Nithin Kamath, the founder and CEO of Zerodha, recently responded to a question on Reddit about what makes Zerodha different, how it became profitable, and why it has not gone public yet. Kamath shared that Zerodha’s journey is the result of 25 years of experience, including 15 years spent building the company. He emphasized that success in business often compounds over time, especially when one is passionate and fortunate to be in the right place at the right time.
Nithin Kamath recounted Zerodha’s humble beginnings as a partnership firm, citing the advantage of lower exchange deposit requirements and early access to NSE’s free trading platform which helped keep their initial costs low. He detailed that Zerodha started with just about ₹10 lakh in capital, spent minimally on essentials like website development and office space, and grew without any wealthy investors backing them.
Nithin Kamath highlighted that Zerodha’s rise coincided with India’s own economic and market expansion, and he credited luck and timing as critical elements of their success. He contrasted his journey with that of Nvidia’s Jensen Huang, who also spent decades preparing for the right opportunity. Importantly, Kamath noted that Zerodha’s decision to remain private has allowed it to prioritize customer interests without pressure to deliver quick exits for investors.
This freedom lets them uphold customer-friendly policies, such as no spam and no tracking, even if these come at short-term business costs. He believes this philosophy is a key competitive advantage, or “moat,” for Zerodha, and that maintaining such principles would be challenging as a public company.
Check out Nithin Kamath’s Linkedin post:
Zerodha’s Unconventional Path and Profitability
Zerodha has revolutionized the Indian brokerage industry by offering a disruptive pricing model: zero brokerage fees for equity delivery trades and a flat fee of ₹20 for intraday and futures & options (F&O) trades. This model made investing highly accessible and affordable for millions of retail investors. The company’s primary revenue comes from F&O trading fees, exchange transaction charges, and other value-added services. By maintaining a lean, technology-driven operation with minimal physical branches and a self-service approach, Zerodha has kept its operational costs low.
This efficiency, combined with high trading volumes from its vast client base, has enabled it to achieve remarkable profitability. As of FY23/24, Zerodha manages over ₹5.6 lakh crore in client assets, processes millions of trades daily, and has reported revenues nearing ₹8,320 crore with profits around ₹4,700 crore.
Read this: Zerodha Is Trusted, But Is It Still Cool? Ankur Warikoo Gives Honest Feedback to Nithin Kamath
Brokerage Market Dynamics and Competitor Activities
The Indian brokerage landscape is highly competitive and rapidly evolving, with several players vying for market share. Zerodha holds a dominant position in the discount brokerage segment, consistently leading in active client accounts. Competitors like Upstox, Angel One, and Groww have adopted similar low-cost models, offering competitive pricing and user-friendly platforms. These firms are continuously innovating, expanding into adjacent financial services such as mutual funds, IPO applications, and investment advisory.
Check out: Groww eyes up to $9 billion valuation, to file updated IPO papers this week
For instance, Groww has aggressively expanded its user base through a focus on mutual funds and SIPs, while Angel One has invested in technology and educational content to attract new investors. The market is also seeing new entrants and existing players actively engaging in digital marketing and customer acquisition strategies, but Zerodha’s long-standing trust, strong brand equity, and educational initiatives (like Varsity) provide it with a significant moat. The overall market is witnessing increased retail participation, especially from smaller towns and cities, driven by digitalization, financial literacy initiatives, and accessible investment platforms.
