Money, Nitin was one of the most successful sub-brokers, breaking volumes of more than 1000 sub-brokers at once.
“But as a trader, I was still finding something missing with the way RMoney was working, not really what a trader requires. That is when we decided to start Zerodha,” added Nithin.
Nithin again lost a considerable amount of money in the market crash during the global financial crisis of 2008-09. After this, he decided to change ways and started to develop an idea of building a company that will provide online stockbroking services for all the traders of the country, which will be simple to use and affordable.
Rise of Zerodha
Zerodha – Startup Launch
After the founders, Nikhil and Nitin, founded Zerodha, it took a long time for them to establish a market standing. It was a slow transition that happened over the last decade. Zerodha, in its first year, opened 3,000 accounts. In India, when the cost of any product or service is less, people generally start questioning the quality. And that was the biggest milestone for the Zerodha founders to conquer. As a result of this, they built a community that also helped them in the long run. Even today, Zerodha doesn’t spend any money on advertising.
The focus on building a community for the traders helped Zerodha. This was because the initial doubts of the traders towards Zerodha’s discount broking model stemmed from the fact that retail investors were often clueless about what stocks should be bought or sold and did not ideally offer any research services. To counter this challenge, Zerodha launched Varsity. Varsity is a learning module that has become immensely popular. It ran Trading Q&A, an active forum where traders and investors were able to discuss stock ideas.
Over time, Zerodha used technology heavily to differentiate itself from the rest of the market. Zerodha also went on to launch Coin, which is an online platform to buy mutual funds directly.
Zerodha is firmly committed to working towards the vision of creating a world without any brokers, which will hugely benefit the stakeholders when it comes to the financial markets. Furthermore, the company is equally committed to providing the best possible customer experience with the help of a support and service that can be highly personalized.
Zerodha envisions creating a brokerage-free world.
Zerodha – Name and Logo
“What’s in a name?” William Shakespeare once said, and this is what Zerodha is likely proving with its wide success. Zerodha founder Nithin Kamath indicated the same in a recent post when a LinkedIn user was confused with the naming of the company. Check out the LinkedIn post below to have a quick glimpse into the same.
The name “Zerodha” is an English-Sanskrit portmanteau word consisting of “Zero” in English and “Rodha” (Barriers or Obstructions) in Sanskrit, to sum up as “No Obstructions.” This name of the company directly signifies the birth of the challenge-free online stock-broking platform that Zerodha is!
Zerodha – Products and Features
Zerodha products and features are:
Kite
It’s a modern browser-based trading tool with a wide range of order types, advanced charting, keyboard shortcuts, and streaming quotations that provides a seamless trading experience.
Zerodha has introduced a ‘privacy mode’ on its Kite trading website, allowing users to hide real-time profit and loss (P&L) changes. This feature was launched on 22 August 2024. The feature aims to reduce distractions and the temptation to overtrade. Currently available only on the Kite website, the feature will soon be added to the Kite app as well.
Zerodha Kite Web was launched in November 2015, and the Kite App was launched in November 2019.
Console
The Zerodha console is a dependable back-office platform created for their esteemed clients. It acts as a vital reporting dashboard, allowing users to easily keep track of and manage all of their investments.
Coin
It’s the finest platform for hassle-free and cost-free direct mutual fund investments. Over 40 mutual fund houses’ thousands of equity, debt, hybrid, and ELSS tax-saving schemes are available on the platform. Zerodha Coin Web was launched in April 2017.
Kite Connect API
The Zerodha Kite Connect API offers a number of capabilities for developers to create trade applications and interface them with Zerodha’s trading platform.
Varsity Mobile
Zerodha Varsity Mobile is a free online tool designed to teach people about stock market trading and investments. It is accessible online via a website or a mobile app.
Zerodha – Business Model
The business model of Zerodha works on a ‘low margin and high volume model.’ Zerodha charges a very minimal amount to the traders for transactions, because of which the trading volume is generally high. This fee collection of smaller amounts from a larger number of clients leads to good revenue generation for Zerodha. Also, one more factor aiding high profit margins for the company is operational costs. They are quite low for Zerodha as compared to some of the top brokers because of its online structure, which allows it to maintain low operational costs.
Zerodha has finally gotten approval from the SEBI (Securities and Exchange Board of India) to offer mutual fund services, said Zerodha co-founder Nithin Kamath via his Twitter handle. The company had applied for the license for the same in February 2021. This will help Zerodha launch its asset management company, AMC, and is surely another feather in its cap.
“Passive, simple, cheap index-traded funds will be on offer. Mutual fund products need to be simplified to attract investments from young investors,” said the co-founder and CEO of the brand, Nithin Kamath.
The revenue model of Zerodha can be summed up as follows:
Commission and Fixed Fee Structure: Unlike full-service brokers, who normally charge a percentage of the deal value, Zerodha charges a fixed fee for intraday and futures and options (F&O) trades. Zerodha charges a maximum brokerage of INR 20 for every transaction, regardless of the value of the transaction.
Volume-based Revenue: Drawing a lot of transactions to its platform is Zerodha’s main goal. By providing high-quality goods at a competitive price, their goal is to make money from the sheer number of trades. Despite charging a set fee for each transaction, the daily total money generated by millions of transactions can be rather large.
Startup Incubation: Rainmatter, a subsidiary of Zerodha, acts as a startup incubator for companies in the banking sector. Profitable businesses like CRED, LearnApp, Smallcase, Streak, Tradelab, and CRED all provide revenue to Zerodha in different ways, like equity investments, revenue-sharing contracts, or acquisitions.
Mutual funds and True Beacon: To broaden its portfolio of products, Zerodha introduced True Beacon, an alternative investment fund that targets high-net-worth individuals (HNIs) with a $million minimum investment. Zerodha aims to enter the mutual fund industry and has applied for a mutual fund AMC license as a result of True Beacon’s success.
Zerodha – Shareholding
Zerodha’s shareholding pattern as of March 2023, sourced from Tracxn:
Zerodha Shareholders
Percentage
Nithin Kamath
41.0%
Nikhil Kamath
36.4%
Seema Patil
14.7%
Fund
0.1%
Straddle Capital
0.1%
Rainmatter
–
Austin Global Ventures
–
Other People
0.3%
ESOP Pool
7.5%
Total
100.0%
Zerodha Shareholding
Zerodha – ESOPs
Zerodha created a new ESOP pool for its employees as of November 1, 2021. Under this ESOP Plan 2021, the company has allocated around 7,00,000 options, as per the regulatory filings of the company with the Registrar of Companies (RoC).
The company then issued another ESOP pool that is estimated to be worth around Rs 100 crore at the beginning of Q3 2022.
Zerodha – Challenges Faced
Zerodha, while a prominent player in India’s brokerage landscape, confronts notable challenges, notably technical glitches during periods of heavy trading, and diminishing customer satisfaction. Its customer service system also lags below that of other top brokers.
In contrast to its rivals, Zerodha does not provide important informative resources like news alerts and daily reports, which reduces investor attraction. But Nithin Kamath, the company’s founder, is aggressively resolving these problems. The goal of features such as the nudge feature is to provide traders with well-informed tools for making decisions.
One such tool is the killswitch, which is used to stop losses from occurring continuously. Challenges remain despite efforts; Kamath predicts a possible market correction and an ensuing slowdown in growth in the upcoming months. To preserve its reputation in the brokerage sector, Zerodha is still dedicated to improving the customer experience and overcoming these challenges.
Zerodha – Investments
Zerodha has invested in five companies to date.
Below are the details of the Zerodha investment:
Date
Company Name
Funding Round
Amount
March 27, 2024
Subko Coffee
–
–
Aug 10, 2023
Rainmatter Capital
Venture Round
Rs 1,000 crore
May 10, 2023
Castler
Seed Round
$5 million
Dec 1, 2022
RBL Bank
POST-IPO Equity
–
Apr 26, 2022
Actlogica
Seed Round
–
According to various news reports, Zerodha has exited RBL Bank.
It has 75+ branches and partner offices as of March 2024
Over 1+ crore clients place millions of orders every day as of March 2024
It is trusted by over 1.3 crore customers in the Google Play Store as of March 2024
It has 6.4 million active customers as of October 2023
Zerodha – Financials
Zerodha has shown consistent growth in revenue and profit over the last few years. In FY24, the company saw significant growth in revenue and profit, continuing its upward trajectory from FY23.
Particulars
FY24
FY23
FY22
FY21
Revenue
INR 9,994.5 Cr
INR 6,877.1 Cr
INR 4,964 Cr
INR 2,729.6 Cr
Expenses
INR 3,119.3 Cr
INR 2,992.7 Cr
INR 2,165.1 Cr
INR 1,260.2 Cr
Profit after Tax
INR 1,122 crore
INR 2,094 crore
INR 2,907 crore
INR 4,700 crore
Zerodha Financials
Zerodha has announced revenues higher than INR 8,370 crore and profits of INR 4,700 crore for FY24, as shared in a blog post by co-founder and CEO, Nithin Kamath. This marks a 22% increase in revenue and a 62% rise in post-tax profit compared to the INR 6,875 crore in operational revenue and INR 2,907 crore in profit reported for FY23. The company has yet to file its audited annual report.
In FY23, Zerodha reported a 38.5% increase in revenue, reaching INR 6,875 crore. Profits also grew by 39%, totaling INR 2,907 crore for the year.
Zerodha Revenue:
Zerodha’s revenue has consistently increased over the last few years, with a notable spike in FY24. Revenue from operations saw substantial growth, and other income showed a significant rise in FY24 compared to FY23.
Particulars
FY24
FY23
Revenue from operations
INR 9,372.2 crore
INR 6,832.8 crore
Other income
INR 622.3 crore
INR 44.3 crore
Total revenue
INR 9,994.5 crore
INR 6,877.1 crore
In FY24, Zerodha’s total revenue increased by approximately 45% compared to FY23. The main contributor was the revenue from operations, but other income also saw a significant rise.
Zerodha Expenses:
Zerodha’s expenses grew in FY24 compared to FY23, but the company’s profit still grew substantially. The biggest increase was seen in operational costs, which rose as revenue increased.
Particulars
FY24
FY23
Total expenses
INR 3,119.3 crore
INR 2,992.7 crore
Employee benefit expense
INR 474 crore
INR 623.2 crore
Finance costs
INR 1.9 crore
INR 1.2 crore
Amortization & Depreciation
INR 24.4 crore
INR 20.4 crore
Other expenses
INR 2,619 crore
INR 2,347.9 crore
Zerodha’s expenses increased in FY24, mainly due to higher operational costs, which grew by approximately INR 271.1 Cr compared to FY23.
Zerodha Profit/Loss:
Zerodha’s profit before tax and profit for the year both saw significant growth in FY24. The company’s net profit increased substantially, reflecting the growth in revenue.
Particulars
FY24
FY23
Profit before tax
INR 7,051.7 Cr
INR 3,884.4 Cr
Profit for the year
INR 5,493.4 Cr
INR 2,904.5 Cr
Zerodha’s profit for FY24 saw a notable increase of approximately 89% compared to FY23, reflecting the company’s strong financial performance.
Quick Summary:
Revenue: Significant growth of 45% from FY23 to FY24 (INR 9,994.5 crore in FY24).
Expenses: Operational costs rose with increased revenue, but profit growth outpaced expense increase.
Profit: Net profit increased by 89% in FY24, reaching INR 5,493.4 crore.
Zerodha – Awards
Zerodha won several awards; some of the prominent ones are:
In the second Unicorn Premier League (UPL) tournament, which was played in Bangalore, Zerodha triumphed against Flipkart by a margin of six wickets to win the championship, as per the news report of February 28, 2024.
Nikhil Kamath, the founder of Zerodha, received the 2023 CK Prahalad Next Practice Entrepreneur Award and the Kempegowda 2023 Award.
Nikhil Kamath also won the Entrepreneur of the Year Award at the Economic Times Awards in 2023.
Zerodha – Competitors
Zerodha faces some cutthroat competition in the market. It is competing with other discount brokers like Upstox. Simultaneously, Zerodha also faces serious competition from full-service brokers, which are huge and popular among traders, such as HDFC Securities, Kotak Securities, Motilal Oswal, etc.
Zerodha plans to expand its financial education efforts, with a focus on multilingual tools and resources. The company aims to offer personalized investment solutions using AI, while also broadening its range of ESG and green investment options. Enhancing user experience through improved platform design, exploring blockchain for better transparency and security, and launching initiatives to support underserved communities are key goals for the future.
FAQs
Who are the founders of Zerodha?
The founders of Zerodha are two brothers namely Nithin Kamath and Nikhil Kamath.
What is Zerodha?
Zerodha is a financial service company and a member of NSE, BSE, and MCX providing brokerage facilities to stock market traders. It is an online Discount Broking company.
How Zerodha started?
Zerodha was founded in 2010 by Nithin and Nikhil Kamath. The brothers started the company with the aim of providing low-cost, technology-driven trading solutions. Zerodha’s focus on offering discounted brokerage fees and an easy-to-use platform quickly attracted retail investors, leading to rapid growth in the Indian stock market.
When was Zerodha founded?
Zerodha was launched in 2010.
Who are the Top Competitors of Zerodha?
Zerodha’s top competitors are :
Upstox
SAS Online
IIFL
Finvasia
Angel Broking
Beeline Broking
TradingBells
Karvy Stock Broking
Sharekhan
Motilal Oswal
HDFC Securities
ICICIdirect
How does Zerodha make money, what is Zerodha Revenue Model?
Zerodha generates revenue through its commission and fixed fee structure. Its Rainmatter-led business incubation program also generates revenue through revenue-sharing agreements and equity holdings.
What is Zerodha business model?
Zerodha operates as a low-cost discount brokerage firm, primarily offering online trading services for equities, commodities, and derivatives. It generates revenue through brokerage fees, providing retail investors with access to a wide range of financial instruments via its trading platform, Kite. Zerodha focuses on offering competitive pricing, technology-driven solutions, and educational resources for traders.
What is Discount Broking?
Zerodha works on the idea of discount broking, which means that it charges a reduced commission or low brokerage on the transactions to ideally attract investors to use this platform.
What is Zerodha funding history?
Zerodha has remained bootstrapped since its inception and has not raised any external funding. The company’s growth has been entirely organic, funded by its founders, Nithin and Nikhil Kamath, and its revenue model.
Muskaan Kapoor
